Sitting of 14 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 21 May.

Oral Answers to Questions
  OFFICE OF THE DEPUTY PRIME MINISTER
  The Deputy Prime Minister was asked—
  OFFICE OF THE DEPUTY PRIME MINISTER

    Social Housing
    Mr. Desmond Swayne: If he will make a statement on his policy for (a) improving the quality of and (b) increasing the quantity of social housing. [112970]
    The Deputy Prime Minister (Mr. John Prescott): On 5 February I launched the sustainable community action plan. It marks a step change in our approach to housing in communities. We will invest £22 billion over the next three years, including £5 billion for affordable homes and £2.8 billion to bring local authority housing up to decent housing standards.
    Mr. Swayne: My district council has been attempting to sell a mobile homes park in Ringwood to its residents, who in turn have made an enormous effort to raise the mortgage money. The deal has been jeopardised by the abolition of local authority social housing grant. What can I say to the residents of Stillwater mobile homes park to reassure them that they will not be left behind, and that they will get a fair deal?
    The Deputy Prime Minister: As the hon. Gentleman knows, the local authority housing condition grants were not being used in a proper manner. Some authorities were not using them to provide the social housing for which they were intended. I explained to the House why I had changed the arrangements in the community plan. Difficulties were caused for projects that were half finished, so we have applied different arrangements from those that are in the process of implementation. The project referred to by the hon. Gentleman does not fall into that class, and I assume that a certain amount of planning took place in the hope that the money would be available.
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    On balance, I think that our judgment was correct. I think that what the hon. Gentleman should tell his constituents is that the argument was very much against the implementation of the right-to-buy policy in this instance.
    Ms Debra Shipley: Will my right hon. Friend explain exactly how social housing will be improved by the warm homes initiative?
    The Deputy Prime Minister: In the community programmes we allow for money not just to build houses but to enable them to meet the new energy standards that we are applying. That is not happening in most parts of the country, and I shall ensure that greater priority is given to it.
    David Davis: The Deputy Prime Minister has claimed in the past that abuses of the right-to-buy scheme reduce the availability of social housing for new tenants. On Monday, the Government introduced their plans for savage cuts in the discounts available to right-to-buy tenants. Are those cuts designed to stamp out abuses, or simply to deny the right to buy to thousands of poorer tenants?
    The Deputy Prime Minister: I think the right hon. Gentleman would agree that where there is abuse we should deal with it, because this is the taxpayer's money, but the reduction in interest rates under our policies—which is considerably greater than any reduction that occurred when his party were in government—has allowed more than 1 million people to buy their houses. The subsidy of nearly £40 billion simply allowing people to buy houses, rather than allowing the public stock to be improved or increased, worked against a good housing policy.
    David Davis: May I drag the Deputy Prime Minister back to the question? Cutting discounts by more than half will not hit the abusers; it will hit the poorest tenants. Only on Monday the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty), confessed that these savage cuts were designed to reduce the number of families exercising the right to buy by 9,000—and it will
    be 9,000 of the poorest families.
    Most of those families cannot afford to move out of social housing, so few if any of the homes will be released to new tenants. According to the figures given by the Under-Secretary of State on Monday, only about 30 homes a year will be released for new tenants in London. Denying the right to buy to 9,000 families will deny the public purse £900 million—about enough for 5,000 new social homes.
    Will the Deputy Prime Minister confirm that what he is doing is not only shattering the hopes and dreams of 9,000 poor council tenants who wanted to own their homes, but denying thousands of homeless people their chance of occupying social housing?
    The Deputy Prime Minister: If the last Administration had been seriously interested in increasing the housing stock and the availability of social housing, they would not have reduced the moneys available to local authorities to provide social housing, year on year.

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    Their sole housing policy was to provide the right to buy. We have restricted that by reducing the discounts in housing crisis areas. We think that that policy is right, and we intend to pursue it.
    I repeat: I think that our policy of reducing interest rates is better than spending £40 billion on subsidising houses simply to implement the principle of the right to buy for 1 million people, and it increases the number of people owning their homes by the same amount. The right hon. Gentleman should have discussed that during his most recent bonding session with his leader.

    Planning System
    Mr. Gareth Thomas: What resources he will give to local authorities to speed up the planning system. [112941]
    The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): The Office of the Deputy Prime Minister has a comprehensive planning reform agenda. We are tackling the structure, processes and culture of the planning system. We accept that authorities need more resources to deliver service improvements, so we are making an additional £350 million available to them over the next three years for planning, of which £50 million is already being distributed this year.
    Mr. Thomas: I am grateful for that reply, but does my hon. Friend accept that the UK's renewables industry has often faced very significant delays in obtaining decisions through the planning system, whether favourable or unfavourable? Given the considerable potential of renewables to deliver the significant environmental benefits that the Energy White Paper refers to, the extra jobs that could be created in the manufacturing and offshore industries, and the new income streams for rural areas that renewables could deliver, is it not now time that the planning system had a presumption in favour of renewables, rather than the neutral position that it currently takes?
    Mr. McNulty: I commend my hon. Friend for his work on behalf of the all-party group on renewable and sustainable energy, and for his interest in this area. Planning policy guidance 22, which is 10 years out of date, does need updating. Among other things, the criteria must include greater clarity and less delay, but I am afraid that it would be totally wrong for the planning system to have a presumption in favour of any type of development.
    Mr. Edward Davey: For the benefit of those of us who could not serve on the Planning and Compulsory Purchase Bill Standing Committee, can the Minister tell us when the House will consider it on Report? He says that he wants to speed up the planning system, yet the Committee finished its proceedings four months ago. Is it not true that delays in the planning system are more down to central Government than to local authorities?
    Mr. McNulty: I would very much like to tell the hon. Gentleman that he was sorely missed in Committee, but
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    he was not. It is certainly still our intention to get that Bill approved and on the statute book as soon as we possibly can.
    Mr. Crispin Blunt: In Redhill—[Horn. MEMBERS: "Hear, hear."] That is the only example of
    turkeys appearing to be in favour of Christmas—a
    Christmas that I am trying to arrange for them. In Redhill, a major development by Linden Homes, involving more than 500 homes and including a significant amount of social housing, has been mired in the planning process for more than a decade and a half. It is running into planning problems with Network Rail, as access to the site is required from underneath a railway line. I am meeting representatives of Network Rail and Linden Homes next week, and I should be very grateful if the Minister could get an official from his Department to observe that meeting and report back to him on how Network Rail is going to assist in getting us through the planning process.
    Mr. McNulty: Strangely, in recent weeks I have listened far more carefully to the hon. Gentleman than previously. However, I am afraid that I am unable to comment on specific planning applications, as they might end up on my desk or those of my colleagues.
    Mr. Bill Olner: Although I welcome the extra resources that local authorities will get during this period, is the Minister prepared to consider the financing of local authorities that have a lot of difficulty in, and spend a great deal of money on, removing illegal encampments of travellers? Will he please meet a delegation from my local authority, which has spent well in excess of £100,000 in legal fees just to ensure that the planning process runs smoothly?
    Mr. McNulty: I accept that this is a serious issue, and I have had numerous meetings on it. I am more than happy to meet a delegation from Nuneaton to discuss it further.

    Retail Developments
    Michael Fabricant: If he will make a statement on his policy on the construction of retail developments on the outskirts of urban areas. [112942]
    The Deputy Prime Minister (Mr. John Prescott): I refer the hon. Gentleman to the parliamentary statement "Planning for Town Centres", which was issued on 10 April. It summarises and clarifies the Government's planning policy for town centres and retail development. We remain firmly committed to focusing retail development in town centres. This policy is working, and we now have more in-town than out-of-town development than at any time since the mid-1980s.
    Michael Fabricant: I thank the Deputy Prime Minister for his answer, but does he recall the application for a retail development in the mining town of Burntwood, in my constituency? Some 10,000 people signed a petition in favour of it, the inspector approved it, Lichfield district council approved it and

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    Staffordshire county council, which is Labour controlled, also approved it. Why did the Deputy Prime Minister refuse it?
    The Deputy Prime Minister: I think that the hon. Gentleman is well aware of the ruling that I cannot comment on a matter that is under legal challenge. Every Secretary of State would have to give the same reply to the House. It certainly applies in this case. The hon. Gentleman is usually on record as a supporter of out-of-town development. He has obviously changed his mind: we have not.
    Mr. Bill O'Brien: May I express my appreciation of the Deputy Prime Minister's work to regenerate urban town centres? Does he accept that the urban renewal programme that he has put in place could be another vehicle to help regenerate town centres? Could guidance be given to regional development agencies and regional assemblies to help them to revitalise urban town centres?
    The Deputy Prime Minister: My hon. Friend knows that that is a key priority for the Government. We have concentrated on urban development, particularly retail development. In 1992, about 190 out-of-town shopping applications were granted, which rose to 1,200 in only five years. We are now concentrating more on the development of in-town urban areas—a decision that was greatly influenced by advice from the regional assemblies and regional development agencies. We greatly encourage them to adopt that policy.

    Housing Renewal Pathfinders
    Jeff Ennis: What impact housing renewal pathfinders are having on the areas they cover. [112944]
    The Minister for Social Exclusion and Deputy Minister for Women (Mrs. Barbara Roche): We have invested £2.66 million in each scheme so that long-term, robust plans to revitalise communities can develop. The first tranche of £4 million funding is available for radical action to begin this year, and more for those moving ahead with completed plans.
    Jeff Ennis: Is the Minister aware that communities such as Thurnscoe, East and Mexborough in my constituency are already benefiting from the funding that she is providing? The number of empty and void properties in my constituency, which can attract antisocial behaviour and are often the cause of disorder and nuisance, is diminishing. Does the Minister agree that if we are to continue to be successful in the pathfinder areas, we must adopt a bottom-up approach that will give local communities a direct input into resolving the problems in the housing areas where they live?
    Mrs. Roche: I agree and I know that the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Harrow, East (Mr. McNulty) visited the pathfinder in my hon. Friend's constituency—and was impressed by what he saw. It is essential to secure community involvement and the
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    schemes are predicated on the fact that the community will be involved. It is also right to target measures to reduce antisocial behaviour.
    Mr. David Curry: Does the Minister accept that many pathfinder areas are precisely those with a predominance of houses at the bottom end of the council tax bandings? If the rebanding goes ahead and a half-A or minus-A band is introduced, what will be the impact on councils of a significant increase in council taxes marginally up the bands? Will the nearly poor be required to pay yet again for the very poor?
    Mrs. Roche: The right hon. Gentleman makes important representations. He will know that no decision has been taken on rebanding, but I shall view his representations as part of the process.
    Mr. Gordon Prentice: I welcome pathfinders in areas such as my own where the housing market has completely collapsed, but rather than more plans, strategies and assessments, people want to see a visible sign of change on the ground. Can the Minister assure me that the pathfinder area in Burnley and Pendle will be adequately resourced so that crumbling and rotten houses can be torn down?
    Mrs. Roche: I have to say that that is exactly what is happening. Action is being taken on the ground. I have seen the pathfinders in action and demolition is taking place. Some of the old crumbling houses are going; new mixed housing is taking its place; and communities are being revitalised. The involvement of local people and action plans are necessary to achieve that.

    Regional Government (North-West)
    Sir Nicholas Winterton: If he will make a statement on plans for regional government in the north-west of England. [112945]
    The Minister for Local Government and the Regions (Mr. Nick Raynsford): We have asked for further responses by 16 May to our soundings exercise on the level of interest in each English region in holding a referendum on an elected regional assembly. We will announce shortly after that date which region or regions will proceed first towards referendums.
    Sir Nicholas Winterton: While I am grateful to the Minister for his reply, is he aware that polls suggest that 78 per cent. of people in the north-west know "not very much" or "nothing at all" about the Government's proposals for regional authorities, and that only three out of 10,000 have responded to the soundings? Does that make it clear to him that the north-west is not interested in regional government? We do not want more bureaucracy. People identify with their districts, boroughs or counties, and I repeat that we do not want regional government and all the expensive bureaucracy that goes with it.
    Mr. Raynsford: I am always a little suspicious of polls and I prefer to look at the evidence of individuals who have responded. The hon. Gentleman will probably be interested to know that we have so far had 2,535

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    responses from the north-west region and 1,530 of those come from his county of Cheshire. [Interruption.] He may have had something to do with that. We will consider the responses carefully after the deadline, which is this Friday, and then my right hon. Friend the Deputy Prime Minister will make his decision.
    Mr. George Howarth: Fond as we are of Macclesfield on Merseyside, does my right hon. Friend agree that a Greater Merseyside authority would make far more sense than a north-west authority?
    Mr. Raynsford: We believe that the people of the region should take the decision, and that is why we are engaged in the soundings exercise. We will make an announcement on the basis of the soundings on whether referendums will take place and, if so, in which regions. It will then be for the people of each region to decide whether they want an elected regional assembly. That is democracy and choice, and we think that it is a good idea.
    Mr. Eric Pickles: Does the Minister realise that the level of interest in the northwest is such that the only people who turned up to a recent meeting organised to discuss the issue were a chief executive of a council and his wife? That is not my idea of a good night out. Does he recognise that business, industry and voluntary organisations are pulling away from the existing regional assembly, and does he agree that this is a solution in search of a problem?
    Mr. Raynsford: I am sure that the hon. Gentleman will be familiar with meetings with a derisory attendance from his experience of Conservative party meetings. We are seeking the views of people via various options, including letters, meetings—if people choose to hold them—and other responses to the soundings. We will take account of the total response. Clearly, if only two people attend a meeting, it would not be given much weight in the assessment of the level of interest.
    Mr. Andrew Miller: Part of the confusion in the minds of the people in Cheshire, including the hon. Member for Macclesfield (Sir Nicholas Winterton), is caused by the misinformation that has been put out by Cheshire county council. Will my right hon. Friend tell the people of Cheshire that the proposals for regional government would not create a further tier of government, as the hon. Gentleman suggests, but an alternative and much better structure of government?
    Mr. Raynsford: My hon. Friend makes a good point. We have always been clear that there must be no question that any additional tiers of government or bureaucracy will be created. That is why we have made it clear that, when there is a vote in favour of an elected regional assembly, local government in that region must be reorganised to a wholly unitary structure. Through an amendment in the other place to what is now the Regional Assemblies (Preparations) Act 2003, we have recently provided that people in those two-tier areas will have a say in a second vote on their preferred form of unitary local government. Once again, the Government
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    are giving choice to people in respect of efficient and streamlined administration, and better local government.
    Mr. George Osborne: The Minister said that he would look at the level of interest in a region. In his response to my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton), he said that he had received 2,000-odd responses from the north-west. What proportion of the total population of the north-west is that?
    Mr. Raynsford: The hon. Gentleman will know that other people often undertake similar exercises. For example, the Liberal Democrat party and its Focus leaflets will probably get a derisorily small number of responses, compared with what we are receiving. Getting 2,500 responses from people represents a very good level of response—[Interruption.] We look forward to seeing what they say. We will analyse the responses, and take decisions accordingly.

    Houses in Multiple Occupation
    Mr. Andy Reed: What steps he is taking to improve the condition of houses in multiple occupation. [112946]
    The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): The Government published a draft housing Bill on 31 March, taking forward our commitment to introduce the mandatory licensing of larger houses in multiple occupation, and also a new housing health and safety rating system.
    Mr. Reed: I thank my hon. Friend for that reply. I am sure that he is aware of the growth in the number of houses of multiple occupation in places such as Loughborough, which is trying to accommodate large increases in the number of students, and of the problems that that is causing in the centre of town. Will my hon. Friend ensure that any licensing system has real teeth so that we can try to tackle the problem and give local residents a real choice? Also, will he look again at the current exemption given to landlords? If their houses are occupied by students, they are exempt from paying council tax. Those landlords run the houses as businesses, and they are benefiting from that exemption.
    Mr. Leslie: I hear what my hon. Friend says about council tax. We do not want students to be liable for council tax. In connection with quality of housing, it is precisely because so many students live in substandard housing that we want to extend the definition of HMO to cover student housing, and to allow for the licensing of student landlords in certain circumstances. However, my hon. Friend will be aware that the Conservative party has devised a novel solution to the problem of poor student housing—it is going to cut the number of students.
    Mr. Henry Bellingham: Is the Minister aware that many small guest houses in Norfolk towns have closed, and have become bed and breakfast establishments and homes in multiple occupation? That

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    has encouraged a lot of youngsters on the dole—the so-called Costa del Dole syndrome. What does he plan to do to discourage that from happening?
    Mr. Leslie: The hon. Gentleman mentioned specific issues that affect many seaside towns with areas where many tenants live in single large blocks, in bedsits and so forth. It is precisely because some of those larger houses of multiple occupation need licensing and better management that the Government are introducing the housing Bill that is now in draft.

    Social Exclusion
    Mr. Gordon Marsden: What assessment his Department has made of the links between transience and social exclusion in seaside and coastal towns. [112947]
    The Minister for Social Exclusion and Deputy Minister for Women (Mrs. Barbara Roche): The Department has not made a formal assessment of the links between transience and social exclusion in coastal and seaside towns. I know that this issue is a particular problem in my hon. Friend's constituency, and that the local education authority is currently preparing a report on the subject.
    Mr. Marsden: I thank my hon. Friend for that reply, and for the interest that she and my right hon. Friend the Deputy Prime Minister have shown in regeneration issues, in Blackpool and other seaside towns. Is she aware of recent research from Sheffield Hallam university showing that there is a significant, continuing and long-term inflow into coastal towns of people with low skills, low employment prospects and, often, poor health? With that in mind, does she agree that we need a more targeted and focused approach? Would she look at the coalfields initiative, and consider whether a similar initiative could be adopted for seaside towns, along the lines of a seaside regeneration taskforce and trust?
    Mrs. Roche: I should be very interested to read the research produced by Sheffield Hallam university. I agree that the subject of transience and social exclusion is important. That is reflected in the neighbourhood renewal strategy, and my hon. Friend's constituency benefits from that funding. However, I shall certainly look to see what we can do.
    Chris Ruane: My right hon. Friend the Deputy Prime Minister was born in the coastal town of Prestatyn, and he will be aware of the dramatic decline of seaside towns in the UK over the past 30 years, which has been as great as that in any steel, coal, rural or inner-city community. What additional help can be given to seaside towns to help them to recover?
    Mrs. Roche: I have already mentioned neighbourhood renewal funding, and many regional development agencies cover coastal towns and recognise that responsibility. I shall make certain that my hon. Friend's interest is communicated to them.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Tim Loughton: If he will list his official engagements for Wednesday 14 May.
    The Prime Minister (Mr. Tony Blair): This morning, I held meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.
    Perhaps, Mr. Speaker, I could say a word about Monday's bomb attacks in Saudi Arabia. These attacks were a cowardly and disgraceful terrorist atrocity. They will, however, make the United Kingdom and our allies across the international community only more determined to track down terrorists and to stamp out terrorism.
    I would like to offer our profound condolences, those of the Government and, I believe, the House to the victims of the attacks and their families and to the Saudi people. I have sent condolences personally to Crown Prince Abdullah and to President Bush. It has to be pointed out that, although of course, tragically, some of the victims may be American and indeed British, the victims will, as ever with these terrorist atrocities, primarily be Muslims.
    Tim Loughton: I am sure that we all wholeheartedly share the Prime Minister's comments.
    Given the whispers around Westminster earlier in the week that the relations hip between the Prime Minister and his Cabinet is not so much a meeting of minds but more one of meat and vegetables, can he tell us when there was last a full discussion, in full Cabinet, on the subject of the euro?
    The Prime Minister: There are regular discussions of Europe and, indeed, of all the issues connected with Europe. I can assure the hon. Gentleman that there will be the fullest possible discussion before the decision on the single currency is announced. The hon. Gentleman knows the timetable for that, as it has been set out by myself and the Chancellor on many occasions.
    Mr. John Lyons: My right hon. Friend will recall the case of Mr. Sandy Mitchell, my constituent, who is in jail in Saudi Arabia. Mr. Mitchell was accused of bombing in Saudi. Since then, he has continually pleaded his innocence, along with others. Will my right hon. Friend step up the diplomatic and political pressure on the Saudis? In view of the horrific bombing yesterday, it is clear that there must be serious doubts about the conviction of Mr. Mitchell and others.
    The Prime Minister: As my hon. Friend knows, we remain deeply concerned about the case of British nationals detained in Saudi Arabia, who have been accused of involvement in a series of bombings. He will know that we are working vigorously to resolve that

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    case. The best thing for me to say to him at the moment is that we are fully aware of the concerns, and the best thing for the individuals concerned and their families is that we carry on working in the way that we are to try to secure their release. I promise my hon. Friend that we shall continue to do so.
    Mr. lain Duncan Smith: May I join the Prime Minister unreservedly in his comments with regard to the atrocious bombing in Saudi Arabia? I think that the whole House will share his view on that, without question.
    The Prime Minister will be aware that referendums on the European constitution are proposed in up to 10 European member states. Why cannot the British people have one, too?
    The Prime Minister: For the same reason that we did not hold a referendum on the Maastricht treaty or on the Single European Act. I see no case for having a referendum on this matter. Indeed, many of the allegations made about the impact of the European Convention are scaremongering. The Convention is important because we are modernising Europe as another 10 countries join the European Union. It is important that we make every effort to ensure that the accession of those 10 countries goes ahead, because a united Europe, with those eastern European countries inside the European Union, is in our interests and the interests of Europe.
    Mr. Duncan Smith: The Prime Minister has to admit that, since he came to power, there have been 34 referendums on issues even as momentous as whether Hartlepool should have a mayor, and he has promised referendums on regional assemblies as well, as the Deputy Prime Minister agrees, but the European constitution will decide how every citizen of this country will be governed. Why will not the Prime Minister simply let the British people have their say?
    The Prime Minister: The reasons against having a referendum are those that I have just set out, and they apply to the previous Conservative Government too. But in relation to those issues that are said to be the reason why we should have a referendum—for example, that we will suddenly yield up defence or foreign policy to the European Commission—are simply false. European defence and foreign policy will remain intergovernmental, and will therefore remain the property of the Governments inside the European Union. The plain fact of the matter is that the reason why the right hon. Gentleman wants a referendum is to vote no to enlargement in order to vote no to the European changes that are taking place, because I am afraid that, under his leadership, the Conservative party remains utterly and implacably opposed to Europe.
    Mr. Duncan Smith: It may have escaped the Prime Minister's notice but the reason why I want a referendum is that the British people can say no. [Interruption.] Oh yes, and the reality is that everybody else thinks that the same idea of the British people having their say should exist. He knows that the president of the Convention says that that should be a necessity, as does everybody else. We know that the
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    British people overwhelmingly want to have their say. The right hon. Gentleman shakes his head, but it is true. Has the Prime Minister become so out of touch, so arrogant, so reliant on a small group of people—oh yes—and so reliant on a small group of friends that he will not let the British people have their say?
    The Prime Minister: What is very clear, as the right hon. Gentleman has just admitted, is that he wants people to say no to European enlargement. That will mean that those—[Interruption.] He has just said that he wants them to be able to say no to the question, and he would be leading the campaign against it. So what we now know from the Conservative party is that it is against the enlargement of the European Union and that it is against those new countries coming into Europe because, under his leadership, the Conservative party is against Europe. That is a disaster for jobs and industry in this country.
    Mr. Duncan Smith: The reality for the Prime Minister is that he will not trust the British people. Let them be the judges of what they want. The Convention will include foreign policy, home affairs, transport, criminal law, asylum and many other issues. Why cannot they be allowed to decide? Is not the reality that a member of his Cabinet said that since the first days when he got to power the Prime Minister ruled by
    "diktats in favour of increasingly badly thought through policy … that comes from on high."—[Official Report, 12 May 2003; Vol. 405, c. 38.]
    The Prime Minister has the opportunity to prove that the right hon. Member for Birmingham, Ladywood (Clare Short) and her words are wrong. If he gives the British people their say, he will do that, so why does he not prove her wrong now by saying from the Dispatch Box that he will give the British people the chance to vote on the constitution?
    The Prime Minister: I have just given the reason. I said why the previous Government did not give people referendums, for example, in relation to Maastricht and the Single European Act. However, when the right hon. Gentleman lists the topics in the European Convention, he is indeed simply listing the topics, but European defence and foreign policy will remain wholly intergovernmental. Therefore, the idea that it somehow changes the nature of this county's foreign or defence policy is simply wrong. The truth is that, after a time of very wise silence on the issue of Europe, the right hon. Gentleman has decided to put the Conservative party back in the position of being opposed to Europe, and it is now opposed not just to the single currency but to accession by the 10 new states. [Interruption.] There is no point in his saying that he is in favour of accession but opposed to the European Convention, which is necessary to make the accession work. If he wants to get up again, let him tell us whether in such a referendum he would say vote yes or no.
    Jonathan Shaw: Yesterday, yet more mass graves of murdered Iraqis were seen. Does my right hon. Friend the Prime Minister agree that forensic evidence was key to building a case against Milosevic for his crimes against humanity? Will he respond to the demands of Human Rights Watch and

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    ensure that forensic experts are sent into Iraq so that relatives can properly identify loved ones and that those responsible for human butchery can stand trial?
    The Prime Minister: My hon. Friend's question is very sensible. Incidentally, I hope that for those people who had some doubt about the wisdom of removing Saddam Hussein, the reports of mass graves are an indication of how brutal, tyrannical and appalling that regime was, and what a blessing it is for the Iraqi people and for humankind that he has gone from power. On my hon. Friend's specific point, we are looking urgently at how we redouble our efforts to protect the sites and to make sure that we gather the evidence. No matter what the exact forum is in which people should be tried for these crimes, it is undoubtedly true that we need to protect the forensic evidence that will allow us to try them.
    Mr. Charles Kennedy: On the Iraq issue, on 25 April, the Foreign Secretary said that the United Nations would have a vital role to play in the search for Iraq's weapons of mass destruction. Now, the United States ambassador at the UN has said that the UN will have no role for the foreseeable future. Who is right?
    The Prime Minister: I have always said that there should be independent verification at the end of whatever finds we make in respect of weapons of mass destruction. I have no doubt that the UN will be involved in that, and what the American ambassador to the UN was saying was simply that coalition forces, who are currently seeking to restore security on the ground, are not going to have the UN back in now, although we are in discussion with the UN and allies as to how we can have such independent verification later.
    Mr. Kennedy: On 7 March, the Prime Minister said that the United States and our country would not touch Iraq's oil revenues, yet the draft UN resolution gives the United States and us total control over those oil revenues. Does the Prime Minister therefore understand why so many people now feel so let down?
    The Prime Minister: That is absolute nonsense. Let me explain the situation to the right hon. Gentleman. First, in relation to the UN's vital role, its primary role must be not just in respect of humanitarian aid but in respect of reconstruction in Iraq and the development of a new Iraqi interim authority. Our resolution makes it clear that the UN special co-ordinator is to be involved in all those aspects. Indeed, the preamble to the UN resolution that we have tabled reaffirms specifically the "vital role" for the UN. In relation to the points that he was making in respect of the oil revenues, it is not true that we will be running the oil revenues of Iraq. What we have said is that they should go into an independent fund with an advisory international board, which will have the UN representative on it and representatives of the International Monetary Fund and the World Bank, and that that development fund money should be used exclusively for the people of Iraq. In those circumstances, the idea that the US and the British are getting their hands on Iraqi oil is completely fatuous.
    John Cryer: Since the Prime Minister seems to be developing a fondness for taking action against those people who disagree with him, can he set out for the House the precise limits, as he sees them, of free speech?
    The Prime Minister: I think—[HoN. MEMBERS: "Answer."] Well, I think that is a very fine example of what we really want to encourage in this House. With the greatest of respect, in relation to Iraq, or any other issue for that matter, I have not noticed that people have been afraid to speak their minds. They have been speaking their minds in many different places and in many different guises, and long may that continue. Instead of arguing about whether we have free speech or not—which we do—let us argue about the actual details of the policy itself because that is, perhaps, a better argument and debate to have.
    Mr. Patrick McLoughlin: The Deputy Prime Minister said that he wanted to make local government funding more easily understood. Can the Prime Minister explain why the average increase for Derbyshire districts this year was some £570,000, yet for Conservative-controlled Derbyshire Dales district council it was an increase of £33,000? When will the council tax payer of Derbyshire Dales get a fair deal from this Government?
    The Prime Minister: Everyone in the hon. Gentleman's area and other areas in the country got a substantial increase in the investment going into education. That is true. We are working on school funding problems in the way that we have explained. However, it must surely be the case that the last thing that Derbyshire or any other part of the country needs is the possibility of 20 per cent. cuts across the board, which is the Conservative proposal. So yes, it may well be true that Derbyshire and elsewhere want more money, but they know that under the Conservatives they will get less.
    Mr. Russell Brown: Over the last four or five years, a university campus has been established in my constituency with close co-operation between the universities of Paisley and Glasgow, the Open University and Bell college. Student figures in that time have grown to more than 1,000. Can the Prime Minister explain what impact yesterday's announcement by Leader of the Opposition on student fees would have on rural areas such as mine?
    Mr. Speaker: The Prime Minister might know how best to answer that.
    The Prime Minister: I can assure my hon. Friend that we will not be following that policy decision for the simple reason that it would mean an immediate £500 million loss of income to universities in this country. Nothing could be more unfair or more disastrous for universities. It would mean literally—[Interruption.]
    Mr. Speaker: Order. Let the Prime Minister answer.
    The Prime Minister: It would mean 150,000 fewer students each year able to go to university and, at the very time universities need more money, they would lose £500 million. That is not a fair deal. It is a disaster for students and universities.
    Angela Watkinson (Upminster): In answer to my question on 2 April, the Prime Minister assured the House that the future of Gibraltar played no role whatsoever in his negotiations with José Maria Aznar in securing the support of Spain for the war against Saddam Hussein. Will the Prime Minister now assure the House similarly that control over the straits of Gibraltar played no part in those negotiations?
    The Prime Minister: I can absolutely give the hon. Lady that assurance.
    Mr. Robert N. Wareing: Despite what the Prime Minister said about Iraq's oil, is it not the case that at the moment the United States, not the United Nations, has de facto control of the oil? Is it not the policy of the United States that the United Nations should be reduced to the international Mother Theresa in the world, with no real political control whatsoever? Is it not about time that this country stopped appeasing the world domination ideas of Bush and his cronies?
    The Prime Minister: First, may I congratulate my hon. Friend on a good example of free speech? Secondly, he is wrong—the oil-for-food resolution governs the oil revenues, and is administered by the UN. The idea is to transfer the revenues from Iraqi oil into a special separate trust fund, which will be administered in the way that I have described, with the UN, the International Monetary Fund and the World Bank represented on it. It is to be used exclusively for the interests of the Iraqi people. With great respect to my hon. Friend, we are conducting a negotiation with other members of the UN Security Council, which I hope will be successful. It provides for a vital role for the UN, not in the sense of the UN governing the coalition or the coalition governing the UN, but the two working in partnership.
    Mr. Iain Duncan Smith: As the Prime Minister pointed out earlier, the atrocious events in Saudi Arabia have shown all of us that the war on terrorism is clearly far from won, reinforcing the need to show in Iraq that we can be a force for good in the region. There is growing frustration that while it took four weeks of a magnificent campaign to defeat the Iraqi regime, after five weeks of peace, there are still serious shortages of food, water and health care in places such as Baghdad. I believe unequivocally that prosecuting the war was right, but how can the allies now avoid the growing charge of being deficient in planning for the peace?
    The Prime Minister: It is important that we take our responsibilities very seriously to make sure that, having won the conflict, we restore services and, indeed, improve them—in many cases, they were in an appalling state before the conflict. I can tell the right hon. Gentleman that in the south of the country we have gone a long way towards doing that. Improvements are still needed, but the situation is improving all the time. In Baghdad, it has been particularly difficult because the security situation has been difficult. However, there is now a renewed vigour in ORHA—the Office of Reconstruction and Humanitarian Assistance—and I am sure that in the coming weeks we will sort out the enormous logistical problems in dealing with this situation. Naturally, a lot of attention is focused on things that are going wrong, but there also are many things in Iraq today that are going right.
    Mr. Duncan Smith: In doing that, it is obviously vital that the coalition act within the bounds of international law. This week, the former International Development Secretary, the right hon. Member for Birmingham, Ladywood (Clare Short), made a startling claim that the Government have been acting against the advice of the Attorney-General, yet the Foreign Secretary is on record as saying that they are not. Both have clearly seen the Attorney-General's advice and both cannot be right. To resolve this split, and to show that he or his Government have nothing to hide, surely the Prime Minister should now publish the Attorney-General's advice today?
    The Prime Minister: It is not the practice of Governments to publish the Attorney-General's advice, and I am not going to depart from that. However, I can point the right hon. Gentleman to the Attorney-General's clear statement last night that the actions of the British Government have been in accordance with international law. Indeed, there is no possibility of our acting in a way inconsistent with international law. That would be wholly wrong—I would not countenance it and neither would anyone else.

    Iraq
    Mr. Tam Dalyell: What instructions coalition forces have received about seizing documents in the Iraqi Foreign Ministry and secret police headquarters that are likely to form the basis of legal action.
    The Prime Minister: As my right hon. Friend the Secretary of State for Defence indicated on 6 May, UK commanders have been told that evidence believed to be linked to war crimes or crimes against humanity is to be secured so that it may be examined by investigating authorities. I understand that similar instructions have been issued to US forces in Baghdad. Now that the security environment in areas of Baghdad is more

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    permissive, efforts are under way by the coalition to secure and assess the kind of documents to which my hon. Friend referred. However, at the time of entry into Baghdad, coalition forces were naturally engaged in other priority tasks, in particular seeking to stabilise the security situation and minimise loss of life.
    Mr. Dalyell: Pertinent to the Prime Minister's opening statement on the dreadful events in Saudi Arabia yesterday is the question of why there was no proper custody of documents of such potential importance that they could have thrown light on the alleged existence of weapons of mass destruction or possible links with al-Qaeda. What does that say about the priority, or lack of it, accorded to intelligence?
    The Prime Minister: The instructions issued to both UK and US coalition forces were to attempt to secure any documents that might be in the possession of the Iraqi authorities. However, when they were first going into Baghdad, their priority was obviously winning the conflict, and they had to pay close attention to the security of their own forces.
    Now that the situation has cleared somewhat, we are trying to make sure that we gather up all the documentation in relation to weapons of mass destruction and in relation to appalling crimes, the like of which we are now seeing. We will obviously want to use those documents in order to show people exactly what happened.
    The premise of my hon. Friend's question is not right. It is not that we did not bother about documents. As the coalition forces were going into Baghdad, the priority was winning the conflict. Now that the situation has cleared somewhat, we are, of course, doing everything we can to gather up the documentation. It is in our interest to do so.
    Dr. Julian Lewis: The Prime Minister's explanation is inadequate. On Monday the Defence Secretary told the House, in answer to a similar question, that the reason why The Daily Telegraph got its hands on the documents before the coalition forces was that it had journalists on the spot. The true situation is that The Daily Telegraph journalist returned by land to Baghdad from Jordan on 11 April, two days after the fall of Baghdad. He did not go into the Foreign Ministry headquarters where he got the documents until the following Saturday. On the following Tuesday—that is, 13 days after the fall of Baghdad—he told the BBC that
    "Iraqi government ministries are effectively open to anybody who wants to walk in and look for documents."
    That was a straight failure by the coalition, and the Prime Minister should accept responsibility for the failure to get such important documents under our control.
    The Prime Minister: I cannot comment on what the hon. Gentleman knows—[HoN. MEMBERS: "Why not?"] about The Daily Telegraph, as I suspect that his sources
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    in The Daily Telegraph are better than mine. In relation to the documents, as the hon. Gentleman knows, the building in Baghdad was not in the British area of control, but the instructions given to coalition forces from the US and the UK were identical. As far as I am aware, every effort was made to secure the documentation and to secure those buildings. Even two days after the fall of Baghdad—[Interruption.]—even a few days after the fall of Baghdad, there was a desperately difficult security situation, and it is not surprising if the commanders on the ground were paying attention first to the security of their own forces. However, I have no doubt that any documentation that we have managed to secure will be extremely helpful, both in respect of the crimes against humanity and in respect of weapons of mass destruction.

    Engagements
    Mr. Jim Cunningham: Has there been any progress in the implementation of the road map for peace in the middle east between the Palestinians and the Israelis?
    The Prime Minister: Yes. The road map has been published and the priority must be the implementation of phase 1. That means improved security from the Palestinians, a freeze on settlement activity, and continuing assistance by the international community for reform and humanitarian assistance. I hope that we now have a situation where, for the first time in many, many months—indeed, for the first time in a couple of years—there is the real prospect of progress on the Palestinian issue. I very much welcome the attempts of Secretary Colin Powell and the American Government, working in concert with other Governments, to push the matter forward. We wi11 continue to play our full part in that.
    Dr. Andrew Murrison: Is it right that foundation hospitals should be based on a discredited star rating system that completely ignores whether or not sick patients get better?
    The Prime Minister: It is nonsense that the star system does not take account of sick patients and whether they get better. It is based on 10 different elements to the star rating. No star rating system is perfect, but that star rating has enabled us for the first time to make a comparison of hospitals across the board. It is interesting that the Conservative party is not just opposed to the extra investment in the health service; it is now opposed to reform in the health service, as well.
    Jim Knight: In October last year, a 15year-old constituent of mine, Anthony Waklin, was killed by a speeding motorist while cycling through his home village, Wool. The 18-year-old driver concerned already owed £1,400 in driving fines and had no licence or insurance. Last week magistrates sentenced him to a paltry £200 fine and a two-year driving ban. Can my right hon. Friend please assure my upset and concerned

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    constituents in Wool that amendments to the Criminal Justice Bill will prevent such injustices in sentencing from happening again?
    The Prime Minister: I totally understand the concern of my hon. Friend and his constituents. I should say to them that we have tabled an amendment to the Criminal Justice Bill to increase the maximum penalty to 14 years' imprisonment for the three offences of causing death by dangerous driving, causing death by careless driving while under the influence of drink or drugs and aggravated vehicle taking where death results. The actions of dangerous and irresponsible drivers can be devastating not only for victims and their families, but
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    for whole communities. That is why I think that it is entirely appropriate that we increase the penalties for such offences. I hope very much that the amendment will receive the support of the whole House.
    Mr. Mark Oaten: Can the Prime Minister explain why inward investment is falling in this country, but increasing in countries that are part of the eurozone?
    The Prime Minister: Issues to do with trade and investment will of course form part of the assessment, but we still get a very substantial amount of inward investment in this country, I am delighted to say.

Point of Order
12.31 pm
Pete Wishart: On a point of order, Mr. Speaker. Yesterday, the Paymaster General made much of the fact that the amendments selected for debate in respect of the Finance Bill had been tabled by Opposition parties, but the impact of the programming has been such that the sheer number of clauses to be debated and the amount of amendments tabled by the Conservatives mean that we will have no opportunity this evening to discuss the amendments tabled by the Scottish National party. We will not, therefore, have an opportunity to discuss issues that are fundamental to the Scottish economy, such as oil and whisky revenue. What should we in the minority Opposition parties do to ensure that our amendments are debated? What can you do to ensure that minority parties' amendments are debated?
Mr. Speaker: Like other hon. Members, the hon. Gentleman is bound by the programme motion, which has been decided. Of course, the Finance Bill will also be dealt with in Committee, and it is up to him and his hon. Friends to seek opportunities to raise the matters about which he is so concerned.

Telecommunications Masts (Railways)
12.32 pm
Mrs. Patsy Calton:I beg to move,
That leave be given to bring in a Bill to restrict the permitted development rights of railway or light railway undertakings in respect of telecommunications masts.
The restriction would have the effect of requiring rail undertakings, including Network Rail, to seek full planning permission before erecting masts more than 15m high, in common with other companies erecting masts. That would enable proper democratic scrutiny and give time for local people to engage in the process.
The masts are required to relay data and voice communications. The work includes the installation of a new signalling system known as the train control system and will allow the introduction of automatic train protection—the highest level of rail safety available. Clearly, I do not argue with that, but I do argue that a failure to require full planning permission means that Network Rail can site masts of any height anywhere it likes on rail land, with consequent loss of public confidence and, indeed, public outrage when inappropriate siting leads to loss of visual amenity and loss in the value of homes.
Network Rail currently engages in a notification process for masts higher than 15m and, I understand, up to 33 m. The consultation that takes place is very limited; even precise locations are made available to the public only on application to the appropriate body—that is, if they can find out in the available time which body that is.
In Cheadle, the first mast, at Ravenoak road in Cheadle Hulme, was notified to residents on 16 December 2002—not a good time for most families. At least one of the most affected families was missed out. The notification was headed "West Coast Modernisation, Notice of Forthcoming Works—Carr Wood Park".
Carr Wood park is some half a mile away. It turns out that it had been the preferred location, as it is screened by trees. In fact, the mast has been put next to a railway bridge where the arrangement of housing is such that about 100 homes have a direct view of the 20 m height of the towering monstrosity. The worst-affected residents' home is 16 m from the base of the 20 m high mast, with no screening whatsoever. That is roughly 65 ft of mast—twice the height of an ordinary house. Network Rail could not have chosen a worse site.
In another case in my constituency, at Smithy Green, the notification letters were delivered to households only after work had begun. It was a mistake, but that is in no sense consultation. Under the law as it stands, however, Network Rail does not have to notify residents at all, so mistakes do not count. I now understand that Network Rail has plans for 33 m high masts in national parks and open countryside, and plans to bring in more than 5,000 in total.
I have been in communication with Network Rail, the local authority and the Department of Transport, and I have written to the Department for Environment, Food and Rural Affairs. A very unsatisfactory situation emerges. Network Rail claims that its permitted development rights when notifying the local planning

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authority come from part 11 of the Town and Country Planning (General Permitted Development) Order 1995. The Minister of State, Department of Transport, the right hon. Member for Warley (Mr. Spellar), indicated in a reply to me that part 17 of the order was the relevant part. A more recent letter from him said that either might be relevant. I quote:
"Part 17 is used for some works, but part 11 is the more important for those relating to track, bridges and stations."
My Bill would amend both parts 11 and 17 for the avoidance of doubt.
Guidelines about masts and their erection published by the Department for Environment, Food and Rural Affairs make it clear that visual amenity is to be the major factor in determining the position of masts. When the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) was a planning Minister at that Department, he said:
"It is vital that the masts which enable the service to be delivered"—
he was talking about other telecommunications companies—
"are designed and sited sensitively so that their environmental impact is kept to a minimum and that local people have a better chance to have their say."
I understand from the Department for Transport that those guidelines, which apply to every other mast company, do not apply to Network Rail. That is extraordinary—all the more so, given that the design of masts that are being erected makes the structure appropriate for additional operators. In addition, prior to its demise, Railtrack entered into contracts with various telecommunications companies to provide them with sites. Should Network Rail wish to provide sites for
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other operators, full planning permission will be necessary. However, the whole world knows that it would be almost impossible to say no once the mast has been there for some time.
The Minister of State has been helpful in suggesting that local authorities can apply for
"the removal of a particular permitted development right and require an application for planning permission by submitting to the Secretary of State an order under Article 4 of the General Permitted Development Order."
However, my local authority in Stockport points out that Network Rail would contest that on a case-by-case basis and that the local authority would have to demonstrate why the location should be treated differently from elsewhere. The procedure would prove to be lengthy and expensive, and is expected to be used only in exceptional circumstances.
My argument is that we have a loophole in the law that requires closing. The public deserve better than this, and at the very least should be enabled to see that their local elected representatives and the local planning authority can protect their amenity in the same way as is expected with all other telecommunications companies.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Patsy Calton, Vera. Baird, Norman Baker, Tom Brake, Mrs. Annette L. Brooke, Sue Doughty, Mr. Don Foster, Paul Holmes, Julie Morgan, Mr. Andrew Stunell, Ann Winterton and Mr. Crispin Blunt.

Telecommunications Masts (Railways)
  TELECOMMUNICATIONS MASTS (RAILWAYS)
  Mrs. Calton accordingly presented a Bill to restrict the permitted development rights of railway or light railway undertakings in respect of telecommunications mast: 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 107].
Orders of the Day

  Finance Bill
  (Clauses Nos. 1, 4, 5, 9, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules Nos. 5, 6, 19 and 25, and any new Clauses and Schedules tabled by Friday 9th May 2003 relating to excise duty on spirits or R&D tax credits for oil exploration).
  Considered in Committee [second day].
  [SIR ALAN HASELHURST in the Chair]

  Finance Bill
    Clause 130

      CHARGE AND RATES FOR 2003–04
      Question proposed, That the clause stand part of the Bill.
      12.41 pm
      Mr. Howard Flight: As hon. Members know, the clause simply sets the basic rates of income tax for this year at 10 per cent., 22 per cent. and 40 per cent. We have already pointed out that the Government appear to be confused by their tax system. They misquoted the basic rate at 20 per cent. in the explanatory notes, when automatic indexation increases in the tax bands of 2 per cent. accompany the rates. However, we wish to speak about the clause because of the failure to deal with personal allowances and inflation: yet another stealth tax especially hits lower and middle-income earners.
      When compared with our competitor countries, Britain has the lowest levels at which people start to pay tax. They will be even lower in real terms as a result of the fall in the real value of personal allowances, which have decreased from 60 per cent. of average income in 1950 to 24 per cent. today. Someone who earns only £15,000 a year—25 per cent. below average earnings—will pay tax of 22.5 per cent. of income as a result of combined income and national insurance tax liabilities of £3,388. If such an individual has, for example, two children, depending on the income of the spouse, whether they can complete the form and whether the Government can handle the administration, they may get back all or more in child tax credit and qualify for working tax credit.
      Why tax people on such modest incomes in the first place? Why do a Labour Government make the rate at which taxation starts even lower in real terms? It is difficult not to conclude that the Government's concealed objective is to make people feel dependent on them for their tax credits to offset the ridiculously low rates at which taxation starts.
      Mr. John Redwood: Has my hon. Friend also noticed that in the Bill the rate for those earning a slightly higher income and above is 40 per cent.? However, we know that the Government want to levy tax at 41 per cent., which they are doing by a backdoor means of changing the rules on national insurance. Would not it be more honest to set the rate at 41 per cent. and thus accept that the Government have broken their promise to the British people not to raise income tax rates?
      Mr. Flight: I thank my right hon. Friend for his comments. The Government have already learned from
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      the local election results that the British electorate are not stupid and that they know perfectly well that they now pay income tax at a rate of 41 per cent. if they qualify for higher rate taxes.
      12.45 pm
      The immediate effect of the stealth tax of freezing personal allowances will yield about £500 million per annum directly, but the knock-on effect will push more people into the higher tax rate. Data received in response to questions put by my hon. Friend the Member for Eddisbury (Mr. O'Brien) show that, according to the Government's own figures, there will be a 23 per cent. increase between 2002–03 and 2004–05 in the number of people with incomes over £34,515, rising from 3.9 million to 4.8 million. Not all those people will pay higher rate tax, because some will be pensioners, but that is nevertheless a good rough and ready measure of the extent to which the Government's income tax policies are pushing policemen, teachers, soldiers and nurses into higher rate tax brackets, as well as starting to tax them at a lower real income.
      We regard this stealth tax as particularly devious and wrong. The Conservatives wish to reform and simplify the tax system when we are elected at the next election, and to take large numbers of people out of paying tax on such ridiculously low incomes.
      Norman Lamb: I entirely endorse the comments of the Conservative spokesman on the impact of freezing personal allowances. It is a stealth tax that will have a significant impact on low-paid people. We wish to debate this clause because it is clearly central to the Government's Budget strategy and to the choices that the Government make about taxation. I understand that, under the procedures of the House, we cannot table amendments to the rates, so I shall make our points by speaking on the clause.
      I want to start by reasserting the Liberal Democrats' belief in the principle of progressive taxation. After six years of a Labour Government, it seems extraordinary that the poorest 20 per cent. pay a higher proportion—41.7 per cent.—of their income in taxes, compared with the richest 20 per cent., who pay just 34.2 per cent. That is a regressive tax system, and we would like to see it adjusted.
      Mr. George Osborne: Will the hon. Gentleman help me to understand his remarks by telling me what the rates and bands of the Liberal Democrats' local income tax would be?
      Norman Lamb: We simply want to propose an entirely revenue-neutral system that would replace council tax—which I shall come to later—with a local income tax. If the hon. Gentleman wishes to support the council tax, which is having a dramatic effect on low-paid people and pensioners on fixed incomes, I would like to see him do so.
      One of the reasons that the rates in clause 130 remain the same as last year's rates is that the Government have orchestrated a £2 billion tax hike through the council tax. They have failed adequately to fund nationally agreed pay rises, pension increases, national insurance increases and new requirements on services imposed on

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      local authorities. We support those requirements, but they have not been adequately funded. The result has been an average increase in council tax that is four times the rate of inflation. The impact of that on pensioners on fixed incomes is severe and cannot be supported. I would have thought that many Labour Members would see that such a regressive system needs to be reformed. The regressive nature of local taxation is even worse than that of national taxation. The poorest fifth of households pay 7.1 per cent. of their income in local taxes, compared with the richest fifth, who pay just 1.8 per cent.
      Income tax is self-evidently based on the ability to pay. The Liberal Democrats' preference for a 50p rate for income over £100,000, which is in line with much of Europe and the state of New York—there is hardly evidence there that it leads to a brain drain—and which I suspect is supported privately by many Labour Members, could initially provide funding to cut council tax by £100 per household this year and get rid of the iniquities of tuition fees and top-up fees, which act as such a disincentive to students on poor incomes.
      Mr. Flight: I thoroughly endorse the hon. Gentleman's comments on council tax. However, the US tax system has substantial allowances against income, including interest payments, so it is not entirely accurate to say that there is an effective 50 per cent. rate of income tax. The net effect on higher earners generally comes out at about 40 per cent.
      Norman Lamb: I thank the hon. Gentleman for those comments; he may well be right. I am sure that he knows more about it than I do, so I am happy to accept his comments. None the less, the fact remains that the overall tax system in Britain is highly regressive and, with the impact of the increases in council tax, it is having a severe effect.
      Mr. John Burnett: In years past, I have had opportunities to gauge the disparities or otherwise between the taxation levied by different states, so will my hon. Friend take it from me that the precedent in the United States, whether it be federal, state or city tax, is according to the ability to pay—an important principle that we should not forget?
      Norman Lamb: Absolutely. That is in great distinction to the system that we have in Britain with a system of local taxes, which, self-evidently, is not based on ability to pay.
      Mr. Redwood: How does the hon. Gentleman work out that someone on a higher income paying 40 per cent. income tax on practically all his income and then paying lots of other taxes out of net inc ame, is on an effective tax rate of 31 per cent? That sounds like Liberal Democrat arithmetic.
      Norman Lamb: As I understand it, the figures have all been properly assessed and are based on parliamentary answers,so they have been accepted as factual.
      Mr. John Bercow: The hon. Gentleman's attempted response to my right hon.
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      Friend the Member for Wokingham (Mr. Redwood) will not suffice. Simply to say that the facts have been checked but that he cannot trouble us with them now is not good enough. What assessment has the hon. Gentleman made of the probable impact of the level of income tax at the higher rate and the increase in national insurance charges on the prospects of recruitment and retention in the police force, the teaching profession and the NHS?
      Norman Lamb: I personally have not made any assessment. [HON. MEMBERS: "Ah!"] Hon. Members express great surprise. I would say only that these higher rates of tax apply in many other countries and do not cause massive problems in terms of a brain drain or recruitment to public services. At the end of the day, we all have to decide how best and most equitably to raise our taxes, and the Liberal Democrats believe that the current system is not adequately progressive and we would prefer to move to a more progressive system.
      To return to the funding of students in further and higher education, about which the Conservative party has also raised concerns, although I am not sure about the funding of its proposals—
      The Temporary Chairman (Mr. Roger Gale): Order. The Chair has been extremely tolerant of the debate so far, but we are now moving far away from income tax.
      Norman Lamb: I am grateful for that. I was simply making the point that with the rate that we are proposing of 50 per cent., the Government could get rid of the iniquitous proposed system of funding of top-up fees and tuition fees for students.
      As I have said, many Labour Members would share our view that the tax system should be more progressive than it is. I suspect that the Minister, in her quieter, private moments may well agree. The Government are caught on the horns of a political commitment not to raise income tax, so tax is still raised but in ways that are more unfair than if it was raised by way of income tax, and which this year is hitting people on low pay and pensioners on fixed incomes very hard indeed by way of the council tax.
      Richard Younger-Ross: Can my hon. Friend explain the impact that the present unjust system has on areas such as Devon where we have a large number of people on fixed incomes and a large number of pensioners and low-paid people who have been penalised by the council tax? Is he aware that all parties on joint administrations in Devon have agreed that the council tax system is wrong and that they want to see a fair taxation system, and that includes the Conservative leader of Devon county council, Christine Channon?
      The Temporary Chairman: Order. I remind hon. Members again that this is a debate about income tax levels, not council tax.
      Norman Lamb: I am in some difficulty in responding to the intervention given your comment, Mr. Gale. I simply endorse what my hon. Friend says and say that in North Norfolk, with a low-wage economy, the position is much the same.
      Mr. Redwood: I declare my interests as they appear in the Register of Members' Interests.
      The clause sets out income tax rates, but it does not tell us the whole story about how incomes will be taxed. As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) pointed out, we must take clause 130 in conjunction with the meanness over the bands and the I per cent. surcharge on national insurance payable over the whole income range for the first time, which means an increase in the 40 per cent. tax rate in the Bill.
      I rise to speak against the clause because I represent a constituency where an income of £35,000 a year is not huge but necessary to meet the ordinary living expenses in such an area, given high house prices, high costs of services, high council and other local taxes and the general cost of living.
      The Government are making a great mistake in drawing so many hundreds of thousands of additional people into the tax net to pay the 41 per cent. tax—the combined income tax rate in the clause and the 1 per cent. national insurance surcharge. That will leave many people quite short of cash to meet their family bills over the year. People in Britain under the Conservative Government, and more recently under the Labour Government, have become used to experiencing rising take-home pay and rising spending power if they are in a reasonable job and keep that job. That is something that Members on both sides of the House usually welcome. The question that we have to ask today is whether the Government are now damaging that in a dangerous way. I believe that they are. They are reaching the point where higher taxes of a stealthy kind on people's incomes are now doing considerable damage.
      What should the Government do about it? They should be more honest about the fact that they are effectively increasing income tax and review again their public expenditures to see whether they can do a better job in controlling and containing waste and unnecessary expenditure so that they do not need to put through such large increases in the tax burden. I am sure that that advice will fall on deaf ears with the Minister, but it is heartfelt and well meant, and the Labour party will discover to its dismay in the ballot box during the months ahead that this is an extremely unpopular imposition, and that the combination of the rates, bands and the national insurance surcharge is correctly perceived outside as a substantial increase in the income tax burden. When the Government use their majority to push this through today, they will do something that they will live to regret.
      Mr. George Osborne: I welcome you to the Chair, Mr. Gale.
      I congratulate my hon. Friend the Member for Arundel and South Downs (Mr. Flight) on ensuring that the clause is debated in the Chamber because this is a classic stealth tax that should be brought to the attention of the public. My hon. Friend has done that exceptionally well, as has my right hon. Friend the Member for Wokingham (Mr. Redwood). The charge that it is a stealth tax is not just a Conservative charge. If one reads the commentary after the Budget from the various accountancy firms, one is struck by the fact that
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      almost every firm pointed to this stealth tax. Tax partners at accountancy firms, including Mr. Warburton, a senior tax partner at Grant Thornton, have said:
      "Because the increase on tax bands has been very modest, there has been a stealth rise…The rate bands are only going up by about 1.7 per cent, while earnings have gone up by about 3 or 4 per cent."
      Of course, that will have a serious effect on people and their incomes. Because:he tax-free allowance for people under 65, which is normally increased in line with inflation, is staying at £4,615, KPMG, another accountancy firm, has estimated that it will cost the average taxpayer £95. 'Those are serious increases at a time when people are already facing increases in council tax, national insurance and so on.
      1 pm
      Grant Thornton has also said:
      "This is a classic case of fiscal drag. More people are drawn into the higher tax bracket and pay the top rate on a rising proportion of their income."
      We need to ask ourselves: what is the point of a higher tax rate if more and more people are drawn into it? The higher tax rate was originally designed for the people with the highest incomes in society but now, as my hon. Friend the Member for Arundel and South Downs pointed out, people in the education system, the health service and police service are paid far beyond that.
      I discovered from the "Today" programme this morning not only that my constituency has the highest income of any in the country—the highest in terms of purchasing power, that is—but that the average income in my constituency is around £30,000. A huge number of people will be paying the higher tax rate in that constituency—and there were many others on the list. Each year, the number increases. This year, as a result of the clause, it will increase by 150,000 people.
      It is incumbent on the Committee to ask the Minister to be honest about this matter. If the Government want to increase income tax. why do they not put it in their manifesto, come to the House with a Budget and do it? Instead, each year, we get this salami-slicing stealth tax, which is eroding people's disposable income.
      Mr. Jonathan Djanogly: Having heard my right hon. and hon. Friends speak in the debate, it seems to me that income tax rates are becoming increasingly irrelevant to the concept of take-home pay. The Government have thrown the majority of people into the dependency culture. The use of tax credits has in effect rubbished the concept of tax rates in relation to take-home pay.
      I had an example of that only a few weeks ago. One of my constituents, a local employer, explained to me how he had two members of staff both earning roughly the same amount of money. However, one of them was getting a lot more through the use of tax credits. He said that that destabilised the wage environment in his company because people compared take-home pay. He resented the fact that he was being used to monitor income tax and in effect to act as a benefits agency on behalf of the Government. That is why I say that overall rates are becoming increasingly irrelevant.

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      The same argument applies to national insurance, which now has little to do with the old stamp concept. It has simply become another way to raise income tax, with the added benefit of squeezing a bit more out of companies. Some have called it a stealth tax but I see nothing stealthy in the way most people's pay packets were hit last month. There will not be much stealth there. However, the stealthy part is the way in which comparative take-home pay is being hit in a secret way. People cannot tell what is going on.
      This Government said that they would not increase income tax and I believe that they are still saying it. In practice, they are deceiving the British people as to what is going on.
      Mr. Flight: My hon. Friend makes an extremely important point. Does he not think that, if we have a society where people do not know what their tax rates are, and where what they receive in their pay packet bears no relationship to the job that they are doing, it is a huge demotivation to increase their skills and productivity and to take the whole economy forward?
      Mr. Djanogly: I thank my hon. Friend for making that important point. This area needs a lot more study, because there are many implications from mixing the dependency culture with income tax and with corporation tax. Companies are viewing the three together. There is a new mind-set coming into play that, whichever way I look at it, works to the negative. I agree with my hon. Friend's point.
      Mr. Bercow: My anxiety is that the Government are plundering the pockets of the people but, to put it mildly, it is not at all clear to t1 e people that they are getting a fair return for that which is levied upon them. I say in all candour to the Paymaster General that she has a responsibility to abandon the insider mentality that is increasingly characterising both the decision making and defensive pronouncements of Ministers.
      It is natural that Ministers will think, "Let us just increase tax a bit. It will not cause appreciable harm. People may not notice. We seem to have been able effectively to con them thus far and it may boost our finances somewhat." My warning to the hon. Lady is that the legendary patience and stoicism of the British people when confronted with additional imposts could soon be wearing thin, if it has not already done so. I invite her to reflect on a number of considerations.
      Mr. George Osborne: My ho a. Friend talks of the legendary patience of the British people. However, I have noticed that they are growing very impatient with the council tax increases. Of course, with the fuel tax increases, their patience broke and there was a tax strike.
      Mr. Bercow: One of my hon. Friend's great qualities is his prescience and it has not failed him on this occasion, for he has precisely anticipated my thought process. The reaction to the incidence of exorbitant council taxes could soon be mirrored in a public reaction to the incidence of exorbitant direct taxation flowing from the Treasury and the Inland Revenue.
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      The hon. Lady has a responsibility to reflect on a number of considerations. First, at what point does the incidence of higher taxation both on individuals and on the corporate sector threaten to undermine individual incentive and competitive industrial performance? If we have not reached that point, we must be very near to it. In the light of the Chancellor's downgraded forecasts for the performance of the economy in the years to come, it would be sensible for her and her colleagues to take stock of the consequences of that burdensome taxation. That is the more powerful a consideration in the light of the fact—which no amount of Treasury casuistry can gainsay—that over the past six years we have sacrificed two thirds of the competitive tax advantage that we have enjoyed relative to other member states of the European Union.
      The second consideration on which the hon. Lady should reflect seriously and which she should discuss with her colleagues is the likely incidence, to which I referred in my intervention on the hon. Member for North Norfolk (Norman Lamb), of higher tax rates, fiscal drag and national insurance contributions on people working in key posts in the public sector. One cannot continually clobber those upon whom we critically depend for the effective discharge of public services without there being an impact on recruitment and retention. In the words of the late Enoch Powell, that point is so blindingly obvious that only an extraordinarily clever person could fail to see it.
      Mr. Djanogly: Take-home pay has fallen for the first time in over a decade this year and that is not to be forgotten, but in relation to the public sector my hon. Friend will be aware that this is the first time in the history of this country that benefits-included average take-home pay in the public sector is higher than in the private sector. That says little for our productivity.
      Mr. Bercow: That is indeed a bad sign, and a worrying portent of the likely development of the two economies of the private and public sectors in the months and years to come.
      Mr. Osborne: Will my hon. Friend give way?
      Mr. Bercow: I will give way once more, but as you will readily discern, Mr. Gale, I am itching to make my third point. Whether the Committee is itching to hear it is of course another matter.
      Mr. Osborne: Has my hon. Friend made any calculation of the amount of churning that will result from the clause? The state will be paying those who work in the public sector, who will then pay it back with tax. My hon. Friend may not be able to answer my question, but perhaps the Paymaster General will.
      Mr. Bercow: I am grateful to my hon. Friend for the deft shoe-shuffle with which he ended his intervention. He is absolutely right. If I were a Minister, I would feel it incumbent on me to provide the answer. I am not, so it is not; but it is the Paymaster General's responsibility to give a satisfactory reply. What merit is there in an arrangement whereby the middle man takes the money and gives it back again, with all the bureaucracy that

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      such a process entails? It would have been sensible to take account of those considerations in policy formulation at the outset.
      My third point is very simple. It is easy for Governments to think—as my party did when in office—in terms of sums raised and inputs made, while focusing far too little on outputs. I have noticed, not just in the Paymaster General's words but in those of her right hon. and hon. Friends, an increasing tendency to stick to the brief and to assume that the House and, more important, the country can be fobbed off with a continuing regurgitation of statistics relating to what is being raised and spent.
      That is understandable, but misguided. Let me say in all sincerity that, ultimately, the public are not much interested in hearing from any of us about inputs. They are interested in outputs, and if the words that they hear from Ministers about the level of inputs do not resonate with them because they are not reflected in local service delivery, they will come to regard Ministers' pronouncements first with cynicism and then with contempt.
      The fact that the Government are spending £50 million an hour makes it incumbent on Ministers to demonstrate that improved services on a substantial scale are resulting from that level of expenditure of the public's money. The effect of the higher taxes is very real and painful for those—often on modest incomes—who must pay them, while the effect of the Government's increased expenditure, often poorly distributed and untargeted, is much less beneficial. The pain is clear, but the gain is frequently either insubstantial or nonexistent.
      Mr. Redwood: Will my hon. Friend give way?
      Bercow: I resist my right hon. Friend's entreaties?
      Mr.Redwood: Does my hon. Friend think that the ministerial reluctance to speak from the heart rather than sticking to the brief is connected with the fact that Ministers are benefiting greatly from the increased taxes? We see that in the ministerial travel bill, the ministerial drinks bill, the ministerial entertainments bill, the ministerial aides bill and the ministerial press support bill. I think that that is where a lot of the money is going, which may explain why Ministers are not prepared to say much here. They know that they are robbing the British people for no good reason.
      Mr. Bercow: My right hon. Friend is usually right, and he is right on this occasion. I believe that money raised from the taxpayer should be used for the taxpayer's benefit. I bear the Paymaster General—who trounced me in Bristol, South in 1992, but with whom I have enjoyed cordial relations ever since—no personal ill will, as she knows; but I do not want her, or her colleagues, to benefit at the centre from increased imposts on the public. I want the British people to benefit, and above all I want my Buckingham constituents to benefit. They are not currently doing so. They are getting restless; they are increasingly angry; they are about to vent their spleen on the Government, and their reaction will be mirrored nationwide.
      1.15 pm
      The Paymaster General (Dawn Primarolo): I am grateful to the right hon. Member for Wokingham (Mr. Redwood) and the hon. Member for Buckingham (Mr. Bercow) for giving me the benefit of their views and advice. Both made it clear that it was for political parties and individual Members of Parliament to decide on the policies that they advance, and to take responsibility for them.
      I was greatly encouraged by the reference of the hon. Member for Buckingham to the 1992 general election campaign in Bristol, South, when he was my very able Conservative opponent. On that occasion he put to the people of Bristol, South the views that he and the right hon. Member for Wokingham have advanced today. He is right: the voice of the people of Bristol, South was pretty substantial. There was an 8.5 per cent. swing to Labour. While I greatly enjoyed the campaign, I am sure that the hon. Gentleman is more safely tucked up in Buckingham now than he would ever have been in Bristol, South.
      Mr. George Osborne: Will the Paymaster General give way?
      Dawn Primarolo: I am happy to, but I am sure that you would like me to speak about clause 130, Mr. Gale. I was being polite to Members.
      Mr. Osborne: Will the Paymaster General reflect on the fact that the difference between the 1992 election and subsequent general elections is that in 1992 the Labour party told the public ir, advance that it would increase taxes and they rejected it, whereas in 1997 and 2001 it did not tell them and then proceeded to increase taxes?
      Dawn Primarolo: The huge difference between the election in 1992 in Bristol, South, as in the country—
      The Temporary Chairman: Order. This is an interesting exchange, hut it is totally irrelevant to the clause.
      Dawn Primarolo: I was enjoying myself, Mr. Gale, as no doubt were Opposition Members, but you are right to return me to clause 130.
      The clause imposes income tax for 2003–04. The starting rate of 10p that we introduced in 1999 means that around 3 million lower earners continue to pay about half the marginal tax rates that they would otherwise pay. We have kept our promise not to increase the basic or top rates of tax, which remain at 22p and 40p.
      Norman Lamb: Will the Paymaster General give way?
      Dawn Primarolo: Will the hon. Gentleman allow me to make a little more progress? I want to reply to a couple of points that he made. The right hon. Member for Wokingham was right—the figures do not add up—and I should like, in a spirit of friendship and generosity, to explain why that is. I shall be happy to give way to the hon. Gentleman later.

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      At 22p, the basic rate is at its lowest for 70 years. As Opposition Members said, the tax rates are complemented by measures designed to make work pay and to eliminate poverty. With effect from April, the Government have introduced child tax credit and working tax credit. Those new credits represent the biggest-ever investment in families, with some £13 billion to be spent on child tax credit alone. Child tax credit is paid not through the wage packet, but directly to the main carer, normally the mother.
      As the hon. Member for Buckingham said, the income tax rates are also part of our commitment not just to macro-economic stability but to sound public finances. That applies particularly to policies enabling us to make a sustained investment in public services. Prudent management of the economy has allowed us to increase public services without raising income tax rates.
      We have already outlined our ambitious plans to increase investment in the national health service, matched by reform, by 7.2 per cent. a year after inflation for the next five years. That will be financed by the increased national insurance contributions to which the hon. Gentleman referred, which is entirely in line with the Beveridge tradition.
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: Before the hon. Gentleman asks me to give an example, I shall give it now and then give way to him. Compared with 1997, by 2008 there will be 66,500 more nurses, 20,000 more doctors, 44,000 new therapists and about 100 new hospitals. To return to the example of Bristol, South, the difference between 1992 and now is that unemployment is down from some 15 to 17 per cent. to under 3 per cent.; people can also see real improvements in a health service that was so badly starved of money for such a long time.
      Mr. Flight rose—
      Dawn Primarolo: I did say that I would give way to the hon. Member for Buckingham.
      Mr. Bercow: I am extraordinarily grateful to the Paymaster General. I shall be candid: I had hoped to tip her into the proverbial pit, but for her to do that herself before I had the chance to do so is generosity on a truly grand scale. Does she not realise that what she has done is to commit precisely the sin—regurgitating statistics about inputs—of which I was., accusing her a few moments ago? Why does she not answer the very straightforward and practical question that the Chief Secretary has twice refused to answer in the past four weeks: why does the increase in clinical activity in the national health service represent only a tiny fraction of the increase in expenditure on it?
      Dawn Primarolo: Without wishing to try your patience, Mr. Gale, by entering into a discussion on the national health service, I should point out that the hon. Gentleman well knows that giver., the resources put into
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      the NHS to date, there has been a significant increase in activity. I will not try your patience by listing them all now—
      Mr. Bercow: Oh go on.
      Dawn Primarolo: No, I shall stay in order despite the hon. Gentleman's invitation. Through the increase in national insurance over the next five years, there will be substantial continuing investment in the NHS.
      Mr. John Baron: Will the Paymaster General give way?
      Dawn Primarolo: I am happy to give way to the hon. Gentleman, but I should point out that clause 130 is only about the actual rates of tax. I shall let him make his point, and then I shall return to being in order.
      Mr. Baron: I thank the Paymaster General for giving way—I shall be brief. How can she square her comments about the NHS with Government statistics that clearly show that during the past three years, expenditure on it has risen by £9 billion—an increase of approximately 24 per cent.—yet hospital treatments have risen by only 1.5 per cent. and hospital admissions have actually fallen by 0.5 per cent.?
      The Temporary Chairman: Order. I will allow the right hon. Lady to respond, but I should be grateful if the Committee would return fairly swiftly to tax rates.
      Dawn Primarolo: I will do exactly as you ask, Mr. Gale. Of course, as the hon. Gentleman knows, when the national health service has been starved of resources and does not have enough beds, doctors, nurses, therapists and other support workers, it takes time to put those people in place to provide treatment. We are now reaching a critical point, whereby such staff are in place and the NHS is going from strength to strength.
      I turn to the specific issues raised by hon. Members. The hon. Member for Arundel and South Downs (Mr. Flight) referred to the indexation of personal allowances. The freezing of them came into effect in April 2003, and cost the basic rate taxpayer 36p a week. As I said, that will help to fund annual real growth in national health service spending—something that the electorate desperately wanted and supported when this Government announced it; and of course, most pensioners over 65 are protected. Those aged 65 to 74 benefit from above-inflation increases in personal allowances, as do the over-75s. The Conservatives repeatedly froze income tax allowances when in power, but they did not use the money to invest in public services; they used it to pay for their economic failure.
      Norman Lamb: None the less, the freezing of personal allowances is a tax increase on low-paid workers. Will the Paymaster General give a commitment that it will not be repeated during this Parliament?
      Dawn Primarolo: If the hon. Gentleman will allow me, I shall first respond to a few more of the points that I need to deal with. I will deal later with his completely

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      incorrect assertion about the position of the lowest 20 per cent. of earners vis-à-vis tax, as he is indeed very wrong.
      The hon. Member for Arundel and South Downs and other Conservative Members referred to the increased number of higher rate taxpayers. To use again the example of Bristol, South, one excellent thing for the constituents whom I represent is that they now have jobs and can contribute to public services through national insurance and the tax system—something that the very high level of unemployment under the previous Administration denied them. We have increased the basic rate limit by inflation to maintain its value. As I said, that is in contrast with the previous Government, who froze the basic rate limit.
      I would have expected Conservative Members to applaud the increase in the number of taxpayers, because it is a sign of a healthy economy—of more people getting into work and getting paid more. For the period 1997–98 to 2002–03, mean male average earnings increased by 25 per cent., and average full-time earnings for men and women increased by 26 per cent. Full-time earnings for the top 10 per cent. of men and women increased by 27 per cent., but prices went up by 13 per cent. Employment has increased by nearly 1.5 million since the spring of 1997. The number of people in work is at record levels—something that the previous Administration never achieved.
      The right hon. Member for Wokingham and some of his colleagues referred to the use of national insurance. The reason why they keep on referring to the increase as a stealth tax escapes me. We announced that we would increase national insurance by 1 per cent., and we said that all the money would be spent on the national health service, which it is. If Conservative Members are saying that they would cancel that rise as well making, according to the hon. Member for Arundel and South Downs, a 20 per cent. cut across the whole public expenditure sector, they need to concentrate not on what this Government are doing but on how to explain to the electorate that there would be fewer teachers, fewer nurses and fewer doctors.
      Mr. Flight rose—
      Mr. Baron: Will the right hon. Lady give way?
      Dawn Primarolo: As I have just referred to the hon. Member for Arundel and South Downs, I should give way to him; that would be the polite thing to do.
      Mr. Flight: I thank the Paymaster General for giving way. She said that all of the 1 per cent. national insurance charge is being devoted to health service expenditure, but I distinctly recollect that approximately half is for the health service, with half going towards tax credits. Would she care to comment on that? Secondly, I repeat that she should not indulge in what she knows to be Labour party misrepresentations. She should instead be concerned by, and take note of, factors such as the 50 per cent. increase in the cost of the central civil service, whose numbers are rising from 450,000 to 529,000. She should also consider ways in which Government expenditure on unnecessary
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      bureaucratic costs might be reduced. That is what I was talking about, rather than Government spending overall.
      Dawn Primarolo: All of the 1 per cent. national insurance rise is devoted to the national health service. If the hon. Gentleman refers to last year's national insurance legislation, which provided for that, he will discover that I said that repeatedly and that it is on the record. Indeed, the figures demonstrate that fact; the rise is not being used for anything else.
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: If I may, I shall deal with the second point made by the hon. Member for Arundel and South Downs. I can only go on the newspaper reports about, and the direct quotes from, the hon. Gentleman himself and the right hon. Gentleman the Leader of the Opposition. If I were to engage in propaganda devised by the Labour party, I would opt for something more spectacular—but I do not need to, as I can merely report the words that have come from the hon. Gentleman's mouth.
      1.30 pm
      I shall now deal with the points raised by the hon. Member for North Norfolk (Norman Lamb). He asserted—[Interruption.] I shall answer the hon. Member for North Norfolk, who has waited patiently; I may give way to the hon. Member for Buckingham later.
      The hon. Member for North Norfolk asserted that the poorest 20 per cent. of households pay 40 per cent. of their annual income in tax. He bases that assertion on a publication from the Office for National Statistics, "Effects of Tax and Benefits on Household Income". However, the hon. Gentleman wants to forget—conveniently—some crucial and substantial facts that did not appear in that publication. The first is that the
      latest figures for 2001–02—the figures used by the hon.
      Gentleman—do not include any measures that the Government have introduced to help low-income households, which came into effect from April 2002.
      Some of the excluded measures are the working tax credit, the child tax credit and the baby tax credit, the above-inflation increases in the basic state pension in April 2002 and 2003, and the increase in the minimum income guarantee for pensioners to match the increase in earnings. The article does not take into account the working families tax credit, which, following OECD guidelines, would reduce income tax payments for those in receipt of the benefit. Taking all the measures announced between 1997–98 and 2001–02, independent research by the Institute for Fiscal Studies shows that households in the bottom two quintiles have experienced the greatest proportion of real income gains over the five-year period.
      What of the assertions of the hon. Member for North Norfolk about council tax and the proposal that a 50 per cent. rate for those earning £100,000 or more will somehow pay for a £100 reduction of council tax—and just about everything else that the Liberal Democrats want to fund? It is interesting to recall that the Liberal Democrats wanted to increase public spending last year,

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      but this year they want to cut council taxes. It seems that they want to fund whatever is fashionable. However, the hon. Gentleman's figures are wrong. The 50 per cent. rate on £100,000 would raise—the Treasury confirmed, when asked—an income of about £4.5 billion. That is the net take when the whole United Kingdom—England, Wales, Scotland and Northern Ireland—is costed. However, when the £100 deduction on council tax is calculated, the Liberal Democrat figure applies only to England.
      As the hon. Member for Buckingham said, it is difficult to take people seriously when their figures do not add up. It is also difficult to take them seriously when it is clear that they read the papers every day to find out what might be in vogue and then shape their policies around it. As confirmed by the hon. Member for Truro and St. Austell (Matthew Taylor), who speaks as the Liberal Democrat shadow Chancellor, the Liberal Democrats now believe that the Government are making the correct and necessary investment in public services. The direct tax burden on a single-earner family on average earnings and with two children will be 20.1 per cent., which is lower than in 1998 or any previous year since 1997, so it is irritating to hear the hon. Member for North Norfolk and party asserting that such people are paying more tax. That does not sit well with the facts.
      Norman Lamb: Does the Paymaster General have any concerns about the impact of this year's council tax increases—four times the rate of inflation—on low paid and pensioner households this year?
      Dawn Primarolo: Of course I have concerns about impacts on lower income households. I shall not try your patience by listing the figures, Mr. Gale, but the Government were generous with the local government settlement on council tax this year. However, many Liberal Democrat authorities chose to increase local taxes on a large scale, so for the hon. Gentleman to stand in his place and claim that his party is concerned—when his councillors are not—is simply not a coherent position. I know that the Liberal Democrats like to be all things to all men and women—even depending on which ward, let alone which city, people live in—but when they are in the House, they should be more consistent in their suggestions. For the party that massively raised council taxes to suggest that it is now someone else's fault is not fair, correct, or accurate. I hope that the hon. Gentleman will not persist.
      Clause 130 is a modest clause and I have explained the effect on tax rates in detail. I have answered the many and varied questions put to me at the Dispatch Box. Before I sit down, may I say that for the rest of the proceedings I shall confine myself to the clauses—and not with questions unconnected with them—if that is how you would like me to proceed, Mr. Gale? I commend the clause to the House.
      Question put and agreed to.
      Clause 130 ordered to stand part of the Bill.

    Clause 131

      INDEXED RATE BANDS FOR 2003–04: PAYE DEDUCTIONS ETC
      Question proposed, That the clause stand part of the Bill.
      Mr. Flight: The clause extends by one month the date on which statutory inflation-linked changes to income tax bands must be made to PAYE deductions. It changes from May to the first pay day after 14 June. Essentially, it short-changes taxpayers by £10 as a result of the Chancellor introducing the Budget later than usual. People have received no apology. They will get the money back: in a sense, it is a £20 million interest-free loan from taxpayers to the Government.
      Such disregard of ordinary people is objectionable. Why cannot the Government get their act together? They were able to charge increased national insurance contributions with effect from May, but here they are messing about with ordinary people, who were expecting to see income tax band adjustments in their May salary. It may be a small matter, but it represents the arrogance of the Government, who could not care less about short-changing people a pound or two here or there.
      Mr. Redwood: I support my hon. Friend, who has summed up the main point extremely well. The Government's action is arrogant, thoughtless and unhelpful to employers, who are under pressure to explain it to their employees. There is no need for an interest-free loan from taxpayers to the Government, given that they are proposing to raise vast amounts of taxation through the Bill and from existing legislation. I hope that the Paymaster General will apologise to the British people for the incompetence of her boss, the Chancellor of the Exchequer. He may well have been preoccupied with his rows with the Prime Minister about the euro, but he has not even offered a statement to the House on that matter. As a result, we have had a delayed and bodged Budget, and we now have a forced loan from the British people to the Treasury. We deserve an apology.
      Norman Lamb: I endorse the views of the Conservative spokesman on the matter. Is it not possible, as the Treasury Select Committee recommended in its report on the pre-Budget report last autumn, for much more notice to be given of the date of the Budget? It should take place in time to ensure that proper arrangements can be made for the new tax year. The problem that we are seeing here should never be allowed to happen.
      Dawn Primarolo: The first day after 17 May has been the day on which employers and pension providers are asked to implement any codes and tax changes resulting from changes in the Budget. As last year, this clause changes the date, for this year only, from the first pay day after 17 May to the first pay day after 14 June. That allows time for the Inland Revenue to send out the necessary employer packs, and for employers to implement them, given that the Budget was in April this year.

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      As PAYE works on a cumulative basis, no one will lose out as a result of the delay. The system automatically gives people the benefit of any tax reduction that they are due on the first pay day after 14 June. The clause makes no difference to the way in which the Inland Revenue and employers administer PAYE. It is essentially a technical amendment, to bring matters into line. As the hon. Member for Arundel and South Downs well knows, the same clause was brought forward last year in a straightforward and reasonable way and he saw no problems with it.
      Question put and agreed to.
      Clause 131 ordered to stand part of the Bill.
      Clauses 132 to 134 ordered to stand part of the Bill.

    Clause 135

      PROVISION OF SERVICES THROUGH INTERMEDIARY
      Mr. Stephen O'Brien: I beg to move amendment No. 8.
      I welcome you to the Chair, Mr. Gale, on what is the first occasion on which I have served under your chairmanship on the Floor of the House.
      Clause 135 extends the scope of the much reviled and criticised IR35 legislation, which continues to cause distress. It applies to people who provide personal services through an intermediary to those who are engaged in a domestic capacity. The proposals are to take effect retrospectively, from 10 April this year.
      The clause means that affected people will have to submit two self-assessment tax returns. The amendment is very simple and offers an easy solution. I am surprised that the Government did not adopt a similar approach in the first place. I hope that, for once, they will accept the amendment with the result that we get a better Bill. The amendment would simply delay the effective date for the income tax change, so that changes to national insurance and income tax happen on the same date.
      The Government's anti-avoidance legislation is drafted in such a way that the people concerned, to reflect their tax affairs properly, must make two self-assessment tax returns this year. Those individuals were encouraged to incorporate by the Government, but they will be left with the increased burden of corporate regulation, no tax incentives, and considerable complexity when it comes to self-assessing their tax affairs.
      It would be sensible to remind the House that the IR35 rules were originally written specifically to exclude domestic staff, presumably because the amounts at stake in tax and national insurance charges were not high. Has that changed dramatically over the past year? Is that why the Government are so monumentally concerned about the matter that they have to capture the domestic staff involved? Given that the clause is expected to raise only £15 million a year, that would be very surprising.
      Furthermore, although a huge—for them—additional regulatory burden is being placed on the people concerned, no regulatory impact assessment is available. Has one been undertaken? The Government claimed always to be able to put in place such an assessment. When the matter has been raised in various Committee discussions, the Government have
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      responded by saying that they would sort out such an assessment—they never volunteer to provide one. Frankly, it is not good enough for the Government not to provide such an assessment, given that some people are patently being given an additional regulatory burden. The people involved are those least in a position to be able to bear such a burden. I call on the Government to issue a regulatory impact assessment in relation to this provision. I think that they would find it pretty poor reading, and that it would be sensible for them to accept the amendment.
      1.45 pm
      To make matters worse, the Government last year encouraged sole traders to incorporate, with the introduction of lower corporation taxes for smaller companies. A number of people acted on that, and incorporated—well done them—but now, only a year later, this Bill proposes to tax certain of those individuals as though they had not incorporated at all.
      The provision is not targeted at wealthy tax planners. It will affect workers on relatively low incomes, who pay tax at the basic rate. They relied on last year's legislation in good faith. The Chancellor's proposed IR35 changes will be a major headache for tens of thousands of people who provide domestic services, such as gardeners, cleaners and cooks. They will be dragged into the Government's bureaucratic tax trap. The people affected will lose money, and be forced to submit extra tax returns.
      The Chancellor is taking almost £50 million over the next three years out of the pockets of nannies, gardeners and cooks, and transferring it to the Government's coffers. The Federation of Small Businesses has noted that the provision will affect some of the lowest earners in Britain.
      Only last year, many of the people involved were encouraged by the Government to incorporate. Twelve months on, they are to be hit by this regulation. None of the expected tax incentives can continue to apply and, for the people involved, assessing their tax position will be a considerably complex task. The problem has arisen solely because of the Government's incompetence, and their inability to draft effective legislation. Many people who thought that they were doing the right thing by following the Government's advice last year will now be seriously inconvenienced and financially penalised for their diligence.
      No doubt, the Government will try to justify this clause only 12 months after they incorporated the very encouragement that has led to what they regard as the mischief of anti-avoidance. The Government say that they must stop anti-avoidance, and the Opposition have said repeatedly—as we must, to prevent the Government from falling into the temptation of mounting a false argument—that we support that. I have demonstrated the scale of the matter, but the theme of this Finance Bill, as was shown yesterday, is that the Government are determined to wrestle as many of the measures as possible through the House under the cloak of anti-avoidance. That is a blatant attempt to stifle scrutiny and criticism.

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      The Government and the Treasury have adopted an arrogant approach. They are not aiming to target anti-avoidance so much as making a futile attempt to be anti-accountability. Britain's honest and hard-working citizens will not be fooled.
      I have read the official record of last year's Finance Bill Committee debates. The Government were fully aware that the interaction of lower corporation tax rates and dividend planning would provide tax advantages for an incorporated business. Even so, they implemented the measures without amendment.
      It is proper and right to remind the Committee and the Paymaster General—I also hope that the Chancellor may deign occasionally to listen to arguments that do not accord entirely with his own—about a Federation of Small Businesses report published on 3 February this year. The report said that, at the time that the Government proposed the measures last year, a self-employed person with profits of £15,000 could pay up to 32 times more in tax than an incorporated counterpart.
      The report, entitled "The Self Employed versus Incorporated Businesses", is well worth a read. It quotes figures from the Institute of Fiscal Studies, so it is not merely self-serving special pleading on the part of small businesses, although there is no more worthy cause in the business arena. The report states that, on profits of £15,000, the self-employed person would pay a combined income tax and national insurance bill of £2,884, which is 32 times more than the £91 paid in corporation tax by a limited company. On profits of £30,000, a self-employed person pays a combined income tax and N1C bill of £7,234, compared to £3,654 in corporation tax for a limited company. Is that not an obvious disparity between self-employment and incorporation?
      As a background to the amendment and to the Government's purpose in extending the measure to low-income earners, such disparity in tax treatment shows that, even after all the strong encouragement and the legislative power devoted to persuading those on low incomes to incorporate, the minute that, in good faith, they do so, they are slapped with a further regulatory burden. Their affairs become complex and they may suffer financial penalties.
      The remarks of Neil Hamper, the head of the Federation of Small Businesses taxation unit, are striking. He said:
      "Clause 135 is evidence of the hole which the Chancellor has dug for himself. It comes as little surprise that many self-employed people, some of the lowest-paid people in the UK, will choose to incorporate when the tax system so obviously discriminates against them."
      It is right that our scrutiny of the measure should be carried out by a Committee of the whole House. Our amendment would at least ensure synchronisation so that the regulatory burden was eliminated. The Treasury could easily accept our proposals, but one fears that, due to the Government's characteristic arrogance and their resistance to admit that they might have got something even slightly wrong, they are so stubborn that they will even resist something as sensible as our amendment, although I hope that the opposite will be the case.
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      Through the Government's mistakes, the original legislation was not drafted properly, so they have a responsibility to those who relied on it. The least that they can do is to implement the measure in such a way that individuals can unwind their affairs or carry out self-assessment with the least complication.
      If the Government are characteristically blind to our arguments, I and my party, on behalf of the relatively low-earning nannies, gardeners, cooks and all the others who are affected by the measure will wish to press the amendment to a vote.
      Several hon. Members rose—
      The Temporary Chairman: Order. The hon. Member for Eddisbury (Mr. O'Brien) took a fairly wide-ranging approach in introducing his amendment. It may be helpful if I indicate now that I shall be unlikely to accept a stand part debate as well.
      Norman Lamb: We very much support the amendment. We, too, share concern about the absence of a regulatory impact assessment. Often, such assessments do not comply with the Government's guidelines as to what they should include, but the fact that there is to be no assessment at all is of serious concern. The measure will add to the regulatory burden of people who are trying to operate small businesses, so there should be an assessment and I should be grateful if the Paymaster General would respond to that concern.
      I also share the concerns expressed by the Conservative spokesman, the hon. Member for Eddisbury (Mr. O'Brien), about the disparity in the tax treatment of sole traders and of limited companies. I shall not go into that in detail, in acknowledgement of your comments, Mr. Gale, but serious concerns have been raised with me and many others by the Federation of Small Businesses. People have been encouraged to incorporate and now this change has happened.
      Last year, when IR35 came in, the Liberal Democrats opposed the measure. We fully accepted the importance of tackling abuse and tax avoidance, but we thought that the Government were taking a sledgehammer to crack a nut and that the implications of the measure could be extremely serious. We are now discussing an extension of IR35, and I have some questions for the Paymaster General.
      What evidence can the Government show that the scale of abuse makes the measure necessary, given the relatively small amount of extra revenue that it will bring in? Why was it thought necessary to extend IR35? Why was the matter not dealt with last year when the first measure was introduced? I was going to ask what assessment had been made of the amount of extra income that would result, but a figure was mentioned by the Conservative spokesman. What is the overall purpose of the reform?
      Mr. Redwood: The clause is disappointing. I welcomed the Government's proposals last year to favour incorporated businesses and to introduce a better tax regime for the smallest companies. It was a sensible measure in favour of enterprise, so it is particularly disappointing that, after only a year, when, as one could have forecast, the policy has enjoyed

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      modest success, the Government want to clobber those who took advantage of it and to reverse the position. I urge the Paymaster General to think again. Her thoughts last year were rather better than her thoughts this year.
      In support of my case, the Paymaster General has evidence that IR35 is not only a widely hated tax but also that it is extremely damaging to the United Kingdom. It pushed people out of self-employment. It sent some of them abroad, where they had successful, high-earning businesses; but others simply left that employment altogether, because the tax was an imposition too far. It did considerable damage at a time when the high-tech industries, which were especially targeted by the measure, were extremely fragile.
      My hon. Friend the Member for Eddisbury (Mr. O'Brien), in moving his amendment, pointed out the big imbalance between the taxation on earnings for a self-employed person and the taxation on profits for a small, incorporated business. He is right about that. However, a fair comparison for the Paymaster General to make, when she assesses the potential damage, as she sees it, to the Revenue, would be not between profits held within an incorporated business and the earnings of a self-employed person but between distributed profits in a small business and earnings. In such a case, the comparison is not as stark as my hon. Friend said, because there would be taxation on the money being drawn out as wages by the person concerned, or even as share dividend. If the person was the shareholder and decided to take money out, there would be a tax payment, which would narrow the gap, so the threat to the Revenue would not be as great as the Paymaster General will undoubtedly want us to believe when she replies to the debate. In normal circumstances, the gap for low-earning, self-employed people would not be nearly as great in terms of tax, as they would want to take all or most of the money out of the incorporated business in one form or another because they would want it to live on. As my hon. Friend pointed out. those people often do not earn much.
      Having listened carefully to my hon. Friend, I think that he was very gentle towards the Government, given the magnitude of their U-turn, in their decision to bash the very people whom they encouraged a year ago. His suggested remedy is mild. If he wishes to push the amendment to a vote, I shall have no worries about supporting it because it is better than the current provision.
      However, it would be better still if the Government dropped the clause altogether. The clause is nasty and brutish; it is part of rip-off, insensitive government. It will not bring in much revenue—the Treasury figures probably exaggerate the amount—but it will do damage and put many small entrepreneurs, people who are trying to provide a service, under a lot of pressure that they do not deserve. Such people are not experts on the tax system; they do not want to go through these enormously expensive and difficult changes. The measure will worry them, when they want only to provide a livelihood for their families and a service for someone else. I hope that the Paymaster General will realise that, in the main, they are decent people, trying to make a modest living while paying sensible amounts of tax. Her decision to target them will not be welcome in any constituency.
      Mr. Baron: May I welcome you to the Chair, Mr. Gale?
      I support the amendment. There is little doubt that clause 135 creates a gross injustice, a point that has been raised by several of my constituents. Last year, the Government encouraged sole traders and the self-employed to incorporate by introducing lower corporation tax rates for small companies. Subsequently, a large number of people did just that. Only a year later, on the grounds of reducing tax avoidance, the Government propose legislation that will tax individuals as though they had not been incorporated at all. Those measures are not targeted at wealthy tax planners; they affect many low-paid workers, who were fooled by the Government into incorporating and, having done so, they are now being ambushed by the Government under the Bill. The victims are normal taxpayers who rely on the Government's legislation in good faith, and they have been badly let down.
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      In addition, the anti-avoidance legislation has been drafted so that the individuals concerned will now have to submit two self-assessment returns for this tax year properly to reflect their tax affairs. So those individuals whom the Government encouraged to incorporate now face not only an increased burden of corporate regulation, but no tax incentive whatsoever and considerable complexity in self-assessing their tax affairs.
      I can only add to the request made in support of my hon. Friend the Member for Eddisbury (Mr. O'Brien) by asking the Government to undertake a regulatory impact assessment to ensure that the measure has been properly thought through. As has been mentioned previously, IR35 rules were originally written specifically to exclude domestic staff, presumably because the amount of tax and national insurance contributions at stake was not very high—the figure of £15 million has been suggested. I should like to understand better whether that has changed dramatically, which would be surprising given the figures suggested.
      The Government are obsessed by tax avoidance, and that is obviously not necessarily a bad obsession, but their approach in this case has hit legitimate businesses that have set up companies to help the organisations that they serve. They are not avoiding tax and, moreover, they provide the very flexibility in the labour market that the Government say that they are trying to encourage and that is an asset to this country.
      The Government criticise other EU countries for their lack of labour market flexibility, but they appear to be piling on more and more regulation domestically and introducing more taxes and tax measures that undermine the asset about which they boast. That cannot continue.
      I support amendment No. 8, as the Government's proposed changes to the law will put an unnecessary burden on individuals who do not deserve to be persecuted in this way. I ask the Government to recognise that they should have listened to the warnings from my Front-Bench colleagues during consideration of last year's Finance Bill. They should seriously

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      consider accepting the amendment, which will at least attempt to salvage something from this shameful sequence of events.
      Mr. Burnett: May I too welcome you, Mr. Gale, to the chairmanship of our proceedings this afternoon?
      Opposition Members are absolutely right to say that the Government have actively encouraged people to incorporate. However, in this case, the commissioning contractor—for want of a better expression—often
      insists on dealing with an incorporated person and they do so for reasons of saving tax themselves. We debated that at length when IR35 was introduced, and I consider the changes made then and these changes to be outrageously unfair. Obviously, when the changes are made, additional national insurance contributions will be payable by the subcontractor; nevertheless, no additional employee benefits will accrue or be available to those subcontractors. In other words, they will pay and they will get nothing, and they will also be subjected to an additional burden of bureaucracy.
      Finally, I should like to ask the Paymaster General whether she could let the Committee know whether the Government yet have any proposal to make the fiscal penalties for disincorporation more fair and less punitive.
      Mr. Djanogly: My hon. Friend the Member for Eddisbury (Mr. O'Brien) described in detail and extremely well how the provision could affect some of the poorest workers in our country. While totally concurring with him, I should like to examine the other side of the coin and explain how the clause will attack middle-class, middle-earning, aspirational and hardworking parents, particularly women. I shall do so in relation to the implications of applying IR35 and how it will affect nannies. That will cost parents who take advantage of the existing regime hundreds of pounds a year. We are talking about extra charges of at least £6 a week and probably £10 or more in London.
      Outside London, the average nanny's wage is about £235 a week net of tax, and it is likely that parents will lose about £312 a year. I note that that is some £60 more than the new child trust fund that is being introduced. One tax partner at Grant Thornton said:
      "If you employ a nanny or housekeeper, the chances are you will pay around 25 per cent. more for the service now this tax break has been removed."
      Parents will therefore have to start paying a triple whammy—their own national insurance, presuming that they work; the employer's national insurance contribution for their nanny and. of course, any other domestic staff; and their nanny's own national insurance bill, because parents traditionally take care of their nanny's tax and insurance liabilities.
      For example, a working mother would have to earn a gross salary of £30,345 simply to pay her nanny a gross salary of £20,400, netting some £300 a week. That shows how middle-class parents are being hammered at the moment. The mother's own annual net pay after tax and national insurance deductions would be about 22,350, while the cost of employing her nanny—including employers' national insurance contributions, which are
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      additional to the nanny's gross wage—would be £22,360. Of course as nanny's wage grows, the triple-whammy effect gets worse.
      The Government provide help with child care through the working tax credit, but although that payment is worth up to £200 a week for people with approved child minders, it is important to note that, despite ongoing lobbying on that point, the Government refuse to apply registration to nannies. Child minders are mostly registered through Ofsted and regulated by national standards for day care and child minding, but nannies are not approved in that way. In addition, parents with a joint income of 58,000 or more will not be eligible for child tax credits.
      We have increasingly seen a move towards nannies and parents going underground in relation to employment, and that will increase under the clause. One of the worst-kept secrets in the capital is that probably as many nannies work outside the tax system as inside it. People do not want to do things that way; they are being forced to do so by a system that does not take notice of the needs of middle-class parents in this country.
      Of course this tax affects women in particular because their salary normally pays for the nanny. Most women will have a very difficult decision to take when they have children: should they stay at home, or should they go back to work? They will want to go back to work to keep their minds ticking over and to keep their trade experience up to date, but in effect they will do so to pay for the nanny, as the figures that I have given show, rather than to provide themselves with any additional salary, so we are talking about an additional tax on women. I thought that the Government were in favour of getting women back to work, but they are clearly in favour of getting people whom they see as being lazy and sitting at home back to work but not doing so for aspirational, hard-working middle-class women who want to get out and do something for this country, and we desperately need to get more women back into the labour force.
      Mr. Redwood: Although I see my hon. Friend's point that some might be tempted down the path of illegality into the black economy, does he not agree that many of the professional women about whom he is talking, who wish to return to work and have every right to do so, would never dream of going down that path, as it would be against their principles and would prejudice their important employments, in which they are expected to be decent, honest and upright? Will not this therefore be a tax that stops women having the freedom of choice that they should have? It will be very bad news for them and will put them off returning to the labour market, which may result in their losing their confidence in future years.
      Mr. Djanogly: I agree absolutely. This Government are not considering aspirational women who want to get out there and improve themselves. My constituency currently has virtually no unemployment, and is one of the fastest-growing areas of the country—a fact of which I am very proud. When I visit local businesses, I am told consistently that there are serious problems with recruitment: they cannot find the people to fill the jobs, and they cannot find people with the necessary skills. Thousands of women in this country are highly skilled and want to work, but they cannot do so because of the

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      current tax system. I hope that that provides some spur, while going in the opposite direction, for the Government to rethink this issue.
      Dawn Primarolo: It may help if I explain to the Committee how the mechanism works in relation to service companies, why domestic employees were exempt last year, and why the Government acted this year. That will lead me directly on to some of the hon. Gentleman's points.
      Although I appreciate and understand the important points that Opposition Members have been making about a company being incorporated or unincorporated, they are sorely mistaken on the focus of this specific measure. I want to explain to them why that is. In relation to the decision last year to exempt domestic employees, what has happened subsequently confirms the point that the Government repeatedly make: if a loophole is left, unfortunately, somebody will try to exploit it.
      The existing service company legislation ensures that workers who would have been taxed as an employee if they had been working under a contract with the client cannot avoid paying tax and national insurance on the same basis as any other employees by using a limited company or other intermediaries to sell their services. As I have said, the current legislation does not, however, apply to engagement in a domestic capacity. Regrettably—again, this point has been made repeatedly since 1997—the Government have to have mind to how taxpayers will behave towards the tax system. Our duty is to ensure that the right amount of tax is collected and that it is collected fairly: by that, we mean that those who should be paying tax do not find artificial ways of not paying it, as that is patently not fair to all other taxpayers. In advocating a higher rate of tax, the hon. Member for North Norfolk (Norman Lamb) fails consistently to understand that it is important to ensure that people pay the tax that they are supposed to be paying.
      2.15 pm
      Generally, schemes operate by setting up the domestic worker as a director and shareholder of a personal service company. The individual employee therefore starts off as an employee of the client. Subsequently—not because it improves the employer-employee relationship or because the employer is interested in helping self-employment grow—the positioning of an intermediary is used simply to reduce tax. I shall explain how that works.
      The domestic company is set up for the domestic worker so that the domestic worker is a director and shareholder of the personal service company. The service company offers the services of the director to the former employer. The domestic worker takes a salary from the company at around the personal threshold of £4,615, and the remainder in dividends. Therefore, if the company net profits are below the threshold for the starting rate of £10,000, the domestic worker can extract up to £14,615 free of tax and national insurance contributions.
      Let me remind the Committee: somebody who was an employee is then encouraged to use an intermediary to reduce the cost to their previous employer or to increase the payment to them by setting up the service company.
      Mr. Burnett rose—
      Mr. Baron rose—
      Dawn Primarolo: The hon. Gentlemen should let me finish, as they need to know what was being marketed. I will then challenge them to say what they would have done were they in government. We did not act out of some fickle desire: there was proof of what was going on, and I shall give that proof to the Committee.
      Mr. Burnett: Will the Paymaster General give way?
      Dawn Primarolo: I will not. If the hon. Gentleman will let me explain this complex point, there will no doubt be plenty of time for interventions.
      The scheme providers usually charge a monthly fee for operating the scheme. Effectively, the domestic worker still receives a weekly or monthly payment, albeit that it might be a larger amount because of the savings that the scheme produces through avoidance—the savings might be split between the former employer and the domestic worker, or the former employer might take all the benefit.
      It was right to ask the question—we did not think that leaving domestic workers outside the system would not raise issues, and as with all points of the tax system, we give careful consideration and follow developments. We had been approached by several parties, however, of which I will give one example, about the number of schemes that were about to be marketed to exploit the loophole. The schemes were able to offer significant savings in tax and national insurance contributions to any domestic employee with net weekly earnings above £111 a week. In terms of the attitude to the Government action, let met quote Leonie Kerswill of PricewaterhouseCoopers:
      "IR35 previously exempted domestic staff, but the cost savings of the arrangement for parents employing nannies has led to an explosion in the use of service companies".
      Mr. Baron: Will the Paymaster General give way?
      Dawn Primarolo: No. I will finish making this point and then I will give way to the hon. Gentleman. I am trying to explain this complex point, giving the proof for why the Government acted in this way. I will give way at the relevant point.
      Bearing in mind the tax and national insurance savings, the Government were faced with a significant problem. For example, a letter was circulated to every client of a particular agency that runs the arrangements for nannies. The letter states:
      "As you will see, we do not believe that the use of a personal service company represents best practice in nanny employment because they involve the use of a tax-saving vehicle which obscures the real employer/employee nature of the relationship between parents and their nannies, with some attendant loss of employment rights for the nannies",
      most of whom are women. The hon. Member for Huntingdon (Mr. Djanogly) was concerned about women's rights.

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      When the measure was announced and comments were made about the Budget, on Saturday 12 April The Daily Telegraph reported the managing director of Nannytax as saying:
      "We cover all types of domestic workers—housekeepers, gardeners, butlers, as well as nannies. The decision to close the tax-break loophole was appropriate. We think the relationship between, for example a family and a nanny, should be one of employer and employee. Nannies who were employed as a private company were losing employment benefits such as maternity leave and some pension rights."
      The fact that the exemption was about to be exploited on a massive scale was flagged up to the Government in the run-up to the Budget, along with the attendant loss of income to the Government and the difficulties that would be created for employees.
      Nursery World is concerned with issues that relate to child care and nannies. In a poll, it asked:
      "Is it a good idea for nannies to become limited companies?"
      Some 36 per cent. said yes and 62 per cent. said no. The clause is not about self-employment. It relates to employees and the problems created by a mechanism that is driving them into a relationship that leads to a diminution of their rights and a loss of tax revenue. The Government have acted now to avoid extensive use of the mechanism before it creates the many problems that the hon. Member for Huntingdon flagged up about families making those arrangements only to find the loophole closed.
      Mr. Baron: Does the Paymaster General accept that there is a gross injustice? Those problems should have been thought through before the mechanism was introduced last year. The Government have in effect encouraged many self-employed unincorporated people to incorporate, and in the following year have ambushed them with the tax measures in the Bill. That appears to many outside the Chamber as grossly unfair. Will the Paymaster General address that central issue?
      Dawn Primarolo: The hon. Gentleman is entirely wrong. The Government have done no such thing. We made our position on IR35 clear when we debated last year's legislation. The clause is not about the rights of people to be self-employed or employed; nor is it about the right of people to have their own companies; it is about the use of a mechanism that is designed only to reduce the amount of tax paid.
      Mr. George Osborne rose—
      Mr. Baron rose—
      Dawn Primarolo: No, I shall not give way.
      I am describing a tax distortion that has been driven by a particular arrangement in the tax system by which people choose to be employees and are in danger of being required not to be.
      Mr. Flight: When we debated the new zero rate of corporation tax for small companies in the last Finance Bill, we welcomed the general principle but stressed that to introduce it without a parallel or averaged rate for
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      sole traders made it an obvious tax incentive for people to incorporate and exploit. Indeed, I made the same point when I wrote to the Paymaster General some eight months ago. I said that it was wrong in principle to have rules in our tax system that act as a massive incentive to incorporation and to the exploitation of the advantages that it brings. The Federation of Small Businesses made the same point. The issue is specific, but it is part of the wider territory. If there is such a big distortion in our fiscal arrangements, it is inevitable that people will try to exploit it at all levels.
      Dawn Primarolo: The clause is not about individuals who choose to be self-employed or to incorporate. It deals with a specific aspect of the tax system. The exploitation of a loophole was driving people into a particular tax position simply to save tax for their previous employer or themselves, or to share it equally. The hon. Gentleman will know that from our discussions on IR35.
      The wider debate, which the hon. Gentleman verges on, relates to changes to incorporated and unincorporated companies, and whether that balance is correctly struck. I believe that it is, but that should not be debated in the context of this clause. I accept that many hon. Members, and people and companies outside the House, want the issue to be explored further. We must always find a basis on which to strike a balance, but that is not what we are dealing with now.
      Hon. Members asked why we are making the change now, and I have set out our reasons. They asked how the mechanism was being exploited and why, and I have made that clear. The debate is not about incorporation or unincorporation; it is about whether we should leave a mechanism in the tax system that leads not only to a loss of tax revenue but to a diminution of employment rights, and all because of a loophole.
      Mr. Burnett: The Paymaster General is invariably fair, and I think she would agree that it is right to put it on the record that there are tax consequences in making distributions out of companies to individuals. However, I sincerely hope that she will deal with the point that I raised. If incorporated sub-contractors pay full employee national insurance contributions, surely they should qualify for full employee benefits.
      Dawn Primarolo: The hon. Gentleman teases me back to the debate that is at the heart of the changes known as IR35: does the individual operate as a shareholder or an employee of his or her own company? If they operate as an employee of their own service company, they get all the rights that all employees get.
      As for opinions within the relevant employment sector, it is interesting to note what is said in an article in Professional Nanny. The article asks whether nannies are being urged to become directors of their own companies and says that
      "if all nannies saw themselves as young Richard Bransons, eager to make their first million, then maybe running their own service company might be an irresistible prospect. But in reality, many nannies are in their first or second job, dedicated to the children they are responsible for, and looking to the parents to protect their interests both as an employee and as a new member of the family."

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      It is incumbent on the Government to protect nannies' best interests. The temptation provided by the loophole has been removed precisely to protect those nannies.
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      Mr. George Osborne: The right hon. Lady would accept that the driving force behind the provision is the high cost of child care. I received a copy of the letter that she read out, but resisted the temptation to take up the offer, because a friend of mine who is a tax barrister told me that the Treasury would close that particular avenue. However, does she accept that dealing with what she calls tax avoidance is likely to cause an increase in tax evasion? Has the Treasury analysed whether there will be an increase in the already large number of working nannies who will be outwith the tax system altogether?
      Dawn Primarolo: I am glad, but not surprised, that the hon. Gentleman decided to resist that temptation on the sound advice of his friend—that clearly supports the case that I have put to the Committee this afternoon. The position of nannies as people who are employed by a family or supplied by agencies remains unchanged, but we have removed any driver that might change that relationship. He will remember that, in the letter to which he referred, the company made it clear that it expected the Government to close the loophole because it was neither reasonable nor fair. For those reasons, it is inappropriate, to put it mildly, to accept an amendment that leaves in place, even for a specific period, the arrangements that gave rise to that loophole. I urge the Committee to reject it and support the clause.
      Mr. Stephen O'Brien: Much of the Paymaster General's riposte concerned nannies, but let us not lose sight of the fact that the provision will affect cooks, gardeners and many others in domestic service, not all of whom are subject to the arrangements that she sought to pray in aid. As we predicted, she sought to defend the provision as an anti-avoidance measure. The Treasury, having found out from its scouts in the City that somebody, somewhere had come up with a clever wheeze and was beginning to market a new product, decided to put a stop to it.
      The Paymaster General has missed the point. We oppose the provision not because it is an anti-avoidance measure but because it lets down people on relatively low incomes who, encouraged by last year's Budget, acted in good faith. They are now being slapped down and face a regulatory burden of two self-assessed tax returns in the current tax year. The amendment would reduce that regulatory burden. Furthermore, the Paymaster General never bothered to answer my serious question about why there is no requirement for a regulatory impact assessment because, I dare say, she would not like the answer that she would have to give.
      Dawn Primarolo: I apologise to the hon. Gentleman. I did not mean to avoid his question, I just forgot to answer it. A regulatory impact assessment is not included because, as he knows, the Government are not required to carry out such assessments of anti-avoidance measures, although he is challenging that. The costs are in the Red Book, but it is impossible to say how much the problem would continue to grow. The
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      experience of the last Conservative Government of profit-related pay shows that initially payments are small but they end up being very large.
      Mr. O'Brien: The Paymaster General is quite right—there is no obligation to produce a regulatory impact assessment. We have had many discussions about that when debating secondary legislation. Even though it is not required, in some cases it is offered, and we receive letters about that. The provision under consideration would have been a worthy candidate for such an assessment.
      Mr. John Gummer: Has my hon. Friend noticed that if the Government decide that any measure is an anti-avoidance measure, they are able to tell the Committee, "We do not need to give you the information that we ought to have"? We should point out to the Committee that that is a dangerous argument that leads to self-assessment and self-regulation.
      Mr. O'Brien: I thank my right hon. Friend, not least because he speaks with experience of government. I am grateful for the opportunity to point out to the Committee, particularly to those who were detained elsewhere at the outset of our debate, the fact that I said that a theme of the Bill is to arm-wrestle as much of its content as possible into the cloak of anti-avoidance in a blatant attempt to stifle scrutiny and criticism. That arrogant approach, I said, was less about anti-avoidance than about a futile attempt by the Government and the Treasury at anti-accountability, which will not fool the hard-working citizens of this country. That answers precisely the point made by my right hon. Friend, with whom I could not agree more: anti-accountability is the inherent culture of this Government. There could have been recognition of unintended consequences in the clause, and the Government could have used it to close a loophole. However, they have blatantly disregarded our arguments, and the clause is now a slap in the face for domestic workers who have incorporated.
      Mr. Bercow: Given that the Government have consistently spun the policy as a response to abuse by fat cat entrepreneurs, and given that my hon. Friend made the seminal point that its main victims will be some of the most vulnerable people in our society, would it not be helpful to know how many cooks, cleaners and gardeners may be affected by the provision? The Opposition have a responsibility to communicate to those people the scale of the damage that the Government are inflicting on them.
      Mr. O'Brien: It is impossible to give those numbers without a census, but it certainly is our duty to speak up for those people. It is interesting that Mr. Neil Hamper from the Federation of Small Businesses said that people running their own businesses should be able to choose which business model suits them best. They should not have to contend with the hoops and hurdles of incorporation to secure generous tax breaks. That is the problem: people incorporated to take advantage of a tax break touted by the Government. My right hon. Friend the Member for Wokingham (Mr. Redwood) properly pointed out that the extent of that incentive

      349
      depends on the way in which the differential is measured, but there is a differential none the less, so the incentive remains. Seeking to end an abuse that has not been proven is, in fact, an abuse by the Government.
      Mr. George Osborne: My hon. Friend has spoken about consultation and its impact. Has he had the opportunity to discuss the matter with the hon. Member for St. Helens, South (Mr. Woodward), an expert on these matters, who may have been able to help him draft amendments?
      Mr. O'Brien: I am grateful to my hon. Friend for that colourful example. I gave a speech in St. Helens only the other day, but did not spot the hon. Gentleman or his alleged butler.
      We have a duty to point out the unintended consequences of the clause. However, the Government have made plain that its intended consequence is a slap in the face for certain people. They have slammed the door shut on people who took advantage of a tax break in good faith. We should speak up for the people whom my hon. Friend the Member for Buckingham (Mr. Bercow) mentioned, and I urge my right hon. and hon. Friends and everyone else who accepts the power of these arguments to join me in the Lobby.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 172, Noes 283.

