Sitting of 8 January 2004

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENVIRONMENT, FOOD AND RURAL AFFAIRS
  The Secretary of State was asked—
  ENVIRONMENT, FOOD AND RURAL AFFAIRS

    Global Warming
    Mr. Graham Allen: What assessment she has made of the impact of global warming on the UK. [146366]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): Scenarios of climate change published by my Department in 2002 suggest that average annual temperatures may increase by between 2° and 3.5° C by the end of the century. As a result, the United Kingdom is likely to experience warmer, wetter winters and hotter, drier summers. Such changes will have far-reaching effects on the UK, putting pressure on water resources and wildlife and increasing the risks of flooding and damage to health.
    Mr. Allen: Twenty years ago, a generation grew up in the shadow of the bomb and fear of nuclear explosions. Now colleagues in the House who go to local schools realise that schoolchildren fear environmental catastrophe in the shape of global warming. Will my right hon. Friend tell us what she is doing to tackle those concerns, so that young people in my constituency of Nottingham, North and elsewhere can be reassured that the Government are taking the problem seriously?
    Margaret Beckett: I understand the point that my hon. Friend makes. As he suggests, awareness of the impact of environmental change is growing. Broadly speaking, the Government are pursuing two courses of action. On the one hand, in the shorter term, there is a whole range of measures to encourage people to adapt to the potential impact of climate change. This is something that we are encouraging in the private sector and in Government Departments partly through the climate impact programme—which encourages organisations to make an assessment of the impact—and partly through measures to tackle it.
    Alongside that, and for the longer term, there is a programme of mitigation. My hon. Friend will be familiar with many of the proposals within that programme. They include the climate change levy, the
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    work of the Carbon Trust to promote low-carbon technologies, the promotion of energy efficiency and so on. We are trying a two-pronged approach to the problem by dealing with the actual impact and by trying to ensure that the impact does not become worse over the years.
    Norman Baker: The Secretary of State will have seen The Guardian and The Independent this morning and the numbing news that one in 10 species, including species found only in the UK, may be extinct by 2050. I am sure that she will agree that it is vital to take all possible action to avert that prospect so far as possible, but does she agree that, although her Department may be sound on the issue, that soundness is not mirrored by other Departments within government? In particular, will she recognise that the aviation White Paper projects a doubling of carbon dioxide emissions by 2030, so that they will become 25 per cent. of total UK emissions? Will she also confirm or deny that the Secretary of State for Trade and Industry—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I suggest that we have a more compact question and not an extended statement?
    Norman Baker: Will the Secretary of State confirm or deny that the Trade Secretary wants to reduce the Government's target of 20 per cent. reductions in CO2 emissions to 15 per cent. by 2010?
    Margaret Beckett: The hon. Gentleman is entirely right in what he says about the reports in this morning's news media about the potential extinction of many species. The study that has been published today indicates that between 15 per cent. and 37 per cent. of land species in the area that was studied could face extinction by 2050. However, it is important for the House to understand that the impact of the highest predictions of global warming would have an even more disastrous effect. So it is not an exaggerated report that assumes catastrophe; it refers to the expected impact of climate change.
    The hon. Gentleman is wrong, however, in suggesting that the problem is not understood across the Government. He cited the aviation White Paper in particular, but the Government made it very clear in the White Paper that we would push for EU air services to be included in the forthcoming emissions trading scheme and that we would encourage all those involved with aviation to adopt working practices that minimise impacts. We are also talking to aerospace manufactures and others and encouraging voluntary action. We recognise the impact of aviation. and we also recognise that the problem has to be tackled at an international level. Through our involvement in the EU, we are striving to get that point recognised and dealt with across the world and not just in the EU.
    Andrew Bennett: Does my right hon. Friend realise that, given the amount of money that President Bush has raised from the gas guzzlers for his re-election, it will be extremely difficult to get international talks back on track to limit CO2

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    emissions? Is it not time that the British Government made as much effort on CO2 emissions as we are doing on terrorism?
    Margaret Beckett: Let me assure my hon. Friend that the British Government continually engage in dialogue with our counterparts in the United States about these issues, their importance and their likely impact on the world. It has long seemed to me that one of the influences on security is, indeed, environmental degradation and the impact that it has on poverty, the movement of peoples and so on. The issues are linked, but he may have overlooked the fact that the United States continues to be involved in the climate change convention and to agree with and promote the aims of that convention in reducing emissions.

    Recycling
    Mr. John Baron: What assessment she has made of whether the UK will meet its recycling targets by 2005. [146369]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): National targets for England are to recycle and compost 17 per cent. of household waste in 2003–04 and 25 per cent. in 2005–06. Our current assessment of local authority performance is that we expect to meet the 2003–04 target and that, although challenging, the 2005–06 target is achievable.
    Mr. Baron: I thank the Secretary of State for that answer. Challenging is one way of putting it, but given that the Environmental Audit Committee has stated that the UK will not come even close to meeting any of its recycling targets because of a lack of funding, will she stop making false promises and start outlining to the House the concrete action that the Government will take to improve their poor record on recycling, given that failure could result in large EU fines, and incinerators being forced on local communities?
    Margaret Beckett: I understand and recognise the concern that we must do as much as we can to meet the targets, but it is not the case that the Government are not on track to meet the targets for this year. I note that the hon. Gentleman called for more funds, so I hope he is aware that the Government have already substantially increased the funds available for the disposal and recycling of waste, both through the general grant that goes to local authorities and specific grants that we have given to deal with waste. I note yet again that although Conservative Members continually complain that the Government spend too much, they call for us to spend more on specific issues.
    Mr. Peter Pike: Does my right hon. Friend recognise that we might achieve our recycling objectives better if the authorities responsible for the collection of waste were the same as those responsible for the disposal of that waste?
    Margaret Beckett: My hon. Friend makes a fair point. We are examining the way in which waste collection and waste disposal authorities work together. I hope that he knows that the Government recently put in place
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    measures that mean that such authorities will have to draw up joint management plans. We have done that precisely because we understand that there can otherwise be different interests and incentives for one authority to leave to another the burden of dealing with these issues.
    Miss Anne McIntosh: Will the right hon. Lady explain how she hopes to meet the 25 per cent. target given that local authorities have demonstrated only a 1 per cent. increase in recycling year on year under her Government? Will she also address the producer responsibility obligations regulations? Although the new scheme comes into effect on 31 January this year, the regulations have still not been published. How does she expect the companies that will comply with the proposed waste scheme to prepare for that when they do not know what they are being asked to do?
    Margaret Beckett: I do not recognise the figure that the hon. Lady cited—perhaps it is out of date or reflects a broad picture that is not relevant on the ground. She makes a point about the availability of regulations. I am mindful of the fact that the detail of regulations that are approved often does not become available until much later in the day and that that creates difficulties. That concerns the Department and we continually work to rectify the situation. However, the solution is not always in our hands. If we have to wait for legal texts, for example, it can be difficult to get regulations out as speedily as we should. However, we continue to work at that.

    Fishing Industry
    Mr. Austin Mitchell: What support she will provide to the east coast fishing industry following the recent catch and catching time restrictions imposed under the common fisheries policy. [146370]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): The settlement we achieved at the December Council provides good support to the east coast industry through increases in quotas and the roll-over of the fishing days for cod vessels in the North sea.
    Mr. Mitchell: I am grateful for my hon. Friend's concern but I wonder whether he is being a little overoptimistic. The financial situation of the Grimsby fishing industry and the east coast fishing industry in general is desperate. We suffer from the same restrictions on catches and days at sea as the Scots—the restrictions were imposed because of the disastrous failure of the common fisheries policy—but although the Scottish industry got a £10 million lifeline last year and hopes to get a lifeline of the same scale this year, the east coast industry got nothing. Surely it is important to keep a viable English industry going on the east coast so that we can inherit the better times that should lie ahead. What is he doing about that?
    Mr. Bradshaw: I accept what my hon. Friend says about the hard times faced by the industry in Grimsby

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    in recent years, but I ask him to recognise the very real gains that we made at the December Council: a 55 per cent. increase in the haddock quota in the North sea and a 28 per cent. increase in the prawns quota. The chief executive of Grimsby fish market, Mr. Martin Boyers, said:
    "It is as good an outcome as you could possibly get",
    and Arnold Locker, who will be known to my hon. Friend, said that the outcome was
    "encouraging …it means that the East coast fleet will be economically viable."
    Mr. Alex Salmond: I do not know what world the Minister is living in. Does he not understand that the increase in the haddock quota has been totally wiped out by the ridiculous map that he and his officials accepted, which bears no relation whatever to the proposals of the Scottish Fishermen's Federation? Does he not understand that the major haddock fishing area has been put into a cod-restricted zone, which means that on one side of the line it will be impossible to fish the quota, and on the other the fishermen will be lucky if the catch lasts until June?
    We want to know who was responsible for this monumental disaster. Was it the Minister and his team; was it Ross Finnie and his team; was it the European Commission and its team; or did it take the combined efforts of all three?
    Mr. Bradshaw: The hon. Gentleman is talking absolute rubbish. We achieved at the December Council much of what he has been calling for over the last six months: a massive increase in the haddock quota for the areas that he is talking about and a huge increase in the prawns quota. I shall quote the industry spokespeople in Scotland, rather than the hon. Gentleman. The head of the Scottish Fishermen's Federation, Alec Smith, said:
    "The increase in haddock is good news",
    and John Patterson, from Peterhead fish market in the hon. Gentleman's constituency, said:
    "The deal overall must be welcomed."
    Yet there has been not a word of congratulation from the hon. Gentleman.
    Mr. Bob Blizzard: My hon. Friend will know that it is not all bad news on fish stocks: there is an abundance of herring off the east coast, which shows that fish stocks can recover if not too many are taken out. Will he set up a small study group to see how we can derive value from that herring? The inshore fishermen of Lowestoft could make a living from it if they could get a price, but at the moment they cannot. How about a marketing initiative for herring?
    Mr. Bradshaw: My hon. Friend makes an extremely constructive suggestion, which I shall consider carefully. He is absolutely right; one of the sad things about the current state of the industry is that some of the species that are most plentiful, such as herring, do not have an enormous domestic market, although there is a market in other parts of the world, not least in Europe. We therefore have a successful, thriving export industry of herring and herring products. I recommend bloaters to anyone who has not yet tried one, and I think that the
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    most delicious fisheries product is soft herring roe. I shall try to do everything that I can to encourage more people to eat herring and herring products.

    European Fisheries Council
    Sir Archy Kirkwood: If she will make a statement on the outcome of last month's EU Fisheries Council and its consequences for the North sea fleet. [146371]
    Mr. Alistair Carmichael: If she will make a statement on the recent European Fisheries Council. [146374]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): As I have already said, the outcome was a good one for the UK. We agreed a long-term recovery plan for cod, the stock levels of which remain worryingly low, and we managed to maximise opportunities to catch those species that are plentiful, such as haddock and prawns.
    Sir Archy Kirkwood: I particularly welcome the increase in the nephrops quota; it has certainly thrown a lifeline to the local boats that fish for prawns in my constituency. However, if the Commission is now persuaded of the important concepts of decoupling and spatial management, surely it should also accept that micro-management from Brussels does not make sense in the long term and is counterproductive for effective fishery management. If, as is rumoured in the press, the Downing street strategy unit will, in the next few weeks, come up with a recommendation radically and dramatically to improve the regional management powers available to committees in this country, will DEFRA Ministers, and the hon. Gentleman in particular, support such a concept?
    Mr. Bradshaw: Yes, of course. I welcome the hon. Gentleman's constructive response to the outcome of the December Council, in stark contrast to that of the spokesman for the Scottish nationalists. It was a good deal and, as the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) said, we managed to persuade the Commission to accept the idea of spatial management—a concept that came from the Scottish industry. We also managed to persuade the Commission to accept the concept of decoupling. I hope that we can build on that, and I hope that when the strategy unit reports, we will be able to make faster progress towards regional management of our fishing industry.
    Mr. Carmichael: Does the Minister share the concern of fishermen in my constituency that an unintended consequence of the deal that was struck in Brussels is that they will be forced out of the haddock grounds where they have always caught the biggest, best and most mature haddock, as those grounds are now in the restricted zones, so they will be forced inshore, where younger, smaller fish are found? Does he agree that that is not in the interests of either fish conservationists or fishermen, and what can he do between now and the finalisation of the regulation to ensure that it does not happen?
    Mr. Bradshaw: I am happy to look at the technical matters raised by the hon. Gentleman. He may not be

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    aware that the Commission's original map on spatial management around his constituency would have created severe difficulties, because it included inshore waters, meaning that the result would have been much worse. In return for the massive increase of 55 per cent. that we achieved in the haddock quota, we rightly took on board some of the industry's suggestions about spatial management, so that people will be able to catch that extra quota in geographical areas where there is not a lot of cod. The only way we could persuade the Commission to increase the haddock quota was to assure it that that would not mean catching a lot more cod.
    Mrs. Joan Humble: I welcome the visit that the Minister will shortly make to my constituency, and I congratulate him on the fact that the cuts in the plaice quota for the Irish sea are not as drastic as feared. However, when he visits my constituency to talk to Fleetwood fishermen, will he take on board their serious concerns about cuts in the quota for plaice, a stock that is within safe biological limits, and of which they want to catch more to remain viable?
    Mr. Bradshaw: I look forward very much indeed to visiting my hon. Friend's constituency on Monday. I welcome her remarks on the fact that we managed to avoid a much more substantial cut in the plaice quota. She may not understand the so-called Hague preference—I do not want to go into detail about it now, but I will discuss it with her and the industry on Monday during my visit. I should like to point out that there were massive increases in the Irish sea quota for haddock, which was trebled. I hope that that will help to mitigate the cuts in the plaice quota that my hon. Friend's local industry is worried about.
    Mr. John Wilkinson: When will Her Majesty's Government realise that the European Union's common fisheries policy has been an unmitigated disaster for the North sea fishing fleet and fishing communities throughout the United Kingdom? Instead of making these pathetic pilgrimages to Brussels to be told what to do by the European Fisheries Council, the Minister should visit Norway and Iceland, proud, independent maritime nations that manage their own fish stocks admirably.
    Mr. Bradshaw: I think it is fallacious to try to compare the United Kingdom fishery, a mixed fishery in close proximity to other EU nations, with Norway, Iceland or the Faroes, as many Opposition Members constantly do. We are, however, always keen to learn from the way in which other countries manage their fishing industries. Indeed, over the past 12 months, the Prime Minister's strategy unit has taken a close look at that, and has visited and spoken to those countries and their industries to see whether there are any lessons that we can learn.
    Shona McIsaac: There are serious concerns among people involved in the catching sector, as was articulated by my neighbour and hon. Friend the Member for Great Grimsby (Mr. Mitchell), and I accept that those fishermen feel that they need
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    extra financial assistance. However, what assessment has the Minister made of the industry's land-based operations in the processing and selling sectors following his discussions in Europe and his recent visit with me to the Grimsby fish auction?
    Mr. Bradshaw: My hon. Friend is right to point out that the UK fishing industry is more than just a catching industry. We have a highly successful fish processing industry, including operations in her constituency, which is going from strength to strength, creating wealth and providing employment. Many other sectors of the fishing industry are also forgotten, such as recreational angling, which, according to latest estimates, contributes about £3 million to the economy every year.
    Mr. John Whittingdale: The Minister attached great importance to fishermen's comments when he described the outcome of the council meeting. However, the chief executive of the National Federation of Fishermen's Organisations said that he was "bitterly disappointed" at that outcome. Alex Smith of the Scottish Fishermen's Federation, whom the Minister cited, said that his "worst fears" had been realised and declared:
    "We were sold down the river".
    The secretary of the Mallaig and North West Fishermen's Association said:
    "If Ben Bradshaw thinks this is a 'negotiating triumph' he must be plain barking mad".
    Is it not the case that the outcome will perpetuate a policy that has failed to conserve fish stocks, that encourages the dumping of dead fish back in the sea, and that is slowly but surely destroying the British fishing industry?
    Mr. Bradshaw: No. It is amazing that the spokesman for the official Opposition cannot recognise a good deal when it leaps up and bites him in the face. I am happy to carry on exchanging quotes from the industry, with whose members I had regular contacts all the way through the Council. They privately told me to my face that this was the best deal they had achieved for years, or ever under the Conservative Government. The president of the national federation, whom the hon. Gentleman mentioned earlier, Mr. Sam Lambourn, said it was "a positive result".
    Mr. Frank Doran: The Commission having accepted in principle the spatial management approach of the Scottish Fishermen's Federation, it is clear from the debates that took place in the Council that there will be additional enforcement measures. What progress has my hon. Friend made in that respect? Can he give us some details about how he intends to approach the matter?
    Mr. Bradshaw: We are taking extra enforcement measures all the time. My hon. Friend is right to point to the fact that if we are to continue to convince the Commission and other European Union countries that we can continue to catch at the present rate, given the science, the system must be properly enforced. As he may be aware, we are under threat of infraction proceedings from the European Commission because of

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    our enforcement. We are looking carefully at what more we can do. One measure is the introduction of satellite monitoring equipment, which will be tamper-proof, in all over-15m vessels. At the request of the industry, we have agreed to fund that fully, rather than expecting the industry to fund it.

