Sitting of 16 October 2003

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    International Finance Facility
    Helen Jackson: What support he has received from EU partners for his international finance facility proposal. [132053]
    Mr. John McFall: If he will make a statement on the international finance facility. [132063]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I can report that at the International Monetary Fund Committee meeting in Dubai, which I chaired, the proposed international finance facility—which I am pleased to say has received all-party support in this House—received wide support in principle from other countries, including EU countries. The meetings mandated the IMF and the World Bank to report back in 2004 on such a proposal that, by doubling aid, could halve poverty.
    Helen Jackson: I thank my right hon. Friend for that reply. Does he agree, however, that there was widespread disappointment at the breakdown of the Cancun talks, given that the global disparities between rich and poor remain and, indeed, grow? Will he consider a virtual relaunch of his excellent IFF initiative, so that it can breathe new life into the efforts that the Government are making to reduce those inequalities?
    Mr. Brown: I am grateful to my hon. Friend. As she rightly says, what we need is the equivalent of a Marshall plan for Africa and the developing countries. If the developed countries would agree to it, the IFF would offer $50 billion extra a year to make possible the achievement of the millennium development goals. My hon. Friend is right to say that we must do more. I do not think that I would call it a relaunch, as such—we in this Government do not do such things. First, a series of meetings with the developing countries will take place in the next few months, and I have already addressed a group of African Finance Ministers. Secondly, we will talk to the Churches, which are a very important element in this matter. We will hold a joint conference
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    with the Churches and the president of the World Bank in London in February. Thirdly, we are working with the non-governmental organisations. Another important factor is that I will meet the all-party international development committee in the next few weeks to talk about these issues. In other words, we are working towards securing the public opinion that is necessary to push the initiative forward, in the same way as we pushed forward debt relief.
    Mr. McFall:My right hon. Friend will be aware that I visited Zambia in May. He kindly put me in contact with the Finance Minister and other Ministers there. His IFF is absolutely crucial for countries such as Zambia because the HIPC initiative is not working for it, and the millennium development goals will not be achieved because of the country's massive debt repayments of $6.5 billion. Its repayments greatly overshadow expenditure on health, education and social programmes. Will my right hon. Friend therefore ensure that his initiative gains greater currency throughout the world, because Africa needs it? Also, will he have a private word with me later, as I am having a Christmas appeal for Zambia and am looking for a private donation from him? I hope that he will provide a good example for my constituents.
    Mr. Brown:As Mr. Speaker knows, money does not change hands in this House, but I shall be very happy to back the efforts in which my hon. Friend, who is Chairman of the Treasury Committee, has been involved. In addition, I shall be happy to support the efforts of all campaigners around the country trying to make people aware of the sheer need in the developing countries. At the moment, all the world's aid spent on the health of the typical African child amounts to £2.50 a year. That is simply not enough to prevent the disease and suffering that takes place. We must first recognise the amount of money that is needed at least $10 billion for education and $15 billion for health, and many more millions are also needed for the anti-poverty programme. We must then persuade people that the IFF is a way forward that could release the money in the time that is necessary for achievement of the millennium development goals. I therefore support my hon. Friend's activities, and those of other hon. Members who are very much involved in these matters.
    Andrew Selous: A moment ago, the Chancellor mentioned his discussions with the World Bank. Is he satisfied that that institution is taking the issue of microcredit seriously enough? Amounts as small as $50 can make a huge difference to the enterprise of individual families throughout the developing world.
    Mr. Brown: The hon. Gentleman is absolutely right. Microcredit is incredibly important, especially in African and Asian countries, if we are going to develop the economic base essential for a permanent reduction of poverty. I have talked to the president of the World Bank about exactly that issue. I held a meeting with others in the Treasury to discuss a number of proposals about microcredit and how we can promote it. I assure the hon. Gentleman that the World Bank is being pushed by everybody to move forward with microcredit.

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    If he looks at the World Bank's latest report on the questions of debt sustainability and of additional resources, he will find that it deals with them very usefully.

    HIPC Initiative
    Mr. George Foulkes: What recent assessment he has made of the progress of the highly indebted poor countries initiative; and what further action he proposes to take. [132055]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I can report that 27 countries have started to receive debt relief, now worth up to $70 billion, and eight have now completed the process. I can announce also that, to create a sustainable exit from debt burdens, the UK will support a further change in the calculation of topping-up at completion point, which could provide a further $1 billion in debt relief. The majority of that money would go to health and education.
    Mr. Foulkes: Am I allowed to congratulate the Chancellor on the lead that he and successive International Development Secretaries have taken on the HIPC initiative throughout the world? I know from my experience that that is doing a great deal not only to reduce poverty in the world but to improve the conditions in which terrorism has been thriving hitherto. The initiative helps to make conditions better for people who might be tempted into terrorism. Does he agree that more countries should be benefiting? We have to be honest about this. Some people in some countries are not benefiting because their leaders are either corrupt or undermining some of the work that the international community is trying to do. Can we also take—[Interruption.] Can we take the initiative to promote democracy in those countries too?
    Mr. Brown: My right hon. Friend is a respected former International Development Minister and he should be listened to because his views carry weight not only in this country but abroad—[Interruption.] Conservative Members are making a lot of noise for a very small number of people—in fact, fewer than 25. I did not think that that sort of number were allowed to meet at the moment.
    On debt relief, eight countries have now completed the process. That means that we are in a position to release more than half of the $100 billion that was pledged at Cologne. The United Kingdom has provided $2 billion in debt relief, the Export Credits Guarantee Department has written off nearly $1 billion and we have contributed $500 million to the HIPC trust fund. So, we will continue to push the issue forward by our own contributions but will ensure that countries can genuinely have a sustainable exit from debt.
    On corruption, it is a condition of the international finance facility that countries are open and transparent in the way they conduct their fiscal and monetary policies. The money will be released on that basis and that basis alone.
    Mr. Andrew Robathan: I am glad to hear what the Chancellor had to say about open and transparent policies. I do not think that there is much difference
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    between us on HIPC. What is his response to the Jubilee debt campaign, which has written to all Members of Parliament this week to ask in particular whether the process could be extended to all countries? I would certainly have a few problems with that.
    Mr. Brown: The priority on HIPC is the 36 or so lowest-income countries. That is the way we have proceeded. The international finance facility is the proper way forward for low-income countries that are not part of the HIPC group. In other words, if they can assure us that they are taking the action that the hon. Gentleman and I think is right—that they are transparent and are opening up to trade and investment—we will provide the resources necessary for health and education, which is our duty. So, the HIPC process must be completed with the low-income countries. That is our priority. The international finance facility is the way forward for other countries that are not part of that process.

    International Aid
    Mr. Tony Clarke: If he will make a statement on progress towards the target of 0.7 per cent. of national income being devoted to international aid. [132056]
    The Chief Secretary to the Treasury (Mr. Paul Boateng): I recently attended the Commonwealth Finance Ministers' conference and was able to inform our colleagues that in the 2002 spending review the United Kingdom announced and is now delivering the largest ever increase in aid, raising aid commitments to developing countries from 0.32 per cent of national income in 2002–03 to 0.4 per cent by 2005–06.
    Mr. Clarke: I welcome my right hon. Friend's commitment and, indeed, the Chancellor's continued commitment to meeting that 0.7 per cent. target. I am sure that he will agree that aid effectiveness is as important as aid volume. Given that 8 per cent. of all adults in sub-Saharan Africa are HIV infected, 42 million people live with HIV/AIDS and 5 million were infected last year alone, how can we ensure that much of that aid money goes to combating that dreadful and awful virus?
    Mr. Boateng: My hon. Friend displays a concern about the impact of the AIDS pandemic that is shared on both sides of the House. Its effect has been disastrous not only socially and in human terms, but economically. That is why last year alone we invested about £250 million on HIV/AIDS plus support programmes for multilateral agencies, including £14 million on the international AIDS vaccine initiative. Absolutely central to that are the poverty reduction partnerships and their links with civil society—non-governmental organisations on the ground in the developing world—because they are often best placed to identify and meet the needs. It is that combined approach, using agencies such as the global health fund and working with civil society on the ground, that will deliver the help that is needed.
    Mr. Crispin Blunt: Is the Chief Secretary aware that in 1995–96 only Holland and the United Kingdom met the United Nations higher target of 1 per cent. of gross domestic product transfer from developed countries to the developing world, a combination of private and public sector transfers? Does he agree that that higher target should be our policy focus? Only the combination of public and private sector investment in the developing world will enable the wealth creation and investment that will take it out of poverty.
    Mr. Boateng: The hon. Gentleman is absolutely right. A characteristic of the cross-party approach to development issues is that we have all recognised the importance of private flows and the way that they leverage so much additional benefit on the ground in the developing world. That was the subject matter of a number of our discussions at the Commonwealth Finance Ministers' conference and we shall be continuing that work, as the Chancellor has indicated.
    Dr. Alan Whitehead: In my right hon. Friend's pursuit of those targets, is he applying the principle of the disarticulation of aid from compulsory trade? In his discussions with other Ministers in those fields, has he enunciated and advocated that principle?
    Mr. Boateng: My hon. Friend is absolutely right. The United Kingdom has distinguished itself by making sure that we increase aid effectiveness, which we have done by about 15 to 30 per cent. Central to that has been cutting the insidious link to which he referred. We are not alone in that, but we still have to fight a battle internationally to make the point that we must untie aid if we are to do the most good. We must concentrate aid where it can be most effective in helping the poorest in those societies rather than simply lining the pockets of the already wealthy.
    Gregory Barker: The increased amount of international aid is greatly to the credit of the Government. The Chancellor has spoken about increased transparency in aid and debt relief, but can the Chief Secretary tell us what practical steps have been taken to increase the audit of the delivery of aid on the ground? What new processes and steps are in place?
    Mr. Boateng: We are offering help to the developing world in achieving stability through a greater emphasis on getting its fiscal and monetary policy right. On transparency, good governance is central, which is why we supported initiatives such as the New Partnership for Africa's Development. As I said earlier, we are also unlocking the potential of civil society, so that in a country such as Malawi the Churches, the trade unions and women's organisations all follow through to see where the money goes. They visit schools; they ask how many new desks have been bought and how many teachers are on the payroll. Furthermore, they actually ask to meet the teachers, because we all know that, unfortunately, in some of those countries those are phantoms—the teachers do not really exist. Utilising civil society as well as establishing good governance is the best way to ensure aid effectiveness.

    Full Employment
    Mr. Win Griffiths: If he will make a statement on his aim to achieve full employment. [132057]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Unemployment in Britain this year has been at its lowest since 1975. More people are in work than at any time in our history and our unemployment is lower than Japan, America, Germany, France and the whole of the euro area. Today, we are publishing our submission to the European review of employment and the pre-Budget report will contain measures to enhance the new deal, including measures to help people into self-employment and to start new businesses, as we advance to our goal of full employment.
    Mr. Griffiths: I thank my right hon. Friend for the tremendous work that he has done at the Treasury and with other Ministers in promoting that policy of full employment. I was surprised that he did not mention the fact that for the first time ever the unemployment rate in some of the nations and regions of the UK, such as Wales, which has often been above the national average, is now below the average—all thanks to the policies that my right hon. Friend and his fellow Ministers have pursued.
    Will my right hon. Friend undertake intensive negotiations with his European counterparts to ensure that the good work being done in this country can also be done in the rest of Europe and enable us to join the euro much earlier than is currently anticipated?
    Mr. Brown: My hon. Friend is absolutely right about Wales. There have been 103,000 additional jobs created since 1997, and Welsh unemployment has fallen significantly, particularly among the young and the long-term unemployed.
    As for the exportability of our proposals on employment, I have regular talks with my European Finance Minister colleagues. The French and German Finance Ministers signed a joint letter with me to our European colleagues, and we are proposing that the same incentives that are available in welfare to work and our new deal should be available in the rest of Europe. Equally, at the same time, we are promoting flexibility in the European labour markets, which is the means by which we can return to a position where full employment can be a realistic goal in Europe. It is unfortunate, however, that the one group of people who want to abolish the new deal is the modern Conservative party.
    Mr. Mark Field: Perhaps the Chancellor would like to enlighten us about what proportion of the much-vaunted job growth of the past two years has been in the private, as opposed to the public, sector.
    Mr. Brown: A significant part of the growth has been in the private sector. I think that, of the 1.7 million additional jobs that have been created, the vast majority are in the private sector. When the hon. Gentleman wishes to disparage the public sector and wishes to talk about pen-pushers in the public sector, let him

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    remember that, among the additional jobs, are 50,000 nurses, 20,000 teachers, 90,000 classroom assistants and 10,000 doctors, all of whose jobs would be at risk under his policies.
    Mr. George Mudie: I congratulate the Chancellor on the fact that for the first time in my constituency, under this Labour Administration, unemployment has halved in a very poor part of Leeds, but he will be aware that we are now entering a phase when, whether for reasons of age, health, lack of skills or drugs, it is becoming more difficult to put certain unemployed people into work. In his next Budget will he consider adding to his existing very good initiatives some imaginative, joined-up, targeted approaches to deal with those very difficult individuals to get them into work, so that they can enjoy the prosperity that work brings to families?
    Mr. Brown: I commend my hon. Friend for his proposals for the Leeds community that are designed to create more jobs and more prosperity in areas of high unemployment. He is absolutely right that the focus of our employment policies must alter to help those who have been hard to employ, those with no skills whatsoever and those who have been in prison or had other experience that makes them unattractive to employers. We can help them and, equally, we must help more single parents back into work. The problem is that the one party that wishes to abolish the new deal for young people, the new deal for the long-term unemployed and the new deal for single parents is the Conservative party. The only new deal that the Conservatives want to keep is the new deal for the over-50s, perhaps because they may have to use it themselves soon.
    Dr. Vincent Cable: Does the Chancellor accept the arguments of the Governor of the Bank of England that, with unemployment at 1.5 million or 5 per cent., the Government are as close to full employment as they are likely to get, that there is therefore no spare capacity and that we can look forward to a decade of below-trend growth and rising interest rates? If there is a fallacy in the Government's argument, could the Chancellor tell us what it is?
    Mr. Brown: First, may I welcome the hon. Gentleman to his new post as the shadow Chancellor from Twickenham? I have worked with him in the past. Indeed, we were in the same political party. We wrote together in the same publications. It may be that, at some point, I could share with the House his views of the Labour party's policy, which were very enthusiastic at that time, but perhaps that is for another day, Mr. Speaker.
    When I gave the Mais lecture on full employment, which the hon. Gentleman will be interested in, I said that we could further reduce unemployment, not simply by maintaining macro-economic stability and enhancing the British economy's productivity, but by the supply-side measures that would include training people who could get jobs but who otherwise would not be able to get them and by exercising pay responsibility. Those are the conditions in which I believe we could create more jobs in the British economy and reduce
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    unemployment further, so, unfortunately, I disagree with him on the first point. I believe that we can both create more jobs and reduce unemployment further, and our goal is full employment.
    Mr. Dennis Skinner: Does the Chancellor recall that about three years ago I asked him for £24 million to flatten the Shirebrook pit site to provide up to 2,000 jobs—more than the number who worked down the coal mine at the time? That construction is well under way, the road has been developed and things are looking well. I now have a further plan for the Markham Bolsover employment zone, which will cost about twice as much and will release an area for 5,000 jobs, just off the M1 at junction 29A. I hope that that is etched in his memory, and we will sort that out in the next couple of years.
    Mr. Brown: I am grateful to my hon. Friend. It is always an expensive Question Time when he asks me a question. What has been done to create jobs in former mining areas, through the various initiatives in which Members have taken part, is not only commendable but is bringing prosperity to areas that had lost hope. I will certainly look at his further proposal without making financial commitments to it.
    Mr. Skinner: Just the first tranche.
    Mr. Brown: So my hon. Friend is not asking for £48 million at the moment, but only for a fraction of that. It is important that in every area of the country where unemployment is too high we take action. That is behind the proposal for 2,000 new enterprise areas, and his constituency will benefit from many of those.
    Mr. Howard Flight: In order to create sustainable full employment, I am sure that the Chancellor agrees about the importance of maintaining our business competitiveness, in which a key factor is the level of business taxation. The CBI's recent report produced from the Government's Red Book figures shows that since the Government came to power, and by 2006, there will be a cumulative increase in the tax burden on business of £54 billion. Government spin has been that the CBI figures are wrong. Will the Chancellor please explain why?
    Mr. Brown: I am grateful that the shadow Chief Secretary is up to explain how we can create full employment without a new deal and by cutting public expenditure by 20 per cent. As for what business is saying about the Government, I do not think that he would like me to read out what Digby Jones said to the Conservative party conference [Interruption.] He does not like it, does he? Not only did he say that the Conservatives could no longer rely on the business community but that the Government had created the macro-economic stability that was the only basis on which we could have prosperity in this country. As for the CBI report, it says that, in 1995, taking everything into account, business taxation was 9.3 per cent. of

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    public expenditure. It then says that, in 2003, business taxation is 8.9 per cent. of public expenditure. That is a fall, not a rise.
    Mrs. Anne Campbell: Does my right hon. Friend agree that a necessary prerequisite of full employment is an adequate supply of good-quality child care, which this Government have done more to provide than any other previous Government? That is the way to ensure that there is full employment for women as well as men.
    Mr. Brown: My hon. Friend is absolutely right. I praise her for putting the issue on the agenda. Only one in nine of the child care places that are needed are currently available, and even though we have made huge advances, there is a great deal more to do. It is partly about the supply of child care places that the industry is capable of producing, and it is partly about making sure that resources are available to those who could otherwise not afford child care. In 1997, 40,000 people received the child care tax credit that we inherited. Today, that figure is 250,000, which is a sixfold increase. We are determined to do more. Parents should not have to face the choice between the children they love and the work that they must do without us being in a position to help them properly. That demands—as I hope that there would be—all-party support for child care expansion.
    Sir Peter Tapsell: As it remains the policy of the Labour Government to join the euro as soon as the Chancellor's five economic tests have allegedly been met, does he think that Britain could then continue to maintain a high level of employment, bearing in mind the very large rise in unemployment in both Germany and France since they joined the single European currency?
    Mr. Brown: This is indeed one of our tests—the effect on employment. I reported and I will continue to report to the House about how that test is being met.
    As for the single currency, the hon. Gentleman should realise that we are saying that we will make a decision on that in the national economic interest. The problem about his position and that of his party is that they would rule out a single currency even if it were in the national economic interest.

    State Pension
    Bob Spink: If he will make a statement on changes in the level of state pension in the last three years. [132058]
    The Paymaster General (Dawn Primarolo): The basic state pension has risen by £5.30 a week over inflation for single pensioners and by £8.50 a week for couples since 2000—a cash increase of nearly £10 a week for single pensioners and nearly £16 a week for couples. Increases over the last three years have given single pensioners £1.10 a week more than an earnings link would have given them, and £1.75 a week for couples.
    Bob Spink: Means—testing has grown like Topsy—from 40 per cent. in 1997 to almost 60 per cent. today, with a Government target to take it to 80 per cent. What
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    would the Paymaster General say to my constituent, Joan Spey of Age Concern in Castle Point, whose friends and colleagues in Age Concern are very proud people? They deeply resent the intolerable intrusion into their lives that means-testing brings. What would she say to those people?
    Dawn Primarolo: The intolerable intrusion is the poverty created for pensioners under the previous Government. As the hon. Gentleman well knows, on the basis of a measure of absolute poverty, more than 1.5 million pensioners have been taken out of poverty since 1997. He also well knows that the fair way forward on pensions must have the basic state pension underpinning people's income in retirement while, at the same time, we target maximum support on the very poorest pensioners. He also knows that the proposals that he has put forward will not help poor pensioners and will not be sustainable. I am sure that Age Concern and his constituents understand those points very well.
    Ms Diane Abbott: My right hon. Friend will be aware how grateful pensioners are for the many measures that the Government have taken on their behalf. However, she will also be aware that the problem of trying to address pensioner poverty by means-tested benefits is not just that every single representative pensioners organisation is against means-tested benefits. There is the problem of take-up. She will be aware that, after 10 years of take-up campaigns, substantial numbers of pensioners simply refuse to claim that to which they are entitled. Is she able to tell the House the latest statistics for the number of pensioners entitled to means-tested benefits who do not claim them?
    Dawn Primarolo: I know that my hon. Friend follows these matters very closely. She is quite right to suggest that the huge challenge continues to be to make sure that those pensioners entitled to the pension credit or the minimum income guarantee receive that money alongside the fuel allowance and the free television licences. However, I can tell her that more than 2 million pensioners already receive the pension credit, which will give so much more to pensioners, and more than 1 million have contacted the Department. The Pension Service, which is directed particularly to pensioners, will do much to deal with the very points that she has made.
    Mr. Mark Prisk: The truth is that, despite the Paymaster General's warm words, more and more pensioners rely not on the state pension but on means-tested benefits. As hon. Members on both sides have said, those pensioners deeply resent the intrusion and complexity involved with them. Despite her words and the Chancellor's promise
    "to end the means test for our elderly people",
    the Government's plans now seek 80 per cent. of pensioners to be means-tested. Perhaps the Paymaster General will answer the question that the Prime Minister failed to answer yesterday. How much will a typical pensioner couple now have to save over their lifetime in order to avoid a means test?
    Dawn Primarolo: The hon. Gentleman knows full well that the question that has to be answered is how—
    Hon. Members: Answer the question!
    Mr. Speaker: Order. Let the right hon. Lady answer the question—[HON. MEMBERS: "Hear, hear."]—in her own way.
    Dawn Primarolo: I will, Mr. Speaker, if I can get more than half a dozen words out.
    As the hon. Gentleman knows, the first issue with regard to pension policy is how to ensure that those in poverty are raised out of poverty. The pension credit and other measures that have been introduced since 1997 ensure that the poorest third of pensioners are better off. The second set of issues that must be addressed—the issues are being addressed by consultation on the pensions Green Paper—is exactly how we combine ensuring that we target the poorest pensioners by giving the basic state pension as the foundation for retirement and assisting people to save for their retirement. All those matters are being addressed, and the pension credit will further assist that by encouraging people to save while still rewarding them.

    Tees Valley
    Vera Bair: What plans he has to direct public investment to the Tees valley sub-region. [132059]
    The Economic Secretary to the Treasury (John Healey): The Tees valley sub-region, like all parts of the UK, is benefiting from the increased public investment that the Government are putting in. In addition to national investment, the regional development agency, One NorthEast, is investing £15 million this year and £24 million next year directly in the Tees valley.
    Vera Baird: I am grateful for that answer, although my question was clearly not as transparent as it should have been. I wanted to hear a comment about the Lyons inquiry, which favours the dispersal of civil service jobs to the regions on the presumed business case that that would be less expensive than if the jobs were in London. The Chancellor has spoken about dispersing 20,000 jobs in that way, but if the business case shows that more can go, can that number be merely a minimum so that more can follow, and can the Tees valley, with its adaptable work force and the lowest commercial property prices in the UK, go on the list of potential recipients?
    John Healey: I pay tribute to how consistently my hon. and learned Friend has pursued that case. I spoke at her regional chamber of commerce in the Tees valley last month and there is great interest in, and commitment to, the Tees valley partnership bid for the relocation of civil service jobs. I confirm that Sir Michael Lyons made it clear that it was not his intention to dictate the public sector functions that should be relocated or where there should be relocation to. I confirm that relocations should be based on business proposals that Departments are preparing as part of the spending review process. I also confirm what my right
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    hon. Friend the Chancellor has made clear: we are looking at the relocation of at least 20,000 London-based civil service jobs to the regions.
    Chris Grayling
    Mr. Speaker: Order. The hon. Gentleman's constituency is quite a distance from the Tees valley.

    Euro
    Mr. George Osborne: How many events he has attended as part of the Government's euro information campaign launched in June. [132062]
    The Financial Secretary to the Treasury (Ruth Kelly): Ministers, including my right hon. Friend the Chancellor, have held a variety of meetings to discuss the euro in England, Scotland, Wales and Northern Ireland. In addition, Treasury officials have held more than 150 meetings with opinion formers in Britain and Europe since the Chancellor's statement on 9 June.
    Mr. Osborne: I am glad to see that the Minister now keeps the Chancellor's diary. She will know, as everyone knows, that the Chancellor of the Exchequer won his battle with the Prime Minister and that there will not be a euro referendum before the general election. Does she think that the Chancellor could be more magnanimous in victory and go along with the charade of the roadshow, at least to save the Prime Minister's face?
    Ruth Kelly: I feel, perhaps, that I need to reassure the hon. Gentleman, who takes a great interest in these matters. The euro has, indeed, been discussed at every level in the Treasury. I emphasise again that more than 150 meetings have been held throughout Europe and throughout Britain—in every country in Britain.
    Mr. Barry Sheerman: Does my hon. Friend agree that the preparation for the euro is no joking matter? It is a serious enterprise that affects the whole of our economy and our future. Would she comment on the fact not only that we need a euro information campaign throughout the country, but that it would be nice if the official Opposition joined the cross-party group on the euro?
    Ruth Kelly: My hon. Friend makes an important point. We have a euro preparations committee, which is open to parties across the House, and there is one political party that refuses to join.
    Mr. Osborne: Are you a member?
    Ruth Kelly: Of course I am. The Government have the right policy—to prepare and decide. That is what we will do. The Tory policy is to deprive the British people of the opportunity to join, whether or not it is in the national economic interest to do so. They say "No, never," dogmatically. Ours is the commonsense position—prepare and decide.
    Mr. Peter Lilley: Can the Minister confirm that if any country that is already a

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    member of the euro were to apply the five tests that the Chancellor applies and find that the euro was not in its national interest, as would appear to be the case from some of the statistics that he has given, there is absolutely nothing that that country could do about it? In the course of the Minister's education campaign, does she spell out the fact that membership is irrevocable?
    Ruth Kelly: We have, of course, emphasised the strategic importance of decisions on the euro, which is why we are committed to a triple lock on the euro decision—a vote in Cabinet, a vote in Parliament and a referendum of the British people. The quality of the analysis that the Treasury undertook in its assessment of the five national economic tests to see whether it is in Britain's national interest to join was widely commended throughout Europe whenever it was presented.
    John Cryer: Can my hon. Friend remind the House of who signed us up to the charter of economic euro-fundamentalism in the first place?
    Ruth Kelly: My hon. Friend is, I think, referring to the Maastricht treaty. It is clear to everyone in the House who signed the Maastricht treaty. [HON. MEMBERS: "We had an opt-out."] We have the correct policy on the euro. If it is in our national British economic interest to join, we shall do so.
    Mr. Michael Howard: I hope that when the Minister next comes to the Dispatch Box, she will answer the question put to her by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). Perhaps she can tell us, too, whether all the internal discussions in the Treasury to which she referred were included in the diary items that she listed in her first response. Is it not the case that the Prime Minister told the House that as part of the roadshow, there have been 60 visits from Foreign Office Ministers, but No. 10 said that none involved him and that none was planned; the Treasury said there were too many events to list but that they had all been low-key, that there was no specific start date and that it could not identify any of them; the Foreign Office said the events had not even started, and the Minister for Europe said that it was never meant to be a literal roadshow—it was all just a figure of speech? Have not these conflicting statements on the roadshow degenerated into total farce, and is it not impossible for the Minister to clear the matter up, whatever she says?
    Ruth Kelly: I find it extraordinary that the right hon. and learned Gentleman can talk about the diary commitments of Treasury Ministers, when I have made it plain to the House that my right hon. Friend the Chancellor has had meetings with business leaders, industry and unions. He has been discussing the euro, and Treasury officials have had well over 150 meetings across the country and across Europe.
    Dr. Phyllis Starkey: Given the indications that, since the introduction of the euro, trade between countries within the eurozone has increased, is it not even more important that British businesses be well informed about the euro and its
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    consequences for them, if we are to maintain our share of European markets and the jobs in Britain that depend on then?
    Ruth Kelly: My hon. Friend makes an important point. British trade has increased, which is why the impact on investment, foreign investment, jobs and prosperity are key to our assessment of the five economic tests. It is also why we have a euro information campaign, and why we have set up standing committees not only in England, but in Scotland, Wales and Northern Ireland, so that business, industry, the unions and all other key stakeholders in the process will be fully engaged and informed, as necessary.

    Consumer Prices Index
    Mr. Bill Wiggin: When the harmonised index of consumer prices measure of inflation has been below 1 per cent. since January 2000; and if he will make a statement. [132064]
    The Economic Secretary to the Treasury (John Healey): The HICP inflation figures are published monthly by the Office for National Statistics. As my right hon. Friend the Chancellor said in the summer in this House, that measure gives a more complete picture of spending patterns by all consumers. It is the most comparable measure internationally, and it is used by our European neighbours. That is why, subject to confirmation at the pre-Budget report, he intends to change the inflation target to the consumer prices definition.
    Mr. Wiggin: Will the Governor of the Bank of England be writing letters, given that the new index—known as HICP, or hiccup—has fallen below the 2 per cent. target several dozen times? Will not that contribute to a significant imbalance in the stability of our monetary policy?
    John Healey: On the contrary, last month the Governor of the Bank of England confirmed to the Select Committee on the Treasury that a change in target is not likely to be a big factor in setting monetary policy and that HICP is a better measure of inflation than RPIX. That is why my right hon. Friend the Chancellor has said that, subject to confirmation at the pre-Budget report, he intends to change the inflation target to that measure.
    Mr. James Plaskitt: The Minister knows that as a rule the harmonised prices index runs 1 per cent. lower than RPIX. The Chancellor has indicated that were it to be introduced, benefits would remain tied to RPIX. Would my hon. Friend expect it to become the benchmark for wage settlements?
    John Healey: Both the Treasury and the Bank of England have confirmed that the estimate of long-term divergence is 0.5 per cent., not 1 per cent. As my right hon. Friend the Chancellor has made clear, the index is a better measure for the conduct of monetary policy and the decisions that hang from it. Pensions, index-linked

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    gilts and benefits will remain tied to the current measure of inflation, so pensioners should have no fear that they will lose out.
    Mr. Michael Howard: But is not this change bedevilled by confusion? Were Treasury sources right when they suggested that implementation might be delayed until the Budget or that alternative options might be considered, including delaying implementation for two years or trying to run the two systems in parallel for a while? Can the Minister confirm that the HICP index is likely to be revised? Has not this ill considered change thrown monetary policy into wholly unnecessary confusion and uncertainty?
    John Healey: I have no idea what the right hon. and learned Gentleman is talking about. His remarks are based not on fact, but on pure imagination. The principal change to the HICP index was made in 1996. As I said to the hon. Member for Leominster (Mr. Wiggin), this series of figures has been published monthly by the Office for National Statistics: I suggest that the right hon. and learned Gentleman consult it.
    Mr. Howard: I remind the Minister that the Governor of the Bank of England suggested that changing the target in this way is comparable to David Beckham taking a shot on goal only to see that someone has moved the goalposts. Does he agree with the Governor's view that leaving out housing costs would be "strange"—that is his word—and might confuse people? The fact is that this change has absolutely nothing to do with the economic needs of the country: it stems from the shabby compromise cobbled together by the Chancellor and the Prime Minister on the euro. Is not monetary stability being put at risk as a result?
    John Healey: I suspect that David Beckham would have welcomed somebody moving the goalposts when he was taking his penalty kick against Turkey last Saturday. If the right hon. and learned Gentleman consults the minutes of the Treasury Committee hearing with the Governor of the Bank of England, he will see that he confirmed that a change in target is not likely to be a big factor in setting monetary policy and that the index is a better measure for targeting inflation and for conducting monetary policy. That is why my right hon. Friend the Chancellor has said that, subject to confirmation at the pre-Budget report, he intends to move to that measure.

    Low-income Families
    Mr. Bill O'Brien: What recent measures he has taken to support families on low incomes; and if he will make a statement. [132065]
    The Paymaster General (Dawn Primarolo): In April, the Government introduced the working and child tax credits. They build on the success of the working families tax credit and are additional to the real terms increases in child benefit. More than 5.8 million
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    households are already benefiting from the new tax credits, and more than 90 per cent. of the families are expected to benefit in 2003–04.
    As a result of these and other measures introduced since 1997, families with children in the poorest fifth of the population are on average nearly £50 a week better off in real terms.
    Mr. O'Brien: I thank my right hon. Friend for her reply and congratulate her and her colleagues in the Treasury on their splendid work in helping low income families. Is she aware of an anomaly that applies to the Child Support Agency? When an absent parent starts a second family and receives family tax credit, it is considered as income whereas when the parent with care receives it, it is considered as non-income. Different principles apply to the two examples. Will she have a word with her colleagues in the Department for Work and Pensions to erase the anomaly of an uneven application of family tax credit to those on low incomes?
    Dawn Primarolo: If I understand my hon. Friend's point correctly, I must tell him that there is no anomaly in the application of the rules. Parents are responsible for their children under CSA rules, which also provide for payment to be made. Tax credit legislation will not cut across that principle. Responsibility would be diminished if the tax credits compensated for parents paying for it. I shall check the record to ensure that I understood my hon. Friend's point properly. However, it is intended that the tax credits should not cut across parents' responsibility to support their children, as determined by the CSA.
    Mr. Peter Luff: How does it help families on low incomes to rig the local government financial settlement in such a way as to force county councils such as Worcestershire's to do the Chancellor's dirty work and impose massive stealth taxes through unacceptable increases in council tax?
    Dawn Primarolo: As the hon. Gentleman knows, since 1997, when the Government took office, the real terms increase for every council has been greater—some 25 per cent., compared with a decrease of 7 per cent. in the last few years of the Conservative Government. He well knows that the Government's record in supporting the poorest families, for example, through support for child care and ensuring that lone parents can return to work, has contributed to the lives of people in his constituency. The shame is that the Conservative party wants to take all that away.

    Insurance Premiums
    Lawrie Quinn: If he will make a statement on the impact of insurance premium levels on the service sector of the economy. [132066]
    The Financial Secretary to the Treasury (Ruth Kelly): I am aware that increases in insurance premiums in the past few years have had an impact on many sectors of the economy, including the service sector.
    Lawrie Quinn: My hon. Friend knows that three quarters of the British work force work in the service sector. Does she share my concern that employers' liability insurance is due for much needed reform? Given that the relevant legislation was enacted in 1969, is not it time that she encouraged her colleagues in the Department for Work and Pensions to consider the important subject of insurance?
    Ruth Kelly: I know that my hon. Friend takes a great interest in employers' liability insurance. Indeed, he tabled a ten-minute Bill on the matter. Surveys show the importance of developing enforcement procedures to ensure that everybody has compulsory employers' liability insurance in place. We are therefore determined, as part of our review of employers' liability insurance, to develop a comprehensive database to ensure that we have full records of firms' procedures. We are also reviewing the current fines system to ascertain whether legislation or regulation is needed.
    Chris Grayling: Is the Minister aware that the situation in regard to employers' liability insurance will be made worse by the Government's latest stealth tax, in the Health and Social Care (Community Health and Standards) Bill, which will allow charging to take place for health care when it is related to a court settlement? Will the Minister work with her colleagues in the Department of Health to ensure that the implementation of this measure does not have the effect—which it could have—of further increasing employers' liability insurance and forcing more businesses closer to the wall?
    Ruth Kelly: The hon. Gentleman will be aware that any system of employers' liability insurance needs to be fair to all parties—to employers, to insurers and, of course, to employees who are injured as a result of an employer's negligence. We are aware of the pressure on the system, which is why we have commissioned this wide-ranging review, and it has already come up with many concrete proposals that are improving the situation. We must also ensure that, in future, all legislation is carefully scrutinised to maintain the pressures on the system at a minimum.

    Government Investment
    Rob Marris: If he will make a statement on planned levels of central Government capital investment in Wolverhampton, South-West in 2003–04. [132067]
    The Chief Secretary to the Treasury (Mr. Paul Boateng): Wolverhampton will benefit from its share of total capital spending by central Government of some £25.2 billion in 2003–04. Investment decisions made by central Departments and regional agencies will be made in accordance with local priorities and the needs of the people of Wolverhampton.
    Rob Marris: I am grateful to my right hon. Friend for that answer and for the capital investment that is coming into my constituency to address 18 years of under-investment in capital projects in the 1980s and 1990s. An example of that under-investment is a school
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    about a mile from where I live, which has a flat roof. So much water was standing on that roof that ducks were living on it. Will my right hon. Friend give an indication of what the effect on constituencies such as mine would be if the Conservatives' policy of 20 per cent. cuts were to be put into effect?
    Mr. Speaker: Order. That is not the responsibility of the Minister.

    Millennium Development Targets
    Ms Meg Munn: What recent discussions he has had with African Finance Ministers on debt and the millennium development targets. [132068]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I have in the last month had meetings with African Finance Ministers in which we promised them that, in return for reform and tackling corruption, the international finance facility could help to ease their debt burden and raise extra billions a year for Africa. The needs of Africa will be at the centre of the UK's G7 presidency in 2005.
    Ms Munn: I thank my right hon. Friend for his answer. Did he discuss the millennium development goal of all children having a primary education, and does he agree that that is an important factor for developing countries? The Government have given priority to education in this country, and if developing countries are to have a long-term future the education of their populations is enormously important.
    Mr. Brown: I am grateful to my hon. Friend and I thank her for the work that she does in this area. Throughout the world, 120 million children are not going to school today, and most of them are in Africa. A child in Africa has only a one in three chance of completing primary school education. That is why it is urgent that additional funds go to education, why we set up the Commonwealth education fund, why aid to Africa is now rising to £1 billion a year—bilateral aid from the UK Government—and why we need the additional resources that the international finance facility will provide to meet the millennium development goal that every child should have the chance of primary school education.

    North Sea Oil and Gas
    Mr. Bob Blizzard: When he expects to complete the review of North sea oil and gas taxation. [132069]
    The Paymaster General (Dawn Primarolo): The consultation on levels of exploration activity in the North sea, which considered whether there were any cost effective measures that could be taken to improve the situation, has now ended. Officials from the Treasury, the Inland Revenue and the Department of Trade and Industry have taken evidence from representatives across the industry which will be considered by a joint working group. The Government

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    will, of course, make announcements on this matter when the review of the items raised in the consultation is completed.
    Mr. Blizzard: I thank my right hon. Friend for that answer. Does she accept that the oil and gas industry is a major source of employment in many coastal communities such as my constituency? We may be only halfway through our reserves of oil and gas, but what is left is harder to find and involves greater commercial risk. Very few exploration wells have been drilled in recent years. Will my right hon. Friend do everything possible in the review to ensure that a new era of exploration is stimulated to sustain the vital employment in those coastal communities?
    Dawn Primarolo: I pay tribute to my hon. Friend, who has done a great deal, in the House and outside it, to raise the important issue of exploration, particularly in the difficult fields. He has also raised many points with my officials and me regarding the east of England economy. The review is looking precisely at this issue, and at whether further assistance can be given. I know that my hon. Friend understands that the Government are involved in a dialogue with the industry, and that he accepts that, before we commit taxpayers' money to further investments to assist the industry, we have to be sure that the return produces the type of results that he suggests. That is precisely what the consultation is addressing.

Business of the House
12.30 pm
Mr. Eric Forth: May I ask the part-time Leader of the House to give us next week's business?
The Leader of the House of Commons (Mr. Peter Hain): The business for next week will be as follows:
MONDAY 20 OCTOBER—Remaining stages of the Courts Bill [Lords].
TUESDAY 21 OCTOBER—Second reading of the European Parliamentary and Local Elections (Pilots) Bill.
WEDNESDAY 22 OCTOBER—Opposition Day [19th Allotted Day]. There will be a debate entitled "The Need for a Judicial Inquiry on Iraq" on an Opposition motion.
THURSDAY 23 OCTOBER—A debate on Defence Procurement on a motion for the Adjournment of the House.
FRIDAY 24 OCTOBER—The House will not be sitting.
The provisional business for the following week will include:
MONDAY 27 OCTOBER—Opposition Day [20th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
The House will wish to know that the Standing Committee on the Intergovernmental Conference will meet on Monday 20 October at 5pm. Further meetings are scheduled for Monday 10 November and Monday 1 December. Members will also wish to know that at the time of next week's business statement I shall publish the calendar for the next Session.
I thought it would assist the House if I outlined the Government's intentions in relation to Lord Hutton's report. When the Government receive the report, we shall publish it to Parliament, and ministerial statements will be made by the Prime Minister and the Secretary of State for Constitutional Affairs. The Government will also ensure that both Houses have an opportunity to debate the report once Members have considered its content.
Mr. Forth: I am grateful to the part-time Leader of the House, but can he tell us why his prediction of business stops rather mysteriously on Monday week? Is the Government's business now in such complete chaos that the part-time Leader of the House cannot even look that far ahead? Perhaps he will give us an explanation. If he is able to give us the calendar for next year, why can he not give us the calendar for the week after next?
Has the part-time Leader of the House any plan to change his title to "part-time gaffer"? I say that because a recent headline stated "Hain fails to deliver anti-US speech". I would expect the part-time Leader of the House to want to grant himself a debate in the House, enabling him either to deliver the speeches that he failed to deliver or to tell us why he failed to deliver them. We do not really know his views on the United States, as was reported in the press. Perhaps he could tell us—although that would pre-empt the debate for which I am asking.
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Who drafts the right hon. Gentleman's speeches? Does he read them before he releases them? Does the Foreign and Commonwealth Office block them? We need to know. [HON. MEMBERS: "Why?"] The right hon. Gentleman's parliamentary colleagues are not even interested in what he has to say, and I do not blame them.
Yesterday the hon. Member for Birmingham, Edgbaston (Ms Stuart) asked the Prime Minister whether he would
"share with the House his views on what kinds of qualities he will be looking for in those who he wishes to see appointed"
—to the House of Lords, that is. I thought that a very good, very fair and rather penetrating question, and so I think did the hon. Lady.
We were rewarded with what I consider to be one of the most revelatory things that the Prime Minister has said in a long time, which will return to haunt him. He replied:
"So far as Labour Members are concerned, my preference … would be for ones who would actually support the Government."—[Official Report, 15 October 2003; Vol. 411, c. 107.]
If that is not Tony's cronies, I do not know what is. The Prime Minister is saying that he would want to appoint to the House of Lords people who would support the Government. That carries forward to an extent that the Prime Minister may come to regret the debate on House of Lords reform. Therefore, I ask the gaffer: can he please give us an urgent debate on the House of Lords, opened by the Prime Minister, so that we can explore further what is in the Prime Minister's mind in terms of him wanting to appoint Labour cronies and stooges to the House of Lords?
Mr. Hain: Well, that was very enjoyable. May I first respond to the right hon. Gentleman's points on the additional information about business after Monday week? It is actually to help him and other right hon. and hon. Members that an advance day is given. Two weeks is not normally announced. Sometimes it is, but it is not an iron rule.
The right hon. Gentleman talks of chaos. They know all about chaos on the Conservative Benches. During the past couple of days I have been wandering around the corridors of the Commons doing my business as Leader of the House. Indeed, I had a very pleasant meeting with the right hon. Gentleman the other day as part of that business. I see little huddles of Conservative Members in need of counselling. Whenever I appear anywhere near them, their tones become hushed and they give me furtive looks. I think that there is a case for a psychological counsellor for hon. Members because there is serious chaos on the Conservative Benches.
I see from The Times that the ever loyal right hon. Gentleman has been overheard in the Tea Room
"loudly complaining that he resented being told when to get up to cheer the leader's speech last week."
Perhaps he can confirm whether he has had a career development interview with the Whips—indeed, he would not dare—or whether he is one of those condemned by his leader in an interview in The Spectator as being one of the
"irreconcilable malcontents, the acolytes of former leadership contenders and their friends and allies in the media."

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It would be very welcome if he confirmed that.
On the question of the United States of America, the media spin that is around is absolutely amazing. If the right hon. Gentleman wants to know my views on the relationship between Britain and the United States or indeed between the European Union and the United States, they are well recorded and I am happy to repeat them now. I believe that it is vital that Europe has a positive partnership with the United States and with the Administration in Washington. It is crucial for the stability of the world. Indeed, it is one of the reasons why I have been completely behind the Prime Minister's recent policies in respect of Iraq and in respect of the alliance with the United States on a number of issues confronting us, including world terrorism. That is my view. It has been my view consistently and the right hon. Gentleman should listen to what I say instead of following the media spin.
The right hon. Gentleman asked about Lords appointments. Does he not realise that the Labour party has only 28 per cent. of the vote in the House of Lords? Does he really think that that is fair when we have won two landslide majorities? We have fewer than one in three of the votes in the House of Lords. Eighty-nine of the 92 hereditary peers are Conservatives. Therefore, it is important that we address the question of getting a much more representative House of Lords. In that way, the two Chambers can work together in a much more constructive fashion for the future of the people.
Mr. Gerald Kaufman: Will my right hon. Friend provide time on an early occasion for a debate in the House on the Israeli plan to build a wall, which will split Bethlehem, prevent access to holy shrines sacred to the Christian, Muslim and Jewish religions, hinder access to the Church of the Nativity and ruin tourism and agriculture in Bethlehem? This matter needs urgent consideration, and 1 should be grateful if my right hon. Friend would arrange a debate on it.
Mr. Hain: I very much agree with the sentiments expressed by my right hon. Friend. The wall is very ill-judged and is completely contrary to international opinion. It will not promote the very reconciliation between Palestinians and Israelis that would give the state of Israel the security that it needs and desperately craves, after attacks from suicide bombers; nor will it give the Palestinians their own independent state. Working together in symmetry and synergy is the objective, and the wall that divides them is very ill-advised. We will consider whether we can find time for an early debate, although I should point out that the Foreign Secretary has been ready to make statements to, and make himself accountable to, the House on middle east policy.
Mr. Paul Tyler: My colleagues and I entirely endorse the point made by the right hon. Member for Manchester, Gorton (Mr. Kaufman). On the question of the Lords, was not the Prime Minister's statement completely contrary to Government Front Benchers' claim that the steps intended will take away from No. 10 direct involvement in future membership of
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the House of Lords? This claim to greater independence for so-called "democratic appointment" is clearly nonsense, and I hope that the Leader of the House will stick to his own view that the only way to make that place more representative and democratic is to have a strong element of elected membership.
We, too, are disappointed that we are not being given details of the business for the week beyond next. As we understand it, one of the various motions for debate will relate to the payment of Chairs of Select Committees, and I ask the Leader of the House to confirm that that is his intention. Will he also confirm that we will be permitted a wide-ranging debate that will look at the context of that proposal? It is surely important that we think very carefully about career paths other than just Select Committees. For example, there are not many enthusiastic recruits for the Chairman's Panel, and if the purpose is to provide incentives, surely the Chairman's Panel is just as important as Select Committees. Indeed, I wonder whether the right hon. Member for Bromley and Chislehurst (Mr. Forth) agrees that the same point applies to membership of the House of Commons Commission. Also, will there be a limit on the term for Select Committee Chairmen? The strong recommendation was made that a deal should be struck, whereby if new patronage is given to Whips on both sides to nominate Select Committee Chairmen, they should be allowed to do so for a limited period only.
Should we not also look at the value for money that the taxpayer is getting for existing salaries paid to Members of this House who are not Ministers? For example, in the current year, the Conservative Chief Whip is receiving an additional £37,055, presumably to give him the extra expertise to undertake the career development interviews of which we are all aware. [Interruption.] I hope that hon. Members are listening carefully. In addition to his salary, the leader of the Conservative party is getting £65,482 per year, which is very doubtful in terms of value for money. His office—this may be particularly relevant—is getting £548,101 for its running, plus £83,784 for travel.
It so happens that the leader of the Conservative party is visiting my constituency today, so there is nothing personal in this. Indeed, I am delighted that he is there: after one of his predecessors visited North Cornwall, my majority went up from just under 2,000 to just under 14,000. So I hope that the current Conservative leader is having a very happy day with my constituents, but on a serious point, in the context of the burden on the taxpayer that the Conservatives are always going on about, and their opposition to the state funding of political parties, this is nonsense and complete hypocrisy. May we have a general debate on this issue?
Mr. Hain: May I congratulate the hon. Gentleman in that, after the night of the long knives for Liberal Democrat Front Benchers—in which everybody else was reshuffled to the right—he, at least, has stayed true to his principles and kept his job? That is very good news for all of us.
As the hon. Gentleman well knows, I voted for a 100 per cent. elected House of Lords, and for other options that would still retain a significant elected membership. Unfortunately, there was no consensus in the House of Commons for any of those elected options.

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Let me deal with the point on which the hon. Gentleman seeks to make mischief. The Prime Minister's comments should be viewed in the context of the Labour party's commitment in the manifesto on which it won the last election. Accordingly, non-party members in the House of Lords should be appointed by an independent commission—and I would have thought that the hon. Gentleman would welcome that, so that there could be no question of cronies.
As to the Senior Salaries Review Board report on the payment of Chairmen of Select Committees and other Committees, I intend to have a debate as early as possible so that consideration can be given to that matter. I also welcome the report published yesterday by the Chairman of the Standards and Privileges Committee. It is an excellent report that will provide us with a way through, and I am sure that the whole House will want to thank him for it. It is an important matter. The hon. Gentleman made valid points about parallel career paths and rewarding Members for taking on positions of seniority and responsibility, and we should view the debate in that context. I shall also lay before the House several other motions in respect of those issues.
The hon. Gentleman also mentioned the salary paid to the Tory Chief Whip. Let me come to his defence, because he has been very busy recently. If there were provision to claim overtime, I guess that he would have claimed it, so the hon. Gentleman should not knock him too hard. My heart is with the Opposition Chief Whip and all my energy is behind him. He should keep the Leader of the Conservative party in his position because he is doing a great job for the Labour party—and, indeed, for the Liberal Democrats. I am obviously in a charitable mood this afternoon.
The hon. Gentleman also referred to the salary of the Leader of the Opposition. As he knows, the current position has existed for a long time. The hon. Gentleman's party aspires to be the main Opposition party, so is he telling me that his party would turn the salary down?
David Taylor: Government Members are well aware of the huge improvements in education that have taken place since 1997. Nevertheless, the redistribution formula now in operation has caused some serious difficulties. Surveys this week have highlighted the number of job losses in areas such as mine in Leicestershire. Last week, there was a conference in Lutterworth of the F40 group, which is still seeking significant reforms of the education finance formula. When the most recent figures on the guaranteed formulas that will increase school funding are made available later in 2003, can we have a full-scale parliamentary debate, which would enable us to examine the implications of the improvements planned by the Secretary of State for Education and Skills?
Mr. Hain: I am aware of the difficulties in my hon. Friend's constituency of North-West Leicestershire. As he implied, the difficulties there and elsewhere are being dealt with by the Secretary of State—and, indeed, by the Deputy Prime Minister. I am sure that my hon. Friend would not want anyone to forget that, despite those difficulties, we have seen record investment in our schools. The House should be reminded that record
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investment in schools and education has taken place right across the country and I am sure that the difficulties can be resolved.
Mr. Andrew Mitchell: May I draw the attention of the Leader of the House to an important article which appears today in a journal of repute and is written by one of Britain's best-informed journalists, Trevor Kavanagh? He says:
"Tony Blair is preparing for a dramatic U-turn over a referendum on the new EU Constitution, it emerged last night."
That is extremely good news. Can the Leader of the House arrange a statement or a debate next week so that the Prime Minister can explain the good news that he is now embracing Conservative policy?
Mr. Hain: No, I cannot. The Prime Minister confirmed what he has consistently told the House and what appeared in The Times on 13 October—that he categorically rules out holding a referendum on the EU constitution. [HON. MEMBERS: "Why?"] Because of the status of constitutional treaties ever since, under a Labour Government, we had a referendum to confirm our membership of the EU. If we decide that joining the euro is in Britain's economic interests, we shall, again under a Labour Government, have another referendum. Constitutional treaties are best negotiated by the sovereign source of authority in this country—the House of Commons and Parliament at large. Every constitutional treaty during the past 30 or so years of our membership of the EU has been dealt with in that way. As for the remarks attributed to Sir Stephen Wall—the European policy adviser to the Prime Minister—in the article, I am advised that they do not reflect his views in any shape or form. The position remains the one that the Prime Minister has set out on many occasions, including to this House.
Joan Ruddock: Is my right hon. Friend aware that the publication of the findings of the farm-scale trials today indicates that two genetically modified crops and their treatments were found to be harmful to wildlife and that the third looks good only because it is compared with a conventional crop treated with a chemical that is likely soon to be banned? Given that that follows a science review that was inconclusive, a cost-benefit report that found no economic case and the wholly hostile public debate on the matter, is it not time that the issue of the commercialisation of GM crops is debated in this Chamber? Will he use his best offices to see that this is done as soon as possible?
Mr. Hain: I acknowledge the expert interest and attention that my hon. Friend has given to this issue, which is welcome. She referred to the publication of the farm-scale evaluations and the achievement that that presents. It is the biggest ecological study ever undertaken of the effect of any farming practice and the Government should be commended for having such an independent study. We need some time to consider the matter, but I will certainly consider seriously her request for such a debate.
Mr. John Horam: Will the Leader of the House consider seriously allocating time to a debate on the Government's policies on transport? He will have

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seen the excellent report produced by the Transport Committee this week, which pointed out that overcrowding, especially in the London commuter area, is seriously damaging commuters' health. The companies in question are also underestimating, in the statistics they publish, the true extent of overcrowding, which we have long suspected. The regulator is in discussions with the Secretary of State for Transport about allocating a further £1.5 billion to railway maintenance, and we also need to know more about that.
Mr. Hain: I am aware of the Committee's report and it needs to be studied carefully. Nobody is in any doubt that improvements are needed in our transport system. The difference between what the Labour Government are doing and what was done under the Conservatives is that whereas they cut support for railways, buses and public transport in general, so that we inherited a dreadful legacy—as everybody knows—of a bodged rail privatisation programme, we are investing £180 billion in a 10-year plan to improve our transport system. Some 1,500 new trains have come into service since we were elected and rail passenger journeys have risen by 20 per cent. since 1997. We are seeing increasing use of our rail services, but the quality of life for rail travellers needs to be improved, as any of us who have used the underground or main line rail services know.
David Winnick: Will there be an opportunity to discuss in the House the proposed state identity card scheme? If the Cabinet discusses the matter, I hope that the House will also be able to do so. Any such debate should be before the Queen's Speech, just in case any such proposal were included in it. I would have no difficulty in collecting many more than 25 signatures from the parliamentary party opposing any such scheme.
Mr. Hain: There are strong feelings on both sides about this issue and it is a matter that the Government are considering and debating. The issues are complex—
Mr. John Bercow: What is your view?
Mr. Hain: If the hon. Gentleman gives me a moment, I shall tell him. Virtually all of us carry ID of some kind around with us. The development of driving licences and passports points in the direction of an identity card, and any such scheme should be considered in that context, including the issue of biometric data. As to whether it should be compulsory and how it should be funded, the Home Secretary and the Cabinet are considering those issues and will continue to do so. If there is an opportunity to consult the House on the matter, we will of course do so.
Sir George Young: I am grateful to the Leader of the House for his kind remarks about my Committee's latest report. When will we have a date for the pre-Budget statement? It is normally in early November, but it is not even on the horizon at the
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moment. Why has it been delayed? When we have the statement, may we then have a debate in Government time on the economy?
Mr. Hain: I am discussing with my right hon. Friend the Chancellor of the Exchequer the timing of the pre-Budget statement. Of course, the Queen's Speech is late this year and the statement needs to be sequenced around that. As soon as I am in a position to give the right hon. Gentleman and the House notice of the statement, I shall do so.
Mr. Clive Betts: I am sure that my right hon. Friend is aware of the excellent legislation that the House recently passed to restrict the sale and use of fireworks. At a meeting in Tinsley in my constituency the other night, more than 100 people complained about the continuing misuse of fireworks, especially the large airbombs, which are little more than dangerous explosives. Will my right hon. Friend therefore ensure that the regulations to implement the legislation are introduced to the House as quickly as possible before—as Superintendent Brennan said to me the other night—someone is killed? We need to ban the sale and use of such fireworks as soon as we can.
Mr. Hain: I welcome my hon. Friend's intervention and I will ensure that the Secretary of State for Trade and Industry is made aware of it. As he knows, the Fireworks Act 2003 has now been enacted, but the regulations need to be introduced. I have experience of the concerns of many of my constituents about the problem. Some of the modern fireworks are extremely powerful and noisy, and they can frighten people. We need to get a grip on the problem.
Mr. Alex Salmond: In the debate next week on the independent judicial inquiry into the causes of war with Iraq, will the Prime Minister open for the Government? If we take, for example, the charges by the right hon. Member for Livingston (Mr. Cook), a former Leader of the House, that the Prime Minister was aware, at the point of going to war, that Iraq did not present an immediate strategic threat, only the Prime Minister can tell us whether that is true. If the Prime Minister is not prepared to submit himself to an independent judicial inquiry, surely he has an obligation to submit himself to parliamentary scrutiny, so we can find out whether he is telling the truth.
Mr. Hain: The Prime Minister has submitted himself to parliamentary scrutiny and been accountable to this House, including to the right hon. Gentleman, more consistently than any Prime Minister on any previous issue of military intervention abroad. That point is simply nonsense. As for the future, the Hutton inquiry is deliberating at the moment and will report in due course. I have also just announced that we will have a statement immediately following its publication and I would have thought that that would be the proper opportunity. In respect of what my predecessor said in his book, the Prime Minister has categorically refuted that version and the right hon. Gentleman should respect that.
Alan Simpson: May I press the case for a statement on GM crop trial results that have

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been published today and for an opportunity for the House to debate and vote on the question of commercialisation of GM crops? Given that of the three trials two were disadvantageous to the case for GM crops and the other, on maize, was invalidated because of its dependence on a carcinogenic herbicide, and given that the public do not want to eat GM crops, the farmers do not want to grow them and supermarkets do not want to sell them, is not it time that Parliament had the opportunity to take the side of those who are campaigning for safe food supply rather than the corporations who seek to take ownership of the food chain?
Mr. Hain: As I said a moment ago, it is important that the Government and the House have a chance to study the findings of this thorough investigation. I am very sympathetic to the idea of a debate on the matter, about which there is much concern, both inside the House and outside it. A debate at some point in the future will be much more informed as a result of this investigation.
Mr. John Bercow: Will the Leader of the House use his prerogative to arrange a debate on taxation in which he can take part? The Government have been busy plundering the pockets of the people for the past six and a half years, but the input of higher taxation has not been matched by the output of improved public services. Would not such a debate allow us to discover whether the Leader of the House still believes that higher taxes are the answer, or whether he now understands, after six and a half years, that without real reform in the method of delivering public services the Government will continue to betray the patients, parents and passengers of this country, as they have done consistently?
Mr. Hain: I shall respond to the hon. Gentleman's questions about taxation in a moment, but he mentioned patients. His party's policy is to rob the NHS of £2 billion and to allow patients with the ability to top up the cost of operations to steal money from the NHS. Nurses, doctors and consultants would be sacked in the process, and the money would be diverted into private hospitals. That is a very dangerous policy for this country's patients. The Government put an extra 1 p on national insurance contributions—the increment applied right up the income scale, and was not cut off at the normal level—to raise £8 billion for investment in the NHS, education and the public services generally. The Opposition are committed to cutting investment by 20 per cent. We have introduced a fair tax system. If there is an opportunity to discuss our tax policies—in an Opposition day debate, or in a debate that we might call for that purpose—we will defend our low, 10p, starting-rate tax for the very lowest taxpayers. We will also defend the way in which we have brought down the basic rate of tax, and the way in which we have introduced an even fairer tax system through tax credits. That compares with the unfair tax system and the continuous rises imposed by the previous Tory Government.
Helen Jones: Given the continuing concern about obesity and poor diet among young children, and the predominance of fat and sugar in their diets, will my right hon. Friend arrange for a
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debate on school meals provision and the role that it plays in promoting good health and healthy eating among young people? Does he accept that serving cheap and poor-quality food to young children may appear to save money, but it has long-term high costs in terms of poor health and educational attainment? Does he agree that the House should have the chance to debate the matter, so that we can have a proper, joined-up policy on this issue?
Mr. Hain: I hope that there will be an opportunity to discuss the matter, and remind my hon. Friend that she can apply for a debate on it. I agree that the matter of school diets and the food that youngsters eat in general is very important. We are what we eat. We are as healthy—or unhealthy—as the food that we take in. It is important to address this matter. My hon. Friend's intervention, and the Government's approach, will help that to happen.
Mr. David Heath: Will the Leader of the House arrange for an urgent debate on the parlous state of the diary farming industry? Many farmers are finding it almost impossible to carry on their businesses because of the unsustainably low price of milk. The only people to benefit are the owners of the large supermarkets. Farmers in my constituency believe that the Government do not care and that Parliament has lost interest: will the right hon. Gentleman prove them wrong?
Mr. Hain: The idea that the Government do not care about farming or rural areas is defied by the facts. We have invested much more support for rural communities than any previous Government. However, in respect of the hon. Gentleman's specific request, I shall certainly draw the matter to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.
Mr. Dennis Skinner: Will my right hon. Friend look into the question of the transfer of housing stock by some local authorities? Perhaps he can give me an off-the-cuff answer today. If an authority decides, as a matter of principle, to retain its council houses rather than sell them off, surely it should not be penalised financially?
Mr. Haim: I am with my hon. Friend in spirit on this matter, as I always am. One of the difficult problems inherited by this Government was the relatively small amount of social housing as a result of the policies pursued by the previous Conservative Government. We have endorsed the important right of people to buy their council houses, but my hon. Friend raises an important point, and I shall ensure that my right hon. Friend the Deputy Prime Minister is made aware of it.
Mr. Graham Brady: My constituent Mr. Peach faxed me this morning to say that police last night apparently visited the Bull's Head pub in Mobberley. They were not looking for drugs or guns, but wanted to inform patrons that it would in future be illegal to hold traditional music sessions there. Can we have an urgent debate or statement next week on the implementation of the new music licensing regime?

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When the new licensing legislation was being considered, Ministers assured the House that there would not be absurd and excessive regulation in its implementation, but there are worrying signs that the absurdities that we feared are taking place. If that is happening, we need a debate to stop it going any further.
Mr. Hain: The Government are not in favour of absurd regulations on this matter. The hon. Gentleman knows that the issue was carefully and thoroughly debated in Standing Committee. However, I shall certainly refer the episode that he describes to my right hon. Friend the Secretary of State for Culture, Media and Sport. I have no reason to doubt that the facts are as he described, so it is obviously a matter for concern.
Mr. Harry Barnes: My hon. Friend and constituency neighbour the hon. Member for Sheffield, Attercliffe (Mr. Betts) asked about fireworks abuse and said that the Fireworks Act 2003 needs to be implemented. That might take a while, but the Department of Trade and Industry can still stress that the existing law allows the police, environmental health and trading standards officers, and bodies such as the Royal Society for the Prevention of Cruelty to Animals to act. Those official organisations should not argue that they must wait for the new legislation to be implemented before they can do anything. They should be proactive and co-ordinate their activities. We are waiting for a statement on the matter from the Department, but does my right hon. Friend agree that it would be useful if it were to make an earlier statement to the effect that that is how those bodies ought to act?
Mr. Hain: My hon. Friend makes a powerful and convincing point, which I shall draw to the attention of my right hon. Friend the Secretary of State for Trade and Industry. I know that she is as concerned as any hon. Member about how the problem has escalated.
Mr. Paul Goodman: May we have an urgent debate on the euro to clear up confusion about an incident reported by the right hon. Member for Livingston (Mr. Cook), the former Leader of the House, in his memoirs? An extract from those memoirs carried by The Sunday Times stated that the Prime Minister laughed and said:
"'Even the Treasury officials can't find out what's going on over the economic assessment, never mind us here at No. 10".
Can the Leader of the House clear up the confusion?
Mr. Hain: There is no confusion. The conclusion of the economic assessment was announced on 9 June. My right hon. Friend the Chancellor of the Exchequer came to the House burdened by 20 studies of the matter in the end. Along with other Cabinet Ministers, I had to read them all. It was the most thorough economic assessment of the euro ever undertaken by this or any other Government. I do not understand how it can be claimed that there was confusion over the matter. The process was completely transparent, very detailed and very thorough.
John McDonnell: The Government still intend to publish the White Paper on
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airport capacity before Christmas, but some malevolent forces are suggesting that there might not be adequate time for debate. Will my right hon. Friend assure me that the House will be informed of the Government's proposals first and before all others, and that there will be adequate time for debate and for questioning my right hon. Friend the Secretary of State for Transport on the proposals?
Mr. Hain: First, I acknowledge that my hon. Friend has a direct constituency interest in this matter in respect of Heathrow. However, I am sure that my right hon. Friend the Secretary of State for Transport will want to inform the House about these important matters first, and that he will want to be questioned by and accountable to the House on this important matter. I am sure that my hon. Friend will have the opportunity to express his constituents' views in those discussions.
Jim Sheridan: My right hon. Friend may be aware of early-day motion 1731.
[That this House congratulates the Scottish Sunday Herald in exposing the so-called dead peasants insurance scheme where employers can take out life insurance for their employees without their knowledge or consent and then cash in this policy when the employee dies; and calls on the Government to introduce effective legislation to outlaw this dishonest practice.]
I seek an assurance from my right hon. Friend that he will use his extensive influence with the appropriate Minister to carry out an inquiry into the extent of that bad practice and, if necessary, implement effective legislation that will protect British workers from it.
Mr. Hain: Obviously, my hon. Friend has raised an issue that deserves consideration and I will certainly ensure that my right hon. Friend the Secretary of State for Trade and Industry considers it.
Kevin Brennan: On the new 118 directory inquiries, has my right hon. Friend, like me, had occasion to use one of those so-called services only to be told that he can be put through to the number without being informed that there is a charge for that part of the service? Is that not a complete rip-off? Is it not an example of public service where the choice is not necessarily better for the consumer? The only winners in this case seem to be rip-off telecommunications companies, advertising agencies and, perhaps, if he wins his case, David Bedford the superannuated long distance runner.
Mr. Hain: Obviously, that matter has excited a great deal of concern in my hon. Friend and others. We will need to look into it.
Mr. David Drew: Further to the matter raised by my hon. Friend the Member for Bolsover (Mr. Skinner), Stroud district council is engaged in a ballot on large-scale voluntary transfers, which I oppose. Despite the huge sums of money that are being put in by those who are encouraging the sell-off, the group in charge—it is not a Labour group, I am pleased to say—has passed a protocol whereby all councillors are banned from putting out any information. Those councillors who do not agree have made their views

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known and the Audit Commission has been brought in to decide whether they are meeting the terms of the protocol. That is an abuse of the role of the Audit Commission. Will my right hon. Friend talk to the Office of the Deputy Prime Minister to look at the way in which the ballots are taking place and, more particularly, into how the Audit Commission, which should have no role in this, is being used? Will he comment on that?
Mr. Hain: My hon. Friend has raised some serious matters. Having visited his constituency a few years ago with him, I know of his concern and also that of my hon. Friend the Member for Bolsover (Mr. Skinner). There is an opportunity to table questions to the Deputy Prime Minister today. Perhaps he might avail himself of that opportunity.
John Cryer: Has my right hon. Friend seen early-day motion 1751 in my name and 10 hon. Friends'?
[That this House calls on the Government to bring the Royal Mail management into talks with the Communication Workers Union on the issue of London Weighting.]
It concerns the refusal of the Royal Mail management to come to the negotiating table to negotiate with the Communication Workers Union in the dispute over London weighting, which has led to the present strike. I was on the picket line in Hornchurch and Rainham this morning. May we have a debate or at least a statement on the dispute? That would enable the Secretary of State for Trade and Industry to tell us from the Dispatch Box why she has not as yet ordered the senior management of Royal Mail to go to the negotiating table and why she continues to allow senior managers to provoke the CWU and engage in a campaign that I think is aimed at eventually breaking the union, which represents employees who earn as little as £13,000 a year?
Mr. Hain: The Government do not want to see the union broken, if that is the objective of anyone concerned. It is important that post office workers— Royal Mail workers in particular—are properly represented and have a right to put their case, especially given the high living costs in London. I am sure that he will agree that the end result of the dispute must be a negotiated settlement—a fair settlement, but one that can be financed. We must continue to work for that.
David Cairns: Has my right hon. Friend had the opportunity to read the
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reported remarks of the Malaysian Prime Minister, Mahathir Mohamad, who yesterday called on Moslems to use brains as well as brawn to fight Jews who "rule the world". He is alleged to have said,
"The Europeans killed six million Jews out of 12 million. But today the Jews rule this world by proxy … They are already beginning to make mistakes. And they will make more mistakes. There may be windows of opportunity for us now and in the future. We must seize these opportunities".
Will my right hon. Friend join me in condemning those remarks as dangerous nonsense? Does it not highlight the need for an urgent debate on the rise in global anti-Semitism. The last time that we witnessed a rise on this scale it had disastrous consequences.
Mr. Hain: Like my hon. Friend I cannot understand how that statement came to be made. We should all focus on getting greater understanding and reconciliation between all faiths, especially between Jews and Moslems who live side by side in the middle east. Their future is in coming together as a community rather than being divided. Such statements do not help.
Mr. David Chaytor: The Leader of the House will know that today in the north of England there are two significant local council by-elections in which candidates with explicitly racist platforms are standing for election. Interestingly, the Conservative party cannot even field a candidate in one of those elections—it is a shame that more Conservative Back Benchers are not here to hear that news. I am sure that my right hon. Friend will agree that whatever the outcome of those by-elections this is an issue that can no longer be swept under the carpet. This House should be debating vigorously the reasons for the reappearance of political parties with neo-Nazi and fascist views. We should be looking at the social and economic conditions that give rise to that phenomenon in certain parts of the country. Will he find time for a debate on that matter in the near future?
Mr. Hain: I will certainly consider the opportunity for such a debate. As one of the founders of the Anti Nazi League in 1977, when that problem was last rampant, I share his sentiments exactly. It is crucial that we confront the racists and the Nazis wherever they appear, and that, when they stand candidates in elections, political parties campaign against them to expose their racism and neo-Nazism. Otherwise, there is a great danger of divisions being opened up and of spreading prejudice and racism.

Defence Policy
[Relevant documents: The Sixth Report from the Defence committee of Session 2002–03, A New Chapter to the Strategic Defence Review (HC93—I and II) and the Government's Response thereto, Third Special Report, Session 2002–03, HC 975.]
Motion made, and Question proposed, That this House do now adjourn.—[Paul Clark.]
1.17 pm
The Secretary of State for Defence (Mr. Geoffrey Hoon): This is the first of two debates on defence just one week apart. Today's debate focuses on defence policy. Next week's will look in more detail at equipment procurement. I recognise that equipment issues cannot be separated neatly from policy matters, but I want to draw a distinction between them for the purposes of these two debates. Right hon. and hon. Members will have an opportunity to examine current equipment issues in detail on 23 October.
Today, I shall give the House an overview of the policy changes driving work at the heart of the Ministry of Defence. I shall explain what those changes are and why they are necessary. In defence, policy changes have usually been gradual. Indeed, defence saw a remarkable continuity and consistency of policy certainly in the years from the end of the second world war to the end of the cold war. However, defence policy can never be static. Historically, there are periods when major and rapid changes are necessary. That reflects the emergence of new threats and requirements and the passing of former threats against which the armed forces have previously been configured.
Britain's armed forces have always been prepared to face up to change. That is a key reason why they have continually been among the best in the world and have punched above their weight for decades. We are in a period of rapid change again now. It requires new thinking and reform to ensure that our armed forces can continue to respond to the changing strategic environment in which they must operate.
The challenge for the Ministry of Defence and for the armed forces in recent years has been to ensure that their planning and assumptions for the future reflect the changes begun by the collapse of the Soviet Union and the military threat it posed. Fifteen years or so ago, we were used to assessing our military capability in terms of a numbers game, whether it was tanks, fighter aircraft, destroyers or frigates. There has been continuing and sometimes rapid change since, much of it at the time difficult and controversial. That was especially true of some of the major reductions in force structures across all three services in the early 1990s. Hundreds of tanks, all our conventional submarines and nearly 150 front-line combat aircraft were withdrawn during that period.
Ageing Chieftain tanks could not meet the logistical and environmental demands of deployed operations outside western Europe. We could barely support two armoured divisions in Germany. The large armoured force on the Rhine was a costly liability in the post-cold war period, not the basis for an expeditionary army. The conventional submarine force, useful though it had been in the Falklands and the Gulf, was primarily designed to help plug the north Atlantic gap against Soviet
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submarines. The boats were not suitable for rapid reaction operations at far distances, so, in the early 1990s, they had to go. So, too, in 1992 did the Phantoms and, in 1994, the Buccaneers that provided air defence against a threat from massed Soviet bombers.
Much of what was done during that period was retrenchment. The new systems that came into service during the 1990s, and those that were retained, were inspired by the cold war but adaptable for the new environment although they were not always optimised for it: aircraft carriers that were smaller than needed for significant operations against targets ashore; armoured forces that, although leaner, more modern and more easily supported, could deploy only slowly, by sea; and combat aircraft that were too specialised in single roles and lacked either the precision weapons to hit targets with minimal collateral damage or access to a network to find targets in unfamiliar environments.
The choices that faced defence were stark. Change was needed, not only to deliver a peace dividend but also to ensure that continuing capabilities were useful in a new strategic environment. The demands to use those capabilities were very real. Our armed forces became engaged quite suddenly in a series of expeditionary operations in the Gulf and the Balkans. Changes in force structure were opposed by some and questioned by many more, yet what seemed impossible or controversial then is today largely taken for granted as being self-evidently correct.
The 1998 strategic defence review did not conclude that process of change; rather it gave it a clear policy basis, setting our armed forces clear tasks and capability goals and moving them all firmly into the expeditionary era. Our forces now have far fewer tanks, fast jets and naval escorts than they did a decade or more ago, but they are significantly better organised, trained and equipped for expeditionary operations. That reflects decisions to invest heavily in the less glamorous capabilities that give our forces strategic reach and enable them to deliver effect when they get to a crisis.
Mr. John Smith: Does my right hon. Friend agree that that point was proven during the recent Iraq conflict when we were able to deploy a larger British force in half the time that it took 10 years ago?
Mr. Hoon: My hon. Friend is right. That is why we must anticipate the need for those capabilities, as I shall set out in more detail in a moment. I certainly agree with his observation.
Among the less glamorous capabilities in which we have invested in recent times are ro-ro shipping, C-17 heavy-lift aircraft and all-weather precision munitions. They have all been brought into service as a result of the philosophy set out in the SDR.
That process of change cannot stop. Technologies and capabilities move on—whether ours, or those of our allies or our potential enemies. The security environment continues to evolve; old threats recede further or disappear, newer ones become more real and more dangerous. Inevitably, much of the current capability of our armed forces still reflects the position in the immediate post-cold war era rather than the demands of the future. Further radical change is needed and, as before, we must think ahead and not look back.

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Thinking and planning ahead is crucial. I take this opportunity to express my thanks to the men and women, both military and civilian, in the Ministry of Defence who undertake that work. Without their expertise and professionalism, our armed forces would not be able to operate to the high standards that we have come to expect. They may not always be visible, but their work makes a major contribution to every operation we undertake.
However, although good planning can help us to anticipate many changes, the nature of emerging threats and the fast pace of geopolitical change mean that we will not always be able to predict precisely the challenges that we shall face. The events of 11 September 2001 exemplified the new threats to nations right across the globe, obviously including the United Kingdom. I commissioned a new chapter to the strategic defence review to ensure that our thinking took those new threats into account.
Llew Smith: On planning, the Government announced about £2 billion extra for the upgrading of Aldermaston, yet in almost the same breath they said that they were not going to upgrade or replace Trident. If that is the case, will my right hon. Friend outline what role there is for Aldermaston?
Mr. Hoon: I have announced no specific decisions on Trident. The Government's nuclear policy has not changed. Obviously, it is important that we retain that capability while it fulfils an important function in Britain's defence policy, but there have been no significant adjustments in that policy and I invite my hon. Friend to look at the various announcements that we have made on that matter. There is no significant change to Britain's policy on those questions.
The results of the new policy work that the Ministry of Defence has undertaken in the last year, together with further work flowing from the new chapter, will be brought together in a defence White Paper that I intend to publish later this year.
Since the publication of the new chapter, our armed forces have undertaken major operations in Iraq. They have faced, and continue to face, difficult challenges. Like a number of right hon. and hon. Members, I attended the service of remembrance here in London last week. I know that all Members of the House will wish to join me once again in expressing our sympathy to the families of those servicemen who lost their lives.
The stark reality of those operations and the courage and dedication of the people undertaking them should remind us all why the issues that we are discussing today matter so much. The policies that we are developing are aimed at giving British servicemen and women the best possible levels of support.
Dr. Gavin Strang: Will my right hon. Friend consider a policy of replacing the US-led coalition forces, which are occupying Iraq, with a United Nations force? In that context, may I put it to him that the sooner all the coalition forces in Iraq are replaced by the military of other nations the sooner we shall achieve stability in that country?
Mr. Hoon: My right hon. Friend knows the Government's position. There have been extensive
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discussions in the UN Security Council, and earlier today it was my understanding that they are likely to lead to the agreement of a further Security Council resolution. Clearly, it is important to the Government that we move to a position where ultimately and, we hope, quickly the Iraqis will be responsible for their own affairs, but at this stage, given continuing instability in Iraq, it is also important that the coalition forces continue their excellent work. Assuming that the Security Council resolution is agreed this afternoon—our time—we shall continue to discuss further steps that will lead to the greater involvement of the international community. However, at this stage, I cannot go as far as my right hon. Friend is urging the Government.
We are planning to deal with the new threats that we face, but in doing so we must ensure that the changes that we make are driven by operational and strategic needs. We will not make changes for their own sake; nevertheless, there will be difficult choices to be made, and we will have to be frank in our assessment of capabilities that no longer meet the same needs that they once did.
There can be no doubt about the achievements of our armed forces. They have never been content to rest on their laurels. They have been prepared to take sometimes difficult decisions to change to meet their future needs.
Angus Robertson: Can the Secretary of State tell the House the Government's intentions on confirming the future of the defence fire service? I understand that an announcement was scheduled for this month. When will the House be informed about when a decision will be made?
Mr. Hoon: As the hon. Gentleman knows, that work is under way and no specific decisions have yet been taken. I assure him and other hon. Members that the House will be informed as soon as decisions are reached.
Our planning draws on the preliminary lessons that we have learned from recent operations in Iraq but also from operations in many other parts of the world that have not necessarily received the same media focus in recent months. We must not be seduced into the old error of planning to fight the last war; there is a clear contrast between the operations that we have undertaken in Afghanistan and those in Iraq, just 18 months apart, yet both involving the same set of military capabilities. Let me therefore try to set out broadly the kind of world in which we believe our armed forces will be operating, after which I will look at the concepts, force structures, processes and, most important, the people whom we will need to deal with that world.
At the broad strategic level, we can see certain trends. Continuing globalisation is likely to mean that the United Kingdom becomes even more open as a society and even more dependent on broad stability elsewhere in the world, especially with key trading partners in the European Union, the United States and, increasingly, Asia. Conflict between states is likely to become rarer—certainly in the United Kingdom's key areas of interest—but at the same time other threats will develop.
Countering weapons proliferation and confronting the threat of terrorism will continue to occupy much of the armed forces' effort. The nature of asymmetric

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conflict and the readiness of certain groups to source and deploy weapons of mass destruction against us and our interests will require a flexible, fast-moving and, usually, multilateral response. There is also a danger that, in the next 30 years, new WMD powers may emerge, as the technology proliferates and technical advances make production easier.
In responding to those challenges, we must recognise that the treatment of those issues is not exclusively or indeed even primarily military, but, to the extent that a military response is involved, is best managed through alliances, partnerships and co-operation.
NATO and the European Union, in their differing but mutually supportive contributions to our security, will continue to occupy key positions in our planning. NATO will remain the basis for our collective defence, for crisis management in the Euro-Atlantic area and for facing together new threats to our security. NATO, too, is adapting to meet those threats. For example, the new NATO response force was inaugurated yesterday.
Mr. Bernard Jenkin: Sometimes the Government say that NATO is the cornerstone of our defence. The last Queen's Speech said that NATO is the cornerstone of our security. Sometimes the Government draw a distinction between the defence role of NATO and the security tasks of the EU. May we make it absolutely clear that NATO is the cornerstone of our security in its widest sense and that, if there is to be a superior alliance in European security, it has to be NATO? That is what the Foreign Secretary has said previously.
Mr. Hoon: I entirely agree with the hon. Gentleman, but I cannot help noticing that, as soon as I mentioned the phrase "European Union", he leapt to his feet—something that I have observed over a number of years in these fascinating debates. I have no difficulty in emphasising NATO's importance as the basis of our collective defence and security if that helps the hon. Gentleman in his difficulty.
That multilateral future will make it imperative that our forces are able to interoperate with those of other countries. Most importantly, it is highly unlikely that the United Kingdom would be engaged in large-scale combat operations without the United States. That judgment is born of experience, shared interests and our assessment of strategic trends.
That all means that we must build more flexible and more rapidly deployable forces that can quickly link themselves with those of our allies. We will do that by harnessing technology and enhancing capabilities, rather than through more platforms. It will also involve investing in the people who use them.
Ms Gisela Stuart: I suppose that I am also guilty of jumping up every time that I hear the word "Europe".
In the context of capabilities, I hope that my right hon. Friend will say a bit more, first, about co-operation between NATO and the EU—not least about the expressed concerns of the United States about our agreeing to precise terms of the Convention on the
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Future of Europe—and, secondly, about developing capability so that the European reaction force and a NATO reaction force will draw on the same resources.
Mr. Hoon: I am grateful to my hon. Friend for making that point. In the past 10 days, I have had a meeting of Defence Ministers in NATO and a meeting of Defence Ministers in the EU. There was absolute agreement among Ministers at both meetings not only about the importance of the relationship between NATO and the EU, but the importance of developing capabilities—whether for use by NATO as an alliance or for use in autonomous operations by the EU, or indeed for use by individual nations. My hon. Friend and I absolutely agree about that important relationship, on which the Government will continue to focus.
Mr. Crispin Blunt: Will the Secretary of State say something about the Government's attitude to our European partners beginning, in effect, to start to merge their armed forces to provide greater flexibility for their rather limited budgets? What will be our attitude if they start to merge their armed forces so that they have some form of single executive direction?
Mr. Hoon: Our emphasis has always been on improving our European partners' military capabilities. The way in which they do so is obviously a matter for them, but I have emphasised today the importance of interoperability. If certain countries chose to pool their resources—for example, to produce a capability that would not otherwise be available—that would be a wholly sensible approach that we would welcome, although, clearly, it would depend on the capability being useful and available. I do not advocate merging forces for the sake of it, but if two countries can join together to fill a capability gap—the process that we considered as part of the Helsinki headline goal target—that would not otherwise be filled, that seems a very sensible and welcome approach.
We need armed forces that are capable of doing their job in that new environment, rather than those that might look impressive in what I might describe as Soviet-style parades. There are those, such as the hon. Member for North Essex (Mr. Jenkin), who count quite a lot and might see themselves as the new "Bernard" Brezhnev, counting tanks and missile launchers as they rumble past. The reality is that our forces will need the ability to reconfigure forces and equipment rapidly to deliver critical effect at the right moment. That is what will determine success.
We are now able to bring force to bear with ever-greater precision, from a wide variety of platforms, to attack and reduce the combat power of an adversary. The astonishing speed with which we can increasingly operate can destabilise an adversary and achieve decisive effect, causing the enemy to give up even though many of its military forces may still remain—what we call effects-based operations, which focus on undermining an opponent's ability to exercise effective command and control of its forces, rather than simply on battlefield attrition. Effects-based operations are not new—just as asymmetric warfare pre-dated the events of 11 September 2001—but a process is being developed

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that provides a better understanding of what effects we might be able to achieve and how best we might achieve them.
Patrick Mercer: I take the right hon. Gentleman's point about Mr. Brezhnev's bean-counting approach and I welcome his comments about radical thinking and not wishing to fight the last war again, but everything he has said involves conventional forces, expeditionary warfare and engaging enemies on the battlefield: not once has he talked about homeland defence and the integration of armed forces and civil forces that will be so necessary in asymmetric warfare.
Mr. Hoon: I am grateful to the hon. Gentleman for raising that issue. I do not overlook that important aspect of defence policy. We dealt with it in some detail in the new chapter, and we have continued to develop it in the work that flows from the new chapter, especially in respect of augmenting our reserve forces to allow a rapid response internationally and domestically. I entirely agree that, in the new environment following the end of the Soviet Union's threat to the United Kingdom, we must pay significant attention to the threats to the United Kingdom, perhaps in a way that had not been thought necessary in a previous generation. We certainly take such things fully into account.
People are at the heart of effects-based operations. The continuing trend towards expeditionary and multinational deployments will have an enormous impact on the skills required of service personnel in the coming years and on the way in which we train them to apply those skills to the tactical situations in which they operate.
Experience tells us that, for many military assets, such as deployed headquarters and logistical support, conducting several smaller scale operations is more demanding than one or two larger operations. Frequent and often concurrent medium and small-scale operations have been the exact pattern since the strategic defence review, with a new operation arising on average about once a year. While we must therefore retain the capacity to undertake the most demanding large-scale operations as part of a coalition, it has become clear that we need to structure our forces with a focus on the more frequent demands of concurrent medium and small-scale operations.
The operational burden is not falling evenly across the range of capabilities. The recent pattern of operations, and of those that we foresee in the future, place extra strain on certain of our forces—the elements that act as multipliers of combat power by enabling more rapid manoeuvre, more rapid deployment, better intelligence and target acquisition, greater accuracy and, therefore, the ability to undertake operations more quickly and at lower cost in life and materiel. We must therefore look hard at whether we have enough of those kinds of forces
The size and shape of each of the services will need to evolve to optimise joint operations and provide greater flexibility and capability to project power. In the case of the Army, experience demonstrates that our current light forces cannot provide the combat power required by some of the more demanding operations in which rapid deployment is needed, so we must move from the
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current mix of light and heavy forces, representing the two extremes of deployability and combat power, to a more graduated and balanced structure of light, medium and heavy forces together with a greater emphasis on enabling capabilities such as logistics, engineers and intelligence. That will lead inevitably to a different requirement over time for main battle tanks, other heavy armoured fighting vehicles and heavy artillery, offset by a new requirement for more medium-weight forces based on the future rapid effects system family of vehicles.
We are currently engaged in the Royal Navy's largest shipbuilding programme for many years. With two new aircraft carriers, Type 45 destroyers, Astute class submarines, new amphibious shipping and Royal Fleet Auxiliary support vessels, we are optimising the fleet for joint operations. Some of our older vessels contribute less well to the pattern of operations that we envisage, and some adjustments are likely to be needed.
With the introduction of Typhoon, the Royal Air Force will enjoy a significant margin of advantage in air warfare over any potential opponent for the foreseeable future. The emphasis of air power will shift from dedicated air defence aircraft such as the Tornado F3 to multi-role platforms equipped with precision-guided weapons and enhanced sensors.
On a wider front, enhancing the armed forces' ability to respond to change means changing the way in which we support them, which will place a premium at all levels on flexibility, innovation and improved systems and processes.
We are engaged in a process of essential change that will lead to the introduction of new technologies and practices into the armed forces. That has always been an essential part of our long-term planning. As in the past, it also means that, inevitably, the new capabilities replace old ones. Those who suggest that this significant modernisation and adaptation of our armed forces is somehow a cuts exercise to score political points are at best mischievous and at worst risk damaging the morale of our servicemen and women.
We have a responsibility to provide our people with the equipment to carry out the tasks that we currently ask of them. The Spitfire played a crucial role in winning the battle of Britain, but as the jet age opened it was obsolete by 1950. The same is true today of many of the technologies and practices that were designed to meet the threats of the cold war. When we dispense with unnecessary capabilities, it is because they no longer meet the requirements of our modern armed forces.
Mr. James Gray: The Secretary of State accuses some of his detractors of making political capital out of suggesting that some of the things that he has described, many of which we endorse entirely, are driven by Treasury cuts. Will he therefore be happy to give us an absolute assurance that, five years from now, under his Government, our forces will be of the same strength and defence spending will be at the same level or at higher levels than today?
Mr. Hoon: The whole point of what I have been setting out to the House is to emphasise that our armed forces are better trained, better organised and better equipped than they have ever been in our history. I expect that, under this Government, that process will continue.

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We need to use the resources we have to provide the best support to our armed forces. That is why the Ministry of Defence undertakes what amounts to a capabilities stocktake every year against our future plans. We examine the systems that we have, those that we have chosen to purchase and those that we may need in the future. The strategic environment changes rapidly, and we must make sure that our planning evolves with those changes. Like all Departments, the Ministry of Defence has only so much money to spend, and it must spend it effectively.
All Departments must also deal with fluctuating financial pressures and live within their budgets: the Ministry of Defence is no exception. Sometimes we have to pay a price for our success. For example, recruitment has been more successful this year than we had anticipated. That is good news, but it also affects the demands on the budget. We also have to manage significant exchange rate fluctuations, and this year there is the added complication of managing the impact of operating full resource accounting and budgeting for the first time. That may require some adjustments. The details are still being worked through, but they will not affect our overall strategic direction.
Patrick Mercer: If recruitment has been so successful this year, albeit that the Army in particular remains far behind its overall recruitment targets, why has it been capped for the next financial year?
Mr. Hoon: I know that the hon. Gentleman thinks carefully about these issues, but I have emphasised that we must not determine them simply by reference to numbers. I know that he listened carefully to what I said. The issue for the Army today is not the number of infantry battalions that we can deploy but the number of supporting, enabling forces that can allow infantry battalions to deploy when we need them. That is the emphasis that I would like to hear from him.
I have already praised the efforts of the Ministry of Defence's headquarters staff, both military personnel and civil servants.
Mr. Blunt: Will the Secretary of State give way?
Mr. Hoon: I have given way a great deal today, including to the hon. Gentleman. I need to reach a conclusion.
Headquarters staff must not rest on their laurels. The cranes and scaffolding around the Ministry of Defence's main building in Whitehall remind us that the modernisation drive will go right to the heart of our defence machine. Through the adoption of new working practices and a modern open-plan working environment, we will slim the number of people in our London head office by more than 15 per cent. Whether in the headquarters, in the civilian staffs or in the services themselves, it is people who will ultimately make the difference. Across the Ministry of Defence, therefore, we need people who have the skills and ability to deal with the range and complexity of modern operations. That will mean different manning requirements and different skill sets to meet the
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changing environment. We will need to rebalance our force structures to ensure that the burden generated by the expected future operational tempo does not fall on certain individuals disproportionately, as it does too often today.
Mr. David Drew: One thing that my right hon. Friend has not mentioned is the engagement of British forces under blue helmets for the United Nations. A group of us went to the Democratic Republic of the Congo last week, and we were able to meet the small contingent—only six members of the British Army—who were there as part of the organisational development of the country. With such small numbers, and given that the Government of the Congo are now asking for more troops, even though the UN has undertaken a huge exercise there, what pressures does that put on our Army officers? Clearly, they are irreplaceable, yet for all sorts of reasons we must move those people around. Would he care to comment on that?
Mr. Hoon: I am grateful to my hon. Friend. He is right to draw attention to the considerable number of deployments in which British forces engage around the world at the request of the United Nations, NATO or, as we saw in the DRC, as part of an autonomous EU operation, which was very successful. Clearly, that creates pressures for our armed forces, but I know that he, like most Members, would want the United Kingdom to play its part in the world by supporting resolutions of the United Nations. Generally, the Ministry of Defence's most effective way of supporting them is to make forces available to ensure that those resolutions are carried through. That work will continue, but it imposes inevitable strains on Britain's armed forces that the Ministry of Defence and I must manage.
Our response to the future strategic environment will be based around flexible and ever more effective armed forces that are structured and equipped to deploy globally and at short notice. The range of tasks that they will need to perform will be broad—from peacekeeping, humanitarian and confidence-building operations through to counter-terrorism and high-intensity combat against a diverse set of potential opponents. They will also need to be able to operate in rapidly assembled but effective coalitions. Flexibility is absolutely the key word—flexibility of people, policy, structures and equipment. That means taking some difficult decisions, but that cannot be avoided if we are to maintain the United Kingdom's reputation for having some of the most outstanding armed forces anywhere in the world.
1.49 pm
Mr. Bernard Jenkin: This debate comes at a crucial time, shortly before the Government's long-promised defence White Paper. The Secretary of State's speech was a softening-up exercise—an exercise in reducing our expectations or increasing our dread at what is likely to come. I hope that things will not be quite as bad as he suggests.
The Secretary of State's "get ready for cuts" speech even denied that we are short of infantry in the British Army. Can he justify the present level of infantry given that the average interval between tours is nine months

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when it is meant to be 24 months? I believe that the Royal Scots regiment has just been in Northern Ireland, and it has just had an infantry tour gap of six months.
The Minister of State, Ministry of Defence (Mr. Adam Ingram)indicated dissent.
Mr. Jenkin: If that is completely wrong, perhaps the Minister will tell us the length of the tour gap when he winds up the debate. When one meets the commanding officers of infantry regiments, they make it clear that they are not getting the tour intervals that were promised in the strategic defence review.
This debate also takes place against the background of British servicemen and women serving around the world. Six months ago, British forces were committed to high-intensity combat operations in Iraq. In the past five years alone, they have been in combat in Kosovo, Sierra Leone and Afghanistan as well as Iraq. In Iraq, the security situation remains fragile. Our armed forces continue to do a brilliant job, coping with many extra tasks as a result of the Government's failure to plan effectively for the post-conflict phase. As well as providing security and military and police training, they are carrying out infrastructure and rebuilding tasks that maintain vital services to local people including water, electricity, basic health care and food. I join the Secretary of State in paying tribute to the armed forces and, in particular, to those who died in the conflict and since and to those who have sustained injury.
Iraq remains an extremely high-threat environment because of organised crime and terrorist groups operating from within and outside Iraq and because of remnants of the Ba'athist regime. Despite that, progress is being made and we harbour no doubts that it is in the national interest and in the interest of global security as a whole that the allies continue to work to bring forward mature and representative administration in Iraq that is capable of preventing a return to dictatorship and the terrorism of Saddam Hussein.
Questions remain, however. How long will British forces remain, and in what numbers? When will the Government succeed in persuading more nations such as Japan—which made an announcement yesterday—to join the peacekeeping and reconstruction effort that is so obviously in their interests as much as in ours? How much has it cost so far and how much more will we need to spend before the task is done?
Politicians of all parties owe it to our armed forces not to let them down as they face these challenges. This debate is about ensuring that the Government have a sound and sustainable defence policy. Therefore, it is the right time—five years on from the strategic defence review—to look at the fundamental elements of the United Kingdom's defence policy. It is time to assess how the Government measure up to the challenge and, indeed, how they measure up to the challenge that they set themselves in the strategic defence review. Do they have a credible long-term defence policy? Finally, what are the implications of changes in Government policy with regard to European Union defence? In reality, do they want to have a sovereign British defence and security policy at all in the long term?
There is little disagreement between us and the Government about the overall mission for defence policy. I can agree with much of what the Secretary of
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State has said today. The mission must be to protect the United Kingdom and overseas territories from military threats and terrorism, to safeguard the national interests of the UK wherever they are threatened and to contribute to global peace and security.
We are confronted by three main threats: terrorism, both internal and external; the threat of ballistic missile proliferation; and the possibility, which we can never remove, of an attack by a foreign power on the UK, the UK's dependent territories or our allies. We also face the challenges of organised crime, and our armed forces have a role in dealing with civil crises. Rogue states, weapons proliferation and international terrorism are the new threats in the post-cold war world.
On 31 May 2003, President Bush announced the establishment of the proliferation security initiative, which is also known as the Madrid initiative. It would result in the creation of international agreements allowing the United States and its allies, including the UK, to intercept ships and aircraft suspected of transporting illicit weapons, missile technology and suspect cargo. The most immediate target for the initiative is obviously North Korea, and we fully support the UK's participation in it.
Llew Smith: The UK is a signatory to the non-proliferation treaty, which places obligations on us to negotiate away in good faith our nuclear weapons. As we are failing to do that, does the hon. Gentleman not think that this country is also guilty of weapons and nuclear proliferation?
Mr. Jenkin: No, but I was intrigued by the hon. Gentleman's intervention on the Secretary of State. I will return to the issue of our nuclear deterrent.
To deliver defence policy overall, we must maintain a military capability to act unilaterally, including with our independent nuclear deterrent. We must strengthen our ability to conduct military operations alongside the United States and our other allies, and we must develop NATO as the cornerstone of European, north Atlantic and global security. We must contribute to military operations in support of the United Nations as part of a coalition, including peacekeeping and humanitarian operations, and we must have the capability to provide the civil power with whatever military assistance may be necessary.
The Government therefore need to deliver seven core military capabilities, and that is where we need to measure their performance. The first must be the maintenance of our independent nuclear deterrent. The answer to the hon. Member for Blaenau Gwent (Llew Smith) is that, if there were a prospect of every other country in the world getting rid of its nuclear deterrent, there would perhaps be a case for us getting rid of ours. I do not think that there is that prospect. Indeed, I read in the newspapers yesterday that Israel is developing a submarine-launched nuclear capability. A time of weapons proliferation is not the right environment for us to get rid of our deterrent.
Llew Smith: Will the hon. Gentleman give way?
Mr. Jenkin: I shall be very indulgent to the hon. Gentleman.
Llew Smith: If, in future, the hon. Gentleman should be responsible for defence matters, will he tell the House

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under what circumstances he would agree to the use of nuclear weapons? To what extent and in what instances would those weapons benefit our defences and the peace of the planet?
Mr. Jenkin: I am not going to make the mistake that, on occasion, the Secretary of State has made with regard to the question about the use of nuclear weapons. I will not give any indication at all of how a future Conservative Government might use an independent nuclear deterrent. Part of its deterrent effect is that we do not give out such information. I dare say, when I am trusted with it, I shall not discuss it with the hon. Gentleman or anyone else.
Llew Smith rose—
Mr. Jenkin: I have given way enough. If the hon. Gentleman wants to continue the debate, I advise him to intervene on the Minister when he winds up. Our nuclear deterrent may seem outdated in the current threat environment, in which the deterrent effect of overwhelming firepower has failed to protect the west from rogue states and terrorism. But only the nuclear deterrent has eliminated for the time being the old coldwar-style threats. If we fail to maintain the deterrent, we will invite such threats to return. To leave the nuclear deterrent to other nations would certainly reduce our influence in the world and undermine our security. When so many other countries, such as North Korea, India, Iran, Pakistan and Israel are developing or enhancing their nuclear capabilities, it is hardly the moment for Labour to revert to unilateral nuclear disarmament, which I suspect is the hon. Gentleman's policy.
if the Government are not to change their policy by default—this point is directed at the Secretary of State—they must begin to answer the question that the hon. Gentleman raised. During a visit to the BAE Systems submarine yard in Barrow-in-Furness last week—I did not have the entire week off—we were informed that the time is fast approaching when planning, design and assessment work on the successor to the Trident missile system must begin. That is because it must be ready in time to replace the current submarines, which will be retired in 2020. However, in a recent written answer, the Secretary of State said:
"There are no current plans for a replacement for Trident, and no decisions on any possible successor system are yet needed."— [Official Report, 15 July 2003; Vol. 409, c. 199W.]
I know that that answer is convenient for the management of the Labour party but the Secretary of State could be more forthcoming—perhaps the Minister of State will mention it in his winding-up speech—about when we need to start planning for a successor to Trident. I do not believe that no one in the Ministry of Defence is thinking about the subject. What are the thoughts of people in the Ministry of Defence? What kind of nuclear deterrent will we need in the future? Surely the Government will maintain a commitment to a continuous, at-sea deterrent because, as the strategic defence review pointed out, that is necessary
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"to avoid misunderstanding or escalation if a Trident submarine were to sail during a period of crisis".
That is an important reason why we should not reduce the number of Trident submarines, even though we think that the need to use the nuclear deterrent might be much reduced in the current environment.
Llew Smith: Will the hon. Gentleman give way?
Mr. Jenkin: I have given way to the hon. Gentleman often enough.
Will the Government be honest enough to have an open debate about Trident's successor in good time or—this might interest the hon. Gentleman—will we have a repeat of the debate about missile defence, when there was a covert U-turn with hardly any debate?
The second key capability is global missile defence. How much better would it be if we could render a missile attack futile and ineffective rather than taking the hit and having to retaliate? We are pleased that the Government finally came round to our thinking on missile defence at the beginning of the year. Fortunately, the United States is making the main contribution, but the UK will make an essential contribution through the X-band radar station at Fylingdales. The UK should offer bases for ground-based interceptors, and we also anticipate that the Royal Navy's suitably modified Type 45 air defence destroyers will be used in a missile defence role.
Thirdly, the UK must be committed to developing precision weaponry, including enhanced air and sea-launched cruise missile systems. Fourthly, we must improve surveillance, processing, communications and interoperability with our key allies. Fifthly, as my hon. Friend the Member for Newark (Patrick Mercer) has said, it is essential to have a home defence force comprising local battalions, which would probably be formed from the Territorial Army.
Sixthly, we above all need flexible, rapidly deployable and sustainable regular forces. There must be the ability to deploy, in a worst case, a substantial expeditionary force to fight in a major regional conflict across the operational spectrum while continuing to sustain unavoidable existing commitments. Within that overall capability, sufficient flexibility to prosecute multiple operations at a lower level must be maintained.
In 1998, the Government published the strategic defence review. They have achieved much that they said they would, but much of what has been delivered was already on track from the outgoing Conservative Administration. Our principal complaint is about the serious gap that has opened between the defence commitments that the Government have taken on and the resources that they have made available to match them. As Lord Guthrie of Craigiebank told the House of Lords on 17 December 2001:
"The defence programme was underfunded before 11 th September."—[Official Report, House of Lords, 17 December 2001; Vol. 630, c. 44.]