      Division No. 196]

      [2:39 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Clarke, rh Kenneth (Rushcliffe)

      Allan, Richard

      Collins, Tim

      Amess, David

      Conway, Derek

      Atkinson, David (Bour'mth E)

      Cotter, Brian

      Atkinson, Peter (Hexham)

      Cran, James (Beverley)

      Bacon, Richard

      Curry, rh David

      Baldry, Tony

      Davey Edward (Kingston)

      Barker, Gregory

      Davis, rh David (Haltemprice & Howden)

      Baron, John (Billericay)

      Barrett, John

      Djanogly, Jonathan

      Beggs, Roy (E Antrim)

      Dodds, Nigel

      Bellingham, Henry

      Duncan, Alan (Rutland)

      Bercow, John

      Duncan, Peter (Galloway)

      Beresford, Sir Paul

      Duncan Smith, rh lain

      Blunt, Crispin

      Ewing, Annabelle

      Boswell, Tim

      Fabricant, Michael

      Bottomley, Peter (Worthing W)

      Field, Mark (Cities of London & Westminster)

      Brady, Graham

      Brake, Tom (Carshalton)

      Flight, Howard

      Brazier Julian

      Flook, Adrian

      Breed, Colin

      Forth, rh Eric

      Brooke, Mrs Annette L.

      Foster, Don (Bath)

      Browning, Mrs Angela

      Burnett, John

      Garnier, Edward

      Burt, Alistair

      George, Andrew (St. lves)

      Butterfill, John

      Gibb, Nick (Bognor Regin)

      Cable, Dr. Vincent

      Gidley, Sandra

      Cameron, David

      Gillan, Mrs Cheryl

      Campbell, Gregory (E Lond'y)

      Gray, James (N wilts)

      Campbell, rh Menzies (NE Fife)

      Green, Damian (Ashford)

      Carmichael, Alistair

      Green, Matthew (Ludlow)

      Cash, William

      Grieve, Dominic

      Chapman, Sir Sydney (Chipping Barnet)

      Gummer, rh John

      Hague, rh William

      Chope, Christopher

      Hammond, Philip

      Clappison, James

      Hancock, Mike

      350

      Harris, Dr. Evan (Oxford W & Abingdon)

      Robinson, Peter (Belfast E)

      Rosindell, Andrew

      Harvey, Nick

      Russell, Bob (Colchester)

      Hawkins, Nick

      Salmond, Alex

      Heald, Oliver

      Sanders, Adrian

      Heath, David

      Sayeed, Jonathan

      Hendry, Charles

      Selous, Andrew

      Hermon, Lady

      Shephard, rh Mrs Gillian

      Hoban, Mark (Fareham)

      Shepherd, Richard

      Hogg, rh Douglas

      Simmonds, Mark

      Horam, John (Orpington)

      Simpson, Keith (M-Norfolk)

      Howarth, Gerald (Aldershot)

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

      Jack, rh Michael

      Johnson, Boris (Henley)

      Smyth, Rev. Martin (Belfast S)

      Key, Robert (Salisbury)

      Spelman, Mrs Caroline

      Kirkbride, Miss Julie

      Spicer, Sir Michael

      Lait, Mrs Jacqui

      Spink, Bob (Castle Point)

      Lamb, Norman

      Spring, Richard

      Lansley, Andrew

      Steen, Anthony

      Laws, David (Yeovil)

      Streeter, Gary

      Leigh, Edward

      Stunell, Andrew

      Lewis, Dr. Julian (New Forest E)

      Swayne, Desmond

      Liddell-Grainger, Ian

      Swire, Hugo (E Devon)

      Lidington, David

      Syms, Robert

      Lilley, rh Peter

      Tapsell, Sir Peter

      Loughton, Tim

      Taylor, Ian (Esher)

      Mclntosh, Miss Anne

      Taylor, John (Solihull)

      Mackay, rh Andrew

      Taylor, Matthew (Truro)

      Maclean, rh David

      Taylor, Dr. Richard (Wyre F)

      McLoughlin, Patrick

      Taylor, Sir Teddy

      Malins, Humfrey

      Thomas, Simon (Ceredigion)

      Mercer, Patrick

      Thurso, John

      Mitchell, Andrew (Sutton Coldfield)

      Trend, Michael

      Trimble, rh David

      Moore, Michael

      Turner, Andrew (Isle of Wight)

      Moss, Malcolm

      Tyler, Paul (N Cornwall)

      Murrison, Dr. Andrew

      Tyrie, Andrew

      Norman, Archie

      Viggers, Peter

      Oaten, Mark (Winchester)

      Waterson, Nigel

      O'Brien, Stephen (Eddisbury)

      Watkinson, Angela

      Öpik, Lembit

      Webb, Steve (Northavon)

      Osborne, George (Tatton)

      Weir, Michael

      Ottaway, Richard

      Whittingdale, John

      Paice, James

      Wiggin, Bill

      Paterson, Owen

      Wilkinson, John

      Pickles, Eric

      Willetts, David

      Price, Adam (E Carmarthen & Dinefwr)

      Willis, Phil

      Winterton, Ann (Congleton)

      Prisk, Mark (Hertford)

      Wishart, Pete

      Pugh, Dr. John

      Yeo, Tim (S Suffolk)

      Redwood, rh John

      Young, rh Sir George

      Reid, Alan (Argyll & Bute)

      Younger-Ross, Richard

      Rendel, David

      Robathan, Andrew

      Tellers for the Ayes:

      Robertson, Angus (Moray)

      Mr. Mark Francois and

      Robertson, Laurence (Tewk'b'ry)

      Mr. David Wilshire

      Question accordingly negatived.
      Clause 135 ordered to stand part of the Bill.

    Clause 138

      APPROVED SHARE PLANS AND SCHEMES
      Question proposed, That the clause stand part of the Bill.
      Mr. Flight: There is a broad measure of agreement between hon. Members on both sides about the merits of employee share ownership. The changes introduced by the clause are intended to provide relief and make more flexible the share incentive plan or SIP arrangements, save-as-you-earn option schemes and the company share option plan or CSOP.

      353
      I believe passionately that as many people as possible should own shares in the businesses for which they work. All the evidence shows that companies with widespread employee share ownership perform better and have much better human relations. Such ownership clearly engenders an owner-employer mentality rather than a them-and-us mentality. Businesses such as the John Lewis Partnership, which has succeeded so well on the back of employee share ownership, are legendary.
      The arrangements generally give greater flexibility in the administration of share plans. That includes, for example, the removal of the former requirement that, in order to be tax-free, a CSOP option must be exercised more than three years after a previous tax-free exercise. Furthermore, an individual will be able to participate in more than one connected SIP in a tax year—that is, he can participate in one or more approved SIPs established by his company or a connected one. However, three aspects of the arrangements are unsatisfactory, and the industry and associated advisers, including ProShare and many of those concerned with encouraging employee share ownership, have made criticisms and contacted the Treasury to seek changes.
      Of particular concern is the change to rules about pay-as-you-earn and the national insurance contribution in relation to CSOPs exercised within three years of grant. The change is clearly unfair and will cause some problems. It should logically apply to options granted on or after 9 April this year, rather than options exercised after that date. The change to options exercised on or after 9 April has two implications for companies that are retrospective in nature.
      The employer will now be responsible for withholding PAYE and NICs from employees, although he can under law deduct those payments from an employee's cash pay. There are strict rules in that regard. If the employee has already been paid for the month or his net pay is insufficient for deduction of the new PAYE and NIC liability, the employer will not have sufficient funds to pay the required sums to the Revenue. It is extremely rare for approved plans, unlike unapproved ones, to contain a provision to prevent exercise of the option if satisfactory arrangements to deal with PAYE and NICs cannot be made. The reason for that is that such provision has not been necessary in the past, as there has been no obligation to apply NICs or PAYE.
      The new rule will therefore mean that employers will often have to pay PAYE and NICs without having any practical method of recovering the costs from employees. The employer will also have their own NIC liability on the exercise of the options. Typically, it will be set at 12.8 per cent. of the employee's option gain. As the new rules apply to options exercised on or after 9 April this year, the employer will have a new liability for which they could not previously have provided. When the NIC rules were amended to allow employers to transfer to employees the NIC liability on unapproved share schemes, many companies attempted to include such provisions in their approved share option plans as insurance against NICs being charged to them, but the Inland Revenue refused to approve share option plans that contained such provision.
      354
      A point of principle is at stake. The Government's argument for applying NIC on unapproved plans was that gains from such plans were liable to income tax, so the contributions went together. Approved plans remain under the capital gains tax regime, however, so there is an issue of principle about whether it is appropriate to charge NICs at all.
      Mr. Djanogly: My hon. Friend makes a good point in saying that, when people try to amend approved schemes, the Inland Revenue throw them out of the door. We are talking not only about a tax implication, but significant cost implications, because many professionals will have to be paid to redo schemes.
      3 pm
      Mr. Flight: I thank my hon. Friend for that accurate point.
      I apologise, Mr. McWilliam, for not having welcomed you to the chairmanship of our proceedings. It has always been a great pleasure to have you as Chairman in Finance Bill Committees.
      The proposed arrangements will require trustees to maintain records of those who have participated in one or more approved share incentive plans. That presents a problem in that, to maintain records of such participants, the trustees will need the full requisite information. It should not be a breach of the plan conditions if the trustees fail to maintain such records as a result of not receiving the necessary information from the company or the participants concerned.
      The retrospective nature of the application of NIC charges to company share option plans will particularly hit companies that allow employees to take options with them when they leave. Such a company would find itself paying the PAYE tax and employees' NICs, as well as the employer's NICs, and would be lucky to make the payments to the accounts office in time, assuming that it knows that the exercise has taken place. Indeed, despite the statement in the Budget notes that the motivation behind the provisions is to close a loophole, there is a broad belief in the share scheme world that CSOPs have not been promoted as an NIC mitigation tool, especially given the continued low limit of only £30,000 of participation.
      Companies sometimes seek to maintain approved status during a takeover as part of their general tax and NIC arrangements. In that context, some small firms may have tried to sell the CSOP to private companies that are looking for an exit on the full understanding that the options would be exercised within three years without the NIC liability being payable. Many of those companies can now benefit from the EM—executive management incentive—plan arrangements and can exercise them when they wish without paying any tax or NICs, but those that cannot benefit from EMI will now be in a less advantageous position whereby they use the CSOP instead. The chief concern is that the provision applies to all existing options. Although the provisions that allow employers to transfer their NIC charges to the employee can apply to CSOP options, it is extremely difficult to make that happen. This is a fundamental issue. The Government may ultimately decide that the measure will not yield much tax, but if the legislation has to change, it should apply only to future, not existing, option grants.

      355
      Another aspect of the proposals is intended to be helpful, but looks to be unworkable—that is, the changes to ease the complexity of the dividend share provisions. Those are contained in paragraphs 9 to 15 of the schedule, which we will debate Upstairs. I understand that the Government recognise the weakness of the proposals and intend to withdraw them for reconsideration. I should be grateful if the Paymaster General could confirm that.
      Another important issue is the threat to employee share ownership in the shape of the proposed requirement by the International Accounting Standards Board that all forms of subsidy towards employee share ownership are charged to the profit and loss account. It is clearly understood that the background to that is abuse in the US, but if it becomes the accounting rule here, it will lead to a major contraction in employee share schemes and do much more to undermine the positive aspects of clause 138 and the accompanying schedule. It is, of course, not for politicians or Governments to tell the professional accounting bodies what to do, but it is important that they realise the extent of the threat to employee share ownership. The theoretical accounting arguments are very much balanced on both sides.
      Conservative Members want to ensure maximum employee share ownership for the good of businesses, the good of individuals and the overall good of our economy.
      Mr. Burnett: I, too, welcome you to the chairmanship of the Committee, Mr. McWilliam.
      The notes to the Bill state that clause 138 deals with
      "tax relieved, employee share and share option schemes designed to encourage employees to identify with the success and growth of the companies for which they work."
      Of course, we support that aim.
      An increasing amount of legislation, certainly in Finance Bills, is increasingly complicated, and Opposition Members rely heavily on briefings from outside bodies. The hon. Member for Arundel and South Downs (Mr. Flight) highlighted the problems with the clause, which is designed to simplify procedures. Will the Paymaster General tell us what consultations the Government have had with professional bodies such as the Law Society, the Institute of Chartered Accountants, other accountancy bodies, the Bar Council and the Chartered Institute of Taxation? I hope that the Government will listen not only to the submissions of the hon. Member for Arundel and South Downs, but to those of the professional bodies. It is in all our interests to have a satisfactory, tax-efficient, un-bureaucratic system that encourages employee share ownership and acts as a first-class incentive to employees. It is important that employees feel part of the ownership of an organisation. Organisations that have such schemes are shown time and again to thrive and grow.
      Mr. Djanogly: At a time when many, if not most, option holders have been saying that their options are going underwater and that their participation in the equity of their company is being wrecked, why do the Government feel that now is the time to start cracking down even further on such schemes? With 600,000 jobs
      356
      lost, tough times and low productivity in the manufacturing sector, is not this the time to encourage share participation and involvement by employees? To that end, why does not the clause, rather than punishing people through tax, increase the use of approved schemes by, for instance, raising the limit of £30,000 to £100,000?
      Dawn Primarolo: First, I want to remind hon. Members of the huge amount of taxpayers' money that we commit to supporting share ownership. Combined tax and national insurance means that the figure is rising to just under £1 billion a year, involving approximately 2.5 million employees. That figure is also rising.
      The hon. Member for Arundel and South Downs (Mr. Flight) is right to extol the virtues of approved employee share ownership schemes in their varying guises in not only rewarding employees but giving them a stake in their company. That leads to the associated benefits in productivity and staff commitment. He will also know that many views exist about the administration of such schemes. As David Cohen, head of employee incentives at Norton Rose, explained recently in an article on the proposals for employee share schemes:
      "This is an area of Tax Law which"—
      he phrases it delicately—
      "has always been an active battleground between the Revenue and Tax Payers."
      That has happened not recently, but over time. He continues:
      "The Revenue's abiding concern is that share schemes will be used to remunerate employees"
      in a way that is proper. He points out that often, taxpayers are motivated to do exactly what the Inland Revenue is trying to minimise.
      It has always been a Government objective and, I presume, a goal of the previous Government, to try to ensure that the patchwork of rules and regulations that have built up over the years should be as clear and simple as possible, given that the subject is already complex.
      Let me deal briefly with consultation. Over several years, the Inland Revenue has been in extensive dialogue with the representative bodies, especially those that are most concerned with employee share ownership schemes. Many comments have been made over that period about desired changes to legislation. The Inland Revenue drew on those dialogues and representations in drafting the changes that are incorporated in the Bill. I recommend the article by David Cohen in this week's "Tax Journal", which clearly sets out the main principles that needed to be tackled and would be helpful to the scheme. I am eternally grateful that they bear a startling, almost identical resemblance to the Government's actions. Dialogue and consultation have therefore been going on for some time.
      Consultation does not always guarantee that there will no subsequent changes. The hon. Member for Arundel and South Downs referred to that. Sometimes representative bodies recommend actions about which they might not have consulted extensively in their organisations. They might subsequently find that they do not quite fit. I will deal with that and the changes that the Government might make later.

      357
      The clause introduces several changes to employee share schemes to make them simpler and more flexible, with the caveat that they are not necessarily straightforward in the first place.
      3.15 pm
      The provision is focused on the tax and national insurance advantage of approved share schemes. The Government remain committed to employee share schemes as an important means of increasing productivity. We acknowledge the positive effects of staff motivation. For example, a large proportion of the FTSE 100 companies have some sort of approved scheme. More than 850 companies granted more than 4,500 options under the enterprise management initiative in 2001–02. Executive management incentive—EMI—was introduced for the smallest and
      newest companies to help them to recruit and reward the high-calibre staff that they need in order to grow.
      Even during the current low in the stock market, companies have continued to introduce and develop their employee share schemes because they are a longterm investment. They are intended not to provide short-term gain but to give employees a long-term interest in the success of the company for which they work.
      The changes that clause 138 introduces are only the latest in a series of improvements that we have continued to make to employee share schemes. Other provisions introduce the statutory corporation tax deduction for companies that offer employee share schemes. Last year, we worked closely with my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on the Employee Share Schemes Bill to introduce some positive changes, which would encourage share incentive plans.
      The changes in this Bill will affect all the improved employee share schemes. We are proposing a key change to share incentive plans—SIPs. The SIPs scheme is one of the two newest schemes, which the Finance Act 2000 introduced. It was designed after extensive consultation and it is intended to fulfil the needs of all companies. It offers them flexible methods of achieving employee share ownership, with tax advantages for employees and the companies that employ them. As the hon. Member for Arundel and South Downs acknowledged, SIPs have been widely welcomed. To date, some 750 companies have applied for Inland Revenue approval of their plans and more than 500 have been implemented or are ready for implementation. We have listened over time to the share scheme industry's ideas on ways to improve the administration of the schemes.
      The changes in the Bill to ease administration for employers respond to industry requests. They have been generally welcomed but the industry has expressed anxiety about the proposed change to the rules for dividend shares. Although the change achieves the simplification for which the industry asked, it appears that those who requested it did not establish its full impact with scheme administrators. Feedback from the
      358
      industry suggests that it would prefer to retain the existing rules. So, since the Government listen to business—
      Mr. George Osborne: That was said with feeling.
      Dawn Primarolo: Perhaps we should not have listened in the first place. I shall table amendments in Standing Committee to withdraw the new proposals, in line with the industry's request.
      The package also includes changes to modernise the older approved schemes—save-as-you-earn and the company share option plan—that were developed in a more regulated climate. The provisions align the company share option plans and the save-as-you-earn rules with those of a SIP when possible and appropriate, to help reduce administration of the schemes.
      Clause 138 also introduces changes to extend the application of pay-as-you-earn to any income tax due after early exercise of a company share option plan. That is not a new tax charge. Early exercise in three years of grant of a company share option plan option currently attracts a tax liability but it is collected through self-assessment and does not attract national insurance. Unfortunately, we have become aware of evidence that company share option plans are being granted and exercised within three years solely to avoid national insurance, and not for any sound commercial reasons. That is not fair on the majority of employees who pay their national insurance contributions, nor is it in line with the objective of encouraging employees to take a long-term stake in the success of their company.
      Mr. Burnett: Will the Paymaster General address a more hazardous aspect of this issue—namely, the possible penalty on the declining value of the shares?
      Dawn Primarolo: An initial problem that we need to address with regard to avoidance is when options are given for shares for 100 years' time, for instance, and the value is rather difficult to quantify. The tax charge is then levied and the benefit year is reassigned—and, lo and behold, it is within three years. There were some difficulties in regard to that, and I appreciate the point that the hon. Gentleman raises, but this is always a challenge. How can I put this delicately? If a set of rules is to operate fairly for everybody, everybody has to use those rules fairly. When some do not, they can spoil it for others.
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: I would like to make some progress, but 1 will be happy to give way to the hon. Gentleman later.
      The change in the Bill will treat company share option plans exercised early in the same way as any other unapproved option. That will not only help to encourage employees to hold their options for three years to qualify for tax and national insurance relief but make collecting tax through the PAYE system simpler for the employee. We recognise that there are some difficult circumstances in which people have no choice but to exercise their options early. Other company share option plan changes that are being introduced as part of

      359
      this package will ensure that employees who exercise options within three years of grant because of injury, disability, redundancy or retirement, for example, will be able to do so tax and national insurance-free. That recognises the hard choices that people sometimes face in their employment. We are trying specifically to deal with that issue here.
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: Not at the moment.
      Mr. Bercow: I was going to be helpful.
      Dawn Primarolo: I thank the hon. Gentleman but I can manage under my own steam at the moment. Should I need his help, I shall certainly call on him.
      The further changes proposed will modernise company share option plans and ensure that they continue to be attractive vehicles for employers wanting to encourage employees to take a stake in their company. That package of improvements is further evidence of the Government's continuing support for companies that offer employee share schemes. The changes result from listening to and working with practitioners. Indeed, ProShare, the organisation that exists to promote share ownership, has already signalled its appreciation of most of the changes.
      The hon. Member for Arundel and South Downs raised a number of questions about the national insurance charge. The Government believe that employers should pay their fair share of national insurance on all forms of employment-related remuneration. While the majority of employees and employers undertake their tax responsibilities diligently, there remains a small but, unfortunately, significant group that seeks to avoid paying tax and national insurance contributions on employment remuneration. The change means that companies that seek to avoid paying national insurance can no longer do so. Employers face an employer's national insurance charge only if the options that they have awarded are capable of being exercised within three years of grant. Employees exercising their company share options within the three years of grant will be able to do so tax and national insurance-free. That means that employers who have been using company share option plans as intended—that is, to encourage employees to take a long-term stake in the company that they work for—will not be affected by the changes.
      We have also been careful to protect employers from the employer's national insurance charge when employees have to exercise their option within three years. That relates to the point that I made earlier about employees being forced to exercise their options. It is a matter for companies and employees to make provisions and arrangements for the recovery of any PAYE and national insurance contributions from employees who exercise early and have a tax liability.
      The hon. Member for Arundel and South Downs also raised some issues about PAYE and asked whether the measure was retrospective. The charge arises if employees exercise their option after 9 April 2003 and within three years of grant. If employees exercise their option in those circumstances, they do so in the full
      360
      knowledge of the tax and national insurance charge that will arise that is, on the basis of the law as it applies on exercise. That change will not prevent employees from exercising early for commercial reasons. They will simply make the decision taking into account the tax and national insurance to be paid. A company share option plan is designed so that employees can take a long-term stake in the company that they work for. If employees keep their options for at least three years after grant, they can be exercised tax and national insurance-free.
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: No.
      The hon. Member for Arundel and South Downs also raised the issue of tackling avoidance using company share option plans, and the question of leavers. Failure to tackle avoidance would continue to undermine the share schemes that aim to incentivise employees, and he well knows that. As I made clear in my speech on Second Reading, measures to counter tax and national insurance avoidance would not damage business or investment in the City. On the contrary, this is about creating a level playing field by ensuring that a small number of businesses can no longer gain an unfair advantage over their competitors by avoiding their national insurance and tax contributions. We estimate that the tax and national insurance that will be protected by these changes will be in the region of £55 million in 2003–04, and between £30 million and £35 million in subsequent years. Employees who have to exercise their options within three years of grant because they have lost their job or for other reasons will be protected. In that way, we protect the innocent and stop the avoiders.
      Mr. Bercow: The Paymaster General began by appearing to lament the phenomenon of early exercise, but was then gracious enough to concede that there were circumstances in which employees would have no reasonable alternative but to exercise that option. Now that she has, with prescience, anticipated precisely the redundancy scenario that I was intending to depict for her, will she tell the Committee whether the loss of job to which she has just referred would also apply to circumstances such as the termination of employment unrelated to redundancy?
      3.30 pm
      Dawn Primarolo: To be perfectly honest, I do not think that I understand the hon. Gentleman's question.
      Mr. Burnett: May I help?
      Mr. Bercow: Will the right hon. Lady give way?
      Dawn Primarolo: I am spoilt for choice. Who will help me first? I shall ask the hon. Gentleman to repeat his question.
      Mr. Bercow: I am genuinely grateful to the right hon. Lady. She was being slightly churlish a few moments ago, because I had intended to compliment her on the intellectual osmosis that seemed to exist between us when she anticipated what I was proposing to say. I am

      361
      not trying to be clever or unhelpful—that would be difficult for me—but simply asking whether the concession applies when someone is sacked, as opposed to being made redundant.
      Dawn Primarolo: I clearly was not hanging on the hon. Gentleman's every word and listening as carefully as I usually do. The answer is no.
      The final point, to which the hon. Member for Arundel and South Downs and others have referred, not just in today's debate, and which is of concern elsewhere, relates to the International Accounting Standards Board's proposals. He will appreciate that its proposals for share schemes are not a Government initiative, and while the accountancy proposals are being developed, it would be inappropriate for the Government to become directly involved in the debate. However, I think that I have made it clear, as the hon. Gentleman certainly has, that we are committed to employee share schemes and continue to pursue a course that enables them to develop and benefit not only employees but the companies as well, and I hope that nothing will be done in future that would undermine that.
      I commend the clause to the Committee and look forward to the debate on the schedule.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 291, Noes 135.

      Division No. 196]

      [2:39 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Clarke, rh Kenneth (Rushcliffe)

      Allan, Richard

      Collins, Tim

      Amess, David

      Conway, Derek

      Atkinson, David (Bour'mth E)

      Cotter, Brian

      Atkinson, Peter (Hexham)

      Cran, James (Beverley)

      Bacon, Richard

      Curry, rh David

      Baldry, Tony

      Davey Edward (Kingston)

      Barker, Gregory

      Davis, rh David (Haltemprice & Howden)

      Baron, John (Billericay)

      Barrett, John

      Djanogly, Jonathan

      Beggs, Roy (E Antrim)

      Dodds, Nigel

      Bellingham, Henry

      Duncan, Alan (Rutland)

      Bercow, John

      Duncan, Peter (Galloway)

      Beresford, Sir Paul

      Duncan Smith, rh lain

      Blunt, Crispin

      Ewing, Annabelle

      Boswell, Tim

      Fabricant, Michael

      Bottomley, Peter (Worthing W)

      Field, Mark (Cities of London & Westminster)

      Brady, Graham

      Brake, Tom (Carshalton)

      Flight, Howard

      Brazier Julian

      Flook, Adrian

      Breed, Colin

      Forth, rh Eric

      Brooke, Mrs Annette L.

      Foster, Don (Bath)

      Browning, Mrs Angela

      Burnett, John

      Garnier, Edward

      Burt, Alistair

      George, Andrew (St. lves)

      Butterfill, John

      Gibb, Nick (Bognor Regin)

      Cable, Dr. Vincent

      Gidley, Sandra

      Cameron, David

      Gillan, Mrs Cheryl

      Campbell, Gregory (E Lond'y)

      Gray, James (N wilts)

      Campbell, rh Menzies (NE Fife)

      Green, Damian (Ashford)

      Carmichael, Alistair

      Green, Matthew (Ludlow)

      Cash, William

      Grieve, Dominic

      Chapman, Sir Sydney (Chipping Barnet)

      Gummer, rh John

      Hague, rh William

      Chope, Christopher

      Hammond, Philip

      Clappison, James

      Hancock, Mike

      350

      Harris, Dr. Evan (Oxford W & Abingdon)

      Robinson, Peter (Belfast E)

      Rosindell, Andrew

      Harvey, Nick

      Russell, Bob (Colchester)

      Hawkins, Nick

      Salmond, Alex

      Heald, Oliver

      Sanders, Adrian

      Heath, David

      Sayeed, Jonathan

      Hendry, Charles

      Selous, Andrew

      Hermon, Lady

      Shephard, rh Mrs Gillian

      Hoban, Mark (Fareham)

      Shepherd, Richard

      Hogg, rh Douglas

      Simmonds, Mark

      Horam, John (Orpington)

      Simpson, Keith (M-Norfolk)

      Howarth, Gerald (Aldershot)

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

      Jack, rh Michael

      Johnson, Boris (Henley)

      Smyth, Rev. Martin (Belfast S)

      Key, Robert (Salisbury)

      Spelman, Mrs Caroline

      Kirkbride, Miss Julie

      Spicer, Sir Michael

      Lait, Mrs Jacqui

      Spink, Bob (Castle Point)

      Lamb, Norman

      Spring, Richard

      Lansley, Andrew

      Steen, Anthony

      Laws, David (Yeovil)

      Streeter, Gary

      Leigh, Edward

      Stunell, Andrew

      Lewis, Dr. Julian (New Forest E)

      Swayne, Desmond

      Liddell-Grainger, Ian

      Swire, Hugo (E Devon)

      Lidington, David

      Syms, Robert

      Lilley, rh Peter

      Tapsell, Sir Peter

      Loughton, Tim

      Taylor, Ian (Esher)

      Mclntosh, Miss Anne

      Taylor, John (Solihull)

      Mackay, rh Andrew

      Taylor, Matthew (Truro)

      Maclean, rh David

      Taylor, Dr. Richard (Wyre F)

      McLoughlin, Patrick

      Taylor, Sir Teddy

      Malins, Humfrey

      Thomas, Simon (Ceredigion)

      Mercer, Patrick

      Thurso, John

      Mitchell, Andrew (Sutton Coldfield)

      Trend, Michael

      Trimble, rh David

      Moore, Michael

      Turner, Andrew (Isle of Wight)

      Moss, Malcolm

      Tyler, Paul (N Cornwall)

      Murrison, Dr. Andrew

      Tyrie, Andrew

      Norman, Archie

      Viggers, Peter

      Oaten, Mark (Winchester)

      Waterson, Nigel

      O'Brien, Stephen (Eddisbury)

      Watkinson, Angela

      Öpik, Lembit

      Webb, Steve (Northavon)

      Osborne, George (Tatton)

      Weir, Michael

      Ottaway, Richard

      Whittingdale, John

      Paice, James

      Wiggin, Bill

      Paterson, Owen

      Wilkinson, John

      Pickles, Eric

      Willetts, David

      Price, Adam (E Carmarthen & Dinefwr)

      Willis, Phil

      Winterton, Ann (Congleton)

      Prisk, Mark (Hertford)

      Wishart, Pete

      Pugh, Dr. John

      Yeo, Tim (S Suffolk)

      Redwood, rh John

      Young, rh Sir George

      Reid, Alan (Argyll & Bute)

      Younger-Ross, Richard

      Rendel, David

      Robathan, Andrew

      Tellers for the Ayes:

      Robertson, Angus (Moray)

      Mr. Mark Francois and

      Robertson, Laurence (Tewk'b'ry)

      Mr. David Wilshire

      NOES

      Adams, Irene (Paisley N)

      Beckett, rh Margaret

      Ainger, Nick

      Benn, Hilary

      Ainsworth, Bob (Cov'try NE)

      Bennett, Andrew

      Alexander, Douglas

      Benton, Joe (Bootle)

      Allen, Graham

      Betts, Clive

      Anderson, Janet (Rossendale & Darwen)

      Blackman, Liz

      Blears, Ms Hazel

      Armstrong, rh Ms Hilary

      Blizzard, Bob

      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

      Barnes, Harry

      Brennan, Kevin

      Barron, rh Kevin

      Brown, rh Nicholas (Newcastle E Wallsend)

      Battle, John

      Bayley, Hugh

      Brown, Russell (Dumfries)

      Beard, Nigel

      Browne, Desmond

      351

      Burden, Richard

      Harris, Tom (Glasgow Cathcart)

      Burgon, Colin

      Havard, Dai (Merthyr Tydfil & Rhymney)

      Burnham, Andy

      Byers, rh Stephen

      Healey, John

      Caborn, rh Richard

      Henderson, Doug (Newcastle N)

      Cairns, David

      Henderson, Ivan (Harwich)

      Campbell, Alan (Tynemouth)

      Hendrick, Mark

      Campbell, Ronnie (Blyth V)

      Hepburn, Stephen

      Casale, Roger

      Heppell, John

      Challen, Colin

      Hesford, Stephen

      Chapman, Ben (Wirral S)

      Hewitt, rh Ms Patricia

      Chaytor, David

      Heyes, David

      Clapham, Michael

      Hill, Keith (Streatham)

      Clark, Mrs Helen (Peterborough)

      Hinchliffe, David

      Clark, Dr. Lynda (Edinburgh Pentlands)

      Hodge, Margaret

      Hoey, Kate (Vauxhall)

      Clarke, rh Tom (Coatbridge & Chryston)

      Hood, Jimmy (Clydesdale)

      Hoon, rh Geoffrey

      Clarke, Tony (Northampton S)

      Hope, Phil (Corby)

      Clelland, David

      Howarth, George (Knowsley N & Sefton E)

      Clwyd, Ann (Cynon V)

      Coaker, Vernon

      Howells, Dr. Kim

      Coffey, Ms Ann

      Hughes, Beverley (Stretford & Urmston)

      Coleman, Iain

      Colman, Tony

      Hughes, Kevin (Doncaster N)

      Cooper, Yvette

      Hurst, Alan (Braintree)

      Corbyn, Jeremy

      Hutton, rh John

      Cousins, Jim

      Irranca-Davies, Huw

      Crausby, David

      Jackson, Glenda (Hampstead & Highgate)

      Cruddas, Jon

      Cryer, Ann (Keighley)

      Jackson, Helen (Hillsborough)

      Cryer, John (Hornchurch)

      Jamieson, David

      Cummings, John

      Jenkins, Brian

      Cunningham, Tony (Workington)

      Johnson, Alan (Hull W)

      Curtis-Thomas, Mrs Claire

      Johnson, Miss Melanie (Welwyn Hatfield)

      Davey, Valerie (Bristol W)

      David, Wayne

      Jones, Jon Owen (Cardiff C)

      Davies, rh Denzil (Llanelli)

      Jones, Lynne (Selly Oak)

      Davies, Geraint (Croydon C)

      Jowell, rh Tessa

      Davis, rh Terry (B'ham Hodge H)

      Joyce, Eric (Falkirk W)

      Dawson, Hilton

      Kaufman, rh Gerald

      Dean, Mrs Janet

      Keeble, Ms Sally

      Denham, rh John

      Keen, Alan (Feltham)

      Dhanda, Parmjit

      Keen, Ann (Brentford)

      Dobson, rh Frank

      Kemp, Fraser

      Doran, Frank

      Khabra, Piara S.

      Drew, David (Stroud)

      Kidney, David

      Drown, Ms Julia

      Kilfoyle, Peter

      Eagle, Angela (Wallasey)

      King, Andy (Rugby)

      Eagle, Maria (L'pool Garston)

      King, Ms Oona (Bethnal Green & Bow)

      Efford, Clive

      Ennis, Jeff (Barnsley E)

      Knight, Jim (S Dorset)

      Etherington, Bill

      Kumar, Dr. Ashok

      Farrelly, Paul

      Ladyman, Dr. Stephen

      Field, rh Frank (Birkenhead)

      Lammy, David

      Fisher, Mark

      Laxton, Bob (Derby N)

      Flint, Caroline

      Lazarowicz, Mark

      Flynn, Paul (Newport W)

      Lepper, David

      Follett, Barbara

      Levitt, Tom (High Peak)

      Foster, rh Derek

      Lewis, Terry (Worsley)

      Foster, Michael (Worcester)

      Linton, Martin

      Foulkes, rh George

      Lloyd, Tony (Manchester C)

      Francis, Dr. Hywel

      Love, Andrew

      Gapes, Mike (llfordS)

      Lucas, Ian (Wrexham)

      Gardiner, Barry

      Luke, lain (Dundee E)

      Gerrard, Neil

      Lyons, John (Strathkelvin)

      Gibson, Dr. Ian

      McAvoy, Thomas

      Gilroy, Linda

      McCabe, Stephen

      Griffiths, Jane (Reading E)

      McCartney, rh Ian

      Griffiths, Nigel (Edinburgh S)

      McDonagh, Siobhain

      Griffiths, Win (Bridgend)

      MacDonald, Calum

      Grogan, John

      MacDougall, John

      Hall, Mike (Weaver Vale)

      McFall, John

      Hall, Patrick (Bedford)

      McGuire, Mrs Anne

      Hamilton, Fabian (Leeds NE)

      Mclsaac, Shona

      Hanson, David

      McKechin, Ann

      352

      MacShane, Denis

      Salter, Martin

      Mactaggart, Fiona

      Sarwar, Mohammad

      McWalter, Tony

      Savidge, Malcolm

      Mahon, Mrs Alice

      Sawford, Phil

      Mallaber, Judy

      Shaw, Jonathan

      Mann, John (Bassetlaw)

      Sheerman, Barry

      Marsden, Gordon (Blackpool S)

      Sheridan, Jim

      Marshall, Jim (Leicester S)

      Shipley, Ms Debra

      Martlew, Eric

      Simon, Siôn (B'ham Erdington)

      Meale, Alan (Mansfield)

      Singh, Marsha

      Merron, Gillian

      Smith, rh Andrew (Oxford E)

      Michael, rh Alun

      Smith, John (Glamorgan)

      Miliband, David

      Smith, Llew (Blaenau Gwent)

      Miller, Andrew

      Soley, Clive

      Moffatt, Laura

      Southworth, Helen

      Moonie, Dr. Lewis

      Spellar, rh John

      Morley, Elliot

      Squire, Rachel

      Mountford, Kali

      Starkey, Dr. Phyllis

      Mudie, George

      Stinchcombe, Paul

      Mullin, Chris

      Sutcliffe, Gerry

      Murphy, Denis (Wansbeck)

      Tami, Mark (Alyn)

      Naysmith, Dr. Doug

      Taylor, Dari (Stockton S)

      Norris, Dan (Wansdyke)

      Taylor, David (NW Leics)

      O'Brien, Bill (Normanton)

      Thomas, Gareth (Clwyd W)

      O'Hara, Edward

      Thomas, Gareth (Harrow W)

      O'Neill, Martin

      Tipping, Paddy

      Organ, Diana

      Todd, Mark (S Derbyshire)

      Owen, Albert

      Touhig, Don (Islwyn)

      Palmer, Dr. Nick

      Trickett, Jon

      Perham, Linda

      Truswell, Paul

      Picking, Anne

      Turner, Dr. Desmond (Brighton Kemptown)

      Pickthall, Colin

      Plaskitt, James

      Turner, Neil (Wigan)

      Pond, Chris (Gravesham)

      Twigg, Derek (Halton)

      Pound, Stephen

      Tynan, Bill (Hamilton S)

      Prentice, Ms Bridget (Lewisham E)

      Vaz, Keith (Leicester E)

      Vis, Dr. Rudi

      Prentice, Gordon (Pendle)

      Ward, Claire

      Prescott, rh John

      Wareing, Robert N.

      Primarolo, rh Dawn

      Watson, Tom (W Bromwich E)

      Prosser, Gwyn

      Watts, David

      Purnell, James

      White, Brian

      Rapson, Syd (Portsmouth N)

      Whitehead, Dr. Alan

      Raynsford, rh Nick

      Williams, rh Alan (Swansea W)

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

      Winnick, David

      Wood, Mike (Batley)

      Robertson, John (Glasgow Anniesland)

      Woodward, Shaun

      Woolas, Phil

      Robinson, Geoffrey (Coventry NW)

      Worthington, Tony

      Wright, Anthony D. (Gt Yarmouth)

      Roche, Mrs Barbara

      Rooney, Terry

      Wright, David (Telford)

      Ross, Ernie (Dundee W)

      Wright, Tony (Cannock)

      Roy, Frank (Motherwell)

      Wyatt, Derek

      Ruddock, Joan

      Russell, Ms Christine (City of Chester)

      Tellers for the Noes:

      Mr. Ivor Caplin and

      Ryan, Joan (Enfield N)

      Mr. Jim Murphy

      Division No. 197]

      [3:31 pm

      AYES

      Abbott, Ms Diane

      Bryant, Chris

      Adams, Irene (Paisley N)

      Burgon, Colin

      Ainger, Nick

      Burnham, Andy

      Ainsworth, Bob (Cov'try NE)

      Byers, rh Stephen

      Alexander, Douglas

      Cairns, David

      Allen, Graham

      Campbell, Alan (Tynemouth)

      Anderson, Janet (Rossendale & Darwen)

      Campbell, Ronnie (Blyth V)

      Casale, Roger

      Armstrong, rh Ms Hilary

      Challen, Colin

      Atkins, Charlotte

      Chapman, Ben (Wirral S)

      Austin, John

      Chaytor, David

      Bailey, Adrian

      Clapham, Michael

      Baird, Vera

      Clark, Mrs Helen (Peterborough)

      Banks, Tony

      Clark, Dr. Lynda (Edinburgh Pentlands)

      Barnes, Harry

      Barron, rh Kevin

      Clarke, rh Tom (Coatbridge & Chryston)

      Battle, John

      Bayley, Hugh

      Clarke, Tony (Northampton S)

      Beard, Nigel

      Clelland, David

      Beckett, rh Margaret

      Clwyd, Ann (Cynon V)

      Beggs, Roy (E Antrim)

      Coaker, Vernon

      Benn, Hilary

      Coffey, Ms Ann

      Bennett, Andrew

      Coleman, lain

      Benton, Joe (Bootle)

      Colman, Tony

      Betts, Clive

      Cooper, Yvette

      Blackman, Liz

      Cousins, Jim

      Blears, Ms Hazel

      Crausby, David

      Blizzard, Bob

      Cruddas, Jon

      Boateng, rh Paul

      Cryer, Ann (Keighley)

      Borrow, David

      Cryer, John (Hornchurch)

      Bradley, rh Keith (Withington)

      Cummings, John

      Bradley, Peter (The Wrekin)

      Cunningham, Tony (Workington)

      Bradshaw, Ben

      Curtis-Thomas, Mrs Claire

      Brennan, Kevin

      Darling, rh Alistair

      Brown, Russell (Dumfries)

      Davey, Valerie (Bristol W)

      Browne, Desmond

      David, Wayne

      362

      Davidson, Ian

      Jones, Lynne (Selly Oak)

      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

      Dawson, Hilton

      Keen, Alan (Feltham)

      Dean, Mrs Janet

      Keen, Ann (Brentford)

      Denham, rh John

      Kemp, Fraser

      Dhanda, Parmjit

      Khabra, Piara S.

      Dobson, rh Frank

      Kidney, David

      Doran, Frank

      Kilfoyle, Peter

      Dowd, Jim (Lewisham W)

      King, Andy (Rugby)

      Drew, David (Stroud)

      King, Ms Oona (Bethnal Green & Bow)

      Eagle, Angela (Wallasey)

      Eagle, Maria (L'pool Garston)

      Knight, Jim (S Dorset)

      Efford, Clive

      Ladyman, Dr. Stephen

      Ennis, Jeff (Barnsley E)

      Lammy, David

      Etherington, Bill

      Laxton, Bob (Derby N)

      Ewing, Annabelle

      Lazarowicz, Mark

      Farrelly, Paul

      Lepper, David

      Field, rh Frank (Birkenhead)

      Leslie, Christopher

      Fisher, Mark

      Levitt Tom (High Peak)

      Fitzpatrick, Jim

      Lewis lvan (Bury s)

      Flint, Caroline

      Liddell rh Mrs Helen

      Flynn, Paul (Newport W)

      Linton Martin

      Follett, Barbara

      Lloyd, Tony (Manchester C)

      Foster, rh Derek

      Love, Andrew

      Foster, Michael (Worcester)

      Lucas lan (Wrexham)

      Foulkes, rh George

      Luke lain (Dundee E)

      Francis, Dr. Hywel

      Lyons, John (Strathkelvin)

      Gardiner, Barry

      McAvoy, Thomas

      Gerrard, Neil

      McCabe, Stephen

      Gilroy, Linda

      McCartney, rh Ian

      Goggins, Paul

      MacDonald, Calum

      Griffiths, Jane (Reading E)

      MacDougall, John

      Griffiths, Nigel (Edinburgh S)

      McFall, John

      Griffiths, Win (Bridgend)

      McGuire, Mrs Anne

      Grogan, John

      Mclsaac, shona

      Hall, Mike (Weaver Vale)

      McKechin, Ann

      Hall, Patrick (Bedford)

      McKenna, Rosemary

      Hamilton, David (Midlothian)

      Mactaggart, Fiona

      Hamilton, Fabian (Leeds NE)

      McWalter, Tony

      Hanson, David

      Mahon, Mrs Alice

      Harris, Tom (Glasgow Cathcart)

      Mallaber, Judy

      Havard, Dai (Merthyr Tydfil & Rhymney)

      Mann, Jonn (Bassetlaw)

      Healey John

      Marsden, Gordon (Blackpool S)

      Henderson, Doug (Newcastle N)

      Marshall, Jim (Leicester S)

      Henderson, Ivan (Harwich)

      Martlew, Eric

      Hendrick, Mark

      Meale, Alan (Mansfield)

      Heppell, John

      Merron, Gillian

      Hermon, Lady

      Michael, rh Alun

      Hesford, Stephen

      Miliband, David

      Heyes, David

      Miller, Andrew

      Hill, Keith (Streatham)

      Mitchell, Austin (Gt Grimsby)

      Hinchliffe, David

      Moffatt, Laura

      Hodge, Margaret

      Mole, Chris

      Hoey, Kate (Vauxhall)

      Moonie, Dr. Lewis

      Hood, Jimmy (Clydesdale)

      Morley, Elliot

      Hoon, rh Geoffrey

      Mountford, Kali

      Hope, Phil (Corby)

      Mudie, George

      Howarth, George (Knowsley N & Sefton E)

      Mullin, chris

      Murphy, Denis (Wansbeck)

      Howells, Dr. Kim

      Naysmith, Dr. Doug

      Hughes, Kevin (Doncaster N)

      Norris, Dan (Wansdyke)

      Hurst, Alan (Braintree)

      O'Brien, Bill (Normanton)

      Hutton, rh John

      O'Hara, Edward

      Irranca-Davies, Huw

      Olner, Bill

      Jackson, Glenda (Hampstead & Highgate)

      Organ, Diana

      Owen, Albert

      Jackson, Helen (Hillsborough)

      Palmer, Dr. Nick

      Jamieson, David

      Picking, Anne

      Jenkins, Brian

      Pickthall, Colin

      Johnson, Alan (Hull W)

      Plaskitt, James

      Johnson, Miss Melanie (Welwyn Hatfield)

      Pollard, Kerry

      Pond, Chris (Gravesham)

      Jones, Jon Owen (Cardiff C)

      Pound, Stephen

      363

      Prentice, Ms Bridget (Lewisham E)

      Squire, Rachel

      Starkey, Dr. Phyllis

      Prentice, Gordon (Pendle)

      Stinchcombe, Paul

      Prescott, rh John

      Sutcliffe, Gerry

      Price, Adam (E Carmarthen & Dinefwr)

      Tami, Mark (Alyn)

      Taylor, Dari (Stockton S)

      Primarolo, rh Dawn

      Taylor, David (NW Leics)

      Prosser, Gwyn

      Taylor, Dr. Richard (Wyre F)

      Purnell, James

      Thomas, Gareth (Clwyd W)

      Rapson, Syd (Portsmouth N)

      Thomas, Gareth (Harrow W)

      Raynsford, rh Nick

      Thomas, Simon (Ceredigion)

      Reed, Andy (Loughborough)

      Tipping, Paddy

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

      Todd, Mark (S Derbyshire)

      Touhig, Don (Islwyn)

      Robertson, Angus (Moray)

      Trickett, Jon

      Robertson, John (Glasgow Anniesland)

      Truswell, Paul

      Turner, Dr. Desmond (Brighton Kemptown)

      Robinson, Geoffrey (Coventry NW)

      Turner, Neil (Wigan)

      Rooney, Terry

      Twigg, Derek (Halton)

      Ross, Ernie (Dundee W)

      Tynan, BilI (Hamilton S)

      Roy, Frank (Motherwell)

      Vis, Dr. Rudi

      Ruane, Chris

      Ward, Claire

      Ruddock, Joan

      Wareing, Robert N.

      Russell, Ms Christine (City of Chester)

      Watson, Tom (W Bromwich E)

      Watts, David

      Ryan, Joan (Enfield N)

      Weir, Michael

      Salmond, Alex

      White, Brian

      Sarwar, Mohammad

      Whitehead, Dr. Alan

      Savidge, Malcolm

      Williams, rh Alan (Swansea W)

      Shaw, Jonathan

      Wishart, Pete

      Sheerman, Barry

      Wood, Mike (Batley)

      Sheridan, Jim

      Woodward, Shaun

      Shipley, Ms Debra

      Woolas, phil

      Simon, Siôn (B'ham Erdington)

      Worthington, Tony

      Singh, Marsha

      Wright, Anthony D. (Gt Yarmouth)

      Smith, rh Chris (Islington S & Finsbury)

      Wright, David (Telford)

      Smith, John (Glamorgan)

      Wright, Tony (Cannock)

      Smith, Llew (Blaenau Gwent)

      Wyatt, Derek

      Smyth, Rev. Martin (Belfast S)

      Soley, Clive

      Tellers for the Ayes:

      Southworth, Helen

      Mr. Ivor Caplin and

      Spellar, rh John

      Mr. Jim Murphy

      Question accordingly agreed to.
      Clause 138 ordered to stand part of the Bill.

    Clause 139

      EMPLOYEE SECURITIES AND OPTIONS
      Mr. Flight: I beg to move amendment No. 12.
      Clause 139, which gives effect to new schedule 22, takes up some 80 pages of the Bill—
      The Temporary Chairman (Mr. John McWilliam): Order. I think it would be unfair if I did not let the Committee know my thinking. It strikes me that debate on the amendment encompasses a clause stand part debate. I ask Members who intend to speak to bear that in mind. I have not finally made up my own mind, but I think it is probably the case.
      3.45 pm
      Mr. Flight: I thank you for that, Mr. McWilliam. Indeed, I was going to crave your indulgence that I might discuss the amendment in a wider, "stand part" context.
      As I said, the proposals in clause 139 take up some 80 pages of the Bill. It strikes me that they have been introduced in response to a court judgment that has

      365
      proved a problem to the Revenue and needs to be corrected. There has, however, been no consultation on the provisions. Dare I say that it has been drafted extremely poorly? It contains a raft of potential new charges and burdens, some of which could be retrospective. To be candid, the proposals as they stand have received widespread criticism from the relevant professional bodies.
      The amendment calls for new schedule 22 to be suspended pending further consultation. The schedule's drafting constitutes a complete rewriting of the Income Tax (Earnings and Pensions) Act 2003, which came into force on 6 April. Indeed, it is a complete contradiction of that legislation; as the Bill stands, we will revert to an incomprehensible drafting.
      The scope and breadth of the proposals were not evident from the Budget speech and press releases—a point that is particularly true of the proposed changes to pay-as-you-earn and national insurance. A statute is being amended that had already been rewritten in plain language; however, the opposite effect is now being achieved. Formulae are used as in the rewritten legislation, but the acronyms used are not explained, save in the explanatory notes. For example, according to the explanatory notes the expression UMV"—it is used in a particular clause—means "unrestricted market value"; however, it would be a great deal more user-friendly for such expressions to be included in the body of the legislation itself.
      Mr. Bercow: Can my hon. Friend advise me, in so far as he can interpret the thinking of the Paymaster General, as to how schedule 22 is consistent with the right hon. Lady's support for the tax law rewrite project, given the implication that that project is intended to simplify taxation?
      Mr. Flight: I thank my hon. Friend for making, in his splendid way, the point that I was making in a rather low-key fashion. This provision is a complete contradiction of any commitment to clearly drafted legislation. As I have pointed out before, eminent lawyers have described schedule 22 as
      "massively complicated and almost impossible to explain, even to … sophisticated people."
      The schedule, in
      "its Technicolor complexity, was introduced without any … consultation".
      As it stands, it is difficult even for the lawyer-experts to understand all the proposals.
      The Bill expands the definition of a "readily convertible asset". In particular, shares in a company under the control of another are to be treated as readily convertible assets. That gives rise to additional PAYE and national insurance liabilities for the employer when charges arise under the new legislation. Several of the changes apply to securities issued before 16 April this year. Before the Budget, shares could have been issued to employees on the basis of legislation then in place—only for those employees and their advisers to discover that the shares are subject to provisions that they could not have been aware of when the transactions were
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      entered into. That, combined with changes to PAYE and national insurance, means that employers are likely to face tax charges for which they have not provided. In respect of national insurance, they will not be able to recover it from employees. The changes should not apply to securities issued before 16 April, where such unforeseen liabilities could arise.
      A new chapter 2 of part 7 applies to restricted securities. The provisions stop the avoidance of the income tax charge when securities are acquired by an employee subject to conditions or otherwise reduced in value. It is a tax-avoidance issue, which the Government understandably sought to address. The conditions were subsequently removed. Without the provisions, the growth in value of the securities would have been subject to capital gains tax. The schedule modernises the existing provisions and makes them more sophisticated. I welcome the fact that the powers provide for a number of elections, which will allow employees to pay income tax by reference to the value of the securities acquired at the date of acquisition on the assumption that some of the restrictions are not there.
      We are particularly concerned that the new raft of proposed legislation is highly complex and has not had adequate consultation. We appreciate the Government's desire to reverse the impact of the recent court ruling and to deal with the PAYE avoidance schemes to which I referred. However, the current drafting will leave many genuine share schemes in a serious mess and will overlay an already overcomplicated regime, which could come to represent a material barrier to wider share ownership for unlisted companies.
      The catch-all drafting could result in a raft of unexpected income tax charges arising at various points during the period of ownership of the shares. The new PAYE and national insurance contribution rules will mean that charges arise when shares have not been disposed of. Venture capitalists with investee companies in which restrictions on shares are included in the articles could face particularly serious problems. There is a plethora of purpose tests, valuation tests and requirements to look back for seven years, which will mean that unlisted companies and owner-managed businesses will need to navigate most carefully through extremely difficult legal waters.
      We wonder whether the Revenue intends to issue any guidance on such matters as the meaning of market value—for example, when restrictions are in the articles of association of the company as opposed to when they are outside the articles. The effects of new capital gains tax, market value definition, the position regarding management buy-outs and what constitutes commercial purposes are all important issues.
      Many of the changes apply with immediate effect, and we are concerned that the new measures impose charges that people did not conceive of when the relevant share schemes were set up, and will leave people having to comply with legislation with which they are unfamiliar. Very little of the principles of the tax law rewrite has been included, as I explained.
      Another concern is the harshness of some of the provisions that could be mitigated by an election, which has to be made in a Revenue-approved form within 14 days of a transaction. I am led to understand that the

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      Revenue has stated that it will not allow taxpayers to make an election before Royal Assent and will positively prevent them from doing so by declining to issue a prescribed form of election. The Revenue has stated that no provision or concession will be granted to allow elections for events that take place between 16 April and Royal Assent to be made within 14 days after Royal Assent. If that is the case, it strikes me as unethical, unfair and without precedent. It could cause real problems for clients who need to get things done before mid to late July.
      I end by echoing the comments of my hon. Friend the Member for Buckingham (Mr. Bercow). So much for the Government's commitment to clarity, transparency and fairness: the provisions in schedule 22 are an absolute nightmare. We have tabled many amendments, and I hope that the Paymaster General will respond by saying that she, too, recognises the need for very considerable clarification and better drafting, and for unintended problems to be addressed.
      Mr. Burnett: I endorse entirely what has been said by the hon. Member for Arundel and South Downs (Mr. Flight). All the information that I have received from the professional bodies leads me to conclude that the clause and schedule are exceptionally complex, and that there has been insufficient consultation.
      If City experts do not understand the clause, what hope is there for anyone else? Do the Inland Revenue and parliamentary counsel understand the clause and the schedule, and the repercussions and tax consequences that they will have?
      It is empty for Ministers to trumpet tax reliefs when they are so complex that they cannot be accessed. It is worthless for them to exclaim that they are seeking to simplify the tax system, when provisions such as the clause and the schedule only make the legislation more complex.
      The scope and breadth of the proposals were not evident in the Budget press release. That is especially true in respect of the consequences for PAYE and national insurance. I hope that the Paymaster General will concede that the amendment is entirely reasonable in the circumstances, and that there should be proper consultation. People need to understand the law, which should be readily accessible. It is in the interests not only of tax practitioners but of their clients and of businesses that they should be able readily to understand the law and its consequences. They must be able to access the law without undue risk or expenditure.
      Mr. Gummer: Does the hon. Gentleman agree that not only businesses or tax advisers need to understand the measure, but that it should be readily accessible to the people whom it affects? Is not one of the problems with the tax system that, if it is not accessible or comprehensible, people will feel that it is not fair? The Government must understand that this complication does not merely make matters difficult for the professionals—it makes them difficult for many people who are pretty ordinary as far as tax is concerned but who will be affected by the schedule.
      The Temporary Chairman: Before the hon. Gentleman replies, I must inform the Committee that I have now made up my mind that there is no scope for a stand part debate. Whatever the conditions of the schedule, the clause itself is perfectly comprehensible. Hon. Members are going quite wide of that, but that is fine.
      Mr. Burnett: I am grateful to the right hon. Member for Suffolk, Coastal (Mr. Gummer) for making an excellent point. For taxation to achieve public acquiescence, it must be fair and intelligible. I draw the right hon. Gentleman's attention to the excellent memorandum, dated May 2003, issued by the revenue law committee of the Law Society, which gives pages of suggested amendments. I hope that we shall have an opportunity to probe those amendments so that we can try to make some sense of a complete mess.
      4 pm
      Mr. Bercow: Notwithstanding the pertinent point made by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), does the hon. Gentleman not think it a pity that the Chancellor cannot be with us in Committee this afternoon, in order to explain how he squares schedule 22 with his foreword to Labour's business manifesto, entitled "Equipping Britain for the Future", published in April 1997, in which the right hon. Gentleman said—ho, ho!—
      "We will not impose burdensome regulations upon business because we understand that successful businesses must keep costs down"?
      Mr. Burnett: I am grateful to the hon. Gentleman for that intervention; he makes an excellent point. However, I hope that the Chancellor is busy squaring the Prime Minister on his view on the euro—
      Hon. Members: What is your view?
      The Temporary Chairman: Order. The debate is wide, but not that wide.
      Mr. Burnett: I shall not go down the euro road—
      Mr. George Osborne: Oh, go on.
      Mr. Burnett:I know that would be welcomed by many—(Interruption.]
      The Temporary Chairman: Order. Hon. Members should not encourage the hon. Gentleman.
      Mr. Burnett: I do not need much encouragement, Mr. McWilliam; that is the trouble.
      We shall be going into these matters in detail in the Standing Committee. Will the Paymaster General assure us that, having heard the arguments, she will acquiesce in this amendment, which is, in the circumstances, entirely reasonable?
      Mr. Djanogly: To date, my policy on the Bill has been to go for brevity, but I am not able to do so on this clause, not least because we are considering about 90 pages of extremely complex new measures. The provisions are problematic in many respects and we are

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      not helped by the fact that there has been a massive lack of consultation, as my hon. Friend the Member for Arundel and South Downs (Mr. Flight) explained.
      The new rules are generally thought to be a sledgehammer to crack a nut and a compliance nightmare. One specialist noted that generalist advisers, let alone their taxpayer clients, will not know when to make their elections under paragraph 431. They will not know how to operate the regime or how to comply with it on every possible occasion that a chargeable event arises. How they were to do that was, he said, beyond him. Even if they managed to comply with the regime, the shares valuation division would be inundated with applications to agree hypothetical values of securities, with and without their restrictions, in order to calculate the amount of schedule E tax charged on each chargeable event.
      The new regime imposes income tax on the acquisition of securities and/or on their value at the time of defined chargeable events, where such securities are made available by reason of any person's employment. That applies irrespective of who acquires and provides the securities.
      I have a few basic points to make about the regime. First, income tax charges can arise for an employee at various stages in the life cycle of a security, on what is, of course, purely a paper value. Secondly, there will not always be a corresponding corporation tax deduction for the employer company because there are many mismatches with the corporation tax regime under schedule 23. I am sure that we shall look into that point in greater detail in the Standing Committee. I understand from representatives of the venture capital industry that the measure will be extremely hard on private equity investee companies, as they are often under the control of their investing limited partnership funds and thus cannot enjoy the tax advantages of things such as EMI—executive management incentive—options, nor will they be able to receive corporation tax deductions.
      Thirdly, the regime will render the employer company liable to account for the income tax under PAYE, which was originally done under a withholding system. Finally, it will require the employer to account for employer national insurance. All those cases apply even where a person other than an employer provides securities to a person other than the employee. All that makes this proposal extremely draconian.
      Proposed new section 421B(3) says that anything provided by a person's employer or by a person connected with the employer will be deemed to be made available by reason of employment, unless the provider of the security is an individual—for example, another shareholder. It also says that the right or opportunity arises
      "in the normal course of domestic, family or personal relationships of that person."
      That wording is very strange; it appears to suggest that an opposite presumption exists where the provider of the security is not the employer or a person connected to the employer, or where the security is to be treated as not acquired by reason of employment. That is not clear, and an indication of where the Government are coming from would be helpful before we have to gather our thoughts later in Committee.
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      The new regime will catch gifts of securities—those securities provided at a price less than their market value; those provided with future payment obligations attached; those provided whether or not at market value or acquisition price; those that attach restrictions on transfer or retention; those that are subject to forfeiture or are convertible; those with artificially depressed or enhanced value; or those that are disposable for more than market value. It will also catch securities options acquired by reason of employment. Some options seem to be caught twice, because the definition of security includes subscription warrants, so a subscription option is both a security and a securities option. Is the regime therefore trying to draw a distinction between subscription and purchase options? That is not clear, and it is absolutely vital that we have an idea from the Minister about that before we go into the details later in Committee.
      Most importantly, can the employer and employee elect under the main part of the new regime—chapter 2, which relates to the restriction of forfeitable shares—to be taxed on the initial acquisition of the securities, valued for tax purposes on a basis that ignores the restrictions on those securities? If so, the subsequent chargeable events tax charges will not arise. However, if people do not elect, income tax charges will be made at various stages in the life cycle of the security, depending on what happens to it. Why not instead say that the profits on the ultimate disposal of the security will be taxed as income under schedule E, unless people elect for upfront income tax treatment to be the cost of entry to the capital gains tax regime, instead of trying to tax the security at lots of different stages in its life cycle? Of course there is no corresponding relief for a fall in value following a chargeable event.
      As my hon. Friend the Member for Arundel and South Downs said earlier, 14 days is much too short a period in which to have to elect for the reasons that he gave, which I will not repeat. Significantly for the private equity industry, which seems to be extremely concerned by these proposals, it would appear that the receipt of a carried interest in a venture capital or limited partnership would fall within the new rules. However, that needs clarification, as it is not clear whether the security interest that the employer acquires is the limited partnership interest itself, as with a unit in a collective scheme, because there is no definition of unit in the legislation, or whether the shares and securities that the partnership acquires in its investee companies count as the employee's securities, and whether, if the latter is the case, they acquire that interest qua partner or qua employee, deriving from their initial acquisition of a carried interest qua employee.
      By making an election, it may be possible to opt for income tax treatment at the outset, so that capital gains treatment for the future is secured, but if the electing needs to be done every time the fund makes an investment, that will be an administrative nightmare, and it will be impossible because, with a fund of funds, carry holders in the top fund will not even know what acquisition funds the lower funds are making. It is illogical that the employer and employee can agree that the employee will bear the employer's national insurance costs in the case of securities options, but not in that of other security interests.

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      Those regimes, when enacted, will generally apply to securities acquired on and after 16 April 2003. Again, in the context of partnerships, it is not clear what is the date of acquisition of the security interest, as that depends on whether it is the partnership interest or the underlying shares or securities in investee companies that count. The definition of collective investment scheme is much too nebulous and unclear. The extension to the definition of readily convertible asset in paragraph 15, which in turn triggers national insurance and PAYE liabilities, is also of concern to the private equity industry, because the widened definition catches shares in a company that is under the control of another company, and limited partnership funds, investee companies, are often caught by that control test. That, of course, gives the employer company a national insurance liability. It also denies it a corporation tax deduction under the schedule 23 regime, and denies it the ability to adopt an enterprise management incentive option scheme, as I mentioned previously. That, of course, is a triple whammy to an industry sector that the Government have said previously they are keen to support, although they may not have intended it to have that effect, in which case I would be interested to hear the Paymaster General's views.
      All the people to whom I have spoken about this clause have said that more time is needed for consultation to get it right and to strike the right balance between anti-avoidance measures—which, of course, the Government wish to implement—and the serious impact that those measures will have on the mid-market private sector and the private equity industry too.
      Dawn Primarolo: This has been a short but none the less important introductory debate to clause 139 and the associated schedule, which we will consider in the Standing Committee. In responding to the amendment and explaining the clause, I will address the issues raised, notwithstanding the fact that, clearly, there will be an interesting and detailed debate when the Bill moves upstairs to a Standing Committee.
      For the sake of absolute clarity, I urge the Committee to resist the amendment, and I commend clause 139, which introduces the reforms to the taxation of share-based remuneration. As the debate proceeded on clause 138, I stressed, and the Committee accepted, that the majority of employers and employees undertake their responsibilities in this area diligently. Unfortunately, however, a small though significant group persists in seeking out ways of avoiding those responsibilities. We have evidence that, in the most recent year for which data are available, at least £1.4 billion has been put through avoidance schemes using shares and securities to take advantage of the fact that the existing rules do not operate consistently and coherently in every situation.
      The anti-avoidance measures relating to employee benefit trusts announced in the Chancellor's pre-Budget report address much of that, but they cannot tackle every scheme: for instance, schemes in which the tax and national insurance saving is worth more than the associated corporation tax deduction for the employer.
      Mr. Burnett: Will the Paymaster General give way?
      Dawn Primarolo: If the hon. Gentleman would let me make my opening remarks and respond to the questions
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      that have already been put to me, I will be happy to take an intervention. This is a complex set of issues, on which I must concentrate as I respond to the Committee.
      4.15 pm
      The scale of the avoidance that uses share schemes in one form or another, which the measures in schedules 21 and 22 tackle, costs the Government—the taxpayer—in excess of £110 million a year. That is not insignificant. Although I recognise what hon. Members say about the representations that they have received from various bodies, I counter that—perhaps this demonstrates the complexity and importance of the subject—by referring them to the article, which I quoted earlier, in this week's "Tax Journal" by David Cohen of Norton Rose who is an expert in such matters. He details each substantive change that we are making and explains why they are better in some instances and clearer in others.
      Obviously the Government do not want to send out the message to the majority of employees and employers who are paying their fair share of tax that we are allowing highly paid executives to avoid their tax liability with complete disdain, which would be the result of the amendment. I make no apologies—I am sure hon. Members would not expect me to—for focusing on the changes that the clause introduces to tackle avoidance and to close loopholes; nor do I apologise for the comprehensive redesign of the rules, which will produce a system that is consistent, coherent and fair. A system that meets those criteria will be less open to abuse by a minority of predominantly highly paid employees who are intent on paying less than their fair share of tax and national insurance.
      The main focus of clause 139 is on tackling avoidance. As hon. Members know, that means that consultation is not appropriate. That is the practice not just of this Government but of the previous Government when trying to deal with such issues. However, in redesigning the rules we have drawn heavily on the feedback from consultation processes that have accompanied a number of discussions with the industry. We have also taken into account the industry's concerns, expressed to us over a long period of time, about the inequities in the current system and its proposals for making the rules fairer so that we design a new system that taxes to income only the value received from the employment at the time when that value becomes accessible and not the capital growth in the value of the share following acquisition, which is the current arrangement.
      I assure hon. Members that those anti-avoidance provisions are targeted at non-commercial transactions that place such benefits in the hands of employees without them paying their fair share of tax and national insurance on the value. They will not adversely affect those who offer their employees genuine share schemes that provide a real stake in the businesses for which they work. However, I accept that hon. Members will want to explore that in more detail upstairs in the Standing Committee.
      If we delay implementing the clause we will not only give a green light to such people to continue to exploit the loopholes in the legislation, but provide a sign-posted road map for everyone else as well. It would be an utter disaster. Hon. Members should be in no doubt that a large coach and horses would be driven along the

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      roads identified in the attempts to change and stop the anti-avoidance, to the detriment of the Exchequer—the taxpayer—for the benefit of a few.
      Our concerns are real. In the space of just last week, Inland Revenue officials received interesting telephone calls from accountants. It seems that the saying for accountants is similar to that for lawyers: the number of opinions required dictates how many different accountants one needs to speak to. One accountant admitted that the existing avoidance schemes would be stopped by the proposals. Another admitted that a new scheme under development would be similarly frustrated, and yet another admitted that if only he had known about the loopholes, he would have had a field day making sure that his clients had access to tax and national insurance relief. To demonstrate our determination not to disadvantage people operating genuine share schemes, I have listened to representations on schedule 22, and I intend to introduce amendments in Standing Committee to correct an error in proposed section 446F(2)(b) of the Income Tax (Earnings and Pensions) Act 2003 and replace "16 April 2002" with "16 April 2003". That is a simple printing error which uncorrected would have resulted in unintended retrospection. In that respect, I agree with the hon. Member for Arundel and South Downs (Mr. Flight). Unfortunately, typographical errors sometimes occur.
      We wish to correct two drafting errors and ensure that appropriate relief is given when arriving at the taxable amount in relation to restricted securities, a point made by the hon. Member for Huntingdon (Mr. Djanogly). We also wish to extend the facility to allow people all the tax upfront on restricted securities awarded in the period between 16 April 2003 and an appointed date. I give hon. Members warning that I shall also table amendments to close the remaining avoidance opportunities that have been drawn to our attention. We will tighten the definition of convertible securities following representations that certain avoidance opportunities may remain if that is not done, putting beyond doubt the fact that PAYE must be operated on all charges to tax arising from the operation of these new provisions.
      At a time when we are asking everyone to make a greater contribution to the UK's need for investment in the public service through national insurance contributions it is important that everyone, including businesses, should pay their fair share of tax and national insurance. As I have already said, people operating genuine share schemes have nothing to fear from the changes.
      I shall now respond to points that I have not covered in my explanation of the amendments that I shall table in Committee. I believe that the question from the hon. Member for Arundel and South Downs about retrospection referred specifically to 16 April 2002, so I hope that he accepts that the correction to 2003 deals with that. Several hon. Members suggested that the provision was a sledgehammer to crack a nut, but I have demonstrated to the Committee that a large amount of money is being taken by a small number of people.
      Mr. Burnett rose—
      Dawn Primarolo: Perhaps I should explain why the provision is not a sledgehammer to crack a nut before the hon. Gentleman intervenes.
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      Share-based remuneration takes many forms, and is used in many different ways. That reflects commercial reality, and the tax rules try to reflect that. However, the cost of avoidance is substantial. A significant sum is involved, and we have no reason to believe that it would reduce over time. The avoidance rules are carefully targeted on those carrying out non-commercial transactions designed to manipulate the value of shares with a view to avoiding tax and national insurance. Companies across a wide spectrum of business are using those schemes—the larger ones to shelter annual cash bonuses, the smaller ones to shelter the owner-director's remuneration. The chairman of the share scheme lawyers group, writing in The Tax Journal on Monday, had no difficulty grasping and explaining succinctly in just two pages what we were attempting to do. As always, I have listened carefully to the points that Members have made in debate, and shall reflect on them, but I must remind them that we will not be deflected from dealing with anti-avoidance.
      Mr. Burnett: I think the Paymaster General told the Committee that about £1.4 billion was the tax lost.
      Dawn Primarolo: No—the value through the scheme.
      Mr. Burnett: The right hon. Lady said that about £110 million a year was lost. How long has that been going on, and how have the Government quantified the loss?
      Dawn Primarolo: I am not sure that I can answer the question as to how long. The issue is when tax avoidance schemes become apparent to tax inspectors, as opposed to when they start operating. That is not always immediately clear. I shall check, and if there is a more suitable answer, I shall make sure that it is passed to the hon. Gentleman. With reference to the £110 million loss, I said that in the past year or so we have seen a growth in this area, but we have been aware of the inconsistencies for some time and we have been moving to correct them. As the hon. Gentleman well knows from his substantial experience, it is a complex area and one should not legislate in haste. We have tried not to do that.
      Norman Lamb: Will the Paymaster General respond specifically to the concerns about the complexity of the provisions, so soon after the tax rewrite Bill was considered in this place? It seems extraordinary that the language used is not consistent and that, after a good initiative from the Government, we are now moving in the wrong direction.
      Dawn Primarolo: The Bill is in the tax law rewrite style. That is why the measure has been taken out in its entirety and put back in. The total number of pages incorporating the necessary changes to deal with avoidance has increased the Bill by 10 pages—if that figure is wrong, I shall correct it in writing to the hon. Gentleman: that is, 10 pages to protect £110 million and produce fairness.
      The hon. Gentleman is right: I am utterly committed to the tax law rewrite project and as a Minister I have given it a great deal of support. Its job is to rewrite existing provisions, not to take decisions about the

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      policy or make improvements. Imperfect as that is, I considered it inappropriate to hold up the tax law rewrite project in order to get the provision in place. This area and another area of the Bill closely follow the tax law rewrite style. We can all agree that that is the way forward.
      On changes to the taxation of convertible shares, the existing rules do not operate fairly to ensure that the right amount of value is taxed when the employee unlocks access to it. We have received representations about this unfairness. The new rules are fairer, taking into account the security acquired and the right to convert at a later date, and treating each of those separately to calculate the tax charged. There are examples where that is of considerable importance.
      There was a question£I do not remember who from£about interaction with enterprise SMEs. We are not attacking genuine share schemes that give employees a real stake. It is the Government's policy to make sure that we do not do that. We are attacking the exploitation of rules by those who do not use the rules properly. Small companies that want to improve their productivity through employee initiatives can benefit from tax and national insurance advantages by using Inland Revenue tax-advantaged arrangements, particularly the enterprise management scheme. The hon. Member for Huntingdon raised that with regard to its interaction with other areas of the tax system, and stressed that we should ensure that there were no adverse effects that would damage provisions elsewhere in the system. I agree. We will discuss the impact of the new rules, particularly in the context of venture capital, with the British Venture Capital Association. We will be mindful across the piece to ensure that there is no inadvertent knock-on effect.
      4.30 pm
      The hon. Member for Huntingdon also asked whether there would be guidance. The answer is yes. We want to ensure that the current guidance is updated. In particular, we want to work with the industry to ensure that it is appropriate. It is one thing to write guidance, but another to ensure that it is acceptable and usable by the industry.
      We are studying carefully the representations made by such august bodies as the Law Society. So far, none of them suggests that the fundamental concept and approach of the changes is flawed. Many proposals appear—I am sure that this is unintentional—to weaken the anti-avoidance effects and not deal with the structures involved.
      I realise that I may have spoken for longer than I should, but I hope I have made it clear why the Government consider absolutely inappropriate an amendment that seeks to delay implementation. That is why I ask my hon. Friends to oppose it, as it is foolish to give, in such a spectacular way, a road map on how not to pay tax. I hope that I have dealt with many of the points that have been made, although I appreciate that I have not mentioned all of them.
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      In recommending the clause to the Committee, I look forward to the discussions in the Standing Committee, which I am sure will be interesting and detailed and will enable us to deal with many more issues so as to put people's minds at rest.
      Mr. Flight: I thank the Paymaster General for her response. In particular, I thank her for some of the corrections that she mentioned, including those about the date and the question of representation and retrospection. I am also glad to note that the Government are now studying the submissions of the Law Society. I trust that they are also considering representations made by the Institute of Chartered Accountants and other professional bodies.
      The clause, as it is currently drafted, smacks of legislation made in haste. As it stands, there is potential for a number of unintended consequences. In particular, as my hon. Friend the Member for Huntingdon (Mr. Djanogly) pointed out, the issue of private equity and venture capital is crucial. Unfortunately, development in that area is already stalling pretty seriously in this country.
      I do not accept that there has been no scope for consultation on such a major issue. Indeed, the Paymaster General is effectively accepting a degree of consultation with the Law Society. The Government have been seeking to close down avoidance and that seems a clear and straightforward objective. The concern is that, because they have not consulted professionals about where they want to go and the unintended consequences that they want to avoid, we have ended up with legislation that is exceedingly complicated for lawyers, let alone those who have to obey it.
      We therefore feel that our amendment is appropriate. As the Paymaster General said, there will be a full debate in Standing Committee and many of the issues will be discussed. However, we are not yet in a society that is so totalitarian that it is right suddenly to introduce such massive and complex legislation with very modest flagging up in the Budget or previously. Furthermore, the new rules are not only about anti-avoidance. We therefore intend to press the amendment to a Division.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 172, Noes 289.

      Division No. 197]

      [3:31 pm

      AYES

      Abbott, Ms Diane

      Bryant, Chris

      Adams, Irene (Paisley N)

      Burgon, Colin

      Ainger, Nick

      Burnham, Andy

      Ainsworth, Bob (Cov'try NE)

      Byers, rh Stephen

      Alexander, Douglas

      Cairns, David

      Allen, Graham

      Campbell, Alan (Tynemouth)

      Anderson, Janet (Rossendale & Darwen)

      Campbell, Ronnie (Blyth V)

      Casale, Roger

      Armstrong, rh Ms Hilary

      Challen, Colin

      Atkins, Charlotte

      Chapman, Ben (Wirral S)

      Austin, John

      Chaytor, David

      Bailey, Adrian

      Clapham, Michael

      Baird, Vera

      Clark, Mrs Helen (Peterborough)

      Banks, Tony

      Clark, Dr. Lynda (Edinburgh Pentlands)

      Barnes, Harry

      Barron, rh Kevin

      Clarke, rh Tom (Coatbridge & Chryston)

      Battle, John

      Bayley, Hugh

      Clarke, Tony (Northampton S)

      Beard, Nigel

      Clelland, David

      Beckett, rh Margaret

      Clwyd, Ann (Cynon V)

      Beggs, Roy (E Antrim)

      Coaker, Vernon

      Benn, Hilary

      Coffey, Ms Ann

      Bennett, Andrew

      Coleman, lain

      Benton, Joe (Bootle)

      Colman, Tony

      Betts, Clive

      Cooper, Yvette

      Blackman, Liz

      Cousins, Jim

      Blears, Ms Hazel

      Crausby, David

      Blizzard, Bob

      Cruddas, Jon

      Boateng, rh Paul

      Cryer, Ann (Keighley)

      Borrow, David

      Cryer, John (Hornchurch)

      Bradley, rh Keith (Withington)

      Cummings, John

      Bradley, Peter (The Wrekin)

      Cunningham, Tony (Workington)

      Bradshaw, Ben

      Curtis-Thomas, Mrs Claire

      Brennan, Kevin

      Darling, rh Alistair

      Brown, Russell (Dumfries)

      Davey, Valerie (Bristol W)

      Browne, Desmond

      David, Wayne

      362

      Davidson, Ian

      Jones, Lynne (Selly Oak)

      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

      Dawson, Hilton

      Keen, Alan (Feltham)

      Dean, Mrs Janet

      Keen, Ann (Brentford)

      Denham, rh John

      Kemp, Fraser

      Dhanda, Parmjit

      Khabra, Piara S.

      Dobson, rh Frank

      Kidney, David

      Doran, Frank

      Kilfoyle, Peter

      Dowd, Jim (Lewisham W)

      King, Andy (Rugby)

      Drew, David (Stroud)

      King, Ms Oona (Bethnal Green & Bow)

      Eagle, Angela (Wallasey)

      Eagle, Maria (L'pool Garston)

      Knight, Jim (S Dorset)

      Efford, Clive

      Ladyman, Dr. Stephen

      Ennis, Jeff (Barnsley E)

      Lammy, David

      Etherington, Bill

      Laxton, Bob (Derby N)

      Ewing, Annabelle

      Lazarowicz, Mark

      Farrelly, Paul

      Lepper, David

      Field, rh Frank (Birkenhead)

      Leslie, Christopher

      Fisher, Mark

      Levitt Tom (High Peak)

      Fitzpatrick, Jim

      Lewis lvan (Bury s)

      Flint, Caroline

      Liddell rh Mrs Helen

      Flynn, Paul (Newport W)

      Linton Martin

      Follett, Barbara

      Lloyd, Tony (Manchester C)

      Foster, rh Derek

      Love, Andrew

      Foster, Michael (Worcester)

      Lucas lan (Wrexham)

      Foulkes, rh George

      Luke lain (Dundee E)

      Francis, Dr. Hywel

      Lyons, John (Strathkelvin)

      Gardiner, Barry

      McAvoy, Thomas

      Gerrard, Neil

      McCabe, Stephen

      Gilroy, Linda

      McCartney, rh Ian

      Goggins, Paul

      MacDonald, Calum

      Griffiths, Jane (Reading E)

      MacDougall, John

      Griffiths, Nigel (Edinburgh S)

      McFall, John

      Griffiths, Win (Bridgend)

      McGuire, Mrs Anne

      Grogan, John

      Mclsaac, shona

      Hall, Mike (Weaver Vale)

      McKechin, Ann

      Hall, Patrick (Bedford)

      McKenna, Rosemary

      Hamilton, David (Midlothian)

      Mactaggart, Fiona

      Hamilton, Fabian (Leeds NE)

      McWalter, Tony

      Hanson, David

      Mahon, Mrs Alice

      Harris, Tom (Glasgow Cathcart)

      Mallaber, Judy

      Havard, Dai (Merthyr Tydfil & Rhymney)

      Mann, Jonn (Bassetlaw)

      Healey John

      Marsden, Gordon (Blackpool S)

      Henderson, Doug (Newcastle N)

      Marshall, Jim (Leicester S)

      Henderson, Ivan (Harwich)

      Martlew, Eric

      Hendrick, Mark

      Meale, Alan (Mansfield)

      Heppell, John

      Merron, Gillian

      Hermon, Lady

      Michael, rh Alun

      Hesford, Stephen

      Miliband, David

      Heyes, David

      Miller, Andrew

      Hill, Keith (Streatham)

      Mitchell, Austin (Gt Grimsby)

      Hinchliffe, David

      Moffatt, Laura

      Hodge, Margaret

      Mole, Chris

      Hoey, Kate (Vauxhall)

      Moonie, Dr. Lewis

      Hood, Jimmy (Clydesdale)

      Morley, Elliot

      Hoon, rh Geoffrey

      Mountford, Kali

      Hope, Phil (Corby)

      Mudie, George

      Howarth, George (Knowsley N & Sefton E)

      Mullin, chris

      Murphy, Denis (Wansbeck)

      Howells, Dr. Kim

      Naysmith, Dr. Doug

      Hughes, Kevin (Doncaster N)

      Norris, Dan (Wansdyke)

      Hurst, Alan (Braintree)

      O'Brien, Bill (Normanton)

      Hutton, rh John

      O'Hara, Edward

      Irranca-Davies, Huw

      Olner, Bill

      Jackson, Glenda (Hampstead & Highgate)

      Organ, Diana

      Owen, Albert

      Jackson, Helen (Hillsborough)

      Palmer, Dr. Nick

      Jamieson, David

      Picking, Anne

      Jenkins, Brian

      Pickthall, Colin

      Johnson, Alan (Hull W)

      Plaskitt, James

      Johnson, Miss Melanie (Welwyn Hatfield)

      Pollard, Kerry

      Pond, Chris (Gravesham)

      Jones, Jon Owen (Cardiff C)

      Pound, Stephen

      363

      Prentice, Ms Bridget (Lewisham E)

      Squire, Rachel

      Starkey, Dr. Phyllis

      Prentice, Gordon (Pendle)

      Stinchcombe, Paul

      Prescott, rh John

      Sutcliffe, Gerry

      Price, Adam (E Carmarthen & Dinefwr)

      Tami, Mark (Alyn)

      Taylor, Dari (Stockton S)

      Primarolo, rh Dawn

      Taylor, David (NW Leics)

      Prosser, Gwyn

      Taylor, Dr. Richard (Wyre F)

      Purnell, James

      Thomas, Gareth (Clwyd W)

      Rapson, Syd (Portsmouth N)

      Thomas, Gareth (Harrow W)

      Raynsford, rh Nick

      Thomas, Simon (Ceredigion)

      Reed, Andy (Loughborough)

      Tipping, Paddy

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

      Todd, Mark (S Derbyshire)

      Touhig, Don (Islwyn)

      Robertson, Angus (Moray)

      Trickett, Jon

      Robertson, John (Glasgow Anniesland)

      Truswell, Paul

      Turner, Dr. Desmond (Brighton Kemptown)

      Robinson, Geoffrey (Coventry NW)

      Turner, Neil (Wigan)

      Rooney, Terry

      Twigg, Derek (Halton)

      Ross, Ernie (Dundee W)

      Tynan, BilI (Hamilton S)

      Roy, Frank (Motherwell)

      Vis, Dr. Rudi

      Ruane, Chris

      Ward, Claire

      Ruddock, Joan

      Wareing, Robert N.

      Russell, Ms Christine (City of Chester)

      Watson, Tom (W Bromwich E)

      Watts, David

      Ryan, Joan (Enfield N)

      Weir, Michael

      Salmond, Alex

      White, Brian

      Sarwar, Mohammad

      Whitehead, Dr. Alan

      Savidge, Malcolm

      Williams, rh Alan (Swansea W)

      Shaw, Jonathan

      Wishart, Pete

      Sheerman, Barry

      Wood, Mike (Batley)

      Sheridan, Jim

      Woodward, Shaun

      Shipley, Ms Debra

      Woolas, phil

      Simon, Siôn (B'ham Erdington)

      Worthington, Tony

      Singh, Marsha

      Wright, Anthony D. (Gt Yarmouth)

      Smith, rh Chris (Islington S & Finsbury)

      Wright, David (Telford)

      Smith, John (Glamorgan)

      Wright, Tony (Cannock)

      Smith, Llew (Blaenau Gwent)

      Wyatt, Derek

      Smyth, Rev. Martin (Belfast S)

      Soley, Clive

      Tellers for the Ayes:

      Southworth, Helen

      Mr. Ivor Caplin and

      Spellar, rh John

      Mr. Jim Murphy

      NOES

      Ainsworth, Peter (E Surrey)

      Clarke, rh Kenneth (Rushcliffe)

      Amess, David

      Clifton-Brown, Geoffrey

      Atkinson, David (Bour'mth E)

      Collins, Tim

      Atkinson, Peter (Hexham)

      Conway, Derek

      Bacon, Richard

      Cran, James (Beverley)

      Baldry, Tony

      Curry, rh David

      Barker, Gregory

      Davis, rh David (Haltemprice & Howden)

      Baron, John (Billericay)

      Bellingham, Henry

      Djanogly, Jonathan

      Bercow, John

      Dodds, Nigel

      Beresford, Sir Paul

      Duncan, Alan (Rutland)

      Blunt, Crispin

      Duncan, Peter (Galloway)

      Boswell, Tim

      Duncan Smith, rh lain

      Bottomley, Peter (Worthing W)

      Fabricant, Michael

      Bottomley, rh Virginia (SW Surrey)

      Field, Mark (Cities of London & Westminster)

      Brady, Graham

      Flight, Howard

      Brazier, Julian

      Flook, Adrian

      Browning, Mrs Angela

      Forth, rh Eric

      Burns, Simon

      Garnier, Edward

      Burt, Alistair

      Gibb, Nick (Bognor Regis)

      Butterfill, John

      Gillan, Mrs Cheryl

      Cameron, David

      Gray, James (N Wilts)

      Campbell, Gregory (E Lond'y)

      Grayling, Chris

      Cash, William

      Green, Damian (Ashford)

      Chapman, Sir Sydney (Chipping Barnet)

      Greenway, John

      Grieve, Dominic

      Chope, Christopher

      Gummer, rh John

      Clappison, James

      Hague, rh William

      364

      Hammond, Philip

      Redwood, rh John

      Hancock, Mike

      Robathan, Andrew

      Hawkins, Nick

      Robertson, Laurence (Tewk'b'ry)

      Hayes, John (S Holland)

      Robinson, Peter (Belfast E)

      Heald, Oliver

      Rosindell, Andrew

      Hendry, Charles

      Sayeed, Jonathan

      Hepburn, Stephen

      Selous, Andrew

      Hoban, Mark (Fareham)

      Shephard, rh Mrs Gillian

      Hogg, rh Douglas

      Shepherd, Richard

      Horam, John (Orpington)

      Simmonds, Mark

      Howarth, Gerald (Aldershot)

      Simpson, Keith (M-Norfolk)

      Jack, rh Michael

      Soames, Nicholas

      Johnson, Boris (Henley)

      Spelman, Mrs Caroline

      Key, Robert (Salisbury)

      Spicer, Sir Michael

      Kirkbride, Miss Julie

      Spink, Bob (Castle Point)

      Lait, Mrs Jacqui

      Spring, Richard

      Lansley, Andrew

      Steen, Anthony

      Leigh, Edward

      Streeter, Gary

      Letwin, rh Oliver

      Swayne, Desmond

      Lewis, Dr. Julian (New Forest E)

      Swire, Hugo (E Devon)

      Liddell-Grainger, Ian

      Tapsell, Sir Peter

      Lidington, David

      Taylor, John (Solihull)

      Lilley, rh Peter

      Taylor, Sir Teddy

      Loughton, Tim

      Tredinnick, David

      Mclntosh, Miss Anne

      Trend, Michael

      Mackay, rh Andrew

      Trimble, rh David

      Maclean, rh David

      Turner, Andrew (Isle of Wight)

      McLoughlin, Patrick

      Tyrie, Andrew

      Malins, Humfrey

      Viggers, Peter

      May, Mrs Theresa

      Waterson, Nigel

      Mercer, Patrick

      Watkinson, Angela

      Mitchell, Andrew (Sutton Coldfield)

      Whittingdale, John

      Wiggin, Bill

      Moss, Malcolm

      Wilkinson, John

      Murrison, Dr. Andrew

      Willetts, David

      Norman, Archie

      Wilshire, David

      O'Brien, Stephen (Eddisbury)

      Winterton, Ann (Congleton)

      Osborne, George (Tatton)

      Yeo, Tim (S Suffolk)

      Ottaway, Richard

      Young, rh Sir George

      Paice, James

      Paterson, Owen

      Tellers for the Noes:

      Pickles, Eric

      Mr. Robert Syms and

      Prisk, Mark (Hertford)

      Mr. Mark Francois

      Division No. 198]

      [4:34 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Brady, Graham

      Allan, Richard

      Brake, Tom (Carshalton)

      Amess, David

      Brazier, Julian

      Atkinson, David (Bour'mth E)

      Breed, Colin

      Atkinson, Peter (Hexham)

      Brooke, Mrs Annette L.

      Bacon, Richard

      Browning, Mrs Angela

      Baldry, Tony

      Burnett, John

      Barker, Gregory

      Baron, John (Billericay)

      Burns, Simon

      Barrett, John

      Barstow, Paul

      Beggs, Roy (E Antrim)

      Burt, Alistair

      Bellingham, Henry

      Butterfill, John

      Bercow, John

      Cable, Dr. Vincent

      Beresford, Sir Paul

      Cameron, David

      Blunt, Crispin

      Campbell, rh Menzies (NE Fife)

      Bottomley, rh Virginia (SW Surrey)

      Carmichael, Alistair

      Cash, William

      377

      Chapman, Sir Sydney (Chipping Barnet)

      McLoughlin, Patrick

      Malins, Humfrey

      Chope, Christopher

      May, Mrs Theresa

      Clappison, James

      Mercer, Patrick

      Clarke, rh Kenneth (Rushcliffe)

      Mitchell, Andrew (Sutton Coldfield)

      Clifton-Brown, Geoffrey

      Collins, Tim

      Moore, Michael

      Conway, Derek

      Moss, Malcolm

      Cotter, Brian

      Murrison, Dr. Andrew

      Cran, James (Beverley)

      Norman, Archie

      Curry, rh David

      Oaten, Mark (Winchester)

      Davey, Edward (Kingston)

      O'Brien, Stephen (Eddisbury)

      Davis, rh David (Haltemprice & Howden)

      Öpik, Lembit

      Osborne, George (Tatton)

      Djanogly, Jonathan

      Ottaway, Richard

      Dodds, Nigel

      Paice, James

      Doughty, Sue

      Paterson, Owen

      Duncan, Alan (Rutland)

      Pickles, Eric

      Duncan, Peter (Galloway)

      Prisk, Mark (Hertford)

      Duncan Smith, rh Iain

      Pugh, Dr. john

      Fabricant, Michael

      Redwood, rh John

      Field, Mark (Cities of London & Westminster)

      Reid, Alan (Argyll & Bute)

      Rendel David

      Flight, Howard

      Robathan, Andrew

      Flook, Adrian

      Robertson, Laurence (Tewk'b'ry)

      Forth, rh Eric

      Robinson, Peter (Belfast E)

      Foster, Don (Bath)

      Rosindell, Andrew

      Gamier, Edward

      Russell, Bob (Colchester)

      George, Andrew (St Ives)

      Sanders Adrian

      Gibb, Nick (Bognor Regis)

      Sayeed Jonathan

      Gidley, Sandra

      Selous Andrew

      Gillan, Mrs Cheryl

      Shephard, rh Mrs Gillian

      Gray, James (N Wilts)

      Shepherd, Richard

      Grayling, Chris

      Simmonds, Mark

      Green, Damian (Ashford)

      Simpson, Keith (M-Norfolk)

      Green, Matthew (Ludlow)

      Smith Sir Robert (W Ab-d-ns & Kincardine)

      Greenway, John

      Grieve, Dominic

      Smyth Rev Martin (Belfast S)

      Gummer rh John

      Soames Nicholas

      Hague, rh William

      Spelman, Mrs Caroline

      Hammond, Philip

      Spicer, Sir Michael

      Hancock, Mike

      Spink, Bob (Castle Point)

      Harris, Dr.Evan (Oxford W & Abingdon)

      Spring, Richard

      Harvey, Nick

      Steen, Anthony

      Hawkins, Nick

      Streeter, Gary

      Hayes, John (S Holland

      Stunell, Andrew

      Heald, Oliver

      Swayne, Desmond

      Heath, David

      Swire, Hugo (E Devon)

      Hendry, Charles

      Syms Robert

      Hermon, Lady

      Tapsell, Sir Peter

      Hoban, Mark (Fareham)

      Taylor. Ian (Esher)

      Hogg, rh Douglas

      Taylor' John (Solihull)

      Horam, John (Orpington)

      Taylor, Matthew (Truro)

      Howarth, Gerald (Aldershot)

      Taylor, Dr. Richard (Wyre F)

      Hunter, Andrew

      Taylor, Sir Teddy

      Jack, rh Michael

      Thurso John

      Johnson, Boris (Henley)

      Trend Michael

      Kennedy, rh Charles (Ross Skye & Inverness)

      Turner Andrew (Isle of Wight)

      Tyler, Paul (N Cornwall)

      Key, Robert (Salisbury)

      Tyrie' Andrew

      Kirkbride, Miss Julie

      Viggers, Peter

      Lait, Mrs Jacqui

      Waterson, Nigel

      Lamb, Norman

      Watkinson, Angela

      Lansley, Andrew

      Whittingdale, John

      Laws, David (Yeovil)

      Wiggin, Bill

      Leigh, Edward

      Wilkinson, John

      Letwin, rh Oliver

      Willetts, David

      Lewis, Dr. Julian (New Forest E)

      Winterton, Ann (Congleton)

      Liddell-Grainger, Ian

      Yeo, Tim (S Suffolk)

      Lidington, David

      Young, rh Sir George

      Lilley, rh Peter

      Younger-Ross, Richard

      Loughton, Tim

      Mclntosh, Miss Anne

      Tellers for the Ayes:

      Mackay, rh Andrew

      Mr. David Wilshire and

      Maclean, rh David

      Mr. Mark Francois

      Question accordingly negatived.
      Clause 139 ordered to stand part of the Bill.

    Clause 148

      NON-RESIDENT COMPANIES: BASIS OF CHARGE TO CORPORATION TAX
      Mr. Flight: I beg to move amendment No. 66.
      The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss amendment No. 67.
      Mr. Flight: The two amendments to which I am about to speak should be viewed in the context of some of the wider issues associated with clause 148, and I hope that the House will grant me indulgence if, rather than making certain points twice, I speak more widely around the amendments at this stage of our discussions.
      Clause 148 was foreshadowed in last year's Budget and the Government's proposals were summarised in a subsequent press release that stated that the new proposals were
      "aimed at modernising the UK tax regime by eliminating a weakness in the existing rules, and so bringing the UK more into line with other major industrialised countries, such as France, Germany and the USA".
      That was essentially because
      "recent work by the OECD … highlighted the fact that the UK was out of step with other major countries, and the changes here … make the UK approach similar to that seen elsewhere".
      The press release stated that the changes would apply to accounting periods commencing on or after 1 January this year. Clause 148 gives effect to those proposals, although, curiously, clause 147, which defines the term "permanent establishment", contains no commencement provision and so will take effect from Royal Assent. I am not clear whether clause 148 can take effect from 1 January as the crucial definition will not have been enacted at that point.
      Amendment No. 66 deals with the issue of the permanent establishment having the same credit rating as a non-resident company. Ratings are given to companies, to corporate debt and sometimes to specific transactions, and it is not clear what is being referred to here. Only a few companies that carry on business in the UK through a permanent establishment will have a credit rating. It is surely not appropriate to treat a UK permanent establishment, which might carry on only one or a limited range of the activities carried on by the company itself, as having the same credit rating as the company as a whole.
      Both the OECD model and the draft legislation attribute to the permanent establishment the profits that would have been realised by a separate enterprise carrying on the same or similar activities. If any rating were to be assumed, it should be that which the assumed separate enterprise would have to have had, having regard to the activities that it carries on. It is illogical to assume a credit rating equivalent to that of the company itself.

      381
      The term "shareholders' loan" is also an issue. Given that "loan" has a meaning that does not include unpaid purchase money, a definition would be required if, contrary to what we feel is appropriate, the provision is to be retained. Failing that, debt securities issued as a consideration for an acquisition would not be included.
      The explanatory notes to the Bill refer to equity capital and loan capital. That would probably be acceptable for financial institutions where there is a substantial amount of guidance, but for other companies it would be difficult to work out what is meant by the term.
      Subsection (5) also permits the Revenue to make regulations for the application of subsection (2) to insurance companies, including the attribution of capital to a UK permanent establishment. That confers an unacceptable degree of power on the Revenue.
      We are also concerned that the terms of the accompanying schedule 25 are discriminatory. The effect of paragraph 5 is that a permanent establishment would be in a worse position than a subsidiary that borrowed from its parent company. That could make organisations think more carefully about whether to set up in the UK as a branch or subsidiary. To be able to deduct interest would require the permanent establishment to have its own credit rating and deal at arm's length with other parts of the organisation. It could be discriminatory if the branch were not treated in the same way as a subsidiary.
      The commentary in the OECD model is a flexible document and there is an ongoing debate about whether a branch should be treated as independent. There is a risk that, if the commentary is changed, the UK provision will then be out of line. If provisions are included in the Bill based on the current version of the commentary, there is a risk that that will restrict the Revenue's flexibility.
      The clause is not specifically about European issues, but it is based on the long-standing principle of the UK's "territorial" basis of taxation for overseas companies, so it indirectly allows European issues to be raised; it focuses on European issues. Indeed, some of the commentary on the proposals from professionals has suggested that it contravenes EC treaties.
      The premise from which the clause proceeds is that British companies should be taxed on all their profits, wherever they arise, and that non-UK companies should be taxed on their UK profits. In both cases, the tax yield is protected by a number of rules that prevent assets or profits from being siphoned out of the UK through transfer pricing, tax-free transfers of assets or excessive interest payment. The UK tax base is also protected by allowing offset of losses only where those have arisen in the UK.
      The Paymaster General will be aware that a number of recent decisions have challenged some fundamental aspects of the corporate tax system of EU countries and our own corporate tax system. Indeed, they could challenge clause 148 and its accompanying schedule. The challenges seek to argue that the application of different tax rules to transactions with foreign companies from the rules that apply domestically is
      382
      unlawful discrimination, but from a domestic perspective such discrimination is necessary and has been practised to ensure that companies do not simply siphon off profits to low-tax countries.
      Those challenges are a significant threat to the UK's ability both to control its tax borders and to exercise its own corporate tax policies. For example, it may be unlawful to restrict interest deductions to EU companies where those payments represent excessive deductions designed to shift profits overseas. That is raised in the German Lankhorst case and the awaited Dutch Bosal case. It may be illegal to apply transfer pricing rules to transactions within EU companies, an issue that has not yet been litigated but which follows in principle from other European Court of Justice decisions. The UK may need to allow tax-free transfers of assets to EU companies because they are permitted between UK companies. The controlled foreign companies rules that prevent British companies from accumulating tax-free cash outside the UK may be unlawful. Again, that issue has not yet been litigated but there are relevant French cases. The well known Marks and Spencer case currently being litigated would require Britain to allow losses of foreign subsidiaries against UK profits. The recent decision in the Lankhorst case may well undermine the usefulness and effectiveness of the clause as interest payments to other EU members of a group would still be deductible.
      The Government have to date refused to discuss—indeed, the Revenue appears to have buried its head in the sand—the impact of European Court of Justice decisions on the UK tax system. We welcome the announcement in the Red Book that that issue will be looked into, but it is the first acknowledgment that a major problem exists.
      I would like in that context to make the following key points to the Paymaster General. The first is about whether the Government are confident of the forecast yield from clause 148, particularly in light of the slowdown in the financial services industry in the City as well as the EU issues. Secondly, the European Court's decisions have made provisions that are designed to prevent abuse of domestic tax rules unlawful. That challenges the UK's ability to protect its corporate revenues. What are the Government doing to defend the UK's tax rights over UK and non-UK companies operating in the UK?
      5 pm
      The Government's failure to face up to the problem so far leaves them with only two—potentially unattractive—options. They can extend the rules that are designed to apply only to international transactions to cover all domestic businesses, which would be highly regulatory and would impose unnecessary compliance costs on UK businesses. Alternatively, they can abandon the rules that prevent international tax avoidance, which would mean the loss of significant tax revenues.

      383
      How do the Government propose to balance the need to raise revenue with the competitiveness of our tax system? The Red Book suggests that they are more concerned with protecting the tax yield than with the all-important issue of competitiveness. They have, at least overtly, ignored all the warning signs that sovereignty is being undermined in this crucial tax area, and are now acting in a way that will have an adverse effect on British business interests and the vital attractiveness of Britain as an international business location.
      Will the Government consider tabling an amendment to the European treaty as part of the 2004 intergovernmental conference, to ensure that specified tax rules designed to prevent international tax avoidance are agreed not to be unlawful, so that we can retain national sovereignty in these areas and, indeed, ensure that what is proposed in clause 148 is effective?
      Mr. Baron: Clause 148 could, I think, cause serious problems for the City of London and therefore for the country as a whole, as the City is a major contributor to our economic well-being. The clause alters the tax treatment of UK branches of non-UK companies, which will have a particularly adverse effect on overseas banks operating in the City. It could seriously jeopardise the City's position as the world's leading international financial and business centre, as foreign banks downsize their operations in London.
      Let me say a little about the importance of the City to the kingdom as a whole. It is no exaggeration to say that it is a global powerhouse at the heart of the UK's financial services, a sector whose net contribution to the UK's current account has been over £13 billion, a significant amount of which has been generated within the square mile. There is a daily foreign exchange turnover of over $500 billion in London, and 56 per cent. of the global foreign equity market and 70 per cent. of eurobonds are traded there. London is the world's leading market for international insurers: the worldwide premium income reached £157 billion in 2001 alone.
      I must declare an interest. I was a fund manager before entering the House, which enables me to testify to the importance of foreign banks to the City's prosperity and wealth generation. About 500 foreign banks currently operate in London, employing some 60,000 people. They contribute enormously to the City's pre-eminent financial position. I believe that this tax change will threaten that position, because it has been built on a false premise by a Government who misunderstand the way in which the City works—and, I suggest, misunderstand the economic facts of life. The Chancellor tries to justify this move by claiming that such changes in the tax treatment of foreign companies simply bring us into line with the US and with other European countries. However, he misses the point that this country's existing favourable tax treatment helps to compensate foreign companies for other factors that make doing business in London, in particular, less attractive when compared with other cities.
      One example is the capital's transport infrastructure, which is a mess. Average journey times have increased by about 16 per cent. since 1998, and motorway congestion is up by 250 per cent. since 1997. Meanwhile, congestion charging has added a further marginal cost
      384
      to businesses operating in London. At the same time, train punctuality has worsened each year under this Government. By withdrawing the advantage of a low-tax regime, they have made the decision whether to locate to London or elsewhere a more finely balanced one for foreign companies. This Government fail to understand that when it comes to the City, increasing mobility of labour and modern technology mean that business undertaken in the London branches of foreign banks can easily be done elsewhere.
      Ian Mullen, chief executive of the British Bankers Association, said of the tax change last year, when it was first mooted:
      "This will massively increase the costs of foreign banks operating in the UK and have an adverse impact on jobs and the competitiveness of the City".
      In a letter to the Financial Times last year, Angus MacLennan, chairman of the Foreign Banks and Securities Houses Association, said that he guarantees that this tax change will result in business going abroad—in the first instance, by way of assets being moved to reduce additional tax, and afterwards as income follows the assets. He said:
      "the reduced revenue base and increasing costs of being in London (compare these with the US, France or Germany…) will lead many to conclude that, economically, they should not be here at all".
      He concluded his letter by saying:
      "This is the reality. Short-term gain and long-term destruction of the best industry in the UK. Our competitor countries must be laughing with anticipation".
      Mr. Bercow: Does my hon. Friend agree that Ministers are especially short-sighted in this matter, given that they know, as we do, that this country has already sacrificed two thirds of its competitive tax advantage since 1997, relative to other members of the European Union?
      Mr. Baron: I readily agree with those figures and that sentiment. What worries Conservative Members is that this country's competitiveness appears to be being continually eroded by these tax increases and regulations. Independent statistics suggest that we are slipping down the competitiveness league tables, which is causing a loss in productivity that will eventually result in the loss of our pre-eminent economic place.
      It is true that these measures will generate income for the Treasury over the short term. Estimates vary, but it is suggested that some £350 million will be generated in the first year, with perhaps another £650 million being generated in 2004–05. However, as my hon. Friend the Member for Buckingham (Mr. Bercow) has just suggested, they will prove to be among the many tax measures that raise money in the short term but lead to a loss of revenue to the Treasury in the longer term—a loss that will far exceed any short-term gain, as foreign banks and employees quietly move out of London.
      This issue is important to the country as a whole. By attacking the jewel in the UK industry's crown, the Chancellor is eating away at our competitiveness and longer-term prosperity. I urge the Government to reconsider their position, because, as sure as night follows day, the tax increase will result in a loss of prosperity and revenue in the longer term to the detriment of us all.
      Dawn Primarolo: The central issue at stake in clause 148 and its supporting schedule—the amendments are designed to attack and eradicate it—is whether it is fair that foreign banks operating in the City of London, which are competing with UK banks, should, on account of their structure, pay little or no corporation tax. Is it fair for UK banks to compete for business against foreign branches that pay no tax? That is the central issue.
      Mr. Baron rose—
      Dawn Primarolo: I am not posing a question for the hon. Gentleman to answer, but opening my case on the clause and the amendments. I shall urge the Committee to reject the amendments, comment on the key aspects of the clause and respond briefly to the hon. Member for Arundel and South Downs (Mr. Flight), who posed wider issues about the European Court of Justice, though I realise that that is strictly outside the remit of the amendments and I shall try to remain in order.
      The amendments would remove the main charge introduced by clauses 147 to 155 and by schedules 25 to 27. The charge remedies what I would politely call a weakness in UK domestic law and ensures that UK branches of foreign companies will pay a fair share of UK corporation tax, reflecting the profits that they make from their UK activities. The bulk of clause 148 and schedule 25 set out in UK law the rules that the UK applies in taxing foreign companies. They also modernise the terminology used in UK law.
      The one truly new element of clause 148 is set out in new section 11AA(3), which changes the way in which the taxable profits of branches are measured. For the first time, consideration will have to be given, for tax purposes, to the amount of equity and loan capital that a branch would have at arm's length. That is, consideration will need to be given to the capital that the branch would have if it were a separate entity carrying on the same or similar activities under the same or similar conditions.
      Amendment No. 66 would remove that change. If it were accepted, the winners would be UK branches of foreign banks—it is primarily banks that operate through branches—which would continue to pay little or no corporation tax in the UK. The losers would be the UK Exchequer and UK incorporated banks that compete with foreign banks for their business.
      It might be helpful briefly to explain the deficiency in the old legislation. Previously, there was no requirement for a UK branch to have regard to the amount of capital that it would require commercially in order to support its business. That meant that a UK branch of an overseas bank could, for tax purposes, borrow every pound that it lent to customers, and the interest cost of that borrowing would significantly reduce the UK profit. In contrast, a UK bank would need to have equity capital and would not borrow every pound that it lent, so it would have a smaller deduction for interest expense. The result was that nine out of 10 of the top foreign bank branches in the UK were paying no corporation tax on their UK profits, despite their large and long-standing UK operations.
      5.15 pm
      Mr. Baron: Will the Paymaster General give way?
      Dawn Primarolo: No.
      Amendment No. 67 would remove the new provision in new section 11AA(5). That provision would give the Board of Inland Revenue the power to make regulations specifying how the new capital requirements are to apply to insurance companies. That will enable the new rules to be adapted for insurance companies, because their capital requirements are organised differently from those of banks and other companies.
      The hon. Member for Arundel and South Downs raised several issues, the first of which was the question of guarantee fees paid to head offices. The new legislation specifies that when computing the profits of a permanent establishment, it should be treated for tax purposes both as if it were a distinct and separate enterprise and as if it were trading in the same or similar activities under the same or similar conditions. That is based on the wording used in article 7 of the OECD model tax convention. There is an inevitable tension here, which arises from the fact that a branch is clearly not the same as a subsidiary, and different economic and legal consequences arise from adopting one structure over another. If the permanent establishment is assumed to be acting under the same or similar conditions, that must logically apply to the actual cost at which it can raise funds. The cost at which it can raise funds will be dependent on the company's credit rating. While it is our view that the assumption of the same or similar conditions means that the permanent establishment must have the same credit rating as the rest of the company, that matter was specified in the legislation to provide clarity and put the matter beyond doubt.
      Mr. Burnett: Is the Paymaster General talking about the profits of the branch operating in the UK?
      Dawn Primarolo: I am talking now about the ability of the branch in the UK to raise loan moneys at cheaper cost, because it has the credit rating of its parent company. The whole clause refers to the profits of branches raised specifically from their UK operation.
      Mr. Burnett: Is that described as "the rating" in the legislation?
      Dawn Primarolo: Yes. We are seeking to ensure that the profits accumulated in the UK are correctly taxed within the UK net.
      The question of guarantee fees is complex and it should be noted that the assumption of the same credit rating is also in line with the current OECD view. If the UK were to take a different view on credit rating, it would be out of line with international consensus, which could lead to double taxation for the foreign branches of UK banks.
      Various representations have suggested that a permanent establishment should not be regarded as having the same credit rating as the company of which it is part and that guarantee fees should be allowed, but it is difficult to justify that both logically and legally. All parts of the same company will have the same credit rating. The permanent establishment will therefore have

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      a certain actual cost of funding. It would be inconsistent with the arm's-length principle to treat the permanent establishment as funded at anything other than the actual rate at which it could borrow funds from third parties. Guarantee fees paid by one part of the same company to another will have no legal effect, and as the permanent establishment can access funds at a certain cost, it is difficult to see why it would pay such a fee.
      The hon. Member for Arundel and South Downs also raised the question of whether the proposals are incompatible with European law.
      Mr. Baron: Will the Paymaster General give way?
      Dawn Primarolo: No.
      The aim of the legislation is not to treat branches and subsidiaries as though they were exactly the same. There are clear economic and legal consequences to adopting one or the other structure. Branches and subsidiaries are not the same, and we cannot pretend that they are. For instance, a branch is able to access the capital of the company as a whole to support its business, and that is why banks often choose to trade through branches. If a bank chose instead to trade as a bank in another country through a separate company, it would need to raise further capital to support the activities of that subsidiary, rather than being able to benefit from the capital and credit rating that it already held. The Bill will create a more level playing field between branches and subsidiaries, so that the way in which the profits of branches are computed reflects the commercial reality: that they have access to company capital to support their business. The Bill will mean that UK branches of foreign banks will now pay a fairer share of corporation tax. That does not mean that branches are being treated more harshly than subsidiaries.
      The new provisions require consideration of the amount of equity and loan capital that the branch would have at arm's length. The Bill adopts a capitalisation approach, which produces a more level playing field between the branches and subsidiaries of foreign banks, and so removes discrimination. That is entirely in line with current practice.
      Mr. Baron: Will the Minister give way?
      Dawn Primarolo: No, I will not.
      The hon. Member for Arundel and South Downs asked why the terms "equity capital" and "loan capital" were not defined. The Inland Revenue saw no need for those terms to be defined in the Bill. Although some have commented that the terms should have been defined, other respondents have agreed that there was no need. The hon. Gentleman recognised that the terms are well established among the banks that form the main group of foreign companies affected by the changes made by the clause.
      I turn now to the issue of decisions with regard to European law, and to the points raised on that matter by the hon. Member for Arundel and South Downs.
      Mr. Baron: Will the Minister give way?
      Dawn Primarolo: No. I want to continue to make my points.
      The Committee will no doubt be aware that there have been recent judgments in the European Court of
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      Justice, and there are ongoing challenges under European law. The particular case to which the hon. Member for Arundel and South Downs referred was in fact a ruling against the German tax system, not the UK's. As a result, the Government are of course aware that some uncertainty may have developed.
      We accept that there is a need to restore certainty as quickly as possible. That point is reflected in the Red Book, in the proposals on corporation tax reforms and the next stage of consultation. The hon. Member for Arundel and South Downs will be well aware of the excellent relationships that have existed between this Government and interests in the City of London, especially in connection, for example, with matters arising from discussion of the draft directive on the taxation of savings. At every point, the Government have discussed—with business in general and with those sectors that have a specific interest in the matter—the developments that we want to secure. We want to ensure that we continue to have a corporation tax system and a general tax system that enhance the Government's objectives of establishing fair tax competition, increasing productivity and ensuring that the UK is the most competitive place to do business.
      Mr. Baron: Will the Minister give way?
      Dawn Primarolo: No, I will not give way. The hon. Gentleman has stood up repeatedly, but I will not be giving way to him.
      This summer's forthcoming consultation on corporation tax reform will provide an opportunity for the Government to consult business on the legislative options to achieve our objectives of continuing to modernise and develop our tax system with regard to the objectives that I set out. We look forward to receiving input from the companies involved. It would be foolish in the extreme to speculate on what might be in the consultation document, and I am sure that the hon. Member for Arundel and South Downs does not seriously expect me to address those points, or to prejudge consultations with the very businesses with which we have worked so closely and in such detailed partnership.
      The final points related to whether the measure would damage the City of London. The Government's credentials for acting in the best interests of the City and for defending its competitive advantage cannot be challenged either in Parliament or in the City itself. Indeed, our credentials are not challenged: we continue to receive accolades from all concerned on our exemplary conduct of the debates.
      Mr. Baron: Will the right hon. Lady give way?
      Dawn Primarolo: No, I will not give way.
      It is clearly not the case that the measure will drive foreign banks from the City of London. Those banks are there for good business reasons. The City is one of the world's premier locations for conducting business of that type. The banks are there because of the crucial networks and support systems. There is nothing to rival the City in the rest of the European Union, and foreign banks will continue to do business there, but they will do so on the same competitive basis as UK banks, which is entirely fair and correct.