    Rural Businesses (Payment)
    Mr. Henry Bellingham: When she next expects to meet representatives of rural businesses to discuss the prompt payment of bills. [146372]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael)s: My colleagues and I frequently meet representatives of rural businesses and we discuss a range of issues. Any request to discuss the prompt payment of bills would be considered on its merits.
    Mr. Bellingham: Is the Minister aware that according to the Forum of Private Business, 350 contractors who helped solve the foot and mouth crisis are still owed over £100 million? That is a staggering figure, and includes firms such as R. W. Pugh of Montgomeryshire, which is owed £500,000, and Luke Furse Earthmoving Ltd. of Devon, which did a superb job and is owed £1.2 million. Luke Furse is a family owned business that has spent £100,000 on legal fees and is being driven to despair. When will the Minister play fair? When will he try and rebuild his credibility with the rural community? When will he follow his own rules and guidelines on the payment of bills?
    Alun Michael: That is a slightly hysterical way of asking the question. Opposition Members would be very critical of the Government were we to pay bills in relation to which there were serious questions. It is right for the Government to have all claims carefully examined. It is a big job, but according to the estimates that I have been given, the process has saved the public purse—it is not the Government's money; it is the public's money, at the end of the day—about £800 million. It is right that the figures should be scrutinised.
    Mr. David Drew: When my right hon. Friend meets rural businesses, will he take up with them the question of how banks impact on rural areas? We were pleased that banks were so positive in relation to farming businesses during the foot and mouth outbreak, but they do not seem to be quite as helpful in dealing with rural manufacturers.
    Alun Michael: Manufacturing in rural areas is extremely important. More people are employed, per head, in manufacturing in rural areas than in urban areas, so issues relating to the services that they receive are important. As my hon. Friend suggests, we found a ready response from the banks to the problems facing organisations outside the farming industry as well as inside it, as a result of the impact of foot and mouth disease. If my hon. Friend has specific issues in mind, I shall be glad to discuss them with him.
    Andrew George: The Under-Secretary of State for Trade and Industry, the hon. Member for
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    Edinburgh, South (Nigel Griffiths), confirmed to me on 6 November in the Chamber that over £50 million was being withheld in respect of claims for foot and mouth compensation pending a potential fraud investigation. Following the acquittal this week of Mr. Pedrick of Sheepwash in Devon in respect of a claim for £17,000, which I am told has cost the Department for Environment, Food and Rural Affairs a six-figure sum to pursue legally, can the Minister say how many more cases have yet to be resolved, whether the £20 million estimate for legal bills will be exceeded, and to what extent and when farmers with a legitimate claim will have those claims properly resolved?
    Alun Michael: Where we know that a claim is legitimate, it is paid. Legal and other costs incurred as a result of queries on claims have to be set against the large sums of money that I am talking about. As we are talking about possible savings of about £800 million, I am sure that the hon. Gentleman will agree that we are right to scrutinise claims carefully where they appear not to be substantiated, where they are not submitted in a timely manner or where there is a lack of invoices. It obviously would not be right for me to comment on an individual case such as that referred to, but ensuring that money is paid out in a timely way only where that is justified is surely the right approach.
    David Taylor: Pre-1997 life as a freelance accountant for small businesses in the rural east midlands now seems rather distant, but what would have been true then is true now—that cash is king for many small businesses and lack of cash flow can tip them over the edge. Will the Minister acknowledge that, despite the huge achievements—50 days down to 40 days in average payment time is great—there remain other things that our Government can do? Will he approach, with the Secretary of State for Trade and Industry, the chief executive of Companies House and get her to use existing Companies Act powers to require the publication of average invoice turnround times in annual reports? That would buttress Federation of Small Business league tables and help a great deal.
    Alun Michael: I am not sure about my hon. Friend's specific proposal, but I am happy to consider that. The Department's payment terms are the payment of valid invoices for goods, services and works within 30 days of receipt and agreement. In the last three years, which includes the year in which foot and mouth had an immense impact, we have met that requirement in respect of more than 90 per cent. of invoices. Anything that can be done to assist small businesses is important and we shall be happy to consider that.
    Mr. James Gray: The Minister says that in the last three years over 90 per cent. of payments have been made within 30 days. How then does he account for the letter, admittedly dated a year ago, from his noble Friend Lord Whitty, in which he says:
    "The Department's target is to pay contractors within 30 days of receipt of invoice."—

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    One might think that that is very fair, but he goes on:
    "Unfortunately, given the large number of suppliers of goods and services which the Department has contracted … this target has proved difficult to meet in the case of 9 out of … 12 invoices".
    DEFRA is not meeting its target on three quarters of those invoices. How does the Minister account for that? How does he account for the fact that the £55 million worth of debts that are owed by the Department to contractors as a result of the foot and mouth crisis are not the result of disputed claims? Those that are disputed form only a small fraction—12 cases, I think, out of 2,000 outstanding against DEFRA. Here is what The Western Morning News headline had to say about the case raised by the hon. Member for St. Ives (Andrew George) a moment ago:
    "DEFRA put me through hell".
    That is what happens to the farmers to whom the Government are trying to cover up their indebtedness.
    Alun Michael: The hon. Gentleman should distinguish between claims that are genuine, clear and not in dispute, for which I have given the figures for compliance with payment requirements, and those where there are questions. It is not surprising if companies that have put in a claim, and say that they have not been paid, do not refer to any disputes or disagreements with regard to the scrutiny that is necessary and that it is appropriate that we should undertake. As I have said, scrutiny of these claims has led to savings of the order of some £800 million. That is not a small sum.

    GM Crops
    Joan Ruddock: If she will make a statement on the withdrawal of six GM seed applications for UK national seed listing by Bayer CropScience. [146375]
    The Minister for the Environment (Mr. Elliot Morley): Bayer CropScience withdrew the UK national list applications for five oilseed rape varieties in November 2003. This was published in the Plant Varieties and Seeds Gazette in December 2003. In 2003, a total of 56 UK national list applications for oilseed rape varieties were withdrawn by the applicants. Withdrawal of national list applications is voluntary and entirely a matter for the applicants concerned.
    Joan Ruddock: May I suggest to my hon. Friend that the likely reason for the withdrawal is that the industry's claims for GM crops clearly cannot be sustained? Has he seen the latest American research, which has been publicised by the Soil Association and shows that, after initial reductions in the early years, there was a massive increase in the chemicals applied to the herbicide-resistant GM crops compared with the non-GM crops? In the case of maize, this amounted to a 29 per cent. increase. Maize is, of course, the only GM crop that achieved a slightly favourable result in the Government's farm-scale evaluations.
    Mr. Morley: I have seen reports on the research to which my hon. Friend is referring. It is important that we analyse those reports in some detail, and I am sure that they will be scrutinised by our expert scientific committees in relation to our current evaluations and discussions on GM applications in this country. It is certainly the case that in the field-scale evaluations, the detrimental impact was linked to the chemical application regimes, not with the genetic modifications themselves, although they are linked to the chemical regimes. That is an important consideration. The Advisory Committee on Releases to the Environment is currently making a detailed evaluation of the field-scale evaluations, and I am sure that it will take this research into account as well. We will receive its report in the near future.
    Mr. Robert Key: Does the Minister agree that we must keep an open mind on GM foods, that our policy must be based on sound science, and that we would be doing a disservice to consumers, farmers and the environment if we were to base public policy on dodgy extrapolations from one or two examples or from one or two dodgy looking research papers?
    Mr. Morley: The hon. Gentleman is absolutely right; we must base our decisions on sound science. Any research must be properly evaluated in detail, whether the conclusions are positive or negative, and we would expect to do that. No country has put in place such detailed examination and evaluation of GM as this country under this Government. That is entirely right and proper, because we must be guided by the facts and by sound scientific advice.

    Animal Welfare
    Mrs. Anne Campbell: When she expects to publish the draft Bill on animal welfare. [146376]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): We hope to publish a draft animal welfare Bill in the first half of this year.
    Mrs. Campbell: I am pleased to hear that news, but may I tell my hon. Friend about an appalling story that appeared in my local paper just a few months ago? Two young children went into a pet shop and bought a hamster. They then tied the hamster to a firework and ignited the firework, killing the hamster. Does he not agree that it is now urgent that the age at which children can buy pets should be raised to 16, and will he consider including such a provision in the animal welfare Bill?
    Mr. Bradshaw: This is certainly one of the issues that will be included in the consideration of our animal welfare Bill. My hon. Friend might already know that this will be the first opportunity for 100 years to make major improvements to our animal welfare legislation. The distressing activity that she has described is covered by existing law, but I recognise that a number of areas need tightening up. I hope that she and other colleagues with an interest in these issues will help us to produce a good piece of legislation that will stand the test of time.

    Transport (Environmental Impacts)
    Sue Doughty: What recent discussions she has had with the Department for Transport with regard to the environmental impacts of transport. [146377]
    The Minister for the Environment (Mr. Elliot Morley): My right hon. Friend the Secretary of State and other DEFRA Ministers have regular discussions with the ministerial team in the Department for Transport on many matters, including the environmental impacts of transport.
    Sue Doughty: I thank the Minister for that answer. Is he aware of the deep concern resulting from DEFRA's failure to provide sufficient sites for hazardous waste when co-location ends in July this year? In a written answer to me on 6 January, there was no indication of any discussions being held with the Department for Transport about the environmental impact of lorries full of toxic waste having to travel many excess miles across the country. Will the Minister discuss this issue with his colleagues at the Department for Transport as a matter of urgency? Will he also apologise to the people who are going to have to put up with those lorries full of toxic waste going past their houses, and for DEFRA's failure in this respect?
    Mr. Morley: It is premature to talk about failure when the issue has not yet been put in place. The Government have set up the hazardous waste forum, where there is a dialogue between the Government and the industry on how those issues are being tackled and resolved. I will be meeting industry representatives in the very near future to talk face to face about the practical issues, which we recognise, and the hon. Lady should understand that the regulations that prevent co-disposal in existing sites do not prevent the construction of a separate cell, where hazardous waste can continue to be put on site, but apart from domestic waste. I am surprised that that issue has not emerged in the discussion that is taking place. That is not, in itself, a difficult technical solution, and some potential consequences of these changes have been grossly exaggerated.
    Mr. Michael Meacher: Is it not inconsistent for the Government to pursue demand management for road transport via motorway tolling and congestion charging only for the aviation White Paper to reject demand management in respect of air travel, where the climate change impacts are far greater? What is my hon. Friend doing to ensure that air transport is urgently brought within the Kyoto protocol, that emission caps are allocated to airlines so that they can be progressively reduced via emissions trading over time and that enforceable limits on noise and air pollution are placed on individual airports so that local residents do not bear all the environmental costs?
    Mr. Morley: On the latter point, I can assure my right hon. Friend that the White Paper addresses the issue of environmental impact on people who live adjacent to airports and, indeed, flight paths. I accept the main thrust of his argument in that the air transport industry
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    cannot continue to expect to be exempt from regulations and controls relating to carbon dioxide and its impact on the environment. We are having discussions with the EU about applying carbon trading to EU flights. He will he aware, of course, that this is a global industry; a global solution is required. We should not rule out any approach when considering the growth in air transport. That growth is a reality—we cannot ignore that either—but we must accept that the industry globally must come within controls that recognise its environmental impact and also the matter of reducing carbon dioxide emissions.
    Mrs. Caroline Spelman: The Minister says that he has regular discussions with the Department for Transport, but a clear gap in those discussions was identified by the Environmental Audit Committee, which criticised the Government for their failure to undertake a proper environmental impact assessment of their plans for airport expansion. That omission has been compounded by the White Paper, which has spread blight far wider than was necessary. The Department for Transport has said that airport operators will have to pay for the problem of generalised blight, but what assessment has his Department made of the impact on council tax payers where the airport is in local authority control?
    Mr. Morley: On the latter point, there are a number of airports under local authority control, many of which were pressing the Government for expansion along the lines set out in the White Paper. Of course there will be costs, which we would expect the airport authorities to deal with. They understand that very well in relation to their expansion plans.
    We recognise the potential for impact assessments and DEFRA has been sponsoring a study on the effects of aircraft noise on children in schools, for example, as part of our commitment to a proper evaluation of the potential impact of pollution at all levels, whether it is noise pollution, air pollution or any form of pollution from the airports. We take these things seriously; they are being addressed. Any airport that is subject to an expansion plan would be expected to do the environmental impact assessment.

    Horse Passports
    Mr. David Cameron: What estimate she has made of the cost of enforcing new legislation on horse passports; and if she will make a statement. [146378]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): The horse passports regulations will be enforced in two ways. Local authority trading standards officers will be responsible for enforcing the requirement to have a passport. The Meat Hygiene Service will be responsible for enforcing the legislation at the slaughterhouse. Enforcement will be subsumed in existing responsibilities and resources.
    Mr. Cameron: What will the Department tell people when they see an army of snoopers paid for with council tax to inspect their stables; when they see a law that has

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    been condemned as defective by a Committee of the House; and when they see a measure that excludes most wild ponies, which do occasionally—and regrettably—end up in the food chain, while including donkeys and other ponies, virtually none of which do? Why have the Government wasted so much time in introducing such a ridiculous piece of bureaucracy just so that the French can go on eating horsemeat?
    Alun Michael: The hon. Gentleman obviously knows very little about the legislation and the reasons for it. It will clearly surprise him to learn that it has strong support in the horse industry.
    The advantage of the horse passport system, apart from the identification of horses and the meeting of our obligations under the legislation, is that the industry will be able to go on using the methods that it currently uses, which are extremely valid and would not be used unless the regulations were in place.
    Mr. Owen Paterson: That was an amazing reply. The National Audit Office has confirmed that the British Cattle Movement Service has lost more than 100,000 cattle, at a cost to the British taxpayer of £15 million a year. Can the Minister name three clear lessons from that fiasco to prove to the House that this latest bureaucratic nightmare will not lose a similar number of horses?
    Alun Michael: It was an amazing reply because it was made in response to an amazing question from an Opposition Back Bencher, but the Front Benchers are even better: they do not seem to understand the difference between horses and cattle.
    We have introduced a statutory instrument that responds to our discussions with the industry about the most efficient and co-operative way of implementing legislation. It is a good example of the Government working with the horse industry and recognising the contribution that it makes to this country and the economy of rural areas. I must say to the hon. Gentleman that that was never done by his party when it was in government.

    Coastal Erosion
    Norman Lamb: If she will make a statement on the impact of dredging on the rate of coastal erosion. [146379]
    The Minister for the Environment (Mr. Elliot Morley): There is no evidence that licensed gravel extraction off the coast is having an effect on coastal erosion, but as a precaution each application must include a coastal impact assessment, which is carefully scrutinised.
    Norman Lamb: Given that many experts—including the head of the erosion project—believe that dredging can have a significant effect on the rate of coastal erosion, given that the revenue from dredging off the Norfolk coast amounts to some 40 per cent. of national revenue from dredging in any one year, and given the extent of erosion off the Norfolk coast, is it not time for an urgent inquiry into the impact of dredging on the rate of coastal erosion?
    Mr. Morley: Research has been and is being done on both the impact of dredging and the movement of
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    sediments in the southern North sea. In the 1990s Southampton university conducted studies on the impact of offshore dredging and concluded that it had no real impact on sea bed patterns or erosion. More recently, in 2002, a study was undertaken of the movements of sea bed sediments in the southern North sea. Although it did not specifically examine the dredging itself, it too concluded that dredging was having no direct impact on coastal erosion.As far as I am aware, there is only one example of a proven impact on coastal erosion, and that dredging was immediately inshore.
    We take these matters seriously; we do not dismiss them. We take them into account in our overall evaluation of licence applications. At present, however, there is no evidence that dredging is having an effect on coastal erosion.

    Milk Prices
    Sir Nicholas Winterton: If she will take steps to increase the farm-gate price of milk for UK dairy farmers. [146380]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): The reasons for low farm-gate prices over the past few years are complex, and cannot be reduced to a single factor. Many of them are for the industry to address. However, the Government can and have taken action in line with their strategy for sustainable farming and food to facilitate such developments.
    Sir Nicholas Winterton: The Secretary of State will know of my long interest in the UK dairy industry. Does she admit that it is extremely important to many parts of the countryside throughout the UK? While there has indeed been a strengthening of support prices in recent times, for obvious reasons, the price increase is not percolating down to farm-gate prices. What meaningful action are the Government taking to ensure that the dairy industry supply chain operates correctly, thereby addressing the frustration of dairy farmers—not least in my constituency, where the industry is very important? They are justifiably concerned about farm-gate prices, and feel that producers should receive a bigger and fairer return for what they produce.
    Margaret Beckett: I do recognise both the hon. Gentleman's long-term interest in this issue and the importance of the industry to the country as a whole. I am grateful to him for recognising that there has been a recent strengthening in the price, and I understand his concern as to whether that is reflected at the farm gate. However, there have been recent signs that cheese prices have improved, which may lead to a further increase in prices, at least in the short term.
    The important point that the hon. Gentleman highlights concerns the action that should and can be taken to improve the supply chain. My noble Friend Lord Whitty has chaired meetings of the Dairy Supply Chain Forum, which has looked at improving efficiency, collaborative solutions and other issues. The Milk Development Council has initiated an innovation workshop to look at the barriers in the sector, and we have given a grant to the Food Chain Centre so that it

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    can look at precisely these issues. We have also established the English Food and Farming Partnerships in order to encourage collaboration. I fully recognise that great concern still exists in the dairy sector and that we would all like to see a lot more improvement, but I hope that the hon. Gentleman will accept that, just as he has sought, the Government are taking steps to work on the supply chain.
    Mr. Ian Davidson: How many of the dairy farmers for whom more money is being sought were among those farmers and rural businesses who made false and exaggerated claims to the Government for compensation and repayment after the recent foot and mouth outbreak? Can my right hon. Friend tell us what steps she is taking to reduce the welfare dependency that is prevalent among so many of our farmers?
    Margaret Beckett: Although we of course deplore, as the whole House doubtless deplores, any steps that were taken to make false claims on taxpayers' resources during the foot and mouth outbreak, I do not believe that there is any indication that a particular sector is more responsible than another. However, my hon. Friend is right in that there is a widespread wish, including within farming itself, for a change in the way that we support British agriculture, making it more related to the actions of the market. Indeed, that process underpins the common agricultural policy reforms that we negotiated recently, and we are in continuing discussion about how we implement those reforms in the near future.