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Things have hardly improved since then. The policy for people was one of the key elements of the SDR but the Government have manifestly failed to achieve what they set out to do.
Mr. Hoon: Does the hon. Gentleman's endorsement of my noble friend indicate that the Conservative party's commitment is to spend more on defence than the present Government?
Mr. Jenkin: I shall make our commitment absolutely clear later in my speech. The election is still some way away, so we do not know what commitments we will have at that time or what the situation will be. I tell the right hon. Gentleman that we shall certainly consult defence chiefs and our allies when in government. We must also see the books, because the Government are a little tight fisted with information about the Ministry of Defence's long-term financial planning. For example, it would be interesting to see a 10 or 15-year projection of the real cost of the equipment programme, but I doubt that the Secretary of State will give me that information. If he would be happy to share it, we could start to explore exactly what we might spend. I do not think that any incoming Government have ever given such a specific commitment. The Secretary of State is to be congratulated on trying it on, with all his friendliness and good humour.
On overstretch, the SDR stated:
"We must break this vicious circle. To do so we must match the commitments we undertake to our planned resources … We need to improve recruitment and retention so that our units are properly manned".
Armed forces personnel levels, apart from failing to meet manning targets in the SDR, have been cut back from SDR levels. I shall be accused of counting but every commanding officer of every battalion in the British Army, except those who have successfully recruited, has been counting how many soldiers he has under-recruited.
"UK Defence Statistics 2003" reveals that there are now 12,000 fewer trained personnel than there were in 1997, despite the increase in defence commitments. Royal Navy warships routinely set to sea without their full complement. The SDR promised to increase the size of the Army by 3,300 yet, today, it is 5,000 men understrength compared with a target that has been reduced since the SDR.
The overstretch of armed forces has become endemic. In June, 55 per cent. of the Army was either deployed on, or recovering from, operations, compared with an SDR assumption of about 25 per cent. In Northern Ireland, the garrison has been reduced not because of the improving security situation but because of operational commitments elsewhere. At a dinner with journalists on 28 April, the outgoing Chief of the Defence Staff, Admiral Sir Michael Boyce, said that any troops who had been withdrawn from the Province because of the peace process should be used to ease pressure on the forces and that the situation would not justify defence cuts. He said:
"What we have got to avoid is this being seen as a great peace dividend by the Treasury … I suspect there would be a great temptation from our friends in the Treasury to capitalise on that."
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I hope that the Secretary of State will resist any such thoughts.
Mr. Gray: My hon. Friend correctly said that the Secretary of State's speech sounded—through the general gabble—like a softening-up exercise for Treasury cuts to come in a future White Paper. Does my hon. Friend agree that the Secretary of State's body language while delivering his speech indicated that he was confident that he would not be the one to implement the cuts?
Mr. Jenkin: Let us concentrate on defence policy today, although I understand what my hon. Friend says.
Admiral Boyce also said that military advice to the Prime Minister would be to avoid a "discretionary operation"—a war in which Britain was not under direct attack—for at least a year unless there was a "pretty compelling reason". He said:
"If you asked us to go into a large-scale operation in 2004, we couldn't do it without serious pain. We must allow ourselves time to draw breath."
That is a damning indictment of the Government's failure to deliver the basic promise on expeditionary capability that they set out in the SDR.
I shall not dwell on equipment because that will be addressed in next week's proposed debate, but there is a real squeeze on the equipment programme that was laid out in the SDR. The carriers, which were the centrepiece of the review, are shrinking in size almost daily. Less than a year ago, the Secretary of State announced that the carriers would be 60,000-tonne ships. We understand that the two new large carriers are likely to be medium-sized. How long will it be before they become through-deck cruisers the—euphemism for small carriers that was acceptable to the Treasury in the 1970s under the then Labour Government?
Given the age of existing fighter vehicles, the Government must get a move on. If the carriers are smaller, there will be fewer joint strike fighters. There are constant rumours about cuts to the Eurofighter Typhoon programme.
The multi-role armoured vehicle has been cut. That followed the demise of TRACER, for understandable reasons. We are promised a new armoured vehicle that is to be in service by 2009, but the Government are only at the concept stage. That is a very short time frame to produce an entirely new armoured vehicle that is capable of carrying a 120 mm gun.
The underlying picture is clear. The Government's defence ambitions are not matched by the resources that they are prepared to commit to defence. We are expecting a new White Paper on defence. The speculation is that it holds new cuts, and the Secretary of State did everything to feed that expectation in order to ameliorate the impact when it arrives. In June he spoke about moves towards a
"balanced structure of light, medium and heavy forces, together with a greater emphasis on enabling capabilities"—
thoughts that he echoed today. We welcome such continuing development, which builds on the work of previous Conservative Secretaries of State for Defence, but there is much more to be done before we have armed forces of the shape, size and capability that reflect the revolutionary change in the strategic environment after 11 September 2001.

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Though the armed forces have been substantially transformed since the end of the cold war, they still need to become lighter, more deployable and more flexible and interoperable with our key allies. What we are likely to see in the White Paper is a fanfare heralding apparently new, but mainly old and delayed, capabilities that have long been in the pipeline, many of which were ordered under the last Conservative Government. That emphasises the theme hidden in the Secretary of State's talk of effects-based warfare and flexibility, whereas the real agenda is cuts. All the indications are that the Secretary of State faces another bruising battle with the Chancellor, who himself faces a funding crisis in the public finances entirely of his own making.
The Secretary of State warns of
"a different requirement over time for main battle tanks",
and of "some limited adjustments" for the Royal Navy. That is just code for more cuts. When he says that capabilities should no longer be judged by numbers of tanks or warships, but by their effectiveness, he simply confirms that he is in retreat.
The Sea Harrier is already going, depriving the fleet of one of the world's most capable air defence fighters. I remind the Secretary of State that when the Spitfire was withdrawn from service, which he mentioned during his remarks, we had another aircraft, the Meteor, in service to replace it. There was not a six-year gap between the Spitfire and its replacement, as there is between the fleet defence aircraft, the Sea Harrier, being withdrawn from service and the introduction of the joint strike fighter.
We also hear that the size of the Army may be scaled back yet again, with fewer infantry because the Government are unwilling or unable to meet the reduced manning requirements. Nobody but new Labour believes that less means more, yet that is what we are asked to believe.
Despite talk about so-called improvements in the enabling capabilities, there are worrying signs that Defence Logistics Organisation staff may be cut back. In particular, the Government have been forced to reveal what they call "implications" for service personnel at the DLO, as the Minister of State told my hon. Friend the Member for Aldershot (Mr. Howarth) in a written answer on 18 September. The word "implications" must have a larger and more pregnant meaning. Of course, it is a cryptic clue meaning more cuts.
Savings have already been made from reorganisation of the Defence Logistics, in the guise of efficiency. We are all in favour of efficiency, but it can be rather overused as an excuse. As the Select Committee has already pointed out, so-called efficiency savings are mainly generated from cuts in levels of stocks, which will have contributed to the problems encountered during the rapid deployment to, and sustainability in, Iraq. This problem, like the procurement problem and the manning and retention problem, goes to the heart of the Government's defence policy.
There is insufficient resource to match the Government's defence commitments. Despite indications at the time of the SDR that 2.5 per cent. of gross domestic product should be reserved for defence in perpetuity, the figure has fallen consistently. We are now at around 2.3 per cent. of GDP, heading for 2.2 per cent.
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at the end of the plan period, compared with, for example, the US Government's 3.4 per cent. of GDP, rising to 3.8 per cent. over their equivalent plan period. The operating capability gap, of which the Secretary of State sometimes speaks eloquently, is getting wider and wider.
In training, we have a dual problem. Not only is overstretch of regular forces disrupting individual and unit training, but problems have been caused by the lack of resources in the training system. In July, a report by the Ministry of Defence's directorate of operational capability found that armed forces training bases were operating
"at the limit of, or beyond, capacity"
because of staff shortages, which diluted the quality of training and the ability to offer pastoral care to recruits. It added that training
"is running at risk and continues to be fragile".
At the time of the report, Ministers promised that all the urgent vacancies for instructors identified by the Army would be filled by now. Have the Government achieved that? I hardly think so, but perhaps the Minister of State could let us know when he winds up. I hope also that Ministers recognise that staff shortages in training bases can also contribute to bullying problems, as we heard from the report by the Surrey police in relation to Deepcut.
The current pressures on the armed forces mean that reserve forces are being intensively used, the Territorial Army in particular. In operations in Iraq, thousands of reservists were used to support the regulars. On 20 June, some time after the end of the conflict, almost 4,000 TA members were involved in Operation Telic. Two Members of the House and two members of the staff of the House have been called up to serve. The extent and duration of current commitments has been problematic for many in the TA, as they try to balance work and service commitments, but imagine how they feel to arrive in Iraq and be told that they are not to take part in security tasks, but are to be employed more like navvies in the reconstruction.
In the debate on 12 June, my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) warned that
"many members of our territorial armed forces will think of leaving. Some have already told me that they intend to do so."—[Official Report, 12 June 2003; Vol. 406, c. 879.]
On 30 September The Guardian reported that almost 2,000 TA members had left since March. We have learned that the total strength of the TA dropped from 39,210 in March to 37,360 in August, more than 4,000 below the Government's target. If Ministers can give us cheerier news, I will be the first to cheer.
The House should be reminded that that target was already the result of an 18,000 cut in TA numbers in the SDR, a cut that the Secretary of State has admitted was a mistake, as we warned the Government at the time. The TA now also has an increased role at home, assisting with home security incidents as part of the civil contingency reaction force. How is it meant to fulfil this role, when it is so under-recruited at home, and when so many members allocated to those tasks are also committed abroad?
I asked earlier whether the Government have a defence policy, and whether they are prepared to commit the necessary resources to sustain it. The final

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question is whether the Government intend to have a sovereign independent defence and security policy in future. The implication of their support for the European security and defence policy, leading ultimately to the EU constitution, is that they do not.
As I mentioned earlier, the Queen's Speech last year reiterated NATO's
"continuing role as the cornerstone of Britain's national security."
We support that statement. The Foreign Secretary told the Select Committee on Foreign Affairs in November last year that
"our alliance with NATO has to be the superior alliance in terms of defence".
The Secretary of State's speech to the Royal United Services Institute in June stated:
"It is highly unlikely that the United Kingdom would be engaged in large-scale combat operations without the United States, a judgment born of past experience, shared interest and our assessment of strategic trends."
If only that strategic judgment and those other statements were genuinely reflected in the Government's policy.
The Government have betrayed the assurances that the Prime Minister personally gave President Bush on these matters at their first meeting in February 2001. When President Bush emerged from the meeting to face the cameras, he was asked about the European security and defence policy. He said:
"He"—
that is, the Prime Minister—
"also assured me that the European defense would no way undermine NATO. He also assured me that there would be a joint command, that planning would take place within NATO, and that should all NATO not wish to go on a mission, that would then serve as a catalyst for the defense forces"—
that is, the EU defence forces—
"moving on their own."
Let us test those assurances against the reality of events since then. Before the Prague summit in February 2002, France threatened to veto the renewal of the NATO mandate in Macedonia unless NATO agreed to hand it over to the European Union—that was European defence undermining NATO. At the Copenhagen summit, the EU decided unilaterally to announce a takeover of the NATO peacekeeping mandate in Bosnia—that was in complete defiance of NATO's so-called "right of first refusal"; and the announcement was made without consulting the American delegation at NATO or anyone in the United States. Earlier this year, the EU announced that the French-led operation in Congo would be an ESDP operation outside the NATO planning and command framework—that was a complete denial of the joint command and joint planning with NATO that was promised to President Bush.
All that was meant to have been resolved in the EUNATO agreement known as Berlin plus, which was concluded just a few months ago after four hard years of negotiation. It gives the EU assured access to NATO military planning under the command of the NATO Deputy Supreme Allied Commander, who is always a European military officer.
Mr. John Smith: Does the hon. Gentleman recognise that the strength of NATO rests in the capability of our
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European allies? Does he think that the overriding objective is to achieve that capability, and that a European defence policy will do just that?
Mr. Jenkin: I agree with everything that the hon. Gentleman said until his very last point. The European Union is not increasing defence spending, but continuing to reduce it; and its duplication of NATO assets such as planning and the command structure means that it spends more money on headquarters and structures while taking money out of capabilities. How much more efficient it would be if it stuck to the Berlin plus agreement, which provided for European forces to be separable, but not separate, under the NATO umbrella. That agreement was concluded specifically to allay US fears that the EU had become a wasteful competitor to NATO, needlessly duplicating NATO assets, divisively decoupling US and European security policy, and discriminating unfairly against non-EU members of NATO.
No sooner was the ink dry on the agreement than our own British Prime Minister was colluding with President Chirac and Chancellor Schröder to set up precisely the autonomous military planning capability that the US has set itself against. The German newspaper, Suddeutsche Zei tung" reported after that meeting that it had obtained a joint paper setting out the agreement made in Berlin, which states:
"Together, we are convinced that the EU should have a common capability for the planning and leadership of operations independent of NATO means and capabilities."
Does the Secretary of State deny that that agreement exists?
Mr. loon: I have reminded the hon. Gentleman on several occasions not to rely on what he reads in British newspapers. I should also remind him not to rely on what he might read in German newspapers.
Mr. Jenkin: The Secretary of State does not deny that the agreement made between the British, German and French Governments exists. I shall give him another opportunity to do so.
Mr. Hoon: If the hon. Gentleman checks the terms of the Berlin plus agreement, which he enthusiastically endorses, he will find that it contains a specific reference to the EU conducting autonomous operations.
Mr. Jenkin: The Secretary of State has not answered the question. This is about conducting operations without the backing of NATO assets and capability.
Mr. Hoon: May I ask the hon. Gentleman to check what "autonomous" means?
Mr. Jenkin: May I ask the Secretary of State why the US ambassador to NATO, Nicholas Burns, said:
"What we cannot support and will not support is the creation of an alternative EU military headquarters, whether it's in Tervuren or some other place, in Brussels or elsewhere"?
Why do we read in today's Financial Times of US "dismay" over the Government's policy on EU defence? Is it true that Condoleezza Rice has telephoned No. 10 to discuss her concerns? The truth is that the Prime

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Minister has betrayed his promises to President Bush, not least by accepting the EU constitution. This is no "tidying up".
Let us apply three tests to the EU constitution as it applies to security and defence. Is there any increase in qualified majority voting? Does it enable a hard core of member states to accelerate the process of creating an EU defence, effectively negating the UK veto? Does the European Court of Justice acquire ultimate jurisdiction over security and defence policy? The answers are yes, yes, and yes. Moreover, the constitution states, for the first time:
"This will lead to a common defence."
What could be clearer than that? We can be sure that the final draft of the EU constitution will reflect some little victory for the Foreign Secretary to wave at the press as evidence of "game set and match to the British" when he gets home, but the substance of the present draft will remain untouched.
The Government can no longer accuse Conservative Members of inventing the image of a Euro-army: we can see, on our television screens and in our newspapers, British and other soldiers bearing EU insignia on their uniforms. We just need to listen to Lieutenant-General Rainer Schuwirth, chief of the EU's military staff, who says that a European army would now be possible as the EU's military staff has more than 190 officers and its own secure headquarters.
In December 2000, the Prime Minister promised:
"European defence cannot be a rival to NATO".
He said there is
"no proposal, no desire or decision for a separate European military planning capability".
In the same month, he told the House of Commons:
"The idea that this will be an independent standing force set aside from NATO is nonsense."—[Official Report, 11 December 2000; Vol. 359, c. 365.]
The EU constitution is a direct challenge to the primacy of NATO and, ultimately, to the sovereign independence of our own national defence and foreign policy. The Prime Minister was being either incredibly naive or deliberately deceitful.
NATO already provides for European defence. Every concession that Labour makes to the EU defence agenda strengthens those who want splits between the US and Europe. EU defence is about not more or better defence, but more structures, more headquarters, more offices and more committees. European nations should certainly share more of the burden of European defence and global security, but since the Prime Minister and President Chirac launched the concept of an EU military force in 1998, EU defence spending has continued to decline.
Mr. Malcolm Savidge: I am a little puzzled that although the hon. Gentleman suggests that co-operation over certain Petersberg-type operations would mean the complete loss of our sovereignty, he is perfectly prepared for us to make our defence policy completely subservient to the United States.
Mr. Jenkin: That is a completely inaccurate account of my argument. Of course I am in favour of co
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operation, but the European constitution is not about that: it is about co-ordination, or structured co-operation, which ultimately involves some coercion in the event of unwillingness to agree. That results in erosion of the national veto and, ultimately, the subjection of our defence policy to the jurisdiction of the European Court of Justice.
Mr. Savidge Mr. Savidge rose—
Mr. Jenkin: I shall not give way to the hon. Gentleman again—I want to complete my remarks.
Mr. Ingram: Does the hon. Gentleman agree with the successful mission that we completed in Bunia in the Democratic Republic of the Congo—yes or no?
Mr. Jenkin: I am in favour of operations through co-operation between member states. However, the arrangements for which the constitution provides will develop and cease to involve simple, bilateral cooperation. They will lead to the creation of an institutional framework, ultimately overseen by the European Court of Justice, in which the increase in majority voting will progressively erode the veto over European Union policies. The debate is about that, but of course I am delighted with the achievements of British and other armed forces in Bunia. However, that is not a reason to submit European Union defence policy to the European Court of Justice and agree to increase qualified majority voting. Incidentally, the operation was carried out without the European constitution, so why do we need it?
The EU defence policy is simply a platform for the vanity of old Europe. NATO, not the EU, won the cold war; NATO, not the EU, brought peace to the Balkans; NATO is peacekeeping in Kabul and supporting European troops in Iraq. Only NATO can bring the US and Europe closer together. As an increasing number of new NATO and EU members realise, NATO guarantees the independence and national sovereignty of its members whereas the EU constitution tends to undermine that. The constitution should therefore be subject to a referendum.
As the Secretary of State said, yesterday was a historic moment for NATO because of the launch of the 20,000 NATO reaction force, which is capable of deployment at five days' notice. Unlike the ludicrous EU so-called rapid reaction force, it is genuinely operational now. As NATO Supreme Commander General Jones said yesterday:
"For the first time in its history, the Alliance will have a joint (multi-national) combined air, land, sea and special operations force under a single commander, maintained as a standing rotational force."
The Government should not agree to anything in Europe that undermines the primacy and pre-eminence of the Atlantic alliance in European security because our security and that of Europe depends on it.
Britain's defence policy needs to reflect today's strategic environment and the lessons of recent military operations, especially in Iraq. The Government should have learned that they should be better prepared next time. General Sir John Reith confirmed to the Select Committee on Defence that British forces in Iraq were "perilously close" to not being ready.

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It was clear from the shortages of equipment, ammunition, spares and supplies for those on the front line that too much was left to chance. Moreover, the Government do not appear to understand that the success of peacekeeping and peacemaking operations depends not only on the latest technology but, crucially, on the number of boots that can be put on the ground.
The Government's policy is too reliant on the sheer dedication and professionalism of our armed forces. Labour takes them for granted. Our pledge is to fund fully the defence capabilities necessary for our national security and for fulfilling our international obligations. At a time of increased threat and demands on our armed forces, the Conservatives will not let them down.
The other big lesson is strategic NATO is indispensable. The US is the only nation that has the military capabilities and will to guarantee European and global security. It is monumental folly for a British Government to help the French to undermine NATO and split the alliance.
The difference between Labour and the Conservatives at the next election will be stark and simple. When the Conservatives say that we will back our armed forces and that NATO is and should remain the cornerstone of our security, we are not simply telling another Labour lie.
2.33 pm
Llew Smith: There appears to be a reluctance to debate nuclear weapons, their use, the circumstances in which they would be used and their so-called benefits. I should therefore like to remind hon. Members of some past statements by prominent Members about the role of nuclear weapons.
Some years ago, I initiated a debate on the future of the non-proliferation treaty. In 1995, when the Leader of the Opposition was a Back Bencher, he said:
"The possession of such weapons is of no use unless we have the will to use them. If we possess nuclear weapons, we must make it clear that we are prepared to use them; otherwise we might as well not possess them."—[Official Report, 3 May 1995; Vol. 259, c. 247.]
In another debate on defence in February 1996, I asked the Liberal defence spokesperson, Sir Russell Johnston:
"If nuclear weapons were a part of our defence and if the hon. Gentleman were in a position of power, would he, if the crunch came, be willing to press the button to start off those nuclear weapons? If he did, could he anticipate some of the devastation that they would inflict on the environment and on the people of this planet?"
He replied, after a fashion, that
"the matter does get theological. I know perfectly well that there is a contradiction, but one prays that one will never have to use those weapons. I shall not go beyond that."—[Official Report, 1 February 1996; Vol. 270, c. 1164.]
The leader of the Labour party, now Prime Minister, said early in 1997 at a press conference that he would be willing to press the button to launch a nuclear attack.
Mr. Blunt: While the hon. Gentleman is on the subject of the Prime Minister, will he tell us when the latter ceased to be his colleague in the parliamentary Campaign for Nuclear Disarmament?
Llew Smith: It is not my place to defend the Prime Minister's position. I am a member of CND now and I
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was a member some 40 years ago. I campaigned and demonstrated with my predecessor, Michael Foot, one of the great peace campaigners of the 20th century. Michael has not changed his position, I have not changed mine, but if the Prime Minister has changed his, he, not I, must justify that.
Mr. Ingram: What about Nye Bevan?
Llew Smith: If the Minister bothers to read Nye Bevan's speech on resigning from the Government, he will realise that one of the reasons for his resignation was the exorbitant amount of money that we were spending on the arms race at that time. I therefore advise the Minister to read history. If he reads the history of that period, he will become far wiser about the subject that we are considering.
Last year, I asked the Secretary of State for Defence whether he would be willing to press the nuclear button. He replied:
"The United Kingdom would, in the right conditions, in extreme circumstances of self-defence, be prepared to use nuclear weapons."—[Official Report, 10 April 2002; Vol. 383, c. 30W.]
I asked the Foreign Secretary whether he agreed that the most practical way of demonstrating to India and Pakistan that nuclear weapons undermined their security was for Britain to take a lead by ridding ourselves of our weapons of mass destruction. In his reply, he let slip:
"I went on the Aldermaston march when I was 12, and I think that I am entitled to change my view between the ages of 12 and 55. Indeed, I was nearer to 12 than to 55 when I changed it"—[Official Report, 25 June 2002; Vol. 387, c. 731.]
Many would argue that he was correct when he was 12. I suppose that the comments prove that people do not always grow wiser as they grow older.
Sadly, it is clear that the leadership of all the major political parties in the House is prepared to commit mass murder with our weapons of mass destruction. That is chilling. Even if the hugely destructive weapons of mass murder were never used in anger, they have already caused the people of this country dearly in their taxes. They have cost others their environment. That applies to the lands of native American Indians in Nevada, where British nuclear warheads have been tested on sacred land, and the original uranium for nuclear warheads was obtained from Namibia, leaving a legacy of uranium miners with terrible respiratory diseases and cancers.
There is also a financial cost. The Secretary of State for Defence admitted on 8 September that the total estimated cost of Trident was approximately—15 billion. How can we always find the money to go to war and to produce weapons of mass destruction when, at the same time, we find it difficult to fund the peace, and to provide the pensions that our senior citizens deserve, free university education, and the kind of public services that communities such as my own in south Wales depend on?
The £15 billion being wasted on Trident is an obscenity. Not only could the financial resources have been better deployed, but the skills and talents of our designers, engineers, computer experts, construction workers and many more have been diverted from socially useful employment into developing nuclear weapons of mass destruction.

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In 1953, shortly after becoming President of the United States, Dwight D. Eisenhower—not a wild-eyed left wing revolutionary but a right-wing Republican—said something that we can all learn from:
"Every gun that is made, every warship launched, every rocket fired, signifies in the final sense, a theft from those who are old and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children … This is not a way of life at all in any sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron".
Sadly, our diplomats, as well as our politicians, try to hoodwink the global public over our nuclear weapons of mass destruction. For example, Britain's representative at the 2002 non-proliferation treaty preparation meetings, ambassador Peter Jenkins, announced that the UK had
"unilaterally reduced our operationally available stockpile to fewer than 200 warheads, which represents a reduction of more than 70 per cent. in the potential explosive power of our deterrent since the end of the Cold War."
But as CND's excellent briefing points out, the 70 per cent. reduction in the explosive power of British nuclear weapons has been achieved largely by replacing older, higher yield warheads such as Polaris and WE177 with the lower yield but more flexible Trident warhead. We should remember what that much-despised but ultimately wise US President, Jimmy Carter, said in his final speech to the American people as President in January 1981. He said:
"In an all-out nuclear war, more destructive power than in all of World War II would be unleashed every second during the long afternoon it would take for all the missiles and bombs to fall. A World War II every second—more people killed in the first few hours than all the wars of history put together. The survivors, if any, would live in despair amid the poisoned ruins of a civilization that had committed suicide."
We should listen, and if we do, we shall learn.
Even the current US Secretary of State, Colin Powell—while still Chairman of the US Joint Chiefs of Staff—at Harvard university in June, 10 years ago, could say:
"Today I can declare my hope and declare it from the bottom of my heart that we will eventually see the time when that number of nuclear weapons is down to zero and the world is a much better place."
Sadly the Bush Administration, of which Powell is now a part, are going in the opposite direction.
We must continue the campaign against all nuclear weapons, in this country and in all other countries that possess them, or aspire to possess them, just as Michael—Foot my predecessor in Blaenau Gwent—is still, at 90 years of age, rightly raging against the madness of nuclear weapons. Yet while the Government argue in favour of British nuclear weapons of mass destruction, they were seemingly willing to go to war against Iraq, with all the suffering and death that that brought, because that country was supposedly trying to obtain such weapons.
Meanwhile, Israel's ownership of nuclear weapons seems acceptable to our Government, as it obviously is to the Government of the United States. In the debate on Iraq in September last year, I reminded the House that the former Israeli nuclear scientist, Mordecai
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Vanunu, had been rotting in an Israeli prison for the past 17 years, when his only crime if it can be so described—was to tell the truth and to inform the world about Israel's nuclear role, when all around him were lying. Sadly, my own Government have done almost nothing over those 17—now 18—years to obtain the release of Vanunu, who is a giant of the peace movement.
Under our current policy of insane possession of nuclear weapons, we make ourselves and the rest of the world even more insecure, as other countries misguidedly seek, at huge financial and environmental cost, to copy our own nuclear weapons of mass destruction. In my opinion—and in the opinion of CND and the wider peace movement—that is unacceptable. I say on behalf of all people with a grain of common sense that the march towards nuclear destruction must stop.
2.46 pm
Mr. Colin Breed: It seems curious to have a defence debate but no Defence White Paper. Like many hon. Members, I feel that today's debate is perhaps a softening-up exercise for the issues that we might discuss in a week's time. Nevertheless, recent events have clearly had an impact on British defence strategy. As the Government appear to have abandoned the strategic defence review, they certainly have some explaining to do. Today and next week will provide them with the opportunity to do that.
I join other hon. Members in remembering the bravery of those who lost their lives and of those who are still in Iraq, whom we wish a safe and swift return home.
The forthcoming Defence White Paper will have to strike some careful balances—the Secretary of State tried to tiptoe his way through that minefield earlier—so the sooner it is published the better. The longer the rumours about infantry cuts or procurement troubles are allowed to persist, the more morale will suffer.
The Secretary of State was careful to stress that, as the Ministry of Defence learns the lessons from Iraq, it should be careful not to learn simply how to fight the last war. I hope that he sticks to his own advice. He also said, and the hon. Member for North Essex (Mr. Jenkin) repeated it, that it was highly unlikely that the United Kingdom would be engaged in large-scale combat operations without the United States. As a nation, we occupy a vital position as a key ally of the US, a central player in NATO, a member of the UN Security Council and an important member of the EU and the Commonwealth. Additionally, we still have commitments to our overseas territories. I do not need to remind the House that the US was not overly helpful during the Falklands crisis.
Mr. Jenkin: That really cannot stand on the record. Although the United States could not help us with overt military co-operation, it was of great assistance to us. That needs to be put on the record.
Mr. Breed: I am happy to accept that, but at the beginning of the conflict, when perhaps we needed the best support, it was not forthcoming. Indeed, there is some evidence to suggest that the Americans were working for the opposition.

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The roles that I have just described for the United Kingdom are not conflicting roles. We must work within them all, in order that we might best maintain national and global security, and we must stand ready to act within each of them. However, this pivotal, multi-dimensional defence relationship carries with it complex responsibilities, particularly when partners within the alliances differ. There will be occasions when we shall be unable to satisfy all our allies, and we might have to choose. However, it would be dangerous and invidious if such decisions were based on the expediency of relationships rather than the principles that we as a country have long cherished.
Flexibility was the watchword of the MOD during its process of reform, and that should include flexibility in terms of who we fight with, not simply how our forces are deployed. The moves on European defence that were made at the Rome summit are about exactly that flexibility. European defence policy is not, and should not be, about ceding control of UK forces; nor is it in direct competition with NATO or the US. European security and defence policy means that we can conduct operations in yet more frameworks with the US, NATO, the UN or the EU, as the situation demands. The counsel from the Conservative Benches to disengage from EU co-operation certainly runs contrary to the wishes of the US and would offer no advantage whatever to NATO. The Conservatives were certainly not opposed, as I understand it, to the Western European Union, which for many years provided a European pillar within NATO itself.
EU operations such as those recently undertaken in the Congo, along with NATO operations such as those in Afghanistan, show that we can work in many organisations to try to improve security worldwide. NATO and the EU are not mutually exclusive. In fact, the EU will act only when NATO chooses not to do so. Therefore, NATO will continue to have, and must have, its prime role.
Regrettably, our forces are deployed in more and more situations all over the world.
Mr. Gray: Before the hon. Gentleman moves from the EU, will he say whether he foresees any circumstance in which our EU partners would increase their defence capability to bridge the gap that exists between the United States and us?
Mr. Breed: I hope so. One of the responsibilities of the countries that are joining the EU is to begin to understand their responsibilities to overall defence policy. At present, it is difficult for them to perform those duties—they will be net receivers of EU support—but, as the Secretary of State pointed out, there will be certain groupings and an understanding. As part of the European Scrutiny Committee, I have visited a number of the acceding countries. They understand that there is a responsibility on them to ensure that they contribute, albeit proportionately, to the defence of Europe.
Regrettably, our forces are deployed in more and more countries all over the world and, as has been clearly demonstrated, they are being stretched further and further, which gives everyone cause for concern, not least the troops themselves.
The last adjustment to defence policy, the new chapter to the SDR, made much of network-centric capability and of interoperability with advancing US
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technology. I think that it is agreed, however, that that should not be achieved at the expense of ensuring that UK forces are properly provided for. Without enough talented men and women, there will be no one to implement UK defence policy. That is why our service personnel must always be the MOD's first priority. They risk their lives to fulfil their duty, and we must repay them properly for that service.
Some strides have been made in that regard. I welcome the recent announcement that unmarried partners of members of the armed forces killed in action will receive equal pension rights as their married counterparts. The increase in widows' and widower awards is also timely.
It is unfortunate that those achievements have been made at the expense of some officers' pensions. It may have been possible to improve the situation of everyone without penalising others if the MOD had not been wedded to the idea of cost-neutral reform. It would have been perfectly possible to keep the MOD budget cost-neutral while making adjustments within it.
There is a danger of seeing such measures in purely fiscal terms—as an extra figure in the MOD budget— but the effect that such measures can have on members of the armed forces and their loved ones cannot be underestimated. To that end, I would like to raise a subject on which I have exchanged many letters and parliamentary questions with the Minster with responsibility for the armed forces: manning control points.
In principle, a mechanism that prevents soldiers who are struggling from blocking promotion paths is reasonable, but in practice we have seen considerable evidence from former soldiers that the system has been misused, or at worst abused. Such a system should never be used simply to try to move decent, hard-working soldiers on to short-term contracts, under which they enjoy fewer rights and their service can be terminated without the pension entitlement that they richly deserve.
When one is told by former servicemen that they believe that that is what has happened to them, one cannot take such an accusation lightly. If—this is another suggestion that has been made to me—undeserving soldiers have been bullied out of the Army and have chosen to release themselves from duty rather than face the embarrassment of being manning controlled, that is also a very serious matter.
The Minister will no doubt be aware that soldiers who feel that they have been unfairly dismissed are assembling a court case. I hope that he can assure those soldiers that the Government will take their case seriously and look closely at their own practices. A repeat of the Gulf war syndrome case, in which the MOD refused to accept any responsibility, would not help the morale of those serving or those who are considering service. An early recognition of responsibility, if need be, is surely preferable to a hefty legal bill later.
Mr. John Smith: Surely the hon. Gentleman will recognise that the MOD's position on Gulf war syndrome is absolutely open and transparent.

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Unfortunately, the research that was commissioned by the MOD has not provided conclusive evidence, but open it has been.
Mr. Breed: It is right to say that it has been open. I have been involved, as the hon. Gentleman has, in a number of debates in Westminster Hall and here and I think that we have rehearsed all the arguments on one side, but I still believe that there is a clear lack of genuine responsibility for the welfare of those soldiers. I am talking not about blame and the scientific evidence but about some recognition that those soldiers who are affected should have at least some support from the MOD, which they served.
The importance of sufficient soldiers on the ground has been reinforced by recent experience in Iraq. Clearly, peacekeeping requires rather more soldiers for longer than combat operations. At a time when UK forces are deployed in so many places around the world, the Defence Analytical Services Agency figures for September show that the establishment strength of the armed forces, even including deployed reservists, is falling. I hope that the Minister may be able to confirm in his winding-up speech that infantry numbers will remain at least at current levels. To cut troop numbers when they are overstretched and when reservist numbers are falling could, at the very least, be foolhardy.
I know that we shall discuss procurement next week, but it is right to put something on the record today as a precursor. The two aircraft carriers are essential to the SDR's expeditionary strategy. Industry sources have told me that the MOD's original plans were always overoptimistic and that the MOD quoted the best estimate for the lowest cost. Perhaps that is what we all try to do when we want to squeeze the proverbial quart into the pint pot but did the MOD play it straight? Was it looking at the broad estimates that were involved, or did it seek to find the figures that most closely fitted its case?
Two smaller carriers may be better than no carriers at all, but we do not know that that is the case, or whether we have one instead of two. Clearly, there needs to be a cost-benefit analysis so that we know precisely that value for money is being achieved. What impact might the shrinking of the carriers have on the joint strike fighter? That is just one issue that will have to be taken into account—there are many others—when we decide to reduce the size or the number of such vessels.
Mr. Gerald Howarth: As the hon. Gentleman has said, we will debate procurement next week. I wonder whether he can tell us in advance, to inform our debate more fully next week, whether the Liberal party is in favour of the two aircraft carriers at the proposed size of 60,000 tonnes?
Mr. Breed: We hope to be able to support that proposal, but, as the hon. Gentleman may well argue next week, we need a precise costing. Signing up to two large carriers now, on the basis of figures that may be wholly optimistic in terms of the final total cost, might not necessarily provide the value for money that he and other Members would want. Part of the problem is that because of our recent experience of cost and time overruns, decisions that were properly taken in a
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previous decade are regarded as rather less successful a decade later. We need robust figures to ensure that, if we do support the proposal for two carriers, they can be completed at the estimated cost and will produce the value for money that we are being encouraged to achieve.
Rumours persist that the MOD will cut the number of Typhoons it plans to order. That may well be advisable, but, if we are to cut them, I hope that the Government will say so soon, perhaps today or next week.
Procurement of major projects is not the only logistical problem that the Government face. One major lesson that the MOD faced in its "First Reflections" report was the supply chain management problems associated with getting equipment to theatre. It seems that even now some units in Iraq do not have desert kit. On 3 July, my hon. Friend the Member for Hereford (Mr. Keetch) asked the MOD whether all troops were now equipped with desert clothing. The Minister said that he would answer the question shortly, but it is still outstanding. I can conclude only that the lack of an answer means that the answer is no, but perhaps the Minister can offer another clarification when he sums up.
We all acknowledge that we have the best armed forces in the world— a point that they have certainly proved this year—but as we ask them to perform more and more tasks we must surely ensure that we do not stretch them too far; we must ensure that their needs are put first at all times. They need to be certain about pensions, and about accommodation and kit. Praise alone, however welcome, is rather hollow if the important material essentials are missing. When they put their lives on the line for us, it is our duty to seek the best for them.
3.2 pm
Mr. John Smith: I welcome the opportunity to make a small contribution to this important debate. It is more or less five years since the publication of the strategic defence review, and today gives us a chance to assess the effectiveness of what was a very important document and a very successful strategy. I say that because, at the end of the day, the best test of Government policy is in its delivery. In the five years since the production of that radical new approach to defence in this country, British forces have done an absolutely outstanding job overseas in completely different theatres. Confronted with completely different security environments, they have in every case successfully achieved their military objectives. We need not argue about this too much—our forces are doing a splendid job throughout the world. But let us make no mistake: there are problems and issues that need to be addressed.
The SDR has been such a success that it is used as a model by other nations, in Europe and elsewhere, for reforming their military. I know that that is so because I have the privilege of being a member of the NATO Parliamentary Assembly and of the defence subcommittee, which examines the future military capability of NATO's existing and forthcoming members. We travel to those countries, and they tell us repeatedly that the policy document that they choose to use to confront the new world security environment is

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the British SDR. Combined with our military advisers in those countries, we are assisting almost all the aspirant members with their military action plans to qualify them militarily for NATO membership. What better tribute could any Government be paid than for their policy to be adopted by others?
I had the privilege of attending the NATO Parliamentary Assembly in Edinburgh, at which the former Supreme Allied Commander Europe, General Wesley Clark, held up the British document and said, "This is the way forward not just for new NATO members, but for our European allies." That is why I must question the complete disapproval of the European security and defence policy on the part of the hon. Member for North Essex (Mr. Jenkin). The truth is that the ESDP will enhance, not undermine, the NATO alliance. He talked about duplicating military capability but that is nonsense, because such capability does not exist in most European allied countries, only one of which has any war-fighting capability. The Americans' biggest concern about the future success of NATO is its members' ability to pull their weight and deliver that military capability.
Mr. Jenkin: The hon. Gentleman is confused. I favour additional European capability, but the ESDP has produced not one extra bullet or lick of paint. In fact, it has probably used up defence resources that would otherwise have been spent on armed forces capability on extra headquarters and structures. The point is that the duplication of NATO planning and assets does not enhance capability; indeed, nothing could be clearer. Can he point to anything that the ESDP has created, in terms of capability?
Mr. Smith: I can point to one thing: all NATO members, including Canada and the United States, and all NATO parliamentarians, unanimously supported the ESDP, because it gives us a better chance of forcing our European allies to deliver a capability that they do not currently possess. The tragedy is that Her Majesty's Opposition—the Conservative party, which once could have been called the party of defence—are so preoccupied with Europe that they are prepared to sacrifice that capability to get on the Euro-bashing bandwagon. That is dangerous militarily.
Mr. Jenkin: When the Prime Minister came back from launching the ESDP at St. Malo four years ago, the excuse given for it was that it was the only way to encourage European nations to contribute to additional defence capability. During those four years, defence spending in the European Union has continued to decline. Only France and Britain have marginally increased their defence spending, France rather more so than Britain; all the other EU countries have continued to reduce their defence spending, so the hon. Gentleman's policy is not working.
Mr. Smith: The hon. Gentleman does not understand the arguments. There are two issues, one of which is defence expenditure. I agree entirely that it is a mistake for our European allies to cut their defence expenditure, given the increasingly dangerous environment that we find ourselves in. But the second and more important issue is how their existing expenditure is spent, and the
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point that the hon. Gentleman misses is that it is not spent on NATO-compatible capabilities. We want the money that they already have to be spent properly, although I agree that it should not be cut further.
Although it offers no guarantees, the ESDP gives us an opportunity to persuade our European allies to develop a capability that they do not currently possess, and which will enhance NATO. The biggest threat to NATO is the gap that is appearing between north America and Europe in military technology and capability. The biggest supporters of the ESDP are the American military. They were the first to recognise it, and if the hon. Gentleman has not visited the Pentagon recently, I suggest that he do so to confirm that fact.
I also pay tribute to this Government's successful defence policy in the light of the appalling mess that they inherited in 1997. We had witnessed the biggest real-terms cut in defence expenditure that this country had experienced in its entire history, including the 1930s. We saw nearly one third of the defence budget cut in real terms over a 10-year period.
Mr. Keith Simpson: The hon. Gentleman customarily speaks with great sincerity on this subject, but when I was a special adviser in the Ministry of Defence from 1988 to 1990, when we were moving on from the cold war into the new era, I do not recall him or any of his hon. Friends, then in opposition, asking us either to increase or even keep defence expenditure at its then current levels. If anything, they were asking for a greater peace dividend.
Mr. Smith: I certainly would have called for increases, but the hon. Gentleman should be aware that I was not a Member of Parliament at that time. If I had been, I can assure him—I am almost certain—that I would have asked for an increase. In a sense, it was not the scale of the cuts that was so damaging, but the way in which the cuts were carried out. The reality is that, by the mid and later 1990s, we were left with dangerous capability gaps. There was virtually no heavy lift capacity whatever for the expeditionary force, virtually no medical support for the British services, because it had been decimated in that period, and virtually no second line of logistics for the entire British forces. The gaps in military capability were dangerous, and the strategic defence review has managed successfully, in a relatively short time, to fill many of those gaps—although I would be the first to say that there is still a long way to go.
Llew Smith: Would my hon. Friend have agreed to one cut—the £15 billion that has been, and is still being, wasted on Trident? If he is in favour of nuclear weapons, in what circumstances would he agree to their use? If they are used, what benefits would they bring to the people?
Mr. Smith: I have to tell my hon. Friend that, as he knows, I have never been a member of the Campaign for Nuclear Disarmament. I have always supported a minimum deterrent, which is why I was surprised to hear the hon. Member for North Essex advocate, as the top priority for Conservative defence policy in the UK, renewal of the whole Trident and nuclear programme—at what price tag, I do not know. It should not be our top priority, because all the major nuclear powers are

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reducing their arsenals dramatically. George W. Bush has reduced the number of operational nuclear warheads in the US from 18,000 to 6,000. As an ex-serviceman and strong supporter of defence, I support that strategy of minimising—and, I hope, one day, eradicating—nuclear weapons of mass destruction throughout the world.
Our security environment changes daily. It has changed dramatically since the strategic defence review, and the changes—not least the events of 11 September—have highlighted weaknesses in that review. I believe that 11 September represents the single largest and most menacing change in the security environment, and the most difficult one to address. We now need even more agility, mobility and flexibility, we need further reach throughout the world, and we need to confront many more scenarios than we could have imagined previously.
Just yesterday, we saw the great achievement of the Chinese—I do not want to sound churlish about it—in putting a space man into orbit 14 times around the earth. What does that mean in security terms? It tells the rest of the world immediately that the Chinese have now developed, without any shadow of doubt, a global capability, when we have assumed for the past 50 years that they had only a regional capability. The purpose of a defence strategy is not to address the actual threats, but the potential threats throughout the world, and to develop our limited resources in the best way possible to meet those threats. The strategic defence review has achieved an enormous amount in that respect, but it has not achieved enough.
I pay tribute to the Government for the biggest single increase in defence expenditure announced in the last 20 years, and I hope for further increases in the years to come. That is not because I am a warmonger, or because I want to encourage conflict anywhere in the world, but because I believe that an increased defence budget can be a force for good throughout the world. Investment in the right sort of military equipment will reduce the loss of life in the world.
We saw that clearly in Iraq. The doom-and-gloom mongers talked about hundreds of thousands of innocent civilians dying as a result of the conflict, but that did not happen. One of the most important reasons why it did not happen in 2003 when it did happen in 1991 was the technical sophistication of the equipment used by the allies when they went into Iraq.
Mr. David Kidney: I share my hon. Friend's pleasure that not too many civilians died in Iraq, but I am finding it extremely difficult to ascertain exactly how many did die there. Does he have any accurate statistics?
Mr. Smith: The sad fact is that we do not know, and we are unlikely to find, a definite figure, but it is certainly nothing like the predictions of hundreds of thousands of deaths that were bandied around at the time. I realise that it is a dangerous argument to talk about balancing 1,000 against 100,000 deaths, but I believe that a badly equipped and trained army is a dangerous army. Being properly equipped and trained makes our army one of the best. However, there is still a long way to go.
Having paid tribute to the Government's defence policy, I want to deal with a couple of other issues. We have already touched on recruitment and retention
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levels in the services generally, and there is a problem there. We have to be careful because the nature of war is changing dramatically. The idea of having large numbers of infantry battalions is an old concept. What we need is the right number of people doing the right job in the right place with the right equipment. Frankly, that is not just a numbers game. Having worked in the services, I recognise that every commanding officer will argue that it is all about numbers and nothing else, but we have to deliver the right people.
It is already difficult, but it gets even harder when we have a tight labour market. Recruiting in our inner cities is becoming more difficult, but the best place to recruit—historically and today—is precisely in our inner cities and in our less favoured areas. I happen to believe that joining the services—I would recommend it to anyone—provides an opportunity for youngsters who otherwise might not have one. It is a wonderful opportunity for a second chance for those who have not succeeded in school or elsewhere, and it gives them an ability to get on in life. However, ethnic minorities do not get the chance that they should get. Since 1997, we have had a good record on our targets for recruiting ethnic minorities. In a previous speech, I said that it was not good enough, and it still is not. The proportion of ethnic minorities in the armed forces should not reflect the proportion of ethnic minorities in this country: it should be double or even treble, as it is in the United States. That is because many people in that group suffer the worst deprivation and live in some of the most run-down inner-city areas in this country.
In a previous speech, I asked whether it was conceivable that General Colin Powell, the first black man to become the chairman of the joint chiefs of staff, could have ever become Chief of the Defence Staff in this country. Someone contacted me after that speech and reminded me that General Powell had commented on that very issue. When he went to Buckingham palace to receive his honorary knighthood, he pointed out that if his father had chosen to emigrate to Britain rather than to New York, his son would have been lucky to become a sergeant-major in the British Army. That is not meant as a condemnation of our forces, because they have done a marvellous job. The Welsh Guards attended the Butetown carnival this year, in the middle of the mardi gras, recruiting young black men and women from the docks in Tiger Bay in Cardiff. More can be done to build on the success of the last few years to improve the recruitment of ethnic minorities. That will help us to meet the capability gap in recruiting, personnel and training, so that our forces can continue to do the splendid job that they do.
I recently had the privilege of visiting Ascension island, the airhead for the Falklands. As ever, we were welcomed by Squadron Leader Mark Pattinson and the other 25 military personnel on the base. We arrived late on a Friday afternoon and they all turned out to give us a warm reception and an excellent briefing before we flew back to this country. They are a splendid example of why our forces are so good.
An important part of general defence policy has to be our defence industrial policy, although I do not wish to stray on to the subject matter of next week's defence procurement debate. The Government have made a good start by publishing the policy document, which has been well received by industry and most defence

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pundits. Of course, it is one thing to produce a good policy, but another to ensure that it works in practice. We need a balanced approach. We should not promote competition and the private sector for their own sake, because they will always be cheaper and more efficient. They need to be balanced against crucial military considerations such as efficiency, reliability, surge capacity and benchmarking.
My only request to the Minister is that he consider carefully how that policy should be applied to the Defence Aviation Repair Agency, which was created four years ago to balance the need to provide the benefits of the imperatives of the commercial sector against the need to prevent monopoly, to provide benchmarking for prices in the industry and a surge capacity in moments of crisis and conflict, such as in Iraq recently. I am confident that if he applies his own policy to the agency that he created so few years ago, the future of DARA, especially in my constituency—and the construction of the £90 million hangar, which will benefit the whole Welsh economy—will remain on course and deliver the benefits that our military services deserve.
Finally, I emphasise the point made by every hon. Member so far and pay tribute to the outstanding work that our servicemen and women do throughout the world.
3.24 pm
Mr. James Gray: It is always a pleasure to follow the hon. Member for Vale of Glamorgan (Mr. Smith), who speaks with such knowledge and passion about all defence subjects—although on this occasion I disagreed with two or three of his conclusions. I certainly endorse his tribute to our armed services throughout the nation and the fantastic job that they have done over the past five years. It is a tribute well worth paying, given that 46,000 of our troops and 25,000 vehicles were delivered to approximately the right place in Iraq with approximately the right equipment. That contrasted starkly with the performance of certain others in the same theatre of war, although I mean no discourtesy to them. I do not agree with the hon. Gentleman, however, that that was necessarily a result of the strategic defence review. Indeed, I think it may be the other way around—I think it may have happened despite the Government's failure to fund the SDR.
Nor am I certain that the hon. Gentleman is right in saying that European security and defence policy will necessarily lead, somehow or other, to an increase in European defence spending. The evidence so far suggests that moves towards ESDP have led to a reduction in spending. I am sure that the Americans, Conservative Members and everyone else who may be listening would be only too delighted if the European nations said "Fine: we will have ESDP tomorrow, we will have a European army, and we will spend 3 or 4 per cent. of gross domestic product on defence". Europe would then be able to defend herself, which would be great—but no one in this or any other European country has ever come close to suggesting that it would be the case. The truth is that we depend on the United States and NATO for the safe defence of Europe and of this country. That will always be so, and I for one welcome the fact.
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I agreed with much of what the Secretary of State said. As he rightly observed, the nature of warfare moves forward all the time and all kinds of new challenges lie ahead. Asymmetrical warfare and dealing with terrorism, for instance, demand a different approach from what was required of us during the cold war.
Incidentally, the hon. Member for Vale of Glamorgan—who I fear has now left the Chamber—was talking complete nonsense when he attacked us for reducing our defence spending towards the end of the 1980s. He had obviously forgotten the fall of the Berlin wall and the peace dividend, as it was always called, and he could not have read any of the reports—he was not a Member of Parliament at the time—of how bitterly the Labour party attacked the Government for not making far deeper cuts. Had Labour been in power at the time of the fall of the Berlin wall, we would have no kind of defence capability left, for Labour was still in thrall to the Campaign for Nuclear Disarmament. We would certainly have seen far deeper cuts had Labour been in power.
It was refreshing to hear the hon. Member for Blaenau Gwent (Llew Smith) talk in a good, old-fashioned, pacifist, CND sort of way. He would have been entirely at home in the Chamber during 1986, 1987 and 1988, before the fall of the Berlin wall. He and the Labour party would then have been wholly in agreement, although now his is more or less a lone voice on the Labour Benches. I look forward to the speech of the hon. Member for Moray (Angus Robertson), whose views I suspect may be similar to those of his Celtic friend across the Chamber.
As I have said, I broadly welcomed what the Secretary of State had to say about the change in warfare. I look forward to seeing the White Paper, which I hope will be published in the not-too-distant future—before Christmas, I trust. It will be interesting to see what it contains. The rumours that have circulated in the defence community so far have been worrying, to say the least. One also suspects, given the Secretary of State's body language, that —notwithstanding all the new Labour talk and all his clever expressions about making best use of our defence capabilities and resources—what he actually meant was that he was required to give the Chancellor of the Exchequer a jolly big whack of cash, and that it had been his job to try to find a way of cutting our defence capabilities in order to do that.
In an intervention I challenged the Secretary of State to tell me if that was incorrect, and this was not about defence cuts. I challenged him to say that we would have the same or greater capabilities next year, the year after that and—if Labour was still in power, which I very much hope it will not be—in five years' time, which he signally failed to do. He would not give us any guarantee about future British defence capabilities. I fear that when the White Paper is published it will be full of clever-sounding new Labour expressions, rather like the SDR. As my hon. Friend the Member for North Essex (Mr. Jenkin) pointed out, in new Labour speak somehow or other less means more. The Government will spin in an attempt to demonstrate that although they are closing three infantry battalions and cutting one tank regiment, and are to reduce the size of the aircraft carriers, Britain should not worry about all

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those deep cuts. They will say "Don't worry about it, Britain. Your defence is safe in Labour's hands. We are saving loads and loads of money by cutting the number of soldiers, planes and ships. Do not worry about it—defence is actually better." I suspect that that is the sort of language that will appear in the White Paper. If I am wrong, I challenge the Minister of State to correct me when he winds up. I hope that he does not resort to clever new Labour spin to conceal the fact that the Government intend to make deep cuts in defence when the White Paper is published.
My hon. Friend the Member for North Essex spoke very well about defence policy in general, so I shall deal with three specific matters. I suspect that the tension between capability and resources currently faced by the MOD will be highlighted in respect of each. The Minister will not be surprised to hear that the first matter is the announcement that the C130J fleet is to be moved from RAF Lyneham in my constituency to RAF Brize Norton. If all goes according to plan, RAF Lyneham will close by 2012.
The Minister has often acknowledged that the plan is extremely bad news for my constituents. It will mean that 750 directly employed jobs will be lost, and that a significantly larger number—in local schools, shops and other enterprises that support the base—will also go. In addition, 2,500 RAF jobs will be lost—a matter that we have not faced up to yet. There will be a hole in the local north Wiltshire economy worth £75 million, which will be very significant for my constituency.
The Minister is aware of all that. I suppose that he would be justified in arguing that the effect on the local economy is not his primary concern, which is to ensure that the defence of the realm is in place. To some extent, I would accept that. I welcome the fact that the Minister and the MOD have agreed to work with me and the local task force that I have set up to counterbalance the worst effects of the closure. I am grateful also for the fact that civil servants are now working with us, but I should like to make a couple of pleas in that regard.
First, will the Minister ensure that if surveys of, for example, the contaminated land on the base are needed, the MOD will be prepared to go the extra mile to assist the task force in the work that it has to do? Secondly, will he ensure that the transfer, when it happens, will be swift and clean? We do not want RAF Lyneham to be left derelict or semi-derelict for a period of years, during which it could become a run-down mess.
The base may become non-viable before 2012. If only a small number of C130K planes are left on the base, it is possible that it may cease to be viable by 2009 or 2010. We should much prefer the matter to be clean cut, with the RAF leaving cleanly so that new civilian businesses and houses can come on to the base. An extended run-down happened elsewhere in my area, at the Corsham base, which was left derelict for a long time after the military moved out. I hope that the Minister will keep an eye on that in the years to come.
As an aside, I hope that the Minister will no longer be in post when RAF Lyneham closes. That is a purely political sentiment—on a personal level, I hope that the right hon. Gentleman will continue his work, but, on a political level, I hope to be doing his job by then. If that
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is the case, I shall certainly heed the request that I am making this afternoon. If I am not in his job when RAF Lyneham closes, I hope that he and his successors will do all that they can to facilitate the base's transfer to civilian use.
My second point is that the Government seem to be concentrating all the RAF's air transport and refuelling capability—as well as most of its passenger capability—at RAF Brize Norton. They are putting all their transport eggs in one basket, in a very big way. If I were a terrorist, or belonged to a nation that hated Britain, RAF Brize Norton would be the first place that I would bomb and try to close down. That would ruin Britain's entire defence capability at a stroke. RAF Lyneham was red hot during Operation Telic. Planes were coming in and out all the time. The fact that the base had two runways was useful on at least one occasion—when one is blocked by a broken down aeroplane the other can be used. We were using RAF Brize Norton at the same time. If all those capabilities were based in one place—at Brize Norton in Oxfordshire—there would be a real risk of it being hit in some way, severely depleting our capability as a result. Leaving aside my constituency interest, the Minister should give further thought to the strategic downside of basing all our transport capabilities at Brize Norton.
My second concern is entirely unrelated but it is a matter that is close to my heart. I was in the Territorial Army for seven years. I remain a member of the Court of Assistants of the Honourable Artillery Company—25 of its soldiers were deployed in Operation Telic. Thanks to my membership of the armed forces parliamentary scheme and my current membership of the Royal College of Defence Studies, I was pleased to spend a week in Iraq in May. During that time I met a great many Territorial Army soldiers. I wish to raise a number of matters relating to the TA and reserve forces, in particular with regard to their usefulness in Operation Telic and other future mobilisations.
The whole Iraq operation could not have happened without the Territorial Army. That should be made plain and it is contrary to what was said in the strategic defence review. I think that a total of 8,800 reservists of one sort or another are serving in the Gulf. At one stage, about 25 per cent. of ground troops were from the TA. They brought a large number of specific skills to the war effort— skills that could not have come from the Regular Army. I am thinking in particular of the Port and Maritime Regiment, which was deployed first in Southampton Marchwood. The regiment was responsible for all the 25,000 vehicles that were loaded. Then, it was moved to Um Qasr in Iraq and was responsible for those vehicles being unloaded, deployed in the field and brought out again. That port and maritime operation was carried out by a TA regiment that was called up on Christmas day, if I remember rightly, and was being used until the other day when the troops were finally demobilised.
The same applies to a significant degree to the Royal Army Medical Corps. A significant number of the medics were national health service doctors and nurses. The operation could not have been carried out without them. The Royal Logistics Corps and the Signals also relied significantly on the TA. There were lots of other teeth arm people out there—infantry people and special

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forces—and all of them were from the TA. I am sure that the Minister will be the first to acknowledge the superb effort that members of the TA made.
I pay tribute to my hon. Friend the Member for New Forest, West (Mr. Swayne), who is serving as a major in the Territorial Army in Iraq and my neighbour and hon. Friend the Member for Westbury (Dr. Murrison), who is serving with the medical services there. It is remarkable that two Members of this House and two members of staff, I think, are serving in the Gulf.
Looking forward, it is one thing to have the compulsory mobilisation of that number of TA soldiers to fight a war—that is broadly acceptable to families and employers—but what is slightly more worrying is the compulsory mobilisation under the Reserve Forces Act 1996 that is now taking place and is apparently likely to continue for many years to come. People are being sent compulsorily from this country—whether they want to go or not—to serve in Iraq in peace-building operations of one sort or another. I shall be interested to know the Minister's reaction to that. Sooner or later, I think that that will become less acceptable than compulsory mobilisation for fighting a war.
The Regular Army expects to go to places such as Iraq to undertake peacekeeping operations, build infrastructure and so forth. A stockbroker does not expect to be called up compulsorily to go to Iraq six or 12 months after the war to patrol and be on guard, or even to relieve Regular Army counterparts. I suspect that there will be a difficulty with retention and recruitment in the TA if such mobilisations go on indefinitely. It would be interesting to hear the Minister's view on what can be done to avoid that.
I have several questions about pay and conditions. I think I am right in saying that, under the Reserve Forces Act 1996, once someone has been compulsorily mobilised for a six-month period, they cannot be remobilised for another three years. If that is so, now that so much of the Territorial Army has been mobilised what on earth will we do if another Iraq arises next year or the year after and it is still three years before we can replenish our reserves?
What can we do about the attitude of employers? Later this year, it will be compulsory for employers to know when their employees are members of the TA, which I broadly welcome. One could argue—I often do—that people should not join the TA unless they are prepared to serve. That is only fair and it is right that employers should know. However, I fear that some employers will say, "Well, if you're in the Territorial Army, I'm not going to employ you." Some private sector employers might have some reason for doing that, but even more worrying is the fact that several public sector employers have adopted that position. I am told that both the Leicestershire and the Cambridgeshire fire authorities have said that no firemen may be in the TA. That seems bizarre. Similarly, two or three police forces have said that no policeman may be in the TA. The Government should make it plain to public sector bodies that if they are in receipt of public money, they should employ members of the TA and other reserve services. Perhaps the Minister could do something about that.
I have come across several soldiers who suffered problems after compulsory mobilisation due to the pay structure. Members of the TA receive the same pay as
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the equivalent rank in the Regular Army. Incidentally, I apologise to the Air Force and the Royal Navy, I am including all three services; I use "TA" as shorthand because I served in it. However, if soldiers can demonstrate hardship—for example, that the amount of money that they are receiving from the Army, Navy or Air Force is less than they need to pay their mortgage and normal outgoings—they are given a hardship payment to make up the difference.
The difficulty lies in the necessity to demonstrate to the authorities that one is suffering hardship. Almost all the TA soldiers who were called up had to do that. They had to produce bankers' orders to prove that they were paying their mortgage so that their pay could be made up to a level that would prevent their families from suffering hardship. There were benefits for those who could see what was coming and had converted their credit card payments, for which they were not paid by the Army, into bankers' orders, but not for those who were unprepared. That is wrong.
If members of the Territorial Army and other services are to be compulsorily mobilised their pay should be commensurate with their civilian pay. They are being taken away from civilian life, where they have family commitments and houses, and receive quite different rates of pay that do not allow them to keep up their way of life. Reserve forces' pay should be linked to civilian pay, although there should be some form of capping. It would be unacceptable for a stockbroker giving up a £150,000 job to be a private soldier to receive the same rate of pay. However, there should be some broad link, without the intrusive pay inquiries that went on during the run-up to Operation Telic, and without too much examination of people's bank statements, so that their way of life can continue as it did before their call-up.
The House will be aware of reports such as the one in The Daily Telegraph on 29 May, headlined:
"TA faces mass fall-out in Gulf pay bungle".
There was an entire page of articles about people affected by a pay bungle in the pay department of the armed services. As we heard earlier, The Guardian reported that 2,000 people have left the reserve forces since Iraq.
The figure may be incorrect and I should be happy to have the Minister's assurance that he is confident that both retention and recruitment in the reserve forces will continue at their current levels. However, the RAMC in my area—Wessex—reports significant departures. NHS personnel in the RAMC are saying, "I'm not having this. I'm not going to be called up compulsorily and kept out there for unreasonably long periods and paid less than I would be as a consultant at my local hospital. I am not going to do it. My wife won't let me do it. I am very sorry but I am going to leave the Territorial Army." If the Minister disagrees, he must say so and let us know what he intends to do about it to ensure that retention and recruitment in the TA and the other services is kept up. I suspect that part of that may involve linking their pay to civilian pay. Incidentally, there is one other thing that he could do about that—we ought to have a mobilisation day.
Mr. Ingram: It is important to correct the hon. Gentleman's comment about 2,000 part—time soldiers as they are called in an article that appeared in

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The Herald and elsewhere—leaving the Territorial Army. I asked for that to be looked at, and it is important to correct what has been said because other hon. Members have referred to it. General Sir Mike Jackson, the Chief of the General Staff, has replied to The Herald—I hope that other papers pick this up too—saying:
"There is no evidence in any of the volunteer reserve forces of mass departures from the TA as a result of the call-out and service in Iraq. The drop in TA numbers is seasonal and consistent with previous years. It is largely due to the departure of officer cadets in the University Officer Training Corps",—
which is part of the TA—
"in their third year, who, on reaching the end of their studies, leave the UOTC. The new university intakes join in October."
So there has been a departure, but for those reasons.
Mr. Gray: I very much welcome that reassurance. It is important that we know that, and it will be important to revisit that statement in the months to come. I hope that that will remain the case and that we will not find that TA people are dropping out. I think that I am right in saying there are 38,000 people in the TA, but there should be 45,000 under the SDR.
I understand that we are currently going through the bidding process—to use laymen's terms—where various parts of the Army bid for TA back-up. Those bids will be decided by the end of this year, and I understand that they currently amount to about 95,000 or 100,000 TA soldiers. We currently have 38,000—less than half what the Army is asking for—so the presumption is that there will be some very heavy scaling back on what the Army is requesting and, no doubt, a careful re-examination of the way in which the TA works and what it does. It would be interesting to know the Minister's reaction to that suggestion and his thoughts about how on earth the TA can begin to supply anything like what the Army is asking for; or perhaps he is considering fundamental restructuring in the roles that it plays.
I wish briefly to mention something else on that front. My hon. Friend the Member for North Essex and the Secretary of State referred briefly to a home defence force role for the TA. Of course, it has always had such a role—that is why it is called the Territorial Army—and there has always been an argument for some kind of home defence role. However, I simply wish to say two things. First, giving the TA one week's extra training, which was announced under the new chapter of the SDR, is laughable. That amount of training is absolutely neither here nor there. It is entirely pointless, and the TA might as well not do it.
Secondly, if, as some have suggested, the TA is taken away from a war-fighting role and moved into some kind of home defence role—a key points guarding role of some sort—on an ongoing basis, I guarantee that people will leave the TA. There is no way in the world that the people with whom I served in the TA, who are trained for war-fighting roles, would content themselves with some sort of "Dad's Army" role, guarding key points.
Of course, like the Regular Army, the TA is ready to fulfil such roles, but only if they are taught war fighting. They must be taught war fighting and they may then use those skills in aid of the civilian power. That is a
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perfectly normal role of both the Regular Army and the TA. However, if those in the TA only had a home defence force role, they would not stay there. As evidence for that, we need only glance back 10 years, or thereabouts, when we had a huge home defence force, which the then Conservative Government set up. We took a lot of former TA and regular soldiers into the home defence force, but it did not last more than two or three years. It was impossible to recruit or retain soldiers. People will not give up their weekends, two weeks a year or Wednesday nights for training to do a job that they believe the police could easily do. They must be trained for war fighting, albeit using those war-fighting skills for defence of the civil power.
One last matter on which I want to touch only in passing relates directly to defence policy, but is none the less extremely important. One of the things that one is required to do at the Royal College of Defence Studies is write a 10,000-word thesis, which I am glad to say I did. I did it on the subject of the use of the royal prerogative to go to war, and I did it largely by examining Hansard dating back to the second world war and examining the way in which we decided to go to war in every war since then, up to and including Afghanistan. The reality, of course, is that in all those wars, two or three of them under this Government, no vote was allowed in this place at any time, nor was there any suggestion that there should be one. In most of those wars, the Secretary of State or the Prime Minister came along to the House of Commons two or three days after the war had started to announce what they had done and to say that the people would judge them in a subsequent general election if they did not get it right.
I know that that runs contrary to what a great many of my hon. Friends and many other Members would think, and that they would ask what is the purpose of having a great House of Commons if we cannot even decide whether to go to war. I would say that the decision to go to war is a great deal too important to leave to this Parliament. It should not be a matter for this Parliament—it should be a matter delegated to the chief executive, the Prime Minister. He should decide on the basis of the secret intelligence available to him what troops he should deploy and what the troops should do when they are in the theatre of war. After all, had the Prime Minister taken that approach, had he not sought to spin and to persuade this House of Commons and the nation that what he was planning to do in Iraq was right, and had he done what he did in relation to Afghanistan—placing a paper in the Library and saying that he had a great deal of secret intelligence that he could not share, but that he must tell the House that he believed that sending in troops was the right thing to do—he would not be in the position he is in today. It is only because he felt the necessity to spin and to persuade people that somehow he landed up in the appalling shambles that we see unfolding in the Hutton inquiry.
Were we in future to have an evenly balanced House of Commons, with perhaps a majority of one or two on either side, and were we required to come to this House for a vote on a war, it seems to me that the Opposition, however noble and distinguished they may be, would take party political advantage of that narrowness of the majority, giving away statesmanship in favour of political expediency. I know that this is a deeply unpopular view in my party, and almost certainly a

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deeply unpopular view within the House as a whole, but I believe fundamentally and passionately that we should ask the Government to carry out certain functions for which they should be answerable in retrospect but for which they should not have to justify themselves to the House in advance. There is a place in modern government for the royal prerogative, and the Prime Minister was incorrect in allowing political pressure to force him to come to this House and seek two substantive votes prior to the Iraq conflict. He should have just gone ahead and done it, and if he had got it wrong, we would have told him about it in no uncertain terms in retrospect.
Angus Robertson: Does the hon. Gentleman believe that there are any other policy areas in which Parliament should not take part, or is it only matters of life and death on which Members of Parliament should not decide?
Mr. Gray: There are quite large numbers of Government policies on which the House takes no decision, such as the appointment of ambassadors and bishops. There are all sorts of areas in which the Prime Minister makes use of the royal prerogative that he has inherited to make dozens of decisions that do not come to this place. If we had a vote in the House every time a bishop was appointed, we would be bogged down to say the least. There are large numbers of areas in which we leave it to the Prime Minister to make up his mind. After all, that is part of parliamentary democracy. When a general election comes, we look at what the Prime Minister and the governing party have done and we decide whether it was a good thing. If every decision, no matter how important or unimportant, came to this place for a vote, they would not be accountable for their actions in the same way as they are under the current system of parliamentary democracy. I realise that that is not a popular view, but having just completed that thesis, on which I shall shortly publish an article, I thought that I would take the opportunity of sharing it with some of my parliamentary colleagues.
Leaving that point to one side, I have a real worry about the way in which the Government seem to be committing us to more and more overseas adventures of one sort or another. We seem to be involved in them with fewer and fewer resources. Rather than face up to that, the Government seek to camouflage the imbalance between commitments and resources with new Labour spin and new talk, with all these clever expressions about modernising warfare and all the standard guff that we hear all the time from the Labour party.
I challenge the Minister to be absolutely straightforward in his response. If he has not got the right resources and if the White Paper is about cuts so that the money can be spent on health, education or other things, I challenge him, for heaven's sake, to say that we do not have the resources to do the things that we would like to do. That is what the people of this country would expect him to say.
3.55 pm
Mr. David Kidney: It is a pleasure to follow the hon. Member for North Wiltshire (Mr. Gray). I enjoyed his speech until he came to his final remarks. I thought that it was a very welcome development that
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Parliament had the final say on the biggest decision that we can take, which is to start a war. However, there will be emergencies when actions sometimes must be taken before Parliament has all the facts, can debate the issue and make a decision. I also welcome what he said about the Territorial Army and reservists, especially the point about the importance of responsible employers ensuring that the reservists have time off to do the important work that they hold themselves ready to do for this country.
I congratulate the hon. Member for South-East Cornwall (Mr. Breed) on his new responsibilities and I wish him well with his brief for the Liberal Democrats.
My constituency has hosted RAF Stafford for more than 60 years, and today its role is to provide combat support services and single service storage and distribution. I therefore thought that I would confine my comments to the policy for defence logistics. A good place to begin is Operation Saif Sareea 2, which took place in September 2000 when United Kingdom and Omani forces came together on an exercise. The UK tested our ability to conduct expeditionary warfare and provide support for expeditionary forces. The National Audit Office gave a reasonably positive assessment of that exercise in July 2002. It concluded that
"logistic support was demonstrated with personnel and equipment being successfully moved to, from, and around a large theatre of operations."
Beyond the headlines, there are issues of concern, and I shall pick out two that are relevant to this debate. The first is the issue of strategic lift. Although dedicated strategic lift assets are probably a matter for next week's debate, the policy relies on access to civilian planes in so far as the Ministry insists on using them for part of its strategic lift capacity. As the National Audit Office said, if we rely on civilian planes, it is absolutely essential that we have guaranteed access to sufficient civilian strategic lift resources in a crisis. I endorse that conclusion.
In relation to the Saif Sareea exercises, the National Audit Office drew attention to the unreliability of asset-tracking systems and pointed out that there were periods when it was not possible to track items sent from the United Kingdom to the exercise theatre. The Public Accounts Committee reiterated those observations and also commented on communications, which again are more a matter for next week's debate.
The conflict in Iraq began with a build-up of our forces mostly in Kuwait and it was then followed by military action. From a logistics point of view, I want to deal with the reports of shortages of supplies that the hon. Member for North Essex (Mr. Jenkin) picked up. I have followed the story and it is my experience that many of the reports were exaggerated. In fact, some of them were unfair to the people who delivered supplies to the front. However, there are points to address.
Lord Bach, who is Minister for Defence Procurement in the other place, talked about that subject when he addressed the Royal United Services Institute for Defence Studies at the end of July. He said:
"In a logistics exercise of this size, there were bound to be some problems. Most of these were addressed quickly. Others proved more difficult to solve."
In his speech, he continued to talk about some of the difficulties and how they could be resolved. He mostly drew on a report that was published in July entitled

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"Operations in Iraq: First Reflections", so I shall move on to that report directly rather than quoting him second hand.
The report said:
"Initial reports suggest that our equipment and logistics support performed well overall, although improvements are required in respect of asset tracking and distribution within theatre."
It includes a comment that the Ministry of Defence is able to track assets that have been properly put together and sent to theatre but that we cannot check where they are when things are off and running.
The report made general conclusions that I shall draw to the attention of the House. We are endeavouring
"to integrate more closely the idea of single-Service supply chains",
yet the report confirms that we are still some way from completing that work. It drew the important conclusion that we must be careful about the balance of ready stocks that we hold and those that we source directly from industry, which especially relates to points made about boots and clothes. The message is not to be too seduced by the "just in time" philosophy of commerce in some of the situations that we face during warfare.
The report drew attention to the need for a
"common and robust tracking system to enable equipment and stocks to be tracked throughout the supply chain in fast-moving, complex operations."
The last conclusion to which I shall draw attention, which is relevant to human support for people doing the fighting, is the
"need to review the provision of Temporary Deployable Accommodation to ensure that accommodation and human support services are made available to our people, particularly in arduous locations."
Behind those recommendations, we must recognise the immense human effort involved in delivering logistic support to the front line. Given that RAF Stafford is a storage and distribution point, as is the Ministry of Defence's Army base at Donnington, I was able to see the work of the people at the Defence Storage and Distribution Agency, who are mainly civil servants, during Operation Telic. I saw their commitment and dedication and listened to their stories of 12-hour shifts, seven days a week. I saw them send away the items that formed part of the supply chain. Their dedication and commitment made the logistic side of Operation Telic a success. The telling statistic when one compares Operation Telic with Operation Desert Storm in 1991 is that we transported twice as much in half the time. The personnel who were involved in that tremendous achievement deserve a big "well done" from the House. The operation required the movement of 46,000 service personnel, ships, aircraft, armoured vehicles, support equipment, clothing, accommodation, medical equipment and food supplies over 5,500 km to the theatre of war.
News of progress on the Ministry of Defence's end to end review, which is one of many reviews that I want to mention in a moment, followed for the Defence Storage and Distribution Agency, although I hesitate to say that
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the review has ended—it will continue. As a first consideration of the review, my right hon. Friend the Minister of State said:
"The Ministry of Defence has recently completed a detailed review of the way in which we provide logistic support to land and air forces (including naval air and the royal marines)."
He said that the review was a fundamental and wide-ranging piece of work, examining the totality of our logistic support from industry to the front line, that the work was in progress, and that consultation with trade unions would take place at every step along the way. He said that a number of key changes were needed, which had been identified. He told the House in September that he had placed a summary of the conclusions of the initial report in the Library, where hon. Members have access to it.
I notice that the end to end review is one of many reviews of the supply chain currently taking place. I was told in the summer that 21 reviews were under way at the same time. There are two dangers associated with such activity. First, there is the effect on human beings. We all wonder about the need for change and worry about the uncertainty created by talk about the need for change. There is a danger that the morale and confidence of those doing the work might be affected by too many reviews at the same time.
Secondly, each review can be justified on its own merits. The people carrying out each review can justify the conclusions that they reach, but it is important to retain an overview of the total effect of all the reviews being completed together, to ensure that the strategic service is satisfactory and robust at the end of the process. However, I should not like my right hon. Friend to think that I have anything against the Ministry of Defence keeping a finger on the pulse of what is happening.
I recognise how quickly the strategy of warfare changes, not to mention the technological developments that take place. Together, those factors for ever change the requirements of our armed forces and our ability to conduct war, whether in our defence or in other people's countries. I recognise, therefore, the need for such reviews. I simply warn about the effects of too many reviews at the same time.
I shall say a little about RAF Stafford's present position. At least three of the current reviews have a bearing on its future. We have the airfield support services, the future defence supply chain initiative, and the air combat service support units. The most high profile part of the airfield support services review has already been mentioned in the debate the future of the fire defence service, which has a presence at RAF Stafford.
The review of the future defence supply chain initiative has a bearing on all the civil servants who work in the storage and distribution service at RAF Stafford. The review of the air combat service support unit has a bearing on the uniformed personnel at RAF Stafford. To give the full picture, there are about 700 uniformed personnel and about 1,100 civil servants at RAF Stafford.
The trade unions nationally are concerned about the reviews relating to the present work carried out by the civil servants. They fear excessive privatisation and a loss of civil service jobs, a loss of the civil service ethos

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on which the forces can rely, and a loss of the ability of the supply chain to respond in an emergency, as the civil service has always done. It is appropriate for me to say to my right hon. Friend the Minister that the trade union campaign concerns me. I take an interest in what the trade unions say to me. My right hon. Friend needs to be able to meet their concerns in the outcome of the reviews that he announces to the House in due course.
Those who work at RAF Stafford, whether in uniform or as civil servants, do tremendous work for the armed forces generally. Not only I, but the whole community of the Stafford area believe that. We have very good relations between the civilians who live in the area, including those whose jobs are at RAF Stafford, and the uniformed personnel based there. Between us, we create a good relationship between civilians and the armed forces: that is perhaps reflected in Staffordshire's good armed forces recruitment record.
The combat support personnel at RAF Stafford are ready to be deployed anywhere in the world at any time. When they are required to go, they go: they are a very reliable part of the supply chain. The tactical supply wing should never be overlooked—its personnel provide the fuel for helicopters used in the activities of our armed forces, not only at the front line, but sometimes beyond it. I have seen images of the holes in the ground in which our personnel work in Afghanistan and Iraq as they keep our helicopters flying, whether on offensive operations, delivering supplies or taking the injured away from the front. They are an important part of the forces on every deployment. How many people know that for the past 30 years the tactical supply wing has worked continuously to supply fuel for helicopter operations in Northern Ireland?
Having been a regular visitor to the Defence Storage and Distribution Agency at Stafford, I would rank its civil servants with the best in the commercial sector. For example, nationwide storage and distribution for Argos is based in Stafford, and there is absolutely no difference between the quality and effectiveness of the two operations.
Despite all that, there is some concern about ongoing reviews that may affect RAF Stafford. In recent years—the hon. Member for North Wiltshire mentioned this—local councils have been consulted by the armed forces when decisions taken following such reviews may have an impact on the local community and economy. That is a good development. The new council that was elected in Stafford in May recently had such a consultation. Perhaps it took it the wrong way or did not understand the importance of an open exchange of views at an early stage, but it came away with the impression, which it then publicised to our community, that RAF Stafford is in danger of closing. The same review team conducted the review into the closure of RAF Lyneham that was mentioned by the hon. Gentleman. Will my right hon. Friend comment on that, especially in relation to the possible effect on the air combat service support units at RAF Stafford? I hope that he will say that the camp has a future.
Mr. Gray: The hon. Gentleman is right to be concerned, but he should nevertheless be cautious about the assurances that he receives. When I raised the matter of RAF Lyneham with the Prime Minister at Prime
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Minister's Question Time, he told me that he was certain that it would play a central role in future conflicts. How wrong he was.
Mr. Kidney: I remember the hon. Gentleman making those comments, so I shall bear that in mind. However, I know my right hon. Friend the Minister very well; I have met him to talk about these issues previously. I am sure that I can rely on his answer, although how much he can reassure me is another matter.
My remarks are entirely about the logistics of providing our armed forces with what they need at the right time. There is a great difference between fighting a war and the business of commerce. A letter of apology, a refund, or compensation after the goods do not arrive on time is fine in the world of commerce, but no use at all for armed forces at the front who rely on prompt delivery.
At the beginning of the debate, the Secretary of State paid tribute to those who have lost their lives in Iraq. I therefore ask for hon. Members' forbearance while I make my final point. The one constituent of mine who lost his life serving his country in Iraq was David Clarke, who had barely reached his 19th birthday. He was serving in one of our Challenger 2 tanks, which was hit by a shell that another Challenger 2 tank had fired. I did not know David, but I went to the funeral and it was clear from the tributes on the day that he was a young man who was full of promise, very brave and committed to public service in the armed forces. He gave his life gallantly for this country. I should like to pay tribute to his family—his mother, father and younger brother—who have behaved with great dignity and fortitude throughout the shock, horror and grief that they have borne.
Clearly, people in that position are worried about combat identification and want to know what the Government can say about reducing so-called friendly-fire fatalities in future combat. It would be helpful if, either today or later in writing, the Minister could bring me up to date on the Government's actions to meet the challenges of combat ID.
4.15 pm
Hugh Robertson: It is a pleasure to follow the hon. Member for Stafford (Mr. Kidney) and his tribute, which he was right to make. All hon. Members would do well to reflect on his words and the lessons that can be learned.
I want to speak about what I believe to be the most important issue that affects British defence policy: our response to the events of 9/11. I should also like to consider the further implications for our defence policy. Before I do so, I want to put another matter on record. A great deal has been written—and said in the House—about the preparations for and the aftermath of the war in Iraq, but little has been said, even in the Chamber, about the fighting of that war.
Whatever one's political view, everybody would agree that the campaign was an overwhelming success. I suspect that it will be studied in staff colleges throughout the world for many years as a model of its type. That reflects enormous credit not only on the armed forces who fought the war but on all those who were involved in its planning and support. I realise that times are

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difficult for the Secretary of State, but he and other Ministers—I include the Minister of State—can be justifiably proud of the role that the Ministry of Defence, and all the other defence institutions for which it is responsible, played; they did the country proud.
Defence has changed enormously in the 22 years or so since I left school to join the Army. Given the scale of the changes, it is not surprising that defence policy has often appeared to chase the game, to use a sporting analogy. It has seemed to react to events rather than to predict the future and act accordingly. When I joined the Army, defence policy was entirely conducted in the predictable parameters—almost a straitjacket—of the cold war. That was the first phase of defence policy that I experienced.
When we went through Sandhurst, people such as my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) taught us the four pillars of UK defence policy. It is a great tribute to my hon. Friend that I remember them now. They were: defence of the UK home base, the overseas dependencies, NATO and our independent nuclear deterrent. It is clear that three of them related to the conduct of the cold war. We exercised endlessly against imaginary enemies, almost always organised on Soviet lines, and memorised their equipment. When I took over as adjutant of a main battle tank regiment in Germany in 1990, we were flown over the battle positions that our individual tanks were expected to occupy when the Red Army crossed the border. Everything was governed by the cold war.
Even then, it was clear to us all that things were about to change. The night that the wall came down, I was a student at the junior division of the staff college. I vividly remember everybody gathering in the television room to watch those amazing scenes from Berlin. We knew then that a new age of defence policy was about to begin. The end of the cold war ushered in a new era of optimism. As many hon. Members have said this afternoon, there was talk throughout the west of a new world order, peace dividends and, of course, smaller defence budgets.
The whole of my second year as an adjutant in Germany was spent preparing for "Options for Change", drawing up orders of battle involving smaller numbers, fewer squadrons and so on. That was an understandable reaction, but, as we now know, a wrong one. In fact, freed from the straitjacket of communism, the world became a rather more dangerous place. Sir Anthony Parsons, our ex-ambassador to the United Nations, put it brilliantly in his book about the first 50 years of that organisation, when he described the period as moving from cold war to "hot peace". Older ethnic, religious and territorial allegiances began to reassert themselves. Bitter conflicts broke out around the periphery of the old Soviet Union and across Africa. Defence planners then began to realise that the reductions made in the early 1990s had gone too far. The strategic defence review clearly sought to put that right.
It is my personal view that the events of 9/11 usher in another new era of defence policy—effectively the third of my lifetime. Some preliminary work has clearly been done in the SDR new chapter, but I wonder whether we in this country have really begun to understand the implications of that momentous event. Indeed, I worry whether, psychologically, we in Britain have already
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begun slightly to dismiss the events of 9/11 as another of those disasters—natural or otherwise—that occasionally afflict the world. People in the United States have certainly not done so, however, as I saw on a recent British American Parliamentary Group visit, and we must not do so here.
Before I examine the implications for UK defence policy, post-9/11 and the SDR new chapter, I want to say a few words about the new threat that we now face. We must recognise at the outset that al-Qaeda is a wholly new and entirely different type of enemy, whose leadership is dedicated to the overthrow of our state and, indeed, of our whole way of life, whatever the human cost. It does not seem to be so much a single, identifiable group as an umbrella organisation. It is a network of many different terrorist organisations and, critically, of rogue states. That network is spread right across the globe from north Africa through the middle east, Afghanistan and Pakistan down to south-east Asia. It is bound together very loosely by a loyalty to an extreme form of Islam and, critically, by a desire to attack the west, particularly America. If we are to defeat such a formless enemy and others like it, we will need a full range of responses considerably outside the scope of normal—in post-cold war terms—UK defence policy.
What does that mean in practical terms? First, we need strong international institutions. My right hon. Friend the Member for Devizes (Mr. Ancram) has talked at some length about the need to repair fractured international institutions such as NATO, the UN and the EU. It is a tragedy that so many of them are divided at the very time when the need for them is greatest. Successful military operations demand clarity of command and control. I therefore hope that, for practical as well as ideological reasons, the Government will concentrate on re-forming and re-focusing NATO rather than devoting their energy to developing alternative structures in the EU, as they are at the moment.
Secondly, we need to broaden the scope of our defence policy to react to the new and complex political military environment. Diplomatic, legal, humanitarian and international development responses will all be needed, and it is vital that we get the correct structures in place now. I shall give an example. Having seen the Iraqi army in 1991—pre-sanctions—I have always felt that the problems of rebuilding that country after the conflict would far exceed the problems involved in fighting the war. I was therefore disappointed, when sitting on the Front Bench in the summer, to hear the right hon. Member for Birmingham, Ladywood (Clare Short)—who was then still Secretary of State for International Development say during the debate on Iraq on 4 June that the
"preparations for the post-conflict situation were inadequate."—[Official Report, 4 June 2003; Vol. 405, c. 210.]
If she is right—I have no reason to doubt her—that must simply never happen again.
We must develop mechanisms that allow the UK's armed forces to react more speedily than existing readiness profiles and resourcing assumptions allow. UK forces will often have to be generated in very tight time scales and I am not convinced that those mechanisms currently exist.
Thirdly, we will have to undertake a fundamental reappraisal of our defence relationship with the United States, especially in respect of procurement and

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training. We clearly must maintain an independent UK military capability, but, in practical terms, as the Secretary of State said, it is unlikely that we will ever again launch a major military operation without the support of the United States, which is the world's remaining superpower. Our forces clearly work well together at the moment, but it will be sensible to ensure, without compromising our independence, that both people and equipment are interoperable in future.
Fourthly, we need to examine the balance and capabilities of our armed forces. We must look at the whole concept of expeditionary warfare and effects-based operations. Again, the Secretary of State said something about that earlier. When one is outside government, it is difficult to have an informed opinion, but it is my instinct—clearly, without the information, it can be no more than that—that the current threat level warrants an increase in our armed forces. If that is not possible, and I realise that there are budgetary constraints, their numbers should certainly not be cut to balance the budget. The operational requirements in Iraq, Afghanistan, the Balkans, Northern Ireland and across Africa simply do not allow that. I say to Ministers that they should remember the experience of the early 1990s, which I lived through as a soldier. It is very simple to reduce troop numbers, but it is incredibly difficult, and takes many years, to build them up again and, critically, to replace the experience that has been lost.
The performance of UK military equipment in Afghanistan and Iraq was enormously reassuring. I heard one of the brigade commanders in Iraq describing the Challenger 2 main battle tank as the man of the match. Clearly, in both those conflicts, the Warrior and the AS 90 proved themselves to be battle-winning assets. It will not be a popular thing to say, but I think that we can agree that the Tomahawk cruise missiles performed extremely well. However, those operations illustrated other things. The new carriers are a vital focus for powerful amphibious operations. They need to be at the planned size both as a means of projecting our power across the globe and for their deterrent implications. They will also be needed at that size to cope with the new expanded role for defence policy.
I visited HMS Ark Royal just after the start of the summer recess. Personnel there were enormously proud of the work they had done during operations in Iraq and enormously enthusiastic about the new carriers. The one message that they asked me to take back was: do not reduce the size.
There is an ongoing need for heavy armour. I am always slightly nervous when I hear talk of cutting main battle tank regiments as though they were dinosaurs of the cold war: they are not. The role of the main battle tank in both Afghanistan and Iraq was crucial. Indeed, I am told that both 3 Commando Brigade and 16 Air Assault Brigade requested more heavy armour on a number of occasions to boost their combat power.
There are clearly lessons to be learned on the role and deployment of attack helicopters. I hope that the lessons learned from both those conflicts will show that there is a role for tanks and helicopters; they are complementary, not alternative assets.
We clearly need to look again and refine the procedures for close air support. I am afraid that my regiment discovered to its cost that that is not always
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what it should be. We need to improve assistance to allow aircraft to identify and to destroy targets while achieving the maximum amount of discrimination against civilian targets. The critical aspect, surely, is the question of balance. Please do not be tempted to reduce our heavy armoured capability to build up a lighter, more mobile role; given the current threat, both are necessary.
One thing stands out above all those factors the quality of the people in our armed services. I have already stated my personal view that the size of the armed forces should be increased as their commitments rise. However, they definitely need to be fully recruited at their current proposed levels. The SDR defined overstretch as trying to do too much with too little manpower, and we must face up to the fact that our armed forces are currently overstretched.
In the new defence environment post-11 September, and allied to the changes in social values that have occurred in this country in the past 10 years, we need to look at the entire welfare, or G5, package and how it affects our servicemen and women. There is also the question of training. All three armed forces need regular, realistic and challenging training: ultimately, that is what saves lives. Because of the current level of commitment, our armed forces are not getting the necessary time to train between operations; ultimately, that is dangerous.
I believe that the events of 11 September have changed the world and should usher in a new era of defence policy. The SDR new chapter has clearly made a start, but we need a fundamental defence review to address these issues. Among other things, such a review should certainly encompass the role of international institutions, with an emphasis on reorganising NATO, the question of the scope of the UK's defence policy, and the mechanism to bring together the diplomatic, legal, humanitarian and international development responses that will be required. It should look again at our defence relationship with the United States, particularly in terms of procurement and training. It should look at the reorganisation of our armed forces, with an emphasis on numbers and balance; that is the way to meet such a complex threat. But above all else, I hope that the first page of such a review will recognise that our servicemen and women are our most valuable assets and need protecting. Without them, without the qualities and professionalism that they bring, nothing in defence is possible.
4.31 pm
Mr. Malcolm Savidge: I should like to develop certain themes that I mentioned in last month's defence debate, particularly terrorism, weapons of mass destruction and the world order. On terrorism, although I share some of Professor Sir Michael Howard's concern about the not wholly helpful use of the term "war on terrorism", I supported the campaign against terrorism and the military action in Afghanistan.
Last month, I quoted what Professor Paul Rogers' report for the Oxford Research Group said about the campaign against terrorism. Today, I should like to refer to the International Institute for Strategic Studies' recently published edition of "The Military Balance".