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      I ask the Committee to reject the amendments, and urge hon. Members to support the clause when we reach that point in today's business.
      Mr. Flight: There are two key points on which I want to put further questions to the Paymaster General. I also want to respond to her comments about the ingredients for the continuing prosperity of the City of London.
      I went into the first point at some length when I asked the Paymaster General whether the judgments of the European Court of Justice to date, and the principles on which they were based, pose an inherent threat to what clause 148 and schedule 25 seek to achieve. As I pointed out, the recent Lankhorst decision could undermine the clause, as interest payments to other EU members of a group would still be deemed to be deductible. If any EU banks or a significant number of foreign banks in the City of London are based in other EU countries, the whole issue of not allowing the charging of wider interest, which the clause is substantially about, could be undermined by the ECJ's principles and rulings.
      Secondly, although I acknowledge the fact that the Government have consulted widely, and in the main effectively, with the City on a number of issues and that, in fighting our patch with the EU, there has by and large been effective collaboration between the Government and enterprise, I passionately believe that it is a mistake to think that the continuing prosperity of the City relies purely on geography, networks and established talent. Having lived through 30 years of history, I have to point out to the Paymaster General that that prosperity always related fundamentally to tax.
      In 1970, the City of London was a dead duck. It was too large for the UK economy, and it came to life only when the then Labour Government agreed with the Governor of the Bank of England on what amounted to tax-free Euro-banking, which thus took off in London rather than in Zurich or any other location. There is a mixture: the City has to be competitive tax-wise and regulatory-wise, and it has to be attractive tax-wise and regulatory-wise, as well as using its inherent advantage of a pool of talented people. If the City becomes uncompetitive regulatory-wise or tax-wise, business will go to New York, Zurich and other places, as sure as eggs are eggs. We must thus consider how we tax overseas businesses in London in comparison with how they are taxed in New York, Zurich and so forth. As I said earlier, I am well aware that the provisions have been consulted on and that they appear broadly comparable to the arrangements in New York and other locations and therefore are not immediately a threat.
      5.30 pm
      Amendments Nos. 66 and 67 would not undermine those provisions; they would address the two little, specific issues to which I referred. We will not want to press the amendments to a vote, because they are not of fundamental importance, but I wish to tell the Paymaster General that, although the provision itself was done and dusted last year, certain things have changed, and in particular the way in which the ECJ has responded, which may render it inoperative. However, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Clause 148 ordered to stand part of the Bill.
      Schedule 5 agreed to.

    Clause 184

      RATE OF LANDFILL TAX
      Question proposed, That the clause stand part of the Bill.
      Mr. Flight: The Chancellor announced in his 1999 Budget that
      "To reduce the amount of waste going to landfill, the landfill tax, £10 per tonne in 1999, will in future rise by £1 per tonne per year."—[Official Report, 9 March 1999; Vol. 327, c. 182.]
      The increases made this year are the last under the £1 a tonne annual duty escalator. From 2005, the annual duty escalator will increase to £3 a tonne, with a view to reaching a rate of £35 a tonne in the medium to long term.
      The United Kingdom has one of the lowest levels of recycling in Europe, with only 11 per cent. of waste recycled—well below that of many European countries, some of which recycle as much as 40 per cent. of household waste. The Government have failed to provide a coherent strategy for sustainable waste management, and we have seen an ad hoc approach, with a tax increase here, a complicated and failing tax credit scheme there and, meanwhile, landfill usage is Increasing.
      The Government have little hope of complying with the 1999 European landfill directive, under which the amount of biodegradable municipal waste going into landfill sites would be reduced to 75 per cent. of 1995 levels by 2006. The amount of municipal waste sent to landfill sites has increased from 21.9 million tonnes in 1999, to 22.1 million tonnes in 2000–01.
      The Environmental Audit Committee recently criticised the Government's strategy, saying:
      "The Waste Strategy 2000 is not so much a waste strategy but a strategy for complying with some of the requirement developed in the EU. Even with that interpretation, it has still not proved effective in delivery".
      I am afraid that the phrase, "not proven effective in delivery" is rather familiar in virtually all areas of this Government's activity.
      The last Conservative Government introduced the landfill tax in 1996—the first tax with an environmental purpose. We understand the need to encourage a comprehensive sustainable waste management system by promoting more recycling and less landfill. The longterm use of landfill is clearly unsustainable, and we believe that the Government should be more effective in promoting the alternatives.
      The response to this measure has been mixed. The Engineering Employers Federation commented:
      "The current rises in landfill tax are only acceptable if the funds raised are hypothecated directly into improving the waste management infrastructure".
      The CBI said that businesses "remain to be convinced" of the need to raise the tax by £3 per tonne per year. Can the Economic Secretary confirm that the £140 million increase in landfill tax revenue scheduled for 2005–06 will go towards promoting sustainable

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      waste management and recycling programmes? Given that the rationale behind increasing landfill tax is to ensure that the UK complies with EU legislation, surely it is vital that that money goes towards increasing recycling and improving markets for recycled materials.
      The arguments against the landfill tax increase are that the increasing rate of tax could act as an incentive to move over to other forms of waste disposal, which end up being more damaging to the environment and in some cases illegal. The Environment, Transport and Regional Affairs Committee cited
      "two very good arguments for the landfill tax not being increased to a much higher level without other changes taking place".
      First, there is a danger that the use of incinerators may increase as landfill becomes a more expensive option, together with the problem of illegal fly tipping. How do the Government plan to avoid simply shifting the problem elsewhere and making things worse? Secondly, the increase in the tax will hit local authorities hardest. The Government's 2002 strategy unit publication, "Waste Not, Want Not" says:
      "Of the total revenue sourced from active waste, approximately 46 per cent. is paid by business and the remaining 54 per cent. by local authorities … Like business, a rise in landfill tax will provide local authorities with an incentive to fund alternative ways of managing waste disposal".
      My concern is that local authorities that cannot claim under the landfill tax credit scheme are struggling hard enough as it is. If the landfill tax trebles over the next eight years, matters will be made worse and the council tax driven still higher.
      Finally, the landfill tax credit scheme, which was introduced along with the tax in 1996 and enabled landfill sites to direct part of their landfill tax liability towards funding local environment projects in return for a tax credit, has encountered high administrative costs. Overall, the scheme was deemed to be a success, but the Public Accounts Committee report identified the following problems:
      "a lack of overall accountability … and a lack of transparency".
      as well as high overhead costs. Following that, the Government announced reforms in the November pre-Budget report, with the new scheme starting on 1 April, but many waste management groups have expressed concern about the new scheme. Two thirds of the money from the scheme—some £100 million—will go towards public spending to encourage sustainable waste management, but the remaining third will continue to go to local projects. I understand that local waste reduction and recycling campaigns have expressed concerns that they may lose out on funding under the new scheme.
      Do the Government remember the pledges that they made in "Waste Strategy 2000", proposing to use the landfill tax credit scheme to help deliver an increase in recycling, particularly of household waste? Are WasteAware and other such schemes not recycling projects? We would contend that "Waste Strategy 2000" is in a shambles. It has failed in its piecemeal approach to sustainable waste management. According to the European Environment Agency, to meet the requirements of the landfill directive alone, the UK must divert 27 million tonnes of biodegradable municipal waste away from landfill sites. The UK will therefore need to deliver the equivalent of one new management facility, capable of processing 40,000 tonnes of waste, per week, for the next 14 years.
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      We have a huge problem, and the EU targets are unrealistic. Instead of working together towards the short-term goal of meeting those EU targets, the Government should embrace a long-term programme to promote recycling, the use of biodegradable materials and sustainable management systems. We would not rule out the use of economic instruments, but we remain unconvinced that increases in the landfill tax will create a sustainable waste policy and promote recycling programmes.
      Like most of the Government's environment policies, the tax stems from a panic to meet the targets laid down by Europe and from the primary motivation of raising revenue. I remind the Economic Secretary of the fridge mountains, the problem of abandoned cars and the disastrous climate change levy, all of which are a result of rushed and ill-thought-out legislation. They fail to take account of the bigger picture or to address the longterm environment issues and deliver the objectives that were claimed.
      We urge the Government to reconsider their policy. They should not base the tax increases on fiscal and short-term considerations, but consider them in the light of an effective long-term waste policy.
      Mr. Simon Thomas: I support the clause. Despite pertinent points made by the hon. Member for Arundel and South Downs (Mr. Flight), I am not sure what Conservative policy is on waste minimisation, waste reduction and recycling. However, he was right that the landfill tax is one of the longest running pieces of environmental taxation in the UK. Its relevance to the waste mountain is important, so it is vital to spend a couple of minutes examining why we need a landfill tax, the rate at which it should be set and whether it will help us to meet the Government's aims and the wider European aims to which we have all subscribed.
      The landfill tax is one of the few taxes that businesses recently asked the Government to raise, and at a greater rate than proposed in the Bill. Although the hon. Member for Arundel and South Downs prayed in aid the CBI, the Economic Secretary will be aware that the waste companies wanted an accelerated increase in the economic drivers towards waste minimisation and a reduction in landfill in favour of recycling. In fact, they were a little disappointed that the Bill did not impose a greater level to reach the Government's eventual target of £35 per tonne for the landfill tax.
      Those companies see clearly that we will not meet our recycling obligations and our more important European obligations to reduce the amount of waste that we send to landfill without a much stronger driver in the economic market. I would have expected the Conservatives at least to be in favour of strong economic drivers, because that is how markets work. Sometimes it is necessary to regulate markets so that they take the right direction for the greater aims of the public good.
      I want the Economic Secretary to address some of the concerns of the Environmental Audit Committee, on which I serve and which recently produced a report on waste. As the hon. Member for Arundel and South Downs rightly reminded the House, that report makes it clear that the Committee thinks that the Government's approach is a knee-jerk reaction to the demands of the

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      European Union. We did not think that their approach was anti-European. The reality is that the Government reacted to demands for which they had not properly prepared. They had not properly engaged with the EU legislation and had not thought through how it would work domestically. As a result, they have been forced to rely on a landfill tax and very little else to achieve their waste minimisation and recycling aims.
      In that context, we have the unhappy news from MEPs who have served on the European Parliament's environment committee that the Government are already missing their EU targets and will fail miserably in implementing EU legislation. I hope that the Economic Secretary can give us assurances tonight that that will not happen and that the landfill tax, increasing at a set rate of progression, will achieve the aims of the 2000 waste strategy throughout the United Kingdom, not just England. The obligation to represent the UK in negotiations on EU targets involves not just Westminster but the devolved Administrations.
      5.45 pm
      Finally, to emphasise the point made by the hon. Member for Arundel and South Downs, the landfill tax may encourage less sustainable methods of waste disposal, and I am particularly concerned that there may be an increase in incineration. That is no reason to argue against the landfill tax. Indeed, it is a reason to argue for an incineration tax or the correct regulation of incineration to ensure that such an increase does not happen. However, I am concerned that we may rely on a single economic instrument that is not designed to encourage recycling or waste minimisation but to stop waste going into landfill. Are we sure that the market and people responsible for the disposal of waste will make the necessary jump?
      We cannot dispose of things in landfill and cannot go ahead with the co-disposal of hazardous waste in landfill, but have we ensured that local authorities and waste disposal companies will take the opportunity to achieve waste reduction, minimisation and recycling? Have we ensured that the landfill tax will prevent the use of other methods of disposal such as incineration? That is not yet clear in the Government's approach to the issue. An economic driver such as the landfill tax is undoubtedly the correct approach, but the Government have not yet thought through its impact on the market—it is a suck-it-and-see approach. I am concerned that many local authorities are already missing their recycling targets, as has been admitted in evidence to the Environmental Audit Committee. We would be in an even worse position if we missed the target set by the European Union. I hope that the Economic Secretary can give guarantees that the Bill will bring about what other areas of government aim to achieve—greater use of recycling, less waste going to landfill and a reduction in the waste produced in the first place.
      Mr. George Osborne: As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) pointed out, clause 184 points the way to substantial increases in the landfill tax. The clause proposes that it should increase by £1 this year, £1 next year and, from 2005–06, by £3 a year so that, according to the Government, it will be
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      levied at £35 a tonne. That is a substantial increase on the original tax introduced by the Conservative Government in 1996, which was just £3 a tonne. Before the clause passes into law, we should reflect on the original assumptions behind the decisions made by the then Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), when introducing the tax.
      The first assumption was that the landfill tax would be offset by a compensatory reduction in employers' national insurance. Indeed, in his 1994 Budget, my right hon. and learned Friend said:
      "I am determined not to impose additional costs on businesses overall … I want to raise tax on polluters to make further cuts in the tax on jobs."—[Official Report, 29 November 1994; Vol. 250, c. 1098.]
      There is a striking contrast with this year's Budget. Instead of a compensatory reduction in employers' national insurance, there are substantial increases. The hon. Member for Ceredigion (Mr. Thomas) did not give the landfill tax the credit that it is due. It is not just one of the oldest environmental taxes, it was the first tax with an explicit environmental purpose. The assumption—pretty radical at the time—was that a landfill operator could offset any contributions that it made to an environmental charity or voluntary group against its liability for landfill tax up to a specified limit. Indeed, it could claim tax credits for 90 per cent. of its contributions to charities and voluntary groups up to a total of 20 per cent. of its overall landfill tax bill in any one year. The nature of those environmental bodies was spelt out—they were non-profit-making bodies, they were not controlled by central or local government and they were often local schemes. They were administered by Entrust, a central Government regulator.
      Since landfill tax was introduced and the landfill tax credit scheme came into operation, more than £400 million has been contributed to environmental bodies, including, in 2000–01, the most recent figures that I have seen, £109 million to those charities. Substantial sums have been given to very small local groups, which has been a huge boon to such groups and charities. It has enabled them to be set up and has done an enormous amount of good locally in, I would guess, every constituency.
      There is a philosophical point here. This is about strengthening civil society. It is about Burke's "little platoons", and about supporting voluntary groups, local charities and so on. As a member of the Public Accounts Committee, I am the first to accept that there have been problems with the scheme. The Committee looked into the matter, and I have its report. There were problems with the lack of oversight, accountability, transparency and so on. It is all spelt out in the Committee's report. However, the problems lay with the Government, the regulator and the way in which the scheme operated, not with the principle of the scheme. That is why I am sad that, instead of trying to fix the problems and stick with the principle, the Government have largely decided to abandon the principle altogether. That is a tragedy, not least because the

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      Government recognised in their pre-Budget report what a good thing the scheme has been. The report stated:
      "The Government recognises that the Landfill Tax Credit Scheme (LTCS) has supported many worthwhile community and environment projects that have improved the quality of the environment at the local level … The scheme has also been successful in generating local community involvement in such projects."
      If we are not here to support such schemes, what are we here for? As I said, it is sad that the Government are largely abandoning the scheme.
      That has caused enormous concern in groups in my constituency and in constituencies across the country. The Economic Secretary is proposing, in effect, to remove two thirds of the funding of the scheme—funding raised directly by clause 184—and to put that money into general public expenditure, although he says that it will be hypothecated to environmental management and so on within centrally managed expenditure. Nevertheless, £60 million or more, which is currently given to the charitable and voluntary groups, will go straight into the Treasury coffers.
      When I wrote to the Minister about the matter, as no doubt did other right hon. and hon. Members, he replied on 22 January and, I think, gave the game away. He wrote:
      "This change reflects the Government's conclusion that public spending will be a more effective way of providing strategic direction to sustainable waste management."
      That tells us all we need to know about the Government. They think that Whitehall knows best. They think that their public spending is a more effective way of delivering change on the ground.
      The charities and environmental groups that have written to me do not accept that, nor do the groups that will lose out most—those involved in activities such as research, development, education and information, all of which are vital, as the hon. Member for Ceredigion said, to a change in attitude in our country towards these issues.
      I shall briefly further detain the House, although know that the nationalists are keen to get on to their whisky clauses. Waste Watch has written to me and probably to many hon. Members. It runs the Cheshire Schools Waste Action club, which, it points out
      "is a successful education project, which increases awareness of waste issues and supports schools in taking action to reduce their waste outputs. Projects have achieved between a 30–80 per cent. reduction of waste within schools."
      Schoolchildren will take that learning with them for the rest of their life. Waste Watch comments:
      "We will lose the opportunity to enable staff and children in Cheshire schools to reduce their waste."
      The Cheshire Landscape Trust has brought to my attention a number of serious concerns, and I should be interested to hear the Minister's response. The trust points out that
      "by moving some £100 million from the private to the public sector, to fund waste management projects, the public sector could lose the substantial amount of matched funding, which is currently running between £400 and £700 million."
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      Again, that should be the sort of thing that we want to encourage. Surely, we want to encourage local groups to work with local businesses and to bring in money through match funding. According to the Cheshire Landscape Trust, that will be lost. It asks,
      "how will local communities, universities and other research establishments who are currently undertaking Research and Development projects access funding for sustainable waste management projects in the future?"
      It goes on to express another very serious concern, noting:
      "One estimate puts the number of job losses due to this transfer of funds away from Environmental Bodies to be 5000. This includes jobs created on and through projects as well as employees working for Distributive Environmental Bodies. For this trust, the proposed changes would put us in a very difficult position with possible job losses."
      Finally, I wish to refer to an organisation that no right-thinking Member of Parliament could ignore—the Cheshire Federation of Women's Institutes. The Prime Minister learned to his cost what happens when one puts the women's institutes' backs up. The federation makes the point:
      "The transfer of funds away from Environmental Bodies, many of which bring local knowledge to the allocation of the funds, means that local involvement and community participation will be lost."
      It asked me to bring those concerns to the attention of the Government and the House.
      These are very serious matters. We are talking about good-minded people who give their time voluntarily in our constituencies to work for local environmental groups and improve our local environment for everyone. Those groups will lose out to the tune of tens of millions of pounds.
      Dr. Alan Whitehead: The hon. Gentleman speaks as though the entire amount that is currently gained in tax forgone will suddenly disappear. Does he accept that, even under the proposals, most of the money that currently goes into the scheme will remain? The money to which he refers relates to the increase and is not taken away from the present amount. Does that not mitigate his case that the money is disappearing from the groups that he is talking about?
      Mr. Osborne: I accept that a proportion of the money will remain, but it is quite small; indeed, it will be less than half. According to the letter that I received from the Economic Secretary, approximately £47 million will remain in the scheme annually, but £100 million will be taken out. Only a third of the money will remain. Given the environmental credentials of the hon. Member for Southampton, Test (Dr. Whitehead), I wonder whether he supports the change. Does he think that the Government would be better at spending the money centrally than local charities and environmental groups on the ground? I would be surprised if he took that view, as it is certainly not my view or that of the groups involved.
      I ask the Economic Secretary to reflect on what I have said and deal with my points, some of which he will no doubt have heard about from environmental groups. In particular, will he address the loss of match funding and the question of where the groups will get their money? I know that he is phasing in some of the changes, but in a

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      year or two those involved will be hit with a big shortfall. Will he also comment on the serious job losses that at least one organisation that has written to me predicts?
      The Economic Secretary to the Treasury (John Healey): The clause is relatively narrow in the context of this rather wide debate. In line with the escalator that we announced in 1999, it increases the standard rate of landfill tax by £1 a tonne to £14 a tonne, with effect from 1 April this year, and by a further £1 a tonne to £15 a tonne, with effect from 1 April next year.
      The Government are committed to a sustainable approach to waste management. The increases will encourage waste producers to seek more environmentally friendly alternatives to landfill, as they will encourage producers and the waste management industry to switch from landfill to minimising waste and increasing re-use and recycling rates—the very purposes that the hon. Member for Arundel and South Downs (Mr. Flight) urged us to adopt.
      The increases are part of a principled national policy to reduce the volumes of waste going to landfill, and they are complemented by additional public spending on sustainable waste management that was announced in the House on 6 May by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.
      The hon. Member for Arundel and South Downs asked about revenue from increasing the landfill tax by £3 per tonne in 2005–06—not in 2003–04 or 2004–05, which are covered by the clause. Although that will make a significant contribution to the increased investment, it is not directly hypothecated. However, the Government made a commitment in the pre-Budget report and the Budget that additional revenue from the increases in the standard rate would be recycled to business.
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      Discussions with business and other stakeholder groups have already shown that there is broad support for a package of measures, including some tailored to those sectors facing the greatest waste management challenges. We will continue to pursue that package of measures through developing the options and consulting further, and we plan to make decisions to the time scale in the pre-Budget report and the Budget.
      The hon. Gentleman raised the spectre of fly tipping connected with increases in the landfill tax. There is no evidence to justify that. A Tidy Britain Group survey in 1999 showed that the majority of fly tipped waste is household waste. As householders do not directly pay the landfill tax, it is unlikely to be the cause of the increase in fly tipping. That said, we take illegal waste disposal by fly tipping very seriously. The penalties are now severe: they include unlimited fines and up to two years in prison.
      The hon. Gentleman and the hon. Member for Ceredigion (Mr. Thomas) asked about incineration. As announced in Budget 2003, the Government have commissioned a review of the environmental and health effects of all waste management and disposal methods,
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      and we aim to report on its findings later this year. The case for using economic instruments in relation to incineration will be considered in the light of that work and in consultation with those with an interest in the field.
      The hon. Member for Ceredigion urged the Government to increase the rate of landfill tax more quickly in order sooner to reach what we set as the medium to long-term level of £35 per tonne. Our research and the recommendations of several reports suggest that that level will result in alternatives to landfill being more widely available and becoming more economically viable. As the hon. Gentleman will know from his work on the Select Committee on Environmental Audit, that view is widely shared. Given the lead times for investment, however, the most important factor in stimulating a shift in behaviour away from landfill is not the current rate of the tax, but the confidence, knowledge and certainty that it will reach the medium to long-term level of £35 per tonne. That gives the lie to the accusation by the hon. Member for Arundel and South Downs that we have a short-term set of policies.
      I have been fortunate enough to give evidence to the Environmental Audit Committee a couple of times. I say to the hon. Member for Ceredigion that I am confident that the landfill tax increases, alongside the other policy measures that we have introduced or plan to introduce, will deliver a waste policy that is better suited to Britain, and which increases recyling and reuse, minimises waste production and helps us to make the reductions in volume that we need to meet our European Union targets.
      The landfill tax is not our only measure. We recently passed legislation to introduce a scheme of tradeable landfill permits, which will help. We have substantially increased public spending through the EPCS—environmental, protective and cultural services—block grant to local authorities and the transfer of the landfill tax credit scheme to public spending. That will help. We have also announced plans for a performance fund for waste management for local authorities, and that, too, will help. All those measures will play an important part in helping the United Kingdom meet our targets.
      The hon. Member for Tatton (Mr. Osborne) asked about the national insurance contributions increase, which was introduced in last year's Budget and took effect last month. It will help fund the 7.5 per cent. real-terms increase each year in spending on the national health service from 2002–03 to 2007–08. It has nothing to do with the landfill tax. However, the hon. Gentleman is right that when the previous Government introduced the landfill tax, it was accompanied by a 0.2 per cent. cut in employers' national insurance contributions.
      The Government estimate that in 2003–04, the cut that was originally introduced with the landfill tax will be worth approximately £780 million, compared with about £670 million raised by the landfill tax. Next year—2004–05—the NIC cut will be worth approximately £820 million, compared with £745 million raised by the landfill tax. The revenue from the landfill tax has yet to recoup the original cut to employers' national insurance contributions.
      The hon. Member for Tatton is a member of the Public Accounts Committee and knows the flaws in the design of the landfill tax credit scheme better than many

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      other hon. Members. He knows that flaws in its design caused the problem, because the Committee examined the matter, as did the then Select Committee on Environment, Transport and Regional Affairs. The problem arises from the design rather than the principle of the scheme. The Government strongly support the principle; that is why we have retained it for non-waste projects. We shall not abandon it, but we will transfer the funding for category C and CC projects to public spending because that will deliver a more strategic, sustainable waste management policy and programme in this country. The hon. Member for Arundel and South Downs urged us to do that.
      The hon. Member for Tatton also knows that one of the flaws in the design and operation of the landfill tax credit scheme since its inception has been a chronic lack of information on what the money is being spent. He asked about match funding, but we face a lack of information and evidence on which to assess some of the individual claims and stories that we hear about projects. Glasgow Caledonian university has conducted the only systematic research on that. It suggests that the rate of match funding for waste projects as well as those in other categories of the landfill tax credit scheme is significantly below the levels that the hon. Gentleman cited.
      Although it is not directly covered by the clause, Committee members may find it helpful if I say a little about our plans for the standard rate of landfill tax after the two years to which clause 184 applies.
      Mr. George Osborne: Before the Economic Secretary moves on, will he deal with the specific point about the loss of match funding and jobs that many groups and voluntary organisations will experience? I presume that people have written to him about that.
      John Healey: I do not know whether the hon. Gentleman missed it, but I have dealt with match funding. I believe that he refers to category C and CC schemes, although he was not explicit. They deal with waste, and their funding has been transferred to public spending. I have written to him and other hon. Members and made a statement in the House and he therefore knows that we have put in place for this financial year a transition scheme to help such projects continue and reach a point where they can sensibly plan for a continuing operation after this financial year if they choose to do that. That will play an important part in providing security, certainty and the ability to plan in the long term for the projects about which the hon. Gentleman is concerned.
      As we have already announced, the standard rate of landfill tax will increase by £3 per tonne to £18 per tonne in 2005–06, and by at least £3 per tonne in the years thereafter, on the way to the medium to long-term target of £35 per tonne. These higher rates send a clear market signal, and announcing them in advance maximises the effect. The Government have discussed with business and others how to make the increases revenue neutral to business as a whole. I have explained that the preferred options will now be developed, and decisions on the package of measures will be announced in the 2003 pre-Budget report. On that basis, I commend the clause to the Committee.
      Question put and agreed to.
      Clause 184 ordered to stand part of the Bill.

    New Clause 1

      RATE OF DUTY ON SPIRITS
      '.—(1) In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits), for "£19.56" there shall be substituted "£18.99".
      (2)This section shall come into force on 1st January 2004.'.
      Brought up, and read the First time.
      Angus Robertson: I beg to move, That the clause be read a Second time.
      I am delighted to be able to move new clause 1, which is aimed at reducing the duty on spirits by 3 per cent. This measure is primarily aimed at helping to boost the Scotch whisky industry, but it would of course have a positive effect on the Irish whiskey industry, affecting colleagues from Northern Ireland, and on the constituency in Wales that produces the sole Welsh whisky, Penderyn. It would also help spirit producers elsewhere in the UK who do not produce whisky.
      The new clause has been tabled after discussions with the Treasury, and I am pleased to see the Economic Secretary to the Treasury in his place this evening. A delegation from the all-party Scotch whisky group, on which I serve as vice-chairman, along with other Members from all parties in the House, lobbied the Treasury on this matter earlier this year. Members from all parties also pressed the Government to accept a 4 per cent. cut in duty. That move was supported by Labour, Conservative and Liberal Democrat Members, and, of course, by the Scottish National party. In that spirit, I hope that there will be cross-party support for this measure, as it is more modest than the proposal supported by the all-party group.
      The Economic Secretary to the Treasury does not need reminding that Scotch whisky is one of the UK's top five export earners, generating more than £2 billion a year from sales in 200 markets. The industry uses around 25 per cent. of Scotland's barley, and 70 per cent. of all Scottish grain is used in grain distilleries, many of which are in my constituency in Speyside, which contains more than 50 per cent. of Scotland's malt whisky distilleries. The industry accounts for 5 per cent. of manufacturing jobs in Scotland and there is a £1 billion a year spend on the purchase of goods and services from local suppliers. Forty thousand jobs depend on the industry, including 7,000 in rural areas, many of which have fragile economies. Indeed, my constituency has the lowest weekly wage of anywhere in Scotland, although that is not something of which people are proud. Any measure that helps to boost an industry of such significant importance must, therefore, be welcomed.
      Pete Wishart: I am sure that my hon. Friend will join me in welcoming the decision to reopen the Glencadam distillery in Brechin. Does he not agree that, for new businesses such as that to develop and thrive, we need a fiscal regime that encourages rather than penalises?
      Angus Robertson: I agree with my hon. Friend. That point is being made across the industry, no matter where the distilleries are located. All the key indicators that I have outlined underline the importance of the industry throughout Scotland, and illustrate the need for the Government to provide the optimal conditions for it to flourish.
      Over the years, commentators have established that the taxation regime at home and abroad is one of the most significant factors in determining whether whisky sells as well as possible. In recent decades, Scotch whisky has made great strides in markets such as Spain, Italy, the United States and the far east—all areas with generally more benign tax regimes. Sadly, some of the worst taxation excesses are to be found in the UK, the state that benefits from massive revenue from the industry.
      As most whisky drinkers will be aware, two thirds of the price of a bottle of whisky is tax. Since 1973, the price of a bottle, including the excise duty, has been subject to VAT, which is levied on the duty price paid. That means that the price of a bottle of Scotch whisky is increased by and subject to a tax upon a tax. On 10 occasions in 18 years of Conservative government, sadly, the Tories took the opportunity to raise the burden on the whisky industry. That discrimination has continued under the Labour Government, and the duty on whisky is one and a half times higher than on other competing beverages.
      Mr. Peter Duncan (Galloway and Upper Nithsdale): Before the hon. Gentleman launches into his usual discourse in anti-Conservative propaganda, he will note that his new clause only returns the situation towards that left by the previous Conservative Government.
      Angus Robertson: I have sought to table a new clause that will attract maximum support across the House. I would like to see far more considerable cuts in duty, but this is a good first measure, and it is supported by Conservative Members, Scottish Labour party Members in the all-party group and Liberal Democrats. I hope that this modest proposal will receive the support of all hon. Members who have been lobbying the Treasury and that they will support it in the Lobby tonight.
      Mr. Roy Beggs: I note how enthusiastic the hon. Gentleman has been in his observations in the promotion of Scotch whisky. Is he prepared to accept that in North Antrim, a neighbouring constituency of mine, the Bushmills distillery also produces high quality and exportable brands of what I would claim to be the best whiskies in the world, and that we too would benefit from a sensible fiscal regime that would help to promote the industry?
      Angus Robertson: I am grateful to the hon. Gentleman for his intervention. I mentioned in my opening remarks that this measure would also benefit the industry in Northern Ireland, and I am delighted to see that the cross-party consensus is growing. I hope that that will be shown in support for the new clause—from Government Members as well—later this evening.
      It is the discrimination against this key industry that the industry and the people who work in it baulk at. There has been some recent narrowing of tax
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      discrimination against spirits, but the discrimination remains. It was continued in this year's Budget by a Chancellor who represents a Scottish constituency.
      Like the Scotch Whisky Association, the Scottish National party has been in favour of a 4 per cent. cut in whisky duty, and experts believe that such a measure would be revenue neutral, creating a high demand for whisky, thereby maintaining duty and taxation income for the Treasury.
      Most distilleries are based in rural areas, such as my constituency of Moray, and they are often the life-blood of the community. A duty cut for Scotch would have helped end the competitive disadvantage that discriminates against Scotland's farmers and rural communities. That can equally be said for Northern Ireland and Wales, and arguably also for spirit producers in England.
      Mr. Alistair Carmichael: I agree with the substance of the hon. Gentleman's remarks, but does he agree that the vast bulk of whisky distilleries in Scotland are in remote areas where manufacturing industry is difficult to maintain, and that the discrimination is not just against the industry but against some of the most vulnerable and fragile economies in the United Kingdom?
      Angus Robertson: I agree with the hon. Gentleman and I am delighted also to have support from the Liberal Democrats on this measure. Undoubtedly, a reduction in duty would not harm the Treasury. It would boost rural and urban communities throughout the UK. I urge all hon. Members, many of whom have been lobbying the Treasury for a more generous cut in duty, to go through the Lobby with us tonight, although I hope that the Minister will announce that the Government are to accede to a 3 per cent. cut in duty, which would be welcomed by Scotch whisky producers and others.
      Mr. Peter Duncan: I am delighted to have an opportunity to contribute to the debate on new clause 1—and to reach new clause 1, given the somewhat spurious point of order that was raised by the hon. Member for North Tayside (Pete Wishart) earlier. I am delighted that the official Opposition have done what they could to progress matters in the context of the Government's appalling knife on the Bill. The official Opposition have done their utmost to debate as much as was humanly possible.
      There is no need to remind the Committee of the significance of the Scotch whisky industry to the people of Scotland. The hon. Member for Moray (Angus Robertson) has given some statistics. I can add a couple of others. One in 54 jobs north of the border is dependent on the Scotch whisky industry. More than 11,000 people are directly employed in it. It also provides jobs indirectly, crucially in some remote and vulnerable communities, and attracts tourism, so there is a significant cause around which, I hope, a significant number of Members of Parliament from Scotland will unite tonight.
      I have drawn attention to the fact that the tax system on spirits originated early in the previous century. The comments by a Chancellor in the 1920s sum up where many of the problems originated. When he was asked to

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      justify his decision to increase tax on spirits but not on wines, he said, "nobody drinks wine," which probably gives some background to why the imbalance has arisen, how it has been amplified over time and why we should do something to redress it.
      The rates applied to typical pub servings of whisky, wine and beer show the imbalance: the rate is 27.38p for Scotch whisky, 19.3p for wine and 16.65p for beer. The industry in Scotland can no longer tolerate that imbalance. Something must be done to start to redress it; it is obviously having an effect.
      Mr. George Osborne: This is an important debate. Is it not worth noting for the record that only two Labour Scottish MPs are in the Chamber at the moment?
      Mr. Duncan: My hon. Friend is known to be a bit more pointed than I tend to be, coming from a very quietly spoken corner of Scotland, where we tend to be a bit more reserved and backward in coming forward, but I note that there are few Members of Parliament from Scotland on the Labour Benches. I am slightly surprised that the chairman of the all-party group has not managed to be with us tonight: I am sure that he is attending to urgent constituency business.
      What other European country would tax its own indigenous industry more severely and aggressively than it does its competitors' products? There is an important issue here, and the new clause goes some way towards dealing with it. There is a gain in taxation to the Treasury if taxation imbalances are addressed. Studies have shown that there is price sensitivity in the market for domestic spirits and that increasing tax again and again on the industry has done nothing to increase the net revenue to the Chancellor in total.
      The increasing and dramatic expansion in bootlegging and the white van trade does not only affect south-east England; corner shops in Galloway or Brechin in north-east Scotland and in all rural communities, are affected. Their sales have dramatically declined because of the expansion in bootlegging and in illegitimate trade. That is to say nothing of the more tricky issue of diversionary fraud, which affects the industry significantly although it may be invisible to ordinary people in Scotland.
      Redressing the tax imbalance would cost the Treasury nothing. I accept that more needs to be done to demonstrate that factually, and to test price sensitivity and elasticity of demand not just in the whisky market but, in cross-referential terms, in the wine and beer markets, but preliminary evidence suggests that the Treasury could implement a degree of reversal without causing itself much of a revenue problem.
      All too often, the nationalists launch a grandstanding programme on issues such as this. We saw that yesterday when they attempted to hijack the bingo taxation issue. I understand that they have already been in touch with most bingo halls in Scotland, which suggests that theirs is the only party that acts on behalf of those who play bingo. It is not, however, the only party to stand up for the distillers: we in the Conservative party are stout defenders of the whisky industry, as we have been in the past. As I said in an intervention, the new clause would do no more than return us to the position brought about by the last
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      Conservative Budget, which recognised the price elasticity I have mentioned and reduced the tax burden on spirits. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who was Chancellor at the time, realised that reducing the tax need not mean a reduction in Treasury revenue.
      As a member of the all-party Scotch whisky group, I support its cross-party objectives. I do not think that the hon. Member for Moray did much to strengthen his case by saying that the Liberal Democrats supported the new clause, but I accept that all parties are involved here, and I shall certainly implore Conservative Front Benchers to give it proper consideration.
      I should like the new clause to mark the beginning of a genuine investigation of how an historic imbalance in the taxing of spirits can be redressed with no impact on Treasury revenues, to the benefit of an industry in Scotland that urgently needs assistance and from which our nation can derive great economic gain in the future.
      Mr. Alan Reid: It is an important principle that taxation should be fair, and it can be easily demonstrated that the taxation of alcohol is not fair. The tax per unit of alcohol imposed on whisky is about 1.5 times that imposed on wine, and 1.7 times that imposed on beer. I shall support new clause 1 because I believe it is a step in the right direction, although I do not think it goes far enough. I know that the hon. Member for Moray (Mr. Robertson) agrees. It is important that we have a new clause before us that can be supported by members of all parties.
      The all-party group lobbied Treasury Ministers for a 4 per cent. cut. The new clause proposes a 3 per cent. cut, but I presume that all members of the group will support it.
      Sir Robert Smith: The new clause would also redress to some extent the damage done to the industry by the effects of corporation tax, which was raised on Second Reading by my hon. Friend the Member for Yeovil (Mr. Laws) and which I understand the Minister is considering.
      6.30 pm
      Mr. Reid: My hon. Friend makes a very important point. The changes in corporation tax that the Government introduced last year are utterly ridiculous so far as the whisky industry is concerned. Whisky takes many years to mature, but the new corporation tax regime punishes the industry for that factor, which is an essential part of it. If accepted, the new clause would certainly help to mitigate some of the losses that the industry is incurring through that change in corporation tax.
      If whisky were taxed at the same rate as wine for each unit of alcohol, the rate would be about £13 per litre of alcohol instead of £19.56. The Government have introduced a freeze in recent years, but it will take many years before the rate of taxation on wine and whisky is the same. We cannot wait that long, so it is essential that we make a start today by supporting new clause 1.
      The Chancellor should not worry about any loss of revenue if the new clause is accepted. Studies produced for the Government Economic Service and the European Commission indicate that the sale of spirits is

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      very sensitive to changes in price—far more than is the sale of wine. So reducing the tax on spirits and increasing that on wine to a comparable level would actually bring in more money for the Treasury.
      Scotch whisky is the world's leading spirit drink. It can be produced only in Scotland, but it also relies heavily on products produced throughout the United Kingdom. It therefore seems bizarre that a product that is so important to the UK economy be taxed far more heavily than wines, most of which are imported. I doubt whether any other country in the world would be so daft—talk about shooting yourself in the foot! The high rate of tax not only damages sales in our own country; it also encourages other countries to impose punitive rates of duty. India, for example, has a tariff of more than 400 per cent. on Scotch whisky. Yet when British trade negotiators protest about this harsh treatment, such countries have a simple riposte: "But your own country also discriminates against whisky!"
      I need not remind the Committee of the importance of Scotch whisky to our economy. The industry employs more than 10,000 people directly, and supports a further 50,000 jobs through its spending on inputs. And it boosts our balance of trade by more than £2 billion a year. The industry is also a major employer in areas where other jobs are very hard to find: in urban areas with high levels of deprivation, and, of course, in remote rural areas with fragile economies and little alternative employment. For example, on the islands of Islay and Jura, where the finest single malts are produced, there is very little alternative employment. As a result of the Government's punitive actions, their product brings in large sums for the Treasury, only a fraction of which is returned to the islands to be spent on public services. An industry such as the Scotch whisky industry should be encouraged, not penalised; surely it has the right to be taxed at the same rate as its rivals.
      New clause 1 is a step in the right direction and I hope that all members of the Committee will support it.
      Mr. Stephen O'Brien: New clause 1, which was introduced by the hon. Member for Moray (Angus Robertson), would reduce the rate of duty on spirits, and would thereby affect, of course, the domestic Scotch whisky industry. I ought really to declare an interest at this point, in that I do enjoy partaking from time to time. I shall not pass comment on which is my favourite brand, except to say that it is both famous and of the bird variety.
      The new clause would reduce the rate from the current level of £19.56 per litre of alcohol to £18.99, and, as was rightly pointed out by my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Duncan), the latter rate was held in 1996, in the last Budget introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke).
      Mr. Alex Salmond: Some of us have reasonably long memories. We remember the right hon. and learned Member for Rushcliffe (Mr. Clarke), the last Conservative Chancellor, being overturned on VAT on fuel in this Chamber. He recouped the revenue
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      the very next day, announcing a punitive rise in tax on whisky. May I have an assurance that that was a mistake on the part of the Conservatives?
      Mr. O'Brien: The hon. Gentleman and his party are introducing a new clause. If they want to persuade hon. Members throughout the House, they might find it more constructive to introduce their arguments in a more consensual and less nitpicking manner. The Conservative credentials on Scotch whisky are there for all to see. [Interruption.] At least my right hon. and learned Friend the Member for Rushcliffe had the decency to have some whisky next to him when he presented his Budgets. The current Chancellor, despite representing a Scottish constituency, never has whisky anywhere near him. That is one great difference on Budget day.
      We need to examine the rate at which my right hon. and learned Friend the Member for Rushcliffe had reduced whisky duty when he presented his last Budget. My right hon. and learned Friend told me earlier today that he had hoped to attend the debate, but he is otherwise detained on other parliamentary business. He may be able to join us later; let us wait and see.
      It is interesting to note that, since we started debating the new clause, we have had only one Scottish Labour Member in the Chamber—the Secretary of State for Scotland—
      The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): Wrong one!
      Mr. O'Brien: I am sorry. We have the Under-Secretary of State for Scotland, the hon. Member for Stirling (Mrs. McGuire) in her place. [Interruption.] Noises from behind me suggest that the Secretary of State is feeling bored with her present job. She may be trying so hard to sell the euro that she has forgotten to help the Scotch whisky industry to sell its product.
      Mr. Peter Duncan: I would like to reassure my hon. Friend on one point. The Scotland Office alcohol bill last year represented a substantial increase on the previous year, so the Secretary of State's commitment to Scotch whisky cannot be in doubt, bored though she may be.
      Mr. O'Brien: I hope that when my hon. Friend received his parliamentary answer, the disaggregation of the different alcohols consumed in the massive increase showed that whisky was the main spirit consumed, thus making an important contribution to the local economy.
      The one Scottish Labour Member who was present earlier appears to have disappeared already. Perhaps he is hanging his head in shame for not being able to persuade his party to think constructively along the lines of the new clause. It proposes a reduction of approximately 3 per cent. The Scotch Whisky Association advocated a more substantial reduction, so it is important to reflect on the most appropriate level that is potentially sustainable. We have to assess the background reasons and ensure that the level can be justified.

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      As my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Duncan) pointed out, the Scotch whisky industry employs more than 50,000 people in Scotland—one in 54 jobs—and the UK spirits industry as a whole employs 65,000. Whisky, the major domestic drinks industry in Scotland, is taxed more heavily than other alcoholic drinks, particularly beer and non-fortified wine—more than 150 per cent. more heavily per unit of pure alcohol.
      Another good background argument is that the Government increased the duty in their first Budget in 1997 to the same level imposed by my right hon. and learned Friend the Member for Rushcliffe, but have frozen the duty since. It was interesting to hear the Chancellor claim in his Budget speech this year that he had a wonderful track record—I use the words advisedly—over the past five years, in which he had frozen the duty. He managed to overlook the fact that, six years ago, he had increased it sharply. It is for people outside this place to judge whether the level of spin in his Budget speech resonated in any way with the words of the former Secretary of State for International Development, the right hon. Member for Birmingham, Ladywood (Clare Short). The imbalance in the duty levels—highlighted in other contributions as well as my own—has effectively been frozen. It would be a shame if any party sought to claim to be more of a friend of Scotch than any other. The Scottish National party likes to think that it is the only friend of Scotch, although the record shows that not to be true. Scotch has many friends, including those of us in the official Opposition. Given what we have just heard from the hon. Member for Argyll and Bute (Mr. Reid), the Liberal Democrats are also claiming to be friends of Scotch. However, are the Government Scotch's friend? Are they looking at the genuine issues involved in the serious costs implications, the competitive position and the imbalances that have been created?
      An important point in this context has been made about corporation tax, which adds about £25 million to the costs of the Scottish whisky industry. Again, that flies in the face of the rhetoric of a Government who like to claim that they bring only good news for everyone. The reality in the real universe—if not in the parallel universe that the Government seem to inhabit—is what
      people have to deal with. The Government merely like to spin about such matters.
      It is important to find a position that is fair for Scotch whisky, and for spirits in general but, given the proportions involved, it is Scotch whisky that is uppermost in our minds. We welcome any party that supports returning to levels of tax that existed before the current Chancellor came to office. The new clause moved by the Scottish National party proposes just that.
      The Minister will no doubt want to tease out of us our view of the revenue implications of the new clause. That is a difficult judgment. The Treasury claims that it has the only model that works, but that model's performance in relation to other matters—such as forecasts—has not been especially reliable. One problem in connection with Committee discussion of the Finance Bill is that it is very difficult to get the Government to acknowledge that data that are difficult to square with they want to achieve ought to be published—not least because the data have been paid
      for by the taxpayer.
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      According to our best estimate, a reduction in duty is likely to be revenue neutral, as it will be compensated for by higher UK sales. Even Government economists believe that a duty cut could boost revenues. However, that is anecdotal, in the absence of the demonstrable evidence that we believe that the Treasury has but chooses not to publish.
      The Government's economic service data—the best data that I have been able to find on this matter—suggest that the excise cut proposed in the new clause would be neutral. That is based on the argument that the cut would reduce smuggling. I do not want to go over the arguments that we usefully explored yesterday in connection with tobacco smuggling. However, it is clear, although they will not say so, that even the Government think that the proposal is likely to be neutral. If it were adopted, the new clause would support corner shops throughout the UK, and especially in Scotland. It would also offer a way of reducing the problems of what is known as diversion fraud.
      The Conservative party is Her Majesty's official Opposition. We believe that there is a genuine prospect of being able to govern again, and that, in government, we will be able to deliver. It is therefore appropriate for us to support the new clause.
      We support the duty reduction in principle and consider that an important point has been made. However, the Government must also commit to making an updated, open assessment of the impact of duty levels on sales of spirits. Only then would we be able to support further duty reductions—a trend that I suspect may tempt other parties. It is important to get a genuine impact assessment as to where elasticity operates in terms of price and volume, and in relation to cross-border sales and smuggling sales and non-sales.
      The new clause is a matter of fairness; it is common sense and is wholly in line with what the Conservatives were able to achieve when we were in government. We believe it to be right. We believe it to be tax neutral and are glad to support it on behalf of the Scotch whisky industry of Scotland and all those who wish to enjoy the benefit of a reduction.
      6.45 pm
      John Healey: I welcome both the chance to debate the new clause and the fact that the hon. Member for Moray (Angus Robertson) has tabled it. I also welcome the strong turnout of officers of the all-party Scotch whisky group.
      The new clause would reduce the rate of excise duty charged on spirits by 2.9 per cent. and, as the hon. Gentleman said, restore the rate to its 1997 level. In essence, the hon. Gentleman argued that, without the new clause, the Finance Bill would not go far enough to support the UK spirits industry. Both he and the hon. Member for Argyll and Bute (Mr. Reid) made the case for what is known as unitary taxation, whereby all alcoholic drinks are taxed equally, according to the percentage of alcohol that they contain.
      As my right hon. Friend the Chancellor announced in his Budget statement, we have this year frozen excise duty on spirits for the sixth successive Budget. I shall explain in a little more detail exactly what that means, as it seems that some people take the duty freezes for granted and are clamouring for more.

      409
      This is the longest period of duty freezes on spirits since the 1950s. Without those freezes, the total tax on a standard bottle of spirits would have been about 92p higher, if duty had increased in line with inflation. The freezes represent a real-terms cut of 12 per cent. The duty on spirits is almost 40 per cent. lower in real terms than it was 10 years ago. It is 57 per cent. lower in real terms than 30 years ago. In recent history, this and previous Governments have constantly reduced the incidence of excise duty on spirits.
      Mr. Peter Duncan: I accept the Economic Secretary's point about the freezes for the past five years, but does he agree that we should be freezing the iniquity so that Scotch whisky is not at a disadvantage compared to beers and wines from outwith our country?
      John Healey: I shall deal with the accusations of discrimination and iniquity later.
      Alcohol in spirits is more heavily taxed than alcohol in beer, still wine and cider. Spirits duty is 60 per cent. greater than beer duty, but there has been a gradual move towards reducing that differential and, since 1997, the Government have played a part in that. As I said, there is a 60 per cent. difference in the duty for beer and spirits but in 1997, it was 76 per cent.
      Our approaches to decisions on alcohol duty are made Budget by Budget, and they take into account a wide range of relevant factors, including relevant duty levels in different drinks sectors. They also have regard to the particular circumstances at the time; for example, the state of the industry or the level of demand for particular drinks.
      Sir Robert Smith: In an industry where there is such a long time lag, it is a pity that the Budget decisions are made only on a yearly basis. Earlier, we discussed the need to give industry long-term indications of the Government's intentions. Would it not be helpful to see a forward plan for the tax basis for spirits?
      John Healey: Our record speaks for itself, but at present we have no plans to change the approach whereby we make such decisions on a Budget-byBudget basis.
      Like previous Governments, we recognise that the benefit of taxing categories of alcoholic drinks rather than alcohol itself is that it allows tailored responses to inevitably changing circumstances. If we were to tax rigidly on the basis of alcohol content alone, we might lose that valuable flexibility. Nevertheless, we are committed to delivering a fairer balance in the burden of taxation falling between different alcoholic drinks and different types of drink producer, and we have consistently done so, as I said, Budget by Budget, since 1997.
      410
      The hon. Member for Moray describes the UK duty regime for spirits as discriminatory. On the contrary, we have one of the least discriminatory regimes of any country. [Interruption.] I hear the question, "What about those on the continent?" asked from a sedentary position. No EU member state applies a system of unitary taxation and all member states apply a higher rate of duty to spirits than to beer and wine. It is also a fact that the UK has the lowest differential between spirits and beer of any EU member state. In Germany, spirits duty is more than six and a half times beer duty. In France, the factor is five and a half times and, in Spain, spirits duty is more than three and a half times that of beer. To answer the question asked by the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan), those are all significant spirits producing nations.
      Mr. Baron: Will the hon. Gentleman give way?
      John Healey: I think that the hon. Gentleman has just joined this debate, although he has been in the Chamber for most of the day, as I have, so I will give way to him.
      Mr. Baron: I thank the Minister for being so generous. The fact that there is a greater inequality on the continent surely does not lessen the fact that the inequality that we have here is basically wrong, and one cannot get away from that. I put it to him that most economists, including some of the Government's economists, are of the clear view that, if the Government were to lower the duty, they could boost revenue. To 'what extent are the Government examining that case, with a view to taking that action?
      John Healey: Perhaps the hon. Gentleman should have been a little more patient because I am about to deal with that very point, which a number of hon. Members made, perhaps before he rejoined the debate.
      We recognise the enormous contribution that the spirits industry makes to the UK economy and, indeed, to the Scottish economy, and its importance to our balance of trade. I also recognise its particular importance to the constituency of the hon. Member for Moray. However, I have to tell him that we have taken consistent steps since coming to power to deliver a fairer balance in taxation between alcoholic drinks, including six successive freezes in spirits duties. In deciding spirits duties, my right hon. Friend the Chancellor has to weigh up a range of factors, including the different circumstances of all sectors of the alcoholic drinks industry, as well as our spending priorities.
      The fact remains that duty freezes and, even more so, cuts, cost revenue. The estimated cost of this year's freeze in spirits duty is £30 million. New clause 1 would cost an additional £30 million in the first full year of its implementation. The hon. Member for Moray shakes his head, but I have to tell him that there is no free way to cut alcohol and spirits duty. May I tell him, the hon. Member for Galloway and Upper Nithsdale, especially If he is about to jump to his feet, and the hon. Member for Eddisbury (Mr. O'Brien), who asked about modelling, that we publish the demand elasticity models on which excise duty costings are based?
      The alcohol model that the Government published most recently was based on the model devised by Professor Marcus Chambers, which was updated in

      411
      1999. That is an independently, expertly and academically devised model. We are working on, and have almost completed, a substantially improved alcohol demand model, and we are currently preparing it for publication. It will be published as a Government economic service working paper before long. The improvements that we have been able to make to the model will help to answer some of the points that have been made, but, more importantly, they will better inform such debates in the House and elsewhere in future.
      The key improvements to the new model involve splitting beer into on and off trade sales to achieve a better understanding of the dynamics in the beer sector and using better data, specifically following the completion of the European single market, to take better account of cross-border shopping as a factor in overall demand. As I said, that will be published shortly as an economic service working paper.
      The point made by the hon. Member for Argyll and Bute about corporation tax treatment was raised by at least two other hon. Members on Second Reading last week. As my right hon. Friend the Paymaster General indicated in her response then, we are aware of the concerns of the Scotch Whisky Association, which it raised directly with me in our meeting before the Budget. We are discussing the issues with its representatives, and the measure was not designed to achieve such outcomes.
      I am grateful to the hon. Member for Moray for giving us the opportunity to have this debate. To hear him speak, however, one would have expected universal disappointment from the spirits industry and universal condemnation of this year's Budget freeze, which is not the case. Let me quote Hugh Morrison, chief executive, no less, of the Scotch Whisky Association:
      "The Chancellor's decision to narrow the duty gap is good news for the industry and represents further progress towards the industry's goal of a modern tax system for alcoholic drinks. Distillers will be raising a collective toast to the Chancellor."
      In summary, we recognise the importance of the whisky industry to this country and to Scotland. In this Budget we have frozen spirits duty for the sixth successive year—the longest period of freeze since the 1950s. That has been warmly welcomed by the industry on behalf of which the hon. Member for Moray seeks to speak. We are pursuing a policy aim of fairer taxation between drink sectors but not a policy of equalising taxation. For those reasons, I urge the House to reject the new clause.
      Mr. Salmond: I want to make a slightly unexpected contribution in support of my hon. Friend the Member for Moray (Angus Robertson)—it is unexpected because I was hoping to speak on the next clause on oil taxation, which is equally important to the Scottish economy, but a combination of guillotine procedures from the Government and some long-winded speeches earlier made that impossible. I therefore want to add my voice to my hon. Friend's excellent arguments in relation to the whisky industry.
      I sat through these debates all afternoon, and I am one of very few Members who are present who did so. I sat through amendment after amendment, but there were never more than eight Conservative Members in the House speaking to amendments, which they said
      412
      were crucial. They were right to berate the Government for having no Labour Back Benchers from Scotland present for a whisky debate—the Under-Secretary of State for Scotland, not the Secretary of State, was the only representative. Equally, however, the Government and the Opposition should look at what is considered to be worth the allocation of time in Finance Bills. Many of the debates—I am sure that many Members who are now present were not here—were so detailed that hon. Members would have had some difficulty in bringing themselves to participate in them.
      When we debate this new clause, however—and the new clause on the oil industry, had we been able to reach it—we are debating matters that touch the livelihoods and jobs of thousands of people in Scotland and elsewhere. Perhaps the attendance that we have now in the House is related to the fact that we have finally reached a new clause about which most hon. Members feel confident that they know something. That does not excuse the Government, however, for not allocating time to allow significant, substantial amendments affecting employment to be properly and adequately debated.
      It is unfortunate that the Chancellor was not able to join us today. I understand that he was closeted away with the Prime Minister discussing other things. It is unfortunate too that the Secretary of State for Scotland was not able to join us—no doubt she was away making speeches stabbing the Chancellor in the back. Both right hon. Members should be concerned about the fate of the whisky industry, and both should be concerned about kick-starting exploration and jobs in the North sea. Given the amount of revenue that this and previous Treasuries have accumulated from the whisky and oil industries, one would think that the Government might allow sufficient time for a proper debate and make the relevant concessions that will keep those vital Scottish industries on the road.
      The level of interest, time and concern that the Treasury Bench has devoted to such vital matters will not go unnoticed by people in Scotland. I thought that the Economic Secretary did a substantial and useful job on the concession on oil pipeline taxation. I hope that the next time we debate vital industries in Scotland, he allows us the time to do that and ensures that the personnel are available so that we have a substantial discussion. I also hope that the Government give those vital industries the priority to which they are entitled.
      7 pm
      Angus Robertson: I am pleased that I tabled the new clause. The Scottish National party feels strongly about the measure, which is crucial to an industry throughout Scotland. I am glad that at this late stage, in the last few minutes of our proceedings, some Scottish Labour Members have turned up to hear the debate and argument on this key issue. I am surprised, however, that not more are present because I went with them to lobby the Treasury earlier this year on the matter, on which there was cross-party consensus. Scottish Labour MPs agreed that duty should he cut by 4 per cent. That idea was also supported by Liberal Democrat and Conservative MPs, and had the support of Northern Irish colleagues, as we heard. I am surprised that not one

      413
      of those Labour Members who were prepared to lobby the Treasury for a 4 per cent. cut were prepared to speak in the debate and I hope that they will vote in favour of the more modest 3 per cent, proposal in the new clause.
      The Economic Secretary said that there is no discrimination. That is news to anyone who lives in a whisky-producing region. I know that he has an interest in the industry and I extend an invitation to him to visit Speyside to explain why whisky produced in Dufftown costs more to buy at home than on holiday in Spain. The idea that the duty rates do not discriminate against Scotch whisky is preposterous, and everyone in Scotland knows it.
      Members who have just arrived in the Chamber should understand that the new clause is not just about Scotch whisky; it would also have a positive impact on whiskey produced in Ireland, which is important to colleagues from Northern Ireland, and on spirit producers in Wales and England. It is a modest proposal and does not even go as far as the Scotch whisky industry wants it to. That is why I will press the new clause to a vote.
      The Economic Secretary did not give a commitment to continue the freezes. Such freezes are welcome, but the discrimination continues. We should end it and roll it back. With the support of hon. Members on both sides of the Committee, I hope that we can start that process.
      Question put, That the clause be read a Second time:—
      The Committee divided: Ayes 174, Noes 292.

      Division No. 198]

      [4:34 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Brady, Graham

      Allan, Richard

      Brake, Tom (Carshalton)

      Amess, David

      Brazier, Julian

      Atkinson, David (Bour'mth E)

      Breed, Colin

      Atkinson, Peter (Hexham)

      Brooke, Mrs Annette L.

      Bacon, Richard

      Browning, Mrs Angela

      Baldry, Tony

      Burnett, John

      Barker, Gregory

      Baron, John (Billericay)

      Burns, Simon

      Barrett, John

      Barstow, Paul

      Beggs, Roy (E Antrim)

      Burt, Alistair

      Bellingham, Henry

      Butterfill, John

      Bercow, John

      Cable, Dr. Vincent

      Beresford, Sir Paul

      Cameron, David

      Blunt, Crispin

      Campbell, rh Menzies (NE Fife)

      Bottomley, rh Virginia (SW Surrey)

      Carmichael, Alistair

      Cash, William

      377

      Chapman, Sir Sydney (Chipping Barnet)

      McLoughlin, Patrick

      Malins, Humfrey

      Chope, Christopher

      May, Mrs Theresa

      Clappison, James

      Mercer, Patrick

      Clarke, rh Kenneth (Rushcliffe)

      Mitchell, Andrew (Sutton Coldfield)

      Clifton-Brown, Geoffrey

      Collins, Tim

      Moore, Michael

      Conway, Derek

      Moss, Malcolm

      Cotter, Brian

      Murrison, Dr. Andrew

      Cran, James (Beverley)

      Norman, Archie

      Curry, rh David

      Oaten, Mark (Winchester)

      Davey, Edward (Kingston)

      O'Brien, Stephen (Eddisbury)

      Davis, rh David (Haltemprice & Howden)

      Öpik, Lembit

      Osborne, George (Tatton)

      Djanogly, Jonathan

      Ottaway, Richard

      Dodds, Nigel

      Paice, James

      Doughty, Sue

      Paterson, Owen

      Duncan, Alan (Rutland)

      Pickles, Eric

      Duncan, Peter (Galloway)

      Prisk, Mark (Hertford)

      Duncan Smith, rh Iain

      Pugh, Dr. john

      Fabricant, Michael

      Redwood, rh John

      Field, Mark (Cities of London & Westminster)

      Reid, Alan (Argyll & Bute)

      Rendel David

      Flight, Howard

      Robathan, Andrew

      Flook, Adrian

      Robertson, Laurence (Tewk'b'ry)

      Forth, rh Eric

      Robinson, Peter (Belfast E)

      Foster, Don (Bath)

      Rosindell, Andrew

      Gamier, Edward

      Russell, Bob (Colchester)

      George, Andrew (St Ives)

      Sanders Adrian

      Gibb, Nick (Bognor Regis)

      Sayeed Jonathan

      Gidley, Sandra

      Selous Andrew

      Gillan, Mrs Cheryl

      Shephard, rh Mrs Gillian

      Gray, James (N Wilts)

      Shepherd, Richard

      Grayling, Chris

      Simmonds, Mark

      Green, Damian (Ashford)

      Simpson, Keith (M-Norfolk)

      Green, Matthew (Ludlow)

      Smith Sir Robert (W Ab-d-ns & Kincardine)

      Greenway, John

      Grieve, Dominic

      Smyth Rev Martin (Belfast S)

      Gummer rh John

      Soames Nicholas

      Hague, rh William

      Spelman, Mrs Caroline

      Hammond, Philip

      Spicer, Sir Michael

      Hancock, Mike

      Spink, Bob (Castle Point)

      Harris, Dr.Evan (Oxford W & Abingdon)

      Spring, Richard

      Harvey, Nick

      Steen, Anthony

      Hawkins, Nick

      Streeter, Gary

      Hayes, John (S Holland

      Stunell, Andrew

      Heald, Oliver

      Swayne, Desmond

      Heath, David

      Swire, Hugo (E Devon)

      Hendry, Charles

      Syms Robert

      Hermon, Lady

      Tapsell, Sir Peter

      Hoban, Mark (Fareham)

      Taylor. Ian (Esher)

      Hogg, rh Douglas

      Taylor' John (Solihull)

      Horam, John (Orpington)

      Taylor, Matthew (Truro)

      Howarth, Gerald (Aldershot)

      Taylor, Dr. Richard (Wyre F)

      Hunter, Andrew

      Taylor, Sir Teddy

      Jack, rh Michael

      Thurso John

      Johnson, Boris (Henley)

      Trend Michael

      Kennedy, rh Charles (Ross Skye & Inverness)

      Turner Andrew (Isle of Wight)

      Tyler, Paul (N Cornwall)

      Key, Robert (Salisbury)

      Tyrie' Andrew

      Kirkbride, Miss Julie

      Viggers, Peter

      Lait, Mrs Jacqui

      Waterson, Nigel

      Lamb, Norman

      Watkinson, Angela

      Lansley, Andrew

      Whittingdale, John

      Laws, David (Yeovil)

      Wiggin, Bill

      Leigh, Edward

      Wilkinson, John

      Letwin, rh Oliver

      Willetts, David

      Lewis, Dr. Julian (New Forest E)

      Winterton, Ann (Congleton)

      Liddell-Grainger, Ian

      Yeo, Tim (S Suffolk)

      Lidington, David

      Young, rh Sir George

      Lilley, rh Peter

      Younger-Ross, Richard

      Loughton, Tim

      Mclntosh, Miss Anne

      Tellers for the Ayes:

      Mackay, rh Andrew

      Mr. David Wilshire and

      Maclean, rh David

      Mr. Mark Francois

      378

      NOES

      Abbott, Ms Diane

      Davies, rh Denzil (Llanelli)

      Adams, Irene (Paisley N)

      Davies, Geraint (Croydon C)

      Ainger, Nick

      Davis, rh Terry (B'ham Hodge H)

      Ainsworth, Bob (Cov'try NE)

      Dawson, Hilton

      Alexander, Douglas

      Dean, Mrs Janet

      Allen, Graham

      Denham, rh John

      Anderson, Janet (Rossendale & Darwen)

      Dhanda, Parmjit

      Dobson, rh Frank

      Armstrong, rh Ms Hilary

      Doran, Frank

      Atkins, Charlotte

      Dowd, Jim (Lewisham W)

      Austin, John

      Drew, David (Stroud)

      Bailey, Adrian

      Eagle, Angela (Wallasey)

      Baird, Vera

      Eagle, Maria (L' pool Garston)

      Barnes, Harry

      Efford, Clive

      Barron, rh Kevin

      Ennis, Jeff (Barnsley E)

      Battle, John

      Etherington, Bill

      Bayley, Hugh

      Ewing, Annabelle

      Beard, Nigel

      Farrelly, Paul

      Beckett, rh Margaret

      Fisher, Mark

      Benn, Hilary

      Fitzpatrick, Jim

      Benton, Joe (Bootle)

      Flint, Caroline

      Betts, Clive

      Flynn, Paul (Newport W)

      Blackman, Liz

      Follett, Barbara

      Blizzard, Bob

      Foster, rh Derek

      Boateng, rh Paul

      Foster, Michael (Worcester)

      Borrow, David

      Foulkes, rh George

      Bradley, rh Keith (Withington)

      Francis, Dr. Hywel

      Bradley, Peter (The Wrekin)

      Gardiner, Barry

      Bradshaw, Ben

      Gerrard, Neil

      Brennan, Kevin

      Gibson, Dr. Ian

      Brown, rh Gordon (Dunfermline E)

      Gilroy, Linda

      Griffiths, Jane (Reading E)

      Brown, Russell (Dumfries)

      Griffiths, Nigel (Edinburgh S)

      Browne, Desmond

      Griffiths, Win (Bridgend)

      Bryant, Chris

      Grogan, John

      Burgon, Colin

      Hall, Mike (Weaver Vale)

      Burnham, Andy

      Hall, Patrick (Bedford)

      Byers, rh Stephen

      Hamilton, David (Midlothian)

      Cairns, David

      Hamilton, Fabian (Leeds NE)

      Campbell, Alan (Tynemouth)

      Hanson, David

      Campbell, Ronnie (Blyth V)

      Harris, Tom (Glasgow Cathcart)

      Caplin, Ivor

      Havard, Dai (Merthyr Tydfil & Rhymney)

      Casale, Roger

      Challen, Colin

      Healey, John

      Chapman, Ben (Wirral S)

      Henderson, Doug (Newcastle N)

      Chaytor, David

      Henderson, Ivan (Harwich)

      Clark, Mrs Helen (Peterborough)

      Hendrick, Mark

      Clark, Dr. Lynda (Edinburgh Pentlands)

      Hepburn, Stephen

      Heppell, John

      Clarke, rh Charles (Norwich S)

      Hesford, Stephen

      Clarke, rh Tom (Coatbridge & Chryston)

      Hewitt, rh Ms Patricia

      Heyes, David

      Clarke, Tony (Northampton S)

      Hill, Keith (Streatham)

      Clelland, David

      Hinchliffe, David

      Clwyd, Ann (Cynon V)

      Hodge, Margaret

      Coaker, Vernon

      Hoey, Kate (Vauxhall)

      Coffey, Ms Ann

      Hood, Jimmy (Clydesdale)

      Coleman, lain

      Hoon, rh Geoffrey

      Colman, Tony

      Hope, Phil (Corby)

      Cooper, Yvette

      Howarth, George (Knowsley N & Sefton E)

      Corbyn, Jeremy

      Corston, Jean

      Howells, Dr. Kim

      Cousins, Jim

      Hughes, Beverley (Stretford & Urmston)

      Cox, Tom (Tooting)

      Crausby, David

      Hughes, Kevin (Doncaster N)

      Cruddas, Jon

      Hurst, Alan (Braintree)

      Cryer, Ann (Keighley)

      Irranca-Davies, Huw

      Cryer, John (Hornchurch)

      Jackson, Glenda (Hampstead & Highgate)

      Cummings, John

      Cunningham, Tony (Workington)

      Jackson, Helen (Hillsborough)

      Curtis-Thomas, Mrs Claire

      Jamieson, David

      Darling, rh Alistair

      Jenkins, Brian

      Davey, Valerie (Bristol W)

      Jones, Jon Owen (Cardiff C)

      David, Wayne

      Jowell, rh Tessa

      Davidson, Ian

      Joyce, Eric (Falkirk W)

      379

      Kaufman, rh Gerald

      Price, Adam (E Carmarthen & Dinefwr)

      Keen, Alan (Feltham)

      Keen, Ann (Brentford)

      Primarolo, rh Dawn

      Kemp, Fraser

      Prosser, Gwyn

      Khabra, Piara S.

      Purnell, James

      Kidney, David

      Rapson, Syd (Portsmouth N)

      Kilfoyle, Peter

      Raynsford, rh Nick

      King, Andy (Rugby)

      Reed, Andy (Loughborough)

      King, Ms Oona (Bethnal Green & Bow)

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

      Knight, Jim (S Dorset)

      Robertson, Angus (Moray)

      Ladyman, Dr. Stephen

      Robertson, John (Glasgow Anniesland)

      Lammy, David

      Laxton, Bob (Derby N)

      Robinson, Geoffrey (Coventry NW)

      Lazarowicz, Mark

      Lepper, David

      Roche, Mrs Barbara

      Leslie, Christopher

      Ross, Ernie (Dundee W)

      Levitt, Tom (High Peak)

      Roy, Frank (Motherwell)

      Lewis, Ivan (Bury S)

      Ruane, Chris

      Liddell, rh Mrs Helen

      Ruddock, Joan

      Linton, Martin

      Russell, Ms Christine (City of Chester)

      Lloyd, Tony (Manchester C)

      Love, Andrew

      Ryan, Joan (Enfield N)

      Lucas, Ian (Wrexham)

      Salmond, Alex

      Luke, lain (Dundee E)

      Salter, Martin

      Lyons, John (Strathkelvin)

      Sarwar, Mohammad

      McAvoy, Thomas

      Savidge, Malcolm

      McCabe, Stephen

      Sawford, Phil

      McCartney, rh Ian

      Shaw, Jonathan

      McDonagh, Siobhain

      Sheridan, Jim

      MacDonald, Calum

      Shipley, Ms Debra

      MacDougall, John

      Simon, Siôn (B'ham Erdington)

      McFall, John

      Singh, Marsha

      McGuire, Mrs Anne

      Smith, rh Andrew (Oxford E)

      Mclsaac, Shona

      Smith, rh Chris (Islington S & Finsbury)

      McKechin, Ann

      McKenna, Rosemary

      Smith, John (Glamorgan)

      Mactaggart, Fiona

      Smith, Llew (Blaenau Gwent)

      McWalter, Tony

      Soley, Clive

      Mahon, Mrs Alice

      Southworth, Helen

      Mallaber, Judy

      Spellar, rh John

      Mann, John (Bassetlaw)

      Squire, Rachel

      Marsden, Gordon (Blackpool S)

      Starkey, Dr. Phyllis

      Marshall, Jim (Leicester S)

      Stinchcombe, Paul

      Marshall-Andrews, Robert

      Sutcliffe, Gerry

      Martlew, Eric

      Tami, Mark (Alyn)

      Meale, Alan (Mansfield)

      Taylor, Dari (Stockton S)

      Merron, Gillian

      Taylor, David (NW Leics)

      Michael, rh Alun

      Thomas, Gareth (Clwyd W)

      Milburn, rh Alan

      Thomas, Gareth (Harrow W)

      Miliband, David

      Thomas, Simon (Ceredigion)

      Miller, Andrew

      Tipping, Paddy

      Mitchell, Austin (Gt Grimsby)

      Todd, Mark (S Derbyshire)

      Moffatt, Laura

      Touhig, Don (Islwyn)

      Mole, Chris

      Trickett, Jon

      Moonie, Dr. Lewis

      Truswell, Paul

      Morley, Elliot

      Turner, Dr. Desmond (Brighton Kemptown)

      Mullin, Chris

      Murphy, Denis (Wansbeck)

      Turner, Neil (Wigan)

      Naysmith, Dr. Doug

      Twigg, Derek (Halton)

      O'Brien, Bill (Normanton)

      Tynan, Bill (Hamilton S)

      O'Hara, Edward

      Vis, Dr. Rudi

      Olner, Bill

      Ward, Claire

      Organ, Diana

      Wareing, Robert N.

      Owen, Albert

      Watts, David

      Palmer, Dr. Nick

      Weir, Michael

      Picking, Anne

      White, Brian

      Pickthall, Colin

      Whitehead, Dr. Alan

      Plaskitt, James

      Williams, rh Alan (Swansea W)

      Pollard, Kerry

      Wills, Michael

      Pond, Chris (Gravesham)

      Winnick, David

      Pound, Stephen

      Wishart, Pete

      Prentice, Ms Bridget (Lewisham E)

      Wood, Mike (Batley)

      Woodward, Shaun

      Prentice, Gordon (Pendle)

      Woolas, Phil

      Prescott, rh John

      Worthington, Tony

      380

      Wright, Anthony D. (Gt Yarmouth)

      Wyatt, Derek

      Tellers for the Noes:

      Wright, David (Telford)

      Dan Norris and

      Wright, Tony (Cannock)

      Mr. Jim Murphy

      Division No. 199]

      [7:03 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Clifton-Brown, Geoffrey

      Allan, Richard

      Collins, Tim

      Amess, David

      Conway, Derek

      Atkinson, David (Bour'mth E)

      Cotter, Brian

      Atkinson, Peter (Hexham)

      Cran, James (Beverley)

      Bacon, Richard

      Curry, rh David

      Baldry, Tony

      Davey, Edward (Kingston)

      Barker, Gregory

      Davis, rh David (Haltemprice & Howden)

      Baron, John (Billericay)

      Barrett, John

      Djanogly, Jonathan

      Beggs, Roy (E Antrim)

      Dodds, Nigel

      Bellingham, Henry

      Doughty, Sue

      Beresford, Sir Paul

      Duncan, Alan (Rutland)

      Blunt, Crispin

      Duncan, Peter (Galloway)

      Bottomley, rh Virginia (SW Surrey)

      Duncan Smith, rh lain

      Ewing, Annabelle

      Brady, Graham

      Fabricant, Michael

      Brazier, Julian

      Fallon, Michael

      Breed, Colin

      Field, Mark (Cities of London & Westminster)

      Brooke, Mrs Annette L.

      Browning, Mrs Angela

      Flight, Howard

      Burnett, John

      Flook, Adrian

      Burns, Simon

      Forth, rh Eric

      Burnside, David

      Foster, Don (Bath)

      Burstow, Paul

      Francois, Mark

      Butterfill, John

      Garnier, Edward

      Cable, Dr. Vincent

      George, Andrew (St. Ives)

      Cameron, David

      Gibb, Nick (Bognor Regis)

      Campbell, rh Menzies (NE Fife)

      Gidley, Sandra

      Cash, William

      Gillan, Mrs Cheryl

      Chapman, Sir Sydney (Chipping Barnet)

      Gray, James (N Wilts)

      Grayling, Chris

      Chope, Christopher

      Green, Matthew (Ludlow)

      Clappison, James

      Greenway, John

      Clarke, rh Kenneth (Rushcliffe)

      Grieve, Dominic

      414

      Gummer, rh John

      Rendel, David

      Hague, rh William

      Robathan, Andrew

      Hammond, Philip

      Robertson, Angus (Moray)

      Hancock, Mike

      Robertson, Hugh (Faversham & M-Kent)

      Harvey, Nick

      Hawkins, Nick

      Robertson, Laurence (Tewk'b'ry)

      Hayes, John (S Holland)

      Robinson, Peter (Belfast E)

      Heath, David

      Rosindell, Andrew

      Hendry, Charles

      Russell, Bob (Colchester)

      Hermon, Lady

      Salmond, Alex

      Hoban, Mark (Fareham)

      Sanders, Adrian

      Hogg, rh Douglas

      Sayeed, Jonathan

      Horam, John (Orpington)

      Selous, Andrew

      Howarth, Gerald (Aldershot)

      Shepherd, Richard

      Hunter, Andrew

      Simmonds, Mark

      Jack, rh Michael

      Simpson, Keith (M-Norfolk)

      Johnson, Boris (Henley)

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

      Key, Robert (Salisbury)

      Kirkbride, Miss Julie

      Smyth, Rev. Martin (Belfast S)

      Lait, Mrs Jacqui

      Soames, Nicholas

      Lamb, Norman

      Spelman, Mrs Caroline

      Lansley, Andrew

      Spicer, Sir Michael

      Laws, David (Yeovil)

      Spink, Bob (Castle Point)

      Leigh, Edward

      Spring, Richard

      Lewis, Dr. Julian (New Forest E)

      Steen, Anthony

      Liddell-Grainger, Ian

      Streeter, Gary

      Lidington, David

      Swayne, Desmond

      Lilley, rh Peter

      Swire, Hugo (E Devon)

      Loughton, Tim

      Syms, Robert

      Luff, Peter (M-Worcs)

      Tapsell, Sir Peter

      Mclntosh, Miss Anne

      Taylor, Ian (Esher)

      Mackay, rh Andrew

      Taylor, John (Solihull)

      Maclean, rh David

      Taylor, Matthew (Truro)

      McLoughlin, Patrick

      Thomas, Simon (Ceredigion)

      Malins, Humfrey

      Thurso, John

      May, Mrs Theresa

      Trimble, rh David

      Mercer, Patrick

      Turner, Andrew (Isle of Wight)

      Mitchell, Andrew (Sutton Coldfield)

      Tyler, Paul (N Cornwall)

      Tyrie, Andrew

      Moore, Michael

      Viggers, Peter

      Moss, Malcolm

      Waterson, Nigel

      Murrison, Dr. Andrew

      Watkinson, Angela

      Norman, Archie

      Webb, Steve (Northavon)

      Oaten, Mark (Winchester)

      Weir, Michael

      O'Brien, Stephen (Eddisbury)

      Whittingdale, John

      Öpik, Lembit

      Widdecombe, rh Miss Ann

      Osborne, George (Tatton)

      Wiggin, Bill

      Ottaway, Richard

      Wilkinson, John

      Page, Richard

      Willetts, David

      Paice, James

      Williams, Roger (Brecon)

      Paterson, Owen

      Wilshire, David

      Pickles, Eric

      Yeo, Tim (S Suffolk)

      Price, Adam (E Carmarthen & Dinefwr)

      Young, rh Sir George

      Younger-Ross, Richard

      Prisk, Mark (Hertford)

      Pugh, Dr. John

      Tellers for the Ayes:

      Redwood, rh John

      Pete Wishart and

      Reid, Alan (Argyll & Bute)

      Mr. Alistair Carmichael

      NOES

      Abbott, Ms Diane

      Beard, Nigel

      Adams, Irene (Paisley N)

      Beckett, rh Margaret

      Ainger, Nick

      Benn, Hilary

      Ainsworth, Bob (Cov'try NE)

      Benton, Joe (Bootle)

      Alexander, Douglas

      Blackman, Liz

      Allen, Graham

      Blears, Ms Hazel

      Anderson, Janet (Rossendale & Darwen)

      Blizzard, Bob

      Blunkett, rh David

      Atkins, Charlotte

      Boateng, rh Paul

      Austin, John

      Borrow, David

      Bailey, Adrian

      Bradley, rh Keith (Withington)

      Baird, Vera

      Bradley, Peter (The Wrekin)

      Barnes, Harry

      Bradshaw, Ben

      Barron, rh Kevin

      Brennan, Kevin

      Battle, John

      Brown, rh Nicholas (Newcastle E Wallsend)

      Bayley, Hugh

      415

      Browne, Desmond

      Grogan, John

      Bryant, Chris

      Hall, Mike (Weaver Vale)

      Burgon, Colin

      Hall, Patrick (Bedford)

      Burnham, Andy

      Hamilton, David (Midlothian)

      Byers, rh Stephen

      Hamilton, Fabian (Leeds NE)

      Cairns, David

      Hanson, David

      Campbell, Alan (Tynemouth)

      Harris, Tom (Glasgow Cathcart)

      Campbell, Mrs Anne (C'bridge)

      Havard, Dai (Merthyr Tydfil & Rhymney)

      Campbell, Ronnie (Blyth V)

      Casale, Roger

      Healey, John

      Caton, Martin

      Henderson, Doug (Newcastle N)

      Challen, Colin

      Henderson, Ivan (Harwich)

      Chapman, Ben (Wirral S)

      Hendrick, Mark

      Chaytor, David

      Hepburn, Stephen

      Clark, Mrs Helen (Peterborough)

      Heppell, John

      Clark, Dr. Lynda (Edinburgh Pentlands)

      Hesford, Stephen

      Heyes, David

      Clarke, rh Tom (Coatbridge & Chryston)

      Hill, Keith (Streatham)

      Hinchliffe, David

      Clarke, Tony (Northampton S)

      Hodge, Margaret

      Clelland, David

      Hoey, Kate (Vauxhall)

      Coffey, Ms Ann

      Hood, Jimmy (Clydesdale)

      Coleman, lain

      Hoon, rh Geoffrey

      Colman, Tony

      Hope, Phil (Corby)

      Cook, rh Robin (Livingston)

      Hopkins, Kelvin

      Cooper, Yvette

      Howarth, George (Knowsley N & Sefton E)

      Corbyn, Jeremy

      Corston, Jean

      Howells, Dr. Kim

      Cousins, Jim

      Hughes, Beverley (Stratford & Urmston)

      Crausby, David

      Cruddas, Jon

      Hughes, Kevin (Doncaster N)

      Cryer, Ann (Keighley)

      Hurst, Alan (Braintree)

      Cryer, John (Hornchurch)

      Irranca-Davies, Huw

      Cummings, John

      Jackson, Glenda (Hampstead & Highgate)

      Cunningham, Tony (Workington)

      Curtis-Thomas, Mrs Claire

      Jackson, Helen (Hillsborough)

      Darling, rh Alistair

      Jamieson, David

      Davey, Valerie (Bristol W)

      Jenkins, Brian

      David, Wayne

      Johnson, Miss Melanie (Welwyn Hatfield)

      Davidson, Ian

      Davies, rh Denzil (Llanelli)

      Jones, Jon Owen (Cardiff C)

      Davies, Geraint (Croydon C)

      Jones, Lynne (Selly Oak)

      Davis, rh Terry (B'ham Hodge H)

      Joyce, Eric (Falkirk W)

      Dawson, Hilton

      Kaufman, rh Gerald

      Dean, Mrs Janet

      Keeble, Ms Sally

      Denham, rh John

      Keen, Alan (Feltham)

      Dhanda, Parmjit

      Keen, Ann (Brentford)

      Dobson, rh Frank

      Kemp, Fraser

      Doran, Frank

      Khabra, Piara S.

      Dowd, Jim (Lewisham W)

      Kidney, David

      Drew, David (Stroud)

      Kilfoyle, Peter

      Eagle, Angela (Wallasey)

      King, Andy (Rugby)

      Eagle, Maria (L'pool Garston)

      King, Ms Oona (Bethnal Green & Bow)

      Edwards, Huw

      Efford, Clive

      Knight, Jim (S Dorset)

      Ennis, Jeff (Barnsley E)

      Kumar, Dr. Ashok

      Etherington, Bill

      Ladyman, Dr. Stephen

      Fisher, Mark

      Laxton, Bob (Derby N)

      Fitzpatrick, Jim

      Lazarowicz, Mark

      Flint, Caroline

      Lepper, David

      Flynn, Paul (Newport W)

      Leslie, Christopher

      Follett, Barbara

      Levitt, Tom (High Peak)

      Foster, rh Derek

      Lewis, Ivan (Bury S)

      Foster, Michael (Worcester)

      Liddell, rh Mrs Helen

      Foster, Michael Jabez (Hastings & Rye)

      Linton, Martin

      Lloyd, Tony (Manchester C)

      Foulkes, rh George

      Love, Andrew

      Francis, Dr. Hywel

      Lucas, Ian (Wrexham)

      Gapes, Mike (llford S)

      Luke, lain (Dundee E)

      Gardiner, Barry

      Lyons, John (Strathkelvin)

      Gerrard, Neil

      McAvoy, Thomas

      Gibson, Dr. Ian

      McCabe, Stephen

      Gilroy, Linda

      McCartney, rh Ian

      Goggins, Paul

      McDonagh, Siobhain

      Griffiths, Jane (Reading E)

      MacDonald, Calum

      Griffiths, Win (Bridgend)

      MacDougall, John

      416

      McFall, John

      Russell, Ms Christine (City of Chester)

      McGuire, Mrs Anne

      Mclsaac, Shona

      Sarwar, Mohammad

      McKechin, Ann

      Savidge, Malcolm

      McKenna, Rosemary

      Sawford, Phil

      McNulty, Tony

      Shaw, Jonathan

      Mactaggart, Fiona

      Sheridan, Jim

      McWalter, Tony

      Shipley, Ms Debra

      Mahon, Mrs Alice

      Simon, Siôn (B'ham Erdington)

      Mallaber, Judy

      Simpson, Alan (Nottingham S)

      Mann, John (Bassetlaw)

      Singh, Marsha

      Marsden, Gordon (Blackpool S)

      Smith, rh Chris (Islington S & Finsbury

      Marshall, Jim (Leicester S)

      Marshall-Andrews, Robert

      Smith, John (Glamorgan)

      Martlew, Eric

      Smith, Llew (Blaenau Gwent)

      Meale, Alan (Mansfield)

      Soley, Clive

      Merron, Gillian

      Southworth, Helen

      Michael, rh Alun

      Spellar, rh John

      Miller, Andrew

      Squire, Rachel

      Mitchell, Austin (Gt Grimsby)

      Starkey, Dr. Phyllis

      Moffatt, Laura

      Steinberg, Gerry

      Mole, Chris

      Stinchcombe, Paul

      Moonie, Dr. Lewis

      Stoate, Dr. Howard

      Morgan, Julie

      Tami, Mark (Alyn)

      Morley, Elliot

      Taylor, Dari (Stockton S)

      Mudie, George

      Taylor, David (NW Leics)

      Mullin, Chris

      Taylor, Dr. Richard (Wyre F)

      Munn, Ms Meg

      Thomas, Gareth (Clwyd W)

      Murphy, Denis (Wansbeck)

      Tipping, Paddy

      Murphy, Jim (Eastwood)

      Todd, Mark (S Derbyshire)

      Naysmith, Dr. Doug

      Touhig, Don (lslwyn)

      Norris, Dan (Wansdyke)

      Trickett Jon

      O'Brien, Bill (Normanton)

      Truswel1, Paul

      O'Hara Edward

      Turner, Dr. Desmond (Brighton Kemptown)

      Olner, Bill

      O'Neill, Martin

      Turner, Neil (Wigan)

      Organ, Diana

      Twigg, Derek (Halton)

      Owen, Albert

      Tynan, Bill (Hamilton S)

      Palmer, Dr. Nick

      Vaz, Keith (Leicester E)

      Perham, Linda

      Vis, Dr. Rudi

      Picking, Anne

      Ward, Claire

      Pickthall, Colin

      Wareing, Robert N.

      Plaskitt, James

      Watson Tom (W Bromwich E)

      Pollard, Kerry

      Watts, David

      Pond, Chris (Gravesham)

      White, Brian

      Pound, Stephen

      Whitehead, Dr. Alan

      Prentice, Ms Bridget (Lewisham E)

      Williams, rh Alan (Swansea W)

      Williams, Betty (Conwy)

      Wills, Michael

      Prentice, Gordon (Pendle)

      Winnick, David

      Primarolo, rh Dawn

      Winterton, Ms Rosie (Doncaster C)

      Prosser, Gwyn

      Purnell, James

      Wood, Mike (Batley)

      Rapson, Syd (Portsmouth N)

      Woodward, Shaun

      Raynsford, rh Nick

      Woolas, Phil

      Reed, Andy (Loughborough)

      Worthington, Tony

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

      Wray, James (Glasgow Baillieston)

      Robertson, John (Glasgow Anniesland)

      Wright, Anthony D. (Gt Yarmouth)

      Robinson, Geoffrey (Coventry NW)

      Wright, David (Telford)

      Wright, Tony (Cannock)

      Roche, Mrs Barbara

      Wyatt, Derek

      Rooney, Terry

      Ross, Ernie (Dundee W)

      Tellers for the Noes:

      Roy, Frank (Motherwell)

      Joan Ryan and

      Ruane, Chris

      Mr. Gerry Sutcliffe

      Question accordingly negatived.
      Bill (Clauses 1, 4, 5, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules 5, 6, 19 and 25, and new clauses and schedules tabled by Friday 9 May relating to duty on spirits or R&D tax credits for oil exploration) reported, with amendments, pursuant to Order [13 May]; to lie upon the Table.

Northern Ireland Assembly (Elections and Periods of Suspension) Bill
Mr. Deputy Speaker (Sir Michael Lord): Under the terms of the Order of the House of 12 May, any Lords amendments relating to the Northern Ireland Assembly (Elections and Periods of Suspension) Bill must be considered forthwith, without any Question put. I should add that copies of the amendments are available in the Vote Office.
Lords amendments considered.

Northern Ireland Assembly (Elections and Periods of Suspension) Bill
  Clause 1

    ELECTION OF NEXT ASSEMBLY
    Lords amendment: No. 1.
    7.18 pm
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne): I beg to move, That this House agrees with the Lords in the said amendment.
    The Bill that we debated on Monday attracted a wide range of comment in the House. The time scale, which was dictated by circumstances, meant that there was little or no time for earlier consultation, but we have looked again at some of the provisions in the light of comments made here and in ancther place. I might say that the other place debated all parts of the Bill without any programme motion in, if my arithmetic is correct, less than two hours and thirty minutes. In consequence of those considerations, earlier today we tabled in another place two amendments, which I hope may meet a number of the concerns expressed here and in the debates in the other place.
    We continue to believe, of course, that the Bill is in itself right, although the need for it is highly regrettable. The Government were heartened by the number of reflections of that view from senior figures on the Opposition Benches here and in another place. We are, however, aware of and sympathise with the feelings that have been widely expressed that a decision of this sort should not simply pass out of Parliament's hands without further provision for scrutiny once the Bill is through. Indeed, the Delegated Powers and Regulatory Reform Committee reported in that sense on clause 1. Accordingly, the amendment subjects the calling of an election by the Secretary of State to the affirmative procedure. The House will have to vote to approve any election date set by the Government. Because, however, we believe that, following a political accommodation that made an election possible, there would be a general wish to proceed swiftly to the hol ding of an election, the amendment will make it possible for the order to be considered after making.
    We have some experience of the need to move quickly in Northern Ireland. For example, the suspension and restoration powers in the Northern Ireland Act 2000 are exercisable, and have been exercised, with votes taking place after making. Concern was expressed in another place that Parliament should have an opportunity to debate any such order as soon as possible. I am happy
    418
    to give this House an undertaking on behalf of the Government that the method of debate and where it takes place will be subject to consultation at the time.
    Rev. Martin Smyth: The Minister says that the debate will be subject to consultation, but surely Parliament should be in a position to do the debating, rather than doing it in Committee.
    Mr. Browne: I made my observations about the amendment in appreciation of the very point that the hon. Gentleman makes. He can be assured that the Government would take such an order as an extremely important step in the process of the exercise of the franchise in Northern Ireland, and that we would, in consultation, adopt such a posture.
    We have no wish to avoid parliamentary scrutiny. We see the 28-day period within which Parliament would be required to debate and vote on the order very much as a maximum. In the event that we did make an order for an election in this way, I give the House the Government's assurance that we would bring it before Parliament for debate as soon as was practicable.
    The amendment gives the House an opportunity to debate any calling of an election to the Assembly in Northern Ireland. I hope that that will be of comfort to hon. Members, and I invite the House to approve the amendment.
    I want to take this opportunity to pay tribute to the officials who have contributed assiduously over a concentrated period to ensure that the work that was needed to get the Bill to its present stage was done expeditiously and efficiently.
    Mr. Quentin Davies: We have had a great deal of discussion about this matter over the past few days in the House and in another place, and the Government are well aware of our views about elections. We believe that electoral dates should be respected and that electoral laws should be regarded as being above political convenience or the intervention of Governments. These are very important matters.
    The Government are also well aware of our view that we must do nothing to prevent a review from happening in accordance with the Belfast agreement on 1 December or to make it impossible for the Belfast agreement to be implemented in its entirety. Conservative Members feel strongly about that. We are worried that the Government who produced the Belfast agreement—I pay tribute to the Prime Minister for that achievement—are taking measures that make its implementation impossible.
    Much discussion has taken place between the Under-Secretary, the Liberal Democrats and me in the past few days. It is right to make it clear to hon. Members that we decided not to oppose the amendments on the basis of two assurances. The first was that the date of 31 December should be changed to 13 November. I expect that the Under-Secretary will claim that the officials made an honest mistake, but he and I specifically discussed whether the date was 13 or 15 November on the telephone this morning. We agreed that it was 13 November. The point is significant because 15 November is a Saturday and there is a justified

    419
    suspicion that if nothing happens by the Saturday, matters will be held over until the following week. The urgency is created by the date of 1 December.
    Mr. Browne: I hate to correct the hon. Gentleman, but we spoke this afternoon, although I tried to contact him this morning. I had a conversation with him about the date. Unfortunately, by the time I managed to speak to him, an agreement had already been reached in another place between Conservative representatives and the Lord Privy Seal. On the basis of that agreement, which was made in the hon. Gentleman's absence because nobody could contact him, the amendment was printed. I tried to contact him subsequently to explain what had happened, and I have been looking for him around the building for some time. I noticed that he came in as the debate started. He was not contactable. Perhaps he could explain the reason for that.
    Mr. Davies: I had a conversation with the Under-Secretary and we reached an agreement. It should not be necessary to have a subsequent conversation after one has reached an agreement. Moreover, he knows that I took action on the basis of our conversation early this afternoon. It involved people in another place doing things that they would not otherwise have done. It was therefore a decisive conversation.
    It is perhaps useful for the public and those who listen to our debates to appreciate that there are, rightly, two sides to the conduct of legislation in this place. There is public debate and sometimes there is a need for compromise and understanding between parties. Conversations sometimes occur outside this place, as they should in any democratic assembly. However, they must be based on full trust and understanding. We had an agreement and one party took action in good faith on that basis. It does not matter whether the Under-Secretary was trying to contact me or whether I was on Mars. The agreement should have stood, because we withdrew an amendment in another place.
    Mr. Browne: I greatly regret that I did not have the opportunity for a private conversation with the hon. Gentleman this afternoon or this evening about the matter. That happened because he was not contactable, not because I was trying to avoid that conversation. However, the Conservative party in another place had already reached an agreement and taken the steps that, according to him, were conditional on his intervention. That is why I wanted to speak to him to explain what had happened. He appears to be making a mountain out of a molehill about whether elections will be held on 13 or 15 November. Frankly, that has nothing to do with the amendment that we are considering—it relates to amendment No. 2. However, since he is making such a song and dance about it, he should understand what happened.
    Mr. Davies: I wanted to deal in the same breath with the two agreements that we reached. They determined the Opposition's action on the amendments, and both hang together. One is the declaration, which the Under-Secretary undertook to make, that if the Government—I see from his gestures that he intends to fulfil that undertaking, and I shall not anticipate the statement to which we are looking forward. The other was the matter of the date.
    420
    7.30 pm
    This is not an ideal situation. What has emerged is a compromise, and it is right that there should be compromises in a democratic country. Sometimes, I think that there should be more compromises, and more consultation. I hope that, when there is a change of Government in two years' time, we shall abide by that aspiration and that principle—indeed, I am sure that we shall. I also hope that we shall not regard ourselves as having a monopoly of wisdom, and that there will be occasions on which we shall be prepared to come to reasonable agreements. I am glad to say that the Government have done that on this occasion, and I pay tribute to them for that. It must be in the interests of the people of Northern Ireland that we can have a frank exchange of views, that different points of view can be put strongly, and that. at the end of the day, all those points of view can be accommodated to some extent—although not, inevitably, 100 per cent.—in the agreements that are reached.
    I shall give the House and the Government the assurance that they are waiting for: on the basis of the assurances that I have received, we shall not oppose the amendment further. I look forward to hearing the comments of the representatives of the other parties and, on the subsequent amendment, to the promised declaration by the Minister.
    Mr. Alistair Carmichael: The Liberal Democrats will likewise not oppose the amendments further. I am pleased that the Government have seen fit to reflect on the representations that were made to them here and in another place, and in particular to the Delegated Powers and Regulatory Reform Committee in the other place, which produced an excellent piece of work at very short notice and was quite trenchant in its criticism of the Government. It made it quite clear that the proposal that was originally in clause 1, as it was when the Bill was before this House, was not an acceptable way of doing business. Indeed, I think that "unacceptable" was the term that the Committee used.
    I was intrigued by the Minister's reference to the relative brevity of the debate in the other place, and by his remark that it has lasted just in excess of two hours. I am sure that that would not be an implied criticism of the Secretary of State, who spoke on Second Reading in this place for the best part of an hour, as I recall.
    Mr. Browne: He took a great many interventions.
    Mr. Carmichael: He did indeed take a goodly number of interventions, as the Minister says. However, if that is an argument against the use of timetable motions, I can assure the Minister that he would have our wholehearted support if he should choose to pursue that argument with his colleagues in the Government Whips Office. I remain of the view that the limiting of the debate in this Chamber on Monday night to a Second Reading only—with no opportunity for the House to vote on the amendments that would have been considered in Committee—was, frankly, a disgrace. I have said that this is a mess of the Government's own making, and I remain of that view. What they have done, having gone to the other place, is to come back

    421
    with the least bad option. On that basis, and in the interests of pragmatism, we are prepared to support the proposal.
    Mr. Peter Robinson: I join the hon. Member for Orkney and Shetland (Mr. Carmichael) in condemning the Government for the procedure that they adopted in this House for this very important measure. There can be no mote crucial issue in any democratic society than mainta ning the purity of the electoral process, and there is no more serious constitutional matter than a Government stepping in to abort a democratic election.
    The Minister must recognise that the fact that some of his colleagues in the other place entered into a self-denying ordinance and therefore managed to complete their business in two or three hours without the kind of guillotine that we had does not take away from the fact that there were Members of this House who were unable to speak on Second Reading here, and that there was no debate at all on any of the amendments in Committee, never mind a Third Reading. That is an insult to Parliament and to parliamentary democracy, and it is certainly an insult to the people of Northern Ireland.
    The Bill as it has returned from the Lords is only marginally improved. The amendment allows the House to consider the matter should an order be made. However, allowing this Chamber to consider what would in effect be a denial of democracy in Northern Ireland might restore some democratic accountability to this House, but it does little to restore democratic rights to the people of Northern Ireland.
    The purpose of the Bill is to allow an election to be put off, not to allow an election to take place at a later stage. The Government have shifted their position consistently on the matter, from what appeared to be an undertaking to have an election in the autumn, to a hope that there might be an election in the autumn, to this Bill, which gives no undertaking to have an election at any specific time. I note that the Minister is not prepared to stake his political career on whether there will be an election in Northern Ireland for the Assembly in the autumn.
    Mr. Quentin Davies: The hon. Gentleman, like me, will have heard the Secretary of State, who sadly is not here this evening, say clearly in the House on Monday that he intended that there should be an election in the autumn. I emphasise the word "intended". Those are strong words. We know the SecnAary of State, we know that he is a man of his word, and we are entitled to believe, are we not, that that remark was made in good faith and that we can all look forward to an election in the autumn on that basis?
    Mr. Robinson: If the Secretary of State had told us what the factors were that would govern his intention, the House might be in a position to reach a conclusion. He might have been saying that he intended, if the conditions that he wanted to occur were favourable, to have an election. If one of the conditions that he wants to occur is such as to allow the right hon. Member for Upper Bann (Mr. Trimble) to win an election, it is probably fairly unlikely that the Secretary of State will have an election in the autumn.
    422
    I can understand how any politician who has put a lot of time and effort into a particular strategy will want to do everything possible to safeguard that strategy. It is not, even from my point of view of being opposed to the Belfast agreement, difficult for me to understand why the Prime Minister, who has expended a great deal of time on supporting that agreement, should want to do everything conceivable to give continued life to that agreement. I do not find that at all surprising. What I find difficult is his inability to recognise that the Belfast agreement's season has passed; that the agreement has failed; that in effect it is finished. Simply because he does not like what the electorate are going to say, he cannot take away their opportunity to say it, which is effectively the purpose of the Bill.
    The Prime Minister knows that, should he allow democracy to seep into the process, the game is up. Any agreement that cannot survive a democratic test has come to the end of the road. The mess that the Government are getting themselves into comes directly from their refusal to face the reality that the agreement cannot survive. They have to face the reality that it has failed and that negotiations for a new agreement are the only way forward.
    Even with the Lords amendment in place and the Prime Minister constructing the most favourable circumstances from the shabby choreography that was outlined during the run-up to the Bill being introduced in the House, even if all the factors that the Prime Minister had wanted to take place had done so, the electorate would still reject the Bill. He may not like it, but the views that this party expresses are the views held by a majority of the Unionist community. The sunset clause inserted by the Lords will be of benefit only if the Government use the time to condition themselves to the reality that the agreement has to go and that a new agreement must be brought in.
    The Government have sought to suggest that the election is being cancelled because of the inability of the IRA to talk the talk. No thinking person believes that that is true. As one who was not waiting for the IRA to use any particular formulation of words, I found the whole word game fiasco completely bizarre. My colleagues and I are not interested in statements from the IRA. Frankly, we would not believe them or rely on them. Only deeds, viewed with the benefit of hindsight, are capable of convincing the Unionist people. The disarray that the leader of the Ulster Unionist party finds himself in today comes as a direct result of his taking the IRA at its word. No Unionist should make that mistake again.
    Approaching the word games as a disbelieving bystander, I never thought that anything stood or fell on the intentionally conditional and cynically devious language crafted by the IRA. Even using words that it has not used before means nothing if it has not lived up to the words that it used in the past.
    The Government were set for an election on I May not because the legislation required it to be on 1 May—the Secretary of State invoked the extraordinary power that he has to call an extraordinary election on I May. He did that without any words from the IRA. Again, the Government came to the House and set the date of 29 May, once more without any words from the IRA, but

    423
    when the Prime Minister tells the public in Northern Ireland that he is satisfied that he has received two thirds of all that he asked from the IRA, the election is off.
    Frankly, we are not fooled by that. We all know that the reason is something other than that. The election was aborted to save the skin of the right hon. Member for Upper Bann. If he could have won the election, does anyone in the House believe that we would not have been out campaigning in Northern Ireland tonight? All parties wanted the election to take place except for half of the Ulster Unionist party.
    The Government ask us, "What would you have an election for in Northern Ireland if there is no prospect of setting up a Government afterwards?" The answer is easy. It is called negotiations. If there is deadlock after an election, the legislation provides for a process of negotiations. As it is, no one has a mandate to negotiate in relation to the Assembly in Northern Ireland. The Assembly has been dissolved, the Members of the Legislative Assembly effectively made redundant, although some finance is being provided for them under the Bill. The reality is that none of them has the democratic authority to negotiate on behalf of the people of Northern Ireland.
    Indeed, the Government included in previous legislation that they brought to the House designating 29 May as the date of the election a provision to ensure that the Assembly would not sit immediately after an election to allow negotiations to take place, so why do the Prime Minister and the Secretary of State ask in a rhetorical fashion, "Why would you have an election if you couldn't set up a Government?" Their own legislation provided the answer: negotiations could then take place with mandated politicians. I believe that the Government will find out just how easy it is to abolish an Assembly and just how difficult it is to set it up again afterwards. There has been plenty of experience of that in Northern Ireland over past decades.
    Although the House of Lords has made a marginal improvement to the Bill, there is still no commitment to an election. I do believe that it would benefit the House for us to divide on this issue, although if other Members do we shall be happy to join them; but at least the people of Northern Ireland will have an opportunity to see their elected representatives deal with this issue once more if the Secretary of State makes a decision during the next few months—or, if Lords amendment No.2 is agreed to, even if he does not.
    7.45 pm
    David Burnside: When the commentators, of whom there are probably far too many in Northern Ireland, come to commentate on this period of history in the political process more commonly known as the peace process, the passage of this Bill will symbolise the ending of the possibility of devolution in Ulster in the foreseeable future.
    We in the Unionist community have no faith in the Government's returning in the next six months to organise an election in Northern Ireland that could create a workable, meaningful Executive or Assembly to try to offer Northern Ireland the benefits of devolution that have been offered, and are working with a certain amount of success, in Scotland and Wales.
    This is why I believe my prediction will be proved correct. The minute the Prime Minister announced the postponement of this election, the Provisional IRA
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    withdrew its contact with de Chastelain. The Provisional IRA and Sinn Fein only react under pressure. They knew that they could not get in; they knew that they could not get anything unless they came back in. They were under pressure. There is no pressure on them now—and what messages are they getting from the British and Irish Governments? The joint declaration was conditional on acts of completion—the ending and disbandment of the IRA as an organisation, and the 100 per cent. conversion of Sinn Fein to a totally normal democratic party. They have no need to do those things, and they will not do them. They will maintain the pressure, they will maintain the army and they will maintain the threat, because the Governments who preside jointly over Northern Ireland have already made another tactical mistake. They already have the concessions on the watchtowers in South Armagh, and they will get more, as surely as day follows night.
    Whatever the Government say, the Unionist people no longer have any faith in this Government's restoring decent, accountable democracy in Northern Ireland. We will come back in the autumn, and I hope that I will be proved wrong. I hope that we will have a democratic election for the Assembly, and that the republican veto that this Government have not had the guts to stand up to will be removed from the democratic process in Northern Ireland.
    Like my hon. Friend the Member for Belfast, East (Mr. Robinson), I have no wish to divide the House, but this is a sad day for democracy in Northern Ireland. We are to have no local democracy, no election and none of the advantages of devolution in the Province.
    David Winnick: I am a little confused, as I believe my hon. Friends may well be. What the hon. Gentleman has just said is virtually an echo of what the hcn. Member for Belfast, East (Mr. Robinson) said. Do we take it that the views of the hon. Gentleman and the Democratic Unionist party on this issue are identical?
    David Burnside: I think that the view across all sections of Unionism is identical: we would like a form of devolution in Northern Ireland. I think that the Ulster Unionist party, the DUP and the broad Unionist community agree that the republican movement continues to have a veto on progress towards devolution in Northern Ireland. If there is unity across the Unionist community, I welcome it.
    Mr. Roy Beggs: Will my hon. Friend further confirm that we in the Ulster Unionist party, being totally committed to an election at the earliest possible date, like our Unionist colleagues in the Democratic Unionist party, had nominated and were prepared to take our message to the community at large in Northern Ireland, with absolute confidence of victory at the end?
    David Burnside: My hon. Friend is correct. I put in my Assembly candidate nomination papers last Friday; indeed, the Ulster Unionist party, along with many other parties, put in nomination papers throughout Northern Ireland. We wanted an election and I was looking forward to one for a single reason: to end the veto of the men of violence who use terrorism, and to

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    replace that threat with democratic, accountable government at Stormont. We do not have democratic, accountable government at Stormont because there is a veto from the republican movement that this Government will not face up to.
    Mr. Nigel Dodds: I want to make a few brief comments, as several of the issues have already been dealt with. I reiterate the comments of other hon. Members about the disgraceful proceedings that have accompanied the process governing this legislation. Frankly, for Members of this House to have no opportunity in Committee or on Third Reading to move amendments or to speak is disgraceful. [Interruption.] The Minister may want to reply to that point directly, rather than by speaking to one of his colleagues from a sedentary position. However short a time the House of Lords, an unelected body, may have spent in Committee on individual clauses, at least it had that opportunity, whereas the elected representatives of the people of Northern Ireland and of those throughout the United Kingdom had no opportunity for detailed consideration of this very important legislation, which deals with the democratic process in Northern Ireland. The Bill was not timetabled but guillotined—a distinction that was made clear in the House the other day. That makes the Government's actions all the more reprehensible.
    The amendments constitute the slightest of improvements. They make no outstanding change to the Bill's substance, in that there is still no date for an election. There is a quasi-sunset clause, and the provision before us will ensure that the matter has to come before the House again if the Secretary of State makes an order. However, the people of Northern Ireland have been denied their right to have their say in an election on 29 May—the second time in a month that they have been denied their right to speak at the polls. That has gone down very badly across all sections of the community in Northern Ireland.
    As my hon. Friend the Member for Belfast, East (Mr. Robinson) said, all the parties in Northern Ireland, bar half of one, wanted this election to take place. I listened with interest to the intervention of the hon. Member for East Antrim (Mr. Beggs). His comments are at odds with those of his senior colleagues in Belfast, and across Northern Ireland, on the pro-agreement wing of the Ulster Unionist party. In the press at home, they were calling virtually daily for the elections to be put off. Indeed, his comments are also at odds with those of his party's leader, the right hon. Member for Upper Bann (Mr. Trimble), who congratulated the Government and welcomed the statement when the Prime Minister and the Secretary of State made it in this House. The people have been denied their choice at the ballot box, and that has been met with the support of the leader of the Ulster Unionist party, but with denunciation from all the other parties in Northern Ireland.
    The irony is that this legislation is progressing through Parliament to stop an election that has already happened. As a result of this provision, the House could end up debating the Secretary of State's decision when the election is already under way, if it is called in the autumn. That is the nonsense of the Government's
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    position. They will end up bringing matters to the House for decision after the elections have already started in the Province.
    The campaign has started, de facto, but the Secretary of State tells the people of Northern Ireland not to nominate candidates, because legislation will be put before the House of Commons. In other words, they should ignore the law, the wishes of Parliament and what Parliament might do. The suggestion is that we should assume what Parliament will do but forget about all the demands of the electoral process. According to the Electoral Office for Northern Ireland and the chief electoral officer, the elections are under way as we sit here tonight. Expenses are being racked up and the other processes are continuing.
    In the autumn, the elections could be announced and halfway through the Government would come to the House to ask whether it approved. That is the nonsense of the situation that the Government are in. They should have let the elections proceed on 1 May, or at the latest—if they had to be postponed—on 29 May. Let the people have their say.
    Lords amendment agreed to.
    Lords amendment: No. 2.
    Mr. Browne: I beg to move, That this House agrees with the Lords in the said amendment.
    Another concern raised in the House was that the power to hold elections was open-ended. The hon. Member for Orkney and Shetland (Mr. Carmichael) referred to the welcome and helpful report from the Delegated Powers and Regulatory Reform Committee in the other place. It was this aspect of the Bill that the Committee described as unacceptable, recommending, in paragraph 7 of its 20th report, dated 12 May 2003, that
    "the House seek a way of defining the enabling power and including in the definition proper Parliamentary scrutiny."
    An earlier section of the report shows that the Committee, acting expeditiously, described the other delegations in the Bill—those outwith clause 1—as
    "both appropriate and subject to an appropriate level of Parliamentary scrutiny."
    I am grateful for those observations.
    As we heard earlier, some hon. Members looked for the Bill to fix a date for an election, or a deadline by which one might be called. The Government continue to think that that would be undesirable. We do not believe that it would advance the restoration of a functioning system of government, or more stable politics in Northern Ireland. What is necessary to the restoration of functioning devolved institutions in Northern Ireland is absolute clarity about the future of paramilitarism, and confidence in the stability of the institutions. That is how we will get functioning institutions. Setting a date will not provide them. Setting a date now for an election in the autumn would effectively mean that the campaign would begin now. I have read the report of the Second Reading debate and it is clear that a substantial part was taken up with campaigning. That is not how we should

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    create a propitious environment for political dialogue and political advance. Indeed, the opposite is true—as that debate showed.
    However, it is right to set some bounds to the power and provide further opportunities for parliamentary scrutiny. Accordingly, we have tabled an amendment that would require the Government to return to Parliament to extend the power if it has not been exercised by 15 November, which is six months from tomorrow, when we hope that the Bill will gain Royal Assent. It would then be renewable, under the amendment, for periods of up to six months thereafter.
    I can also say that it is certainly our intention, if there has been no election by that date, to renew the powers. Indeed if we formed the opposite view—that the power should lapse—we should seek to ensure that the House had an opportunity to consider the question if it wished, before the powers were lost. My right hon. Friend the Chief Whip has authorised me to say that the debate on renewal this autumn—if, regrettably, we have not had an election by then—would be taken on the Floor of the House. However, I stress that it is our intention to have an election by the autumn.
    8 pm
    Mr. Carmichael: I note that the Minister chose his words with some care when he said that the debate this autumn—and, obviously, any vote—would be taken on the Floor of the House. Would that be the case also with subsequent orders that would appear at intervals of six months thereafter?
    Mr. Browne: I am almost certain that it would. However, I am in a position to give the House an undertaking that a debate this autumn would be taken on the Floor of the House. I hope that the House will find that, with these changes, the Bill has been improved.
    Lady Hermon: The Minister is highly respected for his expertise in human rights, and he rightly emphasises those matters whenever an opportunity arises. However, the Bill carries a statement that says that it is compatible with the UK's obligations under the European convention on human rights. The Minister will know that, in the recent Matthews case, the Assembly of Northern Ireland was held to be the relevant legislature, with full legislative powers. Will the Minister assure the House that, if the elections are delayed repeatedly, it will be compatible with human rights obligations to hold elections to the legislature at reasonable intervals?
    Mr. Browne: I am in a position to give the hon. Lady that assurance. She would be surprised if I had not considered those very issues, and I have considered them.
    Mr. Dodds: The Minister said that the Secretary of State could come to the House in the autumn to extend the power to call an election. Does that also include powers to extend the salaries, allowances and other benefits enjoyed by former Assembly Members?
    Mr. Browne: The hon. Gentleman will be familiar with the provisions of the Bill, which allow the Secretary
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    of State to make provision for the salaries of Assembly Members. My right hon. Friend indicated on Second Reading that it was still the Government's intention to review that matter after six months. However, it is the Government's intention to consult parties in Northern Ireland, including the hon. Gentleman's party, about that aspect of the Bill and its implementation. I look forward to taking part in those consultations with him and his colleagues.
    I know that many hon. Members disagree with the Bill, and I understand the strength of their feelings. I hope that they will also acknowledge that the Government have acted in the way that we consider to be in the best interests of the agreement, and of the development of stable Government and a peaceful future in Northern Ireland.
    I commend the amendment to the House.
    Mr. Quentin Davies: I thank the Minister for his clear assurance that any debate on renewal of the powers will be taken on the Floor of the House. That is indeed the assurance that we sought, so we shall not oppose the amendment.
    This short debate has been rather good. After the disgraceful events of Monday, when the House did not even get to the end of Second Reading on this important Bill, the debate has at least offered us another opportunity for people to express themselves.
    It is a pity that the Secretary of State was not able to be here, and that the Prime Minister was unable to be here either on Monday or this evening. On Monday, the Prime Minister would have heard speeches from members of all three parties in Northern Ireland represented in this House—the Social Democratic and Labour party, the Ulster Unionist party and the Democratic Unionist party. This evening's speakers included the hon. Members for Belfast, East (Mr. Robinson), for Belfast, North (Mr. Dodds) and for South Antrim (David Burnside). Those three hon. Members on the Unionist side all said more or less the same thing—that the decision was fundamentally wrong. The Government would be inconceivably stupid if they did not take careful note of that.
    The Minister is good at trying to put a good face on bad news. It made me smile when he said that the report on the Bill produced by the Lords Committee on Delegated Powers and Regulatory Reform was helpful. In fact, the Committee said that the Government's proposal to postpone the elections indefinitely was unacceptable. That is extremely strong language for a Lords Select Committee to use about a Government measure; it shows what a disgraceful decision and mistake the Government have made.
    The situation has not been improved by the Government giving the House non-credible, even shifty, explanations that no one could believe, which is an insult to the intelligence of any rational person. The idea that the elections are being suspended or postponed to punish Sinn Fein-IRA, when in fact all the democratic parties in Northern 1 reland, which object to the measure, are being punished, flies in the face of any notion of justice.
    Even more insulting is for the Government to say that the elections are being postponed to punish Sinn Fein-IRA for non-compliance, when, as the hon. Member for

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    Belfast, East so eloquently said, and as I said on Monday, there was no suggestion from the Government that the elections could not be held when Sinn Fein had not complied at all and had not even clarified the three essential points. Now that it has clarified two of the three, the Government say that it must be punished. That is completely absurd. It is insulting to the House. The Government cannot be serious; if they were, they would not be acting in this wholly irrational and completely lunatic fashion.
    As I have said over and over again, the only way to deal with Sinn Fein-IRA is straightforwardly and in good faith. If they do not comply or if they behave badly, they must be punished and appropriate sanctions must be taken.
    Lady Hermon: Will the hon. Gentleman give way?
    Mr. Davies: In a moment.
    If Sinn Fein-IRA make positive moves, we should make equivalent positive gestures in return. If Gerry Adams made positive comments, it would be utterly ridiculous to respond by saying, "Now we are going to find a new way of punishing you". It would be completely cuckoo.
    However, as the hon. Member for Belfast, East said, the IRA has not actually done anything yet. A comprehensive settlement depends on a programme of implementation. Only when everybody is clearly complying in deed as well as in word will it be possible for us to make corresponding moves in deed as well as in word. It is thus crazy for the Government to dismantle the two towers in south Armagh, or to promise to do so. Even if it was possible according to the advice that they have received from the General Officer Commanding or the Chief Constable—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I have given the hon. Gentleman a little latitude, but I must remind him that we are not discussing the Bill in general; we are discussing Lords amendment No. 2.
    Mr. Davies: We are indeed, Mr. Deputy Speaker, but as I shall not be trying to catch your eye again this evening I wanted to respond to some of the important points that had been made on both sides of the House.
    As I said, we have had a good debate, but—
    Mr. Deputy Speaker: Order. The hon. Gentleman must not flout my ruling or indeed the conventions of the House. So far, only one speech has been made in this debate. The hon. Gentleman cannot reply to matters that were dealt with either in the debate on Lords amendment No. 1 or at any previous time. He really must direct his remarks to Lords amendment No. 2.
    Mr. Davies: That is absolutely right, Mr. Deputy Speaker. On amendment No. 2, I hope that we do not have to debate this subject again and that the Government are not thinking of again rolling forward the postponement of the elections.
    Mr. Dodds: Will the hon. Gentleman give way?
    Mr. Davies: I shall give way in a second.
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    As I have said before, if there is a further postponement that goes beyond 1 December—the date for review—I fear that will be the end of the agreement and of the peace process that we are working to fulfil. That would be an enormous historical tragedy.
    If the hon. Member for North Down (Lady Hermon) still wants to intervene, I shall give way first to her and then to the hon. Member for Belfast, East.
    Lady Hermon: I am grateful to the hon. Gentleman; it is always a pleasure to intervene in his speeches—it is an even greater pleasure when he actually gives way. He knows very well indeed, as do other hon. Members, that the Assembly was suspended last October, so will he please address the constitutional point that, if the elections had gone ahead as scheduled on 29 May, the Assembly could not have met the following day, and that the electorate would have been asked to turn out to vote on a suspended Assembly?
    Mr. Davies: No, the hon. Lady is not correct. If the Assembly were elected, it would no longer be suspended—it would be in place, and it would be able to do its job.
    Mr. Peter Robinson: I want to put a question to the hon. Gentleman that relates to Lords Amendment No. 2 and, in particular, the new date set by the Government—15 November—by which time they would bring this issue back to the House if no agreement to hold an election had been reached. The Government have said, "Clarity is our friend"—I think that was the term used by the Prime Minister—so do they not owe it to the House to make it abundantly clear before this debate ends what requirement has to be met for an election to place? Are only words from the IRA required? Are there any other factors? We should be clear, up front, about what is required for an election to take place.
    Mr. Davies: The hon. Gentleman asks extremely pertinent questions, and to give the Under-Secretary time to respond to them, I shall now conclude my remarks.
    Mr. Carmichael: I very much hope that the undertaking given by the Under-Secretary with regard to any order under Lord Amendment No. 2 that may need to be debated in the House this autumn will extend to any subsequent order that might prove necessary. That was certainly the basis of the understanding that I understood to have been reached between me, the Under-Secretary and the hon. Member for Grantham and Stamford (Mr. Davies), and I hope that the usual channels will bear that in mind. I would certainly view anything other than that as a breach of trust between us and the Government, and I very much hope that that will not be the case.
    May I say in passing that the moves that have brought us to this stage since we discussed the Bill on Second Reading reflect creditably on the Under-Secretary, who has shown himself capable of listening and responding to the concerns of the House? As someone who is new to such discussions between those on the Front Benches, I should like to place on record my appreciation of the efforts that the Under-Secretary, his colleagues in the

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    other place and, indeed, the hon. Member for Grantham and Stamford and his colleagues in the other place have made to expedite matters and to deal with this issue in a way that allows some certainty to be injected at last into the situation. As I have said before, we would not choose to place ourselves in this situation, but, given what has been done, we have done the best that is possible in the circumstances.
    Rev. Martin Smyth: I share the concerns expressed by the hon. Member for Orkney and Shetland (Mr. Carmichael), and I raised them earlier. I also pay tribute to the Under-Secretary for his integrity. He shared with us the fact that it was his intention that there would be an election, but he will remember the immortal bard who said that the best laid plans of mice and men oft gang a-gley. To show that we are impartial, since the majority of Members are English, Shakespeare said that the road to hell is paved with good intentions.
    Some of us are concerned about the concept of introducing a six-month delay because we bear in mind the fact that the prevention of terrorism provisions had to be constantly reintroduced for years. We therefore stand by the concept of election for a devolved assembly.
    May I press the Minister again following the intervention of my hon. Friend the Member for North Down (Lady Hermon), bearing in mind that the hon. Member for Belfast, North (Mr. Dodds) raised the question about continuing to pay the salaries of current Members? Is not there a danger that a nominee for election who is not already an Assembly Member could complain, under human rights legislation, that there is not impartiality, because people who are not working are getting money to continue to campaign, whereas new candidates must work and are placed at a disadvantage? Will he reconsider his undertaking that that is in keeping with the human rights legislation?
    8.15 pm
    Mr. Browne: In the few minutes that I have left, I shall try to deal with some of the issues that have been raised. If I may respond to the issue raised by the hon. Member for Belfast, South (Rev. Martin Smyth) in his peroration, I gave a reassurance that this legislation does not infringe the state parties undertaking under article 3 of the European convention on human rights. That is my view, which I reached after considering the issues involved, and that view is expressed in terms in the explanatory notes to the Bill.
    The hon. Gentleman raised another point, which was also raised on Second Reading, and I shall give him the same response that the Secretary of State gave: any incumbents in the period between the dissolution of an Assembly or Parliament and an election, if they are being paid, as is the case in all assemblies and Parliaments in the United Kingdom, could be said to be operating at an advantage to those who seek to oppose them in an election. Nobody would be any different in that respect. We must bear in mind, however, that that situation cannot run indefinitely. The Secretary of State will bear that in mind in relation to the scheme developed for payment of those who were Assembly Members.
    Secondly, I want to reinforce the point that was made in an intervention by the official Opposition spokesman. It is perfectly clear under the law as set out in the
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    Northern Ireland Act 2000 that a new Assembly would not automatically meet after an election unless suspension was lifted. That is the state of the law at present.
    In response to the hon. Member for Belfast, East (Mr. Robinson), I can do no better than to quote my right hon. Friend the Prime Minister, when speaking in Belfast on 17 October, and the Government have been consistent to that position since—
    Mr. Deputy Speaker: Order.
    Mr. John Taylor: That was going to be his best point.
    Mr. Deputy Speaker: Well, we shall never know.
    It being one hour after the commencement of proceedings, MR. DEPUTY SPEAKER, pursuant to Order [12 May], put forthwith the Question necessary for the disposal of business to be concluded at that hour.
    Lords amendment No. 2 agreed to.