    Fruit Farmers (Kent)
    Hugh Robertson: If she will make a statement on Government assistance to fruit farmers in Kent. [146381]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): Fruit farmers in Kent, like fruit farmers in the rest of the country, receive benefits from the Department for Environment, Food and Rural Affairs' substantial research and development programme, of which about £2.5 million is being spent in this financial year on relevant research at East Mailing, and on the national fruit collection at Brogdale. Producer organisations in the fruit sector receive about £3.5 million a year in assistance from the EU. In addition, growers are eligible for assistance under the England rural development programme and other Government schemes.
    Hugh Robertson: Bearing that reply in mind, can the Minister therefore explain to the House why the national orchard—the country's supply of fruit trees—has declined by a staggering 25 per cent. since this Government came to power?
    Alun Michael: The timing, I suggest to the hon. Gentleman, may not be related to electoral decisions in the way that some matters are. It is the industry's role to produce and to market goods at a quality and price that are attractive to consumers. It operates in a very competitive market, and certain products are more
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    difficult to produce in this country than in others: those factors have certainly had an impact. Because of our climate, the yield of some varieties is not as great as it can be elsewhere. It is worth pointing out that horticulture has never received the price support that has caused such economic distortion in other areas of agriculture.

    Foot and Mouth Disease
    Michael Fabricant: What steps she is taking to prevent a further outbreak of foot and mouth disease. [146382]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): The many steps that have been taken to prevent foot and mouth disease, including improving the detection of illegal imports of meat, banning swill feeding, subjecting animal movements to licensing and a standstill period, are all detailed in the Government's response to the foot and mouth inquiries. Contingency plans have also been strengthened to deal with the disease, should an outbreak occur.
    Michael Fabricant: I am grateful to the Minister for mentioning the illegal importation of meat, because he knows that the British Veterinary Association has identified that as one of the main causes of foot and mouth disease. If he visits the US, Australia, New Zealand—or indeed most other countries—he will find sniffer dogs waiting for him whose job is to detect the illegal importation of meat. The last time that I raised this matter with the Minister, he accidentally told me that the UK had more than two sniffer dogs available. I am grateful for the letter of apology that he sent to me, but will he say how many sniffer dogs we now have for the detection of the illegal importation of meat, and how many airline terminals and seaports have to be covered?
    Mr. Bradshaw: That was a very long question and I shall try to answer as much of it as I can, if Opposition Members stay quiet for a moment. I have travelled to New Zealand, where I was snapped by a sniffer dog for carrying a piece of fruit. The hon. Gentleman is therefore not correct when he says that America, Australia and New Zealand have sniffer dogs only for meat. Those countries have them for the detection of other food products as well, but they have a very different tradition from us. The hon. Gentleman knows that New Zealand is especially concerned about its particular biodiversity.
    In the UK, we have two sniffer dogs that are specifically allocated to the detection of illegal food imports into this country. We will soon have six such dogs, and in the next financial year we will double the amount of money made available to Customs and Excise for that purpose. I expect that the number of sniffer dogs will increase further. However, Opposition Members must realise that, in the current security climate, there has been a bit of a run on sniffer dogs and on their handlers. Their main priority has been to detect explosives, and I hope that Opposition Members will agree that that is absolutely right.

    Sites of Special Scientific Interest
    Colin Burgon: What assessment she has made of the effectiveness of English Nature in protecting sites of special scientific interest. [146383]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): The Countryside and Rights of Way Act 2000 gave English Nature new powers to protect SSSIs from harm, and to concentrate funding on improving their condition through positive management. The Department is working with English Nature and others to increase the percentage of SSSI land in favourable condition. The first complete condition assessment of the 4,112 sites in England was published in full last month. I should add that 1 have seen the work of English Nature on my recent visits to national parks, and it is very impressive.
    Colin Burgon: I thank my right hon. Friend for that reply, but cannot agree with this classification of the work of English Nature. If I had to give it a mark for its 'work in my constituency, I would give it nul points. It gives us very little help in protecting SSSIs. We recently fought an opencast sand and gravel application between Methley and Allerton Bywater. If I were to write to the Minister, would he give me a considered reply that would help to illustrate the weakness of the approach adopted by English Nature?
    Alun Michael: I should be happy to look at any specific issues that my hon. Friend wishes to raise. The Government's 95 per cent. target is a tough and challenging one, spread across a very large number of sites. However, I should be happy to look at specific examples, if my hon. Friend would like to write to me.

    Common Agricultural Policy
    Paddy Tipping: When she will make an announcement on the method of making agricultural support payments to farmers in 2005 following the mid-term review of the common agricultural policy. [146384]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): We hope to make an announcement on the model for allocating entitlements under the new single payment scheme in a matter of weeks.
    Paddy Tipping: The outcome of the mid-term review was a radical and progressive step. Will my right hon. Friend go further down that path and introduce
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    proposals that do not rely only on historical claims, but which pay close attention to those voices that advocate a hybrid solution?
    Margaret Beckett: I am grateful to my hon. Friend for those observations. We have received some 800 responses to the consultation that we carried out following the reformed negotiations, and their variety was most interesting. Some responses supported historic allocation, while others supported area-based schemes and still others supported hybrid solutions. We are considering all those proposals with great care, and are paying particular and detailed attention to their impact on farm incomes and on the future and sustainability of UK farming.

    Bovine Tuberculosis
    Ann Winterton: What recent assessment her Department has made of the spread of bovine TB. [146386]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): Our latest assessment shows that bovine TB restrictions affected approximately 5 per cent. of cattle herds in Great Britain between January and November 2003, compared with nearly 4 per cent. for the same period in 2002. There were 2,869 new TB incidents in the first 11 months of 2003—a slight reduction on 2002. The long-term trend is still upward, although this has been distorted by changes to the TB testing programme in the aftermath of the 2001 foot and mouth disease outbreak.
    Ann Winterton: May I tell the Minister that this is a very serious subject for the cattle industry in the United Kingdom, that bovine TB is almost endemic and that it is creeping into different areas of the country? We have had trials and reviews, but what action will the Government take?
    Mr. Bradshaw: I recognise the seriousness of the matter, not just for the cattle industry, but for the taxpayer. TB in cattle is costing the general public more than £70 million a year—not just in compensation paid to owners whose cattle are slaughtered, but on research programmes, which are an important part of the action. The hon. Lady will be aware of the randomised badger culling trials that are being undertaken to try to ascertain the true role played by badgers and whether badger culling operations should be a possible policy option in the future. We are also reviewing our whole TB strategy. If the hon. Lady would like to feed her views and comments into that review, I am sure that they would be extremely welcome.

Business of the House
12.31 pm
Mr. Oliver Heald: Will the Leader of the House please give us the business for next week?
The Leader of the House of Commons (Mr. Peter Hain):The business for next week will be as follows:
MONDAY 12 JANUARY—Second Reading of the Housing Bill.
TUESDAY 13 JANUARY—Opposition Day [2nd Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
WEDNESDAY 14 JANUARY—Second Reading of the Employment Relations Bill.
THURSDAY 15 JANUARY—Second Reading of the Human Tissue Bill.
The provisional business for the following week will be:
MONDAY 19 JANUARY—Second Reading of the Civil Contingencies Bill.
TUESDAY 20 JANUARY—Second Reading of the Armed Forces (Pensions and Compensation) Bill.
WEDNESDAY 21 JANUARY—Opposition Day [3rd
Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
THURSDAY 22 JANUARY—Debate on "Attendance and Behaviour in Schools" on a motion for the Adjournment of the House.
I have today written to all Members explaining how I intend to review the sitting times of the Chamber before the next election. Members will recall that the decision of the House in October 2002 was to change the hours until the end of this Parliament. The Modernisation Committee will need to review the current arrangements before then, and the House will need to decide whether to maintain or change them.
In the meantime, I will consult on a series of commonsense alterations that can be made—without waiting for the Modernisation Committee's review—to make the current arrangements work better, for example, through changing Committee sitting times and the times when the Chamber is available for visits. Members have expressed their concerns to me about the clash of Committee sittings with other duties, the 8.55am start times, the compression of the week, making better use of early evenings and access for constituents.
On the main question of the sitting hours themselves, there were and still are strong views. Since becoming Leader of the House in June last year, I have been made only too aware of the deep division of opinion between Members in all parties. We are keen to ensure that we find a way forward that, as far as possible, reflects a new and durable consensus, so I wish to explore a balanced set of changes. Colleagues will receive from the Procedure Committee a questionnaire about hours and the Modernisation Committee will consider its findings as part of its formal review of hours, which will include a more comprehensive survey. I can assure the House that all Members will have an opportunity to express their views.
Mr. Heald: I thank the Leader of the House for his announcement about sitting hours, but he knows that
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the House is looking for prompt action from him. Will he tell us more about the timetable of his review and that of the Modernisation Committee—either today or, if not, next week?
The programme motion on the Traffic Management Bill, which was dealt with on Monday, provided for a Committee end-date of 12 February. However, hon. Members assumed that the Bill would start its Committee stage next week, in accordance with normal procedure. Is he aware that we have now been told that the Committee will not start until 3 February and that there is widespread concern about that? Will he pledge that future programme motions will make it clear if there is to be a late start date in Committee, and what does he intend to do about that programme motion in particular?
On the Hutton report, can the Leader of the House confirm that the Prime Minister will not only make the statement to the House that we have been told about, but will lead for the Government in the debate? Does the Leader of the House agree that it is important that civil servants are treated fairly? He will have seen the draft Bill proposed by the Public Administration Committee this week on the civil service. Are we to have a statement on that? On the same subject, does he expect the Prime Minister to make it clear next week in the House whether he agrees with Sir Kevin Tebbit's evidence that it was the Prime Minister who authorised the release of Dr. David Kelly's name? If the Prime Minister agrees with that evidence, he should say so, rather than leaving Sir Kevin—a senior civil servant—dangling in the wind.
Will the Leader of the House tell us whether the constitutional Bills, such as that on the reform of the House of Lords, will be dealt with on the Floor of the House, as is the convention? It is important that we receive such an assurance, especially on House of Lords reform.
Mr. Hain: I thank the hon. Gentleman for his welcome for my statement on the sitting hours. He requests prompt action, and I am concerned about the aggravation caused by early sitting times and other issues—including the fact that hon. Members have not been able to bring constituents into the Chamber after the House has risen in the sometimes relatively early evening, and the fact that Members with constituencies well outside London, such as myself, have not been able to bring constituents to the House for line of route tours in the same numbers as before because they cannot get here early enough. I am in discussion with the House authorities to see what progress we can make promptly.
On the question of the Modernisation Committee's timing, the hon. Gentleman will know—as a member of the Committee—that we are engaged in an important exercise to discover how Westminster can be better connected to the average citizen, so that they can feel that the House of Commons reflects their views.
Mr. Eric Forth: What does that mean?
Mr. Hain: The right hon. Gentleman sneers at that, but I see it as my responsibility as Leader of the House to ensure that the Commons is better connected to the democratic wishes of voters. That exercise will go on for

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some months and thereafter the Committee will formally start the review of the sitting hours. I welcome contributions from the Conservatives, and from Front Benchers and Back Benchers on both sides of the House, so that we can reach a new and durable consensus. It is possible to make changes that will mean that instead of bitterly divided views on the sitting hours, we have a consensus on how to move forward. However, as I said in my letter, I do not see a majority for returning to the old sitting hours when we used to sit well into the night and sometimes into the early morning. Members of the public did not believe that their elected representatives could sensibly make laws at such times. We must consider a series of changes and I want to listen to everyone before proceeding.
The hon. Gentleman asked about the Traffic Management Bill. I am curious about his question on that point, because the start date and the number of sittings were agreed through the usual channels and I understand that no further representations have been made by the Conservatives or anyone else through the usual channels. It is, therefore, a source of concern to me that the hon. Gentleman has raised the matter, and I am sure that the Whips will want to consider any points that are made in the normal way, through the usual channels.
The hon. Gentleman asked about the Hutton report, and I have made the situation perfectly clear. I agree that civil servants must be treated fairly—I am in absolute agreement with the hon. Gentleman on that point. But let us take one step at a time. As I made clear well before Christmas, the Prime Minister will come to the House on the day that the report is published; he will answer questions and, as he said yesterday, he will be willing to be cross-examined on all the issues, including those raised by the hon. Gentleman. That is the proper way to proceed. Subject to the decisions made by Mr. Speaker on how long the Prime Minister's statement will run, there will be an opportunity for as many Members as possible to put their point of view and to hold the Prime Minister to account following the publication of the Hutton report.
My job is to ensure that the House can discuss accountability and all the issues involved in a proper way. When the report is published, I shall keep the House informed about exactly when the subsequent debate will take place and how it will be structured.
On the question of the constitutional Bills, of course the Bill on reform of the House of Lords will be heard on the Floor. That is the proper way to discuss that matter and I shall be happy to receive representations about the detail of it from the shadow Leader of the House.
Mr. Paul Tyler: May I assure the Leader of the House that we at least think that the central role of the House of Commons and Parliament generally in debating the affairs of the nation is critical, and that the re-engaging the electors in that process is extremely important? In that context, can he give us some reassurance?
As Leader of the House he is, we would hope, the primary champion for the rights of the House. Can he give us an absolute undertaking that when the Hutton
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report is published it will be made available to Members of the House at precisely the same time as it is made available to the media? Would it not be outrageous if the report of that inquiry, which has become something of an inquest into Government spin and Government spin doctors, was handed out to the media—or spun to the media—in advance of its presentation to the House? I appreciate that the details are not in the right hon. Gentleman's hands, but will he undertake to make representations to Lord Hutton to ensure that the report will be released simultaneously to Members of the House and to the media? That is extremely important and I hope that right hon. Gentleman can give us that assurance today or, if not, that he will do so as soon as he has been able to discuss the matter with Lord Hutton.
On the sitting hours, I agree with the Leader of the House that it is extremely important that those who send us here should have an input in the process.
Mr. Forth: What?
Mr. Tyler: The right hon. Gentleman does not seem to think that it matters whether the electors know what is happening in the House. Well, I do and I believe that it is extremely important that, for example, broadcasters have at their disposal, in the evening, the main decisions of the House. At present, the Government have a large majority, but important debates and Divisions could be taking place—perhaps in the near future—that should be communicated to those who send us here. Is it not important that those who send us here know what is happening in the House of Commons and can see it at a reasonable hour? Will the Leader of the House give us an undertaking that the Modernisation Committee will take evidence from those whom we represent, as well as from Members and those who communicate with us?
Mr. Hain: I welcome the hon. Gentleman's definition of my role as the primary champion of the rights of the House. That is the way that I see my role and that is how I try to carry it out.
The hon. Gentleman made important points about the Hutton report. As he implied, those matters are for Lord Hutton. Neither my right hon. Friend the Prime Minister nor I, in my role as Leader of the House, have been informed when the Hutton report will be published. We do not yet know that. I shall draw to Lord Hutton's attention the points that the hon. Gentleman made. The decision on who receives what first, in respect of the media and the House, is not in the hands of the Government, but I am sure that Lord Hutton will want to take careful note of the points that he made. I am equally sure that the hon. Gentleman is not accusing Lord Hutton of spin; the matter is not for the Government, but for Lord Hutton and his secretariat.
I very much agree with the hon. Gentleman's last point: electors matter. They send us here and hold us accountable at general elections. It is imperative that we address how electors feel about what we do in the House, the way that we do it and the access that we give them, including better online access. We should not simply be preoccupied with contemplating our own navels and our own internal procedures. We should also

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think about how we have a better direct link to the views of the people in the ways that we conduct business and reflect their views in our proceedings
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I just tell the House that we have a very congested agenda before us today? There is an important statement to come, and there is a great deal of interest among hon. Members in the Bill that will follow. I am not sure whether I will be able to call every hon. Member who is trying to catch my eye during business questions, but I appeal for brevity, and I will do my best in those circumstances.
Mr. George Howarth: May I congratulate my right hon. Friend the Leader of the House both on the decision he has reached and on the open-minded way in which he has approached this subject? May I assure him that, contrary to some press reports, those of us who have been campaigning for a review have been doing so not with a wish to turn back the clock—that can never happen—but to arrive at a sensible way in which the business of the House can be conducted? Indeed, does he agree that that is precisely what our constituents would expect? Finally, may I suggest that, if he continues to proceed in the manner that he has described, we can reach a consensus, which, even if it does not please everyone, will content most hon. Members about how we conduct our business?
Mr. Hain: I very much welcome and agree with what my hon. Friend says. I interpreted the motion as a call for a review, not for a reversal, and between the position that he enunciates and those who, like me, voted for the arrangements governing the existing hours, it is possible to find a new consensus that meets all people's concerns.
Sir Patrick Cormack: Does the Leader of the House accept that the best way to test the will of the House is to have a vote? Will he bear it in mind that Tuesday sittings were changed by a majority of seven? Why cannot we have a vote now on that and keep the other arrangements as an experiment?
Mr. Hain: Because it is not clear what the vote would be on. The hon. Gentleman and many other hon. Members will know that I have spoken to scores of Members in all parties on this matter. There are very divided opinions. We ought to have a proper review and proper consideration, and then decide how we can move forward on an agreed basis.
Mr. Clive Betts: Will the Leader of the House arrange for a debate on the Government's policy with regard to child day centres, linking early-years education with care provision beyond normal school hours, and, in particular, on how that links to existing provision in local authorities? In my constituency, in the Mosborough area, a pioneering project does precisely what the Government intend to do nationally. Unfortunately, the local authority is proposing major changes, which greatly concern my
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constituents, and I would very much welcome the opportunity to discuss that issue on the Floor of the House.
Mr. Hain: I am sure that the opportunity to discuss that issue on the Floor of the House could arise in various different ways, but I agree that it is very important and I am pleased that my hon. Friend has raised it.
Mr. Forth: The Leader of the House will recall that, yesterday, the Prime Minister said:
"we are about to have a report published"—
the Prime Minister obviously knows something that the Leader of the House does not, so perhaps he will have a chat with him about that—
"and rather than the right hon. and learned Gentleman",
the Leader of the Opposition,
"cross-examining me now, he can do that on the day the report is published".—[Official Report, 7 January 2004; Vol. 416, c. 250.]
Can the Leader of the House therefore confirm exactly what he envisages the arrangements will be? First, when the Hutton report is published, will hon. Members have a reasonable amount of time to consider it before it comes to the House? Secondly, will we have a proper opportunity and length of statement to question the Prime Minister immediately? As important, will we then have a full-day debate, opened by the Prime Minister, who should stay throughout the debate so that he can be held properly to account and answer the questions that arise from the Hutton report? Can we please have all that now on the record from the Leader of the House?
Mr. Hain: I assure the right hon. Gentleman that we will not follow the precedent set by the Conservative Government on the Scott report when the Opposition spokesman was led into a darkened room and had only a brief time to consider the situation. It is a matter for Lord Hutton to decide precisely the terms in which the report is released, and I am sure that he will listen to the points made by the right hon. Gentleman. However, the Prime Minister has made it crystal clear, as he did yesterday and as I did before Christmas, that he will come to the House on the day that the report is published and immediately make a statement and be subject to cross-examination and questioning by all the Members of the House who wish to take part in that. I have already answered the point about the arrangements for the debate to follow.
Dr. Brian Iddon: On Tuesday in the other place, there was a debate on the use of the Pugin Room and demands were made for it to be returned to the exclusive use of peers or, as a compromise, for it to be turned over to joint use. Will my right hon. Friend bear in mind the fact that we represent constituencies and are regularly lobbied? We need space to meet our constituents and those who otherwise lobby us.
Mr. Hain: I understand that this is a matter for the Accommodation and Works Committee, but I unite with my hon. Friend and, I guess, Members on both