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That publication shows the balance that one would expect of it, but warns us that in its view, as a result of the Iraq war, al-Qaeda has probably been strengthened, so as far as recruiting power, morale and operating capability are concerned.
During the McCarthy era, the US hard right used to refer to its opponents as "Stalin's useful idiots". One might wonder whether today's US hard right are Osama bin Laden's useful idiots. We must surely agree that, as the IISS says, if Afghanistan and Iraq are not to become breeding grounds for future terrorism, it is of key importance that we address as a priority nation building and stability throughout those countries. If the handover to democracy is to be achieved quickly in Iraq, it is crucial that we seek maximum responsibility for the United Nations in whatever agreements are reached.
It is also vital that we reunite the international community, sadly shattered as it is, in its campaign against terrorism. Of course, we must also seek international unity in our campaign to prevent proliferation of WMD in general and nuclear weapons in particular, as well as long-range missile technologies, whether to terrorists or states. Our primary means of doing so must be through the United Nations, and through arms control treaties. I fully recognise that the UN has many faults, though many of those of which it is accused by its member states are the fault of the member states themselves, not least the most powerful ones. Whatever its faults, it is the only UN that we have, and it is our only hope, so where it has faults, they need to be reformed. It is worth remembering the words of Henry Cabot Lodge, that the UN is
"an organisation to prevent you going to hell, not created to take you to heaven."
We should resist the arguments of the US hard right, who suggest that because the UN is not a perfect vehicle for taking us to paradise, it should therefore be discounted.
Arms control treaties have their weaknesses too, but they have also had considerable successes. If we reflect on the success of the nuclear non-proliferation treaty in preventing proliferation and examine the expert forecasts of what was expected over past decades, we can appreciate that there are far fewer nuclear weapon states in the world than previously foreseen. Of course, there are all sorts of problems, such as dual-use technology, and the nuclear non-proliferation treaty underestimated the extent of potential diversion from civil nuclear programmes into the creation of nuclear weapons.
Where there are weaknesses, our primary responsibility must be to strengthen the treaties and strengthen verification. I welcome the Bush Administration's recognition of that point in respect of additional protocols to the nuclear non-proliferation treaty, but I find it sad that they do not recognise its importance in respect of biological and toxic weapons. They should remember what a previous Republican President, Ronald Reagan, said: "Trust but verify".
The non-proliferation regime urgently needs to be strengthened. Of course, some states are likely to cheat or act in defiance. The US neo-conservatives suggest that we should consequently look to counter-
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proliferation and a more militarily aggressive stance, involving military interdiction of the transport of materials, pre-emptive strikes and even pre-emptive war. It is not inconceivable that the international community could be forced to use such means, but I believe that they are so dangerously destabilising to the whole world community that they should be adopted only as an absolute last resort and if there is international consensus. The fear is that the neo-conservatives regard it as an early resort and want to adopt it either unilaterally or unilaterally with a posse of the willing. They see counter-proliferation as an alternative to non-proliferation, and that could undermine non-proliferation.
Pre-emptive war is a particularly dangerous concept when it is based on flimsy intelligence evidence, on potential future weapons programmes, or on potential future alliances between states and hostile terrorist organisations with which those states have no current relationship. That gives almost carte blanche for nations to declare war against other nations. We should remember that a policy of pre-emptive attack could provoke more terrorism. I recall the figures provided by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) about the first year of the Sharon Government, who used precisely those policies. In that first year, the number of Israelis killed increased fourfold and the number of Palestinians killed was four times as great again.
Pre-emption can provoke proliferation, particularly if the Bush Administration stick to the policy of abandoning the negative security assurances given to the non-nuclear weapon states under the nuclear non-proliferation treaty. Pre-emption can also, of course, destabilise the world order. We shall have to deal with states that, as signatories to the nuclear non-proliferation treaty, are found to be cheating or in breach of it—states such as North Korea, for example. However, it should be done by means of diplomacy and international consensus.
We have to strengthen verification to find out whether other states are more skilfully and more covertly trying to break a treaty to which they are a signatory, but we also have to deal with the non-signatory states. Far too often we do not talk about the problem of dealing with India, Pakistan and-perhaps most of all-Israel. The current position in relation to Israel encourages other middle eastern states to proliferate. Of course, the five nuclear weapons states must show their genuine commitment to fulfilling their obligations. The United Kingdom Government played an honourable role in the negotiations on the nuclear non-proliferation treaty in 2000, when we managed to gain a degree of international consensus that was not expected. However, the rest of the world would be justified in asking how genuine the nuclear states are being when they say that they wish to progress towards multilateral nuclear disarmament.
In particular, the Bush Administration appear to be moving in the opposite direction on almost all the 13 agreements that were reached. Instead of strengthening the anti-ballistic missile treaty, they have abandoned it. They are trying to move away from the comprehensive test ban treaty. The Moscow treaty looks more like a public relations exercise than something that will lead to a genuine, irreversible reduction in weapons, as treaties

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such as the strategic arms reduction treaty would have done. New nuclear weapons programmes are being discussed that contemplate using nuclear weapons rather than having them as a deterrent, and I have already mentioned the situation on negative security assurances. The conference on disarmament in Geneva has been at a stalemate for far too long, with China blocking matters on fissile materials and the United States blocking matters on the weaponisation of space. It is a tragedy that nation states can show such urgency in rushing into war and so little urgency in trying to achieve a safer, more stable world.
A stable future cannot be based on a single state imposing its will by military might. President Bush should remember that when his father spoke of "a new world order" he did not mean one state laying down the law for the rest of the world while breaking the rules itself. Indeed, President Bush should remember the words of an earlier president, John Fitzgerald Kennedy, who in 1961 said:
"We must face the fact that the United States is neither omnipotent nor omniscient—that we are only 6 per cent. of the world's population—that we cannot impose our will upon the other 94 per cent. of mankind—that we cannot right every wrong or reverse every adversity—and that therefore there cannot be an American solution to every world problem."
The US neo-conservatives have ruthlessly exploited the hideous tragedy of 11 September to push forward their own agenda. The real lesson of 11 September is that no nation can enjoy unilateral invulnerability as a result of military power and technology. On the contrary, the security of each nation must depend on the common international security of us all. In a world in which we cannot un-invent nuclear weapons, and given that human ingenuity could invent even more destructive weapons, we urgently need to create a world order that reduces conflict and its causes.
4.43 pm
Angus Robertson: I am pleased to be able to speak in today's debate, having missed the last opportunity because I had to attend a Committee that was discussing the common fisheries policy, which is a matter of supreme importance to the many hundreds of my constituents who face job losses in that industry. Defence is also an important policy area and that is why I am pleased to make my contribution today.
The importance of defence was brought home to me last week when, with other right hon. and hon. Members, I attended the remembrance service at St. Paul's. I attended on behalf of the Scottish National party and Plaid Cymru and I fully associate myself with the comments of the Secretary of State for Defence and other hon. Members and the condolences expressed to family members who have lost loved ones.
The importance of defence was also reinforced last week when I had the good fortune to tour the majority of Scotland's defence establishments and units, including the Army at Craigiehall and Stirling, the Territorial Army at Forthside, the Navy on the Clyde, the Royal Air Force at Leuchars, and the Highlanders, which is the regiment that recruits in my constituency. I have already written to the Under-Secretary of State asking him to pass on my thanks, but I should like to express my gratitude again now.
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The tour was characterised by the extraordinary generosity with time shown by officers and men and women in all the establishments I visited. I am very grateful to them, and I am also grateful to the Minister and the MOD staff who made it all possible. In all the establishments there were reports of men and women who continue to serve in Iraq, Afghanistan and elsewhere. I echo others in paying tribute to all those deployed personnel, and to their families back home. Regardless of political affiliation, there is sincere appreciation of the work of service personnel, which is shared by the SNP and Plaid Cymru.
I want to begin by talking about issues relating to the world as it is, rather than as I want it to be. The first concerns Scottish regiments. It was raised time and again, in discussions last week, by service men and women and their officers who are greatly concerned about the future of various historic Scottish regiments. Ministers are, I know, aware of the considerable unease among serving and retired regimental personnel who fear that the ongoing MOD review will lead to a spending shift that could have a negative impact on current regimental structures.
That unease is also felt in traditional recruiting areas. In Moray, for example, hundreds of signatures were collected in a couple of weeks by The Northern Scot newspaper demonstrating support for the Highlanders. This comes at a time when recruitment to the regiment has been particularly successful, so any threat to its existence is seen as leading inevitably to a reversal of that success. I realise that as the review is ongoing Ministers are unlikely to commit themselves to the preservation of any particular unit, but it would be useful to know what time scale the Government envisage with regard to the publicising of their intentions, so that minds can be put at rest.
Speaking of time scales, let me return to the issue of contractorisation in the airfield support services project. The Secretary of State has confirmed that plans to privatise the defence fire service as part of the ASSP have been postponed. Originally, in reply to a question that I asked earlier in the year, the Minister of State said that the Government would make an announcement in October. The Secretary of State has told us that that had been delayed, and the Transport and General Workers Union says it expects an announcement to be made at the beginning of next year. Will the Minister of State now explain the reason for the delay and tell us in which month an announcement will be made and what issues are holding things up? It should be borne in mind that the implementation of the conclusions of the 2000 fire study would already be saving taxpayers' money and retaining the flexibility of current arrangements.
Perhaps the delay is due to the MOD's intention to decouple the defence fire service privatisation from that of the ASSP. I sincerely hope so. I know that my view commands support across the House: many Labour Members also oppose the privatisation of the defence fire service. We know that 30 DFS personnel have been serving in Iraq in recent months and performing key tasks, including the training of the Iraqi civilian fire service. We are all well aware of the dangers in Iraq, which affect not just service personnel but units and services such as the defence fire service. One DFS member has died on duty in Iraq. I think it wrong to contractorise a service that is so close to the front line. I

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hope that the MOD will listen to DFS members in my constituency and throughout the United Kingdom, and will not proceed with the privatisation.
A number of Members have raised the issue of homeland defence. I, too, believe that the Territorial Army and the part-time Air Force and naval personnel perform a vital role. That was highlighted by my namesake, the hon. Member for Faversham and Mid-Kent (Hugh Robertson), who spoke of the results of 11 September and the plans to introduce civil contingency reaction forces to deal with such disasters. I was very reassured to hear that the TA in Scotland appears to be on course to recruit the target of 500 personnel for both units, but is the Minister of State content that the financial support for the project is adequate? I was told by TA members recently about their concerns over equipment and access to transport for exercises.
On a related issue, will the Minister say whether the MOD is considering introducing pensions for TA members as part of the pensions review? The TA's status appears to be second class compared with that of the reserve firefighters, who do receive a pension. At a time when we are supposed to be looking for imaginative ways to recruit and retain TA personnel, the question of introducing a pension is important.
My last point about the way the world is rather than the way we would like it to be has to do with a matter specific to my constituency—the relocation of search and rescue services from RAF Lossiemouth to new, purpose-built accommodation at RAF Kinloss. The Minister will be aware that D Flight of 202 Squadron, with its two Sea King helicopters, is set to make that move in May 2005, and that building work is due to start next April. The decision follows the completion earlier this year of a two-year option study by the MOD, which concluded that the squadron should join the rescue services already based at RAF Kinloss.
RAF Kinloss is home to the aeronautical rescue co-ordination centre, which controls the military response to emergencies over an area of 1 million square miles. It is also home to the RAF's busiest mountain rescue team, and Nimrod aircraft from the base carry out an average of 52 rescue missions every year. I have gone on record as welcoming the move, with the proviso that its effect on RAF Lossiemouth will be clarified. I sincerely hope that the change will enhance the station's search and rescue capacity, by bringing the main relevant units together on one base. I hope that the Minister will confirm that the change will do nothing to alter RAF Lossiemouth's long-term operational prospects. People in Moray would appreciate a comment on that.
I shall keep my remaining remarks brief as I know that other hon. Members want to speak, but I want to deal with the world as I should like to see it. The hon. Member for North Essex (Mr. Jenkin), the Conservative spokesman, spoke about his desire for a sovereign, independent defence policy for the UK. I agree that that is something that all normal countries should have, although I doubt that Unionist Members in other parties would share my desire that my country should exercise its own sovereign and independent defence policy, with decisions made in Scotland.
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That is what normal countries do—they decide whether they should send their young men and women into conflict. I should like my country to be normal in that respect and able to make such choices in future. Scotland can build on a proud fighting and peacekeeping tradition. Scottish units could offer a more stable life to service families, which would be based in one area for their service careers. They could offer service personnel the same sort of peacekeeping experience available in the UK forces, but without the strains of overstretch. Also, a purely Scottish defence policy could guarantee that the salaries of service personnel would be spent in the Scottish economy. It would ensure that Scotland remained free of nuclear weapons, and that defence industries would be able to continue in a stable democracy.
That is the world as I should like it to be in Scotland. I want my country to become a normal country, making normal decisions about sending our young men and women into conflict. If that had been the case earlier this year, Scottish service men and women would not have had to fight in a conflict that was not sanctioned by the UN.
4.54 pm
Huw Irranca-Davies: I am pleased to contribute to a debate that has contained some thoughtful and intelligent contributions from all parts of the House. Earlier, my right hon. Friend the Secretary of State mentioned that flexibility was now the key word. I agree, and contend that responsiveness is also vital. Other hon. Members have spoken about NATO and other organisations, but I want to comment briefly on the role of the UN. I am not one of the detractors who say that the United Nations is broken and cannot be fixed. The UN is bruised and its often quoted unique legitimacy needs to be restrengthened.
In a debate such as this, there is a temptation to reflect solely on the incidents in our immediate history—those that are still ongoing in Iraq. I want to broaden the discussion. The United Nations is a unique institution. What it decides to do and the responsiveness and flexibility of its decisions and actions have an immediacy of impact on the role of NATO, European reaction forces and United Kingdom troops.
I welcome the work that the Defence Committee has done on the strategic defence review and the new chapter, in particular the focus on terrorism. That work echoes a new realisation within the UN. I think that Kofi Annan has seen that, despite his opposition to what happened in Iraq. He recognised that there is a case to he made for intervention on humanitarian or conflict resolution grounds within states and over sovereign territorial borders. That is the world in which we now live.
The UN can no longer take some effective action but, as on so many occasions, merely pass resolution after resolution hoping that something will come of it. It must make its work meaningful and be serious about acting upon it. That does not mean that military intervention or peacekeeping troops on the ground will be necessary in every instance.
Like many other hon. Members and international observers, I would welcome a change in understanding in the UN. When resolutions are passed they must be

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taken seriously and they must be acted upon more speedily and with more flexibility where appropriate.
I am not one of those who knock the UN. It has played a massive role ever since its inception. Since 1996, there have been 42 peacekeeping and observer missions worldwide. At present, 16 peacekeeping operations are under way. The UN has negotiated 172 peaceful settlements to various regional conflicts, including the Iran-Iraq war, the withdrawal of Soviet troops from Afghanistan and in El Salvador. So, quiet diplomacy also has its role, but backed up by a serious intent and the use of military intervention where necessary.
Humanitarian aid should not be overlooked. More than 30 million refugees in flight from war, famine or persecution have received aid through the United Nations High Commissioner for Refugees since 1951. At present, more than 19 million refugees—mostly women and children—are receiving food, shelter, medical aid and sustenance through the UN.
There is a critique of the United Nations, however. It has failed at moments of supreme crisis to act on the decisions that it has already taken. It has proved insufficient to the challenges that it has faced. Despite the high standards associated with the UN, in the hundreds of wars since 1945 it has authorised use of force only twice: the Korean war in 1950 and the Gulf war in 1991. That amounts to only two occasions in its entire history. That poor record of conflict prevention and resolution and enforcement action is a reflection on the UN. It colours perception of the UN throughout the world, including in present conflict situations, where any discussion of UN action is looked at askance, or with a smile or rebuke. Those of us who seriously believe in the role of the UN have to change that.
I will deal with how we can move to that situation, but if we make the UN more responsive and flexible in its approach, that will have an implication for United Kingdom capabilities as well as European and international capabilities and the demands on them.
Mr. Breed: Does the hon. Gentleman agree that one reason that there are so few UN-authorised actions is the regular imposition of the veto by certain countries? Is he suggesting that that should be reformed?
Huw Irranca-Davies: The hon. Gentleman brings me to that point a little earlier than I had intended. Yes, there should be a review of the use of the veto. That is reflected not only in what has happened in the recent past but also much further back. Indiscriminate use of the veto can lead not only to lethargy but to inertia in decision making while in some areas of the world people are losing their lives.
Iraq has already been mentioned. We could also consider Afghanistan. In the Federal Republic of Yugoslavia, the UN neither backed nor prevented the war and, in retrospect, changed its mind. In Rwanda in 1994, there was a failure to act while genocide was going on. There is a lack of intervention in current situations, for example, in the Congo, the great lakes region or Liberia—a country that turned, inevitably, to the US. The UN fails to enforce many of its resolutions and to act in moments of crisis.
As I said, troop commitments are not required in every case, but the inertia is striking. When people are losing their lives and major human rights abuses are
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taking place, the UN needs to put across the message that it can be more proactive and dynamic when appropriate. The message should resound across the international community that the UN is serious about stepping in when that is needed.
The use of the veto is often not governed by considerations driven by the international fraternity, or sorority, but by national interests, such as energy. That has happened not only in the immediate past. A range of countries has been guilty of indiscriminate use of the veto, or of threatening its indiscriminate use. The US is often mentioned, although it is not the only one, but we can certainly cite it in terms of the Cuban blockade and its belated refusal to condemn Halabja. We can cite Russia in relation to Afghanistan and Kosovo, and so on.
Current processes in NATO and the composition of the Security Council favour certain countries. They also favour countries that can deploy certain resources; in effect, the NATO countries. Should that be so? In a new century, should it be primarily the post-1945 make-up of the Security Council that determines how the UN makes its decisions?The composition of the Security Council and its decision making alienate much of the developing world. That is unfair and it needs reform. It damages the whole concept of multilateralism.
I began my contribution by developing the theme of what the UN has actually achieved. Those achievements are significant, but because the UN has failed to act in moments of supreme crisis it now appears to some people—although I am not one of them—as merely a talking shop. Its decision making is flawed. It is seen, at best, as a creature of the permanent members, with misuse, or threatened misuse, of the veto.
If the use of the veto is to be reviewed and reformed, that use should be delicate. It should be used to cut through problems as a surgeon uses delicate instruments in an operation. It should not be used as a sledgehammer or a chainsaw, as has so often been the case.
The developing world deeply distrusts the UN as a peacekeeper. How can we achieve reform? As the hon. Member for Faversham and Mid-Kent (Hugh Robertson) and other hon. Members have pointed out, if we want the UN to have a better speed of response and to be willing to act where appropriate—which is essential—that will have an effect on troop capabilities and demands on different nations. The decision-making process needs streamlining and the institutions restructuring to some extent.
One suggestion—I do not say that it is the only way forward—is that seats should be found on the Security Council for regional or sub-continental areas, which would have an implication for our representation as well. Another suggestion is to reform the veto and consider majority voting. Greater transparency is essential. Non-permanent members are regularly excluded from the real negotiations. For example, in the run-up to adopting resolution 1441, non-permanent members of the Security Council had to consult the New York Times to see the draft resolutions. So information needs to be passed to all the nations represented at the UN.
I began by mentioning Kofi Annan. In an interview in the Financial Times earlier this year, he was quoted as saying:

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"If the challenges we now face have changed, the responses must also change. We must be able to adapt our institutions and structures to deal with that. I'm not sure that the organs of the organisations are working in an optimum fashion.
I agree with that. We need to increase legitimacy and develop representation for all members of the UN.
In conclusion, I ask a simple and straightforward question to the Secretary of State, as we consider a review of how we deploy and assess the current and future capabilities of UK forces, as well as our interaction with European partners and multilateral partners worldwide: what impact would a reformed, more proactive, more flexible UN have on those capabilities?
5.6 pm
Mr. Crispin Blunt: I do not want to follow the hon. Member for Ogmore (Huw Irranca-Davies) down the road of UN reform; I want to focus rather more directly on British defence policy itself. First, I want to commend to the House the excellent speech by my hon. Friend the Member for Faversham and Mid-Kent (Hugh Robertson). I should have liked to make such a speech, and I commend its details to the Minister. He will know, as I do, with what authority my hon. Friend speaks on these matters, and he had some proper and extremely wise advice for the Government on the detail of the application of defence policy, particularly the complementary use of heavy and light capability, as the Secretary of State referred to it.
There is, however, one detail on which I should like to depart from what my hon. Friend said. In fact, it is not really a detail; it is a rather central point in his analysis of what has happened to British defence policy. I disagree with him that the events of 11 September were a fundamental turning point for the United Kingdom. They were a fundamental turning point for the United States, and that has had significant consequences for the United Kingdom, but the reshaping of British defence policy in 1990-91, at the end of the cold war, was the most significant event for us.
Obviously, through the 1990s, when I was a special adviser in the Ministry of Defence, there was a certain amount of settling down in that process and the adding back of a certain number of infantry battalions when it became clear that the cuts at the end of the cold war had gone too far. Then we had the SDR when this Government came to power in 1997, which very largely confirmed the overall direction that defence policy had taken since Tom King's reforms.
Those reforms have stood the test of time in a strategic sense, although not in a tactical sense, where changes have had to be made. The then Government were beginning to address the whole issue of asymmetric threats as part of the policy of being able to deploy forces overseas and having an expeditionary force capability, which was being built up during the 1990s.
The Defence Committee stated in its report on the 1998 SDR that the Government had not paid enough attention to issues such as homeland security and asymmetric threats. Plainly, the Government's reaction in the form of the new chapter of the SDR shows that they have started to make progress in relation to the
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lessons of the events of 11 September. A wholesale change in British defence policy, however, will not be seen. Our policy was established to enable us to have an expeditionary force capability to intervene around the world to have some influence on those areas of the world from where these threats are emerging. The problem for British defence policy is that the Government accepted the framework that they inherited in 1997 and promptly took £500 million out of the budget in the first year. They have now started to add back a small real growth in the defence budget.
Sitting watching British defence policy and the shape that the armed forces will have to take under those budgetary constraints, however, is like watching a slow-motion train crash. Any serious observer of defence who listened carefully to the Secretary of State's speeches—I am something of an aficionado of such speeches, having had something to do with them previously, and my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) will be the same—will have heard between the lines a Secretary of State preparing to administer very serious cuts inside the Ministry of Defence. That is simply because, on the existing budget, it will not be possible to obtain armed forces fully recruited at the establishment at which the Government now say that they aim, combined with providing two aircraft carriers with their aircraft and the full purchase of Typhoon. The equipment programme rolling forward is far too heavily loaded to be sustained by the funds that the House is currently voting and intends to vote for defence under the Government's comprehensive spending review plans.
We can hear the words of the Secretary of State indicating that cuts will come. We have heard the rumours of cuts in Scottish infantry battalions. I went through all that in 1992-93 with the debate about the end of the Gordon Highlanders, with all the pain that that caused before the Highlanders were formed, and we can hear that debate happening again. We can hear in the words of the Secretary of State, if we listen carefully, the defence pips beginning to squeak.
In my brief remarks, I want to warn the non-experts and the people outside the defence establishment—I suspect that the defence establishment knows perfectly well what will happen—that we are about to have another series of defence crises, as the Government, as usual, try to get a quart out of a pint pot. The timing for the Ministry of Defence, of course, is absolutely lousy. As it needs more money, the Government are running out of it. The fiscal position of the Government is heading south in a tearing hurry—we have already heard about the Chief Secretary sending notes round to spending Departments making it clear that the good days are over and that they cannot expect large increases in their budgets. In terms of the Government's fiscal position, the next two or three years look as if they will be extremely tight, which is usually extremely bad news for the Ministry of Defence.
In the end, it will come down to the Prime Minister. He has deployed the armed forces overseas on numerous occasions and has set the tone that the Government have taken in deploying British troops around the world to Sierra Leone, to the Democratic Republic of the Congo—admittedly only a small force, thank goodness, due to the insistence of the chiefs of staff on avoiding getting anything more than a fingernail into that

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particular mangle—and to the Balkans and Iraq, which look like endless commitments. In the debate during the next year or so about public expenditure, the Prime Minister must give the Ministry of Defence the funds to sustain the operational capability of the armed forces at the establishment and with the forward equipment programmes that the Government are currently planning. If they do not, we will probably yet again face a round of salami slicing. The danger is that that will happen on the back of all the pressure that has been placed on all the men and women of the armed services. For a long while, they have been able to sustain enormous operational pressure, but that cannot go on for very much longer.
The Chief of the Defence Staff and the other Chiefs of Staff are warning about the degrading of training because of the huge commitment to operations. The armed forces need time and money to recover their capability. If they do not receive that, an institution of which the United Kingdom can properly be enormously proud will waste away under the twin fiscal and operational pressures to which the Government are subjecting them.
I hope that the Secretary of State's words were part of his negotiating position with the Treasury and the Prime Minister. I hope that the Secretary of State and his Department can rely on the Prime Minister's support in the negotiations on expenditure that will take place over the next few months.
5.16 pm
Mr. Keith Simpson: It is a great pleasure to follow my hon. Friend the Member for Reigate (Mr. Blunt). He slept through my lectures at the Royal Military Academy Sandhurst, as did my hon. Friend the Member for Faversham and Mid-Kent (Hugh Robertson). Although he has probably disappeared for a wee dram, I think that the spokesman and military adviser for the Scottish National party was another of my boys. I like to spread my expertise widely. Someone on the Labour Benches is probably also among that group.
We heard 10 contributions in the debate and, in their own way, they were all interesting and rich. Their common theme was a genuine warmth and respect for our armed forces and the role that their personnel play. That is a most constructive and important tone.
It was a pleasure to hear the hon. Member for Blaenau Gwent (Llew Smith). It was like a walk down memory lane. He was like a first world war sweat trying to bring back happy memories of open warfare in 1914 before going over the top on the Somme. It was a pleasure to hear him talk about nuclear weapons and nuclear proliferation. He is out of step with nearly all the main parties, but he has genuine heartfelt views.
The hon. Member for South-East Cornwall (Mr. Breed) is standing in for the hon. Member for Hereford (Mr. Keetch). I trust that nothing has happened to the latter in the Liberal Democrat reshuffle and that he has not been sent into the outer darkness. [Interruption.] The Minister mutters something naughty from a sedentary position.
It is interesting that the hon. Members for South-East Cornwall and for Vale of Glamorgan (Mr. Smith) both talked about ESDP as a means of conducting defence
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within more frameworks. The hon. Member for Vale of Glamorgan suggested that it would enhance security and, without wishing to start more rabbits running, I must say that many in the House and, I suspect, Ministers as well are a little sceptical—to say the least—about that. The problem is that enhancement may take place to the detriment of the proven track record of NATO.
The speech of the hon. Member for Vale of Glamorgan was full of good old Welsh stump politics. He is a loyal supporter of the Government and, if I were in central casting, I would choose him to play someone speaking on behalf of the Labour party in the House of Commons in the 1920s or 1930s. It was great stuff.
My hon. Friend the Member for North Wiltshire (Mr. Gray) is a former Front-Bench defence spokesman. He spoke forcefully for his constituents at Lyneham. They know that they have a doughty fighter working on their behalf. He also raised important issues for members of the Territorial Army, including their conditions of service, their pay and the role of their employers.
My hon. Friend mentioned his essay on the use of the royal prerogative to go to war. I am happy to volunteer to mark it on behalf of the Royal College of Defence Studies—I am sure that it is worth a beta plus at least. He made a serious point about the role of Parliament, which I am sure that the House will want to debate on another occasion.
The hon. Member for Stafford (Mr. Kidney) spoke warmly in support of RAF Stafford and the base at Donnington. He raised an important point about logistics and the private-sector ethos of "just in time" that has been introduced into the armed forces. I have said in previous debates that "just in time" could become "just too late". Although "just too late" might cause business problems and loss of money in the private sector, it can mean something far worse in military operations.
I agree with the praise that my hon. Friend the Member for Reigate gave to my hon. Friend the Member for Faversham and Mid-Kent, who spoke warmly and with great knowledge about the military expertise of our armed forces and the danger of changing the balance in our armed forces to the extent that things that we take for granted, such as the heavier side of our Army, could be thrown out. I concur with his comment—I shall use my shorthand—that there is no doubt that throughout military history, sweat has saved blood. We reduce the training level of our armed forces at our peril.
The hon. Member for Aberdeen, North (Mr. Savidge) made a thoughtful speech about the origins of terrorism and emphasised the role of the United Nations. I do not agree with his comments about the United States of America—he is a little over-critical.
The hon. Member for Moray (Angus Robertson) spoke on behalf of the Scottish National party. He rightly said that defence was important and spoke up for the interests of the Scottish defence establishment. I shall perhaps leave the debate between him and Scottish Labour Members about Scottish independence for another debate.
The hon. Member for Ogmore (Huw Irranca-Davies) spoke mainly about the role of the United Nations but raised an important point about the limits of

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humanitarian interventionism. My hon. Friend the Member for Reigate rightly focused on the major problem of the relationship between resources and the commitments that the armed forces face now and, crucially, those that they will face in the next two or three years.
The debate takes place against the background of continuing operations in Iraq, the hiatus over the Hutton inquiry and the defence White Paper, which we hope will be published before the autumn. Post-conflict operations in Iraq are dependent on several factors that are beyond the control of the United Kingdom Government or, indeed, our armed forces. There is still no sign of Saddam Hussein, and I suspect that without his capture or death, elements in Iraq will be encouraged to continue the kind of conflict that they are carrying out. We are yet to discover weapons of mass destruction, and if we are unable to discover them it will continue to cause much scepticism among a large section of the British public. The final factor, of course, is the policy of the United States Government because we are the junior partner.
I shall say a few words about the Hutton inquiry. Yesterday, quite rightly, the Secretary of State said that he accepted responsibility for the actions of the Ministry of Defence and his departmental officials. I am old fashioned because I assume that the right hon. Gentleman is a right hon. Gentleman and that whatever the outcome of the inquiry he will take responsibility for those actions. More significantly, the inquiry has revealed in great detail the workings of modern government, which we would otherwise not have known for some 30 years. That raises questions about the way in which the Government conduct business. To an extent, we have seen government by sofa and informal relationships have perhaps led to decisions not being taken properly. That is something on which the Government and Parliament need to reflect.
My concern is that the Hutton inquiry, combined with the continuing failure to find weapons of mass destruction, has encouraged great scepticism among the public about British government, which should concern all of us—not just the current party in government, but the rest of us as well. There is great scepticism about the role and integrity of our major offices of state and our intelligence services. That concerns me because it may well be that in the next few months, or in a year or two, God forbid, the present Government or another Government come to the House and to the public with claims that there is a clear and immediate threat, and the public will be sceptical or will just not believe them. That affects not just the reputation of the present Government. It is a matter for all of us.
I turn to the defence White Paper that we expect in the autumn. It will be a crucial White Paper. Apart from anything else, it will test the Government's commitment to defence and it will—in the words of the Secretary of State—be about change,
"not change for its own sake, but essential change, modernization and new thinking in defence".
I shall take as my text not the speech that the right hon. Gentleman made to the House today, which was good up to a point, but rather bland. I recommend to all right
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hon. and hon. Members the lecture that he gave at the Royal United Services Institute on 26 June this year, which is the detailed version of the speech that he gave this afternoon. It is far meatier and contains far more interesting ideas. Obviously, it saved the policy-making civil servants having to compose two speeches. I shall focus on the earlier speech, which is the one that we should have heard today.
The speech is entitled "Britain's Armed Forces for Tomorrow's Defence", which I expect will be—surprise, surprise the title of the White Paper. The right hon. Gentleman began his lecture by saying that he is frequently asked
"why are Britain's Armed Forces so consistently successful in the wide range of tasks they undertake?"
He comes to two conclusions in the lecture. The first—a point raised by many hon. Members—is the quality of our personnel and decisions taken by the MOD on how they are trained, organised, equipped and supported. The second is that the armed forces and the MOD are prepared to change and modernise. Most hon. Members would broadly agree with that, perhaps with the caveat that the MOD has a mixed track record on providing the resources for training, organising and supporting the armed forces, but I do not wish to be churlish about that.
I would add two other reasons behind the success of our armed forces recently. First, not only under this Government, but under previous Governments, our armed forces have got used to making do with just enough and just in time. They are supremely practical applied people. They take the Duke of Wellington's knotted string approach to dealing with military problems, but I suspect that, as my hon. Friend the Member for Reigate said, we are just about getting to the end of the knotted string.
Secondly, our armed forces are now trained to operate and fight jointly and multi-nationally, as successive Governments have emphasised. The UK has always been at its most effective when it has been in effective coalitions. His Grace the Duke of Marlborough and His Grace the Duke of Wellington knew how to work coalitions—the right coalitions, not sham coalitions.
In his lecture, the Secretary of State outlined the need to change and modernise across the whole spectrum of defence. He referred to military structures, headquarters, organisations, weapons, equipment and personnel. He spoke in greater detail about effects-based operations—that is, the ability to deliver critical effect at the right moment. What did the right hon. Gentleman mean by that? He stated:
"Measuring the capability of our Armed Forces by the number of units or platforms in their possession will no longer be significant."
Although that sounds good in theory, the problem for us as parliamentarians and, indeed, for the armed forces is that only through their deployment and operations will we be able to assess their capability. How will the MOD or the Treasury assess that capability? What comparative indicators can be used against other countries, let alone against the threats posed by international terrorists? I hope that that core element of the defence White Paper will be considered by the Select Committees on Defence and on the Treasury and by the Public Accounts Committee.

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The Secretary of State said:
"At the heart of effects-based operations are people."
We all agree on that. Those people will be required as never before to have initiative, flexible skills and state-of-the-art technology. Can the Ministry of Defence recruit, train and retain such high-quality personnel in a market where many in the private and public sectors will be looking for the same kind of people? That is an enormous challenge, and as yet I have not heard an answer to how it is to be done.
He said that there is a need to restructure the armed forces to deal with
"the more frequent demands of concurrent medium and small scale operations"
and to act as "multipliers of combat power". The logic of those changes will have an impact on our military organisations, including regiments—not their regimental cap badges, but the way in which they are structured—and on the way in which the RAF and the Royal Navy organise their platforms. I hope that the White Paper will provide some detail on how that will be achieved in practice. If the Secretary of State is correct about the tempo of operations, as I think he is, what impact will that have on service personnel and their families? More frequent operations in less traditional military units will place an even greater stress on armed forces personnel.
What does that mean for the defence budget? The Secretary of State claims that the 2002 spending review settlement provides an additional £3.5 billion and that the defence budget is rising. The Library assessment tells us that since 1997 the share of gross domestic product spent on defence has fallen from 2.7 per cent. to 2.2 per cent. The current financial position is that in real terms UK defence spending is about £1 billion less than in 1996-97. As my hon. Friend the Member for Reigate and other hon. Friends said, there is already a serious crisis in the defence budget without the major changes that the Secretary of State seeks. For the purpose of the debate, however, let us assume that £3.5 billion is the correct sum.
The Secretary of State says that that money has to be used for reform and modernisation. In his lecture, he said:
"But it would be a failure of ambition simply to invest the new money in new systems while carrying on as before with the rest."
He continued:
"So in the forthcoming planning round"—
this is the guts of the issue—
"I will be asking our Top Level Budget holders to think radically".
A dreadful keening noise was heard from the senior military and civil servants sitting in his audience, because they all know that "thinking radically" means: "There is no money in the pot, the Treasury is after us again, and you guys have got to come up with an answer that will make it look as though we are not cutting." He went on to say that their outputs will be delivered "partly by setting them"—wait for it—
"some stiff 'stretch' targets as they are known in the acquisition world."
However,
"These targets are not decisions. And this will not be a 'cuts' exercise."
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I do not know who wrote this, but I suspect that they could earn a tremendous amount of money in the private sector—in fact, they probably do.
The Secretary of State continued:
"The aim will be to give us options—planning flexibility. At the end of the process, we will make decisions. In some areas, investment will go down; in others, it will go up—perhaps significantly."
The House of Commons expects the Secretary of State not to repeat that verbiage in the White Paper but to give answers about what the stretch targets are. Will we have a decision or will there be a continuing exercise? Many of us suspect that the comments are cover for further cuts. That will be disastrous for defence spending.
I do not know whether the Minister of State will pick up a point that several hon. Members made about combating terrorism, especially in the context of ballistic missile defence. That is always a slightly embarrassing subject for the Government, not because of Conservative Members but because of Labour Back Benchers. Will the defence White Paper spell out in detail the programme in which the United Kingdom will participate in conjunction with our American allies and how much it will cost?
Several hon. Friends, including my hon. Friend the Member for North Wiltshire, mentioned my next point. The Government are rightly worried about a major terrorist incident in the UK. However, we are genuinely concerned about the lack of political direction and co-ordination at the heart of Government. The Prime Minister has an outstanding man in Sir David Omand in the Cabinet Office. He is a sort of Sir Maurice Hankey, but with a sense of humour. Despite the training and exercises that the Government have carried out, I agree with my hon. Friend the Member for Faversham and Mid-Kent that public opinion, let alone our armed forces and emergency services, is neither psychologically nor operationally prepared for an equivalent of 9/11. I do not know how people can be prepared for such an eventuality, but the action that has been taken so far is not sufficient. I am especially worried about the role of the civil contingency units. We were promised greater details about that but they have not emerged.
The defence White Paper will be crucial. I applaud much of the Government's thinking—we cannot stand still and there must be change. However, I believe that the Government's comments act as a cover for their inability to deliver a budget to tackle current defence commitments, let alone the great investment in personnel that will be required to deal with network-centric warfare and all the major procurement programmes. Unless the Government can make a convincing case, they will fail to persuade not only Members of Parliament but the public who elected them.
5.38 pm
The Minister of State, Ministry of Defence (Mr. Adam Ingram): I thank all hon. Members for their contributions. The hon. Member for Mid-Norfolk (Mr. Simpson) did himself a disservice when he said that he used to send people to sleep. He did not send me to sleep because he quoted so extensively from that wonderful piece that the Secretary of State delivered. It kept me

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awake, as it did the first time that I heard and read it. It is worth revisiting and the hon. Gentleman was right to alight on it because it makes important points, on which I shall elaborate.
In setting our defence policy, we are conscious that its terms will shape not only the type of operations that we plan to be able to mount but the scope and nature of our procurement programmes far into an uncertain future. Our policy has a significant effect in declaring where and how we plan to operate and exert our influence in the world. It also declares to our allies and adversaries our assessment of the circumstances in which we will operate alone, with NATO, in an ESDP structure or in coalitions of the willing, and the scale of those commitments.
It is critical that our defence policy is based on a rigorous assessment of the nature of the risks that we face, and that it suggests how they may develop in time. Those judgments focus our attention on organisations or nations that are likely to pose the greatest risk to our interests, now and in future.
All that gives us a clear picture of the capabilities needed to match and defeat the challenges ahead, but I need not remind the House that defence capability has two components. One is materiel; the other involves the men and women who serve our country with such distinction. The people we need, and the training that they require to deliver the necessary capability, are changing. In particular, the expeditionary nature of operations and the increasing technological complexity of military equipment are placing unprecedented demands on our people. We owe it to them to ensure that our evolving requirements are adequately reflected in what we believe to be a far-sighted and coherent defence policy that will sustain the vitality, professionalism, skill and reputation of our servicemen and women. As many hon. Members have pointed out, getting that right cannot be regarded as a simple science.
Events have shown that we should not ignore the probability of the unexpected. Accordingly, our defence policy must be alert and responsive to the shocks and crossroads in international affairs that we might encounter. Of necessity, therefore, planning horizons are more ambitious, and while they must be based, in part, on experience, they must also accommodate a greater degree of uncertainty than was the norm in the closing decades of the last millennium. That means that we must always be prepared to re-evaluate our perceptions and predictions.
The fact that the broad direction of the strategic defence review, in terms of deployability, mobility and expeditionary warfare, was the right one has been borne out by events. My hon. Friend the Member for Vale of Glamorgan (Mr. Smith) spoke graphically and forcefully on that subject. The hon. Member for Faversham and Mid-Kent (Hugh Robertson) made similar points. I notice that he is double-hatting in this debate. One minute he is on the Front Bench, the next he is on the Back Benches, and now he is on the Front Bench again.
Mr. Gerald Howarth: He is multi-skilled.
Mr. Ingram: He may be multi-skilled, but he has been very well trained, leaving aside some of the lectures that he may have had to listen to in the past.
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The SDR new chapter provided the new focus of our response to the emerging threat of international terrorism. It built on the solid foundation of earlier work, and added emphasis to a rapidly evolving understanding of our security environment. The defence choices over the coming months will further shape the ability of our armed forces to meet the tasks that we will set in future. Those tasks change as the world around us changes. The greatest challenge that we now face is to predict and adapt to those changes quickly and effectively.
The greatest risk that we face is that of failing to make a judicious assessment of the evolving need and, worse still, failing to enable our armed forces to make the required changes in configuration, equipment, and personnel policy. The Government have a responsibility to assess the challenges, and to enable the changes that will underwrite our defence in the future. This debate has reminded us, as every defence debate does, that our armed forces continue to be heavily engaged in the world, and the probability must be that this will not change in the near future.
The majority of hon. Members have, as I would have hoped, taken the opportunity of today's debate to raise issues that bear upon some of the areas that I have just mentioned. I would like to deal with those points now. One of the central charges made by the hon. Member for North Essex (Mr. Jenkin) was that we have too many commitments and too few resources. I think that that sums up a major part of his contribution. What he did not say, however, was which commitments we should not have undertaken. [Interruption.] If people make the charge that we have too many commitments, they must face up to the responsibility of saying, "Not now. We cannot do this." In saying that we have too few resources, he should not do as he did at the Conservative party conference when he talked about "enough boots", "enough ships" and "enough aircraft". He should define what "enough" means, and tell us what our shortfall is. That is the way in which the Government can realistically be held to account. He should give us not some generalised statement of what could be good a motherhood and apple pie philosophy—but a specific analysis and a specific commitment on those points.
On the hon. Gentleman's point about over-commitment, should we not have made a contribution in Sierra Leone, the Balkans, Afghanistan or Iraq? The Conservatives had very strong views on Iraq. Indeed, they were saying that we should make a commitment in Iraq before we had even come to a conclusion on that issue. The resource pressures were there at that point in time. Now Conservative Members say that there is insufficiency of resources. They were arguing for the commitments. They have to take that on board.
Another issue that the hon. Gentleman raised related to training. He referred to the July publication of the director of operational capability report. An earlier report was published in February. Both those reports were commissioned at my request. I asked the DOC to undertake the studies, and we made a conscious decision to publicise all the things that we discovered during that assessment, which was very much an in-depth assessment of the initial training regime, which perhaps had not been studied comprehensively, if at all, for many years. Clearly, that was required.

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The important aspect was that it identified key areas for improvement. Significantly, 42 out of the 60 actions that were identified have now been acted upon. I visited one of our major training establishments the other week to see what was happening. I met a lot of new instructors. Everyone told me what a wonderful change there had been in the culture, ethos, approach and the way in which training was handled. They knew that there was more to come and that there were probably better ways of doing it. I had to point out to them that we were at the beginning of the implementation of that assessment but that the important aspect was that there was commitment in that training regime.
When I hear criticism of our training regime, I simply reflect on how many thousands have been put through that regime—tens of thousands over the past few years. We could not deliver in all those conflicts to the extent that we have if that machine were broken and failing the armed forces, in this case the Army. I say to hon. Members, when they make their central charge that there is something flawed in our initial training structures, that we could not be successful if that were the case. That does not mean that things cannot be improved. That is why I commissioned the DOC report and why we will continue to look for ways to implement it.
The hon. Member for North Wiltshire (Mr. Gray) commented on the Territorial Army and the reserves issue. In an intervention, I set out the reason for the reduction of 2,000 about which we saw lurid headlines. The media did not come and ask us. They could have got a proper explanation but, sadly, they are more interested in lurid headlines, and others then take up the charge without saying to the MOD, "Give us the facts." I hope that the fact that I gave helps—I am sure that it helped the hon. Gentleman. The hon. Member for North Essex raised the matter, too but did not hear the explanation that was given.
There is another interesting aspect. Again, if the TA were beginning to disintegrate because there was too much pressure on it, too many demands were made of it, or there were some fault lines in all this, we would begin to see a major problem in retention and recruitment. We are not seeing that. Over time, we have to study that but we are not seeing it at this point.
Interestingly, 9 per cent. of the deployed Army reserves have applied to join the regular forces. I hear that the TA is fragile and beginning to disintegrate but TA members have now realised what a contribution they can make by committing themselves in a regular way. That is an indicator of strength, not weakness.
I had the privilege of being in Ukraine recently, where 4 Para, a TA regiment, was training alongside our Polish and Ukrainian friends. Some of them had just come out of Iraq, but where did they want to go? Back to Iraq. I was surprised. There were professional people there. There was a joiner, a plumber, people who could earn substantial money in the private sector, but they wanted to commit themselves in that way, so it is not all doom and gloom. I do not believe even for one moment that there is a weakness in the way in which the TA is currently responding to the demands that are placed on it. Again, we will have to assess that over time.
The hon. Member for North Essex asked about the cost of Operation Telic. I do not know how many parliamentary questions I have answered on that but the
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current net cost is running at £700 million against a predicted budget of £l billion. Further costs for the year 2002–03 are currently being assessed, and will of course be published in due course. We have made it clear that we are committed to achieving our objectives in Iraq, and the budget and financial support is important in that regard.
I turn to the points made by the hon. Member for South-East Cornwall (Mr. Breed). Other Members have said that he may have been elevated in the recent reshuffle—[Interruption.] He is shaking his head. I pass on my best wishes to his predecessor, the hon. Member for Hereford (Mr. Keetch), who will obviously be back on the Front Bench at some point. The hon. Member for South-East Cornwall raised at least two important points, the first of which concerned pensions. Although the issue of pensions does not relate strictly to defence policy, I can see how a connection could be made. The accusation is that we are cutting pensions, but the service pension has not been reduced—it will still be worth 50 per cent. after 35 years, with a tax-free lump sum of three times the pension. Personnel will also have scope to accrue further benefits if they serve for longer.
It is true that we will no longer provide an early immediate pension, as this would not be consistent with the expected Inland Revenue policy of not allowing pension benefits to be paid before the age of 55. We have to position ourselves in terms of future policy—otherwise, we will have to revisit this issue—and that is the sensible approach to take. However, we do intend to provide a replacement early departure scheme, which will offer similar benefits and structure, and provide support until the preserved pension and tax-free lump sum are paid out at the age of 65. [Interruption.] The hon. Member for South-East Cornwall looks perplexed, but before charging us with cutting pensions, he should read the written statement produced by one of my colleagues on 15 September, which dealt with some of those points.
Mr. Jenkin: Will the Minister give way?
Mr. Ingram: I know that the hon. Gentleman allowed me to intervene on him, but I am trying to deal with the many points that were raised. If time permits, I shall certainly return to that issue. I am not being discourteous, but let me not be distracted from trying to deal with the points that were raised.
The hon. Member for South-East Cornwall also mentioned manning control points, on which I have some statistics. Only three people left the Army in 2002 as a result of MCPs, and in the past four years there have been 209 MCP discharges. In the judgment of those who run the Army, MCPs are an essential tool for controlling its manning structure, and are used solely to maintain the structure's integrity. MCPs are a mechanism to retire those who have reached their ceiling, and who are preventing more able soldiers from being promoted. A judgment call has to be made, to ensure that the career paths of talented young people joining the forces are not being restricted. We handle sensitively those who are asked to leave under MCPs, and it is important to remember the statistics to which I have referred.
My hon. Friend the Member for Vale of Glamorgan offered strong support for the strategic defence review and asked about ethnic recruiting. It is worth bearing in

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mind just how successful we have been in recruiting. The financial year 2002-03 was an excellent recruiting year: 26,220 new recruits were taken on, comfortably exceeding the target. Indeed, in recent years there has been steady, year-on-year progression. In 2001–02, the armed forces achieved 95 per cent. of their target; in 2000–01, the figure was 90 per cent.
On ethnic recruiting, all three services have specialist teams whose aim is to promote armed forces careers to ethnic minority communities. According to unaudited figures for the first quarter of 2003–04, 446 people from ethnic minorities, including Commonwealth citizens, were recruited. However, the important point is the aim in achieving better results in this area. That aim is for each service to increase incrementally, each year for the next three years, the proportion of UK ethnic minority recruits—I stress UK ethnic minority recruits—by at least 0.5 per cent., with a tri-service aim of reaching 5 per cent. as soon as possible. We are undertaking several key initiatives to target that issue. It was also right to highlight the fact that, for whatever reason, inner cities are no longer the prime recruiting territory that they once were. To give an example, recent initiatives in London include the launch of the first mobile recruiting office—effectively a bus—which is operating within the M25 area. It enables recruiters to reach communities that have not always been accessible in the past. We are taking the campaign out to the communities, rather than having a static recruiting office.
Patrick Mercer: I heard with interest what the Minister said about recruiting successes, but will he deal with the point that was raised earlier? The Army is under-strength and recruitment is improving but recruitment capping figures have been announced for the infantry, the Royal Armoured Corps and the Royal Military Police. Will he explain why?
Mr. Ingram: We have debated that matter before across the Dispatch Box and I thought that I had reached a point of understanding with the hon. Gentleman. We were highly successful in our recruiting campaign, but the training regime was set at a certain standard with a certain anticipation of numbers. We watched for a while as those numbers increased to see if there was a glitch and establish whether to respond with extra resources. A decision was taken some way down the line to do so because it looked as if the trend was upwards. We then had to staff the additional resources and take them from elsewhere. While we were doing that, we recognised that the armed forces—in this case the Army—were heavily committed. Judgment calls have to be made in the process, but it does not detract in any way from the importance that we place on recruitment. It is important to recognise the strength of our approach to recruiting and how successful we have
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been. There is no failure, but success. That is the important message that has to go out, together with recognition of how good the training regime has been.
Patrick Mercer rose—
Mr. Ingram: I am not going to give way.
The hon. Member for North Wiltshire raised several issues, many of which related to the forthcoming White Paper. It is only proper to wait and see what it contains before conducting a fuller debate. He mentioned Lyneham, but I disagree with some of his comments about it. Irrespective of whether it closes, the number of RAF posts would have changed by virtue of the fact that the new aircraft type requires fewer people to service and maintain it. That explains part of the large reduction in the RAF footprint and we subsequently took the decision to locate in Brize Norton on grounds of the best strategic fit. We took account of all the associated risks, which were part of the review, and our best advice was different from his viewpoint. We were told that the risk was manageable.
I can, however, give the hon. Gentleman a commitment on the reinstatement of the land and putting the base to other uses. We operate a good neighbour policy and I give my commitment to working closely with the local authorities and the planning agencies to ensure that we do the best that we can for the community—primarily because of the great contribution that RAF Lyneham has made over the years.
Many other issues were raised in the debate—[Interruption.] If some hon. Members had not spoken for so long, I would have had more time to respond. I have already had to cut out a range of important responses.
The hon. Member for North Wiltshire also mentioned reservists. The current banded rates for the standard award are as set out in a statutory instrument. Although the rates have not kept pace with the increase in civilian earnings, reservists can additionally claim a hardship award to cover essential outgoings. We recognise that that is not ideal and work is in hand to produce a new statutory instrument. The new scheme will take into account the statistical evidence arising from the mobilisation for Iraq. We are learning a valuable lesson.
My hon. Friend the Member for Stafford (Mr. Kidney) raised many important points, but I do not have enough time to go into them all. He referred to three essential change initiatives that can produce major improvements. All the changes, if reflected in financial changes, will assist the front line. I understand that they will have an impact on the work force in the relevant establishments. I recently visited Donnington and met people from the Ministry of Defence in Stafford. I was able to give them some hopefully strong assurances about how we are handling this. My hon. Friend also asked about contact with the trade unions, and I met them on 18 September.
I was hoping to say something about the contribution of the hon. Member for Moray (Angus Robertson). Scotland is a normal and a proud country. It is proud to be in the United—
It being Six o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Mineworkers' Compensation
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
6 pm
Mr. Kevan Jones: I am pleased to have secured this debate, and I thank Mr. Speaker for selecting this subject for debate this evening. It gives the House the opportunity to discuss the position of former surface workers of British Coal who are suffering from respiratory disease as a result of their exposure to coal dust at work. I know that many right hon. and hon. Members who represent coal mining or former coal mining constituencies will have constituents who are affected.
The decision by the Government to sign, in September 1999, a handling agreement to cover compensation claims for dust exposure by coal miners was widely welcomed in many former mining constituencies such as mine of North Durham. The agreement set in place a scheme to compensate coal miners and avoid the expensive and protracted process of taking individual cases through the courts—a process that had been estimated to take between 15 and 20 years. The scheme has had its administrative problems, mainly because of the large numbers of claims, but many former miners are now being compensated for the damage that coal dust did to their health.
According to the latest figures from the Department of Trade and Industry, more than £785 million has been paid out in compensation. In my constituency, just under £9.5 million has been paid out to former miners or their families. However, no amount of compensation can compensate individuals for the effect that coal dust has had on their health—the daily gasping for air—or the tragedy of watching a loved one die the agonising death that dust causes. I give the Government full credit for recognising the wrong done to those men and putting in place the current scheme, which, I must emphasise, has been welcomed in many constituencies.
The majority of those exposed to coal dust were exposed while working underground. The compensation scheme covers those individuals, but it does not cover those who worked above ground and were often exposed daily to high levels of coal dust. They often worked in the processing of the coal or as blacksmiths, whose main job was on the surface, but often—sometimes daily—took them underground.
The 1999 handling agreement resulted from a High Court case in January 1998, which was brought by underground workers who were exposed to coal dust. The High Court found in favour of six out of the eight claimants, but because all the claimants were underground workers, the Court never addressed the position of surface workers exposed to coal dust. When the handling agreement was signed in September 1999, it was accepted that the issue of potential exposure to coal dust on the surface would be resolved. The agreement even included a statement of intent to that effect.
To underline further that commitment, the Department of Trade and Industry placed a minute before Parliament on 10 July 2000, which indicated that it was prepared to accept liability for those workers in
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dusty jobs on the surface. I have a copy of that minute before me and it is headed "Non-statutory liability to pay compensation to miners for exposure to surface dust". Paragraph 2 explains the liability that the DTI proposes to accept in respect of exposure to surface dust for employees at the surface of British coal mines. Paragraph 5 explains the reasons for accepting liability. It states that
"exposure to dust on the surface leads to the same lung disease as dust underground".
It continues:
"The DTI have investigated the level of dust prevailing in surface jobs in British coal mines, measures which could have been taken to reduce dust and those which were taken.
The DTI proposes to accept that British Coal did not fully meet its responsibilities towards certain categories of workers in dusty jobs on the surface".
The minute is also clear about what the acceptance of liability means for claimants. Paragraph 8 states that
"acceptance of this additional liability will mean that current claimants can extend their claim to cover time spent in dusty jobs on the surface and men who have only worked on the surface will be able to put in a claim".
The reference to surface workers is so clear in that the word "only" is in bold type.
Anyone reading the minute—which is signed by Ann Taylor, director of the coal health claims unit at the DTI—would probably conclude that surface workers exposed to coal dust could pursue claims for the damage to their health, but that is not the case. On 17 July 2000, the DTI retreated from its earlier clear position, as outlined in the minute. It is now prepared to compensate miners for chronic bronchitis, but not for the more debilitating conditions of chronic obstructive pulmonary disease and emphysema. It asserts that, according to the available evidence, levels of coal dust on the surface were low and that if the measurements were accurate, the dose of dust received over a working life would be insufficient to cause loss of lung function causing long-term disability.
That is a very different stance from the one adopted in the minute laid before the House in July 2000. It means that many thousands of surface workers who are suffering the debilitating effects of exposure to coal dust can no longer claim compensation—people such as Mr. Lynn, a constituent of mine in Chester-le-Street, a blacksmith employed by British Coal throughout his working life. Although his main job was on the surface, it took him underground regularly. Mr. Lynn has a medical report stating that he is suffering from chronic obstructive pulmonary disease, but he is denied compensation because his is deemed to have been a surface occupation. He walked into my surgery gasping for air. He is clearly suffering the effects of his employment in the coal industry.
Today my hon. Friend the Member for Caerphilly (Mr. David), who unfortunately cannot be here tonight, raised with me the case of a 90-year-old widow whose husband died recently. His death certificate states that he died as a result of coal dust on the lungs, but she too has been denied the right to claim compensation, unlike many thousands of miners' widows throughout the country.
The DTI has made some concessions to surface workers, but only if they can prove that they worked for a minimum of five years underground as part of their

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employment after 1954. I understand that the concession was made on the basis that if a man already suffered from some disability owing to his underground exposure, work on the surface might increase that disability. I consider that illogical. A surface worker could easily have accumulated far more exposure to dust over, say, 30 years than a man who had worked underground for five years and then worked on the surface for 15.
If it is accepted that surface dust contributes to the cause of disabling chronic obstructive pulmonary disease when combined with underground dust, why should it not be accepted that the same surface dust alone contributes to it? There is evidence—and I have talked to many who have worked in the coal industry, including my father—that many surface jobs, especially those involved in the preparation plants and in the washing of coal, exposed workers to dust levels that were far higher than those experienced by workers underground.
The claimants' solicitors group has also produced some evidence from an environmental study carried out in 1956 that indicates that dust levels at the surface of some collieries were higher than the levels recorded underground. Like Mr. Lynn, many surface workers have medical evidence to confirm that they are suffering from COPD. Despite that, however, the DTI has now issued a blanket denial of liability in respect of purely surface workers, and in respect of those with less than five years underground post-1954.
It is now four years since the handling agreement was put in place and three years since the DTI put a minute before Parliament accepting liability for the dust exposure of surface workers. In that time, surface workers have continued to suffer, and to die. Often, they live next door to other former employees of British Coal who have been rightly compensated for their disability, and they find it hard to understand why they cannot be treated in the same way.
Four years on, the issue of compensation for surface workers needs to be addressed urgently by the Government. Failure to do so will mean that the cases will be put before the courts, and that will be both expensive and time consuming. People continue to die and fail to understand why they cannot be treated in the same way as other British Coal employees. In addition, the good will built up in the constituencies involved—and I remind my hon. Friend the Minister that they are overwhelmingly Labour constituencies—will be lost.
In closing, I urge the Minister to do his utmost to resolve this issue, to avoid expensive litigation, and to compensate men who, through no fault of their own, have had their health ruined because of the negligence of others.
6.12 pm
The Minister for Energy, E-Commerce and Postal Services (Stephen Timms): First, I congratulate my hon. Friend the Member for North Durham (Mr. Jones) on securing the debate and bringing this matter before the House. It concerns many hon. Members, especially those with constituencies in the coalfield areas, and I entirely understand the concerns that have been
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expressed and the strength of those concerns. I am pleased to have this opportunity to update the House on the progress that my hon. Friend has acknowledged is being made in respect of meeting the health liabilities of British Coal.
This debate is the first opportunity that I have had to address the House on this issue, and it allows me to remind hon. Members that this Government assumed not only a legal but a moral commitment to make sure that former miners, and their families, receive the compensation to which they are entitled, and as speedily as possible.
More than 450,000 claims have been registered under both the respiratory and vibration white finger schemes. That amounts to the largest personal injury scheme ever in this country, and possibly the largest ever in the world. We are still receiving more than 4,000 new claims a week under the respiratory disease scheme, and it is impossible at the moment to say when all the claims will be settled. However, I can say that my Department and our contractors are committed to ensuring that our obligations are met in full.
My hon. Friend referred to the fact that the respiratory disease liability stems from a High Court judgment handed down by Sir Michael Turner in January 1998. That judgment found British Coal liable for causing a number of respiratory diseases, including chronic bronchitis and emphysema, in miners who worked underground after 1954.
The judgment did not cover those miners who had worked solely on the surface. However, as part of the ongoing negotiations between the Department and solicitors, we looked at the possibilities of assessing surface-only claims through the scheme. My hon. Friend referred to the minute that the Department placed before Parliament in July 2000, which proposed to accept some liability in relation to surface dust, although—as my hon. Friend will see from the minute—the precise extent of that liability, and the detailed arrangements for the payment of any compensation to this group, would have to be negotiated between the parties.
As a result of those negotiations, the Department offered to process claims for miners who had so-called mixed employment—those who had worked underground and in dusty jobs on the surface. The claimants' solicitors accepted that offer and those mixed workers have been able to have medical assessments and receive offers in the same way as underground workers since then.
My hon. Friend asked in particular about the case of a blacksmith. Where claimants worked in such jobs—spending part of their week above ground and part underground—the Department is putting evidence to an expert panel, the dust reference panel, which is establishing the amount of time spent underground in any given week. Compensation is being paid for that underground exposure. Blacksmiths are shortly to be referred to that panel.
For surface-only workers, the position is more complex. It is not the case that the Department has a blanket ban, as my hon. Friend suggested. As long ago as November 2000 the Department offered to allow surface-only workers access to the medical assessment process for chronic obstructive pulmonary disease

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where there was evidence of substantial exposure to dust. The criterion for entry to the process was evidence of pneumoconiosis—a disease that occurs only as a result of dust exposure and not as a result of smoking. As my hon. Friend will appreciate, there is a need to disentangle the two.
The claimants' solicitors felt unable to accept that offer on the basis that they believed all men in the agreed categories of dusty jobs on the surface—for example, those working in the preparation plants—should have access to the medical assessment process.
We have also offered to discuss compensation for surface-only workers for chronic bronchitis and the temporary exacerbation of asthma. Again, the claimants' solicitors have not to date accepted that offer, although they have asked within the past few weeks to look at it again with officials.
More recently, the Department has offered to consider individual claims for COPD brought forward by the claimants' solicitors on a common law basis, on the basis that some highly susceptible individuals might be more at risk of COPD than the generality of surface workers.
All those steps show that the Department is committed to paying fair compensation to that group of claimants. The step that we are unable to take at present is to put all workers in surface dusty jobs through the main medical assessment process for COPD on a schemed basis. I will explain why that is a difficult step for the Department to take at the moment in the light of the medical evidence that we have received. Notwithstanding that, the compromises that we have made do not amount to the blanket ban that my hon. Friend suggested was in place.
I understand why the solicitors have not felt able to accept any of the offers that we have made to date. They feel that the Department's medical evidence is based on incorrect data. If they could demonstrate that, the medical issues would have to be re-examined in the light of that new information and might well point to a different conclusion. It could then be possible to achieve a comprehensive settlement for surface workers, rather than progressing on a piecemeal basis. I do not want to blame anyone for the delays. We are all in this together. There has been some good co-operation between the parties the claimants' solicitors and the Department. However, those outside the process occasionally fall into the trap of thinking that no progress has been made or that the Government are dragging their feet. I hope that it is becoming clear from my speech that that is not the case.
Mr. Jimmy Hood: I understand that this is the first time that my hon. Friend has spoken at the Dispatch Box on this subject. He is making some interesting points.
I wish to put down a marker and to raise an important issue, which has not had the publicity that it should: the miners who worked for the National Coal Board and private mining companies. As I understand it, the Department is reluctant to settle with miners who are entitled to compensation but who worked partly for the coal board and partly for private mining companies because the private companies' insurers are not prepared to sign up to the scheme. I raise that with my
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hon. Friend and hope that he will pay it some careful attention and seek a solution. Thousands of miners are suffering great injustices. They are entitled to compensation, but they are denied it because those insurance companies have not signed up.
Mr. Timms: I shall certainly look into the important point that my hon. Friend makes, which has been raised with me in the past. The liability on the Government applies to those who worked with British Coal; the scheme relates to British Coal's health liabilities. However, I shall look closely into the extent to which we have made progress in addressing my hon. Friend's point.
In relation to the surface-only workers about whom my hon. Friend the Member for North Durham expressed particular concern, the Department's position is based on advice provided by our medical expert: that the concentrations of respirable dust, as opposed to visible dust, on the surface were not sufficient to cause COPD in the great majority of surface-only workers, even over a working lifetime. It follows that if surface-only workers have COPD, according to our advice it is most likely to have been caused by smoking, as it certainly can be. It is worth remembering that, under the terms of the underground scheme, the effects of smoking 15 cigarettes a day are held to cause damage equivalent to the dust exposure of a face worker, and compensation payments to smokers are discounted accordingly.
Mr. Kevan Jones: With great respect, that is nonsense. I used to deal daily with compensation claims in the shipyards, where a certain percentage of the claim was taken off for smokers to take account of damage not caused by dust. The Department's approach seems to make the generalisation that many people are suffering due to exposure to other things, such as tobacco smoke. In many cases—for example, that of Mr. Lynn—the people involved have never smoked a cigarette.
Mr. Timms: I think that my hon. Friend may not have quite caught my point. I was making the point that, indeed, under the terms of the underground scheme, the effects of smoking 15 cigarettes a day are held to cause damage equivalent to the dust exposure of a face worker, and compensation payments are discounted accordingly.
The Department's medical advice is based on the only dust figures for the surface currently available to the parties and on assumptions relating to loss of lung function that have been accepted by the judge. The differences between the Department and the claimants' solicitors relate to the medical evidence and the consequences that flow from that. We agree with the claimants' solicitors in wanting fair compensation for that cohort of claimants. It is not the case that we want to resist a well-founded claim, but medical evidence is needed to substantiate the case and the problem is that, at present, there is none.
We want to co-operate with everybody involved to reach a fair settlement. We are not resisting a fair settlement if evidence can be found to justify the points that have been made.
Mr. Dennis Skinner: My hon. Friend has suggested that the door has been opened and that he will

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look at the blacksmiths' case, the insurance case, the private mines and some of the other cases. Is he aware that those of us who worked on the screes removing the dirt from the coal were exposed to more dust than about 80 per cent. of the miners underground? He can take it from me-I did 21 years. Some of my friends refused to work on the screes because it was a lousier job than working underground. While he is in this benevolent mood, will he look into that? Will he make sure that things are dealt with before the cut-off date next year? I am worried that if the cut-off date is reached some of the other changes might never take place.
Mr. Timms: I am aware of the point that my hon. Friend makes, and I say again that there needs to be medical evidence to allow us to go beyond what we have done so far and such evidence has not been forthcoming at the moment.
The Department was pleased to co-operate with a proposal from the claimants' solicitors to study data on pneumoconiosis among surface-only workers and to put a group of surface-only workers through the medical assessment process. My predecessor, my right hon. Friend the Leader of the House, announced that to Parliament on 30 March 2001. Data on that disease are significant because, unlike COPD, the disease can only be caused and worsened by dust. If we could establish high levels of that disease among surface-only workers, it could point to higher dust levels on the surface than our evidence to date has shown. If that were shown to be the case, our medical advice would no longer stand because it would be based on unsound evidence. But the study did not produce any evidence that required us to reconsider our medical evidence and, as a result, the position has not changed. We wrote to the claimants' solicitors in February to inform them of that.
More recently, the solicitors chose to raise the matter with Sir Michael Turner at the High Court in July. They applied for an order requiring the Department to disclose all documentation relevant to surface dust by the end of August, to be followed by mediation to determine the issues still between the parties. They asked that, if the mediation were unsuccessful, the judge should give directions for litigation of the issues in the framework of the existing coal health respiratory disease litigation. The judge did not grant the order, but he requested instead that the solicitors identify a number of lead cases and that they investigate their dust exposure and medical circumstances and put them forward at the next court hearing for the Department to consider. It is hoped that that will give the Department sufficient information to decide whether there are points between the parties that can be resolved by mediation.
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At a meeting of the coal health ministerial monitoring group last month, the solicitors made it clear that they were having difficulty identifying lead cases and asked the Department to assist by opening its archives to them in advance of identifying the cases. We were entirely happy to co-operate with that request. We have granted access to British Coal's archives to allow a search for surface dust records. We are next due to appear before Sir Michael on 10 November to report on progress made.
I wish to say to my hon. Friend the Member for North Durham and others in the Chamber and elsewhere who have followed this matter very closely that we have done everything possible—through the offers we made to compensate some cohorts of surface-only workers, through the joint surface dust study and through the opening of British Coal's archives to the solicitors—to give those in the group an opportunity to establish their case. But my hon. Friend will recognise that the Government also have a responsibility to the taxpayer, who is funding compensation, to ensure that compensation is paid only where the Department is genuinely liable, and I make no apology for our adopting a robust approach. If the claimants' solicitors can establish their case—we have been genuinely as helpful as we can in assisting their efforts to do so—we will ensure that payment is made to that cohort of men as soon as possible, but we cannot pay compensation on the basis of the existing medical evidence; the medical case is simply not there.
I should like to say a little about more general progress. This is a huge responsibility, and from the outset the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths) and I have set about meeting all the parties involved in the process to ensure that we are doing everything that we can to make progress. We have held useful meetings with the solicitors representing the claimants, mining union representatives, coalfield campaigners and the Department's own contractors under the auspices of the Department's ministerial monitoring group, and progress continues to be good.
Under the two schemes, a total of £13.7 million has been paid out in both interim and full and final settlements to those in the constituency of my hon. Friend the Member for North Durham. Of course, more needs to be done, and we will continue to be as helpful as we can in establishing claims if the medical evidence is forthcoming, and it occurs to me that perhaps my hon. Friend will have suggestions to make to the claimants' solicitors to assist them in identifying individuals who may be able to help, through their own experience, to establish a case.
The motion having been made at Six o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at half-past Six o'clock.

Preamble
[SIR NICHOLAS WINTERTON in the Chair]

Regional Disparities
[Relevant documents: Reducing Regional Disparities in Prosperity—Ninth Report from the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Committee, Session 2002–03, HC 492-I; and the Government's response thereto, Cm 5958.]
Motion made, and Question proposed, That the sitting be now adjourned.—[Charlotte Atkins.]
2.30 pm
Andrew Bennett: I am grateful for the opportunity to debate the ninth report of the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions, "Reducing Regional Disparities in Prosperity". I am pleased to see the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Corby (Phil Hope), and I congratulate him on his well-deserved promotion. I am not quite sure whether in his new role he will be able to sort out the station at Corby, but I wish him well.
I pay tribute to Claire O'Shaughnessy, who worked as an assistant researcher for the Select Committee for two and a half years. She did an excellent job and the quality of our reports often depended on her skill in drafting. I also thank David Coats, Adrian Healey and Kevin Morgan, who advised the Committee. We were fortunate in having good advisers who disagreed with each other on the whole, and who therefore made the Committee think a little harder. I also appreciate all those who submitted evidence to the Committee and those who set up visits.
I believe that the report is a good one. When I went to the Vote Office to pick up a copy, I was heartened to find that it had been reprinted. The cynic in me says that only a few copies were printed to start with, but, given that one sometimes sees reports stacked up behind the person giving them out in the Vote Office, it was nice to be on a reprint.
The report has been well received on the whole, although I notice that since it came out various people have been keen to produce their own figures, some of them suggesting that great amounts of wealth really are produced in London, and that the regions should be thankful for the few crumbs and sops that are thrown to them. I have two points to make about that: first, when people seek the places where wealth is created, there is a danger that they will actually look at the places where it is accounted for. That may well be the City of London, when in fact the wealth is created in other parts of the country. However, that is not the crucial issue. As someone who is still pleased to call himself a socialist, it seems to me that people should contribute as they can and draw back according to their needs. Ken Livingstone should remember that when he trumpets the amount of wealth that London creates. It may create a lot of wealth, but he should be happier to share it with other parts of the country.
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The English regions have lost substantially in the past 50 years, and they have not received the compensation that they should have had. Throughout the time in question, whichever political party has been in charge, and when the Bank of England has set interest rates, the United Kingdom economy has, on the whole, been dominated by the problems of London and the south-east. Whenever the economy starts to overheat, interest and exchange rates move to take that dominant part of the economy into account. I do not have a difficulty with that, except that often it means that interest rates have often been one, two or sometimes many points higher than they needed to be for the English regions.
A company in my constituency, Cravens, was one of the leaders in manufacturing machine tools in the 1970s. The interest rates that it had to pay were considerably higher than those that Japanese businesses had to pay. Eventually, Cravens went out of business and the great Stockport tradition of manufacturing machine tools was lost. It was lost because the interests of London and the south-east were taken into account when running the economy.
Mr. Philip Hammond: No doubt the hon. Gentleman has anticipated the point that I am going to make. If it is that difficult to manage an interest rate for the disparate regions of a single national economy, will it not be impossible to manage one for the vastly disparate regions of the whole of the European Union?
Andrew Bennett: I have considerable sympathy with that point. I am not one of those who are greatly enthusiastic about the euro, but whether we are talking abut the economy of the UK or Europe, we may have to have one interest rate—and one exchange rate—that covers the whole area, because we must take into account the largest unit in that area. If we have that, however, we must ensure that compensation for the disadvantaged parts, whether in Europe or the UK, is commensurate with the damage that is being done.
Mr. Edward Davey: I am tempted to join in this little debate. Will the hon. Gentleman admit that the differences in wealth and income between the different regions in Great Britain are often greater than the differences between some of the regions of the EU? The argument advanced by the hon. Member for—I ought to know—
Mr. Hammond: You certainly should.
Mr. Davey: The Conservative spokesman's argument is invalidated by the empirical evidence. One could argue that a single interest rate throughout the EU would help the English regions that have suffered from the interest rates set from London.
Andrew Bennett: It might have been a mistake on my part to get too far into this argument. All I wanted to do was place on the record my belief that the English regions have lost out because, on most occasions, interest rates have been set at a level that was not in their interests—certainly not in the interests of the manufacturing industry—and that the compensation awarded by successive Governments has not been adequate.

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We start the debate by talking about Government policy. I praise the Government for coming up with the public service agreement, which states that they want there to be growth in all regions but that they also want to reduce the gap. That is a very attractive target. I am not fantastically enthusiastic about targets: if one fails by a narrow margin, it is considered to be a disaster, whereas if one succeeds, it is considered to be because the target was set too low. As an aspiration, the idea is a good one, but as the evidence is gathered, we see words such as "challenging" and "ambitious", which are really saying that the target is too difficult or impossible to achieve. The central issue is whether the Government will will the means to get anywhere close to that target. Many people question that.
Another issue of considerable concern is that we call ourselves a democracy and we build up an edifice of information, but in some cases the quality of the information on which we base our decisions is very poor indeed. The Office for National Statistics has failed this country terribly. It has totally failed to produce lasting figures for things such as gross value added, and has failed to produce a regional deflator for GDP. It revises the figures almost before it has published them.
The most worrying disaster for the country is the ONS's census figures and the mid-year predictions that it produced from them. People in this country have traditionally accepted the census figures. They may have been a bit dodgy before 1831, but since then they have almost always been believed—they may have been wrong, but people believed them. Following the issue with the 1991 figures, we have been told that either the mid-year predictions were wrong or that the 2001 census was badly wrong. We are trying to take democratic decisions, but we are in deep difficulty because of the quality of the information.
I sympathise with the Ministers who tried to get to grips with the standard spending assessment last year. They came up with a new system just before Christmas, but the ONS used the census figures to shoot at it. That meant that a series of places, mostly bigger cities, suddenly found that, according to the census office, they had many fewer residents, which had significant implications for their finances.
Mr. Chris Mole: Does my hon. Friend agree that the ONS's evidence to the Select Committee was interesting? It did not say that it lacked confidence in the 2001 data and the collection processes; instead, it put its hands up to the fact that the 1991 data were clearly awry. Many of the large changes occurred because things that were wrong in 1991 were put right this time.
Andrew Bennett: I understand that that was the ONS's defence, but I am unsure whether it still holds up. Last week, it suddenly announced that it had accepted the lobbying from places such as Manchester that the figures were wrong. The ONS has conceded that it got the numbers for Manchester wrong by about 7,000; the same point also applies to Westminster and Chelsea. The ONS has started to concede that the way in which it counted the 2001 figures was wrong. Dialogue with Manchester is ongoing, and I think that there will be some changes. It is worrying that we are being asked to make decisions based on poor information.
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When my hon. Friend the Financial Secretary to the Treasury came before the Select Committee, she robustly defended Mr. Cook and the ONS. I understand the principle that Ministers should defend their civil servants, but it seemed to me that she was living in fairyland. The view in the Tea Room is that the ONS cannot count anything and that Mr. Cook should go back to Australia to count sheep rather than try to run that department.
I want to press the Minister on one little point—the Select Committee can suggest spending without taking responsibility for it. We firmly pressed the Government on the point that if the figures for the metropolitan areas were wrong, those areas should be compensated. I am delighted by page 5 of the Government's response, which states:
"If, after considering all the evidence, ONS do revise the 2001 mid year population estimates based on 2001 Census data, ODPM will consider amending the 2003–04 local government finance settlement to reflect this."
I hope that the Minister will tell us this afternoon that those local authorities whose populations have been miscounted will get their money.
Turning to the target for growth, it is important that we achieve growth within the English regions and that a challenging target is set. However, the target must be sustainable. It is not only a question of the Office of the Deputy Prime Minister recognising the problem with the regions; the recognition must be seamless across the Government. It was worrying that the Department for Work and Pensions and one or two other Departments did not realise that their activities should have a regional dimension. For example, the money going to the north-east does not look too bad if we consider all Government expenditure, but if we take out the amount that is being paid by the DWP, we find that the position in the north-east is that much worse, because almost all the money that makes the north-east look not too bad is paid as benefits and compensation for lack of jobs, rather than in other ways. I hope that there will be a regional dimension to the forthcoming spending round and that English regions—particularly the northern regions—will get more money.
Mr. Hammond: Will the hon. Gentleman clarify one point? Is he prepared to see a trade-off involving more equitable growth patterns across the regions if the cost is a lower growth of UK GDP? I fear that that is where the Committee's report and recommendations are taking us.
Andrew Bennett: It is not where the Government are taking us. The Government are quite clear that they want to grow the whole cake, and ensure that the shares are more equitable. Doing a good job for the English regions does not mean that we will grow the whole cake more slowly. It is possible to do what the Government want to do. However, the Government are not willing the means to achieve that general growth and a fairer share of resources.

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There is evidence that some of the growth in London, which might lead to overheating of the economy, creates more problems for people in London than it solves. It is not totally an issue of us and them.
Mr. A. J. Beith: Will the hon. Gentleman give way?
Mr. Kelvin Hopkins: Will my hon. Friend give way?
Andrew Bennett: I am reluctant to give way. I will give way to the two Members who have intervened, but many people want to take part in the debate so it is my duty to be reasonably concise when opening it.
Mr. Beith: The hon. Gentleman was talking about targets and the north-east. The Journal in Newcastle reported the serious difficulty that the targets themselves represent. They average a batch of the poorest regions and compare that average with the richest regions, which is likely to produce a meaningless figure that will not reflect the true difference between the growth rate in the north-east and that in the south-east. Other regions, too, will find that their figures are concealed in a set of targets that do not inform us very well.
Mr. Hopkins rose—
Andrew Bennett: Does my hon. Friend want to intervene?
Mr. Deputy Speaker: Order.
Andrew Bennett: I thought that I had said enough.
Mr. Deputy Speaker: To enable the Chair to follow the debate it would help if the hon. Gentleman, who chairs the Select Committee with great distinction, dealt with the first intervention before accepting another.
Andrew Bennett: I had intended to move on to the next point in my notes because it addresses the problems of the north-east.
Higher education is obviously one of the drivers of local economies. The north-east appears to do quite well in terms of Government spending on higher education. The north-east obviously has some impressive HE institutions, such as Newcastle and Durham—I will not go through the entire list—and a significant amount of money is spent on those institutions. What is worrying and disappointing is that the north-east does not seem to be able to retain graduates in the region and does not appear to get a good deal from the research and development that should be going on beyond that level.
Why does the north-east not do particularly well? Is it because of structural problems, or because it does not have the critical mass to offer opportunities to two-career households? One of the problems that the Government must consider relates to the way in which money is allocated for research and development. They must ensure that a fair proportion of the money goes to some of the most disadvantaged English regions, of which the north-east is one.
Mr. Hopkins: To counter the point made by the Conservative spokesman, the hon. Member for
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Runnymede and Weybridge (Mr. Hammond), does my hon. Friend accept that there is a lot of evidence to show that economies left to themselves, and to the vagaries of market forces, tend to be divergent and to grow more slowly than those where the Government play an active role in redistributing income and wealth?
Andrew Bennett: I will certainly say yes to that, and I will not be drawn any further down that line.
Another area concerns me. The Government's idea to hold the Olympics in London is totally wrong. There was a great opportunity for the Government to promote the English regions. The Commonwealth games were outstandingly successful in promoting Manchester, and although I was not particularly enthusiastic about them, they at least had a regional dimension. If the Government had had the idea of holding the Olympics in Stoke, it might not have got past the Olympic committee, but a lot of preparation must be done for the London bid. It may fail, but the preparatory work has some continuing value. A failed bid from the English regions might be of more value to the whole nation than a successful London bid, which would simply increase London's problems. Another Department, the "Department for Fun", should look very carefully at the regional dimension.
Sir Michael Lyons's review considered moving civil servants out of London. Such reviews have been going on for most of my lifetime, and they have almost always turned out to be a disappointment. The Ministry of Defence had a choice of moving its new procurement division either somewhere between Coventry and Birmingham—not one of the most depressed regions, but at least it is in the regions—or between Bristol and Swindon. The division ended up between Bristol and Swindon, which is one of the areas where the English economy is most overheated.
If the Lyons review is going to work, we must ensure that significant groups of civil servants are moved out of London. They do not have to be civil servants on the margins. It would be great if the Prime Minister were to say, "The No. 10 policy unit is moving," and we could fill in whether we wanted it in Corby or further afield in the English regions. That would start to turn the whole apparatus of government around. We must carefully consider how to get extra resources into the regions. Part of that consideration is to say, "London and the south-east are overheated." If we set an example by moving out significant groups of civil servants, there is a reasonable chance of other people following suit.
Transport policy must strike a balance between solving the problems of overheating in the south-east and ensuring that the English regions have a transport infrastructure. If the north-east does not have that critical mass, we must ensure that the rail and road links between the north-east and Edinburgh are really good. People up there have been lobbying very hard for their road link.
Often, it appears that the Government are spending quite a lot of money on the English regions. We must ensure that the money is spent there and does not drain away to consultants in Cheltenham or any other prosperous place. Often, development consultants do not live in the area, and they come from a long way away. The Select Committee recently visited Oldham,

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where it saw the installation of new windows and PVC doors in housing in some of Oldham's more depressed areas. The Committee were told that Oldham was getting a lot of Government money, yet in fact very little money went into Oldham because the contractor and the PVC manufacturer came from outside Oldham. In name, the money was going to Oldham: in reality, it was going somewhere else.
We must make certain that UK regions do not lose out in the next allocation of structural funds. That applies in particular to the allocation of transitional provisions, and to the allocation of EU structural funds, which will no doubt please the Conservatives.
One or two Members in the Chamber are not particularly keen on devolution to the English regions. I am firmly in favour of it, but we must be clear that devolution alone will not deliver an extra penny to those regions. In a sense, it is a separate argument and we must recognise that, although it may well be that strong regional elected assemblies will have a stronger voice than some Members have had in the House of Commons for their region.
After we published the report, I saw some comments from Ministers and Departments that were not very complimentary, but the Government's response was rather more encouraging. I leave the Chamber simply with this thought: it is time that we got justice for the English regions.
2.55 pm
Mr. A. J. Beith: I warmly welcome both the Committee's decision to work on the report, and the report itself. The Committee has done a great service to the regions of this country, and I hope that the report will result in a lot of thinking in many Government Departments. It is not just the Office of the Deputy Prime Minister that must heed the recommendations of the report, but virtually every Government Department that has an influence on the shape of public spending and where it is distributed, and the infrastructure that enables regions to prosper.
I am very glad that the hon. Member for Denton and Reddish (Andrew Bennett) steered through this important report and that my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) will speak later in the debate on behalf of the Liberal Democrats. He takes a great interest in my region, and he is going there again this weekend to keep his knowledge of the north-east up to date.
The north-east is a region that suffers from low output, low employment, low qualification levels, high rates of mortality, low rates of business start-ups and high rates of business failure, poor transport infrastructure, high incidence of crime and, of course, a very high incidence of social security payments, as the hon. Member for Denton and. Reddish pointed out. That is not the kind of financial assistance that the region wants. It wants people to be in jobs rather than depending on benefit.
The region has some very good features, such as wonderful scenery and countryside and excellent universities and research institutions. It has made huge strides in the development of its artistic and cultural
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facilities. Most employers recognise it as a good region in which to employ people because of the high standard and stability of its work force. It is a region of relatively low housing costs, which should make the area attractive to people who are oppressed by prices in the south-east—if there were jobs for them to move to. It is also important to retain people who come from the region and who have been educated there in the region, rather than watch them move away to overheated parts of the country in order to seek employment.
The Committee is right to identify that action right across Government will be necessary if the advantages that I have just described are to be effective in the face of the problems that I mentioned. One issue that the Committee rightly addresses is the overall public funding of the regions. That brings us to the Barnett formula. The report states in paragraph 75:
"The allocation of public funding to the nations and regions of the UK does not reflect 21st century patterns of need across the country. We recommend that the Government reviews the total allocation of funding to all parts of the UK, including the Barnett formula, as part of the post-devolution constitutional settlement."
I strongly support that recommendation, which is also strongly supported throughout the north-east.
Representing as I do a constituency on the border, it is apparent to me that public funding is much higher in Scotland than in England. One only has to drive along the roads or consider the funding of schools and other public services to recognise that. One reason why Scotland gained particular levels of public expenditure was that it was seen to have precisely the problems that the north-east currently has, including those resulting from the decline of the traditional heavy industries that had been the major employers in much of Scotland as they were in much of the north-east. However, the north-east never got the public expenditure boost that a required percentage of public expenditure gave to Scotland.
The Barnett formula will not always work in Scotland's favour. Many in Scotland point out that it will cause them difficulties in future years. It is out of date from their point of view, as well as from that of the English regions. The Committee's recommendation of a proper review is justified. We need—I hope that my hon. Friend the Member for Kingston and Surbiton will refer to this later—a mechanism to examine the allocation of public expenditure throughout the United Kingdom and to build into that a recognition of needs, which, if satisfied, will lead to a reduction in the disparity and in the need for such a formula. Once a region has the necessary infrastructure, education facilities and kick start to becoming more prosperous, its natural growth rate deals with the sort of problems that I have desrcibed.
There is a danger in the way in which the Government look at figures when assessing how we are getting on. I intervened on the hon. Member for Denton and Reddish to draw his attention to a problem about the target for reducing the disparity in growth rates between the richest and poorest regions by 2012.The Journal in Newcastle today identified and quoted a paper, which is now in the Library. It states that:
"the target will be achieved if the gap between the average growth rate of the six poorest regions, including the North-East, and the three richest, including London, gets narrower by 2012."

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Burying the most deprived regions of the country in such a large package of other regions will not give a true picture of the disparity. If that target is achieved, it will not be possible to tell whether it has made a significant difference to the disparity between the north-east and south-east in terms of growth.
To make matters worse, the baseline for the target is taken as the period 1989 to 2002. That period includes the 1990s recession, which hit hardest in London and the south-east. We have a target with a baseline set during a period when the south-east was at its least prosperous, relatively speaking. Furthermore, packaging regions together will conceal continuing serious disparity, if that exists in 2012. The process will not be much use in guiding the Government and gives the impression that they have searched for figures to produce an achievable target under the present policy. That is pretty depressing.
The Government must face the facts of the disparity between poorer and richer regions if polices are to be developed to deal with those problems. It is not to the Government's benefit—except in the narrowest PR and spin terms—if they select targets that they can meet, but that demonstrably will not reveal continuing disparity. They must face facts, devise targets that relate to the real problems that we all know about, then set about devising policies to meet those much more serious targets.
I do not want to detain hon. Members for long and many issues in the report could be raised, but I shall mention only two. One is rural areas. In any deprived region there are rural as well as urban areas, and I have both within the compass of my constituency. If we are to achieve significant improvement in the rural economy of areas such as the north-east, we need tools and infrastructure. An obvious one is broadband, and I am glad that that was mentioned in the report and in the Government's response.
One way to encourage the creation, development and retention of jobs in remote communities is for people to work from home and to run small businesses from rural locations at home or in small village workshops and offices, but that depends on internet connection. If such areas cannot get broadband—at the moment they certainly do not have it—they cannot face the competition from businesses in areas where internet access is immediate and continuous. They will be at such a competitive disadvantage that the whole strategy of regional development agencies to foster small rural businesses will be ineffective.
The Government have made various statements about how to get broadband into every doctor's surgery and every school. That should create a platform to assist in ensuring that we have broadband in every village and access to it for remote communities. However, I simply cannot obtain from the Government any explanation of how they will deliver broadband to rural institutions such as schools and doctors' surgeries when it is still not available to others in rural areas. If they devise a mechanism that achieves that—connection only to those public institutions—they will have missed a tremendous opportunity because a critical mass can be created by bringing together existing Government policy on broadband and those businesses that desperately need it in rural areas. I ask for more Government attention to that.
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I have had many discussions with BT about broadband and it is trying hard to achieve that critical mass in larger communities—the centres in rural areas, such as market towns. That is good, and I want to see that process completed, but it will not solve the problem. In the really rural communities, such as villages and hamlets, the job strategy is based on modern technology enabling work to continue there that in the past would have had to go to some more urban centre.
My final point relates to regional assemblies. I believe that regions will prosper better if decisions can be made democratically at regional level that shift resources and generate initiatives, but for that to be effective the power must be there. The Committee delivered a warning against the dangers of delivering responsibility to regions without giving them the power to fulfil that responsibility. That is why the process of creating regional assemblies and giving people of a region the opportunity to vote for a regional assembly is one in which the issue of power must be kept to the fore.
The electors of the north-east will want to know whether the regional assembly will be able to make decisions that will make the north-east more prosperous. Sometimes those will be difficult decisions, which shift resources from one thing to another because that is where the opportunity is perceived to lie. The Government's proposals are weak in that respect, but I am persuaded none the less that it is better to put a regional assembly in place and allow its powers to develop.
The Government would be in a better position to win their argument that elected assemblies would benefit the regions if they could hold out the prospect of bringing more and more power of decision to the regional assemblies, as well as the power to hold to account the massive existing apparatus of regional government, such as the Government office for the north-east and the regional development agency. We already have regional government in this country and no one should try to deny that. The regional assemblies would make that government democratic. The more powerful an assembly can be in its ability to use resources effectively and productively, the more chance there is that it can get a region moving through a strategy that tackles the problems that we have been discussing today, which are so well identified in the Committee's report.
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Mr. Graham Stringer: I congratulate my hon. Friend the Member for Denton and Reddish (Andrew Bennett) and the members of the Select Committee on producing an excellent report. I found a lot that was of interest in it, and information that had not previously all been available in one place. I genuinely congratulate them on that.
Given that I am known to have strong views on investment in the regions, one of the more difficult things that happened to me when I was at the Cabinet Office was being asked to reply in the north-south debate that went on after my right hon. Friend the Prime Minister had made some statements suggesting that the north-south divide was not as important as some of us think. It was an uncomfortable debate, and it would have been more uncomfortable had my hon. Friend's report then been available for people to discuss. It shows

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what we know: there have been 50 or 60 years of severe regional imbalance in this country, which has led to worse health rates, income and educational achievement in the regions than one finds in the south-east. Very little has changed that, and it is economically inefficient.
The situation is almost the exact opposite of what the hon. Member for Runnymede and Weybridge (Mr. Hammond) thinks it is. If parts of the economy are underutilised, and other parts are overheated, it is more likely that GDP as a whole will grow less quickly. The recent warnings from the Bank of England are that the most powerful parts of the economy are at full capacity and that we may be in for more difficult economic times.
Mr. Hammond: The hon. Gentleman and I have had this exchange before, and I understand what he is saying, but my concern is that the Select Committee's report appears to suggest that public funding should be skewed to the regions that have performed less well economically, precisely at a time when the locomotive regions, if I may use that phrase, are facing constraints as a result of underfunding in public services and infrastructure. I am afraid that the assumption that investment can be diverted from those regions to other UK regions is demonstrably false. The danger is that too often the investment will go abroad.
Mr. Stringer: What the report is talking about, which I support, is changing the spatial distribution of public expenditure. Relieving some of the congestion in the south-east might lead to more investment there and give a firmer base to the other regions. We have indeed had this debate before, and it never seems right to me that per capita public expenditure is 40 per cent. higher in London and the south-east than elsewhere in England.
Having given that introduction, I take issue with one item that runs through the report. It is very important to be clear about our objectives, even if they are very difficult to achieve, which they are. You may have been an absolute whiz at differential calculus when you were at school, Mr. Deputy Speaker, but I suspect that most politicians were not. If you were, you will know that there is a real and important difference between closing the gap—the difference—between the economies and GDPs of the regions and the south-east, and changing the rate of growth. My hon. Friend the Member for Denton and Reddish used the two phrases interchangeably and they are used interchangeably in the report, but they are not interchangeable.
The Government's position is very clear: to reduce the persistent gap in growth rates. If a region is growing at 2.2 per cent. a year compared with London growing at, say, 3 per cent., and our objective is gradually to increase the region's growth to 2.3, 2.4 or 2.5 per cent. a year—which is very tough and not being done—we will, if we succeed, make London even wealthier in comparison with the region than it was at the start of the process. I do not think that that is right. That is the objective, but I think that the objective should be to narrow the gap so that we have greater economic efficiency and social justice across the country. Even if we achieve that objective, we will end up with greater imbalance than we have at present. That is simply wrong. I very much doubt that most Ministers know that when they
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advocate their policies under PSA3 they are advocating that in five or 10 years London will be richer and the regions poorer in relative terms. That is not a good objective, and changing it will be very difficult.
I shall touch on some other aspects that my hon. Friend the Member for Denton and Reddish discussed, such as the census and recommendations 11 and 12 of the report. We have had debates in this Chamber on the census results, and I have asked questions on the Floor of the House. I have no doubt whatever that for Manchester, and probably for Derby, Plymouth and Westminster, Mr. Len Cook got his figures wrong. Since the census, the evidence that houses were not counted, that forms were not returned and that there was no checking on whether they had been returned, has been overwhelming. As that has been looked into further, more and more such evidence has emerged.
I was disappointed by the Government's response that they would consider amending the revenue support grant for authorities that had missed out. They should be absolutely straightforward on that. If authorities can show that they have missed out in Manchester's case that might be by as much as £20 million or £30 million in revenue support grant terms—that money should be given to them. We should have a commitment that, if the ONS and the authorities can agree on a figure and the Government accept it, the money should be paid over. Although the report does not mention it, the Government should consider the effect of the miscalculations on health spending. The biggest determinant of health expenditure is population, but in some of the most deprived parts of Manchester and Plymouth the population has been miscounted. I ask the Minister for some reassurances.
I had to smile when I read recommendation 12. As my hon. Friend the Member for Denton and Reddish pointed out, we have an innumerate national statistician. I should have thought that that was a disqualification for the job. The Committee says that there should be confidence in the office; the Government reply that they are giving confidence to the office—they have extended Mr. Cook's contract by three years. People in industry and commerce, who, like those in local government, health and almost every other area that Mr. Cook has touched, have suffered from Mr. Cook's inaccurate figures, will cringe. A man who can pretend without any evidence that 1 million young men have disappeared to Ibiza, then announce—as Mr. Cook did six or seven weeks ago—that 800,000 of them have come back and that his counting was wrong, should not be in the job. It is as simple as that. The man is not up to it and we need to have confidence in the office. Extending his contract was a mistake.
Two other reports have or should have been mentioned. One is the Nuffield report. I do not want to stir the pot too much where Europe is concerned, but it was not known before the report was produced by the Office of the Deputy Prime Minister that, although the European Union and the Government claim that there is great regional assistance from Europe, every region in this country is a net contributor to Europe and receives negative assistance. In the context of seeking solutions to regional disparities, Europe is a problem, not part of the solution.