  PETITIONS

    Autism
    8.18 pm
    Dr. Stephen Ladyman: This petition is supported by more than 5,000 signatories and a substantial number of letters of support and e-mails. It was organised by Autism in Mind as an activity for autism awareness year 2002, and it was largely collected by Mr. Terry Rutherford, who carried out a nationwide tour of the United Kingdom during November last year, ultimately presenting the petition at Westminster to me and to my hon. Friends the Members for Sunderland, North (Mr. Etherington) and for Ilford, North (Linda Perham).
    The petition reads:
    To the House of Commons.
    The petition of citizens of the United Kingdom.
    Declares that autistic spectrum disorders now affect 96 in 10,000 people, that autism is a complex disorder and people with autism have specific and complex needs and, to that end, Mr. Richard Exley who has Asperger's syndrome, has drawn up a "call for action" to improve services for autistic people.
    The Petitioners, therefore, request that your honourable House will require Her Majesty's Government to address the "call for action" and ensure that a diagnosis of autism should be made by a practitioner with an understanding of autism, that such a diagnosis should be the key to unlocking the range of public services that an autistic person requires, that such services should be tailored to an individual's needs and be available throughout life and that substantial investment will be made in improving the range and quality of such services and ensuring their availability throughout the United Kingdom.
    And the Petitioners remain, etc.
    To lie upon the Table.

Community Pharmacies
8.20 pm
David Taylor: Community pharmacies play an immensely important role in the delivery of high-quality health care to the people of North-West Leicestershire. I am presenting a petition signed by more than 1,100 constituents who are extremely concerned about the recommendations made in an Office of Fair Trading report, which they believe threaten the future of community pharmacies in Ashby, Castle Donington, Kegworth, Coalville, Ibstock, Measham and elsewhere.
The petition reads as follows:
To the House of Commons.
The Petition of electors within the Parliamentary constituency of North West Leicestershire.
Declares that they are concerned about proposals that would allow unrestricted opening of pharmacies able to dispense NHS prescriptions and (to preserve local pharmacies and safeguard their continued service to local communities).
The Petitioners therefore request that the House of Commons reject the proposals from the Office of Fair Trading on pharmacies.
And the petitioners remain, etc.
To lie upon the Table.

Shop Workers (Criminal Attacks)
Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]
8.21 pm
Mr. Tom Watson: I am pleased to have secured this Adjournment debate to raise the worrying and growing issue of criminal attacks on shop staff. Thousands of workers in my constituency and some 2.7 million people across the country are employed in the retail sector. So it is right that we address the risks and abuse that they face.
I know that the Home Office does not collect specific statistics on attacks on shop workers, but the number of thefts from shops is on the rise. In the West Midlands police force area, the number of recorded offences rose by 12 per cent. in the past two years, from 17,891 incidents in 1999–2000 to just over 20,000 thefts in 2001–02.
The retail crime survey published by the British Retail Consortium gives an idea of the number of attacks on shop staff. Last year, it found that 20,000 staff were physically assaulted in 2001—a 40 per cent. increase in just over a year. Some 28,000 staff were threatened, 68,000 were verbally abused and many more incidents go unreported. Staff in small and medium-sized retail outlets such as garages, newsagents and off-licences continue to be more susceptible to attack. The BRC found that 12 in every 1,000 staff in the small and medium-sized enterprise sector were subject to physical violence compared with seven per 1,000 staff for larger retailers. Small stores are less likely to have security measures, such as CCTV and in-store guards, but more likely to have staff working on their own, often late at night.
Last year, a young manager at the Lidl supermarket in the Hamstead area of my constituency was viciously and violently attacked by a man with a baseball bat. Like thousands of shop staff across the country, he was working late at night with no security or support.
Mark Tami: Although I obviously accept that employers need to do much more to protect staff, does my hon. Friend agree that they also need to put more resources into training staff, especially in conflict management techniques, so that they can defuse such situations before they become violent?
Mr. Watson: I agree. Retailers have to take responsibility not just for the security of the store, its goods and the contents of the tills but for their staff, who are often vulnerable and to whom they owe a clear duty of care. Obviously, training is a key element of that.
Under section 2 of the Health and Safety at Work, etc. Act 1974, employers are obliged to protect their staff against foreseeable risks. While many employers are good at undertaking such duties, some do not take staff safety seriously and many cannot afford to do so. Small, ill-protected businesses are vulnerable, but large stores are targets for serious criminals. The Safeway superstore at the heart of West Bromwich town centre, for example, was recently the victim of an armed robbery.
We have to dispel some myths about retail crime. First, it is not a victimless or faceless crime. Shoplifting is not a harmless or inoffensive pastime, but is often a

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clear indicator of serial criminality. Furthermore, two thirds of violence against shop staff is committed by shoplifters caught in the act. A 45-year-old shop assistant, for instance, was injured trying to stop a heroin addict taking less than £100 from a till. Shoplifting is increasingly linked to violence, substance abuse, street crime and truancy. It costs £2.4 billion every year and is a crime not just against businesses but against communities and ordinary shop staff who go to work every day to earn a living and who often feel let down by judges and magistrates. Retail crime has become an occupational hazard. Violent thieves, aggressive shoppers and abusive customers are making life a misery for retail staff. For too long, shop workers and companies have accepted that behaviour as part and parcel of the job.
That should not be the case. Staff should be free to go to work without fear of being attacked or abused. Under the leadership of Bill Connor, the Union of Shop, Distributive and Allied Workers, which represents 320,000 retailers in the UK, has highlighted the problems and risks faced by its members day in, day out. Its "Freedom from Fear" campaign, masterminded by deputy general secretary John Hannett, rightly called for a zero tolerance approach to violence and abuse in the workplace. Its charter of respect for shop workers, which aims to provide safety and dignity at work, has already been signed by some of Britain's leading retailers, including Sainsbury's, the Co-operative Group, Littlewoods, Morrisons and Iceland, as well as the British Retail Consortium itself. Its national petition has attracted thousands of petitions in support of the campaign.
On 17 September, USDAW will hold a national respect day, which I hope will become an annual event. It is designed both to celebrate the vital role that millions of shop workers play in the community and the UK economy and remind the shopping public that shop staff are parents, friends, sons, daughters, wives and husbands, not just faceless individuals on a till. Shop workers are sometimes literally at the front line of the retail industry. They keep our economy going and politicians, employers and customers should recognise and respect that on 17 September. Will the Under-Secretary back the national day of respect, and will he join me in paying tribute to the union for fighting such a strong campaign on behalf of its members and all retail staff?
Has the Minister had a chance to read USDAW's report on shop workers' experiences of work-related violence and abuse entitled "Voices from the Frontline"? It does not make for easy reading. Julie Banks, an USDAW rep from Walsall, recalls:
"One Sunday a manager ran out and took a female member of security from the precinct. There was a bunch of young lads pinching alcohol. They actually dragged the security guard round the street and the female manager that came from our store was helpless. She couldn't do anything, because if she had tried to intervene they would have got her as well."
Julie goes on to say:
"To do your job to the best of your ability is to please the customer, but some are so unreasonable that you can't do that. And it upsets you if they start becoming abusive, especially if there's no manager around. Usually if you answer back or if you say anything, then they'll report you and you're liable to get into trouble for it."
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Julie also tells of a 16-year-old trainee who was slapped in the face by a customer because she was a bit slow on the till.
Sadly, that old motto in the retail profession, "The customer is always right", is no longer true. On average, at least one shop worker is attacked every hour of the working day. Almost half of those surveyed by USDAW reported physical attacks or assaults on staff in the past 12 months, like the security guards at a Tesco store in Oxford who were bitten by a shoplifter who was HIV-positive, and had to spend months taking a cocktail of anti-HIV drugs, or the 70-year-old newsagent's assistant who suffered head injuries after he was beaten up during a raid in Wolverhampton.
Nearly three quarters of staff have been threatened with violence, like the cashier at a Thresher's off-licence in Walsall, who was pulled over a counter and threatened with a screwdriver by masked robbers, who made off with a haul of cash, cigarettes and cans of beer. At one in four stores, threats are made every week. Verbal abuse is a daily event in more than a third of stores, most commonly when young people are refused alcohol, but also when refunds cannot be given without proof of purchase, and if there are queues at the checkouts or even stock shortages. The legal duty to refuse alcohol sales after licensing hours in 24-hour stores is also a common flashpoint.
Not surprisingly, the daily onslaught of verbal abuse and the fear of violence is taking its toll on the UK's shop workers. Stress-related problems are common and include sickness and nausea, insomnia, headaches, stomach upsets and clinical depression. Almost half of staff have taken time off as a result of violence. The trauma and stress can last a lifetime, and many staff are leaving the retail sector altogether because of fear of violence and abuse.
The Home Office's British crime survey shows that shop workers are three times more likely to be assaulted or threatened than the average British worker. In its list of jobs with the highest risk, retail sales managers came fifth and retail cash desk or checkout operators came 13th. However, the picture is not entirely gloomy. The way forward is collaboration between unions, retailers, police, local authorities and Government. Partnership has been proven to work on the ground.
Birmingham's retail crime reduction partnership is one good example. Eight hundred retailers are signed up to the scheme, with local police and the city council. By working together, having safety in numbers and sharing information and intelligence, small shops and large retailers alike have greater strength in partnership than when acting alone. With the help of a shared database of photographs, once an offender has been banned from one shop, they can be banned from every store in the scheme, so through a network and a system of support for local shops, criminal activity can be deterred and town centres made more secure. Since Birmingham's retail crime operation was set up in 1999, shop crime in the city centre has fallen by a fifth and there are now fewer than 2,000 incidents a year. That is still too many, but it is a huge step forward in making the city centre safe and a more attractive place for both shoppers and staff.
Retail crime reduction partnerships certainly make a difference, but is my hon. Friend aware of the business intelligence crime system? The BICS computer database

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is a key weapon against persistent offenders. It collects, disseminates and uses retail crime intelligence in an entirely new way to allow crime analysis by type of store attacked, type of merchandise stolen and its value, particulars of the offender's modus operandi, details of the day and time of attack, and the name and aliases of the offender, together with circulation of a CCTV or police photograph and any previous retail crime history.
The BICS database has been installed or is about to be installed in up 250 town or shopping centres that have established retail crime reduction partnerships. I understand that there has recently been a bid to the Home Office from the British Retail Consortium to establish the BICS scheme nationwide at a cost of just over £1 million over three years. Such a database could link up information from tens of thousands of stores, and allow intelligence on travelling offenders to be shared across the country. The long-term benefits of extending BICS would undoubtedly outweigh the initial outlay. Businesses would save money, shoplifting and theft would be reduced and, as a result, shop workers would face fewer assaults and attacks. I hope that the Minister and his Department will have an early opportunity to look at the bid and perhaps talk to the British Retail Consortium and USDAW about the project.
Will the Minister also give a commitment to continue providing sustained funding for retail crime reduction partnerships and other local schemes to prevent retail crime? Simple though often expensive deterrents such as CCTV cameras and security guards improve safety and security, deterring shoplifters and protecting staff. Not leaving staff to work alone further reduces the risk of danger. Retailers spent £750 million last year on crime prevention strategies such as CCTV, alarm systems and product tagging.
Together with local authorities. the Government have also helped to increase the network of CCTV cameras on our high streets and key trouble spots. For instance, the £15 million CCTV funding for small retailers in deprived areas announced by the Home Secretary in June 2001 was very welcome. Improved security lighting, locks and gating schemes are also making a big difference. I hope that the Minister can give an assurance today that such financial support can be maintained and built upon in years to come.
Retail crime is not an isolated issue and it cannot be tackled in isolation. Since many of the thugs who abuse, assault and threaten shop staff also commit other offences, tackling retail violence will help in the battle against other forms of crime too. The measures that the Government are already taking to reduce crime, including street crime and antisocial behaviour, should have a positive impact on cutting attacks on shops and their staff.
A survey of experiences of crime among residents in the Hamstead and Great Barr areas of my constituency found, perhaps not all that surprisingly, that local people want to see more police on the streets. That is a traditional solution to cutting crime, but a visible police presence can often be the best deterrent of all. In West Bromwich, East, we welcome the Government's commitment to increase police numbers. We now have more than 7,800 police officers in the west midlands
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area, and if current levels of funding and recruitment continue, we can keep on expanding the strength of the force. We are looking forward to the appointment of the first 40 community support officers in the west midlands. Let us hope that they will be the first of many, as they will help to provide that very important visible presence on the streets and free up regular officers for front-line tasks.
Partnerships, computer databases, CCTV and more police on the beat are all key parts of the battle against retail crime, yet we must not lose sight of how long-term planning can make a difference too. When town centres are regenerated, local stakeholders must work to ensure that tackling retail crime and antisocial behaviour is a prime consideration.
My borough, Sandwell, is gearing up for a transformation over the next decade. The centrepiece is the exciting redevelopment of West Bromwich town centre—a project that includes the recently opened bus station, the c/Plex arts centre, a new Tesco superstore, a police station and a one-stop health centre. We are trying to build so that the shopping centre and surrounding areas are safer for those who live, shop and work there. Will the Minister, together with his colleagues in other Departments, look at collating best practice from those who are involved in the redevelopment of town centres, so that innovative ways of reducing crime through planning and good design can be shared?
This year's retail crime survey is due to be published in less than a month's time. Indications suggest that it will show that most injury is caused to staff who are trying to detain shop thieves, that violent robberies are also on the increase and that drug and alcohol-induced crime is on the rise. That can only make more urgent the need to fund drug prevention and treatment programmes. The figures will certainly make for interesting reading, and I hope that the Minister will have a chance to examine and reflect on the findings of the report when it is published. Without doubt, it will show that Britain's shop staff continue to face attacks, assaults, threats and abuse in the course of their working day. To their credit, USDAW and the British Retail Consortium are taking action on behalf of their members at a local level and raising the issue with policy makers at a national level.
With the Government's support tonight, we can say no to retail crime, abusive customers and drunken and drug-fuelled attacks, and put a stop to the escalating criminal attacks made on millions of our hard-working shop staff.
8.40 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): I congratulate my hon. Friend the Member for West Bromwich, East (Mr. Watson) not only on securing the debate, but on the work that he has done locally and in association with USDAW—the Union of Shop, Distributive and Allied Workers—on the issue of retail crime. Any form of violence is totally unacceptable and should not be tolerated, and everybody has a right to go about their work without fear of physical assault or intimidation or verbal abuse. One cannot underestimate the detrimental effect throughout the community of crime against business and the damaging effect on people's lives,

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businesses and families. My hon. Friend is absolutely right to point out that it is not a victimless crime. Retail crime costs us all as customers—we pay for the costs to business—and there is a hugely disproportionate cost for those who face situations such as those described by my hon. Friend in dealing with violent and abusive customers and others.
My hon. Friend is right to stress the importance of the need to protect shop workers from criminal attack. He highlighted USDAW's "Freedom from Fear" campaign, which is meant to raise awareness of this issue. I have recently corresponded with the deputy general secretary of USDAW, John Hannett, on the matter and in response to specific concerns that he has raised. I know that my hon. Friend tabled an early-day motion on the issue.
Under the Health and Safety at Work, etc. Act 1974, all employers have a legal duty to ensure, so far as is reasonably practicable, the health, safety and welfare of their employees. That duty includes risks arising from violence at work. The Health and Safety Executive encourages employers to manage work-related violence. It has published a general guidance, "Violence at work: a guide for employers", to help them tackle work-related violence in accordance with their duties under the law. The HSE has also published specific guidance for the retail sector, "Preventing violence to retail staff", which provides practical guidance for retailers and their staff on how the problems and causes of violence might be tackled, setting out an approach that can be adopted as everyday practice.
Under the three-year programme to help employers tackle workplace violence, the HSE has published new guidance entitled, "Work-related violence: managing the risk in smaller businesses", which is designed to help smaller businesses manage the risk of work-related violence. It has commissioned research to find examples of good practice in preventing and managing violence to lone workers—my hon. Friend pointed out how vulnerable people often are in smaller establishments—and funded the development of the new occupational standards in managing work-related violence to provide employers with a sound framework on which to develop detailed policies on work-related violence. The HSE held a major joint conference with the TUC last December to raise awareness of violence in the workplace and to share good practice. The deputy general secretary of USDAW, John Hannett, spoke at that event.
My hon. Friend mentioned the scheme that was announced by the Home Secretary and the allocation of £15 million to improve security for small retailers in deprived areas. That funding has been provided to make security improvements to individual shops and shopping parades and to help local shops tackle crime and disorder problems on their doorstep. We helped more than 3,000 shops in the first year and 4,500 shops
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in the second year. With the £6 million that we shall allocate in this financial year, we hope to provide help for a further 5,500 shops.
We also continue to support retail crime reduction partnerships, which we helped to establish. Several regional Home Office directors have provided specific support in their regions to help them play their full part in crime reduction work. It is understandable that those partnerships have tended to focus on excluding offenders from major retail centres. Although that successfully reduces the incidence of shop theft and violence against shop customers, it does not necessarily have the impact that we would like on tackling the causes of crime. We are currently exploring the possibility of a pilot project to extend schemes to exclude shoplifters from shopping centres and include access to drug treatment, which is often involved in such cases.
It may be an opportune time to take the partnership work forward and examine some other issues, such as the usefulness of the database. Perhaps a meeting should be held with the British Retail Consortium and USDAW to explore ways in which to develop the partnerships. I know that my right hon. Friend the Member for Southampton, lichen (Mr. Denham) was especially keen to try to develop that aspect of the work and to look beyond the immediate towards a preventive framework. If we can link retail partnerships' information with the preventive work that we are expanding in the updated drugs strategy, perhaps we can have a genuine impact on continuing violence.
My hon. Friend the Member for West Bromwich, East mentioned the day of respect. We are considering a genuine problem. Not only retail staff but some workers in the public sector face a complete disregard for their safety and a general lack of respect from elements of our society. Every day should be a day of respect. If the day that is requested will help to hammer home the message, it is worth supporting. I have read the pamphlet, "Voices from the Frontline". My hon. Friend is right that the catalogue of appalling examples does not make comfortable reading. It is sometimes necessary for organisations to produce such pamphlets to try to illustrate and make people aware of such appalling situations.
We can do a lot in partnership. I have spoken to representatives of the British Retail Consortium and USDAW separately and together over a period of time. I know that my hon. Friend has also done that. We need to try to develop that relationship and get the most out of the partnerships to evaluate all the potential working practices and best practice around the country. I know that my hon. Friend will be keen to follow up those ideas. I am more than happy to try to facilitate that after this evening's debate.
Question put and agreed to.
Adjourned accordingly at eleven minutes to Nine
o'clock.

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

Stevens Inquiry
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Sutcliffe.]
9.30 am
Mr. Kevin McNamara: I am grateful to Mr. Speaker for granting my request for this debate. The findings of Sir John Stevens—even in the form of an interim overview—represent the most damning indictment of the security services and, by implication, Government practice that I can recall. That being said, I am surprised and disturbed that it should require a Back Bencher, not even a right hon. Member, to bring such a matter before the House. In light of the grave findings and the report of Sir John Stevens, I am surprised that neither the Secretary of State for Northern Ireland nor the Secretary of State for Defence volunteered to make a statement to the House.
Nominally, the report is the third inquiry conducted by Sir John Stevens into allegations of collusion between the security forces and loyalist paramilitaries in Northern Ireland. Taken together with Stevens 1 and 2, it is already the largest criminal investigation undertaken in the United Kingdom. I pay tribute to Sir John Stevens for his courage, tenacity and persistence in pursuing the inquiry. It has been a 14-year battle against formidable odds, and the odds have all been within the establishment. Even more so, I pay tribute to the family of Pat Finucane and to the families of all the victims of collusion, from whatever area they come. Their grief has been compounded by the cover-up and lies that they have come to expect. The tenacity of investigative journalists and the hard work of human rights non-governmental organisations have played a large part, but it has been the families of the victims who have refused to forget and who have kept alive the search for the truth.
Lady Hermon: Will the hon. Gentleman give way?
Mr. McNamara: I had not thought that I had said anything startling so far.
Lady Hermon: The hon. Gentleman has paid tribute to Sir John Stevens, as he has to the family of Pat Finucane. Am I right in thinking that Pat Finucane's widow did not co-operate with the Stevens inquiry, or have I misunderstood the position?
Mr. McNamara: I understand that that is the case. The reason for such a decision was that the family were not happy with the way that they had been treated by the Royal Ulster Constabulary and investigative forces in the past. They considered that only a full and open public inquiry would reveal the truth about what happened.
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The Stevens report's stark message is that successive British Governments have sanctioned murder—that they have employed agents and given them a licence to kill. Agents have acted above the law, without the law and with impunity. While the interim overview and recommendations before us stop short of the full publication that the families of the victims are pressing for, Stevens proposes to allow criminal investigations and prosecutions to proceed, while putting into the public domain the gravity of his findings and the obstruction that he has encountered. I urge full publication as soon as possible.
I hope that the Government will announce that they accept the interim report in its entirety and will respond favourably to its immediate recommendations. Many of Stevens's proposals on bringing accountability to the intelligence-gathering process echo the thoughts of Her Majesty's inspector. Stevens's findings on the murder of Patrick Finucane are clear. It is not in the public interest for an independent inquiry to be further delayed. There is a need to restore confidence. I urge the Minister to bring forward the Government's agreement-in-principle commitment for a full inquiry under the Tribunals of Inquiry (Evidence) Act 1921, to be conducted by an international jurist of repute.
Stevens says that he has uncovered enough evidence to lead him to believe that the murders of Pat Finucane and Brian Adam Lambert could have been prevented from happening. He also believes that the RUC investigation of Pat Finucane's murder should have resulted in an early arrest and detection of his killers.
Stevens concludes that there was collusion in both murders and the circumstances surrounding them. He says that collusion
"ranges from the wilful failure to keep records, the absence of accountability, the withholding of intelligence and evidence, through to the extreme of agents being involved in murder.
"The failure to keep records or the existence of contradictory accounts can often be perceived as evidence of concealment or malpractice. It limits the opportunity to rebut serious allegations. The absence of accountability allows the acts or omissions of individuals to go undetected. The withholding of information impedes the prevention of crime and the arrest of suspects. The unlawful involvement of agents in murder implies that the security forces sanction killings."
Stevens's three inquiries
"found all these elements of collusion to be present. The coordination, dissemination and sharing of intelligence were poor. Informants and agents were allowed to operate without effective control and to participate in terrorist crimes. Nationalists were known to be targeted but were not properly warned or protected. Crucial information was withheld from Senior Investigating Officers. Important evidence was neither exploited nor preserved."
Throughout his three inquiries, Stevens has operated from the premise that those involved in policing and security duties in Northern Ireland work within, and are subject to, the law. Where he has uncovered unlawful activities, he has attempted to assemble the evidence necessary to identify those responsible and bring about their successful prosecution.
At the centre of Stevens's investigation and allegations of dirty tricks and unlawful activities carried out by the British Army are the members and officers of the force research unit—the FRU—previously known as the forward reconnaissance unit, and before that the 14 Intelligence Company. The unit is now known as the

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joint services group and, according to Brigadier Arundell David Leahy, its methods of operation have not changed to any significant extent.
Patrick Mercer: The hon. Gentleman should get his facts straight. He has confused a series of wholly discrete organisations and has misused their titles. It would be a service to the debate if he got his facts straight.
Mr. McNamara: It would have been of service to the debate if the hon. Gentleman had given me the correct names. I would be quite happy to use them. He obviously knows more about it than I do.
Of Brian Nelson, who doubled as the head of intelligence for the loyalist Ulster Defence Association, Stevens says:
"It was only through the investigative efforts of my Enquiry team that I was able to identify and arrest the Army agent Brian Nelson in January 1990. When he was interviewed I discovered that he had been in possession of an 'intelligence dump'. This had been seized by his FRU handlers when my first Enquiry had begun, in September 1989. This crucial evidence had been concealed from my Enquiry team.
"There was a clear breach of security before the planned arrest of Nelson and other senior loyalists. Information was leaked to the loyalist paramilitaries and the press. This resulted in the operation being aborted. Nelson was advised by his FRU handlers to leave home the night before. A new date was set for the operation on account of the leak. The night before the new operation my Incident room was destroyed by fire. This incident, in my opinion, has never been adequately investigated and I believe it was a deliberate act of arson.
"During my first Enquiry I asked to examine particular documents but received written statements that they did not exist. My latest Enquiry team has now recovered all these documents. The dates recorded on them show that they all existed at the time of my first request."
Who was responsible for those lies?
Following three recent major disclosures by the Army and the Ministry of Defence, Stevens is now investigating whether the concealment of documents and information was sanctioned, and if so at what level. The Saville inquiry has heard evidence of discussion papers prepared by senior personnel in the security forces arguing for the adoption of tactics based on illegal use of lethal force through arbitrary killings and extra-judicial assassination. Orchestration of a flawed inquiry under Lord Justice Widgery and consequent failure to prosecute those responsible for the Bloody Sunday outrage sent a disturbing message to the security forces. Her Majesty's Government allowed the impression to remain that although the legal actions were damaging for propaganda purposes, the commission was protected by an informal system of impunity.
If it is tacitly understood that intelligence agencies may operate outside the rule of law, or that such behaviour is given an informal legitimacy through the failure to set lawful parameters, it is not structurally possible to hold the agencies or their employees and agents accountable without the intervention of an outside independent body. It now seems evident that the intelligence agencies have been engaged in running agents inside both loyalist and republican paramilitary
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groups and promoting, planning and participating in terrorist activities in order to achieve internally defined goals. Agencies have protected individuals from other paramilitaries and from investigation and prosecution by the police.
Police investigations have been prevented or undermined, sidetracked and sabotaged. Combatants and non-combatants alike have become victims of those practices and the failure to stop them. Police officers have lost their lives and their honest efforts have been thwarted. For successive Governments, the tactical assessment of the options for a military offensive against terrorism was flawed by compromised intelligence and undermined by its reliance on the unlawful activities of agencies.
I remain to be convinced that dirty tricks saved lives. Undoubtedly, undercover British agents prevented some loss of life, but too often the lack of political control meant that agents were averting their eyes from terrorist crime and ending up acting as judge, jury and executioner.
On 15 January 1990, I raised in the House the shooting dead of Peter Thompson, Eddie Hale and John Joseph McNeill in Whiterock, and the activities of British soldiers from 14 Intelligence Company during an attempted armed robbery. I will not go into the details; I asked questions about the activities of that unit. The Ministers responsible are now saying that they did not know about the activities of those units. The questions that I asked in the House are on the record. Some 13 years later the families of the victims of that incident still await justice.
I believe that intelligence agencies played a significant role in shaping the political geography of Northern Ireland and prevented the emergence of a political alternative for many years. Great strides have been made in addressing the shortcomings of the RUC by a process of police reform and the adoption of a model of accountable policing contained in the Police Service of Northern Ireland. Such changes would have been unthinkable a decade ago. However, the intelligence agencies have so far been immune to change.
When Brian Nelson was first brought to court in June 1990 he faced 34 charges, including two counts of murder. It was admitted that he was an agent for military intelligence. There was, at the time, speculation that Nelson was threatening to expose the involvement of the Army in a large number of offences, including murder. When the trial began two years later, counsel for the Attorney-General, Brian Kerr QC, argued that after
"a rigorous examination of the interests of justice",
15 charges, including two murder charges, were to be dropped. Nelson then pleaded guilty to the remaining charges, including five counts of conspiracy to commit murder.
Following pleas for leniency from the then head of the FRU, Colonel—now Brigadier—Gordon Kerr, and the Secretary of State for Defence, Tom King, Nelson was sentenced to just 10 years in prison. He was freed in 1996 and died this year in somewhat suspicious circumstances; no one knows quite how or why.

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I was not happy when the Attorney-General took control of that prosecution and I was dubious about his reasons for deciding to drop charges. Those reasons remain undisclosed.
David Burnside: Will the hon. Gentleman give way?
Mr. McNamara: No. With the greatest respect, I have a lot to go through. I have secured the debate and I have already given way twice, so I am trying to give other hon. Members opportunities to make their case.
I do not believe that impunity for serious offences committed by agents of the state can be in the public interest. Following the Stalker investigation into allegations of a shoot-to-kill policy in Northern Ireland—[Interruption.]
David Burnside: Will the hon. Gentleman give way?
Mr. McNamara: No. Chief Constable Colin Sampson recommended that police officers should be prosecuted for conspiracy to pervert the course of justice and for fabricating cover stories. The journalist Peter Taylor reported that Sampson also recommended that MI5 officers should face the same charge for destroying a copy of the missing audio tape recording of the shooting dead in a hay shed of 17-year old Michael Tighe, who mistakenly walked into an ambush set by the security forces. In that case, the Director of Public Prosecutions felt that there was sufficient evidence, but the then Attorney-General, Sir Patrick Mayhew, halted proceedings; he informed the House in January 1988 that there would be no prosecutions "in the public interest" and a nolle prosequi was entered. At that time, most of us who were involved in the issue thought that that only revolved around RUC officers. We had no idea that MI5 was involved in the destruction of evidence.
I believe that the activities of intelligence agencies must be governed by the rule of law and that they should be held politically accountable. Shortcomings and breakdowns in the system of accountability inevitably lead to political misjudgment and errors. Through interviews by my staff of a number of individuals who claim to have been undercover agents, I have discovered that there is a particularly blurred line between who is and who is not an agent; between who is a covert human intelligence source and who is simply assisting the security services. Individuals who feel that they have been expected to put their lives at risk will want to know that their information will be acted on; when they make personal and financial sacrifices, they expect protection and security. Without effective regulation, those people feel let down—they do not know where they stand and they have no legal means of redress. The insights that I have gained have been passed on through what I consider to be the appropriate channels. I have no means of knowing whether or not my advice was acted on.
Discovery of the truth behind controversial killings is part of the process of reconciliation in Northern Ireland, where the grief of victims has been compounded by unlawful acts that have apparently been condoned by those in authority. The interests of justice require that those who sanctioned such activities be identified and brought to justice. They must be removed from office
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and punished. The process of cleansing is also essential to the integrity of the intelligence agency. The passage of time and normalisation of the security situation alters a balance to be struck in determining the public interest. The fear that the identity of agents might become known and prejudice the effectiveness of ongoing intelligence-gathering operations must be significantly diminished in today's climate. The fear that cross-examination of police officers and security services agents might compromise intelligence-gathering methods must now be set against the need to establish whether those methods have included unlawful actions. If evidence exists for prosecution, it must be in the public interest to proceed.
Following an indication by Sir John Stevens that he wished to interview an FRU agent known as Stakeknife—I understand that there is now an alternative spelling—new and even more serious allegations concerning the activities of security services have come into the public domain. I do not want to distract attention from the findings of Stevens, which have been thoroughly investigated and are based on verifiable evidence. I am aware of the controversial nature of Stakeknife's allegations, and the extraordinary lengths to which the Ministry of Defence has gone in issuing gagging orders to prevent journalists from reporting them. I am aware that republicans regard the whole affair as yet another example of counter-intelligence propaganda.
However, in light of the naming of Freddie Scappaticci as Agent Stakeknife, I urge the Government to end uncertainty around his position and ensure that no impediments are placed in the way of his questioning by the Stevens inquiry. In particular, it is incumbent on my hon. Friend the Minister to state whether Stakeknife is in the custody of some of the agencies of Her Majesty's Government.
It is alleged that Stakeknife was a low-ranking Irish Republican Army volunteer, who was recruited to the FRU in 1978. As a double agent, he was tasked with advancing himself in the paramilitary group, and he became head of the IRA internal security unit, the nutting squad. For that service, he was paid the salary of a then Cabinet Minister—£80.000 a year; moneys were deposited into a bank account based in Gilbraltar. As head of the nutting squad, Agent Stakeknife would have been in charge of vetting all recruits to the IRA and seeking out British moles. If that were true, he would have been involved in kidnap, interrogation, torture and punishment. He would have taken part in anything up to 40 murders of suspected informers. He would be guilty of colluding in the murder of IRA volunteers, police officers, soldiers and civilians.
David Burnside: Will the hon. Gentleman give way?
Mr. McNamara: No.
It is reported that Gregory Burns, John Dignam and Aidan Starrs were also FRU agents. Burns's girlfriend, Margaret Perry, discovered his double role and the three agents conspired to kill her. It is alleged that Stakeknife then killed the three agents, and all with the approval of his handlers. In a case already considered by the European Court of Human Rights, three IRA volunteers, Mairead Farrell, Daniel McCann and Sean

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Savage were killed in 1988 by the SAS on the rock of Gibraltar. If, as is now alleged, Agent Stakeknife supplied the information that led to that ambush, his handlers could also have chosen to prevent the IRA action. Instead they permitted a summary execution. He is alleged to have been involved in the murder of Joseph Fenton in February 1989. Fenton was a Belfast estate agent who supplied safe houses for the IRA, but acted the good citizen by passing information to the police. Stakeknife had him killed.
Around the same time, the Irish police recruited a confidential informant in the IRA who passed valuable information to the Garda Siochana. If allegations concerning Stakeknife are correct, he was directly implicated in the murder of Tom Oliver, whose body was found in 1991.I should be grateful if my hon. Friend the Minister would inform us of whether there have been any discussions with the Government of the Irish Republic about that allegation, and if he would say what allegations had been made either way.
When the going got hot, and loyalist paramilitaries began to target Stakeknife, it is alleged that the FRU moved to protect him by setting up another Belfast man, Francisco Notarantonio. It planted false documents and persuaded the Ulster Defence Association that he, not the man identified as Stakeknife, was a leading figure in the IRA. If true, those allegations go to the heart of British involvement in unlawful actions in pursuit of British objectives in Northern Ireland. Also, if they are true, responsibility goes right to the top of Government, and they must be held accountable.
Files with information from Stakeknife would have been passed from the FRU to the Joint Irish Section— MI5—and right up to the Cabinet, and possibly to three Prime Ministers: Mrs. Thatcher, Mr. Major and Mr. Blair. It is the job of MI5 to monitor Royal Ulster Constabulary special branch and military intelligence and report, independently of them, direct to Whitehall and the Government. In his preliminary conclusions, Sir John Stevens stated that he wants to question Agent Stakeknife and Brigadier Gordon Kerr, a former head of the FRU who is currently a British military attache in Beijing. It is interesting to note that, despite Sir John Stevens's interim report, not a single person has been removed from their post or suspended as a result of the inquiry.
We are entitled to know how far up the obstructions to the inquiry went. The journalist John Ware has reported that the former RUC Chief Constable, Sir Hugh Annesley, instructed the then commanding officer of Her Majesty's armed forces in Northern Ireland, Lieutenant-General Sir John Waters, not to provide Stevens with Army intelligence. It has also been reported that members of the Stevens inquiry team threatened Waters with arrest if he did not hand over the files in his possession. The cost of the Saville inquiry is frequently invoked as an argument against the public inquiries that everyone wants to be held into such terrible murders. I think that the cost of the inquiry is outrageous, but I am very clear about where responsibility lies: not with the families seeking the truth, but with those that covered up the truth in the first place, such as the Ministry of Defence; those that attempted to pervert the course of justice by the
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destruction of evidence, again the Ministry of Defence; and those who have fought a guerrilla campaign of evasion from the outset—once more, the Ministry of Defence.
Most of the answers to my questions and those raised by the Saville inquiry are in the Government's files. An internal trawl and political will could have saved millions of pounds. The Minister who is to reply to this debate on behalf of the Northern Ireland Office is doing so because the Chief Constable commissioned the report, but responsibility does not stop at the Northern Ireland Office. The Ministry of Defence must answer questions about the FRU and its predecessor and successor units. I repeat my earlier charge: it is the responsibility of MI5 to monitor RUC special branch and military intelligence and report independently of them direct to Whitehall and the Government. Prime Ministers and senior officials were in the picture, deliberately excluded from it, or given only rough generalisations.
The public have been kept in the dark for too long. I believe that the Government have colluded in the unlawful activities of their agents, and that the guilty must be called to account, however high up they are. Where there is sufficient evidence, they must be prosecuted and punished—no more nolle prosequis. It is clear that existing mechanisms for the oversight and scrutiny of the intelligence services have failed. A Committee of Members of this and the other House, appointed by the Prime Minister, meets in secret and has its reports vetted in advance of publication, and so cannot provide the accountability that we are entitled to demand.
When the Government themselves stand in the dock, what is the appropriate remedy? The charges made by Sir John Stevens are the most serious to be faced by any Government in Britain. They go right to the heart of our democracy. Our commitment to human rights, the rule of law and justice in Northern Ireland will count for nothing if we cannot address these matters openly and honestly.
9.53 am
Mr. David Trimble: May I congratulate those in the Ministry of Defence on being virtually the only people who can spell "Steak-knife" correctly? That in itself is significant, because it reminds us that journalists tend to hunt in packs. In the media, as in many other aspects of life, real independent thinking is not often evident.
I start with some basic principles. I congratulate the hon. Member for Hull, North (Mr. McNamara) on securing the debate: it addresses a matter that is topical, so it is good that it is being raised. However, I want to touch on some general principles, which it would have been better if the hon. Gentleman had focused on at the outset.
We are dealing with terrorist organisations and with conspiracies to commit some of the most appalling crimes that humanity has seen, which are designed to overthrow democratic Governments. The public have a right to expect that the authorities will take effective action to ensure that terrorism fails and that terrorists are made amenable to justice. To do that, obtaining intelligence is crucial: if Governments were to fail to endeavour to obtain intelligence, they would be culpable.

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Intelligence can be obtained in a number of ways, but it has been clear from time immemorial that one of the most effective ways is to penetrate the terrorist organisations either by using people who volunteer to join them in order to do so or, more often, by turning members of those organisations—that is frequently the only effective way to do that. If the public are to be protected and terrorism is to be defeated, there must be intelligence agencies that recruit and run agents, and their operations must be secret. In order to defend the public, that must be done and it must be done secretly: those are basic principles that we must never lose sight of.
There is a serious risk that those whose job it is to defeat terrorism may be so focused on the outcome that they begin to lose sight of legal and moral responsibilities and boundaries. Those boundaries are necessary, but some of them must be breached. The hon. Gentleman implied—although he might not have actually said—that there must be no criminal activity by agents, but, necessarily, there is such criminal activity. Being a member of a terrorist organisation is a crime. Therefore, agents for intelligence organisations are necessarily involved in the commission of crime. If those people are to remain members of such organisations, they will inevitably be involved in its activities.
The problem then becomes this: where should the line be drawn? I imagine that we would have no difficulty in saying that the line must be drawn at murder. There are plenty of novels in which intelligence agents commit murders and other crimes, but in the real world the line must be drawn at that. However, where else is it to be drawn, and how is it to be drawn?
We are dealing with a very murky area where the facts are often difficult to ascertain. In recruiting agents, one does not have a huge range of choice and some of the people who are recruited are not attractive characters. They would not have joined terrorist organisations in the first place if they were moral, upright citizens. If one is dealing with members of terrorist organisations who have been turned, one is necessarily dealing with flawed persons. That factor must be borne in mind. Whether those people accurately report their activities or intentions is also uncertain.
It would be nice if we were in a position to conduct a detailed forensic examination of everything that has happened, and I can understand people's saying that because of the difficulties in taking decisions in these matters we should know what has been done. However, I return to my point that secrecy is necessary. While the terrorism continues, too much publicity is prejudicial to the operation of the intelligence bodies—and, consequently, prejudicial to public safety. There are things that must remain secret. Of course there should be accountability and the hon. Gentleman's comments showed that there is a degree of that. Accountability is essential, because we have to trust some people. We tend to place our trust—rightly—in those who hold office and are accountable to the House, and to those who head the agencies concerned. However, I concede that there is a serious risk that people will become so carried away with their objective that they lose sight of where the boundaries should be set.
A lesson learned in Northern Ireland in the 1970s was that soldiers are, by their nature, training and culture, focused on winning, and in a war they have to win by
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whatever means available. However, policemen, by their training and culture, are focused on upholding the law; they know what the law is and what evidence is— much more so than any soldier would. That is why, in such a situation, we must uphold the principle of police primacy, but that was ignored in Northern Ireland in the 1970s. We are worried that Army intelligence may continue to be ignored in the present.
I wish to digress a little. Some hon. Members may have heard the story that I am about to tell. I first heard it many years ago. The hon. Gentleman referred to the fire at Stevens's headquarters. He was using Carrickfergus police station as his base and a fire there destroyed important material contained in various filing cabinets. As a result of the fire, the offices were not available for use and he was relocated elsewhere. When I heard the story, it was said that he was moved to Musgrave police station in the centre of Belfast—that may or may not be accurate.
I heard that a difficulty arose because the Stevens inquiry officers had to use the same canteen as regular RUC members, and apparently the RUC members developed a habit of playing the jukebox whenever the inquiry officers were there. They played a song by Billy Joel entitled, "We Didn't Start the Fire". The incessant playing of the song so irritated the Stevens inquiry officers that a fight broke out. I mention the story because, as far as we can tell, the police officers were absolutely right. I say, "as far as we can tell," because we are relying on comments made by a person who was an agent and has since gone public. He said that the fire at the Carrickfergus police station was started by Army personnel, not by policemen.
I hope that the hon. Gentleman will bear in mind that, at that time, allegations were made that it was the police who were responsible for the fire, and allegations continue to be made against the police. The hon. Gentleman may be aware of a mural that exists in Belfast, put up by republicans, referring to the Finucane case and various participants in it. It alleges that they were special branch agents. Of course, many of the persons that it mentions were not special branch agents. Mr. Nelson was not.
There is a tendency to focus on the police and to attack them—repeatedly and inaccurately. I see examples of that even in the summary of the Stevens inquiry, in which reference is made to a British Irish Rights Watch report entitled "Deadly Intelligence— State involvement in loyalist murder in Northern Ireland", which includes allegations that the RUC incited the death of Mr. Finucane. I am happy to say that the next paragraph makes it clear that there was no evidence to support those allegations. Allegations are too often thrown around in the direction of the police, for which there is no justification.
The inquiry reports from Sir John Stevens are necessarily highly abbreviated, so it is extremely difficult for us to evaluate them. Their conclusion was that there has been collusion in both murders—those of Lambert and Finucane—which was evidenced in many ways by wilful failure to keep records. That in itself is not evidence of collusion. We need to know more about how that shows collusion. There may be more evidence in a full report from Sir John Stevens, which unfortunately he cannot provide because cases are ongoing and there is a need for secrecy. This report refers to "the absence

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of accountability". Again, we would need to know what that referred to in order to know whether it indicated collusion. The report also refers to
"the withholding of intelligence and evidence".
That might indeed be the case. The report goes through to
"the extreme of agents being involved in murder."
That is a very serious matter, and it would be important for us to know what material lay behind it. As far as the report is concerned, that material is not disclosed.
The paragraph referring to Nelson's involvement in the attack on Mr. Finucane states:
"It is not clear whether his role in the murder extended beyond passing a photograph".
With regard to Stobie's involvement in the case, the report states that the information that he provided
"principally concerned the collection of a firearm."
He
>"supplied information of a murder being planned."
Again, there is no material here to demonstrate the collusion that is referred to. That evidence may be there. I would not be surprised if things had happened and things had gone wrong over the years. I would not be surprised at mistakes having been made. Whether deliberately or culpably, we do not know. I hope that we will know, that the full information will become available and that we will reach a point at which it is safe to put the full information in the public domain. Whether that point has arrived must be open to debate.
I must take exception to some of the terms used by the hon. Gentleman. Perhaps he knows more than we do. He referred to Mr. Nelson dying in suspicious circumstances. I do not know what those circumstances were. I am not aware of any evidence about the death to demonstrate that the circumstances were suspicious. Perhaps it is just the fact of the death that the hon. Gentleman regards as suspicious.
Mr. McNamara: I should perhaps have used the word "mysterious", because none of us knows how Mr. Nelson died, why or whether there have been autopsies, and his family have not been properly informed.
Mr. Trimble: I am glad that the hon. Gentleman has clarified matters in that way. Whether the death is mysterious, I do not know, because I do not know what information is available to the authorities in Florida. There may be no mystery. The mystery may be simply that the hon. Gentleman does not know the circumstances. He now describes the death as "mysterious"; previously he described it as "suspicious". The fact that those terms automatically occur to him in describing these matters indicates a certain cast of mind and a certain basic attitude on his part. That is the criticism that I was making of him: he appears to approach these matters from a particular angle.
The hon. Gentleman referred to the Widgery inquiry as "flawed" and doubts whether dirty tricks saved lives. However, successive Chief Constables of the police in Northern Ireland, the General Officer Commanding and others have said that, in the latter years of the IRA's
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campaign, the security forces succeeded in foiling four out of five of the IRA's operations. Accounts such as the book entitled "Fifty Dead Men Walking" also tend to verify that. That book was written by a person who was a member of the Belfast brigade of the IRA, who became an informer and subsequently published a book detailing his activities and experiences. That account substantiates the security forces' claim that they were able to foil four out of five of the IRA's operations. In many cases, that was due to the information obtained by the use of agents, so in response to the suggestion that those activities did not save lives—I am not sure whether they justify the use of the phrase "dirty tricks" in any event—I say that such evidence as we have clearly points the other way.
That brings me back to the basic point: if we are to defeat terrorism, it will be necessary to obtain intelligence and to obtain it by getting people to join illegal organisations or by turning members of illegal organisations. That will inevitably involve criminality. Yes, there have to be guidelines and accountability, and when the guidelines are breached, there must be legal action; there was in the Nelson case. The hon. Gentleman referred to the allegations of a shoot-to-kill policy in the 1980s. There were criminal proceedings. Several police officers were charged with murder and tried. The judgments given by the courts can be read and examined in those matters too. The evidence is that there is monitoring and that the authorities intend to ensure that the law is adhered to in its essential fundamental points. Whether that is always done perfectly, we do not yet know. In an ideal situation we should know more. We have not reached that ideal situation.
I close by reflecting on the comments of the hon. Gentleman when he said that finding out about killings was a necessary part of the healing process of Northern Ireland. Yes, it is; but unfortunately the hon. Gentleman qualified that phrase by saying "controversial killings". It would be good if we had information about all killings and we bore it in mind that the vast majority of the killings were carried out by terrorist organisations and the republican movement. We should keep a degree of balance as we look at this difficult area.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Edward O'Hara): Order. There is much interest in this debate. The first Front-Bench speaker must be called not later than 10.30. That may help those who are called to speak to gauge their contribution and thus enable as many to get in as possible.
10.11 am
Patrick Mercer: I congratulate the hon. Member for Hull, North (Mr. McNamara) on securing the debate and making some clear points. I do not agree with all of them, but I am none the less grateful to him. I also congratulate the right hon. Member for Upper Bann (Mr. Trimble) on his clear exposition of the case.
The purpose of my short speech is to ask people to understand exactly what this campaign was about. This was not some James Bond escapade. It was not glamorous. It involved phrases like "nutting squad". A nutting squad is a squad of thugs that eventually shoots

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people through the head, having first shot them in the ankles, the knees, the elbows and so on. It is a form of torture culminating in execution. Another phrase is ''romper rooms", which were rooms where gangs of thugs, of all political stripes, beat, tortured and occasionally quickly executed the lucky few. Their victims were criminals, perhaps, and innocent people certainly, who were involved in this dirty war.
My own involvement started in the early 1970s as a platoon commander with the Sherwood Foresters and culminated some 20-odd years later in another capacity. As a fresh-faced individual out of university I did not really understand what this was about. I can give a couple of quick illustrations. In Dungiven in County Londonderry in the 1970s I was told to respond to a tout who was on the run. I did not know what a tout was but our dogs eventually picked up the blood trail and found a 14-year-old boy who was bleeding not because of the beatings that he had received from the Provisional IRA, but because of the deep gashes that he had inflicted on himself while crossing barbed-wire fences.
The following year in Crossmaglen I had the dubious privilege of clearing a corpse of explosive that was left with its hands and ankles bound with wire and naked feet—the ultimate indignity. I remember watching a wife receive a telephone call to fetch her husband who had had an accident. The accident involved 77 rounds of Armalite ammunition being pumped through his body. Again, he was a tout. His wife was told to go and find the body as a warning to the rest of the community about touting.
The right hon. Gentleman made it clear that the people who were asked to counter this style of war were policemen and soldiers. The policemen could possibly have been expected to handle this in a slightly different fashion. I fully endorse the right hon. Gentleman's comments about police primacy. As a former practitioner in the field, I know that it was difficult for soldiers to understand precisely what was required. I was told at one stage to lift—to arrest—32 terrorists in the West Belfast sector who were on the run and who would be indicted once they had been captured. I could not understand why those people had not fled from the Belfast area, but they had stayed—I use the phrase carefully—within their ghettos. The fact that they did riot wish to leave the water in which they swam made it extraordinarily difficult for either a born and bred policeman or someone like myself from the mainland to penetrate those deeply violent, thug-like organisations where an outsider, even an outsider from a different housing estate, stood no chance of survival. That is why we used agents.
The right hon. Gentleman has made it clear that those agents were not plaster saints. I do not have time to go into any more detail than that. It was made very clear to us—visitors to that particularly ugly campaign—that we acted at all times within the law, because not to do so made us criminals and terrorists in our own right. That is why soldiers were arrested by policemen, and policemen were arrested by soldiers, when they overstepped the mark. It was not an easy line to understand, and I have no doubt that it was stepped over from time to time.
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However, I draw hon. Members' attention to names such as Private Thane, Corporal Clegg, and Guardsmen Fisher and Wright. I am deliberately not talking about policemen. They were soldiers who were asked to be involved in that sort of campaign and who overstepped the mark. They were all prosecuted, and dealt with in what to my mind was a thoroughly unsatisfactory fashion because they were being asked to carry out duties where the line is blurred.
Someone must defend the people who defend our democracy. Clearly, things have gone wrong. Policemen, soldiers and Ministers have got it wrong; they must be accountable. I ask hon. Members to bear in mind that the peace process is not where it is today because of some benign intent, some benign understanding by thugs and terrorists, some conversion, some sudden ray of light falling into their lives revealing to them that they are wrong and evil. The peace process is where it is today because the IRA and Protestant paramilitary organisations have been shown that they will be militarily defeated if they continue down the road on which they are travelling. Let us be in no doubt about that. There has been a campaign, and a campaign is about killing people if necessary and deterring people because it has to be done. That is not the sort of campaign that we have just seen in Iraq; it is by definition a dirty campaign.
In conclusion, let us remember those men and women who have brought the campaign as far as it has come. As we hear the confused exposition from the hon. Member for Hull, North, let us remember how many gallantry decorations those organisations have won; how many lives those brave men and women have saved; how much violence they have deterred. Let us pay tribute to them, and hope that common sense will prevail and that public interest will dictate that no prosecution takes place.
10.19am
Mr. Gregory Campbell: I rise to speak on a very serious topic that has concentrated the minds of many people in Northern Ireland and throughout the United Kingdom for a considerable time.
Further to what the hon. Member for Newark (Patrick Mercer) alluded to, I preface my remarks by saying that I think that all the law-abiding people in Northern Ireland would want to state that the law— upholding the law and the rule of law—must be paramount. That issue should be at the forefront of all our minds throughout any dirty tricks—any nasty, vicious, sectarian campaign of murder such as that which we have had to endure in Northern Ireland for the past 34 years.
The hon. Member for Hull, North (Mr. McNamara) would have done his cause a greater service had he outlined the context in which the matters he wanted to address had occurred. As I said, the onset of a bloody conflict some 34 years ago was at its height in the early period, from 1969 to 1973. In one year, more than 400 people were murdered; in the House recently, comparisons have been drawn between the extent of violence then and now. The violence has got worse since the Belfast agreement was signed, but it bears no comparison whatever—even though it is worse now than in 1998—with what it was in the early 1970s.

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The violence was virtually endemic between 1969 and 1973 and much of what the hon. Gentleman has raised today had its origins and genesis in that time. The context in which we are talking about any activities that were either across the line or utterly reprehensible must be stated: it was at a time of endemic violence and continuous murder on a daily, if not hourly, basis on some occasions.
The hon. Gentleman alluded to the series of inquiries that have taken place; since that time there have been no comparable investigations and no comparable inquiries in the Irish Republic into the allegations of collusion between the Garda Siochana and/or the Irish army and the Provisional IRA that I am aware of, and I live closer to the border than most hon. Members do.
Despite that, we have the call by the hon. Gentleman—
Mr. Trimble: I am sorry to intrude on the hon. Gentleman, but I want to point out to him that of course he intended to say that there is evidence that some members of the Garda and some members of the Irish army had colluded. He was not of course suggesting that the organisations themselves had done so.
Mr. Campbell: No, I was not indeed. I was coming to the point about the numbers of people involved— allegedly—in Northern Ireland.
There have indeed been allegations for many years regarding a number of people in the Irish Republic and their alleged collusion with the Provisional IRA. In fact, as I understand it, Judge Cory is investigating at least one of those allegations, but the outcome of his investigations remains to be seen.
Those who have acted in a manner in which they should not have acted, those who have overstepped the mark and those who have engaged in acts—legal acts and acts whereby innocent people have died—lead us into a very serious moral dilemma. I have no difficulty in admitting that; it is a moral dilemma. We have heard hon. Members ask how, in a modern civilised society, where, in a dirty, vicious war agents are used, and some lives are saved and others taken, we balance that loss against the gain? We must accept the context in which that is happening, and accept that those who engaged in the brutal, vicious, sectarian war in the first place are inevitably responsible for any agents that have to be recruited to get their war to cease.
I close by saying that the commendable bravery and courage of 99 per cent, of the police officers, the Army officers, and all those who have been in the front line against terrorism for 34 years must be taken into account when considering the alleged collusion or activities of an insignificant number of people who, for whatever reason, have broken the law. On this day, in these premises, when we recognise the courage and bravery of those who have received the highest award for bravery that the nation can offer, we would do well to recognise the courage and bravery of the many tens of thousands of officers who have stood in the front line in Northern Ireland and across the United Kingdom against terrorism.
10.26 am
David Burnside: I congratulate the hon. Member for Hull, North (Mr. McNamara) on securing the debate on the Stevens inquiry, and on his long and distinguished career, the past two years of which I have observed in the House. Over the past 30 years, the hon. Gentleman has called for many inquiries. He will correct me if I am wrong in saying that he has never called for any inquiry into the activities of the Provisional IRA and their criminal and terrorist campaign against the state of Northern Ireland and the: innocent people of Northern Ireland—Protestant and Catholic—over the past 30 years.
Mr. McNamara: I would have called for an inquiry into the actions of terrorists, who by their own actions; condemn themselves. I have always supported the police and the security services in bringing them to justice, and I would always do so.
David Burnside: I am learning today, because my view of the hon. Gentleman's activities over the past 30 years is that they have involved serious concentration on undermining the security forces in Northern Ireland.
The Stevens inquiry has been taking place for a long time. I believe that it has been running for 14 years, which means—someone will no doubt correct me if I am wrong—that it started under the Thatcher and Major Governments. Fourteen years is probably far too long. I would appreciate it if the Minister could give us some guidance on how long it will take and how wide the terms of reference of the Stevens report will be. We read in the press, and in direct quotes from Sir John Stevens, that he will be investigating Stakeknife—so be it. However, may we know what the terms of reference of the report will be?
I, and many others in Northern Ireland, see in the findings of the Stevens report—the public findings, not the full report—many opinions and conclusions that are apparently not based on evidence. We have not yet seen the full report, and we want to know how long the inquiry will last.
There should be inquiries, internal inquiries, into the activities of the security services, the Army and the police, if wrongs have been carried out and members of those forces have gone beyond the law and guidelines in the fight against terrorism. However, there is only one balance in Northern Ireland, and that is the balance of inquiries against the security services. Some £150 million has been allocated to the Bloody Sunday inquiry, and I predict that its conclusion will please neither those who called the inquiry nor the Parachute Regiment. The report will be inconclusive and a total waste of money. There has been no inquiry into the authorisation by Martin McGuinness, second-in-command of the Provisional IRA, of 24 murders of policemen, members of the RUC and the Army in 1972, and I doubt that there will be one.
We should try to draw a line under the past 34 years. Many Members have proposed looking at other conflicts around the world to see how we can achieve a balance. I would like an inquiry into the activities of the Provisional IRA and the foundation and activities of Fianna Fail, which forms the present Government in the Irish Republic and helped to found and finance the

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Provisional IRA. I would like an inquiry into Bloody Friday and the deaths of all the members of the RUC. I will not get one, and the law-abiding people will not get one. That is not the current balance, which is to undermine the security forces, Army and police.
If the Stevens inquiry continues to investigate Stakeknife, as it appears that it will, so be it. However, if the security services cannot handle and use informers and intelligence in the war against terrorism, terrorism will win. We are on dangerous ground in allowing the undermining of the intelligence services—both special branch and the police, and the Army intelligence agencies and units that have operated out of Lisburn for the past 30 years. We need guidelines and accountability, but we need intelligence that includes the use of informers. It concerns me that the balance is tipped one way.
Let us draw a line in the sand and have a truth commission. However, the problem with a truth commission is that everyone has to tell the truth. I look forward to having Martin McGuinness tell the truth about his activities in the past 34 years. I would also like to hear Gerry Adams, Stakeknife and Johnny Adair. Let them all come to a truth commission to explain why they did what they did and say, "We now believe it was wrong and unjustified. Let's bring it to an end." That is what the law-abiding people of Northern Ireland want, not another biased, pro-republican, pro-nationalist inquiry, which is the only thing that the hon. Gentleman has campaigned for in this House for the past 30 years.
It is time to draw a line in the sand on the past 34 years and have some truth. We will not get it through what the hon. Gentleman has suggested today.
10.32 am
Mr. Alistair Carmichael: I, too, congratulate the hon. Member for Hull, North (Mr. McNamara) on securing the debate. However, I must say, with regret, that in many respects it has been an unsatisfactory exercise. I say that because almost every hon. Member who has contributed has done so from one particular perspective, and it is a matter of substantial regret that no one has been prepared to look at the totality of the situation.
The right hon. Member for Upper Bann (Mr. Trimble) rightly spoke about the need for intelligence as part of what the hon. Member for Newark (Patrick Mercer) referred to as a dirty war. No one disputes that, but that is not the only issue open for discussion. There is also the conduct of the Sir John Stevens inquiry and the manner in which it has been obstructed. I would have much more respect for the views of the hon. Member for Hull, North and the right hon. Member for Upper Bann if they looked at the totality of the situation. They demean their case by failing to do so. The issues are massive and the decision to investigate may not please everyone, but the basic position is that once the decision has been taken, it cannot be acceptable for obstruction by anyone to go unremarked.
This is an unsatisfactory forum. With the exception of the hon. Member for Hull, North, no hon. Member has had adequate time to develop their argument. The one person whom we really want to hear from on such occasions, and who is given 10 minutes at the end, is the Minister. Therefore, exceptionally, I do not intend to
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make any further contribution. I shall leave the rest of the time available to me to the Minister, in the hope that she might take more interventions, so that we may have a fuller debate during her speech than we have been able to have so far.
10.34am
Mr. John Taylor: I endorse the congratulations to the hon. Member for Hull, North (Mr. McNamara) on securing the debate. I was rather taken with the self-sacrifice of the hon. Member for Orkney and Shetland (Mr. Carmichael) of what might have been considered to be his own time. I shall try to match that.
Meanwhile, I was as impressed as ever by the speech by my hon. Friend the Member for Newark (Patrick Mercer). It is a matter of fact that Sir John Stevens presented his latest report to the Chief Constable of the Police Service of Northern Ireland on 17 April. As the hon. Member for Hull, North reminded us, we have now had three Stevens inquiries. The first was set up under Lord Brooke when he was Secretary of State for Northern Ireland in 1989 and the third following a request from the then Chief Constable of the Royal Ulster Constabulary, Sir Ronnie Flanagan. Therefore, it is a saga that has already lasted for some 14 years.
The events that prompted those three inquiries are the murder of solicitor Patrick Finucane in February 1989 and the allegations that members of the security forces colluded with so-called loyalist paramilitaries in his murder, and the murders of a number of other Roman Catholics. In recent days we have also read claims that in some of those cases members of the Army's force research unit directed loyalists towards certain targets in order to protect the identity and life of the agent known as Stakeknife. I am sure that hon. Members will forgive me if I say that I most emphatically do not wish to go down that road.
There are, however, two matters on which I wish to comment. The first relates to whether there should now be a public inquiry into the Finucane murder. The second is whether past or serving members of the armed forces should face criminal prosecutions for their part in certain anti-terrorist operations.
The Conservative party does not believe that a public inquiry is warranted. As I have said, there have been three Stevens inquiries over 14 years. The Finucane murder is also the subject of an investigation by the retired Canadian judge, Peter Cory. We are told that his inquiry has now been completed and that the contents are in a secure location in Canada. What purpose would another inquiry serve? After the excesses of the Saville inquiry, which has already cost over £100 million and could end up costing double that, do we really want to create yet another haemorrhage of legal expenses—a lawyers' orgy? If three inquiries by the most senior police officer in the country and a distinguished retired judge cannot establish the truth, how can we be confident that a public inquiry would yield any better results? Therefore, we believe that the latest Stevens report and the Cory report when published should represent closure on this matter.

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On the subject of prosecutions, our view is clear. It would be wholly wrong to put on trial past or serving members of the security forces, the Army or the RUC, for their part in the fight against terrorism at a time when more than 440 terrorists have benefited from the early release scheme established by the Belfast agreement; nor, however, do we believe that members of the security forces should benefit from arrangements of the type put in place for terrorists. That would introduce the concept of equivalence between the legitimate forces of the Crown and illegal terrorist organisations. That is morally repugnant to us and would rightly be resisted by the armed forces and members of the police.
What do we believe should happen? As a result of the latest Stevens inquiry, a number of case files are currently with the Director of Public Prosecutions in Northern Ireland. He will obviously make an assessment in the normal way as to whether in each case there is a less than 50 per cent, chance of a successful prosecution. Yet there is another consideration. The DPP is ultimately responsible to the Attorney-General, who exercises a superintending role over him. It is for the Attorney-General to decide whether a prosecution would be in the public interest. Moreover, under the Shawcross convention, the Attorney-General has a duty to consult colleagues although he cannot take instruction from them. It is our hope that in these cases common sense will prevail and the public interest will dictate that prosecutions do not take place, as occurred in 1988 when Lord Mayhew of Twysden declined to prosecute following the Stalker/Sampson inquiries.
As other hon. Members have said, we are dealing here with very murky events. They should not, however, obscure the huge debt of gratitude that we all owe to the armed forces and the RUC. For over 30 years the overwhelming majority of their members carried out their duties with skill, great bravery and even-handed professionalism. They are deserving of our praise and our thanks. It would be a scandalous travesty if the actions of the few were used to tarnish the achievements and honour of the many.
10.40 am
The Minister of State, Northern Ireland Office (Jane Kennedy): I thank my hon. Friend the Member for Hull, North (Mr. McNamara) for securing the debate. It is a serious matter and one that I know is of concern to all hon. Members here this morning, including some who have not had an opportunity to speak, so I have listened with a great deal of interest to what has been said. There can be no mistaking the anxieties that have been expressed and the disquiet that lies behind many of the questions raised. I hope that I will be able to respond to those questions and address the concerns. I am grateful for the extended opportunity that the hon. Member for Orkney and Shetland (Mr. Carmichael) has given me by being so generous with his time. I am grateful, too, to the hon. Member for Solihull (Mr. Taylor) for being so succinct.
It is right and proper that I commence my response by returning to the reasons for Sir John Stevens's third report. He begins the second chapter of his summary by outlining the events that he investigated. It is fitting that
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we remember that Patrick Finucane was murdered in front of his wife and three children in his home on Sunday 12 February 1989. He was 39 years old and he worked as a solicitor in Belfast. Sir John Stevens says in his report that Patrick Finucane was shot 14 times by two masked gunmen, who entered his house in the early evening.
I begin by saying unequivocally that the murder of Patrick Finucane was a tragedy and a crime. It was a tragedy not only for his family, whose grief is still palpable, but for the legal profession and the wider community in Northern Ireland. There can also be no doubt that it was a crime, and as a Government we have clear views on crime and those who perpetrate it. The Government take Patrick Finucane's death very seriously, as do the police. Indeed, Sir John Stevens concludes that Patrick Finucane's murder, and that of the young man Brian Lambert, could have been prevented. That is a matter of enormous regret.
If I may do so without embarrassing my hon. Friend the Member for Hull, North, I shall respond to some of the comments that he made. A number of contributors to the debate have paid tribute to the work of the security services.
Mr. Carmichael: I listened with interest to what the Minister said about Sir John Stevens's remarks about the murder of Patrick Finucane. She will be aware that he goes on to say in paragraph 4.6:
"I also believe that the RUC investigation of Patrick Finucane's murder should have resulted in the early arrest and detection of his killers."
That has palpably not been the case. Does the Minister have any comment to make on that?
Jane Kennedy: Indeed: I shall come to that shortly. If I do not, perhaps the hon. Gentleman will draw my attention to it again later. Before I get into the detail, I want to respond to some of the comments made about the work of the security forces and the tributes paid to them, but in doing so, I shall make clear the context.
I do not share the views of hon. Members who have denigrated the work of my hon. Friend the Member for Hull, North. I pay tribute to the role that he has played and the tenacity with which he has followed the events, and spoken for and pressed Governments on human rights in Northern Ireland and elsewhere. Indeed, he serves on the Joint Committee on Human Rights. It is worth considering comments that he made in a debate on 11 July 2002 on a report of the Intelligence and Security Committee, again in the context of grave criticisms about allegations of intelligence agencies overstepping the grey line that the hon. Member for Newark (Patrick Mercer) described. I will comment on his remarks in a moment. My hon. Friend said:
"I have made grave criticisms … however, I want to pay tribute to the many men and women in the security forces and intelligence agencies who have not behaved in the way I have described, but have acted with great bravery and dedication. They put their lives on the line because they believed that their work would allow others to live in safety. I pay tribute to them: the nation owes them a great deal."—[Official Report, 11 July 2002; Vol. 388 , c. 1120.]
I associate myself entirely with those comments. People who continue to do such important work deserve our support.

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In their fight against terrorism, the security forces use a variety of techniques, including the use of covert human intelligence sources, which is the phrase that we now use for the term "agent". We have always required the public authorities to act within established guidelines when using those sources. The Regulation of Investigatory Powers Act 2000 ensured that the guidelines set out by Parliament were compatible with the European convention on human rights. That Act has improved the structures for the management of informants and has ensured far greater accountability than there may have been in the past. However, my hon. Friend made a very serious allegation to which I must respond: he alleged that Governments have sanctioned murder. Sir John Stevens does not conclude that successive Governments have sanctioned murder. The report voices many concerns and I accept that its findings must be acknowledged, but the allegation that Governments have sanctioned murder is not one of its findings. It is important that I state that for the record.
We are grateful for Sir John Stevens's efforts in conducting his investigation, just as we are grateful to the former Chief Constable, Sir Ronnie Flanagan, for asking Sir John to investigate. The police response—the Stevens inquiry—has been the largest investigation of its kind in the United Kingdom, and its findings are invaluable to us. Its effort to achieve prosecutions is admirable: we must remember that this third investigation, conducted by Sir John Stevens, has been a criminal investigation, and one that continues.
Sir John Stevens's recommendations for the future are vital, but there could be no one better than Hugh Orde to ensure that the report's recommendations are brought to bear on the reform of the Police Service of Northern Ireland. We must remember Hugh Orde's familiarity with the detail of the Stevens investigation and his knowledge of the circumstances surrounding Patrick Finucane's death. His track record so far is of a Chief Constable who knows what he wants from a police force and how to achieve the best.
The Government's response is that those who are culpable in the affair must face justice. In the first instance, we look to the police investigation and to the criminal process, which must take priority. The investigation is continuing, as I said, and Sir John Stevens has made it clear that lines of inquiry are still being pursued and investigations are still being made. Files have been, and continue to be, sent to the Director of Public Prosecutions, which we welcome. Let no one be mistaken about the role of the DPP: he acts with total impartiality and integrity. He will consider all the allegations passed to him by the Stevens team, and he will apply the prosecutions test to those allegations without distinction. Whether or not he decides to prosecute in each case, he will be acting without fear or favour.
We hear the concerns of the relatives and others who are calling for a public inquiry—a call that was repeated by my hon. Friend this morning. That is why we appointed Judge Cory. He has the task of recommending what, if any, further action needs to be taken in this case and others. Judge Cory is on schedule to complete his work, and to report to both the British and Irish Governments on his six cases by autumn this year. However, let me make it clear that because of the priority given to the criminal justice process we are
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obliged by law to ensure that prosecutions are not prejudiced and that the criminal justice process is not damaged. We would have to ensure that no public inquiry cut across judicial proceedings.
Mr. Gregory Campbell: On the issue of Judge Cory and his investigations, the Minister will be aware of the information, which is in the public domain, that he indicated displeasure at the Stevens inquiry's outcome being in the public domain and said that that could jeopardise his own report. Has Judge Cory been in touch with Her Majesty's Government about his report and its connection with the Stevens revelations?
Jane Kennedy: Judge Cory is in regular touch with the British and Irish Governments about the work that he is undertaking. From time to time, he has expressed various anxieties and made representations to the Irish Government and to us. He continues in that dialogue but is content to continue with his work. We expect to receive his findings in the autumn of this year.
I have broadly set out the Government's position, but I shall try to reply to other issues that hon. Members have raised. My hon. Friend the Member for Hull, North raised the question of a public inquiry, and I shall add one further comment to that. It remains the case that the possibility of holding a judicial inquiry into the Patrick Finucane case has not been ruled out. As I said, however, the criminal justice process must take its course. An inquiry now could undermine the prosecution process and damage the possibility of successful prosecutions. We look to Mr. Justice Peter Cory, who may make recommendations for further action. If he does, we will stand by our commitment to implement his recommendations.
On the Stevens report, it is important to remember that this is a criminal investigation. Sir John Stevens's report is to the Chief Constable, and it was our judgment when the summary was published that it was not for us to make a statement to the House. I note the comments that were made about the suitability of this forum for debating the process, but we have had an opportunity to explore some serious issues. I know that the matter will be returned to on future occasions. Indeed, Hugh Orde has said that it is one of his major concerns. He has committed himself to reporting on the implementation of his recommendations to the Policing Board at its meeting in early July, with an interim report to the board next month. He told the board last week that a good deal of the work envisaged by Sir John Stevens, and contained in his recommendations, was already in progress.
Hon. Members also made comments about Stakeknife. They will not be surprised to learn that I will not comment on intelligence matters. I will not confirm whether press speculation about the identity and actions of Stakeknife is accurate—regardless of how that name is spelt. I will not comment on Stakeknife's whereabouts, nor will I comment on media speculation about any arrangements for his safety. That is a blanket refusal to respond.
Mr. McNamara rose—
Jane Kennedy: Before my hon. Friend intervenes— this may pre-empt his intervention—I will say this: it is

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for Sir John Stevens to decide whether he wishes to interview Stakeknife. The Government fully support him in his investigation, and we will do everything in our power to assist him.
Mr. McNamara: I take it that no impediments will be put before Sir John Stevens if he seeks to interrogate Stakeknife, if that agent exists?
Jane Kennedy: My hon. Friend can be reassured on that.
David Burnside: Does the Minister understand the concerns of those who are currently serving in Northern Ireland in both the intelligence services that are linked to the Army and the police special branch about the problem that they will face in future in handling informers in their traditional way? Does she understand that informers are now very nervous about co-operating with the security services, and that if intelligence gathering in Northern Ireland is weakened, that will put us on very dangerous ground?
Jane Kennedy: The hon. Gentleman makes a serious point.
The hon. Gentleman also asked earlier about the terms of reference of Sir John Stevens in his ongoing inquiries. He spells those out in the opening paragraphs of the published summary of his report.
Finally, I turn to the comments of the hon.—and gallant—Member for Newark. I am grateful to him for enlightening us with examples of his experiences when
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he served in Northern Ireland. The hon. Gentleman and my hon. Friend the Member for Hull, North commented on police primacy. I reassure hon. Members that in my dealings as Minister with responsibility for security with the armed forces and the Police Service of Northern Ireland, I have been consistently reassured that police primacy remains at the heart of the armed services' objectives in their work in Northern Ireland by all those who are engaged in that enormous task.
The hon. Member for Newark also described how those to whom we paid tribute earlier who do that difficult work are constantly trying to judge where the line is drawn. I am sure that he would be the first to acknowledge that those who are engaged in this work are deeply concerned when that line is crossed. They are bitterly disappointed when it is crossed accidentally, but because of the nature of the work that will occasionally happen, as he described. When it is crossed deliberately, the anger that is felt among the brave men and women who undertake this work is very real and deep. It is right and proper that those who cross that line deliberately are held accountable: when that line is crossed, serious consequences sometimes follow.
The security forces and all those who are engaged in this work are properly accountable. The framework within which they operate, as defined by the RIPA regulations, is now comprehensive. It is clear that we need to continue developing and constantly reviewing the way in which we conduct this work. I assure hon. Members that we will continue to do that, and that we will also continue to make the necessary effort to ensure that justice is done, in that case and in others. We uphold the law and the criminal justice system so, in the case of the murder of Patrick Finucane, we look first to the prosecution and conviction of those involved in that crime.

Cyclists
11 am
Mr. Ben Chapman: I am delighted to have been able to secure this debate on the provision for and regulation of cyclists. I am a cyclist myself. I cycle to work every day, but I am consistently amazed by the irresponsibility of many of my cycling colleagues regarding observation of basic laws of the road. The Minister and I have discussed this matter before when we were at red traffic lights together, me on my bike and he in his car. I was a solitary cyclist at red lights, while other cyclists went past me and rode through them. It is all too common to see cyclists ignoring red lights, riding on pavements, riding the wrong way up one-way streets and, in some instances, breaking speed limits. Outside towns, cyclists treat footpaths as their own preserve with virtual impunity.
Lawless cycling causes fear and traffic problems, which are often left behind as the unaware and unconcerned cyclist sweeps on. More importantly, it results in hundreds of cyclists and pedestrians being hospitalised each year. It clearly demands attention. I have called this debate to raise a number of issues surrounding the provision and regulation of cyclists, and to suggest some possible remedies to what I consider to be a major problem.
In my view, adequate legal provision to enforce regulation of cyclists already exists. The difficulty is that it is rarely enacted, and the plain fact is that, by allowing lawless cyclists to continue to flout established ordinance, we are allowing them to put themselves and others at unnecessary risk. I know from my experience that roads, especially in urban areas, can be a dangerous place for cyclists. That applies as much in Merseyside as it does in London. Drivers often pay little heed to their vulnerable two-wheeled pedalling companions.
Although we should expect cyclists to obey the law, we should, as a quid pro quo, ensure that their needs are adequately provided for. Such provision is gradually being established through initiatives such as the national cycling strategy and the cycling projects fund. I welcome and encourage those wholeheartedly in my constituency, which, as part of Merseyside, comes under the local transport plan. We have a cycling strategy that aims to maximise the role of cycling as a mode of transport. It incorporates efforts to extend provision for cyclists and underpin growth in the number of cyclists with a programme of proficiency instruction. That is very much to be welcomed. New cycle paths have been created, and existing cycle paths are being extended across the Wirral. The Wirral is to get a major cycle network as part of the Merseyside cycle network. All that is valuable, but it must progress alongside efforts to improve the enforcement of regulations for cyclists.
Given the numbers involved, provision for cyclists is not adequate. One of my constituents, Mr. Harper, took me on a cycle challenge. We got on our bikes together and went off to observe the provision on the ground in the Wirral. I remember vividly one cycle way that was all of 6 yd long. There is much to be done. The much vaunted targets for hugely increasing the number of cyclists over the next decade could, therefore, offset the benefits of efforts to expand provision.
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I appreciate the need for greater provision for cyclists, but I do not believe that that excuses behaviour that is illegal and irresponsible, and that invariably affects the most vulnerable members of society, particularly the elderly when it comes to cycling on pavements.
I stress that I wholeheartedly support the hosts of lawful cyclists among whose number I hope that I can count myself. I support the work of the all-party parliamentary cycling group and try to participate in its annual cycle ride. As a mode of transport, cycling is essentially positive. It is good for one's health and environment, and in the inner-cities, it helps to ease the ever-present problem of congestion—although that is slightly lighter in London at the moment. It certainly gets me home quickly.
Cycling is loved by many, as is clear from its many lofty descriptions. It has been called
"the most civilised conveyance known to man",
and
"the vehicle of novelists and poets",
and even—although it was said in 1896—
"the great emancipator of women".
There is a romanticism about cycling that, unfortunately, informs some cyclists' tendency to regard themselves as above the law. They see themselves as eco-warriors operating on a higher plain of conscience than other road-users who rely as they see it on combustible, carbon dioxide-creating, environmentally damaging fossil fuel to propel their vehicles, rather than their own sweat and self-satisfaction. Some cyclists have a monopolistic, self-righteous arrogance, feeling that only they can be right. Those urban guerrillas operate according to their own morality and ignore the laws that enable our road system to function safely.
That is demonstrated in the actions of the anti-car non-organisation known as Critical Mass. That amorphous group urges cyclists to reclaim the streets by going out en masse and taking over the roads without regard for other road-users or "The Highway Code". Personally, I am unclear about from whom the streets are being reclaimed. It is presumably from car-owners, although I fail to see why the two modes of transport must be, or indeed how they can be, be mutually exclusive. For cyclists to ignore the laws of the road is not the way to achieve harmony.
I am sure that H.G. Wells is right that
"cycle tracks will abound in Utopia",
but I am equally sure that it would be a dismal Utopia for many if they were unable to get there by car. The two tribes must learn to cohabit peacefully; the farmer and the cowboy must be friends. At present, we have a vicious circle: motorists almost hate cyclists because of their apparent disregard for the law and then cut them up and run them off the road, which in turn justifies cyclists' lawless behaviour.
We must bring the two sides together to break the vicious circle, and it is clear that as well as improvements in provision for cyclists and stricter enforcement of rules and regulations, a fundamental attitudinal shift is required on the part of all road-users. Other than running red lights, speeding and riding on pavements, lawless cyclists can be found riding the wrong way up one way streets, under the influence or, at night, without the lights or reflectors required by law. There are

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problems with cyclists not wearing helmets, although that is not a legal issue because there is no requirement for them to do so.
Like me, you may recall, Mr. Deputy Speaker, the days when the local bobby would make it his business to check bike lights and act as a general guardian of "The Highway Code". Those days are sadly gone, but measures must be found to enforce existing regulations. Any road user disobeying the rules of the road puts others at risk, and even if the offender is not hurt, they might cause an accident by forcing other vehicles to take action to evade them.
I oppose the European Commission's proposal to make motorists liable for such accidents whether they were at fault or not. Motorists clearly have a duty of care towards the vulnerable, but the vulnerable have an equal duty to follow the laws and regulations that exist to protect them. Someone cycling dangerously must be accountable for his or her actions. The roads operate on a system of trust that all users will obey "The Highway Code". Once that trust is broken, the system breaks down, yet cyclists are rarely proceeded against for breaking the most basic principles of "The Highway Code".
The most recent figures available to me are for 2000, when just 52 cyclists were proceeded against for neglecting traffic directions, and just 223 were proceeded against for riding on the pavement—less than a quarter of the 1998 figure. On Merseyside, just 20 people were proceeded against for cycling on the pavement. The enforcement of traffic regulations is left to the discretion of local police chiefs. I am sure that that is right as a matter of principle, but there are thought to be more pressing issues for the police to deal with than enforcing cycling regulations.
Fixed penalty orders may be the most efficient way to discourage the main cycling offences. When applied, they have proved effective. In 2000, in England and Wales, 821 fixed penalty orders were issued for the offence of cycling on the pavement. I understand that the Police Reform Act 2002 introduced police powers to confiscate bicycles from offenders. Indeed, there have been a number of initiatives in recent years, such as mandatory cycle bells for new bikes, fixed penalties for riding without lights and, of course, the vast increase in investment in cycle projects. However, for all the positive effects of increased provision, police powers are rarely applied, regulations are not enforced and little practical change occurs.
Some geographical areas have performed relatively well in enforcing regulation, and of course some authorities choose not to implement the regulations at all. Numerous areas, such as south Wales, Wiltshire and Essex, have seen extended periods in which fixed penalties have not been applied.
There are numerous measures whereby the regulatory system might be strengthened. Subject to improved enforcement, bicycles could be licensed, providing each owner with a progressive record of his or her cycling offences or otherwise. Such licensing need not cover all cyclists; it might be just for each new offender. A monitoring system via licences could carry a variety of penalties according to the frequency of the offences.
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Fines, confiscation and other measures could be applied in the same way as they are applied against drivers of motorised vehicles. Cyclists could be obliged to take out third party insurance to cover them for any damage and injury caused. Fixed penalty fines could be applied on an incremental basis according to the frequency and seriousness of the offence. Equally, the range of offences to which such fines applied could be increased.
Clearly, there is a balance to be struck. We do not want a draconian system of regulation, but we may want some regulation, and we certainly want it enforced. Such measures as I have described could have marked success in putting a stop to lawless cycling if they were introduced alongside increased investment to develop more cycle lanes, appropriate action towards lawless motorists and perhaps even legislation to make wearing cycle helmets obligatory, as it is on motorbikes. Those measures would also need to be combined with more effective enforcement of existing regulation.
Lawless cyclists must be held to account. Riding on the pavement was first prohibited under the Highways Act 1835, yet the law remains largely unenforced. Measures are in place whereby lawless cycling might be curtailed without taking up more valuable police time, such as through the increased role of community safety officers in issuing fixed penalty notices. Enforcing existing laws will help to resolve the problem, but a fundamental behavioural change is also needed on the part of everyone on the roads. Perhaps then the numbers of injuries and even deaths caused by clashes between cars and cyclists, and cyclists and pedestrians, each year can be reduced.
We must find ways to allow the police to stop turning a blind eye while allowing cyclists to ride in their own designated space. After all, the most effective way to persuade more people to cycle is to make the roads and provision for cyclists safer and user-friendly. I hope that this subject can be addressed by both the Department and, where appropriate, the Home Office.
11.14am
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on securing the debate and on the succinct, clear and balanced way that he put his case. I am grateful to him for giving us the opportunity to consider cycling, not simply in terms of transport, but as a positive influence on a number of areas such as health, the environment, education, and the economy. That is something that the Government have recognised in their review of a range of policies.
The 10-year transport plan underlined our commitment to encourage cycling by setting a target of trebling cycle use. That target was an interim one on the way to the national cycling strategy aim of quadrupling the number of trips by bicycle by 2012, which we have endorsed. To help support targets to increase cycling we established the National Cycling Strategy Board for England chaired by Steve Norris. That shows that we work on a cross-party basis on these matters.
There are many reasons why we want to see an increase in cycling, as my hon. Friend clearly described. Transfers from car to bike journeys, or to combined journeys by bike and public transport would reduce

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congestion and, consequently, air and noise pollution. Cycling can also promote social inclusion. One in three households do not own a car. By making it possible for more people to cycle, we improve access to services, jobs and leisure activities.
Improving facilities is essential to increasing cycling. To support that, all local authorities in England, excluding London, have included a cycling strategy in their local transport plans. Authorities' spending on cycling infrastructure was £28.7 million in 2001–02 and £39.7 million for 2002–03, which was a substantial increase in real terms. Projections for the next three years are for spends of between £35 million and £37 million.
In order to determine how well these strategies are working, the National Cycling Strategy Board has established an English regions cycling development team, funded by my Department. Its work includes assessing cycling strategies in local transport plans and authorities' reports as well as auditing on-street provision for cycling and highlighting where improvements can be made. The laughable provision that my hon. Friend described of a 6 yd long cycle lane is the sort of thing that it will look at. A report detailing the assessment of all highway authorities is to be submitted in July.
Better facilities for cyclists alone are of course not enough. Cycling needs to be widely seen as a practical, mainstream form of transport. One of the best ways of encouraging people to cycle more is by promoting its health benefits. Studies show that the risk of premature death is lowest amongst those who are active. Regular moderate exercise, such as cycling, can significantly reduce the incidence of coronary heart disease and other life-threatening illnesses, as well as guarding against the emerging problem of obesity, which is prevalent in this country and many other western countries.
Many people cycle regularly for fun. We believe that an increase in leisure cycling offers a good basis for encouraging people to use their bikes more for everyday journeys. We are highly appreciative of the tourism that cycle routes create. Only last month I visited Sustrans's Cornish way. I was on the route between Bodmin and Padstow. Not only is the route taking local traffic, such as school children, it is attracting tourists from across Europe who come to take an active holiday, cycling through the Cornish landscape and helping to invigorate the local economy along the way. If my hon. Friend has not been on this route I can strongly recommend it. It follows the route of an old railway line and is an extremely attractive and pleasant place to be.
School travel is a matter to which we have given particular focus. In July, I will visit Golden Valley primary school, which provided new cycle parking facilities, as part of a wider safe routes to school programme. Prior to the project, part-funded by my Department under the cycling projects fund, only five children cycled to school, but the project's success has been such that the school now has to limit cycling to one school year each day in order to cope with demand for the facilities. Those are the kind of results that can be produced with relatively modest investment in the right measures, in the right context.
We are also targeting the travel-to-work sector and the Government are urging employers to develop travel plans. A good travel plan should include a number of
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measures to promote cycling, such as the provision of secure parking, lockers and showers for cyclists, allowances for work journeys made by bike and, possibly, loans for bike purchase. Cycle lockers of the type produced by the BikeAway company, which is based near my constituency in Plymouth, offer cyclists protection from having their bikes stolen. I shall now give a little commercial for my constituency: if authorities want to know whether those products would be of benefit in promoting cycling, they may want to contact the company. Bike stands and secure bike pounds also offer the same protection. If sited at colleges and schools, at the workplace and at selected locations around towns such as bus and rail stations, they can bring about significant increases in local cycling trips.
We are actively involved through our road safety programme in promoting cycle training, and, earlier this week, the CTC launched its adult and cycle training schemes, work on which was funded by the Department for Transport and the Department of Health.
Cycling will increase where it is encouraged as part of longer journeys in conjunction with public transport, and local cycling strategies are expected to facilitate it. The National Cycling Strategy Board is working with the Strategic Rail Authority to integrate bike and rail travel. As those initiatives progress, there is reason to believe that a significant increase in cycling will be achieved in the next few years. However, as my hon. Friend said, the Government are aware that the behaviour of a minority of cyclists leaves something to be desired. That small but conspicuous minority bring the vast majority of law-abiding cyclists into disrepute. It is important that they realise that the rules of "The Highway Code" and road traffic legislation apply equally to them.
The Road Traffic Act 1991 made the worst two cycling offences parallel to those for dangerous and careless driving. The maximum fines are currently £2,500 for dangerous cycling and £1,000 for careless cycling. "The Highway Code", which has a specific section on cycling, details cyclists' legal responsibilities. There are also specific offences, including those relating to poor brakes, riding on footways and cycling under the influence of drink and drugs.
The sight of a cyclist ignoring a red light is, alas, all too familiar, especially in London. I usually walk, but one morning I was in a car adjacent to my hon. Friend, who was riding a bike; he was the only cyclist who stopped at the lights. Eight or nine other cyclists went straight past him, some of them weaving dangerously between pedestrians, including children who were trying to cross the road when they had the right of way. I have noticed that dangerous practice more in London than elsewhere in the country, including my constituency, but it gives cyclists a bad name and puts them and other people at risk.
Cyclists and other road users must obey traffic signs and signals, which exist for everyone's safety. A few cyclists also ignore one-way restrictions. My Department is aware that one-way streets can often result in cycle journeys becoming longer and more hazardous, but we have no plans to change the law to allow cyclists to travel the opposite way down a one-way street. Local traffic authorities already have powers to provide for contraflow cycling on one-way streets where

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they consider it to be safe and appropriate. My Department provides local traffic authorities with guidance on such facilities.
There is concern about inconsiderate cycling on pavements, which particularly affects the elderly and disabled, and those with limited movement. Cycling on the footway—the pavement adjacent to the carriageway—is an offence, and has been since the 1800s. The introduction of a fixed penalty for cycling on the pavement on 1 August 1999 provided the police with a direct and simple means of dealing with the problem. Chief officers recognise that the fixed penalty must be used with discretion; it cannot, of course, be issued to anyone under 16.
In addition, my Department recently made the Pedal Bicycles (Safety) Regulations 2003, which will come into force on 1 May 2004 and will require a bell to be fitted on the bicycle at the point of sale. The regulations will enhance the safety of pedestrians who share space with cyclists. To improve the conspicuity of cyclists, my Department recently consulted on amending the Road Vehicle Lighting Regulations 2002 to allow lamps where currently only reflectors are permitted, and to allow additional front and rear-position lamps to flash. Flashing lamps would be in addition to the mandatory position lamps that show a steady light. We are considering responses to the consultation.
Ultimately, the level of enforcement of cycling offences is for the local police to determine, but there is no excuse for adult cyclists breaking the law. My Department supports any action taken by the police to deter and reduce cycling offences. Traffic wardens do not have the power to deal with the offence of cycling on the pavement. However, one of the key aims of the police reform process is to free up police officers for front-line operational duties, and to harness the work of the extended police family in supporting the police. Consequently, community support officers have been given the power to issue fixed penalty notices for offences such as cycling on the pavement, and traffic wardens can be designated as such officers.
My hon. Friend also raised the European Union proposal to make the motorist liable for collisions with cyclists. The provision is presumably motivated by the
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well-meaning desire to maximise the protection given to the most vulnerable road users. However, it would not help us to consolidate our country's good road safety record if we issued the message that some road users need not be concerned about the consequences of their actions because they would be compensated regardless of any fault of their own. Our general line in recent years is that there should be mutual respect between road users, whether they are pedestrians, motorists or cyclists, although I accept that motorists probably have the greatest need to show care.
My Department has examined the case for a road tax on cyclists, but it would require a registration system, such as the one for motor vehicles, and the costs of the system would certainly outweigh any revenue benefit. For similar reasons, it would be impractical to introduce compulsory insurance for cyclists. Like any other road user, a cyclist involved in an accident can be sued for damages by the victim. However, we advise cyclists to take out insurance. Several insurance companies offer policies dedicated to cyclists.
In respect of cycle helmets, our policy is to recommend that they be worn, and our emphasis is on increasing wearing rates through persuasion. My Department conducts monitoring, and has found that about 22 per cent, of cyclists wear a helmet. We will review the option of compulsion from time to time.
The successful promotion of cycling may have huge benefits, through reduced congestion and pollution and improved health. However, as my hon. Friend said, the debate has been in two parts, one on the benefits of cycling, and the other on its problems, as set out in his introductory remarks. The damage done to the image of cycling by a minority of cyclists breaking the law is of concern to us, as well as to my hon. Friend. We need to encourage a culture in which all users take responsibility for their actions and look out for each other. I have no doubt that most cyclists are law abiding and are mindful of the needs of others, but the minority who are reckless and break the law can certainly expect no comfort from the Government. The debate has been useful, and I am grateful to my hon. Friend for giving me the opportunity to speak on the subject.
11.30am
Sitting suspended until Two o 'clock.