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sides of the House. I have regularly taken constituents to the Pugin Room. It is an important facility for Members of the Commons even though it has a red carpet.
Sir George Young: On another parochial issue, the Leader of the House will have noticed that the unsightly and noisy demonstration in Parliament square has not reappeared in the new year. Can we have an early debate on the report of the Procedure Committee and a vote so that the House has the necessary powers to prevent any recurrence of that demonstration?
Mr. Hain: I agree with the right hon. Gentleman. The matter needs to be addressed and we are considering it. We will seek to address it as soon as possible in the way that he describes.
Ms Meg Munn: I welcome the announcement by the Leader of the House that he will move immediately to look to make changes to improve the operation of the new hours. Does he agree, however, that it would be premature to consider how the new hours are operating before the problems that Members have raised continually over the past year have been resolved?
Mr. Hain: As I said earlier, I agree that some aggravating issues can be addressed quite quickly. We then need to take not too long but enough time to make sure that we reach a consensus. As my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) suggested, I believe that it is possible to reach a consensus on modern hours that do not involve some of the anomalies that we face at present. That is the issue that I wish to consult upon, and we can move forward and find an agreed way to do that.
Mr. Andrew Mackay: Does the Leader of the House appreciate that his response to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) indicated to the House that the Prime Minister was not going to lead in the debate on the Hutton report? Again and again, the Leader of the House and the Prime Minister merely say that the Prime Minister will make a statement. Can we have a categorical assurance that there will be a reasonable amount of time between the statement and the debate and that, as has to happen, the Prime Minister opens the debate from the Government Dispatch Box and remains in his place throughout the debate so that he takes account of what the House thinks of the report? As the Prime Minister has made it clear that Hutton will report shortly, it is essential that the Leader of the House now tells us that what I have asked for will happen. If he does not do so, we will assume that the Prime Minister is on the run.
Mr. Hain: That is an outrageous suggestion, and the right hon. Gentleman knows it. The Prime Minister set up the Hutton inquiry and the Prime Minister has already made it clear that he will come here on the day that the report is published to answer questions from the
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right hon. Gentleman and anybody else. I do not think that the Prime Minister could be more accountable or open than that.
As for the debate, I have already made it clear that it will happen a week after publication of the report, so there will be enough time for the right hon. Gentleman and other hon. Members to consider it. The question as to the handling of the debate needs to be decided in the light of what the Hutton report says. [Interruption.] Indeed, the Conservatives have made up their minds about what the Hutton report says in advance. That is a prejudiced position; we are adopting a fair and open-minded position and the House's interests will be protected to ensure that the handling of the debate and who opens and who closes it is appropriate in the light of the report that appears from Lord Hutton.
Mr. Peter Pike: Although I still support the changes made to the hours, may I urge my right hon. Friend to consider one change that would be welcomed by many people who do not live in London or the south-east? That would involve making all Fridays constituency days in which we could accept constituency engagements and moving debates on private Member's Bills to Tuesday evenings. When the Modernisation Committee considers the proposals, will he also confirm that the Conservatives' proposal was for the House to sit from 9 to 5?
Mr. Hain: It was indeed, but I will not pour oil on troubled waters. [HON. MEMBERS: "Go on."] I am being incited to do that, but I am seeking to be a cross-party Leader of the House rather than a single party one.
My hon. Friend makes a very interesting suggestion, and I have received strong representations to that effect. It may well be one of the ways in which we can achieve a new consensus. I point out, however, that I read in The Guardian the other day that, under the new sitting hours, the average length of a sitting day has increased from 7 hours 40 minutes in 2002 to 7 hours 57 minutes. It is not the case that the new sitting hours have led to less scrutiny. On the contrary, they have actually led to more time in the House.
Rev. Martin Smyth: The Leader of the House will be aware that the Northern Ireland Assembly has been in suspended animation since October 2002, and it does not look like it will get off the ground very speedily. Will he therefore consider how urgent legislation required in Northern Ireland is dealt with in the House? For example, the draft Disability Discrimination Bill refers to every other part of the United Kingdom, but does not refer to Northern Ireland except to exclude it from its provisions. Surely all citizens with disabilities or other problems should be looked after by the House in the interim.
Mr. Hain: I agree that citizens suffering from discrimination, including on the ground of disability, must be protected by the House. The hon. Gentleman will know that Northern Ireland questions will take place on Wednesday next week, so he will have an opportunity to raise these matters then. I know that the Secretary of State for Northern Ireland will certainly want to take account of his views.
Mr. Alan Williams: In the negotiations that the Leader of the House has about the

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hours, will he place priority on opening up the hours from 9 o'clock to 12 o'clock on Wednesday morning, which, as he understands, are not at present regarded as available for Select Committees? If he could release those hours, that would make a major difference to the problems that currently confront Select Committees.
Mr. Hain: I am very sympathetic to my right hon. Friend's point. We could make better use of Wednesday mornings for Select Committees, in particular. That is precisely one of the common sense and balanced set of changes that I am seeking to explore over the coming weeks.
Mr. Patrick McLoughlin: Bearing in mind that two Cabinet Ministers gave evidence to the Hutton inquiry—the Prime Minister and the Secretary of State for Defence—is it not only right that those should be the two people who deal with the debate?
Mr. Hain: That may well be the case.
Mr. Forth: Ah.
Mr. Hain: We continually get a ray of darkness from the right hon. Gentleman. This is about handling the matter in a way that is satisfactory to both sides of the House in the light of what Lord Hutton's report says. We do not know where its focus will be and where its spotlight will fall in any conclusions. There is a range of institutions from the BBC to the Ministry of Defence and to the others involved for which there is ministerial accountability, so it is sensible to consider the report and then decide. I will report to the House immediately it is possible to agree a way forward. I will obviously hold business questions on the Thursday of the week in question—whenever that is.
By the way, it is not the case that I have said something different from the Prime Minister about the publication of the report. He is not aware of the publication day any more than I am.
Mr. Michael Connarty: I welcome the statement by the Leader of the House on the revised hours. I know that he is trying to be balanced, but I urge him to amend them only marginally. We now have a more intense, productive and focused week when we are here, and that should not be damaged.
To turn to other Government business, the House received—I think quite warmly—a ten-minute Bill from me in July that talked about amending the National Minimum Wage Act 1998 to take out the anomaly by which people's tips paid through the payroll are counted towards the minimum wage. Are the Government making any progress in introducing such a provision as an amendment to part of their business?
Mr. Hain: I will certainly make inquiries about my hon. Friend's latter point and let him know what the situation is. I, with him, voted for the changes to the sitting hours. I did not think that it was sensible for the House to sit at 11.30 pm, 12.30 am or 3 am and make legislation. However, the existing hours and
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arrangements have thrown up a series of issues, some of which I have described, that we need to address. Unless we address them, we will not get a new consensus and there will be continued division—sometimes bitter division. It is my job to try to assemble a new consensus and I hope that I will have the co-operation of every hon. Member in doing that.
Sir Nicholas Winterton: As Chairman of the Procedure Committee, I thank the Leader of the House for his announcement about the sitting hours. He might not be aware that the Committee is issuing a questionnaire this very day to all Members of the House. Will he join me in urging all hon. Members to respond to the questionnaire, which, although short, is comprehensive? When he sees the replies that are received, he will see that it deals with every option that the House could consider.
On the day on which the statement on the Hutton report is made, will he, as the Leader of the House representing the best interests of the House, ensure that the business on that day is light—there will be notice of when the statement is likely to take place—so that Mr. Speaker can allow maximum time for questioning?
Mr. Hain: I will bear in mind the important point that the hon. Gentleman makes. I have a copy of his excellent survey in front of me, which will be dispatched to hon. Members today. I am glad that he is conducting the survey because it will provide an important background to the Modernisation Committee's review. I have identified at least four options in the letter that I have dispatched today to all hon. Members: first, that we should revert to the old hours; secondly, that the new hours should stand; thirdly, that adjustments should be made to improve the new hours, including Committee sitting times; and fourthly, that the House should sit until 10 pm, as previously, on Tuesdays, but that we should keep the early hours on Wednesdays and Thursdays. Those are not the only options but they show the complexity of the issue. We need to take a bit of time to consider it, and his survey will help us to achieve that.
Mr. Harry Barnes: Has my right hon. Friend read early-day motion 357, which is about an unjustified United States raid on the offices of the Iraqi Federation of Workers Trade Unions in Baghdad on 6 December?
[That this House notes that no explanation, apology or compensation has so far been proffered by the US military authorities in Iraq for the unjustified raid on 6th December 2003 on the temporary headquarters in Baghdad of the Iraqi Federation of Workers' Trade Unions (IFTU) which led to the arrest of eight IFTU leaders who were later released; congratulates a wide range of organisations around the world such as the International Confederation of Free Trade Unions, the International Labour Organization, the Scottish TUC, the RMT union, the Labour Start web site, the Italian CGIL, the International Metalworkers' Federation and the Congress of South African Trade Unions for showing solidarity with the fledgling independent Iraqi trade union movement; regrets that the Iraqi Governing Council and Iraqi political parties failed to act to defend such an important part of the new civil society in Iraq; agrees with

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the IFTU on the need for an apology from the local US military commander who led the attack, for commitments that such an act should never happen again, and for compensation for damages inflicted on the IFTU personnel and possessions; and endorses its appeal for the American authorities not to be further misled by remnants of Saddam Hussein's regime about the new trade union movement.]
I appreciate that it has been difficult to get information out of the Americans about what occurred, but will efforts to find out be redoubled so that we may have a statement to tell us what actually happened from their point of view? I am aware that the Foreign Office and the TUC are taking a progressive line to encourage the development of free trade unions in Iraq, but efforts need to be made so that the Americans respond in a similar way to this country. There was an answer on 27 November—
Mr. Deputy Speaker: Order. The hon. Gentleman has made his point.
Mr. Hain: I am concerned that we get to the truth of what really happened on the occasion that my hon. Friend mentions, which he also raised before Christmas. I assure him that in a democratic Iraq there must be democratically constituted trade unions. They should have the right to organise and their headquarters should have the right to be free from any intimidation or harassment. We should bear that principle in mind when trying to get to the bottom of the matter.
Mr. Michael Weir: Is the Leader of the House aware of the proposal made yesterday by the hon. Member for Falkirk, West (Mr. Joyce) that Scotland adopt variable top-up fees if they proceed in England to prevent Scottish universities from being at a financial disadvantage? Surely we need a debate on the emptiness of the Government's devolution policy if Scotland is simply expected to follow policy decided here. Should the Scottish Parliament not have full financial independence so that it can adopt Scottish solutions rather than being forced to follow this place?
Mr. Hain: We know where the hon. Gentleman stands. He wants an independent Scotland—he nods—despite the fact that the people of Scotland have overwhelmingly rejected that. They prefer devolution with the strong Scottish Parliament that they have with responsibility for matters including education.
Mr. Martin Salter: We are all aware of the pressure that the Leader of the House is under on the revision of the hours, but has he had an opportunity to cross-reference the Conservative Members who signed early-day motion 262 with their entries in the Register of Members' Interests on outside business concerns that might be influenced by the new regime?
[That this House notes that the revised sitting hours and related arrangements have now been in place for 12 months; believes that there is now sufficient experience of the new arrangements to enable the House to judge what
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adjustments would be appropriate to enable the business of the House to be conducted more effectively; and calls for an urgent review of the reforms.]
Mr. Hain: I have not had the opportunity to do that. I am sure that any decision taken by the House will not be informed by what individual hon. Members might do outside the House in the mornings.
Mr. Greg Knight: Is the Leader of the House aware that this week 500 employees at the Sara Lee factory in Bridlington in my constituency lost their jobs? Does he appreciate that the scale of that loss is likely to have an effect on the town of Bridlington similar to that which the collapse of the entire UK car industry would have on the city of Birmingham? Will he therefore pass on my deep concerns to the Secretary of State for Trade and Industry with a plea for more to be done to encourage inward investment in English seaside towns, and may we have a debate on that?
Mr. Hain: The right hon. Gentleman is free to apply for a debate. I am concerned to hear the news from his constituency, but it is against the background of a continued rise in jobs and employment and cuts to unemployment—including in his constituency. Despite the sometimes terrible impact of company and factory closures, most, if not all, people find alternative jobs. We must ensure that we defend existing jobs wherever we can, including in his constituency, but if closures take place, we have active employment programmes to ensure that new job opportunities arise. That has been the case consistently throughout the country since we took power in 1997.
Mr. Kelvin Hopkins: My right hon. Friend will no doubt have seen reports this week about my right hon. Friend the Secretary of State for Transport's frustration at the failure of the Strategic Rail Authority and his apparent decision to take back powers from the authority to Ministers. That is clearly another stage toward direct public ownership and control of the railway industry, which I welcome. Will the Leader of the House arrange a full debate on the Floor of the House on the ongoing crisis in the railway industry, especially so that we may consider the prospect of bringing the whole industry back into public ownership and making it accountable to this Parliament?
Mr. Hain: I am sure that the Secretary of State will want to take account of my hon. Friend's views. I am also sure that my hon. Friend will want to celebrate the fact that more than 1,500 new trains have come into service since we came to power. Passenger numbers have been rising and record investment is going into the railways. There is a long way to go, given the mess that we inherited in 1997, but I am sure that he would want to applaud those trends.
Mr. Nigel Evans: The Leader of the House says that he wishes to reconnect Parliament with the people, which I support. In that spirit, is he aware that the Radio 4 "Today" programme held a poll of its listeners over Christmas to find out the sort of Bill