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The other report is the Lyons report. I am glad that Sir Michael Lyons is drawing up a report on how to move civil servants out to the regions, as that is one of the more straightforward ways of evening up public expenditure across the country. The tables in "Your Region, Your Choice" show that during the first two years of the Labour Government, the number of civil servants employed in the regions decreased, because we were following a flat spending regime. Then their number in London increased, but the number in the regions continued to decrease. That might have changed—the Cabinet Office has not been forthcoming with the figures—but if we did not need a report to put more civil servants into London and to reduce their numbers in the regions in 2000–01, why do we need a report to move civil servants out of London to the regions now? It seems that, as is the case in other policy matters, things happen if there is a benefit to London; if not, there is a delay and a report.
I have one minor criticism of the report, although I realise that it was probably difficult to reach a consensus in the Committee. The report is slightly cavalier about the contributions that cities in the regions can make to regional economies. The figures for the north-west, which is the area I know best, show that the vast majority of GDP is produced within two or three miles of the city centres of Manchester, Liverpool and one or two other major centres in the region. Those cities have to be supported, because that wealth spreads out throughout the north of England, not just the north-west, as people travel in and out of those cities. Basically, regional economies are damaged more greatly if cities do not work than in any other way, and the Committee underplayed that.
Some people regard elected regional assemblies as the solution to the problem, but I am strongly opposed to them, because I see them as a diversion. The Deputy Prime Minister has said that we need to make government in the regions accountable. Well, yes, but the Government do not propose to do that, and in their response to the report they say specifically and explicitly that the elected regional assemblies will not have the job of looking after the Government offices. We are facing a huge and costly local government reorganisation that will take power upwards and divert a lot of attention from important economic and social problems. Although it is, I suppose, a paradox, the problems of regional disparities are so strong that they can be dealt with only at the centre.
Quite apart from the decisions that the Government take, there are natural forces at work in the economy that tend to push resources to the centre. London has many advantages, such as its geographical location, the City of London and its unique architectural heritage and history, which naturally drag a lot of investment into the south-east. The same thing happens on a smaller scale in other urban areas. We cannot deal with that by telling regions to pull themselves up by their bootstraps. Instead, we must change the pattern of public expenditure. It is not sensible to build 1.1 million new houses in the south-east of England when half the country could easily provide space for those houses. If those houses are built, regional differences will be intensified because the investment that would be needed to support them in terms of sewers, roads and transport will be enormous.
Mr. Hammond: Does the hon. Gentleman propose that the constituents of Members who represent south-east constituencies should have no nurses in their hospitals, no teachers in their schools and no policemen on their streets? The investment in infrastructure in the south-east is required to meet the demands of the economy, to relieve the pressures and to allow key public sector workers to live in the region now, not in some imaginary future when there is even greater investment in the south-east.
Mr. Stringer: Of course I am not saying that, but the Government must break a vicious cycle of over-investment in the south-east that leads to under-investment elsewhere. Although it is a well used cliché, not doing so is like pouring petrol on a fire. If the economy is overheated, one should try to take things out and make them work elsewhere, not increase them. Putting more and more economically useful expenditure into the south-east will not make it easier for teachers and nurses to afford to live there. There must be a different solution than simply building 1.1 million houses, although I use that only as an example.
The biggest thing that central Government can do is change the spatial distribution of their expenditure. Some expenditure would be useful to have in the regions, whereas other expenditure, on research and development, which is concentrated in the south-east and eastern regions, or on defence, which is concentrated in the south-west, would not only be useful, but would lead to direct investment and skills in the regions.
I like the report, although it should have been more critical of the Government's objectives, because they are the wrong objectives and people do not understand what they mean. In paragraph 23 of their response, the Government say:
"The Government does not accept the proposition that increased public funding to the less prosperous regions is a necessary condition to improve their prosperity."
That view, if pursued, would abandon the regions without any prospect of them increasing their wealth. Only central intervention and expenditure can help them.
Let us consider not only the 1.1 million new houses, but the decisions on the Olympics, which was taken without competition, and on the national stadium. As it happens, I support a third runway at Heathrow, which will not make me popular in some parts of the country. However, counterbalancing investment will be needed elsewhere in the country. Both the regions and the country need a third runway at Heathrow. It was not a sensible decision to close the synchrotron at Daresbury and move the project to the eastern region. One can go on and on considering symbolic issues. For example, the fastest track in the country will now be the route to Paris, not the busiest rail route along the west coast. All such issues are symbols. In practice, and whatever the Government say, the investment will not be going to the right parts of the country and will not create greater social and economic benefits.
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Mr. Kelvin Hopkins: I welcome the report, and congratulate my hon. Friend the Member for Denton and Reddish (Andrew Bennett) on his

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excellent speech. I strongly agree with what my hon. Friend the Member for Manchester, Blackley (Mr. Stringer) said, although our views might diverge on one or two minor points.
I speak for one of the more prosperous regions. However, even in prosperous regions such as the east, including in my Luton constituency, there are pockets of poverty, deprivation and low economic growth. That is an important point: there is inequality within regions as well as between regions.
Mr. Hammond: Does not that suggest to the hon. Gentleman that conducting this debate in terms of regions is a somewhat bogus distinction? The issue is about different levels of economic growth in different areas. Regions are an entirely artificial construct, are they not?
Mr. Hopkins: No. We are dealing with two parallel problems, inter-local and inter-regional. The deprivation in some of the regions s rather worse than it is in Luton and worse even than the worst parts of the eastern region. Such problems are persistent and long term, as the report points out. They have been with us for decades, and we have not had much success in addressing them.
However, I want to dispel the idea that we have not had any success and that we can do nothing except leave it to the market to solve the problems. In the 1970s, I had the pleasure of working at the economic department of the Trades Union Congress. I was responsible for regional policy. One simple exercise that I did there was to compare two consecutive economic cycles of unemployment rates in the regions of Britain. We found that over the second of the cycles, there was a convergence of unemployment rates in the regions as a result of the implementation of regional policies by the then Labour Government. Those policies worked. They were not enough, but they went in the right direction and they made a difference. I have not got the paper to hand, but I could dig up the figures if needed.
That conclusion is confirmed in a table contained in the submission to the Committee by the Yorkshire and Humber assembly. The memorandum of the Committee's report contains two tables, which can be found on page 69. One shows the trends in the regional share of the national GDP, showing that through the 1990s the divergence got worse. The other, on long-term growth comparisons between Yorkshire and Humber and the south-east between the 1970s, 1980s and 1990s, shows marked differences. In the 1970s, the annual rate of growth between those two regions showed a difference of 0.1 per cent. The difference went the wrong way; they were still diverging, although only marginally, rather than converging as my hon. Friend the Member for Denton and Reddish suggests they should. However, at least they were not diverging as a result of the implementation of regional policies during that decade. When the Conservatives came to power in 1979 they abandoned all those policies, preferring market forces and a period of extreme monetarism. The divergence in growth rates became extreme: 0.9 per cent. a year. Over a decade, that meant a 10 per cent. divergence—or getting on for it—which continued in the 1990s.
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The problem is not that regional policies do not work—clearly, some do—but that we have not had enough of them. My main point is that the Government must have an active role in substantially redistributing economic activity between regions to ensure that our economy is not only just, but that it works better.
Mr. Hammond: The hon. Gentleman has a rose-tinted view of 1970s regional policy. Does not he think that part of the problem in some regions is the industrial monoculture that regional policy promoted and fostered in the 1960s and 1970s, which left those regions incredibly vulnerable when the shape of the international economy moved away from such industries?
Mr. Hopkins: There were major factors in the regions' decline, such as the decline in shipbuilding and steel, which is ongoing. International economic changes, particularly in industrial production, have affected the regions. Despite those problems, there was some redistribution, which helped the poorer regions. We have to go further in that direction, and the Government must take a major, interventionist role in doing so.
Mr. Mole: Does my hon. Friend agree that there have been significant changes since the eras to which he referred in his earlier statistical analysis, such as the shift from manufacturing to services and the strengthening of dependence on knowledge in the economy? Using in particular the evidence gleaned from the south-west and from Cornwall county council about their development of a university for that region, the Committee report refers to the importance of higher education, saying that it is critical to ensure that businesses in those regions have the knowledge and skills to compete globally. Therefore, the critical target for us is through the next comprehensive spending review to increase higher education funding so that we get enough university places, not a reduction in them, to ensure that all parts of all regions can ensure that their citizens have the skills to compete in the global knowledge economy.
Mr. Hopkins: I broadly agree with my hon. Friend. I intended to make precisely those points towards the end of my speech. We have to develop the regions in many ways. The economy has evolved and we are moving on. I will not say that manufacturing will not be a substantial part of our economy in the future, because it must be. I want to defend manufacturing, but clearly the economy has developed and other parts of the economy are growing in relative terms.
As my hon. Friend the Member for Manchester, Blackley said, we want to shift all sorts of economic activity, such as cultural and Government activity, away from the centre and to redistribute it. I refer hon. Members to a recent report by a splendid organisation called Catalyst, a recently established Labour movement think-tank chaired by Lord Hattersley of which I happen to be a member. It produced a report, "Decentering the Nation: A radical approach to regional inequality," in which it suggests shifting great chunks of every type of central organisation—Government, cultural, and economic—to the regions in an effort to develop large regional centres and to even up

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the economy using a very interventionist strategy. That is what I am talking about, and I recommend the report to hon. Members.
We must secure a shift from the centre to the regions, When that happens, the economy will grow faster. In the post-war era, when redistribution was greater in every sense—tax rates for the rich were higher and the gulf between the rich and the poor was narrower—our economy grew more quickly. We had full employment and relatively low levels of inflation, demonstrating that it is possible to have full employment and high growth without high inflation. I constantly draw attention to that successful era and contrast it with more recent decades in which western Governments have made serious mistakes in the running of their economies.
I want to touch on other factors, such as transport links, but I do not want to take too long as other hon. Members want to speak. Transport links are vital now that we are part of a larger economy, yet Britain is almost peripheral to the European economy. I take a sceptical view of the euro, but it is important that we are linked closely to the European economy and that we grow with it, so that we can engage in export and import trade with our European neighbours. In order to achieve that, we need good transport links, especially as we are an island that is geographically peripheral to Europe. The northern and Celtic areas of the United Kingdom are even more peripheral, and they have great difficulty in linking to the golden triangle in the centre of Europe. We need better transport links. In particular, we need a dedicated freight railway from the north—ideally from Scotland—to the channel tunnel that skirts London. That would give us a direct roll-on, roll-off railway link between the economies of the north and those of Europe. If we do not have such a link, our peripherality will continue to damage the economies of the north, Wales and the south-west. We must have better transport links.
My hon. Friend the Member for Manchester, Blackley spoke about European regional funding. I hope that no one thinks that the rather small amounts of money that come from Europe will make much difference—as my hon. Friend said, we are net contributors to the European budget, even on a regional level. We have to talk big when talking about redistributing economic activity to the regions. We must put to one side the rather minor sums that come from Europe—money that is paid more for propaganda reasons than because it would be a major benefit to the economy. If we wanted to do so, we could stop contributing to the European budget and spend the money on regional policies.
There is also the question whether such money is really additional. The coalfields had a problem because the Conservative Government took away the money paid for coalfield support simply because money was coming from Europe. The European money was not additional. The additionality problem probably persists. I want the present Government to take steps to ensure that all citizens of Britain have an equal crack of the whip—wherever they live.
Mr. Deputy Speaker: Before I call the hon. and learned Member for Redcar (Vera Baird), may I tell the House that it is the normal practice for wind-up speeches to start at 5 o'clock—that is 10 minutes each.
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However, although I hope that the Liberal Democrat and the Conservative and Unionist party spokesmen will keep to that limit if we are stuck for time, I would like to give the Minister rather longer to reply to what is clearly an important Select Committee report.
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Vera Baird: I, too, congratulate the Select Committee on producing a report that is both penetrating and comprehensive—a difficult combination to achieve. As my hon. Friend the Member for Denton and Reddish (Andrew Bennett), the Committee Chairman, said, it is important to note that the Treasury has accepted since 2000 that the national economy will not flourish as well as it might unless there is growth in all regions. That is crucial, because it would make regional policy a lever of and a part of national economic policy. Hitherto, regional regeneration and aid have been seen as quasi-charitable, and the amount of money handed out has fluctuated with the Government's view of what can be afforded. That approach should now be over. A commitment to national growth should now also be a commitment to regional growth. However, that needs to be emphasised again and again.
I first referred to what I called a conceptual change in my selection speech in Redcar in 2000. Redcar is in the north-east, an area that has already been fully described by the right hon. Member for Berwick-upon-Tweed (Mr. Beith). I shall not repeat what he said about the levels of deprivation that are to be found in the north-east, but they are found particularly in Redcar.
Although I referred to a conceptual change in late 2000, I must say that it has not yet permeated—I shall put this as delicately as I can—to all the public servants involved in the relevant policies. Indeed, the north-east is still treated by the Government's public servants as though it were a supplicant. It seems to me that the 2002 spending review established two different ingredients to this new concept: the need to grow all the regions, and the need to reduce the gaps between them. I appreciate what has already been said about this, but there is clearly no commitment to close the gap absolutely in any spending review that I have seen.
There have been persistent regional differentials for more than 50 years. There are serious and entrenched market failures in drivers such as skills, innovation, investment and competition and in levels of employment. To someone from a constituency such as mine, however, it is cheering that the Treasury believes that market failures in regions such as mine can be tackled by raising the trend growth by 0.5 per cent. for the worst performing regions. Such a rise would increase our national GDP by more than £15 billion, which connotes the importance of encouraging regions such as mine.
I accept up to a point the Government's general view that the successful solution to regional problems must usually be rooted in the regions themselves. They have evidence of the efficacy of that approach in the success of the regional development agencies. My region's RDA—One NorthEast—was the first further to devolve substantial resources to a sub-regional partnership, the Tees Valley partnership. That move brought great flexibility and provided much greater access to

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resources. It also produced a group of sub-regional executives. In one case, which we hope will bear fruit, the executives used their close local knowledge to work out what was the ideal business—a fairly labour-intensive one—and to attract it to the local, already well serviced industrial zone. They are close to the ground, which is ideal, are extremely well networked, and can be effective.
Essential though regional action is, however, it is imperative to mainstream regional development policies across all Departments. A regional impact assessment process should be undertaken on all policies with a significant spend and with the ability to have an impact on the regions. That would ensure that the aim of growing the regions and reducing the gaps becomes a reality. It would also clarify the impact of policies.
Some policies do, of course, have an adverse regional impact. The North East Assembly identifies two fundamental ways in which current Government policy benefits the south-east at the expense of the regions. The first is by accommodating housing pressure in the south rather than by using that pressure to invest in the north. The second is by concentrating transport spending in the south-east. The Office of the Deputy Prime Minister's policy of investment in affordable housing in the southeast will lead for a long time to investing approximately £9.60 per head in housing in the south-east compared with £7.60 in the north-east. That is likely to draw more people to London, which will increase the pressure there. That does not greatly assist London's economy and will pull more people away from regions such as the north-east, thus increasing regional disparities.
The criteria used in transport decision making are weighted towards reducing congestion. That means that resources are being used to deal with the consequences of success, not to lay the foundations for economic growth to generate success in less prosperous areas. The Federal Republic of Germany allocates a proportion of its transport budget to regional development. It is hard to read that approach into the Government's 10-year plan for transport. In their response to the report, they said that they could read the runes of this plan to find a reflection of that, but I cannot.
Mr. Hammond: What the hon. and learned Lady is saying is all perfectly coherent. The trouble is that it ignores some inconvenient facts about the real world. My constituents in an area close to Heathrow suffer enormous infrastructure congestion. However, companies in west London, Surrey and Berkshire say that when deciding location, the single most important determinant is the proximity of Heathrow airport. We might not like it—many of my constituents are extremely irritated by it—but it is there. We cannot wish it away without enormously damaging our economic prosperity as a nation, and we cannot just redistribute that infrastructure investment without causing collateral damage.
Vera Baird: I am grateful to the hon. Gentleman for complimenting me on my coherence. I fear that he is re-running something that he has already run before in a very specific form, and that has already had an adequate answer from some of my colleagues.
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I turn to an occasional mismatch in policy provision. The regional impact assessment is needed to guard against such a mismatch. The Government have a strong supply-side approach to unemployment in programmes such as the new deal, which, in some regions, work very well because deprived communities are located very close to jobs and the obstacles are likely to be poor transport, lack of skills and probably some race discrimination, for example in some London boroughs. However, in the north-east, particularly in the Tees valley, the opportunities just do not exist. As my constituents all too frequently make me aware, new deal-type programmes alone are inadequate. In Hackney, where the barriers to employment are likely to be lack of skills and discrimination, that kind of supply-side approach can be wholly efficacious, but in Hartlepool there simply are not the jobs in a reasonable travel-to-work area to make it effective on its own. I quickly point out that I am not the Member of Parliament for Hartlepool, which is probably clear even to the most casual observer, but I could not find any London borough that was alliterative with Redcar.
I turn briefly to European structural funding post 2006. We are an objective 2 area. Assuming that the Commission will agree common principles for regional policy but that delivery will be devolved to national Governments—that is, structural funds will be renationalised—it is crucial, as my hon. Friend the Member for Denton and Reddish said, for there to be an additional sum of transitional funding over and above extant UK regional policy transfers; otherwise, regions such as mine will lose out very badly.
When that change comes, there is much hope and much need for less bureaucracy. At present, although those funds are hugely important to a region such as mine, the very curious structure of some of the priorities in our objective 2 programme straitjackets that programme. There are odd terms attached to some of the grant funding. I cannot really comment on this myself, but one member of the regional development board has suggested that the complicated straitjacketing restrictions come from the Department of Trade and Industry, not from Europe. At the moment, only 33 per cent. of the European structural funding available to the Tees valley has been committed, although this is the fourth year of a seven-year programme. That is simply inadequate. There are a number of reasons, including the perceived high levels of bureaucracy, but also the very queer rules. Priority 2 of the financing—I am indebted to the Tees valley joint strategy unit for this—prescribes high levels of support to 20,000 businesses. The unit tells me, which I accept, that there are only just 20,000 VAT-registered three-year-old businesses in that area. Extremely high levels of take-up of support—practically everyone in business there—are envisaged, which is wholly unrealistic. The levels of support for businesses younger than three years are quite different. That pretty random example shows that it is not surprising that Euro-programmes have a long history of underspend. They are difficult to find their way through, and we hope for and need simpler, more appropriately directed structural funding, if it is renationalised.
I, too, shall mention the Lyons inquiry, perhaps with more optimism than others have. The interim report on 9 September detailed a plan to locate various Government agencies in deprived areas on the basis of a

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business case. That is based on the presumption that it is not best for many Departments and agencies to stay in costly London and the south-east. Obviously, that idea is not new. The first initiative was as long ago as 1963, and the idea has been successful. I am acquainted with the move of the Department of Social Security to Newcastle, which happened in the middle of my childhood, I suppose. It had an immense effect on job opportunities there. Of course, the Conservatives stopped all that in 1979 and the approach has declined, to become rather unfashionable. I have always been a rather retro person and I have been an advocate of such action since I took up my current position.
As the Chairman of the Select Committee said, it is crucial for the moves to be to poorer locations where costs are low, not to overheated locations. The Tees valley presents an example. The rent there for commercial property is 15 quid per square foot, as opposed to £65 in central London. The total cost per square foot in London, including services and rates, is £90, whereas it is £22.50 in the Tees valley. There is a 404 per cent. difference between the Tees valley and London figures, and my fifth-form maths—that is as far as it ever extended—has none the less enabled me to calculate that the savings on a 10-year lease on a typical 50,000 sq ft block of office space would amount to £34 million.
Constituency patriotism prompts me to say that further analysis shows that a move to the Tees valley would save £7.5 million more than relocating to Manchester over the same period of time. It would involve some saving in comparison to anywhere else. It is clearly important that relocations are to the right place. Huge decreases in unemployment benefit costs can result, because more jobs are created. There is not really displacement, because those left jobless in the London area fill other vacancies there. In addition, the influx of people on average salaries would stimulate Tees valley regeneration and local markets.
Unemployment is twice the national average and in three wards in my constituency it is at 17 per cent., but the working population enjoy a higher standard of living than the national average, because of the relatively low cost of property and houses. The introduction of other people with similar levels of disposable income will generate more demand for amenities. The joint strategy unit, to which I could not be more indebted, has calculated that for every 500 jobs moved to Teesside an additional 95 to 125 would be likely to be created locally. That glimpse makes it clear that much is to be gained.
I was very pleased when, after I asked this very day in Treasury questions whether the Chancellor's promise of the dispersal of 20,000 civil service jobs was a maximum, I received the answer that because the decisions are based on a business case there may be scope for treating the figure as a minimum.
Regional devolution will not, on the face of it, make much difference unless it is accompanied by reallocation of resources. Democratically elected bodies should make better use of resources that they are given. However, not only will they not be responsible for Government offices, but they will not be responsible for learning and skills councils either. The move to regional control of the levers of regeneration is very partial, in a democratic sense.
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Will things change but stay the same? I think not. The change can be seen as a first step. At the root of the question of regional equality is the issue of the centre of power being in London and the south-east, both historically and now. I, too, am impressed by the Catalyst publication, "Decentering the Nation", although I cannot afford a subscription as my hon. Friend the Member for Luton, North (Mr. Hopkins) can.
The geography of British power is seen from the pretty small and introspective space that we occupy, which one might see as a modern version of a royal court. As a result, significant elements of national policy function effectively as an unacknowledged regional policy for the south-east. The frequent implication that London and the south-east "succeed" through their intrinsic qualities, while other regions fail, ignores that. The only serious way to tackle the issue of regional inequality is not to adopt post hoc policies of compensating, but to intervene in the dynamic that produces it.
I look forward to regional devolution, but I accept that it is only a first step in its current form and assert that once some power has been devolved it should be used to ensure that more of the levers of regeneration are wielded from where they will be most effective: a nodal centre of power in each of the regions.
I congratulate the Committee once again on what I have found a very thought-provoking and well-thought-out report. I congratulate the Government on their twin-track approach in their new integration of regional development with central economic development, and their policy of devolution of power. As an MP from a very deprived constituency in a very deprived sub-region of a very deprived region, I dare—although it is a sunny Thursday, which may be having an impact—to feel optimistic.
3.55 pm
Ms Karen Buck: I fear that by the time I sit down I may not be able to guarantee my personal safety on leaving the Chamber, nor that of my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman), if he is able to catch your eye, Mr. Deputy Speaker. Although I start by welcoming the debate and much of what is in the report, and I shall spell out a few areas on which we might have common agreement, the thrust of what I am going to say will go to the heart of the question of whether regional disparity is what we should be most worried about.
I welcome the report and the chance to debate it. It contains rigorous analysis and it spells out several real problems that cannot be denied. Of course there should be strong economic growth across all of the regions; of course this country will prosper most if all of the regions are able to prosper and if the very real social and economic problems that blight some regions and areas within them are tackled. Areas that have suffered from a collapse of manufacturing industry and the former coalfield communities have had decades of devastation imposed upon them, and generations have grown up in unemployment and poverty as a consequence. Some of the reasons behind that have been touched upon in relation to problems of inward investment and the recent strength of the pound. They are economic problems that UK plc needs to address.

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Of course it is absolutely right that major infrastructure projects that deal with some of those regional imbalances should be supported. My hon. Friend the Member for Luton, North (Mr. Hopkins) talked about a particular railway link that I totally support. For decades, the sort of major capital infrastructure that we need to benefit the whole country and all its regions has simply not been forthcoming. Ratcheting up our investment in research and development and capital infrastructure to deal with some of those problems is long overdue.
I totally agree that strong and accountable regional government, and accountability of existing regional institutions, are good things—I hope that there is consensus on that. Local government has consistently been underappreciated as part of the engine of economic growth at local and regional level, and it should be supported.
As an aside, before I come to the core of my remarks, I very much welcome the references in the report, and by other speakers today, about the census. If we cannot rely on accurate information about our population and its characteristics, we will not get right the measures that are needed. The massive undercounting of the population in central London has left us with a serious problem, and the recent adjustment to the census statistics for boroughs such as Westminster still leaves us below the funding floor. We need to set aside our prejudices against the London borough of Westminster for a minute, even though some of them are absolutely justified. The fact is that when the population is growing, as it is in central London, and there is a failure to provide the necessary investment to support that growth, a large problem is being stored up. That is a problem that we will have to grapple with. I endorse the remarks made in the report and elsewhere about the Office for National Statistics and the need to take a more imaginative approach to how we obtain accurate population counts.
The report refers to the relationship between neighbourhood renewal and regional economic growth, which the Government have not got right. The central point is that the regional argument misses more issues than it addresses. We must get beneath the issue of regional imbalance to examine the real problems.
I am speaking as a London MP. London is a driver of the UK economy and should be supported in that role. I appreciate that we should not hold back other regions, as the Government have recognised, but neither should we hold back London's economic progress, because that would be bad news for the rest of the country. In regarding London as a prosperous region, we are missing the real problem of redistribution. My hon. Friends would all say that redistribution is at the heart of their politics.
London is indisputably the driver of the UK economy. Depending on which statistics one uses, London contributes £10 billion to £20 billion to the UK economy. It also contributes significantly more in terms of taxes of all kinds than its population warrants. It contributes 21 per cent. of UK GDP and contains 12 per cent. of the UK population. The financial and business sector has been the major growth area in the London
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economy and has generated 600,000 jobs. Some 4.5 million jobs across the UK depend on London's economic performance. It is bonkers to consider a strategy to check London's economic strength, because that would damage the rest of the economy.
When discussing overheating, other Members have fairly cited the example of investment in transport and housing infrastructure. The failure to invest in housing infrastructure over the decades has contributed to some of the problems in London and the south-east. Successive Governments—unfortunately, the Labour Government do not have a blameless record—have not built houses. We have failed to build houses, in particular affordable houses—the luxury end of the market seems to be doing okay—and that has caused problems.
The lower end of the economy, the entry-level job sector, is hoovering up jobs from the rest of the world, particularly from Europe. I am not talking about asylum seekers, but about students and workers who come into this country on legitimate work visas. They often live in appalling and dreadfully overcrowded conditions in order to fill the jobs that Londoners cannot take because Londoners cannot get over the cost of housing and other hurdles. That is not an overheating problem, but the result of a lack of investment over the decades. Had we been building affordable homes at the sort of rate at which we were building them in the 1960s and 1970s, we would not have the current problem with the London economy, where the jobs that are pulled in stoke up the difficulties.
Mr. Hopkins: My hon. Friend is right about the housing problem. Does she agree that it would not be as great if we had not sold millions of council houses and subsidised those sales from the historical equity in the public housing sector?
Ms Buck: I agree that there was a rush to right to buy. If anyone were to get their hands on right to buy in the housing association sector, there would be a fresh disaster. The right to buy led to the decline in affordable housing opportunities in the areas where people need to live in order to go to work, and houses to replace the stock sold were not built. The situation was complicated because the need was to build alternative accommodation close to that which was being sold, which was in the most popular areas. It is no longer possible for either key workers or people in entry-level jobs to live in such areas. As it was a populist measure and not a housing measure, the right-to-buy policy created many of the problems with which we are now grappling. Had we built replacement houses in the right places over the past two decades, we would not have the problems that we do.
We cannot build affordable housing in London and the south-east to support the economy and to deal with our crisis of homelessness and overcrowding without a transport infrastructure, including Crossrail, because without that infrastructure people will not move there. It might sound perverse, but the only way to deal with the overheating of the economy of London and the south-east is to tackle the causes of the pressure that brings the difficulties. By making such investment, we shall release the brakes on the London economy, which

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will be good news for the rest of the country. I know that that is a contentious argument, but I believe that it is right.
My second point centres on the argument in the report about neighbourhood renewal. We have to go beyond the concept of regions, because regions do not tell us the whole story. London has some of the highest wages and property prices, and rates of population growth and job growth in the country; that is a success story that is good for the whole country. However, alongside those successes, London has the worst problems. I do not exaggerate—people from Liverpool, Newcastle and elsewhere can tell valid stories of deprivation, but London has the worst problems. Four in 10 London wards are among the 20 per cent. most deprived in the country, and it has the highest level of economic activity anywhere in the country outside Merseyside, despite a strong labour market. London has the highest unemployment of any region in the UK, at 7.1 per cent. compared with a 5.1 per cent average in the UK as a whole. There are more unemployed in London than in Scotland and Wales put together. London has well above the national average long-term unemployment rate, at 19.3 per cent.
The impression that economic inactivity is worse in some of the regions is not justified by the figures. My constituency, Regent's Park and Kensington, North, that lovely, leafy prosperous-sounding constituency, has the 11th highest entitlement to free school dinners in the country and unemployment higher than that of Middlesbrough, Jarrow, Easington, Knowsley and Liverpool, Garston. All of the images of central London, Westminster and Kensington being incredibly prosperous are blown apart by the facts. If we do not appreciate that that is the case, and do not allow for the investment to tackle the problems, London's economy will be held back, the United Kingdom economy will suffer and we will not meet any of the targets that matter to my colleagues and me, such as those on child poverty, education and employment.
In practice, resources are being shifted. Housing maintenance is shifting, but we lost a share of regeneration cash the last time that the index of deprivation was updated and we have a declining share of public expenditure. If the share of public expenditure declines in London, our ability to provide a safe, well policed, healthy and well educated city will go out of the window. We are already on the edge in many respects, despite the general economic prosperity and the overall investment by the Government. London has the needs to justify investment. It is a mistake not to air those needs and I appreciate the opportunity to do so.
In the final analysis, we cannot kill the goose that lays the golden egg. We need to increase investment and employment opportunity in all sectors. We must tackle the chronic, desperate problems of Liverpool, Newcastle, the north-east and the regions, but we cannot afford to do that at the expense of the capital city.
4.9 pm
Mr. Iain Coleman: I welcome the opportunity to speak very briefly in this important debate on the Select Committee report. What I wish to do in my brief comments—although after the
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excellent speech of my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), I do not really have to—is to explode the myth that the streets of London are all paved with gold. Far too many people, some of whom should know better, peddle that line. Some sit not a million miles from the Cabinet table. Indeed, if some commentators were to be believed, one would assume that the staple diet of most Londoners every evening consisted of wild mushroom and snail risotto washed down with a couple of bottles of well chilled Puligny-Montrachet. In practice, that is not the case, as my hon. Friend said.
I note that at present the Select Committee has no members drawn from London constituencies. I hasten to add that I draw no conclusion from that. With your indulgence, Mr. Deputy Speaker—I am aware that my hon. Friend has already done this much better than I can—I wish to give some facts that will show that London suffers from very high levels of poverty and deprivation.
In London, 23 per cent. of households with dependent children have no adult in employment—the highest percentage of any region. In inner London, that rises to 34 per cent. Inner London also continues easily to have the highest level of child poverty in the UK: a staggering and shameful 48 per cent. Nearly 25 per cent. of working-age Londoners are without a job. In inner London, 35 per cent. of pensioners live in poverty. That figure is massively higher than the English average of 21 per cent. More than 50,000 homeless families live in generally very unsatisfactory temporary accommodation in London—70 per cent. of the total for the UK. In April 2001, 80,000 asylum seekers were being supported by London boroughs. The vast majority were living in substandard, unsatisfactory temporary accommodation and suffering from the inevitable high levels of poverty and deprivation that they brought with them.
However, I am pleased that the Select Committee acknowledged that London has some of the most deprived communities in the country. It recognised, for instance, the high number of jobless and the substantial deprivation, and it noticed that the housing market, which will come under increasing pressure as the population grows, was under considerable strain. A recent report projects a rise in population of 700,000 by 2011. London also has a transport infrastructure that simply has not kept pace with the city's changing needs over the past 30 years.
Many of us in London have known all that for a long time. It came as no surprise when in July the Downing street strategy unit published its independent report, which confirmed the depressing position in considerable detail. The London study proves beyond dispute that London, although it has pockets of considerable wealth and affluence, also suffers badly from deprivation and a poor public service infrastructure, which would be made much worse if further public funds were to be diverted from the capital.
London Labour MPs recognise that many regions of the country suffer from long-term poverty and economic decline. For example, many old coalfield communities have been through deeply traumatic times in recent decades and desperately need financial assistance and investment from the Government. No sensible person would query that view or argue that such regions should

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not receive all the support that the Government are able to offer. However, we are saying that that support cannot be at the expense of London. Our region is already suffering from similar or even higher levels of poverty.
I am horrified by an example that came to my attention in the past few weeks of money being taken out of London. It is the so-called consultation announcement by the Office of the Deputy Prime Minister about the management and maintenance allowances allocated to local authorities and housing departments in the capital city. I wonder whether the Minister in his closing remarks might comment on that. I am reliably advised that as a result of the new formulae that the Government seek to introduce in 2006–07—the first year after the transitional relief arrangements taper off—London will lose £170 million. The inevitable effect of the loss of that money will be that tenants in London—the vast majority of whom support the Labour party and put it in government—will face swingeing cuts in the management and repair service that they currently receive from their landlords. As London tenants also face rent increases way above the rate of inflation every year for the next seven years as a consequence of the Government's ill-thought-out rent restructuring arrangements, that new effect on resources to London will come as a double whammy to our tenants.
I am told that the money will be reallocated to other regions of the country, but I fail to understand how the Government will explain that betrayal to tenants in London, many of whom are already living in poverty in very poor quality housing that is in desperate need of renewal and proper maintenance and repair. London scores far too high on unemployment, housing and a range of other agreed measures of deprivation, as I have shown.
We are suffering from deprivation and poverty, and the misery and human tragedy that inevitably accompany poverty. Any policy to remove yet more public funding from London would lead to a further increase in poverty and deprivation.
Although I note that the Select Committee report is an important contribution to the debate on the economies of the English regions, its conclusions do not stand up to serious and vigorous scrutiny and analysis.
4.16 pm
Mr. Chris Mole: I was in two minds about whether to contribute to the debate, but several of the arguments require some response.
My experience amounts to having had the opportunity and the honour to serve as a deputy chair of a regional development agency for three years. At the East of England Development Agency, we always acknowledged that the spend that we had was important but that it would never be a determining factor in the overall direction of the economy of our region. Our spend was about £25 million, and had increased to about £50 million by the time that I left, against the background of a regional economy that is now worth about £80 billion.
The distribution of resources to regional development agencies is enormously skewed. The north-east and the north-west have six to seven times the regional
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development agency budgets of either EEDA or the South East England Development Agency. The south-west is in a slightly better position, but not by much. Consequently, the ability to achieve the progress for which the region was ambitious should be seen in the context of where we wanted to be.
We were not bothered about being first, second or—as we started—third in terms of GDP per capita; we were concerned about being 44th on the list of European regions. The critical issue for us was not competition with the rest of Britain, but with Baden-Württemberg and Catalunya, and those other places to which our inward investors said that they would contemplate changing location, if they could not get the right quality of life and transport infrastructure. The more obvious aspects of direct public expenditure were not critical to changing the performance of the majority of the private sector spend in our region, which, as mentioned, is now about £80 billion.
No one has yet mentioned the Government's response to the Committee's criticism about the allocation of some departmental resources. My hon. Friend the Member for Denton and Reddish (Andrew Bennett) referred to research and development but he did not touch on Ministry of Defence spending, which is enormous and has a significant impact in the regions. The Government's response was inadequate because of their temptation to hide yet again behind the argument that there is a security or military argument for defence investment at particular locations. Those arguments are not transparent to the Committee, or anyone else. Previous speakers made the point about the development of a little political will in the Government to tackle such things. I suspect that this is one area where significant progress could be made for some regions.
As my hon. Friend the Member for Manchester, Blackley (Mr. Stringer) pointed out, some regions have to run faster than others to make the progress called for by the Government targets, which we all support. Some regions will have to make considerably more progress in their economic growth than regions in the south, the east and in London.
I return to a point made by my right hon. Friend the Prime Minister that was rather unfairly dismissed—as my hon. Friend the Member for Manchester, Blackley, who spoke about the matter, returns. I did not feel that the Prime Minister sought to dismiss the disparities between our regions. Like my hon. Friend the Member for Luton, North (Mr. Hopkins), the Prime Minister was reinforcing the point about intraregional disparities. The case has just been made in relation to London. Such disparities are very much present in a region such as the east of England. Luton, Great Yarmouth, Waveney, Harwich, pieces of inner-city Norwich and parts of my own town, Ipswich, are in need of continuing investment and action.
To tease my hon. Friend the Member for Luton, North, perhaps he should not argue for freight to be transported through congested London—blocking up paths that are important for Crossrail— on its way to the channel tunnel, but should in fact support the proposals for upgrading the Felixstowe to Nuneaton route to take freight out through Felixstowe, which is one of Britain's major ports. Felixstowe is where many of my constituents work, but it is important for the nation as a whole that that cost-economic option, which was the

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Strategic Rail Authority's top priority until its last revision, is implemented. That is important not just because it will help my region and the port of Felixstowe, but because of the pressure it will take off the traffic on the North London line and the east coast main line. Such traffic occupies freight paths and unnecessarily adds to congestion.
The Committee produced a good piece of work and the Government made some good points in response, but no one should underestimate the challenges that lie in meeting the targets for economic development in some regions.
Mr. Deputy Speaker: Before I call the Liberal Democrat Front-Bench spokesman, I just want to say that we have a little more time than I had anticipated, so Front Benchers can stretch the 10 minutes a little. However, I want the Minister to have adequate time to reply to this important debate. If we have a moment or two after he has sat down, it is appropriate for the Chairman of the Committee to have the final word.
4.24 pm
Mr. Edward Davey: Right hon. and hon. Members need not be too alarmed; I will not speak for much longer than the original 10 minutes.
The debate has been good, because of the quality of the report. The Select Committee is getting a reputation for being one of the best in the House and is putting new information into the public domain through its work. It is worth placing on the record our thanks to its members.
I found some specific points useful, such as the recognition of the difference between inter and intra-regional problems. Although there has been some debate on the different merits of London and the English regions, the report tries to deal with that issue. Indeed, it states specifically that they have different problems—for example, with respect to unemployment. The unemployment problems in London may be about supply-side issues, but as the hon. and learned Member for Redcar (Vera Baird) suggested, the unemployment problems in her constituency and region may be on the demand side. Those inter and intraregional problems can be addressed only if the policy agenda is sufficiently flexible.
The Committee did a good job in criticising the PSA targets. My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) helpfully added to those criticisms with his point about the tyranny of averages. The Government must be rather more intelligent in their approach to such targets. The Committee's proposal for a scorecard of targets is good, particularly as it includes quality of life. I shall explore further the options for quality of life and sustainability, because our debate is marred by the fact that we too often measure things in accounting terms and do not look at the quality of life on a wider level. Londoners who visit other regions can sometimes find their quality of life to be quite pleasant, but the figures often take no account of that. We have some quality-of-life problems in London that may not be found in other parts of the country.
The hon. Member for Denton and Reddish (Andrew Bennett) made a welcome contribution to the report, about data quality. The lack of data is a scandal.
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Successive Governments have failed to analyse public expenditure and economic data on a regional basis. I shall discuss some of the reasons that lie behind that failure, but the report is right to focus on it.
Some of the thrust of the policy recommendations is right, particularly the idea that we must try to make conditions in less prosperous regions more conducive to business. That was a powerful proposal, but it has not been mentioned much in today's debate. The argument about the need to put sustainability at the heart of the regional economic agenda was also well made in the report.
I wanted to focus on two things that have either been criticised or not mentioned today—the private sector and its role in supporting regional prosperity, and the political dynamic coming from regional devolution. Some have criticised proposals for regional devolution, saying that it will not deal with the problem: but those who make such criticisms misunderstand the power that will come from full-bodied regional devolution.
We have heard that regional devolution will not change the way in which money is allocated—that it will divert money, but that the cake will not be split in any other way. There have been calls to keep the centre strong, and to reallocate the cash in different ways. I think that people misunderstand how regional devolution will help
Mr. Hopkins: I am interested in the hon. Gentleman's enthusiasm for regional devolution. However, my hon. Friend the Member for Manchester, Blackley spoke about the need for massive fiscal transfers from the centre. It is already the case, is it not, that since devolution to Scotland and Wales, big fiscal transfers, particularly to Wales, are now inappropriate, and that in time Wales should become self-sustaining? Would the hon. Gentleman not agree that such independence might lead to fewer or smaller fiscal transfers to the regions, not more?
Mr. Davey: I think that that is highly unlikely. Of course, some people will always say that an area—Wales in this case—should not get more money, but that is not likely to happen. The experience of devolution in Scotland and Wales is that the political leaders have much greater power; they can ensure that the money is spent more efficiently and effectively, and can better champion their area.
Mr. Stringer: Has the hon. Gentleman had time to read the memorandum submitted in evidence by Andres Rodrigues-Pose? That gentleman has studied devolution across Europe and has reached the opposite conclusion. He says that devolution is fashionable, and concludes:
"Devolution thus seems to be contributing to perpetuate and, in some cases, aggravate, existing economic disparities."
I wonder whether the hon. Gentleman has had time to reflect on that.
Mr. Davey: I have not read that memorandum, but I will certainly do so. However, I have read works by other economists who reached the opposite conclusion, so I do not rest my analysis on one memorandum to the Committee. There is a lot of important international

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evidence from countries such as America, Canada and Australia, where there are much more decentralised systems, and Spain and Germany, where there is strong regional government and throughout which there has been much greater economic balance and shared growth. It is difficult to examine Spain and Germany and come to the conclusions that the hon. Gentleman is trying to push.
Mr. Hopkins: I apologise for intervening yet again, but is it not the case that some of the poorer states in the United States of America exist only because of massive federal fiscal transfers? Defence bases and so on are set up to ensure that such states do not suffer, so the centre solves the problem of regional inequality, not devolution.
Mr. Davey: No one who is pushing the devolution or decentralist agenda has ever suggested that there will remain no fiscal transfers through either tax or benefits; no one, to my knowledge, argues that. Also, America has a much greater spread of wealth between different regions and cities, and has much less intrastate equality, and we would not want to adopt the American model in other respects. Wealth is spread out across the cities there in a way that we do not see in the UK.
I want to argue for regional devolution. One must look at it from a dynamic point of view. The reason why there have been such regional imbalances over such a long period—50 years according to the report, although it is probably longer than that—is that we have a centralised system of government. Everything is decided in the capital, and with political power so rooted in centre, business and finance are of course attracted there. Once power is devolved, and assemblies and politicians in the local government areas are given real power, we shall see not only the public sector but the private sector responding. The process involves a dynamic. One of the the greatest reasons for regional devolution is the failure of centralism to tackle the problems that many hon. Members have been concerned about today.
The challenge for the Government is that their regional devolution agenda is so weak. "Your Region, Your Choice" is a disappointing document, as we have argued on many occasions. The hon. Member for Manchester, Blackley (Mr. Stringer) is right that it does not present the agenda that those of us who believe in devolution want to see enacted. We want to see much more ambitious agendas, and perhaps we would have a different view if the Government adopted one.
I should like to focus on three subjects, and I urge colleagues to knock on Department doors in Whitehall to ask that the relevant powers in relation to those subjects be devolved to the Office of the Deputy Prime Minister, so that they will be included in the Bill on the future regional assemblies. The three areas are transport, skills and the environment, which are particularly important if we are to deal with the regional differences. Transport is important because we must ensure that people, goods and services can flow. Skills are important because we live in a high-skill, knowledge economy, which is crucial. We should also focus on the
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environment, because sustainability and the quality of life agenda are important in making people want to live in regions and cities of the country.
I am pretty clear from my discussions with Ministers that before the powers Bill is drafted the Office of the Deputy Prime Minister has no intention of unpicking the deal that was in "Your Region, Your Choice". The Office of the Deputy Prime Minister therefore has no will to knock on any other doors in Whitehall to add more powers. That is the problem that we face. Those of us who want bolder, stronger devolution must go out and persuade Ministers in the Departments for Transport, for Education and Skills and for Environment, Food and Rural Affairs that they should be giving up power and knocking on the door of the Office of the Deputy Prime Minister, asking for some of their powers to be included in the future Bill. If we as Members of Parliament can rise to that challenge and campaign for more powers to be included in that Bill, that will be significant—not least, as my right hon. Friend the Member for Berwick-upon-Tweed said, because it will then be much more likely that we will win the referendums in the three northern regions next autumn.
Mr. Jim Cousins: Does the hon. Gentleman think that our efforts to promote those additional powers would be helped or hindered by the prospect of much more revenue being raised at local council or regional level by a local or regional income tax?
Mr. Davey: I think that they would be helped. I certainly see a local income tax as key to the devolving and decentralising of powers. Those countries that have local income tax tend to be the ones that have decentralised power very effectively. It was in the three fields of transport, skills and the environment that the White Paper was very lucid. It made a strong case for those powers to be decentralised, but it did not follow that up. Some of those areas already have the organisation for that, through regional government. The RDAs will go into the regional assemblies, but the learning and skills councils, too, have a regional dimension. It is absolutely bizarre that they are not put together with the RDAs to make elected regional assemblies very powerful in the skills agenda.
On transport, the Highways Agency has regional committees. Even the SRA operates on a regional basis. There is no reason on God's earth why those transport powers and functions cannot be given to elected regional assemblies. County councillors get very annoyed that the Highways Agency can come along and decide that it wants to do something or, in the case of some road projects, not do it, which can get in the way of the county council's strategic plans. Surely, now we are to have regional assemblies it would make real sense for the Highways Agency to be broken up and to be accountable to the regions in which it is spending important money. On the environment, there are so many quangos such as the Environment Agency, the Countryside Agency, the Forestry Commission and no doubt many others. They should all be accountable to the people whom they are supposed to serve.
If we had that richer devolution, we would see financial power and public sector jobs being pulled to the regions. We have the Lyons report, but if we really

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broke up Whitehall and gave power to local communities by empowering local government and regional assemblies, we would see the jobs go. They would have to follow the political power. We could have Lyons report after Lyons report, but that would not tackle the real problem. We must get rid of political centralism. That is what is holding back the regions, and we must deal with that.
Other hon. Members have quoted examples that show that we are going in the opposite direction. In my constituency, we had a big Ministry of Agriculture, Fisheries and Food—as it was then—site at Tolworth. That was closed down and the civil servants moved, but they were not moved to the regions. They were moved to Page street, in central London. I questioned the permanent secretary and other civil servants at the time on the financing of that, and they could not really make a case. The only real reason was that they wanted the chief vet next door, so that they did not have to wait for him to travel up from Tolworth. That is how such matters work. Departments want their civil servants right by them, so that they can keep an eye on them, because in this centralised political culture, the Departments must be kept close by in order to do their job. If power is pushed down to the regions so that people have to be accountable in those regions, the civil servants will go with the political leadership. Jobs will follow. That is why regionalism is so important.
Mr. Hammond: The hon. Gentleman said that Ministers want their civil servants close by so that they can keep an eye on them. Has it occurred to him that it might be the civil servants who want to keep an eye on their Ministers, and that that might actually be for the good of the country?
Mr. Deputy Speaker: A brief response, please.
Mr. Davey: That might sometimes be the case, but in this instance I believe that it was the other way round. I shall draw my comments to a conclusion because I took the hint, Mr. Deputy Speaker.
Other points have arisen during this debate and, as a London Member, I want to refer to the London regions. The hon. Member for Regent's Park and Kensington, North (Ms Buck) put the matter very well. There is real poverty in areas that are usually perceived to be wealthy and prosperous. My constituency of Kingston and Surbiton is perceived to be homogenously prosperous, but nothing could be further from the truth. Some people, I am delighted to say, are very wealthy with high incomes and that is good, but they distort the average. People look at the average of wealth and income in my constituency and think that that applies to everyone, but it is only because some people are incredibly wealthy that they mask a long tail of people on modest incomes and some on very low incomes. There are some shocking housing conditions in my constituency and real poverty, and that point has been well made by other London Members. It is important that the Government have a multi-faceted approach because it is not just a question of dividing the cake of public expenditure in different ways.
I shall end on that point. We should devolve political power and move away from a sterile and static debate about how we share out the existing cake.
4.41 pm
Mr. Philip Hammond: This has been an interesting debate. We have heard some heartfelt speeches, all of which will play extremely well in hon. Members' local and regional press during the next few days. At one stage I feared that I would be isolated in my views, but the hon. Members for Hammersmith and Fulham (Mr. Coleman), for Regent's Park and Kensington, North (Ms Buck) and for Ipswich (Mr. Mole) changed the geometry of the debate a little towards the end. I should hate this to end up as a north-south division in the debate.
I represent a south-east constituency, but I have lived in the north-west and the east midlands and I recognise people's concern and anger about the waste of human resources in regions where economic growth is inadequate to ensure full employment of all the resources available. My concern is that in trying to address that problem, we must not, to use the phrase of the hon. Member for Regent's Park and Kensington, North, kill the golden goose. That is the issue at stake.
The Select Committee's report is detailed and thorough with some useful analysis, but I must tell the hon. Member for Denton and Reddish (Andrew Bennett) that I found it depressingly old fashioned in its focus in its conclusions on public spending solutions to all the problems that it identified. I would be critical in isolation of the focus of the Committee's report on relative measures to reduce disparities rather than absolute measures, because I suspect that to our constituents absolutely prosperity is more important than relative prosperity. The Committee is effectively absolved from that criticism because it was addressing the Government's focus through the PSA target.
The hon. Member for Manchester, Blackley (Mr. Stringer) and the hon. and learned Member for Redcar (Vera Baird) have already identified the aspect about which I was somewhat disturbed: the disjunction between the Government's target and that addressed by the Select Committee. The report reads as though the Committee was addressing a set of Government policies designed to reduce disparities in regional prosperity, but that is not what the Government's target does. It sets out to reduce the disparity in growth rates—in other words, to slow down the growth of that disparity in regional prosperity, but certainly not to reverse it. I wonder why the Select Committee did not challenge the PSA target more forthrightly or consider whether the Government should put different targets in place.
I understand the concerns that have been expressed about disparities in regional growth and prosperity. However, I must warn hon. Members who have spoken today and members of the Committee that they are looking the wrong way. Their eyes are off the ball. The relative growth about which we need to be worried is between ourselves and our competitors overseas, especially in places such as Asia. Even the Prime Minister has recognised that. I believe that the hon. Member for Ipswich made that point.
Someone who used to work in a factory in the north-west or the north-east that is no longer there and who goes to a shop that sells items that they used to make will not see the words, "Made in the greater south-east" on the bottom of those items but—99 times out of 100—"Made in China." If a call centre in Hartlepool or

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Swansea closes down, it does so not because it is relocating to Bromley or Dorking, but because it is relocating to Bombay or Delhi. The focus on inter-regional differences in economic growth is a dangerous exercise in navel gazing as the deluge of competition from overseas descends on us.
The Committee made it clear, and I am glad that it did, that it advocates raising the game of the weaker performers, not seeking to achieve the target of reduced disparity by limiting the game of the stronger performers. Fortunately, the Government's response strongly supports that view. No one disputes the need to encourage growth in under-performing areas, but it must never be at the expense of what I would call, at the risk of raising the ire of certain members of the Committee, the locomotive areas of the economy.
Mr. Mole: Will the hon. Gentleman tell me how he squares what he has just said with the views of the Conservative majority involved in the south-east regional planning processes on Professor Stephen Crow's report on housing demand in the south-east and, indeed, with their continuing opposition to the communities plan, which is very much about ensuring that the locomotive of the nation—I believe that is how the hon. Gentleman described it—stays at full speed?
Mr. Hammond: It is a question of balance. I am sure that we do not want to turn this debate into a debate about the communities plan, but the concern about the plan is whether it is a sustainable solution and whether the concreting over of large areas of the south-east to make stand-alone communities in the Thames gateway and in Ashford will really relieve the pressures felt by those of us who represent constituencies in the south-east.
The Local Government Association was quoted in the report as saying that a single locomotive of the economy is an unsustainable solution. I have not seen any evidence of that, and given that the UK's relative economic performance in Europe is good, it would be a very dangerous experiment to risk derailing that locomotive. The point that hon. Members with London constituencies could have made, which I will make now, is that London is a world city. We did not ask for it to be a world city—we probably did not even intend it to become one—but it is, and it is rapidly becoming the world city. That is a national asset. It attracts wealth, prosperity and many other things to Britain because of its international status. I really do believe that we should back our champions, not seek to undermine them, because that is good for the whole of Britain.
Even in the regions, the message is the same. I was disappointed to see that the Committee was wary of the core cities concept—of backing cities that might act as beacons within each region and give them their sense of identity—and instead suggested that the focus should be spread more widely in each region. Of course, we need to ensure that prosperity is distributed more widely, but I firmly believe that we will achieve that in a more enduring and sustainable way by promoting the core cities within the regions.
The Government should be pursuing the target of achieving the maximum sustainable growth potential in every part of the country, without regard to what that
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does to relative growth rates. This is about achieving the maximum growth in every area—the regions are largely irrelevant to the discussion. The Committee correctly identified the travel-to-work area as the key focus for demand and supply factors, and recognised that intra-regional differentials are at least as great as, and sometimes much more significant than, inter-regional differentials.
Mr. Hopkins: Would not the hon. Gentleman accept that more equal societies grow more quickly economically, and that some of the most successful economies in Europe—geographically, not the European Union—such as Norway are among the most equal societies? If we deal with inequality within communities and across the country we are likely to be a more successful economy and to grow more quickly.
Mr. Hammond: I am not sure that the evidence is clear. It is interesting that the hon. Gentleman cited Norway. I should not have thought that it was a good example. The Norwegian economy is peculiarly skewed by natural resources and not comparable to ours. That can be debated, but I have made my view clear. The promotion of champions—core cities in the regions and the Greater London region within the UK—for the national good will ensure the greatest benefit for all of our people. I agree that we need to make supply-side improvements throughout the country. In the south-east, that is largely to address bottlenecks in the economy. In some of the regions further north, it is about improving their attractiveness as places in which to do business. In addition, as several hon. Members have mentioned, there is a clear need to stimulate demand in areas in which there is no demand within the relevant economic area.
Underused resources are a cost to the economy. It benefits us all to try to employ those that are not currently being used, but not if that involves taking out of use more productive resources. I liken it to decommissioning a machine in a factory in order to provide more jobs. It might seem like a good idea in the short term, but it is not the way to prosperity in the long term, as we all know in our heart of hearts.
The Committee believes that the Government are ignoring, or giving a low priority to, their public service agreement targets. It is probably right. The Chancellor understands that UK GDP growth is the driver of the feel-good factor and of regional well-being. National growth rates are a greater determinant of economic well-being than relative regional variations, and it is the national growth rate that defines our ability to fund public services and to expend money on public investment.
The Committee wants to argue about the distribution of the cake. I am more anxious that we do not undermine the production of the largest possible cake. If the Committee had its way, the cake would become smaller. I have asked the hon. Member for Denton and Reddish, and will do so again, whether he would care about that. Would he trade greater regional equity for lower UK economic growth? I suspect that he might, and that would alarm me very much.
The Committee recommends that R and D spending should be allocated on the basis of regional impact rather than value for money. It recommends that the

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economically weakest areas be prioritised and that mainstream public funding be diverted from economically fast growing areas—something that will reduce the capacity of those areas and the international competitiveness of those areas—in order to support less well performing areas.
I thought that the Committee's conclusions on funding in paragraph 75 would be very dangerous for the United Kingdom. There is already a squeeze in the fastest growing regions, and I am pleased to say that the Government have rejected the list of proposals that the Committee made for reallocating public spending. If the Committee's views were to prevail, I would suggest that there would be economic damage as business relocates out of the UK in response to poor infrastructure and poor services in those parts of the country in which internationally footloose business is interested in locating, which would be a loss to the UK. If one has captured growth and GDP generation in the UK, one can always redistribute the wealth that that growth generates through fiscal systems and public investment. If it is lost to France, Germany, India or China, it is lost for ever and that is a dead loss to the UK.
The hon. Member for Denton and Reddish can take some comfort from the fact that his policy prescription has been adopted by at least one Department: the Office of the Deputy Prime Minister. The Deputy Prime Minister is the king of the regions and in his local authority funding formula, which drives the council tax, he has done precisely what the hon. Gentleman is looking for. He has diverted huge amounts of resources from the most prosperous and fastest growing areas of the country, which are not the areas of the country with no problems to resolve and are areas that do face cost pressures and delivery problems in public services. That has created a real stress in delivering public services that business requires if it is to locate in those areas.
When I talk to foreign-owned businesses in my part of the country, there are issues that they always raise. They are there because of Heathrow—make no mistake about that. If Heathrow airport closed tomorrow, in 30 years Surrey's economy would be on its back. That is why they are there, but having got there they are deeply concerned about the relative lack of infrastructure investment to support the burdens that they and their employees place on the area, and the poor quality of public services caused by pressure of funding, which creates pressures on their employees such as health and education pressures. That makes it more difficult for them to hire and retain the people who they want in those regions.
Government policy is important, and it can be very negative. One of the things that has not been mentioned so far in the debate is relative pay between the regions. We should be focusing on the comparative advantage of the different regions. The Treasury has already accepted the need to introduce regional variations in public sector pay. The Select Committee says that before that can happen, there would need to be better statistics. The Committee's report speculates on what "very difficult" means in the jargon of Government reports. I know what "need better statistics before progressing down this route" means in the jargon of Government reports: it means kick it into the long grass.
Andrew Bennett: I think that, given the record of the Office for National Statistics, it would be crazy for
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anyone to go down that line at this stage because we do not have the regional information available. We do not have regional deflators to work out inflation levels in individual regions and there is an argument, which has been advanced by the Conservatives, that the regions are not all that natural. Does one come up with regional pay on the basis of where someone lives, or of where they work?
Mr. Hammond: I certainly would not do that on the basis of regions at all. My point is that there must be flexibility across the country to reflect local labour market conditions. If one is trying to exploit comparative advantages, many of the regions outside the south-east, the east and London have significant comparative advantages, one of which is a lower cost of living. In some regions, one in three employees works in the public sector. Public sector pay tends to be determined nationally with limited regional variations, and the Government should not act to dampen what should be a comparative advantage. Public sector pay feeds through into general market pay conditions in a region and raises the local level, which is a negative effect.
The other area in which Government policy is significant and political agendas come into play is regional government. I do not know what lies behind the Deputy Prime Minister's long-running obsession with elected regional assemblies. However, if the answer to the question is an extra tier of bureaucrats and an extra phalanx of politicians, the question was certainly not, "What can I do to stimulate regional economic growth?"
The Government hide behind regional government as a solution to regional economic performance, and the report records their position:
"The Government argues that its proposals for devolution could make a significant contribution to achieving the PSA target."
We all know that that is nonsense. Business knows it and the Select Committee knows it. Page 55 of the report states:
"Devolution does not in and of itself mean a reduction in the gaps between regional economic performance. Unless devolution is accompanied by some reallocation of resources it will not make much difference".
Lord Rooker said:
"It is true that there will be no new money, no new powers."—[Official Report, House of Lords, 7 April 2003; Vol. 647, c. 102.]
Furthermore, Stephen Rankin, director of CBI North-East, says that business men worry that elected assemblies would
"hinder rather than help them".
Local authorities clearly fear that elected regional assemblies would take such powers away from them rather than devolving them down from central Government.
Paragraph 170, which we have already touched on, is curious. In it, the Select Committee pleads for scrutiny of the Government offices for the regions. The hon. Member for Denton and Reddish will have read "Your Region, Your Choice" and must know that the proposed structure is somewhat different from that suggested in paragraph 170. Effectively, the Government offices for the regions will be perched just

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above the right shoulder of the regional assemblies to watch them. Far from the assemblies monitoring the Government offices for the regions, the Government offices for the regions will monitor the assemblies.
There is no example of an extra tier of government being a positive factor in stimulating economic growth. Rather, it is a recipe for more political interference, bureaucracy, and red tape and for more cost to the hard-pressed council tax payer. It will not deliver a single extra nurse, teacher or policeman. Whatever elected regional assemblies may or may not do—we could debate that—they will not stimulate regional economic growth.
I share the Select Committee's concerns and objectives on the continued waste of human resources in the less dynamically growing regions. However, I am slightly depressed by its old-fashioned focus on equality over quality. That is to say, it wants to even things out rather than trying to ensure that we promote the best. In absolute terms, national prosperity allows our investment in public services and infrastructure, and it enables us to hold our own against our international rivals. That must be the focus of the Government's attention because that is what will deliver for all the people of the United Kingdom, wherever they live.
I urge hon. Members to back our champions, whether they are regional cities or London, and to ensure that we do not allow a mistaken obsession with trying to even out inequalities in growth to undermine the relatively impressive economic growth that we have been achieving in this country, and which underpins all the investment in public services that we all wish to continue.
5.4 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope): This has been a good debate, and I congratulate my hon. Friend the Member for Denton and Reddish (Andrew Bennett) on his report and presentation, and the other members of the Select Committee on their work. I echo his thanks to the staff and the people behind the scenes who put so much effort into producing such reports.
The hon. Member for Kingston and Surbiton (Mr. Davey) described the need to get political devolution right down. If I read his party's political strategy rightly, he wants to reduce the number of MPs in Parliament as a result. I can tell him that at the next general election we are hoping to achieve something similar for the Liberal Democrats, but through a slightly different mechanism.
I start by saying how much, with the debate and the report, the Government's direction is to try to promote a very positive attitude to regional economic development. I was disappointed to hear the hon. Member for Runnymede and Weybridge (Mr. Hammond) describe the whole project as a dangerous exercise in navel gazing and to repeat the usual scaremongering that we expect from the Conservatives about concreting over the countryside, when it is really a community plan designed to create sustainable communities in both north and south. We experienced that counsel of despair from his party for 18 years with its failure to invest, and it is the problems caused across the country that the Labour Government are now endeavouring to respond to and successfully overcome.
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One of the key messages is that reducing disparities in regional economic performance is a vital part of creating a more prosperous and inclusive society. If we are to maximise growth in the UK as a whole, unlike in the view of the hon. Member for Runnymede and Weybridge, so that everyone benefits from prosperity, we must ensure that all the UK's regions are fulfilling their potential. That is why we have set ourselves a PSA target to make sustainable improvements in the economic performance of all English regions and to reduce in the long term the persistent gap in growth rates between the regions. We will define measures to improve performance, and report progress against those measures by 2006. The objective is to develop policy, on a time scale for the spending review 2004, that will identify key drivers of regional economic growth and the changes and enhancements to policy required to deliver that challenging target in the longer run.
Mr. Hammond: May I ask the Minister the same question that I asked the hon. Member for Denton and Reddish? If it comes to a conflict between the two objectives of achieving the maximum possible sustainable growth in all regions and reducing disparity between the regions, is the Minister prepared to forgo some economic growth in order to increase the equity of that economic growth?
Phil Hope: Once again the hon. Gentleman fails to understand that this is not about "either/or"; it is about "both, and". We must ensure that we have economic performance in all regions. We are not simply trying to redistribute economic activity from the south to the north because we know that when that fails, businesses making choices to invest will simply go elsewhere in Europe. We must stimulate growth for the country as a whole by stimulating growth in every region rather than trading off one region against another. The hon. Gentleman seems to be implying that that is not the case, but that is exactly our policy: to create successful regions in all regions.
Mr. Cousins: May I remind the Minister of a point that cropped up in the debate? The Government's target does not consider every region. It smooths regions and bunches them together and, according to the form in which the Government have expressed their target, we will not even know the outcome until 2010 or 2014. On that basis, we will not know in this Government's lifetime how we are getting on. That simply cannot be right.
Phil Hope: We are trying to use targets as mechanisms to drive Government policy. They help us to focus our activities to ensure that we achieve the type of economic growth in every region that we failed to achieve in the past. The total of economic growth in the regions gives the UK national growth—it is bottom up. That combined growth creates a successful UK economy. Targets create the policy driver that enables us to consider a range of measures that we can then apply to the regions to achieve our goals. I am happy to give way again to my hon. Friend if I have not answered his question.
Mr. Davey rose—
Mr. Cousins rose—
Phil Hope: I give way to my hon. Friend.
Mr. Cousins: I am very grateful to the Minister, and it is a credit to the masterly strategy of Mr. Deputy Speaker, who is in charge of us, that we are able to do this.
I would press the Minister on that point. If there is not a target for every region but for regions smoothed together, and if we do not know the outcome of the measure until 2010 or 2014, is it not a meaningless exercise?
Phil Hope: No, it is not a meaningless exercise. Let me explain that at present we are reviewing what indicators we use and how we go about doing that. The PSA project team is supported by a consultancy group called Frontier Economics. It is conducting a wide-ranging review of the scale and causes of regional disparities in growth rates. That review, of course, has involved officials from Whitehall. Frontier Economics has been employed to assist in the review of six to 10 existing Government policies that might affect regional growth. The target is driving an analysis, which will create the kind of information to which my hon. Friend alludes. We can then use that evidence and analysis to assess whether existing policies on regional growth are succeeding.
The initial conclusions that have been drawn from the work of the project team are already being discussed in Government Departments, and policies are being fed into the 2004 spending review. We are using an analysis of data that we have commissioned, and information is being fed in. That in turn will feed into an assessment of the success or otherwise of achieving a very challenging PSA target.
Andrew Bennett: But as far as the general public are concerned, when will we see a thermometer on the wall outside the Department that shows how we are moving up—the level of contributions, so to speak? The point of my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) is that we do not want to wait until 2012 to learn that Ministers failed at this point. I suspect that my hon. Friend the Minister expects to be somewhere else in the ministerial ranks by then.
Phil Hope: I am even more grateful for the kind remarks about my personal future in 12 years' time—if I still have my seat.
I understand the point, but we shall gather regional economic data and make assessments every year. It is not a case of having just one set of outcomes that we measure in 10 or 12 years' time. We shall monitor the impact of our policies in every region.
The Government have pursued an active regional policy since 1997. Hon. Members will be aware of it. We set up regional development agencies and facilitated regional chambers. We developed the role of the Government offices referred to in the White Paper, "Your Region, Your Choice", and set out proposals for directly elected regional assemblies. We already have
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policies and measures in place to achieve the target of reducing regional economic disparities. We are producing new policies and driving the data collection and assessment into the 2004 spending review, and we support at regional level new agencies such as the RDAs, which will spend some £2 billion in the years ahead to ensure that action is taken at a regional level to achieve the outcomes. A substantial body of work is being done at the regional level to achieve the kind of regional development that we wish to take place.
Mr. Stringer: Will the Minister explain why RDAs were set up with a previously determined constant budget for the first two years? New regions in the south-east meant that money was transferred from the regions to the south-east. Can he explain how transferring money to the south-east helped the regions?
Phil Hope: I understand my hon. Friend's concern, but the fact is that we are putting in a lot more money. I believe that it was the hon. Member for Kingston and Surbiton who mentioned the differences in investment between the different regions. The RDAs in the north-east, the north-west and the south-west have had significant new sums of money poured into single regional pots. That has provided them with real resources to promote economic development in their areas, and they are doing so very successfully.
We can argue over differences between particular projects at particular times, as that will always be the case. The fundamental point, however, is that RDAs are making a substantial and important contribution by driving forward the economic development, growth and activity in their regions as never before, because, as my hon. Friend the Member for Luton, North (Mr. Hopkins) said, it was abandoned by the Conservatives when they were in government. So, the RDAs, which the Conservatives are still opposed to and would abolish were they to return to power, are having a significant impact on their regions.
Mr. Davey: I want to bring to the Minister's attention the fact that the Conservative spokesman has denied that they want to abolish RDAs. That is an interesting point to introduce to the debate.
Phil Hope: The hon. Gentleman makes a good point. He and I seem to share the same analysis of the Conservative party's policies, but maybe they will be clarified now. This will be very interesting.
Mr. Hammond: Shaking my head does not usually require very much clarification. The hon. Member for Kingston and Surbiton knows very well, because we have had the same exchange before, that we realise that business communities in many regions recognise that RDAs do a worthwhile job. I have talked to representatives of RDAs and told them that we would expect a Conservative Government to engage with them to consider how to address the issue of democratic deficit. We are not committed, as we were previously, to their outright abolition. We will engage with them.
Mr. Deputy Speaker: Order. We are dealing with a Select Committee report and not the policy of the future Government.
Phil Hope: In pursuing the debate, we are pursuing the policy of the future Government, the Labour Government, who have been pursuing a very positive regional and economic strategy with increasing success.
RDAs have a particular role to play by building links with universities and industry. The Lambert review stressed the importance of linking up to identify opportunities for the future delivery of better knowledge transfer. That point was raised earlier in the debate about the new economics of the 21st century. It is about the RDAs finding, supporting and developing the new higher-skilled and higher-waged industries through their links with universities and industries, which will generate the new wealth that the regions outside London and the south-east desperately need.
On the question of the census—
Andrew Bennett: Can we have the money?
Phil Hope: Let me say a few things first. We understand the concerns raised by the Committee. The 2001 census achieved a 94 per cent. response rate despite the foot and mouth epidemic, and there was extensive consultation with key stakeholders about the census. We appreciate the difficulties that people have raised.
My hon. Friends—
Andrew Bennett: I cannot shout out.
Mr. Deputy Speaker: Order.
Phil Hope: My hon. Friends the Members for Manchester, Blackley (Mr. Stringer), for Hammersmith and Fulham (Mr. Coleman) and for Regent's Park and Kensington, North (Ms Buck) raised two points about Manchester and Westminster. They know that address-matching studies of those two places are currently under way. Members know that the ONS and the local authorities are comparing the address base and examining the population figures of both places to determine whether there is a discrepancy and, if so, how it will be handled.
Those exercises will provide important evidence to judge whether further revisions to local estimates are needed. They will also inform an assessment as to whether any additional research is required for other areas. We are researching the future census straight away.
Regarding the question that I have just been asked, if the 2001 census figures are proved inaccurate in some way and are amended and fed into the Office of the Deputy Prime Minister, the amendments to the 2003–04 settlement will take place at the same time as the subsequent year's settlement is made. In that case, changes will be reflected in the grant received by local authorities during that financial year.
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In a written answer given in September, the Minister for Local Government, Regional Governance and Fire said:
"Officials of the Office of the Deputy Prime Minister have been discussing with local authority representatives the use of 2001 Census data other than population in the 2004–05 Settlement. Unfortunately the late availability of some of the 2001 Census data has limited the options for using it in this year's settlement. Therefore the 1991 Census data will be used for the 2004–05 Settlement."—[Official Report, 17 September 2003; Vol. 410, c. 739W.]
I wanted to put that on the record, given the interest that has been created.
Mr. Stringer: I am grateful for my hon. Friend's statement. I would just like him to clarify it. Is he saying that if we show that the figures are wrong, we will get the money that should have been paid to Manchester, Plymouth and other authorities in next year's settlement plus an adjusted settlement for that year? In other words, will we get two dollops of money next year?
Phil Hope: My hon. Friend may put it as colloquially as that, but I am not able to put it in quite those terms. I can only refer him to what I said earlier, and what I placed on the record. I hope that that will satisfy my hon. Friend. If I go any further, I will possibly find myself getting into deep water.
Many points have been raised by other hon. Members. My hon. and learned Friend the Member for Redcar (Vera Baird), who has been a real champion for her constituency, made a very powerful contribution. She raised the question of the Lyons review in particular. It is an important review, and other hon. Members have referred to it as well. We are concerned to ensure that the interim report from Sir Michael Lyons will inform Government thinking.
The report that has come out is an interim report and the final version will come out later this year. We will take its considerations seriously. As has been said, the Chancellor indicated in the House this afternoon that the Government have a real interest in seeing how we can pursue the Lyons review in a more purposeful way. I think that the relocation of a figure of 20,000 staff is mentioned in the interim report. Until we get the final report it is not possible to say, but the Government are certainly committed to looking at such policies and ensuring that we see the changes that we wish to see.
In my constituency, the Department for Work and Pensions has recently transferred 200 members of staff to locations in and around Corby. I think that there are many other such anecdotal stories, but I can only use the example from my own constituency. The Government are committed to considering the proposals in the Lyons review. It is important that we pursue such policies wherever possible, as they will make an important difference.
I know that my hon. Friend the Member for Denton and Reddish wishes to make some final remarks, so I will make only a few. Comments have been made about rural areas. I do not think that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) is able to be present to hear my reply, but we are keen to ensure that rural areas are seen as a part of the regional development process. There will be regional proofing through the regional chambers. That is an important

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part of Government policy. As regards broadband, we are keen to ensure that outlying rural areas and not just larger villages and towns receive the support that they need to achieve connectivity. The Government are involved in aggregating broadband demand from public bodies such as hospitals and schools to allow a greater roll-out in rural areas, and our regional co-ordinators are working on that. The RDAs are also working on piloting new means of access to broadband, such as satellite delivery to remote areas, and providing working brokerage services between groups of users and suppliers. That puts on the record one small contribution that is being made to economic regeneration in rural areas within regions.
I take the opportunity to comment on points made by other hon. Members about differences not only between regions—the PSA target is about reducing economic regional disparities—but within regions. It is right that the solution is not either/or. We must tackle both. As my hon. Friends know, we are developing targeting of specific areas within regions as well as trying to tackle broad economic regional differences with the neighbourhood renewal fund and housing policy.
Our housing policy has been subject to clear opposition from the Conservative party. The sustainable communities plan is all about thriving, sustainable, inclusive communities and tackles two different problems. The first is the lack of affordable housing in London and the south-east, which is a problem that has been overlooked by successive Governments, but we owned up to that. Now, the sustainable communities plan is making real inroads in ensuring that local authorities start to bring empty properties back into use and live up to their planning obligations to provide affordable housing, and also in the four growth areas in London and the south-east ensuring that we have a planned approach in which the infrastructure, as well as housing, is provided for those communities. Whether it is the Thames gateway, Milton Keynes and the south midlands, Stansted or Cambridge, we see sustainable growth that, far from concreting over the countryside in the way that the Conservatives continue to stereotype and characterise as our policy, is about building sustainable communities and recognising the need for affordable housing in those areas of London and the south-east.
As well as that expenditure and support, we have support in the north also. The pathfinder scheme deals with the failure of housing markets—market collapse in some areas—and we are putting £500 million into renewing key areas in the north.
Time has defeated me and I cannot deal with all the issues, including European Union structural funds, but I have noted the points and concerns that have been raised.
182WH
Finally, I want to emphasise the importance of devolution and support for the elected regional assemblies. It is a shame that the Conservatives have turned their back on providing and creating a stronger regional voice throughout the country. Regional assemblies are crucial to the success of the economic regional strategies that we are developing, and I hope that when the campaigns get under way next year hon. Members will be in the forefront of championing their constituencies not only here, but out there when regional assemblies are elected in the future.
5.27 pm
Andrew Bennett: I thank all those who have contributed to this useful debate. I also thank the Minister for giving us the news about the census and the money that goes with it. I wish that he had also been able to assure us that we shall have those national statistics on a more reliable basis. Will it be possible to follow up those targets, so that not only those in the Government machinery but the Select Committee and the general public can look at those areas?
The Minister did not give a commitment on the Barnett formula, but everyone who wants the formula to be redrawn should first be able to understand it, which is difficult.
Broadband is important not only for rural communities, but for overspill estates and some urban areas.
Core cities are also important, but what is the relationship between the city of Manchester and Disley, for example? Which is freeloading on which? It seems to me that, certainly in the north-west, existing local government boundaries do not correspond to core cities. One could argue that Liverpool and Manchester would make one city instead of two—[Interruption.] I shall not go into the question of the railways, which are also trouble, but whether we have a new central railway, a line to Felixstowe through Ipswich or a good line to Immingham, it is important to have one good freight line that enables manufacturing areas of the country to export to Europe effectively.
I have a great deal of sympathy with the arguments about London and some of the wards, but we must be careful about using wards as building blocks. They exist for electoral purposes—
Mr. Deputy Speaker: I am afraid that the hon. Gentleman must save his sympathy for another time.
Before adjourning the sitting, I congratulate those in the Chamber on an excellent debate.
It being half past Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

WALES

  Welsh European Funding Office
  Adam Price
  To ask the Secretary of State for Wales (1) when he was informed of the decision of the Welsh Assembly Government to disband the Welsh European Funding Office; [129211]

  (2) what discussions he had held with Welsh Assembly Government colleagues prior to the disbanding of the Welsh European Funding Office; and if he will give the exact dates; [129212]

  (3) what discussions he had with the Welsh Assembly Government with regard to the disbanding of the Welsh European Funding Office. [129213]

  Mr. Hain
  I have regular discussions with the First Minister on a variety of issues, including structural funds. However, The Assembly is responsible for the administration of European structural funds in Wales and it is entirely for the Assembly to determine how these funds are implemented.

TRANSPORT

  Aviation
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what consultation his Department has held with the UK aviation industry about the transfer of legislative powers to negotiate with the USA from the UK to the European Commission. [132559]

  Mr. McNulty
  The granting of a mandate for the European Commission to negotiate a liberalised transatlantic open aviation area with the US was an integral part of a balanced package of measures on the conduct of aviation external relations agreed in the light of the European Court of Justice's decision in November 2002 in the "Open Skies" cases. The details of a possible mandate for the Commission to open aviation negotiations with the United States were under frequent discussion in Council and its Working Groups for several years, beginning with the so-called "soft rights" mandate agreed by Council in June 1996. Throughout this period the Department was in regular dialogue, both at Ministerial and official level, with all interested parties on our aviation relations with the US, including the prospects for comprehensive Community-level negotiations.

  Bus Services
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will instigate a monitoring system for 288W
  bus operators in receipt of local government subsidies to ensure proper compliance with quality bus partnership standards. [132561]

  Mr. McNulty
  Quality bus partnerships are normally agreements which require investment by operators in better vehicles or other means of improving services, so would apply to profitable services that are operated without subsidy. Where operators of subsidised services are able to use the facilities provided by local authorities under quality partnership schemes, it is open to the local authority to specify the required standards in the contract and enforce compliance with the operator's contractual obligations.

  In the case of a statutory quality partnership under the Transport Act 2000, Traffic Commissioners have the power to impose financial penalties on operators who fail to comply with undertakings they have made under the partnership scheme, or place conditions on their licences.

  Transport Subsidies
  Mr. Gordon Marsden
  To ask the Secretary of State for Transport what the average public subsidy per mile travelled for(a) bus routes and (b) light rail and tram systems was in the last year for which figures are available. [131926]

  Mr. McNulty
  For local buses in England, the average public subsidy per vehicle mile averaged £1.32 in 2001–02.

  Modern light rail and tram systems in England receive no public operating subsidy but the older Blackpool Corporation Tramway is supported. On the same mileage basis, the tramway received public subsidy of £1.31 per vehicle mile.

TRADE AND INDUSTRY

  Credit Companies
  Keith Vaz
  To ask the Secretary of State for Trade and Industry what steps the Government is taking(a) to monitor the extent to which credit companies offer high interest loans and (b) to regulate the practice. [131747]

  Mr. Sutcliffe
  The information is as follows:

  (a) There are currently in excess of 200,000 businesses licensed under the Consumer Credit Act 1974 and monitoring the activities of all these businesses would create a significant burden on legitimate business.

  (b) The Consumer Credit Act 1974 contains provisions that allow a consumer to challenge an extortionate credit bargain. However, only about 30 extortionate credit cases are known to have reached the courts since the Act came into force and of those, in only 10 did the court find the agreement to be extortionate.

  I believe that these provisions have not operated effectively in enabling consumers to challenge unfair credit agreements and I intend to publish a White Paper this autumn, which will contain details of how I intend to make it easier for consumers to challenge unfair credit transactions.

  Botswana
  Angus Robertson
  To ask the Secretary of State for Trade and Industry how many applications for export credit guarantees were received by her Department in each year since 1997 with regard to Botswana; how many were successful; and if she will make a statement. [131626]

  Mr. Mike O'Brien
  ECGD has received the following inquiries relating to applications for export credit guarantees with regards to Botswana:

  Year

  Number of Inquiries

  1997

  2

  1998

  2

  1999

  0

  2000

  4

  2001

  1

  2002

  0

  2003

  1

  None of these have led to the issue of an ECGD guarantee.

  £ million

  Region

  Total

  2000–01

  2001–02

  2002–03

  2003–04

  2004/05/06

  East Midlands

  0.560

  0.200

  0.360

  Yorks and Humber

  2.132

  0.296

  0.478

  0.658

  0.700

  South East

  6.300

  1.300

  5.000

  West Midlands

  21.149

  1.145

  8.252

  11.752

  East England

  12.530

  4.300

  3.350

  4.880

  North East

  48.165

  2.000

  2.780

  3.385

  40.000

  South West

  0.370

  0.370

  North West

  142.777

  1.777

  141.000

  London

  1.700

  1.700

  Total

  235.683

  2.000

  3.076

  12.585

  218.022

  (c) Public Sector Aggregation

  The Government intend to spend £1 billion on broadband connectivity for its own needs over the next three years. The Broadband Aggregation Project will set up nine Regional Aggregation Bodies (RABs), which will be publicly owned companies and which will aggregate and procure public sector demand for broadband. In so doing they will obtain better prices through bulk buying, and thus better value for money, and also encourage broadband service providers to invest in creating more broadband infrastructure which they can use to provide a service to the public. Figures on the breakdown by region of this funding are not available.

  Coal-fired Power Stations
  Mr. Grogan
  To ask the Secretary of State for Trade and Industry what discussions she has had with(a) the UK mined coal industry and (b) trades unions about the likely impact of the Large Combustion Plants Directive implementation options proposed in the current consultation. [132408]

  Broadband
  Mr. Ruffiey
  To ask the Secretary of State for Trade and Industry how much Government funding has been allocated for broadband rollout in each year since 2000, broken down by English region. [131845]

  Mr. Timms
  Government funding for broadband to each English region falls under three main areas:

  (a) £30 million UK Broadband Fund:

  £ million

  Region

  Total

  2000–01

  2001–02

  2002–03

  2003–04

  East Midlands

  2.090

  —

  0.315

  0.800

  0.975

  Yorks and Humber

  3.100

  —

  0.465

  1.300

  1.335

  South East

  2.900

  —

  0.025

  1.975

  0.900

  West Midlands

  2.082

  —

  0.312

  0.910

  0.860

  East England

  3.220

  —

  0.483

  1.200

  1.537

  North East

  1.460

  —

  0.220

  0.615

  0.625

  South West

  3.780

  —

  0.567

  1.600

  1.613

  North West

  2.679

  —

  0.210

  0.299

  2.170

  London

  0.113

  —

  0.019

  0.045

  0.049

  Total

  21.424

  0

  2.616

  8.744

  10.064

  (b) RDA Single Pot funding

  The latest available figures indicate that each RDA has allocated the following amounts to a range of broadband projects from their single pot budgets:

  Mr. Timms
  This issue has been among the topics I have discussed in recent meetings with the Coal Authority and UK Coal Ltd. These and other bodies and organisations with an interest in UK coal mining have also responded formally to the Government's recent consultation paper on implementation. The Government will take a decision on the most appropriate approach after considering the responses to the consultation.

  Export Credits Guarantee Department
  Mr. Simon Thomas
  To ask the Secretary of State for Trade and Industry how many allegations of corruption have been reported to the head of internal audit at ECGD; how many of these allegations have been passed on to NCIS; and whether these are in relation to contracts that have already received support from the ECGD, or to contracts on which the ECGD is being asked for support. [132372]

  Mr. Mike O'Brien
  ECGD has signed a Memorandum of Understanding with NCIS, relating to the Anti-Terrorism, Crime and Security Act 2001. This Act came into force in February 2002. Since that time
  291W
  the Head of Internal Audit and Assurance has dealt with five allegations of corruption, all of which have been referred to NCIS.

  It would not be appropriate for me to provide any information in relation to the cases concerned as there is a risk that this may encourage speculation or allow the identification of individual cases, which may prejudice any possible action by the relevant investigatory agencies.

  Independent Schools Price Fixing
  Mr. Willis
  To ask the Secretary of State for Trade and Industry if she will make a statement on the investigation into price fixing of fees in independent schools. [132061]

  Mr. Sutcliffe
  No. This is a matter for the OFT.

  Post Office Card Account
  Mr. Ruffley
  To ask the Secretary of State for Trade and Industry what assessment she has made of the take-up of the Post Office card account in(a) Suffolk, (b) Norfolk and (c) Essex; and what the UK national average take-up is. [131840]

  Mr. Timms
  None. However, the Department for Work and Pensions regularly place data on Direct Payment of benefits and pensions in the Libraries of the House. This includes figures on how many people have said they want to open a Post Office card account.

  I understand from the Department for Work and Pensions that as of 3 October 2003, 1.25 million customers had requested a Post Office card account. I understand from the Post Office that some 787,000 Post Office card accounts had been opened by that same date.

  Information is not available in the format requested.

  Royal Mail
  Keith Vaz
  To ask the Secretary of State for Trade and Industry when she last met the Chairman of the Royal Mail. [131720]

  Mr. Timms
  As shareholder of Royal Mail Holdings plc, my right hon. Friend the Secretary of State for Trade and Industry meets the chairman several times a year. Her last meeting with Allan Leighton was on 4 September 2003.

  Store Cards
  Mr. David Stewart
  To ask the Secretary of State for Trade and Industry what assessment she has made of the effects of the interest rates charged by store cards on consumers. [131357]

  Mr. Sutcliffe
  [holding answer 14 October 2003]: The Department has had no specific discussions regarding the interest rates levied on, or the terms and conditions associated with, store cards.

  However, the DTI is reaching the conclusion of its review of the Consumer Credit Act 1974. Government proposals in this area will be set out in a White Paper planned for publication in the autumn. This will address
  292W
  issues such as the transparency of credit products including how they are sold to consumers, advertising and the form and content of credit agreements.

  Through discussions and focus groups, we have been particularly careful to involve key stakeholders from consumer groups, business and enforcement agencies at all stages of the review.

  In terms of consumer protection, the objective is to increase transparency and understanding throughout the UK credit market, empowering consumers to make informed financial decisions.

  You may also be aware that the Department of Trade and Industry recently appeared to give evidence at a Treasury Committee inquiry into the transparency of credit charges.

  Timeshares
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry what steps the Government is taking to protect timeshare owners where their facilities provider was transferred from one company to another following a change in their management contract. [132321]

  Mr. Sutcliffe
  There are currently no plans to amend domestic or European timeshare legislation to cover timeshare facility providers transferring clients from one company to another.

  The Unfair Terms in Consumer Contracts Regulations can provide protection for timeshare owners but it depends on the circumstances of the case.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Abandoned Cars
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs how many abandoned cars each local authority in England and Wales stated they had removed in their submissions to the most recent municipal waste survey. [131286]

  Mr. Morley
  The question on how many abandoned vehicles removed by local authorities in England and Wales was most recently asked in the 2001–02 Municipal Waste Management Surveys for England and Wales. Data recorded by district show that 320 local authorities out of a total of 376, responded to the abandoned vehicles question. The authorities and the numbers of abandoned vehicles removed and destroyed reported are listed as follows:

  Authority

  Number of vehicles

  Adur

  854

  Allerdale

  87

  Alnwick

  23

  Amber Valley

  243

  Ashfield

  641

  Ashford

  686

  Aylesbury Vale

  876

  Babergh

  718

  Barnet

  4,431

  Barnsley

  549

  Barrow-in-Furness

  83

  293W

  Authority

  Number of vehicles

  Basildon

  1,746

  Basingstoke and Deane

  985

  Bassetlaw

  348

  Bath and North East Somerset

  590

  Bedford

  1,455

  Berwick-upon-Tweed

  32

  Bexley

  1,776

  Birmingham

  5,257

  Blackburn with Darwen

  231

  Blackpool

  134

  Blaenau Gwent

  861

  Blyth Valley

  130

  Bolsover

  208

  Boston

  284

  Bournemouth

  1,420

  Bracknell Forest

  865

  Bradford

  1,607

  Braintree

  715

  Breckland

  307

  Brent

  4,115

  Brentwood

  500

  Bridgend

  540

  Bridgnorth

  49

  Brighton and Hove

  2,519

  Broadland

  196

  Bromley

  4,215

  Broxbourne

  544

  Broxtowe

  437

  Burnley

  105

  Caerphilly

  1,832

  Calderdale

  802

  Camden

  1,897

  Cannock Chase

  50

  Canterbury

  974

  Caradon

  317

  Cardiff

  590

  Carlisle

  232

  Carmarthenshire

  517

  Carrick

  242

  Castle Morpeth

  66

  Ceredigion

  182

  Charnwood

  256

  Chelmsford

  700

  Cheltenham

  648

  Cherwell

  705

  Chester

  365

  Chesterfield

  134

  Chester-le-Street

  18

  Chichester

  1,081

  Chiltern

  325

  Chorley

  274

  Christchurch

  156

  City of Bristol

  1,353

  City of Kingston-upon-Hull

  1,254

  City of London

  0

  Colchester

  579

  Congleton

  65

  Conwy

  310

  Copeland

  118

  Corby

  1,200

  Cotswold

  154

  County of Herefordshire

  460

  Coventry

  1,210

  Craven

  119

  Crawley

  1,037

  Croydon

  4,376

  Dacorum

  1,300

  Dartford

  706

  Daventry

  613

  Denbighshire

  286

  Derby

  996

  Derbyshire Dales

  73

  Derwentshire

  89

  Doncaster

  1,313

  294W

  Authority

  Number of vehicles

  Dover

  683

  Dudley

  272

  Ealing

  4,916

  Easington

  24

  East Cambridgeshire

  277

  East Dorset

  282

  East Hampshire

  311

  East Hertfordshire

  393

  East Lindsey

  359

  East Northamptonshire

  257

  East Riding of Yorkshire

  316

  East Staffordshire

  240

  Eastleigh

  225

  Eden

  35

  Enfield

  6,347

  Epsom and Ewell

  360

  Erewash

  324

  Exter

  1,317

  Fareham

  238

  Flintshire

  256

  Forest Heath

  680

  Forest of Dean

  360

  Fylde

  45

  Gateshead

  143

  Gedling

  838

  Gloucester

  896

  Gosport

  545

  Gravesham

  942

  Great Yarmouth

  400

  Greenwich

  4,200

  Guildford

  934

  Gwynedd

  873

  Hackney

  4,066

  Halton

  189

  Hambleton

  40

  Hammersmith and Fulham

  1,473

  Harborough

  480

  Haringey

  4,560

  Harlow

  1,310

  Harrogate

  262

  Harrow

  2,249

  Hart

  648

  Hartlepool

  87

  Hastings

  1,148

  Havant

  900

  Havering

  3,126

  Hertsmere

  650

  High Peak

  82

  Hillingdon

  3,128

  Hinckley and Bosworth

  429

  Horsham

  333

  Hounslow

  3,118

  Hyndburn

  128

  Ipswich

  1,327

  Isle of Anglesey

  81

  Isle of Wight

  345

  Isles of Scilly

  0

  Islington

  3,643

  Kennet

  146

  Kensington and Chelsea

  232

  Kerrier

  357

  King's Lynn and West Norfolk

  457

  Kingston upon Thames

  2,159

  Kirklees

  310

  Lambeth

  3,775

  Lancaster

  124

  Leeds

  1,707

  Leicester

  1,434

  Leicestershire

  —

  Lewisham

  4,671

  Lichfield

  —

  Lincoln

  227

  Luton

  4,876

  Macclesfield

  141

  295W

  Authority

  Number of vehicles

  Maidstone

  1,386

  Manchester

  1,102

  Mansfield

  410

  Medway

  2,512

  Melton

  20

  Mendip

  396

  Menthyr Tydfil

  750

  Merton

  2,140

  Mid Bedfordshire

  620

  Mid Devon

  339

  Mid Suffolk

  205

  Mid Sussex

  370

  Middlesbrough

  470

  Milton Keynes

  1,987

  Mole Valley

  497

  Monmouthshire

  270

  Neath Port Talbot

  688

  New Forest

  1,246

  Newark and Sherwood

  246

  Newcastle upon Tyne

  389

  Newcastle-under-Lyme

  150

  Newham

  8,117

  North East Derbyshire

  84

  North East Lincolnshire

  327

  Newport

  1,040

  North Devon

  192

  North Hertfordshire

  587

  North Kesteven

  139

  North Lincolnshire

  192

  North Norfolk

  138

  North Shropshire

  134

  North Somerset

  884

  North Tyneside

  168

  North Warwickshire

  150

  North West

  326

  Northampton

  2,061

  Norwich

  590

  Nottingham

  1,066

  Oswestry

  56

  Oxford

  1,560

  Pembrokeshire

  723

  Pendle

  392

  Peterborough

  2,309

  Plymouth

  2,040

  Poole

  978

  Powys

  172

  Preston

  135

  Purbeck

  194

  Reading

  1,563

  Redbridge

  2,219

  Redditch

  519

  Reigate and Banstead

  558

  Restormel

  389

  Rhondda, Cynon, Taff

  1,052

  Ribble Valley

  35

  Richmond upon T hames

  1,201

  Richmondshire

  33

  Rossendale

  174

  Rother

  288

  Rotherham

  410

  Runnymede

  659

  Rushcliffe

  147

  Rushmoor

  571

  Rutland

  40

  Ryedale

  100

  Salisbury

  400

  Sandwell

  5,247

  Scarborough

  620

  Sedgefield

  90

  Sedgemoor

  619

  Sefton

  194

  Sevenoaks

  532

  Sheffield

  1,421

  Shepway

  859

  296W

  Authority

  Number of vehicles

  Shrewsbury and Atcham

  110

  Slough

  1,665

  Solihull

  341

  South Bedfordshire

  1,800

  South Buckinghamshire

  435

  South Cambridgeshire

  547

  South Derbyshire

  325

  South Gloucestershire

  1,185

  South Hams

  235

  South Holland

  175

  South Kesteven

  221

  South Lakeland

  403

  South Norfolk

  171

  South Oxfordshire

  441

  South Ribble

  36

  South Shropshire

  13

  South Somerset

  589

  South Staffordshire

  82

  South Tyneside

  420

  Southampton

  5,000

  Southend-on-Sea

  2,296

  Southwark

  2,848

  Spelthorne

  669

  St. Albans

  622

  St. Edmundsbury

  854

  St. Helens

  48

  Stafford

  73

  Staffordshire Morelands

  21

  Stevenage

  1,052

  Stockton-on-Tees

  64

  Stoke-on-Trent

  200

  Stratford-on-Avon

  73

  Stroud

  257

  Suffolk Coastal

  181

  Sunderland

  186

  Sutton

  2,166

  Swale

  976

  Swansea

  1,598

  Swindon

  1,300

  Thameside

  1,155

  Tandridge

  586

  Taunton Deane

  352

  Teesdale

  30

  Teignbridge

  1,591

  Tendring

  1,538

  Test Valley

  658

  Tewkesbury

  150

  Tanet

  1,271

  The Vale of Glamorgan

  299

  Three Rivers

  802

  Thurrock

  2,400

  Tonbridge and Mailing

  632

  Torbay

  648

  Torfaen

  856

  Tunbridge Wells

  695

  Tynedale

  28

  Uttlesford

  372

  Vale of White Horse

  386

  Waltham Forest

  3,466

  Wandsworth

  2,794

  Wansbeck

  165

  Warwick

  300

  Watford

  777

  Waveney

  339

  Waverley

  382

  Wealden

  637

  Wellingborough

  750

  Welwyn Hatfield

  887

  West Berkshire

  772

  West Devon

  85

  West Dorset

  528

  West Lancashire

  94

  West Oxfordshire

  346

  West Somerset

  79

  297W

  Authority

  Number of vehicles

  Westminister

  333

  Weymouth and Portland

  48

  Winchester

  246

  Windsor and Maidenhead

  490

  Wirral

  955

  Woking

  448

  Wokingham

  405

  Wolverhampton

  1,800

  Worcester

  464

  Wrexham

  385

  Wycombe

  1,169

  Wyre

  73

  Wyre Forest

  73

  York

  475

  Animal Welfare (Greyhounds)
  Mr. Best
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will include provisions to increase protection for greyhounds within the greyhound racing industry in the Animal Welfare Bill. [132231]

  Mr. Bradshaw
  Yes. Defra officials are discussing possible measures to improve welfare with the racing industry and welfare organisations.

  Biodiversity
  Ms Walley
  To ask the Secretary of State for Environment, Food and Rural Affairs who will represent the Department at the 7 Meeting of the Conference of the Parties to the Convention on Biological Diversity in Kuala Lumpur, in February 2004. [131978]

  Mr. Morley
  The composition of the delegation has yet to be decided. It will be determined in the light of the agenda. I am planning to attend the High Level Segment from 18 to 19 February 2004.

  Climate Change
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs how much carbon dioxide was produced per person in the UK in 2002. [131063

  Mr. Morley
  The average production of carbon dioxide per person in the UK, due to activities such as electricity generation and use, travel and industrial production, is estimated to have been almost 10 tonnes in 2001, the year for which latest published data or greenhouse gas emissions is available.

  Mr. Wiggin
  To ask the Secretary of State of Environment, Food and Rural Affairs what steps she is taking to reduce the emissions of carbon dioxide from industry into the atmosphere. [131079

  Mr. Morley
  Reductions in emissions of carbon dioxide from industry are being achieved through the Climate Change Levy, Climate Change Agreement; the UK and EU Emissions Trading Schemes and the Integrated Pollution Prevention and Control (IPPC regime.

  The Climate Change Levy applies to energy used it the non-domestic sector. Revenues are recycled to levy payers via a 0.3 percentage point cut in employers'
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  National Insurance Contributions, and receipts from the levy, administered by the Carbon Trust, provides additional support for energy saving measures.

  Climate Change Agreements enable energy intensive business sectors to receive an 80 per cent. discount on the climate change levy in return for agreeing to meet challenging targets for improving energy efficiency or reducing greenhouse gas emissions. 44 sectors have signed agreements with the Government, including major energy intensive sectors like steel, chemicals, paper and non-ferrous metals.

  The UK Emissions Trading Scheme (ETS) enables target holders in this voluntary participation scheme to meet their emissions reductions targets through their own efforts, by buying surplus emissions allowances from those who have found it cheaper to reduce emissions, or if they over achieve, by selling their surplus allowances. 32 organisations are committed to delivering reductions of 1.1 MtC by the final (fifth) year of the scheme. Climate Change Agreement holders are also able to use the UK ETS to achieve their targets.

  An EU Emissions Trading Scheme is due to start in January 2005 and will be mandatory for certain industrial sectors.

  The Integrated Pollution Prevention and Control (IPPC) regime introduced by a 1996 EC Directive, and which is being phased-in through regulations produced under the Pollution Prevention and Control Act 1999, applies an integrated environmental approach to the regulation of certain industrial activities. In determining the conditions of an IPPC permit the designated regulator must take energy efficiency into account, which in turn contributes to reducing carbon dioxide emissions.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the research being undertaken on the effects of carbon dioxide on environmental sustainability. [131090–

  Mr. Morley
  Carbon dioxide emissions threaten environmental sustainability since they are the main cause of climate change. Defra funds a significant programme of research on climate change worth approx. £12.7 million in 2002–03. This figure include: £8.4 million for the Climate Prediction Programme at the internationally leading Hadley Centre, which underpins the UK's research on assessment of the potential impacts of climate change on the UK, partly through the provision of a consistent set of climate change scenarios published in April 2002.

  Research on the effects of climate change is also commissioned by the Department, other Government Departments and the Research Councils. Defra provides a focus for such research in the UK through the ground-breaking UK Climate Impacts Programme which provides a link between researchers and stakeholders in industry and the public sector to enable them to assess the risks to their activities from climate change and to develop adaptation strategies to minimize such risks.

  Defra also funds research on the global effects o climate change and is developing a programme to assess the effects of different levels of greenhouse gases in

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  the atmosphere. This will help us to contribute to the debate on identifying levels which avoids dangerous anthropogenic change and thereby contribute to environmental sustainability.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the Government's plans to tackle climate change. [131066]

  Mr. Morley
  Tackling climate change is a high priority for the Government which will continue to show international leadership by taking effective action to reduce emissions of greenhouse gases.

  Policies outlined in the UK Climate Change Programme (CCP) will ensure that the Government are on course to meet its Kyoto commitment to reduce greenhouse gas emissions by 12.5 per cent. below base year levels by 2008–12 and move towards the domestic goal of reducing carbon dioxide emissions by 20 per cent. below 1990 levels by 2010. The Government are committed to monitoring the effectiveness of the policies and measures in the CCP and will be reviewing it formally in 2004. In addition, as announced in the Energy White Paper, the UK is putting itself on a path to cut its carbon dioxide emissions by some 60 per cent. by 2050, with real progress by 2020.

  The UK works closely with international partners to ensure that effective efforts to combat climate change are taken by all Parties to the United Nations Framework Convention on Climate Change and that the Kyoto Protocol enters into force as soon as possible.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what the average temperature in England was in(a) August 1993 and (b) August 2003. [131067]

  Mr. Morley
  Observations analysed by the Met Office show that the average Central England temperature was 14.6°C in August 1993, and 18.0°C in August 2003. The average Central England temperature in August during the period 1971–2000 was 16.2°C and over that period the average trend in August temperatures has been a rise of about 0.3°C per decade.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs by how much she aims to cut greenhouse gas emission by 2010. [131091]

  Mr. Morley
  The UK's commitment under the Kyoto Protocol is to reduce emissions of a basket of six greenhouse gases by 12.5 per cent. below base year levels by 2008–12. Base year levels are 1990 for carbon dioxide, methane and nitrous oxide, and 1995 for the F-gases (hydrofluorocarbons, perflorocarbons and sulphur hexafluoride).

  The UK has also set itself a domestic goal to reduce carbon dioxide emissions by 20 per cent. below 1990 levels by 2010.

  Data for emissions of the basket of six greenhouse gases for 2001, submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in April 2003, show that emissions fell by 12.3 per cent. between the base year and 2001. Provisional data for 2002 shows that emissions fell by around 14 to 15 per cent. between the base year and 2002.

  Flooding
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the number of homes damaged by flooding between January and June; what measures are in place to prevent flooding; and if she will make a statement on her objectives for flood defence. [131061]

  Mr. Morley
  I understand that 1,209 properties have been flooded in the period between January and June 2003 based on Environment Agency figures. In the most serious flooding incident in the Thames Valley over the new year, it is estimated that some 400 properties were protected from flooding and disruption to a further 1,000 properties was prevented by the Jubilee River flood alleviation scheme. In other areas of the country, flood defences have of course also reduced flooding.

  The Department's policy is to reduce risks to people, property and the environment from flooding and coastal erosion through the provision of defences, flood forecasting and warning systems, increased flood resilience of property, beneficial land management changes and discouragement of further development on the floodplain. The Government invests significant sums of money each year to reduce risk and this investment profile is rising steeply with plans to spend approximately £1.5 billion between 2003–04 and 2005–06.

  Defra has agreed Service Delivery Agreement (SDA) targets with Treasury to implement the outcome of the Funding Review and reduce risk to houses, infrastructure and environmental assets from the Department's capital programme over the spending review 2002 period. Delivery plans for these targets are available from the Defra website: http://www.defra.gov.uk/environ/fcd/policy/aim.htm. We are also developing a new Strategy for Flood Management and Coastal Protection which will be a cross-Government update to our 1993 Strategy. A Stakeholder Forum is being established, partly to inform this Strategy work.

  Defra's flood management programme includes High Level Targets for operating authorities, encouragement of Shoreline Management Plans and Coastal Groups, a joint research and development programme with the Environment Agency and funding of the Agency's flood plain maps, Catchment Flood Management Plans, Public Awareness Campaigns and the National Flood and Coastal Defence Database and associated risk assessment methodology.

  GM Crops
  Mr. Paul Marsden
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the locations of current GM crop trials in Shropshire. [132303]

  Mr. Morley
  There are currently no GM crop trials in the UK.

  Mr. Steen
  To ask the Secretary of State for Environment, Food and Rural Affairs when she will reply to the letter from the hon. Member for Totnes. concerning genetically-modified food dated 3 July 2003. Defra ref: 183640. [131544]
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  Mr. Morley
  [holding answer 14 October 2003]: My officials wrote to the hon. Member on 18 July 2003, stating that the letter had been transferred to Food Standards Agency (FSA) for reply.

  The FSA report to Parliament through Health Ministers, and I understand that my hon. Friend the Parliamentary Under-Secretary for Public Health (Miss Melanie Johnson) wrote to the hon. Member on 21 September 2003.

  Mr. Rosindell
  To ask the Secretary of State for Environment. Food and Rural Affairs if she will make a statement on the future of GM-free zones; and what plans she has to allow GM crops to be planted alongside conventional crops. [132116]

  Mr. Morley
  We will consider the terms on which GM and non-GM crops might co-exist when we have received a report on this subject from the Agriculture and Environment Biotechnology Commission. This is due shortly. We are also considering our broader policy on GM crops in the light of all the available information, including the report of the GM public debate. It is not clear how compulsory GM-free zones would be consistent with European Union law. However, the European Commission has suggested that voluntary GM-free areas might be acceptable in circumstances where, for practical reasons, it is very difficult to achieve satisfactory co-existence arrangements.

  Bear Products
  Mr. Challen
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the restrictions on importation and sale of products derived from farmed bears. [131418]

  Mr. Morley
  Under animal health controls the importation into England of products derived from bears is only permitted on the basis of a valid import licence issued by Defra. Each application for a licence is assessed on its own merits and in deciding whether or not a licence should be issued consideration is given to any animal health risk the product may present. In addition, the international trade in all bear species and their parts and derivatives is regulated by the Convention on International Trade in Endangered Species (CITES). The Government implements strict policies on trade to conserve endangered species and maintains a precautionary approach banning all commercial trade in bear bile or gall bladders irrespective of whether or not they come from captive bred specimens, on the grounds that this trade is likely to be detrimental to the species. International trade in other products derived from farmed bears listed in the Appendices to CITES is subject to regulation to ensure that it stays below the level at which species might become endangered.