Further Education
2 pm
Mr. Deputy Speaker (Mr. Edward O'Hara): This debate will last one and a half hours, and it may help hon. Members gauge their contributions if I say now that the first Front-Bench spokesman must be called no later than 3 o'clock.
Dr. Vincent Cable: I appreciate the opportunity to introduce this debate. I chose the subject for a mixture of reasons—national, local and personal—as many hon. Members do.
Nationally, a great deal of controversy is building up about recent increases in funding for schools and higher education, but little has been said about the further education sector. I suspect that that is for two reasons. One is that the further education sector rarely attracts headlines, and the other is that the mood in that sector has changed. The Government made a big increase in grant awards last November, and ended 10 years of cuts and contraction. I will try to show that despite that, there are still considerable problems, and perhaps the change is not as impressive as it seems. None the less, the mood of frustration and anger that many of us encountered in recent years, with further education lecturers striking and so on, has certainly changed.
At local level, there are two further education colleges in Twickenham, and they are an important part of the local community. The Learning and Skills Council described the tertiary college, on the basis of its published results, as the top FE establishment in Greater London. The college is an outstanding institution, not just in conventional academic and vocational training qualification terms, but in terms of value added. An interesting experiment took place in which the performance of a cohort of 250 GCSE students who went to the tertiary college was compared to that of an equivalent cohort that went through the private sector and attended top private schools. It showed that the tertiary college significantly outperformed the private sector, and that there was real value added. The college is in a relatively affluent part of suburban London, but a high percentage of its intake comes from deprived parts of inner London, and from adjacent boroughs such as Hounslow and Baling, which have a high ethnic minority population. Its achievements are considerable.
The second institution is the adult education college. It is more difficult to measure performance in adult education, and it is hard to ensure that we are comparing like with like, but some assessments suggest that the college is one of the top colleges, if not the top college, in the country. It is certainly enormously appreciated locally. There are high participation rates, and it is greatly valued. The Minister will be familiar with it, as she recently visited its new business department.
I use the example of those colleges not simply to talk about them in a parochial sense but to test the impact of recent changes in funding. I will go through the arithmetic as it affects those colleges, because that makes the points more concrete arid real, but first I shall add a personal note. My father has been dead for 20 years, but in his time he was one of the leading figures in
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FE. He was one of those people who first worked on the shop floor, and then educated himself. He became an FE lecturer, trained two generations of people in York in the building trades, which included everything from bricklaying and stonemasonry to quantity surveying, and eventually became the national president of his trade union. He helped to introduce much of our training infrastructure in the late 1960s and early 1970s, including the block day release schemes, which have become somewhat battered over the years, but are none the less the foundation of FE. Among the things he taught me were the importance of further education for people who wanted to improve themselves but did not have the opportunity to go to university, and its critical importance for the skill base of, for example, the building industry. Those two things are as important now they were then.
The issue of funding is central. I shall take the arithmetic that the Government have given us at national level and apply that to the institutions I know, to try to tease out what it means. The headline was that the Government's three-year award was a 26 per cent, cash increase, which in real terms was estimated to be 19 per cent. The fact that that was a three-year settlement was an advance and a positive change; it will give greater certainty, which is important. In the coming academic year, 2003–04, that settlement amounts to a 10 per cent, cash increase, which is an increase of 7.5 per cent, in real terms. That is impressive, and has been regarded as such in the sector.
I discussed the numbers with the college principal, Eric Kirby, and his chief finance officer, Graham Try, whose analysis is all the more credible because he is chairman of the Chartered Institute of Public Finance and Accountancy, one of the leading organisations of public sector accountants in the country. They showed me that of that 7.5 per cent, real-terms increase, 2 per cent, goes towards the national teacher superannuation scheme, and 3.5 per cent, consolidates two existing pots of funds that were available last year, partly for teachers and partly for standards—that is not new money. A further 1 per cent, is for employers national insurance. The 7.5 per cent, increase cannot therefore meaningfully be described as additional real resources, because 6.5 per cent, is already spent. The increase is welcome, but it does not provide additional real money.
We are talking about a real increase of about 1 per cent., although even that description is flattering. Colleges must also account for their support staff pension fund, which is an additional obligation. There is also a rather technical accounting point—I do not fully understand it; perhaps the Minister can explain it—which is that the standards fund consolidation does not allow for an increase comparable to that in the last financial year. The estimate for the college, which was made by someone who is reputable and professional, was that it would end up with no real increase. In fact, things are slightly worse, because staff pay must be taken into account.
All hon. Members will know from the deputations that we have seen during the past few years, and from the strikes that took place in some of our colleges, that there has been cumulative enormous frustration among technical college lecturers. There are major shortages in certain skill areas where there is competition from the commercial private sector, and the salaries of many of

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the people teaching academic subjects lag considerably behind those of people teaching the same subject in schools. The maximum figure was 30 per cent.; even the official figures show more than 10 per cent.
Colleges are faced with a dilemma: either they award the lecturers 2.5 per cent., which is the inflation level built in to the award, in which case they will not solve the structural problem of pay, or they pay over the odds and face the need to make a real cut in services. I do not know how different colleges would deal with such a dilemma. The people whom I spoke to at the college were aware that it was in a serious predicament. Although that college is excellent and well managed, and is not thinking about laying off staff or affecting student welfare, it is going to neglect the maintenance of its building, which has already been condemned by Ofsted as totally unsatisfactory. People already have to make hard choices.
I also went to the other college that the Minister visited and I spoke to the principal, Christina Conroy, who is dynamic and successful. She took me through the arithmetic of her institution, where the position was even worse—the cost increase factors applied there as they did in the tertiary college. In addition, only half of that college's revenue comes from the Government. One of the problems for adult colleges is that a substantial part of their income is funded by adult community learning. My local college is seriously underfunded in that area, and it cannot escape because the Government have decided to freeze the allocations until 2008 because of the complexities of a new funding formula.
Adult colleges are trapped. Their only other source of income is to increase fees, but that will cause a dilemma for them. If they carry out market testing and make an increase of 5 per cent., they will lose a substantial number of pupils. There is a problem with the elasticity of demand; they will have to safeguard the interests of the vulnerable clients. There is a limited scope for fee increases. Adult colleges are faced—as tertiary colleges are, but in a different way—with cuts, not increases. I am having to explain to constituents why popular, albeit economically marginal courses are now having to be cut, when the Government have announced big headline increases in cash.
I have illustrated some of the problems suffered by the two colleges—and I stress that those are particularly well managed and successful colleges. I imagine that further down the food chain, with badly managed colleges in more difficulty, the consequences are much worse. I do not want to pretend that the crisis is enormous. I am not talking about redundancies or a critical financial situation, but I am stressing the fact that the expectations that were aroused are being deflated rapidly. One of the colleges described the situation most eloquently, saying that there had been a curve of constant cuts for more than a decade, which had now reached a plateau at a lower level. That is the environment in which the colleges have to operate.
I have several other specific points to make, the first of which concerns staff. I have already mentioned the dilemmas faced by many colleges, certainly in the southeast of England, including the part of outer London that I represent, where there are acute labour market difficulties. One of the changes, which is designed partly
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to counter the adverse labour market trends, is an improvement in inner London weighting for the part of London that I represent. It used to be 6 per cent., but it has now been increased to 12 per cent. That is a substantial and welcome improvement.
The problem is that the studies on which the Department based its formula suggest that to meet changes in the real costs of living and the market conditions in which people operate, particularly with housing, the figure would need to be about 16 to 20 per cent. We have the awkward problem that although the Government have taken a substantial step forward, the conditions perceived by those who work in the environment, and those who employ them, are deteriorating. I appreciate that it is difficult to meet expectations, but the position of staff, especially in high-inflation areas, is difficult, and that problem has not been solved by the current changes.
Many of the problems that I have described do not apply only to this year; they will apply next year too, because the same cost factors will exist. Colleges are emphasising that the funding that they attract in real terms is conditional. It is not automatic. They have to satisfy a variety of tests to receive something that amounts to between 0 and 3.5 per cent, in real terms. That makes sense up to a point, but it entails uncertainty and complexity.
One of the matters that I have been asked about is business links. In future, the Learning and Skills Council will evaluate colleges in terms of how successful they have been in employer engagement. In a general philosophical sense, I do not have a problem with that. Of course colleges must be economically useful; they must make themselves relevant to their local business community. I do not think that either of my two colleges has problems with that. They are active participants in a business club. They constantly hobnob with the local business networks. As the Minister knows, the business school is very much at the forefront of their minds. Anxiety is felt, however, about the fact that, certainly given the comments of the Secretary of State, the Government seem to believe that the further education sector is failing collectively in such areas.
The Government perhaps do not appreciate that one of the fundamental difficulties that the further education sector has in dealing with business is caused by the problems of small firms. What tends to happen in that sector is that there are employees who want to be trained and there are colleges who want to train them, but companies cannot release their work force because of the fundamental difficulties of releasing staff in a small company. It is important that colleges should not be punished by a crude indicator of business engagement. We look forward to the ideas that will come through in the skills exercise to be carried out imminently by the Government to show how they will address the problem of the small company and how we can obtain the release of staff in a way that meets the needs of employees, companies and colleges.
One of the positive changes taking place, of which there are many, relates to the gradual roll-out of the maintenance allowance for people aged between 16 and 19. There are growing numbers of teenagers who did not do particularly well at school, who now have the opportunity to do post-school advanced vocational qualifications—A-levels—with the help of maintenance

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allowances. That is a big step forward. As I understand it, the programme is being rolled out, and it would be useful to know at what pace that will happen.
The Foyer Foundation has carried out some interesting research that suggests the enormous potential of building on the concept of the maintenance allowance for people over 19 years old. I meet many people, particularly young mothers, who are trying to get back into the labour force through upgrading their qualifications and training. That would also apply to people who have been mentally ill and are trying to rebuild their lives, who have enormous difficulties with the benefits system, which will help them with employment-related benefits, but will not help them to retrain.
The Foyer Foundation suggests that if the maintenance allowance could be extended to that age group, that would give a very favourable economic cost-benefit ratio. I do not want to go into the technicalities, but there are suggestions that that would be a productive use of Government funding. It would be interesting to gauge the Government's reaction to that work.
In conclusion, I am grateful for the opportunity to introduce an important subject. This is not a crisis point in further education, but perhaps it is a good time to think about FE and take stock of the changes that have taken place in the light of the Government's new settlement last autumn. The fundamental problem remains that the FE sector is still in the shadow of higher education; sadly, it still does not have the same degree of status and impetus behind it. Part of my effort is to ensure that that situation is changed.
2.18pm
Mr. David Lepper: I begin by congratulating the hon. Member for Twickenham (Dr. Cable) on securing the debate. It is a little disappointing that there are not more hon. Members present to consider the important issues that the hon. Gentleman has raised about the funding of further education. My hon. Friend the Minister will know something of the variety of further education provision that exists in the city of Brighton and Hove, part of which represent. We are perhaps unusual in that we have a long-established FE college.
I am glad that the Minister was able to come down in November last year to open the refurbished and latest version of that college—City College Brighton and Hove. It was established in the late 19th century as one of the colleges funded by the tax on whisky, which was directed to increasing opportunities for those who might not otherwise have them. We also have two excellent and innovative sixth-form colleges—one in my constituency and one in the constituency of my hon. Friend the Member for Hove (Mr. Caplin). As a result of a historical accident in the Hove part of the city, we have secondary schools with their own sixth forms. Therefore we have a breadth of provision at that level.
My colleagues who represent the city of Brighton and Hove have made a point of regularly meeting representatives of all those institutions at least once a term. I can attest to the welcome that was given in November last year to my right hon. Friend the
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Secretary of State's announcement of the £1.2 billion increase over the next three years in funding for further education; the three-year funding system that is linked to performance agreement plans from each college and the extension of the educational maintenance allowance.
As I have said, there is a variety of provision in Brighton and Hove, and in the past that has presented problems. Last year, I corresponded with the Minister and drew her attention to some of the problems that can exist in capital funding when sixth-form colleges are governed by one regime, and schools with sixth forms by another. I thank her for the flexibility that both she and the officials in her Department showed in their discussions with the Learning and Skills Council nationally that led to a relaxation of some central Government funding restrictions to sixth-form colleges. We will wait to see what the impact of that will be on the colleges in my constituency, but it is a welcome move.
As the hon. Gentleman has said, the sector generally welcomed last year's changes with enthusiasm. John Brennan of the Association of Colleges, writing in the spring edition of FE Now!, describes it as "a major step forward". He refers to the 78 per cent, increase in cash terms, the 42 per cent, increase in real terms since 1996–97 and the increase both in cash and real terms of funding per student. He says in his article that
"The 1990's nightmare of the efficiency squeeze has been replaced by a steadily improving funding picture".
As the hon. Gentleman said, colleges are expressing worries about the impact on the funding announcement of factors such as employers' national insurance contributions, pension schemes, the effect of consolidation into core funding of allocations for pay, especially professional standards payments in sixth-form colleges, and the staff development component of the standards fund. Colleges are also expressing concerns about their ability to meet the participation targets of further education within the increased funding that is available, which they willingly embrace. I am sure that they will find ways of meeting them.
I understand that colleges have until August to set their budgets for the next year. I am sure that the Minister will be liaising with learning and skills councils throughout the country, as they in turn will be liaising with the colleges within their areas, so that we can ensure that, as we approach the August deadline, some of those problems in school funding that have hit the headlines recently do not occur in the further education sector as well. There is great enthusiasm, and I am sure that Ministers will be willing to listen to the reasonable approach that they will find coming from that sector, while welcoming the settlement announced last year.
There are some other concerns that affect sixth-form colleges in areas where there is variety of provision. These relate to the inequality of funding generally between sixth-form colleges and school sixth forms, and not only in respect of capital issues. I am glad that the Government are taking steps to reduce that inequality. The gap is likely to be down to about 5 per cent, in the near future, and we hope that further progress will be made. However, there is some concern on the part of colleges about what the impact will be on sixth-form colleges when funding for 16 plus is under the remit of learning and skills councils.

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Before I leave this area of further education, I should like to put on record my family's debt of gratitude. The hon. Gentleman talked of his father's contribution to FE. My son, who is now an established journalist with a national magazine, received his initial training in journalism at City College Brighton and Hove. My daughter, having spent eight years as a poorly paid nursery nurse, went to Varndean college—a sixth-form college—to take an access course that gave her the opportunity to go to university. Such a debt of gratitude to our FE institutions is probably shared by families throughout the country.
The hon. Gentleman referred to the research undertaken by the Foyer Federation. I have the honour of chairing the friends of the Brighton and Hove foyer. Its role is to secure support from the community for that excellent institution; it is one of 120 foyers throughout the country. There are 50 spaces at the Brighton and Hove foyer, and all respect is due to the manager of the foyer, Sheila Hall, and her staff for their excellent work in providing stability to young people who have faced either real hardship—of a sort that we cannot imagine— or great instability and vulnerability in their lives up to the point when they arrive at the foyer.
The Brighton and Hove foyer caters for people with few, if any, formal qualifications. It gives people, as all foyers do, a second chance. They are young people who have reached the age of 17 or 18 and who have probably left school with no qualifications, or who may not have attended school for much of their last two or three years of formal education.
We all welcome the Government's aspiration to ensure that, by 2010, 90 per cent, of young people will have participated in a full-time programme fitting them for higher education or skilled employment by the age of 22. Foyers have an important role to play in helping to meet that target, as young people who attend often have not only left school with little in the way of formal education, but, because of that, are likely to drift into low-paid employment with little chance of training on the job. Research that is quoted in the Government's skills strategy progress report, published earlier this year, found that 22 per cent, of people with a degree or its equivalent who are in work are likely to receive continuing training opportunities; only 5 per cent, of those with no qualifications are likely to receive continuing training opportunities when they find work.
As the hon. Gentleman suggested, the problem is that at the age of 19 some of the excellent work that helps young people comes to an end because of changes in benefit rules, in particular access to housing benefit which comes into force at that age if the person is in full-time education—that is, studying for more than 16 hours a week.
I shall cite the cases of two people at the Brighton and Hove foyer. Mr. X came to live at the foyer when he was 18. He was doing a full-time media course at City college. Whatever might be said in some quarters about media courses, I remind hon. Members that my son found gainful employment through taking one at City college. After doing very well in his first year, Mr. X went back to college in the second year. However, as the course was full time, when he reached his 19th birthday,
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he had to move out of the foyer because his rent could no longer be paid by housing benefit. Therefore, the stability that underpinned his education success was being undermined.
The second case is that of Miss Y, who came to the foyer from a difficult family background. She was entitled to income support and full housing benefit because of her family circumstances. She was in year 2 of a full-time HNC course in design. However, when she reaches her 19th birthday, she will no longer be entitled to those benefits. Under the current rules, as her studies are not considered to be vocational, she will not be allowed to continue them. Unfortunately, as she is in full-time education, the housing benefit department will not pay her rent, even if she is no longer claiming benefits. The skilful work of the staff at the foyer, and the helpful offices of the local new deal team, ensured that that young woman was able to continue her education and remain at the foyer. Such successful cases often involve staff turning a blind eye to certain regulations, or engaging in a degree of subterfuge, to ensure that the youngsters can continue studying: that should not be necessary.
As the hon. Gentleman said, the Foyer Federation is proposing an extension of the education maintenance allowance, which the Government will be rolling out from 2004. I commend to my hon. Friend the Minister the submission from the federation, of which I am sure that she is aware. That submission is entitled "Second Chances", and is a response to the progress report on the skills strategy. It argues for an extension of the education allowance to people aged between 19 and 30 who are on courses leading to level 2 or 3 attainment. It would be a means-tested allowance, linked to attendance at, and completion of, those courses—so it would not offer something for nothing, but it would be tied to the study that the young people are doing. That— along with, perhaps, some change in housing benefit entitlement—would make a great difference to the life and education opportunities of some young people, many of whom are extremely vulnerable.
I hope that the Minister and her colleagues will carefully consider what the Foyer Federation has to say, and that they will discuss such matters with Ministers in the Department for Work and Pensions, because this is a cross-departmental issue. I believe that some announcements will arise from the skills strategy progress report that will be produced later this summer, and I look forward to seeing some acknowledgement of the Foyer Federation's findings in them.
The benefits that are to be gained will not be only for the young people themselves. Our economy will also benefit because there will be an increase in the skills base that underlies it, and an outlay at this stage will reduce the likelihood of later benefit dependency by those young people, because they will have been given a chance by the foyers, with their links to educational institutions.
I end by joining the hon. Gentleman in welcoming much of what the Government have done over the past few years, and particularly the announcement in November. The Government have set high targets and expectations for participation in full-time education, because they know that the opportunities for the rest of our lives are often governed by those educational

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opportunities. I welcome the progress that has been made, and look forward to the Minister's comments on the issues that are raised in the debate this afternoon.
2.34pm
Mr. John Horam: I thank the hon. Member for Twickenham (Dr. Cable) for raising this subject because I, too, believe it to be extremely important. I agree with the hon. Member for Brighton, Pavilion (Mr. Lepper), who spoke well and charmingly personally about his own and his family's experience, that we do well to debate the issue as often as we can in the House. I apologise to the hon. Member for Twickenham, to other hon. Members and to the Minister for the fact that I shall have to leave before the end of the debate, because I have to chair a Select Committee. That is one of the consequences of the new sitting hours. I put it on record, however, that I support the new hours, even if they do cause the occasional inconvenience.
The hon. Gentleman said that Richmond upon Thames college was the highest performer in the London area, and that is indeed the case. He may like to know that Orpington is ranked No. 2 out of the further education colleges. Moreover, Richmond upon Thames college is a tertiary college, and is therefore in a different category from Orpington, so Orpington is really the No. 1 when it comes to straight further education colleges. However, I will not pursue that further, as they are both very good colleges. Orpington college has received a string of awards, most recently for its basic skills training, for which it received a quality mark. It is a brilliant college and we are proud to have it in the London borough of Bromley, and in particular in Orpington.
I recognise the value of the new funding package that the Government put in place last November, and would not like anything that I am about to say to detract from my appreciation of that. However, I shall make several general points about how the situation is working out. The Minister will be aware that the Association of Colleges has made the point that qualifications are often inflexible rather than modular, and that the funding that colleges receive is often linked to students completing their qualifications. In practice, that means that colleges are inhibited from offering employers and students the learning that they want.
The Minister will also be aware of the excellent early-day motion tabled by the hon. Member for Bury, North (Mr. Chaytor), who I know takes an active interest in further education issues. That early-day motion
"urges the Department for Education and Skills, the Qualifications and Curriculum Authority and the Learning and Skills Council to implement proposals in the interim skills strategy which … give colleges greater ability to develop bespoke"—
I emphasise the word "bespoke"—
"training and flexible qualifications with simplified assessment systems so that they can equip more individual learners and employers with the skills they need in the modern economy."
That is the heart of the matter; we need flexibility and a more bespoke approach.
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I mentioned that Orpington college is remarkable for its emphasis on basic skills and its basic skills strategy. However, as the hon. Member for Twickenham mentioned, there are some problems in that area arising from the reluctance of businesses to identify staff who are in need of support, or to give time to it, because they fear that, as a consequence, they will lose staff or may have to pay them more because of the increased qualifications gained. I wonder, therefore, whether the Government could find ways of rewarding employers if they engage staff in accredited training, and simultaneously reward colleges, in funding terms, for delivering a better work force.
My next point is a familiar one, but still valid, and one that weighs heavily on the principals of further education colleges. It concerns the excessive bureaucracy that accompanies much of the funding. The way in which colleges are expected to bid for additional project money, and the constant auditing of how resources are spent, create huge additional costs. I am aware that the Government have made a commitment to reduce such bureaucracy in many areas, including education, but on the ground floor there is little evidence of it happening. That is a problem for FE colleges that are trying to work the new systems.
Finally, I wish to raise the question of the starter home initiative. I raised that issue in a previous debate on further education in this Chamber some time ago—
2.40 pm
Sitting suspended for a Division in the House.
2.55 pm
On resuming—
Mr. Deputy Speaker: Fifteen minutes' injury time will be added on.
Mr. Horam: We all have some difficulties with Divisions in the middle of debates; I am sure the Minister feels the same as we all do. I shall recap my point about the starter homes initiative. Lecturers at further education colleges cannot participate in the scheme, whereas teachers can. The Minister is a London MP, as I am, and she will be aware that this is a particular disadvantage in London and the southeastern area, where housing is such a problem.
She will know that I raised the matter the last time we discussed further education in Westminster Hall. Indeed, she interrupted my speech to say that the problem had been sorted out. Sadly, it has not. She may recall a flurry of correspondence on the subject between her Department, the Office of the Deputy Prime Minister and myself, in which she finally agreed that FE lecturers did not qualify for the starter homes initiative. The latest word that I had—I do not know whether she was copied in to this correspondence—was from the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty) on 16 April this year. He said:
"The Starter Home Initiative (SHI) is jointly run by the Office of the Deputy Prime Minister and the Housing Corporation, and funded centrally by ODPM … The Corporation expects to hold

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a bidding round for key worker and other affordable housing schemes in the autumn this year. We are in the early stages of drawing up the details of our approach, in consultation with the Housing Corporation and other Government Departments, including DfES. As part of this work, consideration is being given to the eligibility of key worker groups for housing assistance from April 2004".
In conclusion, I ask the Minister to look into that matter and, as a departmental Minister with responsibility for further education, to do her best to promote the case of further education lecturers to be included in the starter homes scheme.
2.57 pm
Linda Gilroy: Before I begin my speech, Mr. Deputy Speaker, may I ask when the summing-up speeches will start?
Mr. Deputy Speaker: We have added 15 minutes on, so the first Front-Bench spokesman will be called at 3.15 rather than 3 o'clock.
Linda Gilroy: Thank you, Mr. Deputy Speaker.
I welcome the opportunity for this debate, and congratulate the hon. Member for Twickenham (Dr. Cable) on obtaining one of these much-prized opportunities. I shall reflect on the wider context of the contribution that FE makes in the south-west region before turning to the further education sector in Plymouth. In the south-west region as many as 416,000 people are studying in further education—one in seven adults of working age. The majority—some 330,000— are studying part-time, but just over 70,000 are either 16 to 19-year-olds on full-time A-level, AVCE or GNQ courses, or studying HND/HNC in further education establishments.
Colleges are key to the regional economy and to raising the skills level. They produce an ad ded value of some £660 million in our region, and something like 21,000 jobs over and above those directly in the sector. I think that in Plymouth, about 4,000 people are in full-time further education, and about 20,000 part-time students from Plymouth and the surrounding area are studying in Plymouth.
Two of the leading establishments are Plymouth college of further education, which is predominantly sited in my constituency of Plymouth, Sutton, and Plymouth college of art and design. Both play an important part in the life of the city, and in changing a community that has seen the decline of a traditional industry—the defence sector—into a community in which new sectors require people to be trained through further education. In particular, the colleges have been the key to preparation for call centre work and tourism, and, indeed, the groundwork—basic skills.
We have particularly high levels of need for basic skills education; there are low levels of adult literacy and numeracy in the city. I shall return to that issue shortly. The colleges play a critical role in achieving access for people from some of the poorest communities in our city and the surrounding areas, particularly those who have no tradition of higher education in their backgrounds. The links that the further education sector provides between people in such circumstances and the possibility of higher education are critical.
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I greatly welcome, therefore, the largest ever investment programme in further education, which represents a vote of confidence in the colleges. I particularly welcome the fact that all hon. Members here have recognised that that involves a significant increase, even if it also involves challenges for those setting the budgets of the further education sector, as hon. Members have taken the time to outline. The £1.2 billion extra going into the sector means a real terms increase of some 19 per cent, over the next three years. Certainty comes with knowing that we have a three-year increase. That will be helpful, because what people in the colleges want most is stability and simplicity.
I hope that my hon. Friend the Minister can assure us that everything possible will be done to reduce to a minimum the significant shifts that result from technical changes in funding rules, and the audit problems that the hon. Gentleman outlined. Those shifts may happen after courses have been provided and resources have been dedicated to running them, and that can create difficulties.
The hon. Member for Orpington (Mr. Horam) referred to the need to be able to align the investment with flexibility in courses. Plymouth college of art and design, a big and important institution, is now one of only a handful of specialist art colleges in the country. In welcoming the skills strategy, it wrote to me:
"Too often, qualifications are inflexible rather than modular and too often the funding which comes to colleges is linked to students completing whole qualifications. In practice this means that we are inhibited from offering employers and students the learning they want."
I hope that the Minister can assure hon. Members that every encouragement and incentive will be given to colleges to use the additional funding to close the gap between the pay and conditions of lecturers and teachers who do similar work. Every hon. Member has probably been lobbied about that. A significant number of teaching posts as well as student places and additional jobs are created through the further education sector.
I hope that my hon. Friend the Minister can assure me that the work that further education colleges do to improve access to higher education continues, particularly for those from the least advantaged communities, which I have mentioned. I hope that she will join me in congratulating Plymouth college of further education and the local foyer. Hon. Members have referred to the foyer campaign, and I believe that my own college and foyer have just received a beacon award from my hon. Friend at Westminster today. Others attended the ceremony, but unfortunately I could not be there as I was chairing a meeting of our Cooperative group of MPs. I understand that the college and the foyer have just been recognised for achieving excellence in improving access for some vulnerable young people—which other hon. Members have also spoken about. The Minister probably heard about that in the citation.
The partnership between the Plymouth foyer and Plymouth college of further education has sought to provide residents with the opportunity to gain formal accreditation for the personal development targets that they have achieved. The programme was developed to broaden key skills, work with others, and improve learning performance and problem solving. A tutor

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from the college, key workers and support staff identified potential students and worked with them on the compilation of folders of evidence.
Some 10 residents enrolled on the programme. It is interesting to examine the outcomes that the programme achieved: increasing confidence and refreshing skills learned at school that some people might have forgotten. Of the 10 participants, two enrolled on an access to higher education course at the college, one is doing a GNVQ in health and social care, one is doing A-levels, and another has entered the employment market. That is a laudable outcome, given that the participants were so vulnerable and had some of the greatest barriers and hurdles to surmount.
I hope that others have commended the further education maintenance allowance proposal submitted by the Foyer Federation. Last week I attended a meeting hosted by the Chairman of the Broadcasting Committee, my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper), and was very taken with the contribution that the proposal could make to constituents living in the foyer in Plymouth and to a wide range of other young people.
Mention was made of the need to persuade my right hon. and hon. Friends in the Department of Work and Pensions, as well as my hon. Friend the Minister here today, of that. However, we will probably have to persuade the Treasury in the end, as the proposal carries a large price tag. If piloting is being considered to show that the foyers' suggestions can add value to the economy as well as to individuals, I can think of no better place for it than Devon and Cornwall, where a network of foyers operates under the Devon and Cornwall housing association. The Minister might like to consider that suggestion. Plymouth and the southwest have a good record. The Minister may recollect the success that we made of the Connexions pilot and the robust results that we achieved, so if she wants an ally when she goes to the Treasury about such matters, she should look west.
General work is being done to enable people who aspire to university education for the first time to develop the building blocks that lie in between them and it. Such work is important in a city such as Plymouth. I hope that the Minister can assure me that it will continue, and that she will do everything that she can to highlight the damage that the plans that the Conservative party announced yesterday could do to young people, such as those whom the Plymouth project seeks to help. I hope that she will ensure that everyone knows that the Conservatives' plans will limit the number of higher education places available to young people, and that they will be bad for an economy such as Plymouth's, where there are whole swathes of households that have never aspired to higher education.
Other countries already have far larger proportions of their young people going into higher education, and that affects not just our ability to compete as a city economy, but our ability as a country to compete internationally. Other hon. Members outlined in significant detail the challenges that face those who draw up the further education budgets. I am sure that my hon. Friend is already aware of some of those. I look forward to hearing her concluding remarks, and I hope that she can offer some of the assurances that I have sought.
3.10pm
Mr. David Rendel: For reasons that I hope to expand on in a moment, further education is certainly worth funding properly. It is in the Government's interests to do so if they are serious about expanding the educational opportunities available to us all, particularly those opportunities that are available to those who in traditional terms have perhaps not enjoyed any education beyond 16. My hon. Friend the Member for Twickenham (Dr. Cable) is therefore to be congratulated on securing this important debate. Politicians have not been talking about FE nearly enough.
For a very long time, FE colleges have been the Cinderella service of our education and skills system: under-recognised, undervalued, and underfunded. That is extraordinary given that FE involves twice as many students as there are in higher education. Part of the trouble is that two-thirds of FE students are part-timers and that is one of the causes for their low priority in Government thinking. That is quite absurd. There is no reason to suppose that a course is any less valid because it is spread over a longer period and studied on a part-time basis.
England's 400 FE colleges are responsible for nearly 4 million students. That is nearly one in 10 of our population. They are studying for 17,000 different qualifications. In fact, FE is and must be central to the Government's entire education and skills agenda. It is central to opening up vocational learning opportunities for 14 to 16-year-olds. It is central to academic and vocational opportunities for 16 to 19-year-olds. It is central to adult learning and skills. FE is central to assisting people to achieve the qualifications that they need to enter higher education, as well as being a direct provider of higher education. It is not difficult to see that the sector is crucial not only to the Government's aim of widening participation in education but to the wider strategies aimed at tackling social exclusion, unemployment, skills shortages and prisoner reoffending—a subject to which I intend to return shortly.
We are talking about a student intake drawn in large part from the very groups for whom the Government want to expand such opportunities. Indeed, 27 per cent, of college students come from the most deprived 15 per cent, of all local government wards. To give credit where credit is due—something that hon. Members may think I do all too seldom—in last year's comprehensive spending review, there was at long last some recognition by the Government that the FE sector requires more money, as my hon. Friend pointed out. Although the Secretary of State talks in terms of a 19 per cent, real-terms increase in funding over the three years to 2005–06, funding per student will rise by only 5 per cent, over that period. Most colleges are receiving increases this year that will just about keep pace with inflation, but little more.
Sadly, that is in the context of an overall decline in unit funding over the last decade. Between 1993–94 and 1998–99, real terms funding per student in further education fell year on year and by 14 per cent, overall—from £3,910 to £3,350. Recent funding settlements have merely halted this trend. They have not put it significantly into reverse. There has been a 70 per cent, increase in the number of students in the FE sector over

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the past five years. Unfortunately, as in our higher education sector, funding has not kept pace with the rise in the number of students. Like our schools, colleges also face extra costs such as the rise in national insurance and pensions contributions and increased pay for teaching staff.
Furthermore, the new money has come with strings attached. In his speech to the Association of Colleges annual conference in Birmingham on 19 November 2002, the Secretary of State announced that the investment would be tied to
"a new system of targets and performance management … designed to deliver the Prime Minister's four key principles of public sector reform".
He said that the resources
"will be allocated on the basis of a performance contract with each college based on the following: increasing customer focus, with targets for student numbers and employer engagement; providing high quality teaching and learning, with a target for learner success rates; and improving the capability of the college workforce, with a target for professional qualifications for teachers."
It is ironic to say the least that one of the Prime Minister's key principles of public sector reform as outlined by the Secretary of State is to
"promote devolution and delegation to the front line".
There is an obvious contradiction between that principle and the targets regime announced in the very next sentence. One target is to reduce bureaucracy—only new Labour could institute a centrally imposed target with the aim of reducing bureaucracy. If that is not a contradiction in terms, I do not know what is.
On the subject of bureaucracy, will the Minister act on the unnecessary bureaucracy introduced by at least some of the local learning and skills councils? They vary in how they deal with what they require of their local colleges, but there are horrific tales of colleges having to account for spending down to the last paperclip and of learning and skills councils failing to inform colleges in good time about their budget for the following year, apparently in the expectation that colleges can simply raise or cut staff levels at the stroke of a pen, even in the middle of the academic year.
The Government must also do something about the many separate funding streams through which colleges receive their finances. A typical college has about 30 different funding streams. Far too much money is stuck in specific pots, all of which require separate applications. I suspect that someone will soon start a further education course in how to apply for money to run FE courses.
I turn now to just one illustration of the work that colleges and the FE sector in general can do. It is a demonstration both of the vital part that FE services play in our society and of why the funding question is so important. A recent investigation by the Public Accounts Committee, on which I sat, highlighted the role that education plays, and could play, in reducing prisoner reoffending. In fact, the Prison Service told us that investment in education to help offenders secure jobs after their release would be the single action most likely to affect reoffending.
In response to my questions, the then director general of the Prison Service, Mr. Martin Narey, told us that education can reduce reoffending by 10 to 14 per cent.
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annually. He said that the return from investment "would be dramatic" but that not enough money is going into the system. As a consequence, he said that, with the exception of the under-17 age group,
"I do not believe I am doing much more than playing at the edges".
The implications of that analysis, at a time when record numbers of people are behind bars and our prisons are struggling to cope, should be clear to all: the financial cost of providing at least some basic education to those in prison is far outweighed by the cost of locking them away for a second stretch.
It is never easy, and it is certainly not popular, to call for more spending on those in prison, and I suspect that I do so at some risk. It is all too easy for the tabloids to say, "If there's enough money to spend on offenders, why can't we have enough money for our schools and those who have not offended?" However, it is an area of policy in which politicians will just have to defy the tabloids. We must point out that prison education is hugely cost effective not only in helping prisoners to become productive members of society, but in reducing the costs of crime, both financial and social.
I shall turn to the dramatic new Conservative policy announced yesterday. The Conservative press release, of which the hon. Member for Daventry (Mr. Boswell) will be well aware, states that the Government's 50 per cent, higher education participation target
"forces too many young people onto unsuitable courses when they would benefit more from high-level vocational qualifications."
For a party that says that it believes in choice, one might suppose that such a decision is for the individual student rather than the shadow Secretary of State for Education and Skills. Leaving that aside, where will the money come from for the roughly 400,000 extra places on vocational courses that the policy implies? The Conservatives are hoping to use all the money that they save from taking people out of universities to pay for the abolition of tuition fees, but they have not told us where they will find the extra money for all the extra vocational courses.
Colleges already face real problems with the recruitment of teaching staff because salaries are so uncompetitive, as other Members have said. If the Conservatives are serious about providing more courses to train people to be plumbers and carpenters—as their leader said yesterday—they will need to find the money to pay for more tutors. The salaries will have to be competitive enough to attract people who at the moment can earn far more on the job—more, in most cases, than MPs earn. The truth is that the Conservatives are nostalgic for the old days when a university education was the preserve of a privileged few. There will be fewer places and less support for students from non-traditional backgrounds in higher education, and no commitment to additional resources to help those who prefer vocational courses in FE instead.
To return to the Government, the reality is that they have no coherent vision for the role of the FE sector in our education and skills system. As I said at the outset, it is arguable whether the Government's aim of widening participation in this sector will be met at all. Some 11 per cent, of degrees already come from FE colleges. There seems little recognition from the Government, however,

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of the huge role that FE is ideally placed to play in expanding the educational opportunities available to us all. That is reflected in the discrepancy between funding for colleges and funding for school sixth forms; between the support offered to part-time students and that offered to full-time students; and between the different levels of support students can expect depending on whether they opt for the FE or the HE route.
In addition to well funded FE colleges, we need to support students in FE. We welcome the Government's decision to introduce education and maintenance allowances for 16 to 19-year-olds. However, the time has come, as has been said in relation to the foyer movement, to develop a comprehensive system of student support for adult FE students. It is interesting to note that we spend in excess of £2.2 billion a year on student support for full-time higher education students, but barely a tenth of that amount on full-time and part-time adult FE students. That is despite the fact that the FE sector has twice as many students. Those inconsistencies are indicative of a Government who, after six years in office, continue to lack a coherent sense of direction for the FE sector. That failure undermines the Government's strategy for 14 to 19-year-olds, their higher education strategy, and their adult learning strategy. It also points to a continued failure to recognise the immense value of the FE sector to society as a whole. Our FE colleges are a vital resource, and we should support them.
3.23 pm
Mr. Tim Boswell: It is a privilege to participate in this debate, and I congratulate the hon. Member for Twickenham (Dr. Cable) on opening it in such an appropriate manner. When we debate further education in this place, we find that so few people are committed to it that, in one sense at least, those who are so committed are all hon. Friends, and their concern should be that so many people do not pay as much attention to the subject as they should. That is the spirit in which the contributions of the hon. Gentleman who introduced the debate and those of other hon. Members have been made. It is true of the interesting comments by the hon. Member for Brighton, Pavilion (Mr. Lepper) on progression, and those by my hon. Friend the Member for Orpington (Mr. Horam) about the particular problems faced by his local college— incidentally, I am aware of those problems having visited that college, as well as that in the constituency of the hon. Member for Twickenham.
It was interesting to see so many participants in the beacon awards. One is familiar with those because they have been given to leading and outstanding colleges. It was also a particular pleasure to see the local college of the hon. Member for Plymouth, Sutton (Linda Gilroy) receive the award from the Minister, not least because its principal was exported from Northampton, which is adjacent to my constituency. There is a lot of good in further education—that is perhaps the most important thing that we can say.
In case the hon. Member for Newbury (Mr. Rendel), who speaks for the Liberal Democrats, feels left out, I wish to say that I agree with his remarks about bureaucracy and about prison education, and want to associate myself with them.
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The hon. Member for Plymouth, Sutton caused me to lift one eyebrow because in talking about Conservative proposals—which I do not intend to do at length today, because time does not permit it—she assumed that all post-16 activity would need to be conducted in higher education. It is clear from other remarks that she made that that is not the case. However, the hon. Member for Newbury implied that under our proposals, things would be like that.
Linda Gilroy: May I clarify the point that I made? I was stressing the importance of the FE sector in stretching the imaginations of people who do not aspire to higher education. If the numbers in higher education are restricted, the incentives that encourage people to go in that direction will be significantly diminished—and there are a range of other associated issues.
Mr. Boswell: I am grateful to the hon. Lady for clarifying that. However, her argument is somewhat numinous. I would prefer to see proper provision of proper educational instruction in training and in skills that have a practical end result, rather than hopeing that the problems of further education will be solved at one remove through the higher education sector.
Briefly—because it would take too long if we were to draw out these matters—I turn to the attacks of the hon. Member for Newbury on policies that have at least some resemblance to his own. I will not debate that similarity now, but I say to him, with respect, that he should not be worried about Conservatives wishing to go back to the metaphorical dark ages, because it was under a Conservative Government—indeed, it was largely under the Administration of Baroness Thatcher—that the proportion of young people in higher education rose from 8 to approximately 30 per cent. So we will hear no more of that.
On the skills agenda more generally, I will make a contribution tomorrow, if I manage to catch Mr. Speaker's eye, so I shall confine my current comments to the subject of further education funding and related matters. My hon. Friend the Member for Orpington had to leave the debate early to chair a Committee, but he made a distinguished contribution before he left, and I agree with him that this is a better settlement for further education than a couple of the past settlements. That is clearly true, so why argue about it? This is what we must now say to the Minister: whereas in the past we have had new Labour rhetoric unsupported by funding, on this occasion it is accompanied with a measure of funding, and that is at least some advance, but the key questions are about where we go with that and how far it will take us.
The hon. Member for Twickenham used his forensic skills to make the following point very well, and he had more time than I to do so. Clearly, it is possible to deconstruct the Government's inflated figures of what will be available by 2006. First, there is the issue of inflation. Secondly, there is the fact that this comes through over a period of three years, and in year one there will be no increase above inflation. There are also the increases in costs: in national insurance contributions, which alone account for £25 million in the sector, in pensions, and in pay, which has already been referred to. There is a need to keep pay broadly

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aligned with that of schoolteachers, and there are also further developments to come involving technicians' pay, which are welcome and necessary.
In itself, widening participation and increasing the effort and outreach entails further costs. The greater load will be carried by new enrolments. The assessment by the Association of Colleges suggests that there will be an overall increase of some 5 per cent, for students. To put it another way, most colleges will receive an extra 2.5 per cent, both in 2004–05 and in 2005–06, and that, of course, adds up to 5 per cent. A small number will receive 1 per cent, more than that in both years, for outstanding performance. However, those are conditional receipts, and are not yet actual receipts. I am sure that the Minister would wish to argue that that is proper. As the hon. Gentleman said, the guts of the matter is that in the real-life college situation, there may be no increase at all. That is better than a diminution, but it does not add up to a whole strategy.
One of the points that I want to make refers back to our brief exchanges on higher education. As the Association of Colleges points out, some of the figures for expansion, such as the proposed 11 per cent, increase in enrolment, depend on participation in foundation degrees. I am not here to rubbish such degrees. However, top-up fees may become a deterrent in themselves, and a far greater one than what I described to the hon. Member for Plymouth, Sutton as the somewhat numinous advantages of the availability of mass higher education on the scale that she envisages.
In any case, there are already real pressures on adult enrolment. Adults are excluded from modern apprenticeships, for example. No extra money is available to take on additional adults at the moment. In a press release that I quickly scooped up during the last Division interval, the association refers to difficulties with access at level 3. That is part of cutting off natural progression; we should be repairing historic skills deficits in cities that are comparatively disadvantaged.
A second issue, on which we all agree, is that colleges are central to the skills agenda. In the past I have been the first and foremost among those criticising Ministers for their rather sniffy attitude to colleges' delivery. I do not think that Ministers always take into account the value added by colleges or the difficulties that they face.
3.32pm
Sitting suspended for a Division in the House.
3.46 pm
On resuming—
Mr. Boswell: I was saying that we all accept that colleges are central to the skills agenda, and that Ministers have not always been generous to them in the past. If we put that beside the spirit of the new skills proposals, to which we look forward, it seems that there is an anomaly in the present remuneration for colleges, and the way in which employer requirements are scored in respect of college participation. That is a central issue.
The point has already been made that the funding formulae sometimes reward only full glasses and give no acknowledgment to half-full glasses. That may well be a
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disincentive, either for completion—people may not be able to get through to the end—or because the course may not be what is actually required by the employer or by the individual.
However, another problem for employers is the proportion identified as employer-driven participation. I understand that the Secretary of State has said that it is as low as 7 per cent. On the occasions when I have examined the total revenue for colleges derived specifically from fees, it has always been quite low. I believe that it is below 10 per cent. The Minister is nodding. Of course, some of the students who are in colleges—we hope that they are there and that they have not been deterred, as some employees of small and medium-sized enterprises may have been, according to earlier exchanges—may not be counted as having been sent there by their employers even if the employer is actually picking up the tab, because they may not be directly funded on contract to the college.
I hope that Ministers will review that and refine the formulae, so that at least they do not jump to the conclusion that because colleges have a relatively low direct employer participation rate, that means that employers are not interested. I believe that the experience of most of us is that among good employers—to be fair, I must add that that usually means those that are well organised—there is a strong wish to make full use of college facilities.
It might also be worth considering whether students who are inspired by their employers to participate in basic skills training for which there is no fee nexus should not also be counted as participating with the encouragement of their employers. I believe that to be the case, and it is hugely important.
This year's funding settlement provides some relief. It is better than recent settlements; there is no point in arguing about that. However, we do not need a one-off—or even a three-year-off—change of gear without further progress. With all the difficulties and handicaps that further education has faced in the past, what is needed now, alongside a central role for FE, is a steady and sustained effort, without too many initiatives, but with a continuation of appropriate funding and a degree of continuity of policy and approach. That is the only way to deliver what we want collectively, which is a long-term improvement in the broad skills base of the entire labour force.
3.49 pm
The Minister for Lifelong Learning and Higher Education (Margaret Hodge): It is refreshing to come to a debate in which all hon. Members from all political parties welcome the Government's investment in a particular sector. It is also refreshing to come to a debate in which all those who have spoken recognise the importance of the further education sector.
In response to the rather sour contribution from the hon. Member for Newbury (Mr. Rendel), I should point out that if FE had been a low priority in Government thinking, we would not be increasing investment by 19 per cent, in real terms over the coming three-year period. We would not be issuing a whole series of policy documents and initiatives that bring FE in from the cold and ensure that it can make its proper contribution. FE is central to what the Government are about. It is central

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to our desire to raise skill levels and qualifications, to improve our skills base and enable us to have a prosperous economy. It is central to our social inclusion agenda that we enable every individual to develop their potential and to contribute fully.
I do not recognise the interpretation that the hon. Member for Newbury put on our policies. Indeed, it is because FE covers everything from basic skills through to higher education, and because it deals with everyone from the age of 14 through to our oldest learner, who was 107, that it plays such an important role in what we do. If the hon. Gentleman were properly informed he would know that, as promised by the Learning and Skills Council, all colleges—except five, where there is still a dispute—received their budgets by the end of April. Again, I do not recognise his figure of 5 per cent. He should look at our departmental annual report, published today, in which we show that funding per student will rise by 7 per cent, in the next three years in real terms. By 2005–06, total funding for students will be 13 per cent, in real terms higher than it was in 1998–99.
The hon. Member for Twickenham (Dr. Cable), whom I congratulate on securing the debate, acknowledged that there is a 10 per cent, cash increase in the base funding rates for all colleges. He has two particularly good colleges in his constituency. I am in correspondence with the principal of Richmond adult community college about her funding. Funding for people in that area comes through the learning and skills councils. If the college gains funding elsewhere it is difficult for us to justify putting in additional funding to support activities that are funded elsewhere. I hope that he will recognise that.
A number of hon. Members mentioned that our funding over time will depend on performance. There will be a 2 per cent, real-terms increase this year. We recognise that there are additional pressures, but with that additional money all colleges are much better equipped to deal with them. Over the three-year funding period, which many hon. Members have welcomed, those that perform well next year will get a 2.5 per cent, premium. Excellent colleges that exceed their performance targets will get a 3.5 per cent, premium, which will go through into the following year. The outcome-focused funding mechanism is one of the most innovative structures that we have developed in government. Colleges will be rewarded for meeting and exceeding the outcomes that we want. The outcomes involve participation, success rate, employer engagement and raising the skills of the work force.
I will deal quickly with some of the issues that have been raised. The hon. Members for Twickenham and for Daventry (Mr. Boswell) expressed concern about how employer links are to be refined. We are aware of the importance of having sensitive mechanisms for measuring employer engagement; it would be different if someone were talking about a sixth-form college, and very different in many general FE colleges. We will be sensitive to that, but we want to encourage employer engagement. We are also sensitive to the importance of bringing small and medium-sized enterprises into the loop more firmly, and of ensuring that colleges can respond to training needs in SMEs. We will have something to say about that in the skills strategy that we shall publish in the summer.
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I had the great pleasure of visiting City college in the constituency of my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper), and seeing much of the excellent work that he has done there. I congratulate him on his active engagement with the FE sector, which is apparent in our correspondence on various issues. He talked about the foyer, as did the hon. Member for Twickenham, and he asked whether we could move towards some kind of support beyond the age of 19. All hon. Members recognise that that is important. We will introduce the education maintenance allowances nationally by 2004 and I hope that we will have something further to say about our proposals beyond that point in the skills strategy paper we will publish in June or July. We recognise, as other hon. Members do, that for many disadvantaged people in our community it is not beneficial for support for individuals to be cut off at age 19.
Linking with the Department for Work and Pension, which my hon. Friend the hon. Member for Plymouth, Sutton (Linda Gilroy) mentioned, is complicated and expensive. We are in constant discussion with our colleagues in the DWP, and my hon. Friend is correct to say that we should bang a little more consistently on the Treasury's door to try to get sensible working across Departments. There is, however, a real attempt to deal with that throughout the Government.
My hon. Friends the Members for Brighton, Pavilion and for Plymouth, Sutton spoke about our moves towards trying to get a level playing field between sixth-form colleges and schools with sixth forms. I acknowledge and welcome their recognition of the work we are doing on that. We hope to go further, and the financial settlement has taken us a long way down that road. However, no one can account for things that are outside their control. For example, because of pension contributions, we have probably been able to make less progress than we would have liked. Nevertheless, I think that we will make serious progress.
The hon. Member for Orpington (Mr. Horam), among others, spoke about qualifications being flexible. The importance of having bespoke qualifications to meet employer needs was also mentioned. We hope to deal with that matter in the skills strategy. Indeed, those who have read the document that we issued in consulting on the skills strategy will have seen various suggestions as to how we can move forward on modular and bespoke qualifications to meet the needs of individuals better.
I do not take kindly to hon. Members saying that we are not tackling bureaucracy. We have a long way to go, but the hon. Member for Newbury ought to ensure that he is better informed. I shall simply say that we have reduced some 75 or 76 different funding streams to five. We are implementing all the recommendations of the Sweeney task force on bureaucracy, and I hope to make announcements in the not-too-distant future about how we can take that good work further forward.
I know that hon. Members are anxious to move on elsewhere now. This has been a good debate; I welcome it, and the support that has been given to the generous funding settlement. I also welcome the partnership that we have established with colleges, in which we will put the learner at the centre, to increase participation and raise standards.

Sutton Courthouse
4 pm
Mr. Paul Burstow: I am delighted to have secured the time for this debate today, and I hope, Mr. Deputy Speaker, that it will be possible for my hon. Friend the Member for Carshalton and Wallington (Tom Brake) to catch your eye during the debate so that he may have the chance to contribute.
I understand that the Minister cannot, today, prejudge any decisions about courthouse closures. My intention is to expand on some of the points that I raised with the Minister in correspondence after our exchange during the most recent Lord Chancellor's Question Time. The Minister knows of my concern about the way in which the Greater London Magistrates' Courts Authority approached the fulfilment of its stated purpose, which is
to provide a better level of service to court users at the point of delivery—in the courtrooms and at the courthouses."
What has the GLMCA achieved in the two years since it was set up? It has increased its costs. What local magistrates used to do for free now requires a justices' chief executive, paid more than £120,000 a year, and a permanent staff of more than 100, costing approximately £5 million a year. It seems that the main output of the GLMCA is a strategic plan, which was published in December 2001. The plan proposes to improve the delivery of services by closing several of the local courts where those services are delivered.
I am not dogmatically opposed to closing courthouses, or to replacing them with new, purpose-built courthouses, but I believe that any such proposals must be grounded in well-substantiated evidence. For example, the strategic plan should have a clear analysis of what capacity is required, taking account of the wider requirements of other types of courts, such as their use by tribunals. The GLMCA seems to have had some discussions on the question of capacity with the Court Service, but has not carried out its own systematic appraisal. When challenged on that point, GLMCA officials offer nothing more than vague generalisations: they cannot give chapter and verse, or put forward detailed figures to back up the strategy.
The GLMCA's work load assumptions were independently reviewed by the Lord Chancellor's Department in a case arising from the appeal against the proposed closure of the courthouse in Kingston, and the Minister appears to have concluded that the GLMCA's view that the work could be absorbed at Wimbledon was suspect. If the figures for one court closure are open to challenge, the basis for closures and for building new courts elsewhere might also be found wanting, and a large amount of taxpayer's money could be spent on building new courts that are soon found to be too small to carry out the work required of them.
Can the Minister give an assurance that the assumptions made by the GLMCA are thoroughly verified by her Department before substantial amounts of public money are committed to such projects?
Even if the work load assumptions were correct, I would expect there to be a range of investment appraisals setting out how the requirements could be met. Such investment appraisals should be supported by
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other evidence and studies. For example, there should be a risk analysis examining factors such as what would happen if the planned work load increased, proposed building works were delayed, or receipts from the planned disposal of property were reduced. It seems, however, that the GLMCA has carried out no such risk assessments.
There is a history of Government projects in which risks have not been properly assessed and costs have overrun, and assets have consequently not been properly used and taxpayer's money has been wasted. There should be a business plan and an implementation plan, but the GLMCA has admitted that it has neither.
Moreover, to ensure that the proposals are robust, they should be subject to a cost-benefit analysis. That would examine the impact that the proposed changes would have on court users. For example, it would examine whether the closure of a court would have an impact on the cost and time spent by witnesses, victims, the police and others who have been led to expect that the changes will bring about an improvement in the service that they receive.
The proposals should all be focused on the service provided to the end-users of the courts, but it seems that, all too often, they have been framed solely for the convenience of the GLMCA. The GLMCA has been resolute in refusing to consider how the proposed changes, and the closure of courts in particular, will affect those who use the local courts. I find disturbing the approach that has been adopted so far.
I will now move on from the generalities of the GLMCA's strategy to examine proposals in the London borough of Sutton. I appreciate that the Minister will have to determine an appeal should a decision be taken to close the court. I will therefore avoid touching on issues that she might have to consider in that role. The proposal to close Sutton courthouse is based on the premises that it is underused and that the Croydon court has the capacity to take on the work currently done there.
Does the Minister agree that it is unreasonable to expect us not to see the figures on which the proposal is based? The GLMCA has been asked repeatedly by the chair of the Sutton bench, Mr. Tony Kerr, and the executive head of legal services at the London borough of Sutton, Fiona Ledden, for the figures on which it relies. To date, it has failed to produce those figures. Will the Minister undertake to ensure that the information is provided by the GLMCA and that those being consulted have an opportunity to comment before any decisions on the future of Sutton courthouse are taken? I find it impossible to view as proper a process that is meant as consultation but which does not provide such basic information to enable a realistic evaluation of the case for closure to be undertaken. Does the Minister agree that consultation can be effective only if all those involved are in possession of the full facts on which decisions are made?
In correspondence, I have tried to obtain from the GLMCA information about the advice that its members were given which led them to decide to press ahead to the statutory consultation stage on closure of Sutton courthouse. The GLMCA has refused to publish that information. On what basis is it refusing to provide an open and transparent process in which the public may

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scrutinise its decisions? Will the Minister ask the GLMCA to provide copies of the advice on which its decision to proceed with consultation on the closure were taken and make it available to Members and others?
It has been asked how meaningful the process is. I have been unable to find anyone in my constituency who supports the closure. It has been opposed by the magistrates at both Sutton and Croydon, by constituency MPs, by the London borough of Sutton, by the Metropolitan Police Authority, by the local witness support scheme, and by many court users and local residents. On what basis were all those views swept aside and the GLMCA convinced that its views alone were of any value? Why does it appear that the GLMCA feels able to ignore everyone else's views?
As the Minister has pointed out to me before, the GLMCA is responsible for running magistrates courts in London, and she has no power to intervene until or unless there is an appeal against a proposed closure. If the members of the authority are not accountable to her and to the Department for their decisions, to whom are they accountable? It seems that the majority of authority members are effectively self-selected, appointed by the authority itself, while others are appointed by the London Mayor, Ken Livingstone. There is no apparent need for the authority to take account of Government policy, and still less, and more importantly, of the views of local residents.
I have written to the Minister about other concerns and I look forward to receiving a response through correspondence in due course. The plans to close local courthouses are being taken by an unaccountable body, using inadequate and flawed information. There has been no genuine consultation. Above all, the closure of local courthouses, including the one in Sutton, lacks the compelling evidence necessary to give the public confidence that their law and the administration of local justice is in safe hands with the GLMCA. Nor will they have any confidence that it will achieve its stated purpose, which is to improve service delivery to court users at the point of delivery in the courtrooms and courthouses.
4.8pm
Tom Brake: I welcome the opportunity for the debate. I thank my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) for leaving me time to make a brief contribution. The Minister may be aware that I asked a question during Prime Minister's Question Time about the future of Sutton magistrates court. I expressed concern about the loss of a local court delivering justice locally. In his response the Prime Minister seemed to indicate that he felt that the Greater London Magistrates' Courts Authority was in effect a local organisation making a local decision.
That is not the case. Who is in the GLMCA? Do I meet its members in Woodcote road or Wallington high street on a Saturday morning? Do they approach me? Do I meet them when I am out canvassing? Have they ever approached me directly? The answer is no. I do not know who the GLMCA are. However, I know who my local magistrates are, because I meet them and have regular contact with them. It is clear that they are opposed to the proposal that the GLMCA may make, although I hope, of course, that it does not.
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Since the exchange at Prime Minister's questions, I have written to the Prime Minister. I have the letter that I shall send him here. I finish it by posing three questions. First, does he accept the need for justice to be delivered in the manner that best suits the local community, and for justice to be administered by an organisation that is responsive to the needs and wishes of that community? The local magistrates court and local magistrates do that.
Secondly, are the Government committed to the principle that families who need to resort to the courts should be dealt with locally by maintaining the widest possible network of hearings centres? Clearly, that will not happen if Sutton magistrates court is closed. Croydon will be much less accessible, and many families will have enormous difficulty getting to and from the court.
Finally, I ask a specific question about an initiative at Sutton magistrates court that is helping to ensure that young offenders are dealt with according to statutory time limits. I understand that that is to be cancelled. How will removing those time limits help to process cases locally?
As my hon. Friend said, the Minister is not in a position to answer those questions, but I wanted to put them on the record. I hope that the Prime Minister will respond. I finish the letter by inviting him to come to Wallington to meet local residents and talk to magistrates, the local police, the local authority, Victim Support and a host of local organisations that want the court to be kept open. If the Prime Minister did so, he would have a clear picture of what the local community feels about the importance of Sutton magistrates court. I also extend that invitation to the Minister. I would welcome a visit from her, so that she could see for herself how important the court is to the local community. She has been very helpful on other cases, including the Kingston court. I hope that, if we have to proceed with an appeal, she will be willing to meet me, my hon. Friend, local magistrates and the local authority, so that she can hear our point of view.
I should like the Minister to confirm that, if the GLMCA decides to proceed with the closure, she will expect it to produce specific details as to why it wants to do so. We want to be able to examine in detail what it alleges are the reasons for the closure. Certainly, in relation to Kingston magistrates court, a number of the arguments that the GLMCA deployed for wanting to close the court did not bear examination. We want to know what reasons the GLMCA deploys, so that we can knock them down.
Our residents have made it clear that they want local justice delivered locally by local magistrates who understand the issues, are accessible to local people, are not remote and live in the community. I hope that, when decisions are taken about the court's future and when, potentially, an appeal is heard, the residents' wishes will be at the centre of any decision.
4.13pm
The Parliamentary Secretary, Lord Chancellor's Department (Yvette Cooper): I congratulate the hon. Member for Sutton and Cheam (Mr. Burstow) on securing the debate. I know that he feels strongly about this issue. He has raised it with other Ministers, as has

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the hon. Member for Carshalton and Wallington (Tom Brake). They have raised the proposal of the Greater London Magistrates' Courts Authority to close Sutton magistrates court and transfer the work to Croydon. As they both acknowledged, the Ministers in the Lord Chancellor's Department have to take decisions on appeals about the closures of magistrates courts, so there is a limit on what I can say in advance of any appeal on which I may have to decide. However, I shall try to respond as best I can to the points made by hon. Members, and I assure the hon. Member for Sutton and Cheam that I shall reply to his letter shortly.
As hon. Members are aware, magistrates courts are managed by locally based magistrates courts committees, as set out in the provisions of the Justices of the Peace Act 1997. Each committee is statutorily responsible for the efficient and effective administration of the magistrates courts, including the provision of adequate accommodation. The GLMCA is responsible for Sutton magistrates court.
Decisions to close, retain or expand magistrates courts are the responsibility of the local MCCs after consultation with the local paying authority. The Government already encourage MCCs to extend their consultation processes wider than is set out in the legislation, and it is usual for MCCs to consult more widely than their paying authorities and for longer than the eight-week minimum period set out in Cabinet Office guidelines. We also expect them to consult a wide range of local stakeholders, including magistrates, staff, police, the probation service, the Crown Prosecution Service, MPs and other community groups. In the case of the proposal to close Sutton courthouse, the GLMCA confirmed that it consulted for three months from 4 December 2002 to 14 March 2003, and it has extended the consultation period until 16 May to allow time for any further representations.
Given that no formal determination has yet been made by the GLMCA, I cannot comment on specific issues relating to the proposed closure of Sutton magistrates court. If the GLMCA makes a formal determination to close the court and an appeal is lodged by the local paying authority within one month of receipt of notification, I will have to make a decision. If there is no appeal by the local paying authority, the Lord Chancellor's Department has no role. We will consider any appeal lodged with the Department on the merits of the case presented by each party once dialogue has ended between the GLMCA, the local paying authority and officials in my Department.
Hon. Members asked about the information that I should demand from the GLMCA. In every case, I am always keen to ensure that all sides have the fullest access to the information and representations put forward by the other side, so that they both have a chance to respond. That will ensure that the GLMCA can respond to points made during the paying authority's appeal, and that the paying authority and others, including magistrates and local MPs, are fully aware of the reasons put forward by the GLMCA and can respond further.
In all such cases, I have been keen to ensure that each interested party is satisfied that it has had the full opportunity to make its case to the Lord Chancellor's
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Department. I can assure the House that if an appeal and determination is made in the case of Sutton magistrates court, I will do so again.
Mr. Burstow: Before we get to an appeal stage, will the Minister use her good office to encourage the GLMCA to pass on to the consultees all the relevant information that they have asked for but not yet obtained?
Yvette Cooper: I am not aware of what information the GLMCA has or has not circulated, but I will ensure that the hon. Gentleman's concerns are passed on to the GLMCA. As he will know, because any proposed closure is a matter for the GLMCA rather than the Lord Chancellor's Department, it is the GLMCA's responsibility to ensure that proper consultation takes place. However, as I said, if an appeal process is entered into, I will do my best to ensure that all parties have access to the fullest possible information on which the decisions are based.
Magistrates courts committees need to take difficult decisions about their courthouses. They must take responsibility for the condition of the estate, lack of disabled access, poor facilities for witnesses and victims, old and decrepit courthouses, and unused courthouses. All those factors must be taken into account, which inevitably means that magistrates courts committees sometimes have to take decisions that will not be popular with the local community. They must also consider access and the views of the local community when taking their decisions.
Mr. Burstow: The Minister is making a fair point: difficult decisions must be taken. The key point, however, is surely that those decisions must be grounded in clear evidence, which the GLMCA's strategic plan is not. Certainly, the evidence on which it is based has not been published. Surely Londoners deserve to have sight of the evidence so that they can form opinions about whether the GLMCA is delivering efficiency and effectiveness?
Yvette Cooper: Again, as I said, I cannot comment on what evidence has and has not been produced, its status, or how convincing it is in advance of any appeal process. I am afraid, therefore, that I cannot engage with the hon. Gentleman on the details of the information submitted by the GLMCA, except to say that the authority has the responsibility to consult properly and to take decisions about the use of its courts.
Tom Brake: Does the Minister believe that the GLMCA should consider, as part of its consultation process, the impact of the court closure on the number of magistrates willing to continue as magistrates?
Yvette Cooper: Clearly, the GLMCA and every other magistrates courts committee must consider the impact of any of their decisions about courthouses on magistrates, staff and members of local communities, and on the distances that they must travel and facilities.
Hon. Members made broader points about the GLMCA, on which I will try to comment. I am not sure that I understood the point made by the hon. Member for Sutton and Cheam, but I believe that the hon. Gentleman was suggesting that the committees that

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preceded the GLMCA were run by magistrates for free. There were magistrates courts committees and administrations for the separate courts throughout London, and different administrations came together to form the GLMCA. They all had their own budget allocations and administrations, so it would be inaccurate to say that before the GLMCA, they were magically run by magistrates with no administrative support. However, it may be that I slightly misunderstood the points that the hon. Gentleman made at the beginning of the debate.
I recognise the concerns that both hon. Members have expressed about whether magistrates courts committees entirely reflect the views of magistrates or the local community. I also recognise the concern that magistrates courts committees are not clearly accountable to the local community or to Parliament. I am aware of concerns about the current structure of the magistrates courts committees, which we considered in great detail when we developed the structure for the new unified administration of the courts, in which the magistrates courts service and the Court Service will be merged into a single organisation.
The aim is to make the services part of a single executive agency that is ultimately accountable through Ministers to Parliament, and to create local courts boards that include representatives from the wider community as well as magistrates. We are still holding a series of debates with stakeholders about how to do that so that we can ensure that local community views are taken into account.
We have also tabled an amendment to the Courts Bill to ensure that magistrates in particular are directly consulted, as there is concern that because magistrates courts committees exist, local magistrates on a particular bench or in a particular courthouse do not necessarily believe that they have been closely involved in particular decisions taken by the magistrates court committee. We tabled the amendment in order to clarify our intention that magistrates should be consulted on all sorts of decisions.
The hon. Members for Sutton and Cheam and for Carshalton and Wallington also asked about the decision on the Kingston courthouse. I decided to agree to the appeal on the courthouse and then, for several reasons, to overturn the decision to close the magistrates court. We were concerned that Wimbledon did not have the capacity for the work load to be moved there. Other considerations were the size of the population served by Kingston magistrates court, and the fact that it was located so near to other criminal justice agencies. As
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part of our approach to creating criminal justice boards and improving co-ordination across criminal justice agencies, co-location offers huge advantages.
Mr. Burstow: I want to return to the point that the Minister was making, before she turned to Kingston, on the future reforms for making courts more accountable. Given the fact that there is now a clear policy intention to make those changes, does she agree that the strategic plan of the GLMCA should not proceed apace, but should wait until the new authority takes over and is able to take a look at it in the context of the new accountability framework?
Yvette Cooper: The problem is that it will take two years to set up a unified administration. It is important that there is not a complete planning blight in the meantime. Decisions related to local circumstances, when progress needs to be made rapidly, should not be delayed for two years. That applies not only to London, but to areas throughout the country. Clearly, it is important that discussions are held with the Court Service about different estate implications, and the implications for county courts and the Crown court. Part of unified administration will be a unified estates strategy in every area, and we expect all those issues to be taken into account. I always ask whether those sorts of issues have been considered during the appeals process. However, it would be wrong to halt any development of or changes to estates simply because an overall administrative change is due.
The decisions to be made about the locations of courthouses and the distribution of work around London are not easy. The GLMCA must take responsibility for those decisions, and do its best to improve services for local communities, not just in the provision of magistrates courts, but in the work of the wider criminal justice system. When appeals come to Ministers, we try to ensure that every opportunity is given for those involved to make representations and give their views. Should we reach the point of determination to close, followed by an appeal, I would certainly consider all the detailed questions that the hon. Members for Sutton and Cheam and for Carshalton and Wallington raise, and I should ensure that they were given the opportunity to make their points. The two hon. Gentlemen understand, and have acknowledged during today's debate, however, that it would be inappropriate for me to comment on the detail of the issues involved at this stage. I hope that the situation is resolved and that, in the meantime, the hon. Gentlemen can have further discussions with the GMLCA.

Seafarers
4.28 pm
John McDonnell: Last year, the Home Office commenced its consultation on the review of the Race Relations Act 1976. That included taking into account the proposals to implement European Union equality directives. Within that consultation, the total repeal of section 9 of the 1976 Act was recommended. The consultation was due to be completed by the end of January, and the Government are to make a decision on the matter imminently. Since then, I have led a number of delegations on behalf of the RMT parliamentary group to the Department for Transport and the Home Office. The repeal of section 9 has the support of the RMT and the TUC.
For the record, I shall explain the contents of section 9. It is a curious anachronism, left over from our racist and colonialist past. It is one of the last bastions of legislative racism yet to fall in the fight to secure a fair society. It is one of the last elements of a racist foundation of law.
Let us go back to the battle for anti-racist legislation in this country. The first major breakthrough was enacted by a Labour Government. The Race Relations Act 1968 outlawed racial discrimination generally, but focused particularly on employment. Shipowners at the time exerted considerable pressure on Parliament with the result that there were three exemptions within the legislation, especially for the shipping industry. The exemptions were that shipowners could refuse to employ a person on board a ship if that would result in people of a different colour, race or ethnic or national origin being compelled to share sleeping, eating or sanitary accommodation.
The second exemption was that shipowners could discriminate in such a way as not to force passengers of a different colour, race or ethnic or national origin to share cabins. The third exemption was that shipowners could engage seamen abroad at lower rates and on different terms than United Kingdom-domiciled seamen. A later Labour Government introduced the new Race Relations Act 1976, under which they outlawed the first and second disgracefully discriminating measures, but left the abuse to discriminate on pay on the statute book.
However, that Labour Government recognised that race discrimination was unacceptable in a modern society and set up a working group of industry representatives, employers and trade unionists to study ways in which to overcome problems in outlawing the practice. The working group recommended that race disparity be removed on a staged basis, over five years. There was an attempt to make agreements with certain countries, such as the Philippines, Pakistan, Bangladesh and others but, in reality, there was no movement towards removing the practice. There was increasing recognition that voluntary agreements would not work and that the only way in which to eradicate the practice would be to require legislative amendment. There was an expectation that when a Labour Government were elected, the legislation would most certainly be amended.
Since then, we have seen the effect of the legislation. We have seen the disparity between the wages paid to UK seafarers and those from other countries when they
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work alongside each other in the same job. Sometimes, the disparity is that non-UK seafarers will be paid less than half the wage of the others. On some ships, they are paid less than the minimum wage. We have also seen the behaviour of some companies, such as P & O Ferries, where UK seafarers have been dismissed and replaced by Filipinos to reduce wage rates. I have one contract of employment in front of me. It shows that the Lapthorn Group are employing a Filipino seafarer for 48 hours a week at less than $500 a month.
Twenty-seven years on, another Labour Government have now arrived, and we expect change; 110 MPs have signed an early-day motion urging the Government to implement change as soon as possible. We believe that it is time to act, but we are fearful that the Government are about to halt the forward march of equality commenced by previous Labour Governments. Why do we believe that? The powerful lobby of shipowners has used every form of influence that it can exert via No. 10 and the Department for Transport to block reform. Rumours abound in the industry and elsewhere that the Government have succumbed to such pressure. There are real fears that, once again, a progressive measure to tackle unfairness in the workplace has been vetoed by No. 10 as a result of lobbying by business interests. I desperately hope that the Government are not about to sell out some of the poorest paid workers in the seafaring industry.
What arguments are the shipowners putting forward? Their basic argument for the past 40 years is that, if British shipping companies were forced to pay all their crews a fair wage, they would become uncompetitive, with the result that companies would be forced to flag out, register under another company or move offshore. That would lead to a reduction in British seafaring and registration under a UK flag. Let us examine those arguments. We have had no estimate based on an objective analysis of the implications for British shipping provided by the Chamber of Shipping. We have heard some hysterical statements that the whole British seafaring industry will be wiped out, but there has been no objective study into such matters.
At present, wage costs are not significant to British shipping. Wages comprise a small percentage of operating costs—most studies say between 2 per cent, and 3 per cent. Increasing wages to a fair level would not be a disproportionate burden on shipowners. It would be offset by some of the advantages of UK flagging.
4.35 pm
Sitting suspended for a Division in the House.
4.46 pm
On resuming—
John McDonnell: I was arguing that wages were a small percentage—2 per cent, to 3 per cent, in our last cost analysis—of operating costs for most shipowners, so increasing wages to fair levels would not be a disproportionate burden. Also, the increases would be offset by the fact that UK flagging, and the employment of seafarers, adds to the reputation of any company for safety and reliability. It may also lead to lower insurance premiums and savings as a result of increased efficiency and the skills of the British seafarers operating their ships.

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A significant factor in the flagging decision of any company is national taxation arrangements. The Government have put UK shipping companies in their best competitive position for decades by developing a set of support proposals under their "charting a new course" initiative in 1998. That resulted in a raft of proposals for British shipping, including a tax concession of £15 million under the tonnage tax regime.
However, the result is that the same British shipping companies that opposed the reforms under the Race Relations Act 1976 on the grounds of loss of jobs have taken the tax concession and replaced British seafarers with lower-paid, poverty-waged foreign nationals. Since 1998, although more vessels have been registered in the UK, the number of British seafarers, particularly ratings, has continued to decline. The shipowners have clearly taken the Government's tax concession and run.
UK ratings and officers face mounting redundancies, despite the incentives provided to British shipping. I believe that the eradication of the discriminatory clause would protect, and not cause a loss of, British seafarer jobs. Clearly, shipping companies that pay decent, fair wages would not be affected, other than in the fact that they would be assisted in protecting against UK-flagged operations employing seafarers on exploitative pay and conditions. If problems are associated with the repeal of the legislation, owners, the Government and unions should sit down to work out a further programme of support initiatives in order to minimise any drawbacks and promote the advantages of the repeal for the long-term future of the industry.
Despite the spuriousness of the shipowners' arguments, it seems that they have been able to mobilise key support, associated with No. 10, to block the repeal of section 9. The word on the departmental and parliamentary street is that the section will merely be amended to state that discriminatory treatment can continue on the basis of the place of domicile of the seafarer. That is exactly the wording put forward by the Chamber of Shipping in the recent edition of Lloyds List. What do those words mean? If the amendment were accepted, a shipowner could continue to discriminate against someone by paying lower, exploitative wages and employing them on poorer conditions, based on where they live ashore—their place of domicile. In effect, that means no change.
Shipowners will be able to discriminate against seafarers and pay them lower wages if they live in the Philippines, Pakistan, Bangladesh, India or Africa, just as they do now. Those seafarers will do the same job as the person from the UK working next to them or on another ship. They will have exactly the same role, but they will still be paid a quarter or a half of the other seafarer's pay. Many of them will have no paid leave and no employment protection rights even as they do the same job as the British seafarer.
The Government's proposed amendment will make it clear that discrimination under the Race Relations Act 1976 will be exempted on the basis of race, colour, nationality or ethnic origin, but will be allowed on the basis of domicile. No matter how clear the drafting of the clause, there is no doubt that that will embed racist treatment of seafarers for a generation, if not for generations to come. We have the opportunity to change. We have had the consultation, we have heard
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the message from the representatives of the seafarers themselves and, as a Government, we should put some weight behind this major reform.
The argument that has been put forward by the shipowners that their industry would be crippled by paying fair wages is the same argument that has been mobilised for every reform measure that the Labour and the trade union movement have put through, from the abolition of slavery through to the proposal for sanctions against apartheid South Africa, the introduction of the minimum wage, minimum standards for working conditions, changes to the length of the working day or even equal rights.
The moral case is overwhelming. We need to act now, because we have the opportunity to act. I expect a Labour Government to do the right thing by British seafarers and by those seafarers from other countries throughout the world who are currently so exploited by shipowners.
4.52 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I congratulate my hon. Friend on securing the debate and on setting out the issues so clearly, especially as he had an interruption because of a vote in the House. I hope that we can progress without an interruption in the next 20 minutes or so.
I have long associated myself with campaigns to remove discrimination on the grounds of race and colour. None of us in our party has a monopoly of care on that issue. Many of us have had worries in that respect over a long period. My hon. Friend and I share the same views. Such discrimination on the grounds of race or colour undermines our ambition for a fair and just society. That is important to understand because it underpins what I am about to say.
Over the past few years, we have seen a substantial revival in the UK merchant fleet, with an increase of about 90 per cent, in UK-registered shipping since 1997. The introduction of the tonnage tax in 2000 and the reforms introduced by the Maritime and Coastguard Agency to make the UK register more customer friendly have helped to produce a favourable environment for shipping, and we are determined to ensure that that continues. After years of decline and decay in our UK fleet under the Conservative Government, our fleet has grown in a way that it has not done in perhaps 100 years.
As an important maritime nation, the UK has continued to play a major role in the International Maritime Organisation and, in particular, we continue to give our full support to the international quality shipping campaign, which focuses on the problems caused by sub-standard ships. I think that my hon. Friend would agree with me that the greatest hazard to any seafarer, whether he be officer or rating, is working on a sub-standard ship where there could be loss of life and cargo. This country has a proud record in helping to push up international standards in that regard. We can proudly boast a sound maritime administration that maintains a high-quality flag. The United Kingdom is currently top of the Paris memorandum of understanding white list, having the best port state control record in Europe. It does not feature as a targeted flag in any other port state control region. I am proud that the fleet under the United Kingdom flag is rated the best in the world

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The conditions of employment on UK-registered ships are high—certainly higher than those for ships under flags of convenience—and all UK registered ships are required to have crew agreements approved by the MCA. For example, MCA surveyors assess safety, accommodation on board ship and pollution prevention. In February, the United Kingdom ratified the International Labour Organisation convention 178 concerning seafarers' working and living conditions, which will require more regular inspections of ships. In addition, the United Kingdom is one of only a small number of ILO member states to have ratified ILO convention 180 on limiting seafarers' working hours. The measures show the Labour Government's strong commitment to protecting seafarers' interests.
That is the background against we have laid an order to amend the Race Relations Act 1976. Until now, under that Act, there has been retained the ability to discriminate on grounds of race, ethnic or national origins and colour and nationality against seafarers recruited abroad to work on UK registered ships. My hon. Friend described that as a curious anachronism, and I agree.
For most of the period in which the 1976 Act has been in force, there has been a sharp decline in the number of UK-registered ships, and, therefore, in the number of ships that can be subject to United Kingdom legislation, so the number of people covered by our legislation has declined until recent years. However, as I said, there has been a huge increase in UK registered shipping since 1997. That has highlighted the fact that foreign seafarers do not have the protection that UK seafarers enjoy under the Act.
The European Community race directive adopted under article 13 of the EC treaty establishes the principle of equal treatment between persons irrespective of racial or ethnic origin, of which we are very supportive. In many respects, it accords with the race relations legislation that this country has had for many years— many other European Union countries have not had such legislation. As part of a package of measures implementing the race directive and the EC article 13 employment directive, the Government want to amend section 9 of the Race Relations Act 1976 to eliminate the ability to discriminate on the grounds of race, ethnic or national origin or colour. I am pleased to announce that there is an order before the House to remove those anachronisms to which my hon. Friend referred. However, in respect of section 9 of the Act, by virtue of a separate order-making power in the measure, we have decided to outlaw discrimination on the basis of colour and national origin as well as on the basis of the grounds required by the directive.
An order has been laid giving effect to the changes. Nationality is the only ground on which to justify paying people differently, including their retirement and death benefits. It is also important to remember that foreign seafarers qualify for the national minimum wage on UK flagged ships when they are in UK waters. Parallel legislation will be laid for ships registered in Northern Ireland.
The Government are persuaded that regulating to prevent pay differentiation on UK-registered ships for seafarers who are recruited abroad would be ineffective
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and, indeed, counter-productive. It would also be out of line with what is being done by our European Union partners, even though we intend to go further than the directive requires. My hon. Friend made a point about the proportion of crewing costs. They are a substantial part of overall shipping costs. He will know that shipping is a highly competitive industry and that the cost of wages is important to operators' margins. The shipping companies operate in a globally liberalised and highly competitive sector.
The Chamber of Shipping estimates that the additional costs to shipowners of paying foreign seafarers at UK rates could be up to £40 million a year. That would drive many companies to register their ships abroad. As many as 400 ships could leave the UK register, thus removing them from our jurisdiction and carrying the risk that they could move to less safety-conscious registers. If those owners move their ships to other flags, there could be a deterioration in the terms and conditions of work on board those ships for all the people who work on them, whether they be UK or foreign seafarers.
John McDonnell: May I ask exactly where the estimate of 400 ships came from and whether it has been objectively tested by anyone?
Mr. Jamieson: That was an estimate from the Chamber of Shipping, but the number could be higher or lower. There are substantially more ships on our register, but the indications that we have had from discussions suggest that that is probably the number of ships that would flag out.
We must remember that flagging out is not a difficult process. Indeed, it can be done virtually overnight. Part of the evidence that we have used comes from the Maritime and Coastguard Agency, which is an independent agency that advises us on such matters. It has already received approaches from shipping companies asking which other flag state it would recommend in the circumstances.
The marine officers' union, the National Union of Marine, Aviation and Shipping Transport Officers, has expressed concern that the total repeal of section 9 would lead to flagging out to other registers, thereby leading to a reduction in the employment of UK officers at UK pay levels. The Government have listened very carefully to the officers' union.
We have also considered carefully the views of the RMT, which represents the seafarer ratings. I believe that it supports the total repeal of section 9, but I hope that it will at least welcome our decision to take the matter even further than the EU directive. We are not convinced by the argument that to oblige shipowners to pay foreign seafarers at UK rates would remove the cost differential that encourages the replacement of UK seafarers by cheaper foreign crews. We have not seen any evidence that there would be more jobs for UK seafarers. In fact, as I have indicated, there could well be fewer jobs if many ships flagged out from the UK register.
Mr. Eric Joyce: I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing this important debate. I also congratulate the Minister on his announcement.

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Does he agree that it is very important in discussing world trade and the world economy to distinguish between equity and equality? The flip side of the coin is that if there were not substantial flagging out, the net effect would be to reduce the jobs that are available in places such as the Philippines and the Baltic states on UK-flagged ships. The fact is that retaining the nationality exemption enables us to transfer knowledge and finances to those economies.
Mr. Deputy Speaker (Mr. Edward O'Hara): Order. That was a long intervention.
Mr. Jamieson: Thank you, Mr. Deputy Speaker. I very much agree with what my hon. Friend said. That is exactly our fear.
I shall move on to wage rates, particularly the rates paid to those on ships that fly the UK flag, many of which never come anywhere near the UK. I firmly refute the claim that paying foreign seafarers local rates amounts to unfair exploitation. The rates paid to foreign seafarers on United Kingdom ships often compare favourably with rates for other jobs in the countries concerned. This is an important matter, so I have taken the trouble to find statistics for comparable rates paid to seafarers in a number of countries, to discover whether that is the case. For example, a Filipino chief officer earns an average $2,400 per month; that may not be as much as a UK officer, but that figure should be compared with an average of $298 for a computer programmer living onshore in the Philippines. That is a huge difference. Similarly, a Polish able seaman's average monthly salary of $1,053 compares with an average of $550 for a shore worker in Poland.
John McDonnell: May I give an example that is nearer to home? Salaries for British motormen on the North sea are £20,000 per annum. Filipino seafarers on the Pride of Hull receive approximately £10,365 a year for doing the same job, with no pay for leave.
Mr. Jamieson: Of course, if they are in UK waters, they are subject to UK law. Whatever we do, even if we
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keep the nationality issue, it would not make any difference to that circumstance. My hon. Friend makes a good argument, but that sort of thing needs to be taken up with the union. Nothing that we do here would change that circumstance for those people.
I shall give another example. I am told that the Filipino able seaman is paid an average of $1,100 a month, whereas a qualified nurse in the Philippines earns only $130 a month. My hon. Friend said that we are selling out the poorest paid workers, and paying them lower, exploitative wages. They may be lower wages than United Kingdom wages, but in the countries where those who earn them are supporting families, where they are buying goods and housing themselves, the wages are anything but exploitative. In fact, for many of those people, the wages are good. We have had to take that into consideration.
The Labour Government are firmly committed to removing discrimination wherever possible, and we are convinced that the continued payment of local wage rates to seafarers recruited abroad to serve on UK ships is necessary to ensure the continuing success of our shipping policy, and of the UK register, which is a beacon of quality in the global shipping industry. Our proposals will mean that seafarers of all nationalities employed on UK-registered ships will enjoy greater protection under the Race Relations Act 1976 than has been the case. They will also enjoy the advantages of being employed on ships registered under a high-quality UK flag. That will be particularly relevant in regard to safety, conditions of work and contractual arrangements.
I am grateful to my hon. Friend for raising the subject and for giving me the opportunity to put the Government's case, which is strong. I am proud of the order that we are putting forward today, which ends certain discrimination that has been in place since 1976. If the order is agreed to, we shall see an end to some of that discrimination—and I am proud to put my name to that.
Question put and agreed to.
Adjourned accordingly at nine minutes past Five o 'clock.

CULTURE, MEDIA AND SPORT

  National Lottery
  Mr. Simon
  To ask the Secretary of State for Culture, Media and Sport how many organisations in the Birmingham, Erdington constituency have(a) applied for and (b) claimed awards from the Community Fund in each year since the National Lottery began. [112992]

  Mr. Caborn
  Comprehensive information on applications for Lottery grants is not centrally held at the Department for Culture, Media and Sport.

  The following table, which is based upon information supplied to us by the distributing bodies for the National Lottery awards database, shows the total number of awards made by the Community Fund to applicants within the constituency of Birmingham, Erdington.

  Number of awards within the constituency of Birmingham, Erdington

  1 May 1994 to 30 April 1995

  0

  1 May 1995 to 30 April 1996

  3

  1 May 1996 to 30 April 1997

  2

  1 May 1997 to 30 April 1998

  2

  1 May 1998 to 30 April 1999

  6

  1 May 1999 to 30 April 2000

  12

  1 May 2000 to 30 April 2001

  5

  1 May 2001 to 30 April 2002

  4

  1 May 2002 to 30 April 2003

  0

  Mr. Simon
  To ask the Secretary of State for Culture, Media and Sport what plans are in place to strengthen local advertising campaigns in order to encourage more successful applications for National Lottery funding, with particular reference to regions where there is a record of failing to secure them. [113000]

  Mr. Caborn
  The consultation paper on Lottery distribution (published July 2002) sought views on a number of issues, including raising awareness of Lottery funding and application mechanisms. Ideas included a National Lottery Day, One Stop Shops, to provide a single point of access for advice and a single promotional body, which would raise awareness of the achievements of the Lottery nationally, regionally and locally.

  Proposals from the review will be published in the summer.

  Mr. Simon
  To ask the Secretary of State for Culture, Media and Sport if she will list(a) the average grant given for all constituencies, (b) the average grant given for West Midlands constituencies and (c) the average
  244W
  grant given for Birmingham, Erdington under the National Lottery Awards For All scheme in each of the last three years for which statistics are held. [113001]

  Mr. Caborn
  The following table, which is based upon information supplied to us by the distributing bodies for the National Lottery awards database, sets out the average grant given for all constituencies, the average grant for West Midlands constituencies1 and the average award to Birmingham, Erdington under the National Lottery Awards For All scheme in each of the last three years.

  1 Using the definition of the West Midlands (as provided by the House of Commons website) comprising the following constituencies:
  Birmingham, Edgbaston; Birmingham, Erdington; Birmingham, Hall Green;
  Birmingham, Hodge Hill; Birmingham, Ladywood; Birmingham, Northfield
  Birmingham, Perry Barr; Birmingham, Selly Oak; Birmingham, Sparkbrook and Small Heath
  Birmingham, Yardley; Sutton Coldfield; Coventry North East; Coventry North West;
  Coventry South; Dudley North; Dudley South; Halesowen and Rowley Regis; Stourbridge
  Halesowen and Rowley Regis; Warley; West Bromwich East; West Bromwich West; Meriden;
  Aldridge-Brownhills; Walsall North; Walsall South; Wolverhampton North East;
  Wolverhampton South East; Wolverhampton South West.

  £

  1 May 2000 to 30 April 2001

  1 May 2001 to 30 April 2002

  1 May 2002 to 30 April 2003

  Average grant given for all UK constituencies

  3,324

  3,537

  3,617

  Average grant given for west Midland constituencies

  3,544

  3,876

  4,009

  Average grant given for Birmingham, Erdington

  3,234

  4,115

  4,276

  Sport (Young People)
  Mark Tami
  To ask the Secretary of State for Culture, Media and Sport what support her Department gives to sporting activities for the young outside of the formal school environment. [113018]

  Mr. Caborn
  This Department is committed to increasing and improving opportunities for young people to participate in sporting activities both within and beyond the curriculum. Initiatives beyond the curriculum include: the Community Club Development programme (£60 million); the New Opportunities Fund's Out of School Hours Learning/School Sport Co-ordinators programme (over £19 million); the School to Club Links programme (£9 million) and Step into Sport (£15 million). These complement or directly support delivery of the joint DCMS/DfES national
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  strategy for PE, school sport and club links, in which we are investing a total of £459 million over the next three years.

TRANSPORT

  Driving Licences
  Mr. Burstow
  To ask the Secretary of State for Transport how many claims for lost driving licences the DVLA has received in each of the last five years. [113035]

  Mr. Jamieson
  An application for a duplicate driving licence is appropriate where licences have been lost, stolen or defaced after being held by the driver for a certain length of time. From the statistics available it is not possible to state specifically how many applications are for lost licences only. However, during the past five years applications for duplicate driving licences have been.

  Number

  1998–99

  661,000

  1999–2000

  467,000

  2000–01

  510,000

  2001–02

  584,000

  2002–03

  700,000

  DVLA does not meet claims for lost licences.

  Railways
  Miss McIntosh
  To ask the Secretary of State for Transport what criteria the Strategic Rail Authority used in deciding to award the Greater Anglia Franchise to the successful bidder; and what representations he received on that decision. [113096]

  Mr. Jamieson
  The Strategic Rail Authority (SRA) has not yet awarded the Greater Anglia franchise. It issued Invitations to Tender (ITTs) to three bidders—and a consultation document to stakeholders—on 15 April. That followed a process of "Qualification to receive an ITT document", in which applicants were ranked on their responses to a questionnaire.

  Jeremy Corbyn
  To ask the Secretary of State for Transport what progress has been made on the reopening of(a) the Matlock to Buxton railway line and (b) the Bletchley to Bicester line. [113199]

  Mr. Jamieson
  The Strategic Rail Authority is currently undertaking a feasibility study on the proposal to re-open the Matlock to Buxton line. The study is expected to be completed in two stages. The first stage will look at options to re-instate the link that formerly existed. This is expected to be completed in September 2003. If the partners agree to continue, stage two would develop the preferred option in detail. Stage two will be completed in April 2004. The Strategic Rail Authority is also currently examining the case for reopening the section of line between Bicester and Bletchley for freight and diversionary purposes. This would potentially enable the introduction of passenger services on the 246W
  eastern section of the route. For these projects to be taken forward, they would have to represent value for money and be affordable.

HOME DEPARTMENT

  Age Discrimination
  Mr. Bercow
  To ask the Secretary of State for the Home Department what steps his Department is taking to address the issue of age discrimination. [109440]

  Beverley Hughes
  The Home Office has continued to integrate age into its equal opportunity policies and to apply its commitments that there should be no unfair discrimination on the basis of age and that staff of all ages and backgrounds should be provided with opportunities to maximise their skills and achieve their potential. Action on diversity will continue to tackle any negative attitudes towards older staff, particularly through the training and development of managers and through the monitoring of recruitment, selection and appraisal statistics.

  Since 1 April 2002, following a review of the Department's age retirement policy, Home Office staff in all grades below the Senior Civil Service have been allowed to retire at any point between the ages of 60 and 65. From the same date, the Home Office changed its recruitment policy to allow the recruitment of staff up to the age of 64 subject to their meeting normal standards of health and provided that there is an expectation of a reasonable period of employment and return on recruitment and training.

  The Prison Service is carrying out a separate review of its age retirement policy. However, on 16 December 2002 a temporary relaxation of its policy was issued, applicable to all non-operational staff below the Senior Civil Service, effective until 1 July 2004. This allows staff covered by the policy to apply for an extension of service beyond 60, subject to health and efficiency considerations.

  In making these various changes, the Home Office has been implementing recommendations of the Performance and Innovation Unit (PIU) report 'Winning the Generation Game'.

  Anti-terrorism (Detainees)
  Mr. Stringer
  To ask the Secretary of State for the Home Department how many people have been detained under the Anti-terrorism, Crime and Security Act 2001; how many people are detained; and how many of those currently detained are Muslims. [112931]

  Mr. Blunkett
  [holding answer 13 May 2003]: 15 foreign nationals have so far been detained using powers in part 4 of the Anti-terrorism Crime and Security Act 2001. Eight were detained in December 2001, one in February 2002, two in April 2002, one in October 2002, one in November 2002, and a further two in January 2003.

  Of the total detained, two have voluntarily left the United Kingdom. The other 13 remain in detention.
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  Under the Special Immigration Appeals Commission's direction under section 11 of the Contempt of Court Act 1987, we are directed that 'there shall be no publication of any matter which may identify them or any of them'. Therefore it would not be appropriate for me to provide personal information on those detained, and this has been our position since the passage of the Act.

  Anti-terrorism Website
  Simon Hughes
  To ask the Secretary of State for the Home Department what the(a) set-up and (b) running costs are of his Department's anti-terrorism website. [109512]

  Mr. Blunkett
  The anti-terrorism site (www.homeoffice.gov.uk/terrorism) is a part of the core Home Office website and the running costs are met from the existing budget for running the main website. Costs directly associated with setting up these pages are:

  1. Copy-writing services: £3,150

  2. Template design: £1,410

  The site had 275,000 page impressions during March and April. A service guaranteeing resilience of the servers in the event of increased traffic or security breaches was also procured at a cost of £30,000 per annum. Although this has been put in place to protect the site as a whole in accordance with security requirements, its implementation was timed to tie in with the launch of the anti-terrorism site in order to ensure that the site would cope with the large volume of traffic.

  Antisocial Behaviour Orders
  Sir Michael Spicer
  To ask the Secretary of State for the Home Department (1) how many antisocial Behaviour Orders are in force; [111774]

  (2) how many breaches there have been of antisocial Behaviour Orders. [111773]

  Mr. Bob Ainsworth
  From 1 April 1999 to 31 May 2000 data on the number of antisocial Behaviour Orders (ASBOs) issued was collected by police force area. From 1 June 2000 official statistics on the number of ASBOs issued are based on quarterly returns from Magistrates' Courts Committees (MCCs).

  Available information shows the number of notifications received by the Home Office of ASBOs issued from 1 April 1999 up to 31 December 2001 was 532. The number of notifications received from 1 January 2002 up to 30 November 2002 (latest available) was 253. Data are not collected centrally on the number of ASBOs in force at any given time.

  We are aware that the number of ASBOs made nationally have been consistently under-reported in returns made by magistrates courts and are considering how reporting can be improved. 66 persons had breaches of their ASBOs proved to the satisfaction of the court and notified to the Home Office in 2000 and a
  248W
  further 258 in 2001 (persons breaching an ASBO more than once and dealt with on separate occasions will be counted more than once in these figures).

  However, as the number of ASBOs made is known to be under-reported and breaches of ASBOs count persons every time they appear in court, these figures cannot be used to calculate a breach rate. For this reason a special exercise was undertaken, covering the period 1 June 2000 to 31 December 2001, to match persons convicted of breaching their ASBOs on at least one occasion (as notified by the police and the courts) with ASBOs made (as notified by the MCC). This showed that during this period 125 persons had breached their ASBOs out of 428 for whom ASBOs had been made and notified to the Home Office, a breach rate of 20 per cent.

  Statistics on breaches of ASBOs in 2002 will be published in the autumn.

  Civil Emergencies
  Simon Hughes
  To ask the Secretary of State for the Home Department what recent discussions he has had with his counterparts in other EU countries in relation to improving joint contingency planning and cooperation in the event of civil emergencies. [109604]

  Mr. Blunkett
  I refer the hon. Member to the reply I gave to the hon. Member for Hereford (Paul Keetch) on 24 March 2003,Official Report, column 24W.

  Correspondence
  Simon Hughes
  To ask the Secretary of State for the Home Department when he will reply to the letter of 23 April from the hon. Member for Southwark, North and Bermondsey regarding extradition arrangements with the United States. [112864]

  Mr. Blunkett
  [holding answer 13 May 2003]: I wrote to the hon. Member on 12 May.

  Demonstrators
  Lynne Jones
  To ask the Secretary of State for the Home Department how many demonstrators have been charged with(a) conspiracy to commit a criminal act and (b) a criminal act in each of the last 18 months. [112161]

  Mr. Bob Ainsworth
  The information requested is not collected centrally.

  Extradition (USA)
  Simon Hughes
  To ask the Secretary of State for the Home Department what discussions he has had with his US counterparts on(a) terrorism and (b) extradition since 1 January. [112136]

  Mr. Blunkett
  I and my officials are in constant contact with our US counterparts on terrorism and extradition issues, where there is excellent co-operation between us.

  I visited the US in late March and early April when I met the US Homeland Security Secretary, Tom Ridge. We agreed to build further on US/UK co-operation by

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  setting up a Joint Contact Group of senior officials to drive a joint programme of work in the fight against terrorism.

  I also discussed extradition with the US Attorney General John Ashcroft in Washington DC, and signed a new UK/US bilateral extradition Treaty on 31 March. I met John Ashcroft, together with other Ministers again in Paris for the G8 meeting on Justice and Home Affairs on 5 May at which common action to improve arrangements for identification was agreed.

  Firearms Amnesty
  Dr. Kumar
  To ask the Secretary of State for the Home Department what plans there are to increase spending on the advertising and promotion of the firearms amnesty; how much has been allocated for the year April 2003 to March 2004; which the preferred medium is in which to promote the campaign; and on what basis he has reached this decision. [111256]

  Police force area

  1997

  1998–991

  1999–20002

  2000–012

  2001–022

  Avon and Somerset

  240

  241

  429

  365

  411

  Bedfordshire

  56

  149

  177

  140

  182

  Cambridgeshire

  134

  141

  186

  146

  195

  Cheshire

  70

  97

  72

  167

  177

  Cleveland

  144

  245

  199

  203

  267

  Cumbria

  54

  33

  34

  29

  34

  Derbyshire

  280

  322

  451

  398

  461

  Devon and Cornwall

  94

  144

  140

  111

  138

  Dorset

  78

  42

  123

  153

  174

  Durham

  65

  25

  53

  116

  163

  Essex

  269

  317

  344

  356

  546

  Gloucestershire

  87

  116

  158

  179

  188

  Greater Manchester

  888

  1,143

  1,372

  1,513

  2,175

  Hampshire

  157

  147

  215

  163

  175

  Hertfordshire

  56

  61

  164

  217

  224

  Humberside

  535

  563

  543

  502

  473

  Kent

  364

  277

  340

  335

  269

  Lancashire

  163

  179

  227

  233

  343

  Leicestershire

  106

  185

  137

  119

  146

  Lincolnshire

  92

  80

  141

  152

  153

  London, City of

  4

  15

  6

  5

  Merseyside

  576

  856

  914

  1,041

  1,211

  Metropolitan Police

  2,926

  3,004

  4,118

  4,258

  5,675

  Norfolk

  75

  59

  56

  57

  68

  Northamptonshire

  130

  191

  177

  78

  98

  Northumbria

  277

  457

  531

  472

  541

  North Yorkshire

  131

  74

  59

  47

  70

  Nottinghamshire

  532

  629

  713

  693

  870

  South Yorkshire

  328

  401

  369

  448

  737

  Staffordshire

  241

  123

  184

  321

  386

  Suffolk

  17

  34

  69

  136

  118

  Surrey

  59

  66

  92

  129

  107

  Sussex

  218

  315

  377

  326

  404

  Thames Valley

  325

  471

  555

  609

  703

  Warwickshire

  86

  56

  69

  73

  102

  West Mercia

  84

  105

  114

  111

  177

  West Midlands

  840

  808

  1,008

  1,058

  1,636

  West Yorkshire

  974

  1,041

  1,235

  1,544

  1,759

  Wiltshire

  61

  85

  84

  79

  98

  Dyfed-Powys

  61

  60

  45

  68

  43

  Gwent

  129

  215

  248

  197

  176

  North Wales

  109

  94

  104

  74

  99

  South Wales

  295

  222

  315

  275

  337

  England total

  11,816

  13,283

  16,234

  17,083

  21,659

  1 There was a change of counting rules for recorded crime on 1 April 1998, which would have the tendency to increase the number of offences counted. Numbers of offences before and after this date are therefore not directly comparable.

  2 Figures may have been inflated by some forces implementing the priciples of the National Crime Recording Standard (NCRS) before 1 April 2002.

  250W
  Mr. Bob Ainsworth
  The firearms amnesty ran from 31 March to 30 April 2003. It was agreed after the success of the first burst of advertising at the beginning of the amnesty to repeat the radio advertising in the last week and an additional £122,000 was spent in April 2003 to achieve this.

  There are currently no plans to run another amnesty in the coming year and therefore no additional money has been allocated for advertising and promotion. Over 40,000 guns where handed in during the period.

  Gun Crime
  Dr. Kumar
  To ask the Secretary of State for the Home Department how many(a) gun crimes and (b) arrests relating to gun crime there were (i) in England and (ii) in each UK police force area in each of the last five years. [112721]

  Mr. Bob Ainsworth
  Information on the number of recorded crimes involving firearms, including air weapons, is given in the table.
  251W
  Numbers of arrests for recorded crimes involving firearms are not collected centrally.

  Information relating to Scotland and Northern Ireland are matters for my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Northern Ireland.

  Immigration and Nationality Directorate
  Simon Hughes
  To ask the Secretary of State for the Home Department pursuant to his answer to the hon. Member for Croydon South (Richard Ottaway), of 12 December 2003,Official Report, column 480W, on the Immigration and Nationality Directorate, how many letters were sent to members of the public where a passport could not be traced in (a) 1997, (b) 1998, (c) 1999 and (d) to date in 2003. [112148]

  Beverley Hughes
  The information requested is not held centrally and could be obtained only at disproportionate cost. However, the Integrated Casework Directorate's (ICD) Return of Passport Unit, which was set up in October 1999, issued 97 lost passport letters in the year 2000, 103 in 2001, 390 in 2002 and 251 so far this calendar year.

  I have already now instituted new measures to ensure that in future (a) much fewer passports are held by IND and (b) where a passport does need to be retained it is for as short a period as possible and in a dedicated secure place.

  Northumbria Police
  Mr. Cousins
  To ask the Secretary of State for the Home Department how many offences involving(a) drugs, (b) alcohol abuse, (c) violence and (d) disorder were reported in each command or division of the Northumbria police area in each year from 1998 to 2002. [113073]

  Mr. Bob Ainsworth
  Information on the total number of recorded crimes in some main offence groups, including violent crimes, has been collected and published at the Basic Command Unit level since 1 April 1999. The number of violent crimes recorded in Basic Command Units in the Northumbria police area is given in the table. Details for 2002/03 are not yet available.

  Number of violent offences recorded by the police in Northumbria police force area by police Basic Command Unit

  Violence against the person

  1999–2000

  2000–01

  2001–02

  Gateshead East

  1,156

  989

  1,787

  Gateshead West

  667

  668

  666

  Newcastle Central

  1,077

  908

  999

  Newcastle East

  778

  639

  709

  Newcastle North

  776

  720

  842

  Newcastle West

  948

  1,052

  1,224

  North Northumberland

  430

  339

  325

  South Tyneside

  1,282

  1,483

  1,687

  South-East Northumberland

  1,324

  1,499

  1,493

  South-West Northumberland

  398

  313

  429

  Sunderland City

  1,643

  1,574

  2,292

  Sunderland West

  642

  646

  827

  Tynemouth

  890

  810

  954

  Wallsend

  600

  450

  475

  Washington

  952

  872

  928

  252W

  Number of violent offences recorded by the police in Northumbrian police force area by police Basic Command Unit

  Sexual Offences

  1999–2000

  2000–01

  2001–02

  Gateshead East

  97

  79

  123

  Gateshead West

  55

  36

  61

  Newcastle Central

  58

  43

  40

  Newcastle East

  52

  52

  58

  Newcastle North

  67

  74

  88

  Newcastle West

  89

  60

  90

  North Northumberland

  17

  23

  19

  South Tyneside

  83

  98

  103

  South-East Northumberland

  131

  113

  113

  South-West Northumberland

  20

  13

  7

  Sunder City

  78

  68

  76

  Sunderland West

  54

  44

  42

  Tynemouth

  59

  53

  96

  Wallsend

  68

  79

  60

  Washington

  55

  56

  54

  Number of violent offences recorded by the police in Northumbrian police force area by police Basic Command Unit

  Robbery

  1999–2000

  2000–01

  2001–02

  Gateshead East

  153

  152

  177

  Gateshead West

  80

  94

  81

  Newcastle Central

  140

  114

  96

  Newcastle East

  85

  87

  74

  Newcastle North

  101

  93

  109

  Newcastle West

  152

  138

  146

  North Northumberland

  5

  1

  10

  South Tyneside

  154

  168

  129

  South-East Northumberland

  55

  80

  72

  South-West Northumberland

  4

  4

  11

  Sunderland City

  163

  169

  196

  Sunderland West

  43

  48

  53

  Tynemouth

  118

  102

  92

  Wallsend

  74

  74

  67

  Washington

  62

  57

  74

  Recorded crime figures do not include details of whether drugs and alcohol are an aggravating factor in offences. The requested details of drug offences, alcohol abuse and disorder are not available.

  Oakington Reception Centre
  Mr. Lansley
  To ask the Secretary of State for the Home Department what plans he has to(a) change the composition of asylum applicants housed at the Immigration Reception centre, Oakington and (b)increase the maximum length of stay of residents. [112424]

  Beverley Hughes
  The Oakington fast track facility enables asylum claims which, upon initial screening, appear to be straightforward and suitable for speedy decision making, to be determined in about seven to 10 days. If the decision is to refuse, the claimant may be removed, moved to a Removal Centre or released temporarily.

  There are no plans at present to alter this. Our aim at Oakington is to fast track claims as rapidly as possible. In some instances it may be considered necessary to detain at Oakington beyond the decision stage, non-suspensive appeal (NSA) cases where Judicial Review of a 'clearly unfounded' certificate is sought for example. It is not our intention to detain at Oakington any longer than is necessary.
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  Oakington is a designated place of detention and may also be used to house other persons under the published detention criteria.

  Mr. Lansley
  To ask the Secretary of State for the Home Department how many residents are housed at the Immigration Reception Centre, Oakington; and from which countries. [112427]

  Beverley Hughes
  On 12 May 2003 there was a total of 302 persons detained at Oakington. They were from the following countries: (listed in order of the highest number): Turkey, Jamaica, Serbia and Montenegro, India, Albania, Sri Lanka, Afghanistan, Moldova, Pakistan, Bangladesh, Romania, Czech Republic, Poland, Nigeria, Ukraine, Cameroon, China, Uganda, Latvia, Tanzania, South Africa, Rwanda, Macedonia, Brazil, Botswana, Ivory Coast, Algeria, Cyprus and Bulgaria.

  Police
  Simon Hughes
  To ask the Secretary of State for the Home Department what training police officers receive in how to deal with victims of(a) child abuse and (b) rape; and whether there is an officer at every police station who has received this training. [112106]

  Mr. Bob Ainsworth
  There is currently no national training for police officers on dealing with victims of child abuse and rape. Individual forces are responsible for determining the training required by their officers.

  Centrex (the Central Police Training and Development Authority) is reviewing the training needed by police officers in relation to the investigation of sexual offences in the light of recommendations made in the report of a joint inspection by Her Majesty's Inspectorate of Constabulary and Her Majesty's Crown Prosecution Service Inspectorate. The review will result in a new learning requirement which will defile what officers need to learn and the standards to which they should be trained and will be aligned with the National Occupational Standards for the police service.

  The Home Office, together with the Association of Chief Police Officers, the Police Skills and Standards Organisation, Centrex and others, is considering how to take forward the recommendations of Lord Laming in the report of his inquiry into the death of Victoria Climbie. The Government are committed to implementing Lord Laming's recommendations, which included several concerning the training of police and other practitioners involved in child protection work.

  The deployment of officers following training is entirely a matter for the chief officer of the force concerned.

  Mr. Tom Watson
  To ask the Secretary of State for the Home Department what the costs were of policing the annual party political conferences in 2002; and how these costs were met. [111163]

  Mr. Bob Ainsworth
  Information is only available about the additional costs for policing at the Labour Party and Conservative Party's annual conferences. The additional cost of policing the Labour Party conference in Blackpool in 2002 was £1.52 million. The additional cost for policing the Conservative Party conference in Bournemouth last year was £0.89 million.
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  Forces are assisted with their additional costs through a special grant for the Home Office. For 2002, these grants met the police authorities additional costs in full.

TRADE AND INDUSTRY

  Business Support
  Mark Tami
  To ask the Secretary of State for Trade and Industry what support her Department is providing to indigenous and inward investing supplier companies to(a) locate and (b) expand their business in the United Kingdom. [113023]

  Alan Johnson
  Invest. UK in London and overseas promotes the UK as the top inward investment location in Europe and works in partnership with all of the UK's Development Agencies to attract the maximum level of inward investment. Regional Selective Assistance (RSA) is available to indigenous and international inward investors located, or planning to locate, within the UKs assisted areas. RSA provides grants to help support business expansion and create and safeguard jobs.

  Concorde
  Mr. Evans
  To ask the Secretary of State for Trade and Industry how many representations she has received on the future of Concorde since January. [112911]

  Alan Johnson
  Twenty one. The Department's Aerospace and Defence Directorate has received six further representations.

  Door-to-door Selling
  Dr. Kumar
  To ask the Secretary of State for Trade and Industry if she will introduce legislation preventing door-to-door salespeople calling on households unannounced. [113402]

  Miss Melanie Johnson
  The Office of Fair Trading is currently investigating the doorstep selling sector as a super complaint within the terms of the Enterprise Act 2002. Their report is expected later this year. Any recommendations will be carefully considered.

  Export Licences
  Mr. Menzies Campbell
  To ask the Secretary of State for Trade and Industry what standard and open export licences were granted in respect of spare parts for Hawk aircraft in(a) 2000, (b) 2001 and (c) 2002 and for which countries; what risk assessments were made to determine the risk of these exports being diverted or re-exported in contravention of arms export licensing criteria; and if she will make a statement. [112329]

  Nigel Griffiths
  Details of these were given in response to the question from the hon. Member for Crawley (Laura Moffatt) on 26 October 2000,Official Report, columns 199–203, and in my letter dated 14 November to the hon. Member for Newcastle-under-Lyme (Paul Farrelly), a copy of which has been placed in the Libraries of the House.

  Franchises
  Mr. Barnes
  To ask the Secretary of State for Trade and Industry what powers she has to prevent two master franchises within the same trading scheme in the United Kingdom from using coercive attempts to press their franchisees with registering for VAT as a means of the master franchises obtaining an exemption under the provisions of the Trading Schemes Act 1996; and if she will make a statement. [113009]

  Miss Melanie Johnson
  There are no such powers under the Trading Schemes Act. Registration for VAT is a matter for Her Majesty's Customs and Excise.

  Inward Investment
  Mr. Liddell-Grainger
  To ask the Secretary of State for Trade and Industry what help she will give to Regional Development Agencies in England to increase inward investment. [112954]

  Alan Johnson
  As part of the RDAs 'Single Pot' funding in 2003–04, Invest.UK are providing £12.93 million.

  Invest.UK plan to spend at least £7.2 million in 2003–04 to promote the UK to potential inward investors world-wide. Enquiries generated through this national promotional campaign play a pivotal role in supporting RDAs cluster development activities, helping RDAs deliver their regional economic strategies, and increasing inward investment to their regions.

  Invest.UK has also led the development of a bespoke 'best practice' modular training package for the RDAs to assist them to increase the quality of their 'aftercare' service to inward investors.

  Pharmacy
  Ms Walley
  To ask the Secretary of State for Trade and Industry if she will make a statement on the

  Regional Development Agency

  12001–02

  12002–03

  22003–04

  Advantage West Midlands

  170,850

  205,156

  216,026

  East of England Development Agency

  62,596

  89,413

  81,299

  East Midlands Development Agency

  97,439

  102,892

  127,211

  North West Development Agency

  276,872

  274,855

  318,478

  One North East

  162,671

  193,828

  219,256

  South East of England Development Agency

  110,542

  115,034

  123,952

  South West of England Regional Development Agency

  91,940

  101,958

  101,061

  Yorkshire Forward

  246,267

  210,274

  243,287

  London Development Agency

  289,141

  296,059

  291,239

  Total

  1,508,318

  1,589,469

  1,721,809

  1 Budgets are net of receipts forecast to be generated by the Agencies and include changes approved during the financial year in respect of End Year Flexibility entitlement, claims on the Contigency Reserve and budget swaps between Agencies.

  2 Indicative allovations.

  Trading Schemes
  Mr. Barnes
  To ask the Secretary of State for Trade and Industry which schemes in the United Kingdom which have two master franchises benefit from the single-tier exemption from the Trading Schemes Act 1996. [113046]

  Miss Melanie Johnson
  Information on individual schemes exempt from the Act is not held centrally.
  256W
  progress of the Government's response to the Office of Fair Trading report on the control of entry regulations and pharmacy services in the UK. [111586]

  Miss Melanie Johnson
  The Government made an interim response to the OFT's report on control of entry regulations for pharmacies on 26 March. The Government is considering the report and its recommendation further and will come forward with a balanced package of measures 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.

  Photocopiers
  Mr. Edwards
  To ask the Secretary of State for Trade and Industry what representations she has received about sharp practices involving leasing agreements for office photocopiers; and if she will take steps to afford greater protection to consumers affected by such practices. [113174]

  Miss Melanie Johnson
  The Office of Fair Trading is responsible for monitoring the behaviour of consumer hire companies licensed under the Consumer Credit Act and it has confirmed that few complaints have been received. No action is proposed at this time.

  Regional Development Agencies
  Ms Buck
  To ask the Secretary of State for Trade and Industry if she will list funding allocated(a) to each regional development agency, (b) to the London Development Agency and (c) in total in (i) 2001–02, (ii) 2002–03 and (iii) 2003–04 (estimated). [113207]

  Alan Johnson
  Budget allocations, in £000s, to the Regional Development Agencies, including the London Development Agency, for 2001–02, 2002–03 and 2003–04 are given in the following table.

EDUCATION AND SKILLS

  After-school Activities (Redbridge)
  Linda Perham
  To ask the Secretary of State for Education and Skills what after-school activities are available in the London borough of Redbridge. [111740]

  Mr. Miliband
  Redbridge receives funding from my Department to provide after school study support opportunities for young people in the area: £284,859 this
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  year through the Standards fund. We allow individual schools and local authorities the freedom to decide which activities best meet local needs. Study support can range from homework and study clubs to special-interest activities including the creative arts and ICT, and many of these take place after school.

  Redbridge has also received two grants totalling £527,050 through the New Opportunities fund to provide out of school hours activities. The first grant targets approximately 10 schools in the Hainault and Loxford areas and the second has introduced activities into more than 15 other schools in the borough. Many of these activities take place after school, and include a Bollywood Dance Club, girls' football, and a zoology club.

  Redbridge has, in addition, been awarded £795,343 by the New Opportunities fund for after-school childcare to date, and is on course to meet its DfES target of 1,387 places to be created before June 2003. It has also received an extra capital allocation of £22,000.