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that they would like to come before Parliament? They decided that there should be a Bill on law and order so that people could protect their homes properly. Will he arrange an urgent debate on that so that we can discuss something that worries many people?
Mr. Hain: I agree that the issue worries many people. I thought that the "Today" programme's poll was a worthwhile exercise. It is open to any Member of the House, including those high up on the private Member's ballot—
Michael Fabricant: Where is the hon. Member for Ealing, North (Mr. Pound)?
Mr. Hain: My hon. Friend the Member for Ealing, North (Mr. Pound) was not high up on the ballot. It is open to any hon. Member to take forward the "Today" programme listeners' verdict, and I hope that hon. Members will consider doing so.
Ms Oona King: May I urge the Leader of the House to support the suggestion to bring in private Members' Bills on a Tuesday evening because it is important that we use that space more? I resist being held hostage here by the lovely gentlemen opposite—they are all gentlemen—and urge my right hon. Friend to ensure that we maintain the current sitting hours.
Mr. Hain: My hon. Friend and others have put to me the interesting suggestion that we could liberate all Fridays and consider private Member's Bills on Tuesday evenings. Arithmetically speaking, we would require 22 Tuesday evenings to have time equivalent to that on the Fridays on which we sit. The suggestion will no doubt be considered during the Modernisation Committee's review.
Bob Russell: The House will agree that the health and well-being of our children is of the utmost importance. With that in mind, will the Leader of the House, with the Secretary of State for Education and Skills, find time to debate here the incredible, callous decision of Conservative-controlled Essex county council to abolish the school meals service in Essex?
Mr. Hain: I find it astonishing that the Conservative council has taken that decision, and I agree with the hon. Gentleman that the welfare of youngsters ought to be at the top of our agenda.
Mr. George Foulkes: Returning to the topic raised by the hon. Member for North Cornwall (Mr. Tyler), engaging the public with our work here, does not the Leader of the House think it entirely unsatisfactory that he cannot announce the topics for Opposition day debates when he makes his statement? The public do not know what is coming up in those debates, and neither do the MPs and Ministers who have to prepare for them. Should he not make it a requirement that, when he makes his statement, the topics of Opposition day debates have to be announced, or are the Opposition in total disarray?
Mr. Hain: Fortunately, I am not responsible for the Opposition, but I think that my right hon. Friend makes
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an interesting suggestion. In the last few minutes, I have had requests about all sorts of details for the coming weeks shouted at me or made in more sedate terms. It would be interesting to know the subject of Opposition day debates in advance so that Members could prepare and their constituents make representations. I shall energetically pursue the suggestion.
Mr. David Ruffley: The Leader of the House may be aware that the Penrose report delivered to the Treasury on 23 December has now been copied to the Financial Services Authority. That is not part of the normal Maxwellisation process, and it is a decision that the Equitable Life members action group has rightly described as highly questionable. In light of that and the appalling year-long delay in publishing Penrose, may I ask the Leader of the House to prevail on the Financial Secretary to the Treasury to come here next week and make an urgent statement about what exactly is going on in the Penrose inquiry?
Mr. Hain: I am sure that the Financial Secretary will have carefully noted the hon. Gentleman's points. Those with Equitable Life pensions have suffered grievously, and their interests ought to be seriously considered.
Mr. Mark Lazarowicz: I am grateful to my hon. Friend the Member for Burnley (Mr. Pike) for pointing out earlier that the Conservatives' proposal for our hours was for a 9 to 5 day. Will the Leader of the House bear it in mind that the 11.30 am start was itself a compromise between those who wanted a late start and finish and those who wanted an earlier start to the day? Will he assure the House that if he moves towards a compromise, it will not only be a question of having later hours; we should also have the option of an earlier start on all days of the week?
Mr. Hain: That is exactly why the issue is so complex. My hon. Friend has made a perfectly fair case. I do not know whether Conservative Front Benchers will resurrect their proposition—the right hon. Member for Bromley and Chislehurst (Mr. Forth) is nodding vigorously—or whether they will get unanimity on that point. Opinion on the Conservative Benches is just as divided as it is in other parties. We should approach the issue on a non-party basis in the interests of the House.
Mr. Christopher Chope: May I assure the Leader of the House that he was absolutely wrong in what he said about the Traffic Management Bill? No start date for the Standing Committee sittings has been agreed, and nor has the number of sittings. Surely, in any event, those are matters for the Programming Sub-Committee, and that cannot meet until the Selection Committee has appointed the Standing Committee. Will he assure the House that the Standing Committee on the Traffic Management Bill will be appointed this coming week so that the Programming Sub-Committee can decide how many times the Committee should sit and when it should start?
Mr. Hain: I made it clear earlier that the usual channels—the Government Whips—invited further

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representations. That invitation still stands, and if the hon. Gentleman or anyone else wants to make representations, they will be listened to.
Huw Irranca-Davies: My right hon. Friend will, I am sure, have noted several excellent ideas for modifying the existing hours. He, like me, is of a generation who remembers the joy of getting a Meccano set at Christmas, and we know that just because one cannot get all the right pieces in place the first time, that does not mean that one chucks it in the bin.
Mr. Hain: That is a verdict with which I completely agree.
Mr. Tim Boswell: In the interests of justice, will the Leader of the House consider having a word with his Foreign Office colleagues about the situation of my constituent, Ian Nisbet, who, with two other British nationals, has been imprisoned in Cairo since April 2002? His legal process has been constantly frustrated by adjournments, the last one of which took place on Christmas day and is likely to lead to a further 15-week delay. Does the right hon. Gentleman consider that entirely inappropriate in a legal process? If we do not get some action from the Egyptian authorities, it may be necessary for me and other concerned Members to hold another debate in the House on the matter.
Mr. Hain: I appreciate the hon. Gentleman's point, and I know that the Foreign Secretary will want to address the matter as soon as he can. Indeed, he is actively considering the hon. Gentleman's requests and representations at the moment.
Several hon. Members rose—
Mr. Deputy Speaker: Order. We must now move on.

Higher Education (Student Support)
1.15 pm
The Secretary of State for Education and Skills (Mr. Charles Clarke): Today, the Government will introduce a Bill to reform higher education. Before we do so, I wish to make a statement about the related matter of student support.
Change in higher education is necessary because, first, the barriers to access to university need to be lowered. The measures that I am announcing today mean that disadvantaged students will get financial support to study what they want, where they want. Secondly, universities need more investment. Vice-chancellors will say that these proposals will generate hundreds of millions of pounds of new money for them to spend on improving the quality of teaching and to compete with the best universities in the world. Thirdly, we need to move towards treating students as financially independent from the age of 18.
I believe that there is a broad consensus about the fact that universities need more resources and that it is reasonable for students to make some contribution, after they have graduated, to those resources. Where there has not been consensus is about the fairest way to raise this new funding, so that access from the poorest communities is promoted and not undermined. The Government have listened carefully to the concerns that have been raised and we have discussed this matter widely. Those concerns very much inform the proposals that I make today.
Our original proposals were set out in the White Paper that I presented to the House on 22 January last year. Those are that we will remove up-front fees for full-time undergraduates, so that higher education is free at the point of entry. We will provide loans with a zero real rate of interest, paid back through the tax system at a rate dependent on earnings, beginning at a threshold of £15,000 a year rather than the current £10,000. We will introduce the new higher education grant from September this year.
We will also establish the new office for fair access, to ensure that universities support students from the poorest backgrounds. The focus of OFFA's work will be those universities with the poorest track record in widening participation. No university will be able to put up its fee without OFFA's agreement. OFFA will concern itself not with admissions but with applications. In addition, universities will be able to set fees ranging from £0 to £3,000. We will maintain the £3,000 cap in real terms through the next Parliament.
Those were the commitments in the White Paper. Today, I add the following commitments to meet the concerns expressed by some colleagues. First, I accept that some colleagues have genuine concerns about the impact of variable fees on our university system. The Government will therefore establish an independent review, working with OFFA, to report to this House, based on the first three years of the fees' operation.
Moreover, our legislation will require that any proposal to raise the fee cap above £3,000 in real terms is subject to affirmative resolution. There will be an opportunity for a debate on the Floor of both Houses so that every Member of Parliament can vote on such a

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proposal, dependent on discussions through the usual channels. However, I have to make it clear that we do not agree that a substantially higher fixed fee would be the way to raise additional resources. It would be deeply damaging. We would be denying universities the freedom to incentivise industrial, vocational, scientific, technical, engineering and sandwich courses, or foundation degrees, which are vital for the economic future of this country.
Secondly, I want to emphasise the Government's strong commitment to promoting access to higher education for part-time and mature students. From September 2004, we will provide improved fee support and a grant for part-time students. I welcome the changes recently announced by the Higher Education Funding Council for England to support part-time and foundation degree courses. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education and the funding council will consult on ways in which the funding system might further support the development of part-time study in higher education.
Thirdly, for full-time undergraduates entering higher education from 2006, we will write off any student loan repayment that is still outstanding after 25 years. On average, we expect graduates to repay their loans in 13 years, but those who have taken on family responsibilities or are on low incomes may need more time. That gives rise to genuine concerns and fears, and I think that a 25-year limit is fair. Fourthly, from September 2006, maintenance loans will be raised to the median level of students' basic living costs, as reported by the student income and expenditure survey. That increase will be modest for most students, but it will be significant for those studying away from home in London. The principle of the decision will ensure that students have enough money to meet their basic living costs while studying.
I emphasise that the student loan is free of real interest. Repayments will be based on money earned, not money owed. It is much better for students to be able to borrow on those terms than at commercial rates. Over time, although it cannot be afforded at this stage, the Government's aspiration is to move to a position where the maintenance loan is no longer means-tested and is available in full to all full-time undergraduates, so students will be treated as financially independent from the age of 18. My fifth and final intention is to ensure that every student from a poor economic background has enough resources to meet even the highest course fee without incurring additional debt. The £3,000 package is achieved by maintaining fee remission at about £1,200; raising the new higher education grant from the £1,000 that I originally proposed to £1,500 a year for new students from 2006; and, through OFFA, requiring universities to offer bursaries to students from the poorest backgrounds, so that the full fee cost of the course will be covered. For example, there will be a minimum bursary of £300 for a course whose fee is £3,000.
The effect of our commitments is that no student from a poor background will be worse off as a result of our proposals, whichever university they attend and whatever fee is charged for the course. Moreover, those commitments will align the level of the higher education grant with that of the education maintenance allowance for 16 to 18-year-olds, which has been very successful.
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About 30 per cent. of students will receive a full grant and a further 10 per cent. a partial grant. A major advantage of this approach is that modern universities with strong records in recruiting students from poorer backgrounds will be able to use at least 90 per cent. of any increased income from fees to improve course quality, rather than about 70 per cent. of such income, as implied in some earlier discussions. Those universities have made, and are making, a first-class contribution to this country's higher education and economy, and I want to encourage, not discourage, that commitment.
On the bursaries, I have invited Universities UK to work with universities and ourselves to develop model bursary schemes to provide a clear offer to students. In addition, I accept in principle the argument of some of my hon. Friends, who have made it very coherently, that there is a strong case for combining the higher education grant and fee remission to give students greater choice up front about the way in which they use the financial support that they receive from the Government. Again, that would be a further move towards financial independence at 18. However, that approach raises policy, financial and practical issues, which we are examining in detail. If they can be resolved, we will adopt that approach.
From the outset, I have emphasised that our changes, which mainly come into effect from 2006, will not affect adversely the level of public funding for teaching and research. My proposals will improve access to university by abolishing up-front fees and re-establishing student grants. They will provide universities with resources that they urgently and desperately need. They will raise the threshold at which repayment begins from £10,000 to £15,000 and, moreover, they move us towards the day when students become financially independent at 18. The abolition of up-front fees, the higher education grants and bursaries, the raising of the interest-free loan, the higher repayment threshold, and the 25-year write-off of debt mean that students will have the money that they need while they learn, and can afford to contribute when they earn. Universities will get the sustainable funding stream that they need to deliver world-class higher education. I can tell the House that this is a coherent package to be taken as a whole or not at all. If it is not supported by the House, none of those benefits will arise. It is not a pick and mix menu. I commend the proposals to the House.
Mr. Tim Yeo: I am grateful to the Secretary of State for providing me with a timely copy of his statement.
The policy that the Secretary of State has announced today is a clear breach of a specific pledge given by every Labour Member of Parliament to voters at the last general election. I remind hon. Members that the Labour manifesto in 2001 said:
"We will not introduce 'top-up' fees and we have legislated to prevent them."
That promise was made without any qualification whatever. Even hon. Members who read the totality of the Labour manifesto would not have found any hint that that promise applied only to one Parliament.
In the face of principled opposition to the Bill from Members on both sides of the House, including a significant number of Government Back Benchers who

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are less willing than the Prime Minister and the Secretary of State cynically to break their promise to voters, the Secretary of State has now produced a policy that achieves an amazing triple whammy. It is bad for students, it is bad for universities and it is bad for taxpayers. It is bad for students because, in future, the vast majority will pay far more for their education, thus making university education dependent on ability to pay, not ability to learn. It is bad for universities because, for the first time ever, their freedom to decide whom they admit to study will be taken away. There is no certainty that all the money paid by students in top-up fees will become extra income for the universities, which may well remember that when the Government introduced new student fees in 1998, much of the money was later clawed back by the Treasury. It is bad for taxpayers because, for every extra pound that the universities receive, the taxpayer will have to contribute at least £1.25. Even a Government as wasteful of taxpayers' money as the present one may think that that is not good value.
The first question—[HON. MEMBERS: "Hurrah!"]
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman. The House should listen to the Opposition spokesman in exactly the same—[Interruption.] Order. If the hon. Member for Huddersfield (Mr. Sheerman) wants to teach me to do my job he must find another occasion. The fact of the matter is that the House should listen with moderation and calm. This is a difficult issue and has attracted a great deal of attention. The Secretary of State was listened to respectfully, and so should the Opposition spokesman.
Mr. Yeo: Will the Secretary of State guarantee that Exchequer funding per student will grow in real terms after the introduction of top-up fees? Has the Chancellor of the Exchequer, notable today by his absence from the Front Bench, guaranteed the Secretary of State that that is indeed the case and that there will be no repeat of the previous clawback?
Secondly, if the Secretary of State does not intend to increase the maximum top-up fee that universities can charge, why is that not included in the Bill—adjusted, perhaps, for inflation? As the whole policy is based on breaking one election promise, any assurance the Secretary of State offers on this matter is of little value, especially as his statement today already confirms the very mechanism by which he plans to increase the maximum cap in future.
Thirdly, will the Secretary of State confirm, therefore, that top-up fees capped at £3,000 a year are too low to contribute to the costs of increasing student numbers to the arbitrary 50 per cent. target set by the Prime Minister, and that top-up fees would need to rise to £8,000 or £10,000 a year to make any meaningful contribution to the costs of meeting that target?
Fourthly, what is the cost of the extra concessions the Secretary of State announced today? In particular, what will be the cost of writing off any student loan not repaid within 25 years? Will the right hon. Gentleman confirm that the cost of the concessions that he announced today
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and of any further concessions that he may decide to make during the passage of the Bill raise the cost to taxpayers without benefiting universities? In practice, it would be cheaper for taxpayers if the Secretary of State simply wrote out a cheque to the universities, instead of setting up the cumbersome bureaucracy contained in the Bill, but that of course would not allow him to establish the new access regulator, and thus to be able to control who will enjoy the benefits of university education.
Fifthly, the Secretary of State has said that some universities may retain 90 per cent. of the income received in fees. Will he confirm that that means that other universities will retain less than 90 per cent.? How much less? Seventy per cent.? Fifty per cent.? Will he confirm that the system that he is setting up involves a cross-subsidy between one university and another? Is this the stick that the new access regulator will use to beat universities that refuse to co-operate with the Government's social engineering experiment?
Sixthly, we know that some hon. Members are worried about variable fees and the fact that they create two tiers of universities—those that charge the top fee and those that do not. Is the Secretary of State happy that his policy creates two tiers of students—those willing to incur debts of £30,000 and those who are not? Does he recall saying in the House on 3 December that universities that charge a zero fee for certain courses would encourage people to study those subjects? The right hon. Gentleman thereby, perhaps unwittingly, confirmed that top-up fees would deter some students from taking up the university places for which they are qualified.
The Conservative party will fight this damaging policy every inch of the way. We will oppose the Bill when the Secretary of State finally summons up the courage to bring it before the House for a vote on Second Reading. We believe the Bill breaches the principles that universities should have independence not just academically, but over admissions policy, and that access to university should not be based on ability to pay.
A year after first announcing the policy, the Government have been forced into a series of changes which have made an already flawed policy much, much worse. The Government are destroying the independence of universities, burdening future students with huge debts, and wasting more taxpayers' money. That is wrong in principle, it will be damaging in practice and it must be defeated.
Mr. Clarke: Let me deal with the points that the hon. Gentleman raises. The manifesto was for a Parliament. It is for a Parliament. That is what will be carried through. On the so-called triple whammy, it was almost a triple whammy in the foot, if I may say so, covering up a serious absence of policy on the part of the Opposition.
The hon. Gentleman claimed that our policy was bad for students. It is not. It is good for students. Getting rid of up-front fees will benefit students. Providing proper financial support for students when they are at university is good for students. Expanding places at universities, which the hon. Gentleman wants to close, will be good for students, particularly for those from working-class backgrounds who traditionally have not gone to university.