  International Whaling Commission
  Mr. Hancock
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment she has made of the effectiveness of the International Whaling Commission; and if she will make a statement. [131941
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  Mr. Bradshaw
  The IWC has to operate within the terms of its parent treaty (the International Convention on the Regulation of Whaling), which dates from 1946. Within the very real constraints of that treaty (which aims to facilitate the orderly development of the whaling industry and which also provides for unregulated whaling under "Special Permit" for scientific purposes), the IWC has done well to introduce and maintain, for almost 20 years, a moratorium on commercial whaling, to which all members, except Norway, subscribe. Changes to the terms of the parent treaty require the unanimous agreement of all; there is thus no prospect of securing desirable change while keeping pro-whaling countries within the ambit of the treaty.

  Junk Mail
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the proportion of junk mail which can be recycled; what estimate she has made of the proportion of paper waste represented by junk mail in the last year for which figures are available; and what steps the Government are taking to reduce the volume of junk mail. [131104]

  Mr. Morley
  Between 500,000 and 600,000 tonnes of paper was used in direct mail and promotions in the UK in 2002. In terms of total tonnage, this is a relatively small proportion of the overall paper waste stream. For example, the paper packaging waste flowing into the waste stream in 2002 was 3.7 million tonnes. However, junk mail is largely disposed of in the household waste and it should be possible to collect much of this paper for recycling.

  The current level of recycling of junk mail is estimated to be some 13 per cent. We have, therefore, recently agreed a voluntary producer responsibility scheme with the industry to increase recycling of junk mail. Under this Agreement, the Direct Marketing Association (DMA) has undertaken to meet specific targets for the recycling of junk mail in the UK. The targets are:

  30 per cent. by the end of 2005;

  55 per cent. by the end of 2009; and

  70 per cent. by the end of 2013.

  The Agreement also requires the DMA and its members to continue to contribute to waste minimization by improving the targeting of distribution of direct mail and by making full use of, and publicizing, available services that allow householders to opt out of being sent direct mail, such as the Mailing Preference Service.

  We believe that this Agreement will both increase the recycling of junk mail and reduce the amount of direct mail sent to homes.

  Living Places Consultation
  Mr. Truswell
  To ask the Secretary of State for Environment, Food and Rural Affairs when she intend to publish proposals for action arising from the "Living Places" consultation document and responses. [131535]

  Mr. Morley
  We are at present considering the various legislative options available. However, we will make an announcement regarding our plans at the earliest opportunity.

  Pollution
  Mrs. Anne Campbell
  To ask the Secretary of State for Environment, Food and Rural Affairs whether she plans to increase penalties for environmental pollution to create a greater incentive for companies to improve environmental performance. [129032]

  Mr. Morley
  There are currently stiff penalties available under the Environmental Protection Act 1990. These offences on summary conviction can carry the statutory maximum, and on conviction on indictment, a prison sentence of up to two years or a fine or both. Defra is currently considering whether to introduce a sliding scale of penalties under section 33 to reflect the seriousness of fly-tipping offences. If magistrates do not consider their maximum fine to be high enough, a case can be referred to the Crown Court, who have unlimited powers. Penalties for environmental pollution can therefore be awarded to any level under the current system.

  Several steps have been taken with regard to sentencing and penalties. At the end of 2002, the Magistrates Association, in association with Defra, issued a guidance pack entitled "Costing the Earth" to all its members, highlighting the seriousness and costs of environmental crime.

  Defra also increased the amount for fixed penalty notices for litter and dog fouling offences to £50 on 1 April 2002, and through the Anti-social Behaviour Bill, proposes similar fixed penalty notices for minor offences of graffiti and fly-posting. We are also considering a possible role for the use of fixed penalty notices to help enforce duty of care legislation.

  Defra is also funding research looking at sentencing in environmental cases. This research should provide a robust basis with which to inform future discussion and policy-making.

  Quarries
  Miss McIntosh
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the implications of the new licensing arrangements on long-term investment and job security at quarries in the Vale of York. [132269]

  Mr. Morley
  There has not been a specific assessment on the new licensing arrangements on long-term investment and job security at quarries in the Vale of York.

  The Environment Agency has a duty to consider social and economic, as well as environmental aspects of sustainable development in its licensing policies. As part of the Environment Agency's assessment of any new licence application, it will take into account any relevant considerations. Quarry and mine operators will have the same opportunities as other abstractors to submit a business case to the Environment Agency in support of their licence applications, which can address any social or economic issues including long-term investment needs and effects on employment.
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  Miss McIntosh
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will take steps to allow(a) a quarrying abstraction licence to be tied to the life of the planning permission for a quarry and (b) a right of appeal and compensation where a licence is refused or curtailed. [131977]

  Mr. Morley
  It is not appropriate for the length of abstraction licences to be tied to the life of planning permissions, as consideration of each address very different issues. The Environment Agency will determine the length of an abstraction licence on a case-by-case basis, using guidance that it has developed and taking into account relevant considerations.

  If a licence application is refused or curtailed, there is a right of appeal to the Secretary of State under the Water Resources Act 1991.

  If a licence is varied or revoked during its term, there are provisions under the Water Resources Act 1991 to pay compensation for any loss or damage.

  In addition, the Water Bill provides that there can be compensation for loss or damage where a licence cannot be granted to any previously exempt abstraction, such as quarry dewatering, when it becomes subject to licensing.

  Ragwort
  Mr. Pickthall
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement about the spread of American ragwort; what measures are being employed to check the spread; what incidents of damage to livestock have been reported to her Department in the past 12 months; and what research has been conducted into the possible passage of ragwort toxins into the food chain. [131871]

  Alun Michael
  We have not been able to find a reference to American Ragwort in the literature, and without the Latin name, cannot identify the plant species concerned. Research on possible human exposure to ragwort toxins through the contamination of milk and honey was conducted by the then Ministry of Agriculture, Fisheries and Food in the 1990s. Further, in 1994 the MAFF Working Party on Naturally Occurring Toxicants in Food considered the evidence for human exposure to ragwort toxins through contamination of food and concluded that exposure via these routes is unlikely to pose a risk to health.

  Recycling
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to increase the number of kerbside collection recycling schemes. [131082]

  Mr. Morley
  The Government has set statutory targets for local authorities to increase the recycling and composting of waste. Some local authorities have chosen to introduce doorstep collection of recyclates to help meet those targets. In 2001–02 58 per cent. of households in England were served doorstep collection schemes. This had increased from 51 per cent. in 2000–01.
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  The Government is also supporting the Household Waste Recycling Bill introduced by my hon. Friend, the member for Lewisham. The Bill provides, with some exceptions, that all local authorities in England must offer doorstep collection of at least two recyclates by 2010.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs how much household waste was recycled in 2002; and whether the Government are on track to achieve their 2005 target of recycling 25 per cent.of household waste. [131084]

  Mr. Morley
  The Defra Municipal Waste Management Survey records that in 2001–2, England achieved a household waste recycling rate of 12.4 per cent., in line with average annual increases of 1 per cent. This makes targets for 2003–04 and 2005–06 look challenging. However, there is evidence that measures the Government is taking are having an impact, with Local Authority projections suggesting the 2003–04 target of 17 per cent. will be met. We plan to continue this momentum towards 2005–06.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the incentives given to the UK population to recycle household waste. [131085]

  Mr. Morley
  The Government and Devolved Administrations fund waste awareness and education programmes to inform the population about the environmental benefits of recycling. There are no financial incentives for the population to recycle household waste.

  In its response to the Strategy Unit Report 'Waste Not, Want Not' recommendation that local authorities in England should be able to take forward incentive schemes to reduce waste and increase recycling if they wish to do so, Government undertook to work with stakeholders to consider the practicalities of operating such schemes and how the potential disadvantages might be overcome.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the sources of household waste included in local authority recycling schemes. [131086]

  Mr. Morley
  The Municipal Waste Management Survey for 2001–02 showed the following tonnages of materials collected for recycling and composting from household sources by local authorities:

  Material

  Thousand tones

  Percentage

  Paper and card

  959

  31

  Glass

  428

  14

  Compost1

  940

  30

  Scrap matal/white goods

  370

  12

  Textiles

  42

  1

  Cans

  26

  1

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  Material

  Thousand tones

  Percentage

  Plastics

  8

  0

  Co-mingled

  217

  7

  Other (including oils, batteries etc.)

  150

  5

  1 Includes organic materials (kitchen and garden waste); not home composting

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs for what reasons home-composted garden waste is not included in the Government's recycling targets. [131087]

  Mr. Morley
  Home-composted garden waste is not included in the local authority Best Value Performance Indicators due to the difficulty in accurately measuring the amount of waste that is composted by householders. However, the use of home composting is a key tool in reducing the amount of waste that local authorities collect and so is reflected indirectly in the Performance Indicators.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the effects of changes in the type of ink used by newspaper producers on the recycling of newspapers; and if she will make a statement. [131105]

  Mr. Morley
  About 10 per cent. of the UK's newsprint is printed using flexographic presses which, at this level, is not sufficient to compromise the quality of recycled pulp produced for newsprint manufacture. We are aware that with current reprocessing technologies, a significant increase in these printing processes would have the potential to compromise the quality of recycled paper, and we have held discussions with the industry on this issue.

  The Waste and Resources Action Programme will be taking forward work to assess the technical issues associated with the de-inking of flexographic inks.

  Sewerage
  Paddy Tipping
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the(a) individuals and (b) organisations who responded to the consultation paper, "Review of Existing Private Sewers and Drains in England and Wales"; and if she will place a summary of the responses in the Library. [131214]

  Mr. Morley
  [holding answer 14 October 2003]: The consultation period of the paper, published on 1 July, extends until 26 September. We will place responses from organisations or individuals, that are not marked confidential, in the Library and a summary of responses when ready.

  Timber Procurement
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on how the Government's(a) sustainable development, (b) fair trade and (c) environmental objectives are being pursued in timber procurement. [131569]
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  Mr. Morley
  The Government's timber procurement policy is actively to seek to buy timber and timber products from sustainable and legal sources. This policy encapsulates environmental and social objectives that are relevant to sustainable forest management.

  Fair trade as a concept is not specifically addressed by this policy. There is no Government-wide approach to the procurement of Fairtrade products. Each Government Department is responsible for making its own decisions on such products, against the background of the Government's value for money policy, the EC procurement rules and the Department's objectives. However, the Government are committed to supporting ethical trading wherever possible and provide significant support to the Fairtrade Foundation's efforts in promoting the supply and marketing of Fairtrade products.

  Central Government Departments and their agencies have been provided with a model contract clause that sets out the Government's specific requirements for legal and sustainable timber. This includes a demand for independent verification of the claims made by suppliers for the source of the timber acquired. For existing contracts Departments are discussing the policy with their contractors to raise awareness and identify opportunities for obtaining timber from assured sources wherever feasible and mutually acceptable.

  Central Departments are required to report annually on their timber purchases and a summary is published in the annual report Sustainable Development in Government—http://www.sustainable-development.gov.uk/sdig/reports.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the guidance given to government officials on legal and sustainable timber procurement and on the regulatory framework. [131631]

  Mr. Morley
  Guidance on timber procurement and on the regulatory framework is available on the Government's website for sustainable development in Government—http://www.sustainable-development.gov.uk/sdig/improving/contextf.htm

  Central Government departments and their agencies have been provided with a model contract clause that sets out the Government's specific requirements for legal and sustainable timber. The text of this clause and covering information note issued by the Office of Government Commerce in December 2002 is annexed to this reply.

  The Government intends to create a central point of expertise on timber procurement (CPET) to help public sector buyers specify their requirements with more clarity and assess the credibility of supplier's claims for the sources of their timber. The CPET is planned to begin its work later this year.

  Waste Management
  Bob Russell
  To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on alternatives to landfill and incineration for waste disposal. [131614]
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  Mr. Morley
  Government's policy for waste is set out in Waste Strategy 20001. This is underpinned by the waste hierarchy which sets out the order in which options for waste management should be considered, based on their presumed environmental impact. This prioritises waste minimisation in the first instance, followed by re-use, followed by recycling, composting and energy from waste. Disposal by incineration and landfill are at the bottom of the hierarchy. These should only be used when all of the other options have been considered.

  The Strategy, together with Government's response to the Strategy Unit report, "Waste Not Want Not", which reviewed progress in its implementation, have led to the introduction of a wide range of measures to move waste management up the waste hierarchy. These include significant increases in the Landfill Tax, from 2005–06; the introduction of Best Value Performance Standards (or statutory targets) for recycling and composting for local authorities; and the creation of the Waste and Resources Action Programme, which was launched in November 2000 to create stable and efficient markets for recycled materials and products, and to remove the barriers to waste minimisation, re-use and recycling.

  The Waste and Emissions Trading Bill, currently going through Parliament, proposes a system of tradable allowances, reducing year on year, for the amount of biodegradable municipal waste local authorities may landfill. This system would enable local authorities to meet their targets for reducing the amount of biodegradable municipal waste going to landfill in the most cost effective way taking account of their local circumstances.
  1"Waste Strategy 2000: England and Wales"—Department for Environment, Transport and the Regions, May 2000
  http://www.defra.gov.uk/environment/waste/strategy/cm4693/index.htm

  Bob Russell
  To ask the Secretary of State for Environment, Food and Rural Affairs what investigations she has undertaken on the installation of anaerobic digestion systems for waste disposal; and if she will make a statement. [131615]

  Mr. Morley
  None. However, Government will shortly be issuing a consultation paper on how anaerobic digestion can be treated as a contributor to both composting and energy recovery for the purpose of Government indicators. This follows representations to Government from the waste management industry and local authorities regarding anaerobic digestion, which is currently classified by Government as a form of energy recovery from waste. Changing the classification should make it a more attractive waste management option for local authorities.

  Bob Russell
  To ask the Secretary of State for Environment, Food and Rural Affairs how many anaerobic digestion systems for waste disposal there are in the UK; how many have been(a) built and (b) closed in each of the past five years for which figures are available; how many are planned to be built in the (i) current financial year and (ii) following year; and if she will make a statement. [131616]
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  Mr. Morley
  These figures are not available. My Department is aware that anaerobic digestion is employed for a number of commercial and industrial waste streams and that some local authorities are considering pilot plants for the treatment of biodegradable municipal waste. Later this year we expect to launch a programme which will support authorities investing in new waste processing technologies and which will provide impartial advice and funding for demonstrations of new and innovative processes. Some aspects of anaerobic digestion may be eligible.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what measures have been put in place to deal with changes in levels of household waste since 1996–97; [131073]

  (2) what target was set for household waste recycling in England and Wales in the Government's 2000 Waste Strategy. [131083]

  Mr. Morley
  The Government has put a number of measures in place to deal with the problems of the on average 3 per cent. per year increase in household waste. "Waste Strategy 2000: England and Wales"1 was published in May 2000, and sets out the Government's strategy for managing waste and resources better and the changes needed to deliver more sustainable development.

  The strategy included targets for increasing levels of recycling and composting of household waste to 17 per cent. by 2003–04 and 25 per cent. by 2005–06. Progress towards achieving these targets can be found in this year's Departmental Report2.

  In November 2002 government published the Strategy Unit report "Waste Not, Want Not", which reviewed progress in implementing government obligations mainly on municipal waste and recommended a range of measures to drive up performance. The Government response 3 sets out a package of strategic measures that will help to boost the minimisation, re-use and recycling of municipal waste, and move waste management up the waste hierarchy.
  1 "Waste Strategy 2000: England and Wales"—Department for Environment, Transport and the Regions, May 2000 http://www.defra.gov.uk/environment/waste/strategy/cm4693/index.htm
  2 "Defra Department Report 2003"-Defra, May 2003–http://www.defra.gov.uk/corporate/deprep/default.htm
  3 Government response to Strategy Unit report "Waste Not, Want Not"—Defra, May 2003 http://www.defra.gov.uk/environment/waste/review/index.htm

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on waste minimisation projects. [131060]

  Mr. Morley
  The Government have announced, in response to the SU report, that WRAP (Waste & Resources Action Programme) would be taking forward the following four waste minimisation initiatives:a national home composting programme, following established best practice in other countries, using sustained training and communication methods to establish greater household participation. The programme, which is currently under
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  development, is likely to be delivered through local authorities in a bidding process, linked to the provision of other support services (on waste awareness and kerbside best practice);
  development of re-useable nappy services, with a programme of support for SMEs and new entrants to business for start-up support for new nappy laundering businesses;
  a retailers initiative, seeking to work with major retailers—both challenging them and supporting them to play their part in waste minimisation;
  a waste minimisation innovation fund to provide resources to support innovation by retailers and others—in areas such as minimising material use in consumer products, design for minimum material use and maximum recyclability.

  WRAP (the Waste & Resources Action Programme) has recently undertaken an extensive dialogue on the waste minimisation initiatives with local authorities, NGOs, businesses, academics, community organisations and others. The results of this exercise are now being used to finalise how best these new programme areas should be delivered.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the use of anaerobic digestion of waste. [131074]

  Mr. Morley
  Anaerobic digestion is currently classified by Government as a form of energy recovery from waste. Energy recovery is a less desirable option than recycling and composting in the Government's hierarchy of waste management options. However, following representations from the industry and local authorities, we have agreed that anaerobic digestion should be treated as a contributor to both composting and energy recovery. We will shortly be issuing a consultation paper on how this could be done.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs how much funding local authorities received for sustainable waste managing schemes in the last year for which figures are available. [131075]

  Mr. Morley
  The information is as follows:

  EPCS

  The main source of funding for local authority waste services is through the Environmental, Protective and Cultural Services (EPCS) Standard Spending Assessment (SSA).

  The EPCS SSA provides for a wide range of local authority services including libraries, local transport and flood defence, as well as waste. In total, the provision for the block is:

  EPCS SSA

  £ million

  2002–03

  8,961

  2003–04

  9,435

  Provision for waste services is not separately identified within the total.
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  Waste Minimisation and Recycling Fund

  We have provided £50 million additional funding for 2002–03 and £90 million for 2003–04 through a £140 million Waste Minimisation and Recycling Fund to encourage local authorities to expand recycling operations in their area.

  Information on the final totals for all financial claims made under round 1 (2002–03) of the National Waste Minimisation and Recycling Fund including the separate arrangement for London is as follows:

  Waste Minimisation and Recycling Fund

  Capital Spend Allocated 2002–03 (£ million)

  38.58

  Actual Capital Spend 2002–03 (£ million)

  30.74

  Proportion Spent (%)

  80

  Revenue Spend Allocated 2002–03 (£ million)

  11.42

  Actual Revenue Spend 2002–03 (£ million)

  10.47

  Proportion Spent (%)

  92

  The underspend on the capital budget is due mainly to delays in the procurement of capital items such as vehicles and boxes. The Department is seeking end-year flexibility to carry forward the remaining capital budget (7.8 million) so it can be spent by Local Authorities in 2003–04.

  The Waste Private Finance Initiative (PFI)

  Waste PFI funding is allocated on a project specific basis. Since the introduction of the September 2000 criteria recycling has been at the forefront of all schemes approved by the department.

  In the last 12 months six projects have been approved at outline stage and another three at final stage, which are now signed and operational. The following table shows the allocations for each scheme:

  Authority

  Financial Year Project signed

  Approval stage

  PFI Credit allocation (m)

  ELWA

  2002–03

  Final

  47

  East Sussex, Brighton and Hove

  2002–03

  Final

  49

  Leicester City

  2003–04

  Final

  30.8

  Central Berkshire

  N/A

  Outline

  37

  West Sussex

  N/A

  Outline

  25

  Gloucestershire

  N/A

  Outline

  25.105

  West Berkshire

  N/A

  Outline

  23.74

  Cornwall

  N/A

  Outline

  25

  Nottinghamshire

  N/A

  Outline

  31.93

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what measures the Government will put in place to achieve the 2005 target to reduce industrial and commercial waste sent to landfill to 85 per cent. less than in 1998. [131076]

  Mr. Morley
  Waste Strategy 2000: England and Wales1 was published in May 2000, and sets out the government's strategy for managing waste and resources better and the changes needed to deliver more sustainable development.

  The Strategy set a target to reduce the amount of industrial and commercial waste sent to landfill to 85 per cent. of the 1998 level by 2005.

  In November 2002 government published the Strategy Unit report 'Waste Not, Want Not', which reviewed progress in implementing government obligations and
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  recommended a range of measures to drive up performance including some related to industrial and commercial waste. The government response2identifies a package of strategic measures to take forward these recommendations, and move waste management up the waste hierarchy.
  1 "Waste Strategy 2000: England and Wales"—Department for Environment, Transport and the Regions, May 2000 http://www.defra.gov.uk/environment/waste/strategy/cm4693/index.htm
  2 Government response to Strategy Unit report "Waste not, Want not"—Defra, May 2003 http://www.defra.gov.uk/environment/waste/review/index.htm

  Water Pricing
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the Water Price Review 2004. [131071]

  Mr. Morley
  The Director General of Water Services (Ofwat) is responsible for setting water price limits.

  My right hon. Friend the Secretary of State made a statement to the House on 21 January 2003, Official Report, column 5WS, this year when publishing her Initial Guidance on the periodic review to the Director General. A joint statement, explaining what the review is, setting out how and when decisions will be taken, and inviting views, was issued in August by Government and the environmental and quality regulators and Defra was a signatory.

  The Secretary of State's Principal Guidance to the Director General will be published in early 2004 and she will make a further Ministerial Statement to the House at that time.

  Water Quality
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the quality of UK(a) inland and (b) coastal water; and what research she has conducted on levels in other EU countries. [131070]

  Mr. Morley
  Monitoring and assessment of inland and coastal waters in Scotland and Northern Ireland, and with respect to the devolved functions in Wales are matters for the Scottish Executive, the Northern Ireland Executive and the National Assembly for Wales.

  In England, in 2002, the Environment Agency surveyed about 7,000 freshwater sites, representing 35,000 kilometres of rivers and canals, for their chemical quality and around 2,000 of these for biological quality. The results of this most recent assessment of inland water quality can be found on the Agency's website www.environment-agency.gov.uk from Tuesday 23 September 2003.

  Our national monitoring programme provides regular data on the environmental quality of the marine environment, including coastal waters. A National Marine Monitoring Programme, consisting of 109 stations monitored by six agencies, has been set up to detect long-term trends in physical, biological and chemical variables at selected estuarine and coastal sites. In 2000, the OSPAR Commission for the Protection of the Marine Environment of the North-East Atlantic produced a set of Quality Status Reports for the region, which evaluated the effectiveness of measures taken,

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  planned for the protection of the marine environment and set priorities for the region. This was agreed by all the contracting parties, including the UK. Other regional seas programmes have produced similar assessments for other European waters.

  The UK participates fully in the activities of the European Environment Agency, which compiles and disseminates information for Europe on a wide range of environmental topics, including inland and coastal water quality, through its website, its Environmental Signals reports and other publications.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what the five(a) best and (b) worst performing regions of England in

  Percentage of river lengths by grade for each region, 2002

  Grade

  EA region

  Good (Grades A + B)

  Fair (Grades C + D)

  Poor (Grade E)

  Bad (Grade F)

  Good and Fair (Grades A + B + C + D)

  South West

  83.2

  14.0

  2.6

  0.2

  97.2

  Thames

  67.8

  27.7

  4.5

  0.0

  95.5

  Midlands

  63.0

  31.1

  5.5

  0.3

  94.2

  North East

  67.6

  25.6

  6.1

  0.8

  93.1

  Southern

  43.5

  48.4

  8.1

  0.0

  91.9

  Anglian

  54.5

  37.2

  8.3

  0.0

  91.7

  North West

  62.0

  29.4

  7.7

  0.7

  91.5

  England

  65.5

  28.3

  5.8

  0.4

  93.8

  Note:

  The regions shown are Environment Agency regions. The Midlands and the North West regions cross the Welsh political border, however the overall England results do reflect the English political boundary.

LEADER OF THE HOUSE

  Video-conferencing
  Huw Irranca-Davies
  To ask the Leader of the House what assessment he has made of the(a) demand and (b) capacity for video-conferencing and web-cameras for honourable Members' use. [132117]

  Mr. Hain
  I am aware that some hon. Members would like to see additional provision for video-conferencing and web-cameras. I suggest that my hon. Friend approach the Speaker's Advisory Panel on this. The Information Committee has also taken an interest in this.

TREASURY

  Private Sector Health Care
  Mr. Love
  To ask the Chancellor of the Exchequer what representations he has received regarding the provision of a subsidy through the tax system towards the cost of health care in the private sector. [132070]

  Dawn Primarolo
  We receive many representations regarding many issues of tax policy.

  I remain unconvinced that reducing the NHS budget by £1 billion to subsidise the private health insurance payments of those who already can afford it is an effective use of taxpayers money funds.
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  chemical quality of water were in the last year for which figures are available. [131072]

  Mr. Morley
  The following table shows results from the Environment Agency's 2002 General Quality Assessment of rivers and canals in each of the Agency's seven regions. These were published by DEFRA on 23 December 2003 on their website (http://www.defra.gov.uk/environment/statistics/index.htm).

  Chemical quality is one of a range of indicators of the overall quality of a water body and is affected by human activity, natural geography and weather.

  The table is presented in order of the percentage of river lengths which are of 'Good and Fair' chemical quality, however this is an arbitrary choice and the order would vary if it was based on a different range of grades.

  Economic Growth
  Mr. Hunter
  To ask the Chancellor of the Exchequer if he will make a statement on the projections for United Kingdom growth made by (a) the Treasury and (b) independent forecasters at the time of the (i) 2002 and (ii) 2003 budget. [132071]

  Ruth Kelly
  Between the 2002 and 2003 Budgets, both the Government and independent forecasters revised down their GDP growth forecasts for 2003, reflecting a fragile global economic environment and heightened international uncertainties.

  At the time of the 2003 Budget, the average of independent forecasts for GDP growth in 2003 was consistent with the Budget forecast, with over 70 per cent. of forecasters included in HM Treasury's 'Comparison of independent forecasts' either within of above the Budget forecast range.

  Financial Mutual Organisations
  Mr. Bailey
  To ask the Chancellor of the Exchequer what his policy is on support for financial mutual organisations; and if he will make a statement. [132072]

  Ruth Kelly
  The Government welcomes the contribution of the mutual sector to providing greater choice and diversity in the market and in tackling financial exclusion. The Government will continue to work closely with the sector.

  Tax Allowances
  Lynne Jones
  To ask the Chancellor of the Exchequer if he will make it his policy to index-link personal tax allowances at least in line with inflation. [132073]

  Dawn Primarolo
  The level of personal allowance for 2004–5 will be announced, as usual, at the Pre Budget report.

  Budget Forecasts
  Mr. Boswell
  To ask the Chancellor of the Exchequer when he next plans to meet the new Governor of the Bank of England to discuss the Chancellor's Budget forecasts on the public sector deficit for 2004–05. [132074]

  Ruth Kelly
  The Chancellor meets the Governor of the Bank of England regularly to discuss various issues concerning the British economy, including the public finances. In addition, a representative from HM Treasury attends each of the monthly meetings of the Monetary Policy Committee.

  Eurozone
  Mr. Rosindell
  To ask the Chancellor of the Exchequer what assessment he has made of the recent change in the budget deficits(a) in Germany, (b) in France and (c) on average in the eurozone. [132075]

  Ruth Kelly
  In 2002, the general Government deficit reached 3.1 per cent. of GDP in France, 3.5 per cent. of GDP in Germany and 2.3 per cent. of GDP in the euro area.

  Youth Unemployment
  Mr. Jim Cunningham
  To ask the Chancellor of the Exchequer what assessment he has made of the effect of the level of youth unemployment on the economy; and if he will make a statement. [132076]

  Ruth Kelly
  Youth unemployment is particularly detrimental to the long-term health of the economy.

  That is why this Government have made a priority of reducing it. With the help of the New Deal for Young People, we have reduced long-term youth unemployment by 133,000 or three-quarters since 1997.

  Climate Change Levy
  Mr. Tynan
  To ask the Chancellor of the Exchequer what the receipts were to the Exchequer in 2002–03 under the climate change levy. [132054]

  John Healey
  In 2002–03, the climate change levy raised £829 million for the Exchequer. This figure was published by the Office for National Statistics in "Financial Statistics" (Table 2.1 D) in August 2003.

  Iraq
  Mr. Dalyell
  To ask the Chancellor of the Exchequer if he will publish a monthly estimate of the costs incurred by the Government as a result of its presence in Iraq. [131995]
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  Mr. Boateng
  I refer the hon. Member to my answer I gave the hon. Member for Blaenau Gwent (Llew Smith) on 14 October 2003,Official Report, column 144W.

  Pensions
  Mr. Viggers
  To ask the Chancellor of the Exchequer what amount in taxation he has levied from pension funds in the last five years. [132077]

  Ruth Kelly
  Approved pension funds do not normally pay tax on their investments. The only exceptions are where a pension fund is involved in an activity outside the terms of its tax approval or makes a taxable payment to a scheme employer or member. The amount of tax paid by pension funds under these circumstances in the last five years is not held centrally.

CULTURE, MEDIA AND SPORT

  British Branding Overseas
  Mr. McNamara
  To ask the Secretary of State for Culture, Media and Sport what estimate she has made of the cost of promoting British branding and identity in culture, media and sport overseas in the last year for which figures are available; and what element of this expenditure promotes(a) Welsh, (b) Scottish and (c) Irish branding and identity as a distinct component of that of the United Kingdom as a whole. [131945]

  Mr. Caborn
  There are a number of Government Departments which promote British branding abroad. DCMS provides £35.5 million per annum to VisitBritain (formerly the British Tourist Authority) to promote Britain overseas as a tourist destination. In 2002–03 an additional £20 million was provided from the Reserve in order to help tourism recover from the impact of the foot and mouth outbreak and the terrorist attacks of 11 September 2001. Funds are not allocated for individual regions of Britain. Britain is promoted as a whole in a way which maximises the impact of VisitBritain's campaigns in individual markets overseas. Tourism is a devolved matter and is the responsibility of the respective administrations in Scotland, Wales and Northern Ireland.

  Childhood Obesity
  Mr. Hancock
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the impact of advertising on childhood obesity; and if she will make a statement. [131937]

  Estelle Morris
  The Department has a responsibility only in relation to broadcast advertising. It has made no separate assessment of the impact of advertising on childhood obesity but will participate in consideration of the Food Standards Agency's recent report on the promotion of foods to children. The Department is fully supportive of Government initiatives to tackle the problem of child obesity, and is working closely with the Department of Health and the Department for Education and Skills on these as well as developing its own health initiatives relating to increased physical activity, particularly in children.

  Euro Entry
  Mr. Stephen O'Brien
  To ask the Secretary of State for Culture, Media and Sport how much has been spent in each year by her Department in preparing for UK entry to the euro; how much her Department plans to spend on preparations for UK entry to the euro for each year from the current financial year up to and including 2005–06; and what estimates she has made of the total costs to her Department of changeover to the European Single Currency. [131591]

  Mr. Caborn
  I refer the hon. Member to the answer given to him by my hon. Friend the Financial Secretary to the Treasury on 14 October 2003,Official Report, column 142W.

  Ministerial Events Attendence
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport if she will list the(a) sports events, (b) arts events, (c) broadcasting events, (d) tourism events and (e) museums and galleries she has attended since 1 November 2002. [118007]

  Tessa Jowell
  The number of events attended since 1 November 2002, is given in the following list:

  Sporting:

  8 December 2002 BBC Sports Personality of the Year

  1 January 2003 Arsenal v Chelsea @ Highbury

  12 February 2003 England v Australia @ Upton Park

  16 March 2003 World Indoor Athletics Championships

  13 April 2003 London Marathon Opening

  Arts:

  19 November 2002: A Streetcar Named Desire

  10 November 2002: Twelfth Night @ Donmar Warehouse

  15 December 2002: Mahler 2 @ Royal Festival Hall

  21 December 2002: The Wind in the Willows @ Linbury Studio

  23 December 2002: The Merry Wives of Windsor @ RSC Swan Theatre

  28 January 2003: The Rite of Spring @ Treptow Arena

  10 February 2003: The Vortex @ Donmar Warehouse

  15 May 2003: Henry V @ National Theatre

  20 May 2003: Winters Tale @ Roundhouse

  28 June 2003: The Lady from the Sea @ The Almeida Theatre

  Broadcasting:

  6 February 2003: Launch of BBC 3

  23 February 2003: BAFTAS

  13 May 2003: Thirty Club Dinner

  16 May 2003: Cannes Film Festival: Calendar Girls

  Tourism:

  7 November 2002: Tourism Forum @ Tate Modern

  4 February 2003: Cumbria: CBI Dinner

  5 February 2003: BTA Breakfast

  22 May 2003: Tourism Breakfast @ Claridges

  Museums and Galleries:

  17 December 2002: The Soul of the Homeless @ Museum of London

  3 February 2003: Constable to Lacroix @ Tate Britain

  17 March 2003: Durer Exh. @ British Museum

  25 March 2003: Titian Exhibition @ The National Gallery

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  17 March 2003: Roundhouse Theatre Event

  3 April 2003: British Empire and Commonwealth Museum

  28 April 2003: Built Heritage Foundation, Shoreditch

  28 April 2003: Elizabeth @ National Maritime Museum.

  The list includes events attended up to the start of the summer parliamentary recess 2003.

  Tourism
  Mr. Hancock
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on(a) the domestic tourist industry and (b) the measures she is taking to encourage in-bound tourism. [131938]

  Mr. Caborn
  England's tourism industry is worth £62 billion a year. £52 billion of which is generated by domestic tourism. In 2002 British residents took 135 million tourism trips in England. Statistics for this summer will be available by the end of November. Early indications from the industry are that it was a strong season. In April this year, VisitBritain launched a £4 million 'Enjoy England' campaign to promote domestic tourism in England. Following a consultation exercise over the summer, VisitBritain will shortly be publishing its three-year domestic marketing strategy for England.

  VisitBritain receives £35.5 million a year to promote Britain overseas as a tourist destination. It has 27 offices overseas and it runs on-going campaigns using advertising, PR, direct mail, the internet and other marketing tools. Major campaigns this year have included partnership campaigns with the industry in the United States and, in Europe, a £4 million "City Breaks" campaign to promote short breaks in Britain.

HOME DEPARTMENT

  Civil Emergency
  Simon Hughes
  To ask the Secretary of State for the Home Department what plans he has to hold an exercise in a major United Kingdom city to test the preparedness of the relevant services in the event of a biological terrorist attack. [131656]

  Mr. Blunkett
  My Department has plans for, or involvement in, a number of exercises over the coming months as part of a regular programme of counter-terrorism exercises. The programme has been in place well before 11 September 2001.

  Other Departments such as the Department of Health as well as local government and local emergency services also run exercises to test procedures and equipment across agencies. Some are based in cities such as the recent exercise at Bank Station, others are planned for areas where procedures can be practised with minimal disruption to the public, as well as through tabletop exercises.

  As I announced in July 2003, we are embarking on a broader programme of exercises, and, where in the past such exercises were usually conducted in private, we aim to put as much information in the public domain as we can without providing information that may be useful to terrorists. Further information about counter-terrorism

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  exercises is available on the Home Office website at www.homeoffice.gov.uk/terrorism/govprotect/resilience/counterterr.html.

  It is important to note that the Government, emergency services and others regularly train and practise their responses to all kinds of major incidents, including natural disasters and accidents, not just those caused by terrorist acts, in order to increase national resilience to a range of threats.

  Crime (Merseyside)
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department how many young offenders were successfully prosecuted in April 2003; and what the average sentence(a) given and (b) served was in (i) England and Wales and (ii) Crosby. [129476]

  Paul Goggins
  Statistics of court proceedings for 2003 will be published in the autumn of 2004.

  Illegal Firearms
  Mr. Ruffley
  To ask the Secretary of State for the Home Department what assessment he has made of the number of illegal firearms in circulation in each year since 1997 in(a) the UK, (b) Suffolk, (c) Norfolk, (d) Essex, (e) Cambridgeshire and (f) Bury St Edmunds. [131843]

  Caroline Flint
  There are no reliable estimates of the number of firearms held illegally either on a national basis or in particular areas. The overall level of crime involving guns is low but we are developing a range of measures in conjunction with all interested parties to address the recent unacceptable rise in firearms offences.

  Passports
  Patrick Mercer
  To ask the Secretary of State for the Home Department whether the United Kingdom will meet the 1 October 2004 deadline imposed by the United States which requires biometric technology to be embedded in United Kingdom passports so that the bearers do not need to apply for a visa. [128662]

  Beverley Hughes
  As we have previously said, biometrics on UK passports will begin to be implemented in 2005.

  The Foreign and Commonwealth Office is organising representations to the United States Government with the aim of ensuring UK passport holders retain visa waiver status, on the basis that realistic programme and implementation plans will be in place by the US deadline.

  Terrorist Munitions
  Patrick Mercer
  To ask the Secretary of State for the Home Department (1) what measures have been taken to prevent terrorist munitions being smuggled into the UK via container traffic; [128659]

  (2) what measures have been taken to prevent weapons of mass destruction being smuggled into the United Kingdom. [128660]

  Mr. Blunkett
  Since the terrorist attacks in the United States on 11 September 2001, the Government have conducted a thorough and comprehensive review of all 320W
  preventative measures to counter terrorism to better protect this country from the threat from international terrorism.

  We have taken major steps to enhance the security of the UK's borders. There are extensive powers for counter-terrorist policing at our ports and our border agencies work closely together in sharing intelligence and operations.

  We are also working closely with our international colleagues to implement a range of measures to improve port security and reduce the likelihood of the illicit movement of materials.

  The Home Office leads on countering the potential threat from CBRN material. I refer the hon. Gentleman to my statement of 3 July 2003 in which I spoke about the introduction of routine screening of port traffic for the illicit movement of radiological materials (to reduce the threat from nuclear or radiological attack). This technology will greatly improve our existing capacity to detect and prevent the illicit importation of material into the UK. This is a significant part of the £330 million additional counter terrorism money announced in the Budget.

  It has never been government policy to release details of our contingency plans for security reasons but, as I told the House on 20 March 2003, we have taken precautionary measures to deal with the events we can anticipate. We cannot guarantee 100 per cent. security but we deal rapidly with change and will keep all aspects of our planning under review and will keep Parliament, and the public, informed of any significant developments.

DEFENCE

  Council Tax
  Mr. Paul Marsden
  To ask the Secretary of State for Defence (1) how many armed service personnel serving abroad in the last 12 months for which figures are available paid council tax contributions; [132305]

  (2) what the average council tax contribution paid by armed services personnel was while serving abroad in the last 12 months for which figures are available. [132306]

  Mr. Caplin
  Service personnel living in service accommodation pay a contribution in lieu of council tax (CILOCT) in circumstances where they are liable for payment of an accommodation charge. As at 1 April 2003, of those serving abroad some 11,500 service personnel were paying CIEOCT for service families accommodation, and some 6,000 for single living accommodation. Armed service personnel serving abroad may also be liable for council tax on their own property within Great Britain. No information is held on the number of people who fall into this category.

  The average daily contribution in lieu of council tax (CILOCT) paid overseas by service personnel, based on 2003–04 charges for the most commonly occupied service accommodation as at 1 April 2003 are:

  £3.27—Officers Service Families' Accommodation

  £2.56—Other Ranks Service Families' Accommodation

  £0.21—Officers Single Living Accommodation, and

  £0.06—Other Ranks Single Living Accommodation.

  Iraq
  Paul Flynn
  To ask the Secretary of State for Defence pursuant to his answer of 24 September on deployment of military personnel in Iraq, reference 129882, how much the logistical help provided in Multinational Division South East will cost. [132415]

  Mr. Ingram
  The Ministry of Defence identifies the costs of operations in terms of the net additional costs it has incurred. The costs which the MOD would have incurred had the operation not been undertaken—expenditure on wages and salaries or on conducting training exercises, for example—are deducted from the total costs of the operation.

  For the most part, the costs incurred will be those arising from the deployment and activities of the United Kingdom's force elements in Iraq. The same principle will apply to other nations contributing forces. There may be occasions when other nations draw food or fuel from UK sources. On such occasions, those drawing the supplies will be charged at an appropriate rate to recover UK's costs. Therefore the provision of this service will not incur additional cost. There may be other occasions where other nations make use of UK transport facilities where spare capacity exists. In such circumstances, a charge will not be levied. These are all reciprocal arrangements intended to make the most effective use of resources while not disadvantaging any of the troop contributing nations. Any attempt to apportion costs for this arrangement would be impractical.

  It is too early to estimate the costs likely to arise from UK military operations in Iraq in 2003–04. Once these are known, additional funding will be sought in the normal way through Supplementary Estimates.

  War Pensioner's Mobility Supplement
  Mr. Simon Thomas
  To ask the Secretary of State for Defence how many people(a) of all ages and (b) aged over 65 years are in receipt of war pensioner's mobility supplement. [132376]

  Mr. Caplin
  As at 30 June 2003, the total number of war pensioners of all ages in receipt of war pensioners mobility supplement was 18,340. Information is not available for those aged over 65 years and could be provided only at disproportionate costs.

  Afghanistan
  Mr. Rosindell
  To ask the Secretary of State for Defence if he will make a statement on the United Kingdom's military operations in Afghanistan. [132127]

  Mr. Ingram
  The United Kingdom's military operations in Afghanistan are focused primarily upon the International Security Assistance Force in Kabul. We also lead the Provincial Reconstruction Team in Mazar-e Sharif and provide staff officers to support the coalition headquarters at Bagram.

  Army Personnel (Self-harm)
  Mr. Hancock
  To ask the Secretary of State for Defence (1) pursuant to his answer of 16 September,322W
  Official Report, column 703W, on Army personnel (self-harm), if he will place the information in the Library as soon as it becomes available; [131935]

  (2) pursuant to his answer of 16 September 2003, Official Report, column 703W, on self-harm, if he will place the information in the Library when it becomes available. [132488]

  Mr. Caplin
  The work to trial the collection and analysis of the existing information on incidents of deliberate self harm in the Army has only just begun. The purpose of the work is to develop the Department's understanding of the scale of the problem and to inform the development of policies and practices within the armed forces. There is no current intention to place this information in the Library of the House.

  Defence Attaches
  Mr. Keetch
  To ask the Secretary of State for Defence what the cost was of(a) defence attaches and (b) the Defence Export Services Organisation in each financial year since 1997–98. [132153]

  Mr. Ingram
  [holding answer 14 October 2003]: Costs readily available for Defence Attachés in each financial year since 1997–98 are as follows:

  Financial year

  Costs identified (£ million)

  1997–98

  30.6

  1998–99

  31.7

  1999–2000

  32.4

  2000–01

  34

  2001–02

  37.2

  2002–03

  37.1

  Operating costs for DESO in each year since financial year 1997–98 are as follows:

  £ million

  Financial year

  Expenditure

  Receipts

  Net operation costs

  1997–98

  —1

  —1

  14.380

  1998–99

  45.359

  -29.342

  16.017

  1999–2000

  46.473

  -34.977

  11.496

  2000–01

  55.81

  -41.430

  14.380

  2001–02

  48.930

  -37.853

  11.077

  2002–03

  56.944

  -44.407

  12.537

  1 Full details of costs in this year are no longer available.

  The net operating costs are more than offset by benefits to the Defence budget arising from DESO's activities. Main sources of offsetting income from DESO are three Government-to-Government project offices, where the customer country pays Ministry of Defence costs, and the Disposal Services Agency, where costs are met from revenue.

  Defence Spending
  Mr. Rosindell
  To ask the Secretary of State for Defence by how much he plans to increase defence spending over the next five years. [132157]

  Mr. Ingram
  Plans for defence spending in 2004–05 and 2005–06 are set out in the Government's Expenditure Plans for the Ministry of Defence, a copy
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  of which can be found in the Library of the House. Plans for defence spending beyond 2005–06 will be set in the 2004 and 2006 Spending Reviews.

  Depleted Uranium
  Lynne Jones
  To ask the Secretary of State for Defence if his Department will phase out the use of depleted uranium. [132312]

  Mr. Ingram
  United Kingdom forces have two types of depleted uranium (DU) ammunition: 20 mm rounds used by the Royal Navy's Phalanx Close-in Weapon System (a missile defence system): and 120 mm anti-tank rounds (CHARM 3), fired by the Army's Challenger II (CR2) tanks.

  The Royal Navy's Close-in Weapon System does not require anti-armour properties and in recent years, a new tungsten round has been developed for it. Since 1996, all replacement ammunition for the Phalanx system has been of the tungsten variety. Some ships still carry the 20 mm DU round, however, and would fire it should the operational need arise.

  There is currently no plan to replace the DU penetrator in the CR2 Main Armament Weapon System although a programme is being commissioned over the next three years to determine the most cost-effective means of maintaining CR2's capability. This will investigate the replacement of the rifled barrel with a smoothbore barrel, which in turn, may offer alternative munitions. DU replacement is not the primary aim of this programme.

  To date, DU has consistently outperformed all equivalents as a kinetic penetrator when employed in anti-armour weapon systems: its use, therefore, currently offers the best operational effectiveness in this role.

  Service Personnel (Debt Management)
  Mr. Wray
  To ask the Secretary of State for Defence what special assistance is given to(a) service and (b) ex-service personnel who are facing financial difficulties; and if he will make a statement. [121520]

  Mr. Caplin
  Service personnel are expected to manage their financial affairs responsibly. However, individuals facing financial difficulties can be assisted by way of advice at unit level within the chain of command. Commanders, along with others in the unit, including administrative and welfare staffs and chaplaincy services, can provide help and assistance in dealing with individual financial difficulties and will facilitate liaison between the individual and credit organisations.

  Each service produces self-help publications on debt and debt management, and RAF personnel receive instruction on the need for integrity in their personal and financial affairs, with recruits instructed on basic money matters, including how to operate a bank account, balance a cheque book and use a credit card. Personnel are also made aware of the support available through the Citizens' Advice Bureau, SSAFA-Forces Help, professional credit advice organisations and respective benevolent funds.
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  At the Veterans Agency there is a Veterans Advice Unit which aims to provide 'one-stop-shop' guidance to former armed forces personnel or their families on where to seek professional help on a wide range of issues including financial difficulties.

  Ex-service Personnel
  Mr. Wray
  To ask the Secretary of State for Defence what plans he has to encourage ex-service personnel to rejoin the armed forces; and if he will make a statement on the value of ex-service personnel to the armed forces. [121521]

  Mr. Caplin
  Ex-Service personnel are routinely encouraged to consider rejoining the armed forces. All three services ensure that regular contact is maintained with former service personnel from the moment of discharge (and in many instances in the weeks leading up to the discharge date), when their continued value to the armed forces is fully explained to them, and for a period of time thereafter. Such has been the nature of these initiatives that in financial year 2002–03, a total of 762 ex-service personnel rejoined the armed forces and for the first five months of 2003–04 a further 345 former service personnel have rejoined.

  The armed forces greatly value ex-service personnel. Those who rejoin the regular forces bring their past experience and expertise with them which is particularly useful when individuals join branches or trades currently experiencing a shortfall. Many who rejoin do not have to repeat the full re-selection process and many of those formerly on the trained strength do not have to repeat initial training. This is a considerable saving on time and resources.

  Ex-regular personnel have played, and continue to play, a vital role in recent operations in both Afghanistan and Iraq.

  Firearms
  Mr. McNamara
  To ask the Secretary of State for Defence what rules govern the handling of firearms in a made ready condition; and in what circumstances made ready firearms may be carried inside an Army barracks. [131985]

  Mr. Ingram
  For the purposes of answering this question, it has been assumed that the hon. Member is referring to the non-operational use of firearms by Army personnel. The relevant rules maintain that unless an individual is ordered to make the weapon ready, or he/she is about to fire, the weapon is always to be made safe; that is no live round is to be carried in the breech, and, in the case of automatic weapons, the working parts are to be forward.

  Under normal circumstances, a soldier would only carry a made ready weapon inside the barrack area when they are ordered to do so; for instance when training on a range, or if there was an imminent threat to life.

  HMS Bulwark
  Mr. Hancock
  To ask the Secretary of State for Defence what the original in-service date was for
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  landing platform dock Bulwark; what the current in-service date is; what the reasons are for the changes; and if he will make a statement. [131933]

  Mr. Ingram
  The original in-service date for the landing platform dock Bulwark was March 2003. The current planned in-service date is March 2005. There have been a number of manufacturing, project management and productivity difficulties experienced at the BAe Systems Barrow shipyard which caused slippage to HMS Bulwark's sister ship, HMS Albion. Resources were concentrated in HMS Albion in order to minimise the delays. This caused a consequential delay to HMS Bulwark programme.

  There are opportunities to improve upon the ISD of March 2005 and the Ministry of Defence will continue to work hard with BAe Systems with the aim of accelerating the programme and achieving ISD some weeks earlier than currently forecast.

  Colombia (Military Aid)
  Mr. Hancock
  To ask the Secretary of State for Defence if he will make it his policy to stop giving military aid to Colombia; and if he will make a statement. [132079]

  Mr. Ingram
  British military assistance to Colombia is focused primarily on Explosive Ordnance Disposal training, and provision of British military education. We believe that it provides clear benefits to the Colombian Armed Forces, and the country as a whole, by reducing the number of deaths (civilian and military) from explosive devices, and by introducing Colombian military personnel to British defence concepts in key areas such as the democratic and accountable control of the armed forces and Rules of Engagement. As a matter of policy, we therefore do not intend to cease providing military assistance to Colombia.

  Mr. Hancock
  To ask the Secretary of State for Defence what assessment he has made of the benefits of giving British military aid to Colombia; and if he will make a statement. [132080]

  Mr. Ingram
  British military aid to Colombia is focused on providing assistance primarily in the fields of Explosive Ordnance Disposal (EOD) and military education and training. Mines and other explosive devices are responsible for a significant proportion of deaths among the Colombian armed forces, and also have a devastating effect on the civilian population. Provision of British military training and education is designed to help Colombia develop more professional armed forces, and to introduce personnel to British defence concepts, including the importance of accountable and democratic control of the armed forces, and the use of Rules of Engagement.

  The nature of other aspects of military advice and assistance provided to Colombia is confidential between Governments, and I am withholding details under Exemption 1 of the Code of Practice on Access to Government Information, which covers information where disclosure would be harmful to national security, defence or international relations.
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  Mr. Hancock
  To ask the Secretary of State for Defence how much military aid Britain has given to Colombia in each of the last five years; and if he will make a statement. [132175]

  Mr. Ingram
  Details of military assistance to Colombia from January 2000 onwards are in the list. Information on assistance before this date is not held centrally, and could be obtained only at disproportionate cost. The nature of other aspects of military advice and assistance provided to Colombia is confidential between Governments, and I am withholding details under Exemption 1 of the Code of Practice on Access to Government Information, which covers information where disclosure would be harmful to national security, defence or international relations.18–28 January 2000: One officer visited Colombia to discuss with the Colombian armed forces the disposal of terrorist explosive devices and to advise on the maintenance and replacement of EOD equipment. The total cost of this visit was £3,252.08.
  2–14 September 2000: One officer visited Colombia to advise the Colombian authorities on improving the protection of police stations against terrorist attack. The total cost of this visit was £3,480.00.
  26 March-6 April 2001: A team of five UK military personnel visited Colombia to provide EOD training support to the Colombian authorities. I am afraid that we have been unable to locate records of the cost of this visit.
  28 January-2 February 2002: One officer visited Colombia on a remit to scope further aspects of EOD training required by Colombia. The total cost of this visit was £893.61, exclusive of flight costs. In the event, the planned further training did not take place due to UK resource constraints.
  19–24 March 2003: Two EOD personnel participated in a counter terrorist seminar in Colombia organised by the Metropolitan police, at a total cost of £7,225.
  30 August-5 September 2003: Three EOD personnel visited Colombia on a scoping visit. Final costs associated with this visit are not yet available.
  2003–04: The Foreign and Commonwealth Office's Human Rights Project Fund is supporting a project to raise awareness in the Colombian armed forces on their role in prevention and protection of the rights of internally displaced people, at a cost of £14,723.54.

  In addition, Britain has funded the following UK-based military training and education courses:
  A Colombian officer attended the MSc in Global Security course (August 2002-August 2003), at an approximate cost of £26,760.
  A Colombian officer attended the Royal College of Defence Studies course from January 2002-January 2003, at an approximate cost of £48,296.
  A Colombian officer is attending the Advanced Command and Staff College, which began in September 2003, at a projected cost of £77,934.
  Two Colombians are currently attending the CT Bomb Disposal Course at the Army School of Ammunition at a total projected cost of £15,220.

  Mr. Hancock
  To ask the Secretary of State for Defence what steps he is taking to ensure that military aid to Colombia is not being used by(a) the Colombian army and (b) paramilitary death squads against civilians; and if he will make a statement. [132176]

  Mr. Ingram
  When considering bilateral military assistance to Colombia, the UK takes account of the need to avoid funds being used in any way which would
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  not be compliant with United Nations human rights recommendations. Mechanisms are in place to check that, at the time military assistance is given, the military units involved are not implicated in human rights violations, internal repression, or collusion with paramilitary organisations.

  Personal Injury Claims (Army)
  Mr. McNamara
  To ask the Secretary of State for Defence how many personal injury claims concerning Army personnel have been lodged in each year since 1990; and how many and what percentage were(a) settled out of court, (b) dismissed and (c) found against the Department. [132177]

  Mr. Caplin
  The Ministry of Defence does not generally record the details of personal injury cases brought by members of HM forces by individual Service. This information could be obtained only at a disproportionate cost. The vast majority of cases are settled amicably. Three per cent. of cases proceed to trial. The information contained in the following table is in relation to personal injury claims received from members of HM forces since 1990. There is no direct correlation between the numbers of claims received in-year and claims settled and repudiated in the same year because of the time lapsed between receipt and investigation of the claim.

  Financial year

  Claims received

  Claims settled

  Claims repudiated

  1990–91

  582

  126

  144

  1991–92

  672

  136

  135

  1992–93

  750

  195

  356

  1993–94

  1,004

  210

  230

  1994–95

  1,312

  314

  227

  1995–96

  1,014

  235

  125

  1996–97

  924

  344

  224

  1997–98

  1,038

  391

  211

  1998–99

  738

  412

  165

  1999–2000

  752

  504

  344

  2000–01

  924

  948

  397

  2001–02

  819

  351

  253

  2002–03

  666

  733

  322

  Sea King Helicopters
  Mr. Ben Chapman
  To ask the Secretary of State for Defence if he will make a statement on Sea King replacement at RNAS Yeovilton. [132400]

  Mr. Ingram
  The support amphibious and battlefield rotorcraft programme is designed to replace the capability provided by the Sea King Mk4 early in the next decade. The project is in its early stages and we have yet to decide how the capability requirement will best be met.

  Absence Without Leave
  Mr. McNamara
  To ask the Secretary of State for Defence how many soldiers went AWOL in the past 12 months. [132181]

  Mr. Caplin
  The total number of soldiers reported AWOL during the period 1 October 2002 to 30 September 2003 inclusive was 1,695.

  Terrorism (Israel)
  Mr. Rosindell
  To ask the Secretary of State for Defence what recent discussions he has held with the Israeli Government on the defence of Israeli citizens from terrorist attacks; and what advice he gave. [132120]

  Mr. Hoon
  My right hon. Friend the Prime Minister met with Israeli Prime Minister Sharon on 14 July 2003 and discussed the current situation in Israel and the Occupied Territories, including terrorism and security issues. Officials also met with last month their Israeli counterparts on matters of mutual interest. I am withholding the content of these talks under Exemption 1 of the Code of Practice on Access to Government Information.

  September 11
  Jim Knight
  To ask the Secretary of State for Defence how many tri-Service personnel have been activitated in response to the 11 September terrorist attacks. [132272]

  Mr. Ingram
  No members of the United Kingdom armed forces were engaged in the immediate response to the events of 11 September 2001 in New York, Washington and Pennsylvania. Since that date, however, a large number of Service personnel have been involved in a variety of military operations designed to counter the threat from international terrorism.

  UK Military Hospitals
  Jim Knight
  To ask the Secretary of State for Defence how many military hospitals there are in the UK. [132271]

  Mr. Caplin
  There is now only one military hospital in the United Kingdom, the Duchess of Kent's Psychiatric Hospital at Catterick, which is expected to close by 31 March 2004 when alternative facilities are in place.

INTERNATIONAL DEVELOPMENT

  Iraq
  Andrew Selous
  To ask the Secretary of State, Department for International Development, by when he expects electricity will be fully available throughout the British occupied sector of Iraq [132049].

  Hilary Benn
  Power supplies in the South of Iraq have shown progressive improvements in recent weeks due to a steady increase in generating and transmission capacity combined with lower demand as a result of cooler weather.

  The average person in Basra now has access to electricity for about 20 hours per day, although grid failures can lead to longer local outages. Outside Basra the situation is more variable. In other urban areas power is now available for an average of four hours out of six. Some isolated communities remain without access to power, as they were before the conflict.

  The provision of full electricity supply will require significant additional investment in the medium to long term. [132049]

  Kazakhstan
  Angus Robertson
  To ask the Secretary of State for International Development how much the Department contributed to multilateral organisations active in Kazakhstan in 2002–03; how much is allocated for 2003–04; and if he will make a statement. [131646]

  Mr. Gareth Thomas
  The information is not readily available for the years 2002–03 and 2003–04. The most recent available figure is for calendar year 2000 where the UK's attributed share of multilateral assistance to Kazakhstan was £1.47 million broken down as EC £0.86, UN £0.25 million and other £0.36 million.

  Turkmenistan
  Angus Robertson
  To ask the Secretary of State for International Development how much the Department contributed to multilateral organisations in Turkmenistan in 2002–03; how much has been allocated for 2003–04; and if he will make a statement. [131798]

  Mr. Gareth Thomas
  The information is not readily available for the years 2002–03 and 2003–04. The most recent available figure is for calendar year 2001 where the UK's attributed share of multilateral assistance to Turkmenistan was £0.64 million broken down by EC £0.42 million and UN £0.22 million.

WORK AND PENSIONS

  Means-tested Benefits
  Mr. Gibb
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 15 September 2003,Official Report, column 556W, on means-tested benefits, what percentage of the population aged 60 years and over was in receipt of income support in each year between 1993 and 2002. [131951]

  Malcolm Wicks
  The answer is in the table.

  Income Support Pensioner Beneficiaries aged 60 or over as a percentage of the population: Great Britain—May 1993 to May 2002

  Income Support MIG Beneficiaries aged 60 and over (000s)

  Percentage of the population aged 60 and over

  1993

  1,967

  16.8

  1994

  1,998

  17.1

  1995

  1,980

  16.9

  1996

  1,957

  16.7

  1997

  1,903

  16.2

  1998

  1,830

  15.5

  1999

  1,789

  15.1

  2000

  1,784

  15.0

  2001

  1,907

  16.0

  2002

  1,945

  16.2

  Notes:

  1. Jobseeker's allowance replaced income support for the unemployed from October 1996, therefore to enable comparisons to be made, figures prior to May 1997 exclude the unemployed.

  2. Beneficiaries of a benefit unit are the sum of claimants and their partners.
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  3. Percentage for population has been calculated using the revised ONS population estimates for age group 60 and over, for 1993 to 2002.

  4. Figures are based on a 5 per cent. sample and therefore subject to sampling variation.

  5. Claimant figures have been rounded to the nearest hundred and quoted in thousands, percentage population figures to one decimal place.

  Source:

  IAD Information Centre, 5 per cent sample.

  Pensions
  Mr. Gibb
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 9 September,Official Report, column 303W, on pensions, what percentage of stakeholder pension sales went to working individuals earning between (a) £10,000 and £20,000, (b) £20,000 and £30,000, (c) £30,000 and £40,000, (d) £40,000 and £50,000 and (e) £50,000 and £60,000; and if he will make a statement. [131953]

  Malcolm Wicks
  The information requested is in the following table giving a breakdown of stakeholder pension sales for the 2001–02 tax year by earnings of policyholders:

  Annual earnings of stakeholder pension policy holders

  Percentage of total stakeholder pension sales

  Under £10,000

  24

  £10,000 to £20,000

  40

  £20,000 to £30,000

  19

  £30,000 to £40,000

  5

  £40,000 to £50,000

  2

  £50,000 to £60,000

  1

  £60,000 and above

  2

  Notes:

  7 per cent. of sales were to people not in work (e.g. children, spouses, the unemployed and pensioners).

  Earned income data are derived from the Survey of Personal Incomes (SPI) and consists of all income chargeable under Schedule E (mainly pay, private and occupational pensions, retirement annuities and state retirement pensions) Schedule D Cases I and II (self-employment income), and miscellaneous other earnings.

  The SPI is a representative sample of nearly 200,000 individuals, drawn from the Revenue's Self Assessment, Pay As You Earn and Claims systems. Where we have been able to match these individuals to the SPI, primarily those with earned income, the totals in the tables are based on this sample.

  Around two-thirds of stakeholder pensions taken out in their first year on the market have been by people on moderate incomes (earning under £20,000 a year). This demonstrates the encouraging start that stakeholder pensions have made in offering people, particularly modest earners, a new opportunity to save for their retirement.

  Source:

  Inland Revenue data for 2001–02 tax year

  Mr. Michael Jabez Foster
  To ask the Secretary of State for Work and Pensions what the percentage increase was in the basic state retirement pension between April 1997 and April 2003; and what the increase in the Retail Price Index is that would have applied under the previous formula. [132326]

  Malcolm Wicks
  The information is in the table.
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  Percentage increase in basic state pension on previous year

  Retail prices index (percentage in September of previous year)

  1997–98

  2.1

  2.1

  1998–99

  3.6

  3.6

  1999–2000

  3.2

  3.2

  2000–01

  1.1

  1.1

  2001–02

  7.4

  3.3

  2002–03

  4.1

  1.7

  2003–04

  2.6

  1.7

  Section 150 of the Social Security Administration Act 1992 provides for the Secretary of State to review the amount payable in respect of pensions and to increase them in line with the general level of prices.

  Over the last three years basic state pension has been increased by more than the Retail Prices Index (RPI). We have announced that we will increase the basic State Pension by 2.5 per cent. or RPI, whichever is the higher, for the remainder of this Parliament.

SOLICITOR-GENERAL

  Asbestos
  Dr. Cable
  To ask the Solicitor-General pursuant to her answer of 17 July 2003,Official Report, column 589W, on asbestos, how many Crown Prosecution Service buildings have been identified as containing asbestos; if she will place copies of the asbestos registers for each building in the Library; and what steps she has taken to compile a central register. [130942]

  The Solicitor-General
  The Crown Prosecution Service have approved the appointment of an asbestos inspector via an Office of Government Commerce call off contract. A programme of inspection surveys has been agreed. The inspections and all the written survey reports are to be returned to the Crown Prosecution Service prior to the 21 May 2004 in compliance with Regulation 4 of the Control of Asbestos at Work Regulation 2002.

  A central asbestos register on the surveys will be held and managed by the Crown Prosecution Service and the asbestos register will be placed in the Library.

  Departmental Hospitality
  Mr. Lidington
  To ask the Solicitor-General how much was spent on food by the Department and by each agency for which it is responsible in(a) 2001–02 and (b) 2002–03; what proportion of that food by value was produced in the United Kingdom; what guidance she has issued to encourage the procurement of home-grown food; and if she will make a statement. [129385]

  The Solicitor-General
  Expenditure on food in the Crown Prosecution Service is generally limited to official hospitality provided by the Crown Prosecution Service and a canteen subsidy. Records of spend on food provided at some external conferences and like events are not kept centrally and so cannot be included.
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  In 2001–02 the Crown Prosecution Service recorded expenditure of £23,000 on hospitality and £110,000 on a canteen subsidy. The figures for 2002–03 were £20,000 and £83,000 respectively.

  Information made available by the canteen service providers indicates that on average 30 per cent. of the food they procure is produced in the United Kingdom. It is not possible to assume a monetary value of UK food supplied to the Crown Prosecution Service indirectly through the subsidy because the subsidy contributes to items other than food.

  Expenditure on food by HM Crown Prosecution Service Inspectorate is generally limited to official hospitality and meeting refreshments. HMCPSI does not provide any canteen facilities.

  HMCPSI did not purchase any unprepared food supplies during 2001–02 or 2002–03. Expenditure on meeting refreshments and meals, supplied by external caterers, was £1,600 in 2001–02 and £1,700 in 2002–03. There was additional relevant expenditure in financial year 2002–03 attributable to a reception to launch the HMCPSI Annual Report and two seminars hosted by the Inspectorate.

  HMCPSI does not record what proportion of its food supplies are UK produced.

  Expenditure on food by the Serious Fraud Office is generally limited to official hospitality and meeting refreshments. The SFO does not provide any canteen facilities. Total expenditure within these categories for each of the two years was £19,000 in 2001–02 and £20,000 in 2002–03. The further breakdown to amounts spent on food and its place of production is not available.

  Expenditure on food in the Treasury Solicitor's Department and the Legal Secretariat to the Law Officers is limited solely to hospitality. There is no staff canteen. There is, therefore, no regular purchase of food.

  The amounts spent in 2001–02 and 2002–03 on hospitality were less than £10,000 in both years.

  Microsoft (Licensing Fees)
  Norman Lamb
  To ask the Solicitor-General how much was paid to Microsoft in licensing fees by the Law Officer's Department and its agencies in each of the last three years; and how much has been budgeted for(a) 2003–04 and (b) 2004–05. [130673]

  The Solicitor-General
  CPS Headquarters spent the following on Microsoft licences (approximately):

  2000–01— £2.5 million

  2001–02— £1.2 million

  2002–03—nil

  The CPS has no specific budget for Microsoft licences for 2003–04 and 2004–05.

  Since 2002, all IT services have been outsourced to LogicaCMG who purchase and manage Microsoft licences on behalf of the Crown Prosecution Service.
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  There may have been some expenditure on Microsoft licences by the Crown Prosecution Service locally, however figures could be obtained only at disproportionate cost.

  Although HMCPSI is not a part of the CPS, it benefits from being part of the CPS IT network. Information relating to payments to Microsoft for licensing fees in that context is subsumed in that relating to the CPS return.

  HMCPSI also has a very small number of its own PCs. Expenditure on Microsoft fees for these machines in the last three years is as follows:

  2000–01—nil

  2001–02—nil

  2002–03—£773

  HMCPSI has no budget for Microsoft fees in 2003–04. The budget for 2004–05 has not been agreed, but it will not include a specific budget for Microsoft fees.

  The Serious Fraud Office spend on Microsoft licenses is as follows:

  2000–01—£3,000

  2001–02—£16,000

  2002–03—£20,000

  2003–04—£250,000 est.

  Expenditure by the Treasury Solicitor's Department on Microsoft licenses since 2001–02 has been:

  2000–01—£36,000

  2001–02—£37,000

  2002–03—£71,000

  2003–04—£113,000 (Forecast outturn)

  2004–05—£52,000 (Budget).

  These payments have been made to OGC preferred suppliers under the Microsoft Select Agreement.

  The accounts kept by the Legal Secretariat to the Law Officers do not provide separate costs for the purchase of Microsoft licences. However, LSLO usually acquires licences through the purchase of new computers with software already installed and licensed.

  Roger Sylvester Case
  Harry Cohen
  To ask the Solicitor-General when she expects the judicial review of the Crown Prosecution Service's decision not to prosecute officers involved in the Roger Sylvester case to be concluded; and if she will make a statement. [131789]

  The Solicitor-General
  The judicial review into the Crown Prosecution Service's decision was adjourned on 21 May 2001 at the direction of Lord Chief Justice Woolf so that the inquest could proceed. The inquest concluded on 3 October 2003 and the jury returned a verdict that Mr. Sylvester was unlawfully killed. The Crown Prosecution Service will now conduct a further review of all the available evidence, including the evidence given at the inquest.

EDUCATION AND SKILLS

  Child Care (Redcar)
  Vera Baird
  To ask the Secretary of State for Education and Skills what budgetary provision has been made for children's centres in the Borough of Redcar and Cleveland. [132422]

  Margaret Hodge
  The indicative funding allocations from April 2004 to March 2006 to develop children's centres in the local authority area of Redcar and Cleveland are: Revenue £623,253 which includes £192,213 for rural wards, and Capital £2,258,185 which includes £700,000 for rural wards. The monies are to create 231 new full day care places and give 3,457 pre-school children access to integrated services in the area. This is building on their four Sure Start local programmes, 14 Neighbourhood Nursery projects, maintained nursery schools, and other existing early years provision.

  Child Employment
  Dr. Evan Harris
  To ask the Secretary of State for Education and Skills if he will place in the Library a copy of the report of the review of Child Employment Procedures carried out in response to the Private Member's Bill proposed by the hon. Member for Gravesham in February 1998. [129055]

  Margaret Hodge
  The report of the Review of Child Employment Law was completed in 1999. Since that time we have taken action to address issues raised by the Review and in the light of these changes, and with the passage of time, it would no longer be appropriate to publish the report. However, the Better Regulation Task Force has announced that it is to undertake a study into the regulation of the employment of children and their findings will be published on completion. The Task Force hopes to make recommendations on the regulation of the employment of children that will:

  help to protect children from exploitation;

  assist employers to meet their obligations; and

  encourage proportionate enforcement.

  I am pleased to sponsor this study.

  Consultancy Contracts
  Mr. Austin Mitchell
  To ask the Secretary of State for Education and Skills how many consultancies were commissioned by his Department in the last two years for which figures are available; and what the cost of those contracts was. [130896]

  Mr. Stephen Twigg
  This information could be supplied only at disproportionate cost.

  OECD Indicators
  Mr. Gibb
  To ask the Secretary of State for Education and Skills what assessment he has made of the Education at a Glance 2003: OECD Indicators finding that(a) the calculated high rates of return to tertiary education in the United Kingdom are to an important extent due to relatively short standard university studies and (b) tertiary graduation rates are higher in the

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  United Kingdom that in France and Germany; and what implications these findings will have on reform of the 14 to 19 curriculum. [131955]

  Alan Johnson
  Relatively short duration university studies represent good value for money. Shorter tertiary courses reduce both the direct and indirect costs of the course because, other things being equal, the individual will need to spend less on tuition and their foregone earnings will be lower. Individuals enter the labour market sooner and so have more time to recoup the costs of their investment through higher earnings.

  Alongside course duration, the other main cause of high rates of return is the higher graduate premium, ie the high (relative to other countries) pre-tax earnings of UK graduates.

  Question addresses two separate OECD indicators, in both of which the UK position is encouraging:
  Concerning the ratio of graduates to the population at the typical age of graduation, the UK is towards the upper end at 37.4 per cent. (well above the OECD average of 30.1 per cent.).
  Concerning the proportion of UK students who complete their tertiary course, at 83 per cent. the UK has one of the best completion rates among OECD countries.

  The Working Group on 14–19 Reform, which is due to report in 2004, is taking account in its work of available international comparative information.

FOREIGN AND COMMONWEALTH

  Burma
  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the UK Government will raise the plight of ethnic minorities in Burma at the United Nations Security Council. [132252]

  Mr. Mike O'Brien
  The Government are encouraging all the appropriate bodies of the UN to tackle the issue of helping bring about national reconciliation, respect for human rights and democracy in Burma. Should Burma feature on the Security Council agenda, the Government would ensure that the plight of Burma's ethnic groups was taken fully into account.

  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government is making to the Burmese regime about the treatment of Aung San Suu Kyi. [132250]

  Mr. Mike O'Brien
  The UK has made numerous representations to the Burmese authorities about the detention of Daw Aung San Suu Kyi. I spoke to the Burmese ambassador to the UK on 1 September to register the UK's grave concern about the continued detention and treatment of Aung San Suu Kyi. We have also discussed this issue with ASEAN and other countries and encouraged them to raise the treatment of Aung San Suu Kyi with the Burmese Junta. While Aung San Suu Kyi's release from detention to home arrest on 26 September was a step in the right direction, the regime must go much further and fully release her and her NLD colleagues and engage in genuine dialogue to reach national reconciliation.

  China
  Paul Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the Government policy is on selling military equipment and armaments to China. [132223]

  Mr. Rammell
  The sale of military equipment and armaments to China is covered by the EU embargo on the sale of arms to China. The Government's policy is based on the UK interpretation of this embargo. No sale can take place without an export licence. All export licence applications assessed on a case by case basis against the consolidated EU and UK arms export licensing criteria.

  We would not approve the export of equipment where there is a clear risk it might be used for international aggression or which might be used for internal repression.

  Antarctic (Pollution)
  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs what actions the UK Government is taking to combat pollution in the Antarctic. [132242]

  Mr. Rammell
  The UK meets its obligations under the Marine Pollution Convention (MARPOL 73/78) and the Environmental Protocol to the Antarctic Treaty through strict enforcement of the Antarctic Act 1994, the Antarctic Regulations 1995 and merchant shipping legislation. This ensures that pollution in Antarctica is minimised and that waste is removed from the region for safe disposal elsewhere. The British Antarctic Survey (BAS), as the principal UK presence in Antarctica, is one of the leaders in environmental and waste management in the region. BAS has introduced stringent waste management and recycling policies and has already undertaken major clean-up and removal of its former bases. It has introduced oil spill response plans, installed a sewage treatment plant at Rothera research station and is also implementing over the next five years a sustainable energy strategy. This will reduce consumption of hydrocarbon fuels and their emissions. Furthermore, HMG insures that all other British activities in Antarctica are appropriately permitted. Such permits set pollution and waste disposal conditions for all British vessels, aircraft and expeditions operating in the area. The UK is also in the lead among Antarctic Treaty parties pressing for the adoption of stricter guidelines for the increasing numbers of large cruise ships entering Antarctic waters.

  European Agencies
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proposals were presented to(a) the European Commission and (b) other EU member governments to locate the (i) European and Asylum and Migration Observatory, (ii) European Agency for Security of Communications Networks, (iii) European Food Authority, (iv) European Maritime Safety Agency, (v) European Aviation Safety Agency and (vi) European Rail Safety and Interoperability Agency in the United Kingdom; what discussions he had on locating each in Scotland; and if he will make a statement. [131647]
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  Mr. MacShane
  We have proposed that only one of the EU agencies be located in the UK and that is the European Maritime Safety Agency (EMSA). We have suggested to our EU partners that it should be located in Glasgow. It is currently unclear as to when a decision will be made on the location of this Agency, along with several others, including those mentioned by the hon. Member. A number of other countries have bid for the site of the EMSA and other agencies. The last substantive discussion of the sites in general was at the Laeken European Council in December 2001.

  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proposals were(a) presented to the European Commission and (b) presented to other EU member governments to place (i) the European Agency for Civil Protection, (ii) Eurojust, (iii) the European Police College, (iv) the Community Agency for Information Exchange on Visas, (v) the European Bureau of External Border Surveillance and (vi) the European Monitoring Centre for Drugs and Drug Addiction in (A) England, (B) Scotland, (C) Wales and (D) Northern Ireland; what discussions were held to secure its location in Scotland; and if he will make a statement. [131795]

  Mr. MacShane
  We have pro posed that only one of the EU agencies cited by the hon. Member be located in the UK, namely the European Police College Secretariat (ECS). We have suggested to our EU partners that this should be located at Bramshill. I also refer the hon. Member to the answer I gave him today.

  Iraq
  Mr. Rosindell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what British interests were harmed by the bomb that exploded outside the United Nations headquarters in Baghdad in August. [132129]

  Mr. Rammell
  The despicable terrorist bombing of the UN HQ in Baghdad on 19 August was an attack on the interests of the UN, the Iraqi people, and the international community. 23 people were killed, of whom one was a British citizen, and over a hundred injured. The coalition has made clear that it will not be deterred by terrorist attacks of this nature.

  Mr. Rosindell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how often he receives briefings from the Commander of British Forces in Iraq. [132131]

  Mr. Rammell
  The Ministry of Defence provides several briefings every week to my right hon. Friend the Foreign Secretary and FCO officials on the situation in Iraq, which take full account of the views of the Commander of British Forces in Iraq.

  Israel
  Clare Short
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason the UK abstained in the UN Security Council vote on Israel on 16 September. [131886]

  Mr. Rammell
  The draft resolution before the UN Security Council on 16 September was unbalanced and therefore unhelpful to the implementation of the 338W
  roadmap. As our Permanent Representative to the UN said at the time, we regret that the Security Council was unable to pass a balanced resolution. But the resolution's sponsors would not accommodate UK amendments intended to achieve a better balance, and the UK therefore abstained. A resolution on the situation of President Arafat was subsequently put to an Emergency Special Session of the UN General Assembly. European Union proposals for a more balanced text were then accepted and the UK, with our EU Partners, voted for the resolution.

  My right hon. Friend the Foreign Secretary has made clear the Government's view that expelling or harming President Arafat would be wrong and counterproductive. Israel should not allow its justified anger at the continuing violence to lead to actions that would undermine both the peace process and its own interests.

  Sri Lanka
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) when he last had discussions with representatives of the government of Sri Lanka; where these discussions took place; what topics were addressed; and if he will make a statement; [131831]

  (2) when he last had discussions with representatives of the Liberation Tigers of Tamil Eelam; where these discussions took place; what topics were addressed; and if he will make a statement; [131832]

  (3) when he last had discussions with (a) representatives of the US Government, (b) representatives of the governments of the EU member states, (c) representatives of the EU Commission, (d) representatives of the UN, (e) representatives of non-governmental organisations, (f) representatives of the government of Sri Lanka and (g) representatives of the Liberation Tigers of Tamil Eelam concerning the resumption of negotiations between the government of Sri Lanka and the Liberation Tigers of Tamil Eelam; and if he will make a statement. [131833]

  Mr. Mike O'Brien
  During my visit to Colombo in January this year, I met with a wide range of interlocutors including representatives of a number of the governments, multi-lateral and non-governmental organisations listed. In London in September I met Professor G. L. Peiris, Sri Lankan Minister for Constitutional Affairs and Government Chief Negotiator; prior to that I met him in March. I also met with Milinda Moragoda, Sri Lankan Minister for Economic Reform, Science and Technology in June. I discussed the peace process with both ministers.

  I have not met with representatives of the LTTE.

  Sudan
  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the UK's relationship with Sudan. [132243]

  Mr. Mullin
  The UK has full diplomatic relations with Sudan. Through our Embassy in Sudan we are also in close touch with non-governmental groups from the north and south of the country. The UK Government pursues political, cultural, human rights and development issues. In 2002–03 we committed around £15 million to support
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  both humanitarian work and the peace process. Peace is crucial to the future development of Sudan and regional stability. The UK plays an active role in the peace process, including through the UK Special Representative for Sudan and the Sudan Unit, jointly staffed by the Foreign and Commonwealth Office and the Department for International Development.

  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Sudanese Government about human rights abuses in Sudan. [132244]

  Mr. Mullin
  We monitor the human rights situation in Sudan closely. The Embassy regularly lobbies the Government of Sudan on human rights issues. In September, the Head of the FCO's Human Rights Policy Department visited Sudan to meet government officials, representatives of non-governmental organisations, academics and others, including political prisoners. We will maintain pressure on the Government of Sudan to improve its record and will continue to raise human rights violations at every opportunity both bilaterally and as part of the EU/Sudan dialogue.

  Thailand
  Mr. Best
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the Thai authorities about conditions for displaced Burmese minorities resident in refugee camps in Thailand. [132251]

  Mr. Mike O'Brien
  The Thai authorities have a long record of providing safe haven for those fleeing persecution by the Burmese regime. The British embassy in Bangkok and EU colleagues are in regular contact with the United Nations High Commission for Refugees, and the Thai authorities, to encourage them to ensure Burmese refugees are treated with compassion. I discussed Burma in broad terms with Thai Foreign Minister Dr. Surakiart Sathirathai when he visited London at the beginning of July and again on the way to the Bali ASEM conference of the same month. We have been in regular telephone contact since. In March 2003, my hon. Friend the Parliamentary Under-Secretary of State at the Department for International Development (Sally Keeble) visited the refugee camp at Mae La.

  Treaties
  Mr. Cash
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his statement of 16 September,Official Report, column 794, when it became Government policy that all international treaties take primacy over national law; and on what evidence he bases the statement that under the draft constitutional treaty for the first time provision is made whereby Parliament can legislate to repudiate a treaty. [131821]

  Mr. MacShane
  It is an established principle of international law that a state may not plead its national law to escape its international law obligations, including its treaty obligations. As a matter of UK constitutional law, international treaties have effect in UK national law to the extent that they have been implemented in national law.

  Article I–59 of the draft EU Constitutional Treaty states that any member state may decide to withdraw from the Union in accordance with its own constitutional
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  requirements. The Government believe it is highly unlikely that any member state would wish to withdraw, but sees a case for stating the political and legal reality of what would happen in such exceptional circumstances.

  Turkey
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last had discussions with his Turkish counterpart; what matters were raised in these discussions; and if he will make a statement. [131445]

  Mr. MacShane
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs met Turkish Foreign Minister Abdullah Gul, in New York on 25 September. They discussed Turkey's progress towards EU accession, Cyprus and developments in Iraq. The Foreign Secretary reaffirmed the UK's commitment to Turkey's EU candidacy and welcomed the significant progress that Turkey has made towards meeting the Copenhagen Political Criteria. He also discussed the urgent need to work towards a Cyprus settlement on the basis of the Annan plan. The Turkish Foreign Minister gave the Foreign Secretary an update on Turkey's plans to help rebuild Iraq.

  Cyprus
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with(a) representatives of the Turkish Government, (b) representatives of the Cypriot Government, (c) representatives of the Greek Government, (d) representatives of the US Administration and (e) representatives of the European Commission since April concerning re-unification negotiations in Cyprus. [131446]

  Mr. MacShane
  Foreign and Commonwealth Office Ministers and officials regularly discuss the prospects for resumed Cyprus settlement negotiations on the basis of the UN plan with representatives of the Turkish, Greek, Cypriot and US governments. We also discuss developments on the island with the European Commission and EU partners, including at monthly meetings of the Working Group on South East Europe. These contacts are too numerous to list here, but have included my right hon. Friend the Foreign Secretary's meetings with Turkish Foreign Minister Gul in London in July and at the UN in September. I discussed the issue with the Greek officials in Greece 10–11 October.

  We firmly believe that securing a comprehensive settlement in Cyprus before 1 May 2004, in enabling a re-united island to accede to the EU, would be I the best interests of all Cypriots, and the region as a whole. In addition, it would provide a boost to Turkey's own EU candidature.

  West Bank and Gaza Strip
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the report on housing conditions in the West bank and the Gaza Strip, prepared last year by the United Nations Human Rights Commission's Special Rapporteur on housing; and if he will make a statement. [131629]
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  Mr. Rammell
  We share Special Rapporteur Miloon Kothari's concerns about deteriorating housing conditions in the Occupied Territories and the wider human rights and humanitarian consequences of the Israeli-Palestinian conflict. We are particularly concerned about the destruction of Palestinian infrastructure by the Israeli authorities. Such actions are provocative, exacerbate tension and undermine on-going efforts to bring about an end to violence and a return to negotiations. We continue to press Israel to end the disproportionate use of force, demolitions and destruction of infrastructure.

  The UK Government's support to the Palestinians includes a combination of emergency and development assistance. Our humanitarian support has mainly focused on basic service provision, but we are also supporting an UN Relief and Works Agency project to rebuild housing in Jenin Refugee Camp, destroyed in 2002 during Operation Defensive Shield. While humanitarian assistance can help alleviate suffering, only a comprehensive solution to the conflict will provide the conditions for permanent improvement in Palestinian living conditions. We are encouraging Israel and the Palestinian Authority to resume implementation of the Quartet Roadmap to this end.

NORTHERN IRELAND

  Water Metering (Commercial Premises)
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland how many commercial premises are being used in each constituency in Northern Ireland; how many of these commercial premises have been fitted with a water meter; and how many of these commercial premises will receive their first account during January and February 2004. [131776]

  Mr. Spellar
  I have asked the chief executive of Water Service to write to the hon. Lady in response to this question. A copy of the letter will be placed in the Library.

HEALTH

  Ethnic Minority Staff
  Mr. McNamara
  To ask the Secretary of State for Health pursuant to his answer of 30 June 2003,Official Report, column 141W, on ethnic minority staff, if he will require national health service trusts to give information on the ethnicity of hospital and community medical and hospital dental staff when making their six-month reports on suspensions. [128706]

  Mr. Hutton
  [holding answer 18 September 2003]: The Department will start to collect information on the ethnicity of hospital and community medical and dental staff as part of the routine data collection exercise on long term suspension as soon as practicable.

  Achondroplasia
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many children in each year since 1997 have suffered from achondroplasia. [132209]
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  Dr. Ladyman
  This information is not collected in the form requested. Hospital Episode Statistics collect data on admissions for various conditions. The table records hospital admissions for achondroplasia. This does not represent the number of in-patients, as a person may have more than one admission within the year.

  Primary diagnosis (ICD1O Q77.4) Achrondroplasia count of finished inyear admission episodes: age on admission 0–17 years—NHS hospitals England 1997–98 to 2001–02 Diagnosis code description Q77.4 Osteochrondrodysplasia with defect growth of tubular bones and spine—Achondroplasia

  Year

  Number

  1997–98

  98

  1998–99

  76

  1999–2000

  83

  2000–01

  102

  2001–02

  125

  Notes:

  1. Admissions—Admissions are defined as the first period of in-patient care under one consultant within one health care provider. Please note that admissions do not represent the number of in-patients, as a person may have more than one admission within the year.

  2. Diagnosis (Primary Diagnosis)—The primary diagnosis is the first of up to 14 (seven prior to 2002–03) diagnosis fields in the Hospital Episode Statistics (HES) data set and provides the main reason why the patient was in hospital.

  3. Grossing—Figures have not (yet) been adjusted for shortfalls in data (i.e. the data are ungrossed).

  Source:

  Hospital Episode Statistics (HES), Department of Health.

  Attention Deficit Hyperactivity Disorder
  Mrs. Iris Robinson
  To ask the Secretary of State for Health how many individuals in England have been diagnosed with attention deficit hyperactivity disorder over the last three years. [132469]

  Dr. Ladyman
  I refer the hon. Member to the reply I gave on 6 October,Official Report, column 1265W.

  Diagnostic and Treatment Centres
  Mr. Dobson
  To ask the Secretary of State for Health what estimate he has made of(a) former and (b) seconded NHS staff who will be working in private diagnostic and treatment centres. [131908]

  Mr. Hutton
  The exact number of professional staff working in these new units will be finalised in the next stage of negotiations leading to contract close.

  Mr. Dobson
  To ask the Secretary of State for Health for what reasons the bids from(a) BUPA and (b) BMI to run private diagnostic and treatment centres were unsuccessful. [131910]

  Mr. Hutton
  The procurement process for independent sector treatment centres involved inviting bids from a wide range of independent health care sector organisations, which included BUPA and BMI.

  The quality of bid submissions was very high and many companies, including BUPA and BMI were able to meet the stringent clinical standards requirements that had been set. The Department, along with local national health service sponsors, was also seeking examples of: additionality of staff, to avoid any disruption to the local NHS and to ensure that the

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  activity provided in these units was additional to existing work being handled in NHS facilities; innovative solutions in terms of methods of working and patient experience; and value for money in terms of the costs of each procedure, and the affordability of this activity for the local NHS health economy. In order to provide fairness in the evaluation process the bids for all schemes were evaluated by a team made up from central Departmental experts in procurement and clinical practice and local NHS clinicians and managers representing the sponsors of the schemes. The resulting preferred bidders and reserve bidders were therefore chosen on the basis of the criteria and BUPA and BMI were not able to demonstrate their competitiveness on enough of these to warrant their inclusion.

  Mr. Dobson
  To ask the Secretary of State for Health whether(a) NHS hospitals and (b) diagnostic and treatment centres will be paid more than the standard tariff for operations to reflect start-up costs they may incur. [131911]

  Mr. Hutton
  From this year, the Government have introduced a new financial system to provide a transparent, rules-based system for paying providers of services to national health service patients. Primary care trusts (PCTs) will commission the volume of activity required to deliver service priorities, adjusted for case-mix from a plurality of providers on the basis of a standard national price tariff, adjusted for regional variation in wages and other costs of service delivery. By 2008, all NHS providers will be required to meet tariff.

  The Department is currently consulting on whether and how additional support above tariff should be provided for up-front revenue costs of new investment. However, we expect many of the contracts for new independent sector treatment centres to be at or below tariff. Where in the short-term we may initially pay slightly more than tariff to some independent sector providers, this is to cover start-up costs so that the new facilities open as quickly as possible to treat more patients, reduce waiting lists and bring additional clinical staff to treat NHS patients. In these cases, local PCTs commissioning care from these new units will not be disadvantaged.

  Mr. Dobson
  To ask the Secretary of State for Health whether he will require private diagnostic and treatment centres to have intensive care beds. [131912]

  Mr. Hutton
  Treatment centres offer high quality, pre-booked surgery and diagnosis facilities for the treatment of routine, elective national health service patients and will not be required to have intensive care beds. They will be expected to be able to deal with typical surgical problems to the same standards as NHS providers. Local trusts, primary care trusts and new providers will agree protocols for referring and transferring patients who require emergency or urgent care that cannot be provided by the treatment centre.

  Diet
  Chris Grayling
  To ask the Secretary of State for Health what recent research the Government have commissioned into the impact on anti-social behaviour of provision of dietary supplements of vitamins and minerals. [130058]
  344W
  Miss Melanie Johnson
  The Medical Research Council (MRC) has not recently funded any research into the impact of dietary supplements of vitamins and minerals on anti-social behaviour. However, the MRC does have a nutrition portfolio and spent £17 million in 2001–02. The MRC always welcomes high quality applications for support into any aspect of human health and these are judged in open competition with other demands on funding.

  European Single Currency
  Mr. Stephen O'Brien
  To ask the Secretary of State for Health how much has been spent in each year by his Department in preparing for United Kingdom entry to the euro; how much his Department plans to spend on preparations for United Kingdom entry to the euro for each year from the current financial year up to and including 2005–06; and what estimates he has made of the total costs to his Department of changeover to the European Single Currency. [131604]

  Ms Rosie Winterton
  I refer the hon. Member to the response given by my hon. Friend the Financial Secretary to the Treasury (Ms. Kelly), on 14 October 2003,Official Report, column 142W.

  Hospital Beds
  Mr. Brady
  To ask the Secretary of State for Health (1) what estimate he has made of the number of patients in each of the last 12 months who have returned home following admission for in-patient treatment due to the unavailability of a hospital bed, without being discharged from hospital; [129100]

  (2) what estimate he has made of the average time between an in-patient admission and the patient being allocated to a bed over the last 12 months. [129146]

  Mr. Hutton
  [holding answer 11 September 2003]: Data are not collected on this aspect of patient care. The NHS Modernisation Agency has established an emergency services collaborative. The collaborative is working with every health community to analyse bed management processes and spread best practice. However, the Department collects quarterly data on the number of operations cancelled by hospitals for non-clinical reasons at the last minute (that is, on the day the patients are due to arrive or after arrival in hospital or on the day of their operation) or on the day of surgery (in 2002–03 only). Data for England, by national health service trust and strategic health authority level, are available in the Library and on the Department's website at www.doh.gov.uk/hospitalactivity/data_requests.htm

  The data collected on cancelled operations for non-clinical reasons are not broken down into the reasons for cancellation.

  Mr. Amess
  To ask the Secretary of State for Health what estimate he has made of the number of beds that will be freed up in NHS trust hospitals due to the creation of fast track NHS diagnostic and treatment centres. [131887]

  Mr. Hutton
  The independent sector treatment centre programme will free up substantial additional capacity. In some specific instances, the activity freed up in the national health service trust is lower than the numbers
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  being transferred into treatment centres. This is due to the nature of the work which will replace it, for example, more complex cases, with longer lengths of stay, as well as providing capacity to improve non-elective services such as accident and emergency.

  Hospital Stays (Healthy Visitors)
  Dr. Evan Harris
  To ask the Secretary of State for Health how many overnight stays for healthy visitors in NHS beds in(a) England, (b) each region and (c) each strategic health authority there were in each of the last six years; and at what total cost [128904]

  Mr. Hutton
  The Department does not hold any information relating to 'healthy visitors'.

  Ministerial Travel
  Mr. Don Foster
  To ask the Secretary of State for Health if he will list internal flights made by Ministers in his Department in 2002, including in each case the(a) cost, (b) departure location and (c) destination; and of these how many were (i) first class, (ii) business class and (Hi) economy class. [103587]

  Mr. Hutton
  [pursuant to his answer, 19 March 2003, Official Report, c. 847W]: I regret that the previous response the hon. Member received was incorrect. The response should have read as follows.
  "The tables show details of internal flights taken by Ministers in the Department of Health in 2002, according to available information".

  My right hon. Friend the then Secretary of State for Health (Mr. Milburn) took the following flights.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Newcastle

  Belfast

  Single

  Premium Economy

  161.30

  Belfast

  Heathrow

  Single

  Business Class

  176.90

  Birmingham

  Newcastle

  Single

  Business Class

  161.50

  I took the following flights.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  London

  Manchester

  Return

  Business Class

  135.50

  London

  Belfast (return to Aberdeen)

  Return

  Business Class

  502.70

  Gatwick

  Plymouth

  Single

  Business Class

  159.70

  My noble Friend the then Parliamentary Under-Secretary of State (Lord Hunt of Kingsheath), took the following flight.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Edinburgh

  London

  Return

  Business Class

  332.40

  My hon. Friend for Salford (Ms Blears), in her capacity as the Parliamentary Under-Secretary of State, took the following flights.
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  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Heathrow

  Manchester

  Return

  Business Class

  278.90

  Heathrow

  Teesside

  Single

  Business Class

  159.20

  Heathrow

  Manchester

  Single

  Business Class

  135.50

  Heathrow

  Manchester

  Single

  Business Class

  108.50

  My hon. Friend the Member for Tottenham (Mr. Lammy), in his capacity as the Parliamentary Under-Secretary of State, took the following flights.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Heathrow

  Newcastle (return to Gatwick)

  Return

  Business Class

  329.30

  Gatwick

  Plymouth

  Single

  Business Class

  159.70

  Heathrow

  Manchester

  Single

  Business Class

  143.50

  City Airport

  Manchester

  Return

  Business Class

  285.20

  Heathrow

  Newcastle

  Return

  Business Class

  308.30

  My hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), in her capacity as the Parliamentary Under-Secretary of State for Public Health, took the following flight.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Heathrow

  Glasgow

  Return

  Business Class

  332.40

  My hon. Friend the Member for Salford (Ms Blears), in her capacity as the Parliamentary Under-Secretary of State for Public Health, took the following flights.

  Departure location

  Destination

  Type of flight

  Class

  Cost (£)

  Heathrow

  Manchester

  Single

  Business Class

  108.50

  Heathrow

  Manchester

  Single

  Business Class

  143.50

  Heathrow

  Manchester

  Single

  Business Class

  138.50

  Heathrow

  Manchester

  Single

  Business Class

  132.50

  Heathrow

  Manchester

  Single

  Business Class

  148.50

  Gatwick

  Plymouth

  Return

  Business Class

  320

  Manchester

  London

  Return

  Business Class

  290.40

  Heathrow

  Manchester

  Single

  Business Class

  143.50

  Heathrow

  Manchester

  Return

  Business Class

  234.90

  NHS Trust Deficits
  Mr. Hancock
  To ask the Secretary of State for Health which NHS trusts are in deficit; what his strategy is for resolving the situation; and if he will make a statement. [132352]

  Mr. Hutton
  We have no plans to publish un-audited in-year financial information. All national health service trusts have been asked to plan for and achieve financial balance in 2003–04. Audited information for all NHS trusts will be published in their individual annual accounts and will be available centrally in autumn 2004.

  Strategic health authorities and the NHS Modernisation Agency will be working closely with NHS organisations to ensure that they are able to deliver their financial and service delivery plans.

  Ophthalmology (Oxfordshire and Buckinghamshire)
  Mr. Lidington
  To ask the Secretary of State for Health what the planned location is of the proposed diagnostic and treatment centre for ophthalmology for Oxfordshire and Buckinghamshire. [131399]

  Mr. Hutton
  [holding answer 14 October 2003]: The ophthalmic treatment centre for Oxfordshire and Buckinghamshire will be provided through a mobile unit.

  The unit will provide services for patients in North Oxford, Wycombe and south west Oxfordshire and as it is mobile it can be used elsewhere as the need arises. The final locations will depend on discussions between local primary care trusts and will relate to demand from national health service patients, and will be convenient for patient access.

  Paediatric Dentistry
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will list for each primary care trust the average wait for a child between an initial dental consultation and being operated on under general anaesthetic. [132298]

  Mr. Hutton
  Information is not collected on the waiting time from initial dental consultation to being operated on under general anaesthetic for a child.

  Information is collected on how long a patient is waiting for elective in-patient admission from clinical decision to admit. Information for the specialty paediatric dentistry showing the total patients waiting and the average waiting time for this specialty by primary care trust has been placed in the Library.

  Patient Records
  Mr. Gibb
  To ask the Secretary of State for Health if he will list the Government Departments and agencies which will have(a) trusted access, (b) non-trusted access and (c) any other forms of access to patients' NHS records via the NHS net. [131958]

  Mr. Hutton
  It is not intended that any Government Department or agency that is not involved in providing care to patients will have access to patient records via the NHSnet.

  Private Health Care Providers
  Mr. Nicholas Brown
  To ask the Secretary of State for Health how many foreign-owned private healthcare providers have pilot programmes with NHS trusts. [131344]

  Mr. Hutton
  The number of foreign owned private health care providers who are or have undertaken pilot programmes within national health service trusts is not held centrally.

  There are, however, a number of primary care trusts (PCTs) who are engaged in programmes with private organisations. These organisations are providing administrative support services to help PCTs design and deliver improved health care. Some of these—such as the work with United Healthcare Group to implement the Evercare model of care for at-risk elderly—are part
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  of the Transformational Change Programme, managed by the National Primary and Care Trust Development Programme (NatPaCT), which aims to help primary care trusts redesign services. However, we do not hold centrally details of all PCTs who have entered into arrangements with private organisations.

  Renal Dialysis
  Mr. Colman
  To ask the Secretary of State for Health what renal dialysis services are planned for(a) Queen Mary's Hospital, Roehampton and (b) the Kingston area. [131943]

  Mr. Hutton
  This is a local matter for South West London Strategic Health Authority. There is provision for renal dialysis services within the Queen Mary's Roehampton rebuilding programme, which is due to be completed in 2005. In the meantime, options for developing services in the Kingston and North Wandsworth area are being considered by the local national health service.