  Child Care
  Mr. Evans
  To ask the Secretary of State for Education and Skills how many(a) nurseries, (b) playgroups, (c) child minders, (d) out-of-school clubs and (e) holiday schemes have been provided in Lancashire in each year since 1997. [112057]

  Mr. Miliband
  The available information for Lancashire Local Authority is shown in the tables.

  Figures for 2001 and earlier years for England and Government Office regions were published in DfES Statistical Bulletin 08/01 "Children's Day Care Facilities at 31st March 2001", which is available in the Library and on the DfES website, www.dfes.qov.uk/statistics. Figures for 2001 for out of school clubs and holiday schemes have recently been revised and are shown in the tables.

  Numbers of day care providers1 by type of provider Lancashire Local Authority area 1999–2001 Position at 31 March each year

  1999

  2000

  2001

  Day nurseries

  230

  240

  270

  Playgroups and pre-schools

  290

  290

  280

  Childminders

  1,500

  1,400

  1,400

  Out of school clubs

  70

  80

  90

  Holiday schemes

  30

  220

  20

  1Figures have been rounded

  2Includes those schemes exempt from registration

  Numbers of day care places1 by type of provider Lancashire Local Authority area 1999–2001 Position at 31 March each year

  1999

  2000

  2001

  Day nurseries

  8,800

  9,600

  10,900

  Playgroups and pre-schools

  6,600

  6,600

  6,500

  Childminders

  6,000

  5,800

  5,900

  Out of school clubs

  1,600

  1,900

  2,200

  Holiday schemes

  900

  2670

  640

  1Figures have been rounded

  2Includes those schemes exempt from registration

  Education Funding
  Mr. Luff
  To ask the Secretary of State for Education and Skills if he will make it his policy to bring funding per pupil in Worcestershire closer to the national average. [112661]

  Mr. Miliband
  In introducing the new funding system in 2003–04, our aim has been to produce the best possible match between the distribution of funds and the differing circumstances and needs of pupils, schools and Local Education Authorities. It is our policy to ensure that the funding each authority receives reflects the needs of its pupils, and the cost of providing an education service.

  The new funding system comprises of a basic entitlement per pupil—the same everywhere, and a top ups for each pupil with additional educational needs—again the same everywhere. There are also top ups to reflect the higher costs of recruiting and retaining staff in some areas, and the higher costs of providing an education service in sparse areas. The top up for additional educational needs was informed by research conducted by PricewaterhouseCoopers into the costs of providing for pupils with additional needs. The top ups for area costs are based on earning differentials from the labour force survey.

  These top ups mean that there are differences in what individual authorities receive. Those which have more deprived pupils and/or receive extra funding to take account of the high costs of recruiting and retaining staff in their area, receive a higher level of funding overall than those which have comparatively low levels of deprivation and/or do not receive additional funding for area costs.

  All LEAs have seen an increase in their Education Formula Spending Share of at least 3.2 per cent. per pupil in 2003–04, in addition to compensation for the bulk of the pension contribution increase and the transfer into EPS of nursery grant and class size grant. The increase for Worcestershire is somewhat more substantial at 4.1 per cent. This translates into an increase in Worcestershire's Education Formula Spending Share of 6.0 per cent. when pupil number changes are taken into account.

  School Inspections
  Mr. Gibb
  To ask the Secretary of State for Education and Skills what percentage of lessons inspected by Ofsted in 2001–02 in(a) Year 7, (b) Year 8, (c) Year 9 and (d) Year 10 were set by ability in (i) specialist and (ii) non-specialist comprehensives. [113074]

  Mr. Miliband
  This is a matter for Ofsted and HM Chief Inspector, David Bell, will write to the hon. Member and will place a copy of his letter in the Library.

  School Governance
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what representations he has received about the School Governance (Constitution) (England) Regulations. [111735]
  259W
  Mr. Miliband
  We have received no representations about these regulations, which were made on 18 February 2003. However, some enquirers have sought and received clarification on some of the issues.

  Statemented Children (Shropshire)
  Mr. Owen Paterson
  To ask the Secretary of State for Education and Skills (1) how many children have been statemented in Shropshire in each of the last 10 years; [111662]

  (2) how many children with statements of special educational needs in Shropshire were taught in (a) maintained special schools and (b) other maintained schools in the last 10 years. [111663]

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

  Number of pupils with statements of special educational needs (SEN): Shropshire local education authority

  Pupils with statements of SEN

  January

  Total number of pupils

  Number of pupils in maintained special schools

  Number of pupils in other maintained schools1

  Number of pupils in all other schools2

  19943

  2,288

  504

  1,609

  175

  19953

  2,449

  525

  1,760

  164

  19963

  2,662

  578

  1,927

  157

  19973

  2,844

  590

  2,059

  195

  19983

  2,906

  610

  2,139

  157

  19994

  1,679

  191

  1,352

  136

  20004

  1,667

  190

  1,327

  150

  20014

  —5

  —5

  —5

  —5

  20024

  1,501

  206

  1,132

  163

  20034

  —

  —

  —

  —

  (Provisional)

  1,462

  216

  1,091

  155

  1 Includes Maintained Nursery, Primary and Secondary Schools and Pupil Referral Units.

  2 Includes independent schools, non-maintained special schools and City Technology Colleges.

  3 Before local government reorganisation. Prior to 1999 Shropshire included Shropshire and Telford and Wrekin.

  4 After local government reorganisation. Figures from 1999 onwards are not directly comparable to those for earlier years.

  5Not available. SEN data for 2001 are known to be incomplete.

  Source:

  Annual Schools' Census

TREASURY

  Departmental Underspending
  Mr. Bercow
  To ask the Chancellor of the Exchequer what plans he has to reduce his Department's underspend in 2003–04 from that of 2002–03. [112779]

  Mr. Boateng
  The Chancellor's Departments are currently estimating an underspend of £34 million in 2002–03. This is less than 1 per cent. of total provision. The spending plans for the Chancellor's Departments are set out in: "2002 Spending Review—New Public Spending Plans 2003–2006" (Ref: Cm 5570. Published July 2002).

  Departmental Report
  Mr. Bercow
  To ask the Chancellor of the Exchequer what the cost was of the publication of the 2001 Departmental Report. [112799]
  260W
  Mr. Boateng
  I refer the hon. Gentleman to the answer I gave to the right hon. Member for Berwick-Upon-Tweed (Mr. Beith) on 24 July 2002,Official Report, column 1192W. The final cost of the Departmental Report 2001–02 was £4,912.

  Euro
  Linda Perham
  To ask the Chancellor of the Exchequer whether he plans to seek changes to the European Stability and Growth Pact prior to any future UK entry into the euro. [113115]

  Ruth Kelly
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Ilford, South (Mike Gapes) on 23 January 2003,Official Report, column 424W.

  External Reports
  Mr. Maude
  To ask the Chancellor of the Exchequer if he will list(a) the title and subject, (b) the total cost to his Department and (c) the commissioned author or organisation of each external report commissioned by his Department in each year since 1997. [103726]

  Ruth Kelly
  Since 1997 HM Treasury has on its own or in collaboration with other Departments commissioned people external to the Department to prepare reports.

  The completed reports on which the Treasury took a lead include:
  Economic Instruments and the Business Use of Energy (Lord Marshall), November 1998.
  Work Incentives, The Modernisation of Britain's Tax and Benefit System Number Two (Martin Taylor), November 1998.
  Competition in UK Banking (Don Cruickshank) January 1999.
  Independent Enquiry into a Tonnage Tax (Lord Alexander of Weedon), July 1999.
  Banking Services Consumer Codes Review (DeAnne Julius) May 2001.
  Myners Review of Institutional Investment in the UK (Paul Myners) March 2001.
  Securing our Future Health: Taking a Long-Term View, The Wanless Review' (Derek Wanless) April 2002.
  SET for Success: The supply of people with science, technology,engineering and mathematical skills (Sir Gareth Roberts), Apri12002.
  Medium and Long-Term Retail Savings in the UK (Ron Sandier), July 2002.

  Costs for these reports are not held centrally but will have been met from within the Department's Departmental Expenditure Limits (DEL).

  Illegal Food Imports
  Andrew George
  To ask the Chancellor of the Exchequer how much his Department has allocated to tackling illegal food imports in(a) 2000–01, (b) 2001–02, (c) 2002–03, (d) 2003–04, (e) 2004–05 and (f) 2005–06, broken down by category of activity. [112559]

  John Healey
  [holding answer 13 May 2003]: The Government are investing £25 million for the years 2003–06 to tackle illegal imports of meat, other animal

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  products, plants and plant products. Of the £6 million allocated for 2003–04 Customs will receive £4m. This will help to fund:
  Four new mobile anti-smuggling teams
  An expansion of the detector dog programme from 2 to 6 Extra intelligence activity
  A publicity campaign at ports and airports in the UK and overseas

  The distribution of funding for the years 2004–05 and 2005–06 is the subject of negotiation between Defra, the Food Standards Agency and Customs.

  In previous years the lead enforcement authorities for tackling these illegal imports were Defra, Port Health Authorities and Local Authorities. Customs was not therefore in receipt of any funding for this activity.

  Information Technology
  Mr. Howard Flight
  To ask the Chancellor of the Exchequer what his 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 has been in each financial year since 1997. [107093]

  Ruth Kelly
  The contribution by HM Treasury to Total Managed Expenditure can be measured by the total of spending under resource and capital budgets, less non-cash items in AME. Data for 1989–99 to 2001–02 were published in the 2002 Departmental Report. New estimates will be published in the same table in the 2003 Departmental Report, in May 2003.

  Spending in each year on Information Technology is set out in the table below, showing separately administration costs (including licences, software maintenance, repairs, and hire of IT equipment) and capital costs (including purchases and the capitalisation if IT consultancy costs).

  Year

  IT administration costs (£m)

  IT capital costs (£m)

  1997–98

  1.74

  1.77

  1998–99

  2.07

  2.63

  1999–2000

  1.24

  2.95

  2000–01

  1.58

  2.79

  2001-02

  1.30

  3.66

  2002–03

  2.31

  3.09

  Mortgage Market
  Linda Perham
  To ask the Chancellor of the Exchequer what steps he is taking to reduce floating-rate debt in the UK mortgage market. [113114]

  Ruth Kelly
  The Chancellor announced in the Budget that he has commissioned Professor David Miles to undertake a review of the supply and demand factors limiting the development of the fixed-rate mortgage market in the UK.

  Liquefied Petroleum Gas
  Dr. Kumar
  To ask the Chancellor of the Exchequer if he will make a statement on plans to change the level of duty on liquefied petroleum gas fuel. [112718]
  262W
  John Healey
  Duty rates for all fuels, including liquefied petroleum gas (LPG), are reviewed annually as part of the Budget process. In Budget 2001 the Government announced that duty on all road fuel gases would be frozen in real terms until at least 2004.

  Budget 2003 has announced that duty on all road fuel gases, including LPG, has been frozen at 9 pence per kilogramme, and that the Government will consult stakeholders on how best to ensure that future support for road fuel gases continues to reflect its environmental and other policy objectives. This consultation will be carried out in the next few months jointly by HM Treasury, HM Customs and Excise and the Department for Transport.

  PFI Contracts
  Dr. Kumar
  To ask the Chancellor of the Exchequer what plans he has to insert a fair wages clause into contracts, including PFI contracts between government and private companies entitling agency staff to the same pay and conditions as directly employed public sector employees. [112808]

  Mr. Boateng
  All staff transferring from the public to the private sector are protected by the Transfer of Undertakings (Protection of Employees) Act. This requires that all staff contracts, with the new employer, contain identical terms and conditions to those in the original public sector contracts, with the sole exception of terms relating to membership of occupational pension schemes. The Local Authority Best Value code of practice and the Scottish Executive protocol, entitle new joiners to outsourced work forces to be offered "fair and reasonable" terms and conditions that are "overall, no less favourable" than those available to transferees.

  Treasury Solicitor's Department
  Mr. Gibb
  To ask the Chancellor of the Exchequer who the chief executive officer of the Treasury Solicitor's Department is. [112709]

  The Solicitor-General
  I have been asked to reply.

  The Chief Executive of the Treasury Solicitor's Department is Juliet Wheldon CB QC, HM Procurator General and Treasury Solicitor.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Antibiotics (Animals)
  Mr. Burstow
  To ask the Secretary of State for Environment, Food and Rural Affairs whether she has placed a copy of the most recently published annual report into the sale of antibiotics for use in animals in the UK in the Library; and what period that report covered. [112406]

  Mr. Morley
  On 10 April 2003 the Veterinary Medicines Directorate (VMD) published the fourth in a series of reports designed to provide information about the sales of veterinary antimicrobial products in the UK. This covered sales of these products in the calendar year 2001. This report, entitled "Sales of Antimicrobial Products Authorised for Use as Veterinary Medicines, Growth Promoters, Coccidiostats and Antiprotozoals
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  in the UK in 2001" is available on the VMD's website (www.vmd.qov.uk). Copies of this report were place in the Library of the House on 1 May 2003.

  Animal By-products
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent representations and discussions she has had with(a) small abattoirs, (b) slaughterhouses and (c) independent butchers regarding the Animal By-Products Regulation. [111111]

  Mr. Morley
  The Department has undertaken extensive consultation during the negotiations on the Animal By-Products Regulation. This has included discussions with representatives of the abattoir and butchery industries.

  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what measures she is taking to(a) maintain and (b) encourage the development of new (i) small abattoirs, (ii) slaughterhouses and (iii) butchers under the Animal By-Products Regulation. [111119]

  Mr. Morley
  The purpose of the Animal By-Products Regulation is to ensure that animal by-products are used or disposed of safely. The Department has, however, taken steps where possible to minimise the impact on these industries. We are encouraging our regional partners to deploy the schemes within the England Rural Development Programme to support the network of small and medium abattoirs where a regional need is identified.

  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to the Answer of 28 April 2003,Official Report, column 22W, on Animal By-Products Regulations, for what reason remainders of wild animal carcases which have been used to produce game trophies are not exempt from the scope of the regulation. [111395]

  Mr. Morley
  These controls are in place to maintain existing controls on the trade and import of game trophies under the Balai Directive (92/118/EEC).

  Cetacean By-catch
  Mr. Hayes
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the level of cetacean by-catch within the UK 200-mile limit in the last 12 months. [112496]

  Mr. Morley
  Since 2000 the Sea Mammal Research Unit (SMRU), under contract to Defra, has carried out a number of surveys to estimate the level of by-catch in UK fisheries. These surveys recorded for the offshore bass fishery 53 common dolphins caught in 116 hauls in 2001 and eight common dolphins caught in 66 hauls in 2002. However, by-catch information from other member states whose vessels operate in this fishery and elsewhere in UK waters is not available so it is not possible to produce reliable estimates of dolphin by-catch deaths in within the UK 200-mile limit. It is for this reason that I have been pressing the Commission for urgent action to widen observer coverage of EU fisheries and to bring forward proposals for positive action to reduce by-catch.

  Civil Servants
  Mr. Brazier
  To ask the Secretary of State for Environment, Food and Rural Affairs what performance incentive schemes exist for civil servants in her Department. [112452]

  Alun Michael
  Currently three schemes operate within Defra.i) In February this year a Special Bonus Scheme, applicable to individuals and teams, was introduced to recognise special achievement and contributions beyond normal job requirements. Payments are one-off and not consolidated.
  ii) Staff who, in their appraisal for the period 2003–04, are recognised as consistently exceeding performance requirements will receive one off non-consolidated bonuses in 2004.
  iii) In accordance with senior Civil Service pay arrangements which are not delegated to Departments, all Senior Civil service pay in Defra is performance related including the rate of progression through the pay range. Under these centralised arrangements, Defra is also able to award non-consolidated performance bonuses for delivery of key priorities.

  Departmental Expenditure
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what her estimate is of the expenditure of her Department on newspapers, magazines and periodicals in 2002. [106297]

  Alun Michael
  The Department's expenditure on newspapers, periodicals and magazines in the financial year 2002–2003 was £91,095. This figure covers central purchasing through Defra's library services. This excludes the cost of newspapers, periodicals and magazines purchased in Defra local offices and in the Department's Executive Agencies. These figures could only be compiled at disproportionate cost.

  Departmental Relocation
  Mr. Streeter
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to relocate parts of her Department to the West Country. [110998]

  Alun Michael
  I refer the hon. Member to my reply given to my right hon. Friend the Member for Gateshead, East and Washington, West (Joyce Quin) on 8 May 2003,Official Report, columns 786–87W.

  Fisheries
  Mr. Hayes
  To ask the Secretary of State for Environment, Food and Rural Affairs how many UK fishing vessels there were(a) under 10 metres and (b) over 10 metres, in each year since 1973; what proportion were blue water vessels; and what proportion were foreign-owned. [112498]

  Mr. Morley
  The information requested, where readily available, is given in the following tables. The blue water fleet has been taken as those UK fishing vessels greater than 10 metres overall length.

  Vessel data for 1 January 1973 to 1 January 1990 are available only in terms of under and over 40 foot in length (12.2 metres) and relate to the active rather than the registered UK fishing fleet. The statistics for these years also understate the overall size of the fleet: the

  265W
  registered fleet exceeded the active fleet by about 3,000 vessels in 1991 when the earlier statistical series was replaced.

  The Department does not collect statistics on foreign ownership of fishing vessels. The table includes estimates from 1997 onwards of the number of vessels that are considered to be partly or wholly owned by foreign interests, based on advice from local port offices of the Fisheries Departments in the UK.

  Number of active UK fishing vessels

  Proportion of over 10 m vessels that were foreign owned

  Details as at 1 January

  40 ft and under

  Over 40ft

  Total

  Number

  Percentage over 10 m

  1973

  3,961

  2,366

  6,327

  n/a

  n/a

  1974

  4,073

  2,505

  6,578

  n/a

  n/a

  1975

  4,356

  2,560

  6,916

  n/a

  n/a

  1976

  4,158

  2,533

  6,691

  n/a

  n/a

  1977

  4,307

  2,433

  6,740

  n/a

  n/a

  1978

  4,601

  2,352

  6,953

  n/a

  n/a

  1979

  4,732

  2,335

  7,067

  n/a

  n/a

  1980

  4,878

  2,364

  7,242

  n/a

  n/a

  1981

  4,512

  2,383

  6,895

  n/a

  n/a

  1982

  4,970

  2,381

  7,351

  n/a

  n/a

  1983

  4,485

  2,312

  6,797

  n/a

  n/a

  1984

  4,767

  2,207

  6,974

  n/a

  n/a

  1985

  5,433

  2,151

  7,584

  n/a

  n/a

  1986

  5,868

  2,052

  7,920

  n/a

  n/a

  1987

  6,305

  1,861

  8,166

  n/a

  n/a

  1988

  6,251

  1,953

  8,204

  n/a

  n/a

  1989

  6,128

  2,004

  8,132

  n/a

  n/a

  1990

  6,326

  1,957

  8,283

  n/a

  n/a

  Number of registered UK fishing vessels

  Proportion of over 10 m vessels that were foreign owned1

  Details as at 1 January

  10 m and under

  Over 10 m

  Total

  Number

  Percentage over 10 m

  1991

  7,364

  3,825

  11,189

  n/a

  n/a

  1992

  7,538

  3,873

  11,411

  n/a

  n/a

  1993

  7,831

  3,730

  11,561

  n/a

  n/a

  1994

  8,128

  3,564

  11,692

  n/a

  n/a

  1995

  7,607

  3,220

  10,827

  n/a

  n/a

  1996

  6,757

  2,963

  9,720

  n/a

  n/a

  1997

  6,091

  2,576

  8,667

  162

  6.3

  1998

  6,022

  2,436

  8,458

  152

  6.2

  1999

  6,027

  2,244

  8,271

  141

  6.3

  2000

  5,916

  2,123

  8,039

  124

  5.8

  2001

  5,769

  2,049

  7,818

  116

  5.7

  2002

  5,713

  2,008

  7,721

  119

  5.9

  2003 (provisional)

  5,847

  1,808

  7,655

  121

  6.7

  1 The distribution of ownership at 1 January was as follows:

  1997

  1998

  1999

  2000

  2001

  2002

  2003

  Anglo Spanish

  107

  107

  97

  84

  73

  76

  74

  Anglo Dutch

  40

  35

  36

  33

  37

  37

  38

  Other

  15

  10

  8

  7

  6

  6

  9

  Mr. Hayes
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on areas of linkage made during the CFP derogation negotiations between obtaining the support of other member states and the United Kingdom supporting measures in other areas. [112502]
  266W
  Mr. Morley
  The outcome on the package of fishery measures at the Council of Ministers in December 2002 was negotiated by the UK with reference only to the fisheries matters that were under consideration.

  Forestry Commission
  Andrew Bennett
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress is being made in dedicating Forestry Commission land for permanent public access. [112361]

  Mr. Morley
  The Forestry Commission has not yet dedicated any of its land as the dedication regulations are not yet in place. These regulations are expected to be finalised by the autumn.

  Milk Quota
  Mr. Swayne
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what assessment she has made of the economic impact on the dairy industry of a delay in deciding the base year for milk quota; and if she will make a statement; [112206]

  (2) when she expects to reach a decision with her European partners on the base year for milk quota; and if she will make a statement. [112207]

  Mr. Morley
  Under the current CAP reform proposals, published on 22 January, eligibility for the dairy premium, which is planned as compensation for the price cuts, would be based on quota held on 31 March 2004. We, and some other member states, have expressed concern that the current proposal to base eligibility on quota held at a date in the future has already given rise to speculation on the quota market. We have suggested that it should instead be based on quota held on 31 March 2003, and confined to active producers as at 31 March 2004.

  No formal assessment has been made of the economic impact on the dairy industry, including the effects of quota speculation, of any delay in coming to a decision on the eligibility criteria for the premium. This would in any case be very difficult to determine, as its effect would vary enormously according to producers' individual circumstances.

  The earliest that a formal agreement will be reached on the dairy premium, along with the rest of the CAP reform package, will be the meeting of the Council of Agriculture and Fisheries Ministers on 11 and 12 June 2003.

  Solvent Waste
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to ensure 100 per cent. of the solvent waste stream from the dry-cleaning industry is recycled. [112390]

  Alun Michael
  None. The nature of dry cleaning operations makes it difficult to capture 100 per cent. of the various solvent waste streams for recycling. The Solvent Emissions Directive (1999/13/EC) which aims at reducing emissions of volatile organic compounds due to the use of organic solvents from certain activities and installations, including dry cleaning operations, does not include specific requirements to ensure that a certain
  267W
  amount of the solvent waste stream should be recycled. Instead it controls releases from the operation of the dry cleaning process as a whole by controlling the maximum amount of solvent that can be emitted per unit mass of cleaned garments, that is emissions of waste gases and fugitive emissions to air, soil and water and solvents contained in any products.

  We intend to consult separately on proposals to include requirements on the operators to ensure that waste contaminated with solvents are recycled or disposed of by waste licensed contracts. This will be in line with existing waste management regimes. There are incentives within these proposals to encourage recovery of any residual solvent contained within the waste from dry cleaning operations.

DEFENCE

  Armed Forces (Domestic Violence)
  Ms Atherton
  To ask the Secretary of State for Defence what plans he has to apply the proposals in the "Justice for All" White Paper to domestic violence in the armed forces. [113036]

  Dr. Moonie
  The Ministry of Defence is given to understand that the Domestic Violence Unit at the Home Office is to issue a consultation paper arising from the "Justice for All" White Paper as part of a cross cutting review and I can confirm that the Ministry of Defence will participate in the consultation process. Any subsequent changes to laws applying to incidents of domestic violence would apply to the service community in the same way as to other sections of the population.

  Ms Atherton
  To ask the Secretary of State for Defence what guidance he has given to the armed forces on the reporting of domestic violence; and what recent discussions he has had with ministerial colleagues on the content of such guidance. [113037]

  Dr. Moonie
  The Ministry of Defence's latest guidance on the reporting of incidents of domestic violence within the Armed Forces was published in a "Defence Council Instruction" on 1 February 2002 and is being incorporated into appropriate single-service regulations. The policy takes account of Home Office directives on the subject and with the underlying principle that domestic violence by Service personnel is not to be tolerated under any circumstances. MOD Ministers have not had cause to discuss this policy with other ministerial colleagues.

  Armed Forces Accommodation
  Mr. Hancock
  To ask the Secretary of State for Defence pursuant to the answer of 1 May 2003,Official Report, column 445W, on armed forces accommodation, if he will place in the Library a copy of the guidelines relating to the 4-tier grading system. [112669]

  Dr. Moonie
  Yes.

  Causes of Death
  Harry Cohen
  To ask the Secretary of State for Defence what recent progress has been made in 268W
  identifying the causes of death of (a) Sapper Luke Allsopp and (b) Staff Sergeant Simon Cullingworth; and if he will make a statement. [112486]

  Dr. Moonie
  The investigation into the deaths of Sapper Allsopp and Staff Sergeant Cullingworth is still ongoing and it is not yet possible to predict when it is likely to finish. It would, therefore, be inappropriate for me to comment further at this stage.

  Children's Rights
  Mr. McNamara
  To ask the Secretary of State for Defence what(a) changes have been made and (b) guidance has been issued by the Director General of Service Personnel Policy on bringing law and policy relating to under-18s into line with UK obligations under (i) the United Nations Convention on the Rights of the Child and (ii) other international guidelines. [112629]

  Dr. Moonie
  Our existing policy and procedures for recruitment were already in line with our obligations. We have a policy to ensure that no under 18s are deployed on UN peacekeeping operations and no under 18s carry out operational patrols in Northern Ireland, and last year we introduced a policy whereby no under 18 soldiers may be deployed on operations outside the United Kingdom unless they are of a purely humanitarian nature and no hostile forces are involved.

  Cluster Bombs
  Harry Cohen
  To ask the Secretary of State for Defence what measures exist to control the onward sale to third countries of(a) RBL 755 and (b) BL 755 cluster bombs originally exported from the United Kingdom. [112482]

  Mr. Mike O'Brien
  I have been asked to reply.

  The risk of strategically controlled goods being diverted to a third country is considered at the time of application for a licence, when this possibility is considered against Criterion 7 of the Consolidated EU and National Arms Export Licensing Criteria. Criterion 7 addresses the existence of a risk that the equipment will be diverted within the buyer country or re-exported under undesirable conditions and includes consideration of the capability of the recipient country to exert effective export controls. The Government may draw upon information from a wide variety of sources when considering the risk.

  Deepcut Barracks
  Mr. McNamara
  To ask the Secretary of State for Defence what categories of items have been reported(a) stolen and (b) lost at Deepcut Army barracks in each of the past 10 years; and how many rounds of (i) ammunition and (ii) weapon parts were missing in each year. [112633]

  Dr. Moonie
  In accordance with Service accounting procedures, records of items stolen or lost have been retained for the past five years only. The categories of military stores involved in incidents of theft or loss at Princess Royal Barracks, Deepcut during this period are as follows.
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  Year

  Category

  Stolen

  1998

  Miscellaneous Stores

  2002

  Equipment, Miscellaneous Stores

  2003

  Miscellaneous Stores

  Lost

  1998

  Accommodation Stores, Equipment, Miscellaneous Stores

  1999

  Accommodation Stores, Equipment, Rations, Miscellaneous Stores, Clothing

  2000

  Accommodation Stores, Equipment, Miscellaneous Stores, Clothing

  2001

  Accommodation Stores, Equipment, Miscellaneous Stores

  2002

  Accommodation Stores, Equipment, Rations, Miscellaneous Stores, Clothing

  Over the past five years, two small weapons parts have been found to be missing. There have been no recorded incidents of lost or missing ammunition rounds since 29 September 2002. Records prior to this period are currently in the possession of Surrey police and are unavailable for examination.

  Mr. McNamara
  To ask the Secretary of State for Defence how many claims have been made against insurance for personally issued kit at Deepcut Army barracks in each of the past 10 years. [112634]

  Dr. Moonie
  The Ministry of Defence does not insure itself against the loss or theft or personally issued military kit. Any private claim would be a matter between an individual and his or her insurer.

  Mr. McNamara
  To ask the Secretary of State for Defence how many fires have been recorded at Deepcut Army barracks in the past 10 years; and in how many cases civilian firefighters have been called to assist. [112635]

  Dr. Moonie
  Records are only available from June 1997. Since that time there have been eight separate fire incidents within the perimeter of the Princess Royal Barracks, Deepcut. On each occasion the local civilian fire service was called to assist.

  Electoral Procedures
  Patrick Mercer
  To ask the Secretary of State for Defence what steps he is taking to ensure that service personnel on operations can vote in elections. [112655]

  Dr. Moonie
  The Representation of the People Act 2000 and the Representation of the People (Scotland) Regulations 2001 presented Service personnel with a range of electoral registration options. They may register to vote at their private or other qualifying address, Service Families Accommodation or Single Living Accommodation, or register to vote by means of a Service declaration, or by rolling registration. A fresh Service declaration must be made every 12 months and, together with all households in the United Kingdom, all Service Voters will receive an annual renewal notification from the local Electoral Registration Officer with whom they are registered. The Ministry of Defence issues annual Defence Council Instructions explaining these measures in detail. The last was issued on 31 January 2003. Those overseas who are registered as Service Voters can only vote by proxy. Those in the United Kingdom who are unable to vote in person may vote by either post or proxy. Those individuals who choose to register on an electoral register—and who are not registered as Service Voters through a Service 270W
  declaration—will be able to vote either by post or proxy if they are overseas or away from home during an election. If personnel are overseas, every effort is made by ships, units, and stations to give reasonable assistance to personnel to register or vote in line with their electoral registration choice.

  Executive Agencies
  Mr. Nick Gibb
  To ask the Secretary of State for Defence who the chief executive officer is of the(a) Defence Diversification Agency, (b) Defence Evaluation and Research Agency and (c) Veterans Agency. [112701]

  Dr. Moonie
  The Director General of the Defence Diversification Agency is Professor Damien G. McDonnell BSc PhD DSc CPhys FinstP QBE. He does not have the title chief executive since the Defence Diversification Agency is part of the Ministry of Defence head office and not a Defence agency.

  The Defence Evaluation and Research Agency (DERA) no longer exists. On 1 July 2001, two new organisations, QinetiQ pic and the Defence Science and Technology Laboratory, a trading fund, were formed from DERA. The chief executive officer of QinetiQ is Sir John Chisholm MA FR Eng, and the chief executive of DSTL is Mr. Martin Earwicker.

  The chief executive of the Veterans Agency is Mr. Alan Burnham.

  Graduate Scientists
  Mr. Chaytor
  To ask the Secretary of State for Defence how many graduate scientists were recruited by the Nuclear Weapons Research Establishment at Aldermaston in each of the last three years; and how many additional graduate scientists will be recruited during 2003–04. [112825]

  Dr. Moonie
  The following figures show the number of science graduates recruited at the Atomic Weapons Establishment.

  Science graduates

  2000–01

  39

  2001–02

  38

  2002–03

  43

  The expected recruitment figure for 2003–04 is 50.

  Gurkhas
  Patrick Mercer
  To ask the Secretary of State for Defence what plans he has for the two Gurkha reinforcement companies. [112651]

  Dr. Moonie
  Both of the remaining Gurkha Reinforcement Companies are due to be disbanded, the first by July this year and the second by March 2004.

  Improved infantry manning levels mean that the requirement for the Gurkha Reinforcement Companies has reduced. Notwithstanding this we intend to maintain Gurkha force levels at around 3,500 and plan to create two additional permanent Gurkha sub-units.

  Iraq
  Jeremy Corbyn
  To ask the Secretary of State for Defence what latest estimate he has of the death toll from current hostilities in Iraq among(a) UK forces, (b) US forces, (c) Iraqi forces, (d) Iraqi civilians and (e) other civilian non-combatants. [110267]

  Mr. Hoon
  As of 6 May, 34 United Kingdom Service personnel had died during coalition military operations against Iraq.

  The number of fatalities suffered by US forces is a matter for the US authorities.

  We make every effort to minimise any impact on the Iraqi civilian population. We have no means of ascertaining the numbers of Iraqi military personnel or civilians, or other civilians who were killed or injured during the coalition's military action.

  Patrick Mercer
  To ask the Secretary of State for Defence what efforts his Department is making to assure the employers of TA soldiers serving in Iraq that their employees will return at the earliest opportunity. [112649]

  Dr. Moonie
  As my right hon. Friend the Secretary of State for Defence stated on 30 April 2003,Official Report, columns 15–16WS, we will continue to withdraw assets and personnel from the region where possible, but we will maintain an appropriate military presence for as long as is necessary. The requirement for Reservists will match this pattern. Where possible, Regional Reserve Forces' and Cadets' Associations (RFCAs), in concert with the Regional Brigade Chain of Command, have kept local employers of TA and Regular Army Reservists informed of the situation.

  Mr. Tynan
  To ask the Secretary of State for Defence if he will ensure that reservists on duty in Iraq are kept informed by their commanding officers of how long they will be required to remain in Iraq. [112877]

  Dr. Moonie
  On mobilisation, reservists are informed of the likely length of their mobilised service. This is usually 6 months in theatre plus a further 1½ months made up of pre-deployment training and post-deployment admin and leave (a total of 7½ months). Should there be any changes to the period of mobilised service, reservists would be informed by their commanding officer as a matter of course.

  Jeremy Corbyn
  To ask the Secretary of State for Defence how many UK civilians have been deployed in Iraq by his Department since the end of the war; from what department of government they have been drawn; and what the expected(a) cost and (b) length of their deployment is. [113236]

  Dr. Moonie
  [holding answer 13 May 2003]: The number of Ministry of Defence civilian personnel deployed into theatre is in excess of 180. Of those personnel, the number deployed into Iraq varies daily, but is in the order of 12. In addition, some 50 civilians from other Government Departments have deployed, or are deploying into Iraq with the Office of Reconstruction and Humanitarian Assistance. The Coalition, including civilian personnel, will stay in Iraq only as long as is necessary to help the Iraqi people to build their own political institutions and reconstruct
  272W
  their country. It is too early to predict how long this is likely to take and therefore, how much the deployment of United Kingdom civilians to Iraq will cost.

  Military Police Training School, Chichester
  Mr. Tyrie
  To ask the Secretary of State for Defence if he will make a statement on the future of the Royal Military Police Training School and the Roussillon Barracks in Chichester. [112913]

  Dr. Moonie
  I refer the hon. Member to my right hon. Friend the Minister for the Armed Forces' Written Ministerial Statement on 25 November 2002,Official Report, columns 1–2WS. RAF Halton was identified by the 'Defence Training Review as the benchmark location for Joint Police Training. This benchmark assumes that the RMP training would be moved to RAF Halton and that other units at Roussillon Barracks would also be relocated. We do not expect to make a final decision on the location for police training and the eventual use or disposal of Roussillon Barracks before 2005.

  Naval Campaigns (60th Anniversaries)
  Dr. Julian Lewis
  To ask the Secretary of State for Defence what plans he has for commemorating the 60th anniversaries of major naval campaigns and events in the Second World War. [112267]

  Dr. Moonie
  During the first few years of this century, to 2005, there was and will be a succession of 60th anniversaries of significant actions in the Second World War. It is not possible for the Ministry of Defence to mark all of them and so it was decided that the Department would fund a commemoration of one representative battle for each of the Services, with a triService commemoration of the 60th anniversary of the end of the War. The actions chosen by the Services were the Battle of the Atlantic for the Royal Navy, the Battle of El Alamein for the Army and the Battle of Britain for the Royal Air Force.

  The Battle of Britain was commemorated by the Royal Air Force in 2000. The Army organised a Service of Thanksgiving on 23 October 2002 in Westminster Abbey to mark the Battle of El Alamein and the Royal Navy have just organised an event in Liverpool to mark the Battle of the Atlantic.

  The Government will also be organising events in 2005 to mark the end of the war, but planning is at an early stage and no details are available.

  Forces Recruitment
  Dr. Julian Lewis
  To ask the Secretary of State for Defence what changes there have been in recruitment rates for(a) the Royal Navy and (b) the Royal Marines since the outbreak of the Gulf conflict. [112268]

  Dr. Moonie
  It is too early to gauge whether the Gulf conflict has had an impact on recruitment to the Royal Navy and the Royal Marines since the process can take a number of months from enquiry to entrance and any knock-on effect would not be evident until later in the year. No candidates have withdrawn enquiries or
  273W
  cancelled interviews as a stated consequence of the conflict and the flow of expressions of interest remains high.

  The number of enquiries and subsequent applications to join the Service as Naval ratings and Royal Marines other ranks shows an increase of between 8 per cent. and 10 per cent. respectively on the same period for last year.

  Service Personnel (Open University Study)
  Mr. McNamara
  To ask the Secretary of State for Defence how many service personnel have(a) enrolled on and (b) completed an Open University course in the past 12 months. [112624]

  Dr. Moonie
  The best estimates available are that, for financial year 2002–03, 161 RN, 110 Army and 1,477 RAF personnel registered to undertake Open University courses. Accurate figures for enrolment are not available as personnel who elect for personal reasons to undertake an OU course are under no obligation to tell the OU that they are Servicemen or women, or to report to their Service managers that they have commenced a course of learning with the OU.

  In addition, 21 RN, 18 Army and 76 RAF personnel were registered for OU degree courses during the last 12 months under existing sponsorship schemes.

  Figures for course completion are not held centrally and could be provided only at disproportionate cost.

  Suez Medal
  Mr. Martlew
  To ask the Secretary of State for Defence when he expects the sub-committee chaired by General Lord Guthrie of Craigiebank to report regarding the issue of a Suez Canal Zone medal; and if he will make a statement. [112764]

  Dr. Moonie
  The HD Committee has seen the report submitted by General Lord Guthrie on behalf of the sub-committee. They have not indicated when an announcement will be made.

  Training Establishments
  Mr. McNamara
  To ask the Secretary of State for Defence what determination has been made by the Director General of the Training and Education Rationalisation Delivery Group of the appropriate instructor to trainee ratios, including pastoral care and supervisory duties, in each service. [112617]

  Dr. Moonie
  There are two aspects of instructor to trainee ratios: formal training class size and pastoral care out of working hours. The requirement for supervision varies accordingly. The Ministry of Defence does not currently recommend precise supervisory ratios, but work is in hand to develop policy guidance for Commanding Officers of training establishments.

  Mr. McNamara
  To ask the Secretary of State for Defence what work has been done by the Director General of Training and Education to formulating a policy for development of the arts, music and other cultural expression in training establishments. [112626]
  274W
  Dr. Moonie
  None. Under Service regulations, maintenance of morale, personal development and recreation are command functions policy responsibility for which lies with the individual Service Principal Personnel Officers. At a local level, development of the arts, music and cultural expression rests with the individual commanders of training establishments, as part of their command function. Many units have voluntary bands and encourage trainees to join. Many also have theatre and music clubs, which often stage productions. Training establishments support music and the arts in a recreational and developmental context and encourage participation as an adjunct to training in operational skills.

  Mr. McNamara
  To ask the Secretary of State for Defence what measures have been taken by the Adjutant General to rectify the staffing shortfalls at(a) the School of Electrical and Mechanical Engineering at Bordon and (b) the Defence School of Transport at Leconfield. [112618]

  Dr. Moonie
  The Army Training and Recruiting Agency, of which the schools at Bordon and Leconfield are a part, has undertaken a comprehensive review of military establishments at all of its schools. In the case of Bordon and Leconfield, urgent action has been taken to amend the establishments. The Assistant Chief of the General Staff has directed the Army's manning authorities to arrange for suitably qualified personnel to be posted there as a matter of priority in the short term.

  Mr. McNamara
  To ask the Secretary of State for Defence what rank of empowered commissioned officer has been appointed at each Army training establishment to enable each recruit and trainee to obtain confidential welfare and other advice; and what steps have been taken to advertise the availability of this officer. [112619]

  Moonie
  Within the Army Training and Recruiting Agency (ATRA), empowered officers are normally of the rank of either Major or Captain and, dependent on the establishment, will either be the Unit Welfare Officer, the Second in Command, the Unit Educational Officer or the Unit Resettlement Officer. At each school, the name and contact details of the officer will be publicised widely using a combination of briefings, Unit Orders, flyers and/or posters. A "credit card" showing useful contact numbers is issued to recruits/trainees at some ATRA establishments and consideration is being given to the issue of a card of standard, robust, design for use by all ATRA establishments.

  McNamara
  To ask the Secretary of State for Defence what direction has been issued by the Director General of Training and Education concerning(a) time for sport in training establishments and (b) sport policy; and if he will place a copy in the Library. [112625]

  Moonie
  A policy for Armed Forces sports is nearing completion. I anticipate that it will be approved during the summer. I will write to the hon Member and a copy of my letter will be placed in the Library of the House.

  Mr. McNamara
  To ask the Secretary of State for Defence what assessment has been made by principal personnel officers of the number and quality of Welfare and Emotional Support Projects in initial training
  275W
  establishments; what targets are set for the projects; and if he will place a copy of the project action plans in the Library. [112627]

  Dr. Moonie
  The Services have already introduced measures to ensure that welfare presentations and training are now included at Initial Training establishments. The Army have ensured that all new recruits receive instruction on welfare services available, access to WRVS, Service Padres and confidential support telephone lines. The RN and RAF have also adopted similar measures and included organisations like The Soldiers, Sailors and Air Forces Association (Forces Help) (SSAFA (FH)) and the Benevolent and Dependants Funds, who have traditionally provided welfare support to the Services and their families. In addition, all three Services have successfully developed Welfare websites that have proved popular with Servicemen and their families. An action plan for continued spreading of good practice is being prepared; a copy of this action plan will be placed in the Library of the House when complete.

  Mr. McNamara
  To ask the Secretary of State for Defence what steps have been taken by principal personnel officers to disseminate best practice guidelines on sustaining links between recruits and trainees with their parents during initial training; and if he will place a copy of the guidelines in the Library. [112630]

  Dr. Moonie
  The Principal Personnel Officers strongly encourage recruits and trainees to sustain links with their parents during initial training. The Naval Service considers that these links are strong, but samples of parents/guardians are to be surveyed on a regular and routine basis to confirm this. Commanding Officers of Army initial training units have for some considerable time now written to, or kept in telephone contact with, parents of recruits aged under 18 years. All Army recruits are also encouraged to maintain contact with parents themselves.

  Following a recent review of the legal position, RAF guidelines to disseminate best practice are expected to be published shortly. A copy of these guidelines will be placed in the Library of the House.

  Mr. McNamara
  To ask the Secretary of State for Defence what library services are available at initial training establishments. [112632]

  Dr. Moonie
  The following library services are available at initial training establishments:Royal Navy
  Britannia Royal Naval College (BRNC)—The library serves 600 students per year and works in conjunction with Exeter and Plymouth Universities. It is extensively used for research, in particular work towards Foundation Degrees, and includes a major collection of Maritime strategic history books.
  HMS Raleigh—library forms part of the wider Learning Centre.
  Commando Training Centre Lympstone—The library offers a full library service for the Corps of Royal Marines.
  Army
  The Royal Military Academy Sandhurst (RMAS)—The library serves some 760 students per year. It focuses on military history, doctrine and international affairs, and is widely used for research.
  Army Training Regiment Bassingbourne—A new library is due to open soon.
  276W
  Army Technical Foundation College Arborfield—General reference, technical and recreational library for students.
  Army Foundation College—General reference and recreational library for students.
  Royal Air Force
  RAF Cranwell—Houses the Trenchard Library, the main RAF library covering recreational and reference materials. It also has a technical library.
  RAF Halton—This contains a recreational and reference library within the Learning Centre.
  RAF Honington—Houses a large recreational and reference library.
  The library facilities listed above generally include good internet and computer training facilities in addition to their stock of books, videos and periodicals.

  Mr. McNamara
  To ask the Secretary of State for Defence what assessment has been made by principal personnel officers of the recreational facilities at Army training establishments; how many(a) non-alcohol cafes, (b) internet facilities and (c) quiet areas have been established in the past 12 months; what targets have been set in the form of an action plan; and if he will place a copy in the Library. [112623]

  Dr. Moonie
  The Army Training and Recruiting Agency (ATRA) is currently conducting a comprehensive survey of these facilities at all of its establishments. The number of facilities established during 2002 and in 2003 to the current date is as follows:

  non-alcohol cafes: 8

  internet facilities: 19 (plus 60 personal IT equipment in individual's rooms)

  quiet areas: 26

  Once this survey is completed, a new scaling requirement and action plan will be developed.

  War Pensions Claims
  Mr. Djanogly
  To ask the Secretary of State for Defence what the average time taken was to review applications for(a) war disability pension and (b) war widows pension in the last year for which figures are available. [112555]

  Dr. Moonie
  [holding answer 13 May 2003]: Over the year up until April 2003 the average time taken for an appeal to be processed from the initial request for appeal until implementing payment of the award or pension was 283 days. This is within the target figure which has been set at 290 days. Statistics are compiled for all appeal cases and are not split between war disability pensions and war widow(er)s pensions. Separate figures could be provided only at disproportionate cost.

DEPUTY PRIME MINISTER

  Local Authority Finance
  9. David Taylor
  To ask the Deputy Prime Minister what plans he has for further changes to the formula used to distribute Government grant to English local authorities. [112949]
  277W
  Mr. Raynsford
  Following the review of the grant distribution formula which took effect this year, we have no plans to change any of the Formula Spending Share formulae until at least 2006–07, other than to reflect changes of function or financing.

  This will give local authorities greater certainty about future funding.

  Tom Brake
  To ask the Deputy Prime Minister if he will make a statement on budget allocations to local authorities. [112953]

  Mr. Raynsford
  In terms of formula grant, the Office of the Deputy Prime Minister was able to allocate an extra £2.4 billion or 5.9 per cent. to authorities for 2003–04, with each authority receiving more than inflation for the first time ever.

  Including special grants, total funding to all English authorities increased by some £3.8 billion, or 8.0 per cent.

  Regional Government
  Ann Winterton
  To ask the Deputy Prime Minister if he will make a statement on the funding of the North West Regional Assembly. [112950]

  Mr. Raynsford
  The North West Regional Assembly is a voluntary body. The bulk of its funding comes from local authority subscriptions and other sources.

  In 2003–04, the Assembly will receive up to £1,837,000 from central Government to support its work scrutinising the plans and activities of the Regional Development Agency, and advising the Government as the Regional Planning Body.

  Joyce Quin
  To ask the Deputy Prime Minister if he will make a statement on his Department's plans for encouraging public debate on his proposals regarding elected regional Government in England. [112948]

  Mr. Leslie
  The Office of the Deputy Prime Minister has received over 6,000 responses to the soundings exercise on whether to hold referendums to create Elected Regional Assemblies in the English regions.

  As we near decisions on which regions will have referendums, we will continue to raise public awareness and encourage debate.

  Right to Buy
  Claire Ward
  To ask the Deputy Prime Minister what recent response he has received from local councils on the restriction of the right to buy discount. [112951]

  Mr. McNulty
  Councils in six of the 42 areas identified as subject to the greatest housing market pressures asked to be excluded from the discount and 12 councils asked to be added to the list. The majority of local authorities recognised the change was needed to address the scheme's impact on affordable housing and profiteering.

  Civil Defence (London)
  Angela Watkinson
  To ask the Deputy Prime Minister what funding arrangements are in place to enable the London Fire and Civil Defence Authority to prepare for terrorist attacks in London. [112952]
  278W
  Mr. Raynsford
  The London Fire and Emergency Planning Authority is one of the functional bodies of the Greater London Authority and its annual budget is part of that set by the Mayor for the GLA.

  Central Government funding for the LFEPA is generally provided through the Local Government Finance Settlement for the GLA. The 2003–04 Settlement gives the GLA just over £2 billion, an increase of £95 million or 4.9 per cent. on 2002-03 on a like for like basis.

  The LFEPA also benefits from the New Dimension programme to enhance the national mass decontamination capability. This will bring an extra 400 gas-tight suits for fire-fighters, 10 new purpose built vehicles and 20 mass decontamination units available to meet London's needs.

  The Office of the Deputy Prime Minister is also working closely with London Fire Brigade to improve their current CBRN response capability through the purchase of new personal protective equipment and detection equipment—which Government will fund directly.

  Building Regulations
  Dr. Whitehead
  To ask the Deputy Prime Minister (1) what assessment he has made of the contribution that building regulations make to the achievement of Government targets for the reduction of greenhouse gas emissions; [113183]

  (2) what assessment his Department has made of the scope for amending building regulations to require new buildings to contribute towards the energy used within them; [113185]

  (3) what changes he plans to enhance the contribution that building regulations make to the energy efficiency of new buildings. [113184]

  Mr. Leslie
  The energy performance requirements in Part L of the Building Regulations have been reviewed twice in the last decade to see what contribution they can make towards achieving the Government's energy performance and carbon dioxide emissions targets, while remaining proportionate, cost-effective and practical. Other greenhouse gases are controlled in different ways. In the Regulatory Impact Assessment published in October 2001 to accompany the latest amendment to Part L of the Building Regulations, which came into effect in April 2002, it was estimated that the changes would lead to a reduction in carbon emissions of 1.4 million tonnes of carbon (equivalent to about 5 million tonnes of carbon dioxide) per year in 2010.

  The consultation document published in June 2000 that proposed this amendment included an assessment of the scope for improving performance standards over the period to 2008. Both these documents can be inspected on the Office of the Deputy Prime Minister website at http://www.safety.odpm.gov.uk/bregs/brnews.htm.

  As to plans for future enhancements, it was announced that a new review of the Building Regulations would occur in the Energy White Paper with the aims of

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  bringing a further major revision into effect in 2005 for new buildings and refurbishment work, and raising standards even more over the next decade.

  Council Tax
  Mr. Wiggin
  To ask the Deputy Prime Minister how much was raised in Council Tax in(a) 2000–01, (b) 2001–02 and (c) 2002–03; and how much is expected to be raised in 2003–04. [113078]

  Mr. Leslie
  Tabled as follows is the most recent figure for gross council tax income in England for each financial year. Gross council tax income includes council tax collectable by local authorities and council tax funded through council tax benefit.

  Year

  Gross council tax income (£ billion)

  2000–011

  14.5

  2001–021

  15.5

  2002–032

  16.6

  2003–042

  18.9

  1Outturn figures

  2Budget figures

  The figures in the table are the amounts expected to be collected in respect of each financial year. They are not the amounts actually collected within the financial year. Some of the council tax due for a particular year is not collected within that year. This means that the amount actually collected in any particular year is made up of income in respect of that year plus amounts collected from earlier and/or later years.

  Devon County Council
  Mr. Swire
  To ask the Deputy Prime Minister what percentage of central government funding allocated to Devon County Council has been ring-fenced for environmental policy implementation in each of the last five years. [109645]

  Mr. Raynsford
  The majority of what local authorities spend on the environment comes in unring-fenced form from general grant. In the last five years Devon received one ring-fenced revenue grant for the environment of £1.159 million for waste in 2002–03. This represented less than 0.5 per cent. of the total revenue grant from central Government in that year1. The waste fund also provided Devon with £0.375 million of capital funding in 2002–03. In addition Devon County Council was awarded the Supplementary Credit Approvals (SCAs) related to environment to the value set out in the following table.

  SCAs

  £000

  Land fill gas/contaminated land

  Flood defence

  1999–2000

  734

  0

  2000–01

  261

  231

  2001–02

  1,648

  0

  2002–03

  1,764

  28

  2003–04

  0

  0

  1The total of general grant and specific and special grants for Devon in that year was £418.909 million. The grant of £1.159 million for waste is attended to cover work by the country council and the districts.

  Firefighters
  Mr. Evans
  To ask the Deputy Prime Minister how many firefighters there were per head of population in(a) Lancashire, (b) the North West of England and (c) Wales in each year since 1997. [112056]

  Mr. Raynsford
  The number of firefighters per 10,000 of population are tabled as follows:

  Number of firefighters per head of population

  1997

  1998

  1999

  2000

  2001

  2002

  Lancashire

  Wholetime

  7.0

  7.0

  7.1

  7.1

  7.1

  7.1

  Retained

  2.5

  2.4

  2.3

  2.2

  2.0

  1.9

  North West

  Wholetime

  8.2

  8.2

  8.1

  8.0

  8.0

  8.0

  Retained

  1.3

  1.3

  1.3

  1.3

  1.2

  1.2

  Wales

  Wholetime

  5.9

  5.9

  5.9

  5.9

  5.9

  5.9

  Retained

  5.1

  5.1

  5.1

  5.1

  5.1

  5.1

  Notes:

  1. Based on annual returns to HM Fire Service Inspectorate and population figures published by the Office for National Statistics.

  2. Wholetime strength expressed in full-time equivalents and retained strength in 24-hour units of cover.

  3. North West figures comprise fire brigade areas of Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside.

  Heating Systems
  Mr. Don Foster
  To ask the Deputy Prime Minister pursuant to his answer of 10 April 2003,Official Report, column 355W, on heating systems, what the nature is of the research referred to; what stage the research is at; whether there is a mechanism for people to submit comments or evidence to that research; and when the results will be known [113225]

  Mr. Leslie
  The research underlying SEDBUK, the UK's database of domestic boiler seasonal efficiency indices, which was developed to facilitate SAP energy ratings, was carried out as a collaborative venture by industry and Government in 1997 to 1999. Collaboration has continued since then and this has focused on improvements and rectifying anomalies.

  Research into the evaluation of the energy performance of micro-combined heated and power (micro-CHP) units is at an early stage. A laboratory test procedure is being developed through consultations that have been commissioned by a group set up by the Energy Saving Trust. The procedure is close to completion and it is anticipated that the next stage will be to turn it into a "Publicly Available Specification' (PAS) through the offices of BSI. It is akin to the standards in the Boiler Efficiency Directive, used to evaluate full and part load performance for boilers, and aims to establish similar performance parameters for microCHP systems. The results obtained could be used to determine a seasonal performance index for microCHP systems. However, while this index would be similar to the SEDBUK for boilers it would be inappropriate to make direct comparisons between these products on an efficiency basis. Consideration is therefore being given to the development of a comparison system based on total carbon emissions, total energy or total energy costs.
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  As the rating development will be reliant upon microCHP field trials, it is not possible to say precisely when the further research results will be known, but the aim is to have the SEDBUK equivalent in place in time for inclusion in the next major revision of the Building Regulations Part L in 2005. There will, of course, be consultation with the interested parties on these initiatives during the intervening period.

  Home Improvement Agencies
  Mr. Drew
  To ask the Deputy Prime Minister what the timetable is for the letting of the new contract for the national co-ordinating body for Home Improvement Agencies. [113053]

  Mr. McNulty
  In accordance with EU competition rules and Government procurement policy, the Office of the Deputy Prime Minister will shortly be going out to tender for a new contract to be funded centrally. The new contract will be in place from 1 April 2004.

  Mr. Drew
  To ask the Deputy Prime Minister what evaluation he has undertaken cf the effectiveness of Foundations, the national co-ordinating body for Home Improvement Agencies. [113054]

  Mr. McNulty
  As part of a continuing dialogue, officials of the Office of the Deputy Prime Minister agree an annual plan with Foundations and have detailed quarterly round-up meetings with them to ensure that they are meeting the requirements of the contract.

  Mr. Drew
  To ask the Deputy Prime Minister what funding central government has allocated for Home Improvement Agencies in each of the last three years; and what its projected budgets are for each of the next three years. [113055]

  Mr. McNulty
  The Office of the Deputy Prime Minister funding for the years requested are tabled as follows:

  £ million

  2000–01

  6.7

  2001–02

  8.5

  2002–03

  8.5

  2003–04

  8.5

  2004–05

  10.5

  2005–06

  10.5

  This funding is ring-fenced within the Supporting People programme for 2003–04. Thereafter, it will be for local authorities (county councils in the case of two-tier administrations) to manage funding for Home Improvement Agencies within their budgets for Supporting People services, in line with the strategy agreed by the local Commissioning Body.

  Over the period 2003–04 to 2005ndash;06 the Department of Health will be providing £9.5 million earmarked for Home Improvement Agencies so that they can become key players in the provision of services to older people on discharge from hospital.

  Mr. Drew
  To ask the Deputy Prime Minister pursuant to the written statement of 6 May 2003,Official Report, columns 28–29WS, on the Home Improvement Agency, what consultation was undertaken in advance of
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  the statement; with whom; and if he will publish the local commissioning models and statements consulted upon. [113052]

  Mr. McNulty
  The written statement issued on 6 May reflects the outcome of the public consultation exercise launched in September 2002, and a series of meetings of a Home Improvement Agency (HIA) policy group at which the Office of the Deputy Prime Minister, the Department of Health, agencies and other key stakeholders were represented. That group also had the opportunity to consider draft recommendations from Foundations' separate research project, which looked to establish optimum structures and commissioning arrangements for HIA services. It is expected that the final recommendations from Foundations will be made available on their website in due course.

  Local Elections (Young People)
  Linda Perham
  To ask the Deputy Prime Minister what steps he is taking to increase the number of young people participating in local elections. [112537]

  Yvette Cooper
  I have been asked to reply.

  The Government are keen to encourage young people to participate in elections. My Department contributed to the Children and Young People Unit's work on the engagement of young people in democracy, and we support fully the Electoral Commission's campaigns and competitions aimed specifically at young people. The addition of citizenship studies to the national curriculum and the piloting of new technologies such as text messaging and digital television for voting should also help to engage, and appeal, to young people, as well as increasing their interest, understanding and involvement in the democratic process.

  Objective 1
  Mr. Chapman
  To ask the Deputy Prime Minister if he will make a statement on the criteria for Objective 1 funding. [112598]

  Alan Johnson
  I have been asked to reply.

  The eligibility criteria for Objective 1 are specified in Article 3, paragraph 1 of Council Regulation (EC) No. 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds as follows:
  The regions covered by Objective 1 shall be regions corresponding to Level II of the Nomenclature of Territorial Statistical Units (NUTS level II) whose per capita GDP, measured in purchasing power parities and calculated on the basis of Community figures for the last three years available on 26 March 1999, is less than 75 per cent. of the Community average.
  The outermost regions (the French overseas departments, the Azores, the Canary Islands and Madeira), which are all below the 75 per cent. threshold, and the areas eligible under Objective 6 for the period 1995 to 1999 pursuant to Protocol 6 to the Act of Accession of Austria, Finland and Sweden shall also be covered by this Objective.

  On 1 July 1999 the European Commission drew up the list of areas which would be eligible for Objective 1 for the period from 2000 to 2006. In the UK, four regions were eligible on the basis of the average GDP per

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  head using data for 1994 to 1996. These are Merseyside, Cornwall and the Isles of Scilly, South Yorkshire and West Wales and the Valleys.

  Special Advisers
  Mr. Pickles
  To ask the Deputy Prime Minister what the costs have been in(a) salary, (b) administrative support and (c) travel of special advisers employed in his Department since May 2002. [91620]

  Mr. Leslie
  The costs to public funds for special advisers employed in the Office of the Deputy Prime Minister for the period 1 June 2002 until 31 March 2003 is(a) £189,633 salary costs, (b) £43,725 administrative support costs and (c) £17,877 travel costs.

CABINET OFFICE

  Internet
  John Robertson
  To ask the Minister for the Cabinet Office (1) how many people in(a) Scotland and (b) the UK (i) do not regularly use the internet and (ii) have never used the internet; [111290]

  (2) what steps he is taking to give the long-term unemployed (a) better knowledge of and (b) better access to the internet; [111288]

  (3) what steps he is taking to give those in low income households better access to the internet; [111291]

  (4) what steps he is taking to encourage people who do not regularly use the internet to log on more often; [111292]

  (5) how he plans to publicise the forthcoming launch of Online Nation; [111293]

  (6) what percentage of (a) households and (b) schools in (i) Scotland and (ii) the UK had access to the internet in each year since 1998; [111289]

  (7) what estimate he has made of the percentage of voluntary organisations in (a) Scotland and (b) the UK who have had websites in each year since 1998. [111294]

  Mr. Alexander
  The UK has made considerable progress in recent years in terms of the proportion of the population regularly accessing the internet. The UK online programme drives forward work across Government, helping to meet the Prime Minister's commitment of internet access for all who want it by 2005. In 1998, 10 per cent. of UK households (8 per cent. in Scotland) had internet access, compared to 45 per cent. by April 2003. Virtually all schools across the UK are now connected to the internet. All schools in England will have broadband connections by the end of 2006.

  In total, 62 per cent. of the UK adult population—some 28.7 million people—have now used the internet (October 2002 National Statistics Omnibus Survey); 38 per cent. of the UK adult population, 17.6 million people have yet to get online; and 50 per cent. of the adult population, 23.1 million people, log on regularly. The survey currently provides six-monthly breakdowns of results for the devolved administrations, so 2003 results for Scotland are not yet available.
  284W
  In November 2002 the Prime Minister announced that we had successfully achieved our target of setting up 6,000 UK online centres in England, enabling thousands of individuals to enjoy the benefits of the internet by providing free or low cost internet access and offering support for first time users. Many of the centres are located in the 2,000 most deprived wards in England. They are located in libraries, community centres, village halls, football clubs, mobile facilities and other community venues. UK online centres have a proven track record of helping to support and engage harder to reach groups, including the long-term unemployed, in the provision of access to ICT learning and skills. So far 16.9 per cent. of users have been unemployed.

  The Scottish Executive's Public Internet Access Points initiative aims to create over 1,000 new internet access points in a wide range of venues throughout Scotland where people already go as part of their everyday lives—e.g. shops, post offices, community centres, pubs, sports facilities etc. Over 500 venues are now up and running. In addition over 550 libraries in Scotland now provide free public access to the internet.

  To enable people to find their nearest internet access point the UK online helpline, in association with the Scottish Executive, provides contact/location information of public internet access facilities across the UK, including in Scotland.

  During the forthcoming 'Get Started' (formerly 'Online Nation') publicity campaign, the UK online helpline will also provide information on events and activities (including taster sessions) in Scotland and Scottish callers will receive the Internet Made Easy CDROM (a joint development with Scottish University for Industry) covering basic skills and outlining the benefits of the web.

  The 'Get Started' campaign will seek to explain to those currently not using the internet how the internet can benefit their daily lives, and will encourage them to access the internet at their nearest public internet access point. We are especially keen to encourage elderly people and those in low income households to get online as it is these people who are least likely to be aware of what the internet can do for them. This campaign will run simultaneously with a campaign in the Scottish Executive with similar objectives.

  The 6,000 UK online centres will offer a free introductory session to the internet to anyone who wants it. In addition, we have commissioned regional TV programmes and community service announcements to demonstrate how people have benefited from using the internet.

  To help get our message across we are working with a number of companies and voluntary organisations to deliver the campaign. These include the BBC, Arriva Group, BT pic, Dixons Stores, the Prince's Trust, the National Library for the Blind, and Citizens Advice. We hope that working with these partners will enable even more people to understand the benefits that the internet can bring.

  285W

  Households, schools and voluntary organisations online in Scotland and the UK since 1998

  Percentage

  Schools

  Households

  1Scotland

  UK

  2Scotland

  3UK

  1998

  48

  28

  8

  9

  1999

  66

  66

  14

  20

  2000

  73

  88

  24

  34

  2001

  84

  97

  36

  39

  2002

  4—

  99

  40

  45

  2003

  —

  99

  —

  45

  1 Percentage of Scottish publicly-funded schools with access to the Internet—source NGfL Scotland Progress Report and NGfL Scotland Progress Report 2.

  2 Scotland households: Source Family Expenditure Survey (April 1998 to March 2001) and Expenditure and Food Survey (from April 2001), by financial year.

  3 UK households: Source Family Expenditure Survey (April 1998 to March 2001) and Expenditure and Food Survey (from April 2001), October to December quarter.

  4 2002 School Census will not be published until June 2003

  Voluntary organisations are independent organisations and are not required to notify either Government or indeed anyone else when setting up a website. Therefore no figures are held centrally either for Scotland or the UK on the percentage of voluntary organisations with websites.

  Public Sector Jobs
  Ann Winterton
  To ask the Minister for the Cabinet Office what criteria are used for the advertising of Government and public sector jobs; what steps he is taking to ensure the widest display of Government and public sector job advertisements in varied media publications; and if he will make a statement. [112673]

  Mr. Alexander
  Individual Government Departments and agencies have responsibility for external recruitment, with the exception of the Fast Stream. The recruitment process for jobs in the Civil Service, including advertising, must be consistent with the principle of selection on merit on the basis of fair and open competition, in accordance with the requirements of the Civil Service Commissioners' Recruitment Code. Decisions about advertising have to take into account, subject to the details of the vacancy or vacancies, how best to ensure that information is widely available in the areas where the target candidate market is to be found.

  We have set targets to improve the diversity of Government Departments at senior levels, and therefore recruitment advertising at every level includes trying to reach those who might not traditionally consider the civil service as a career. This includes the use of varied publications, and face to face contact.

  The Cabinet Office works closely with other public sector employers, both at strategic and operational level, to promote the spread of best practice in recruitment.

FOREIGN AND COMMONWEALTH AFFAIRS

  Iraq
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to the answer of 1 May 2003,Official Report, column 449W, on Iraq, what factors underlay the decision on whom to invite to the National Dialogue Conference on l5 April. [112348]

  Mr. Mike O'Brien
  The Coalition issued invitations to individual Iraqis to attend the Nassiriya Conference on 15 April. Invitations were aimed at attracting a range of Iraqi groups, including opposition and exile groups and those newly liberated.

  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations were received by his Department from(a) the All Party Parliamentary Archaelogical Group and (b) the British School of Archaeology on the need to protect Iraq's cultural heritage in advance of the start of the invasion of Iraq; what steps were taken in respect of the representations; and what response his Department made to the representations. [111360]

  Mr. Mike O'Brien
  Dr. Crawford, Chairman, British School of Archaeology in Iraq, wrote to Edward Chaplin, FCO Director, on 27 December 2002, to express her concern about the threat to the monuments and heritage of Iraq in the event of millitary action. Mr. Chaplin replied on 4 February stating that the letter had been passed to the relevant Government Departments, as requested, and offered the Middle East Department as a future contact point.

  I replied on 16 April to the All Party Parliamentary Archaeological Group's letter of II February to my right hon. Friend the Prime Minister.

  The Government shares the concerns of the group about the importance of protecting and preserving archaeological sites and museums in Iraq. Before the conflict started, the Ministry of Defence consulted widely with the archaeological fraternity, who provided lists of key sites of cultural and historical interest in Iraq. Troops were briefed accordingly and avoided key sites of cultural and historical interest as far as possible during the conflict.

  We could not prevent damage inflicted by Iraqi forces. Most of the looting by criminal elements occurred whilst the fighting was continuing. The aim of the Coalition forces at this stage was to suppress Saddam Hussein's forces with minimal loss of Coalition lives and Iraqi civilians.

  Troops guarded cultural sites where they could, but this was not always possible due to the security situation. It also now appears that organised groups had access to Baghdad Museum and planned the looting well in advance of military action.

  The US has informed us that there are guards at the Baghdad Museum and that the looting of artefacts is now under control.

  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of the United States to
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  provide for an independent body that can carry out an investigation of allegations of the unlawful use of lethal force by members of the armed forces performing policing and public order duties in Iraq. [111846]

  Mr. Mike O'Brien
  None. We are not aware of any allegations of unlawful use of lethal force by UK personnel in Iraq. However, were such an allegation to be made, the Special Investigation Branch of the Royal Military Police, a detachment of which is currently deployed in the Gulf, would be responsible for carrying out an investigation into the circumstances.

  Any allegations against US personnel would be a matter for the US authorities.

  Mr. Kidney
  To ask the Secretary of State for Foreign and Commonwealth Affairs what involvement the United Nations has in Iraq in respect of(a) delivery of humanitarian aid, (b) policing and other civilian security, (c) re-building works, (d) economic development and (e) establishment of new political institutions. [112283]

  Mr. Rammell
  We believe that the UN has a vital role to play in Iraq. It is already delivering humanitarian aid under the Oil for Food Programme and co-ordinating the work of humanitarian NGOs.

  The UK, together with the US and Spain, has put forward a draft Security Council resolution providing for an influential and wide-ranging UN role. The draft resolution calls for the appointment of a UN Special Co-ordinator whose tasks would be:
  support for and co-ordination of humanitarian and reconstruction assistance by UN agencies and non-governmental organisations;
  support for the orderly and voluntary return of refugees and displaced persons;
  working with others to restore and establish national and local institutions for representative governance;
  facilitating the reconstruction of key infrastructure, in cooperation with other international organisations;
  promoting economic reconstruction and the conditions for sustainable development, including through co-ordination with national and regional organisations, as appropriate, civil society, donors and the international financial institutions;
  encouraging international efforts to contribute to basic civilian administration functions;
  promoting human rights;
  encouraging international efforts to rebuild the capacity of the Iraqi civilian police force;
  supporting international efforts to promote legal and judicial reform.

  We will be discussing the detail of this role with the UN and with Security Council partners.

  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations the Government made about the invitations to the National Dialogue Conference in Iraq on 15 April; whom the Government met for discussions, and on which dates; who made the final decisions about the list of invitees; and if he will make a statement. [112316]

  Mr. Mike O'Brien
  The meeting in Nassiriya took place on 15 April, while the military campaign was still under way. The invitation list was primarily a US one, designed quickly to initiate the political process towards establishing an Iraqi Interim Authority. The UK was 288W
  invited to suggest additions to the invitations list. There were a number of close contacts between UK and US officials in the run up to this meeting, but the final decision on invitees rested with the US organisers on the event.

  Bolivia
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his US counterpart concerning the privatisation of water supplies in Bolivia by the Bechtel corporation. [112171]

  Mr. Rammell
  My right hon. Friend the Foreign Secretary has had no discussions with his US counterpart concerning the privatisation of water supplies in Bolivia by the Bechtel corporation.

  Council of Europe Conventions
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the conventions of the Council of Europe that the United Kingdom has still to ratify and the reasons why these conventions have not been ratified by the United Kingdom. [112050]

  Mr. MacShane
  The UK has signed 19 conventions that it has not yet ratified:

  1. Protocol no. 4 to the Convention for the Protection of Human Rights and Fundamental Freedoms, securing certain rights and freedoms other than those included in the Convention and in Protocol no. 1—signed 16 September 1963

  The UK has not ratified because the extent of the obligation regarding right of entry is unclear. There are no present plans to ratify, but the matter remains under consideration.

  2. Convention Relating to Stops on Bearer Securities in International Circulation—signed 28 May 1970

  Austria, Belgium, France and Luxembourg, which were the four parties, have denounced the Convention which has since ceased to be operative.

  3. Convention on the Establishment of a Scheme of Registration of Wills—signed 16 May 1972

  English law has been amended to enable compliance with the Convention in England and Wales (1982 Administration of Justice Act). The UK is unable to ratify because Scottish law has not been amended to enable the Convention to be ratified. The Scottish Executive do not see ratification as a priority.

  4. European Convention on the Control of the Acquisition and Possession of Firearms by Individuals—signed 28 June 1978

  Ratification would require amendments to be made to the Firearms Act 1968. There are no plans to make such amendments as the UK has already ratified UN and EC instruments on weapons control. Ratification is unlikely.
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  5. European Convention for the Protection of Animals for Slaughter—signed 10 May 1979

  The UK could not ratify at the time of signature, as domestic legislation was more restricted in its scope than the Convention. The EC approved the Convention in 1988, and in 1993 its requirements were incorporated in Directive 93/119/EC, which was implemented in the UK in 1995. The Department for Environment, Food and Rural Affairs has been seeking Ministerial agreement from the relevant departments and the devolved administrations. Ratification is likely in early 2004.

  6. Protocol amending the European Social Charter—signed 21 October 1991 and

  7. European Social Charter (Revised)—signed 7 November 1997

  The Department for Work and Pensions is keeping under review how the Revised Charter will operate and, with other interested departments and the Devolved Administrations, will consider the provisions of the original Charter in the context of future decisions about ratification of the Revised Charter.

  8. Convention on the Participation of Foreigners in Public Llife at Local Level—signed 5 February 1992

  Ratification of this convention remains under consideration by the Office of the Deputy Prime Minister.

  9. European Convention relating to questions on Copyright Law and Neighbouring Rights in the Framework of Transfrontier Broadcasting by Satellite—signed 2 October 1996

  The UK could not initially ratify this convention until EEC Directive 93/83/EEC had been implemented. There is an agreement among EU member states that they should ratify simultaneously. Until all member states have the necessary legislation in place, ratification cannot take place.

  10. Agreement on Illicit Traffic by Sea, Implementing Article 17 of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances—signed 31 January 1995

  The Home Office has not yet found a suitable legislative slot to enact the new legislation required to proceed with ratification. We will continue to look for such a legislative slot, and restart the ratification process when one becomes available.

  11. Convention on the Recognition of Qualifications concerning higher education in the European Region—signed 7 November 1997

  The instrument of ratification was signed by the Secretary of State for Foreign and Commonwealth Affairs on 6 May 2003. The UK will ratify this convention in the very near future.

  12. Criminal Law Convention on Corruption—signed 27 January 1999

  Before the Convention had entered into force, the Home Office considered it desirable, although not necessary, to reform domestic law on corruption before ratifying the Convention. However, it remains uncertain when the draft Corruption Bill will proceed and,
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  following the entry into force of the Convention in 2002, the balance of the argument has changed. We intend to ratify in the near future.

  13. Civil Law Convention on Corruption—signed 8 June 2000

  Certain minor amendments are needed in relation to UK law on limitation of civil actions to enable ratification to take place. Relevant provisions have been included in the Corruption Bill, which was recently published in draft, and will be taken forward when a legislative opportunity arises.

  14. European Convention on the Promotion of a Transnational Long-term Voluntary Service for Young People—signed 19 September 2000

  The Department for Education and Skills will not be pursuing ratification of this Convention. It closely mirrors an existing EU scheme and as such, ratification would lead to a duplication of work.

  15. Additional Protocol to the European Agreement on the Transmission of applications for Legal Aid—signed 4 October 2001

  The Lord Chancellor's Department has established that no primary legislation is needed to proceed with ratification. They are in the process of preparing an Explanatory Memorandum on this protocol. Ratification is therefore expected to take place in the latter half of 2003.

  16. Additional Protocol to the Convention for the Protection of Individuals with regard to automatic processing of personal data, regarding supervisory authorities and transborder data flows—signed 8 November 2001

  17. Second additional Protocol to the European Convention on Mutual Assistance in Criminal Matters—signed 8 November 2001

  The Explanatory Memorandum for this protocol has been laid before Parliament. The Crime (International Co-operation) Bill must be given Royal Assent before ratification can progress. This is likely in late 2003, with ratification following in early 2004.

  Convention on Cyber Crime—signed 23 November 2001

  New legislation will be required in order to ratify this convention. The principal cause of delay has been finding Parliamentary time for this legislation. Ratification is expected in late 2004 at the earliest.

  19. Protocol no. 13 to the European Convention on Human Rights on the Abolition of the Death Penalty in all circumstances—signed 3 May 2002

  Ratification is expected in June 2003. The Explanatory Memorandum is currently laying before Parliament under the Ponsonby rule.

  Counselling Services
  Mr. Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what arrangements are made in his Department to allow staff to access counselling services. [111935]
  291W
  Mr. Mike O'Brien
  Since March 2002 the FCO has provided a counselling service to staff (and dependants), both in the United Kingdom and overseas, via an Employee Assistance Programme.

  Drug Trafficking
  Mr. Pike
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with(a) Commonwealth members from the Caribbean, (b) other Caribbean governments, (c) Venezuelan authorities, (d) Colombian authorities and (e) the USA on ways in which co-operation and joint operations can combat drug trafficking from the Caribbean coast of South America; and if he will make a statement. [111566]

  Mr. Mike O'Brien
  The UK maintains an active dialogue on drugs trafficking with Caribbean and South American countries. In November, I had a detailed discussion in London with Jamaica's Minister for National Security, Dr. Peter Phillips, on the challenges he faces; and last July, my right hon. Friend the Prime Minister met President Uribe of Colombia and underlined the importance he attaches to co-operation on drugs issues.

  We support a range of projects in the region to strengthen law enforcement capability in producer and transit countries, often in co-operation with the US. In the Caribbean, a British Military Advisory and Training Team from the Royal Navy is providing maritime skills to enable local coastguards to intercept consignments of drugs. The local US Embassy is providing the same coastguard detachments with vessels in which to conduct their operations.

  Gibraltar
  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department held(a) during and (b) before the Azores Summit in March concerning Gibraltar; and at what level they were conducted. [113288]

  Mr. Straw
  Discussions during the Azores Summit focussed on Iraq. Gibraltar was not discussed at, or in relation to, the Summit.

  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he held personally with his Spanish counterpart concerning Gibraltar during the Azores Summit in March. [113239]

  Mr. Straw
  None. I did not attend the Azores Summit in March.

  Guantanamo Bay Detainees
  Tony Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress has been made towards bringing into practice a judicial system for the prisoners held at Guantanamo Bay. [111809]

  Mr. Mike O'Brien
  It is for the US, as the detaining power, to decide whether to prosecute the detainees.

  We have pressed the US at senior levels to resolve the position of the detainees at Guantanamo Bay and will continue to do so.
  292W
  We have made clear our views that the detainees, if prosecuted, should receive a fair trial.

  Indonesia
  Jeremy Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what monitoring of Indonesian military operation in Aceh is being undertaken by the UK Embassy in Jakarta; what discussions his Department has held with women's rights organisations on such operations; and if he will make a statement. [113234]

  Mr. Mike O'Brien
  [holding answer 13 May 2003]: Our Embassy in Jakarta will be using all available sources of information, including NGOs, to monitor military operations in Aceh.

  FCO officials have recently held discussions with an Aceh-based member of ORPAD, the Acehnese Women's Organisation for Democracy, who had expressed concern about the noticeable build-up of military activity in Aceh.

  International Criminal Court
  Tony Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) if he will make a statement about recent activities of the Government relating to bilateral agreements with the United States concerning the International Criminal Court; [111806]

  (2) what implications the recent Extradition Treaty signed with the United States has for the treatment of those suspected of committing war crimes who might be tried by the International Criminal Court. [111808]

  Mr. Rammell
  On 31 March 2003, my right hon. Friend the Home Secretary, together with the US Attorney General, signed a new bilateral Extradition Treaty between the United Kingdom and the USA. Article 16.2 of the Treaty contains a standard provision precluding the UK from transferring persons extradited from the US elsewhere without US consent, and vice versa. Such a provision features in the existing (1972) UK/US Extradition Treaty.

  At US request, the UK has provided a side letter to the new Treaty confirming that the UK understands this provision to preclude the onward surrender to the International Criminal Court (ICC) of a person extradited from the US; and that the UK would contest any request from the ICC for such a surrender, as being incompatible with Article 98.2 of the ICC Statute.

  Article 98.2 provides for non-surrender of an individual to the ICC where the requested State has an international obligation that gives the right of consent to the sending State.

  There have been no other discussions with the US in respect of agreements relating to Article 98.2 of the ICC Statute since officials met at US request on 17 October 2002. I refer my hon. Friend to the answer I gave him on 26 February 2003, Official Report, column 595W.

  Kashmir
  Margaret Moran
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what representations he has received in the last 12 months in respect of human rights violations in Indian-held Kashmir; [110665]

  (2) what recent discussions he has had on introducing international human rights inspectors to Indian-held Kashmir. [110666]

  Mr. Mike O'Brien
  We have in the past 12 months received nearly 150 letters from members of the public and 37 letters from honourable Members raising concerns over the human rights situation in Jammu and Kashmir. We have also received a number of reports from human rights non-governmental organisations on alleged violations by the security forces and certain police groups there.

  I discussed the human rights situation in Kashmir, including access for international monitors, with Mr. I.D. Swami, the Indian Minister of State for Home Affairs, in New Delhi on 17 October 2002. We will continue to urge the Government of India to allow access to Jammu and Kashmir for international human rights groups, such as Amnesty International, and UN Special Rapporteurs.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Governments of(a) India and (b) Pakistan, on the killing of civilians in (i) Nadimarg and (ii) Chatisingpura. [112732]

  Mr. Mike O'Brien
  My right hon. Friend, the Foreign Secretary remains in close and regular contact with the Governments of India and Pakistan. The Foreign Secretary condemned the 24 March killing of innocent civilians at Nadimarg and urged Pakistan to do its utmost to discourage any acts of violence by militants in Kashmir. These points were covered in the joint statement with US Secretary Powell at Camp David on 27 March.

  The differences between India and Pakistan can only be resolved through peaceful means and engagement. We therefore welcome recent moves by both sides towards the normalisation of relations. We hope that these positive developments prove to be the first step in a process of building confidence, normalising bilateral relations and resolving their outstanding differences, including Kashmir. We will continue to do all that we can in support of these positive developments.

  Mental Health
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many of his staff retired on medical grounds due to mental health problems in the last year. [111962]

  Mr. Mike O'Brien
  Under the terms of the Data Protection Act the Foreign and Commonwealth Office is unable to provide this information, as it would infringe individual privacy. The identity of individuals and their medical history should remain private, especially when the numbers involved may be so low that identification is easy to achieve.
  294W
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many of his staff have taken sick leave due to mental health problems in the last year. [111985]

  Mr. Mike O'Brien
  In the last financial year 157 staff at the Foreign and Commonwealth Office took sick leave due to mental health problems. Our definition of mental health illness includes depression/mental illness and stress.

  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many sick days were lost over the last year by his Department through staff mental health problems. [111999]

  Mr. Mike O'Brien
  The Foreign and Commonwealth Office had 157 incidents of mental health absence in the last financial year. An incident is defined as one continuous absence period. We are unable to provide a full breakdown of days lost to mental health absence without incurring disproportionate costs. Our definition of mental health illness includes depression/mental illness and stress.

  Nigeria
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations have been made to the Nigerian Government regarding the death sentence passed on Amina Lawal. [111913]

  Mr. Rammell
  I refer my hon. Friend to the answer I gave my hon. Friend the member for South Swindon (Julia Drown) during oral questions to the Foreign Secretary on 6 May Official Report column 528.

  North Korea
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to the Answer of 28 April 2003,Official Report, column 126W, on North Korea, what discussions the Government have had with international partners in the last six months; and what meetings are scheduled to discuss the situation in North Korea. [112123]

  Mr. Rammell
  The Government are in close and regular consultation with international partners on the issue of North Korea's nuclear programmes. The UK has participated in talks about DPRK in a range of international fora including the UN and the EU. My right hon. Friends the Prime Minister, the Foreign Secretary and I are in contact with US, Chinese, Russian, South Korean and Japanese colleagues, on North Korea, and will continue to work with them and other key partners to find a peaceful and lasting resolution to this issue.

  Pakistan
  Mr. Roy
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received about movement of Taliban supporters in tribal regions of Pakistan and their alliances. [112609]

  Mr. Mike O'Brien
  There is continuing activity by Taliban remnants in the tribal regions of Pakistan and Afghanistan. We regularly discuss with Pakistan the
  295W
  importance of their continuing support for coalition action against Al Qa'ida and its associates (including Taliban remnants).

  Russia
  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received on whether the closure, by Russian authorities, of internally displaced persons camps in Ingushetia has stopped following President Putin's statement on 10 December 2002; and what(a) bilateral and (b) multilateral action the UK Government are taking to press for an end to this closure. [112160]

  Mr. MacShane
  We are not aware of any camp closures in Ingushetia since President Putin's order that this practice should be stopped. Nevertheless, we have continued to remind the Russian authorities of their assurances that all movement of internally displaced persons (IDPs) would be strictly voluntary and of their obligations under the 1951 UN Convention on Refugees. We last did so bilaterally in March and the EU took similar action in mid-April at the EU-Russia Co-operation Council.

  However, we are concerned by recent reports that the Ingush authorities have ordered the demolition of shelters built for IDPs currently living in dilapidated tent camps. We are monitoring the situation closely and would welcome a positive outcome to the negotiations between the Ingush Government and the humanitarian agencies involved.

  Sponsorship
  Mr. Oaten
  To ask the Secretary of State for Foreign and Commonwealth Affairs which of his Department's projects have received sponsorship in the last financial year; who the sponsor was in each case; what the nature of each project was; what time-period was covered by each project; what the total cost of each project was; how much money was involved in each sponsorship deal; and if he will make a statement. [112399]

  Mr. Rammell
  In line with the Government's commitment in its response to the Sixth Report from the Committee on Standards in Public Life, details of individual amounts of sponsorship in 2002–03 valued at more than £5,000 are disclosed in the department's Annual Report which is available in the Library of the House.

  Turkey
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations his Department made to the Turkish Government about the judgment of the European Court of Human Rights on 17 July 2001 in the case of Leyla Zana and other Kurdish members of the Turkish Parliament; whether diplomats from the Embassy in Ankara(a) attended the retrial hearing on 25 April and (b) intend to attend future hearings; and if he will make a statement on the treatment of the human rights of the defendants. [112827]

  Mr. MacShane
  [holding answer 12 May 2003]: FCO officials raised the case of Leyla Zana and her codefendants with their Turkish counterparts at the most recent round of an ongoing Human Rights dialogue on
  296W
  26 November 2002. A representative of the British Embassy in Ankara did attend the retrial hearing on 25 April. The Embassy will continue to liaise with our EU Partners to determine who attends future hearings.

  UN Firearms Protocol
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the UK has ratified the UN protocol against the illicit manufacturing of and trafficking in firearms, their parts and components and ammunition; and which other states have ratified the protocol. [112169]

  Mr. Mike O'Brien
  On 6 May 2002, the UK signed the Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts, Components and Ammunition, one of three protocols to the UN Convention on Trans-national Organised Crime. We are now working in conjunction with the European Commission to ensure that the necessary measures are in place for the UK to ratify the Protocol. We are also encouraging others to sign the Protocol and work towards its implementation.

  According to the UN Office on Drugs and Organised Crime there have been 52 signatures and four ratifications to the Protocol.

  United States
  Alan Simpson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the US government about the Pentagon's proposals of 4 March to repeal the 1993 legislation that bans research and development of further nuclear weapons. [112278]

  Mr. Mike O'Brien
  We understand that the US Department of Defence has requested that the US Congress rescind US legislation that prohibits US government research and development into low-yield nuclear weapons. My right hon. Friend the Foreign Secretary has not discussed this matter with the US government.

  The US government stated in May 2003 at the second session of the Preparatory Committee for the 2005 Review Conference of the States Parties to the Treaty on the Non-Proliferation of Nuclear Weapons, that it is reducing reliance on nuclear weapons and is not developing, testing or producing any nuclear warheads and has not done so in more than a decade. The US confirmed that there is no current requirement for a new nuclear warhead and that the US President has not directed such work.

PRIME MINISTER

  Access to Government Information
  Mr. Barnes
  To ask the Prime Minister if he will ensure that the exemptions provided in the code of practice on Access to Government Information which allows for the waiving of legal professional privilege in the drafting of legislation is employed automatically by departments when legislation is being drafted which is intended to protect the public. [112980]
  297W
  The Prime Minister
  The circumstances in which information is exempt from the code of practice on account of legal professional privilege are set out in paragraphs 4.15 and paragraphs 4.16 of the Guidance on Interpretation to the code of practice on Access to Government Information (second edition 1997), a copy of which is available in the Library.

  Gibraltar
  Mr. Ancram
  To ask the Prime Minister what discussions he held with his Spanish counterpart concerning Gibraltar during the Azores Summit in March; and whether an agreement was reached. [113287]

  The Prime Minister
  None.

  Official Visits
  Mr. Steen
  To ask the Prime Minister if he will make an official visit to Gaia House near Denbury in South Devon. [112965]

  The Prime Minister
  I have no current plans to do so.

WORK AND PENSIONS

  Access to Work
  Mr. Boswell
  To ask the Secretary of State for Work and Pensions what steps he is taking to improve awareness of the Access to Work scheme; and how much was spent on its promotion in the last year for which figures are available. [110738]

  Mr. Nicholas Brown
  Jobcentre Plus invests around £300,000 per year on marketing and publicising its specialised services and programmes for disabled people. Promotional material is available in a wide range of media such as leaflets, audiotapes and videos. Information and advice on Access to Work forms an integral part of many of these campaigns and it is not therefore possible to give a separate figure for this scheme only.

  Information on all our disability services is available from Jobcentre Plus offices. Detailed information is also available on the Jobcentre Plus web site. The web address is included on Jobcentre Plus publicity material and can be accessed through most internet search engines.

  Disability Employment Advisers regularly meet local employers to promote the full range of disability services, including Access to Work. In addition, many disability organisations actively promote Access to Work to their members and some have information about the programme on their web site.

  Research shows that applications come from a range of sources, suggesting that knowledge of the programme is widespread1.

  1Source:

  "Users' Views of Access to Work" Employment Service study, March 2001.

  Attendance Allowance (Burton)
  Mrs. Dean
  To ask the Secretary of State for Work and Pensions how many people in the Burton constituency are in receipt of attendance allowance. [113147]

  Maria Eagle
  There are currently 2,100 customers in receipt of attendance allowance in the parliamentary constituency of Burton.

  Note:

  Figures taken from a 5 per cent. sample at 30 November 2002. Figures are rounded to the nearest hundred.

  Source:

  IAD Information Centre

  Benefit Payments
  Mr. Alan Reid
  To ask the Secretary of State for Work and Pensions how many recipients of(a) state pensions, (b) war pensions and (c) benefits were written to by his Department during April to inform them that they must change to a direct payment method; and for each of these three groups, how many chose to have their payments made into (i) a bank or building society account, (ii) a basic bank account and (iii) a post office card account. [112907]

  Malcolm Wicks
  The information is not available in the format requested.

  Information that is available shows that 538,666 customer invitation letters were issued in April. This was made up of 538,430 child benefit customers, 209 Veterans Agency customers (the final segment of Veterans agency customers) and 27 Jobcentre Plus customers (the residue from a pilot exercise in March). For the same period 382,199 customers responded to our letters and opted for payment into a bank or building society account, many of which can be accessed at post office branches. We do not differentiate between current and basic bank accounts. 60,086 customers responded with a request for a post office card account.

  The change will be phased in over a two-year period and is due to be completed in 2005.

  Disabled People
  Mr. Boswell
  To ask the Secretary of State for Work and Pensions what plans he has to improve access to Job Centre Plus for disabled people, with particular reference to(a) physical access to premises and (b) staff training in disability awareness. [110740]

  Mr. Nicholas Brown
  The administration of Jobcentre Plus is a matter for the Acting Chief Executive of Jobcentre Plus, Clare Dodgson. She will write to the hon. Member.

  Letter from Clare Dodgson to Mr. Tim Boswell, dated 14 May 2003:
  As Jobcentre Plus is an Executive Agency, I have been asked to reply to your question concerning what plans we have to improve access to Jobcentre Plus for people with disabilities. This falls within the responsibilities delegated to me as Acting Chief Executive of the Agency.
  We are currently undertaking a four year programme to upgrade our premises and introduce a new integrated service to all people of working age. As a part of this programme our offices are being designed and refurbished to enable all of our customers to gain access to them. We are also ensuring that our customers have access to all of our services through careful planning of our service

  299W
  delivery arrangements. For example, where Personal Advisor interviews are conducted on an upper floor and a lift is not available we will make arrangements to interview people with mobility problems on the ground floor.
  In planning for our new services we are consulting on our proposals for service delivery with MPs, local partners, stakeholders, customer groups (including groups of and for disabled people), staff and trade unions. We are currently reviewing the training given to Personal Advisers and are seeking to better equip them to deliver work focused interviews to all of our customers.
  Additionally, enhanced training is being developed for Personal Advisers specialising in helping people claiming Incapacity Benefit.
  The new Jobcentre Plus service enables us to widen the help and support previously given to millions of customers in receipt of incapacity and disability benefits. Through building modernisation, integrating services and better training we aim to meet the needs of all of our customers.
  I hope this is helpful.

  Mr. Goodman
  To ask the Secretary of State for Work and Pensions which organisations have been awarded contracts to deliver the New Deal for Disabled People in the Wycombe constituency. [112373]

  Mr. Nicholas Brown
  [holding answer 12 May 2003]: New Deal for Disabled People, delivered by around 60 Job Brokers across England, Scotland and Wales, is helping people with health problems and disabilities to move into work. Since the national extension of the programme began, it has helped over 11,000 people into jobs and almost 38,000 have registered with Job Brokers to actively pursue employment.

  Job Brokers are contracted to deliver their services by local authority area. The Job Brokers currently operating within the Wycombe district council area are Scout Enterprises (Western) Ltd, Support Shop Ltd, Yes2Work and Shaw Trust Employment.

  Older People
  Linda Perham
  To ask the Secretary of State for Work and Pensions (1) which voluntary and commercial organisations have been consulted during the development of the Older People Strategy; [111736]

  (2) when he expects to publish the Older People Strategy; and if he will make a statement; [111737]

  (3) whether he plans to repeat the Listening to Older People programme; and if he will make a statement. [111742]

  Maria Eagle
  We have established a system for consulting directly with older people, and a range of statutory and non-government organisations representing the diverse interests of older people through the setting up of the Partnership Group. The Group comprises members from the Better Government for Older People network, the Older People's Advisory Group, employment, education and research organisations, a media consultant, as well as national organisations representing the interests of older people. It is chaired by the Minister for Pensions and meets on a regular basis to provide views on presented ideas from Government on the development of policy or services, and to serve as an external think-tank for ideas on service delivery issues. A full list of the organisations represented on the Partnership Group is listed.
  300W
  The Government set up Better Government for Older People (BGOP) as an independent organisation with a Management Board of key partners, and a UK wide networking partnership to ensure older people are engaged at all levels of decision-making. Membership of BGOP is open to any authority or organisation that is committed to engaging older people in decision making and working in partnership. The Older People's Advisory Group is one of BGOP's key partners and provides opportunities for older people themselves to participate in all areas of public life including the formation of policies.

  The publication "Life Begins at 50" in May 2000 set out the Government's responses to needs expressed by older people themselves in the form of an interdepartmental action programme. This followed consultation with a range of bodies. We are currently considering options for reporting progress on that programme and its strategic objectives.

  We will consider the need for further Listening to Older People events in that context, taking account of the development of other channels of engagement.

  Organisations represented on the partnership group

  Anchor Trust

  National Pensioners Convention

  Older People's Advisory Group

  Chalmers Communications

  Centre for Policy on Ageing

  Better Government for Older People Network

  Third Age Employment Network

  Counsel and Care

  The Abbeyfield Society

  Help the Aged

  Age Concern England

  Employers Forum on Age

  Policy Research Institute Ageing and Ethnicity

  Older People's Services, Department of Health

  Association of Retired Persons and Over 50

  Local Government Association

  Economic and Social Research Council Growing Older Programme

  National Association of Citizens Advice Bureaux

  Pensions
  Mr. Evans
  To ask the Secretary of State for Work and Pensions what percentage of working-age(a) adults, (b) men and (c) women in the UK are members of a stakeholder pension plan. [111158]

  Maria Eagle
  Specific data on the number of individuals contributing to a stakeholder pension will not be available until the middle of the year. However, latest figures from the Association of British Insurers (ABI) state that 1.25 million stakeholder pensions had been sold up to the end of December 2002, of which an estimated 97 per cent. had been bought for individuals of working age, (56 per cent. men and 44 per cent. women). ABI figures show the number of stakeholder pension policies sold, not the number of individuals who have taken out a stakeholder pension. People are allowed to hold more than one stakeholder pension.
  301W
  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 11 February 2003,Official Report, columns 687–88W, on pension schemes, what checks he has carried out on the data given for the number of pension schemes that have completed winding-up and the number of members of those schemes, between 1997 and 2002. [112639]

  Maria Eagle
  The data used for the answer of 11 February 2003,Official Report, columns 687–88W, were supplied by the Pension Schemes Registry (PSR). The PSR ensured that the data provided in answer to this question were correct at that time and within the limitations that the PSR have when providing data, as explained in the answer.

  The PSR analysed the data scripts produced to ensure that the relevant schemes had been counted. They also compared the revised figures against previous figures supplied in response to requests for pension scheme wind up statistics. This comparison allowed for the time difference since previous figures.

  Data supplied by the PSR are not designed or intended to provide a statistical record of the number of schemes which wind up. The PSR registers schemes for tracing purposes and collects the levy from pension schemes, including those in the process of winding up. New scheme data are being reported to the PSR on a continuous basis, so the figures are subject to daily revision. Any figures provided are a snapshot of a particular time.

  The figures provided in the answer of 11 February 2003, Official Report, columns 687–88W, replaced those issued in the answer of 18 December 2002, Official

  Customers sent home unseen from Medical Services Examination Centres between 1 May 2002 and 28 February 2003, broken down by reason

  Type

  May 2002

  June 2002

  July 2002

  August 2002

  September 2002

  October 2002

  November 2002

  December 2002

  January 2003

  February 2003

  Doctor productivity

  77

  66

  40

  40

  47

  81

  90

  38

  56

  52

  Doctor cancelled

  116

  109

  194

  171

  116

  168

  177

  109

  181

  168

  Doctor ill

  91

  20

  20

  214

  231

  80

  101

  113

  86

  111

  More claimants attended than doctors could manage to see

  760

  597

  651

  872

  1120

  1,236

  1,180

  585

  827

  705

  Case mix problem (some cases take longer than others)

  14

  11

  14

  20

  18

  15

  28

  8

  19

  27

  No interpreter available

  31

  32

  32

  20

  44

  40

  53

  30

  45

  45

  File not at Medical Services Examination Centre

  73

  55

  108

  80

  113

  110

  76

  79

  79

  51

  Doctor mismatch (not specialised in required medical area)

  35

  46

  41

  35

  37

  40

  33

  32

  27

  29

  Claimant called in error (didn't require examination)

  44

  29

  45

  41

  46

  53

  40

  31

  34

  56

  Doctor booked but not informed

  7

  3

  3

  11

  40

  14

  22

  6

  11

  6

  Claimant requested same-gender doctor

  8

  3

  0

  0

  0

  0

  0

  1

  6

  0

  Claimant unfit to be seen

  22

  17

  12

  19

  22

  27

  26

  15

  34

  80

  Claimant arrived too late for appointment (greater than 30 minutes)

  63

  61

  49

  58

  67

  94

  89

  68

  54

  116

  Claimant would not wait (less than 30 minutes)

  26

  40

  17

  24

  36

  45

  33

  25

  65

  98

  Claimant would not wait (greater than 30 minutes)

  176

  111

  168

  155

  159

  308

  289

  189

  180

  216

  Inadequate information provided to Medical Services.

  5

  8

  7

  5

  12

  8

  7

  14

  7

  16

  Accommodation problem (eg power failure at site)

  2

  10

  11

  24

  2

  5

  188

  9

  12

  13

  Total not seen

  1,550

  1,218

  1,412

  1,789

  2,110

  2,324

  2,432

  1,352

  1,719

  1,789

  Total seen

  51,510

  40,742

  49,616

  47,673

  52,815

  59,792

  55,449

  41,047

  51,704

  49,763

  Total seen as proportion of those who attended (percentage)

  97.08

  97.10

  97.23

  96.38

  96.16

  96.26

  95.80

  96.81

  96.78

  96.53

  Source:

  Medical Provision and Contracting Team management information.
  302W
  Report, column 859. Additional procedures were introduced to prevent a recurrence of the problem with the reply of 18 December 2002, Official Report, column 859. These procedures ensure that confirmation is received from the IT contractor that the data supplied reflect the data requested, data request is attached to the data script, comparisons are made with previous data, an additional manual check is made of the information and a control record is completed.

  A long-term objective is to introduce a new system to provide data which the new kind of regulator will use to discharge its new functions. The specification for this new system will emerge from work to develop the new kind of regulator.

  SchlumbergerSema
  Paul Holmes
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 3 April 2003,Official Report, column 844W, on SchlumbergerSema, for what reasons customers may be sent home unseen from their medical assessments; how many customers were sent home unseen between 1 May 2002 and 28 February, broken down by reason; and if he will make a statement. [108842]

  Mr. Nicholas Brown
  SchlumbergerSema are committed to providing a professional service to customers attending their examination centres. Of 517,806 customers who attended Medical Examination Centres for assessments between 1 May 2002 and 28 February 2003, 17,695 were sent home unseen. This corrects the previous information given in the answer of 3 April 2003,Official Report, column 844W.

  The information is in the table.

  Transco
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 10 April,Official Report, column 395W, on Transco, whether an exemption certificate was issued to Transco by the HSE from the requirement to reassess its engineers' qualifications by the approved competency standard before 3 March 2002. [111552]

  Mr. Nicholas Brown
  I am advised by the Health and Safety Executive that it has never issued a certificate to exempt Transco from the requirement for its engineers to be assessed or re-assessed against nationally approved competency standards.

  Exercising its powers under the Gas Safety (Installation and Use) Regulations 1998, the HSE issued, on 1 April 2002, a certificate temporarily suspending the requirement on Transco to be registered with CORGI until such time as the new national vocational qualification, referred to in my previous answer, had been aligned with the nationally accredited certification scheme for individual gas fitting operatives. The certificate was issued in order to enable the national gas emergency service to continue without interuption, in the interests of public safety. The alignment and assessment processes were successfully completed by the certificate's expiry date of 31 October 2002.

  Travel-to-work Areas
  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions how many travel to work areas have(a) less than five per cent. (b) six to 10 per cent. (c) 11 to 15 per cent. (d) 16 to 20 per cent. and (e) over 20 per cent. of the work force turning over each year. [110688]

  Mr. Nicholas Brown
  The information requested is not available.

  However, a measure of turnover is available in Great Britain at government office region level using the quarterly Labour Force Survey. The definition of turnover used for this analysis is the number of people who have been with their employer for less than three months at the time of the survey. By adding the quarterly figures together we are able to estimate the number of people who have changed jobs over the year.

  In 2002 we estimate that six of the 11 regions in Great Britain had a turnover of 16 to 20 per cent. of the workforce over the year, whilst the remaining five regions had turnover of over 20 per cent. of the workforce.

LORD CHANCELLOR'S DEPARTMENT

  All-Postal Voting
  Mr. Keetch
  To ask the Parliamentary Secretary, Lord Chancellor's Department, if he will introduce all-posting voting at general elections. [112369]

  Yvette Cooper
  [holding answer 12 May 2003]: All postal voting is currently possible only in local elections. The independent Electoral Commission is currently evaluating all the electoral pilot projects which took
  304W
  place on 1 May, including the all-postal voting pilots. We will consider carefully their assessment and any recommendations they may make.

  Council Tax
  Ms Drown
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many liability orders for non-payment of council tax bills were(a) heard and (b) refused by magistrates courts in England in the last year for which figures are available. [112544]

  Yvette Cooper
  Central Government does not collect information on the number of liability orders for nonpayment of council tax bills heard or refused by magistrates courts in England. However, estimates are available on the number of liability orders granted by local authorities in England. The most recent information available is given in the table attached. These estimates are based on information supplied to The Chartered Institute of Public Finance and Accountancy (CIPFA) on its Revenue Collection Statistics return. The most recent information available is for 2000–01 and is based on returns from 227 local authorities in England (out of a possible 354). The information provided in the table has been grossed by CIPFA to provide totals by class of authority.

  Local authorities in England

  Number of liability orders granted in 2000–01

  London Boroughs

  468,000

  Metropolitan Districts

  558,000

  English Unitaries

  513,000

  Shire Districts

  677,000

  Total England

  2,216,000

  Document Classification
  Harry Cohen
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many documents are held by the Lord Chancellor's Department that are subject to security classification, broken down by category of classification.—[107361]

  Ms Rosie Winterton
  The information is not readily available and could be provided only at disproportionate cost. My Department follows the Cabinet Office Guidance on document marking and control.

  Legal Professional Privilege
  Mr. Barnes
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will introduce proposals to remove legal professional privilege involved in the provision of advice to Government departments in the drafting of legislation.—[113008]

  Ms Rosie Winterton
  The Government has no plans to introduce any proposals to limit extent to which legal professional privilege applies to advice to Government departments. Legal professional privilege is a general principle of the common law which protects confidential communications with a legal adviser from disclosure in legal proceedings.

  Mental Health
  Mr. Paul Marsden
  To ask the Parliamentary Secretary, Lord Chancellor's Department (1) how many sick days were lost over the last year by the Department through staff mental health problems; [111995]

  (2) many staff in the Department have taken sick leave due to mental health problems in the last year. [111981]

  Ms Rosie Winterton
  This information is not yet available. My Department will be carrying out an analysis of sick absence by type of illness for the financial year 2002–03 over the next few weeks, after which I will write to the hon. Member with details, a copy of which will be placed in the Libraries of both Houses.

  My Department is committed to managing sickness absence effectively. A great deal of work has been undertaken to raise awareness of our Service Delivery Agreement targets, and of the need to manage attendance in accordance with best practice policies. My Department is also committed to providing a safe working environment for employees, by seeking to reduce absence due to work related injuries and illness arising from the government's Revitalising Health and Safety initiative.

  Public Guardianship Office
  Mr. Gibb
  To ask the Parliamentary Secretary, Lord Chancellor's Department who the chief executive officer of the Public Guardianship Office is. [112706]

  Ms Rosie Winterton
  The chief executive officer of the Public Guardianship Office (PGO) is David Lye.

  Further information is available on the PGO's website: www.guardianship.gov.uk.

  Timber
  Ms Walley
  To ask the Parliamentary Secretary, Lord Chancellor's Department how much timber will be used in the redevelopment of Clive House; what types of timber will be used and for which purposes; from which countries it will come; and which companies will be providing the timber. [111032]

  Ms Rosie Winterton
  3.47m3 of carcassing timber and 94m2 of plywood will be used in the redevelopment of Clive House. The softwood timber for the window
  306W
  frames will be sourced from Sweden and will be obtained through Sampsons. The timber for the remaining items such as kitchen base units, reception desk, coat cupboards, bench unit, vanity units, CCTV monitor enclosure, joinery suites and doors has not yet been sourced. Brown and Carroll will be supplying the timber for these items.

NORTHERN IRELAND

  Assembly Elections
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland what his estimate is of the total cost of postponing the Assembly elections; and how this sum is made up. [112616]

  Mr. Paul Murphy
  Payment to registered parties and candidates to reimburse expenditure which may have been incurred in connection with the election which was to have taken place on 29 May could total up to £4 million. The cost to the Electoral Commission of administering this scheme will be up to £50,000. The Electoral Office estimates that they have incurred costs of £67,000 as a result of the postponement of the election. All these costs will be met from the UK Consolidated Fund.

  Mr. Dodds
  To ask the Secretary of State for Northern Ireland how much the electoral offices in Northern Ireland have spent to date on the Northern Ireland Assembly elections due in May; and what the estimated total cost is. [112908]

  Mr. Browne
  The Northern Ireland Assembly (Elections and Periods of Suspension) Bill is currently before the House. The purpose of the Bill is to postpone the date of the poll for the election of the next Northern Ireland Assembly from 29 May 2003, and to provide a mechanism for setting the date of the next poll.

  As at 9 May the Chief Electoral Officer had spent approximately £250,000 on the Assembly elections. Around £183,000 of this expenditure has been spent on material which can be used at the next Assembly election. The Chief Electoral Officer had estimated the total cost of the elections due to take place in May at £3 million. This does not take account of other costs arising from the postponement of the election including reimbursing political parties and candidates.

HEALTH

  Breast Cancer
  Mrs. Roe
  To ask the Secretary of State for Health what recent progress there has been regarding his Department's discussions with Myriad Inc. on the patent for testing breast cancer genes relating to hereditary breast cancer. [111931]

  Ms Blears
  [holding answer 12 May 2003]: There have been no recent discussions with Myriad.

  Most likely condition for an abortion. North-east London, 1993 to 2001

  2001 SHA

  2000 SHA

  1999 SHA

  1998 SHA

  1997 SHA

  1996 SHA

  1995 SHA

  1994 1HAs

  1993 1HAs

  Total number of abortions

  11,149

  10,406

  9,905

  9,725

  9,085

  9,114

  8,438

  8,518

  8,538

  Marital status

  Single

  Single

  Single

  Single

  Single

  Single

  Single

  Single

  Single

  Age group in years

  20–24

  20–24

  20–24

  20–24

  25–29

  20–24

  25–29

  25–29

  25–24

  Gestation group in weeks

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  9 to 12

  Previous children

  None

  None

  None

  None

  None

  None

  None

  None

  None

  Previous abortions

  None

  None

  None

  None

  None

  None

  None

  None

  None

  Legal grounds

  2C

  2C

  2C

  2C

  2C

  2C

  2C

  2C

  2C

  Notes:

  1 North East London Strategic health authority (SHA) is equivalent to three health authorities (HAs); Barking & Havering, Redbridge & Waltham Forest and East London & The City.

  2Includes Ground C alone (that the pregnancy has not exceeded its 24th week and that the continuance of the pregnancy would involve risk, greater than if the pregnancy were terminated, of injury to the physical or mental health of the pregnant woman There were boundary changes in HAs prior to 1993 and comparable data are therefore not available

  Children's Food (Ingredients)
  Dr. Kumar
  To ask the Secretary of State for Health (1) what has been done to address the 2001 Food Commission report concerning high levels of sugar, salt and saturated fat in food marketed at children; [111765]

  (2) what measures are being taken to work with food retailers and manufacturers to raise consumer awareness of (a) healthy eating regimes and (b) the contents and properties of pre-packaged food items. [111696]

  Ms Blears
  The Department of Health and the Food Standards Agency (FSA) are engaged with stakeholders in a wide range of activities aimed at promoting a healthy balanced diet as outlined in the NHS Plan and the FSA's nutrition action plan. This includes discussions with food industry organisations about their health promotion activity and reducing salt levels in processed food; work on sugars and fat will follow through in 2003–04.

  The five-a-day logo was launched on 25 March 2003, as part of the five-a-day programme aimed at raising public awareness of the health benefits of eating at least five portions of a variety of fruit and vegetables a day.

  The FSA recommends that manufacturers provide full nutrition labelling on all pre-packaged foods to aid consumer choice on healthy eating and is pressing for changes to the current European Union rules to make this a legal requirement.

  Abortion Statistics
  Mr. Rosindell
  To ask the Secretary of State for Health if he will make a statement on the statistically most likely candidate in the North East London health authority for an abortion in the latest year for which figures are available in terms of(a) the marital status of the woman, (b) the age of the woman, (c) the gestation of the pregnancy, (d) the number of previous children born by the woman, (e) the number of previous abortions undergone by the woman and (f) the legal grounds under which the abortion was performed; and how many abortions were performed in the north-east London health authority in each year since 1973, broken down by the above categories. [111531]

  Ms Blears
  The available information is shown in the table.

  The Department of Health leads work across Government and with stakeholders to develop a food and health action plan as part of the Government's strategy on sustainable farming and food. The plan will focus on consumers' health needs, aiming to achieve a healthier diet for the people of England, will include clear policy objectives on nutrition and will set out arrangements for future co-ordination of nutrition work.

  The FSA has noted the Food Commission Report and, as identified in the nutrition action plan, is working with a range of stakeholders, including food manufacturers and retailers, to address issues relating to the salt, fat and sugar content of food.

  General Practitioners
  Bob Spink
  To ask the Secretary of State for Health what remedies are available to patients who are not offered a choice of doctor when their local GP practice has closed. [113124]

  Mr. Hutton
  [holding answer 13 May 2003]: There are inevitably occasions when patients are unable to register with their general practitioner (GP) of choice, due, for example, to limited practice capacity. Patients who experience difficulty in registering should contact their primary care trust, which is under a duty to help its local population to register with a GP or personal medical service (PMS) provider and, if necessary, has a reserve power to allocate patients to a GP or PMS provider.