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The policy is good for universities, as the universities will tell the hon. Gentleman in his interesting cabals with them, because the universities will get the resource they need to provide the quality of teaching to raise standards in this country. It is good for the taxpayer, because in our basic position the taxpayer will be able to benefit from an active economic sector with the universities which generates the current economic strength of the country.
On the hon. Gentleman's specific points, I can give him the pledge he seeks that the Exchequer funding per student will grow, as it has done since we were elected in 1997, and in sharp contrast with the record of the Government whom he supported. We have decided not to write the top-up fee into the Bill, as he suggests, but to allow every hon. Member to vote on any increase in that fee, as I suggested, because of the existing concerns. It would be inflexible to do otherwise.
On the hon. Gentleman's third point, he said that the £3,000 capped fee is too low. That is extraordinary from a party that says that it will introduce a zero fee for everybody and criticises us for introducing a £3,000 cap, which it says is too low. That is an arrow at the inconsistency and dishonesty at the core of the Conservative party's policies.
On the hon. Gentleman's fourth point, the cost of extra concessions, the one that he specifically asked about was the 25-year debt repayment guarantee. The cost of that, we estimate, is about £25 million all together. We think it is reasonable because there are groups of people—I think particularly of those who are parenting, who may go through university and decide to raise families and not go into the workplace, or people who go for vocational work, for example in the Church or voluntary organisations, without significant income—who should be freed from the worry that they have a debt hanging over them for the rest of their life. I believe that policy is right.
It is not the case that there will be cross-subsidy between one university and another. Overall, the fees that are generated will be used by the universities to improve the quality of what goes on at those universities. That is the right way to proceed. On the hon. Gentleman's final point about the zero fee, as I have said many times to him across the House and to his predecessors, money is a factor in any decision that anybody takes. My point is that money is a factor, not the factor. If we are trying to encourage, as we are, foundation degrees, science study, engineering study and sandwich courses, it would be extremely shortsighted to take the view that we should forbid a university trying to encourage people on to those course to use the power to vary fees.
Mr. Phil Willis: I thank the Secretary of State for an advance copy of his statement.
Despite the orchestrated support for the Secretary of State, Labour Members should be ashamed of themselves and of the statement. If they vote for the policy, they will be breaking a solemn manifesto promise. To say that it was for one Parliament will not wash with the electorate, who were told categorically that they would not have to pay top-up fees. Labour Members will vote for the policy knowing that they are pulling up the ladder of opportunity for thousands of poorer students in generations to come.
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If Labour Members vote for the policy, that will fly in the face of everything the Labour party has stood for since its inception. This is a policy born out of Thatcherism. It has been adopted by a party that has lost its way—a party that has sold its principles to a Prime Minister who has led it elsewhere. Perhaps Labour Members think it is okay to say one thing to the electorate and something else when they are in government. [Interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. The House should give a hearing to the Liberal Democrat Front-Bench spokesman, in the same way as the other two spokesmen have been heard.
Mr. Willis: Thank you, Mr. Deputy Speaker. Hon. Members do not like the truth. The electorate will not be allowed to forget. We will not allow them to forget.
I have told the Secretary of State on many occasions that as a party we share the objectives that the Government are trying to achieve, particularly to encourage more students who are currently excluded from university to go there, and to provide greater resources to our universities. We are the only party that is offering a viable, sensible and costed alternative to the Secretary of State's policies.
It is no good members of the Tory party crying crocodile tears. This morning on the "Today" programme, when asked what the alternative was, the hon. Member for South Suffolk (Mr. Yeo) said that the Tories did not have one; they are simply against what the Government say. That is not a sensible debate. The Secretary of State may not appreciate our policy to fund higher education with a 50p tax rate, but it is a viable alternative to the Government's policy.
We will examine the Bill carefully. We support many of the proposals that the Secretary of State has put forward today. We support the up-front tuition fees; the increase in the repayment threshold; the raising of the threshold for maintenance loans and the 25-year limit on payments. We particularly welcome the increase in support for part-time and mature students. But for the Secretary of State to say that the Government will increase grants to £1,500 for our poorer students and then tell them to keep that in the bank for three years so that they can use it to pay off their tuition fees, is really hypocrisy of the greatest sort. That is exactly what has been said today.
The Secretary of State said that the £300 bursaries would be the minimum. What will happen in universities such as South Bank? How will our poorest universities get the funds together to support increased top-up fees? Perhaps the Secretary of State will enlighten us on how they will be supported.
The statement is a dog's breakfast. It is over two years since the Prime Minister launched a review of student funding. Two years ago he said that one of his objectives was
"tackling the problems of debt and the perception of debt".
How on earth can one treble students' debt and achieve that objective?
The Secretary of State and the Prime Minister may believe, from their privileged backgrounds, that debt should be seen as an investment, but in reality, many of

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the kids on the estates of Moss Side, St. Paul's in Bristol or Seacroft in Leeds would laugh in the face of anyone who made that comment. It is a middle-class comment perpetrated on working-class kids.
What in these proposals will support students with disabilities? Where is the support for students on four-year courses and sandwich courses? Will they all have to pay top-up fees? Where will our universities get the resources? Too little, too late, was the response from the chairman of the Russell group this morning. It expected, like most hon. Members, that £3,000 would be only for starters for the universities; it would not be where they finish. The regulator is simply a sop to Labour Back Benchers and is a bureaucratic nonsense for our universities.
What is the funding gap that these proposals are trying to bridge? The Secretary of State must have an estimate, because on page 6 of the DFES paper "Student loans and the question of debt" the average student debt in 2006 was estimated to be £15,000. What are we trying to do? Does he agree with the Institute for Fiscal Studies that the money coming in from his proposals will be only £500 million?
The Secretary of State has been uncharacteristically disingenuous. He has tried to move the debate between fixed fees and variable fees. The real question is whether we have fees at all. The Conservative party has sold its principles long ago. The Labour party is about to do the same. The Liberal Democrats will oppose this measure on principle, not simply as opportunists.
Mr. Clarke: First, I thank the hon. Gentleman for his Christmas card this year. It contained as much information about Lib Dem policy as what we have just heard.
The Government's position is not to pull up the ladder of opportunity, to use the hon. Gentleman's metaphor, but to build a staircase whereby people from the poorest communities in Britain can have a chance. It is a staircase that involves better school education, better college education, better skills education and better university education, and that is something that we, and I believe the hon. Gentleman, are broadly concerned to do.
I am grateful that the hon. Gentleman said that he would examine the Bill carefully, but the point that I make in all candour to him and his colleagues is that when they consider whether to support the Bill on Second Reading, they must decide whether they want to carry through his mis-statement, when he said that he supported up-front fees. [Interruption.] It was a mis-statement; I acknowledge that his policy is the opposite. But the effect of voting against the Bill on Second Reading will be to ensure that up-front fees stay; to ensure that grants do not happen; and to ensure that the threshold is not increased. So the choice that he and his colleagues have to make is whether to vote for the Bill on Second Reading and then consider the various improvements that they would like to see made during the Bill's passage, or whether to try to vote the Bill down on Second Reading.
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The £1,500 grant to which I referred today is on top of the student loan, not in place of it in any respect whatever, and it can be used immediately, if so chosen, to pay off any fee that arises; it is not saved for three years and then used.
The new universities are very positive about the proposals, for the important reason that they are precisely the universities that have been most effective, most entrepreneurial, at developing courses that deal with the economic problems of our country, building relations with our different institutions—the sandwich courses and the four-year courses, the foundation degrees—and they want the flexibility to decide how best to do that, which is one reason why variability is important.
We have taken measures to assist students with disabilities. The disability student allowance is a good case in point. We do encourage the sandwich courses through our sector skills approach, and we will continue to do so.
All kinds of assertions have been made on the funding gap, but I shall rest on what Lord Dearing said in the report in 1996. He estimated a funding gap of the order of £8 billion. In order to deal with that, he proposed that we should ask graduates to contribute: a policy that the hon. Gentleman opposes. Lord Dearing proposes today, in an article in The Guardian that the hon. Gentleman may or may not have seen, that the variable fee approach is a way to attack that funding gap. He acknowledges, as he should, that from the Exchequer, from taxpayers' money, we have already put £3 billion in towards that £8 billion funding gap, and, as I said to the hon. Gentleman, we will continue to invest from the Exchequer, from taxpayers' money, in universities. So, yes, the hon. Gentleman is right that there is a funding gap; the question for serious politicians and serious political parties is how we close it. Our proposals are about doing just that.
Several hon. Members rose—
Mr. Deputy Speaker: Order. The House will be aware that there is some interest in this matter, but I must protect later business, so once again I ask for the co-operation of right hon. and hon. Members in not making statements but putting precise questions to the Secretary of State. That would be most helpful to everyone concerned.
Mr. Barry Sheerman: My right hon. Friend will know that I appreciate and support much of the Bill because, as he said, it moves back to the principles of the Dearing report. Does my right hon. Friend believe that there can be some refinements in Committee and on Report, because there is still room for change and improvement? Has he an open mind on change during the Bill's passage through the House?
Mr. Clarke: First, may I appreciate not just my hon. Friend's but his Committee's contribution to the public debate on this question during the past year? The short answer to his question is that of course refinements—his word—will always be looked at; that is the right thing to do. But if the question is whether we would be prepared

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to contemplate a fundamental change in the Bill's approach, for example on variability or whatever, the answer is no. It is, as I said, a package, but a package where refinements can be considered.
Mr. Julian Brazier: Will the Secretary of State confirm that the amount of money that the package in its totality will raise is less than the cost of the latest round of expansion in the universities, so the funding gap can only widen? Secondly, will he confirm that there are now 10 universities with a dropout rate of around 25 per cent. or higher, and does he think that that drop-out rate will go up or down after these proposals?
Mr. Clarke: I cannot confirm the hon. Gentleman's first figure because it is wrong. The extra money coming through will be of benefit to the universities. On his second point, Britain has the lowest drop-out rate of all the OECD countries. The drop-out rate is high in 10 universities; there are other universities from the same group—the ex-polytechnics and so on—which have outstandingly good records on drop-out rates. We all work to improve them and the hon. Gentleman is right to raise the matter, but he should not demean what is happening. Our universities have an outstanding record on this compared with those in any OECD country.
Mr. Nicholas Brown: Why are the Government philosophically attracted to a market-based solution to the funding problems of higher education? Once the cap is lifted, as it inevitably will be, how will youngsters from homes of ordinary means, or even just above ordinary means, ever be able to afford to take the most prestigious courses at the most prestigious universities, for which the fees will of course rapidly be raised, as the vice-chancellors have, in fairness, said is their intention?
Mr. Clarke: My appeal to my right hon. Friend and others is to look at the reality of the current university system. Fifty per cent. of students in our universities—part-time students. postgraduates and others—are paying variable fees right now, in the system that is moving forward. That is the reality. The second reality that it is important to recognise—I believe, after speaking to the universities, that this is the case—is that every university will have at least one course whose fee is £3,000, and that no university will have only £3,000 courses. There will be massive variety through the system, and that is as it should be.
The reason for variability is not some ideological market-based obsession of the kind that some people are concerned that we are about. This is about trying to ensure that universities, in seeking to increase access and to provide courses that are relevant to the economic future of the country, are able to make rational choices about adopting the right fee structure to address those issues while bringing more money into the system. The assurance that I will happily give to my right hon. Friend is that there is no market dogma driving this approach. I know that some people believe that there is, but there is not.
The second assertion made by my right hon. Friend related to ambitions for raising fees in the future. I know that he is concerned about that because we have
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discussed it directly. As I have announced today, we have in place a rigorous process—involving every Member of the House in a vote, if the situation were to arise—relating to allowing the cap to increase. That is a positive approach that will deal with the issue properly.
Mr. Peter Luff: How can the Secretary of State justify imposing on a newly married, recently qualified teacher couple a combined household debt of £50,000 to £60,000 or more?
Mr. Clarke: That will not happen. The hon. Gentleman gave the example of teachers, but he may not be aware that my Department has a whole programme for encouraging people into teaching which involves paying up front in a way that deals with many of these questions. Other colleagues in both the private and public sectors have similar policies. The key question for the married couple to which the hon. Gentleman refers is: are they able to earn at a level that enables them to make a reasonable contribution? If so, they will make that contribution; if not, they will not have to pay it. If, for example, the wife decided to stay at home and look after the children, the effect of the 25-year cap that I have announced today would mean that that debt would not hang over her after that point.
Dr. Alan Whitehead: I welcome my right hon. Friend's commitment to move money into the pockets of poorer students who would otherwise not have access to higher education. May I urge him, however, to examine urgently and early the case for fee remission to grants up front, so that the £1,300 that could be created by that process could go into the pockets of those poorer students in 2006, when the scheme starts?
Mr. Clarke: I appreciate the effort that my hon. Friend and his colleague, my hon. Friend the Member for The Wrekin (Peter Bradley), have put into the consistent, serious, intelligent and applied work that they have done to promote the course of action that he suggests. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education has discussed with him in detail the direction that we should take. We do not agree on all the points, as my hon. Friend knows, but we appreciate the spirit and style of the serious discussion on the policy.
The answer to my hon. Friend's question is yes, we will examine the question in the way that he suggests. As I said in my statement, there is a strong case for bringing fee remission and the grant together, which we support in principle. There are some serious issues involved, and it would be foolhardy of me to say, "Okay, we can brush those aside", which is why we must look at the matter carefully. If we can sort those problems out, however, we will do what he and his colleague have suggested.
Mr. George Osborne: Do a majority of Labour Back Benchers support this policy?
Mr. Clarke: I am tempted to ask the hon. Gentleman whether a majority of Conservative Back Benchers support their Front Bench's policies—[Horn. MEMBERS: "Yes!"]—then I will say the same the other way round.

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I will answer that question after the Second Reading of the Bill, when we are able to count up the numbers in detail.
Mr. Huw Edwards: What reassurance can my right hon. Friend give to those modern universities that already take a high proportion of access students? They have expressed concern that the extra fees that they might receive would be redirected to the students and not directed into teaching and other resources that they need.
Mr. Clarke: The reassurance that I can offer to those universities is that, instead of having to find about —800 per student in the form of higher fees—as outlined under our previous proposals—they will have to find about £300 per student, as a result of our decision to increase the student grant. As I said in my statement, that means that in all cases, the universities will be able to spend more than 90 per cent. of any income that they generate by increasing fees—it is a matter for them to decide whether they want to do that—directly on teaching quality, salaries, investments and so on, rather than reprocessing it into student bursaries. We have analysed this question in relation to those new universities. The figure that we were talking about before was of the order of 70 per cent., and it was that figure that gave rise to some of the concerns reflected in my hon. Friend's question. What I have announced today addresses that point.
Mr. David Bendel: Given that the universities that charge top-up fees are now going to be expected to pay something back to the students in the form of bursaries, will the Secretary of State tell us what proportion of the gap in funding—whose existence he has acknowledged—will be covered by the increase in fee income that the universities can expect to receive?
Mr. Clarke: The estimate depends entirely on the level of fees that the universities charge, and we do not know that yet. If we were to assume that 75 per cent. of courses were set at the full £3,000 level and the remaining quarter at the current level, for example, the extra income that that would generate would be of the order of £1 billion to £1.2 billion. On an annual basis, it helps to supplement the £3 billion that we have already put in to attack the historic underfunding deficit that we inherited from the Conservatives.
Peter Bradley: I am rendered practically, but not quite, speechless. It has to be acknowledged that this is a radically different Bill from the one that I believe Ministers originally envisaged, and much of it is welcome. I welcome the commitment to a maintenance grant, to equity for the modern universities, and to parliamentary control over the future of variable fees. The Bill leaves one important question unanswered, however. If we have disarmed the adverse consequences of variable fees, what are they for? If the three-year review is unable to find an answer to that question, will my right hon. Friend be prepared to abandon them altogether?
Mr. Clarke: The reason we have variable fees—I know that my hon. Friend understands that we already
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have them for part-time students, postgraduate students and so on—is to reflect the reality of university courses as they are. As I said to my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), this policy comes not from some ideological dogma but from a recognition of the reality of promoting the kind of courses that we want. I recognise, however—and it is an important recognition, if I may say so—that my hon. Friend and his colleagues reflect accurately a widespread concern, certainly on the Labour Benches and possibly on the Opposition Benches, that the impact of variable fees could be different from the one that I have just described. It would be foolish not to acknowledge that such concern exists.
My answer has two parts: first, that we have a review of the kind that my hon. Friend and his colleague, my hon. Friend the Member for Southampton, Test (Dr. Whitehead), have promoted, to analyse the effect of the variable fees after three years, so as to determine whether my hon. Friends' fears have been realised, involving an independent report making recommendations directly to the House so that it can make its judgment on those questions and every hon. Member can make their call—that is a principled way of going about this in a proper way. Secondly, we put in the safeguards that I announced earlier relating to the ability of every Member of the House to vote on any increase in fees.
Mr. Desmond Swayne: On precisely that point, will the right hon. Gentleman remind us of whether such motions would be amendable and tell us how much time would be available for their debate?
Mr. Clarke: As I said in my statement, the precise process is for the usual channels to discuss, but the submission that we are making quite explicitly is that this particular issue should be dealt with not on the Committee Corridor in the normal 90-minute exchange, but on the Floor of the House so that every hon. Member can make a decision on it.
Mr. Dennis Skinner: Is the Secretary of State aware that way back in 2001 I was elected to represent the parliamentary Labour party on the committee that endorsed the manifesto? There were a lot of things in it, but I felt pretty certain that we would not introduce top-up fees. It is clear that variable fees is just another way of describing top-up fees. I suggest to my right hon. Friend and colleagues that if there is not some way found to eliminate the variability of those fees, it is conceivable that the Government have bitten off more than they can chew.
Mr. Clarke: I am genuinely grateful for that contribution—[Laughter.] I mean that seriously. I answered the manifesto point a moment ago. I want to put in the mind of colleagues and my hon. Friend this fact: universities close courses; it happens quite frequently. They close courses because they cannot find students to go on to them. The main funding for those courses—say a physics course—comes through the HEFCE. If the universities say, "We want to run that course with the money from the HEFCE", they may

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decide that the best way to achieve that is to charge a low fee. If they want to establish a foundation degree in some area that we are talking about, which is a key aspect of our proposals, they may decide that it is not intelligent to charge a fee of £2,500 from the outset for such a degree. The question for us is, in those circumstances do we effectively forbid universities from deciding to lower a fee to attract students? My answer is no.
Mr. Eric Forth: How can the Secretary of State have the gall to talk about academic freedom when the Government control fees and funding, and a bureaucracy is to be set up to control admission?
Mr. Clarke: The OFFA process is about applications, not admissions, as I indicated earlier, and the right hon. Gentleman and Conservative Front Benchers are fundamentally wrong in respect of a charge made earlier by the hon. Member for South Suffolk (Mr. Yeo) and now by the right hon. Gentleman. It is wrong to say—it will not happen—that OFFA, which we are to establish, will control university admissions. Universities will control university admissions, and that is as it should be. Power would truly be taken away from the universities by following the policy of the hon. Member for South Suffolk, in saying that the money would come only from the state and not through fees. The inconsistency in his position—which many Conservative Members understand, but he does not—is the risk of universities being entirely dependent on the state.
Mrs. Lorna Fitzsimons: I represent Rochdale, where a majority of my constituents still do not go on to higher education, partly because we have not been lucky enough to have one of the education maintenance allowance pilots, although we are going to have them rolled out. Will my right hon. Friend accept it from me, as the representative of such a constituency, that the debate about choice and variability is erroneous? The biggest choice for my students—for those who are going to choose—is whether to go into higher education in the first place; the choice is not between institutions. The biggest determinant in that choice is aspiration at the ages of six and 11. As the Bill progresses, will he also ensure that we do everything we can for those aged six and 11? Although I give a huge welcome to the maintenance increase, which is long overdue, the thresholds represented by the ages of six and 11 will make the distinction for constituents such as mine.
Mr. Clarke: I agree with my hon. Friend completely. One of our hon. Friends told me this week that 9.1 per cent. of the students in his constituency went to university—that is a disgraceful figure. As I said to the hon. Member for Harrogate and Knaresborough (Mr. Willis), our task must be to build a staircase of opportunity and, as my hon. Friend says, it starts at the very bottom. In fact, I would say that it starts not even at six and 11, but at pre-five through the Sure Start initiatives, which have been so important. The only way that we will crack this appalling waste of talent and the
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disincentive to ambition and aspiration is by investing in the education system from birth and right through. That is why we must decide how and where we are going to do that. I believe that our policies will positively assist that to happen.
Mr. Tim Boswell: I was a higher education Minister when student numbers were expanding but no tuition fees were charged. Does the Secretary of State recognise the fact that from time to time I have had the chance to consider non-starter policies, which evolve by concession into non-earner policies without stopping being non-starters?
In the light of that analysis, I understand that the cost of the concessions that the Secretary of State has announced today exceed £1 billion a year. Can he confirm to the House—an answer he did not give earlier—that the Chancellor has guaranteed those commitments to concessions as new money for the higher education budget, or is there a danger that it will simply be knocked off that budget and lost to the university sector?
Mr. Clarke: If I had been a higher education Minister under the previous Government, I think that I would draw a veil over my record on university funding. The answer to the hon. Gentleman's question is that the policy is completely agreed with the Chancellor and with the Treasury. It will be carried through with the guarantee that I gave earlier—it is fundable and it will be funded.
Mrs. Anne Campbell: I welcome the concessions that my right hon. Friend has made, but, for those of us who are still extremely concerned about the principle of variability, how can he reconcile his statement that this is a coherent package with some incentive for us to vote for the Bill on Second Reading?
Mr. Clarke: I think that this is a coherent package. I also think two other things. The first relates to variability for fees for students from the poorest third of families. The proposals that I have made today effectively take away that variability, because they mean that any student from one of those poorest families will get their fees effectively covered by the combination involved in the £3,000 package. So, there is no variability from that point of view.
More than that, as my hon. Friend knows better than anyone else in the House, the decision of the university of Cambridge to respond to this approach by saying that it will go for bursaries—on top of the grant of £1,500 and on top of the fee remission of £1,200—of £4,000 for students from those families, which makes a total package of about £6,500, is a dramatic illustration of the fact that it will be genuinely possible for students from the poorest backgrounds to go to the most prestigious universities in this country. I can say to her that other elite universities, although I am not at liberty to reveal which, are prepared to do similar things. That is a direct consequence of the policies that we have carried through.
Sir Patrick Cormack: As the Secretary of State has been kind enough to share