  Office of the Independent Regulator
  Mr. Dobson
  To ask the Secretary of State for Health what estimate he has made of the(a) staff levels and (b) running costs of the Foundation Trust Regulator. [131907]

  Mr. Hutton
  Subject to legislation, the Office of the Independent Regulator will be established as a non-Ministerial Department, which will be accountable to Parliament but not subject to direction from the Secretary of State for Health. The Independent Regulator is responsible for structure and staffing of the Office of the Regulator. However, he or she must consult the Minister for the Civil Service on the number of staff and their terms and conditions.

  The extent of these costs and the number of additional staff required will depend on the number of national health service foundation trusts. In the Explanatory Notes to the Bill, published in March 2003, the Department estimated that, in the first full financial year, 2004–05, the running costs would be £2.3 million. This estimate was based on legal and financial costs, accommodation, expenditure on information technology and the running costs for 12 staff. Final arrangements for the structure and staffing of the Office are for the Regulator to determine and, once appointed, the Regulator will develop detailed proposals and estimates.

  Surgical Procedures (Comparable Costs)
  Lynne Jones
  To ask the Secretary of State for Health what assessment he has made of the comparable costs of surgical procedures carried out in national health service hospitals, diagnostic and treatment centres and under contracts with(a) the United Kingdom private sector and (b) overseas health facilities. [131493]

  Mr. Hutton
  The Department carries out an annual reference cost collection exercise. This year, for the first time, we have collected information on the cost of activity carried out for the national health service by non-NHS providers. This does not include overseas treatment or independent sector treatment centres, although this may be included in future years.

  Waiting Rooms (Piped Music)
  Mrs. Anne Campbell
  To ask the Secretary of State for Health what assessment he has made of(a) patients' reactions to piped music in NHS waiting rooms and (b) whether this has any therapeutic effect; and if he will make a statement. [132420]

  Mr. Hutton
  [holding answer 15 October 2003]: The use or otherwise of piped music in hospitals is a matter for local decision making, which should reflect the views of staff and patients. We are not aware of any specific research on the effect of piped music in national health service waiting rooms.

  Waiting Times
  David Davis
  To ask the Secretary of State for Health what the breakdown by clinical area of waiting times is for the number of people waiting for a referral to a specialist from their general practitioner. [132395]

  Mr. Hutton
  Information on patients waiting for their first consultant out-patient attendance following general practitioner written referral is collected at the consultants main specialty function, and only for those patients waiting over 13 weeks.

  The table shows the number of patients waiting over 13 weeks by specialty.

  Patients waiting for 1st consultant out-patient appointment following GP written referral: England (provider based): quarter 1, 2003–04

  Specialty

  Patients waiting over 13 weeks

  General surgery

  9,616

  Urology

  6,821

  Trauma and orthopaedics

  30,378

  Ear, Nose and Throat

  22,264

  Ophthalmology

  17,926

  Oral surgery

  8,801

  Restorative dentistry

  928

  Paediatric dentistry

  273

  Orthodontics

  1,602

  Neurosurgery

  456

  Plastic surgery

  3,467

  Cardiothoracic surgery

  150

  Paediatric surgery

  418

  Accident and emergency

  58

  Anaesthetics

  635

  Pain Management

  1,246

  General medicine

  7,804

  Gastroenterology

  2,503

  Endocrinology

  859

  Clinical haematology

  229

  Clinical physiology

  —

  Clinical pharmacology

  11

  Audiological medicine

  312

  Clinical genetics

  37

  Clinical Cyto-molecular genetics

  —

  Clinical Immunology and allergy

  269

  Rehabilitation

  58

  Palliative medicine

  —

  Cardiology

  4,311

  Dermatology

  11,952

  Thoracic medicine

  805

  Infectious diseases

  31

  Genito-urinary medicine

  1

  Nephrology

  225

  Medical oncology

  3

  Nuclear medicine

  10

  Neurology

  6,741

  350W

  Patients waiting for 1st consultant out-patient appointment following GP written referral: England (provider based): quarter 1, 2003–04

  Specialty

  Patients waiting over 13 weeks

  Clinical neuro-physiology

  104

  Rheumatology

  5,254

  Paediatrics

  2,274

  Paediatric neurology

  30

  Geriatric medicine

  223

  Dental medicine specialities

  85

  Medical ophthalmology

  —

  Gynaecology

  8,341

  Antenatal clinic

  202

  Postnatal clinic

  —

  Mental handicap

  8

  Mental illness

  468

  Child and adolescent psychiatry

  216

  Forensic psychiatry

  4

  Psychotherapy

  12

  Old age psychiatry

  157

  Clinical Oncology

  5

  Radiology

  2

  General pathology

  19

  Blood transfusion

  —

  Chemical pathology

  108

  Haematology

  40

  Histopathology

  —

  Immunopathology

  36

  Medical microbiology

  —

  Neuropathology

  —

  Community medicine

  18

  Occupational medicine

  —

  Joint consultant clinic

  25

  All specialties

  158,831

  Source:

  Department of Health form QM08

DEPUTY PRIME MINISTER

  Building Regulations (Disabled People)
  Mr. Kidney
  To ask the Deputy Prime Minister what assessment he has made of the levels of knowledge among builders of the housing design needs of disabled people. [130979]

  Phil Hope
  No direct assessment is made. However, the Office of the Deputy Prime Minister undertakes extensive contacts with builders' organisations such as the House Builders Federation and the National House-Building Council. Officials of the Office of the Deputy Prime Minister discussed with builders from time to time their understanding of the Building Regulations, including Part M, 'Access and Facilities for Disabled People'.

  Mr. Kidney
  To ask the Deputy Prime Minister what representations he has received on the adequacy of Part M of the Building Regulations in securing liveable accommodation for disabled people. [130980]

  Phil Hope
  The Requirements of Part M of the Building Regulations relating to housing were introduced in 1999, and are intended to make it reasonably safe and convenient for disabled people to visit new dwellings and to use the principal storey. The provisions are expected to enable occupants to cope better with reducing mobility and to 'stay put' longer in their own homes. Such representations as the Office of
  351W
  the Deputy Prime Minister receive range from those who feel Part M should not apply to dwellings to those who would like to see it extended in different ways.

  Buildmark
  Huw Irranca-Davies
  To ask the Deputy Prime Minister if he will make a statement on the nature of representations received in the last 12 months in respect of the Buildmark warranty scheme; and what major areas of concern were expressed in these representations. [132514]

  Phil Hope
  I refer my hon. Friend to the answer given on 6 October 2003,Official Report, column 1025W.

  The matters raised included instances where defects in homes were not detected, where claims fell outside the terms of the cover and where the resolution service offered under the scheme was unable to settle a dispute between the owner and the builder, or did so only after some delay. The number of cases brought to the attention of the Office of the Deputy Prime Minister is small, bearing in mind that, at any one time, there are approximately 1.5 million homes covered by the scheme. However, any instance where defects come to light in a new home after hand over, or where appropriate remedial work is not carried out promptly, is regrettable. The house building industry must work for continuous improvement in quality of construction. The Buildmark scheme is helping them to do this.

  High Hedges
  Lynne Jones
  To ask the Deputy Prime Minister how many representations his Department has received in support of legislation on high hedges from(a) hon. Members and (b) members of the public since the fall of the Private Member's Bill on High Hedges on 20 June 2003. [131914]

  Yvette Cooper
  Since 20 June 2003, the Office of the Deputy Prime Minister has received(a) 402 representations from hon. Members and (b) 182 representations from members of the public, concerning high hedges, almost all in favour of the legislation.

  Official Residences
  Mr. Pickles
  To ask the Deputy Prime Minister if he will list the(a) maintenance, (b) running and (c) capital costs associated with each of his official residences in each year since 1997. [91630]

  Yvette Cooper
  The cost of my right. hon. Friend the Deputy Prime Minister's accommodation including rent, security and maintenance costs, which include capital works, in Admiralty House is tabled as follows:

  £

  1998–99

  172,572

  1999–2000

  301,615

  2000–01

  224,677

  2001–02

  211,082

  2002–03

  260,916

  The costs are based on an apportionment of the costs of running Admiralty House and are charged to the Office of the Deputy Prime Minister by the Cabinet Office who manage the building.

  In addition my right hon. Friend the Deputy Prime Minister has the use of Dorneywood which is not owned by the Government, and therefore there is no cost to public funds

  South East Housing Growth (Water Supply)
  Mr. Hancock
  To ask the Deputy Prime Minister what research his Department has(a) commissioned and (b) evaluated on the effect of the projected housing numbers forecast for the South East on the level of water supply; and if he will make a statement. [131514]

  Keith Hill
  The Office of the Deputy Prime Minister is committed to ensuring that projected growth in housing numbers across the South East has the necessary water and sewerage services. In the growth areas, proposals for increased housing are based on studies which assess infrastructure requirements including water, and as more specific locations for growth are defined in local studies and plans, the requirements can be considered in terms of specific capacity increases required.

  Together with regional and local partners, the Office of the Deputy Prime Minister has held and will continue discussions with the respective water undertakers and environmental regulators over the level of water supplies needed to meet the projected housing growth across the South East.

HOME DEPARTMENT

  Animal Procedures Committee Report 2002
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  In accordance with section 20(5) of the Animals (Scientific Procedures) Act 1986, I have placed the Committee's annual report for 2002 in the Library today. The report includes the Committee's consideration of particular licence applications and its consideration of enforcement and compliance issues.

WORK AND PENSIONS

  Benefit Fraud Inspectorate Report (Redcar and Cleveland Borough Council)
  The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)
  On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) visit report on Redcar and Cleveland borough council was published on 9 October 2003 and copies of the report have been placed in the Library.

  Following the housing Green Paper "Quality and Choice: A Decent Home for All", published in April 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The performance standards for housing benefits allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are the standards that the Department for Work and Pensions expects local authorities to aspire to and achieve in time.

  The BFI visited Redcar and Cleveland borough council to find out why the council had not regularly submitted performance data to the Department for Work and Pensions as required by the Department.

  It was agreed with the council that the normal scope of a BFI inspection would not be suitable, and that the BFI visit would look at the key performance indicators produced by the council and the processes that were intrinsic to the production of its performance data.

  The report finds that the council had undergone two major changes since April 2002. It had implemented the verification framework in April 2002 and transferred its housing stock to a private landlord as a large-scale voluntary transfer in July 2002. The BFI's visit concluded that these changes were poorly planned and senior management did not fully anticipate the effect they would have in terms of resources. Consequently they have had a detrimental impact on the benefits business.
  22WS
  At the same time as these changes, there was considerable uncertainty within the benefits service because the council had started negotiations with a private contractor with a view to contracting-out the benefits service.

  These factors caused a backlog of work to build up in August 2002 and this stood at 12,000 items (11 weeks work) at the time of our visit. The report finds that since August 2002, the council's performance in processing new claims to benefit and changes of circumstances had deteriorated significantly. The BFI's sampling showed it had moved from delivering a quick and efficient service to its customers, to one where new claims to benefit and changes of circumstances were taking an average 77 and 44 days respectively to process. However, the latest performance data received by the Department for Work and Pensions indicates that the council's performance is better than this.

  The report finds that the council's benefits service used an IT system that was developed in 1987 and which no longer fully supported the business. This had made it difficult for the council to produce the management information required by the Department for Work and Pensions.

  In May 2003, the benefits service was contracted out and plans put in place to clear the backlog of work, and also to recruit staff to take the benefits service to full complement. The new contract had been negotiated with the requirement that a new IT system will be implemented before the start of the 2004–05 financial year. In 2002–03, Redcar and Cleveland borough council administered some £38.6 million in housing benefits, about 14 per cent of its total gross revenue expenditure.

  The report makes recommendations to help the council address weaknesses and to further improve the administration of housing benefit and council tax benefit.

  My right hon. Fri end the Secretary of State is now considering the report and will be asking the council for its proposals in response to BFI's findings and recommendations.

DEFENCE

  Defence Science and Technology Laboratory
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  The following key targets have been set for the Defence Science and Technology Laboratory for financial year 2003–04:

  Propose simpler method of measuring customer satisfaction and at least maintain overall satisfaction and improved customer understanding of DSTL by 2005.

  Maintain, and by the end of a three-year period show, an increase in scores for scientific and engineering capability in the technical benchmarking exercise.

  Maintain accreditation to IS09001: 2000, Good Laboratory Practice, IiP and other mandated quality and safety standards. Implement all recommendations arising from the Safety, Health, Environment and Fire (SHEF) audits and Board of Inquiry.
  23WS
  Achieve a Return on Capital Employed (ROCE) of 6.5 per cent. for 2003–04 and an MOD dividend of £3 million per year. Capital employed will equate to the total assets from which shall be deducted the total of current liabilities.

  Maintain the average charge rate for manpower for 2003–04 and beyond below that for 2001–02 uplifted by GDP deflator.

  Achieve planned progress on site rationalisation to meet the 2006 date for transfer of DSTL staff to the new core site.

  Agree and implement a DSTL diversity action plan.

CONSTITUTIONAL AFFAIRS

  European Convention for the Protection of Human Rights and Fundamental Freedoms
  The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. David Lammy)
  On 10 October 2003, the UK ratified protocol 13 to the European Convention for the Protection of Human Rights and Fundamental Freedoms banning the death penalty in all circumstances. The ratification will apply at present only to the metropolitan area of the United Kingdom. Ratification will be extended to the Crown Dependencies and Overseas Territories at a later date. We shall in due course seek parliamentary approval pursuant to section 1(4) of the Human Rights Act 1998 to add protocol 13 to the list of scheduled convention rights.

  Court Service Annual Report and Accounts 2002–03
  The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie)
  The Court Service annual report and accounts for 2002–03 has been laid before Parliament today. This document gives full details of the Agency's performance and expenditure for that year. Copies or the report have been placed in the Libraries of both Houses.

DEPUTY PRIME MINISTER

  Supporting People
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper)
  The supporting people programme went live on 1 April. The programme provides services which help vulnerable people—including victims of domestic violence, older people and teenage parents—live independently in their accommodation.

  The Government have today announced a grant allocation of £1.8 billion for the first year of the programme. Officials will be writing to local authorities individually to confirm allocations for 2003–04.

  The Government have also set up an independent review to gauge the true picture of how the funding is being utilised. The review will report by Christmas and will inform local authority budget allocation decisions for the next financial year. This review is in the context of the growth of the transitional housing benefit element of supporting people, which has increased by £400 million from the original estimates by local authorities, which were announced in February. In all there are now an estimated 250,000 units of housing support, excluding sheltered and community alarms, compared to fewer than 100,000 estimated in 2000.

  The review will specifically consider:
  The considerable variations between authorities' costs and patterns of service provision.
  Services which were previously paid for out of other budgets where it is unclear how the resulting savings have been re-deployed;
  Whether the programme is meeting its original objectives, including schemes which raise questions about compliance with grant conditions.

  A key objective of the programme remains to ensure vulnerable groups receive the level of complex support they need through planned sustainable spending arrangements that demonstrate equity, efficiency and value for money.

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Health and Social Care (Community Health and Standards) Bill
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Warner.)
On Question, Motion agreed to. House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 18 [General powers]:
Earl Howe moved Amendment No. 182:
Page 8, line 26, at end insert—
"( ) An NHS foundation trust shall have the power to pay remuneration and allowances to any person without reference to future national agreements on pay negotiated by the NHS."
The noble Earl said: In moving Amendment No. 15, I am conscious that I am bringing us on to some controversial territory. The question it asks is simple: to what extent should foundation trusts be free to set their own pay and conditions for the staff they employ?
I am, by instinct and conviction, against the idea of trying to impose artificial prescriptions from the centre on an organisation of the size and diversity of the NHS. As far as I can judge from their pronouncements, government Ministers have embraced that view, too, in broad terms, although perhaps not universally. Therefore, direction from the centre, especially when the Bill before us purports to set the NHS free, should be looked upon critically and the assumptions underpinning it should be tested rigorously before it is retained as a feature of the new NHS.
Yet the idea that foundation trusts should not be bound by national pay agreements is one that was described by the Minister in another place as "preposterous", "absurd", "ridiculous", and to be treated with "complete derision". Colourful phrases such as those make me think straightaway that we are dealing here with more of a shibboleth than anything else because those words do not constitute a decent argument.
We already live in a competitive market for healthcare staff. The private sector, including agencies, compete with the NHS not just on the basis of pay rates, but also in terms of working conditions. Those who seek to cap the ability of foundation trusts to set their own pay rates point to the danger of
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predatory behaviour by those trusts which would disadvantage the rest of the health economy in the locality. I do not buy those arguments and I will explain why.
We all know that local labour markets in the South of England are different from those in the North. Recruitment and retention of healthcare staff in the South is hampered by the profusion of alternative jobs in other sectors, many less skilled and many better paid. Housing costs in the South are much higher than they are in the North. These disparities have been recognised by the Government in Agenda for Change. They were recognised by the Chancellor in the last Budget debate. There is no argument that local labour markets demand different responses and different rates of pay if we are to deal with the realities of life.
Agenda for Change contains much that is welcome relating to pay flexibilities. Potentially, there is flexibility amounting to 30 per cent in pay rates, which doubtless managers in foundation trusts would be free to use if they judged it to be necessary. Nevertheless, 30 per cent is an artificial cap and a cap which is not necessarily appropriate to the realities of the market, any more than previous formulas were. Under Agenda for Change, it is still necessary for the Government or the regulator to say to a hospital manager that he may not, for any reason at all, stray outside the prescribed formula, no matter how good a case he can present. That is unjustifiable.
I maintain that, in practice, there will be little to incentivise managers to stray outside the bounds of nationally negotiated pay agreements. Predatory behaviour by foundation trusts against other NHS bodies will be curbed by two principal restraints: the national tariff and the duty to co-operate under Clause 29 of the Bill. The national tariff will, in practice, limit what trusts are able to pay their staff. There can be no question of an unbridled bonanza of pay rises in foundation trusts.
However, in the event that the local health economy looks like being destabilised by pay differentials, the regulator has power to act. But I do not believe that that will happen. The private sector is already free to attract staff away from the NHS, and it frequently succeeds. But it does so not by offering higher hourly pay rates but rather by holding out the promise of a better working environment, more user-friendly hours and better staffing ratios. Anyone who is afraid of predatory behaviour by foundation trusts needs look only at that precedent, which tells us that pay freedoms are not simply about the hourly rate of pay.
I do not expect to receive many warm words from the Minister in response to the amendment. However, I hope that I will receive an answer that is not dismissive. If he disagrees with the extension of freedoms to foundation trusts, with respect, he needs to tell the Committee why. I beg to move.
Lord Clement-Jones: I suspect this is one of those areas of the Bill where noble Lords on these Benches part company with the noble Earl, Lord Howe, in his

1055
search for even greater flexibility than the Minister has proposed. That has been the watchword of most of his responses in the course of the Bill.
The Minister dealt with the issue on the third day of Committee, when he said:
"As the noble Lord acknowledged, first, NHS foundation trusts will implement the new Agenda for Change pay system. The Secretary of State will not support applications from NHS trusts without a clear commitment to implement Agenda for Change. Under the new pay system, NHS foundation trusts will be specifically represented in forums for national collective bargaining on staff terms and conditions of service".—[Official Report, 13/10/03; col. 628.]
I welcome that statement.
However, we are concerned not only about the past and the present but also about the future. One of the key concerns of many of those who have reservations about foundation trusts is their potential impact, and their ability to offer better terms and conditions, on the local health economy in their areas.
That is one key issue that has not yet been fully addressed in terms of the future. I believe that the amendment of the noble Earl, Lord Howe, nicely teases that out and I hope that, in a sense, mine does, too, in terms of what the Minister and his colleagues propose for the future. As I read it, the Bill is silent on that subject. It is a question of whether or not foundation hospitals take part in future bargaining and negotiations. I believe that, as yet, that question remains unresolved.
From the way that the Minister responded on the subject of the regulator and his powers—he said that it was not the job of the regulator to consider that side of things—it is not clear whether the regulator will have the power to insist that foundation hospitals join, in a coherent manner, the national pay bargaining negotiations or whether he will be comfortable if each foundation hospital conducts its own negotiations, paying well outside the flexibility of Agenda for Change in future. What will make Agenda for Change last for the future? The answer to that is not clear at all. I believe that a number of unresolved questions of great importance derive from both amendments.
Baroness Finlay of Llandaff: I declared my views by adding my name to Amendment No. 185. In these two amendments, which appear to go in opposite directions, we are being asked to look into the future and speculate as to what might happen. We have already expressed concern about destabilisation of local health economies and about staff moving from one trust to another.
A duty of co-operation is set out on the face of the Bill, but I do not know how far one will have to be non-co-operative—that is, how many staff will have to move from one trust to another—to demonstrate that one really is poaching staff and destabilising the local health economy in staffing areas. We are already well aware of staffing problems in some parts of the UK. It would be incredibly easy for a foundation trust, freed of any rigours in relation to pay negotiations, to drive up the price per hour or people's salaries and drain local trusts of staff.
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Agenda for Change is being introduced and it has been welcomed by the professions. I believe that even that will be difficult to regulate, if I may use that word, although it will not come directly under the terms of the regulator. Job descriptions can be subtly rewritten and a little more responsibility added so that, within a foundation trust, staff may do almost the same job but have a few more responsibilities and thereby move to a higher pay bracket.
Terms and conditions certainly need to be improved, but I have to disagree with the noble Earl, Lord Howe. When staff move, they do so for pay increases on an hourly rate. It is true that they also move for better conditions. I am aware of trusts which have very good staff relationships but, sadly, they will lose staff to another organisation where the hourly rate of pay is higher. There is a huge need for staff to have creche facilities and similar support organisations within the trusts in which they work. I do not see anything in the Bill to stop trusts doing that. However, I shall be gravely concerned if they are allowed to determine their own rates per hour. Therefore, I firmly support Amendment No. 185.
11.15 a.m.
Baroness Carnegy of Lour: The noble Baroness has expressed very clearly the view that I imagine would pertain in very large parts of the health service. That is entirely natural because it is the culture in which National Health Service employees have lived over many years.
At the same time, if one stands back a little from the health service, one sees that one problem involved in running 1 million people from the centre is that of national wage negotiations. That poses a big problem for the health service because of the different costs in different parts of the country and the fact that people are far better off in one part compared with another and that therefore, as my noble friend Lord Howe said, money is being paid unnecessarily to some or too little is being paid to others. That causes a great economic difficulty for the health service.
As can be seen from the record of industries that have moved into the private sector, an extraordinary difference occurs when national pay bargaining comes to an end. However, that subject is for another day because we are discussing only foundation hospitals.
Frankly, foundation hospitals are not going to be free at all. They will suffer from a combination of the barnacles that will be attached to what could be a very good ship by the governance arrangements, which we have already discussed, and the difficulties caused by bringing in politics and imposing national pay bargaining. Because foundation hospitals are not being allowed to negotiate their own arrangements, it will not be possible to use the money that they generate through greater efficiency to improve the pay and conditions of staff, which is what they should be able to do. It will not be possible for them to influence nearby hospitals with regard to improving their standards. As I believe the noble Baroness said, the only way that it will be possible to improve the pay and

1057
conditions of staff will be to alter their jobs so that they are promoted and do something extra. That is the present situation, and that hampers everything.
It is extremely unwise of the Government to prevent foundation hospitals being free. The whole idea will falter on that. Originally, I thought that my party's opposition to foundation hospitals was wrong, but the more I look at the Bill the more I realise that it cannot work. This is one of the main obstacles. I feel very strongly about this. The Liberal Democrats and the Government are 100 per cent wrong. I support the amendment.
Lord Warner: It is clear from this debate, and will become even clearer after I have spoken, that the Government are positioned very neatly between the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Howe. I have to say that I feel pretty comfortable in that particular position.
However, I reassure the noble Earl that I would not dismiss with derision the points he makes. Certainly, we agree that NHS foundation trusts should have a degree of flexibility when it comes to staff pay and conditions; indeed, just as NHS trusts do now. Noble Lords probably will be impressed by the kind of practical issues raised by the noble Baroness, Lady Finlay. Those are important considerations.
With the state of my voice, I shall not engage in the kind of ringing phrases used by my noble friend in another place. I should like to set out what I think is pretty convincing architecture which the Government have put in place through the Bill and its policy approach. It is worth reminding the Committee that Ministers are not now involved in pay negotiations. They cannot unilaterally amend the results of those negotiations between employers and employees or introduce new ones. It is our belief that employment contracts are a matter for staff, unions and employers, not for third parties. We start from that position.
However, it is essential—we have said this on a number of occasions; no doubt I shall be accused by one or two noble Lords of having a mantra on this— that foundation trusts act in ways that are consistent with equal pay principles and do not prejudice the interests of the wider NHS, including NHS employers. As I said on an earlier amendment, a "beggar your neighbour" policy among NHS bodies serves no one's interest. The danger with the amendment tabled by the noble Earl is that it could encourage people along that particular path.
The balance between freedom for staff, unions and employers to negotiate what is right for them, flexibility for NHS foundation trusts and looking after the interests of the wider NHS is precisely what we are achieving in the current arrangements that will apply to NHS foundation trusts. We have struck that balance. The issue of balance arises in different guises in the Bill.
As I said earlier, NHS foundation trusts will implement the new Agenda for Change pay system. Again, to repeat what was said earlier, the Secretary of State simply will not support applications from NHS
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trusts without a commitment to implement Agenda for Change. Under the new pay system, foundation trusts will be specifically represented in forums for national collective bargaining on staff terms and conditions. That will be a contractual right for all Agenda for Change staff so that they will be part of that negotiating process. They are not excluded from that negotiating process. They are not, in effect, outside it—that is to say, being told the results and having to lump it. They are part of the process of settling the terms under Agenda for Change. Because there are alternative means for enabling foundation trusts to sign up to Agenda for Change, there is no need, as the noble Lord, Lord Clement-Jones, suggested, to make legislative provision for this in the Bill. Perhaps I may say to the noble Lord, as an aside, that it is quite inappropriate to include a reference to Agenda for Change in legislation as it is a term based on the outcome of a nationally negotiated agreement between the employers and unions and not a statutory body or scheme in the sense that is usually used in a Bill.
Turning to the detail of Amendment No. 182, I do not know whether I shall reassure the noble Earl, but I shall try. We believe that it is not right to suggest that a foundation trust should or would want to have a right in statute to ignore future pay agreements when the vast majority of the staff will be employed on terms negotiated under such contracts as would be the case if we were to take the amendment at its face value. The noble Baroness, Lady Finlay, made an important point about the fact that NHS employers have many staff who do not stay in one place for their whole careers. They move around and there are some issues concerning their ability to have some sort of framework as points of reference, which Agenda for Change produces.
As I said, these national negotiations are a matter for employers and unions and not the Secretary of State. I emphasise again that it is also not for the independent regulator to interfere. Negotiations are not matters in which either the Secretary of State or the regulator should be involved. In concluding on why we do not think the amendment is appropriate, I should point out that we have had a number of discussions about partnership working. That is why NHS foundation trusts will be subject to the same statutory duty of partnership that applies to all NHS bodies—a duty to co-operate in the exercise of their functions.
In our view an amendment such as Amendment No. 182 would cut across that partnership approach and having to have regard to a wider NHS interest. For those reasons and some of the other reasons I have suggested, we believe that it is inappropriate.
Lord Clement-Jones: Although the Minister has just displayed admirable consistency with his previous response on Monday, I want to put on record that noble Lords on these Benches do not believe that it is wholly satisfactory. I well understand his unwillingness to include in the Bill references to Agenda for Change. That is simply a device to debate this issue once more. However, what is particularly troubling is the fact that the regulator will have no

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place in this process at all. I can well understand wishing to keep this as a matter between unions and employers, but to have no regulatory mechanism at all in these circumstances bodes very badly for foundation trusts. That is the root of many objections to foundation trusts, particularly on the staff side. No doubt we shall return to this issue.
Earl Howe: Once the Secretary of State has given approval for a foundation trust to be authorised on the condition that that trust signs up to Agenda for Change—quite obviously, in the light of what the Minister said—what would happen if the regulator did not see eye to eye with that point of view, was ambivalent about Agenda for Change and the foundation trust then decided that it did not want to have anything to do with it? Would the regulator be obliged to make Agenda for Change a condition of the licence in the light of the Secretary of State's point of view, or is the regulator free to say that he has no views on the matter?
Lord Warner: It is not for me to second guess the regulator who no doubt would want to take account of the Secretary of State's position in approving a particular applicant for foundation trust status. It would be a matter of public record that that was the Secretary of State's position and that that was the condition on which he had approved a particular application to go forward to the regulator in that sense.
The regulator would have to make his own judgments either before he had considered giving authorisation or after if, indeed, the behaviour had changed from that which was expected at the time he had given it. Both circumstances could apply. The regulator would need to consider whether in subsequent behaviour by a foundation trust there had been a significant breach of the conditions under which he had given the authorisation. The noble Earl and I could debate the issue all day, but none of us is clever enough to think of the myriad of circumstances under which that might happen.
The regulator would then make a judgment about whether he wanted more information from a foundation trust, or whether ultimately he thought that the trust's collective behaviour had been so significantly different from that suggested in its application for foundation trust status that he had to take some appropriate action. I repeat that the duty of partnership is there and would be an important issue if there was a gross change of behaviour by a foundation trust after an authorisation had been given.
I have done my best to try to clarify matters for the noble Earl.
11.30 a.m.
Earl Howe: I am most grateful to the Minister. I agree with him about the duty of partnership. That is in the Bill for a purpose and I share the noble Lord's interpretation of that purpose.
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The fact remains that if the regulator is of a free market disposition and is indeed an independent entity then it does not really matter what the Secretary of State believes in these situations. If a foundation trust were to break away from Agenda for Change, and provided it did not destabilise the local health economy, I should not have thought that the regulator could object too much. So I think that we are entering some very interesting territory. I shall read very carefully what the Minister has said on the issue.
However, it seems to me that my noble friend Lady Carnegy was absolutely right—and I must disagree with the noble Baroness, Lady Finlay, for whom 1 have an enormous amount of respect and time—that a beggar my neighbour approach and driving up the cost of healthcare is not actually what happens in the healthcare economy. Yes, sometimes people leave hospitals because they will get a little more money, but it does not happen on a great scale. If the noble Baroness really fears that this will happen, then logically she should be against Agenda for Change, because that presents the same kind of opportunities for pay rises in the NHS.
The NHS cannot exist outside the whole economy. If we are going to have foundation trusts that are truly free to assume responsibility for themselves, their patients and for their local communities, there should be no place for a straitjacket of national pay agreements that does not take account of the realities of the local market place. If, in urgent individual cases, a manager judges that he can justify paying more than the maximum limit laid down by Agenda for Change in order, for example, to prevent a serious staffing shortage, he should be able to do so.
We can learn these lessons from Spain and Sweden where pay freedoms have been allowed with the result that productivity and morale have prospered without detriment to the rest of the health economy.
I am most grateful to all noble Lords who have taken part, whether or not they have agreed with me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe moved Amendment No. 183:
Page 8. line 26, at end insert—
"( ) An NHS foundation trust shall have power to procure information technology systems subject only to compliance with such interoperability standards as may be specified in regulations."
The noble Earl said: I have just mentioned the experience of Sweden and Spain in pioneering the foundation trust model.
Alongside pay freedoms, the other lesson from those countries is the lesson of IT. On IT procurement the Government have returned to their age-old instincts: the IT contract for the NHS has been centrally drawn up and is being centrally managed. It will account for a vast sum of public expenditure. Recently, we understand, it has entered somewhat choppy waters. Why? Because the Government in their usual fashion have tried to impose too many risks and liabilities on the contractors, with the result that all but one of the

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three main bidders have walked away. The Government appear to be forcing an unrealistic pace on those contractors and it is said that the unprecedentedly tight deadlines have frightened off other bidders. Smaller suppliers on which the NHS depends are being squeezed out and if we are not very careful some may go to the wall. None of that has apparently deterred Ministers from pursuing their centralist policy. The NHS is to have the IT system that Ministers think is best for it.
Foundation trusts in Spain will say that one of the freedoms that has made the most difference to them is the freedom to procure their own IT. The only requirement imposed on them is interoperability with systems elsewhere. 1 must ask: why have the Government not looked more carefully at that model and drawn the lessons from it? I do not know what evidence the Government have for thinking that a giant, centrally managed government contract is likely to prove successful. The history of large national IT procurements in other departments is not exactly reassuring.
The NHS contract is immensely complex. Its broad specifications run to 550 pages without all the detailed technical requirements that one has to build in. Last year the DoH acknowledged openly, and 1 thought refreshingly, that there were "significant risks"—its words not mine—attached to the IT programme. Indeed, that is right.
So the Government have hang-ups about granting greater freedoms to foundation trusts as regards IT. I believe that that is a totally and unnecessary restriction. I really should like to hear the Minister's explanation. I beg to move.
Lord Warner: I hear what the noble Earl says about the IT strategy. I do not think that this is the place to have a long detailed debate about the Government's IT strategy. I shall try to deal with the amendment by relating why it is not compatible with the IT strategy.
I do not disagree with some of the thinking outlined by the noble Earl. It is worth bearing in mind that the regulator will have powers under Clause 6(3) to require that NHS foundation trusts comply with IT interoperability requirements to ensure that there is data integrity across the NHS.
I do not think that anyone in the Committee would disagree with the proposition—we have all learnt by mistakes made by successive governments regarding public procurement of IT—that there needs to be some common architecture for IT to operate successfully and for local systems to be able to transfer information from one part of the country to another. One of the uncomfortable facts of life for the NHS is that people move around and that records and information about them may need to move around. So a common architecture to ensure compatibility between local systems is an important aspect. Nothing in this legislation prevents the regulator ensuring that. There are many stand-alone systems that presumably are bespoke to a particular function in an office which do not come into that category.
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PCTs may also include requirements on interoperability in their contracts with NHS foundation trusts. Let us stop and think about the issue. It is not in the interests of NHS foundation trusts to do other than ensure integrity and compatibility of NHS data flows and value for money in their own IT solutions. Why would they want to buy systems that are unable to relate to other parts of the NHS?
In the light of these considerations, we believe that the regulation-making powers proposed in the amendment are superfluous and would seem on face value to reduce NHS foundation trusts' independence from the Secretary of State, a matter about which the noble Earl and his colleagues have been so concerned. So the safeguards are there, without being oppressive where there are particular local systems that do not have linkages to other parts of the NHS.
Baroness Carnegy of Lour: The Minister said that he did not think that the amendment is good enough because it limits foundation trusts unnecessarily. The Government are missing an enormous opportunity to find out how IT could operate within a common architecture—which there must obviously be because, as the Minister says, people move about, statistics will be required and all the rest of it. The systems must be interchangeable, but surely foundation trusts might find new ways that would avoid the massive problem of one great system, which is what the Government are trying to operate with.
It is yet another missed opportunity—as is the pay bargaining arrangement, although this is of course on a much smaller scale—to discover how better ways could be found by foundation trusts. They could experiment and pioneer new ways, but that is being prevented by the arrangements. My noble friend's wording may not be ideal, but surely the Government should accept this one and let trusts see whether they can find ways—within the requirements of the Bill, of course—to improve the working of their IT. The Government are being remarkably narrow minded on the issue.
Lord Warner: I do not want to go through the detail, but this House and the other place have umpteen times debated the problems of local initiatives in IT because, with the best of intentions—not just in the health service but across the public service—people have taken projects forward to a point where it subsequently becomes inevitable that they cannot inter-relate to other parts of the public service. We have only to consider the criminal justice system, to cite another example from outside the NHS where that is a problem.
We are trying to strike the right balance, which we think we have done, in enabling a common architecture. That is a rather grand phrase, but local initiatives often—because, for good reason, they are designed around local needs—do not necessarily meet the needs of a wider agenda and cause problems for inter-relation with other systems. I ask the noble Baroness to reflect on that: it is not as though we do

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not have a lot of experience of that going wrong. We must ensure that the national frameworks are right. That is in the best interest of people locally.
Earl Howe: I am again grateful to my noble friend for her support. We must ask which approach carries the greater risk: the Government's approach—which, by their admission and in my estimation as a non-IT specialist, carries considerable risk; or the approach floated in my amendment, which I advocate, under which foundation trusts should have a measure of freedom to procure and commission a system that suits their needs. The Minister and I agree that there must be interoperability and compatibility. That is not in dispute. Clearly, different parts of the NHS must speak to each other through their IT systems. But the Minister has not made the case for imposing a giant national system on the NHS.
Baroness Howarth of Breckland: May I intervene on two counts? Having been involved in at least four government computer systems, the real difficulties have been in gathering comparable information across large areas. When local projects develop programs, interface—what the noble Earl calls interoperability— is not always as easy to achieve in this fast developing technological world as one would hope.
However, I must tell the Minister that we would all feel much more comfortable with the debate if he had not rather firmly put us in our place by ruling out the big debate about the strategy for development of government IT and had been more forthcoming with information. The National Care Standards Commission and the Food Standards Agency—I declare an interest in both as a member of the boards—have had difficulties with their systems. On the other hand, it would be a real mistake not to have a system that can produce information because of the problems with small project-based systems.
11.45 a.m.
Earl Howe: I take due note of what the noble Baroness has said from her experience. I am sure that her first point is extremely pertinent.
I do not intend to prolong the debate, but I share the disappointment expressed by the noble Baroness that the Minister could not have taken us more into his confidence on the Government's thinking on IT contracts. Nevertheless, we have had a useful exchange of views, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe moved Amendment No. 184:
Page 8, line 26, at end insert—
"( ) An NHS foundation trust shall not be required to obtain permissions from or provide information to any strategic health authority."
The noble Earl said: This is a probing amendment about strategic health authorities. We have been led to understand that strategic health authorities will have no role whatever in performance-managing
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foundation trusts. The fact that they are nowhere mentioned in the Bill is, on the face of it, confirmation of that understanding. However, I should be grateful if the Minister would clarify what functions, if any, strategic health authorities will continue to have in relation to foundation hospitals. In particular, I believe that money from the NHS Modernisation Fund is usually channelled through SHAs. How will such money now be distributed to foundation trusts?
The amendment is phrased as it is because I would not want the Minister to think that I am advocating a further line of reporting for foundation trusts beyond those that are being created for them. Nevertheless, one benefit of performance management is that it can often prove helpful to a trust as a means of identifying any problems at an early stage and of providing appropriate practical assistance. The intention is that all NHS acute trusts should achieve foundation status within five years, so the question arises: what role will strategic health authorities have after that? Will there be a mechanism to substitute for the constructive role currently played by SHAs?
One of strategic health authorities' other main roles is to provide oversight of specialised commissioning arrangements. HIV/AIDS, renal services, haematology, neurosurgjcal services and neo-natal intensive care are examples of services provided across more than one PCT. Presumably—although we shall debate this in more detail when we reach Clause 29—foundation trusts will have an important role in delivering those jointly commissioned services. For those services not to be overseen by anyone is unthinkable. They are often extremely complex and difficult arrangements to establish and deliver. Equally, from time to time disagreements between hospitals need to be sorted out. I see no mechanism in the Bill to resolve those disagreements other than the broad duty of co-operation set out in Clause 29.
At the same time, I am instinctively uncomfortable with the thought that the role of SHAs should be replaced by enhanced functions for the regulator, who is not close to local events or circumstances and could not necessarily add much value to the process of ensuring genuine local collaboration. Ministers will need to explain this area much further if we are to be comfortable about the future of specialised services over the longer term. I hope that the Minister can enlighten us. I beg to move.
Baroness Andrews: I shall deal specifically with the terms of the amendment. It invites us to explore the relationship between SHAs and foundation trusts. It is an opportunity to make clear that, while foundation trusts are firmly within the NHS and subject to national standards of performance, they will not be overseen or performance-managed by SHAs. Each NHS foundation trust will take full responsibility for the outcomes that it achieves as regards volume, quality and responsiveness to patients. So they will not be required to obtain permission from, or to provide information to, any SHA. The amendment is not necessary.

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I shall attempt to answer the noble Earl's other questions. Strategic health authorities—the local headquarters of the NHS, if you like—will continue to have a significant role in establishing and implementing the vision of the local health economy, the long-term plan and the shape of the overall development of services in their area, backed by commissioning decisions of primary care trusts. In addition, we expect that SHAs, together with higher and further education institutions, will continue to be involved in making arrangements for education and training through workforce development confederations. So, however the foundation trust programme evolves, there will be a continuing role for the strategic work to be done by SHAs.
The noble Earl also asked about commissioning arrangements. The strategic health authority has responsibility for specialist commissioning. We know that those 37 areas of specialist commissioning are very important aspects of the NHS's work because they deal with some very rare conditions with very small groups of people who need to be thoroughly protected—for example, aspects of renal care or paediatric services. The relationship between SHAs and foundation trusts in relation to commissioning will be as it is now. It will be contracted in the same way, and the same arrangements will apply to the relationship that now obtains with the trusts. But the nature of the contract will change. Contracts will be binding and legal. We are making those for foundation trusts because we want greater transparency so that we know exactly what will be delivered. We want better security in innovation and development. The changing nature of the contract should enable us to deliver that. There will be no change in the capacity to commission or the trust's ability to commit to delivery.
The noble Earl made a point about the role of the modernisation agency and the position of SHAs. To the extent that any public funds are made available for any central initiative—for example, the national framework initiatives—foundation trusts should have access to an equitable proportion of those funds, wherever the source is. Such funding might be paid by way of a grant or injection of public dividend capital from the Secretary of State under Clause 11. That could be distributed by SHAs for that purpose.
The noble Earl also raised the question of CHAI. It will continue to have a role in the inspection of foundation trusts. Its functions will closely mirror its functions in relation to other NHS bodies. It will encourage improvement, carry out annual reviews, publish performance ratings and carry out value-for-money studies. But the main difference is that they will report those aspects, not to the Secretary of State, but to the independent regulator.
I confirm what the noble Earl said about the duty of partnership. It is in the Bill for a purpose. That duty of partnership is very much to ensure that, although foundation trusts are a different animal, they are firmly within the NHS and will work with SHAs in the appropriate way. For example, they will be able to continue to provide much of the information that they
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provide to SHAs at present, as part of their own commissioning arrangements. We look forward to that partnership flourishing in the future.
Baroness Cumberlege: In the past, we have looked at SHAs as holding the ring in the local economy. We know that in the future some people will be outwith the ring—foundation hospitals. If a foundation hospital finds that a specialist service such as neonatal intensive care, for example, will be uneconomic, or that it cannot attract the necessary staff, and decides to discontinue the service and not to seek a contract with the primary care trust, the regulator can come in and look back at something that has already taken place, but he cannot prevent something happening. What happens in those situations?
Baroness Andrews: As I understand it, the SHA will have a view on that. What we expect to happen is largely what happens now: people, including the other commissioning bodies, will get around the table to discuss the needs of the local community and how they can best be met. There may be another contract for specialist commissioning with another hospital in another area that can offer an even better service. I would expect such discussions to happen just as they do now.
Baroness Finlay of Llandaff: Perhaps I may explore further the information flow that will be available to a strategic health authority. If I heard the Minister correctly, the foundation trust will not have to report to the strategic health authority. So the strategic health authority will be able to invite information, but it will be up to the foundation trust to give or withhold whatever information it might perceive to be in its best interest. On the basis of the information it receives, the strategic health authority will take a decision on specialised commissioning. I am concerned that they will then be able to ask CHAI for information founded on only an inspection that it might have carried out some time ago. Changes that might occur in the local health economy could be disguised in the name of commercialism. I do not see how the strategic health authority will be able to obtain detailed information if the foundation trust decides that it does not want to disclose it and just wants to have the contract continued.
I am sorry to push the Minister further, but I am worried about an information gap appearing between those responsible for highly specialised commissioning and those who will provide the services. Until now, as the noble Baroness, Lady Cumberlege, said, the strategic health authority has had a duty to hold the ring on services in an area, and has done so.
Baroness Andrews: One of the points that I did not make in response to the noble Baroness, Lady Cumberlege, was that the regulator can also protect specialist services essential to the NHS, because he can require the provision of certain services under Clause 14. That extra security is built in.

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In response to the very detailed question about information flow, I understand that the SHA cannot require the trust to provide information, for the reasons that I explained. But the sort of information coming forward from the trust at present, which informs its commissioning process and delivery, will obtain and continue to flow in the same way. I do not share the noble Baroness's concerns about an information gap. But, if it would help, I will write to her to try to spell out, for the purposes of the debate and for other Members of the Committee, how we see the process working. As the noble Baroness must know, the contracts between the trusts and commissioners are quite detailed. The changing nature of the contract may involve more information being exchanged than at present. We will certainly write to noble Lords and set that out in a little more detail.
Noon
Baroness Masham of Ilton: As there are queries and concerns about specialised services, will the Minister spell out to us all, rather than just to my noble friend, the exact duties that strategic health authorities will perform?
Baroness Andrews: Yes, I am happy to do that for the noble Baroness, Lady Masham.
Earl Howe: Not for the first time, the Minister has given the Committee a full and enlightened reply, for which I am very grateful. In many ways, her reply covered even wider ground than my own remarks and we should be grateful for that. Nevertheless, the points raised by my noble friend Lady Cumberlege and the noble Baroness, Lady Finlay, were extremely well put. They are not alone in feeling unease about specialised commissioning and quite what power and leverage the strategic health authority will have in those circumstances. I heard what the Minister said about the power of the regulator, but this is one instance when her offer to enlighten us further by way of a letter will be gratefully received. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 185 not moved]
Clause 18 agreed to.
Clause 19 [Information]:
Earl Howe moved Amendment No. 186:
Page 8, line 41, leave out from first "the" to end of line 2 on page 9 and insert "regulator requires"
The noble Earl said: Once again, in Clause 19 we see the phenomenon of the independent regulator being elbowed aside by the Secretary of State. Subsection l(a) specifies that an authorisation,
"must require an NHS foundation trust to disclose such information as the Secretary of State specifies to the regulator".
Once again, why is it necessary for the Secretary of State to specify anything at all in this context? Why is not the regulator able to specify the information that he requires? Why does the Secretary of State also need
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to receive information? I fear that foundation trusts will find that they are supplying the same amount of information as they were before they became foundation trusts. This time, however, they will be sending it in two directions at once. They may actually find that they are churning out even greater amounts of paper than before if the Secretary of State and the regulator do not make a concerted effort to avoid duplication of data collection. That does not conjure up a happy picture because, although data collection is a necessary fact of life in any public service, I thought that the aim was to reduce bureaucracy to foundation trusts not to perpetuate it at current levels.
Nor do I fully understand why it is necessary in Subsection (2) to empower the regulator to ask any other health service body to deliver to him any information that he may request. That provision is extremely sweeping. For a start, it seems to ignore common-law rights of patient confidentiality. I hope that the Minister can reassure me on that particular issue. However, the provision also suggests that the regulator will be able to demand information from PCTs and non-foundation acute trusts that they may already be sending to the Secretary of State. Again, that is a recipe for duplication. To the extent that the information requested by the regulator is not information to which the Secretary of State has access, one has to ask why such an additional burden needs to be imposed on health service bodies. I beg to move.
Baroness Finlay of Llandaff: I rise to support the wording of the first amendment, but I will oppose the second. I will try to explain why. As is already well known, I am concerned about the involvement of politics in the day-to-day running of the NHS and the flow of political influence prior to an election, with the need, perhaps, to boost the voting ratings by using the NHS as a political football. That is why I was keen to see the Secretary of State a little out of the loop and the regulator left to specify what he felt was really required from foundation trusts. However, I am concerned about leaving out subsection (2) in Amendment No. 187, especially in the light of the Minister's comments in reply to my last question. It is essential that the regulator can draw on as much information as possible.
I return to points that I made previously about the network provision of care and data from organisations such as the cancer registries. Such information may be very important to the regulator to examine to determine the performance of the foundation trust to see whether it really is delivering the quality care that it claims. There has to be a check for the regulator on information from an external source as well as the information that is provided within the trust. I have tremendous reservations about that. In fact, I would not want anything to stop the regulator's ability to seek information from wherever he felt it should be sought in order to reach an informed decision. With

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those two different views, I support one amendment but I am afraid to say to the noble Earl, Lord Howe, that I cannot support the second in this group.
Baroness Andrews: It is such a relief to have the noble Baroness, Lady Finlay, on our side even for half the time. One out of two cannot be bad. To address the noble Earl's concerns, I will explain why it is difficult for us to accept his amendments in terms of what we are trying to do with Clause 19. For the Secretary of State to be able to set standards to allocate resources and plan provision of health care across the NHS in line with his responsibilities under the relevant Act he must be able to determine what he needs to know and draw upon information gathered across the NHS. It goes much wider than simply finding out about foundation trusts themselves. The amendment would restrict the Secretary State's ability to carry out his duties with respect to the NHS, and the second amendment would restrict the regulator's ability to monitor compliance with the terms of the authorisation.
Clause 19 requires the NHS foundation trust to provide information to be used for national policy development, planning decisions, manpower planning and tracking, and so forth. Those are matters that extend far beyond the regulator's function. If the amendment were agreed, it would be up to the regulator to provide such information as he thought relevant. However, it would hardly be appropriate for him to decide what information the Secretary of State needed with regard to those much wider matters.
I reassure the noble Earl on two points. First, the intention is definitely not to replicate existing data collection. Foundation trusts will have earned their autonomy. There is no line management or performance relationship. We simply expect the information requirement from NHS foundation trusts to be a subset of that required by NHS trusts at the moment. Members of the Committee will be pleased to hear that the Department of Health is currently undertaking work to streamline information requirements throughout the NHS. We are well aware of the arguments about bureaucracy, excessive information and paperwork, and we are doing our best.
Let me also reassure the noble Earl on the point that he made about confidentiality. The independent regulator does not have the power to require confidential information. The data protection rules apply fully. In any case, common law rights of confidentiality are not affected by this clause.
The second purpose of Clause 19 is to ensure that the regulator is able to obtain the information that he needs to set the terms of authorisation and monitor compliance with those terms and statutory obligations, as well as investigating breaches. As the noble Baroness, Lady Finlay, said, he may well need access to information from sources other than foundation tr5usts. The noble Baroness gave the example of the cancer networks in Wales. There are many other examples: it could be information from the PCTs on their commissioning needs or on the services
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that they have already received from the foundation trusts. The amendment would remove his power to require NHS bodies to disclose information that is essential for any proper judgment to be made about the performance of the foundation trust.
I reassure the Committee that they are legitimate concerns, and we take them seriously. We do not expect the regulator routinely to collect data from bodies other than the foundation trusts. Nor do we expect that the provision of the information will place a significant burden on them. He is most likely to require specific information if he needs to take specific action, such as varying the terms of authorisation or investigating breaches. Such information may well differ from that routinely submitted to the Secretary of State.
I hope that, with those assurances, the noble Earl will feel able to withdraw his amendment.
Earl Howe: The noble Baroness, Lady Finlay of Llandaff, need not worry; my second amendment was very much in the nature of a probe. To my delight, the Minister has satisfied me in every respect on that matter.
There is no argument between us about the need for data collection, providing that the data are necessary. My concern is about the regulatory burden. The Minister has satisfied me on that, in large measure. My fear is, for example, that non-foundation trusts could find themselves submitting information to strategic health authorities, as well as to the regulator. However, it appears, in the light of what the Minister told us about the way in which the power will be used, that that would be unlikely and that the regulator will seek to avoid doing it.
It has been a helpful exchange. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 187 not moved.]
Clause 19 agreed to.
Clause 20 agreed to.
Clause 21 [Fees]:
[Amendment No. 188 not moved.]
Clause 21 agreed to.
Clause 22 agreed to.
Clause 23 [Failing NHS foundation trusts]:
[Amendment No. 189 not moved.]
Clause 23 agreed to.
Clause 24 [Voluntary arrangements]:
Earl Howe moved Amendment No. 190:
Page 10, line 19, leave out '"may" and insert "must"
The noble Earl said: In moving Amendment No. 190, I shall speak also to Amendment No. 191.
Clause 24 deals with voluntary arrangements. I should be grateful to hear a little more from the Minister than the clause discloses about how the power that it confers is to be used. In the first instance, it is not clear why, if the regulator is satisfied that it is necessary to introduce a. moratorium or to move to a

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voluntary arrangement, he then has an option to choose between those two courses of action or, indeed, to do neither. Nor is it clear what the implication of each is for the trust. I would hope that he would issue warnings to the trust in the first instance, before taking any irrevocable step. However, supposing that he specified that there should be a voluntary arrangement, what would be the financial effect on the operation of the trust?
We all hope that the provisions laid out in Clauses 23 to 25 will not in practice be required, but there needs to be certainty about them. If a foundation trust were forced into dissolution because it had failed and there were unmet liabilities, who would bear the responsibility for those liabilities? How would the creditors be paid?
The other amendment is designed to give the foundation trust some control over whether its financial difficulties can be resolved under the provisions of the Insolvency Act 1986 that are brought into play by Clause 24(2). As the Bill stands, the regulator is always in the driving seat in deciding upon a moratorium or voluntary arrangement; but we know from the commercial world that it is often the organisation itself that has the best understanding of its dilemma. It would seem sensible, if ever that were to happen with a foundation trust, to allow the board to approach the regulator and ask him to issue a suitable notice under subsection (1). I hope that the Minister will look upon that suggestion constructively; it is intended as a helpful suggestion. I beg to move.
12.15 p.m.
Lord Warner: I accept the spirit in which the noble Earl moved the amendment. Before I deal with the amendments, I shall take the opportunity, as this is our first discussion about the insolvency regime for NHS foundation trusts—I share the noble Earl's wish that we will not need to use the arrangements, but we must make adequate provision—to inform the Committee that the department has prepared a paper setting out our proposals for the secondary legislation, which will, in effect, establish a bespoke insolvency regime for NHS foundation trusts, under Clauses 24 and 25. I have arranged for copies to be placed in the Library, and I tried to arrange for copies to be sent to noble Lords who had spoken in the debate. I detect from the noble Earl's remarks that they may not have arrived. I certainly asked for them to be sent to everybody before today's debate. I will check the arrangements and try to ensure that they are available to noble Lords during the lunch break.
I did not propose to go through the letter, which is fairly detailed—it is about four or five pages of detail—not least because I wanted to preserve my vocal chords. I shall speak briefly on the amendments. I can see that they are intended to ensure that the regulator imposes a moratorium or voluntary agreement, if it is appropriate to do so. We do not think that the amendments are necessary. Although the regulator's power to impose voluntary
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arrangements are discretionary, the clause sets out clearly the situations in which he would exercise the power; that is, when it is "necessary or desirable".
It is highly unlikely that we would get to the point of dissolution without some kind of interchange between a foundation trust that was in difficulties and the regulator—and, indeed, some of their creditors. It would be unusual for that to happen without some interaction between the trust and others, including the regulator. The regulator is also under a duty to act reasonably, which would include exercising his powers under Clause 24, if it were in the public interest to do so. He has an overriding responsibility to protect the NHS. If a voluntary agreement were the best way of protecting NHS interests and assets, one would expect him to use his discretion sensibly.
I hope that the noble Earl will read the detailed arrangements for a bespoke insolvency system for the NHS. I am happy to discuss it with him, if that would help, after he has had time to consider the details.
Earl Howe: That was a helpful reply. I shall not exercise the Minister's vocal chords any more than I have to. I have not yet received the letter to which he referred, but that may not reflect in any way on his office: I confess to not having opened my post this morning. I look forward to receiving the letter, and, no doubt, we can return to the matter at a later stage, if need be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 191 not moved]
Lord Warnermoved Amendment No. 191A:
Page 10, line 24, after "arrangements)" insert "including any related provision of that Act"
The noble Lord said: This is a technical amendment to ensure that the policy intention for the insolvency regime can be properly applied in practice. Other sections of the Insolvency Act 1986—not in Part I— will require modification to allow the insolvency regime for NHS foundation trusts to be fully effective. All that the amendment does is to give powers to make such necessary modifications to the Insolvency Act at a later stage. I beg to move.
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
Clause 25 [Dissolution etc.]:
Baroness Noakesmoved Amendment No. 192:
Page 10, line 38, leave out subsection (2).
The noble Baroness said: Amendment No. 192 deletes subsection (2) of Clause 25. We now turn to the dissolution provisions of the Bill. Subsection (2) concerns the consultation arrangements that the regulator must carry out before winding up a foundation trust. Our amendment is a probing one.
Clause 12, which deals with the prudential borrowing code, lays down that the regulator should consult the Secretary of State, the foundation trust and other persons that he—the regulator—considers appropriate. But under Clause 25 there is a different formulation based on the regulator having to comply

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with an order on consultation. Are the Government saying that they do not believe that the regulator would get the consultation right in the case of dissolution? What kind of order is envisaged? Would it be a separate order for every dissolution or would it be a generic one? If it is to be generic, why cannot the discretion of the regulator be relied on, as the Government are content to do under Clause 12? I beg to move.
Lord Warner: The regulator clearly has an important role in considering whether a foundation trust needs to be dissolved in order to protect NHS services. That is why the Bill provides for secondary legislation in this area to prescribe the process leading to the dissolution of a foundation trust. It includes requirements on the regulator to consult in making his decision about the future of a foundation trust. It is not a matter of not trusting the regulator; it is a very important and potentially contentious area. It is important that the consultation arrangements are right and appropriate.
It is expected that the consultation requirements cover a range of interests, including bodies with responsibilities for NHS services; that is, the strategic health authority, PCT commissioners, Patients Forums, the oversight and scrutiny committee, staff representatives, the Secretary of State and significant creditors, as well as the governors if they have not been removed already under Clause 23(4).
We think that it is right that the independent regulator consults these groups—there may be others—so that he or she has the relevant evidence required to reach such an important decision about the future of an NHS foundation trust. It certainly would not be in the spirit of the Bill to encourage any arbitrary action in this area. We will put forward secondary legislation in the appropriate form at a later stage, which will go into more detail on the consultative arrangements. I hope that that clarifies matters for the noble Baroness.
Baroness Noakes: I thank the Minister for that reply, from which I take it that the regulations will be generic regulations and not specific to particular dissolutions.
Lord Warner: Perhaps I may reassure the noble Baroness on that point.
Baroness Noakes: I am grateful to the Minister, who, interestingly, said that dissolution is an important matter and that, therefore, it is important to get consultation right. I think that the subtext is that the prudential borrowing code—some of us have significant doubts about its relevance and importance—is not an important matter. We have at least had some light shed on the Government's thinking. I shall consider carefully what the noble Lord said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Noakes moved Amendment No. 193:
Page 11, line 1, at end insert—
"( ) any other body specified by the regulator"
The noble Baroness said: In moving Amendment No. 193, I shall speak also to Amendments Nos. 194 and 195, which concern the transfer of assets and liabilities on the dissolution of a foundation trust. Amendment No. 193 extends the bodies to which property or liabilities could be transferred under subsection (3) to include any other body specified by the regulator. The list in subsection (3) is quite restrictive. It does not allow transfer to a special health authority or to a local authority. There could be some circumstances where that could be appropriate. It does not allow transfer to a private sector healthcare provider, which might be appropriate in, say, diagnostic and treatment centres—or whatever it is that we are now supposed to call them. In general, subsection (3) shows a considerable lack of imagination about what might appropriately be done with assets on a dissolution. Our amendment would allow a greater range of opportunities to be considered.
Amendment No. 194 tackles a different issue. It provides that property or liabilities not transferred to the people specified in subsection (3) should be transferred to the Secretary of State; that is, assets and liabilities cannot be left in limbo but must be transferred somewhere. That would prevent the regulator from abandoning liabilities, including assets with a negative value.
In another place, Conservative Members often asked Ministers what would happen to liabilities at the end of the day. They were stonewalled. I hope that the Minister will give us a clear answer today. On our last Committee day, I talked briefly about the doctrine of "standing behind" public sector bodies, whereby the Government are expected to pick up the liabilities of any public sector body, should that situation arise. As far as I am aware, there has never been a case where a public sector body—especially one like a foundation trust, which is classified to central government—has been allowed to go bust without having its liabilities picked up. In that debate, I referred to the Treasury's view that the Government will pick up foundation trust liabilities.
In effect, my amendment expresses what "standing behind" is all about; namely, that the Government will pick up any liabilities. If the Minister thinks that that is not the case, how would the regulator pick and choose liabilities that would be left stranded? The Bill contains no rational way for any deficit to be shared among creditors. I cannot believe that the regulator has an absolute power to determine which creditors are paid and which are not.
Finally, Amendment No. 195 provides that liabilities cannot be transferred under Clause 25 without the consent of the person to whom they are being transferred. For example, can the regulator foist liabilities on another foundation trust without that trust's consent? I hope not, which is why our amendment provides for consent. These amendments

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may seem to be matters of detail, but they raise issues of very real substance which could have practical implications should the unfortunate situation of having to wind up a foundation trust occur, which is not beyond the bounds of possibility. I beg to move.
Lord Warner: Perhaps I may set out the context of the amendments before turning to them specifically. As I have said before, an essential aspect of the new disciplines being placed on management as the quid pro quo for additional freedoms which come within an NHS foundation trust is that the Secretary of State does not intend to guarantee debt. I have said that before. It is important that we begin at that point. In the event of a failure by a foundation trust, the Government would stand behind NHS patients and behind essential NHS services—that is, the protected services—which would be part of the authorisation. They would not stand behind or bail out poor management. I say that again, and it is a point to which we may return several times in later discussion. To ensure that we do not end up bailing out NHS foundation trusts, the Bill includes provisions for a special failure regime with the primary aim of protecting the staff and assets required to deliver NHS essential services. Before turning to the amendments, perhaps I may explain why I shall not address all the detailed points. The insolvency paper I referred to when responding to an earlier amendment deals with some of the specific matters raised by the noble Baroness.
Amendment No. 194 would require the Secretary of State to pick up all the property and liabilities of a dissolved NHS foundation trust. We have made our intentions quite clear. The effect of Amendment No. 194 would amount to a guarantee on foundation trust viability and thus would be wholly inconsistent with our policy aims. For that reason, we do not think that the amendment should be accepted.
Amendment No. 193 seeks to ensure that the property of a dissolved foundation trust can go to any body specified by the regulator. Here we return to the important point about what should happen to the protected assets of a dissolved NHS foundation trust. Those assets may be transferred only to other NHS foundation trusts, PCTs, NHS trusts or the Secretary of State because they are protected assets of the NHS. In a dissolution of a foundation trust, it would not be right to enable those assets to be transferred to other alternative bodies. In responding to another amendment, I shall return to the matter of non-protected assets; the distinction here is between protected assets and non-protected assets.
A private healthcare provider, for example, could be asked to step in and manage a service previously provided by a failed foundation trust. This would be effected either by a franchising arrangement or by tendering for contracts. But the assets associated with that service would remain within NHS ownership and the service would remain free at the point of use. The Bill as currently drafted ensures that NHS assets are not transferred to a private provider in the kind of
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circumstances that I have indicated; that is, where they are protected assets. We believe it is right that such assets, which are crucial to the delivery of NHS services—and in the spirit of what I have said about the Secretary of State standing behind patients and NHS services, but not bailing out failing management— should be retained. That is consistent with ensuring that those assets could not be privatised or sold off to pay the debts of a foundation trust whose management, in that particular situation, would effectively have failed. That is why Amendment No. 193 would be inappropriate.
I turn now to the non-protected assets. Once the Secretary of State has arranged for the transfer of those property rights and liabilities essential to the continuity of NHS services, any remaining property and liabilities will be subject to normal insolvency rules. Potentially this could include assets such as retail facilities, car parks and buildings used solely for the provision of private patient care or other income-generation activities. One possibility—it is not the only one—is that such assets could be transferred to creditors, including the Secretary of State, who may himself be a creditor in these circumstances. Alternatively, they could be sold off to meet the liabilities of the failed foundation trust in the same way that trust-owned assets can be sold off at present. That covers the distinction we make here between the protected assets for NHS services and the non-protected assets.
Amendment No. 195 would ensure that dissolved NHS foundation trust assets and liabilities could not be transferred to another body without that body's consent. We believe that this amendment is unnecessary because both the Secretary of State and the regulator are under a common law duty to act reasonably. Foisting unwanted things on to other bodies would not be deemed reasonable. Discussions with bodies that were to receive the assets and liabilities of a dissolved foundation trust would in any case form part of the transfer process because the regulator would be required to consult those bodies before the powers in Clause 25, including the transfer of property and liabilities, could be exercised.
I have done my best to address and deal with the points raised by the noble Baroness, but more detail is set out in the letter that I mentioned earlier.
12.30 p.m.
Baroness Noakes: It is clear that we shall not be able to conclude our deliberations on these issues until the letter to which the noble Lord referred has surfaced and noble Lords have had an opportunity to read it.
I wish to comment first on the point made about discipline on management and not guaranteeing debt. I have never heard an explanation of how not guaranteeing debt results in imposing discipline on management. I understand that nothing in the Bill would make management responsible for the debt. Any debts built up by a foundation trust would remain the debts of that trust and would have nothing to do with the management. Perhaps I may suggest that that is a piece of empty rhetoric.

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Further, I would suggest that the Minister has not yet explained how, if certain liabilities are not to be picked up for one reason or another, the regulator is to choose between them. Given that there is no framework covering the payment for certain liabilities, I am concerned whether such an ability to pick and choose between liabilities, leaving some of them stranded and therefore not met, satisfies human rights law. No doubt we can expand on that point further.
I look forward to reading the letter, in particular in order to understand how protected and non-protected assets are really defined and to see how the process will work in practice. I had assumed that the importation of the Insolvency Act provisions was much more a matter connected with the voluntary arrangements. Clearly that is something that I shall have to consider further. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 194 and 195 not moved.]
Clause 25 agreed to.
Schedule 3 agreed to.
Clause 26 agreed to.
Clause 27 [Mergers]:
Baroness Noakes moved Amendment No. 196:
Page 11, line 35, leave out paragraph (a).
The noble Baroness said: In moving Amendment No. 196, perhaps I may speak also to Amendments Nos. 197 and 198. These amendments concern Clause 27, which deals with mergers involving NHS foundation trusts.
Amendment No. 196 seeks to strike out paragraph (a) of Clause 27(2). It states that a merger requires the support of the Secretary of State if one of the parties is an NHS trust. I hope that the Minister will confirm that if the merger involves two foundation trusts, the support of the Secretary of State would be wholly irrelevant. That is an important point.
Noble Lords will recall our earlier debate on the involvement of the Secretary of State in the creation of foundation trusts. We queried why that matter could not be left entirely to the regulator, and why it is necessary for the Secretary of State to have a veto on the independent judgment of the regulator at that stage. By the same token, we do not believe that the Secretary of State should have a veto or anything approaching that when it comes to mergers of foundation trusts. Those matters should be wholly within the powers of the regulator.
Amendment No. 197 is a probing amendment to ascertain what role the Government envisage for the Independent Reconfiguration Panel. While the panel is still an unknown quantity, having issued only one report, it seems to us right in principle that the panel should be consulted as a part of any merger decision. The amendment requires only consultation, it does not require the regulator to act on the advice of the panel.
Lastly, Amendment No. 198 rewrites subsection (6) of Clause 27. The existing subsection requires merger applicants to consult in accordance with regulations. Our rewritten subsection would require the merger applicants to consult in every case—that is, whether or not there are any regulations, and additionally in accordance with regulations. An onus should be placed on the applicant to consult, whether or not any regulations are issued.
Over time, it is inevitable that mergers of foundation trusts will take place. That is why we believe it is important to get these provisions right. I beg to move.
Lord Hunt of Kings Heath: My noble friend may wish to consider this point between now and Report. There will be any number of reasons for foundation trusts being involved in mergers, but there will be occasions where a merger takes place because of the weakness of one organisation and it is felt that a more successful organisation should, in essence, take over. There have been a number of examples of that within NHS trusts. However, the governance arrangements in such mergers are not always satisfactory.
Let me give an example. In my own patch some years ago, the Birmingham Heartlands Trust merged with the Solihull NHS Trust, which was in great difficulty. The Heartlands Trust had very strong leadership. Having agreed to the merger, the first thing that happened is that the people who gave incredibly strong leadership to the Heartlands Trust had to apply for their own jobs within the new trust structure. On my reading of the clause, that would happen again in such circumstances.
It does not make sense. It makes sense where you have a merger of organisations of equal strength, but my reading of the clause is that where a weak performer merges with a stronger organisation, the new governance arrangements in Schedule 1 would, nevertheless, kick into place. I argued, and the House accepted, that there should be transitional arrangements for NHS trusts going forward to NHS foundation trust status, so there is a case for giving the regulator discretion, in the circumstances I have discussed, to allow the governing body arrangements—particularly in relation to the board of directors—to continue in order to achieve continuity. My noble friend may care to look at that issue between now and Report.
Baroness Cumberlege: The noble Lord, Lord Hunt, raises an interesting question. You seldom get a genuine merger in the private sector. That is also true, as the noble Lord said, in the National Health Service. Sometimes the word "merger" is a misnomer for a takeover—and where there is a takeover there are always aggrieved people.
When one considers mergers and the research that has been carried out on them in the private sector, one finds that they take longer than anticipated, that the benefits are less than anticipated and that they do not achieve the savings anticipated. It is a very distracting process, and many people come out of it extremely bruised.

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If you are a shareholder in the private sector you can anticipate these things and disinvest immediately or later on. In the public sector, in the National Health Service, you do not have the opportunity to do that. The least we can do for our public—who are shareholders but cannot make choices in that respect—is to consult with them and ascertain their views.
Although I appreciate what the noble Baroness, Lady Noakes, said about the fact that there are bound to be mergers—I am sure that there are—one of the matters that disturbs even those who have the greatest expertise in the NHS is the concern that bigger is not always best. Huge hospitals are now specialising with great expertise, but they are not that good in dealing with multi-pathologies and patients who have a range of problems.
I hope that the foundation hospitals, if they come into being, are successful. I hope also that there will not be too many takeovers—which I foresee—in the future.
12.45 p.m.
Baroness Carnegy of Lour: In replying to his noble friend Lord Hunt, the Minister will probably remember that in any merger between two foundation trusts there will be attached a huge membership, governors who have been elected by members, and directors who have been appointed by the governors. So there will be a political, with a small "p"—or even, perhaps, with a big "P"—thread running through the discussions on any take-over. When my noble friend Lady Cumberlege refers to aggrieved people, she is thinking about what has happened so far with NHS trusts. However, the grievance may take a more difficult form in a merger of two foundation trusts.
Lord Warner: I have listened carefully to the points made by my noble friend and to the comments of the noble Baronesses. I shall consider what they have said. They raise important issues in regard to governance arrangements if there are mergers. I shall write to my noble friend as quickly as possible and copy the letter to other noble Lords.
The discussions in another place highlighted a gap in the Bill in that it did not provide adequately for mergers of NHS foundation trusts after establishment. We recognise the importance of ensuring that such mergers should occur in a way that balances the need to minimise bureaucracy with the need to safeguard the interests of the NHS and NHS patients. That is why we have brought forward these provisions. That is the context in which we are discussing the amendments.
Amendment No. 196 would remove the veto of the Secretary of State over mergers involving NHS trusts. We believe that it is entirely appropriate that the support of the Secretary of State should be required before an NHS trust applies for NHS foundation trust status through a merger with an NHS foundation
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trust, just as his support would be required if the NHS trust was making an individual application for NHS foundation trust status.
If the Secretary of State did not have this power, there would be effectively a backdoor route for NHS trusts to become NHS foundation trusts without obtaining his support. In effect, there would be a short cut into foundation trust status without going through the processes that other applicants now have to go through. NHS trusts are ultimately subject to performance management by the Secretary of State, and he will be well placed to judge whether they are in a fit and ready state to move forward to an application to the regulator. It is important to preserve those arrangements in order that we do not create loopholes.
Amendment No. 197 requires the regulator to consult the Independent Reconfiguration Panel. I remind your Lordships that the Independent Reconfiguration Panel is not a statutory body and so we are up against the issue, upon which we keep touching, of whether it is right to refer in primary legislation to a body or concept that is not statutorily established. On those grounds, it should not be referred to in legislation.
However, the regulator can take advice from any person he thinks appropriate. This could include the Independent Reconfiguration Panel. I am certainly happy to give the assurance that it is not the Government's intention to exclude it. I shall not outline the details of the arrangements for consultation, but they are fairly extensive and contain many safeguards.
As regards Amendment No. 198, which relates to consultation on mergers, we will require applicants for mergers to carry out the kind of comprehensive public consultation that would need to occur for any major reorganisation in the NHS. Clause 27(6) provides for the Secretary of State to make regulations setting out the consultation requirements. Compliance with these regulations would be a condition of authorisation.
We have included this power—believe it or not— because we intend to use it. We expect to introduce the regulations under Clause 27(6) before any applications are made for mergers involving foundation trusts. These are likely to require consultation with the local public and patients— including patients forums, once established—staff, other local NHS bodies and local authorities, including overview and scrutiny committees.
This important measure is designed to ensure that the views of local communities and stakeholders are sought, listened to and taken into account. However, we do not believe it would be appropriate to remove the Secretary of State's discretion on whether to make regulations and what they should contain, particularly as the requirements may themselves change over time. That, effectively, is what this amendment would do.

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The requirement that a consultation should be "adequate" is simply not necessary. As a matter of law, consultation must be adequate. If it is not, it is open to challenge in the courts.
Baroness Noakes: I thank the Minister for that reply and other noble Lords for their contributions to the debate. The noble Lord, Lord Hunt, raised an interesting point about continuity of management. I suggest that such a provision would be very difficult to draft because the Bill is predicated on mergers, and a merger has no dominant party. What the noble Lord, Lord Hunt, referred to was a takeover, and there is no provision in the Bill for a takeover. It is probably counter-cultural to the NHS to suggest that there might be a takeover. So while the Bill maintains the fiction of merger, I suspect that the points that he has raised, which I completely accept are valid, may be extremely difficult to accommodate in the Bill.
Lord Hunt of Kings Heath: I am grateful to the noble Baroness for giving way. Does she agree that, because of that, it might be appropriate to look at whether the regulator could be given discretion so that he or she could exercise judgment in those cases? I agree with her that it is quite difficult to set hard and fast rules here.
Baroness Noakes: That is a very constructive suggestion, and I hope the Minister will take it into account.
So far as the Secretary of State's consent is concerned, we will have to agree to differ. We see that the sticky hands of the Secretary of State are far too apparent in relation to foundation trusts. It would be no bad thing, we think, for the regulator to have complete say about whether or not foundation trusts were set up or merged in due course, but we will doubtless not progress that argument.
I take the Minister's point that the Independent Reconfiguration Panel is a mere figment of the Secretary of State's imagination and therefore cannot be referred to in the Bill. But that is a pity, because then we cannot refer to anything that requires the regulator to consult. If the regulator is not required to consult, the independent reconfiguration panel may wither on the vine, but that may of course be what the Secretary of State intends.
I was grateful to the Minister for his reply on consultation and his assurance that the regulations would be out before there was ever any issue of a merger. That will deal with the point in my amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 197 and 198 not moved.]
Clause 27 agreed to.
Clause 28 agreed to.
Clause 29 [Co-operation between NHS bodies]:
[Amendment No. 199 not moved.]
Clause 29 agreed to.
Clause 30 agreed to.
[Amendment No. 200 not moved.]
Clause 31 [Patients'Forums]:
Lord Clement-Jones moved Amendment No. 201:
Page 13, line 19, leave out subsection (2) and insert—
"(2) In section 15 (establishment of patients' forums) after paragraph (l)(b) there is inserted "and (c) for each foundation trust.""
The noble Lord said: In moving Amendment No. 201, I shall also speak to Amendments Nos. 202 and 203.
We come to one of the largest question marks at the centre of the Bill and one of its major flaws—namely, the failure to provide for patients forums for foundation trusts. The key question in relation to Clauses 30 and 31 is why parts of the existing legislation are not being amended so that foundation trusts are put on the same basis as NHS trusts. This is the mystery of the dog that is not barking; I am sure the Minister will be putting on his deerstalker and trying to elucidate matters later in the debate.
Let us first look at the existing legislation. Section 11 of the Health and Social Care Act 2001 provides for public involvement in consultation. This is a very general provision, which states that it is the duty of everybody to which the section applies, including NHS trusts,
"to make arrangements with a view to securing, as respects health services for which it is responsible, that persons to whom those services are being or may be provided are, directly or through representatives, involved in and consulted on—

"(a) the planning of the provision of those services,

"(b) the development and consideration of proposals for changes in the way those services are provided, and

"(c) decision to be made by that body affecting the operation of those services".

That is a very general provision which is being amended to include foundation trusts. But when one looks at that section, that was always intended. It was purely coincidental that that section went through on the 2001 Act; it was not part of the 2002 Act. The Minister may have had a crash course in the history of this particular part of patient and public consultation. I hope he has, because it is very convoluted and hard fought.
Without the patients forums provisions, that is not a very useful piece of stand-alone legislation. There are no sanctions for failure to comply. Indeed, the provisions are extremely vague in the way in which they are applied.
Let me turn to something rather more specific which was deplored on these Benches and the Conservative Benches as not being nearly as satisfactory as the one-stop shop provided by community health councils. We had that debate on both Bills as they went through this House.
Section 15 of the National Health Service Reform and Health Care Professions Act 2002 provides for the establishment of patients forums. Such forums have very specific duties under that section. They must monitor and review the range and operation of services provided by, or under arrangements made by, the trust for which it is established; obtain the views of patients

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and their carers; provide advice and make reports; make available to patients and their carers advice and information about those services; and so on. These are very specific provisions.
Section 16 provides additional functions for PCT patients forums. The Government have simply provided for PCT patients forums to have a degree of responsibility for reporting on foundation trusts. But there is no extension of the power, for instance, to insist that foundation trusts respond to the concerns of the PCT patients forums. Ultimately, no separate patients forum is specifically provided for by amendment to Section 15 of the 2002 Act. That is a major hole in the middle of the Bill, which the amendments are intended to remedy.
There are other aspects which the Government have provided for. They give the Commission for Patient and Public Involvement in Health a role in relation to foundation trusts. However, it appears that they have very little capacity to fulfil that and none of that makes up for the fact that no patients forums will be provided for in the Bill.
Having set up the architecture of patient and public involvement for individual NHS trusts, it seems inexplicable that the Government have gone down this route. Do they believe that the board of governors will fulfil this role? We heard, as we went through the Government's provisions, that the role of the board of governors will be utterly minimal. There is nothing like the detail setting out what kind of public involvement mechanism there will be for the board of governors. So far as one can see, the role of the board of governors will simply be to elect the non-executive directors.
This seems a very shaky model, particularly when the Government were extolling its virtues. Indeed, they extolled its virtues on the basis of the recommendations of the Bristol inquiry. The Bristol inquiry put forward a model which the Government claimed to be implementing when putting forward the patients forums. I have not looked back at the precise form of the parliamentary commitment given by Ministers as the legislation on patients forums went through, but it seems a far cry from the Government's commitment to patient consultation and involvement at the time that both pieces of legislation went through for the Government now to say that foundation trusts will not be included in that.
There is grave disquiet on these Benches. It seems that what the Government will eventually allow to happen is the withering away of patient information and consultation. That seems a somewhat extraordinary step only a year after the passing of the 2002 Act. We need considerable tightening up in this area. I very much hope that the Government will have a change of heart on this matter and move forward to put foundation trusts on all fours with NHS trusts. I beg to move.
1 p.m.
Earl Howe: I rise to support the noble Lord, Lord Clement-Jones, in all that he has said. He has put the
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case extremely well. Only a few months ago Parliament agreed to the creation of patients forums as successors to community health councils on the clear understanding that every NHS trust and every PCT would have one; in other words, both providers and commissioners. Never was there even a hint from Ministers that the creation of foundation trusts would render those assurances null and void as regards the providers. Only when this Bill was published did we realise that the goalposts had been moved even before they had been planted into the ground. So now, just as the new national system of patient and public involvement is being rolled out in statutory instruments, we are engaged in debating a Bill which ensures that that system will be condemned to a limited span of life. It is a state of affairs that must be unique in parliamentary history and demonstrates either a lack of candour by Ministers originally or else—which I find more likely—policy-making on the hoof and simply a disregard for undertakings given.
The argument that patients forums are no longer needed because of patient representation on boards of governors was dealt with very well by the noble Lord. It is an argument that rests on a false premise. Accountability has three strands: the governance strand; in other words, the mechanism by which an organisation is controlled and managed to ensure that it delivers; the scrutiny strand to make sure that what has been promised is properly delivered; and patient and public involvement, which influences the delivery of services to match the needs of users. Neither scrutiny nor patient and public involvement can be done in-house. They require an arm's length relationship to ensure impartiality and to avoid conflicts of interest. Governors are an intrinsic part of their organisation. Their lack of impartiality will mean that they cannot also be scrutineers. To blur the distinction between those three strands of accountability is bound to lead to all three of them being compromised.
It is no good the Government saying—as they do— that PCT patients forums will perform the scrutiny and involvement roles in foundation trusts. The remit of a PCT patients forum in this context is a much more limited one, as the noble Lord correctly said. At the end of the day foundation trusts can ignore what they say. That is a long way from the kind of influence and leverage that patients forums will have in ordinary NHS trusts. The absence of a duty to create a patients forum in every foundation trust should not be looked at in isolation, I suggest. It should be seen against the background of an absence of legal accountability elsewhere. Neither governors nor, indeed, members of a foundation trust are accountable in law to anyone at all.
The Government are saying that it is up to the constitution of each foundation trust to determine whethe there is a patients forum within the hospital. That is one instance where I could have wished that the Government had chosen to be more prescriptive, not less. That lays me open as an easy target for the Minister but I would find it surprising if he did not agree with me—as Ministers have stated repeatedly in

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the past—that a patients forum should be seen as one of the essential checks and balances in the delivery of a responsive and patient-centred health service.
Baroness Pitkeathley: There is one thing of which there can be no doubt and that is this Government's complete commitment to the absolute necessity of putting patients and their families absolutely at the centre of the NHS. We have ample evidence of that in the setting up of the Commission for Patient and Public Involvement in Health, the other arrangements and, indeed, the huge consultation exercise which is going on at the moment in the Department of Health about patient and public involvement. The governance arrangements for foundation trusts offer the opportunity to further this issue. There can be absolutely no question of a withering away as the whole issue of patient and public involvement has now gained such momentum that no provider of health services can ignore it. The absence of specific duties for patients forums within the foundation trust structure is an anomaly. I very much hope that the Minister will be able to reassure us about the Government's continued commitment to ensuring the maximum patient and public involvement in foundation trusts as throughout the rest of the health service.
Baroness Finlay of Llandaff: I should have liked to add my name to these amendments but due to a clerical oversight on my part 1 did not. Of course the Government have tried to put the needs of patients and their families at the heart of things. Like the noble Baroness, Lady Pitkeathley, who has just spoken, I view this matter as an oversight. I am flabbergasted that these amendments were not incorporated in the Bill before it reached us.
I have a major concern regarding patients who are extremely ill. They will be in-patients in the foundation hospitals. They are quite different from the medically well who will constitute the public who will be consulted and may join a board of governors. They are very different from the medically slightly unwell who will probably express opinions out in the community. When patients are very ill, no one should underestimate how vulnerable they are and how difficult it is for them to express concern or dissatisfaction with any aspect of their care. Attention to detail is absolutely crucial in improving the quality of care that they receive. Without a patients forum right at the heart of the provider who is providing services for these very ill people, I fear that their vulnerability could be overlooked and that they could be subject to a paternalistic and, dare I say, even arrogant approach by the management of a foundation trust who, for whatever benevolent reason, believe that they know best what is right for those patients and do not give them a forum in which to express themselves. I find it astounding that we do not establish a patients forum right at the heart of this measure. I urge the Minister to look very seriously at the proposals before us.
Baroness Carnegy of Lour: Once again the noble Baroness, Lady Finlay, has reminded us what it feels like to be inside a hospital. We in this House find it easy to conceive how the public will view these hospitals. We can imagine how the members of a trust will view the hospital. We can imagine how they will feel about the board of governors and so on.
In hospitals, where there are vulnerable people— and almost all patients will be vulnerable, especially long-term patients—there must be some mechanism. Most of us who visit people in hospitals have seen the problems there and how difficult it is for families and patients to express their complaints. For example, people may want to complain about the way in which they are fed—about whether it is ensured that they can get the nourishment that they need and reach the cup of tea that has been served up. There are all those small things that people find it very difficult to complain about, on which a person's life may depend.
I hope that the Minister does not simply tell us how the governors will be able to deal with those important matters. I cannot see how a trust can operate properly without a mechanism to deal with them.
Lord Hunt of Kings Heath: I agree with my noble friend Lady Pitkeathley. I am disappointed by some comments made by noble Lords on the matter, because they display a lack of trust in the leadership of foundation trusts in ensuring that there will be proper and effective patient involvement in their activities. I hope that we shall not be prescriptive and that we will allow each foundation trust to make its own arrangements.
I simply ask noble Lords to consider the consultation documents issued by applicant foundation trusts in the first wave. What is so impressive about that documentation is how much effort and focus has been devoted to the arrangements that they want to make to ensure that public and patients are involved and can make their views known. It is very unlikely that any future foundation trust will want to go forward without having robust patient involvement arrangements. I hope that we shall show some trust in those organisations to make their own arrangements, subject to the overriding considerations in the Bill.
I agree with the noble Lord, Lord Clement-Jones, in his reference to the distinction between patient representation and the work of governing bodies. It is very important that the two are kept distinct. Governing bodies are not there to carry out the role of patients forums or organisations like them. I am worried that a number of foundation trusts are referring to the governing bodies as patient councils. They are not patient councils or members' councils but governing bodies. It is very important to keep that distinction.
1.15 p.m.
Lord Warner: The architecture that we have constructed is not quite as shaky as the noble Lord,

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Lord Clement-Jones suggested. 1 am grateful for the points made by my noble friends Lord Hunt and Lady Pitkeathley.
The Government totally accept the need for independent patient involvement. Patients need to be satisfied that their interests are considered at all stages of patient care. However, independent scrutiny and monitoring of NHS foundation trusts will be carried out by PCT patients forums and overview and scrutiny committees of local authorities. Advice about patient and public involvement will be provided to them by the Commission for Public and Patient Involvement in Health. That is the context in which we are discussing the matter.
PCT patients forums will carry out a range of roles with respect to NHS foundation trusts, including monitoring and reviewing services commissioned by the PCT; monitoring how successful NHS foundation trusts are at achieving involvement, including some capacity for inspection; advising NHS foundation trusts on the range and operation of services that they provide, and on encouraging involvement; representing the views of members of the public; and being able to refer relevant matters to relevant bodies—for example, the independent regulator or the overview and scrutiny committee. Those bodies will be engaged in the work of NHS foundation trusts.
Individual NHS foundation trusts may decide to put in place arrangements reflecting many of the functions of patients forums, if they believe that such arrangements are a helpful way in which to discharge their accountability and ensure patient-led monitoring mechanisms. There is nothing in the Bill to prevent trusts from going down that path in the application that they make for foundation trust status.
PCT patients forums will also promote the involvement of members of the public in consultations, decisions and policy development by NHS foundation trusts, and advise on encouraging involvement and on compliance with their Section 11 duties. As I said, they will carry out other roles, too. There is extensive provision for patient involvement in the new world opening up with NHS foundation trusts.
However, I recognise that there are strong feelings and concerns about the issue across the House, and I am prepared to give an assurance that we will consider the issue further. More specifically, we shall certainly consider whether we can give more reassurance to Members of this House and those outside who feel so strongly, by requiring NHS foundation trusts initially to have a patients forum, while retaining the discretion to disband them if, subsequently, they seem unnecessary, given the other arrangements in place locally that I have outlined. We should not dismiss the present architecture quite as quickly as many noble Lords have done, but I am happy to give the assurance that we will carefully consider an alternative to provide
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more comfort for patient interests, and to show that we are really serious about patient involvement on the providers' side.
Baroness Carnegy of Lour: I wonder whether that is the right answer. It is the sort of answer that the Government are inclined to give—that we shall have a temporary arrangement and see what is necessary. It sounds all right, but if one was setting up a foundation trust it would be particularly irritating to have a temporary arrangement and then to have to think of something else.
Would it not be better to put into the Bill a provision that foundation trusts have a duty to have some arrangement for patient consultation? We should change the Bill, leaving foundation trusts to make the arrangement they want. Would that not be a better answer? I do not know what my noble friend Lady Cumberlege or the Liberal Democrats think about that, but it strikes me that that would be a better response from the Government.
Lord Clement-Jones: I welcome some of the Minister's words but, like the noble Baroness, Lady Carnegy, I have my doubts about the rather tentative way in which the Minister rounded off his response. We had a firm, hard assurance from the Government, but then we find that the actual words are very flabby when written down on paper. That is the problem with the measure on these Benches, and, I suspect, on the Conservative Benches as well.
Like the noble Baroness, Lady Finlay—although I am rarely flabbergasted by what the Government do— I am mildly surprised by the fact that they have not included the sort of provision that we have suggested. I should have thought that a way of creating a more acceptable context in creating foundation trusts would have been to bolt them into the patients forum structure.
The noble Lord, Lord Hunt, more or less alleged that we have a lack of trust in trusts. Of course, one can turn on the moral imperative in these circumstances, but it is not that we have a lack of trust in trusts. People tend to do what they are obliged to do, and it always creates a problem if there is an optional extra for which they have to find money out of existing budgets. One sees that in social care and, no doubt, if the amendment is not passed, we shall see it in health care as well. After all, the staffing costs and other costs of patients forums are met in existing NHS trusts through the Commission for Patient and Public Involvement in Health. That will not be the case for foundation trusts.
The noble Lord, Lord Warner, says that he totally accepts the need for patient and public involvement, but everything becomes conditional after that. He says, "If the trust believes", "There is nothing to stop them", and so on. There is no requirement. The PCT patients forum is of course a very different animal, as I explored in my opening remarks. Above all, there is no requirement on the foundation trust to respond to anything that a PCT patients forum says to it. The Government have deliberately omitted amending that

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provision in the 2002 Act. None of this is accidental or co-incidental. It is all utterly deliberate, which is depressing.
When the Minister talks about an alternative, I hope that he is going to consider seriously the alternative contained in the amendment, otherwise I assure him that the issue will come thundering back on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 202 and 203 not moved.]
[Amendment No. 204 had been withdrawn from the Marshalled List.]
Clause 31 agreed to.
Clauses 32 to 34 agreed to.
Schedule 4 agreed to.
Clauses 35 to 37 agreed to.
Schedule 5 [Audit of accounts of NHS foundation trusts]:
Baroness Noakes moved Amendment No. 205:
Page 128. line 37, leave out ", in the public interest,"
The noble Baroness said: I shall speak also to Amendments Nos. 206 and 207. The audit provisions in Schedule 5 are rooted in the audit arrangements for local authorities. I remark in passing that they are a more logical fit with the imposition of the Audit Commission as auditors, about which the Liberal Democrats spoke earlier. The amendments seek to challenge one part of those arrangements in relation to public interest reports.
In the Bill, the Government have tried to create bodies that are accountable to their members. That is the driving force behind their proposals, as I understand it. The guide to foundation trusts referred to that as local public ownership and accountability. In the guide, which was issued in December, we were told that there would be,
"accountability mechanisms to local people",
most notably through governance arrangements that would define accountability to the local community. That is all very well. However, the audit arrangements are one of the strongest forces for underpinning accountability, and in them we find no mention of local members or the local community.
I suggest that that is another of the confusions at the heart of the Bill's approach to foundation trusts. They are local when it suits the Government to make them local, but not otherwise. In effect, our amendments replace the concept of public interest with the interest of the members of the trusts. Public interest may be too restrictive a notion in terms of what auditors should report on as a result of their audit effort. Local foundation trusts are not local authorities. They should be primarily accountable to their members according to the Government's doctrine.
Many other aspects of Schedule 5 could usefully be amended to reflect the role of the board of governors, which appears nowhere in it. I hope that the Minister
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will be prepared to look again at those arrangements to reflect the kind of accountability that the Government say that they espouse. I beg to move.
Lord Warner: We found the amendment slightly surprising. Membership provides a mechanism for the public to get involved in the running of hospitals, but NHS foundation trusts do not use membership as a means of deciding who gets what type of service. They have a much broader responsibility, providing NHS services for the benefit of the public generally, not only for the members of the NHS foundation trust. It is therefore appropriate that the auditor should determine whether a report should be made for the interest of the public generally and not only for members.
The amendment seems to narrow the obligations of the auditor and leave the general public out of the picture. Whatever the intentions may have been, the amendment does not benefit the public because it narrows the auditor's responsibilities.
Baroness Noakes: I thank the Minister for that brief response. I think that he failed to deal with the point that I put to him, which was that nothing in the schedule related to the accountability structures that the Government have alleged that they are creating. Accountability to the members of the trusts is completely absent from Schedule 5. I shall reflect on his answer and perhaps table a raft of different and more extensive amendments to consider on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 206 and 207 not moved]
Schedule 5 agreed to.
Clause 38 [General duty of NHS foundation trusts]:
Baroness Barker moved Amendment No. 208:
Page 15, leave out line 6 and insert "ethically, and put and keep in place arrangements for the purpose of monitoring and improving the quality of health care provided by and for that body"
The noble Baroness said: The amendment is very simple but none the less important. Clause 38 sets out the general duty on NHS foundation trusts that they must exercise their,
"functions effectively, efficiently and economically".
Nowhere does it require hospitals to act ethically. Our amendment would restore that fundamental duty in healthcare to foundation trusts.
One could recite many different examples in which hospitals have acted efficiently and economically, but under the regime put forward for foundation trusts they would not be required to act ethically. Medical ethics might at times not be efficient or economic, but are nevertheless important. It is perhaps no surprise that my colleagues in another place considered the amendment when it was revealed that A&E services had effectively been completely distorted earlier this year, to make sure that A&E performance figures met the time scales put on them. That may have been a

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demonstration that they could work efficiently and economically, but I am not sure that it was at all ethical.
I am not a doctor and do not pretend to be. However, I am sure that in many different medical fields there are efficient and economic practices. Whether they are ethical or not is a separate matter. The issue that comes to my mind is the performance of caesarean sections in maternity provision.
It is wholly wrong that foundation trusts should not be subject to such a duty. I am sure that their staff would wish to act ethically. Therefore, the provision should be in the Bill. We talked earlier about a duty of equality, and the amendment is about the quality of the care provided by the hospitals. The amendment may be simple, but it is of fundamental importance. I beg to move.
1.30 p.m.
Baroness Finlay of Llandaff: I support the amendment. I know that everyone is hungry and I do not wish to give a lecture on bio-ethics, but I remind the Committee that as well as autonomy, beneficence and non-maleficence, there is also the principle of justice. Justice demands that the patient has the right to the best treatment within the resources available, but it also demands the just allocation of resources. It is completely dependent on management to allow the just allocation of resources and to allow the other principles of ethics to be invoked. Beyond those four principles, there are also issues surrounding scope and the size of the decision, and so on. That is a fundamental and important principle if foundation trusts are really to serve the population they are intended to serve; that is, people who are extremely vulnerable.
Baroness Andrews: Would that we had time for a seminar on medical ethics. We would probably enjoy it a lot, lunchtime or no.
As the noble Baroness has said, it is a simple but important amendment and I understand the case that she makes. Under Clause 38, the independent regulator will monitor the NHS foundation trusts' performance against that duty through their audited annual financial statements. I want to make sure that that is clearly understood.
Under Clause 44, an NHS foundation trust will be under a duty to put and keep in place arrangements for the purpose of monitoring and improving the quality of healthcare provided by and for that body. It would be an unnecessary duplication to include that duty also in Clause 38, but specific only to NHS foundation trusts.
I would ask whether the term "quality" would imply an ethical dimension. I hope that it would always do so. However, I can reassure the noble Baroness that foundation trusts will be bound by the Human Rights
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Act 1998. That will ensure ethical and equitable behaviour. On those grounds, it is unnecessary to duplicate a duty in the legislation.
Baroness Barker: I thank the Minister for her thoughtful answer. I was worried to hear her say at the beginning of her response that the independent regulator would review foundation trusts through their financial statements. We are talking a completely different language when discussing ethics.
Perhaps the Minister shone a torch on the reason for including the amendment in such a belt-and-braces fashion. 1 admit that it is a belt-and-braces fashion and there is a good reason for it. When one looks at the Bill in its entirety and sees the number of words devoted to finance, efficiency, and so on, the one area in which it is deficient above all others is that of ethics. I will reflect further on the Minister's suggestion that quality implies ethics. When we reach Clause 44, I do not doubt that we shall discuss the issue further. For the moment, and in view of the hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 38 agreed to.
Clause 39 agreed to.
Lord Warner: This may be a convenient moment to take a break in the Committee's proceedings until after Starred Questions. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Baroness Andrews: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 1.34 to 2 p.m. for Judicial Business and to 3 p.m. for Public Business.]