  Civil Defence
  Mr. Keetch
  To ask the Secretary of State for Health what contingency plans are in place to respond to bioterrorist attacks using(a) clostridium botulinium toxin (botulism), (b) yersinia pestis (plague), (c) francisella tularensis (tularaemia) and (d) viral haemorrhagic fevers; and if he will make a statement. [103437]

  Mr. Hutton
  The Department of Health has had contingency plans in place with the national health service and key public health agencies to ensure a rapid response to, and recovery from, a terrorist attack for several years. Comprehensive guidance was first issued to the NHS in November 1998, followed by more specific guidance 'Deliberate Release of Biological and Chemical Agents: Guidance to help plan the health service response' issued in 2000.

  Following the events of 11 September 2001, regional directors of public health were given further generic advice on dealing with biological threats in October 2001, and guidance for clinicians on dealing with clostridium botulinium toxin (botulism), yersinia pestis (plague), francisella tularensis (tularaemia) and viral haemorrhagic fevers was put up on the Public Health Laboratory Service (PHLS) website. All departmental guidance is now openly available on the Department's website at www.doh.gov.uk/epcu/cbr/intro.htm and the PHLS website at www.phls.co.uk/topics az/deliberate release/menu.htm

  A UK national stockpile of medical countermeasures for dealing with these infections has been established. This is accessible by the NHS on a 24-hour basis for rapid deployment in the event of a mass casualty incident, which may or may not be associated with deliberate release of hazardous material.

  The Department has also expanded its diagnostic and emergency support for public health emergencies by developing a facility, expertise, technology and training base at the Centre for Applied Microbiology and Research related to agents of greatest threat.

  Collaborative Programme (Emergency Services)
  Chris Grayling
  To ask the Secretary of State for Health what assessment he has made of the Modernisation Agency Emergency Services Collaborative Programme. [111024]

  Mr. Lammy
  Assessment of the progress of the Collaborative is undertaken on an ongoing basis, through regular monthly reporting of improvements against the target.

  The Collaborative is run over six waves, with every acute trust in England being involved by July 2003. The Collaborative is in its early stages but sites in wave 1 are already showing improvement across their emergency care systems resulting in reduced waits and delays for patients.

  Contraceptive Pill (Cervical Cancer)
  Jim Dobbin
  To ask the Secretary of State for Health if he will make a statement on links between long-term use of the contraceptive pill and cervical cancer. [111433]
  310W
  Ms Blears
  An association between long-term use of oral contraceptives (OCs) and a slightly increased risk of cervical cancer has been recognised for many years. However, it has not been possible to demonstrate a direct causal relationship as the presence of other factors, such as persistent infection with human papilloma virus (HPV), that are believed to have an important role in the development of cervical cancer, are also associated with long-term use of OCs.

  A review of all eligible research on the long-term use of OCs and risk of cervical cancer has recently been published (The Lancet—5 April 2003–361:1159). This review took into consideration many other relevant factors, such as HPV infection and still found that use of OCs for many years is associated with a slight increase in the risk of cervical cancer compared with 'never-use'. A copy is available in the Library.

  The Committee on Safety of Medicines (CSM) has kept the issue under review and has considered the latest evidence. CSM has advised that, as it is not possible to be certain that all relevant factors, such as duration of HPV infection, have been fully taken into account in the review, a definite causal relationship has yet to be established. Nonetheless, the new study strengthens the evidence for a causal link between long-term OC use and cervical cancer and research is ongoing.

  Warnings about the risk of cervical cancer with long-term use have been included in the summary of product characteristics for health professionals and the patient information leaflet for women for many years. In addition, women are advised to regularly attend for a cervical smear in accordance with Guidelines. In the United Kingdom, the introduction of a highly effective screening programme means that the total number of cases of cervical cancer is low and mortality has fallen.

  Counselling
  Mr. Paul Marsden
  To ask the Secretary of State for Health what arrangements are made in his Department to allow staff to access counselling services. [111934]

  Mr. Lammy
  Department of Health staff are provided access to a free-phone telephone counselling and information service provided by Corecare. The service is available 24 hours, 365 days per year. In addition to the telephone help line employees can be offered up to eight sessions of confidential face to face counselling.

  Diabetic Treatment Facilities
  Chris Grayling
  To ask the Secretary of State for Health how many NHS trusts are reducing diabetic treatment facilities in hospitals and moving services into primary care. [111766]

  Mr. Lammy
  Information relating to the number of diabetic treatment facilities in national health service trusts is not collected centrally by the Department.

  The "National Service Framework for Diabetes: Delivery Strategy", published in January this year, sets out how the local progress can be made to put the NHS on track to reaching all the national service framework standards by 2013.
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  It will be for primary care trusts to decide the best approach to delivering the standards across both hospital and primary care to reflect local circumstances and the communities they serve.

  Fluoride (Water Supplies)
  Dr. Naysmith
  To ask the Secretary of State for Health what advice he has received from(a) the Chief Medical Officer and (b) the Chief Dental Officer on the implications of the recent Medical Research Council report on water fluoridation for the Government's policy on fluoridation. [111468]

  Ms Blears
  We have asked the Chief Medical Officer and the Chief Dental Officer to consider how the success of existing fluoridation schemes in improving oral health, and the oral health benefits residents of naturally fluoridated areas enjoy, might be extended to other communities who wish it. The Medical Research Council has identified and prioritised the research necessary to strengthen the evidence base on fluoridation and the Department is already taking action to commission appropriate research.

  Dr. Naysmith
  To ask the Secretary of State for Health what research he has commissioned comparing the bio-availability of artificial and naturally occurring fluoride in water supplies; and when the findings of such research will be made publicly available. [111469]

  Ms Blears
  Following a competitive tendering exercise, research has been commissioned from the School of Dental Sciences at Newcastle University. The aims of the study are to investigate the effect of water hardness and source of fluoride ion on bio-availability of fluoride in drinking water by comparing the relative bio-availability of fluoride in: artificially fluoridated hard and naturally fluoridated hard tap drinking water; artificially fluoridated soft and naturally fluoridated soft tap drinking water; artificially fluoridated hard and artificially fluoridated soft tap drinking water; and naturally fluoridated hard and naturally fluoridated soft tap drinking water. The study is due for completion in the Autumn.

  Food Ingredients
  Chris Grayling
  To ask the Secretary of State for Health if he will make a statement on the process that will be used to assess the allergenic nature of food ingredients to meet the requirements of Directive 2000/ 13/EC. [111753]

  Ms Blears
  Proposed amendments to the Food Labelling Directive 2000/13/EC, which reached Common Position stage on 20 February this year, would require certain specified ingredients and their derivatives always to be declared in ingredient lists on food labels because of their link with food allergy or intolerance. The European Food Safety Authority will be responsible for reviewing and making recommendations for amendment of this list of specified ingredients in accordance with Article 29 of Regulation (EC) 178/2002.

  Food Standards Agency
  Mr. Roger Williams
  To ask the Secretary of State for Health what recent representations he has received from and discussions he has had with(a) the Food Standards Agency and (b) local authorities regarding food law enforcement. [111102]

  Ms Blears
  The Food Standards Agency (FSA) has responsibility for food law enforcement matters, as this area falls within its remit to protect public health and consumers' interests in relation to food. The FSA advises and keeps Health Ministers regularly informed, through frequent discussions and briefings, about relevant developments and issues. The FSA works very closely with local authorities and their representative bodies and receives regular representations from them regarding food law enforcement issues. These are made informally through day-to-day contact between FSA officials and local authority enforcement officers and more formally by means of written representations, through the enforcement liaison group (a joint FSA/ local authority committee that was set up to strengthen and develop links with local authorities) and at regular meetings of the FSA's chairman, chief executive and other senior officials with representatives of the local authorities co-ordinator of regulatory services and with the Local Government Association. These representations relate to a wide range of issues including, for example, the FSA's local authority monitoring and audit programmes, levels and consistency of food law enforcement activity, recruitment and retention of enforcement professionals and licensing of food premises.

  Janet Anderson
  To ask the Secretary of State for Health how much the Food Standards Agency has budgeted to spend on the Food Working Party when it is appointed. [111208]

  Ms Blears
  The Food Standards Agency has recently invited tenders for the 2003–04 contract to run a food working party of United Kingdom consumer and enforcement organisations with an interest in UK, and particularly European Union, food policy. The budget for 2003–04 will be in the region of £40,000.

  Janet Anderson
  To ask the Secretary of State for Health how much the Food Standards Agency spent on its Foodaware initiative in 2002–03. [111210]

  Ms Blears
  Foodaware is a quarterly working party of United Kingdom consumer and enforcement organisations with an interest in the UK and particularly European Union food policy. The Food Standards Agency funds the Secretariat. The budget for Foodaware was £40,000 in 2002–03.

  Heart Disease (Women)
  Chris Grayling
  To ask the Secretary of State for Health what changes there have been to death rates from heart disease among women in the past ten years. [111757]

  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.
  313W
  Letter from Len Cook to Mr. Chris Grayling dated 14 May 2003.
  As National Statistician, I have been asked to reply to your recent question concerning the changes in death rates from heart disease in women in the past 10 years. (111757)
  The most recent available mortality data are for the calendar year 2001. Figures for coronary heart disease (also known as ischaemic heart disease) and for other types of heart disease are shown in the attached table for each year from 1992 to 2001.

  Age standardised mortality rates1 per 100,000 female population from heart disease2 in females3, England and Wales, 1992 to 20014

  Calendar year

  Coronary heart disease

  Other types of heart disease

  Coronary heart disease and other types of heart disease

  1992

  136.5

  26.0

  162.5

  1993

  134.8

  30.6

  165.3

  1994

  123.8

  28.5

  152.3

  1995

  119.5

  28.9

  148.4

  1996

  114.1

  28.1

  142.2

  1997

  107.5

  27.1

  135.1

  1998

  105.6

  27.1

  132.7

  1999

  98.8

  27.1

  125.8

  2000

  90.9

  25.0

  115.9

  20015

  88.0

  26.2

  114.2

  1 The rates have been standardised using the European standard population.

  2 The cause of death was defined using the International Classification of Diseases, Ninth Revision (1CD-9) codes for the years 1992 to 2000, and the International Classification of Diseases, Tenth Revision (1CD-10) codes for 2001. The codes used are listed: Coronary heart disease—1CD-9 410–414; 1CD-10 120–125; Other types of heart disease—ICD-9 390–398, 402, 404, 420–429; 1CD-10 100–102, 105–109, 111, 113, 130–152. Figures quoted exclude pulmonary heart disease (1CD-9 415–417; JCD- 10126–128).

  3 The data refer to females of all ages.

  4 Figures for 1992 are based on deaths registered in that calendar year and for 1993 to 2001 on deaths occurring in each calendar year.

  5 The introduction of ICD-10 for coding cause of death in 2001 means that data for heart disease in this year are not completely comparable with data for earlier years. The data should therefore be interpreted with caution. For coronary heart disease the effect of the change in classification in 2001 is described in a report published in May 20026.

  6 Source:

  Office for National Statistics. Results of the 1CD-10 bridge coding study, England and Wales, 1999. Health Statistics Quarterly 14 (2002), 75–83.

  Infectious Diseases
  Mr. Bercow
  To ask the Secretary of State for Health what plans he has to overhaul the infectious disease services and to create new isolation units and hospitals for victims of such diseases. [107931]

  Ms Blears
  There is already a network of specialist infectious disease units across the country and most hospitals have single rooms suitable for isolation.

  There are no immediate plans to create new specialist centres or isolation hospitals.

  Mr. Andrew Rosindell
  To ask the Secretary of State for Health (1) what measures are being taken to prepare(a) airports and (b) other entry points into the United Kingdom to deal with future outbreaks of infectious diseases in foreign countries; [111303]
  314W
  (2) what programmes are planned to train airport officials in recognising potentially infectious persons before they enter the country. [111304]

  Ms Blears
  The national health service locally is responsible for providing medical practitioners to undertake public health functions at ports, airports and railway stations handling international trains. These medical practitioners would be expected to know about relevant clinical aspects of communicable diseases as part of their normal professional learning, and the NHS would be responsible for ensuring that they are suitably equipped. Warnings of future threats from outbreaks of communicable disease in other countries and guidance on dealing with them will be cascaded through the NHS if the need arises.

  Mr. Rosindell
  To ask the Secretary of State for Health what organisation would be responsible for coorclinating health operations in the event of a large scale outbreak of an infectious disease in a major population centre. [111305]

  Ms Blears
  This aspect of the primary care trusts' accountability for control of infectious diseases is discharged by the Health Protection Agency (HPA), which is responsible for the investigation and management of suspected communicable disease incidents affecting the community, including outbreaks of infection. The HPA's responsibility includes the preparation of multi-agency contingency plans, leading and co-ordinating the public health response, undertaking appropriate epidemiological investigation, providing advice to the public and professionals and convening multi-agency incident/outbreak control teams.

  The Chief Medical Officer discharges his responsibilities via the regional directors of public health, who play a key role in management of large scale incidents.

  The Department's emergency plans would be brought into effect when necessary to ensure that the national health service can cope with large numbers of patients. These plans involve co-operation between all the key organisations.

  Integrated Medicines
  Mr. Paterson
  To ask the Secretary of State for Health how much his Department has spent on evaluating integrated medicines in each of the past five years. [111666]

  Ms Blears
  The term 'integrated medicine' is usually applied generically to the use of complementary therapies to supplement orthodox treatment. At the present time, no projects have been commissioned with a specific remit to assess the interaction between a complementary therapy and an orthodox treatment. Questions of this sort can best be considered once the efficacy of individual complementary therapies, acting on their own, is better understood.

  Between 1999 and 2001, the Medical Research Council spent an estimated 520,000 on such research. The Department of Health has currently awarded two

  315W
  grants at a total value of £800,000. On 21 April, I announced post-doctoral awards in complementary medicine research, totalling a further £1.3 million.

  Meningitis Trust
  Mr. Kidney
  To ask the Secretary of State for Health what financial support his Department gives to the Meningitis Trust. [111403]

  Ms Blears
  The Meningitis Trust is in receipt of a grant under section 64 of the Health Services and Public Health Act 1968. The grant is for three years.

  In 2002–03, the award was for £20,000, in 2003–04 the award will be for £27,000 and in 2004–05 the award will be for £35,200.

  The Section 64 Grant is to help finance the trust's home visiting service, which was launched last year to help people suffering from meningitis after they have been discharged from hospital.

  Methadone
  Ms Atherton
  To ask the Secretary of State for Health pursuant to his Answer of 7 May 2003,Official Report, column 767W, on methadone overdose deaths, if he will make it his policy to ensure that all methadone prescriptions are taken under medical supervision. [113101]

  Ms Blears
  The Department of Health's 'Drug Misuse and dependence—guidelines on clinical management' (1999) states the following:

  `Supervised consumption is recommended for new prescriptions for a minimum of three months, and should be relaxed only when the patient's compliance is assured. However, the need for supervised consumption should take into account the patient's social factors, such as employment and child care responsibilities. If supervised ingestion clashes with these and is still felt necessary, it must be made available at a time that allows the patient to attend without putting their job or families at risk.'

  NHS Electronic Bookings
  Chris Grayling
  To ask the Secretary of State for Health which pilots for NHS electronic bookings have been completed; and what the outcomes of the work carried out were. [110174]

  Mr. Hutton
  There are 43 health communities taking forward electronic booking as part of the national booking programme; at least one in every strategic health authority. These comprise:Five electronic booking enterprise communities: North West London, South East London, Dorset, Manchester and West Yorkshire. These were established to move electronic booking faster and act as demonstrators for the rest of the national health service. They ran from April 2002 to March 2003;
  38 electronic booking shadow communities between May and November 2002. These were established to continue the development and spread of electronic booking, learning from the experience of the enterprise communities and will run until November 2003.

  Work with the enterprise communities was used to inform the development of the specification for the procurement of electronic booking systems currently underway.
  316W
  An interim report on the work of the enterprise communities was published by the Modernisation Agency in November 2002, a copy of which is available in the Library. A full evaluation, reporting the progress of the enterprise communities and early findings from the shadow communities, will be published in the summer.

  NHS Premises
  Mrs. Calton
  To ask the Secretary of State for Health what recent advances have been made by the NHS in improving the environmental standards of NHS premises. [109649]

  Mr. Hutton
  The national health service has made significant advances in improving the environmental standards of NHS premises.

  The NHS has met the energy efficiency target of 20 per cent. reduction in energy use from 1990 to March 2000.

  Work is now underway, in concert with Action Energy and the Carbon Trust, to assist the NHS in meeting new, challenging targets of 15 per cent. energy or 0.15 million tonnes carbon efficiency from March 2000 to March 2010.

  The "New Environmental Strategy for the NHS" issued in April 2002 requires the NHS to produce local strategies and plans of action against a number of key areas, including: transport, waste, water, energy/ carbon, and procurement.

  To assist the NHS, advice is provided in "Sustainable Development in the NHS". A software tool, the "NHS Environmental Assessment Tool", will help the NHS identify and hence seek to improve its environmental impacts. Additionally, to assist the NHS, NHS Estates is involved with:
  the Government's Watermark initiative to address water conservation;
  the Department of Health and Sustrans to provide seminars on healthy transport planning;
  producing further guidance to address total waste management; and
  promoting sustainable construction as part of the major NHS capital development programme to 2010.

  NHS Treatment Abroad
  Mr. Jon Owen Jones
  To ask the Secretary of State for Health how many patients he estimates are eligible to have treatment in another EU country paid for by the NHS owing to an undue delay in treatment in England, with reference to the European Court of Justice ruling on treatment of patients abroad. [109976]

  Mr. Hutton
  No estimate has been made of the number of patients who may wish to seek authorisation for treatment abroad under the El 12 referral arrangements.

  Nationals of the European economic area resident in this country are eligible to apply for referral to another European Union country using the E112 referral scheme. Whether authorisation is granted will depend on certain conditions being met. One of these is that the treatment in question cannot be given to the patient

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  "within the time normally necessary for obtaining the treatment in question in the member state of residence, taking account of his current state of health and the probable course of the disease".

  It is not possible to estimate at any given point in time how many patients this might apply to. In 2002, 1,120 E112 forms were issued in respect of residents of England, Scotland and Wales.

  Mr. Jon Owen Jones
  To ask the Secretary of State for Health what discussions he has had with his counterparts in the Scottish Parliament, Welsh Assembly and the Northern Ireland Office concerning the right of patients to have treatment in another EU country paid for by the NHS owing to an undue delay in treatment in the UK, referred to in the European Court of Justice ruling on treatment of patients abroad. [109978]

  Mr. Hutton
  Following the European Court of Justice judgment in Case-C157/99 Geraets-Smits/Peerbooms, the Department reviewed the operation of the arrangements in place in the United Kingdom for referral of patients elsewhere in the European Economic Area under Regulation (EEC) 1408/71. The devolved administrations were consulted.

  Mr. Jon Owen Jones
  To ask the Secretary of State for Health (1) what efforts he has made to inform patients of their right to have treatment in another EU country paid for by the NHS if subject to undue delay in this country as stated in the European Court of Justice ruling on treatment of patients abroad; [109882]

  (2) what efforts he has made to inform patients of their right to have treatment in another EU country paid for by the NHS if subject to undue delay in England, as referred to in the European Court of Justice ruling on treatment of patients abroad. [109977]

  Mr. Hutton
  The Department publishes the patient referral arrangements in Regulation (EEC) 1408/71 through "Health Advice for Travellers", which is widely available in post offices. Information is also available on CEEFAX, PRESTEL and the internet.

  Revised guidance to the public to take account of recent rulings in the European Court of Justice on treatment of patients abroad is being finalised and will be published in the next edition of the leaflet.

  Guidance to the national health service on directly commissioning treatment in other European economic area countries is also available on the Department's website.

  Obesity
  Chris Grayling
  To ask the Secretary of State for Health when the Health Development Agency will publish its report into obesity. [109286]

  Ms Blears
  The Health Development Agency (HDA) intends to have a draft report, "Weight management: an analysis of reviews of diet, physical activity and behavioural approaches", completed by May 2003 for consideration and approval by the HDA obesity reference group and the Department of Health. The next 318W
  meeting of the obesity reference group will be held on 9 July 2003. It is intended that the HDA report will be published in autumn 2003.

  Public Health
  Dr. Evan Harris
  To ask the Secretary of State for Health (1) what action his Department intends to take to clarify the responsibilities of health authorities and local authorities in the area of communicable disease control; [110958]

  (2) whether his Department intends to establish a statutory notification scheme for laboratories; [110957]

  (3) what action his Department intends to take to amend the powers exercised as a last resort over people, premises and property in circumstances posing a risk to public health;[110959]

  (4) what action his Department intends to take to change the reserve powers available to the Secretary of State in the event that an outbreak of communicable disease is being mishandled. [110960]

  Ms Blears
  Responses to the consultation exercise which the previous Government conducted in 1989 suggested that there needed to be changes to the Public Health (Control of Disease) Act 1984 in these four areas. However, legislation to make these changes was not brought forward by the then Government. The general issues raised will be considered as part of the review which we plan of the Public Health (Control of Disease) Act.

  Scans (Waiting Times)
  Mr. Norman
  To ask the Secretary of State for Health what proportion of(a) CT scans, (b) MRI scans, (c) ultrasound scans, (d) X-ray tests and (e) audiology tests were classed as (i) consultant-led first out-patient appointments and (ii) consultant-led in-patient elective admissions in the last year for which figures are available. [109660]

  Ms Blears
  No statistics are available centrally which allow us to show which computed tomography (CT) scans, magnetic resonance imaging (MRI) scans, ultrasound scans, x-ray tests and audiology tests are taken as a part of an out-patient attendance or as part of a n elective in-patient admission.

  Severe Acute Respiratory Syndrome
  Mr. Peter Luff
  To ask the Secretary of State for Health what assessment he has made of the role of aircraft air conditioning systems in the spread of (a) SARS and (b) other infectious diseases; and if he will make a statement. [110807]

  Ms Blears
  The pattern of illness so far suggests that travellers are not at increased risk if they have travelled by plane with someone with severe acute respiratory syndrome (SARS). However, as a precaution, if a passenger is identified with symptoms and is suspected of having SARS, the details of those sitting in nearby seats, two rows in front and behind, will be taken and they will be given information on action to take should they develop symptoms within 10 days of the flight.
  319W
  Mr. Rosindell
  To ask the Secretary of State for Health what public funds he has made available for research into possible vaccinations against SARS. [111306]

  Ms Blears
  The probable causative pathogen of severe acute respiratory syndrome (SARS) has only recently been identified. There is still a certain amount of scientific work to be carried out before we can start research into the development of a vaccine.

  Dr. Evan Harris
  To ask the Secretary of State for Health whether the World Health Organisation recommends against screening by(a) interview and (b) body temperature at airports of entry of passengers returning from SARS affected areas. [110999]

  Ms Blears
  To reduce the risk that travellers may carry the severe acute respiratory syndrome virus to new areas, the World Health Organisation recommends screening international travellers departing from areas where local transmission is occurring, by answering a few questions and may include a temperature check.

  Mr. Wilshire
  To ask the Secretary of State for Health if he will make a statement on the preparations being made at hospitals near Heathrow Airport to treat people arriving at Heathrow Airport who are infected with the SARS virus. [110558]

  Ms Blears
  The Chief Medical Officer issued detailed information to all general practitioners and health professionals on 14 March and subsequently on 7 April. A letter to all chief executives of national health service primary care trusts was also issued on 29 April, reminding them of the action they need to take in their own organisations as a precaution in case of further possible cases presenting to the NHS.

  Mr. Wilshire
  To ask the Secretary of State for Health if he will make a statement on the precautions being taken at Heathrow to prevent the spread of the SARS virus into the United Kingdom via the airport. [110559]

  Ms Blears
  Since the outbreak of severe acute respiratory syndrome (SARS), environmental health officers (EHOs) based at Heathrow's health control unit are boarding flights arriving at the airport from high risk areas such as Hong Kong, China and Singapore. EHOs are meeting planes before passengers disembark to ascertain from the cabin crew whether there are any ill passengers on board. In addition, they verify that the airline is aware of their legal requirement to notify port health authorities of any suspected infectious disease.

  If a passenger has become ill during the flight and develops symptoms suggestive of SARS, an EHO/ health control unit officer and a medical officer will board the plane on its arrival. Airline crew and passengers remain on board while the medical officer assesses the patient and establish the nature of the illness. The health control unit arranges for the patient's subsequent care.
  320W
  If SARS is suspected, then all passengers and crew will be given information sheets about the illness and the need to seek early medical advice should they develop symptoms within ten days of the flight.

  Close contacts, including passengers sitting in the same seating row or within at least two rows in front of or behind the ill passenger, will be given a form to complete. The form will require them to provide their contact details and in the event of the suspected case being confirmed, will enable public health services to monitor their health.

  The plane involved will then be impounded by EHOs until it has been disinfected by the airline in accordance with current requirements.

  Dr. Harris
  To ask the Secretary of State for Health (1) pursuant to his statement to the House of 28 April, if he will make a statement on the status of a declaration signed by passengers returning from SARS-affected areas; [110931]

  (2) pursuant to his oral statement of 28 April 2003, Official Report, column 38, on Severe Acute Respiratory Syndrome, if he will make a statement on the action to be taken against people returning to the United Kingdom from SARS-affected areas, who are unable or unwilling to sign a declaration; [110961]

  (3) what (a) scientific and (b) medical advice he has received in support of a policy of screening for SARS at airports using a declaration for passengers to sign. [110923]

  Ms Blears
  Travellers returning from severe acute respiratory syndrome affected areas are not currently required to sign declarations. The statement my right hon. Friend, the Secretary of State made on 28 April, referred to this course of action being considered should the need arise.

  Dr. Harris
  To ask the Secretary of State for Health if he has received advice from(a) the World Health Organisation and (b) the Chief Medical Officer on the transmissibility of SARS through (i) aerosol routes and (ii) fomites. [110963]

  Ms Blears
  The World Health Organization (WHO) has on-going research (from members of WHO laboratory network) on the exact mechanism of transmission based on the stability of the severe acute respiratory syndrome (SARS) coronavirus. From the information to date the WHO continues to advise the need for personal protective equipment appropriate for standard, contact, and airborne precautions—for example, hand hygiene, gown, gloves, a face mask providing appropriate respiratory protection, eye protection, footwear that can be decontaminated—for health care workers to prevent transmission of SARS in the health care settings. They have also issued advice on decontamination and disinfection of potential fomites to reduce the spread of infection.

  The Chief Medical Officer emphasised in his letter to Chief Executives of national health service trusts and primary care trust of 29 April, of the need to maintain absolute rigour in reducing the risk of cross infection through effective respiratory precautions, high quality sterile practice by staff caring for the patient concerned, exceptional standards of environmental hygiene—for

  321W
  example, walls, floors, surfaces—in the clinical areas where patients have been cared for even temporarily, such as walk-in centres, and absolutely no inappropriate re-use of medical devices and equipment.

  Dr. Evan Harris
  To ask the Secretary of State for Health if he will list hospitals and primary care trusts where suspected SARS cases are being observed or treated as inpatients. [110964]

  Ms Blears
  There have been a number of cases where people fit the suspect definition of severe acute respiratory syndrome which have been investigated. However from these only four probable cases have emerged. Indeed two previous probable cases have been removed following confirmation of alternative diagnoses. The last case in the United Kingdom was admitted to hospital on 10 April, and all those diagnosed as probable cases have now recovered.

  Dr. Harris
  To ask the Secretary of State for Health how many(a) suspected and (b) probable SARS cases there were in the UK on the most recent day for which information is available. [110966]

  Ms Blears
  As of 12 May, there were four probable cases of severe acute respiratory syndrome (SARS) in the United Kingdom.

  There have been a number of cases where people fit the suspect definition of SARS which have also been investigated. We will only be reporting cases that fit the probable case definition issued by the World Health Organisation. At this time of year in south-east Asia influenza activity is high and we would therefore expect travellers to this area to be returning with flu-like

  Diagnoses and rates for selected conditions, total diagnoses and workload in GUM Clinics: England, Wales and Northern Ireland 1997–2001

  Diagnoses

  1997

  1998

  1999

  2000

  2001

  Infectious syphilis (primary and secondary)

  Male

  101

  88

  160

  252

  613

  Female

  50

  44

  55

  75

  102

  Total

  151

  132

  215

  327

  715

  Uncomplicated gonorrhoea

  Male

  8,602

  8,649

  10,972

  14,725

  15,903

  Female

  4,054

  4,180

  5,002

  6,406

  6,794

  Total

  12,656

  12,829

  15,974

  21,131

  22,697

  Uncomplicated genital chlamydial infection

  Male

  16,985

  19,896

  22,962

  28,100

  30,763

  Female

  23,598

  26,259

  30,821

  36,700

  40,362

  Total

  40,583

  46,155

  53,783

  64,800

  71,125

  Genital herpes simplex virus (first attack)

  Male

  5,870

  6,356

  6,302

  6,473

  6,787

  Female

  9,896

  10,065

  10,279

  10,471

  11,063

  Total

  15,766

  16,421

  16,581

  16,944

  17,850

  Genital warts (first attack)

  Male

  32,679

  33,670

  34,716

  34,847

  35,487

  Female

  30,875

  31,255

  31,723

  31,297

  32,185

  Total

  63,554

  64,925

  66,439

  66,144

  67,672

  All diagnoses

  Male

  228,205

  242,681

  256,466

  276,120

  292,060

  Female

  277,490

  291,136

  305,733

  324,885

  345,778

  Total

  505,695

  533,817

  562,199

  601,005

  637,838

  All diagnoses and workload

  Male

  464,861

  498,537

  519,574

  561,270

  628,743

  Female

  548,297

  578,855

  594,942

  634,371

  704,167

  Total

  1,013,158

  1,077,392

  1,114,516

  1,195,641

  1,332,910

  322W
  symptoms, which are unrelated to the current outbreaks of SARS. Each suspected case is carefully evaluated on the clinical presentation of its symptoms.

  The situation is changing daily, and it would not be beneficial to report suspected cases as there will be many who after investigation do not fit the WHO case definition. We therefore only report on probable cases, as required by WHO.

  Mr. Dismore
  To ask the Secretary of State for Health what advice and assistance he is giving to people of Chinese origin regarding concerns over the SARS issue; and if he will make a statement. [111782]

  Ms Blears
  [holding answer 7 May 2003]: The Department of Health issued updated information and advice to all travellers from the United Kingdom about severe acute respiratory syndrome (SARS) on 8 May. This information is reviewed daily.

  Sexually Transmitted Infections
  Mr. Paul Marsden
  To ask the Secretary of State for Health what the level was of sexually transmitted infections, broken down by disease, in each year since 1997. [109689]

  Ms Blears
  Information on the number of new cases (diagnoses) and new cases per 100,000 population by disease, for the years 1997–2001 is shown in the table. This is taken from the statutory reporting of diagnoses made at genito-urinary medicine (GUM) clinics on form KC60. Data on sexually transmitted infections (STIs) are only collected centrally from GUM clinics where most STIs are diagnosed and treated. STIs diagnosed and treated by general practitioners or in other settings are not available.
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  Diagnoses and rates for selected conditions, total diagnoses and workload in GUM Clinics: England, Wales and Northern Ireland 1997–2001

  Rates (per 100,000 of population)

  1997

  1998

  1999

  2000

  2001

  Infectious syphilis (primary and secondary)

  Male

  0.36

  0.33

  0.60

  0.93

  2.27

  Female

  0.18

  0.16

  0.20

  0.27

  0.37

  Total

  0.27

  0.24

  0.40

  0.60

  1.31

  Uncomplicated gonorrhoea

  Male

  30.54

  32.46

  40.92

  54.59

  58.96

  Female

  14.80

  15.22

  18.14

  23.15

  24.56

  Total

  22.78

  23.71

  29.37

  38.67

  41.54

  Uncomplicated genital chlamydial infection

  Male

  60.30

  74.67

  85.64

  104.17

  114.05

  Female

  86.16

  95.58

  111.80

  132.65

  145.89

  Total

  73.05

  85.29

  98.90

  118.59

  130.17

  Genital herpes simplex virus (first attack)

  Male

  20.84

  23.86

  23.50

  24.00

  25.16

  Female

  36.13

  36.64

  37.29

  37.85

  39.99

  Total

  28.38

  30.34

  30.49

  31.01

  32.67

  Genital warts (first attack)

  Male

  116.01

  126.37

  129.47

  129.19

  131.56

  Female

  112.72

  113.77

  115.07

  113.12

  116.33

  Total

  114.39

  119.97

  122.17

  121.05

  123.85

  All diagnoses

  Male

  810.13

  910.83

  956.49

  1,023.64

  1,082.73

  Female

  1,013.11

  1,059.74

  1,108.99

  1,174.28

  1,249.80

  Total

  910.20

  986.42

  1,033.80

  1,099.91

  1,167.32

  All diagnoses and workload

  Male

  1,650.27

  1,871.10

  1,937.75

  2,080.76

  2,330.89

  Female

  2,001.82

  2,107.03

  2,158.05

  2,292.90

  2,545.17

  Total

  1,823.58

  1,990.87

  2,049.43

  2,188.17

  2,439.39

  Smoked Food
  Mr. Key
  To ask the Secretary of State for Health what legislation regulates the description of food as smoked. [111472]

  Ms Blears
  European rules on food labelling are implemented in the United Kingdom by the general provisions of the Food Safety Act 1990 and the Food Labelling Regulation 1996. These make it an offence to describe food in a way that is false, or likely to mislead a purchaser about its nature, substance or quality. Guidance notes accompanying this legislation make clear that terms like "smoked" can easily be abused and suggest that products that have been immersed in, or sprayed with, a solution which imparts flavour and colour should be described as "smoke flavoured" rather than "smoked".

  Sunbeds
  Mr. Rosindell
  To ask the Secretary of State for Health what recent discussions he has had regarding health risks associated with the use of sunbeds. [110545]

  Ms Blears
  I refer the hon. Member to the response I gave him on 12 May 2003,Official Report, column 111 W.

  TB
  Tim Loughton
  To ask the Secretary of State for Health if he will make a statement on the strategic national plan to deal with tuberculosis. [109113]

  Ms Blears
  The tuberculosis action plan is currently being finalised and will be published shortly.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Departmental Report 2003
  The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)
  My 2003 Departmental Report, which contains information on progress against the Department's objectives, the challenges ahead for the forthcoming financial year and summary expenditure plans for the Department for 2003–04 to 2005–06, will be published today. Copies will be placed in the Libraries of both Houses.

WORK AND PENSIONS

  Benefit Fraud Inspectorate
  The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)
  On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report of compliance with the Race Relations Act of the Housing and Council Tax Benefit and counter-fraud services of 10 randomly selected local authorities was published today. Copies of the report have been placed in the Library.

  The BFI completed an inspection of the 10 authorities to establish how each met the requirements of the Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000. The Act demands that public bodies remove discrimination and proactively promote race equality. An overarching report that covers all 10 local authorities has been produced.

  The BFI found that seven of the 10 authorities had a race equality scheme in place by the deadline of 31 May 2002 and the remaining three had a scheme in place by October 2002.

  However, BFI considers that all local authorities will need to look closer at the housing benefit and council tax benefit services they provide their community to ensure equal treatment across all areas.

  The report notes that positive action to promote services and consult with users was more prominent in larger local authorities with a high black and minority ethnic population where residents were often supported
  8WS
  through community groups. Additionally there was a notably higher standard in local authorities where there was clear evidence of strong commitment from senior officers and members.

  The report notes that local authorities recognised the need to monitor recruitment of staff through all the stages. There was less commitment to measure staff progression, development, training and performance of existing staff members. Delivery of staff training on the requirements of the Act was sporadic.

  The BFI has incorporated the requirements of the Race Relations Act into its inspection process. Future inspection reports will report on compliance with the Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000.

  Child Poverty
  The Secretary of State for Work and Pensions (Mr. Andrew Smith)
  I have published "Measuring Child Poverty Consultation: Preliminary Conclusions". Copies have been placed in the Library.

  The Government issued a consultation document in April 2002 to promote debate on how best to build on their existing indicators to measure child poverty in the long term. The document published today outlines recommendations and next steps based on a thorough analysis of the responses to the consultation document and to events held with children and young people, and adults with experience of poverty.

  Further technical work is necessary before finalising the precise details of any new measures for the long term.

  We remain committed to our existing public service agreements. We have taken action to raise the incomes of all families, especially those on the lowest incomes, and we are making steady progress towards the Government's target to reduce by a quarter the number of children living in low-income households by 2004–05, with the impact of the new tax credits still to be felt.

TREASURY

  OGCbuying.solutions
  The Chief Secretary to the Treasury (Mr. Paul Boateng)
  OGCbuying.solutions has been set the following performance targets for 2003–04

  i. The Agency will facilitate at least £120 million value for money improvements for Central Civil Government over the 2003–04 year.

  ii. The Agency will continue to achieve levels of customer satisfaction above 90 per cent.

  iii. The Agency will make a Return On Capital Employed (ROCE) payment of 8 per cent.

  iv. The Agency will reduce by 5 per cent. the ratio of internal costs over value for money improvements compared with the outturn for the same ration in 2002–03.

  A copy of the Agency's Business Plan for 2003–04 can be found on their website www.obcbuyingsolutions.gov.uk.

HEALTH

  NHS Foundation Trusts
  The Secretary of State for Health (Mr. Alan Milburn)
  I have today placed in the Library a list of those National Health Service trusts that have been successful in their preliminary application for NHS foundation trust status, with a view to their establishment in April 2004, subject, of course, to Parliament's approval of the Health and Social Care (Community Health and Standards) Bill 2003, currently before the House of 10WS
  Commons. These NHS trusts will now enter the preparatory stage for NHS foundation trust status. The applicant NHS trusts must satisfy the requirements of the preparatory phase, outlined in "The Guide to NHS Foundation Trusts", and must retain three stars in the performance ratings to be published in the summer before they can be approved to become NHS foundation trusts. The objective of the full application process is to help applicants to prepare for NHS foundation trust status, check whether the applicant's vision to utilise the freedoms of NHS foundation trust status is consistent with the aims of the policy, and to test the organisation's readiness.

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

EU: Export of Cultural Goods
Lord Brooke of Sutton Mandeville: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I draw attention to the fact that I am president of the British Art Market Federation.
The Question was as follows:
To ask Her Majesty's Government when they expect the next triennial review of the threshold figures under Council regulation (EEC) No. 3911/92 on the export of cultural goods from member states of the European Union.
Lord McIntosh of Haringey: My Lords, as the regulation was introduced in 1993, the next triennial review would be due in 2005. However, the European Commission has so far declined to undertake any such reviews in 1996, 1999 and 2002. We have pressed the Commission and other member states about this at every available opportunity without success. We will continue to pursue this at both ministerial and official level.
Lord Brooke of Sutton Mandeville: My Lords, I thank the Minister for that reply. As he will be aware, the background to the Question is that a failure to update the thresholds has more than doubled in a decade the number of export licences the DCMS has to process each year, with a consequential potential impact on their timeousness. Since the issue of qualified majority voting applies to the Council's examination of the figures and not to the Commission's proposal itself, do the Government believe that the Commission is legally justified in not proposing regular triennial updates of the threshold figures? If so, have the Government considered testing the issue in the European Court of Justice?
Lord McIntosh of Haringey: Yes, my Lords. As the noble Lord, Lord Brooke, knows, the position is that the Council has to consider the matter acting on a proposal from the Commission. Unless the Commission puts a proposal forward, the Council cannot do anything about it. Our view is that this is not the right way to behave and we are taking legal advice about it at the present time.

Kazakhstan
2.37 p.m.
Viscount Waverleyasked Her Majesty's Government:
What measures are being taken to strengthen the United Kingdom's relationship with Kazakhstan.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, we are strengthening our relationship by increasing ministerial and other high-level engagement. My right honourable friends the Prime Minister and the Foreign Secretary have met their Kazakh counterparts during the past year. Kazakh Ministers for defence, trade and industry and the environment have visited the United Kingdom and met with their ministerial counterparts this year. Visits from at least two more Kazakh Ministers are planned for this year and I hope to visit Kazakhstan. I am very pleased that a group of Kazakh parliamentarians are currently visiting the United Kingdom.
Viscount Waverley: My Lords, will the Minister take account of Kazakhstan's importance to the United Kingdom as a long-term strategic partner receptive to multi-sector co-operation? Should not senior Cabinet Ministers he encouraged to visit Astana and does not more note need to be taken of the parliament which hitherto has received insufficient attention? How is the ambassador, without the support of Her Majesty's Government and based 800 miles away, able to create comparative advantages with only occasional visits to the seat of parliament, government and the president?
Baroness Symons of Vernham Dean: My Lords, I absolutely accept the points made by the noble Viscount about the importance of a long-term strategic relationship with Kazakhstan. I was delighted to be able to discuss those very points with a group of parliamentarians whom I met yesterday. The noble Viscount may also be interested to know that they had a similarly helpful meeting with my honourable friend Mr O'Brien.
We had a useful debate on the subject, led by the noble Viscount, last year. As to the points he raised about the ambassador, we hope that we shall be able to move the embassy to Astana very soon. The diplomatic commitment is self-evident, the numbers serving in our embassy having risen from four at the time it was opened to nine currently.
Lord Avebury: My Lords, is it appropriate to strengthen relationships with the corrupt and repressive regime of President Nazarbayev? Should we not take the advice that the Washington Post gave President Bush on 1st May to help those inside Kazakhstan who continue to struggle for a different kind of future and offer our co-operation to the US Justice Department which is investigating transactions involving illegal payments of 115 million dollars to President Nazarbayev and his cronies, some of those payments being made through Vaeko Europe Limited,

231
a company registered in the British Virgin Islands? Does the Minister consider that the machinery for policing transactions of this kind through our dependencies is adequate, or should they be strengthened?
Baroness Symons of Vernham Dean: My Lords, the fact is that this Government believe in a process of critical engagement. I assure the noble Lord, Lord Avebury, that the sensitive issue he mentions has been raised on occasions when British Ministers have had the opportunity of doing so with Ministers from Kazakhstan. We believe that these are important issues which should be discussed among friends.
I point out to the noble Lord that it has been a considerable achievement in a country the size of Kazakhstan, given the enormous diversity of its ethnic make-up, that it has achieved a cohesion and stability; that it has rid itself, for example, of nuclear weapons which have been a substantial legacy to global security; and that it is now prepared for the kind of critical engagement on the crucial issues raised by the noble Lord.
As regards the particular case he raised, that is a matter which is currently going through a judicial process, so I shall not comment further.
The Lord Bishop of Portsmouth: My Lords, reluctant as I am to oppose the supplementary question posed by the noble Lord, Lord Avebury, do not the press censorship and oil scandals make it all the more important that the links for which the noble Viscount, Lord Waverley, is pressing come further up the Government's agenda?
Baroness Symons of Vernham Dean: My Lords. I believe that that is the right line to take. I make no bones about the fact that, as the noble Lord, Lord Avebury, pointed out, the record on human rights is patchy and improvements are needed. But where human rights are contravened, such as in the registration of, perhaps, religious organisations—no doubt a matter on the right reverend Prelate's mind—or in steps taken against political opposition and an independent media, our ambassador in Kazakhstan, along with our EU partners, conveys the concerns to the government and calls for reform. Those points have been raised by my honourable friend the Parliamentary Under-Secretary of State and, indeed, by myself within the past 24 hours.
Lord Howell of Guildford: My Lords, I warmly endorse the words of the noble Viscount, Lord Waverley. When the Minister visits Kazakhstan will she take every opportunity to encourage further democratic development there? Might it be worth pointing out that it is perhaps not such a good idea in Kazakhstan to put Ministers who leave the cabinet in gaol, which seems to be the habit, even though it is a power that the Government here might sometimes wish they had?
Baroness Symons of Vernham Dean: My Lords, tempted as I am, I shall not be drawn. It is very
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important that there is political pluralism in Kazakhstan. I assure the noble Lord that, again, this matter has been raised. The noble Viscount, Lord Waverley, has been extremely prescient in the choice of day for his Question. He will know that there has been engagement on these issues. It is important that we sustain that engagement and that we are honest with our friends in Kazakhstan. However, at the same time it is very important that we acknowledge that progress is being made. There seems to me to be a will to engage on these matters and to speak very frankly about them.
Lord Kilclooney: My Lords, having recently returned with a Council of Europe delegation from Yerevan, I congratulate the Government on their magnificent new embassy which is about to open in that city. The Minister mentioned the embassy in Kazakhstan. Can she confirm that Kazakhstan is one of the main countries in which the United Kingdom now invests; that we are number one in Europe in investing in Kazakhstan; that the Americans have already selected a site in the new capital, Astana, and have under construction their new embassy? Can she make clear that the United Kingdom will soon select a site in Astana to provide an embassy for the United Kingdom and will not delay the decision further in order to have agreement with the French to have a joint embassy?
Baroness Symons of Vernham Dean: My Lords, I am happy to receive the noble Lord's congratulations. As to his points on investment, he is right. We invest more in Kazakhstan than any other country in Europe. We are the second largest investor in Kazakhstan world-wide. I am happy to report that UK investments currently total more than £2 billion since independence in 1991. Those investments tend to concentrate in the oil and gas sector but as I, as the trade Minister, have been discussing, we should very much like to see further diversification in that respect. As to opening an embassy, we intend as a first step to open a small office staffed by a Kazakh national to assist liaison with ministries in Astana. An indication of the increasing importance that we attach to that is the increase in numbers. However, we agree that the need to move in due course to Astana is important. We are discussing various options with our EU partners and our embassy in Almaty.
Baroness Stern: My Lords, is the Minister aware that the death penalty is still in operation in Kazakhstan? According to Amnesty International, no accurate figures are published on the number of executions carried out. Is the Minister also aware, and does she welcome as I do, the announcement by the Government of Kazakhstan that they have launched a public debate on the death penalty with a view to imposing a moratorium? In the light of that, will she raise with the Kazakhstan Government the importance of publishing accurate information on the number of executions and give all possible support to

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the government in their efforts to initiate a public debate, which should lead to a moratorium on the death penalty?
Baroness Symons of Vernham Dean: My Lords, I am aware that that matter is of great concern. Indeed, I discussed it yesterday with the parliamentarians who were visiting us. As the noble Baroness, Lady Stern, pointed out, Kazakhstan is discussing the possibility of a moratorium on the death penalty. Her Majesty's Government hope that very soon that will become a reality. I am grateful to the noble Baroness for the pertinent suggestion she made about ensuring that we ask the government at least to be clear about the numbers currently suffering that penalty.
Lord Blaker: My Lords, what is the attitude of Kazakhstan to the campaign against terrorism? Given its geographical location and its ethnic composition, is that not quite an important question?
Baroness Symons of Vernham Dean: My Lords, the Government of Kazakhstan have adopted a robust attitude over the issues around terrorism. Some of those issues are associated with the very fraught question of drugs and the ways in which drugs move from or through Kazakhstan. Again, that is a matter we touched on in your Lordships' House when we discussed this matter in May last year. That is another important reason why we should ensure that the level of debate we have with Kazakhstan is one that reflects the importance of that country as a huge thoroughfare from Asia into Europe. It is important to ensure that it is as secure as possible, both as regards drug trafficking and the very important question the noble Lord raised in relation to terrorism.
Baroness Strange: My Lords, is the Minister aware that my noble friends the Chief Whip, Lady Hilton and Lady Smith and I visited Kazakhstan a few years ago? We have the happiest recollections of that visit and the greatest affection and warmth for the Kazakh people. We were delighted to renew the acquaintance of some of them on their current visit here.
Baroness Symons of Vernham Dean: My Lords, I was not aware that the noble Baronesses had had such a successful visit. I am now, and I am delighted to learn of it.

Hunting: Civil Service Impartiality
2.49 p.m.
Lord Renton of Mount Harryasked Her Majesty's Government:
When they propose to allow civil servants from the Department for Environment, Food and Rural Affairs to attend hunt meets.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, staff in Defra have not been
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prevented from attending hunt meets in a private capacity. However, all Defra staff are subject to a duty of impartiality, so it may not be appropriate for an individual staff member to attend a hunt meet—either in support or in protest—if that creates a conflict of interest.
Lord Renton of Mount Harry: My Lords, it is difficult to see how there can be a conflict of interest in just attending a hunt meet. Does the Minister recall the leader in The Times of 28th April? It suggested—anticipating the review of Defra by the noble Lord, Lord Haskins—that many hundreds of senior Defra staff would be required to put on their wellies, leave Whitehall and go and live in the countryside in order to be nearer those whose lives they rule. That is a splendid idea.
Will the Minister consider actively encouraging some of those "expats" to go to a hunt meet, to follow the hunt either by car or on foot —and thus to learn from close-to what tremendous enjoyment of the countryside hunting gives to thousands of people?
Lord Whitty: My Lords, the noble Lord anticipates what I am sure will be some lively debate in this House when the Hunting Bill reaches it. We have yet to receive the details of my noble friend Lord Haskins's report on the structure of Defra and its agencies. It is important to recognise that a good number of Defra and the agency staff delivering services to the countryside are resident in the countryside. They do not all—contrary to the noble Lord's impression—live and work in Whitehall. They have close contact with many in the countryside, including those involved in field sports and other activities.
As to the question of impartiality, I was referring only to those few members of staff who are dealing with the hunt proposals. Other members of Defra staff are perfectly free to do whatever they like in their own time.
Lord Strabolgi: My Lords, are officials from Defra allowed to attend hunt meets in France where hunting has flourished ever since the right to hunt was granted to the people by the French Revolution?
Lord Whitty: My Lords, I am not sure that this House would approve of all aspects of the French Revolution. Francophile though I am, some things have moved on further in the United Kingdom than they have in France.
Viscount Astor: My Lords, has the Minister attended a hunt meet? If he has not, will he do so in order to improve his knowledge and, indeed, his impartiality?
Lord Whitty: My Lords, the answer to that is, "Not for many years". That is the kind of question addressed to me when, as a junior civil servant in the Ministry of Aviation, I was asked whether I could have a view on a matter if I could not fly an aeroplane. One

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can take a view on these matters whether or not one has actually participated in them. That applies to civil servants as much as it does to Ministers.
Lord Renton: My Lords, I hunted for one-third of the past century while MP for Huntingdonshire—until I was 70. Is the Minister aware that if fox hunting is abolished, foxes will suffer terribly because they are so prolific and so destructive of poultry and game that they will have to be killed by other means, which are much more cruel than fox hunting?
Lord Whitty: My Lords, again we are anticipating other debates. I do not accept that finality, either in terms of the relative cruelty or as to the effect on pest control. Analysis has shown that a small proportion only of foxes die as a result of hunt activity. Already, therefore, most foxes are controlled by means other than by hunting with hounds.
Lord Corbett of Castle Vale: My Lords, I refer back to my noble friend's answer as to getting staff delivering services to live nearer to the people who are to enjoy them. Does that mean that it is now government policy that the Home Secretary should be based in HMP Wandsworth and the Minister for Defence in Aldershot?
Lord Whitty: My Lords, I think that I shall repeat my noble friend's remark, "Don't tempt me". There is a serious point behind the report of my noble friend Lord Haskins and the second question of the noble Lord, Lord Renton of Mount Harry; namely, that a perception of Defra staff is different from the reality. The reality is that most people who deliver services are fairly close to the point at which those services are received. It is only really the "upper echelons"—if one wants to put the matter that way—of the former MAFF and DETR who are located in Whitehall. It may well be that we shall want to deliver some further decentralisation. It is not the case that we are all already metropolitan.
The Countess of Mar: My Lords, is it not possible for Defra officials to attend a hunt—totally impartially rather than in a partisan way—in order to observe what actually happens so that they can speak from experience? One does not have to be partisan when one attends a hunt meet.
Further to the question of the noble Lord, Lord Corbett, if Home Office officials go to the country to see what happens—they do not have to actually live there for a long time, and I understand that the report of the noble Lord, Lord Haskins, does not say that they must live there—they will understand it much better and get more co-operation from the local people. For my own part, I should welcome any civil servant who cares to come and see what actually happens on the ground.
Lord Whitty: My Lords, it is important to recognise that those involved in dealing with hunting, both
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currently and in previous periods, have a lot of contact with hunt organisations and people involved with hunting. That has been very much the case over the past few months. I am asked whether it is sensible for people who are directly involved with the drafting of the Bill to appear at a hunt, with the consequent suggestion that they are supportive of hunting. That would not he any more sensible than it would if they were to join a bunch of hunt protesters. The impartiality of those particular civil servants needs to be preserved.
Lord Davies of Coity: My Lords, with regard to my noble friend's reply to the noble Lord, Lord Renton, that a relatively small number of foxes are killed by hunting and that most of them are killed by other means on the basis of pest control, does he acknowledge that if hunting is banned far greater numbers will be killed as a result of those other means?
Lord Whitty: My Lords, I certainly accept that a greater number would be killed by other means. The point I make is that a small percentage of the total deaths of foxes result from hunting with hounds. Clearly, there are different situations in different parts of the country, but the average is well below 10 per cent of all fox deaths.
Lord Mackie of Benshie: My Lords, would it not perhaps be more sensible for the MPs who condemn hunting to go to the countryside and attend a hunt rather than the civil servants?
Lord Whitty: My Lords, regrettably I have no power of direction over MPs. Certainly, they should visit the countryside. Whether they actually watch or participate in a hunt is entirely up to them.
Baroness Byford: My Lords, is it not important that civil servants have the opportunity to go out into the countryside and see how it works? The question is a little wider than that of my noble friend. Are the Government having second thoughts on seeking derogation for the fallen stock issue? It hugely affects the hunts. At the moment, as the noble Lord knows, the hunts collect fallen stock, but it is putting enormous pressures on them. Civil servants should have the opportunity to understand the issues at first hand. So my question is directly about the hunts but also about the wider issue.
Lord Whitty: My Lords, in relation to visits to the countryside, I must try and correct once again the view that Defra civil servants, and indeed civil servants from many other departments, spend all their time within one mile of Whitehall. I can assure noble Lords that at this very moment a large number of Defra civil servants are in the countryside, talking to country people of various descriptions and trying to deal with those problems. In my own case—if I was included in the question—I try and get out to the countryside as frequently as I can. It is therefore not the case that Defra are a faceless bunch of Whitehall bureaucrats.

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So far as concerns the fallen stock issue, the Government, the Civil Service and Ministers are aware of it. We have had several discussions with industry and others. The position is that we have proposed a scheme whereby a small levy is taken from farmers. We are still assessing whether the disposal scheme proposed by the Government is viable in the light of the response. It will be a week or two before I can give a clear answer. The issue of derogation does not therefore arise.

Iraq Survey Group
3 p.m.
Lord Wallace of Saltaireasked Her Majesty's Government:
To whom the British members of the Iraq Survey Group are responsible.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, the Iraq Survey Group is not yet fully operational. Precise terms of reference for any United Kingdom contribution are still being developed, but it is likely that they will be similar to the arrangements for other UK personnel in the coalition; namely, that United Kingdom personnel assigned to the Iraq Survey Group would be under operational command of the UK Chief of Joint Operations and under tactical control of the US Commander of the Iraq Survey Group.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that informative reply, and for confirming that the Iraq Survey Group is necessarily an American-led group, which will be searching for evidence of weapons of mass destruction in Iraq. Does he accept that questions of trust and transparency are now extremely important in that search, and that British participation in an American-led group that is not more widely accountable will not build the trust necessary so that, if and when weapons of mass destruction are found, they are found in circumstances that the whole world will accept? Does he accept that the United Nations ought to play a vital role in that, as well as in other aspects of reconstructing Iraq?
Lord Bach: My Lords, we certainly appreciate the need for credible, independent validation of evidence of Saddam's programme to develop weapons of mass destruction. The United Nations Monitoring, Verification and Inspections Commission and the International Atomic Energy Agency could be a means to provide such validation. We are in the process of discussing independent verification with our coalition partners and with the international community. Ultimately, decisions on the future role of the UN in Iraq will be for the international community, not just for the United Kingdom.
I should add that the Iraq Survey Group will not just be looking for weapons of mass destruction; it will also be unearthing other matters—investigating possible
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war crimes and support by the regime for terrorism. It will be looking for the black side of the Iraqi apparatus.
Lord Forsyth of Drumlean: My Lords, given that the objective of the war was to prevent weapons of mass destruction falling into the hands of terrorists and other groups, and given that anything of any marketable value seems to have been looted during the immediate aftermath of the fall of Baghdad, what reassurance can the Minister give the House that those weapons of mass destruction have not found their way into the hands of the sort of people about whom we were concerned when the war was initiated?
Lord Bach: My Lords, we are carefully considering the issue of looting that may or may not have taken place on such sites. Coalition forces have acted to secure such sites, both to preserve any evidence of illegal weapons programmes for subsequent investigation and to protect the Iraqi population from any hazardous substances that may be present. Bearing in mind the evil of the regime that has been toppled, about which we hear more every day. I cannot give any guarantee that, in the last analysis, it did not do the sort of thing that the noble Lord suggests. We are determined, for the sake of the Iraqi people and of the world, to ensure that we discover any weapons of mass destruction that are still present.
Lord Bruce of Donington: My Lords, will my noble friend take steps to protect the hitherto accurate papers that have been produced on various subjects, and to ensure that the publications that the Government have produced concerning weapons of mass destruction are corrected, because most of those so far issued by Her Majesty's Government have been grossly inaccurate?
Lord Bach: My Lords, I cannot agree with my noble friend about that. We always take great pains to ensure that what we say is accurate. Frankly, there can be no doubt that Saddam's regime continued to develop weapons of mass destruction in breach of UN resolutions and that evidence of those programmes will be found. In the United Nations the Security Council itself was convinced of that fact last November, when it passed Resolution 1441, unanimously agreeing that Iraq, because of its possession of weapons of mass destruction, was a threat to international peace and security.
Lord Avebury: My Lords, will the Minister say more about the wider remit that he mentioned? In particular, will a survey be conducted of the huge number of people who were internally displaced or sent into exile by the Iraqi regime? Should we not be systematically recording the names and former addresses of those persons so that they can, if possible, reclaim their property under a legal system?
Lord Bach: My Lords, I can tell the House the proposed mission of the survey group. It is to coordinate and conduct intelligence exploitation

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throughout Iraq; to locate, disable and eliminate Iraqi weapons of mass destruction production and storage facilities and materials; to complete the removal of the Iraqi regime and enable the prosecution of war crimes and crimes against humanity; to determine the status of Kuwaiti prisoners of war, which has been a running sore, to put it mildly, since the first Gulf War—and, of course, the American Captain Speicher, who was captured during that first war; and to remove the threat from Iraqi WMD and assist the global war on terrorism. Those are its draft functions, which are much wider than merely looking for weapons of mass destruction, important though that is.
Lord Howell of Guildford: My Lords, will the survey group play any part in investigating the killing fields that have in the past two or three days been revealed outside south Baghdad, to bring home to the wider world that we are dealing not just with an Iraqi dictator but someone who seemed to engage in the practices of Pol Pot?
Lord Bach: My Lords, I cannot say for sure whether the Iraq Survey Group will do that or not, but I expect that that will be very much a part of considering the black arts of that ghastly regime. I must agree with the noble Lord when he says that what has already emerged—without the Iraq Survey Group—is so shocking that those who took the view that somehow or other the conflict was not justified may be carefully thinking about what they said at the time.

Genetically Modified Food: Imports
3.7 p.m.
Lord Jenkin of Rodingasked Her Majesty's Government:
Whether they expect an imminent decision by the United States Government to file a complaint with the World Trade Organisation challenging the European Union's moratorium on the import of genetically modified foods; and, if so, what action they intend to take.
Baroness Symons of Vernham Dean: My Lords, the United States Government announced yesterday, 13th May, that they are seeking consultations with the European Commission on the so-called moratorium on the approval of GM products within the European Community. If the issue is not satisfactorily resolved by consultations then, 60 days after receipt of the request for consultation, the US has the right to seek the establishment of a World Trade Organisation dispute panel to consider the matter. It is a matter for the Commission, in consultation with European Union member states, to decide how to defend the case.
Lord Jenkin of Roding: My Lords, but has not the so-called moratorium—I agree with the language of the noble Baroness on that—been viewed for many
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years by the Commission as illegal? Three years ago, a Commissioner, Margot Wallstrom, said that the moratorium was illegal and unjustified. Why has nothing been done about it? Is it not also profoundly anti-science? That being so, how does all that square with the Prime Minister's speech last autumn at the Royal Society, which was both pro-trade and pro-GM food—and, of course, pro-science?
Baroness Symons of Vernham Dean: My Lords, the United Kingdom has never agreed with the so-called de facto moratorium on GMOs, which was imposed by some EU member states. We have made clear that we support an ordered return to effective and evidence-based European Community decisions on approval of GM products.
However, the noble Lord is not right to say that nothing has been done. We agree with the Commission that the conditions already exist for taking decisions on GM products, particularly since the entry into force only last October of the strengthened generic GMO release and product approval directive. That is an important development. I am sorry that the United States has decided to move to the disputes procedure now, when we have in place a mechanism that, we hope, would allow us to resolve the difficult issue.
I agree that it is very important that our decisions on GM are science-based. We believe that we have taken the right decision in the consultation exercise in which my noble friend and his colleagues in DEFRA are involved. We should have some answers on that in September this year.
Baroness Miller of Chilthorne Domer: My Lords, I take it from the Minister's comments that she is as disappointed as I am that the US invokes international institutions only when it will benefit the US and that it fails to come on board with international institutions ranging from the Kyoto Protocol to the International Criminal Court. Meanwhile, will the Minister impress on the EU the importance of adapting the labelling regime to take account of country-of-origin labelling so that consumers have a proper choice when it comes to GM?
Baroness Symons of Vernham Dean: My Lords, I cannot agree with the entirely sweeping nature of the noble Baroness's opening remarks. It is important to recognise that a number of disputes are running in the WTO at any one time. It is possible—and I hope that it will be the case—that we will resolve the dispute without running through all the issues. Around a quarter of WTO cases are solved before they have run through a process that can last as long as two years.
I agree that traceability and labelling are very important. The United States has already said that it would regard it as another restrictive practice. The United Kingdom believes that it gives consumers information on which they may make an informed choice.
The Earl of Selborne: My Lords, does the Minister agree that the failure to agree in Europe on traceability

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and labelling has caused the de facto moratorium? It is caused specifically by the difficulty of identifying produce that, although not genetically modified itself, is derived from genetically modified processes. Does the Minister agree that an identity-preserved route is probably the best way to deal with the matter? Admittedly, it places the cost on those who seek to avoid genetically modified food, rather than the producer.
Baroness Symons of Vernham Dean: My Lords, I do not know whether the traceability issue has made it difficult for some of our partners to move from the de facto moratorium. We have a mechanism in the directive, to which I referred in response to the noble Lord, Lord Jenkin, about a way through. The issue is now being used for a number of approvals, although it is taking some time. We wish to see the issue of traceability resolved. It is right that we found some difficulties with the proposals put forward because of the basis of the thresholds used. I stress that it is argued that any decisions that we take on GM and GM products should be in the interests of this country's consumers.
Lord Taverne: My Lords, will the Government point out to their EU partners who support the moratorium that, not only is it without any scientific base, but it is deeply damaging to a very important industry and has devastating effects on the developing world?
Baroness Symons of Vernham Dean: My Lords, we have made clear our position on the moratorium, as I hope that I have made clear to noble Lords. There are several issues relating to the developing world and GM food. One of the most difficult has been that some aid to parts of Africa in desperate need of food and other aid has been in the form of GM grain. It is enormously important to deal with the issue sensitively. It is a matter of enormous sensitivity in this country, particularly to young mothers and others with young children. But it is also a matter of great sensitivity in parts of the developing world. It is made so difficult because there are issues for consumers and, as the noble Lord rightly pointed out, producers.
Lord Hodgson of Astley Abbotts: My Lords, in discussions with the US Government on the issue, will the Government take into account the WTO approval of up to 4 billion dollars worth of sanctions to be levied by the European Union on the US because of its illegal use of export tax breaks?
Baroness Symons of Vernham Dean: Yes, my Lords, we certainly will. Those of a cynical turn of mind might note that the WTO has indeed calculated that damage to the EU in respect of the foreign sales corporation tax is around 4 billion dollars. I am sure that those noble Lords who have studied the matter will also have noted that the United States has said that the damage that the EU position on GMOs causes to the US economy is, astonishingly enough, 4 billion dollars.

Business of the House: Debate 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 debate on the Motion in the name of the Baroness Williams of Crosby set down for today shall be limited to three-and-a-half hours.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Northern Ireland Assembly (Elections and Periods of Suspension) Bill
3.15 p.m.
Lord Williams of Mostyn: My Lords, I beg to move that the House do now resolve itself into Committee on the Bill.
I wish to say a word on consequent procedure. If the Committee amends the Bill, copies of the Bill as amended will be available shortly after the end of the Committee in the Printed Paper Office. Noble Lords will then have one hour, from the end of Committee stage, to table any amendments that might be required on Report.
Moved, That the House do now resolve itself into Committee.—(Lord Williams of Mostyn.)
Question, Motion agreed to.
House in Committee accordingly.
[THE CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Election of next Assembly]:
[Amendment No. I not moved.]
Lord Williams of Mostynhad given notice of his intention to move Amendment No. 2:
Page 1, line 10, leave out subsection (3) and insert—
"(3) Section 96 is amended as follows—

(a) in subsection (2), after "section" there is inserted "31(2),",

(b) after subsection (2) there is inserted—

"(2A) Paragraph (b) of subsection (2) does not apply to an order under section 31(2) if the order declares that the Secretary of State considers it to be expedient for the order to be made without the approval mentioned in that paragraph.
(2B) An order containing a declaration under subsection (2A)—

(a) shall be laid before Parliament after being made: and

(b) shall cease to have effect if it is not approved by a resolution of each House of Parliament before the end of the period of 28 days beginning with the date on which it is made.

(2C) Subsection (2B)(b) does not prejudice the making of a new order.
(2D) In calculating the period of 28 days mentioned in subsection (2B)(b), no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.""

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The noble and learned Lord said: As always, I am grateful for the courtesy that the noble Lord, Lord Glentoran, showed me because I was aware of his intention. As Committee Members know, we had a significant discussion in some depth yesterday about how we ought to deal with these matters. I indicated that, following the extremely helpful report of the Select Committee on Delegated Powers and Regulatory Reform, chaired by the noble Lord, Lord Dahrendorf, we had given the matter further thought. I told noble Lords yesterday that I intended to move an amendment that would require the Government to come back to Parliament if the relevant power had not been exercised by 31st December this year. I have had further representations, not least from the noble Lord, Lord Glentoran, in the context of his amendment, and the noble Lord, Lord Smith of Clifton.
That being so, and having listened, I hope, with an open mind, I intend, not to move this amendment in Committee, but to move an altered, I hope, improved amendment on Report. That would bring forward the date from 31st December to 15th November. That would have the attraction that, if Royal Assent is tomorrow, it would be a six-month period, so there would be the internal symmetry of six months' succession. Furthermore, I gathered the feeling in your Lordships' House that, although the 31st December proposition was welcomed, perhaps something a little more rigorous might be wished for. I hope that noble Lords will accept my undertaking to table the amendment on Report. It has already been lodged in the Printed Paper Office. I repeat my heartfelt thanks to the committee of the noble Lord, Lord Dahrendorf, not only for its report, but for the speed and efficiency with which it worked. With the leave of the Committee, I will not move this amendment.
[Amendment No. 2 not moved.]
Clause 1 agreed to.
Clauses 2 to 6 agreed to.
Lord Williams of Mostynmoved Amendment No. 3:
After Clause 6, insert the following new clause—
"RENEWAL OF POWERS UNDER SECTION 1
(1) Unless subsection (4) applies—
(a) the following provisions of the 1998 Act—

(i) section 31(2),

(ii) the word "31(2)," in section 96(2), and

(iii) section 96(2A) to (2D),

(all as substituted or inserted by subsections (1) to (3) of section 1 of this Act), and
(b) subsection (4) of section 1,
together collectively referred to below as "the temporary provisions", remain in force until 31st December 2003 and then expire if not continued in force by an order under subsection (2).
(2) The Secretary of State may by order made by statutory instrument provide that the temporary provisions are to continue in force for a period, or further period, in each case not exceeding 6 months from the coming into force of the order.
(3) An order under subsection (2) may not be made unless a draft of the order has been approved by a resolution of each House of Parliament.
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(4) This subsection applies if an order is made, at any time, under section 31(2) of the 1998 Act, as substituted by section 1(2) of this Act.
(5) If subsection (4) applies, the temporary provisions do not expire, and the provision to the contrary in subsection (1) ceases to apply.
(6) If the temporary provisions expire, the Secretary of State must by order made by statutory instrument make such amendments of enactments as appear to him to be necessary or expedient in consequence of the expiry.
(7) Subsections (4) to (7), and (9), of section 6 apply to an order under subsection (6) as they apply to an order under subsection (1) of that section.
(8) If by virtue of section 6(7)(b), as applied by subsection (7) of this section, the order under subsection (6) ceases to have effect, the amendments made by the order also cease to have effect, but this does not prejudice the making of a new order."
The noble and learned Lord said: I outlined this amendment to noble Lords yesterday. We have attended very carefully and, I hope, appropriately to the recommendations of the committee chaired by the noble Lord, Lord Dahrendorf. This amendment would bring about the draft affirmative resolution procedure; that is to say, in the context of Northern Ireland, it is often prudent to move promptly. Equally, Parliament must have its proper opportunity for scrutiny and comment.
When I responded yesterday, I indicated that I would propose the amendment—I hope it meets with your Lordships' approval—which would mean that if Parliament were not to approve by affirmative procedure the Secretary of State's decision in 28 days, that decision would fall.
A number of your Lordships yesterday raised some questions with which I shall deal now. In particular, the noble and learned Lord, Lord Mayhew, raised a question that was also raised by the noble Lords, Lord Brooke, Lord Tebbit and Lord Smith of Clifton. It was: what would happen if Parliament were not sitting? I believe that I have satisfied him on that in relation to the relevant provision, but there is of course the opportunity to delay coming back to Parliament within the 28-day period. I made it plain that I did not consider that to be proper behaviour and I would deprecate it. I am giving an undertaking this afternoon that the Government would bring back such an order to Parliament, as soon as practicable, for debate. I hope that that meets the point raised yesterday.
A further specific point was raised by the noble Lord, Lord Smith of Clifton. I said yesterday—and I repeat it now—that I am not the master of Commons procedure. I hope that it is acceptable merely to say that I am hopeful and confident that we shall find a way forward that will meet the legitimate expectations of Members of both Houses. I beg to move.
Lord Glentoran: I thank the noble and learned Lord for introducing the amendment and for his understanding. It is my understanding that my noble friends who were on the committee are satisfied with the process and with what the Government have delivered.
Lord Smith of Clifton: I share the sentiments of the noble Lord, Lord Glentoran, and I thank the noble

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and learned Lord the Lord Privy Seal for the way in which he has accommodated the wishes of the Committee as expressed yesterday. We are most grateful to him for his extreme skill and dedication in handling the negotiations.
Lord Brooke of Sutton Mandeville: As one of the three Back-Bench Peers on this side of the Chamber and as one of those who, as the Minister said, raised the matter yesterday, I am extremely grateful to the noble and learned Lord not only for the fact that he has reinforced what he said yesterday, but also for the manner in which he has done it.
On Question, amendment agreed to.
Clause 7 agreed to.
House resumed: Bill reported with an amendment.

International Order
3.24 p.m.
Baroness Williams of Crosbyrose to call attention to the case for reconstructing the international order and transforming international political institutions; and to move for Papers.
The noble Baroness said: My Lords, we have seen once again today the extreme outrage of another terrorist act, this time in Saudi Arabia, with, again, serious loss of life. Only shortly afterwards, that terrorist outrage was echoed in Chechnya, with further serious loss of civilian life.
What emerges clearly from them is that terrorism is far from dead. It is wounded, as was said by the US Secretary of State, Colin Powell, on his visit to Saudi Arabia, but it is far from having been destroyed.
In response to the events in Saudi Arabia, a country that has long been troubled by guerrilla and terrorist movements within it, which have not been adequately addressed by the regime, the US President, George Bush, said,
"the United States will find the killers and they will learn the meaning of American justice".
What was once again emphasised was the relentless use of military power to destroy terrorism.
Most students and scholars of the subject recognise that military power alone will not eradicate the roots of terrorism. That requires at least three things: first, the belief that the constitutional and peaceful path can lead to results that will not be achieved by violence alone; secondly, that the world is ready to address some of the issues that are the causes of terrorism; and, thirdly, that the world recognises the level of resentment towards the global injustice that still exists so powerfully in our world and that seems so far to have been little lessened by the forces of globalisation.
In Iraq, as a result of the gallantry and courage of our Armed Forces, the war has been won. Clear evidence of the brutality of the overthrown regime was provided only recently by the discovery of mass burials in central Iraq.
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However, there are two great problems with the strategy that the British and American Governments have followed. The first is that even today there is little, if any, evidence of the weapons of mass destruction which were again and again argued to be the real justification for the war against Iraq. The second problem is that there has been little opportunity to discuss the preparations that were made for winning the peace. In the war against terrorism, winning the peace in Iraq is as important at least as winning the war, and so far it is not going well.
The most recent reports indicate that looting is continuing; that security does not exist in large parts of the country and particularly not in Baghdad; that water and other essential public services have not yet been adequately restored; and, perhaps saddest of all, that hospitals are still overwhelmed and do not have sufficient medical supplies.
Whatever the details, my most serious point is that it is now clear that the coalition did not have in place adequate preparation for what would happen immediately after the victory and that even now it does not have adequate numbers of police, of engineers or of other people who could rapidly show the people of Iraq that we were serious when we said that we intended to build a model of democracy in that country that would be a beacon for the whole of the Middle East. Many of us found that hard to believe, but I do not think that many of us recognised how quickly our failure to think through our strategy once the war ended would be revealed.
A disturbing report was published in yesterday's Washington Post. It said—and I shall discuss it in greater detail shortly—that the United States Government have no intention whatsoever of placing the United Nations anywhere near the core of the reestablishment of an administration in Iraq. The so-called interim authority currently has no legitimacy. I refer to the arrangements that have been made for dealing with the Oil for Food programme and the administration of the revenues from oil for the benefit of the Iraqi people. Our own Prime Minister spoke in moving terms about oil revenues being held in trust for the Iraqi people. There is no convincing evidence of what the structure of accountability, of development and eventually of answerability to the Iraqi people will be. Indeed, we cannot find any accurate information about the role of Halliburton or the other American contractors who have been uniquely allowed to bid for the reconstruction of Iraq without serious competition.
All of this is profoundly disturbing. To put it very frankly, the language that we have used and heard in this House—I believe presented in all sincerity—is very different indeed from the current language in Washington. In Washington today the United Nations is still being rubbished. It is still being described as a busted flush as something that is essentially over and done with. That is very different from the way in which our Government have presented to us the central role that it hopes to see the United Nations have.

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In that context, it is perhaps particularly disturbing that even now there has been no reference whatever to the possibility of United Nations inspectors returning to give credibility to any inspections of weapons of mass destruction. That is disturbing because, bluntly, with the best will in the world, inspection by armies of the coalition will not carry credibility with the international community and least of all with the Arab world.
Only today, in a remarkable coincidence, the highly respected International Institute of Strategic Studies based here in London has produced a strategic survey which states that Iraq may prove to be "an inspiration for terrorists". That report was published only a few hours before the new outrages in Saudi Arabia and in Chechnya.
All of this has caused a crisis of credibility in the world international institutions, in the United Nations and also in the economic institutions, in NATO and elsewhere. How can we address it? First, we cannot simply rest upon complaining about the way the world is and about the new threats that have emerged.
In this context, it is important that we look at the analysis presented by the United States. It is of course the case that the United States today is economically relatively less powerful than she was when the world's political institutions were born in the period immediately after the Second World War. In the early 1950s the United States was responsible for something like half of the world's output of goods and services. Today that figure is just over a quarter. But militarily, as we know, the United States bestrides the world and now spends on defence more than the next 10 biggest spenders in the world—a position of unreachable superiority. The National Security Strategy 2002 sets out the current administration's view that the United States should preserve its dominance in the world scene and, in particular, its military dominance.
However, the United States has rightly analysed the technological advances in weapons development in the world and shown the way in which they enable and empower whole groups of small states, collapsed states and. indeed, private actors, to have access to weapons, if not of mass destruction, then of very substantial destruction. It is a fair challenge by the United States to the rest of us that we have failed to take this threat seriously and that, indeed, we have failed to uphold United Nations resolutions.
The United States was like the rest of us until about two or three years ago. It also allowed one UN resolution after another to be flouted. But those of us who believe in multilateralism must face up to that challenge and must find answers for it. In that respect we should consider the possibility of a new mechanism to deal with what are two real challenges in our world. One is, of course, the possible use of weapons of mass destruction which, even if they may not prove to be the case in Iraq, could certainly prove to be the case elsewhere—North Korea springs to mind.
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The second challenge is the importance of looking at systematic breaches of human rights—genocide, torture, actions against humanity. In my view, most of these cry out for a mechanism which would enable nations which are believed to be about to threaten either the use of weapons of mass destruction or systematic breaches of human rights to be brought within the multilateral framework. By that, I mean that I believe the United Nations must look at how it can create mechanisms for dealing in advance with some of these challenges.
Perhaps I may mention to your Lordships' House an example that is with us right now—the gradual collapse of parts of the Democratic Republic of the Congo into serious indications of genocide which so far have not been dealt with in any way, or even contained, by the international community. That is only one of many such examples.
Next, we must look at the role of the multilateral organisations in respect of how to deal with the desperate and desolate third of the world that still lives on less than one dollar a day. In that respect we need also to transform the world's global economic institutions. It is simply unacceptable that the World Bank, the International Monetary Fund and the G8 do not represent some of the largest and most significant countries in the world. Countries such as India, Indonesia and Brazil do not find any position on the governing body, for example, of the G8 and do not find a very serious position on the governing bodies of other international economic organisations. We cannot any longer go on with an economic structure in which the voice of the developing world is so much weaker than that of the developed world.
In that context, I should like to pay a proper tribute to the recently resigned Secretary of State for International Development, Clare Short, who, together with Gordon Brown as Chancellor of the Exchequer, has done remarkable work in trying to build up the multilateral structures of international development. In that context, one can mention everything from the issues of debt to the issues of an international financing facility—and many other areas of work. One need only call into DfID to see how deep is the commitment to dealing with these terrible issues.
But, bluntly, Britain on her own can do only a very small amount in this economic field. Until now, Britain has consistently relied on the support, help and financial assistance of her EU neighbours to bring some of this about. It is the EU that finances the Palestinian Authority. It is the EU, with Britain very much a leading figure in it, that has assisted in the redevelopment of Africa and in setting up some of the new development programmes. Without this alliance, it is unlikely that we will see much advance in economic development. However, I must make one large exception for, in my view, the disgraceful continuation of the common agricultural policy in its present form—the single most damaging act that could be taken against the prosperity of the world outside.
I shall conclude with this. Multilateralism is at the very heart of the best of British policy and it always has been. I refer to the commitment to the UN; the

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commitment to international approaches to world development; and the commitment to an approach to trying to get a world of law based upon human rights. I am profoundly concerned that we may be moving away from our crucial support for multilateralism. Little by little it is being undermined and weakened. A huge—and fateful—amount depends on the ability of the Prime Minister to persuade the administration of the United States, which shows over and over again its contempt for multilateral institutions, that it should be brought back to the path of international law. I can think of no greater cause that could lie before the Government, but I must say that recent events, including the almost certain decision that will be made shortly to postpone once again the issue of the euro, are likely to push Britain in a different direction.
One of the most important parts of this debate is the examination of the United Kingdom's relationship with, on the one side, her European neighbours and, on the other side, her American ally, to see how that bridge can be strengthened and to ensure that Britain keeps the balance and does not shift too far away from the multilateralism that is so important to the peoples of the world.
My Lords. I beg to move for Papers.
3.40 p.m.
Lord Howell of Guildford: My Lords, along with all noble Lords, I have enormous respect for the noble Baroness, Lady Williams. It is a great pleasure to follow her very interesting speech. Nevertheless, I hold certain fundamentally different views which I think I should set out at the outset of the debate if only to offer your Lordships a form of punch-bag to use in the no-doubt excellent debate to follow.
I agree that in these troubled times our aim should be to avoid the development of a lawless world and to maintain a law-abiding world, but I want to argue two points. First, the nature of the states we now live in has altered over the past decade or more. Therefore relations between our states, looking outward at the international order we are now debating, have also changed. All nations now have new inward-facing and outward-facing profiles.
Secondly, I want to challenge the popular and widely-held view reflected in the speech of the noble Baroness, Lady Williams, that there is a form of unacceptable American hegemony which the rest of the world should not tolerate and that somehow a counterweight to it must be constructed. I believe that perspective to be totally false, and I believe that I have the support of the Prime Minister in saying so.
With the ending of the ideological wars of the 20th century, the institutions which tried and largely failed to hold that world together all now face the need for urgent reform and rebuilding. That is, I believe, widely agreed. Those institutions certainly include both the United Nations and. closer to home, the European Union, which now has to restructure itself to meet completely new world conditions far removed from those under which it was founded. Indeed, in the words
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of the noble Baroness, Lady Williams, there is now a crisis of "credibility" in those two institutions and in others.
The old world came to an end when the Berlin Wall fell; it came to an end in the bloody shambles of Srebrenica, in the Kosovo intervention in the sovereignty of another nation, in the rise and spread of global terrorism through the 1990s, in the horrors of 9/11, and in the second Gulf War, just over, when extraordinarily accurate precision missiles were fired from outside Iraq, replacing artillery and destroying the regime which has now come to an end in the killing fields of Baghdad which even at this moment are being uncovered.
All these events told us and continue to tell us that the international institutions could not and cannot cope and that internal sovereignty as envisaged or described in Article 9 of the UN Charter is no longer sacrosanct. The events tell us that old military and defence ideas no longer work, that enemies are everywhere but no longer so visible, and that nations can no longer deliver security to their people by thinking only about borders and territory. They also tell us that the world has new standards and principles to which our institutions, at all levels, must adjust.
That serves to explain why Britain, along with other nations, has embraced, for example, a revolution in military affairs and why we are examining our own very great vulnerabilities from the ground up. It also explains why all kinds of conflicts, issues and tensions which once seemed so remote because they took place in far-off countries are now our priorities. I cite the large-scale movement of people in the form of migrations, the ins and outs of Islamic politics, antimissile defence systems, nuclear proliferation—which, regrettably, is carrying on apace— and concerns about weapons of mass destruction, also mentioned by the noble Baroness, which, in the case of chemical and biological mixtures, almost any state can manufacture and hide away. I believe that, at present. some 25 countries are either seeking to become, or are already, involved in biological weapons manufacture. Above all, I cite human rights abuses in distant regimes and states and what we do about them. These are the new priorities.
I would argue that this also explains why modern governments, again including our own, have had increasingly to mobilise non-governmental agencies and commercial enterprises to meet those challenges and to deliver both the internal services and support which the citizen expects, as well as delivering foreign policy and foreign activity.
All this may be obvious to your Lordships. As the noble Baroness reminded us, in its many manifestations terrorism almost anywhere in the world threatens us all. This morning's grim news from Riyadh makes that clear, as did the news from Bali and, alas, as will other horrors to come. Terrorism is blind to national borders. Similarly, any banker will tell you that global financial markets and capital flows ignore boundaries. Any computer nerd will explain that global information networks penetrate all borders

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and cultures, while any doctor or conservationist knows that threats to our health or to our environment can come from anywhere in the world. The saga of the SARS threat is such an example.
This debate could not be more timely. We are entitled to ask, given this completely new set of world conditions, how we are to organise a new constitutional order within our country—it is happening already—and a new international order outside to meet these totally unfamiliar problems.
When facing the outside world, it must first be understood that our interfaces with other nations and other societies are not just governmental. The notion of our relations with other countries, even those with our near neighbours, being conducted entirely through head-to-head governmental officialdom is, I think, outdated. Non-governmental organizations, corporations, regulators, judges and other professional bodies all have their own trans-national links and, increasingly, common agendas that seek to open up societies, uphold respect for human rights, free markets and trade, and share intelligence and techniques in the face of new outside threats.
Obviously, this raises complex new questions about whether the old institutions such as the United Nations really can get to grips with the new pattern. I have to say that a body like the United Nations, in its present form, which is apparently neutral as between authoritarianism and democracy, will certainly have to adjust radically in order to meet the new principles which the modern society of nations is seeking to uphold. One must ask, as did the very learned and able commentator, Frank Vibert, the other day: in its present form, can such a body really be the source of final legitimisation? I know that that puts a question mark over a central concern and belief of the noble Baroness, but I ask the question all the same.
I do not know the answer to all these issues, but one thing is clear to me. The attempt to replicate the old, protective, inward-looking, centralised nation state on a European scale is doomed to failure. In my view, that is why the current Euro-convention, with its itching desire to give more power to EU central institutions, has completely misjudged the situation. It has failed to adjust to the new architecture. By the same reasoning, the obsession with what it calls American hegemony, or hyper-power, and the reaction to it by trying to create a rival power bloc are truly yesterday's responses rather than those of today.
In a fascinating speech last week, my noble friend Lord Hurd pointed out that while America may have the military power physically to destroy any regime at the press of a button, when it comes to building democracy and stable societies America needs allies and not rivals. However, I did not agree with everything that my noble friend said. He also remarked that, for a smaller country, its relationship with the United States was like that of a penny-farthing cycle. With respect, that overlooks the fact that, although it is possible for a circus performer to
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ride a single-wheeled cycle, it is very difficult to do so. Without the farthing, the cycle is completely directionless.
The new order has to start from an understanding that the world is being upheld by United States power and military predominance; it is not being threatened by it, as so much rhetoric and oratory seem to imply. I happen to believe firmly that, in the new order of things, America cannot go it alone. In that sense, the "Neocons" in Washington who proclaim that America can do so and that the rest of us are merely ancillaries, wimps and so forth, are wrong. But then so is President Chirac wrong when he denounces American hegemony. Today's network world entirely outdates the concept of rival power blocs trying to match each other militarily.
Today our welfare and security depends on keeping our markets as wide open as possible in the WTO negotiations; on intimate international co-operation on defence and missile technologies; and on strong and friendly partnerships, not only with the US and not only with our European neighbours in NATO but with other responsible major powers such as Japan and our Commonwealth colleagues.
This is the emerging new society of nations, working in agile and adaptable relationships—the new order to ensure our security against utterly novel threats. It is a far cry from the narrow plans for Euro armies and rival command headquarters.
These are not new thoughts. I put most of them in a book I wrote five years ago. No one took the slightest notice but events are now doing the work and conveying the message, prompting many new hooks on the themes. There is indeed a new international order to be obtained and sustained—but it cannot he built on old foundations and on dreams of remote federations or universal government. The sooner the thinkers and policy makers in all governments and international institutions grasp that fact the better.
3.51 p.m.
Lord Desai: My Lords, I am grateful to the noble Baroness for introducing this timely debate. In my remarks I shall try to respond to what has been said by both the noble Baroness and the noble Lord, Lord Howell. I agree and disagree with both of them in part. I dread to say that I shall propose a third way.
I do not want to comment in great depth on Iraq or Saudi Arabia because I do not believe that that is part of the process. I will merely say in regard to weapons of mass destruction and their non-discovery that before the war started the argument was that the UN weapons inspectors would need months, not weeks, to find them if they were there. I do not know why people believe after the war that we should have days rather than weeks or months to find them. I am trying to be as non-controversial as possible.
I wish to concentrate on the reform of the United Nations. Before the Iraq war started, I said that we had missed a golden opportunity to reform the United Nations on its 50th anniversary and that it was very important that we should do so. I begin with this issue

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because I agree with much of what the noble Baroness said. Multilateralism is essential in international affairs but, as the noble Lord, Lord Howell, said, we cannot continue with the old structures. We need new structures.
To begin with, the Security Council must be reconstituted. We cannot have another 1945 settlement based on the concept of Europe and the great powers looking after the world. I make two suggestions in that regard. First, membership of the Security Council should be expanded from its five permanent members to include Brazil, India, Indonesia, Nigeria and perhaps South Africa. Secondly, there should be no veto. We should adopt the practice recently started in the European Union of qualified majority voting, with different voting rights for different countries. So it would not be one country, one vote. The voting ratio could be decided, for example, by income, population and territorial size. That would give poor but populous countries some weight and rich but not very populous countries another kind of weight.
I am sure that it would not be beyond human imagination to devise voting procedures whereby a majority of votes and a majority of population, for instance—double conditions—would ensure that whatever the Security Council decided was based on a broad consensus of opinion. We cannot ignore the militarily powerful, but nor should we ignore the populous and the poor. Both conditions must be satisfied. So we must start with reform of the Security Council.
Reform of the United Nations Charter will also be required. I agree with the noble Baroness, but my priorities would be the reverse of hers. My first priority would be human rights protection across the world. If there is one cause that should define a new United Nations it is human rights protection.
I agree with the noble Lord, Lord Howell, that we have now gone beyond the notion of a sovereign nation state, especially in regard to human rights violations. We are all agreed that we cannot allow a nation state to be sovereign to slaughter its own people. I have said on previous occasions in your Lordships' House that my support for the Iraq war was not based on whether weapons of mass destruction would be found but more on the human rights violations practised by Saddam Hussein. I am therefore unreservedly glad that he has gone.
If there is to be a human rights focus in the United Nations, we shall have to amend both Article 2, Principle 4, and Article 51 of the charter and so on. We must allow the use of force on certain declared grounds where human rights are being violated by a sovereign state to an extent that the international community finds intolerable. Such matters should be not only decidable in statute, I am sure that we can devise procedures whereby the Security Council, perhaps expanded, could decide that such a violation has occurred.
Over the past 13 years we have, on an ad hoc basis, increased the scope of intervention, with or without UN authority. I do not complain about that. I was
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happy with the action taken in Kosovo and Bosnia because what matters—I may have become a consequentialist in my old age rather than a proceduralist—is that the outcome was good. Although the procedures may or may not have been legal, the legitimacy of the act was defined by the quality of the outcome. That, of course, is not the way lawyers think about such matters. So the charter will have to be revised.
We have to go further. When a country joins the WTO it signs a treaty by which it has to abide. The rules lay down that a country has to change its policies and structures in order to abide by the rules of the WTO—there are appellate procedures and so on. But some countries have joined the UN and have not abided by its charter—and there have been no sanctions. As I said in your Lordships' House on a previous occasion, we cannot continue with the chaotic conditions under which the charter had been violated on more than 100 occasions by 1971.
We must have a charter which countries not only have to sign but by which they have to abide. This will place limitations on national sovereignty. If they want to join, countries must abide by the charter, or they need not join. If a common vote can throw countries out of the Commonwealth for not abiding by the standards it places on democracy and human rights, why cannot the United Nations do that summarily? We should not admit any and every country that is willing to sign the charter; a country must satisfy minimum standards of human rights performance and democracy before being allowed to join.
The Inter-Parliamentary Union, which has existed since 1888, insists on certain democratic practices by which each member country has to abide. I do not see why the United Nations cannot do the same. We cannot have the peculiar situation whereby the UN Commission on Human Rights consists of a majority of countries which score very low on any human rights performance index. That is the politest way I can describe what is happening. It brings the UN into disrepute. A body such as that cannot confer legitimacy. Merely because many people do not like the United States it does not mean that everything the United States does is good or everything it does is had. Life is not that simple.
As regards the EU, in constructing a multilateral world there is a great desire to create a multipolar world. We have to be very careful about whether a multipolar world is necessary to create a multilateral world, as it may not be so. Even if we wanted to create a multipolar world, I do not believe that the European Union is currently ready and willing to build itself as an independent military power.
Here, perhaps, I disagree with the noble Lord, Lord Howell, and agree with the noble Baroness, Lady Williams. I should prefer a stronger EU, but the EU has not had the will to make itself into a strong federal state since German reunification. We have wasted 10 years in not constructing a strong EU, and still there is no willingness or leadership in Europe to do so. We can forget about Europe being a rival

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military focus or rival power unless we have a considerably larger budget at federal level, most of which would have to be devoted to military spending. I do not think that the European Union is ready for that, so it should abandon any boast of creating an alternative force. The EU has gained a lot from American defence spending. It should say, "Thank you very much. Your defence spending is our peace dividend. You do the cooking and we shall wash the dishes. If we break a few along the way, so be it".
However, my last thought is a worrying one. The common tension between the EU and the United States relates not only to Iraq but to international trade. There are considerable doubts about the continuing expansion of the globalised pattern of trade and capital movements. I worry about tensions in the latest round of WTO and the likelihood that the Cancun conference might fail. That should give us all pause for thought. The quarrels about GM foods, steel tariffs, or income tax concessions to American exporters are not worth the price of the continued expansion of open economies and free movements of capital. If only we could add the free movement of people to the free movement of capital.
4.2 p.m.
The Lord Bishop of Newcastle: My Lords, I am grateful to all the staff and attendants for their unfailing kindness and help to me during those rather bewildering days immediately prior to and following my introduction to the House. I am also grateful to you, My Lords, for the warmth and friendliness of your welcome.
I am grateful, too, to the noble Baroness, Lady Williams, for giving us the opportunity of so timely a debate—a debate that recognises the complexities, challenges, difficulties and dangers of the present time in our world's history.
The conflict between Iraq and the international community has raised the questions that have been at the heart of international affairs since the end of the Cold War: how should the international community deal with rogue regimes; when is it right and when is it ethical to intervene in the internal affairs of another nation state; how useful are sanctions as a policy of containment; how should the threat of weapons of mass destruction be managed; perhaps above all, how are we to live together peacefully in a world where the military and economic power of the United States remains unrivalled.
Can we still find a way to resolve disputes through co-operative behaviour that is structured by international institutions such as the United Nations? The national security strategy of the United States of September 2002 is one of the key statements in this debate. The basic premise of the strategy is that:
"the US possesses unprecedented and unequalled strength and influence in the world".
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The document continues:
"Whilst the United States will constantly strive to enlist the support of the international community, we will not hesitate to act alone if necessary, to exercise our right of self defence by acting pre-emptively against such terrorists to prevent them from doing harm".
That strategy helps to explain the differing reactions of the European nations to the second Gulf War and the means by which our own Government have sought to influence US policy through negotiation and dialogue. That process of constructive engagement and dialogue must go on, despite the failure to secure a common European position on Iraq.
Global issues and the problems facing our world cannot be solved by the United States alone. Other nations must be involved, not least through strengthened international institutions. Developments in nuclear weaponry, globalisation of the economy and the information revolution have radically challenged traditional understandings of the nation state. Not only that; those developments have challenged the way we think and act. They have challenged the traditional reflections of the Christian Churches, especially the theory of a just war, which locates legitimate authority for the use of force with a sovereign state. But with the erosion of national sovereignty, we may need to move to what we could call a "theory of just intervention", which recognises that in the modern world sovereignty is diffuse, and to press for a greater regulation by transnational institutions.
Christian and other faith communities will need to contribute a vision of human kind made in the image of God that always seeks to promote a collaborative approach. In thinking about a theory of just intervention, I am not limiting the concept to military intervention alone. I include economics, aid, healthcare and debt relief—a systematic intervention to help the millions and millions of people living in abject poverty and despair across our world.
We need a new way of viewing the world based less on national interest and more on a global common good. For national interests cannot hut be intertwined with, or be inseparable from the common good. It is that kind of dialogue, engagement and discourse that is so necessary today. That is the engagement and discourse that I believe must lie at the heart of our Government's policy.
What happens at international level has also to take place at local level too. I live in the city of Newcastle, which like all cities in this land, is becoming a very cosmopolitan place. I rejoice in that.
For the past five years I have been engaged with the leaders of all the faith communities in the city in continuing debate about the common good. We have met regularly and prayed together in our own traditions, especially at times of international tension and conflict. We are now embarked on a process to establish a council of faiths, which will become a publicly recognised and elected body to speak and act on behalf of all the faith communities in our regional capital.

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It is the result of years of patient meeting and talking. It has required the building of trust and sometimes a willingness to challenge and to be challenged. And it has involved the taking of risks. In a very small and local way it points to the continuing necessity of an international order and international institutions that exist for the well-being, peace and safety of all God's people.
If I may, I shall leave your Lordships with one final reflection. If the United States is to be acceptable as the world's chief police officer, it must, like all good police officers, observe the law, which the police are expected to enforce; otherwise it ceases to be a policeman and becomes something like a vigilante. To carry out that role effectively, it needs the understanding, support and co-operation of others, and must seek those things.
Is there a case for an enlarged United Nations Security Council, able to authorise military action by majority vote? Is there a case for an enlarged NATO, transformed into an alliance for peace, whose forces would carry out the tasks authorised by that enlarged Security Council? We urgently need a new kind of order. Above all, we must find a new way of resolving disputes through co-operative behaviour and structured by strengthened international institutions.
4.10 p.m.
Lord Chalfont: My Lords, it is my first and most pleasant duty to congratulate the right reverend Prelate the Bishop of Newcastle on his distinguished and moving maiden speech. Many years ago, when I visited the United Nations on behalf of Her Majesty's Government, my colleague, Lord Caradon, used to remind us constantly that all policy—international and national—should have a moral centre. It is good to have the introduction of that moral dimension into our debate by the right reverend Prelate. I hope that he will bring it to our debates many times in the future, and I congratulate him most warmly on his maiden speech.
Like the noble Lord, Lord Howell of Guildford, I have great respect for the noble Baroness, Lady Williams of Crosby. I am delighted that she has introduced the debate today. However, the noble Baroness will not be surprised to hear that, also like the noble Lord, I find myself in disagreement with her about several things. The main point that I want to mention by way of introduction is her implication that problems cannot be solved by military force. Of course, problems cannot be solved by military force alone, but we should also remember that there are few problems, especially in the international field, that can be solved without not the use of military force necessarily but the threat and existence of military force.
That leads me to say that many profound matters relating to the international structure and what is sometimes called the "new world order" seem to be stuck in a time warp. Many who are ready to celebrate the fact that the Cold War is over still seem to talk and think in Cold War terms about such things as
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international institutions and, for example, the interdependence of the United States of America and Europe. However, as the noble Lord, Lord Wallace of Saltaire—I am sorry that he is not in his place at the moment—said in a recent article, those days are over, and the thinking and calculations of the Cold War have gone. The noble Lord went on to draw conclusions in his article with which I found it difficult to agree.
One of the first facts that I like to underline is that the United States no longer needs Europe as much as the nations of Europe need the United States. As the noble Lord, Lord Howell of Guildford, said, the structure of world politics has changed irrevocably, partly, but not entirely, because of the events of September 2001—"9/l1", as it is sometimes called—and partly because of the war in Iraq, which was, to some extent, a consequence of those events. It can be argued persuasively and with some force that some of the major international institutions, familiar to us for many years, have, because of that irrevocable change in the world structure, ceased to be entirely relevant to the construction of a new world order.
I shall refer briefly to three institutions: the United Nations, NATO and the European Union. With respect to the noble Baroness, the crisis of credibility in the United Nations cannot be dismissed lightly by referring to rubbishing in Washington. The United Nations—the Security Council, at least—has been shown to be impotent when faced with a real problem of international conflict. It is widely accepted, not only in the United States, that the main function of the United Nations in future may well be through the activities of its agencies and such bodies as UNESCO and UNICEF and that the Security Council has become irrelevant in the calculus of world power. No amount of new mechanisms or tinkering with existing mechanisms will alter that. Whereas the United Nations has, in the past, been an important international institution in the past, there is now a sense in which it is irrelevant to the future.
Then, there is NATO. Much of its original reason for existing disappeared with the dissolution of the Soviet empire and the consequent disappearance of the military threat from the East. However, NATO is more than a simple military defensive alliance. Its future role in the world order may still be significant, but only if its members face the urgent task of reassessing its role, composition and functions.
Finally, there is the European Union. It has been fatally damaged by the behaviour of certain members, especially in the events leading up to the war against Iraq. It must be clear to anyone but the most unreconstructed Euro-fanatic that any possibility of a common foreign and defence policy for the European Union is the purest fantasy. Recent events have proved that beyond a doubt.
The basic reason that those institutions have ceased to be crucial and, perhaps, even relevant to the emergence of a new world order is, however, of a more profound kind. They represent what has been called "soft power" in international relations—that is, the

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use of diplomacy, negotiation and talk as instruments of international relations. The future world structure, mentioned by the noble Baroness and by the noble Lord, Lord Howell of Guildford, will be one in which terrorism and weapons of mass destruction will be dominant features of our life. The solution to such problems is more likely to be a matter of "hard power", and that, of course, means, in effect, the United States, the only remaining superpower.
Whether we like it or not—I know that some people do not like it—the future world structure is likely to be dominated for some time by American military and economic strength, exercised, more and more frequently, unilaterally. There is strong evidence that the United States is, as the right reverend Prelate said, bent upon a foreign policy based upon pre-emptive action when it perceives its interests to be threatened. In fact, the future of American foreign policy might fairly be described as neo-colonial or imperialist. I do not use those words pejoratively. The United States seeks, in the words of one of its distinguished analysts, Paul Nitze, to create,
"a liberal international order under which our free and democratic systems can live and prosper".
To some extent, that might be an undesirable, even frightening phenomenon. I must confess that it does not frighten me in the slightest, although I sometimes fear that it might be over-ambitious. I understand that my view will not be universally shared, but I propose that anyone who thinks that we can solve the problems of the new world order with the Cold War instruments of soft power is living in a dream world.
Whether we like it or not, we are almost certainly about to enter into a period of Pax Americana, and this is a reality we must take account of if our foreign policy is to be effective and realistic. The relationship between the United Kingdom and the United States should be a central plank—I would even go so far as to say the central plank—of our foreign policy. We share, more than any other European country, the values, political priorities and historical perspective of the United States. As Sir Malcolm Rifkind wrote in a recent article,
"we are an Atlantic and not just a European nation".
One of the often repeated fallacies of the current debate is that we have no need to choose between Europe and America in our foreign policy. It has been repeated over and over again until people have come to believe it. It may well be that recent and current events are making it clear that we shall indeed have to make that choice, and we may be very close to the time when it will have to be made.
4.21 p.m.
Lord Dahrendorf: My Lords, like others who have spoken, notably my noble friend Lady Williams, to whom we owe a debt of gratitude for introducing this debate, I believe in a world order in which the rule of law domesticates and civilises power. If notions of globalisation and world civil society—indeed, cosmopolitanism and world citizenship—are to make
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any sense as opportunities for advancing universal liberty and welfare, there have to be rules by which all abide at the risk of incurring sanctions by the international community.
While some progress has been made along this road since the days of Dumbarton Oaks and Bretton Woods—in other words, since the end of the Second World War—we still have a long way to go to reach that objective. Some believe that the diplomatic disaster, military success and peace-building quandary of the Iraq war is the moment to take a great step forward in the construction of an international order of law. I wish I could share this belief. There are at least two reasons why I find it difficult to do so.
The first is the evident power of the United States of America on the global scene, referred to by almost everyone who has spoken. I say this without resentment, as a statement of fact. If there has to be a hegemon, let it be a free country which retains its openness and attractiveness as a country of opportunity, even at a time when the role of the neo-conservative clique casts doubt on its adherence to its own values. In my view, it is shortsighted and counterproductive to hope for a bipolar or multipolar world. Europe has not had very happy experiences with such alleged balances of power. It is even more unfortunate to think of the European Union as a "counterweight" to the United States. The idea is hopelessly unrealistic and merely serves to split what L in a slightly old-fashioned way, still regard as the West. But all of us in the West have to take up the challenge of what I called the domestication and civilisation of power. It would not surprise me if the great struggle between the use of hard power and the gradual development of law was to be the main theme of international relations in the years to come. If this were the case, I should be clearly on the side of the rule of law.
If US hegemony is one reason why there is no imminent chance of reconstructing the international order, the second is the vested interest in the principle of the sovereignty of states, coupled with the insistence on non-interference in their internal affairs. The right reverend Prelate the Bishop of Newcastle, in his immensely thoughtful maiden speech, referred to this condition much more ably than I could. This is, of course, the principle on which the post-war international order was based. One effect of the evident role of the United States is that countries will insist on it because they believe it protects their integrity. The UN Security Council bears witness to this approach in its composition, rules and decisions.
In fact, if not in law, many inroads have been made into the acceptance of unrestricted sovereignty. The noble Lord, Lord Desai, pointed this out, as did the right reverend Prelate the Bishop of Newcastle. Indeed, even in the Iraq case, diplomacy might have led to a second resolution which would have given the blessing, at least, of the Security Council to intervention by a coalition. In my view, intervention in the affairs of member states of the world community is the single most important issue to be dealt with in reconstructing the international order.