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some of his aspirations with the House and to acknowledge concerns, he must have thought about what he will do if things do not work out as he hopes. What answer will he give to the vice-chancellors, and what will he do if they say to him, "This policy is not working. We are still underfunded."?
Mr. Clarke: On the funding aspects, we will continue to put funding in, as we do through the comprehensive spending review and by the process that we have had. As I said to my hon. Friend the Member for The Wrekin (Peter Bradley), we will review the operation of the process from that point of view as from every other. That is the right thing to do. I will tell the hon. Gentleman what I say to the vice-chancellors, and I say it quite directly: this is a major opportunity to transform the resources, funding and standing of universities in this country and to enable them to make the contribution that we all want them to make to research, teaching and local economic development. The Bill will be the means of achieving that. I urge all vice-chancellors to seek support for it for precisely those reasons.
Mr. Kevin Barron: My right hon. Friend knows that the take-up of higher education in my constituency and many others in South Yorkshire is well below the national average. I would like to know what estimate he has made of the difference that the new grant package, in particular the removal of up-front fees, will make to take-up. I recognise that low-income families are not the only issue, but my constituency has a high proportion of them, which must impact on the aspirations of my constituents. Will more of our young adults than at present go into higher education?
Mr. Clarke: The answer is yes, unequivocally. I say, by the way, that that is in direct contrast to the policy of the Conservative party, which wants to reduce the number of students. We are removing two key barriers. Key barrier No. 1 is that we are removing the up-front fee, which has to be paid if someone wants to get even a foot into the campus. The second barrier that we are removing is the fact that the maintenance loan is not enough for many students to fund their living costs while they are at university. I am putting that right through the announcement that I have made today, so our measures will specifically assist people in my right hon. Friend's constituency, and I am glad to say that.
Mr. Patrick McLoughlin: I quote:
"We will not introduce 'top-up' fees and have legislated to prevent them".
In the totality, what does that mean?
Mr. Clarke: I have already dealt with that on a number of occasions and I have nothing to add.
Dr. Brian Iddon: I find the concept of variability impossible to accept. I am worried about, for instance, the impact of the policy on the newer universities, which are already struggling financially to the extent that they are chopping the most
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expensive courses in science and engineering. In order to compete in the market economy that we are about to introduce, they will have to charge extremely low fees in comparison with better-off universities. That will make their financial position much worse. Are those universities expected to survive, or does my right hon. Friend expect them to amalgamate with nearby universities that are better off?
Mr. Clarke: I certainly do not expect amalgamation. As my hon. Friend knows, a specific proposal in the White Paper has allowed a higher education college in his constituency to become a university, which was not permitted by the previous arrangements. That is not a policy for merger; it is a policy for strong universities with community roots—and the Bolton institute certainly has those.
We need to invest in the science and engineering-based courses mentioned by my hon. Friend. The fundamental remunerative resource for those courses does not come from fees; it comes from the HEFCE, as a result of decisions made by my right hon. Friend the Chancellor in conjunction with it about the types of course that we want to encourage and support. That can happen only if those courses attract students, however, and that is what we must bring about. We must not erect barriers that prevent universities, such as the one in my hon. Friend's constituency, from doing what they need to do to recruit students.
Mr. Elfyn Llwyd: Yesterday, the hon. Member for Falkirk, West (Mr. Joyce) said that if the Bill became law Scotland would inevitably have to follow because it would not be able to compete. The Leader of the House has said the same to Welsh Labour Back Benchers. Does that not undermine the whole concept of devolution, given that every single party in Scotland and every single party in Wales is opposed to the proposals?
As an ex-president of the National Union of Students, is the Secretary of State not ashamed of, or at least slightly embarrassed about, introducing a policy that was considered regressive and divisive even by the Thatcher Administration?
Mr. Clarke: Those of us who represent English seats were entirely happy for the Scottish Parliament to decide what system of student support to choose. These matters are devolved, and rightly so. Let me, however, refer to something that I know the hon. Gentleman is seriously considering. One thing that the Bill will do is to devolve higher education student support to Wales, and if it falls that too will go.
Geraint Davies: Does my right hon. Friend agree that the introduction of a time limit for the repayment of student fees will make the proposals much more progressive from the point of view of low-earning graduates? For example, someone earning £17,000 a year for 25 years because of child care and career breaks will pay only £4,500, the maximum being £9,000. If the fees rise, that person will still pay £4,500. Poorer graduates will meet a falling proportion of the total fee costs over time. However, I urge my right hon. Friend to reduce the 25-year time limit if he can.
Mr. Clarke: The proposals will indeed have the effect described by my hon. Friend. Let me take this opportunity to thank him for, and congratulate him on, the consistent work that he has devoted over past months to supporting the policy that I have announced today.
Mr. Christopher Chope: How will the Secretary of State ensure that students who defer their university entry from 2005 to 2006 in order to do voluntary work at home or overseas during their gap year are not penalised?
Mr. Clarke: After Royal Assent, I shall ensure that all students and all families understand the implications of the policy for their own circumstances. The decisions that they make on the basis of that information are a matter for them. I am not going to start telling every student in the country what to do.
Joan Ruddock: I thank my right hon. Friend for his response to concerns raised by people like me, but may I tell him that the £15,000 threshold for repayments is still too low for graduate workers in London, especially those in the public sector? As for variability, I must tell him with great regret that he has not convinced me; but I am prepared—and I hope we shall be given time for this—to consult sixth-form students and students at Goldsmiths college to establish whether the package will deal with concerns about the future of poorer students.
Mr. Clarke: I am grateful to my hon. Friend for what she has said. We did indeed discuss the matter, and I have tried to take account of some of the points that she made to me then. I think it important for Members to follow her advice and discuss with schools and colleges in their areas what they expect the implications for them to be.
Having raised the threshold from £10,000 to £15,000 we considered raising it further, but decided that it would be better to put the money into increasing the maintenance grant. There is an argument to be had about that, but that was our judgment, and others will have to make their own judgments.
What is significant for my hon. Friend's constituents and for students living in her London constituency is my announcement about increasing the maintenance loan in line with the expenditure survey.
Paul Holmes: Most Members—including many who will, with heavy hearts, do what the Whips tell them and vote for this measure—believe that the introduction of a £3,000 variable fee is the thin end of the wedge. They fear that the limit will be removed, and fees will soar to the astronomical levels that we have seen in the United States. The Secretary of State has conceded that he can guarantee the £3,000 limit only into the next Parliament. What would he say to vice-chancellors such as the vice-chancellor of Imperial college London, who said this week that he would like to charge £10,000 a year in tuition fees to all students and £20,000 a year to medical students?
Mr. Clarke: I will say to those vice-chancellors in public, here in the House, what I have said to them in private: it will not happen. Let me also say to them that they should consider very carefully what support they can provide in the form of bursaries and grants. I made that point earlier in relation to Cambridge university, but I think other universities should do the same.
Mr. Jon Owen Jones: I agree with much of what the Secretary of State said in his statement, and I think he has the agreement of the House in general, but I do not agree with him about variable fees and I do not think the House does either. May I suggest that, in the time-honoured tradition, he establishes a commission—perhaps under the chairmanship of Sir Ron Dearing—to report in 2006 prior to legislation for 2008? Universities would then lose, at most, two years of extra funding, and the Secretary of State would lose one hell of a problem.
Mr. Clarke: Let me tell my hon. Friend of a problem that neither he nor I would lose. The problem that we share—he may experience it more than any other Member because of the large number of students in his constituency—is the need to secure the future of our universities in all respects, and to establish a student support system that is strong and effective. We can try to duck that problem for a while—not that my hon. Friend suggested that—but the country as a whole will still have to face up to it. One of the jobs of any Government, certainly a reforming Government, is to face up to such questions and to try to create a climate that meets the needs of the country. That is, I believe, what our policies are about.
Mr. James Clappison: The Secretary of State says that universities, not OFFA, will be responsible for admissions, but does not the funding mechanism that he has established, together with what he has said today about the focus of OFFA's work, put the strongest possible pressure on universities not to admit applicants strictly on the basis of academic merit, but to take account of other considerations about their backgrounds? That would be wrong, would it not?
Mr. Clarke: No, in no way.
Tom Levitt: I welcome this package, as I welcomed the original package. My local university, Derby, will certainly support it as well.
Will my right hon. Friend confirm that when a student is entitled to a higher education grant and a bursary and when the sum of those is more than the balance of the fees due, the student will still receive the money and will thus be a net beneficiary of the system?
I agree that it is important to maintain the principle of variability, but is not the effect of my right hon. Friend's proposals likely to reduce the amount of variability that exists in practice, as more universities opt for the £3,000 fee?
Mr. Clarke: The answer is yes to my hon. Friend's first question. I also agree with the second question, but I think that one will find a scattering of courses across

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the country in different universities, with some degree of variability. That deals with the situation, and is in fact desirable.
Mr. Andrew Robathan: What does the Secretary of State understand by the statement:
"We will not introduce top-up fees"?
Mr. Clarke: I shall say again what I have said before: a manifesto is for a Parliament. That is the situation.
Mr. Clive Betts: I welcome some of my right hon. Friend's proposed changes, but I still think the £15,000 limit too low and the 25-year period too long. However, my fundamental problem is with variability and the bringing in of a market-driven higher education system. Does he accept that if he were prepared to make concessions on variability, he would gain a widespread consensus among Labour Members? Without that, he will find it very difficult to win the support of many of his right hon. and hon. Friends, including me, for the total package that he is asking us to accept.
Mr. Clarke: The first point is that I have discussed variability today, and I hope that people will consider carefully the meaning of what I said. Secondly, through the support that we provide in a direct series of ways, I have established a position for the third of students from the poorest families whereby variability in the fees that they have to pay, or deal with, is effectively eliminated. Thirdly, I know that some colleagues—my hon. Friend may be among them, I am not sure—think that there should be no variation on a principled, ideological basis: that variation in part-time student fees, postgraduate fees and so on is okay, but variation in full-time undergraduate fees is not. But I believe that many of those who have been worried about variability are actually worried about a high fee level for students from poor backgrounds and its disincentive effect. I have sought to address that point very directly in today's statement.
Mr. Owen Paterson: What will be the annual cost of the concessions and the administration, and what, therefore, will be the net sum passed on to universities?
Mr. Clarke: It is not a net sum passed on to universities—it is the money that they raise by charging fees themselves. I gave the estimated answer to that question a moment ago. According to the estimate of 75 per cent. at £3,000 and 25 per cent. at the existing level, the income to universities would be some £1 billion to £1.2 billion.
Mr. Martin Salter: I welcome the extra help for poorer students announced by the Secretary of State, although I regret the lack of any movement on thresholds. None of the concessions would have been achieved but for the campaign run by Labour Members in the past 12 months. Does he accept that, despite the concessions and the movement made,
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he is asking an awful lot in asking us to play fast and loose with our own manifesto, on which he, I and every other Labour MP was elected?
Mr. Clarke: The request that I make to my hon. Friend and to all our colleagues is to assess the situation facing universities and student support, and to make a judgment, as I have done and as he will have to do. That is what we are about. The one thing that would not be acceptable would be to refuse to face up to these questions, which are important for the future of the economy and of our society. It is true that such active engagement in this debate—call it campaigning or whatever—has been a very important aspect of the evolution of these policies. We have tried to listen to the points made by my hon. Friend and by many others in these discussions.
Mr. Michael Clapham: I recognise that my right hon. Friend has gone a long way to meet many of our fears, but I should tell him that I cannot swallow variable fees. I am also very concerned about the issue of trust. May I encourage him, at this eleventh hour, to consider taking up the idea of a commission, rather than reviewing the situation in three years? Such a commission could report before the next election, so that we could have a guided manifesto commitment.
Mr. Clarke: I will think about everything, of course, but I want to emphasise that the Dearing commission looked at this issue seriously and came up with some serious proposals, which we are seeking to implement. That is the right way forward in addressing the problems that my hon. Friend describes. As he knows in respect of his own constituency, for people in the families whom he represents the accessibility of some universities is very low. We need to set about changing that right now.
James Purnell: As someone who got a grant to go to university and then campaigned on the streets of Westminster against its being removed by the hon. Member for Daventry (Mr. Boswell), I should tell my right hon. Friend how glad I am that a Labour Government are bringing it back. But does he remember the then Conservative Government putting an artificial cap on student numbers of some 33 per cent., and will he promise that this Labour Government will never cap young people's aspirations, and that anyone who gets the right A-level results will be able to go to university?
Mr. Clarke: I will give that commitment, and I should say to all Conservative Members that it is very important that they face up to the issues, just as I am asking my colleagues to do. The list of evasions that are part and parcel of the position of Tory Front Benchers is outrageous. They have explicitly said that they want to reduce the number of students going to university. They are wrong, and that policy will be deliberately rejected by their constituents, as it should be.
Mr. Harry Barnes: The writing-off of student debts after 25 years is presumably intended to attract those of us who have criticised this measure, but is it not peculiar to operate

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in such a way? For most graduates, those are the years of marriage, raising children and having a 25-year mortgage. Surely it would make rather more sense to say that they should pay off the debt after 25 years, rather than during that period.
Mr. Clarke: My hon. Friend is always creative in his policy approaches, and I welcome that in every respect. The point that he eloquently makes about family responsibilities has formed a very important part of our consideration of what constitutes the right thing to do. It is precisely because of those issues that the threat of a debt to be repaid over a lifetime ought to be removed by introducing the cap of that 25-year limit.
Mr. James Plaskitt: I thank my right hon. Friend for his statement and for the improvements that he has made through his proposals. However, I draw his attention to the comments of Lord Butler of Brockwell, the master of university college, in his letter to Members. He says that
"the general view among universities appears to be that the Government should get its top-up fees legislation through as a first step. There will certainly have to be further steps".
If—or, as I suspect, when—universities want to raise the cap, what will he require from them in return?
Mr. Clarke: If I may say so, Lord Butler has not been in the university world for very long, and his knowledge of it is perhaps not as great as that of some others. I have talked to many universities about these policies, and I know that some would like to have a higher fee cap than the £3,000 that we propose. But I also know that those same universities say—in my view, they will continue to say it—that this is a step towards meeting the funding need that has been identified, and they will welcome it. I say to Lord Butler, to Mr. Richard Sykes and to everybody else concerned that this is the position.
Mrs. Joan Humble: In his proposed introduction of variable fees, my right hon. Friend seems to be assuming that most undergraduates will be studying either single honours or combined honours degree courses. However, there is a real concern among the new universities, which offer modular degree courses, that they will be unable to offer variable fees should they wish to do so, because students are encouraged to choose modules across different departments in the first semester, and other modules across other departments in the second and third semesters. How can universities price variable fees in that context, and how can students possibly make choices?
Mr. Clarke: If there were a fixed fee of, for the sake of argument, £2,500, as has been suggested, the universities that my hon. Friend mentions would be unable to make any dispensation whatsoever to deal with the prices of the different modules in operation. I know of the concerns that she describes, which is why I have made today's statement on increasing the grant. The implication is that a much higher proportion of fee income generated, particularly by the new universities of which she speaks, will be able to be used for increasing academic standards in those areas. However, if she talks to many of the vice-chancellors, as I have done, they will
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tell her that they want the power to look at different fee levels for sandwich courses, four-year courses, foundation degrees, science degrees and so on. Without that power, which would be removed if there were no variable fees, their ability to drive their universities forward to meet the economic needs of their localities and the social needs of their students would be very severely inhibited.
Mrs. Betty Williams: My right hon. Friend will be very aware that variable fees is the main concern of a majority of Labour Back Benchers. I welcome the concessions that he has made in today's package. For example, he says that there will be an independent review, working with OFFA, at the end of three years. Does he agree that if things do not work out, a great deal of harm will have been done to higher education, and can he tell the House today what he really means by this independent review?
Mr. Clarke: I have suggested the independent review in response to the arguments advanced by a number of people. It is fair to say that we need to see and understand how the policy works. I have suggested that we should do that for a period of three years, after which a report should be made to the House so that hon. Members can discuss the arrangements. That is the right way to go. I do not believe that variable fees will damage this country's university system, for the reasons that I have set out. However, we need to have an informed and independent consideration of the issues involved so that we can make our judgment.
Mr. lain Luke: My right hon. Friend will understand that there is much concern north of the border about the possible introduction of variable top-up fees in England and Wales. The major worry of university principals in my city has to do with the impact on universities, both north and south of the border, that are less well endowed financially. They will be less able to attract quality research staff and, as a consequence, their research programmes will suffer. What guarantees can my right hon. Friend give that the playing field will remain level in respect of access to research resources, given the huge imbalance that exists between universities?
Mr. Clarke: First, I can guarantee that cross-border discussions will continue to address that problem. My right hon. Friend the Secretary of State for Scotland has discussed the proposals with the Scottish Executive to determine how to move forward in those circumstances. I can confirm that research will remain a national responsibility, but I cannot state that there is no difference between the two systems. The meaning of devolution was that different systems would be created. That is what has happened, and those different systems have different implications. However, the Government and the Scottish Executive are obliged to work together as closely as they can to deal with the different implications in a positive and constructive way. I can make a commitment to ensuring that the Government do just that.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Michael Lord): Order. I appreciate that a number of hon. Members have not

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been able to catch my eye on this important statement. However, we must move on as there is other important business to protect. I remind the House that this issue can be revisited when we consider the Bill on Second Reading.