Horse Passports
Viscount Astorasked Her Majesty's Government:
Why they are asking all horse and pony owners to apply for horse passports when the required statutory instrument has neither been laid before, nor approved by, Parliament.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, in February 2002, the Government announced that, in order to comply with European legislation, all horses would be required to have passports by the end of 2003. Earlier this year, the Government consulted on a draft statutory instrument

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implementing that announcement. The final version of the statutory instrument will be laid before Parliament shortly.
Viscount Astor: My Lords, I thank the Minister for his Answer. Can he explain why, in the consultation paper issued by his department, a second option was given—that of passports purely for horses that would be entering the food chain? It was not a requirement that all horses have passports. Is this not a case of the Government, again, gold-plating a directive in an entirely unnecessary way?
Lord Whitty: No, my Lords. Indeed, the majority of organisations within the equine industry supported the view that, in order to comply with the European legislation, it would be more sensible to ensure that all horses were covered by the passport legislation. In that way, we could ensure that horses not destined for the food chain could continue to receive the veterinary medicines which would otherwise be banned.
Viscount Falkland: My Lords, is it not the case that the almost universal derision with which this measure has been met—certainly within the horse community—is due to the fact that most people realise that, for a human, obtaining a passport is a voluntary act? If you wish to travel, a passport provides you with government protection. However, apparently horses and donkeys are made compulsorily to have passports, whether they are travelling, as some do, and may need them or whether they are munching in a field. Is this really a passport or are we talking about a registration document? If the latter, why not say so? The presentation here has been quite incredible.
Lord Whitty: My Lords, I completely refute the first part of the noble Lord's question. Although there was a certain amount of derision in the short debate that we had in this House, by and large, as I said, the equine organisations support the legislation. It is, in a sense, a registration document and "passport" may not be the most appropriate term, although it would be used if the horse went between one European country and another.
Lord Higgins: My Lords, as the motivation for this impractical measure seems to come from those involved in the horsemeat trade, is the Minister aware of the concern of the International League for the Protection of Horses that, under the new draft legislation, it would not be possible for the UK to ban the export of live horses for slaughter? What is he going to do about that?
Lord Whitty: My Lords, it is true that the European Union is considering, as a separate issue, the regulations covering the transport of live horses. It is also true that, although in a rather indirect way, the UK ensures that horses and donkeys are not exported for slaughter, although that is not an explicit regulation at present.
Baroness Masham of Ilton: My Lords, would it be possible to have a kind of geriatric passport for elderly
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children's ponies which will not enter the food chain and will not be sold? Would that not be a kind thing to do?
Lord Whitty: My Lords, I assume that the noble Baroness meant "children's elderly horses". Clearly, in the enforcement of this legislation, both local authorities and the FSA will consider the priority areas. But any horse, however elderly, could change hands and could therefore require this degree of legislation. Therefore, in the long run, it would be better if all horses were covered.
Baroness Byford: My Lords, does the Minister accept that it is estimated that only 10,000 to 12,000 horses and ponies are exported for human consumption? Would it not be far more sensible if only those animals were required to have documentation? Further, does he agree that, following the issue of the consultation paper, it was recommended that those animals should not be given medicines six months prior to being killed? If that is the case, would it not be sensible to put a stop to the overall passport scheme and to apply it only to horses that are to be exported for human consumption?
Lord Whitty: My Lords, clearly the motivation for these regulations was to deal with horses for human consumption. Some human consumption of horsemeat does take place in this country, so let us not pretend that it is consumed only by foreigners. The benefit of having a comprehensive horse passport system is that horses whose owners declare them to be not destined for human consumption will continue to be able to use the veterinary medicines which would be banned were that not clear. Therefore, one good reason for pursuing this matter, and one reason that the industry, by and large, supports it, is that we would be able to continue to use traditional veterinary practices.
Baroness Gardner of Parkes: My Lords, can the Minister tell me what the penalty will be for failing to register or obtain a passport for a horse, how enforcement will be carried out and what the cost of enforcement will be?
Lord Whitty: My Lords, the noble Baroness will have to wait until the statutory instrument is placed before this House. That should be within the next month or so. Enforcement will be carried out by the Food Standards Agency in relation to animals which are, or may be, destined for food consumption. The rest will be dealt with by local authorities—usually through trading standards offices. The level of enforcement will be relatively light.
Lord Berkeley: My Lords, if my noble friend is correct, horses are exported live to France, with or without passports. Does he really believe that the French authorities will care whether they have the right documentation before they are slaughtered in France?
Lord Whitty: My Lords, I am surprised that my noble friend has such a poor view of the French.

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Horsemeat in France has long been a part of the diet of certain sections of French society, and the French, above all, are fairly careful about what they eat. Therefore, I believe that French potential slaughterers, whether of French horses or otherwise, will be very careful and will require this documentation.
Lord Swinfen: My Lords, if a horse is sold at auction and has previously been given banned medication, how will the new owner, who might use it or sell it for human consumption, know that it has had that medication?
Lord Whitty: My Lords, most horses will have some documentation. If a horse changes hands at an auction, once the passport system is up and running, the passport will either carry a declaration that the animal is not destined for human consumption, in which case the new owner would not be allowed to use it for that purpose—the designation cannot be changed—or it will indicate that it is for human consumption and therefore, as the noble Baroness has just said, the last six months of its veterinary record would need to be checked.
Baroness Byford: My Lords, perhaps I may suggest to the Minister that I consider the Government to be very complacent in this matter. The consultation finished in June this year. The legislation is due to be implemented in November this year, when animals must also be registered, and the noble Lord has just said that the statutory instrument might be brought forward in the next month or so. 1 believe that November is the next month.
Lord Whitty: My Lords, I certainly agree with the noble Baroness on that last point. It is our intention to bring forward the statutory instrument in November. We are still considering whether any leeway should be given in respect of the implementation date.

Iraq Survey Group: Accountability
3.9 p.m.
Lord Wallace of Saltaire asked Her Majesty's Government:
Whether the Iraq Survey Group is accountable to the British Government; and, if so, how this is reported to Parliament.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the Iraq Survey Group (ISG) is not part of the Coalition Provisional Authority. It is part of the United States-led military forces in Iraq and is therefore accountable to the United States Administration. British personnel seconded to the survey group are under the tactical control of the United States' commander. They are under the operational command of and accountable to the United Kingdom Chief of Joint Operations and thus to Her Majesty's Government. On reporting, the
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findings of the group are available to the coalition partners, including our own Intelligence and Security Committee, which will have access to the full text of the ISG interim report.
Lord Wallace of Saltaire: My Lords, can the Minister confirm that the second-in-command of the ISG is a British brigadier, that the second largest component in the ISG is British and that David Kay in his interim report to a joint meeting of four congressional committees referred to the ISG as "a joint operation" of the coalition partners; that is, the United States, Australia and the United Kingdom? Is this a joint operation which, nevertheless, is entirely American?
Baroness Symons of Vernham Dean: Indeed not, my Lords. I believe my Answer was very clear. I have been extraordinarily careful in the drafting of this response for the purposes of accuracy. The noble Lord, Lord Wallace of Saltaire, is right; the second-in-command is British. He is right that there are about 60 to 100 British personnel involved in the ISG. Numbers vary; in the whole operation there are about 1,300 or so. Indeed, this is a joint operation and the reporting is as I have indicated to your Lordships.
Lord Astor of Hever: My Lords, in the light of the White House request for a further 600 million dollars on top of the 300 million already spent, what is the total UK contribution?
Baroness Symons of Vernham Dean: My Lords, I am not in a position to give your Lordships an idea of the total UK monetary contribution. Our contribution in terms of participation in and support for the survey group has been predicated not only on our sharing relevant findings but on having operational input and offering advice on strategy through the appropriate channels. I shall do my best to obtain a monetary figure for your Lordships and place a copy of my response to the noble Lord in the Library of the House. However, this is not purely a monetary issue; it is also about participation.
Lord Roberts of Conwy: My Lords, will the interim or final report be made available to this Parliament?
Baroness Symons of Vernham Dean: My Lords, I have asked for a copy of the interim report to be placed in the Library of the House. The interim report is also available on the Internet. It can be found at www.cia.gov. If the noble Lord wants to look that up he is now in a position to do so. However, he need not go to that trouble because I shall ensure that a copy is placed in the Library of the House.
Lord Wallace of Saltaire: My Lords, I note that on 5th June, Sir Jeremy Greenstock, then Her Majesty's representative at the United Nations, announcing the setting up of the ISG, stated,
"we the coalition provisional authority on the ground, are instituting the work of the Iraq Survey Group to carry out the business of investigation on the ground".

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Does that not imply that the British Government are very much part of a joint operation for which the Government should be responsible to Parliament?
Baroness Symons of Vernham Dean: Indeed, my Lords, but I do not think that what Sir Jeremy Greenstock said goes against what I have said. We are participating by way of our input to and strategic support for the ISG. However, as a matter of accuracy it is not part of the Coalition Provisional Authority. I am bound to tell your Lordships that in the end it really does not make a great deal of difference because a version of the report will be placed in the Library. The full report cannot be placed in the Library—noble Lords would not expect that to be the case—because if published it would jeopardise the security of personnel on the ground in Iraq. However, it will be available to the ISC and I am assured that that will reflect the availability of the report to the equivalent committees in the United States.

Alcohol: Binge Drinking
3.14 p.m.
Lord Turnberg asked Her Majesty's Government:
In the light of the Strategy Unit's recent report about the adverse effects of "binge" drinking, what practical steps they are taking to combat heavy alcohol consumption.
Lord Bassam of Brighton: My Lords, the interim analytical report published by the Prime Minister's Strategy Unit in September highlighted the scale of alcohol misuse in England. The National Alcohol Harm Reduction Strategy for England will be published later this year and will contain measures to tackle the range of harms caused by alcohol misuse, including binge drinking. As this is a devolved issue, the governments in Scotland and Wales are also working in this area and the Strategy Unit is in close touch with them.
Lord Turnberg: My Lords, I am grateful to my noble friend for that response. I commend the Government for taking this matter seriously. The burden of heavy alcohol consumption on society and health is very serious indeed. It is enormous and costs several million pounds per year. With one in three men and one in five women drinking beyond the recommended safe limits, it is a particular problem.
Does the Minister agree that among the several measures which need to be taken, one simple one would be the labelling of alcoholic drinks with recommended safe limits? Does he also agree that the practice of some Premier League football clubs of marketing their own brand of alcoholic drinks, including whisky, sends quite the wrong message to the young?
Lord Bassam of Brighton: My Lords, the noble Lord makes two very important points. These are issues to which the strategy unit will undoubtedly return when it produces its final report. Given the state of some parts of the football industry, far be it from me to suggest that football clubs relinquish any revenue through promotions, but this is an issue which needs to be addressed.
Lord Walton of Detchant: My Lords, is the noble Lord aware of the recent disturbing report by a distinguished gastro-enterologist, Dr Christopher Record, in Newcastle upon Tyne of a marked increase in the number of young women suffering from liver damage as a consequence of high alcohol consumption; such young women being under the misapprehension that they are safely able to drink as much as young men? What action will the Government take to target that particular vulnerable group?
Lord Bassam of Brighton: My Lords, we are well aware of the vulnerability of all in our society to excessive drinking. This is one of those issues on which we shall have to make recommendations, particularly in terms of health promotion and of encouraging moderate and sensible drinking.
Viscount Bridgeman: My Lords, this problem cuts across three departments: the Home Office, the Department of Health and the Department for Culture, Media and Sport. Does that not indicate the need for joined-up thinking across those three departments? Will the Government consider setting up such a committee?
Lord Bassam of Brighton: My Lords, I would go a little further than the noble Viscount and suggest that this subject touches more departments than he indicated. I refer, for instance, to the Office of the Deputy Prime Minister, which has important liaison with local authorities. I think that the Department of Transport and the Department of Trade and Industry would have something to say. Yes, we are well aware of the need for joined-up thinking. That is precisely why the Strategy Unit was placed in charge of producing a report and a strategy across government. For those reasons, all of those departments have been involved in discussion and consultation to produce the interim report and no doubt will be involved in discussions to provide the background for the final strategy report.
Lord Avebury: My Lords, rather than waiting for the report of the Strategy Unit, why do the Government not set a good example by reducing the consumption of alcohol at their own social occasions? Is the Minister aware that I have been unable to discover by means of Questions how much alcohol is consumed by government departments when they act as hosts, and that the Prime Minister refused to answer a letter I wrote to him asking for the drinks bill of 10 Downing Street?
Lord Bassam of Brighton: My Lords, I was not aware of that. I am grateful to the noble Lord for his

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advice and information on this matter. Clearly, it is important for us all in politics to set a good example as regards drinking, but not to moralise.
Baroness Masham of Ilton: My Lords, now that more women are going into the Armed Forces and trying to compete with men, how much education is given to women about the dangers of binge drinking and competing with men?
Lord Bassam of Brighton: My Lords, I could not put a quantity on that. I would have thought that it makes good sense in educational terms that those in government and in public life ensure that we make everyone in society aware of the dangers of binge drinking. This is a very important issue. It is for that reason that the Strategy Unit was given the important job of looking at ways in which we can improve public information on the subject. I am most grateful to the noble Baroness for her comments.
Viscount Falkland: My Lords, does the noble Lord agree that the term "binge drinking" has been somewhat misused? It usually relates to licensing arrangements of one kind or another, and we have a change imminent. In fact binge drinking—to anyone who knows anything about the history of this country—has been part of our drinking habits for hundreds of years. It is a cultural matter: people drink to get drunk very quickly. In Italy, for example, they do not do so. So a great deal of education in cultural change is needed. That takes a long time. Do the Government have any plans to address that particular aspect of the issue?
Lord Bassam of Brighton: My Lords, I simply say to the noble Lord that he would find it useful, if he has not done so already, to look at the Strategy Unit's interim report. It seeks to address exactly that issue. The noble Lord makes a good point; that the culture that surrounds drinking varies across countries. One issue of concern, certainly here, has been binge drinking associated with the drinking-up period in public houses.
Baroness Gardner of Parkes: My Lords, the point made by both the noble Lord, Lord Walton of Detchant, and the noble Baroness, Lady Masham, was about women competing with men. In the past we have again and again had very good health warnings explaining that women can drink only half the quantity of alcohol that men can. Why is it that we are no longer getting the same amount of health education on this point?
Lord Bassam of Brighton: My Lords, with respect, we are pumping out a great deal of information. The Government spend about £100 million per year on treatment and advice on problems associated with alcohol abuse. We shall continue to do that. As I have said on many occasions during this series of exchanges, part of the purpose behind the Strategy Unit's report
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is to ensure that we get that message over because we obviously need to repeat it and to ensure it gets to the right place.
The Earl of Onslow: My Lords, does the Minister agree that we drink rather less than the French? In my youth there was an advert in the French underground, which stated, "Jamais plus d'un litre de vin par jour", which was put up by M. Mendes-France, the then Prime Minister. For the Labour Front Bench, who possibly do not speak such appalling French as I, that means, "Never more than one litre of wine a day". But that is an enormous amount of wine to drink. Even our binge drinkers on average do not drink that much. Is he also aware that when Garibaldi's British contingent went to Italy, they had to be sent back for binge drinking because they always got totally off their trolleys? There is nothing new about the British behaving in this disgusting way.
Lord Bassam of Brighton: My Lords, I am always taken apart by what the noble Earl has to say on these matters. He has great historical knowledge and wisdom in that respect. I was not there during the time of Garibaldi and did not have the good fortune to read the adverts on the Paris Metro, but I think that we must take binge drinking seriously. It is a serious subject, even in your Lordships' House.
Lord Dholakia: My Lords, does the Minister accept the figure produced by the British Crime Survey that 40 per cent of serious crime in this country is committed by people while under the influence of alcohol? Could he identify whether specific projects are being run in our prisons to address that particular problem?
Lord Bassam of Brighton: My Lords, the noble Lord is right: it is undoubtedly the case that alcohol has a very important relationship with acts of disorder in our community and society. It is for that reason that the Government have taken swift and keen action with their range of anti-social behaviour measures. I agree with the noble Lord that it is important that prison education includes an element on abuse of drugs and drink.

Northern Ireland Assembly: Elections
3.24 p.m.
Lord Smith of Clifton asked Her Majesty's Government:
Whether elections will be called to the Northern Ireland Assembly, in view of the shortage of time now available to the Secretary of State in which to announce a date for such elections.
The Lord President of the Council (Baroness Amos): My Lords, as the Prime Minister said yesterday in another place, we accept that elections to the Northern Ireland Assembly should go ahead, but it is much better that they do so on a basis which offers a real

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prospect of resumed devolved government. Intensive discussions have been continuing between the Government and political parties with that object in view.
Lord Smith of Clifton: My Lords, I am slightly disappointed because statements by the Government are beginning to get all the credibility of a Billy Bunter postal order. Does the Minister agree that procrastination of this kind is now leading to a very serious loss of momentum in the political process in Northern Ireland, not least as permanent staff are leaving Stormont because of the hiatus? Does she also agree, as the Government espouse, that elections really must be held in the very near future?
Baroness Amos: My Lords, I think the noble Lord will accept that this is a very sensitive time with respect to the discussions in Northern Ireland. We want to see Assembly elections go ahead as soon as possible, but it is much better that those elections go ahead on a basis which offers a real prospect of resumed devolved government. That is why intensive discussions have been continuing between the British and Irish Governments and the political parties. That is our objective.
Baroness Park of Monmouth: My Lords, can the Lord President of the Council tell the House what progress has been made in the work of the Monitoring Commission, which was set up, as I understand it, to secure the acts of completion on both sides, which were regarded at that time as a prerequisite of any return to government by the Assembly?
Baroness Amos: My Lords, work is ongoing with respect to the Monitoring Commission. The noble Baroness will know that the political parties in Northern Ireland have had differing views on this issue. I shall check the latest position, and will write to the noble Baroness if there have been any improvements to the Answer that I have given.
Lord Molyneaux of Killead: My Lords, given the importance of these decisions, particularly in regard to the dates of the election—which, after all, I need not remind your Lordships were decided by this House— would it not have been prudent to have invited all the political parties in Northern Ireland to join in, and not just two of them, given that one of the partners in the discussion is a sovereign independent nation?
Baroness Amos: My Lords, I take the noble Lord's point. We stay in touch with a range of political opinion. The SDLP met with the Prime Minister last week. My right honourable friend the Secretary of State for Northern Ireland saw a range of pro-agreement parties during the past week. I must say that it is right that we should try to facilitate the process of building trust and confidence and in particular an end of paramilitary activity. Our efforts are directed towards that.
Lord Glentoran: My Lords, I, and certainly my party, agree with the noble Lord, Lord Smith of
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Clifton, and the Government that elections must happen. If they do not happen soon there may never be elections for devolution again. What kind of programme do the Government have? Are they thinking of having elections and maybe not summoning the Assembly until Sinn Fein/IRA has delivered? The Prime Minister, my party, the Ulster Unionist Party and others have demanded that before Sinn Fein is admitted into the Executive, it must deliver that which we all understand as total decommissioning and a total end of the war. Perhaps the noble Baroness can help me on that issue.
Baroness Amos: My Lords, the noble Lord will understand if I am not able to answer directly the question with respect to a programme and to give details of it. My right honourable friend the Prime Minister said on Monday that we believe that the omens for progress are good. We will continue to work towards the goal of elections to restored institutions. Intensive discussions are happening to deliver that end. I am sure that the House will understand that I cannot speculate further on the potential timing of an election while we are at such a sensitive stage of discussion.
Lord Hylton: My Lords, does the Leader of the House agree that it is essential that all paramilitary groups disarm and cease using terror tactics?
Baroness Amos: My Lords, as the noble Lord is aware, we have been working towards ensuring that paramilitary groups give up their weapons. That is a key part of our strategy.

Health and Social Care (Community Health and Standards) Bill
3.29 p.m.
House again in Committee.
Clause 40 [The Commission for Healthcare Audit and Inspection]:
Earl Howe moved Amendment No. 209:
Page 15, line 33, after "the" insert "Independent"
The noble Earl said: In moving Amendment No. 209, I shall speak also to rather a lot of other amendments. I do not know whether it would be for the convenience of the Committee if I read them out, but I shall take them as read: they are the amendments listed in the group.
We move with, I suspect, something of a sense of relief to Part 2 of the Bill and the issues relating to the creation of the new Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection. I begin by once again making clear that, in broad terms, we welcome what the Government are doing by creating those bodies. Indeed, we have long advocated that the acute sector of the NHS and acute private hospitals should be subject to the same inspection and monitoring regime and the same set of quality standards. Bringing together the existing

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Commission for Health Improvement and the relevant functions of the National Care Standards Commission is a decided step forward. But those new organisations need to be set up correctly.
One of the main themes of our debate during this part of the Committee's proceedings will be the need to ensure that both CHAI and CSCI are truly independent in their operation—independent, that is, from Ministers, government and Whitehall. The amendments to add the word "independent" to the names of the two bodies are symbolic of that theme, but they are also intended as signposts to wider and deeper issues. The independence of CHAI and CSCI must be a cardinal feature of how each body performs its functions. In particular, I shall be arguing that each should be the guardian of the standards that it promulgates.
If both bodies are to command public confidence, they should not be seen as mere tools of government. Regrettably, that is how CHI, for all its splendid people, is sometimes perceived. The star rating system is one example of that. It was introduced by the Government as a means to rank NHS trusts against each other. The system has been discredited, but it is CHI that must implement it at the Government's behest.
It will occasionally be necessary for CHAI and CSCI to speak out and be critical of government. The precedent of the Audit Commission, part of the functions of which are being absorbed into CHAI, is valuable. I am well aware that being criticised is uncomfortable for Ministers, but it is healthy and we should not fight shy of it. That measure of independent action on CHAI's part requires it to be independent on several levels: operationally, financially and in the manner of its executive appointments. We have tabled amendments to address all three of those levels. Earlier this year, there were distinct signs that Ministers wanted to water down previous guarantees of CHAI's independence. I state in the clearest terms that any such watering down is unacceptable.
Turning briefly to other amendments in the group, under Schedule 6 there are various provisions for the Secretary of State to involve himself with the people who will be running CHAI. He appoints and removes the chairman and members under Paragraphs 3(1) and 3(2); he can make regulations about the appointments and removals from office under Paragraph 3(5); and he can set pay, pensions and compensation for loss of office under Paragraph 4. There are similar provisions relating to CSCI in Schedule 7.
Several of my amendments in the group would replace the Secretary of State with the NHS Appointments Commission for CHAI; others would do the same for CSCI. They refer to the special health authority designated to perform the appointment functions for the regulator, CHAI and CSCI under the new clause relating to the regulator that we debated during our first day in Committee. That is probably the NHS Appointments Commission, but a special
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purpose health authority could be set up. The important point is that the appointer is not the Secretary of State.
It may appear unusual for pay and pensions to be settled by the appointments commission. Again, it would be possible to set up a more independent mechanism. The important point is that real distance should be placed between the Secretary of State and the chairman and members of CHAI and CSCI. That is the purpose of the amendments. I beg to move.
Baroness Barker: I shall speak to Amendment No. 211 and the following amendments in the group. I echo what the noble Earl, Lord Howe, said. The Committee will recall that early last year, when the then Secretary of State, Alan Milburn, talked about setting up CHAI and CSCI, he undertook that they would be no less independent than the Audit Commission. Reading this part of the Bill, one must question that, and do so in some detail. Hence the number of amendments to this part tabled in my name and that of my noble friend Lord Clement-Jones, who I believe told Members of the Committee that he is unable to be in his place this afternoon.
The noble Earl is right to home in on the detail of the composition and operation of the regulatory bodies. As it stands, the Secretary of State retains to himself the power to hire and fire those who will have the most key roles of oversight of the work of foundation trusts and private hospitals. That is unacceptable, so we seek to remove some of those powers from the Secretary of State and, under later provisions, place them within the body of CHAI.
To reflect on some of our earlier debates, the reason we feel so strongly that those bodies must have real distance and independence from the Secretary of State is because of the doubts that have been expressed about the governance, accountability and arrangements of foundation trusts. Within that unsure framework, there needs to be a truly robust and independent body with strategic responsibility to consider critically and in an unfettered manner the performance of those hospitals. Therefore, and with some force, on one of only a few occasions under the Bill, we have common cause with the noble Earl, Lord Howe.

I hope that the Minister will understand that the measures are placed within the whole context of the operation of health and social care in future. They do not simply reflect our distaste for any particular incumbent at the Department of Health.
Baroness Finlay of Llandaff: I, too, support this group of amendments and have added my name to one of them. The arguments for the independence of the inspectorates have been well stated and I shall not repeat them. However, it has struck me that they will have two crucial roles. One will be to inspect, report, identify problems and where things are going well and to provide appropriate feedback. The other, linked but separate, will be to drive up standards in those areas where they identify a deficit for whatever reason—I stress those words. There may be complex reasons. We

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have had some inquiries that we all wish had never been needed, but behind the problems were complex faults detected in the system. It will be only through rigorous independence that the inspectorate bodies will be able to ask the questions that really need to be asked, to identify the deficits in standards and be able to drive up standards of care.
From all we have heard so far, all the Government's improvements to date have been to drive up standards. I cannot see what there is to fear from independence, but there is much to be feared in an accusation that an inspectorate body is somehow in the control, pay or influence of the political arena.
Lord Hunt of Kings Heath: I declare an interest as a member of the advisory board of the new CHAI, which has begun to meet over the past few months. I understand the points raised by Members of the Committee about the need for the two bodies to be independent and to be seen as such. They are absolutely right. Their role and responsibility for checking quality is awesome. The impact of their reviews can lead to major changes, such as the loss of jobs of senior executives and non-executives. Their relationship to performance ratings is critical. In addition, they are in a position to make more general judgments about the success or not of policies being developed in the health and social care area.
I disagree with Members of the Committee in so far as my experience of the existing CHI is that it is robustly independent. I was the Minister responsible for dealing with CHI for three years. I found it all too independent and robust. At times, I have criticised the approach taken by CHI and the review teams. That is absolutely right, as it was a visible indication of the very independence of Peter Homa, Deirdre Hine and the other commissioners. This is not a theoretical discussion. We can consider at least three years' experience of an organisation. Nobody has brought evidence to your Lordships' House to suggest that CHI has been anything other than robustly independent. Anybody who knows the character of Ian Kennedy, the chair designate of the new CHAI, or Denise Platt, the chair designate of CSCI, could doubt their robustness and independence. I have no doubt that we will see from them extraordinarily good work that is wholly independent.
I must take the noble Earl to task on his comment on performance ratings, which he said were now discredited. They are not discredited. They may not be perfect, and nobody would claim that, in their first year or two, they were 100 per cent perfect. But they give a very credible measurement of the overall performance of individual NHS trusts. I doubt that any Members of the Committee would detract from the strengths and abilities of any of the trusts going forward to foundation trust status. They are some of our best organisations. Their star-ratings contain both key targets and a huge number of benchmark indicators. Of course they need to be refined; that will happen. It would be wrong to suggest that the credibility of the star-ratings has been undermined in any sense in the way that the noble Earl has suggested.
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No doubt my noble friend will have something to say on the third issue raised, the appointment of the chair and commissioners. I put it to the noble Earl that, if the Government were concerned to put into those positions people who would simply do what they were told, would they really have appointed Sir Ian Kennedy or Denise Platt?
Baroness Finlay of Llandaff: The noble Lord, Lord Hunt, has given powerful arguments for independence and stated rightly that the people appointed are of independent mind and spirit. I am not sure, therefore, why he is fearful of adding the word "independent" into the Bill. When those people leave office, we need to ensure that that tradition is maintained.
Lord Hunt of Kings Heath: It is because I have always listened to noble Lords explain on many occasions in your Lordships' House that we should not seek to add unnecessary words to Bills or to lengthen them unnecessarily. It would be extraordinary to suggest to the appointees that adding the word "independent" to their title will somehow change the nature and philosophy under which they operate. We should think better of them.
3.45 p.m.
Baroness Howarth of Breckland: I am not sure whether I support the amendment. I wish to explain why, and to build in a few questions. I do not know what is meant by the term "independence" in relation to the two bodies. I declare an interest as the vice-chair of the National Care Standards Commission. However, what I have to say is entirely my own. I do not seek to join the new commission, so I feel very free in making my own comments.
Independence seems to mean different things in different places. Unless we have that more clearly specified—some of the amendments may propose to take that through—we might run into difficulties. For example, non-departmental public bodies, non-ministerial departments and even economic regulators are subject to financial control. But the way in which that budget is set, how representations are received in the public spending reviews and whether the Minister will make sudden cuts in assigned budgets—that has happened to some independent regulators—will affect how that independent regulator can carry out its task.
That accountability may well have a political perspective. The noble Lord, Lord Hunt, mentioned in an earlier debate that some issues will always have political outcomes—it is in the nature of the beast. I give standards for registration in old people's homes as an example. Independent regulatory agencies are given powers over regulation but are also subject to controls by elected politicians through those standards. How those standards can be interpreted and what freedom they have will also affect the nature of independence. Indeed, standards as a whole may be handed down from the Department of the Health to the regulator for implementation, with little room for flexibility, where the regulator might see better ways of, say, acting proportionately in achieving an aim.

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The nature of the relationship between the regulator and the relevant department is usually set out in a management statement that includes how the regulator will receive rules and guidelines relevant to the exercise of the regulator's functions, including how the regulator is to be held to account for its performance. We must remember that the regulator, however powerful the personality, must be held to account.
Will the Minister say whether that will be the mechanism for the agreement between new CHAI and CSCI and the departments, and whether it will give detailed instruction or broad direction for the new regulators?
This week saw the launch of the new report by the Better Regulation Task Force on independent regulators. I commend it to all Members of the Committee. The question of complexity, and sometimes duplicity, contained in the word "independent" emerged throughout the discussion. Do the Government have a clear definition of independence? That would help me to know where I stand in this debate.
Lord Warner: I share the noble Earl's pleasure at moving to Part 2 of the Bill. It is appropriate that we should celebrate with such a bumper group of amendments to discuss. Phonetically, the amendments would mean that CHAI would become "itchy" in shorthand. I wonder whether Sir Ian Kennedy and his colleagues would thank us if we agreed to such amendments. In particular, as I shall suggest, they would add nothing in legislative terms. A name does not guarantee independence. The Bill ensures that both CHAI and CSCI will be more independent of government than the bodies from which they are formed; namely, the Audit Commission, CHAI and the National Care Standards Commission. The acid test of CHAI and CSCI's independence will be how independently they behave in the discharge of their functions and how they report to Parliament.
On Amendments Nos. 211 and 235, we have made it clear that we are committed to ensuring the independence of CHAI and CSCI. I am grateful to my noble friend Lord Hunt for his excellent statements in support of our position, which, I think, accurately describe what we are about. However, the Secretary of State must continue to be accountable to Parliament for the work of both inspectorates. In keeping with that principle, the Bill must provide for the Secretary of State to have limited—and I emphasise limited— checks and balances on how both organisations perform their functions.
The Bill currently contains powers in Clauses 51 and 78 to require CHAI and CSCI to carry out an inspection of any particular body or service. The Bill gives the two inspectorates a high level of discretion about how they exercise their functions, so the Secretary of State will not be able to influence how they exercise them day to day. However, the Secretary of State remains responsible for the health and social
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care services that they are inspecting and might need to ask them to carry out a review of a particular authority or service if concerns are raised. For example, such a power would be used when there were considerable concerns about a local authority's child protection services, such as those raised by the case of Victoria Climbié. It is therefore important for the Secretary of State to be able to exercise this function in a speedy manner when the need arises.
CHAI and CSCI will be markedly more independent than other inspectorates with a like remit. In particular, most other NDPBs, such as the Audit Commission, can be directed by Ministers about any matter. The Bill does not include such a power for CHAI or CSCI and instead gives both inspectorates a very wide discretion on how they exercise their functions, allowing the Secretary of State to direct the inspectorates only in certain limited circumstances. For example, it would be unprecedented for legislation setting up an NDPB not to include direction-making powers that the Secretary of State could use if the organisation were seen to be failing to exercise its functions properly—hence the specific rather than general provision in Clauses 130 and 131.
It is important that the Secretary of State can give a general direction on matters of government policy to which the inspectorates must have regard—a requirement to comply with proper procedures of good government accounting, for example—hence, again, the specific provision in Clauses 128 and 129. The same power to make directions to have regard to government policy applies to Ofsted, and I doubt whether noble Lords would regard Ofsted as a body that lacks independence.
Finally, it is important that the Secretary of State can ensure that the criteria and standards which the inspectorates will use to review NHS and local authorities are fair to the bodies being inspected and reflect national standards, to which we will come at a later stage. Hence the specific requirements for the Secretary of State's consent to the inspectorate's criteria in Clauses 49, 59, 77 and 83.
The Bill includes other provisions that will emphasise the independence of the bodies, including provisions to: enable the Secretary of State, or the National Assembly in Wales, to delegate the function of appointing the chair and other commission members of both inspectorates to the NHS Appointments Commission working to Nolan Principles; give the chair and commissioners considerable security of tenure so that they may be removed only when they are deemed unfit or unable to perform their functions; and to provide for the appointment of CHAI and CSCI chief executives by the commission members themselves. I recall that, in the case of the Audit Commission, there must be government approval of the chief executive. There are therefore real differences between the new bodies and some existing bodies that are accepted on all sides of the House to be perfectly independent.
Other provisions require both commissions to make an annual report direct to Parliament, or the National Assembly for CHAI, on the state of health and social

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care in England, or Wales in the case of CHAI. The only direction and regulation-making powers in the Bill are those that we believe to be absolutely essential, for the reasons I have given. Noble Lords will have the opportunity to scrutinise any regulations when they are laid before Parliament.
Members of the Committee have expressed concern about the regulation-making powers that will allow the Secretary of State to approve the criteria that CHAI and CSCI draw up. It is important to be clear that the commissions themselves will be fully responsible for drawing up the inspection criteria. However, it must be right that the Secretary of State, who retains parliamentary responsibility for the work of the commissions and for drawing up national standards, ensures that the criteria and standards themselves fit together. We do not want to create a situation for the NHS in which the standards and criteria do not fit. That would cause a great deal of difficulty for people throughout the country who are being inspected against criteria that measure performance against national standards.
We would not wish to place a specific duty on CHAI to have to consider requests to undertake reviews and inspections at the behest of all and sundry, which is effectively what Amendment No. 292 would require. We would want CHAI to concentrate on its core job. Within that, it is appropriate for the Secretary of State to be able to request CHAI to undertake additional reviews or investigations when there are serious concerns.
Turning to the issue of appointments, I remind Members of the Committee that Clause 183 enables the Secretary of State to delegate responsibility to the NHS Appointments Commission for all or part of his function of appointing members to public bodies that have functions relating to health and social care or the regulation of professions associated with health or social care—including CHAI and CSCI. In addition, Clause 183 and Schedule 12 also permit the appointment of lay members of health profession regulatory bodies. In that context, as we have already said, there are good reasons for deciding that public appointments are not automatically delegated.
Some of the differences expressed by Members of the Committee have arisen because we have not given an undertaking to delegate everything. We have created a capacity to do that, but we are reserving appointments or certain aspects of appointments in particular cases to the Secretary of State. The Government believe that that is sensible.
In some cases, Ministers may wish to delegate the initial selection and sifting processes but not the final appointment itself, or Ministers may wish to retain direct responsibility for certain appointments, or take back responsibility for appointments. We have tried to create some flexibility to take account of all sets of circumstances. However, I repeat what I have said on previous occasions. The Government envisage that the overwhelming majority of national appointments for which the department is responsible will be delegated
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to the NHS Appointments Commission, with only a small proportion of appointments being made directly by the Secretary of State.
Examination of what the Government have been doing shows that they have moved in this direction far more than previous governments were willing to do. If noble Lords need to judge us in terms of our future behaviour, our past behaviour should be examined, and that has been to give away a great deal more of the appointment functions in the health service than previous governments have been prepared to do. The position regarding CHAI and CSCI has already been made quite clear. The Government are committed to delegating all stages of the appointments processes for both bodies to the NHS Appointments Commission for both chairs and non-executive members. Ministers will not be involved, other than—this is important—in setting the criteria against which candidates are judged.
Some of the amendments would confer inappropriate functions and powers on the NHS Appointments Commission, rather than on the Secretary of State. In particular, Amendment No. 243 would require the Secretary of State to obtain the consent of the appointments commission before making any regulations for the appointment of the chairman and other members. It would be inappropriate for the Secretary to State to have to ask the appointments commission whether he could make any regulations.
The function of the appointments commission is to make appointments to CHAI, CSCI and others and to remove persons from office in specified circumstances. It is not a function of the commission to become directly involved in the making of detailed regulations about the conditions of appointment. We should not seek to burden a body that is intended to carry out recruitment and appointment in that way. Amendment No. 242 would allow the commission to make the regulations. That is neither legally possible nor appropriate.
Amendments Nos. 220,244 and 245 would place the decision about whether an individual should be suspended from office in the hands of the appointments commission, rather than the Secretary of State. It is consistent in a wide range of bodies that that function is in the hands of the Secretary of State. It is he, not the NHS Appointments Commission, who will be responsible for CHAI and CSCI and will, therefore, be held accountable to Parliament for their actions, if there is a problem. In special circumstances, it may be necessary to act quickly. We have discussed those issues before.
Amendment No. 468 seeks to make it clear in the Bill that appointments to CHAI and CSCI can be delegated. That is not necessary, for the reasons that I gave.
Amendments Nos. 223 to 230, 249, 251 and 252 would have the effect that the appointments commission, not the Secretary of State, would be responsible for determining the remuneration, other allowances and pension to be paid to the chairman and

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other members of CHAI and CSCI and any compensation payable, if there were special circumstances that made it right for a person for hold office. The noble Earl made much of the importance of those functions. It is proper that the functions should belong to the Secretary of State, as he sets the overall budget for CSCI and CHAI and, in consultation with the inspectorate, can ensure that the remuneration paid to the chair and other members is appropriate and proportionate. What is being asked for is simply not normal practice for such bodies.
I should have responded to the noble Baroness, Lady Howarth of Breckland. I do not think that, at this stage, we want to bring the Secretary of State into protocols on joint working. The convention with inspectorates of all kinds is that Ministers do not engage themselves in the joint working arrangements between bodies. That is best left to the good sense of the bodies themselves, in which we have great confidence, to organise joint working protocols.
4 p.m.
Earl Howe: I am not sure that the Minister has quite answered the question asked by the noble Baroness, Lady Howarth of Breckland, about the definition of "independence". In my book, it simply means "free from political interference"; that is what I think of as independence.
Nothing in my remarks was intended to impugn Sir Ian Kennedy or anyone else. That was not the point. My point was that the Bill was formulated in such a way that, when it suited the Government—this Government or any other—CHAI would be allowed to get on with its job and, when it did not suit the Government, the Bill allowed Ministers considerable scope to interfere. The powers are widely drawn.
Individual appointments—current or future—are not the issue. The Bill sets out legally binding ties to government. The Minister went through several of them. I see no virtue in anticipating debates on subsequent clauses—for example, Clauses 128 and 130, which relate to CHAI, or Clauses 129 and 131, which relate to CSCI. We will come to those, and they are important. Similarly, we should reserve for a later moment our debates on performance ratings, standards and criteria.
We have suggested that the word "independent" should be added to the names of the bodies. If the word is so superfluous, one must ask why the Government thought it a good idea to have "independent" as an epithet for the regulator. I imagine that the Government's intention was to make a declamatory statement, as it were, about what the post of regulator was all about. I have no problem with that. The Minister said that CHAI and CSCI would be more independent of government than the current bodies are. We will need to test that proposition as our debates proceed. To my mind "more independent of government" is not the same thing as "independent of government".
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It has been a useful debate, and I thank all noble Lords who took part. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 210 to 212 not moved.]
Clause 40 agreed to.
Schedule 6 [CHAI: Supplementary]:
[Amendments Nos. 213 to 218 not moved.]
Lord Warner moved Amendment No. 218A:
Page 130, line 38, after "that" insert "one of"
The noble Lord said: The amendments are technical by nature and have been proposed by parliamentary counsel. I will go through them as briefly as possible.
Amendment No. 218A will make it clear that one of the conditions of conduct, as opposed to all of them, may apply before the Assembly can remove the person from office. Amendment No. 222A changes Schedule 6 to make it clear that the Assembly must consult the Secretary of State before carrying out the appointment and removal of the CHAI member whom it appoints to represent the interests of Wales under paragraph 3(1)(b). The Committee will know that we have already made clear our intention that, in practice, the Secretary of State and the Welsh Assembly will delegate the power to a special health authority, namely the NHS Appointments Commission, which will appoint to the positions according to Nolan principles.
The amendments reciprocate the current provision for the Secretary of State to consult the Assembly before appointing other members to or removing them from CHAI, as specified in paragraph 3(7).
Lord Roberts of Conwy: Is the special health authority a joint England and Wales body?
Lord Warner: I believe it is, but I shall check that and confirm it for the noble Lord.
Amendments Nos. 232A and 253A correct a typographical error in sub-paragraph (3) to make it clear that the Assembly may in the prescribed manner remove from office the person appointed by it under sub-paragraph (l)(b) if, and only if, it is satisfied that one—rather than all—of the conditions specified in sub-paragraph (4) applies. The conditions are that the appointee is unable or unfit to carry out the duties of his office, has failed to carry out the duties of his office or has become disqualified from holding office.
Amendments Nos. 253B and 253C amend Schedule 8. The schedule states that property rights and liabilities can be transferred from the Crown to CSCI, for instance in relation to property and other assets currently used by the SSI as part of the Department of Health. It does not make the same provision for CHAI. Amendment No. 253B will mean that the scheme may also transfer property rights and liabilities from the Secretary of State to CHAI, should that prove necessary.

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Amendment No. 253C would allow transfer schemes under Schedule 8 to provide for compensation for any other person or body who is adversely affected by any such scheme. Such compensation might be paid, for example, where it was necessary for a contract with a service provider to be terminated early because it was no longer required by the new commission. We do not anticipate there being many instances where compensation would be paid, but it is important to have the provision to cover a situation where the rights of third parties are shown to be adversely affected.
Amendments Nos. 335C and 361A are technical government amendments in nature and were suggested by parliamentary counsel. Under Clauses 67, 73, 89 and 99, regulations may provide for CHAI, the Assembly or CSCI, as appropriate, to require prescribed persons to provide an explanation of any documents or information that the inspectorates obtain in exercising their relevant powers or of any matters which are the subject of the exercise of any functions of the inspectorates.
The Bill currently provides that those regulations may require explanations to be provided at times and places set out in the regulations. That is to ensure that it would be possible to require explanations to be provided in person, as opposed to in writing, which will sometimes be appropriate, particularly where the inspectorates come across conflicting data in the course of exercising their functions. We are using regulations in this matter to ensure that they compliment the intended methodologies, inspection processes and performance assessment regimes of inspectorates and the Assembly. The regulations will be subject to parliamentary scrutiny in the normal way before they come into effect.
Amendments Nos. 384B, 384C and 396A to 396E are technical drafting amendments to correct incorrect references to the Commission for Local Administration. As drafted, the clauses provide for complaints to be referred to the "Commission" for Local Administration, whereas, under Part 3 of the Local Government Act 1974, referrals need to be made to a,
"local Commissioner who is a member of the Commission".
The amendments simply correct that in the text of Clauses 112 and 114.
Amendment No. 408A amends the Superannuation Act 1972 by adding CHAI and CSCI to the list of bodies that can admit members to the Principal Civil Service Pension Scheme. We want to ensure that certain staff who transfer to CHAI and CSCI do not suffer any detrimental effect by having less favourable pension arrangements.
Members of the Principal Civil Service Pension Scheme, such as those individuals who currently work in the Social Services Inspectorate, would be able to remain members of that scheme upon transfer. That will ensure that their terms and conditions of service are protected on transfer of employment to the new commission. Staff members who were previously members of the Audit Commission pension scheme
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will be able to join the Principal Civil Service Pension Scheme because there is no comparable scheme to their current one.
You will be pleased to know that, finally, Amendment No. 408B corrects an omission from the minor and consequential amendments in Schedule 9. It amends Section 55 of the Care Standards Act to ensure that it now refers to CSCI instead of the National Care Standards Commission and to the Health and Social Care Act instead of the Care Standards Act.
While I am on my feet, perhaps I may correct what I said earlier. The NHS Appointments Commission is not an England and Wales body. I apologise for the slip. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 219 to 222 not moved.]
Lord Warner moved Amendment No. 222A:
Page 131, line 20, at end insert—
"( ) The Assembly must consult the Secretary of State before exercising any of its functions under the preceding provisions of this paragraph."
On Question, amendment agreed to.
[Amendments Nos. 223 to 231 not moved.]
4.15 p.m.
Baroness Barker moved Amendment No. 231 A:
Page 132, line 17, at end insert—
"Responses to recommendations
The CHAI must respond in writing to any recommendation which—

(a) is made by a Committee of either House of Parliament, or a Committee of both Houses, and

(b) relates to the exercise by CHAI of its functions."

The noble Baroness said: We continue on a related matter, which is about the way in which the independence of the new bodies is to be demonstrated and proven. Amendments Nos. 231 A, 316 and 346 perhaps lead us away from the rather disappointing debate on the preceding group of amendments about individuals, on to the real basis upon which one can fairly determine the independence of the bodies. Amendment No. 231A requires CHAI to respond in writing to a committee of either House of Parliament about its functions and about carrying them out.
Amendment No. 316 requires CHAI to provide Parliament and the Assembly with material on the investigations and reviews which it conducts. Amendment No. 346 requires CSCI to provide reports of its investigations to the Comptroller and Auditor-General. I was struck by something said by the noble Lord, Lord Warner, in reply to the noble Earl, Lord Howe, in the previous debate; namely, that the Government do not want these bodies to be required to produce reports for all and sundry because that would distract them from their core jobs.
The core job of these bodies is to provide public information about the standards and quality of health and social care. I suggest to the Minister that the production of reports in writing is a key means by which they could do precisely that. More than that.

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they would build confidence in standards of health and social care. It would not be an imposition for Parliament or the Assembly to make such a requirement of a public body: indeed, it would be unusual were there not to be a requirement for them to do so. After all, these bodies are not only providing strategic reports on the overall level of service provision and the adequacies of it, but also, from time to time, they are investigating some of the most serious matters in public life as they affect individuals.
Those three small requirements on these bodies are not onerous, but they are important. In particular, Amendment No. 346 proposes copies of reports being sent to the Comptroller and Auditor-General about CSCI are an essential part of the data which not only politicians but also the public need in order to make correct and informed judgments about the most important public services in the country. I beg to move.
Lord Warner: Amendment No. 231A seeks to increase CHAI's accountability to Parliament by requiring it to respond in writing to any recommendation of the committees of the House that relates to the exercise of CHAI's functions. Similarly, Amendment No. 316 would place a general duty on CHAI to keep Parliament and the Assembly informed about the provision of healthcare.
I do not think that any of us disagrees with the principle that the work of CHAI should support Parliament's scrutiny of policy and public services. Clause 126 requires CHAI to produce an annual report about its findings during the year, which is to be provided directly to Parliament. It is already discharging, in writing, that widely drawn responsibility to report on its work.
Elsewhere in the Bill there is also provision for it to produce and make public reports as they undertake specific studies throughout the year. Therefore, it already provides for written reports to be made available to Parliament and to be put in the public arena. There may be occasions when CHAI might fall within the sights of Parliament or the Health Select Committee. It will therefore be expected to provide such information in such a form as may be requested. However, it would not be right for CHAI to be put under a duty to do so as a matter of course.
Ofsted has a direct reporting line to the Education and Skills Select Committee, but that is primarily because Ofsted is a non-ministerial department, unlike CHAI and CSCI, which are non-departmental public bodies. They are constitutionally different. It would be inconsistent with well-established precedent for a duty to be placed on the commissions, as non-departmental public bodies, to keep the Health Select Committee informed of matters relating to health and social care services. Of course they will co-operate in the normal way, as would any other body, with parliamentary Select Committees, but I suggest that the amendment would undermine the important principle that the Secretary of State is the person accountable to Parliament for the actions of these commissions.
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Amendment No. 346 has the effect that CSCI, where it conducts general reviews of local authorities or other persons providing English local authority social services under Clause 78, must always send a copy of such a report to the Comptroller and Auditor-General. I do not believe that this amendment is necessary. Clause 78 concerns the general function of review and investigation of social services that CSCI will have. There is no need for the NAO automatically to receive a copy of all reports following such a review or investigation under this clause.
Of course, when exercising its audit function, the NAO can already request from CSCI any information and reports it deems necessary. In our view, there is sufficient provision for this in the legislation.
Baroness Barker: I thank the Minister for that response. It was helpful to tease out from him the strength and force of some of those other requirements on the two bodies. I would simply say that, particularly in relation to Amendment No. 346, we sought to probe the extent to which the type of reports produced by the Audit Commission would be made available. There is a fair degree of disquiet on these Benches about the extent to which the existing Audit Commission functions will relate to the new bodies. I question whether solely the audit function to which the Minister referred will be sufficient to provide the full strategic information that will be needed.
None the less, the Minister has been helpful in his reply. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Noakes moved Amendment No. 232:
Page 133, line 3, leave out sub-paragraph (5) and insert—
"(5) The CHAI may borrow money other than as mentioned in this paragraph up to a limit of its annual expenditure for the previous year as shown in its annual accounts less any amounts outstanding in respect of loans advanced under this paragraph."
The noble Baroness said: In moving Amendment No. 232 I shall speak also to the amendments grouped with it. We now come to a group of amendments dealing with the financial side of both CHAI and CSCI. The need for financial independence lies at the heart of the amendments and I shall build on the comments made earlier by my noble friend Lord Howe about the importance of independence.
I shall speak to Amendment No. 232 shortly, but it may help noble Lords if I begin with Amendment 317, which would give CHAI a basic financial duty, inserted as a new clause before Clause 61. It is not a revolutionary provision; it simply requires CHAI to break even on its income and expenditure account. No reference is made to CHAI's financial duty in the Bill and I hope the Minister will agree that it is important to be clear about the way that CHAI will operate financially.
The specification of a financial duty is important because Amendment No. 319, which applies to Clause 61, concerns the fees that CHAI may charge. The amendment states that the regulations made on fees by the Secretary of State must ensure that CHAI can meet its financial duty. Amendment No. 320 would achieve the same end in respect of regulations made by the Assembly under Clause 62.
Amendment No. 232 concerns another aspect of financial independence. It would give CHAI the ability to borrow money other than from the Treasury. This would ensure that if CHAI needed to invest in property or information systems and so forth, it would not be frustrated in that by the Treasury's power of veto. Borrowing money commercially should be a route made available to CHAI in order to keep its independence. I imagine that it would not often want to borrow at the higher rates that would almost inevitably pertain in the private sector, but if the Treasury is intransigent—perish the thought—then the option would be available.
Amendments Nos. 253, 357 and 358 are mirror images for CSCI of the amendments I have just spoken to, thus ensuring that it, too, would be financially independent. Charging by CSCI is a particularly sensitive issue for local authorities, which are not currently charged by the Social Services Inspectorate. May I put a direct question to the Minister: what do the Government intend in relation to charging local authorities? Is it intended that local authorities should bear the additional costs by way of CSCI fees? The Local Government Association considers this to be an important issue and I hope that the Minister will be able to respond.
If the Government are unable to accept these amendments, which are crucial to the financial independence of CHAI and CSCI, will the Minister say in what ways the financial independence of those bodies will be secured? We see nothing in the Bill to give us comfort on this. The noble Baroness, Lady Howarth, referred earlier to the damaging impact when cuts in resources can be imposed on bodies suddenly and almost without notice. That is potentially a very real issue.
I turn now to one further amendment in the grouping, Amendment No. 318. This is a probing amendment designed to explore how fees will be set, and in particular seeks to ensure that English NHS bodies bear none of the costs attributable to any functions of CHAI in relation to Welsh bodies. Cross subsidy is rarely attractive but it is particularly unattractive if it means that there are hidden reallocations of resources between the two countries. I beg to move.
Baroness Barker: I rise briefly to speak to Amendment No. 321. It is a small amendment, but none the less relevant. It seeks to give CHAI the power to charge for its reports. Noble Lords who have worked long and hard in this field will know that such reports are always fairly bulky and expensive to
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produce; a considerable cost can be incurred. It seems only reasonable that CHAI should have the power to make a charge.
4.30 p.m.
Lord Warner: I shall speak first to the non-government amendments in this grouping. As the noble Baroness, Lady Noakes, has explained, Amendments Nos. 232 and 253 seek to allow CHAI and CSCI to borrow money from the private sector. I assume that underpinning this proposal is the argument that such a power would reduce the dependence of CHAI and CSCI on government funding, thereby guaranteeing the commissions greater freedom of action. However, I should remind the Committee that allowing CHAI and CSCI to borrow from the private sector would go against Cabinet Office and Treasury rules for borrowing by non-departmental public bodies as well as precedent. Neither the Audit Commission nor Ofsted may borrow from the private sector, and no one suggests that those bodies are not independent.
I hope that the amendments will be rejected, and to that end I shall set out further arguments. First, any money obtained through loans from the private sector is likely to be charged at higher rates than money borrowed from government. Thus there exists a very strong "value for money" justification for not allowing CHAI or CSCI to borrow from sources outside of government.
Secondly, public bodies such as CHAI and CSCI will be providing a valuable public service and therefore cannot be allowed to run the risk of amassing excessive debts through private sector borrowing. Indeed, I felt a little queasy when the noble Baroness mentioned some of the things that the bodies might do. Such borrowing could present a real danger to the effective performance of their key functions. Equally, to allow bodies that are neither democratically elected nor responsible to shareholders to borrow from the private sector would be irresponsible, given that it would not be possible to hold them to account for their actions. Through allowing them to borrow only from government, as the Bill currently provides and in accordance with normal precedent for bodies of this kind, the risk of excessive debt is effectively nullified.
The Government are committed to the commissions having access to the resources necessary for them to carry out their important functions. We are introducing new clauses which place duties on both commissions to manage their respective financial affairs so that their expenditure is covered by their income.
The amendment is neither necessary nor desirable, for several reasons. Both commissions are already placed under a duty to carry out their functions effectively, efficiently and economically under paragraph 2 of Schedules 6 and 7 respectively. Furthermore, both commissions must ensure that they manage their budgets effectively under paragraph 10(3) of these schedules. In doing so, they must send

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annual accounts to the Comptroller and Auditor General, who in turn must certify them and lay copies of his reports before Parliament.
Under Clauses 61, 62 and 84, the Secretary of State or the Assembly, as appropriate, may prescribe those functions for which CHAI and CSCI may charge fees. It may not be appropriate to allow them to charge fees for all their functions. For example, where they undertake a comparative study of a number of bodies in order to enable them to draw general conclusions as to the state of the health service or social services, it will probably not be appropriate to charge the bodies involved. We anticipate that it will be necessary for the bodies to retain an element of state funding for such studies.
Amendments Nos. 319, 320 and 358 seek to ensure that any such regulations made by the Secretary of State and also, in the case of CHAI, the Assembly, do not hamper either commission's ability to manage cost recovery to the extent that they would fail to meet their financial duties as set out under the proposed amendments.
Amendment No. 318 seeks to ensure that CHAI and CSCI do not charge fees which exceed the cost of the activity they are undertaking. While I am sympathetic to the amendment, I do not believe that it is necessary as, clearly, this is something that we would expect CHAI and CSCI to do as a matter of course. It has always been our expectation that any fees levied should be to cover operating costs rather than with a view to making a profit. It is not in CHAI's interest to overcharge healthcare providers.
Currently Clause 61(6) provides a power that will enable the Secretary of State to make regulations that would allow an independent person or panel to review an individual charge that CHAI has set. Where such a person or panel feels that CHAI has wrongly applied its own fee scales in a particular case and, as a result, has charged too much for a particular review or investigation, they will be able to substitute a lesser fee. Clearly the independent person or panel will be very unlikely to substitute a lower fee if the amount charged by CHAI or CSCI was not sufficient to meet its costs. So the amendments are not necessary.
Were CHAI or CSCI to set outlandish or unreasonable fee levels, it would be incumbent on the Government, like others, to make known their view that the fees set were not reasonable. If the bodies refused to set fees appropriately, the Government would have to take a view as to whether or not the chair of CHAI or CSCI was fit to carry out the duties of his office. Ultimately—this is something of a nuclear option—such behaviour could lead to the removal of the chair from office, although it would be very strange if such behaviour developed among incumbents of those offices.
The position is different for providers regulated under the Care Standards Act. At subsections (2) to (5) of the proposed new Section 113A in Clause 103(2), the Secretary of State has retained powers to set fees under Part 2 of the Act, if necessary.
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Amendment No. 321 would entitle any person who requests a copy of any material relevant to a review or investigation under Clauses 45 to 47, or a study under Clause 53, to have one on payment of such reasonable fee, if any, that CHAI considers appropriate. I should draw the Committee's attention to the fact that CHAI is not given review or investigation functions under Clauses 45 to 47 of the Bill.
The noble Baroness, Lady Noakes, drew attention to the issue of local authority and CSCI fees. The SSI is currently funded by a top slice of the local authority social services settlement. This money will be returned to local authorities when CSCI commences charging local authorities. We do not anticipate significant increased costs to local authorities.
I now turn to the government amendments. Amendment No. 317A, 319A and 357A are technical amendments, recommended by parliamentary counsel, to Clauses 61 and 62, which allow CHAI to charge fees to NHS bodies with respect to the exercise of its review functions in relation to services commissioned by those bodies from practitioners or providers. The Bill currently empowers CHAI to charge fees to individual practitioners or providers with respect to the exercise of CHAI's functions in relation to the services provided by those persons and could be interpreted as not allowing CHAI to charge the commissioning NHS bodies with respect to the exercise of those functions. These amendments therefore enable CHAI to charge the commissioning NHS or Welsh NHS bodies with respect to the exercise of such functions by CHAI. We believe that there may be circumstances where CHAI may wish to charge the practitioner or provider—for example, where CHAI has investigated some problem with the practitioner's or provider's practice—and we retain that option in the respective clauses.
Under Clause 84, fees are most appropriately charged to the local authority as the work that CSCI will be undertaking is in respect of all social services provided by a local authority, including those commissioned from other providers. However, parliamentary counsel has advised that, as in the case of Clause 61, there could be doubt as to whether Clause 84 allows CSCI to charge fees to the local authority with respect to the exercise of its functions in relation to services commissioned by the local authority from other persons.
Amendment No. 357A therefore clarifies that when CSCI is carrying out a review of the social services provision of a local authority it may be able to charge that authority for work that it undertakes in respect of services that a local authority can commission or provide by arrangements with other bodies and not just for the services provided by the authority itself.
Baroness Noakes: I thank the Minister for that comprehensive reply. I shall have to wait until I read it in Hansard to absorb it fully. For example, I am not clear whether or not he answered my question in respect of basic financial duties. That may be because of my lack of comprehension rather than the lack of an answer, but time will sort it out.

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I thank the Minister for the clarification in regard to the charging of local authorities. The Local Government Association will be very interested in that. I shall ensure that it is made aware of it because one of its considerable concerns is that local government will end up bearing additional costs through this route. I suspect that that is what it will involve.
The issue of financial independence was at the heart of the amendments, and the Minister did not give an answer on that. He answered that the Government wanted various powers to control CHAI and CSCI, and that that is the way in which the Bill has been drafted. It is directly contrary to the direction of travel in the amendments.
The Minister referred to borrowing being against Treasury rules because excessive debts could be run up. But one minute we are told that we can trust CHAI and CSCI because they are responsible bodies, with excellent chairs and members, and that all the Government need are reserve powers—to get rid of a recalcitrant chairman, for example—and the next minute the Minister argues that they have to have the most detailed powers to prevent those bodies stepping an inch out of line. His answer did not carry any real credibility.
The Minister often refers to the Audit Commission and Ofsted. The Audit Commission is quite different. It has extensive fee-raising powers, which is what drives its income and expenditure account. It is not constrained in the same way as CHAI and CSCI will be.
There are a lot of loose ends in this area. Financial independence is a key element of the independence we seek to establish for CHAI and CSCI. I shall read carefully the Minister's comprehensive response—for which I thank him—and in the mean time I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Warner moved Amendment No. 232A:
Page 133, line 25, leave out "provided" and insert "proved"
On Question, amendment agreed to.
Schedule 6, as amended, agreed to.
Clause 41 [The Commission for Social Care Inspection]:
[Amendments Nos. 233 to 236 not moved]
Clause 41 agreed to.
Schedule 7 [CSCI: Supplementary]:
[Amendments Nos. 237 to 253 not moved.]
Lord Warner moved Amendment No. 253A:
Page 136. line 21. leave out "provided" and insert "proved"
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
Clause 42 agreed to.
Schedule 8 [CHAI and CSCI: transfers of property and staff, etc]:>
Lord Warner moved Amendments Nos. 253 B and 253C:
Page 136, line 32, after "to" insert "the CHAI or"
Page 137, line 2, at end insert —
"( ) A scheme under this paragraph may contain provision for the payment of compensation by the Secretary of State to any person or body (other than one mentioned in sub-paragraph (1)) whose interests are adversely affected by the scheme."
On Question, amendments agreed to.
Schedule 8, as amended, agreed to.
Clause 43 agreed to.
Clause 44 [Quality in health care]:
Baroness Barker moved Amendment No. 253D:
Page 16, line 16, at end insert—
"( ) It is the duty of each NHS body to put and keep in place arrangements for the purpose of monitoring the uptake of the following NICE approved technologies—

(1) pharmaceutical technologies, and

(2) medical devices."

The noble Baroness said: Clause 44 is, perhaps, the heart of the Bill in that it deals with quality of healthcare. It is a rather short clause, and my amendments would make up for the deficit in the description of what constitutes quality of healthcare.
Members of the Committee who have read the debates on the subject in another place will have picked up on the widespread concern that what passes for quality in healthcare is often measured in terms of management performance. That is particularly of concern under the framework of foundation hospitals.
The amendments would do two things. They would ensure that NICE guidance will be adhered to and that the task of monitoring it will be assumed by CHAI. Given the statement made by the noble Lord, Lord Warner, at Second Reading, in response to the noble Baroness, Lady Finlay, I am sure that he will be delighted to see that. The amendments also make it explicit in the Bill that national service frameworks, milestones and guidance are also to be the subject of scrutiny by CHAI and CSCI.
The difficulty is that, having taken what is regarded on all sides as a huge leap forward in bringing together the best evidence, best research and best practice in national service frameworks, the Government have fallen short of ensuring that, in some cases, their implementation is backed by resources and in gathering and monitoring the data which come from that implementation.
The amendments seek to make sure that the single most important source of information that will enable judgments to be made about quality in healthcare is a primary function of the new body. It is extremely important that information on the uptake of new technologies, new drug therapies and new clinical practices are gathered together, made available and fed back into the future planning of healthcare. For all that the independence of foundation trusts is to be welcomed, there is a genuine fear that there will be a

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dissipation of the gathering of data that will inform the development of future quality healthcare and, in particular, the innovation and effectiveness of new treatments.
It is perhaps a truism, but in some disciplines of healthcare novelty in itself is often taken to be a quality standard. If one were to go back to look at the provision of some treatments—statins, for example— perhaps novelty in itself is not a quality standard. Some very old treatments which have been around for a very long time are far more effective.
The coherence which these amendments would bring to the gathering of quality data by CHAI and CSCI is to be welcomed. I believe that there is a case for making this responsibility explicit on the face of the Bill. I beg to move.
Earl Howe: I am in complete sympathy with what the noble Baroness has said. I should like to speak to Amendment No. 274 in my name, which aims at very much the same goals as those of the noble Baroness.
There is considerable concern, as I am sure the Minister is aware, about the patchy implementation of NICE guidance around the country. NICE guidance is meant to be binding on PCTs and trusts, but there is considerable evidence to show that it is being quietly ignored where budgetary constraints get in the way. The review being conducted by Professor Trevor Sheldon will no doubt prove illuminating. But meanwhile, there is a strong case for ensuring that a systematic and transparent process is put in place to ensure that NICE-approved medicines and technologies are accessible to all who need them. CHAI is the body most obviously suited to this task.
Only last week we saw reported in the press the research by Glasgow Royal Infirmary showing that NICE guidance on statin prescribing is being widely ignored. Another example is atypical antipsychotic drugs; the Zito Trust has highlighted considerable variations in prescribing around the country. In some areas, atypical antipsychotics account for 70 per cent of all antipsychotics prescribed; in others, only 20 per cent. This is a concern in many areas. I understand the normal rule is for PCTs to implement guidance within three months. That is certainly not happening in many instances.
I have consciously mentioned medical technologies as distinct from medicines. Medical technologies, such as pacemakers, stents and implantable defibrillators are implanted into patients in specialist centres, and not all are subject to national registries or have audit databases associated with them. As a result, unlike prescription drugs, reliable data on the uptake of medical devices are not available, and it is unclear whether government and NICE targets are actually being met. There is anecdotal evidence that they are not, particularly in relation to some cardiac and orthopaedic treatments. The first step towards enabling CHAI to monitor effectively the uptake of technologies and to highlight regional disparities
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would be for appropriate data to be collected at PCT and NHS trust level. I very much hope that this will happen.
Hazel Blears, the former health Minister, was quite clear on the matter when she spoke in another place on 10th April. She said that it was the Government's view,
"that the Commission for Health Audit and Inspection should be the principle external inspector of the implementation of NICE guidance… I expect that CHAI's work will cover clinical guidelines, as well as the appraisals that are integral to the clinical governance agenda in the organisation".—[Official Report, Commons, 10/4/03; col. 147WH.]
Noble Lords will note that I specifically mentioned in my amendment not only health technologies but the clinical management of specific conditions.
Hazel Blears' words seem unequivocal, but the Bill at the moment contains only an implicit duty for CHAI to monitor the update of NICE guidance. The duty ought to be statutory and the implementation of NICE guidance ought to be incorporated into CHAI's annual report to Parliament.
Lord Roberts of Conwy: I support my noble friend's amendment and the thrust of the amendment moved by the noble Baroness, Lady Barker. I have received a very good brief from the Medical Technology Group, which points out that medical technology is transforming healthcare by achieving a higher return on resources allocated for improved patient health and health system outcomes. The group gives a variety of examples, saying that diagnostic imaging virtually eliminates exploratory surgery; lasers allow more rapid recovery from eye surgery and other procedures; minimally invasive surgery avoids lengthy hospital stays and long recuperation; and so on. I have no doubt that the group is correct in its assessment.
The group points out that medical technology not only benefits the patients but creates greater efficiency and savings in the health system, greater productivity, faster recovery times, a quicker return to work and lower absenteeism. Advances in technology have made exciting, groundbreaking possibilities a reality, and there are many examples of that.
The use of medical technology and the resulting cost savings to the NHS and improved patient outcomes will enable the Government to achieve many targets as set out in the national service frameworks and Department of Health guidelines. It will also enable NHS bodies to fulfil requirements laid down in technology appraisals published by NICE, and ensure that the statutory requirement that funding follow all NICE decisions is met.
Earl Russell: As an academic, I am used to the problems that arise when a government attempt to assess quality. I am very happy to support my noble friend's amendment, which I believe to be necessary.
I spoke recently with someone who had been in hospital for purposes of gender reassignment, who was very far from convinced that she was getting equal treatment to some of the other patients in the hospital. I remember on another occasion listening to a junior Minister, whom I will not name because, although he

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did not say so, I take him to have been speaking under Chatham House rules, who was very far from convinced that in the field of mental health patients received equal treatment.
There are big questions here that need addressing. The only trouble with tabling any amendment to any Bill is that it necessarily has to be cast in terms comprehensible to the Bill. That, I am afraid, one cannot get round; but it may be that it is the terms comprehensible to the Bill that we need to consider. All the Government's thinking on quality within the profession rests on two premises. One is that government are capable of recognising quality when they see it. The other is that quality is ultimately quantifiable. It is about time that the Government started wondering whether the two assumptions need double checking.
I remember reading a letter in the Independent from someone who had recently had a heart operation, from which, when he went in, his chances of recovery were approximately 50/50. He was being operated on by Sir Magdi Yacoub, who came to see him the night before, ran through a standard series of medical checks that he had to do, then spent half an hour sitting with him talking about Bach. The patient ascribed his survival to that half hour's conversation about Bach. We shall never know whether it is true or not, but 1 found it plausible. How do we quantify that in any form of performance indicator? Is that what distinguishes a great doctor merely from a very good one? If so, how an earth is the state ever going to recognise it?
Lord Warner: Although I applaud the sentiments behind the amendments and very much welcome many of the contributions made by noble Lords, I hope that I shall be able to provide sufficient reassurances to support our view that the amendments are unnecessary.
We believe that the significance of NICE and the national service frameworks will be adequately reflected by the provisions already in the Bill. I shall briefly refer to the remits and purpose of those two pieces of activity. NICE'S formal remit is the promotion of clinical excellence and the effective use of available resources in the health service, as the Secretary of State may direct. It is therefore central to our plans to modernise the NHS and drive up standards. I should like to give an illustration of the amount of effort being put in. There are currently 48 guidelines and 41 technology proposals in simultaneous preparation, making it the largest programme in any country. It is respected throughout the NHS and, indeed, throughout the international community. The national service frameworks are another element of the overall programme of modernisation.
There is a set of arguments that I want to deploy from those two pieces of activity, which are designed to help us to improve health and social well-being by providing services to more people more quickly and to a higher standard; improving the patient experience, reducing variations in care across the country; and increasing compliance with evidence-based practice.
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The processes for doing that are enshrined in the Bill. The Explanatory Notes make it clear that it is envisaged that any statement of standards issued and published by the Secretary of State under Clause 45 of this Bill is likely to be informed by national service frameworks, NICE guidance and other relevant sources.
Having established NICE and national service frameworks, it would be bizarre if the Secretary of State ignored all that work and those activities in setting the national standards that he will have to set and which will be made public later this year. As the Minister responsible for overseeing the work on national standards, I can assure Members of the Committee that the experience of NICE, national service frameworks and others will be reflected in those national standards. We are building up national standards that reflect those particular pieces of work and experience.
Clause 45, which relates to national standards published by the Secretary of State, makes it clear that any NHS body and cross-border strategic health authority is under a duty to take such standards into account in discharging its duty of quality under Clause 44. There are some strong mechanisms for building the work of NICE and the national service frameworks into the national standards.
The Bill then requires CHAI to produce criteria which the Secretary of State will ultimately approve which are compatible with measuring performance against those national standards. In our view those arrangements are strongly enshrined in this piece of legislation.
As I said, CHAI must take account of those standards when it undertakes its reviews. I remind the Committee that NHS bodies are also under an obligation to provide funding for treatments and drugs recommended by NICE within three months of guidance being issued. Of course, we know that there are some problems in some parts of the country with meeting that obligation but the obligation is clear and statutory. CHAI will therefore take account of statutory obligations on NHS bodies when carrying out its reviews. I suggest that we have a well-established set of arrangements which enshrine NICE and national service framework work in the standards that will be set under this legislation. The criteria that CHAI establishes will be consistent with those national standards. The work of NHS bodies will be inspected and reviewed by CHAI using those criteria. It will become apparent in the work done by CHAI where particular bodies are not operating in a way which is consistent with national service frameworks and with NICE guidance.
5 p.m.
Baroness Barker: I thank all Members of the Committee who took part in this extremely useful debate. I note particularly the comments of my noble friend Lord Russell who, as ever, takes us into the heart of a point very memorably.

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The Minister's response was encouraging but not sufficiently encouraging to dissuade me from returning to the matter at a later stage. Great Explanatory Notes of History is not a tome that I have read. The explanatory note that the Minister read out does not carry sufficient force to satisfy me or, I imagine, the noble Earl, Lord Howe. I believe that we agree that there is much good work going on, particularly in national service frameworks. The difficulty is that they do not have the force of statute and their implementation is therefore a matter of some randomness. That is the heart of the issue. The Minister's response did not go far enough to satisfy us that in future all that good work will be implemented. The question remains why the Government are running away from their own good work. I thank the Minister for his reply. I shall withdraw the amendment for the moment but I signal that this is a matter to which I am sure we shall return. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Barker moved Amendment No. 254:
Page 16, line 20, at end insert "; and
(c) services to support independent living and rehabilitation"
The noble Baroness said: I turn to two other matters which again relate to quality in healthcare. The lack of definition of "quality" has concerned a great many organisations in different fields. The double whammy of a lack of definition of "quality" and the lack of clarity about the extent to which foundation trusts will pursue objectives which mesh with the rest of the healthcare system prompt these two probing amendments—Amendments Nos. 254 and 255.
Amendment No. 254 relates to rehabilitation and independent living. The amendment was no doubt drawn up in the wake of our discussions on delayed discharge. There is great fear that foundation hospitals, as bodies concerned principally with acute care which are at some remove from the rest of the healthcare system, will not place the emphasis that they should on the key factors in the lives of the largest number of their users—older people and other vulnerable adults.
Amendment No. 255 refers to the need to consult with patient representatives and clinical experts and tries to determine what quality standards are. In speaking to a previous group of amendments, I said that there was a great deal of emphasis on managerial matters such as response times and numbers of staff. However, there is much less emphasis on what could truly be described as qualitative matters, for example, cleanliness in hospitals. I was reminded of that in our discussions on patients forums. Patients and users had been aware of problems arising from lack of cleanliness in hospitals long before they reached
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Ministers' desks. The amendment seeks to include those people who have a slightly different perspective on the matter in the drawing up of the definition of "quality". It is important that we seek to widen definitions and to get away from number crunching as a way of determining whether foundation trusts will work and whether healthcare is of a sufficient quality. I beg to move.
Baroness Finlay of Llandaff: I strongly support the spirit of the amendment. Healthcare is not just about trying to prevent disease occurring, diagnosing it early and then treating it. The treatment is often devastating for the patient. Rehabilitation is absolutely essential if they are to resume their lives after treatment. Only this week we have had statistics about the number of patients in chronic unmanaged pain. An amputation might signal the end of treatment for a gangrenous leg, but the path to rehabilitation and eventual independent living is long and tortuous. It requires resources and such patients require support. With good support and good rehabilitation processes outcomes are dramatically different. With such support many of these patients will return to work and feel that they have resumed the role in society from which they were plucked by their illness. Without a continuum of rehabilitation services and the ongoing provision of quality care, many patients will become chronically disabled and depressed and will be unable to contribute to society as a result of their illness. I beg the Minister to include the provision as a quality measure. The bulk of healthcare falls within the list specified in the amendment.
Earl Russell: I am very glad that the noble Baroness, Lady Finlay of Llandaff, said what she did about pain. It is a constant drag on a great many people. Apart from the sheer unpleasantness it is also a constant interference with their ability to work. The incapacity benefit test, as it stands at present, because it measures a person's medical condition in a snapshot taken at one moment simply does not take adequate account of things—it never has done. If the noble Baroness were able to assist in promoting a dialogue between the medical authorities and the Department for Work and Pensions she might make a contribution which would be very valuable to a great many people.
I agree also with what my noble friend Lady Barker said about involving users, by which I take it she meant not only patients but also those who at a more junior level are engaged in applying treatment. She brought back to me a memory of a train journey across Yugoslavia in 1961 in the days when Yugoslavia was still able to pretend to be a country. I was sitting next to a surgeon from Zagreb who was describing the operation of a works council that, because it involved nurses as fully-fledged members, had succeeded in convincing the authorities that it was not sensible to polish the floors until they were so shiny that every nurse fell over when going about her duties. That is a lesson that needs relearning from time to time.
Lord Warner: Amendment No. 254 would add consideration of,
"services to support independent living and rehabilitation",
to the definition of healthcare that, subject to parliamentary approval, Clause 44 will establish as,
"the promotion and protection of public health",
and,
"services … for or in connection with the prevention, diagnosis or treatment of illness".
No one would disagree with many comments made by Members of the Committee about the importance of independent living and rehabilitation being properly linked as part of the patient pathway from ill health to recovery. However, I on the whole suggest that it is not the business of the National Health Service to provide services to support independent living and rehabilitation. That has been seen increasingly as the job of local authority social services, which under the Bill are subject to inspection and monitoring by CSCI. Where such services are provided by the NHS, they would in any event be within the existing definition of healthcare as services provided in connection with the treatment of illness.
I respectfully suggest that there is not a great deal of merit in the proposed change, which would simply confuse the position further on what is social care and what is healthcare. Many Members of the Committee know only too well that those issues have been difficult to define for many people at an operational level. Over the past two decades or so, we have moved a long way down the track of seeing the services as best provided within the world of social care. Many professionals would see the amendment as a slightly retrograde step—as something that goes back on some changes brought about in the past two decades. I am happy to place myself in this camp, based on my experience as a director of social services.
With respect to the duty of equality, Amendment No. 255 seeks to ensure that NHS bodies consult persons such as patient representatives, clinical experts and CHAI to ensure the effective discharge of their obligations to monitor and improve the quality of healthcare that they provide or obtain. Given our increasing emphasis on patient and public involvement, I sympathise with the amendment, but the local clinical governance and other arrangements already in place remain sufficient.
When implemented effectively, clinical governance ensures high-quality patient-focused care. That is why it is and will remain for NHS bodies, as part of their accountability arrangements, to provide evidence that they have appropriate mechanisms in place. Their clinical governance arrangements are, of course, looked at as part of performance monitoring. A key part of the work of CHAI will be to continue to investigate the performance of individual bodies. To ensure that each and every NHS body meets the needs of the population that they serve, each already consults with additional persons such as patient groups as a matter of course.
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Although the amendments are well intentioned. I do not think that either is necessary. I suggest as gently as I can that Amendment No. 254 slightly goes; back rather than looks to the future.
5.15 p.m.
Baroness Byford: My contribution will be very small. I am somewhat concerned, having heard the noble Lord's response. I am not quite sure whether he is saying that this is not the right place in the Bill—that is one matter—or that the problem is covered by something else, which is a totally different matter. Rehabilitation is hugely important. As someone who has had two heart attacks, the rehabilitation that I received from one hospital was of very different quality from that of the other.
I shall raise a smaller problem. When I was involved in the WRVS—it was a long time ago—one of the big problems was with those released from hospital and into the responsibility of social services. It was a huge difficulty, and I do not think that it has been solved properly even now, 20 years later.
I add my questioning voice. It is not a Front-Bench voice but my personal interpretation. I came in rather late. Have I misinterpreted a suggestion that the provision would be in the wrong place? However, if it is a good idea and in the right place, I hope that the Minister will dwell on it a little further and that the noble Baroness will take him up on the issue, as it is enormously important.
On another personal account, my brother lost two fingers in an accident. Although his treatment at the hospital was good, it has taken some time to get to grips—that is a bad expression, but it is very true—and cope in a way that he had perhaps never thought of before. I am sure that there must be lots of similar cases. My experience of the two Leicester-based hospitals was that one was very much more highly geared to give specific after-care that was enormously beneficial, and meant that I returned to work very quickly compared with the first time round when it was not the same standard.
Lord Warner: I was not saying that the provision was in the wrong part of the Bill, but that the overwhelming majority of rehabilitation and moving towards independent living was seen as part of the world of social care rather than healthcare. That is not to say that none of it is important in relation to healthcare. Where it is part of healthcare, those issues can be inspected by CHI already. The lead area of relevant inspection should remain with CSCI, which is what we have tried to maintain in the Bill. We are not in any way diminishing the importance of the service areas to which the noble Baroness draws attention.
Baroness Finlay of Llandaff: Will the Minister clarify something for me on rehabilitation, as I am feeling a little confused? Highly specialised physiotherapy and occupational therapy, limb-fitting services and other very technical services are currently called rehabilitation services. All the people working in those services would seek reassurance that they were not

1131
suddenly being excluded from healthcare and transferred across. They view themselves very much as core members of the management team within healthcare, which I think is precisely why the noble Baroness tabled the amendment.
Lord Warner: All of us who have worked in health and social care want the individual patient experience to be seamless as they move from one to the other, as many people do. It is inevitable that, at some point, the NHS ceases to take responsibility and that the social care agency takes it. The precise time when that happens varies slightly from one part of the country to another, and is slightly different for different individuals.
The amendment and this part of the Bill are not about the merits or demerits of rehabilitation or independent living, but about the inspection and review arrangements for those services. There are two inspectorates, CHAI and CSCI. All that we say—it is a much narrower point than some of the debate—is that primary responsibility on inspection in this area is likely to be with CSCI, because the great bulk of the work on rehabilitation and independent living takes place in social care. We are not saying that there is no rehabilitation and no independent-living work in the health services. The primary inspection responsibility should not be confused, because it is likely to rest in CSCI. All that we are arguing is that the amendment could confuse the responsibilities of the inspectorates.
Baroness Noakes: Is the Minister saying that rehabilitation services within NHS bodies, such as those referred to by my noble friend Lady Byford and the noble Baroness, Lady Finlay, would be inspected by CSCI rather than CHAI? That was not my understanding.
Lord Warner: When the noble Baroness reads Hansard, she will see that I said that under the definition of "health care", one could include rehabilitation and work towards independent living, but I said that the bulk of that work was undertaken in a social care world. We have already discussed whether there would be protocols between CHAI and CSCI or joint working. There may well be reviews in which both inspections are involved. Noble Lords are attributing to my words—though I am pleased that they are listening to them—much more importance than is required. I have said merely that rehabilitation and independent living are primarily social care areas which are likely to be the responsibility of CSCI, but I have not said that they will be the responsibility only of CSCI. Healthcare includes those elements and, where it does, CHAI will have an involvement.
Baroness Noakes: In that case, where in subsection (2) of Clause 44 would one fit rehabilitation?
Lord Warner: "Treatment".
Earl Russell: As the Minister has now returned to the point twice, I shall touch on a point that I was
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going to refrain from making. He has slightly misunderstood the grammar of my noble friend's Amendment No. 254. I do not think that it was the purpose of that amendment to suggest that the NHS should be in charge of independent living. The word which governs that amendment is "promotion"— promotion of health and of independent living. In neither respect does the amendment suggest that the NHS should be in charge of all health. As I understand them, the words of the amendment are teleological. They describe a purpose to which "health care" should be addressed, not a continuing condition for which the NHS should be responsible. That makes a number of the Minister's criticisms a little wide of the point.
Lord Warner: In order for us to move on, I shall take away the amendment and have a look at its wording. I would be surprised if we were to shift our position, but I am happy to review the matter in light of possible confusion about our position. Before Report, I shall write to all noble Lords about the issue.
Baroness Barker: I thank all noble Lords who took part in that discussion. It perfectly encapsulated some of the worst things that are happening in hospital discharge. The debate perfectly encapsulated the gap between discharge from acute hospitals and community care.
I imagine the Minister is relieved that he did not sit through the many hours of the Community Care (Delayed Discharges) Bill when we discussed those matters at considerable length. It was feared then, as it is now, that continuing healthcare in the community had been inappropriately considered. My fear, and it has perhaps grown in the past half-hour, is that the inspection regime has not been fully thought out or joined up.
I thank all noble Lords. I will await with eager anticipation the noble Lord's letter to me, but I hope that he is not defensive of his position and takes on board the intent behind the amendment, which was precisely to see joined-up services in rehabilitation. On that note, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 255 not moved.]
Clause 44 agreed to.
Earl Howe moved Amendment No. 256:
After Clause 44, insert the following new clause—
"STANDARDS

(1) The CHAI shall be the principal guardian of standards in the NHS and shall prepare and publish standards in relation to the provision of health care by and for English NHS bodies, Welsh NHS bodies and cross-border SHAs.

(2) The CHAI must keep the standards under review and shall publish amended statements whenever it considers it appropriate.

(3) The CHAI must consult the Secretary of State, the Assembly and such other persons as it considers appropriate before publishing a statement or amended statement under this section.

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(4) The standards set out in statements under this section are to be taken into account by every English NHS body, every Welsh NHS body and every cross-border SHA in discharging its duty under section 44."

The noble Earl said: In moving Amendment No. 256, I shall speak also to Amendments Nos. 336, 344 and 345. Amendment No. 256 precedes Clause 45 for a very good reason. It both anticipates and diametrically opposes the provisions of the clause. That provides us with a classic illustration, if ever there were one, of why the amendment tabled by my noble friend Lady Cumberlege at the start of the Committee proceedings was so apposite.
Clause 45 is a mark of the Government's obsession with political control of the health service and it is profoundly misconceived. It states that the standards to which healthcare is provided in the NHS are for the Secretary of State to determine. The principle underlying my amendment is simple. It is to state that the standards which are promulgated in the NHS and the equivalent standards adopted in social care should be those for which CHAI and CSCI respectively can claim full responsibility as independent bodies.
I have used the words "principal guardian" in the amendments and I hope that these convey the right connotation of ownership that is predominant but not exclusive. It is to be hoped that when standards are set in the NHS everyone will feel ownership of them, but CHAI will be their chief defender and promoter. The Government say that CHAI is there to assess whether the standards set by the Government have been reached and that it would be quite wrong for the body responsible for setting standards to be promoting them. This amounts to saying that CHAI cannot be judge and jury in its own cause.
I believe that that is exactly what CHAI ought to be. The standards by which the quality of healthcare is to be measured should not be for politicians to determine. As the noble Earl, Lord Russell, pointed out last week in a characteristically acute intervention—and I am sorry he is not in his place now—benchmarks that are set for the NHS by politicians contain hidden clinical judgments.
The present Government came to office in 1997 proclaiming a healthcare standard: it was that fewer people should be kept waiting for treatment. To the voter, that standard seemed sensible. But arising from it, targets were set which meant that the NHS, instead of being in the business of treating the sickest patients first, was all of a sudden in a numbers game. The standard and the targets worked directly contrary to the interests of patients because they distorted clinical judgments.
The Government have now moved away from a pure numbers game by focusing on waiting times, but they are in exactly the same trap. While it can matter very much how long a patient has to wait for in-patient treatment, what really matters is that the sickest and most urgent cases are treated before less serious ones. These are prime examples of how political interference in setting standards can damage patients—and I could name others.
To me, this issue is the crux of Part 2 of the Bill. The Secretary of State can try to influence CHAI insidiously through the purse strings that he holds and the appointments that he makes. Each of these is wrong. But if CHAI is not to be fully responsible for the standards that it upholds and cannot defend those standards to the hilt as clinically and ethically well-founded, its credibility will be non-existent.
Nor is there any sense in proposing, as the Bill effectively does, that the standards of quality that are observed in England should be different from those that are observed in Wales. It is a nonsense to think of a different and parallel set of standards operating in Wales, yet Clause 46 explicitly provides for different standards to be in force in Wales, set by the Assembly.
We all know about devolution—like it or dislike it— but to say that there should not be a uniform set of standards recognised on both sides of the Border is carrying devolution to excess. We will have an opportunity to debate Clause 46 a little later.
What I passionately want to see emerging from the Bill are two organisations—CHAI and CSCI—which command the confidence of patients, of hospitals, of PCTs, local government, care homes and the general public. They should bestride the NHS and social care and they should bestride politicians.
If need be, CHAI should be in a position to say to the government of the day and to the Assembly that this or that is what should happen for the good of NHS patients and these are the standards that we should use for measuring the delivery of the service. The second-guessing of standards by Ministers is, in my view, no way to proceed.
Therefore, I make no apology for the amendments. They go to the heart of the difference of approach between the Government and ourselves towards professional autonomy in the health service and beyond. The Government should be letting go of the reins. I beg to move.
5.30 p.m.
Baroness Barker: I shall speak to Amendments Nos. 259, 261, 262, 263, 265 and 267, which are grouped with those of the noble Earl, Lord Howe. These amendments follow very much in the same vein as those outlined by the noble Earl. In order to have the confidence of the public, the process of setting standards should involve the key stakeholders— particularly patients.
I return to the matter of national service frameworks. One reason that the national service frameworks are so good and effective is that they are the product of collaboration between researchers and clinicians and, in particular, they involve patients in the process. One of the greatest things about national service frameworks is that they counteract the often episodic view of illness which can come across from a strictly clinical point of view.
We believe that, taken together with the approach of the noble Earl, Lord Howe, the amendments that we have tabled provide the way to achieve a set of

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standards in which confidence can be sustained. Therefore, it is my pleasure to support the noble Earl, Lord Howe.
Lord Warner: I shall backtrack a little. The report from the Office of Public Services Reform, published earlier this year, sets out government policy on the respective roles and responsibilities of those involved in the inspection of public services. It clearly sets out the role of Ministers and their departments as being,
"to set standards determining how the service is to be delivered and to make sure effective performance management systems are in place".
That is our general proposition on setting standards and on their relationship with measuring performance. I shall elaborate on that a little.
It remains our view that it is wrong for the bodies responsible for inspecting services and for ensuring that they comply with certain standards to also be responsible for setting those standards. Furthermore, it is also entirely wrong for government to abrogate their responsibility for setting the standards of care for NHS patients and for those in receipt of social services to independent commissions. That would be the effect of the amendments.
I suggest that it is for the government of the day to determine the framework within which the NHS and social services should operate and to set the budget commensurately. Setting the standards for health and social care provision enables the Secretary of State to match performance expectations with funding. It would be entirely inappropriate—some would say even irresponsible—to divorce the function of setting standards for the performance of public services from the function of determining the level of funding that those services should receive.
I was very interested in the noble Earl's view that one can let an inspection body set standards, irrespective of the cost of funding those standards in the public arena. I suggest that that would be an interesting approach to budget-setting for any future Chancellor of an alternative government to the present one.
The publication of standards by government is also a vital tool for ensuring the democratic accountability of health and social services. Were governments to be prevented from setting standards for health and social care, it is difficult to see how they could be held accountable for the performance of those same services. I want to remind noble Lords what my noble friend Lord Hunt said at Second Reading. He said that we cannot,
"completely divorce the NHS from politics. Politicians do have to make judgments about national standards. They do have to make judgments about resources".—[Official Report, 8/9/03; col. 68.]
I suggest that those same principles apply to social services in a global sense.
Healthcare standards set by the Secretary of State are the core tool for ensuring increased levels of quality in the health service. Setting healthcare standards, implemented at a local level and assessed by an
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independent body, is the means by which the Government can ensure that the greatly increased resources being provided for the health service— around 7.5 per cent in real terms per year—are appropriately directed and spent wisely.
The power of defining the standards of health and social care will be inclusive. We are not saying that they will be written by people simply sitting in Richmond House. Our draft standards for healthcare, on which we are working, will be subject to a three-month public consultation later this year and that will take full account of the views of all stakeholders, including CHAI.
For English local authority social services, there is a long and well-tested route for setting standards under Section 7 of the Local Authority Social Services Act 1970. Standards issued under that provision are well known and respected by local authorities and are used in the assessment of performance by the Social Services Inspectorate. That process has been in existence for a very long time. Indeed, in an earlier incarnation I was subject to that inspection regime against national standards. CSCI will continue the practice and will be able to take an overview of the quality of all social care services using standards issued under that section and national minimum standards issued under the Care Standards Act.
In addition, in Clause 53 we provide particular provisions for CHAI to advise the Secretary of State of changes it thinks should be made to the standards that he issues for healthcare. Using existing provisions of the Care Standards Act and Clause 75 of this Bill, CSCI will also be able to advise on standards for social care issued by the Secretary of State. Therefore, when the inspectorates find things which suggest that modifications of national standards should be applied, we are not saying that there is anything to stop both inspectorates communicating their views on that to the Secretary of State and, indeed, where necessary, putting those views into the public arena.
Standards are not static: they change over time. They can change to respond to public expectations, growing expenditure and concerns about health. We suggest that amending them in those circumstances is the job of elected governments, not inspectorates.
Unlike other amendments in this group, Amendment No. 263 would leave the Secretary of State to set standards but would require him to undertake a process of public consultation before publishing them. As I have said, the Secretary of State will not burden the health service with health care standards which do not have wide support. I have indicated that we shall have a full range of consultation on any national standards provided by the Secretary of State under Clause 44.
I shall not make a long speech about Wales. Essentially, the short answer to the points raised is that we devolved responsibility for health care to the Welsh Assembly. It is for the Welsh Assembly, alongside the Secretary of State for Health in England, to set the standards for Wales in accordance with their needs and under the terms of the devolution settlement for

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Wales. Many of the same arguments that I set out for England apply in the Welsh context except that it is the responsibility of the Welsh Assembly rather than that of the Secretary of State for Health.
Earl Howe: I did not expect to persuade the Minister in my remarks. The situation is quite simple. We do not agree that Ministers should set standards. There is a fundamental disagreement running through the heart of this debate. From our point of view this is all about taking politics out of the health service. That is a consistent theme of the Opposition throughout the Bill.
I have no difficulty with the Secretary of State feeding budgetary stipulations into the formulation of standards. Indeed, my amendment allows for that. However, I deeply believe that the health service should be assessed against objective standards of quality—as objective as they can be—and standards which everyone can see are evidence-based and which do not have unintended consequences. All of the standards set by the Government in the past few years—waiting lists, waiting times, A&E waits, two-week cancer waits or whatever they happen to be—are well-intentioned. However, they are all wrongly formulated because they have unintended adverse consequences. If in a major part of its work CHAI is just the poodle of government Ministers, we are merely perpetuating central control of the NHS by indirect means. Sooner or later—probably sooner—that would work to the detriment of patients. Standards of quality in the NHS are not to be defined as whatever the Secretary of State thinks patients want. That is the nub of this issue.
We cannot get any further here. I note what the Minister said. I do not agree with it. I think that this is a theme we shall pursue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Byford moved Amendment No. 257:
After Clause 44, insert the following new clause—
"LOCAL POLLS ON FLUORIDATION
(1) A Strategic Health Authority may conduct a poll to
ascertain the views of those polled about—

(a) any recommendation to fluoridate local water supplies;
or

(b) any recommendation to cease fluoridation of local
water supplies.

(2) It shall be for the Strategic Health Authority concerned to
decide—

(a) who is to be polled, and

(b) how the poll is to be conducted."