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We now accept a high degree of intervention with respect to the exercise of the allegedly "soft" power of international economic institutions. Two weeks ago, I had the pleasure of addressing the executive directors of the World Bank in Washington and discussing with them strategic issues of the institution, so ably led by James Wolfensohn. They all agreed that the days of helping poor countries by simply giving their governments money are long past. They have also moved on from what is sometimes called the "Washington consensus" of imposing a neo-liberal blueprint of economic policy on recipients of international support. My argument—that cushioning the trek through the valley of tears which the process of development inevitably involves is the most important task—met with considerable support. This means, however, that international organisations impose—if that is not too aggressive a word—measures of social policy on countries which may have wished to avoid such costly measures in the interest of rapid growth. This is intervention, if ever the term had any meaning. Yet it is necessary and. I believe, acceptable, so long as there are rules which guide it and restrain the intervening international bodies.
It is worth mentioning in this context the extraordinary interventions of the European Union in the administrative and political structures of countries which seek membership of the Union. The accession countries had to introduce swathes of legislation within a timespan which made proper democratic scrutiny very difficult. They also had to be seen to comply with the so-called Copenhagen criteria laid down by the European Union for adherence to the principles of democracy and the rule of law. I do not say this critically; indeed, I believe that in this regard the EU has played a highly constructive role and perhaps shown the way for methods—and limits of—intervention which could one day be applied on a wider canvas.
The most visible, and controversial, interventions are of course those relating to countries which threaten others, and, even more controversially, through their domestic regimes, violate the principles of human rights and liberties enshrined in the UN Charter and other international agreements. I was very pleased by what my noble friend Lady Williams and the noble Lord, Lord Desai, said about breaches of human rights and international obligations in relation to them. I do not propose to go over the ground of the Iraq debates again in your Lordships' House, but I shall repeat what I said at the time: how much I would have wished to see international intervention in Germany after September 1938 in order to prevent the murderous events set in motion in September 1939.
The gist of these somewhat philosophical reflections is simple. This may not be the time to engage in the reconstruction of the international order, but it is definitely the time to produce building blocks—in some cases mere ideas, in others examples—for a new order that does not stop short of intervening in the affairs of sovereign states but takes the rule of law seriously, all the way to forms of intervention that aim at the roots of threats to peace under the rule of law.
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I have one final thought. I have indicated my hope for a civilised world society and also my doubts that we shall reach such a state of affairs in the lifetime of even the youngest among us. This is a familiar dilemma, in which one can do worse than to follow the advice of the great enlightenment philosopher Immanuel Kant. If we cannot achieve a world society under the rule of law today, we should nevertheless act in such a manner that the road to that end is not blocked. The objective of the international rule of law is the yardstick by which current policies and actions can and should he measured. That we can begin to do without waiting for others here and now.
4.31 p.m.
Lord Judd: My Lords, I should like to thank the noble Baroness, Lady Williams of Crosby, for introducing this debate, and in particular for the forthright and challenging way in which she put the case to us. Certainly, today's grim and sad news from Saudi Arabia and Chechnya underline its relevance.
I do not want to be melodramatic, hut it seems to me on occasion that the world is in a classic pre-revolutionary situation. We have unrivalled concentration of power and wealth, and the control of that wealth is in very few hands. We have millions of socially and economically deprived people across the globe. However, it is not simply a matter of economic and social exclusion. We also have increasing numbers of highly educated, extremely able and sometimes, in personal terms, not particularly economically deprived people who feel excluded from the political systems and the crucial decision-making in the world.
If that is not a classic pre-revolutionary situation, I wonder what is. In the midst of all that, we have a constituency of ambivalence—the large numbers of people who are economically and socially deprived but would never themselves participate in an act of terrorism. Indeed, they would probably be appalled to see one at close quarters but, because of their deprivation, they do not wake up every morning saying that their priority is to get rid of the terrorists. Sometimes they can be forgiven for being ambivalent, at least, and just wondering on occasion whether the rhetoric of the terrorists is not actually on their side.
How do we respond to that challenge? First, there must be a redefinition of security. We have to recognise that, in the highly complex globe on which we live, environment, finance, economics, trade and migration all come together in the management of human affairs. What matters is not only the terrorism itself but formulating our approach to how we co-ordinate the arrangements for those aspects of life. They are parts of security—if we do not get that management right, there will be a security problem.
Then, of course, there is the issue of governance. On this occasion, I am glad to find myself in a great deal of agreement with what my noble friend Lord Desai has said. Obviously, there must be reform of the Security Council. If we were creating the Security Council today, it would not be set up with the power structures that it has at the moment. However, as it

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exists at the moment, we must be careful about contradictions in our position. It is not convincing to argue that in no way will Britain contemplate giving up the veto and then to complain when the French exercise theirs. Either we must accept the principle of the veto, or we should say that the time to think about how we might emerge from the veto is upon us.
It also seems to me that we should consider the reform of the secretariat. There should be a greater emphasis on professionalism and less on using it as a means of putting people into positions for political purposes alone. We should consider the selection of the Secretary-General. That is one of the most important tasks in the world. I shall never forget, when I was director of Oxfam, talking with humanitarian ambassadors in Geneva along with the heads of several other agencies. We asked what the criteria were, on which the international community had agreed, for the selection of the next Secretary-General. There was a hilarious half-hour as everyone tried to avoid answering the question, until the French ambassador looked at me directly and said, "You know perfectly well the one criterion on which we are all agreed. On no account must we have a strong Secretary-General". That may have been leg-pulling, but there is an essence of disturbing truth in that analysis. Do we want a strong United Nations, or do we not?
In discussing this issue, we must face the matter of the multilateral financial institutions. The noble Baroness, Lady Williams, referred to that matter. It is not satisfactory that they seem to live a life of their own while the political life of the United Nations goes on separately. I am not suggesting for a moment—it would be madness to suggest—that the Security Council should take over the economic and financial co-ordination of world affairs. However, there should be some way in which the IMF, the World Bank and the G8 report to the Security Council from time to time, so that it can consider the security matters of the world intelligently, taking into account the financial and economic realities with which we are confronted.
The noble Baroness spoke powerfully about the United Nations and Iraq. Of course, the rule of law matters, but I have always believed that what mattered as much as the rule of law was the authority of the global community. In the situation that I have been describing, what matters is that the world can see that what is being done is being done not by a partial grouping of nations—not by an unrepresentative grouping of powerful nations—but with the authority, endorsement and involvement of the maximum possible cross-section of the global community. If we do not take the challenge of the authority of the international community seriously, we play into the hands of the extremists, who say, "There you are—there is another example of power being wielded by the unrepresentative minority. We are the people who will look to your interests and fight for you. Come to our side". The ambivalence is there to be exploited. The authority, as much as the law, matters in the deployment of the United Nations.
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Of course, the noble Baroness was right to refer to the weapons of mass destruction. I have immense respect for my noble friend Lady Symons, who is to reply to the debate, and she knows that. However, I was sorry when, the other day, she was a bit dismissive of the points coming from the Liberal Benches, because we have to look at the matter as the world is looking at it. If the global community is not involved in the issue of how we get rid of the weapons of mass destruction, there will he suspicions and doubts to be exploited by the extremists. Therefore, it is practical politics to ensure that the wider global community is involved.
The same point applies with even greater significance to the whole issue of reconstruction. We must not create a situation in which the extremists can say, "This is just the power brokers of the world—the unrepresentative rich of the world—organising Iraq from their point of view in the way they want". It has to be seen as something that is taking place with the engagement and the involvement of the global community. That is why the United Nations is indispensable in this context.
The noble Lord, Lord Howell of Guildford, spoke of his doubts about the United Nations and the international institutions. He was very honest—he said that he did not know the answers, but he had doubts. I wonder whether he would agree that we all have to be very careful when we talk about the weaknesses of the United Nations. The United Nations is not something separate—it is us and all its other member countries. When we talk about the weaknesses of the United Nations we are talking about our own weaknesses. I fear that, although there has been a commitment of intellectual rhetoric to the multilateral institutions over the years, the driving force has always been to put our narrow national interests at the forefront when it comes to the point. I believe that we have to make that international rhetoric—which is sometimes based on an intellectual conviction that we have failed to apply—central to our policy. We have to seek always to strengthen the multilateral institutions. We need a conceptual design in which European institutions, for example, or other regional institutions play into the global situation and are not in rivalry as regards that situation.
We also have to look very seriously at the issue of a philosophy which maintains, "Do as we do", rather than, "Do as we say". In talking about nuclear proliferation, weapons of mass destruction or chemical weapons, the conventions matter tremendously. The conventions may need to be strengthened, but the conventions must be there. Our commitment to those conventions must be second to none.
I conclude with this point. I am fortunate in my life to have had many highly enjoyable and stimulating visits to the United States. I am glad to count many of my best friends as Americans. We may not think so at the moment, but pluralism is still alive in the United States. Our job is to strengthen the debate within the United States and the position of those who challenge the narrow perspectives that currently have the

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ascendancy and who see the relevance of multilateralism and the rest. We need to let those brave people in the States who are trying to advance that argument know that they have friends abroad, in Europe and the United Kingdom, who are with them.
If there is one potential major tragedy, it is that the grandchildren of the current generation in the United States will wake up and say, "What did you do with your supreme power when you had it? It was in our interests as much as anyone else's to have strong multilateral institutions. Why were you not using that strength to build strong, effective multilateral institutions instead of turning your back on them and marching off in a unilateral direction?" There are those in the States who believe that as strongly as I do or as any other Member of this House does. We need to be with them. In our concern about terrorism and for the future, we all know that, although we must have multilateralism, the ultimate battle is in the realm of hearts and minds.
4.44 p.m.
Lord Campbell of Croy: My Lords, I, too, should like to thank the noble Baroness, Lady Williams, for starting this debate and choosing the subject. I do not intend to go, as she did, into the current situation in Iraq, but to move to the wider subjects of the United Nations and associated institutions.
Those institutions were established after World War II by and with the United Nations Charter. Since 1945, the Security Council has had the task of preventing another world war and has provided a lightning conductor in crises. The veto was included in the charter for the use of the five major powers who had been victors in the 1939–45 war, in order to avoid confrontation between the United Nations and one of the live, a situation that could in itself have led to war. The charter also allowed for regional security arrangements additional to those of the United Nations itself. Those provisions have been used. For example, NATO has seen Europe through a dangerous period in and after Stalin's time. The United Kingdom should, in my opinion, continue to support the United Nations as the supreme international authority for the whole world, dealing with threats of serious warfare and outbreaks of armed violence. My contribution to this debate is mainly to record post-war efforts in the past 50 years or so to preserve peace.
I would remind your Lordships that the first real test of the United Nations occurred in June 1950 when North Korea attacked the south—on a Saturday afternoon, following the precedent set by the Italian dictator. Although it was a tough campaign—the United States of America in particular had many casualties—the United Nations' action in countering an act of aggression successfully served as a warning to any country contemplating an attack on its neighbour.
I well remember that episode because I was then a professional diplomat. I was at the time on a three-year posting in the British permanent delegation to the United Nations in New York. So I was in my seat at Lake Success at the emergency meeting on the Sunday
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morning when the necessary resolutions were adopted, without the risk of a veto, the Soviet delegation having boycotted meetings owing to disputes over who should occupy China's seat in the council.
During the period 1948–52, I served—and sat behind in the council—two permanent representatives of the United Kingdom: Sir Alexander Cadogan, and then Sir Gladwyn Jebb, who later became Lord Gladwyn and a Member of this House. I am giving this account of those early days because they set a salutary pattern of United Nations conduct for consideration by any rogue state considering mischief. I speak as someone who took part, in New York and Paris, in United Nations negotiations over 50 years ago.
In the late 1940s and early 1950s, the general public had great hopes of the United Nations, especially in the United States. I was a passionate enthusiast myself. Some regarded it as a world government, but that was never the intention. Sovereign states would continue to take their own decisions. The United Nations' role was to serve as a vital and necessary meeting place for nations where they could negotiate for the peaceful resolution of disputes. My noble friend Lord Howell of Guildford said that the United Nations must change with new situations. I agree entirely. I agree also with the noble Lord, Lord Chalfont, that the authority of the Security Council has diminished. That is sad, but other means are now needed to police the world. The United Kingdom should continue to support moves to strengthen international order and the institutions involved.
4.49 p.m.
Earl Russell: My Lords, I would like to begin by making my apologies to the House, and especially to my noble friend Lady Williams of Crosby and the noble Lord, Lord Howell of Guildford, for arriving late at the debate. I was warned that the debate might start shortly after half-past three. I was in the Peers' Entrance at 3.35. We all know that that would normally give us several hours in hand. It goes to show quite how dangerous prophecy is, which is a salutary warning for the debate.
I am most grateful to those on all three Front Benches for having encouraged me to speak when I otherwise might well not have done so. The twin poles of what I have heard so far have been the speeches of the right reverend Prelate the Bishop of Newcastle and the noble Lord, Lord Judd, on one hand, and of the noble Lord, Lord Chalfont, on the other. My praise for the right reverend Prelate must be limited only by the fact that in praising a maiden speaker one must not render his remarks controversial. I look forward to being able to do so on another occasion. I agree with the noble Lord, Lord Judd, that America is pluralist on the matter. I was entertaining recently a former American Fulbright scholar for whom I was host. I asked him if he knew any American academic who supported the policy of President Bush on Iraq. He replied instantly, "No".
The noble Lord, Lord Chalfont, whom I of all people cannot reproach for not being in his place, is obviously to an extent right about the coming period

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being one of a pax Americana, and about the importance of hard power. However, if he looks at some medieval history, he will appreciate that hard power is not quite as simple as it seems. There are few clearer symbols of hard power than a medieval battleaxe. It had few tougher practitioners than King Henry II but, in the conflict between him and Archbishop Becket, in the long term I do not think we can say that King Henry II was a winner.
People have a great weakness for being liked. Medieval political theory constantly stressed the importance of rulers having counsel from people who would tell them things that they did not want to hear. That was salutary. It is a paradox, and one from which we can learn something, that the man who carried the guilt for the death of Becket is also the man who carries the principal credit for the origins of English law. In that paradox, we have the friction between hard power and soft power, as it has always been. It is not quite as simple as the noble Lord, Lord Chalfont, suggests.
My particular concern is the movement of peoples, on which the noble Lord, Lord Desai, touched very briefly. I remember watching television film in the early 1990s of one of the many occasions when Saddam Hussein was targeting the Kurds, who were crawling on hands and knees over the tops of the mountains into Turkey—not the friendliest place of refuge for a Kurd. In that moment, I realised that sending a large quantity of destitute people out of one's own country into a neighbouring country is as much an act of aggression as firing guns at them. We must have some orderly way to arrange the movement of people, and we must not think that we can stop it.
People often point out that the movement of peoples in this century is far easier than it has ever been hut, for exactly that reason, it is far easier to control. In fact, there is a possibility of control that has not existed in any earlier century. When my ancestors came over here from Bordeaux, they did not have to ask anyone's permission, and no one thought that they could have stopped them. However, when an airliner comes down out of the sky. it is visible for miles around. In the 20th century, it has been possible to attempt a degree of control of which people have not even dreamt in centuries gone past. We are only just beginning to learn how to use that power.
We have a very newly published report on the subject, States of Conflict, which appeared yesterday from the IPPR. It is by Professor Stephen Castles of the University of Oxford's centre for refugee studies, and others. The report is very powerful, and calls for a good deal of fresh thinking on the subject. Its first part, which so far has had all the press and publicity, is reasonably familiar to those who are used to following briefings from the UNHCR and similar bodies. It stresses that there is a very clear correlation between the top refugee-producing countries, oppression of minorities, abuse of human rights and abuse on grounds of gender. That is familiar territory.
It is also familiar territory that most of the world's refugees are going to the poorest countries. One of those that comes near the top of all the tables is
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Guinea, but because Africa comes very low on journalists' beat, with the prominent exception of my former pupil Richard Dowden, we do not hear as much about it as we should. We come somewhere right down at the bottom.
Although the correlation between human rights abuses and the production of refugees is fairly simple, the overall picture is a great deal less clear, as always. No clear correlation with poverty was found, but it was extremely difficult to make an absolute separation between poverty and human rights abuses. I can understand the reasons for that difficulty.
If any matter needs to be approached on a multilateralist basis, this does. After all, the United States is itself a country of refugees. My late wife once described it as the only country in the world where the majority of the population is homesick. They might dispute that in Australia. The US should understand the need for some international standards but, recently, moves to investigate causes have turned into a competitive struggle to divert refugees elsewhere.
The report describes that as a strategy of diversion, with,
"an increasing emphasis on policies designed to place responsibility for processing claims and providing protection on other countries".
It suggests that the policies are:
"Non-arrival policies…measures designed to prevent people without adequate documentation from entering".
Of course, one does not usually apply to tyrants for visas; they tend not to like it. The report concludes:
"The refugee regime of the rich countries of the North has been fundamentally transformed over the last 20 years. It has shifted from a system designed to welcome Cold War refugees from the East and to resettle them as permanent exiles in new homes, to a 'non-entrée regime', designed to exclude and control asylum seekers from the South…These changes to policy and procedures have made it virtually impossible for forced migrants who are genuinely in need of protection to enter the EU and claim asylum".
That is the situation, and we have not only airliners that are easy to control, but borders such as the Greek-Turkish border in the Dodecanese, which is almost impossible to control. Three miles in a rowing boat in the middle of the night and someone is across the border of the EU, and no one is likely to spot them. No wonder that the report points out that there is a diversion from legitimate refugees into a new underclass of anonymous migrants who do not declare or regularise their existence.
That trend interferes with the stability of the free market. A market must depend on the ability of capital and labour to find their own level. But if capital can migrate at the drop of a hat and the migration of labour is so insuperably difficult, it must have a large depressing effect on wages, which must have a depressing effect on purchasing power, and therefore ultimately on the whole economy, to everyone's detriment.
It states that the best solution to all this is global free trade, but not on what it calls the "Washington consensus model" which goes with restricted social expenditure and privatisation. It states that there is a

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danger of economic interests pushing policy in the direction which is not in the interests of peace or stability. That is the policy of sealing up a kettle. I do not recommend it.
5 p.m.
Lord Hannay of Chiswick: My Lords, the recent war in Iraq, the diplomacy that preceded it and the consequences that will flow from it make it necessary and urgent that we take a new and wider look at questions of international order and at the political institutions that underpin it. I therefore join in thanking the noble Baroness, Lady Williams, for having given us an opportunity today to do precisely that.
It would of course he futile to deny that in the past few months a number of those institutions—the UN, NATO and the EU in particular—have taken some hard knocks and have suffered considerable collateral damage from the paralysis and marginalisation that flowed from the divisions within each of their ranks over how to handle Iraq. Whether one deplores that and regrets it, as I do, or whether one glories in it and seeks to rub salt in the wounds at every opportunity, as do the neo-conservatives in Washington, we need to come to terms with the consequences and to learn and apply the lessons from our failures. And we need to recognise that some of the worst damage inflicted has been to the credibility and wider public support for these institutions. Support for all of them has tended in the past to be broad but relatively shallow, as has understanding of their workings. If we are to restore that credibility, we will need to address those politically intangible factors as well as the nuts and bolts of how those institutions work.
I would argue that it would be as unwise to overstate and exaggerate the damage caused by recent events as it would be to deny or belittle it. For one thing, we are much too close to events to be able to draw far-reaching and definitive conclusions with any confidence. One can usefully remember the sequence of the debate during and following the Bosnia crisis in the mid-1990s. Then, too, many observers and commentators were ready to write off the prospects of those same three key institutions as being irremediably damaged. But it was not so. And the concerted efforts of the international community ensured that at different moments all three of those institutions bounced hack and have since achieved much.
Perhaps I may give one example of the way in which the significance of this present crisis seems to me to be being overstated: it is the question of international law and the policy of pre-emptive action to deal with threats to international peace and security. To most of the opponents of the use of force, the action taken by the US/UK-led coalition was simply illegal. From this, they draw the conclusion that the rule of international law has been flouted and that a whole string of other pre-emptive moves are now in contemplation. But if they had listened a little more carefully, they would have noted that those coalition allies situated their action quite firmly within the framework of international law as they understood it and made it
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clear that it was designed to enforce existing mandatory Security Council resolutions which had been evaded over a long period.
One can dispute that view, but it is not altogether sensible to ignore its implications, which are that those precise parameters for action cannot easily be replicated elsewhere and are not currently replicable in any other part of the world. The precedent created by the humanitarian intervention in Kosovo in 1999, without any Security Council authority, was far more ground-breaking than the invasion of Iraq, but it was debated in much less apocalyptic terms, perhaps because it was less contested both within and between the main contributors to international debate on these matters in Europe and North America.
Rather too much, in my view, is being made of what is depicted as a titanic struggle between unilateralism and multilateralism. Of course there is a real tension between these two methods of dealing with international challenges. Of course the proponents of a multilateral approach to the solution of the world's problems—among whom I number myself—are those who believe that from trade to the environment, from weapons proliferation to the fight against terrorism, from security to human rights, the multilateral ways of dealing with them are better than unilateral ways. We take a much more extensive view of the application of these methods than do those who prefer to put their faith in the strength of the nation state and the virtues of ad hoc combinations.
However, we are talking about methods; we are not talking about religion. We are talking about approaches neither of which can purport to have the answer to every threat and every challenge. So it surely makes sense to apply a more utilitarian approach to the discussion and to try to avoid a complete polarisation of the debate. We need to discuss what works and what works better. I do not believe that the multilateralists have much to fear from such a discussion, but I sometimes worry that an over-dogmatic approach from that side of the argument could be just as damaging to the prospects of the international institutions we value as can be the wilder sallies of the unilateralists, which must certainly be rebutted and resisted.
We and our other European partners are not going to resile from our support for multilateral solutions to many of the world's most pressing problems—nor should we. However, when addressing those less convinced than we are, we should give more weight to the pragmatic and utilitarian argument and in so doing be more willing to address the shortcomings of multilateral institutions than we have been in the past.
Now for a few thoughts about those three specific political institutions and one not mentioned so far; the G8. The indispensability of the UN remains, in my view, as evident as are its recent setbacks. In Iraq, we need to move away from a sterile discussion of whet her the UN's role should be "a" or "the" vital one; whet her the UN or the coalition allies should be "in the driving seat", or some other such phrase; or whether indeed the overthrow of Saddam Hussein's obnoxious regime

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should in some way be given a stamp of approval. We need to focus rather on aspects of post-war Iraq which the UN can handle more effectively than any single state, however powerful, and where a failure to engage the UN fully will only damage the legitimacy and the prospects for the emergence of a prosperous, representative and stable society in Iraq—on issues such as facilitating and legitimising the establishment of democratic institutions; ensuring that the proceeds of Iraq's oil wealth go to the people or Iraq; validating and monitoring Iraq's abandonment of programmes for making weapons of mass destruction; coordinating the massive international effort of reconstruction that is required; and trying those who have committed heinous crimes. We should be asking ourselves how well the new draft resolution tabled at the UN meets those criteria—to which my answer would be, "Good in parts but not in others"—and remedying it where the latter is the case.
More widely, we should be cautious of too many radical prescriptions for reforming the UN's institutions, and there I am afraid I differ from a number of previous speakers. Is it seriously likely that agreement could be reached to reform the charter to include, or to preclude, concepts such as pre-emptive action or humanitarian intervention? And if not, would the UN not be more damaged by trying and failing? Do we really want to set off in pursuit of the great white whale of international diplomacy and Security Council reform and to what purpose? Would it not be better to focus rather on repairing relations between the five permanent members whose breakdown was at the heart of the debacle over the second resolution on Iraq and to avoid in future such diplomatic monstrosities as the long succession of public debates at ministerial level, which systematically polarise positions to the point of no return?
There is a good deal of loose talk, too, about NATO being an organisation whose time has passed. I find that unconvincing. Can we really see clearly enough and far enough into the future to be sure that we will never again need NATO's guarantee of mutual defence? Is it not irresponsible to start questioning the viability of NATO just when we have welcomed in a number of central and eastern European countries for which it is a sheet anchor of their newly re-established independence and security? NATO won its peacekeeping spurs in Bosnia and Kosovo and is about to be involved in Afghanistan. It remains, too, the indispensable basis from which to develop Europe's own security and defence activities. It is the only viable partner in a dialogue on security issues with a nuclear-armed Russia. Surely we need to strengthen and adapt NATO to the challenges of the future, not to question its utility and undermine its credibility.
The Iraq crisis could not have occurred at a worse time for the European Union, just when the whole question of the future development of its common foreign and security policy is coming to the fore at the intergovernmental conference. Plenty of voices are raised in this country and in this House arguing that
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the experience of Iraq has proved definitively that CFSP is an impossible and, indeed, undesirable objective. Plenty of other voices—far more, I believe, and this is likely to be a more Europe-wide view—argue that Europe should learn the lessons of our powerlessness to influence US policy and the actual course of events so long as we remain divided, and that we should press on with determination to construct and execute a common foreign policy.
After all, Europe already has an effective common policy in the Balkans. Europe is united in its approach to the Arab/Israel problem, the next massive challenge to the international community. There is no reason why Europe should not pull together over post-war Iraq. The alternative of continuing as an economic giant but a political pygmy is not attractive nor in the longer run sustainable. We need now to give Europe the tools it needs to do a better job and we need to get Europe's nations working together to protect and further their shared interests. We also need to find a better way than exists at present for Europe to work together with the United States when it is in our overall interests to do so and to argue with it when it is not in our interests to do so. The details of that are for another day and another debate.
In conclusion, the G8 summit is not really an institution but an annual fixture in the international landscape about to meet in Evian in June. I suggest that it is time for the G8 to return to its original focus, which was economic, and to cease duplicating foreign policy debates, which are better handled elsewhere. The war in Iraq has tended to obscure the fact that the world economy is not in brilliant shape and urgently needs leadership by the large nations. The Doha round of world trade negotiations is approaching deadlock. The task of bridging the gap between developed and developing countries is as far from achievement as ever. Why not turn the G8, once and for all, from a club of rich countries into a group which includes the main players in the developing world—China, India, Indonesia, Brazil, South Africa and Nigeria—and by so doing give a new impetus to the work that must be done if we are to ensure that globalisation is a force for good and for the greater prosperity of nations?
One can see clearly from all that that no amount of tweaking the institutions is a substitute for making them work when they are most needed. One can take a pessimistic view on that last point and one would if one listened to some of the ideologues of neo-conservatism in Washington. But to take their more extreme views as a given, as a fixed point, would indeed be a counsel of despair. It would be far better, surely, to work for an outcome which does not allow all that our countries have striven for so successfully since the Second World War to atrophy and slide towards irrelevance.
5.13 p.m.
The Earl of Sandwich: My Lords, the noble Baroness, Lady Williams, has again presented us with a timely debate, in this case no less than the re-ordering of our international affairs. That is as broad a canvass as your Lordships' House could ever face. The brave

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title of this debate reminds me of the talk after the 1973 oil price hikes of the need for a new international economic order. We are less starry-eyed today.
Nevertheless, despite all the political confusion, the Iraq war has provided this new opportunity to discuss the effectiveness of our world institutions. I admire the noble Baroness's faith in change when so many have become cynical. I share her belief in reinforcing the power of national parliaments to influence international bodies.
However, my starting point is not the Middle East but the least developed countries and the willingness of the international financial institutions, the OECD and the UN to lift those countries out of poverty, protect their agriculture, strengthen their institutions and develop their economic base. The world's institutions must reform themselves further before they can claim to improve those poor economies. I would, for example, like to see much greater participation by the developing countries in their own development. Here, I declare an interest as a dyed-in-the-wool supporter of NGOs and the Churches and as a trustee of Christian Aid.
We need to ensure that internal changes in the World Bank and in the IMF—especially the involvement of civil society in decision-making—are not just on the agenda, which is a favourite trick of institutions, but are actually taking place. Poverty reduction strategy is one obvious area. Debt sustainability is another, in which various national bodies can play a key role alongside their government in establishing targets and monitoring systems. I agree with the noble Baroness that it is not only governments but the many organisations which make up civil society which must be involved. The noble Lord, Lord Dahrendorf, made that point very well in defining the concept of intervention under the rule of law. I cannot follow the noble Earl, Lord Russell, in his interesting comments on migration and free trade, but there is obviously a close connection there.
There is a parallel attempt to make the WTO more representative and accountable so that it neither reflects powerful lobbies in rich countries nor degenerates into overregulation and internal conflict. That process is a slow one because the vested interests of trade protection, notably the CAP, are unwilling to give up territory. The Doha round has produced little progress in TRIPS or agriculture, although I believe that the EU has made a new offer on trade in services. It would help if the EU could get its act together on the CAP. Equally, the US has no right to complain about EU protection or GM food labelling or anything else when it refuses to co-operate with the international community in so many other departments. The only genuine advances I can see are not in the WTO but in some of the corporations, even the pharmaceutical companies, which genuinely see the advantages of fairer trade, codes of conduct and opening up markets—entirely in their own interests—with benefits for the poor.
Because of those frustrations in reaching longer-term reforms, the UN system has tried to create more momentum in the advocacy of the millennium
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development goals and the Monterey process. Here, they are working much more strictly to a G8 and OECD timetable. That has become a new way of working to deadlines which has brought a temporary stimulus but will increasingly frustrate the developing countries as they get agonisingly close to 2015, recognising only then the rhetoric which donors use to disguise their actual contributions. The simultaneous process of doubling development aid, as admirably pressed for by Gordon Brown, has demonstrated the need for donor-led rather than UN-led reform.
That is really the nub of the argument for any change in our international system, whether we are talking about the UN or the EU. Unless the central players are given a fast track procedure, no amount of highly-paid bureaucracy in New York will ever make any difference.
I was going to talk about peacekeeping in the Congo, but I think I shall curtail my remarks on that except to say that I am very pleased that the noble Baroness has raised that subject. There is a grave situation there and I am not sure that there is likely to be any real change, but it is surely time for us to shore up the UN in the eastern Congo as well as in Kinshasa where the national dialogue is now coming to a head.
Once it has identified a problem, the Security Council can and should move quickly. It works on the principle of effective engagement by the major players with the acquiescence of the minor ones. Unlike the noble Lord, Lord Desai, I do not see how that could change. I agree with my noble friend that we should improve the present situation rather than attempt to enlarge the council. However, we have seen, over Iraq, how the various safeguards can slow down the council to the point where it can he ignored altogether. That is where we arrive at the impotence, mentioned by my noble friend Lord Chalfont. I am one of those who did not believe that we had international law on our side. I believe that the UN was seriously undermined by the coalition with ominous consequences.
I turn to the role of the UN in Palestine. We need to reinforce the role of the UN, which has been all but ignored by Israel with calamitous results—the shattering of lives by Israeli armour and the under-funding of the UN agency which we set up to help. The role of our ally in this affair has been shamefully self-interested. That is another reality which governments must tackle within the UN system.
The US is not the world's policeman, still less a vigilante, as mentioned by the right reverend Prelate, and nor is NATO. We must somehow strengthen the role of the Security Council and improve its credibility in the eyes of the rest of the world, including, I must say, the average US citizen who is unaware of international affairs. It is our job to help make that citizen more aware through our connections with the United States.
Afghanistan is a much better example than Iraq of how the international community can respond. In Iraq the interim administration should now move faster towards a government that is recognised by the Iraqi people, working closely with the United Nations. We

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need to restore confidence in our international institutions but at the same time make certain that the people they serve are in the front line of their work.
5.21 p.m.
Lord Haskel: My Lords, I warmly congratulate and thank the noble Baroness for moving this Motion. It is timely and urgent. Of course we need strong international institutions which give authority and legitimacy to international actions—the rule of law and the moral basis called for by the right reverend Prelate the Bishop of Newcastle. Of course we need institutions for international decision-making. But I agree with the noble Lord, Lord Campbell, that we need international institutions where we can air our differences and iron out our disputes. Other noble Lords have spoken about difficult and disturbing matters that need to be sorted out.
I am not sure that I agree that those matters have so destroyed the integrity of these institutions that they need to be rebuilt. If these institutions fail to produce international agreements, it does not mean that they have collapsed. It means that they are imperfect. And if they are imperfect they need nurturing or modernising, but not necessarily rebuilding. The noble Lord, Lord Hannay, spoke about them bouncing back.
At present we are concerned about the credibility of the United Nations and the Security Council. But these institutions have stood the test of time. They have been put together with painstaking negotiation and consensus building over a number of years. They have outlasted governments and will outlast the idealogues in Washington. Because the Security Council failed to produce a unanimous decision to go to war does not mean that that institution has collapsed.
I can think of two occasions only when the Security Council agreed to go to war. They were—grudgingly—in the 1960s against Korea and then in 1991. So things really remain much the same.
It simply means that some nations were unhappy about a pre-emptive strike against Iraq—what the noble Lord, Lord Chalfont, described as a "colonial act". But that failure does not mean that they now think that the United Nations and indeed, the Security Council are redundant. It means that the United Nations is also a forum for voicing our differences.
It is reasonable only to expect that differences will arise. In fact, I challenge the assumption that we have to conform and not rock the boat by voicing our different opinion. In real life there are different points of power in the world, but it does not mean that every dispute has to be polarised along the same lines.
We are committed to the principles that are important to us, but the circumstances around these principles change. We are certainly influenced by decisions made in the past, but we cannot be locked into them. Indeed, that is where we look to politicians
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for a lead, for guidance. We want them to lead us into alliances within which we can differ, where we can influence and not just be locked into collective action.
The UN and NATO are not perfect. The noble Lord, Lord Hannay, sensibly called for caution. That is why we must depend upon them to do what they can and not denounce them for failing to do what they ought.
Meanwhile, there are many other national institutions getting on with what they ought to be doing. The World Health Organisation is lighting SARS and other infections, acknowledging that disease does not recognise international boundaries. The world continues to co-operate on science. On 23rd April a Soyuz rocket provided a lifeline to the international space station after the shuttle disaster. Even the United States needs international cooperation.
Perhaps the most important international institution for decision-making and national interdependence is the one which regulates world trade—the WTO mentioned by many noble Lords. We should all be concerned whether the WTO is up to the job of regulating world trade, because that is where most disputes arise. Few governments will compromise where their economic interests are concerned; partly because they run the risk of not being re-elected and partly because they cannot afford the financial loss.
Furthermore, world trade is the key to helping poor people in poor countries. That is of enormous political importance. If those countries want to earn and trade their way out of poverty, instead of being trapped in dependence on aid, it is the WTO that has the means of delivering this. To appreciate how liberal and well-regulated world trade can do that, one has only to compare the progress made by many African countries over the past 25 years, compared with the progress made by many countries in South East Asia. That is how the developing world will gain a voice in international economics, for which the noble Baroness, Lady Williams, called. This is the economic development about which the noble Lord, Lord Dahrendorf, spoke so movingly.
History is littered with examples of trade disputes which have stood in the way of real peace. Raising trade barriers in order to protect domestic producers and retaliate against other barriers in the past has caused endless economic hardship. Helping trade to flow smoothly and providing a means of dealing fairly with disputes over trade issues must lead to international confidence and co-operation. A system based on rules rather than power must be in all our interests.
Not only does the WTO benefit developing countries, it also benefits developed countries such as ours. We are the fifth largest exporter of goods and the second largest exporter of services. That means that one in four jobs in Britain is linked to business overseas and so we are very dependent on the WTO for our standard of living.

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Europe may not be able to balance the United States in military power, but we can balance it in trade. We have three disputes with the US at the moment. Handling a conflict between two economic superpowers is of enormous political sensitivity. It even worries my noble friend Lord Desai.
Lord Desai: My Lords, it must be serious then.
Lord Haskel: My Lords, the United States imposed tariffs on steel imports last year, which have been declared unlawful under WTO rules. The WTO has also declared tax breaks allowed to large US exporters to be illegal. Then there is the dispute over GM crops which we discussed earlier today.
The EU and the US are talking, and we shall have to see what happens, but my point is that having a mechanism and a forum to deal with such disputes is too precious to be abused or sidelined simply because there are other disagreements in the UN. We just have to work harder at it. I know that my noble friend Lady Symons and her team are working hard to ensure that the conference in Cancun in September will be successful. It is important that she should not be distracted, because, if successfully concluded, the WTO Doha development agenda will have an impact way beyond Iraq. It will have an impact on the world's economy, on prosperity and on peace and security. Success at Cancun would be a major step in putting those differences in the Security Council behind us.
In the end, most of the world's urgent challenges can be tackled only through international institutions: the reconstruction of Iraq and Afghanistan; poverty in Africa; the fight against terror; weapons proliferation; and, of course, the Middle East process. No country, not even the US, can tackle those matters single-handed; it needs allies, as the noble Lord, Lord Howell, said. International organisations are the fulcrums of power. In order to exercise that power, we must all nurture those institutions, however imperfect they may be.
5.31 p.m.
The Lord Bishop of Portsmouth: My Lords, I suspect that few members of your Lordships' House could arrange and then initiate a debate on the future of the world, and I warmly congratulate the noble Baroness for managing to do so at such a critical point in our international relationships. Following the example of the noble Earl, Lord Russell, I apologise to the House for missing the beginning of her speech—for similar reasons; perhaps less baroque but credible none the less. It is also a pleasure to take part in this debate because it has included the maiden speech—a speech both wise and apt—of my noble friend and colleague the right reverend Prelate the Bishop of Newcastle.
The term "balance of power", to which the noble Lord, Lord Dahrendorf, referred—or, rather, the lack of it—has produced much of the context that we are now addressing. From time to time, historians and political scientists use such a term as a recognisable phenomenon by which big powers are checked and are not allowed to develop excessive influence. A balance
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of power explains the development of NATO and the United Nations in response to the events that led up to the Second World War and its whole, terrible outcome. It can be traced back through several tiers of European history; the study of which I suggest is more than ornamental—through the 16th, 12th and ninth centuries, and even to the bonding of the Greek city states after the Persian Wars.
I wonder whether such a Weltanshauung is any longer possible, because of the combination of two factors: the economic dominance of the world by the United States and the fact that the EU has a strong economic and political unity, albeit in some tension at present, with no real military strength but with a fine track record of overseas development. I do not mean to be critical; I am trying to be descriptive. With the position of the United Kingdom, nervously marooned in the middle of the Atlantic—which is perhaps where we belong, as part of Europe yet tied to North America—a discernible gap in world politics as to what Europe can deliver becomes all the more frustrating.
The United States National Security Strategy, published last September, recognises some of those factors, such as its,
"unprecedented and unequalled strength in the world—"
some would say a strength equalled only by the Roman Empire. It states clearly:
"while the United States will constantly strive to enlist the support of the international community, we will not hesitate to act alone, if necessary, to exercise our right of self-defence by acting preemptively against such terrorists, to prevent them from doing harm".
But the same report recognises a wider shift that goes beyond US pre-eminence. It states:
"The greatest danger lies at the crossroads of radicalism and technology".
That is what caused the trauma of 9/11 to produce the view that the US,
"must adapt the concept of imminent threat to the capabilities and objectives of today's adversaries".
One could say that the rest is history. I suppose that the major shift away from a "balance of power" view of the world political, economic and military stage has taken the following specific form. The first Gulf War in 1990 was conducted under the auspices of the United Nations and involved the largest military coalition in history, with clearly defined objectives. Military action was taken only when other options had been seen to fail. By contrast, the second Gulf War amounted to a unilateral or near unilateral action, without the express authority of the United Nations—in the eyes of some, without clearly defined objectives. Some would hold that we have moved from a multilateral to a unilateral world order, with all the potential dangers involved.
Those remarks are not intended to be anti-American. I lived in the Mid-West 20 years ago for five months as the visiting professor at a university, and met the youth and young graduates from all over North America—a testing encounter as well as an enjoyable one. Only last Thursday I returned from a

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fascinating and most agreeable lecture trip to Georgia in the deep South. Over there, things feel different. There is no doubt that the soul of the United States was deeply wounded by 9/11—having, on its own terms, held out through the Cold War. But as the noble Lord, Lord Judd, has pointed out, and as I know myself from my personal contacts and conversations in Atlanta, Savannah and elsewhere, US citizens are themselves debating their action over Iraq—more than is perceived over here.
In that context, our Government's policy of, shall we say, tempering United States enthusiasm, is deemed by many, although not all, to be an appropriate response—the defence being, "Who else would do it?"—although how it will turn out in future is hard to say. As a nation, we probably find that role easier because we once had an empire. But we need to be more aware than we often are of how the big and powerful, or the small but once upon a time powerful, are perceived by small countries.
Lithuania is a nation in which I gather that the noble Lord, Lord Haskel, has his roots. I visited the small Lutheran Church in the west of Lithuania the weekend following 9/11, and I found the way in which people in a nation that has suffered so much from different kinds of imperialism over the centuries viewed the events in New York sobering. Terrible, they said, yes, but big nations occasionally need to be stood up to. They did not condone what the terrorists did; they were simply offering a small nation's perspective. As the world has more small nations than large ones, we must take that perspective on board.
However, political, economic, military and, we could add, cultural power is not enough either to change the world, if we wanted to, or to explain the complexities of globalisation. For many key issues—from international financial stability to drug smuggling, global climate change, terrorism and the proliferation of weapons of mass destruction—those powers alone cannot ensure success.
I draw those remarks together with three observations that appear to me to have a bearing on the context of post-Iraq conflict as a test case for world stability. First, unless Saddam Hussein's lasting legacy is to be a severe, if not near-fatal, weakening of the EU, to the point where it has no serious political role on the world stage, relations within the EU must be renurtured. I think we are aware that, beneath the rhetoric associated with the French President, there are many in France who want this to happen, and who understand our mid-Atlantic position as not an "either/or"—that is to say, either us and the EU, or us and the US—but, dare I say it, a good, Anglican "both/and".
Secondly, the role of the United Nations needs to be reinvigorated so that it does not, by default, go the same way as the League of Nations did in the 1930s, with tragic consequences: in effect, a talking shop ignored by the serious players. That is why we need to get the UN into the political saddle over Iraq, over and above its more morally obvious role in humanitarian aid. International institutions can so easily shrink in
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influence, and quite quickly, never to recover their original purpose. It seems to me that the UN is the only organisation that can call into account the unilateral actions of the US. I am pleased that we are in there working hard at it.
Thirdly, the role of the Churches and faith communities, to which the right reverend Prelate the Bishop of Newcastle referred in local terms, needs also to be recognised more fully, as they are members of already existing international networks that can be forces for stability and change. The most obvious is the Roman Catholic Church, with its specific face in the form of His Holiness the Pope. Others, for good theological and historical reasons, are less personally focused and more dispersed. The Church of England is part of the Anglican Communion, which includes the Church of the Province of South Africa, led by the Archbishop of Capetown, and the Episcopal Church of the United States of America. The Lutheran World Federation has contributed considerably to post-perestroika recovery in parts of the former Soviet Union, not just the Baltic nations. The list is endless and includes the role of religious communities on a whole range of issues, such as debt relief, HIV/AIDS and trade, all of which reflect positively on the phenomenon that we call globalisation.
The Archbishop of Canterbury, in his Dimbleby lecture, posed the question:
"If states cannot provide the security for their people, in what sense have they a right to be obeyed?"
That brings us to the basic ethic of restraint—not, "I can therefore I must", but, "I can yet is it right to do so?", echoing the words of the noble Lord, Lord Haskel. The doctrine of restraint is an uncomfortable companion to speedy decision-making, especially in the context of aggression and fear.
I conclude by quoting some words, to which bishops keep returning as we reflect on our ways of leadership, from the Rule of Saint Benedict on the role of the abbot:
"He must so arrange everything that the strong have something to strive for and the weak nothing to run from."
There is, I suspect, more in those words than their originally envisaged, mid-6th-century Italian monastic context. They could also refer to governments, international organisations, world religions and even, I suggest, the so-called superpowers.
5.43 p.m.
Lord Brett: My Lords, many noble Lords have expressed their appreciation to the noble Baroness, Lady Williams, for initiating the debate. I, too, can express my appreciation with great sincerity, as I have two interests: I am the chairman of the governing body of the International Labour Organisation, which is a United Nations agency. I am also a member of the World Commission on the Social Dimensions of Globalisation, which is co-chaired by the presidents of Finland and Tanzania. At our fifth meeting of the World Commission this weekend in Geneva, lo and behold, we are looking at recommendations that we will make to the international financial institutions

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and the United Nations system. For me, the debate could not be more timely. I am very grateful to all noble Lords for their contributions. They have helped me in my thinking. I have, therefore, little to add other than comments.
First, we have had 30 dialogues, internationally and nationally. to find out what governments, employers, trade unions, civil society and faith organisations feel is wrong with the world in the context of the globalisation that has taken place over 20 years. There are many criticisms of the United Nations system. The half of the world's population who will go to bed tonight having earned no more than 2 dollars a day will not lie awake worrying about the veto, the General Assembly or the Security Council. They worry about health, jobs, education and water. Let us not forget that one fifth of the world's population has no access to clean water. It is for that provision that they look to the United Nations system.
We talk about the UN General Assembly and Security Council. The noble Lord, Lord Haskel, mentioned other agencies, such as the World Health Organisation. UNESCO and UNIDO, which are part of the United Nations family. The only element that is not part of the UN is the World Trade Organisation. In our 30 meetings, criticism tended to be directed at the World Bank, the IM F and the WTO. The rosy view of the WTO expressed by the noble Lord, Lord Haskel, is not one that I have heard echoed too often in the developing world.
I have also gleaned that, in the past 20 years, globalisation has weakened the nation state and strengthened multinational enterprises, of which there are some 65,000, with 850,000 foreign affiliates employing some 54 million people. The UN is an international system geared to security, through the Security Council and General Assembly; economics, through the World Bank and the International Monetary Fund; and trade, through the WTO. We do not have a social policy pillar. A series of United Nations agencies, such as the World Health Organisation, UNCTAD and the ILO, deal with different aspects of social policy. But, in decision-making at international level, social policy comes far down the ranking order. That is why some of the social policy decisions that we have made internationally have been a dereliction of the creation of the kind of society that we want.
I therefore hope that the World Commission, when it publishes its report at the beginning of next year. will have something to offer the system of international order. I agree with the noble Lord, Lord Hannay, and those who are cautious and say that we should not try to rewrite the charter. The ILO's charter, for example, refers to "the chairman", and some of my colleagues want it changed to a non-sexist title. We resisted opening the 1919 charter, because to do so would be to invite everyone else to tamper with other parts of it. Despite all its imperfections, the UN system needs reinvigorating, as the right reverend Prelate the Bishop of Portsmouth said, not reinventing.
5.47 p.m.
Lord Beaumont of Whitley: My Lords, in addressing this important subject I make clear that the views that I express, while my own, as always, are also the policy of the Green Party, of which I am a member. When I was young, and for a long time after, I fell into the trap of believing that the sooner we achieved world government the better. Some in your Lordships' House may still believe so, but I hope not. I have come to believe that I was incredibly naive. I now believe that we should strive for government at the most suitable level for the subject dealt with. In Roman Catholic social teaching that is referred to as "subsidiarity". But that is a most misleading term. as it implies power travelling down, whereas the reality should be power travelling up and being given to more complex bodies only where essential.
In a complex world with almost instant communications, it is essential that power be given to bodies such as the UN in some matters. The main one of those is the preservation of world peace. Not the least of the recent crimes of the United States is that it has gone far to destroy the power of the United Nations to perform that function, just as it destroyed the power of the League of Nations 80 years ago. We have been accomplices in that later crime and must now do our best to repair the harm that we have done.
Another area where a supra-national body is needed is the environment. With climate change now an established fact, the challenges it offers can be met only by large-scale international co-operation. The same is probably true in the field of health. But in most other areas international bodies given large powers do more harm than good. Although there have been signs recently of change for the better, the World Bank has on the whole in its history done exactly that. In its misguided endeavours to impose corporative capitalism on all parts of the world, it has destroyed indigenous agriculture in the third world and driven millions from the countryside to the cities to become landless, workless and, it must be said, lawless.
Another body which has done immense harm, I believe, but which shows no signs of amendment is the World Trade Organisation. Perhaps I may pick out just one major area in which, to me, it seems to be a completely evil influence—I use the word advisedly. I select animal welfare. I believe that there is not a single religion in the world or any philosophy that has ethical pretensions which does not regard kindliness to our fellow creatures as essential to our full humanity. But we live in a world in which the European Union hesitates to pass laws in which it fully believes for fear that the WTO should decide that they are in breach of free trade and are therefore illegal.
I thank the noble Baroness, Lady Williams, and the Liberal Democrats, for having made this debate possible. I also thank the speakers who have illuminated us today—particularly the speeches made by the noble Lords, Lord Judd, Lord Hannay of Chiswick and Lord Brett. I hope that it may he a step on the road to re-establishing the United Nations and to restructuring all international bodies—or, as has

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been cogently argued, if restructuring is not on the agenda, at least to administering them so that they are democratically accountable to nations and not just to international corporations and are allowed, nay required, to respect ethical and humane standards.
5.52 p.m.
Lord Wallace of Saltaire: My Lords, this has been a very interesting and, in many ways, outstanding debate. I have listened with fascination and I have learned a lot. I say this as someone who teaches a 20-lecture introductory course on the structure of the international system. Therefore, I am forced to delve deeply into some of these issues.
The acceptance around the Chamber has been that the international order has already been transformed in a great many ways and that we now need to adjust, as far as we can, international institutions and international law to this transformed world. The noble Lord, Lord Chalfont, referred to the passing of the Cold War. I was sitting in Moscow two days ago listening to people being nostalgic about the good old balance of power and the days when we kept order in the world. But that has gone.
We have a proliferation of new, weak and very often corrupt states—the majority of states in the United Nations. We have had a doubling of world population with all the impact that that means in terms of the movement of peoples. There is both the unpushed movement of people—people trying to better themselves from the poor world in the rich—and forced migration, on which my noble friend Lord Russell spoke so movingly. There has been the revolution in communications and these astonishing years of growth in the global economy which so far have avoided a depression since 1945.
Let us recognise that we all now depend upon the international economic institutions, from the G8 through to the IM F, to ensure that we do not slip back into a deflationary spiral, which it would be very easy to do if governments, central banks and economics ministries fail to get together. Many noble Lords have recognised that the UN Charter, international law and sovereignty and non-intervention do not entirely fit the world we now have.
A number of noble Lords have spoken about the problem of American hegemony and that we now live and are likely to go on living for the foreseeable future—at least in military terms—in a world of Pax Americana. We may agree with my noble friend Lord Dahrendorf that the United States is the best available hegemon that one might have. One has only to think about the possible alternatives to recognise that we are better off with the United States than anything else. It was the great legacy of President Roosevelt and of a previous generation of Americans that they gave us the structure of international institutions from which we now benefit so much. This was a deliberate effort to build institutional constraints upon American power.
We also recognise the depth and bitterness of the revolt within the United States against the whole structure of multilateral institutions that a previous
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American generation created. I have been shocked at various meetings with American neo-conservatives during the past few weeks by the depth of their bitterness and by the depth also of their ignorance about global interdependence. Ten days ago, at a meeting, I heard someone ask, "I do not believe that a structure of international institutions effectively exists. Why does it matter to the United States what you Europeans think?". If one asks that question one demonstrates the depth of one's ignorance about the way in which the international system operates.
But it is there. It is there built inside the current Administration in what one must call the bitterness of the disputes between the Pentagon and the State Department and, so I understand, of the personal relationships between Donald Rumsfeld and Colin Powell. The National Security Strategy, mentioned by the right reverend Prelate the Bishop of Newcastle, sets out a definition of the world in which hard power is all that counts, the United States is justified in operating pre-emptively and, as a number of neo-conservatives would say, the United States is the righteous power—that religious language is often used—and is thus entitled to reform the world in its own image.
As some noble Lords have said, within the United States thankfully there are many self-correcting mechanisms of American politics and of American society. Business interests know very well that the United States needs international economic institutions. It needs the World Trade Organisation. The US Administration, even while Mr Rumsfeld is so busily attacking the need for these, is demanding that the International Atomic Energy Agency be allowed to conduct intrusive inspections in Iran because there are some questions about the Iranian nuclear programme.
The US Administration is also taking the whole issue of genetically modified foods to the World Trade Organisation and asking NATO to take over nation-building and security in Afghanistan. My noble friend Lord Russell commented that people in America do not like to be hated; they like to be liked. There are other self-correcting mechanisms in any liberal democracy which mean that we should he engaging as actively as possible in the American domestic debate.
One of my criticisms of the British Prime Minister over the past 18 months is that while he has worked extremely hard to provide public support for the US Administration and private influence in Washington, a major element was missing: namely, to persuade the American Congress and the American public that they must take this transformation of the world more seriously and that they must take the need for multilateral co-operation more seriously.
We need, all of us—diplomats, scholars, parliamentarians, members of government—to be playing a much more active role in what has become an astonishingly introverted Washington debate. We certainly need to get out into Atlanta, Savannah, Texas and Louisiana from where America is now being run.
Several speakers have pointed out that we must also recognise the current weakness of many intergovernmental organisations and the sheer difficulties

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of reform. I am not sure that United Nations reform is quite the great white whale of international diplomacy, hut if I had been the Permanent Representative at the UN, then I might well have regarded it in that light. Nevertheless, after almost 60 years, the structure we have inherited is no longer entirely appropriate and it is right now for us to explore the landscape for necessary change before the coming 20 to 30 years slip by.
I would cite for reform the irresponsibility of so many weak and failed states inside the UN and other international institutions, the caucus politics through which chairmanships are designated and elected, the scandal that Libya has been elected chair of the UN Human Rights Commission, and the previous scandals over UNESCO and the UN Food and Agriculture Organisation. I could mention many others. All those demonstrate that, as the British Government and as people working in this area, we ought to be criticising the current structure and asking how it should change. Of course there will he deep resistance to change, and some of those changes will have to he effected through other ad hoc institutions such as the G8 group of countries, now G9—although I understand that the Chinese have already been invited to attend part of the coming G8 meeting—through the EU as it gradually enlarges, through the OECD as it gradually enlarges, and through initiatives such as the New Economic Partnership for Africa's Development, which is struggling hard to introduce political conditionality into the principles of economic and social development in Africa.
What is the British role in Iraq? The immediate British role should he to insist that the phrase, "a vital role for the United Nations", is carried through in the wake of those in Washington—thankfully not the whole of the Bush Administration—who wish to prevent the UN assuming any authority whatever. That means putting UNMOVIC back in and insisting that the other half a those promises made by President Bush in Belfast regarding the roadmap for Israel and Palestine is followed through.
The British Government have a great opportunity to work with other European states, if only they can learn to work together in a multilateral world and not—here I agree with the noble Lord, Lord Desai—in a multipolar world. After all, four members of the UN Security Council are currently members of the European Union, or five if one includes Bulgaria as a candidate state. Some 40 per cent of the UN budget comes from EU members, along with 50 per cent of the UN peacekeeping budget. Collectively, the European states punch well below their weight.
How the European nations should use their influence within these institutions is a delicate issue, as is criticising the current American approach. Of course we need to promote our values—we are interested in promoting the values of western democracy—but in that role we need to avoid the "white man's burden" approach being called for by the Washington "neo-Conservatives" in persuading the nations of the developing world to move towards our values. We should not push or bully them.
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Finally, what is the role for the House of Lords? I suggest that there may he a theme here for a sessional committee. If we accept what was said by my noble friend Lord Dahrendorf in his speech, now is the time to produce building blocks, new ideas on intervention and the rule of law. If we accept the power of ideas in getting things under way, then we may have some small role to play in pushing forward the case for strengthening the structures of international order and for transforming international institutions, in spite of the enormous obstacles to reform and the prejudices and vested interests that block the way forward.
6.4 p.m.
Baroness Symons of Vernham Dean: My Lords, I, too, thank the noble Baroness, Lady Williams, for securing a debate on this very important subject and for what I thought was a tremendous opening speech. It gave us much to kick off on and to discuss as the debate continued. I should also like to congratulate the right reverend Prelate the Bishop of Newcastle on his maiden speech. Not only was it very thoughtful, but I am bound to say that it was also thought-provoking. We look forward to hearing more from the right reverend Prelate in the future.
Our debate has spanned a wide range of global challenges. If a central theme has emerged from the many interventions, it is that of course the world is evolving and the international order has to change along with it. In a sense that is always true. It is also always true that such international institutions as we have must also change if they are to remain useful and relevant.
The international institutions are certainly capable of change. Over the past few decades, new circumstances, ranging from the end of the Cold War to an increase in concern for the environment—so ably argued by the noble Lord, Lord Beaumont of Whitley—have fundamentally altered the international landscape. Bodies such as the European Union and NATO have changed significantly in terms of their membership and role in order to reflect that.
Many of those institutional changes have come about through what might be described as an evolutionary process rather than through radical restructuring. That incremental approach should not undermine either our real ambitions in regard to the tasks that lie ahead for the international community or our enthusiasm for making some of these changes rather more quickly.
We are faced with modern threats and uncertainties. For many, collective security is at the top of the international agenda. New threats have emerged—terrorism, the proliferation of weapons of mass destruction, rogue and failing states and massive human rights abuses—all of which require a new response from international bodies. Reforms aimed at enhancing international security, but which are also aimed at our prosperity and sustainable development, are absolutely crucial. The United Kingdom has been at the forefront in addressing these threats, refocusing the international agenda from traditional concerns

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with territorial defence to what is perhaps a broader concept of collective security—a collective security also informed by tackling some of the issues around poverty.
Perhaps I may say that the noble Baroness, in her very powerful opening speech, concentrated heavily on the perceived shortcomings of the United States. I do not suppose she will be surprised that I have remarked on that. I understand why she sought to concentrate her remarks in that way, and of course it was a theme taken up with considerable passion by my noble friend Lord Judd. However, I was left with the impression that both of those superb interventions about the most powerful country in the world—while many players on the world stage matter a great deal, the United States is most powerful in economic and military terms—left many questions unanswered. The problem for us all in the international community is that, while we have the institutions that reflect the will of the nations as we move into the 21st century, we must also have the means in the international community to enforce that will. We must enforce it diplomatically, through international law and, if it should come to it, militarily as well.
The noble Baroness was unhappy about the response of the United States to the outrage this morning in Saudi Arabia. I take that up because it is something that has happened today. However, we have to acknowledge that the greater part of enforcing the will of the international community does fall, over and over again, to certain nations of the world. That needs to be addressed. In this respect, I agree with many of the points made by the noble Lord, Lord Howell of Guildford. He addressed the question of how we should enforce the international will when our diplomatic institutions fail us. This hugely difficult question has to be addressed if we are truly to get to grips with the new world order.
The statement of fact about the pivotal role of the United States was very clearly articulated by the noble Lord, Lord Dahrendorf, in his well-argued speech. It provided much of the energy in our debate this afternoon. However, when listening just now to the remarks of the noble Lord, Lord Wallace of Saltaire, I was not sure how much of his argument was directed at the current Administration in the United States—or perhaps even at certain individuals within the Administration—and how much of it was a fundamental argument about the institutions and the culture of the United States itself. On a future occasion that may provide us with a very interesting debate.
I want to take up some of the points made by the noble Baroness, Lady Williams, about Iraq. I did not quite understand her comment about the draft United Nations resolution not addressing the point about the interim authority in Iraq. It is addressed in operative paragraph 9 of the draft resolution. Perhaps we can discuss that issue later.
I should also say to the noble Baroness that, while I absolutely acknowledge that there is a very difficult situation in Iraq and huge shortcomings, the almost unremittingly gloomy picture she painted was not
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quite fair. Much is improving. Water is being reconnected; sewage plants are being repaired; electricity is being restored; most of the hospitals are working, even in Baghdad; and the schools are functioning. Most importantly, mass graves are being discovered and recorded—but they are not being dug and they are not being filled with new victims. That has to be an improvement.
I do not agree with the noble Lord, Lord Wallace of Saltaire, that it is the role of the British Prime Minister to intervene in US thinking about its own attitudes. It is the role of the British Prime Minister to put forward British Government policy and to try to persuade others to our view. At that, if I may say so, he does rather well.
The noble Baroness, Lady Williams, was particularly concerned about the role of the United Nations, a theme taken up by the noble Lord, Lord Campbell of Croy, and my noble friends Lord Desai and Lord Judd. We remain committed to UN reform to make the organisation more effective and, indeed, more representative of the modern world. We support an enlarged Security Council, expanded to 24 seats, including an enlarged membership of both its permanent and non-permanent parts.
The United Kingdom has backed Germany, Japan and India in their bids to become permanent members of an enlarged Security Council, and we have said that countries from Latin America and Africa should choose two further permanent members. So, in answer to the point raised by the right reverend Prelate the Bishop of Newcastle, we very much support these reforms.
The reforms, of course, will require the approval of two-thirds of the Security Council, including the P5, if they are to go forward. No such agreement exists at present. We shall have to work very hard to secure that support. I can assure the noble Lord, Lord Campbell of Croy, that the United Kingdom wants to see a strengthened UN based on real political resolve to deal with rogue states and proliferators.
But the UN's pre-eminence can be maintained only if there is genuine political will to tackle the new threats we perceive in WM D and rogue states. The Security Council needs to adapt to these threats. It is not only a question of institutional reform but of really addressing the issues. I strongly agree with the right reverend Prelate the Bishop of Portsmouth in that regard.
My noble friend Lord Desai raised the issue of the veto. That will no doubt be considered in any enlargement of the Security Council. However, it is unlikely that there will be a consensus for change. The UK believes that the veto should be used with restraint and in accordance with the principles in the UN charter.
There is much in the UN Secretary-General's reform initiative with which we can work. I can assure my noble friend Lord Judd that we are by no means complacent. We recognise that a great deal more work needs to be done in regard to the problems of UN bureaucracy, over-manning and the budget. Perhaps

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more importantly, we need to focus on areas such as counter-terrorism, human rights, poverty reduction and sustainable development, a theme to which many noble Lords referred.
As to the question of the mechanism for responding to human rights abuses—or the "just intervention" articulated by the noble Baroness, Lady Williams, my noble friend Lord Desai and the right reverend Prelate the Bishop of Newcastle—the United Kingdom participated very actively in the debate on humanitarian intervention which followed the Kosovo conflict. We drew up principles to guide the Security Council in deciding when to intervene but we were unable to secure the agreement of other permanent members. So I am sorry to say that, with some reluctance, I have to agree with some of the caution expressed by the noble Lord, Lord Hannay.
The debate has been reinvigorated by the report of the International Commission on Intervention and State Sovereignty, an initiative of the former Canadian Foreign Minister. The principles published last year on the responsibility to protect are now on the agenda for the United Nations General Assembly. We intend to work closely with our Canadian counterparts to try to build consensus around the difficult issues referred to by the noble Baroness.
The noble Lord, Lord Hannay, was quite right to caution us that the circumstances of these conflicts are all different. I agree that the reasons for intervening in Kosovo were in many ways far more ground-breaking than the issues surrounding the more recent intervention in Iraq. The emergence of the doctrine of overwhelming humanitarian need or overwhelming humanitarian disaster now seems to be a well-accepted basis for such intervention.
As many noble Lords have remarked, some of our institutions are already adapting. The UN is not the only multilateral forum that matters and it would be a shame if we were to allow that impression to prevail. Of course the UN matters in economic terms and in what it is able to do through its various branches and diplomatically, hut it has much to learn from the developmental changes of other organisations.
The noble Lord, Lord Chalfont, made an important point about NATO's role. NATO is indeed an example of how reform is working. At the Prague summit in November 2002 NATO leaders agreed to transformation of the alliance to meet new threats, including the threats posed by WMD and terrorism. NATO agreed to develop more flexible forces, able to deploy more rapidly wherever they are needed. As the noble Lord, Lord Hannay, said, the recent decision to enhance NATO support for the International Security Assistance Force in Afghanistan exemplifies NATO's relevance and its ability to take on new tasks. So NATO is already engaged in a process of reform.
We are also working hard to match the EU's undoubted economic and political muscle with a security role, without of course cutting across NATO's role. We have put into place institutional arrangements which guarantee that the EU will not duplicate NATO's assets and will act only when NATO as a whole is not engaged.
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The EU operation in Macedonia, which took over from NATO on 31st March this year, is a good demonstration of how the EU can have a real security role in an area where it is already very active on other fronts. The integrated EU effort in the Balkans has also been strengthened by the deployment of a civilian police operation under the new ESDP arrangements.
More widely, we are working to increase the EU's influence on the international stage through a strengthened common foreign and security policy. I recognise that for many noble Lords this is a controversial matter. The aim is not that we should always agree on every aspect of foreign affairs or give up our right to pursue a national policy. But where we do agree, we should be able to exert greater influence by working together on the world stage.
I agree with the noble Lord, Lord Chalfont, that what happened over Iraq was a blow to European decision taking—of course it was—but Iraq is not the whole picture. Noble Lords should reflect on what the noble Lord, Lord Hannay, said about the recent example of the EU contribution to the publication of the road map. The EU, in partnership with the United States, Russia and the UN, has played a crucial part in offering at least some hope of a way forward in the Middle East.
I agree with my noble friend Lord Desai and the noble Lord, Lord Howell, that we need new structures. But we can have them through reform of existing structures if we have the courage to reform them properly. In the case of the EU, both the unprecedented expansion through the accession of other countries and the discussions on the convention will provide us with further means of doing so.
As to regional organisations playing an increasing role in the maintenance of international security, in our own region the OSCE is a very good example of an organisation that has adapted to a changing security agenda. It did so in meeting the challenges in the Balkans. It now takes a more comprehensive approach to security, addressing the protection and promotion of human rights and fundamental freedoms, economic and environmental co-operation as well as more conventional military issues.
This is not a question of Europe v. the United States or the countries of the Middle East. Multilateralism is growing in the world in the form of evolution of regional bodies. I ask your Lordships to reflect on that. Look at what is happening in Africa. The African Union, established last year, has an explicit mandate to maintain peace and security among its members. Its intervention in Burundi is a sign that it will take this responsibility seriously. Similarly in West Africa, ECOWAS is playing a major role in maintaining the fragile peace agreement in Côte d'Ivoire.
I ask your Lordships to think about Latin America and Mercosur, which is well on its way to building a single market in an area four times the size of the continent of Europe, with a potential market of 200 million people and a joint GDP of more than a trillion US dollars.

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I ask your Lordships to look into Asia and the UN-ASEAN agreements and dialogues that we have going there with summits, inter-regional links, and discussions on important issues such as HIV-AIDS. It is important to look not just at Europe, the United States and the Middle East, but at the whole of the rest of the world and the way in which those countries build multilateralism through their regional relationships.
Let us consider, too, the important organisation of the Islamic conference, which promotes solidarity among its 57 members and consolidates their cooperation in economic, social and scientific fields. Again, that is a very important issue.
I am pleased to say that my noble friend Lord Desai, the noble Lord, Lord Howell of Guildford and the noble Lord, Lord Haskel, concentrated very heavily on the World Trade Organisation. At Doha, WTO members agreed that the new trade round should result in benefits to all member countries. Surely the international community learnt some lessons from what happened in Seattle. A great deal of work was done to get this round launched. I agree with my noble friend Lord Haskel, to whom I am grateful for his support, that we have a testing time ahead. The agreement that we are seeking is vital, not just for us in the developed world, or for those in emerging economies, but for developing countries.
Most of your Lordships talked about the importance of tackling poverty. If this trade round can only halve the tariffs in the world, we could increase world trade by 400 billion dollars. The World Bank has said that 150 billion dollars of that would be trade with developing countries—a sum that is three times what the whole world spends on aid. Trade is a much better, long-term, sustainable answer than just giving aid, as my noble friend Lord Haskel recognised.
My noble friend Lord Brett was right that millions of people around the world do not have access to much of what we all take for granted. A debate such as this would seem very far from their daily lives. Their agenda is about food, water, fuel and health.
However, the key, as pointed out by the noble Earl, Lord Sandwich, and referred to by the noble Baroness, Lady Williams, is agriculture. The noble Baroness was quite right. Of course, the United States, Japan and the EU must all address the issue, but let us be frank. The EU is the worst offender. We subsidise our agriculture more than any other trading bloc in the world. We subsidise every cow in Europe to the tune of two dollars a day. We subsidise—give in aid—one dollar a day to the 1.8 billion people in the world who do not have enough to eat. That is a disgraceful statistic.
I am sorry, but I cannot agree with the noble Lord, Lord Beaumont of Whitley. I think that WTO is the way to change that position, not a way of sustaining it. It is the one mechanism that we have that will make a difference. I agree so strongly with the noble Earl, Lord Russell, about not reverting to protectionism. I hope that his speech will be read by many of our friends in Europe.
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We have talked about the international financial institutions, which have a very important role to play, as evidenced by the remarks of the noble Lord, Lord Dahrendorf. The millennium development goals give a clear mandate for working to eradicate poverty.
The UK is very active in the financial action task force and similar regional bodies such as the eastern and southern Africa anti-money-laundering group in promoting international anti-money-laundering standards. Those are important points about which I have to speak briefly, as I do about the important role of the OECD on issues of bribery and what individual governments do to try to deal with corruption at home.
I was taken by the argument of the noble Lord, Lord Hannay, about opening up the G8 to developing countries. I agree with much of what he said. He may be interested to know that developing countries are being asked to the G8, and so too, is the director general of the World Trade Organisation.
I cannot close without saying something about the importance of the Commonwealth. I think that it is doing rather well. It is already engaged in the process of transforming its international role following the 1999 call by the Prime Minister for a high-level review. The result has delivered a 21st century Commonwealth that is leaner, better focused, more effective, and which has not duplicated the work of other international organisations. It is important to make that point.
I shall write to the noble Earl, Lord Russell, about the IPR report. I agree with him that there is more to be said about that, but I hope that he will forgive me, as he was the only one of your Lordships to raise that issue, if I deal with it separately in a letter, which I shall place in the Library.
I shall say something in closing, not from the brief given to me by the department, but from my own thoughts. That is what is called courageous. Of course the noble Baroness, Lady Williams, is right. There is a new situation and it is enormously difficult for us to focus on how to make our multilateral organisations work better, accurately to reflect what the nations of the world think, yet being able to deliver. Although the noble Lord, Lord Howell, addressed that point, he was one of the few of your Lordships who did so. There is a problem about delivering on fine words. The noble Lord is raising his eyebrows—I do not mean his fine words, but the fine words of the international community.
On occasion the international community talks big but is not prepared to follow through on some of the issues. I hope that in trying to look more broadly than the United Nations, NATO and the institutions that are closest to our hearts, together with the Commonwealth, we can recognise that multilateralism has taken a formidable hold. Countries are coming together and seeing what can be done if they open the door to engagement instead of slamming it and saying that as they do not agree, they will not talk.

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I refer to the regional organisations in Asia and Africa. I could have said what was happening in the Caspian; I mentioned Latin America where we are seeing a move towards multilateralism. Working with that is hugely important. I thank your Lordships for a tremendously interesting debate.
6.27 p.m.
Baroness Williams of Crosby: My Lords, it is often a pleasure to take part in debates in the House of Lords, and occasionally it is an absolute privilege. This was such an occasion. For me, it was a great privilege to be here and to listen to your Lordships. I believe that there were some remarkable insights and ideas, which would take far too long for me to repeat, but I am grateful to have heard them.
I should also say that in every possible respect our new maiden Peer, the right reverend Prelate the Bishop of Newcastle, rose to the challenge of that standard with total and complete competence and confidence.
There are not many Ministers of any party who have the command and understanding attributed rightly to the noble Baroness, Lady Symons. She and I do not always agree, but today, as on many other occasions when the entire world was thrown at her, she caught it and dealt with it in the most remarkable and competent way. As she spoke so passionately at the end, having thrown away her brief, which is something that she can do easily at any time, she indicated that she wanted us to suggest ways in which we could deliver on the fine words. I shall commend to her in a very quiet voice the thought of my noble friend Lord Wallace of Saltaire when he suggested that it was a matter that could be considered by a Lords Committee as there is great experience and competence in this House.
Finally, it was a great pleasure to pick up the bouquets from all sides of the House about the subject of the debate, but I admit in all humility that the original inspiration came from my formidable and noble friend Lord Roper.
I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Northern Ireland Assembly (Elections and Periods of Suspension) Bill
6.30 p.m.
Standing Order 47 having been dispensed with, Report received.
Clause 1 [Election of next Assembly]:
Lord Williams of Mostynmoved Amendment No. 1:
Page 1, line 10, leave out subsection (3) and insert—
"(3) Section 96 is amended as follows—

(a) in subsection (2), after "section" there is inserted "31(2),",

(b) after subsection (2) there is inserted—

"(2A) Paragraph (b) of subsection (2) does not apply to an order under section 31(2) if the order declares that the Secretary of State considers it to be expedient for the order to he made without the approval mentioned in that paragraph.
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(2B) An order containing a declaration under subsection (2A)—

(a) shall be laid before Parliament after being made; and

(b) shall cease to have effect if it. is not approved by a resolution of each House of Parliament before the end of the period of 28 days beginning with the date on which it is made.

(2C) Subsection (2B)(b) does not prejudice the making of a new order.
(2D) In calculating the period of 28 days mentioned in subsection (2B)(b), no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.""
The noble and learned Lord said: My Lords, earlier, in Committee, there was a little confusion about the numbering of amendments, for which I was entirely responsible.
To make things perfectly clear—I have dealt with the substance of the matters—I must point out that there are now two amendments in my name for Report. Amendment No. 1 will insert the affirmative resolution procedure into Clause 1, which grants the power to call elections. Amendment No. 2, which refers to new Clause 7, will change the date at which the power to call elections must be renewed or else lapse from 31st December to 15th November, as I explained fully in Committee. I beg to move.
On Question, amendment agreed to.
Clause 7 [Renewal of powers under section 1]:
Lord Williams of Mostynmoved Amendment No. 2:
Page 6, line 5, leave out "31st December" and insert "the end of 15th November"
The noble and learned Lord said: My Lords, I have also explained this matter to your Lordships. I think that your Lordships were pleased. I beg to move.
Lord Glentoran: My Lords, this is as good a moment as any to wind up the debates on the Bill. I shall take the opportunity to do two things. First, I say, once again, a big "Thank you' to the noble and learned Lord the Lord Privy Seal, the Northern Ireland Office, the officials and all who worked with us. I hope that I may be so hold as to include the other parties—the Liberal Democrats and the Unionists—with whom the noble and learned Lord and I have worked hard over a short time to get the Bill to a situation with which all of us in the House can, I hope, be satisfied. As has been said, none of us wanted the Bill, but, at this stage. we have got the best that we could have hoped for. We must hope that it is not too long before the Bill is in the wastepaper basket and is no longer in use.
Having said that, I shall raise one other subject. There are many things going on in Northern Ireland. Both Governments have committed themselves to quite a lot of changes, and some of them give us quite a lot of concern. It is hard to know where the legislative programme might go, what the Government feel they need legislation for and what they will go on doing without legislation in the devolution situation. If the noble and learned Lord the Lord Privy Seal could give us some clarification on that, I would be grateful.

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Overall, it has been a satisfactory debate. It has been short and sweet in your Lordships' House—your Lordships will be delighted about that—but it has often been long and arduous in various corridors and offices.
Lord Smith of Clifton: My Lords, I echo what the noble Lord, Lord Glentoran, said. There has been some hard pounding over the past week or so. We have made the best of a bad job, and I echo the comments about the mutuality that was shown.
Enough plaudits have been given to the noble and learned Lord the Leader of the House, but there is one attribute that is rarely mentioned but which shone through in the past 10 days—his intellect. It is at the service of your Lordships' House and is a great asset.
Baroness O'Cathain: My Lords, I want to follow the comments of my noble friend Lord Glentoran and say something about the current situation in Northern Ireland, in which we do not have an Assembly. Until now, we have been taken into the thinking of the Government by the noble and learned Lord the Lord Privy Seal, and I trust that that communication and consultation will continue. It has helped us all to understand what has happened in the past few weeks. I thank the noble and learned Lord for keeping us informed.
Lord Rogan: My Lords. I wish to be associated with the words of the noble Lords, Lord Glentoran and Lord Smith of Clifton. I heartily agree with what they said.
Lord Williams of Mostyn: My Lords, I am very grateful, not just for myself but on behalf of my Private Office—actually the indefatigable Nicky Daniells—and all our colleagues in the Northern Ireland Office.
We have done useful work. With specific regard to what the noble Lords, Lord Glentoran and Lord Smith of Clifton, and the noble Baroness, Lady O'Cathain, asked of me, I will do my very best to keep the House as fully informed as I can. I know that. in the past, your Lordships have welcomed the letters in which I have been able to set out a legislative timetable. even if it was on a tentative basis. I undertake to continue to do that.
My Lords, where there is discord, let us bring harmony—
Noble Lords: Oh!
On Question, amendment agreed to.
Lord Williams of Mostyn: My Lords, now for the harmony: I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Williams of Mostyn.)
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On Question, Bill read a third time, and passed, and returned to the Commons with amendments.

Hereford Markets Bill [H.L.]
6.36 p.m.
Lord Livsey of TalgarthMy Lords, I beg to move that this Bill be now read a second time.
Before going into the detail of the Bill, it would be apposite for me to give noble Lords some background to the need for the Bill. First, there is the nature of Herefordshire. I think that it is the best county in England, but, as a Welshman, I would say that. It is an excellent rural county. It has excellent pasture land that fattens cattle and produces stores. It is varied in its cropping. It produces cider, hops and fruit in great abundance.
My association with Herefordshire goes back a long time. Although I lived just on the Welsh side of the border when I was a child, I have fond memories of Hereford town and Hereford cattle market as it was in those days. Over 40 years ago, the great ambition of nearly all Breconshire farmers was to farm in Herefordshire, because of the fertility of the soil. It is a very productive county and produces excellent products.
Hereford markets bestride the rural and urban part of the county. Hereford is a true county town, and it services the whole county. The livestock market was reconstructed in the 1960s, and it now lies alongside the ring road in Hereford. The markets are open on Wednesdays and Saturdays. There is also the butter market in the market hall in High Town, as well as farmers' markets. I can remember famous election campaigns in Hereford from many years ago, including one that the late Robin Day contested. There were so many fireworks that he lost his voice, which was the first time that I could remember that happening—probably the first and the last time.
The livestock market occupies what is probably the largest space in the market—3.2 hectares—and is the biggest generator of traffic in New Market Street, which the market lies alongside. It is the cause of much congestion. On that side, there is also an open market with traders and tenants. The market was founded by royal charter in 1597 by Queen Elizabeth I. the last of the line of Tudor monarchs. Indeed, this is a very historical situation. The market is now regulated by local legislation. by old Acts put in place mainly in the 19th century. The Hereford Improvement Act 1854 empowers the council to maintain and regulate markets and fairs in Hereford and to provide market facilities. It also incorporates the Markets and Fairs Clauses Act 1847, which contains general regulatory powers for markets. The Food Act 1984 is the modern equivalent. It gives the council the power to stipulate the days and times of the markets and fairs.
The Hereford Improvement Act 1872 extends the council's power to provide market facilities. The Hereford Order 1927, which is contained in the Ministry of Health Provisional Orders Confirmation

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(No. 9) Act 1927, updated the provisions in relation to the market tolls. Finally, the Hereford Corporation Act 1936 gave the council power to lease stores, shops, and so on, and to use the market facilities for other purposes. It also updated the financial and animal health provisions applying to the market.
The Hereford market is run by the Hereford Market Auctioneers—HMA—which is made up of two companies. Its lease on the market expires in 2005. The proposal is for the new market to commence work by 2006. Let me make it clear that this is an enabling Bill which paves the way for the possibility of local action to be taken as far as the market site is concerned.
The market's turnover is a six-figure sum and approximately 50 full-time equivalent jobs are involved with the market. Unfortunately, during the last decade, the amount of livestock going through the market has fallen by 31 per cent and the cattle throughput by 78 per cent. This is, in the main, due to the impact of the foot and mouth disease outbreak which caused a severe decrease in livestock numbers. In fact, the market was closed for normal trading for nearly 12 months but was used as a centre for collecting livestock.
There are severe limitations on the market site and many constraints. The lorries coming into the market, which is in the middle of Hereford, are becoming larger and larger. Very large articulated lorries queue up to get into the market, and those queues go back on to the ring road. One of the reasons for this is the Defra hiosecurity measures resulting from the foot and mouth outbreak of 2001. The lorries have to stop at the market gates, which causes substantial delays and back-up on the ring road.
When the market is in action on a Wednesday, the air quality, which has been measured, is not at all good—in fact, it is quite poor. Elevated levels of NO2 are found in the atmosphere on Wednesdays.
The other related problem is that quite a lot of competition comes through the market, which has had an impact on the number of livestock coming forward where new markets have been built. A new market has been built in Ross-on-Wye, another at Brecon and another at Ludlow, which is particularly successful.
The council has conducted one study and is in the middle of a second one. The first study was carried out in 1997 by Donaldsons, the consultants. It looked at traffic generation and congestion as a result of the existing market site and concluded that it was not satisfactory. Indeed, the animal welfare facilities in the market were not up to standard either and there were considerable delays and costs. When consulted, the auctioneers concluded that the present site was inefficient for modernising the livestock facility. The 1997 study concluded that relocation of the market was the best option, probably west of the city. There are many options in this regard; there has not been any process yet, and it is far too early for the council to select a site.
The redevelopment of the existing site is the other aspect. The New Market Street site, where the council has freehold and the market is situated, adjoins the
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Courtyard Theatre and Hereford United Football Club ground in the well known Edgar Street. They are all within the Advantage West Midlands rural regeneration zone from which assistance can be given for regeneration on this site. It is not just the market site that we are considering—the adjoining site is being considered for regeneration and redevelopment as well. It is a considerable area if the two are put together.
A major master planning exercise is being carried out by Herefordshire council, funded by Advantage West Midlands rural regeneration. This is due to be completed by August 2003. The objective is to regenerate an important part of the city of Hereford, to drive growth in all sectors of the local economy, to bring real benefits to the residents of Herefordshire—the entire county—and to provide a sub-regional service and employment centre on the present market site.
The council's draft unitary development plan contains proposals for leisure facilities for commercial developments which combine new homes associated with those commercial developments, new office space and re-establishment of the canal basin with connections to the rest of the canal network and, indeed, an amenity for the whole county. I must make it absolutely clear that the council is looking at the possibility of only the livestock market going outside the city of Hereford. The rest of the markets—the open market, the Butter Market and the farmers' market—will remain within the city.
The council's unitary development plan identified desirable features for a livestock market and concluded that there were 46 possible sites. I shall not go into any of that, because this Bill is an enabling measure. It is up to the democratically elected members of the council to decide their own processes and put them through.
The main points being addressed are a site's capacity to meet the minimum size requirements and to deal with the expected animal throughputs of a new market. It should be available or capable of being acquired at or close to agricultural land value with limited hope value attached. Its location should maximise ease of access by sellers and have regard to likely future livestock catchment areas and populations, and maximise the ease of access by buyers to the major highway network. The new site should be close to or within Hereford city urban area as well as capable of convenient and low-cost connections to existing highways. It should also be suitable for the development proposed without unduly detracting from the amenity of adjoining land uses or other established or proposed planning designations. Ideally, this will be identified through the UDP process.
In fact, of the 46 sites identified, not one site actually fully met the features, so a criteria-based policy was put in place and written into the council's unitary development proposals. That included the following factors: that the proposed site was restricted for use as the new livestock market and necessary ancillary uses

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only—in other words, it is only for use as a livestock market; that the site is of a size and nature capable of adequately accommodating the identified needs of the livestock market, and will not have a detrimental effect on the surrounding area or its immediate setting; that the site is well related to the primary road network, where the development will not create an unacceptable impact on the highway network and satisfactory access can be provided; and that the site can be adequately serviced by the provision of infrastructure to include the necessary supply of water and for the satisfactory disposal of sewage and trade effluence in surface water. The scheme must include proposals for sustainable drainage and incorporate measures to ensure that the run-off does not contaminate local watercourses. The built development, car-parking and lairage should be located and of good design to respect its surroundings and character, in order to protect local amenity and minimise landscape impacts. Finally, a comprehensive and suitable landscaping scheme is provided to help assimilate the development into the surrounding area and to safeguard landscape character.
The development, in fact, would be limited to the sales rings, pennage, lairage, car-parking, and ancillary use such as agricultural supplies and veterinary and financial services. The only retail use that would be permissible would be the sale of goods related to agricultural businesses alone. I should like to emphasise that fact.
Following those processes, it was clear that many of the potential sites for the livestock market's relocation would be outside the urban area. However, the council's consideration of these sites threw up a legal difficulty, which explains the need for this Bill. It is because so many sites are outside the urban area that I am proposing the Bill to your Lordships' House. The original charter of 1597 stipulates that markets must be held within the city of Hereford. Therefore, the council could not move the market outside the Victorian city boundaries without the enactment of this Bill. The Bill allows for the relocation of the market outside the city.
The Bill does not take away the council's duty to hold the markets; that still applies. Nor does it give the council the power to move the markets to a particular site. Full planning permission, environmental and other consents will need to be obtained before the livestock market can be moved. The Bill allows the council to consider other sites for the market outside the built-up area.
Clauses 1 and 2 simply contain citation, commencement and interpretation provisions. The operative provisions are Clauses 3 and 4. Clause 3(1) confirms that the market rights remain with the council, notwithstanding the repeal of the old enactments. Clause 3(2) updates the public legislation applying to the markets by making them subject to the provisions of Part III of the Food Act 1984, which governs most local authority markets. Clause 3(3) restates the council's powers to hold the markets,
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provide and improve facilities for them, and enter into agreements for others to run the markets on the council's behalf.
Clause 4(1) gives the council the power to relocate the city's markets anywhere within Herefordshire, replacing the council's current power to relocate the markets anywhere within the city. That power is subject to limitations, including protection under Clause 4(2) for anybody else in the county who has market rights, which safeguards the interests of all the other market towns in Herefordshire. There is a requirement under Clause 4(3) to consult stakeholders who might be affected by relocation.
Clause 5 repeals the old local Acts governing the markets, so that they are regulated entirely by the Bill and the charter. As a local authority, the council had to pass a resolution under Section 239 of the Local Government Act 1972 to promote the Bill. That resolution was approved unanimously on 1st November 2002. A further resolution confirming the promotion was passed unanimously in January. That was unanimous by all political parties on the council. The Bill was then deposited on 27th November and the ordinary process of advertising and giving copies to government departments took place. The examiners held that the Bill complied with all the relevant Standing Orders on 18th December 2002, and it received its First Reading on 22nd January 2003.
After a Private Bill such as this is deposited, there is a period for people who believe that they will be affected by the Bill to petition against it. That gives them the opportunity to be heard by the committee considering the Bill and to call evidence against it. No petitions were lodged against the Bill during that period. The scene was therefore set for the Bill to receive a formal Second Reading, which was briefly put down for 19th March. However, the council then learnt that the noble Lord, Lord Temple-Morris, wished to raise some matters, and it was agreed to hold this debate.
I understand that the noble Lord has met with the agents for the council and that they have had the opportunity to discuss some of his concerns with him. I shall listen carefully to his remarks. I hope that the contents of my speech may assuage him.
As I have already said, the passage of the Bill will not give the council the power simply to relocate the market as it sees fit. The process that will take place as regards the council is that there will be a unitary development plan, which will be revised after legislation. The revised U DP will be published, and it will then be subject to scrutiny by the public. There will be a public inquiry, and the planning process by the council will follow.
The redevelopment proposals, in fact, will read as follows: first, to demonstrate that they provide a significant overall benefit to the vitality and viability of the city centre as a whole; secondly, to include provision for local government offices and for the retention or relocation of existing stall markets to a suitable site within or adjacent to the city centre; thirdly, to be prepared on a comprehensive basis,

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treating the site as a whole; fourthly, not to prejudice the achievement of the plan's town centre and retail strategy; fifthly, to provide a high standard of design, merited on the prestige location—there is an excellent development just the other side of the ring road that really needs support in making the area more attractive; sixthly, to ensure that safe, effective and attractive pedestrian links are provided to the city centre and to the Courtyard Theatre and football club to the north. This is a comprehensive development to improve the centre of Hereford, to respect the historic fabric of the area and to provide for the retention and beneficial use of the listed Market Tavern, which should be integrated into any scheme. I have visited the Market Tavern on numerous occasions when attending the market in the past.
I should like to record the apologies of the right reverend Prelate the Bishop of Hereford, who would very much have liked to attend this debate. He had to be in Shrewsbury today. However, in a letter to me, he said that,
"most Herefordians like the market and want to keep it".
He says that they have no attachment whatever to the ugly buildings from the 1950s and 1960s on the market site. Indeed, those building are,
"old-fashioned, grubby and worn out".
It is not an attractive site to visit. He went on to say that although it is important that the butter market and the farmers' market are kept, the cattle market could better perform its function at an out-of-town location. I have tried to summarise his views.
When the council comes to appraise any potential site through the planning process, it will have to do so publicly and reasonably, as any local authority would. The council's decision would be subject to scrutiny not only by local council tax payers, who would have the ultimate sanction of voting to remove any councillor who favoured a policy that local people did not, but also potentially by judicial review by the High Court. Any new livestock market site chosen by the council would then be subject to consultation with market traders and other stakeholders in accordance with the safeguards put in place.
I realise that I have only a limited time to speak and will finish soon.
Following a UDP inquiry and adoption of the plan, the council will be able to make a decision to apply for planning permission to relocate the market to a particular site. In making that decision, the council will again, through the planning process, be subject to scrutiny by the court and local opinion as to the reasonableness of its decision, including whether it took into account all the relevant responses to the consultation exercise.
As I mentioned earlier, a proposal to relocate the market to a particular site will receive planning permission only if it meets the conditions set out above or the policies that replace them in the final form of the UDP. The application for planning permission will have to be publicised and affected stakeholders will be able to make objections. An environmental impact assessment and traffic impact assessment will also
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have to be carried out and will be material considerations when the decision on whether to grant planning permission is made. Indeed, in the final analysis, there is a possibility that the Secretary of State will decide to call in the application. Therefore, as I said, there may be a public inquiry.
The council will consider any site that is available or readily capable of acquisition at or close to agricultural land value.
Lord McIntosh of Haringey: My Lords, the noble Lord said a few minutes ago that he had very little time left. He has minus 12 minutes of time left.
Baroness Byford: My Lords, I did not think that the debate was time limited. It has come in the normal order of business. Am I wrong about that?
Lord McIntosh of Haringey: My Lords, it is not time limited, but we have a convention that speeches should not exceed 15 minutes.
Lord Livsey of Talgarth: My Lords, I understand and respect what the noble Lord says. If I may humbly say so, however, these are unusual circumstances for a Private Bill. I shall endeavour in the next minute and a half, or even sooner, to sum up.
This Bill is both necessary and timely. It is necessary because the livestock market cannot reasonably carry on or refurbish on its current site, and suitable sites outside the city limits cannot be considered without this Bill. The Bill is simply a paving measure to enable that to happen. It will also enable all areas of Herefordshire to benefit. Farmers from all over the county will benefit from a more accessible market. People from all over the county will benefit from the redevelopment of and new facilities in the city centre. I therefore have much pleasure in moving this Second Reading. I should like to thank the parliamentary agents and legal officers of the council for their help. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Livsey of Talgarth.)
7.5 p.m.
Lord Temple-Morris: My Lords, it is a pleasure to follow the noble Lord, Lord Livsey of Talgarth. I say in his defence, as the result of a recent intervention, that it was important that we heard him on this matter. Perhaps other noble Lords do not quite realise that, by the council stating its case at this time and in this House, this important Bill will be facilitated generally and in another place. I therefore thank the noble Lord for his intervention. As to whether he went against a convention, as a relative new boy I know riot. However, this debate is certainly not time limited, as the noble Baroness, Lady Byford, has just said.
The noble Lord and I go back a long way. Indeed, our presence here on this particular issue occurs because for many years we were neighbouring Members of Parliament. I was grateful to hint for his kind words about Herefordshire, spoken from the

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depths of Wales. I sympathise with those depths because, as he well knows, I was for some years his constituent. I miss his calm hand of guidance on my parliamentary affairs, although it is nice to be in your Lordships' House with him. It will not surprise your Lordships to know that we have had a constructive joint approach to this Second Reading.
I also, incidentally, welcome the presence on the speakers' list and in the House of the noble Baroness, Lady Byford. I appreciate that her title comes from another place and another county. She may not realise it, but the name Byford applies to a particularly beautiful hamlet about 10 miles west of Hereford. I do not want to alarm her, but it is not far from a possible site of the new cattle market. We would welcome her presence.
My constituency interest in your Lordships' House is governed not only by my long period as Member of Parliament for Leominster, but also by the wishes, views and understandable concerns of my successor, Mr Bill Wiggin, now Member of Parliament for Leominster, which he would like put forward in this House. I think that those concerns should be put forward in this House because that will, as I said, facilitate the Bill. However, I shall try to make the points as succinctly as I can. No doubt Mr Bill Wiggin will be amplifying them in another place.
The purpose of this Second Reading debate mainly comes down to the fact that the Bill's ramifications are very considerable. Although it is a simple enabling Bill, as the noble Lord rightly said, it will also have very considerable consequences—some of which the noble Lord has touched on in his considerable speech. However, the purpose of this debate is certainly not to oppose the Bill. My view is that the Bill and the idea that it represents are sound. I believe that the Bill will provide a great opportunity to create a modern livestock market for the county of Herefordshire and for our neighbours in Wales and elsewhere. It is equally vital to redeveloping a large part of central Hereford, which has had some very attractive redevelopment generally in recent years. I think that the proposals really will make it a tremendous city, which in many ways it is already. I say that with some bias because it is my county town and I lived there for 21 years.
It is therefore incumbent on the council—I think that this is important, and it is why I welcomed the noble Lord's speech—to deal with the concerns that arise on the Bill as far as it can, when it can. One must not be unrealistic in pushing for too much, too soon, hut, as and when matters come up, the council has a duty to be as full as possible in its replies, explanations and assurances with regard to future action to those who are understandably concerned. I turn to those major concerns, which are the final group of points that I wish to make.
The first point—which is a local constituency interest point—is the very large financial ramifications of the proposals. As the noble Lord said, we are dealing with the redevelopment of a very large site. In fact, as he rightly said, there are two sites. There is vast
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potential, but also vast expense involved. Therefore, when local people say that we will have new council headquarters and offices, new police headquarters, a library, a cinema, retail outlets and a sports centre, and that the future of the local football team, Hereford United, will be assured for ever, that is all lovely and beautiful. However, I am pleased that serious work is being done by Advantage West Midlands and others. That was a plus factor that I did not know about, but it came out in the noble Lord's speech. We need the flesh to be put on those bones so far as possible, and as soon as possible. We need the necessary reassurances.
I found the noble Lord's words very helpful in terms of the general qualifications for a suitable site. Now may be too soon hut, as and when, any progress on finding a site should be reported by the council. Any previous possibilities should be excluded as soon as possible. A number of sites have got it into their minds that they could be chosen, but we are far from choosing any particular site, as the noble Lord knows.
My next point relates to existing market traders and other markets that operate within the larger confines of the Herefordshire livestock market. I particularly welcome the assurances already given that those markets will continue. Those traders can therefore continue to function in the centre of Hereford. There will be strict limitations on any traders that come on to the new site, as and when.
It is important that at Westminster and in this House we welcome local and democratic control in the matter—that the planning controls and the unitary development plan will apply. Whatever happens with regard to control of the council, the lack of one-party control of the council—I do not want to interfere with sensitivities of the moment in that regard—is an additional safeguard. The provisions cannot be whipped and forced through; they must go through with the broad consent of the council. That is the position at the moment.
This is a large scheme which has great scope and ramifications. I again thank the noble Lord for all that he said. The debate enables me to call on the council to come up with as many details of the scheme as it can, as soon as it can.
7.13 p.m.
Baroness Byford: My Lords, I, too, would like to thank the noble Lord, Lord Livsey, for introducing the Bill. It is the first time that I have ever participated in debate on a Private Bill, so I find myself needing to seek advice. When I come to pose questions, I presume that I should pose them to the noble Lord himself, and certainly not to the noble Lord, Lord Rooker, which would not be fair. It is unusual, but I shall ask questions on that basis.
My reason for taking part in the short debate stems from my concern about the closure of livestock markets over recent years. The Hereford livestock market has played an important part as a centre which sells a large number of sheep in particular, but also cattle, many of which are reared in Wales and come across the border to be fattened. Having been in

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Hereford earlier this year, in March, I am aware of the site and its being set in the heart of the city. I think that the noble Lord referred to a 3.5-hectare site, hut the whole site is some 100 acres in size. It is very valuable, and I can understand the financial attraction of relocating the market elsewhere and developing the site for other purposes, to many of which the noble Lord referred.
The proposals have great ramifications, and will make a difference to local people. I am sure that the noble Lord will accept that some concerns are being expressed locally. I want to put several questions to him. First, the Explanatory Memorandum states that:
"The location, condition and physical constraints of the existing market site off New Market Street, together with the application of modern regulatory requirements, render that site ill-suited for the purposes of the livestock market".
Was a cost analysis carried out? Was it possible to upgrade the present site to meet the new requirements?
Secondly, how much consultation has taken place and over what period? Was a public meeting held to consider the proposals? Thirdly, presumably the operators of the market, businesses and smallholders have been consulted in advance. Have there been any objections—I understand that there have—to the proposals for the market to be moved elsewhere?
Fourthly, on to which site will the market be moved? The noble Lord spoke of 46 possible sites. I find it rather odd to introduce the Bill when we do not have a site to which the market will be moved. I expect that he will respond to me on that. Is the council confident that the new site, whenever it is settled, will be a financially viable unit in the future? The noble Lord referred to the fact that fewer animals are going through livestock markets following the foot and mouth outbreak, and that obviously has longer-term implications, because there are other cattle markets in the area.
Fifthly, if the site is out of town, is the council confident that the smallholders and other agriculture-linked businesses will be content to move to the new site? Have they expressed any concerns? Sixthly, what is the current site worth? Will the money raised by the sale of the livestock market be ring-fenced to pay for a new market? It is essential that we have some direction on the future finances of the new market.
Seventhly, what research has been carried out on the long-term viability of livestock markets, bearing in mind the Government's desire to restrict animal movement to lessen the risk of disease spread? Eighthly, has the council undertaken research into the possible reduction in the number of people coming to the current market who often then spend time and money in Hereford? It is a meeting place. Has that been considered a relevant factor or is it of no consequence? Ninthly, at line 24 of page 1, subsection (8) maintains that the requirements of Section 239 of the Local Government Act 1972 have been observed. What did they include?
On page 3, Clause 4(1) states:
"The Council may from time to time alter the location of the markets to any place or places within the district",
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but I understand that it is proposed to move the livestock market "out of town". There is no consideration of keeping the livestock market within the town, although it will obviously fall within the district.
The Bill requires the council to consult in advance before moving markets to a new site. If a new site has not been established, are we not putting the cart before the horse? Does not the new site have a bearing on the proposals? A new site could be chosen by the council, but those who use the current livestock market may not like the site or think that it will work. That seems odd.
Am I right in thinking that a Bill to move the site was proposed, but that the Government objected? I have a copy of a letter from Tony McNulty MP, Parliamentary Under-Secretary of State, dated 28th January 2003. Its last paragraph states:
"In my opinion the promoters have failed to undertake an adequate assessment of the compatibility of their proposals with European Convention on Human Rights in respect of clause 4(1)".
What has the council done since that letter was received to remedy that position? Have changes been made, or is in fact the same Bill being put forward today?
I am sorry that the Deputy Chief Whip was a little agitated, but the move is hugely important. Hereford is very much a focal point for Herefordshire. Having visited Wales last year and been to Hereford, and having gone hack again this year, I think that the Bill is important and I am very glad to have had the opportunity to ask the questions that I have asked tonight.
7.20 p.m.
Lord Beaumont of Whitley: My Lords, I thank the noble Lord, Lord Livsey, for explaining the contents of the Bill so fully. With regard to the suggestion from the Government Front Bench, in 35 years in your Lordships' House I have never believed that your Lordships wanted the Second Reading speech of the mover of a Bill to be time limited. I hope that that is so because it would be totally wrong to do so.
In contrast to the 11 questions posed by the noble Baroness, Lady Byford, I have only one. A Bill such as this rings alarm bells with all environmentalists. We have experienced market Bills. The Hailsham market Bill presented a rather nasty deal whereby a supermarket was offering inducements to the local council to move the market in order that it could build a branch in the middle of the town. I am pleased to say that your Lordships managed to knock that Bill on the head.
I would never suspect my former noble friend Lord Livsey of being a party to such a thing. The purposes of the Bill as he has explained them, and my researches before this Second Reading debate, have led me to believe that such a suspicion would he wrong. However, perhaps in winding up he could put it firmly on the pages of Hansard that no such deal is under way and that there is no proposal to build supermarkets in the centre of the town.

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I should like those assurances, but with that I give full support to the Bill.
7.22 p.m.
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, I shall take just a couple of minutes. The noble Lord, Lord Livsey, has made this such a major debate, according to my noble friend Lord McIntosh, that I want to put a couple of things on the record. As this is a Private Bill, the Government do not speak in support or against, but their views, brief as they are, ought to be placed on the record. Following what was said by my noble friend Lord Temple-Morris, I hope that the House of Commons will not have to put aside three hours of prime debating time on the Floor just so that the Member for Leominster can make the same points as my noble friend. I consider that to be an absolute waste of parliamentary time because no one is opposing the Bill.
The Bill is simple: it frees Hereford District Council from a restriction in an antiquated charter. The Bill contains safeguards about consultation; Herefordshire cannot move markets to a location where they would infringe the rights of other markets in the district; and—this needs stating—as in any new development, the relocation of the market would be subject to the ordinary planning procedures. There is nothing in this Bill that pre-empts any planning decisions.
Finally, on the point raised by the noble Baroness, Lady Byford, it is true that the Government initially considered that the agents' compatibility assessment of the ECHR implications of the Bill was inadequate. The Government are not required to take a view on the implications themselves. However, following further discussion with the agents, the Government are content that the assessment was adequate.
I need not go into further detail: our concerns were removed through discussions with the promoters. On 6th March, Tony McNulty made a statement to another place to that effect. I regret that that has not been transmitted to the noble Baroness and I apologise if we have forgotten. We have a bad track record of keeping noble Lords on the Front Bench informed and I apologise.
I have nothing to say about the general issues the noble Baroness raised about markets because I know from my time at MAFF, when I was dealing with animal health as opposed to welfare, that the issue of traceability is a problem. Many supermarkets buy direct from farms and are bypassing the markets. However, I understand the vitality and importance of markets for social intercourse for farmers. They can put on their best suits, meet and chat, reducing some of the isolation. That issue is not a fundamental part of the policy, but it is one of the reasons the markets are considered so important.
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Like everyone else, I have visited Herefordshire many times both as a Minister and privately on holiday and I have really enjoyed it. But people tell me, "Jeff, don't tell anyone else about us because we don't want it spoilt".
7.25 p.m.
Lord Livsey of Talgarth: My Lords, I thank the Minister for those remarks. I shall refer to them in addressing the questions posed by the noble Baroness, Lady Byford. I thank the noble Lord, Lord Temple-Morris, for his warm welcome and support of the Bill. I well understand the concerns which relate to the possible site.
As the Minister said, this is an enabling Bill. It is for local democracy, as the noble Lord acknowledged, to decide with the council what will happen about the site. It is not my place today to pontificate on any particular site because that is the decision to be made by the council. He referred to the fact that the council is narrowly dependent on a great deal of cross-party support. It is likely therefore that many safeguards will be locked in, but I take on board his remarks.
I can give the noble Lord the reassurance that every market town in Herefordshire has been consulted on this matter by the council and their views have been taken into account. The local economies in those market towns should not therefore be adversely affected by the development and it will not impact on any of their markets.
I want to address in particular the questions posed by the noble Baroness, Lady Byford. I cannot respond to one of them, but I am sure that we will be able to write to her in reply. First, she asked who had been consulted. It is my duty to inform her that interest groups were consulted between October 2002 and January 2003. The groups consulted were the Meat and Livestock Commission; the Food Development Group; the six town councils to which I have referred; the market traders; the tenants; the NFU; the Tenant Farmers' Association Ltd; and the Farmers' Union of Wales. The noble Baroness asked about public meetings. There was a meeting with the NFU which 70 NFU members attended. There was not one single objector to the development of a livestock market outside the town.
The Chamber of Commerce was also consulted in relation to another question the noble Baroness raised; that is, her concern that fewer people might visit Hereford as a result of the moving of the market. The general opinion of all of those canvassed was that there would not be an adverse effect.
As regards the public, the consultants published leaflets in which they asked for responses. The public responded and their views have been taken into account. The noble Baroness then referred to concerns about the location and I repeat what I said in reply to the noble Lord, Lord Temple-Morris. It is for the council to decide what sites will be considered. As I explained during my speech, that will go through the normal processes.

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As yet the cost is not known because it is the subject of the UDP, which does not complete its report until August this year. So, we do not know the details of that. The money will be ring-fenced. The noble Baroness referred to viability. That will be part of the report of DTZ Consulting, to whom I referred, which is at present conducting the consultation. Should the Bill pass through this House and another place, the general public, the farmers and rural dwellers appear to be at ease with what is proposed in principle; that is, that the livestock market be moved.
The Minister referred to the issue of Tony McNulty and I shall not repeat that. The only point I cannot answer is a complicated question. I should very much appreciate it if the noble Baroness would write to me with her question concerning various clauses and subsections of the Bill and what impact they would have. I am not able to answer the question in the time allowed, and I apologise for that.
The noble Lord, Lord Beaumont, asked a fundamental question in relation to the possibility of a supermarket being built on the old market site. The categorical answer to that is "no", that most certainly will not happen; it is not allowed. It is regarded as something which would not assist the sustainability of the area. In that respect, the fact that the other markets remain in the middle of Hereford should ensure quite a lot of market trading.
Finally, I thank the Minister and all those who have participated in the debate. I apologise if I detained the House too long. I was not given instructions about the length of time I could speak. As a relatively new Member—I came in at the same time as my noble friend—I was not clear about that. I apologise to the Minister.
On Question, Bill read a second time, and committed to an Unopposed Bill Committee.

Government Resources and Accounts Act 2000 (Audit of Health Service Bodies) Order 2003
7.32 p.m.
Lord McIntosh of Haringeyrose to move That the draft order laid before the House on 2nd April be approved [17th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move that the draft order laid before the House on 2nd April be approved. This occasion marks the concluding stage of a long dialogue between Parliament and the executive on the powers of the Comptroller and Auditor General. Members of this House will recall passionate discussion of this issue during debate on the Government Resources and Accounts Bill in 2000. That Bill provided for the change from cash accounting to resource in Government.
However, there were vigorous representations both here and in the House of Commons that the Bill should also provide for the Comptroller and Auditor General's powers to be strengthened in line with Parliament's concerns, which centred on three areas:
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first, the present inconsistency in the audit treatment of NDPBs, where, although the C&AG is currently the statutory auditor of about three-quarters of such bodies, the rest are subject to different arrangements; secondly, the fact that public services are now being delivered in increasingly new ways, including through the intermediation of private sector bodies—increasingly, the C&AG needed a right of access to those bodies; and thirdly, the fact that arranging administrative access for the C&AG may give rise to delay.
While the Government had some sympathy for those concerns, they also had concerns of their own about moving in the direction advocated. For instance, on the audit of NDPBs, the Government were concerned that the same level of service as is currently delivered by competitive tender might not be available under the C&AG's monopoly audit. On access, the Government were concerned that extending statutory access could be not only more burdensome for contractors and other parties subject to access but could also discourage them from coming forward to engage as partners in the delivery of public services.
However, the Government concluded that it would be appropriate to include provision in the Government Resources and Accounts Bill for orders which could be used to address the PAC's concerns. At the same time the Government sought to set out some wider considerations and implications arising from any such changes, and therefore invited the noble Lord. Lord Sharman, to review current audit and accountability arrangements in central Government.
The noble Lord, Lord Sharman, reported in February 2001. He broadly endorsed the extension of the C&AG's powers and recommended that the order-making powers should be used to address them. However, he also recognised the need to address the Government's own concerns in that area, and recommended that any new arrangements should be the subject of protocols and other arrangements to maintain service levels and minimise any extra burdens.
The Government accepted the key recommendations of the noble Lord in that area. The Government's response to his report also records assurances endorsed by the C&AG of the kind which the noble Lord recommended on service levels and burdens, and I am pleased to report that the response received a warm welcome from the PAC.
It is clear, I hope, that, with the leave of the House, I am speaking to all three orders. The second and third orders carry into effect the intentions set out in the government response by making the C&AG the statutory auditor of certain non-departmental public bodies where he is not already the statutory auditor, and by strengthening his powers of access. The original orders, which were laid on 6th February, were withdrawn in the light of concerns by the Joint Committee on Statutory Instruments. I am sorry for the inconvenience caused by the need to re-lay the two orders. However, I can assure the House that the

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revisions have not entailed any diminution in the powers of the C&AG compared with the original versions of the orders.
The first order, which I have moved, is also being made under the Government Resources and Accounts Act and is intended to make the C&AG the statutory auditor of the 19 special health authorities, including the Dental Practice Board, which is treated as a special health authority for audit purposes. Together with an accompanying negative resolution order, this order will ease the audit burden on special health authorities and the Department of Health, while maintaining full parliamentary accountability.
The audit of public bodies order provides for the C&AG to be made the statutory auditor of those NDPBs—other than NDPBs incorporated under the Companies Acts—which are required by or under statute to be audited by auditors appointed either by the Minister or the NDPB. The order includes a schedule listing the NDPBs affected and sets out the legislation that is being amended and the amendments to be made. The intention is that the C&AG will become statutory auditor of the NDPBs on the dates shown in the order.
Of the 25 NDPBs affected by the order, five are already audited by the C&AG by agreement. The remaining 20 are currently audited by private sector auditors, and the dates shown in the order for these NDPBs reflect the expiry dates of the auditing contracts.
I should remind the House that the C&AG is already the statutory auditor of most NDPBs, although I should add that a change in the Companies Act will be needed, possibly together with a change in the EU's eighth company law directive, to make the C&AG eligible to audit NDPBs which are companies.
The rights of access order extends the C&AG's statutory access rights for the purpose of his financial audit of all government departments and NDPBs. For that purpose his statutory access will be extended to grant recipients, but excluding individuals receiving social security and similar grants, to registered social landlords, train operating companies and bodies contracted or subcontracted to provide goods and/or services to Government or NDPBs. The order also provides access to the Regulator of the Landfill Tax Credit Scheme. In general the order will have the effect of making statutory the administrative arrangements already established or likely to have been established in the future for access.
The assurances about how the C&AG will use his powers under these two orders are set out in Section 3 of the Government's response to the noble Lord, Lord Sharman. As the response records, the assurances in Section 3 were endorsed by the C&AG. In particular I note that he has undertaken to consult the audited NDPBs and their sponsoring departments on key aspects of the audit, to provide additional audits at their request and to minimise any potential burdens on the bodies subject to statutory access, most of which are in the private sector. I welcome these and the other assurances that he has given.
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On the basis of the regulatory impact assessment which accompanies the orders, the Government are satisfied that on balance these new audit and access arrangements add up to a clear gain for Parliament and the public.
I take the opportunity to reconfirm the Government's policy that the C&AG should have access to the bodies covered by the Audit of Public Bodies Order for the purpose of his value-for-money studies as well as his financial audits. Although the value-for-money access to these bodies will not be statutory, it will be implemented through contract, grant conditions or other appropriate means. Such access will of course be used by the C&AG solely in connection with his statutory value-for-money examinations of public sector bodies, and not for the purpose of conducting value-for-money examinations of the accessed bodies themselves, most of which are in the private sector.
The Government Resources and Accounts Act 2000 (Audit of Health Service Bodies) Order 2003 deals with the audit of the special health authorities and has of course been prepared in consultation with the Department of Health. The SHAs are listed in the annexe to the order. The order is intended to ease the audit burden on SHAs and the Department of Health, while maintaining full parliamentary accountability.
At the moment SHAs prepare their own annual accounts. Those accounts are then audited by auditors appointed by the Audit Commission and submitted to the Department of Health, which prepares separate NHS summarised accounts for each SHA, making changes to ensure consistency of presentation across all NHS organisations and to reflect events which come to light affecting the accounts after the underlying individual accounts have been completed. Finally, the C&AG examines and certifies the summarised accounts and lays them before Parliament together with his report on the accounts.
Plainly, the present arrangements require two sets of accounts to be prepared for each SHA—one set by the SHA and the other set by the Department of Health. Each SHA is, in effect, audited twice—once by auditors appointed by the Audit Commission and then by the C&AG.
By making the C&AG the statutory auditor of SHAs in place of the Audit Commission arrangements, the order will remove the dual audit burden. However, the individual SHAs' accounts will of course continue to be laid before Parliament. The Dental Practice Board, which is treated as an SHA, is covered by the new arrangements.
The companion negative resolution order will discontinue the requirement for the Department of Health to prepare summarised accounts for the SHAs mentioned in that order, which will achieve a resource saving for the department itself. These new audit arrangements for SHAs are intended to take effect for the 2003–04 year and subsequent financial years.

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On the basis of a regulatory impact assessment on the affirmative SHA order and the associated negative order, the Government have concluded that the new audit arrangements for SHAs will bring clear gains in terms of a simplified auditing framework, reduced audit burdens and the maintenance of full accountability to Parliament. I should add that the Audit Commission is content with this change. I commend the draft order to the House.
Moved, That the draft order laid before the House on 2nd April be approved [17th Report from the Joint Committee].—[Lord McIntosh of Haringey.]
The Earl of Mar and Kellie: My Lords, we on these Benches welcome the orders. I am happy to pay tribute to the Government for incorporating the sensible recommendations made by my noble friend Lord Sharman in his report Audit and Accountability for Central Government. I regret that he is unable to be in his place today.
I have two questions for the Minister. In the debate about the report on 13th March 2002 my noble friend Lord Razzall highlighted my noble friend's second recommendation and feared that it would be,
"lost in the realm of Whitehall".—[Official Report, 13/3/02; col. 870.]
The second recommendation was that audit committees for public bodies should adopt audit principles developed in the private sector.
The noble Lord, Lord McIntosh of Haringey, in his response—I am sure he will recall—recognised that this was a valid point despite the difference in organisation of public and private sectors. Does the noble Lord still consider that to be valid? If so, what steps have been taken in the past year to ensure that the second recommendation has been put in place? Furthermore, what are the Government's plans to ensure that this is carried out?
My second question is simpler. It is about Network Rail and its borrowings. There is some confusion about the public sector status of the Network Rail borrowings. Do the orders help to resolve that confusion?
Baroness Wilcox: My Lords, I thank the Minister for his clear, speedy and helpful explanation of the three orders. We on these Benches, as did the noble Earl, Lord Mar and Kellie, for the Liberal Democrats, welcome these orders which enhance the role of the Comptroller and Auditor-General in the auditing of government accounts and non-departmental public bodies.
As the Minister explained, the first order makes the Comptroller and Auditor-General the statutory auditor for 25 non-departmental bodies, of which he already audits five. The transfer of powers for the remaining 20 will occur as the contracts with the
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existing auditors expire. The second order provides the Comptroller and Auditor-General with new powers of statutory access rights in certain cases—such as those that have received grants or those that provide public services—in order to conduct his audit.
The Government Resources and Accounts Act 2000 (Audit of Health Service Bodies) Order 2003 makes the Comptroller and Auditor-General responsible for auditing special health authorities and that includes the Dental Practice Board.
Together these orders move towards a situation where the Comptroller and Auditor-General has greater statutory power. We applaud the Government's response to the report of the noble Lord, Lord Sharman, Audit and Accountability for Central Government. We believe that these measures will create a clearer audit process, while at the same time maintaining—as is essential—full accountability to Parliament.
There is, however, a price to be paid for accountability. That is the burden which is imposed upon the audited bodies. It is vital that these burdens are kept to a minimum—and I am grateful to the Comptroller and Auditor-General for his assurances that he will strive to do that. I can only stress the importance of his keeping his eye on the ball with this issue, and not allow the auditing process to add unnecessarily in time and money to the burdens of those affected. The last thing we want is for the auditing process to cost the taxpayer more money than it saves. Can the Minister give me one last reassurance on the matter, given that we are ready to agree that these draft orders be approved?
Lord McIntosh of Haringey: My Lords, I am grateful to both the noble Earl and the noble Baroness for their reception of these orders. I can deal quickly with their questions. The answer to the question of the noble Earl, Lord Mar and Kellie, about audit committees is that the Government are preparing an audit committee handbook for government departments. We hope to issue that shortly. It will cover the point raised in debate on the report.
On the question of Network Rail, I simply challenge his view that there is any confusion. The Comptroller and Auditor-General's view is that the accounts of Network Rail should be consolidated in the accounts of the Strategic Rail Authority. They will be under generally accepted accounting practice. The order does not affect that issue.
I can gladly confirm to the noble Baroness, Lady Wilcox, that the protocols which have been entered into with the Comptroller and Auditor-General are based on the requirement that there should be no extra expense to non-departmental public bodies or indeed to special health authorities involved in these changes.

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I know it is a long time since the noble Lord, Lord Sharman, reported, but one of the reasons for the delay is that we had to make sure that that was the case and that we could recommend these changes without qualification to the House.
On Question, Motion agreed to.

Government Resources and Accounts Act 2000 (Audit of Public Bodies) Order 2003
Lord McIntosh of Haringey: My Lords, I beg to move.
Moved, That the draft order laid before the House on 3rd April be approved [17th Report from the Joint Committee].—(Lord McIntosh of Haringey.)
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On Question, Motion agreed to.

Government Resources and Accounts Act 2000 (Rights of Access of Comptroller and Auditor General) Order 2003
Lord McIntosh of Haringey: My Lords, I beg to move.
Moved, That the draft order laid before the House on 3rd April be approved [17th Report from the Joint Committee)—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
House adjourned at ten minutes before eight o'clock.

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