The noble Baroness said: Many noble Lords are aware that when we took the Water Bill through this House earlier this year, one of the provisions which was added late in the day involved adding fluoride to the water system. As I am sure the Minister is aware, this issue is hugely controversial.
When the Bill was originally presented to us that particular section was not in it. We debated through Committee and still it was not added. It was not until
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we were coming towards Report stage that we insisted that we should have a separate Committee stage to debate this important issue. Whether one is for or against the idea, it is controversial as, indeed, we proved in the House.
The reason for bringing this matter before the Committee tonight is that when we debated it at that time in the Water Bill we were told that the responsibility for the decisions to be made would be taken away from the water companies and local authorities and given to the Strategic Health Authority. As this Bill is now before the Committee it seemed foolish not to seek clarification of how the Government intend to proceed.
The Water Bill is currently before Members in another place. They too will find this whole question of adding fluoride to the water a very controversial issue and perhaps be more split than your Lordships. To be fair, I believe that the majority of noble Lords feel that it is wrong to deny the addition of fluoride to the water if it will save children's teeth. That is the big argument. Others will take the opposite view and say that it would be better to supply free toothpaste and toothbrushes to all families who could then go about their business in the normal way. Some people say that we are creating a nanny state and that people should organise their health in a better way. So that was the debate when we discussed the issue earlier.
I tabled the amendment to try to discover from the noble Lord, Lord Warner, whether the Government have given any further thought to the subject since it was raised in the summer. The matter is quite complicated. My understanding, unless the situation has changed since the summer, is that one strategic health authority might take one view and the neighbouring authority another, but that they are both supplied by water from the same water company. Whether the Government have solved that practical problem since our discussions earlier this year, or whether it has just been left quietly in the background, I cannot possibly judge. Certainly, it is a very great issue in the country.
As I say, I do not call for families to be denied opportunities. The purpose of the amendment is to seek guidance. We were told in our debates that the Government would go to public consultation. They were not able to tell us how that consultation would take place. They were only able to tell us that it would not be one person one vote. No more information was given about how these strategic health authorities would achieve their aim.
I apologise for raising an issue which is perhaps a little wide of many of the Committee's discussions, but it is a timely opportunity for me to raise it in this important Bill. It may be that we shall not have another important health Bill in which this issue can be addressed. I beg to move.
5.45 p.m.
Earl Howe: My noble friend has made a very well-reasoned case. I hope the Minister will respond constructively. I would only add to what she has said

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by making a couple of brief points. If polls are held, those who vote should obviously be well informed. I would hope that any poll would be preceded by proper public consultation on what are, after all, complex issues. Polls on their own are clearly not enough.
I am relaxed about the idea of strategic health authorities instigating polls. Whether they are the right body to conduct polls is another question. I am a little doubtful about that because it is unlikely that strategic health authorities would be regarded as neutral in this debate. But that is a detail.
I am sure my noble friend would agree—and she has acknowledged as much—that ideally her amendment would sit better in the Water Bill rather than in this one. Nevertheless, I take no exception at all to her initiative in raising the matter under this banner. I look forward very much to hearing what the Minister has to say.
Baroness Andrews: Barely four sitting weeks ago, we did indeed have a very lively debate on this issue. I thought that it was rather good fun. One matter we agreed on eventually was our wish to give local communities a real choice on whether to have their water supplies fluoridated. We had some considerable discussion on that.
The Water Bill, which is still in the Committee stage in another place, addresses the full range of issues which must be addressed to remedy the flaws in the existing legislation on fluoridation. The noble Baroness will know that those provisions cover the rights and duties of the water companies, the publication of proposals and the consultations required, as well as the assessment of public opinion. The Bill includes enabling powers to make regulations on consultation and the assessment of public opinion.
Perhaps I may just reiterate the stage we have reached, which is simply to restate that strategic health authorities will have to ascertain public opinion on fluoridation schemes. The final decision on schemes will rest with the strategic health authorities. I am sure that the noble Baroness will remember, in our debate in this Chamber, my noble friend Lord Warner speaking at great length—perhaps even exhaustive length—about the range of options which the SHAs could undertake in order to ascertain public opinion. He spoke of everything from local TV and radio to public opinion surveys involving the professional bodies and achieving, as an objective, a means of measuring public opinion from the widest range of backgrounds as possible.
We also spent some time discussing the nature of the regulations. I would say to the noble Baroness that these will be affirmative regulations. They will return to this House and there will be another opportunity to discuss their nature and content. I again restate what my noble friend said: this will not be done in a "hole in the corner manner". Indeed they will require the SHAs not least to seek the views of the local population.
The point is that even before we get those affirmative regulations in this House, they will have to be consulted upon. I feel sure that when they return,
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the process will meet the issues about which the noble Baroness is concerned—the necessity of making sure that the consultation is valid and is robust; that it takes into account the wider fringes of opinion; and that the eventual decision is that which meets the wishes of the local community.
I hope that with those reassurances she will accept that we are trying to go the extra mile to make that a proper process. I look forward to her contributing again on the affirmative regulations. I hope that the noble Baroness will find it possible to withdraw her amendment at this point.
Baroness Byford: I thank the Minister for her considered response. When I say that I am not happy, I mean it genuinely. I feel that we have moved no further since the summer. She is right to say that we had a long debate and that the noble Lord, Lord Warner, kindly listed all the various options but, at the end of the day, a small word remains in my mind: how? I am no further forward on that. I think that the noble Baroness has again said that nothing has been decided; that various options are open to us; and that we shall try to end up by reflecting what the local community wants, although we have still not discovered how to do that.
The noble Baroness—and the noble Lord, Lord Warner, during our previous discussion—said that regulations would be laid under the affirmative procedure. That is a start, but we cannot change regulations—unless the noble Baroness tells me that we can; my understanding is that we cannot. So the only chance that we have to clarify what will happen is when a Bill is in front of us. During debate on the Water Bill I was told that that was impossible and that I was out of order: it would be the responsibility of the health authority, which is why I am back here pursuing it.
I thank the noble Baroness for her genuineness. I am not happy, but I must wait to see what happens to the Water Bill at the other end of the Corridor, because I know that many honourable Members on all sides of the House are extremely exercised by the problem. I went to the Public Bill Office because I was not sure whether I was technically correct to raise the matter tonight, so I apologise to the Committee, but I am technically correct to do so. I hope that doing so will push the Government a little further towards giving us greater guidance on how they envisage the regulation being advanced—if possible, before the Motion that the Bill do now pass. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 258 not moved.]
Clause 45 [Standards set by Secretary of State]:
[Amendment No. 259 not moved.]
Earl Howe moved Amendment No. 260:
Page 16, line 24, leave out "may" and insert "must"
The noble Earl said: On behalf of my noble friend Lord Peyton, and at his specific request, I move Amendment No. 260, standing in his name and speak

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also to his Amendment No. 264 as well as my amendment, Amendment No. 260B. Were he here, my noble friend would speak much more trenchantly than can I on the matter to which he draws the Committee's attention. It relates to the concern that he has so often, rightly, raised about the role of the Secretary of State and what the Secretary of State ought to be doing. The clauses give wide powers to the Secretary of State running parallel with the wide powers of CHA1.
Were he here, my noble friend would reiterate his concerns about double banking and second guessing of CHAI by the Secretary of State—and vice versa. I am sure that my noble friend will want to return to the matter on Report, depending on the answer that the Minister is kind enough to give.
CHAI's remit has a number of broad headings—for example, the effectiveness of NHS management, the delivery of patient care, and so on. If standards must be set by the Secretary of State—it seems that the Minister is not to be persuaded otherwise—they should be set only in respect of those broad headings.
If that happens, some, but not all, of the objections that I raised on the previous group of amendments will fall away. If that occurred, CHAI would set the criteria for the standards and monitor performance accordingly. But we should not countenance a multitude of standards set by the Secretary of State, some of them perhaps overlapping with the standards and criteria set by CHAI. That would place CHAI in a very difficult position. The broad domains of CHAI's work are a legitimate focus of interest for the Secretary of State, but those domains are few in number; hence the amendment that I have tabled. I beg to move.
Baroness Barker: I shall speak to Amendment No. 266, which is in this group. Following our recent discussion on an earlier group of amendments, Members of the Committee will not be surprised to learn that we feel that, if the Secretary of State is to set the standards, he or she must be required to consult patient representatives, clinical experts and CHAI. The amendment is yet another attempt to ensure that the standards to which healthcare must be provided, and that CHAI must inspect, are clinical targets not political measures. It is as simple as that. I make no apologise for expressing our view in those terms.
Lord Warner: I was interested to see the amendment tabled by the noble Lord, Lord Peyton, suggesting that the Secretary of State must publish national standards. It suggests that he is a strong supporter of the Government's position as outlined in the previous discussion. I do not wish to go over all the ground again. I wish to remind Members of the Committee of the context of our approach. The Government undertook, in their response to Sir Ian Kennedy's Bristol report, to ensure the development of standards for the NHS. We think that that is a function of the Secretary of State.
When the Government announced the establishment of CHAI, they stated that there would be inspection against clear national standards and a continuation of the vision for CHI set out in Learning
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from Bristol. We have already held nine workshops, attended by more than 200 key stakeholders drawn from patients, clinicians, representatives of professional and voluntary organisations, NHS managers and many others. The advice from those individuals is helping us already in the development of national standards. We are reaching out to people on the frontline with responsibilities for delivering healthcare in the framing of those national standards. We will publish a draft statement of standards later this year for a wide-ranging public consultation process. We will undertake appropriate consultation when any future amendments are made to the standards. We are absolutely committed to a full range of consultation.
The standards will cover all aspects of services, including safety and efficacy, the involvement of patients, their families and carers, accessibility and responsiveness, environment and amenities—such as food and cleanliness standards—and governance, both clinical and corporate. They will come into effect in April 2004. I must disappoint the noble Earl by saying that, from the work that we have done already, the arbitrary figure of 10 that he proposed would be impracticable and would help neither the inspectorate nor the National Health Service. That is the approach that we are adopting.
We do not think that it is necessary to name the specific groups that would be consulted, as the amendment in the name of the noble Baroness, Lady Barker, proposes, which specifies,
"patient representatives, clinical experts and the CHAI".
Worthy though they are, the amendment would give them a statutory status denied to a wide range of other groups that will be involved in the process, such as voluntary and charitable organisations, non-clinical specialists, trade unions, management organisations, international experts, NICE—which we discussed earlier—the National Patient Agency and the Health Protection Agency. I could go on. A wide range of people is involved in the process of devising national standards. Well-intentioned though the amendment is, it is too narrow. The process of setting healthcare standards will be an inclusive one and we do not believe that the amendments are necessary.
Earl Howe: I am grateful to the Minister, but I am dismayed to hear that the department intends to promulgate an inordinate number of standards for CHAI to implement. I can only return to the concerns that I raised in a debate on a previous group of amendments. The provision is inordinately prescriptive. I am not sure how welcome the Government's approach will be to CHAI either, although that must be a matter for Sir Ian Kennedy to judge. Clearly, my amendment was a probing one. It has probed very successfully and we will have to reflect long and hard on the implications of what the Minister has told us. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 260 A to 267 not moved.]
[Earl Howe]
Clause 45 agreed to.
Clause 46 [Standards set by Assembly]:
Earl Howe moved Amendment No. 268:
Page 17, line 6. after "such" and insert "NHS bodies in areas of England adjoining Wales and cross-border SHAs and such other"
The noble Earl said: Even if the Government are unable to agree with the arguments that I tried to put forward earlier, I would strongly urge them to consider this amendment. It suggests that, before publishing a statement of standards, it should not be enough for the Assembly to consult such persons as it considers appropriate. It should be obliged, at the very least, to consult those hospitals and SHAs in border areas of England that may be affected by the standards that the Assembly sets in Wales.
English hospitals will be performance managed by English strategic health authorities according to standards laid down in England. If those hospitals accept Welsh patients, everyone must be clear about the standards to which doctors, nurses and managers should be working with regard to the care of those patients. If it is proposed for example, that Welsh NSFs, not English NSFs should apply to Welsh patients, not only do the English hospitals and their doctors have to sign up to that difference, the strategic health authority must also take it into account for performance management purposes. To take a hypothetical example, if beta interferon were the treatment of choice under Welsh standards of MS treatment but not English ones, that would have direct budgetary and clinical consequences for English hospitals and their staff.
Alternatively, the Assembly may accept that Welsh patients who are hospitalised in England should be subject to English standards of treatment. In that event, equally, consultation would be necessary with those English health bodies potentially affected.
Ideally, the standards laid down on both sides of the border would not differ from one another, but if that is to be made to happen—as opposed to being a fond hope—there is no possible argument for the Assembly failing to consult relevant health service bodies in England. Either way, with the greatest respect for our Welsh friends and colleagues, it makes no sense for Wales to treat itself as an island in drawing up its standards of treatment. It must bring into its deliberations all those across the border whom its decisions will affect. I beg to move
Baroness Finlay of Llandaff: I have listened carefully to the debates about standards, and I have many questions for the Minister about the relationship between devolved healthcare in Wales and the situation in England. I seek some assurances.
My understanding was that, if the Secretary of State set standards in England, the National Assembly for Wales would have to pick up through CHAI only the standards that it thought were important for the population of Wales, particularly if there were thematic issues, such as apply to cancer care, or major cross-boundary flows, such as in cardiac surgery. That
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would allow the Assembly to benchmark services in Wales against services in England, and it would be able to establish local standards in Wales that would be monitored by the healthcare inspection unit in Wales, which will benchmark standards throughout Wales. The reason was that inspections by CHAI in Wales would not be as frequent as those by the healthcare inspection unit, whose role would be to run an ongoing monitoring process to drive up standards.
I seek clarification that the clause will ensure that that process will happen, that, as part of that process, cross-border issues will be covered and that, with thematic flows, there will be equity of standards for patients travelling across the border.
Baroness Andrews: Some of the issues raised by the noble Baroness, Lady Finlay of Llandaff, come up in a later amendment. I may decide to answer them in the context of the later amendment. I may also decide that it would be better to answer her specific questions in writing to ensure that there is clarity of understanding on the issues.
The noble Earl's amendment would place an obligation on the Assembly to consult English NHS bodies operating in areas that adjoined the Welsh border before publishing a statement of standards. I hope that I can convince the noble Earl that such an amendment is unnecessary.
The noble Earl said that everyone needed to clear about what will be inspected and against what standards and why. We have not had the clause stand part debate on Clause 46, so I simply refer to what my noble friend said about how important it was that Wales developed its own standards. He made the dual case that it was a devolution issue, as a matter of principle, and, secondly, that it was a practical issue because Wales was different. It would take me too long, even with the assistance of the noble Baroness, Lady Finlay of Llandaff, to explain why Wales is so different, but the Committee must take it from me that it is.
One of the things to be seen particularly in Wales is a different pattern of epidemiology. There is different social and medical geography, and there are different concentrations. Obviously, clinical standards do not vary, but the new Welsh health authorities are trying to deal with issues in a different way. Within what we might think of as a suite of standards—not simply a set a standards—clinical standards will be the same, but organisational principles will be different. For example, in Wales, one of the organisational targets that we might set is to have more work done through the medium of Welsh. We might also, for example, see a higher priority being given to primary care because of the relative quality of primary care. Therefore, there will be differences in the priorities that are set. When we are talking about Welsh standards, that may be the type of priority we are considering.
As regards the amendment, I want it to be clear that, under the Bill, the Assembly does not and will not set standards that apply to healthcare provided by English bodies for English patients: nor should it.

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Ultimately, it will be for the commissioning body— whether it be Welsh or English—to take responsibility for the provision of care to patients from its areas.
The Assembly's responsibilities for setting standards quite properly extend only to the NHS in Wales and to those English bodies which provide healthcare for Welsh patients under the commissioning arrangements already in place. Those commissioning arrangements have been in place for many years and they work. There has rarely been much contention attached to them.
In cases where English bodies provide healthcare to Welsh patients, they will be acting, in effect, as sub-contractors, as they always have done. As with any other contract, Welsh commissioning bodies would expect to be able to set the contract conditions, which, in this case, would be the standard to which healthcare is to be provided. In the same way, Welsh bodies contracting with English commissioning bodies to provide services to English patients in Wales would expect those services to match the standards set by the Secretary of State and CHAI to ensure that the terms of the contract have been complied with. Since those boundaries will be in place, there would be no reason for cross-border consultation because I am certain that it will be clear.
I stress, as I have before, that clinical standards do not and should not vary across the NHS in England and Wales. In setting standards in Wales which reflect the particular needs of Wales, as I have tried to illustrate, the Assembly will do that in the light of cross-border England and Wales bodies, such as the National Institute for Clinical Excellence and the Royal Colleges. With those reassurances, I hope that the noble Earl will withdraw the amendment.
Earl Howe: I realise that the noble Baroness has tried to be helpful. Patients in Wales and England do not expect two sets of standards that are roughly the same. They expect the same sets of standards, which, I believe, are quite a different matter from prioritising healthcare needs. The Welsh Assembly is entitled to prioritise the way in which funds are used to treat patients in Wales. I have no quarrel with that. The standards by which those services are delivered should not differ from those that operate in other parts of the country.
We might debate Clause 46 stand part to wrap up these issues. I sense that a number of Members of the Committee would welcome a return to this issue, albeit it a brief one. I do not propose to say any more on the amendment. I am disappointed that the noble Baroness seems to think that there is no need for a consultation requirement for the Assembly. I still believe that there is. I shall read carefully what she said and I will reflect on the matter between now and Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 46 shall stand part of the Bill?
Earl Howe: I approach Clause 46 from the point of view of the patient. A patient would regard it as a total
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nonsense if, as soon as the Bill comes into force, a process of standard setting takes place across the Welsh border that is entirely separate from the process taking place in England. Why cannot there be co-operation and co-ordination leading to a single set of standards and a single inspectorate? Why cannot CHAI and CSCI be guardians of a uniform set of standards in both countries and monitor those standards independent of government?
The noble Lord, Lord Warner, remarked earlier that health is a devolved matter. Yes, he is right to say that, but it cannot be an entirely devolved matter or else Clause 46 and all the Welsh provisions would have no part in this Bill. Westminster still has primary legislative responsibility for health matters in Wales. On that basis, I can only repeat that I believe it is totally unnecessary to have different standards operating on each side of the border.
I believe that different national service frameworks apply in Wales for diabetes, heart disease and children's services. There can be no sense in that. This is not to criticise the competence of the Assembly or what is set out in those national service frameworks; it is simply to say that standard setting by the Assembly is needlessly confusing and a duplication of effort. As I said earlier, the Assembly has the right to determine priorities for healthcare in Wales, but that: is quite different from saying that the standards by which care is delivered have to be different from those in force in England. Everyone should agree what are the standards and one body should be tasked with monitoring them.
If one pursues this, different standards presuppose different treatments. If that is so, one must ask: to what purpose? Heart disease is still heart disease wherever it occurs. Diabetes is still diabetes. Yet it is perfectly possible to imagine the treatment of choice for a particular condition being different depending on which side of the border a patient is being looked after and which national service framework is in force. That cannot be a sensible result of devolution; it has to be just plain crackers.
The issue will come into starkest focus in hospitals located near the border, as we have just debated. In hospitals such as the Countess of Chester Hospital in Chester, doctors may find that they have to administer one type of treatment to an English patient and another type to a Welsh patient suffering from exactly the same condition. How is the performance of those doctors then to be assessed? Either we will have duplicated inspections of those hospitals by CHAI and then again by Welsh inspectors, which would be crazy—I hope that that will not happen—or we will have CHAI tasked with inspecting the treatment of Welsh patients as well as English, but doing so, in the case of the Welsh patients, against benchmarks to which it does not subscribe. That again would be crazy. All we are doing here is tying ourselves up in knots.

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It is not enough merely to hope that the standards on either side of the border will marry up with each other, as the Government appear to be doing. What the Bill proposes is manifestly not in the interests of patients.
6.15 p.m.
Baroness Barker: My noble friend Lord Clement-Jones has also put his name to the Question whether Clause 46 should stand part of the Bill. The noble Earl, Lord Howe, said that he approaches this matter from the standpoint of the patient. I think perhaps that he approaches it from the standpoint of the English patient. As I listened to his words, I became less convinced of his arguments, although I agree that the clause is worth debating, as is the preceding clause.
Noble Lords on these Benches have the same concerns about standards being set by the Assembly, but only on the basis that we have expressed concerns about standards being set by the Secretary of State. I believe that it is entirely possible to approach this from the standpoint that there may be healthcare needs in Wales which are different from those in England and which may then lead to the development of different standards.
For example, there is a high prevalence of pneumoconiosis in certain areas of Wales. Therefore, while it is entirely reasonable to accept that common standards can be set for some conditions, to which people living on both sides of the border may subscribe, how those standards are implemented may well differ on a national basis. We are concerned whether Clause 46 does in fact give the Assembly the freedom it needs to achieve standards in a different fashion.
Earl Howe: Will the noble Baroness allow me to intervene? I think that she is confusing standards with the criteria of treatment. Standards should be standards, wherever they are set. If someone suffers from pneumoconiosis in England, they should be treated to the same standard as if they suffered from the condition in Wales. The criteria may well differ on either side of the border.
Baroness Barker: I would cite the example of Northern Ireland, where they are attempting to achieve the same standards of healthcare but are going about it in a completely different way with money that they have been awarded by the Government. If they can achieve the same standards in a different way, that is a legitimate thing to do. But there may be conditions in Wales which require different standards—which is also a legitimate concern—and that is one of the freedoms that we would wish to see before the Assembly.
Baroness Howarth of Breckland: I differ with the noble Baroness, Lady Barker, and agree with the noble Earl, Lord Howe. Standards are standards and implementation criteria are the way in which you achieve those standards.
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I intervene briefly to raise an issue which, I fear, I have raised slightly tangentially before. It is a matter about which I am still uneasy. I refer to the issue of specialist care. I again cite the example I know best of children who suffer from single ventricle conditions. An organisation called Little Hearts Matter is working to ensure that children in Wales, Scotland, Northern Ireland and England receive the same standards of care.
I am referring to very specialist care. If a child does not receive the exact care he or she will simply die. I know about that condition but I am sure that there are examples in the treatment of cancer where patients need a particular specialist care and for the same standards to apply wherever they are. Can the Minister reassure me about such standards?
I met the family of a child who was ill in Wales. It took two hospitals to diagnose that the child was suffering from a single ventricle disorder before the child was transferred to a specialist hospital in England, where the correct treatment was received. A child in England went straight to that hospital. Luckily, both survived—but the chances of the second child were far higher than the chances of the first.
Diagnosis standards and standards of treatment need to be the same, although the way in which we reach those standards may be different. I want to be absolutely sure that the treatment of specialist conditions will have standards clearly set wherever it may be in the United Kingdom.
Baroness Finlay of Llandaff: As someone who is practising in Wales I have been involved in these discussions from both sides. I hope that what I say may add a little clarification because I believe that there is not as big a difference between everyone as there would appear to be at the moment.
As I understand it, the Assembly has no problem at all with the thematic standards for specialist services and children being treated equitably. Unfortunately, if a diagnostic delay occurs in one hospital, or a diagnostic delay occurs in a hospital in England, it could be due to 100 different reasons that may have nothing to do with the standards specifically set.
There are standards and, yes, there are absolute standards—and those standards should be reached everywhere. But there are additional issues in relation to the delivery of standards in Wales. It is very important that we involve local clinicians in the generation and the wording of the standards in order to take them along with the improvements to be instigated. We need to ensure that they have ownership of the standards as they apply to Wales, and that they are not perceived as standards written by the Secretary of State in England and catapulted into Wales. That certainly would not be accepted by the professionals who have to enact the standards. Minimum standards have to be emblazoned on their consciousness at all times to ensure that they are met.
The consultation process and the necessity of taking the profession along with this requirement has meant that differences have emerged in regard to the need to

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deliver healthcare services to the population of Wales. My understanding is that the Assembly will be subject to, observe and respect the standards set by CHAI; that the inspectorate from CHAI will cover England and Wales; and that therefore specialist services will be benchmarked, Welsh patients against English patients in different regions in England. In addition, health inspection in Wales will take this local process of consultation and try to drive up standards of care in those areas which have a lot of work to do.
It is with a fair degree of shame that I have to admit that in parts of Wales there is a lot of work to be done. We have very specific recruitment and retention issues in some parts of Wales. We have some problems that relate to the history of the health services in Wales. We also have problems that relate to the industrial history of the population of Wales, which have not applied in the same way, by and large, to the population in England. The percentages and the numbers affected are very different. It has been my understanding that there is no wish to lower the standards in Wales but there is a recognition of a gap that needs to be driven up, and the professionals have to go with it.
I do not think people are that far apart. The Assembly is only too aware of the need to drive up the minimum standards, which it has been attempting to do.
Baroness Andrews: I am extremely grateful to the noble Baroness, Lady Finlay, for that explanation, which she delivered with the authority of her profession working in Wales. She is absolutely right, and I hope she has reassured noble Lords that there will be no difference in the standards of clinical care provided, or between desired patient outcomes, in England or Wales. However, she has explained that there are differences in the ways of doing things and the way in which the bodies will work. She has drawn attention to the fact that there will be a health inspectorate in Wales which will be created under the Government of Wales Act 1998. It will do just as she says—drive up local standards across Wales in certain areas. At the same time, CHAI will be in operation in certain clinical areas, doing its cross-border work.
Let me gently remind the Committee that, in Wales, health is a devolved matter. The National Assembly is responsible for the delivery of healthcare services in Wales. It should set its own healthcare standards; it should reflect the social and medical demography; it should involve its clinicians, voluntary bodies and patients in the way in which it knows will work best, because its history and geography are different. In exactly the same way as the Secretary of State would expect to set healthcare standards with all the conditions that my noble friend discussed, so does the National Assembly expect to set them in Wales.
In would be unreasonable in the future for CHAI simply to impose its own standards across Wales as it will be developing them in England. I do not want to extend this debate, in view of the hour, and I hope that the noble Earl will not oppose the Question that the clause should stand part of the Bill.
Earl Howe: Perhaps I could wrap up this short debate by thanking all those who have taken part. It has been illuminating, and I am particularly grateful to both noble Baronesses who have spoken from the Cross Benches for teasing out some of the finer points of these issues.
Yes, the Minister is quite right—health is a devolved matter to Wales. I am not seeking to turn the clock back. The Welsh Assembly is responsible for the delivery of healthcare in Wales and the prioritisation of services. If it chooses, it is entitled to set targets.
I am in no way advocating the imposition of English standards on Welsh clinicians and Welsh patients. I would not dream of such a thing—it would be patronising in the extreme. However, I am in favour of a collaborative, nationwide approach to the setting of standards. That is a desirable aim for both English and Welsh patients and for those who administer the treatment. It is not heresy to propose that CHAI and clinicians on both sides of the border should agree to what standards the NHS should work. That leaves entirely open the question of implementation criteria and prioritisation and all the other things that I have mentioned.
Baroness Andrews: I remind the noble Earl that Clause 141 requires the Assembly and CHAI to co-operate with each other, so there is a beacon of hope in the Bill.
Earl Howe: I am grateful to the Minister for drawing the Committee's attention to that clause. Let us hope that it is carried aloft by those tasked with this tremendously important matter.
Clause 46 agreed to.
Clause 47 [Introductory]:
Baroness Noakes moved Amendment No. 269:
Page 17, line 17, leave out subsection (1).
The noble Baroness said: On behalf of my noble friend Lord Peyton, and at his specific request, I move Amendment No. 269. I shall speak also to our amendment, Amendment No. 373, standing in my name and that of my noble friend Lord Howe. Like my noble friend Lord Howe, I cannot pretend to rise to the oratorical heights of my noble friend Lord Peyton in moving the amendment, but I hope that I do not let him down too badly. He will certainly let me know if I do.
Amendment No. 269 proposes the deletion of Clause 47(1) and, with that, the so-called "general function" of CHAI to encourage,
"improvement in the provision of health care by and for NHS bodies".
CHAI has been set up, as its title informs us, to audit and inspect the NHS. It is really asking too much of such an organisation to have as its "general function"—by which I assume is meant an overriding or exceedingly important function—the improvement of healthcare. Like many organisations that involve audit and inspection, we will expect CHAI to produce from time to time illuminating insights into how

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healthcare is delivered. Those insights may indicate how healthcare could be improved. In time, that could lead to improvements in healthcare. But CHAI has no powers beyond its reporting powers, and I believe that we ask too much of CHAI to say that its important or general function is to encourage the improvement of healthcare. I am sure that it will not discourage the improvement of healthcare, but that is quite a different matter from having a key responsibility to improve it.
Amendment No. 373 in this group adds elderly people to the children who are specified as a particular focus of CHAI in Clauses 47 and 101. If children are to be specified, the exclusion of other vulnerable groups from special mention leads the reader of the Bill to believe that they are less important. We seriously doubt the need positively to specify particular patient groups in either of the clauses.
The inclusion of children, though worthy, seems likely to owe more to the issue of the moment, following the Victoria Climbié inquiry, than to rational analysis. Over time, different groups will be perceived as more or less worthy of special focus. That could be safely left to CHAI, but if the Government are determined to include one vulnerable group, we believe that, as a minimum, elderly people must also be included. Elderly people comprise a large group of people with many and varied special needs, and they can be at least as vulnerable as the young. I beg to move.
Baroness Barker: I shall speak to Amendment No. 270 and all those that follow in the group. To a large extent, I echo the comments of the noble Baroness, Lady Noakes. We believe that it is somewhat invidious to have named one particular group in the Bill. It is particularly strange to have done so, given that older people comprise the largest number of healthcare users.
As regards the other amendments, we believe that a key function of CHAI will be to inspect the provision on the availability of information about healthcare. Time and again in surveys consumers of healthcare mention their concern about access to information on local healthcare services. Throughout the passage of this Bill noble Lords and Members of another place have spoken about the Office of Fair Trading report on dentistry and the great difficulties people have knowing where to get information about local dental services. Guides to local NHS services were supposed to be distributed to every household last October and yet surveys show that people do not recall having received them. Information about the availability of healthcare is of fundamental importance. Therefore, we believe that it should come within the functions of CHAI.
In Amendment No. 275 I return to my favourite subject of ethical practice. We believe that it should be an explicit function of CHAI to have and to provide information about ethical practice within healthcare.
However, I wish to concentrate on Amendment No. 277 which governs the extent to which it will be possible for CHAI to provide information, or to
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inspect the extent to which information is made available about the continuing healthcare responsibilities of the NHS.
I hate to tackle the Minister as he did not have the joy of being the Minister during the passage of the delayed discharge Act but during that Act's passage we spent a very, very long time discussing this matter. We did so in the wake of the ombudsman's report which was highly critical of the Department of Health's guidance on information about the continuing healthcare duties of the Department of Health. Since that time all strategic health authorities are supposed to have instigated a review of the information made available by agencies, and particularly to analyse the extent to which it is compliant with the Coughlan judgment. There remains a great deal of uncertainty about the clarity of the information and, indeed, the clarity of the guidance which is available. We believe that that is a critical function for CHAI to inspect, involving, as it does, one of the biggest groups of users of services.
The Minister will know that an immense amount of work is being done on the implementation of the No Secrets guidance regarding good practice in the protection of vulnerable adults. In the light of that we believe that it is wrong not to mention vulnerable adults, people with learning disabilities and people with mental health problems on the face of the Bill. The amendments seek to correct that.
Baroness Howarth of Breckland: I wish to address Clause 47(2)(d). I wish to retain that provision in the Bill. I have had a long career working with the whole range of vulnerable groups, including many who are invisible when in hospital. I have been involved with an organisation which seeks to promote the recruitment of specialist nurses to help disabled people entering hospital as their needs are not always recognised.
I wish to have children firmly included on the face of the Bill because they are the most invisible group in a hospital setting. Children and young people become lost on general wards as there is still not a great deal of specialist provision for them. That does not mean that I do not believe that there are vast numbers of other people with rights. However, the fact that most of the users of hospital services are elderly people gives them a huge advantage in terms of the acknowledgement and attention that they receive whereas children become lost in such a setting.
Lord Warner: I shall quickly go through the amendments, most of which have slightly different purposes. Amendment No. 269 would have the perverse effect of removing CHAI's duty of encouraging improvement in the provision of healthcare by and for NHS bodies. Given that CHAI is being established to help drive out poor performance, improve further the quality of care and continue to raise the quality of healthcare standards, it could be argued that CHAI's duty to encourage improvement is clearly implicit. However, we believe that subsection (1) should remain as a clear signal to healthcare providers, patients and the public of CHAI's primary purpose.

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Amendment No. 277 would place a duty on CHAI to ensure that the NHS fully discharges its legal functions under the 1977 Act to provide continuing healthcare. The noble Baroness may have overlooked the fact that a duty of care was introduced by the Health Act 1999. A consequence of that duty is that NHS bodies are already under an obligation to put and keep in place arrangements to monitor and improve the quality of healthcare that they provide to all individuals. Thereby, statutory force is given to the introduction of clinical governance within the NHS. I understand the noble Baroness's concerns, but we do not think that Amendment No. 277 is necessary either.
Amendments Nos. 270 and 276 suggest in effect that CHAI should pay particular concern to the availability and quality of information for patients about healthcare. I am pretty sympathetic to those amendments, certainly more so than to some of the others, as I shall make clear. In reviewing the quality of healthcare, CHAI has the power to review the quality of information provided. We fully expect that to be the case.
I accept that there is something special about information in many respects, and I understand the arguments that the noble Baroness has consistently made about the importance of providing information to patients so that they can exercise choice and decisions. I am willing to take those two amendments away and consider the issues and the intention behind them further. We shall see whether we can do something to help in the run-up to Report.
Amendments Nos. 271,272,278,373 and 374 would place CHAI under a duty to have particular regard to the need to safeguard and promote the rights and welfare of older people and other vulnerable patient groups, as Members of the Committee have said. I do not in any way question the importance of the issues that the amendment raises. I obviously have sympathy with those concerned about the vulnerability of older people and certain other adults. However, I feel that we have to draw a line somewhere in listing those patient and service-user groups to which CHAI should pay particular attention. If we were to list each individual group in the Bill, that would begin to undermine the principle that CHAI should have regard to safeguarding and promoting the rights of all patients and service users, including the groups mentioned.
It is also very difficult to define precisely what we mean by vulnerable adults. Some adults may be vulnerable in some contexts but not others. The existing definitions of vulnerable adults in the Care Standards Act 2000 and regulations in the Police Act 1997 are intended to include people who may be vulnerable because of a situation in which they are placed. For example, one area of the definition relates to,
"an adult to whom personal care is provided in their own home under arrangements made by a domiciliary care agency".
That definition may cover many people with disabilities who do not want to be classified as vulnerable in other areas of their lives. We think that there is quite a problem with definition.
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I am grateful for the support given by (he noble Baroness, Lady Howarth, on the issue of separating children out as a special case. I would not have expected otherwise, given our joint backgrounds in the area. We have chosen to continue to ensure that the most vulnerable group in society—children, as identified in the Care Standards Act—is covered very specifically. Again, I have to emphasise that singling children out for such attention does not mean that other vulnerable groups will not have their rights and welfare well within the sights of CHAI.
I draw attention to the fact that CHAI has already made clear its intention to do that in its Vision statement in June of this year. That outlines its commitment to promote equal citizenship by ensuring that the well-being and healthcare of vulnerable groups are fully reflected in its assessments and that their rights are safeguarded. Those groups include older people; people with mental illness or learning disabilities; people from areas of social deprivation; or people for whom English is not a first language. In light of the reassurances that I have given, I hope that noble Lords are willing to think again about that issue.
Amendment No. 275 places a duty on CHAI to consider varying degrees of the application of "correct ethical practice". That is a matter for the General Medical Council. I am certain that if the Government had proposed such an amendment, it would have been deemed interference in medical self-regulation, which has a long tradition.
We realise that the system is not perfect and that bad individual cases come to light. However, if CHAI becomes aware of, or suspects, something amiss in the way in which healthcare professionals are behaving, it will be open to it to report that to the appropriate body. Clause 135(2)(g) explicitly provides for CHAI to disclose information to another body for the purpose of its statutory function of safeguarding patients. Those bodies would include the likes of the GMC. It will then be for the appropriate body to investigate further. Therefore, we do not believe that the amendment is appropriate.
6.45 p.m.
Baroness Barker: I thank the Minister for his reply on information, which is a neglected but important area of healthcare. Although he said that the fact that children are included in the Bill should not be read as an exclusion of other groups, it has already been interpreted in that way. As an employee of an organisation that works for poor, older people, I have no wish to see children or any other client group put at odds with one another.
If the Minister is to resist attempts to include definitions of groups, might he agree to reconsider our proposal at a previous sitting that the general duty of equality should rest not only with CHAI, but also with CSCI and NHS bodies? That may be a far neater and

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more elegant way of addressing our genuine fears about different levels of provision for the different groups named in the Bill.
Lord Warner: I am happy to look again at that issue, but I cannot make any promises. As someone who may be classified now as an older person, I certainly do not regard myself as vulnerable.
Baroness Noakes: I know that my noble friend Lord Peyton will read carefully in Hansard the Minister's reply to his Amendment No. 269. My noble friend has indicated to me that he is in earnest about his amendment. Without wishing to pre-empt my noble friend's views, I should warn the Minister that he will almost certainly want to return to the issue on Report.
On the issue of elderly people, children and other vulnerable groups, I was disappointed by the Minister's attitude. The noble Baroness, Lady Howarth, stood up for children as I expected that she would. Children may get lost, but elderly people get very badly treated. They are still a very large and special group. I still have a problem with specifying children, while not specifying other groups who are equally important.
It is not a question of whether or not the current CHI will take this matter into account. I have every confidence that the organisation emerging under Sir Ian Kennedy will be as conscientious as we hope it to be. The real issue is that of visibility over time. If something is not on the face of the Bill, there is an implication that the only important group is children, and I do not accept that. I want to reflect on the matter, and I am afraid that I have to put the Minister on notice that we may well want to return to it on Report. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 270 to 272 not moved.]
Earl Howe moved Amendment No. 273:
Page 17, line 28, at end insert "; and
( ) the clinically appropriate prioritisation of healthcare interventions"
The noble Earl said: Clause 47 is important because it defines what CHAI is being created to do and what its legal functions are to be. I have no difficulty with any of the functions listed in subsection (2). However, I do not believe that they cover the ground fully.
My amendment suggests that CHAI should also be concerned with the clinically appropriate prioritisation of healthcare interventions. At first sight, that may seem unnecessary. We know, and I am sure we all accept, that doctors have a duty to prioritise treatment for their patients on the basis of clinical need. However, over the past few years, we have seen a distortion of that process, brought about by politically inspired target-setting. There is no doubt at all that these centrally imposed targets, especially those relating to waiting times, have affected the scheduling of elective and non-emergency treatments.
It was instructive in July to hear Michael Barber, head of the Prime Minister's Delivery Unit, concede to the Select Committee on Public Administration in another place that poorly designed goals,
"can lead people to put effort into the wrong thing".
He also said that targets can work,
"to the detriment of all other activities".
That, I suspect, is as close as we are going to get to an apology from the top of government for inappropriate target-setting over the past few years. Yet some of the Government's key targets are still in place. As the BMA pointed out, a maximum waiting time for cancer diagnosis may well prompt excessive referrals. It is characteristic of many of these targets that they are about process rather than outcome.
Centrally imposed targets will not of course be binding on foundation trusts. However, the risk that clinical priorities will be distorted in a foundation trust will still be there—albeit emanating from a rather different quarter. Should it happen that the board of governors contains a powerful and influential element which insists on certain resource allocations that advantage a particular group of patients at the expense of others who are in more urgent need, that should be a matter of concern.
CHAI needs to be alive to the risk of such events and alive to when they happen because they directly affect the care of patients. The proper prioritisation of healthcare is quite distinct from the availability of it and quite distinct again from its quality or effectiveness. I suggest that if CHAI does not include clinical prioritisation as a formal part of its remit, it will not be doing its best by those who use the health service. I beg to move.
Lord Warner: We have some difficulty with the amendment. Reading it at face value, it would seem to require CHAI to look at whether doctors made the right decisions in their approach to, and treatment of, patients. That is, of course, a matter for the General Medical Council and other professional bodies. It rather looks as though the amendment sets up CHAI to second-guess clinical decision-making and, indeed—it could be interpreted as such—to second-guess NICE, which does much work in setting out whether certain interventions and drugs are the most appropriate way to treat particular conditions.
We have some difficulty in trying to interpret the amendment. From what the noble Earl said, I was not sure that he had reassured me on those particular concerns. We do not think that there is any question of CHAI being unable to comment on either national standards or, indeed, the way things are working out in practice in the health service. The provisions in the Bill are framed so as to set up CHAI to carry out a proper monitoring role and report on what it sees happening in an independent way at the NHS front line.
I suggest that any concerns the noble Earl has are covered within the framework we set up for CHAI. If the inspectorate thought that there was a distortion of suitable clinical priorities on a widespread basis—I do

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not believe that to be true—it would be possible for CHAI to say so. Areas such as national service frameworks and how they are working are well within the remit of CHAI. There is nothing to stop CHAI— indeed, that is its purpose—finding out how such things work in practice, reporting on them and telling the story as it sees it. Indeed, that is why it is being set up.
I believe that the concerns of the noble Earl may be a little wide of the mark. Certainly, for the reasons I have sought to outline, we do not think that the amendment is appropriate.
Earl Howe: If it is the case that my amendment is unnecessary, as the Minister's latter remarks seem to suggest, I am pleased. However, I think he was being a touch disingenuous. I would not have expected him to acknowledge forthrightly that there are certain political targets that have been imposed on the NHS that have had a distorting effect on clinical prioritisation, but that is my firm belief.
We are not talking of doctors underperforming but of managerial override of what doctors want to do. Managerial override is not an issue for the GMC. Most certainly, I would have thought, it is an issue for CHAI. I will read carefully what the Minister said. I hope that the Bill does contain scope for CHAI to highlight such events, should they occur. I have no regrets about raising the topic under this amendment. I shall again consider the matter. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 274 to 278 A not moved.]
Clause 47 agreed to.
Clause 48 [Nationalperformance data]:
Baroness Barkermoved Amendment No. 279:
Page 17, line 30, leave out "has the function of publishing" and insert "must publish"
The noble Baroness said: I was heartened earlier on by the Minister's response to our amendments concerning the role of CHAI and information. Amendment No. 279 goes one step further and deals with CHAI's role in relation to data on clinical performance.
The amendment seeks to remove the rather ambiguous and perhaps inelegant phrasing which exists in this clause; that is,
"has the function of publishing",
and states that CHAI must publish data. It is important to state that for two reasons. First, it must be the organisation's basic raison d'etre to do that; to gather such information and to make it publicly available. Secondly, it is important to make sure that this independent body—and I do not propose at this hour to rehearse earlier arguments today about its independence—is the authoritative body which will publish data about healthcare performance, even, I would suggest, when that is inconvenient to Ministers or embarrassing to the Government. I do not think that there can be a greater test of the independence of
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a public body. I am sure, given the Minister's earlier reassurances this afternoon about its independence, that that should be no problem.
I am not being flippant. One of the many things taught us by the Bristol review was the difficulty of gaining data in the first place and the importance of that data being in the public domain. That has led to improvements in services and trust and public confidence. This is an absolutely essential part of the building of that trust. I therefore hope that the Minister will give a favourable response to the amendment. I beg to move.
7 p.m.
Baroness Howarth of Breckland: I noticed earlier in the afternoon that the noble Lord, Lord Warner, spoke of putting the Government's views in the public arena. I hope that means directly to Parliament. I have two experiences. One is with the Food Standards Agency, which reports directly and is able to make its views known to the public. The other is with the National Care Standards Commission, which makes its views known to the Minister who decides whether the Government will make them known to the public. There is a real difference.
Lord Warner: Clause 48 gives CHAI the function of publishing data in relation to the national performance of healthcare provided by and for NHS bodies. It will be for CHAI to determine what this may entail and how it goes about it.
It may help the Committee if I explain that where a public body is to be given some broad task, it is usual in legislation to confer a "function" on it, rather than to impose a duty, as this amendment proposes. The exception is where it is desired to oblige the body to do a specific task; for example, the duty in Clause 49 to publish an annual review.
The Bill, therefore, gives CHAI a raft of functions including the function of publishing data relating to the provision of healthcare by and for NHS bodies under Clause 48. We would naturally expect CHA] to exercise all of its functions. However, we are trying to leave it to decide how to perform those functions. We have attempted not to be over-restrictive about what that should cover.
I feel that the amendment would tie CHAI's hands, burdening it with a requirement to publish data on all performance rather than in areas which it, as a body, finds would be most beneficial. That would obviously require a great deal of resource, which would need to be diverted from other resources if we moved to this kind of obligation proposed in the amendment.
I do not think that there is anything sinister in giving CHAI a degree of discretion about what it publishes. Some would say that that will enable it to target the material it puts in the public arena in a more effective way in order to highlight major concerns, rather than just becoming a machine, so to speak, to disgorge a

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large amount of data and performance information without producing the synthesis and analysis which shows those major areas of concern.
Baroness Barker: I thank the Minister for that reply, which I must say is somewhat disappointing. He overstates what we are attempting to do; we are not attempting to tie the hands of the regulator. The amendment does not state how the regulator should discharge that function, simply that it should do so. That seems to me in no way as prescriptive as the Minister made out.
This is of fundamental importance. That body will be independent and with the information and resources that will for many people determine, not least, the exercise of their choice, which is one of the Government's stated fundamental aims in the Bill. There are other reasons as well.
I am always heartened when the noble Baroness, Lady Howarth of Breckland, supports anything that I say. She was dead right about the reporting differences between the Food Standards Agency and the National Care Standards Commission; that was a most helpful intervention. I am pretty disappointed with the Minister's response, and this is yet another matter to which we will return on Report: it is far too important to let it run by. With that, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Noakes moved Amendment No. 280:
Page 17, line 31, at end insert "including the publication of data for the purpose of monitoring the performance of the Department of Health against its Public Service Agreements"
The noble Baroness said: The amendment is intended to ensure that CHAI will publish data that are relevant to the appraisal of whether the Department of Health has met its public service agreements (PSAs). The Committee will recall that PSAs are, to use the words of the Chancellor of the Exchequer in 1998,
"essentially a contract for the renewal of public services".
The theory was that departments must deliver their PSA targets if they are to receive money from the Chancellor to modernise public services. In practice, we know that the Chancellor has been pouring money into health without any regard for PSA targets.
The Department of Health's PSA targets cover a large number of areas and the department's annual report contains a self-appraisal on how well it has done. In practice, the department has often modified the targets or put a gloss on their achievement. Let me take just one example.
Target No. 14 of the 1998 PSA required value for money to improve by at least 3 per cent per annum. The department's annual report stated that it had met the 1998 target because it had met other non-efficiency targets. The truth is that the department had missed the target by a mile. On my calculation, based on data underpinning the department's latest annual report,
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the NHS had negative efficiency—that is, a loss of efficiency; not a gain—of 8 per cent between 1998 and 2001.
There is more to value for money than activity-related productivity, but no objective data have been produced to explain how a value for money gain of 3 per cent per annum was achieved despite an activity-related efficiency loss of about 2.5 per cent per annum. We can have no more confidence about the current target of a mere 2 per cent per annum value-for-money gain.
Because there is no policeman auditing or inspecting the department's achievements—or lack of them— those issues do not surface. Doubtless the Chancellor will conspire to spin PSAs as successful because the Government cannot bear to admit that their policies are failing, as they surely are.
Our amendment would ensure that CHAI will publish data relating to PSA targets, so that a degree of independent judgment would be brought to bear on the Government's achievements against their targets. I beg to move.
Lord Warner: The amendment is totally misplaced. It would be inappropriate for CHAI to review the Secretary of State against his public service agreements, as he is accountable to Parliament; so it is for Parliament to question him about his actions in implementing those agreements. If there is disagreement about how the Secretary of State has behaved over public service agreements, it is for Parliament to call him to account; it is not for CHAI to monitor the performance of public service agreements. It is always open to CHAI, should it so wish, to give advice to the Secretary of State, under Clause 53, concerning the relationship between the implementation of the agreements and the provision of healthcare by NHS bodies.
Strategic health authorities also have a key role in performance-managing aspects, such as the reduction of health inequalities, which are part of public service agreements. CHAI will also have a role in reviewing the performance of PCTs and acute trusts in tackling health inequalities. In several areas, specific parts of public service agreements will fall into the territory that CHAI will cover. But CHAI should not have an overarching duty to monitor the Secretary of State's performance against his public service agreements.
Baroness Noakes: Well, what a surprise! The Department of Health does not want to have its performance scrutinised. The amendment refers to CHAI publishing data relevant to the appraisal of whether the Department of Health had met its public service agreements. It is not about CHAI calling the Secretary of State to account; nor is it about giving an inappropriate role to a public body. Under the amendment, CHAI would have access of a very particular and privileged nature to the data that would enable judgments to be made.
The Minister talked about strategic health authorities having a role in the delivery of some of the targets related to health equality. That is absolutely

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fine. CHAI would be the best placed body to have access to the data held within the strategic health authorities on the achievement of their targets. It would be best placed to say whether the data were good or bad.
The Minister cannot realistically argue that the Department of Health and the Secretary of State for Health can continue to escape with choosing the terms by which their own performance will be judged. It is a very serious issue. I shall not press the amendment now, but 1 give notice that I shall return to it on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 280A not moved.]
Clause 48 agreed to.
Clause 49 [Annual reviews]:
Baroness Noakes moved Amendment No. 281:
Page 17, line 35, after "English" insert "and Welsh"
The noble Baroness said: In moving Amendment No. 281, I shall speak to the other amendments in this group. It is a long group of amendments, and I am afraid that I shall take several minutes of the Committee's time to cover various aspects of the position in Wales and related cross-border issues. We have touched on some of them, but the amendments address slightly different aspects of the Welsh issue.
The amendments fall into two main groups. Amendments Nos. 281 to 306 together would ensure that CHAI is the inspection body for both England and Wales. Proposals in the Bill to limit CHAI to England are unacceptable, because in Wales reviews and inspections are to be carried out by the Assembly; that is, politicians in Wales. It is not only wrong in principle for the review and investigation functions in Wales to be carried out by a politically controlled organisation, it is also inefficient. How can Wales, with its much smaller health budget, begin to amass the competence and expertise that will be grown in CHAI? Why do the Government want to expose the Welsh healthcare system to a system of inspection that, by definition, will struggle compared with CHAI?
When this matter was debated in Committee in another place, the Minister failed to produce any example of Welsh diseases being different from those in England or how the provision of healthcare in each country would be different. He certainly failed to produce an example of how patient care would in any way be enhanced by separate inspection arrangements. Devolution was not meant to mean substandard.
The noble Baroness, Lady Finlay, who is unfortunately not in her place, referred to different incidences of disease, but that is a different matter from different diseases and different patient care solutions. The noble Baroness, Lady Andrews, tried to convince us that Wales was different when she spoke to the earlier group of amendments, but I was not convinced that they were not distinctions without a difference.
Amendment No. 302ZA is a probing amendment to try to discover what CHAI's responsibilities are for healthcare in Wales. Clause 53 gives CHAI a number
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of functions of keeping both the Secretary of State and the Assembly informed about healthcare. However, as we have seen, the Bill is at pains to ensure that CHAI has very little remit in Wales. Our amendment makes it clear that CHAI should report only on things, that it has looked at in Wales. Without something like this, it is difficult to see how CHAI could be expected to comply with Clause 53.
The second group of amendments—Amendments Nos. 326 to 331 and Amendment No. 334—concern the interface between the Assembly and English NHS bodies. The amendments are predicated on the Government sticking to the Assembly keeping inspection functions and the focus of the amendments is alternative ways of keeping the Assembly out of the NHS in England. Amendment No. 326 is the most modest of the group. It amends Clause 68( I) so that the Assembly's function of reviews will be carried out,
"where appropriate in conjunction with the CHAI".
Amendment No. 331 is similar and states that the Assembly may request CHAI to carry out a report on an English body.
Amendment No. 327 goes further and makes it a positive duty of the Assembly to request CHAI to do work that relates to English bodies. Amendment No. 330 restricts the Assembly's inspection rights to Welsh bodies only, coupled with Amendment No. 334, which removes the rights of the Assembly to enter premises outside Wales.
We incline towards Amendment No. 327, because we believe that hospitals should be subject to inspection that is free from politics. That has to mean CHAI rather than the Assembly, which is no more than a bunch of politicians. It would be a retrograde step to let politicians directly into the English NHS, even if devolution has given them a free hand in Wales.
The English hospitals that the Assembly might choose to review are already subject to review by CHAI. Indeed, CHAI would have the major inspection interest because of the dominance of English patients in English hospitals. Unless we do something positive in this Bill, English hospitals could become the subject of two inspections directed at the same issue. There is a duty to co-operate in Clause 141, which is better than nothing, but it does not take the Assembly clearly out of English hospitals.
I will now touch briefly on Amendments Nos. 328 and 329 which concern how the Assembly should conduct its functions when there are English interests at stake. Amendment No. 328 requires the Assembly to take into account the impact of its decisions on healthcare in areas of England that border Wales. Let us suppose that the Assembly decided to review coronary care provision with the needs of only Welsh patients in mind. Its decisions could have a big impact on English hospitals and English patients and so it needs to consider cross-border implications in its reviews.
Amendment No. 329 makes it clear that, if the Assembly is reviewing an English body, it must judge it against the standards set by the Secretary of State under Clause 45 and not the standards set for Welsh

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bodies under Clause 46—my noble friend has already referred to that issue. It cannot be right that English hospitals must follow both Welsh and English standards if they are different. That is burdensome for doctors and nurses who would have to inquire as to whether their patients were funded by England or Wales, which is simply nonsense. That is not the way that healthcare should develop. Much of what I have said applies also to the Assembly, CSCI and English local authorities. Amendments Nos. 361 and 399 repeat some of the CHAI amendments for CSCI. The principles are the same. I beg to move.
Baroness Andrews: This is a reprise of our earlier debate, although I take the noble Baroness's point that she has raised some different issues.
I shall take two points that the noble Baroness made right at the beginning. She deplored what she saw flowing from the function of the Assembly as the inspectorate in Wales. She said that it was a case of politicians doing the job of inspectors. I stress the independence of Health Inspectorate Wales, which is to be put in place under the Government of Wales Act 1998.I shall not rehearse the arguments for a devolved Welsh health policy; we have gone over it a lot today.
The new health inspectorate in Wales will enjoy exactly the same independence as other inspectorates established by the Assembly. In Wales, we already have a fine schools inspectorate, Estyn, which is completely free of the Assembly, and there has never been any criticism of its independence. The new inspectorate will be in that tradition. Likewise, the Social Services Inspectorate for Wales and the Care Standards Inspectorate for Wales have already proved their independence.
The independence of HIW will be clearly defined in the same way. The head will be appointed through existing senior Civil Service appointment procedures. There will be complete editorial control and the right to publish. The reports will be submitted to the Assembly's Minister for Health and Social Services and commissioned by the Assembly. There will be accountability to a senior Assembly director. There will be rights of independent access, an independent complaints procedure and so on. I hope that the noble Baroness is convinced by that, as the Assembly is convinced, and by the fact that the other inspectorates work extremely well in Wales and perform their functions independently.
The noble Baroness's second group of amendments contains some contradictory alternatives to the measures in the Bill. As noble Lords have not given notice of an intention to oppose the Question that Clause 68 stand part, I assume that the amendments were exploratory. They go from one extreme to the other: at one extreme, the amendments extend CHAI's review and investigation function to Wales and, in so doing, duplicate the power in Clause 68 for the Assembly to review services commissioned for the people of Wales under the standards set by the Assembly. We have had that debate, and we have explained why it is important.
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The remaining amendments put a fence around Wales, leaving the Assembly to review services in Wales but requiring it to ask CHAI to fulfil the Assembly's review functions in respect of English providers of services to Welsh patients. At their most permissive, they simply allow the Assembly to invite CHAI to exercise its functions in England.
We have dealt with the more prescriptive approach. I have made the case for Health Inspectorate Wales. I hope that I have shown that it will be independent— necessarily so, as it will be locally based and sensitive to the different organisational structures and healthcare needs in Wales. The noble Baroness, Lady Finlay of Llandaff, gave us what I am sure we all agree was an astounding set of examples of why Welsh healthcare was different. The concentrations of disease are different; the morbidity patterns are different; the mortality patterns are different; and the rates of occupational disease are different. Wales needs its own sensitive organisation to deal with that.
I reassure the Committee that we are not saying that the independent inspectorate will be introspective or isolationist in its reporting. It will co-operate with other bodies operating in Wales, including CHAI and the social services inspectorate. I have already referred to Clause 141, which imposes the duty of co-operation. It is more than a start. It will be a duty that will be implemented and observed and it is a very important safeguard.
In relation to other issues raised—including cross-border issues—the Assembly has overall responsibility to ensure that appropriate healthcare is provided. A great deal of that is done under commissioning arrangements. The Assembly therefore needs the powers, as well as the functions, to review healthcare. Clause 68 gives the Assembly those powers. They are identical to those provided elsewhere in the Bill for CHAI, which will carry out reviews and so forth.
The problem with Amendment No. 334 is that it would make the exercise of the power impossible. It would deny the Assembly's health inspectorate access to premises in England. Let me be clear: Clause 68 is not a carte blanche. It does not mean that HIW will wander at will across the English countryside inspecting wherever it chooses. It is a closely constrained power to review or investigate where services are commissioned.
The border arrangements are based on years of experience. I shall not bore the Committee with the tale of my tonsillectomy when I was four years old. However, I can assure Members of the Committee that it was a very fine example of cross-border commissioning at the time, which can have only improved since then.
It is also important to bear in mind that HIW and CHAI will not arrive at the same hospital to do the same inspection in the same way. Obviously, they will work out who has done an inspection, whether an inspection is required in the near future, and who will carry out it out. There will be the dialogue that presently exists to ensure that those arrangements are sensible. The importance of co-operation is already

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recognised in the Bill. Clause 121 allows CHAI and CSCI to assist the Assembly in the conduct of their general functions. On the basis of those explanations, I hope we can agree that the amendments are unnecessary.
Amendment No. 302ZA is neither needed nor desirable. It would limit CHAI's ability to inform the Secretary of State or the Assembly about the provision of healthcare in Wales, except for national matters which it has reviewed or investigated itself. I cannot believe that this is in the interests of the NHS or patients because CHAI will have a focus on disseminating information. It will also be under a duty to co-operate and it must be able to access information that is necessary to undertake its functions. If it were denied opportunities to access relevant materials, it would impair and reduce its own function. Therefore, we know that there will be co-operation and sharing of information, not just with HIW, but with other bodies. It will be two-way traffic. CHAI will be in a position to add value to reviews—both those that it conducts and those conducted by HIW. It will not work in a vacuum, nor should the other bodies.
The reason that the Bill places duties on CHAI and others to co-operate is to ensure that the best information is available as widely as possible. As the noble Baroness rightly says, much of the work of CHAI and HIW will be of interest and value on both sides of the Welsh border. It would be wrong to constrain either body in the manner proposed in the amendment. With that explanation, I hope that the noble Baroness will withdraw her amendment.
Baroness Noakes: As ever, I thank the noble Baroness for that comprehensive reply. This is a complex group of amendments. I shall read her necessarily complex reply in Hansard before deciding how to move forward. The noble Baroness spoke a great deal about the health inspection unit of Wales. However, the Act states that the Assembly should have those functions. That is what is so offensive in relation to access to English hospitals. The Act states that it should be the Assembly. If the Act said something else, it would be a great deal less offensive. Having politicians coming into the English NHS is simply not right. If Wales wants to do it under devolution, so be it. But that should not happen in England.
I also raised the point about efficiency. It is not efficient to have a second unit. I carefully read the regulatory impact assessment which stated that in respect of Wales having a separate inspection unit there had been no assessment of set-up costs or running costs. It stated that,
"it is considered that the overall costs will represent value for money".
My response to that is: I ask you. That simply is not a credible statement. It really is not. I believe that the way in which this has been structured may well result in second-rate inspection for Wales.
Much has been made of the differences in regard to Wales, but, although I have great respect for what the noble Baroness—and the noble Baroness, Lady
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Finlay—said, the issues she raised tell us no more than that there are regional differences around the United Kingdom. I could cite just as many differences in rates of morbidity and so forth as the noble Baroness did for other areas of the country. CHAI will handle regional variations standing on its head.
I wish to make a final comment. One of my honourable friends in another place recently visited the Countess of Chester Hospital. I am sure that the noble Baroness is aware that that hospital is one of those affected to a very significant extent by cross-border issues. The person he met expressed absolute horror at the thought of inspections being carried out by both CHAI and the new healthcare inspection unit for Wales. This is a very serious issue for those trying to deliver healthcare in today's complex environment.
The hour is late and this is not the time to pursue the matter to the bitter end, but I can say to the noble Baroness that we shall return to this issue on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Warner: I beg to move that the House do now resume.
Moved accordingly, and, on Question. Motion agreed to.
House resumed.

Prostitution
7.31 p.m.
Lord Faulkner of Worcesterrose to ask Her Majesty's Government how they plan to respond to Recommendation 53 in their consultation document of July 2000 Setting the Boundaries—Reforming the Law on Sexual Offences that, "There should be a further review of the law on prostitution".
The noble Lord said: My Lords, perhaps I may start by saying how grateful I am to other noble Lords who have indicated their wish to speak in this debate.
My purpose in asking the Question on the Order Paper is to attempt to take forward the debate which we had earlier this year on Clause 56 of the Sexual Offences Bill. The noble Lord, Lord Lucas, and I moved amendments which sought to separate the issues of child abuse and sex trafficking from consensual adult prostitution, and we were supported by the noble Baroness, Lady Walmsley. I am delighted to see that both noble Lords are in their places and taking part in the debate.
We all drew attention to the way that recent changes in the law have done nothing to improve the safety of women working in the sex industry. An earlier example was the prohibition of carding—placing cards advertising sexual services in phone boxes—in Sections 46 and 47 of the Criminal Justice and Police Act 2001. That made it harder for women working in the relative safety of their own flats to advertise for clients, with the consequence that many were tempted to resume soliciting on the streets, where the risk of serious assault is many times greater.

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Research carried out by the Economic and Social Research Council among indoor and street-working prostitutes in three British cities found that women working on Glasgow's streets were six times more likely to be violently attacked by clients than those working indoors in Edinburgh, and four times more likely than indoor workers in Leeds. The consequence of recent legislative changes has been that we now have some of the most punitive laws on prostitution anywhere in the world, in particular given the increasing number of anti-social behaviour orders being directed at women working in the sex industry. At the same time, we are doing little to address the vulnerability of sex workers or to tackle the influence of pimps on those women.
Much of this was recognised by the Setting the Boundaries report team, which set as its aim the creation of a safe, just and tolerant society. But prostitution was not included in its terms of reference and it did not have access to all the latest research from different countries around the world. However, Setting the Boundaries does contain the important recommendation, and repeated in my Question, that there should be,
"a further review of the law".
My noble and learned friend Lord Falconer of Thoroton, speaking on 13th May in Committee on the Sexual Offences Bill, said that the Government,
"would look to see what the scope of an appropriate review should be in all the issues surrounding prostitution".—[Official Report, 13/5/03; col. 187.]
He indicated that on Report he hoped to say precisely what the scope of the review should be. Unfortunately, on Report, my noble and learned friend said:
"there remains much groundwork to be done before we will be in a position to announce the timing of such a debate".—[Official Report, 9/6/03; col. 61.]
When it comes, the review must contain a detailed examination of how other countries have changed their laws on prostitution over the past decade. In Denmark, for example, Danish-born sex workers can operate legally indoors but are not allowed to pay third parties such as pimps. Germany has designated areas where the women can work. Brothels were legalised in Holland in 2000. There, women pay their taxes, take out health insurance and receive social welfare benefits. Brothels are seen in Holland as professional businesses, which can be inspected at any time, like other businesses, to make sure that they comply with labour laws. The premises have strict rules about hygiene and condom use. Any form of forced prostitution, pimping or trafficking is illegal.
Earlier this year, New Zealand passed the Prostitution Reform Bill. The philosophy behind it— which might, I suspect, be shared by many of your Lordships—is that prostitution is neither condoned nor condemned. It is acknowledged that prostitution can be harmful to sex workers and that that harm should be addressed by legislative means. The Bill had the stated aims of safeguarding the human rights of sex workers; protecting sex workers from exploitation; promoting the welfare and occupational safety and
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health of sex workers; creating an environment that is conducive to public health; and protecting children from exploitation in relation to prostitution. The New Zealand Parliament believes that criminalisation is not the way to achieve these aims and that it is better to focus on decriminalisation, improving standards and protection.
Decriminalisation is also the approach adopted by the state parliament in New South Wales, Australia. Since 1995, prostitutes are permitted to work away from the streets in well-run brothels which operate without interference from the police. There are offences relating to coercion and advertising premises for prostitution, and soliciting in a street near to a school, dwelling, church or hospital is prohibited.
Its neighbouring state, Victoria, has gone in a different direction. There it has adopted a licensing and planning permit approach, and only persons who obtain a licence from the Business Licensing Authority can lawfully offer a prostitution service. The BLA also, in a very matter of fact way, licenses motor-car traders, estate agents, credit providers, introduction agents, pawnbrokers and travel agents—an interesting combination of trades and professions. Street soliciting was made illegal in Victoria for both clients and prostitutes. There are strict rules on what is allowed in the licensed premises. The manager or licensee has to be present at all times; no alcohol, no drugs and no one under the age of 18 are permitted.
I was recently in Melbourne on a Commonwealth Parliamentary Association delegation to Australia and was able to meet senior officials of the Business Licensing Authority and to see one of these operations at first hand. I was chaperoned by one of the BLA officials and by a senior Conservative Member of another place who was a fellow CPA delegate. We visited one of the leading brothels in the city of Melbourne. The other one, of a comparable size, is so successful that it has a Stock Exchange listing.
It was a pretty cheerless establishment, with dingy furniture and threadbare carpets. But it was clean and the rules on drugs and alcohol were strictly observed, as were the requirements for showers, clean towels, panic buttons and the provision of condoms.
On speaking to some of the sex workers, they appeared quite articulate. One had worked on the streets around Leicester Square in London, which she said had been a terrifying experience, particularly compared with the relative security of a licensed premises in Melbourne. I was told by a number of people that the principles underlying the legislation had included a determination to keep out organised crime, and in pursuit of this no licensee can operate more than one business. People with convictions for dishonesty or violence are not granted licences—they are given only to persons of good repute.
Critics of the Victoria regime argue that it is bureaucratic, as the costs of administering it exceed revenue from licence fees two to three times over. It is also admitted that there are still large numbers of unauthorised premises—at least as many again, and perhaps more.

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The administrators also admit that they are not doing enough to encourage sex workers to leave the industry. This last criticism has been taken up by representatives of the Christian Churches in New Zealand. A highly respected opponent of the new New Zealand law is Bishop Richard Randerson, Dean of Holy Trinity Cathedral in Auckland. He urged his Government to work with the Church and other social service agencies to address the economic factors driving many into prostitution and do more to help people leave the sex industry through programmes on health, housing, education, employment and drug detoxification.
Bishop Randerson and his fellow Church leaders prefer the approach adopted by the Swedish Government, which is one country I have not yet mentioned. Sweden has unambiguously adopted a pro-feminist position, arguing that prostitution is a form of male social violence, with women sex workers as its victims. In 1999, the law in Sweden was changed, criminalising the clients of prostitutes. Purchasing sexual services carries a penalty of a fine or up to six months' imprisonment. It relates to all forms of prostitution, whether purchased in the street, in brothels or in massage parlours. No criminal sanctions apply to sex workers.
There are mixed accounts of what the new law in Sweden has achieved. On the one hand, it is claimed that it has drastically reduced the number of prostitutes on the streets of the major cities. But the prostitute women groups say that it has made things less safe for them, and there are anecdotes that large numbers of men now travel over the border to Norway to buy sex.
Other countries—more enlightened than ourselves—are tackling prostitution quite differently from us, as this brief account describes. While they differ markedly in their practical application, they are consistent in one respect—they take seriously the rights of women who take part in the sex industry and seek, by a variety of means, to make life safer for them and to improve their health and well-being and, in many cases, actively encourage them to leave the industry.
With the greatest respect to my noble friend and her colleagues in the Government, very little of the legislation we have passed here over the past three decades comes anywhere near doing what other countries are attempting. That is why we need the review, and we need it now.
7.42 p.m.
Lord Brooke of Sutton Mandeville: My Lords, I pay tribute to the noble Lord, Lord Faulkner of Worcester, for securing this debate and for introducing this important topic as he did. Although I was not present during the earlier debate to which he alluded, I am, however, very familiar with the carding issue he referred to then.
The noble Lord said to me, prior to the debate, that it would be good to hear a former Member of Parliament for Soho on this subject. I am not at all sure
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about that, but it is by generalising from my narrow experience as an inner London MP that I want to contribute to the debate, and on the equally narrow point that others are affected by prostitution than simply the prostitute and her, or his, client.
Although the understandable shorthand of your Lordships' House abbreviated this Unstarred Question to the single word "Prostitution", the actual and full words of the Question on the Notices and Orders of the Day, as the noble Lord, Lord Faulkner, said, ask the Government about their response to Recommendation 53 in the consultation document of July 2000, namely that there should be a further review of the law on prostitution. Those were the final words of Chapter 7 of Setting the Boundaries, the chapter devoted to trafficking and sexual exploitation. The opening paragraph of the chapter included the sentence:
"It is important to emphasise that we are not looking at how or whether prostitution should be legal or illegal: that is beyond our remit".
The Question of the noble Lord, Lord Faulkner, implies that the Government's plan on how to respond to Recommendation 53 is still awaited. It may be that we shall receive the answer tonight, when the noble Baroness the Minister winds up, although, looking at her face, I suspect we may not. Until the Government respond, noble Lords are entitled to adduce issues for consideration. Mine come under the penultimate sentence of paragraph 7.8.1 in the same relevant Chapter 7, which states:
"Communities are very concerned about overt prostitution in their midst, and about the linkage between sex markets and other forms of criminality, including drugs".
On three occasions during my 24 years as Member of Parliament for the Cities of London and Westminster, the concerns identified in the sentence that I have quoted became so acute in three different parts of south Westminster that I was obliged to seek the time and attention of three Home Office Ministers—two Home Secretaries and one Minister of State. Two of them are, sadly, now dead, but the noble Lord, Lord Rees, the earliest of them, is still, happily, very much with us. All three Ministers were responsive.
The British, and inner Londoners in particular, are live and let live people. However, on all three occasions—in Mayfair, Soho and St Marylebone—the chafing irritation and environmental disturbance had become locally so intolerable, not only to residents but, in at least two cases out of three, to the butcher, the baker and the candlestick maker as well, that they came to me about it.
There has always been a tradition of areas of critical mass in London in terms of prostitution. In what I say next, I eschew any personal reputation for erudition, but I pay tribute to Stephen Inwood's A History of London, whose 936 pages I reviewed some five years ago. The Westminster tradition of prostitution is an old one. A 13th century traveller listed the whores of Charing—now Charing Cross—among the sights of London alongside the relics of Westminster and the churchyard of St Paul's. I fear some of their custom

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came from the entourages of the Royal Palace and of Westminster Abbey, but from the 12th to the 17th century, the south bank of the river was notorious for being the heart of the trade.
Seven Bankside "stewmongers" paid the poll tax in 1381, and were all making a good living. The Southwark "stews", or more recognisably brothels, were regulated by ordinances issued in the 15th century by the then Bishop of Winchester, controlling rents and opening days, banning enticement and the sale of food and drink, forbidding the employment of diseased, married or unwilling women, and insisting that a prostitute who took money from a customer should, "ly still with him" all night.
Henry VIII brought this early experiment in state-regulated prostitution to an abrupt end by ordering the closure of the Southwark stews in 1546, but the prostitutes simply reappeared in Shoreditch, in St Katharine's by the Tower or in Holborn. The City itself had—and I think still has—four Love Lanes, three Maiden Lanes and a final lane, now renamed, whose original name I cannot repeat in your Lordships' House, where I regard Hansard as the equivalent of a family newspaper. The prostitutes also congregated in Smithfield but they returned to Southwark, then under the City's jurisdiction, before finally transferring to Covent Garden in the 17th century.
Thereafter Mrs Goadby of Berwick Street in Soho, Mother Needham of St James's and Molly King and Mother Douglas of Covent Garden were familiar figures in contemporary novels and prints and, at the turn of the 18th century, sex tourists in London could even buy a guidebook entitled Harris's Book of Covent Garden Ladies. When the gates of St James's Park were locked at night, the grounds were patrolled by prostitutes and, as we learn from Boswell, by their customers.
Even in the 19th century the very comprehensive Metropolitan Police Act of 1839 did not give the police a right to enter what by 1850 had become the 3,000 brothels of the metropolis. Prostitutes were still openly present in theatres to attract custom, as they had been when the 16th century theatres were still on the south bank. The effect in the 19th century was to drive respectable and fashionable families from drama to the opera. Prostitutes still lined the streets in St James's, Covent Garden, Marylebone and Whitechapel, and the 30 or so arrests on a typical night were mainly for being drunk or disorderly. The Home Secretary in 1857 annotated a letter with the sentence:
"An attempt to suppress these things by legislation would be quite absurd".
The past century is more familiar to all of us so I shall not extend this backdrop save to say that from the 1930s the Messinas of Soho, an Italian family, imported Belgian, French, Italian and Spanish girls, installing them in flats in the West End in the same way that the Albanians are now said to preside over most of an empire in Soho alone whose takings were—so the source document for this debate says—£1 million a
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month in the year 2000, while profit from the London area as a whole ranged between a quarter of a billion pounds and half a billion pounds.
I have gone into this history at some length to make the point that such concentrations of activity are bound to impinge on the neighbourhoods in which they are situated. Of the three cases I brought before Home Office Ministers, the first and third, in Mayfair and Marylebone, were resolved by putting in considerable police manpower—and, in the case of Mayfair, womanpower as 24 women police constables were deployed for months in a very confined area. But the consequence, of course, was that the prostitutes simply decamped either to King's Cross or to Tooting or elsewhither, and that has separate consequences for those unintended destination communities.
The case in Soho was rather different. There, by 1980, there were 164 distinct sex establishments established within the bounds of Soho, and no sign that they would not flood outside Soho into adjacent neighbourhoods. They were not, of course, all practising prostitution but the effect of environmental pollution on the butcher, the baker and the candlestick maker, and their residential customers, was the same.
I put the problem to the late and still lamented Lord Whitelaw, as he then was not. I have to say that his officials were not keen that he should respond, but he took me at my word about critical mass, and the licensing of sex establishments legislation was the result, leaving to local authorities the right to determine the number of licences. The effect on Soho residents and on decent traders was benign in the extreme and Soho owes its multi-faceted prosperity and, indeed, attractions over the past two decades to it.
What, therefore, this speech amounts to is a plea to the Government that, if they are minded to review the laws on prostitution, they should bear these considerations in mind. When we debated the Licensing Bill the Government were patently surprised by some of the evidence of conditions on the ground in inner cities—Manchester, for instance, as well as London—adduced by the Opposition Benches; evidence which in turn was likely to militate against the Deputy Prime Minister's plans for urban regeneration.
I say a final word about the contemporary scene. The Albanians who have taken over from the Italians are accustomed to settle matters with a knife. The Jamaicans who have brought crack cocaine into Soho in the manner described in the sentence I quoted earlier, do so with a gun. Either of these is unattractive in the heart of London's leisure industry and tourist district. The lesson is to see whether by legislation we can secure dispersal of the sex industry instead of concentration. Lest I seem preoccupied by the involuntary spectators and their experience, let me close by saying that I feel profound sympathy for the eastern European girls whom the Albanians bring here, who I suspect would have fallen foul of at least one, but probably rather more, of the Bishop of Winchester's 15th century rules in the Southwark stews.
7.53 p.m.
Lord Carey of Clifton: My Lords, I am grateful for the opportunity to offer some brief thoughts on this debate. I am particularly grateful to the noble Lord, Lord Faulkner, for his determination to get a thorough appraisal of laws relating to prostitution. As I am sure is the case with other noble Lords, I am also grateful to the noble Lord, Lord Brooke of Sutton Mandeville, for his historical survey. If I understood the noble Lord correctly, it appears that the Bishop of Winchester to whom he referred had a lot to answer for.
No doubt when a former Archbishop of Canterbury stands up to speak about prostitution it is assumed that he will be against it. I shall not disappoint your Lordships on that conclusion. For moral reasons I am against prostitution. It is the most liquid and transitory of relationships undermining marriage as well as communities.
However, it is not the moral argument that I wish to address but broader issues relating to the compassion and care which I believe to be at the heart of the concerns of the noble Lord, Lord Faulkner. I recognise that in the past the Church, along with other sections of society, has been so concerned to maintain moral rectitude and high standards that our attitude to women engaged in prostitution has been less than Christian. It has been harsh, unfeeling, uncaring and condemnatory. We have assumed that women engaged in such activities are worthy of society's disapproval and punishment. In recoiling, we have abandoned the possibility of making a difference to their lives. I recently read Dr Helen Self's book Prostitution, Women and Misuse of the Law, which I commend to noble Lords.
My attitude on the issue changed some years ago when I met a young prostitute who started on the game, as it is called, when she was in her very early teens. When I met her she was already a reformed character, having been befriended by a church group and given a home for herself and her two small children. I was so taken by her honesty and determination to better herself that my wife and I linked up with her and became very good friends with her. We began to support her. To my surprise, four years ago she told me that she felt called to the ordained ministry. She is now a priest in the Church of England, a happy, intelligent young woman who is proving to be an excellent minister. But her story is disturbing. She had a terrible start in life, being thrown on the streets, destitute and lonely. She was abused by pimps and let down by authority. She was arrested when she was 15 and found herself on a charge sheet. She now had a record, and the way was barred to do something more useful with her life. She told me that she had known violence, intimidation, abuse and fear. It is a miracle that she is now a reformed person who can speak of God's love with an authenticity that most sermons lack. She is quite convinced that present laws work against the chances of women breaking free of prostitution or escaping from a culture of violence that intimidates many women trapped in it. She has expressed her willingness to come to the House of
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Lords to meet as many Peers as want to hear her story, and I would be most willing to arrange that if there were a sufficient number.
Although it is true the Church has been uncompassionate and uncaring, that is not the total picture. The noble Lord, Lord Faulkner, mentioned the Church in New Zealand, and there are many illustrations of caring Christians working among prostitutes, providing hospitality and unjudgmental care. A few days ago, I was talking with a young woman who works with several other youngsters in a Christian project in Spitalfields. Last year, they gave support to 223 different prostitutes, listening to their concerns and endeavouring to show them a better lifestyle.
In the vast majority of cases, the women have not chosen that way of life because it gives them an enjoyable lifestyle, a comfortable existence and the chance to meet a nicer kind of person. They live that way, in the majority of cases, because of lack of hope. Many end up on the street because of drug abuse. For some, it is part of an inevitable spiral that started with sexual abuse in childhood. Out of sight, of course, are the many unknown women kept in almost slave-like conditions by gangs who feed off their earnings.
The urgent question is, "What can we do?". As we have heard, it would be foolish to return to the old days of punitive legislation in an attempt to reduce numbers and clear up streets because of public cries of, "Not in my backyard". We need legislation that will protect vulnerable people and chastise those most guilty of abusing them. As I understand it, the current law is somewhat contradictory. The law pushes women on to the streets through the Sexual Offences Act 1956 and off the streets through the Street Offences Act 1959. The Sexual Offences Act 1985 forces them to make rapid and sometimes dangerous judgments before jumping into a stranger's car, sometimes with dreadful consequences.
In case of misunderstanding, I want to repeat that I am against prostitution on moral grounds. Prostitution mocks women by making them a commodity, cheapens and devalues sexual relationships, and demeans us all as societies. However, it is for different moral reasons that I make a contribution to the debate. My instinct tells me that our current attitude towards prostitution raises urgent moral questions that a good and civilised society needs to address. We will not get rid of prostitution by condemning it and sanitising it by removing it far from public gaze. Perhaps we shall diminish it as a social problem only when we care more deeply for the women who are its victims. Therefore, I support the noble Lord's appeal for a review of the law as far as it affects prostitution.
8 p.m.
Lord Lucas: My Lords, this is the first time in almost 12 years in this House that I have attended or participated in a debate in which no noble Lord has claimed any direct knowledge of the subject at hand. But for all that, I have listened to three informative

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speeches, all of which I agree with. We live in an understanding age and it is time to take a step back and say that we know prostitution is going to take place and that we want to make the conditions under which it takes place the most agreeable and sensible for everyone who gets involved.
I share the position which the noble Lord, Lord Faulkner, has taken: we must give priority to the safety of the women who involve themselves in this trade in order to ensure that they are safe from attack, are not exploited by other people and can undertake their trade in reasonable circumstances. At the top end of the trade, as we have learnt from recent newspaper reports, it can be extremely profitable. It works out at about £4,000 a week, according to reports of the convent-educated madam who is being tried in France. That is almost what a lawyer earns and the equivalent seems to me to be entirely reasonable.
At the lower end, women are exploited in an awful way. They are hooked on drugs and enslaved to pimps. That happens because they are forced to ply their trade in ways that are fundamentally unsafe. They are denied access to the very aspects of our society— namely, the police and other helping agencies—who should be their supporters in these circumstances. It is time that we looked at how we can set our laws to rights, rather than every few years being happy at the extension of anti-social behaviour orders to prostitutes, as if that were an answer to the situation. It is just a medieval suppression of the trade and is absolutely no answer at all.
Equally to be supported are my noble friend's arguments about the people among whom the trade is plied. If there is a concentration of it, it becomes extremely anti-social behaviour to have going on around one. The answer to concentration is to enable prostitutes freely to advertise. Prostitutes turn up together in one place because that is where they can be found. We have laws against putting stickers in telephone boxes and we also have laws which prevent the stickers going up in private places, in newsagents or in sex shops. It is hard to find the legal location of other prostitutes, but if we remove the laws which prevent the proper advertising of prostitution services, it will no longer be necessary for people to concentrate together. Indeed, there will probably be an advantage in spreading out; you would be more local to the clients rather than asking them to travel long distances to wherever you might be.
There are changes we can make in the law which will benefit both sides and recognise that, yes, we want the prostitutes to be safe, but, yes, we want to be able to live our lives pretty well unconscious of the trade, if that is what we want to do. I suspect that that is the position most of us would like to find ourselves in.
I do not know whether the Government are the right people to review this matter. There is such a political downside and such a risk of sticking oneself up as a patsy for the Daily Mail on a bad day that I cannot see politicians really wanting to become involved in this type of thing or wanting to say, "Well, this is an original document coming from the Government"—
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whether it is Labour or Conservative—"as party policy". I believe that that is what Royal Commissions are for. That would provide a chance for things to be discussed in public, for all sides to have their say and for conclusions to be produced which are not associated with one party or the other and which, indeed, with luck, might command a degree of all-round support. I should have thought that that was the kind of forum we should be seeking, but I do not know that judges will be queuing up to be in charge of it.
However, if we could move forward on that basis and give ourselves time to think and time to talk this through in a forum where no one would feel difficult about expressing, or holding, their views, I should be delighted. It is so unsatisfactory to allow things to carry on as they are. So many people are being hurt by it.
8.6 p.m.
Baroness Walmsley: My Lords, I add my congratulations to the noble Lord, Lord Faulkner of Worcester, on securing this debate and on the very clear way that he laid out the issues before us this evening. I also want to congratulate Dr Helen Self on her excellent book on the subject of prostitution, which the noble and right reverend Lord, Lord Carey of Clifton, has just recommended to us.
It has been a very interesting debate on a vitally important issue. It is important not just to those who are actually involved in the sex trade but also to local communities who are affected by it, as was so colourfully described by the noble Lord, Lord Brooke of Sutton Mandeville. As he was speaking, I found myself thinking that perhaps we are today's equivalent of the relics of Westminster that he mentioned.
However, to be more serious, there is much evidence that the incidence of prostitution is on the increase, and the Government cannot, and I am sure do not wish to, ignore the vast amount of human misery that the sex trade represents. In answer to a parliamentary Question from Dr Brian Iddon as far back as March this year, the Minister, Hilary Benn, said that the Home Secretary was,
"examining the scope for a review of [the law on] prostitution".— [Official Report, Commons, 24/3/03; col. 16.]
As that was seven months ago, I hope that the Minister will be able to tell us this evening that a plan for such a review is now in place. To do so would demonstrate considerable and welcome political courage.
On these Benches, we believe that few women or men voluntarily choose to be sex workers, although they have a right to do so. Most of them feel forced into it. The causes of that are various, but the main ones are undoubtedly poverty and sexual abuse, as well as drug addition. Increases in homelessness and lack of access to benefits have made many young people vulnerable to those who offer them money, shelter or drugs in return for sex. Numerous studies have identified strong links between prostitution and sexual abuse in childhood. That is why it is so vital to break the cycle of sexual abuse of children through all the initiatives that the Government are undertaking, and more.

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Three overarching factors are clear to me when considering what to do: first, that sex workers are more often than not victims themselves and we should treat them as vulnerable people to be helped, not harassed; secondly, that prostitution is more a public health issue than a public order issue; and, thirdly, that this is an international issue and our solutions should take into account lessons learnt in other countries and contain elements of co-operation—they will not work in isolation.
Those involved with prostitution are increasingly at risk from violence, disease and drug addiction—if, indeed, the addiction was not one of the prime causes of the prostitution in the first place. Although the Government's drugs policies are not the subject of our debate this evening, they are clearly very relevant to it. If you find effective ways of reducing the number of people addicted to hard drugs, you will reduce a major push factor into the sex trade.
Then there is the international dimension. Many of the prostitutes working in the UK have been trafficked from abroad. In his evidence to the Setting the Boundaries team, Inspector Paul Holmes of the Metropolitan Police estimated that as many as 75 per cent of sex workers in London are foreign, and, as we have heard, most of them come from the Balkans. Another witness said that in eastern Europe 80 to 90 per cent of the new unemployed are women who have few opportunities to gain employment any other way. Many, although not actually imprisoned, are virtually imprisoned here because of their lack of English and fear of the police. They know that they are here illegally, although many were lured here with promises of legitimate jobs and a better life. So they fear deportation if they are caught. That could mean rejection by their families, or worse, when they go home.
Clearly, the way we deal with these women requires enormous sensitivity, understanding and the compassion urged upon us by the noble Lord, Lord Carey of Clifton, as well as joined-up action on the part of the police and immigration services. Can the Minister tell the House how the two services are working together to address the massive problem of people being trafficked to this country to be exploited for sex?
Inspector Holmes made it clear that it is very difficult to get the women to testify against those who exploit them. Instead, police action has to be based on intelligence so it is vital that some of that fear is taken away by the implementation of new policies.
Unfortunately, although selling sex is not illegal, the current legal framework surrounding prostitution pushes prostitutes into a criminal sub-culture which does not serve the needs of the police, the sex workers or the communities where they cause a nuisance. I very much agree with the noble Lord, Lord Lucas, although I forgive him for ignoring the possibility of a future Liberal Democrat government, that giving a prostitute a series of anti-social behaviour orders for soliciting is not a serious and positive contribution to the problem. That is why it is vital that we have a full review and
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consider the options as well as the experiences of other countries where they have experimented with changes to the law.

Liberal Democrats believe that no one of either gender should be obliged to become a sex worker. Various related public policies can reduce that pressure. Ensuring that everyone obtains a good education or training; enhancing the economic independence of women and young people; improving the benefits system; ensuring good, affordable child care for those young mothers who want to work legitimately and working to combat sexual abuse of women and children would all help. The Government are doing a good deal but there is always more to do.
We also believe that the Government must face up to the public health implications of the sex trade. To neglect that is short-sighted in view of the immense dangers of HIV and other sexually-transmitted diseases as well as the health dangers associated with drug abuse.
We believe that local health authorities should be responsible for health care, outreach, education and HIV prevention services for male and female prostitutes and their clients to promote safer sex practices and reduce the incidence of HIV. That would be much easier to do in a regime where the sex trade was regulated and not pushed underground.
Therefore, we believe that the current laws that force prostitutes into the criminal sub-culture should be repealed and replaced after appropriate consultation with a realistic, fairer more effective framework of law specifically designed to protect vulnerable individuals, to regulate prostitution and to prevent nuisance.
We would replace the ineffective legislation on kerb crawling and soliciting with a new offence of harassment covering the behaviour of pimps, prostitutes and clients. Although we are opposed to the establishment of state or local authority run brothels, we would want to see a system to regulate the activities of privately owned brothels. That would allow the full range of inspections to take place and the full range of health and welfare services to reach the sex workers.
The safety, well-being and human rights of these vulnerable women—they usually are women but in some cases men—must be paramount. Many of the young women concerned are mothers. Thousands of children are affected indirectly by the sex trade because their mothers are involved in it. If we want to improve their life chances we must improve those of their mothers.
For the sake of the communities that feel threatened and the vulnerable exploited people forced into prostitution and their children, I urge the Government to comply with recommendation 53 of the Setting the Boundaries report.
8.15 p.m.
Viscount Bridgeman: My Lords, I am sure we are all very grateful to the noble Lord, Lord Faulkner, for

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initiating this debate and for giving us such a very comprehensive outline of the practice in other countries.
To say that we are dealing with the oldest profession in the world may be of little comfort at the start of my speech. Nevertheless, it is worth recalling the legislative landmarks on the subject over the past 150 years. Conveniently, my noble friend Lord Brooke of Sutton Mandeville has covered the earlier period.
While never entirely accepted, prostitution has been widely tolerated at various times in history, as we have heard. The Vagrancy Act 1824 was an attempt to exert extensive control over women on the streets through wide discretionary powers to arrest anyone acting suspiciously or in a riotous or indecent manner. However, in the 1860s a series of Contagious Diseases Acts introduced extensive powers to control prostitution as a public nuisance with public offences of loitering, soliciting and spreading venereal disease committed by the female prostitute. It is interesting that as early as the 1880s these measures were so hotly contested by contemporary feminists and working men that in 1886 these Acts were repealed.
The next milestone was the Wolfenden Committee on Homosexual Offences and Prostitution, which was established in 1954. That led to the Sexual Offences Act 1956 and the Street Offences Act 1959. Those Acts provided neighbourhood respectability since they drove prostitutes off the streets. But, significantly, it was the nuisance of prostitution which they addressed and not the exploitation of women. The 1956 Act attempted to deal with the exploitation by third parties by way of association and economic factors, by introducing the offences of "brothel keeping" for female offenders and "living off immoral earnings" for male offenders.
However, prosecutions for either "pimping" or "brothel keeping" have been minimal. Police complain that prosecutions involve lengthy observation which takes time and absorbs a lot of manpower and there is often a lack of evidence that the man has lived off the women's sex work. I shall return to that point.
An important development of the 1956 Act was an attempt for the first time to introduce equality between the prostitute and client by introducing the offence of "kerb-crawling". Again this proved difficult to enforce, though the effectiveness of enforcement and prosecution has been considerably improved under the Criminal Justice and Police Act 2001. So it was an important and much needed initiative when the Government launched the Setting the Boundaries review in January 1999.
It was, if I may say so, a wise decision to restrict the terms of reference for that inquiry. It did not, for instance, examine the legal base for the regulation of prostitution or in what circumstances it could or should be legalised. It did, however, consider the offences relating to the sexual exploitation of individuals in prostitution with two important new offences—one of the sexual exploitation of adults— which were given effect to in the Sexual Offences Bill,
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which has just passed through your Lordships' House. Perhaps I may say how fortunate we are to have the noble Lord, Lord Faulkner, and my noble friend Lord Lucas who were very closely involved with that Bill. There was also an important recommendation that the law on soliciting should apply equally to men and women.
One of the most important aspects of this Bill is the section on trafficking, which draws on a Home Office paper which identified that trafficking for sexual purposes is a two-way movement: into countries which have existing sex industries which can absorb them and from countries where there is an indigenous sex industry. The report also highlighted the effect of the derisory sentences, which is a powerful disincentive to the allocation of police resources to what is in any case an unpopular role within the service.
The Sexual Offences Bill identifies three separate offences: trafficking respectively into, within and out of the United Kingdom for sexual exploitation. This last category covers the re-export of girls to be forced into prostitution abroad; for example, West African girls being sent to Italy. Each of these categories carries a maximum sentence of 14 years' imprisonment.
What should be our ideas for the future? One alternative, which has been raised in the debate, is some form of legalisation of brothels. Theoretically, that has attractions. It should get the girls off the streets, look after their health and so on, and it has been advocated by several senior police officers. However, experience has shown that it is not so simple.
My information on Melbourne comes from considerably earlier than that of the noble Lord, Lord Faulkner, to whom I must defer on the subject, but I am advised that in Melbourne, where brothels have been licensed since 1984, it is the old story: conditions have improved for the clients but not for the prostitutes. The latter have no control over their clients and are liable to be abused by the brothel managers. In some instances, they are required to sign contracts waiving their civil rights and entitlement to statutory health and safety protections. However, in view of what the noble Lord said, the state of Victoria should be given the benefit of the doubt.
The so-called Eros Centres in Germany have been similarly described as a reversion to neo-slavery. In the state of Nevada in the United States, even the social lives of prostitutes are strictly controlled. It has been found that even in that regulated environment, sexually transmitted diseases are difficult to detect quickly and the prostitutes become adept at concealing them to avoid ejection from the brothel. Significantly, in many legalised brothels throughout the world there is a high proportion of women from disadvantaged ethnic communities.
Then there is the decriminalisation argument, based on the acceptance in some quarters that prostitution is inevitable. That view is widely held both in the probation service and in certain police forces. The English Collective of Prostitutes advances the seductive—if I may use that word—argument that prostitution is a victimless crime. Against that there is

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the argument that prostitution is not empowering for women, despite the beguiling picture of economic freedom presented by traffickers to women, especially from the Far East and the Balkans.
Then there is the "zones of tolerance"—which, like decriminalisation, are superficially attractive—which have been established in Utrecht and Amsterdam in Holland and attract substantial interest in this country, particularly in Birmingham. In theory this should produce prostitute free and kerb-crawling free zones, but prostitutes complain of harassment from outside the zone and little protection within it. Their economic point of view is that a police presence discourages the clients.
Finally, there is eradication, with harsher penalties for women entering prostitution; strong support mechanisms for those wishing to leave the industry; and full criminalisation of the client and pimp, with more effective and harsher penalties. There is growing support for that approach both within the United Kingdom and in several states in the United States.
I refer your Lordships to an interesting article that appeared in the Herald in Scotland. It contrasted the attitudes to prostitution of Edinburgh—with its reputation for propriety and respectability—with the more warm-hearted and tolerant Glasgow. The policies were exactly the opposite of what might have been expected. Edinburgh's attitude is relaxed, based, among other things, on an experiment with "tolerance zones".
I should mention that in Edinburgh there was a well-known lady called Mrs Noy who was a Tory and used to turn up at Conservative fêtes—to the great embarrassment and humiliation of the Conservative Member of Parliament. I fear that takes us back a year or two, in any case. She further had a sign in her window that read, "Life is better under the Tories".
By contrast, the Glasgow approach is very strict. I quote a spokesman:
"our goal is to work towards the elimination of prostitution, not the tolerance of it".
In fact, neither approach has been a success. The zones of tolerance in Edinburgh have been abandoned and there is certainly no diminution of prostitution in Glasgow, with three recent particularly nasty murders of prostitutes and the unpleasant statistic advanced by the noble Lord, Lord Faulkner. So there is no quick fix, as the noble and right reverend Lord, Lord Carey, said.
I finish by citing material derived from a perceptive paper by Catherine Benson and Roger Matthews in the International Journal of the Sociology of Law in 1995. It gives the crude and unadorned picture of the darker side of the lives of women engaged in street prostitution. The first point was made by several of your Lordships: the majority of women working as prostitutes have economic, social and heath-related problems. That was especially highlighted by the noble Baroness, Lady Walmsley. The myth of the "happy hooker" is indeed a myth. Prostitutes almost always suffer from some degree of dependency. The next point is that women who work on the streets are the repeated
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targets for sexual and violent physical attacks. Twenty-seven per cent of street prostitutes interviewed admitted being raped in the past 12 months. A further 43 per cent had suffered some form of physical assault or abuse. The majority of clients have regular partners or are married. Many kerb-crawlers are middle-aged or middle class.
Significantly, the regulation of prostitution is low-status police work. Police response tends to be reactive rather than proactive, often, largely, to placate local residents. As one vice squad officer explained, "You have got to be seen to be doing something, even if they [the prostitutes] do just go straight back out there. If we didn't, we would be overrun with girls and complaints about them".
Despite growing inequalities over the past 20 years, the number of prostitutes working in the streets in the majority of areas has either remained constant or decreased. The problem will not go away.
The Government are to be commended on the Sexual Offences Bill, in particular. But I shall leave the Minister with two thoughts, both covered by noble Lords who have spoken today. The least society owes those women is to improve their safety—I echo my noble friend Lord Lucas. Society also owes them the provision of every practicable facility for an exit route by providing counselling, rehabilitation and safe houses. I finish by saying what a heart-warming story we heard from the noble and right reverend Lord, Lord Carey, to which the noble Baroness, Lady Walmsley, has also referred. With those two thoughts, I very much look forward to hearing what the Minister says.
8.26 p.m.
The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, I add my voice to those of all noble Lords who have thanked my noble friend Lord Faulkner for provoking such a wide-ranging and thoughtful debate. I can only agree with him that the time is right for a sensible debate on the issues arising from prostitution. There has been no such discussion for more than 50 years. Issues arising from prostitution are numerous and complex. One should remember the words of the noble Viscount, Lord Bridgeman, who referred to the comprehensive nature of what has been tried internationally, much of which has failed.
I have rarely heard such a wide-ranging and thoughtful exposition of the history as we had the advantage of hearing from the noble Lord, Lord Brooke. It is important, because it emphasised the observation by the noble Viscount, Lord Bridgeman, that there is no quick fix. It is a difficult issue that will need a lot of very careful thought. We must consider all the available options, however radical. There are no easy answers, therefore, but that does not mean that it is an issue from which we can afford to shy away.

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I, too, was very touched by what the noble and right reverend Lord, Lord Carey of Clifton, said. He rightly emphasised the need for compassion and care, but also that there is redemption and possibility of change. Those women who are given a route out of prostitution can make an enormously valuable contribution to our country.
Many who become involved in prostitution do so at a very young age, as the noble and right reverend Lord, Lord Carey, told us. Those children are victims of abuse, pure and simple. We are determined that the law should be sufficiently robust to ensure that we can act swiftly and firmly to stop those predatory individuals who use and abuse young people in that way.
Prostitution also makes victims of women—and indeed a significant number of men—who are exploited by their pimps and abused by their clients. It also makes victims of those communities in which the sex trade takes place on the streets or in neighbouring flats. I was very pleased that the noble Lord, Lord Brooke of Sutton Mandeville, rightly emphasised that aspect of the difficulty. From noble Lords' remarks, it may be said that it was ever thus and that over the past 700 years we have tried virtually every model that there is. However, try we must continue to do. I know that some noble Lords are disappointed that the review on sex offences, which led to the introduction of the Sex Offences Bill, did not fully cover prostitution. I warmly thank the noble Viscount, Lord Bridgeman, for his congratulations on what we did do, because we made some important strides forward.
At the time, the sex offences review team considered that the issues surrounding prostitution went much wider than the remit of that law review. However, it was recognised that, although it is important to ensure that the legal framework is right, it is equally important to look at how the law is enforced, and, indeed, to look at other ways of tackling the issue. Enforcement has been at the heart of what we have talked about this evening. This will include preventive strategies to stop young people from being drawn into prostitution, support for those who find themselves involved in it, and a range of measures to deal with the practical impact of prostitution on our communities.
It is also instructive to look at models of good practice from around the country, and indeed from around the world. We have had some clear examples of that tonight, by my noble friend, Lord Faulkner, and from the noble Viscount, Lord Bridgeman. All in all, it was considered that the issues arising from prostitution were so wide-ranging that they demanded a separate review. I am pleased to say that the Government accepted that recommendation, and we are now acting upon it by scoping the issues for a review dedicated to exploring the problems arising from prostitution. I bear in mind what the noble Lord, Lord Lucus, said about politicians not having the stomach or courage for the task, but I assure noble Lords that this Government do.
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The Home Office is leading this scoping exercise, working with an inter-departmental group of officials. The team is also consulting key stakeholders from outside the Government, including the criminal justice agencies, the statutory services, voluntary groups and academics. The team will also ensure that the voices of those with first-hand experience of involvement in prostitution will be heard.
That is not a straightforward process, as noble Lords will appreciate. The issues associated with prostitution are numerous and complex, and we want to make sure that we have explored the issues fully. For that reason I am unable to be specific about the timing of the review, but we will ensure that all those who have been involved with prostitution and the issues that arise from prostitution, have an opportunity to engage in the debate.
We will be interested to hear views on ways of dealing with the issues arising from prostitution both nationally and internationally, through early prevention, through the application of civil and criminal remedies, and through the provision of support for those abused and exploited. We need to open up the debate on the best way to tackle these issues so that we can develop—for the very first time— a national strategy for prostitution.
If I may say so, I think my noble friend was a little unkind in his assessment of the Government's attempt at reform. The new offences in the Sex Offences Bill on trafficking and the sexual exploitation of adults and children should make a significant contribution to protecting those women—and children—involved in prostitution by delivering them justice and protection through the prosecution of their exploiters. We are also bringing forward new powers to deal with anti-social behaviour.
I understand the concern that enforcement of the law should not have unintended effects on the safety of those working on the streets, but we must also act to make our communities safe. The noble Lord referred specifically to the prohibition on carding. It was made an offence in response to considerable concern in communities where carding was common that not only was it distasteful and off-putting to residents and tourists alike but those placing the cards were extremely aggressive. I have seen no evidence that the ban on carding has driven prostitutes on to the street. Nor, in all honesty, would I expect that to be the case, when the advertising of sexual services takes place in the local press and, increasingly, through the Internet. Carding took place only in a limited number of cities.
I wholeheartedly agree that enforcement activity must be balanced with support for the women involved in prostitution. There are many excellent projects around the country doing just that. The Home Office has funded 11 projects to look specifically at what works best as effective exit strategies. Those projects are being evaluated and will provide useful good practice guidance to practitioners. My noble friend suggested that we should also look rather further afield for inspiration. He gave us an instructive whistle-stop tour around the world, from Sweden via Europe to

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Australia and New Zealand. I found the examination of the situation in Edinburgh and Glasgow particularly instructive, although, of course, I would not necessarily agree with the comment made by the lady in Edinburgh.
In each model one can see advantages and disadvantages. For each model, there are mixed accounts of how well it is succeeding in practice. It is a complex issue, and it is absolutely right that experience elsewhere should be examined in great detail. That forms part of the current scoping exercise. We must consider what kind of strategy is most likely to deliver the objectives that we all want to see: a reduction in the level of violence and exploitation experienced through involvement in prostitution; a reduction in the problems that the trade causes to local communities; and a reduction in the support that the trade inevitably provides for the drugs trade and other forms of organised crime, rightly highlighted by the noble Baroness, Lady Walmsley.
A national strategy for prostitution must address early prevention to safeguard children who may be at risk of abuse through prostitution; protection and support for those drawn into prostitution; and justice through vigorous enforcement of the law against those who coerce, control and abuse those exploited through
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prostitution and against those who contribute to anti-social behaviour and neighbourhood degradation through activities associated with prostitution.
We are working vigorously on the issue with our international partners. The noble Baroness, Lady Walmsley, referred to the White Paper Secure Borders, Safe Haven. Our response is to take a four-pronged approach to international matters: legislation; enforcement; and international co-operation to aid prevention and support victims. The scale of the problem is still unclear, as no reliable estimates exist. The Home Office research study Stopping Traffic, published in 2000, estimated that anywhere between 140 and 1,400 women were trafficked to the UK every year for the purpose of commercial sexual exploitation.
I will also chair a ministerial group on sexual offences. It will be part of that group's remit to examine prostitution and trafficking issues. I assure the House that the ministerial team, working cross-departmentally, will put a lot of energy into addressing those important issues. I also understand the health issues, and those matters will continue to be of great importance to us.
House adjourned at twenty-one minutes before nine o'clock.

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