BILL PRESENTED
  HIGHER EDUCATION
  Mr. Secretary Clarke presented a Bill to make provision about research in the arts and humanities and about complaints by students against institutions providing higher education; to make provision about fees payable by students in higher education; to provide for the appointment of a Director of Fair Access to Higher Education; to make provision about grants and loans to students in higher or further education; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Monday 12 January, and to be printed. Explanatory notes to be printed [Bill 35].
Orders of the Day

  Horserace Betting and Olympic Lottery Bill
  Order for Second Reading read.
  Mr. Deputy Speaker (Sir Michael Lord): I advise the House that Mr. Speaker has not selected for debate the amendment tabled by members of the Scottish Nationalist party.
  2.32 pm
  The Minister for Sport and Tourism (Mr. Richard Caborn): I beg to move, That the Bill be now read a Second time.
  The Bill covers two distinct subject areas, both of which are of considerable interest to the House, and I shall deal with each in turn. First, it deals with the Government's remaining involvement in the financing and administration of horse racing. Part 1 of the Bill covers the sale and dissolution of the Horserace Totalisator Board, normally known as the Tote. It provides for the vesting of the Tote's assets in a successor company wholly owned by the Crown, and the subsequent sale of that company. The Bill will enable the Government to deliver our manifesto commitment to sell the Tote to a racing trust, and to do so in a way that is fair to racing and to the taxpayer.
  The Tote was established as a corporate body in 1928, with an exclusive statutory right to conduct—or to authorise others to conduct—pool betting on British horse racing. It was set up to provide an alternative to fixed-odds betting, and to provide a source of income to the sport of racing.
  The Tote's profits, over and above what is required for reinvestment, remain within racing. The Tote is a long-standing symbol of British horse racing, but it is no longer necessary for it to remain a public body. Its present status is not appropriate for an organisation with commercial ambitions that are likely to conflict with the accountability and constraints required of bodies in the public sector.
  In March 1999, a review of the Tote's status recommended that the whole of its business should be sold in a single entity. The Government agreed with that recommendation, and we announced in March 2000 our intention to sell the Tote to a racing trust—a consortium representing British horse racing interests. The Bill will enable that to be achieved.
  The Government's intention is to sell the Tote to a racing trust. If that is not possible, we will explore other sales options. However, I know that the will of both Houses of Parliament is that we fulfil our manifesto commitment.
  Mr. Robin Cook: My right hon. Friend follows these matters very closely, and will be aware that considerable work has been done to prepare a shadow racing trust. There is no doubt that that body exists and will make a bid, but I am a little unsettled by his reference to the possibility that the Tote could be sold elsewhere if a sale to the racing trust cannot be achieved. That possibility is not mentioned in the Bill. For the avoidance of doubt, will my right hon. Friend

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  confirm that it is the Government's clear intention to sell the Tote to the racing trust, and that there is no reason at the moment why that should not happen?
  Mr. Caborn: I can give my right hon. Friend that confirmation, and I have said already that there is a considerable amount of good will. The shadow racing trust has been up and running for a considerable time, and it has already proved itself. I see no reason why the sale of the Tote to the racing trust should not go ahead, but it would be wrong if the Government did not make provision for other eventualities. In the event of the Tote's sale to the trust not being completed, we would have to come back to the House with new legislative proposals to secure the Tote's transfer away from public ownership. The measure is precautionary, but my right hon. Friend is right that the Government want to sell the Tote to a trust not dissimilar to the one that has been in existence for some considerable time already.
  Mr. Laurence Robertson: I welcome this long overdue Bill, but I agree with the right hon. Member for Livingston (Mr. Cook) that the Bill does not guarantee that the Tote will be sold to the racing trust. The Minister says that he cannot foresee any circumstances in which that would not happen, but one factor that might prevent such a sale would be if the Government asked for too much money. No Government have ever put money into the Tote, so this Government cannot expect to make too much money from its sale.
  Mr. Caborn: The hon. Gentleman has gone a little beyond the point made by my right hon. Friend the Member for Livingston (Mr. Cook), but I shall deal with his questions as I make progress with my remarks. However, if the hon. Gentleman catches your eye, Mr. Deputy Speaker, I am sure that he will be able to say more about these matters later in the debate, and also in Standing Committee.
  We believe that it is in the long-term public interest to open up the pool betting market to effective competition, but we also believe that a reasonable period of preparation is necessary if the Tote, when it is owned by the racing trust, is to continue to provide a reliable income stream for the sport. I assure the House that I, my right hon. Friend the Secretary of State and our officials would not have spent as much time trying to secure a satisfactory arrangement if we did not believe that the Tote would be sold to a racing trust.
  The sale will bring benefits to the betting market through safeguarding a competitive pool, and it will benefit the public by increasing consumer choice and consumer protection. That is why we announced to the House, on 27 November last year, our plans to sell the Tote to a racing consortium. Our current intention is to issue the successor company with an exclusive licence to operate horse race pool betting for British racing for seven years.
  Mr. John Greenway: Those of us who have followed this issue closely are grateful to the Minister for his efforts in ensuring that the Bill provides for a licence exclusivity period of not less than seven years. However, does he accept that alternative points of view have been raised elsewhere, and that the future of
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  racing faces uncertainty as a result of the Office of Fair Trading rule 14 notice? Would not it give the industry some reassurance if the provision for seven-year exclusivity were to be included on the face of the Bill?
  Mr. Caborn: I do not believe that that needs to be included on the face of the Bill. What I am saying today at the Dispatch Box is, according to the conventions of the House, a clear statement of the Government's intentions. That is why I do not believe that the provision needs to be included on the face of the Bill. I hope that the House will agree that a seven-year exclusive licence strikes the right balance between the two priorities that I have outlined. I am convinced that it is the best way forward for racing, the betting industry and the punter.
  Mr. Ian Cawsey: Will my right hon. Friend give way?
  Mr. Caborn: This is the last time I shall give way, because I would like to get past the third page of my brief.
  Mr. Cawsey: My right hon. Friend has been very patient. I take his word about all the people who will benefit from the Bill, but I wish to make a point about the horses involved. Some animal welfare groups have said that the current system raises funds for the longterm welfare and care of racehorses, and they want a guarantee that any new legislation will maintain that system in the future.
  Mr. Caborn: If I could get past the third page, I might answer hon. Members' questions before they are asked.
  The Bill gives the Secretary of State the power to require the Gaming Board to issue the licence and be responsible for the regulation of pool betting on horse racing. If during the licence period Parliament approves our plans to reform the general law on gambling, it will be for the new Gambling Commission to take over the job of regulation. The seven-year licence will not he extended, and at the end of that seven-year transitional period there will be a new regulatory regime that will allow other operators to provide pool betting as well.
  Part 2 of the Bill provides for the abolition of the Horserace Betting Levy Board and its associated levy appeals tribunals. It provides for the transfer of its assets, the abolition of the horserace betting levy system and the issuing of certificates of approval to race courses by the Gaming Board. The Government's intention is that local authorities will take over the Gaming Board's proposed responsibility for the licensing of race courses for betting purposes in due course, as set out in the draft Gambling Bill that is currently undergoing pre-legislative scrutiny by a Joint Committee of both Houses.
  The Government undertook two consultation exercises in March and November 2000 to consider whether a statutory system for funding horse racing was necessary. I am sure hon. Members will agree that it should not be for the Government, or another body, to dictate how much bookmakers should pay racing for the use of its product. Therefore, we recommended the abolition of the levy board and the levy system, to be replaced by commercial agreements between the horse racing industry and betting companies.

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  The Bill helps to end the Government's unnecessary involvement in funding horse racing, while still safeguarding the important work that the levy board does to support veterinary research—much important work is done around Newmarket—and the improvement of breeds of horses. We seek to ensure those are maintained to at least current levels after the abolition of the board. Therefore, the safeguards that my hon. Friend the Member for Brigg and Goole (Mr. Cawsey) requested will be in place, as he will see if he reads the Bill carefully.
  Hugh Bayley: My right hon. Friend will be aware that race courses have benefited from loans at favourable rates from the levy board capital fund. Indeed, every major capital development at York race course, even though it is one of the biggest and best in the country, has been supported by the fund, including a third of the cost of its new Ebor stand. When the levy board capital fund is transferred to a successor body, can my right hon. Friend give me an assurance that it will enjoy the same tax advantages as at present, so that the benefits to race courses can be maintained at the current level?
  Mr. Caborn: I shall take that point on board. I do not wish to give a misleading answer now, but I will ensure that that question is answered fully in the course of proceedings on the Bill. I know that it is important for race courses such as York, which has done a fantastic job of upgrading.
  I would like to make it clear that the decision to sell the Tote and abolish the levy board is in no way a reflection on their performance. The staff and board members of both bodies have carried out their duties to a very high standard and I am grateful for their efforts.
  I turn now to the other subject area covered by the Bill. Part 3 will enable dedicated Olympic lottery games to be established as part of the national lottery, in the event that London is chosen to host the 2012 Olympic and Paralympic games. It also creates the necessary structures for holding the proceeds from those lottery games and a distribution mechanism that will enable those proceeds to be used to meet expenditure in connection with the staging of the Olympic games.
  As hon. Members will be aware, we announced the Government's intention to support a London bid for the 2012 Olympic games in a statement to the House on 15 May 2003. Staging the Olympic and Paralympic games in London in 2012 would bring the opportunity to inspire greater participation in sport, increase the medal success of our elite athletes, and, importantly, leave a lasting legacy of community facilities across the country. But it would also bring benefits beyond the sporting sector. A London games would have a positive impact in terms of regeneration, investment and tourism, and we want as many of those benefits as possible to extend across the UK.
  Mr. Andrew Love: I strongly support the London bid for the Olympics, but as the Member of Parliament who represents Picketts Lock, I am aware of what an uphill task it will be for the Government to win the bid. If we are to gain the
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  advantages that my right hon. Friend has outlined, we need to ensure that we win the bid. The first part of the Bill will set up a trust for the betting levy board, and I suggest the advantages of a mutual trust. The Football Foundation is a perfect example. We need to mobilise public support for the Olympic bid to turn it into—
  Mr. Deputy Speaker: Order. Interventions are becoming mini speeches, which means less time for genuine speeches later. I would be grateful if interventions could be brief and to the point, and if the Minister's responses could be in the same vein.
  Mr. Caborn: If my hon. Friend catches your eye later, Mr. Deputy Speaker, I am sure that he will be able to develop his point further. It will be discussed during the proceedings on the Bill, in any event.
  Chris Bryant: We need to ensure that the benefits of a London bid accrue to the whole country. If we are to win the bid, it will be essential for the Government to be involved in ensuring that every part of the country supports it, and that will require proven benefits for every part of the country, not least Wales.
  Mr. Caborn: I do not wish to go into too much detail, but I assure my hon. Friend that we have worked with every regional development agency and all the devolved Administrations. The chair of the Olympic 2012 bid committee, Barbara Cassani, is already touring the country. She has been to Scotland and she has a date in her diary to visit Wales to meet the decision makers and discuss how the staging of the Olympics in London can benefit the regions and the devolved countries. We will ensure that we engage with the decision makers in every part of the UK to ensure that there are benefits from the Olympic and Paralympic games being held in London, as well as from the major cultural festival that would run alongside the games in 2012. That would have a major impact on tourism, regeneration and the development of regional economies, and we are making every effort to put proper communications in place to achieve those aims.
  New Olympic lottery games would represent the first time that the national lottery has been dedicated to a specific cause in that way. Staging the Olympic and Paralympic games is an exceptional occasion. It represents the greatest sporting spectacle in the world, and is a unique national opportunity. It is a cause unlike any other, and the measures proposed in the Bill would enable people to buy a ticket knowing that the money would directly contribute to staging the UK Olympic and Paralympic games. That is very important.
  Some people will choose to play Olympic lottery games instead of existing national lottery games. However, Olympic lottery games, as part of a wider strategy for growth, have the potential to invigorate interest in the lottery in general, and therefore benefit all the existing good causes. Camelot will, of course, continue to launch non-Olympic lottery games, and more generally we should seek ways to maximise the benefits that hosting the Olympics can bring across all the funding sectors.

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  It is envisaged that new Olympic lottery games, as provided for in the Bill, would generate an estimated £750 million towards an overall £2·375 billion public funding package. That total includes a substantial contingency.
  Pete Wishart: Has the Minister made an assessment of how much good causes and charities will lose as a result of the Olympic games?
  Mr. Caborn: Yes; if I remember correctly, it is 5 per cent., but I shall write to the hon. Gentleman and place a copy of my letter in the Library. The assessment was made by Camelot and was announced to the House, so it is on the public record. I cannot recall the exact figure now, but as I said, I will write to the hon. Gentleman to confirm the figure.
  In addition to the £750 million from new Olympic lottery games, £340 million will be sought from existing sports lottery distributors. How that is spent will be a matter for discussion with those bodies. Up to a further £410 million will he met, should it be required, by changing the percentage shares going to existing good causes after 2009. My hon. Friend the Secretary of State announced that to the House when she presented the funding package. The balance of the £2·375 billion funding package will be met by money raised through a London council tax, and, if required, by funding from the London Development Agency. It is right that London, as a leading beneficiary, should bear its share of the costs.
  Broadly speaking, it is the intention that lottery funding should be directed to sports investment, Olympic facilities and event staging, and that money raised from the Olympic council tax should address the capital requirements of the games, including transport infrastructure.
  The Bill will establish an Olympic lottery distributor to make grants in connection with staging the 2012 Olympic and Paralympic games, if London's bid is successful. The new distributor will be lean and focused, with minimal bureaucracy and a small and expert board. A separate distributor is essential to ensure that effective and informed decisions are taken on Olympic expenditure.
  All those involved in the bid believe that we have a very strong chance of success for London in 2012, and we will be working to ensure an extremely high standard bid that meets all the International Olympic Committee's criteria. By allowing new dedicated Olympic lottery games, the Government are showing their commitment to do everything possible to bring the Olympics and Paralympics to London in 2012.
  I should also like to say that I genuinely welcome the cross-party support that we have received so far in the House. I believe that that support is vital if we are to have the best chance of winning. I also thank the press—it is not often that we do that from the Dispatch Box—but I have noted a unanimity of purpose that is second to none. It has been in evidence right across the board in respect of Olympic decision makers, which will hold us in good stead when we make the final bid in July 2005.
  The Bill before the House covers two distinct and important areas. The sale of the Tote and the abolition of the levy board will end the Government's remaining
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  involvement in the administration and financing of horse racing, while ensuring the best deal for racing, the taxpayer and the betting industry. The provision for a new dedicated Olympic lottery game will generate revenues that will be a vital part of the overall funding package for the 2012 Olympics, if London's bid is successful. I commend the Bill to the House.
  2.53 pm
  Mr. James Paice: For the record, I have no declarable interests but, as many hon. Members will know, I have considerable constituency interests in many aspects of the Bill.
  The Opposition welcome the Bill in principle, and the core elements of all three parts of the Bill as described by the Minister have our support, but we will need to explore many elements of detail in Committee. Most especially—the right hon. Member for Livingston (Mr. Cook) started this ball rolling—we shall need to debate the absence from the Bill of countless assurances and statements previously made by Ministers.
  Parts 1 and 2 relate to horse racing, which is a huge industry, and I know that many of my hon. Friends are as interested and committed to it as I am. I always say that the few minutes of the race that are witnessed live or on television are the tip of a huge pyramid of activity underpinning the few minutes of equine competition. There are 59 race courses in the country, about 14,000 horses in training and 9,500 owners. There are bookmakers, groundsmen, vets, saddlers, stable staff and others—a total of about 100,000 jobs dependent on horse racing.
  As my hon. Friend the Member for Ryedale (Mr. Greenway) said, it is a period of great uncertainty for the industry with both Office of Fair Trading and European Court decisions outstanding. There is particular concern that the OFT does not understand racing properly and about the interdependence of its many elements. The original rule 14 notice of April last year would, if carried through, lead to the closure of many courses. That is almost everyone's view. That might not make much difference to the punter who only ever sees racing from his front room or in the betting shop, but it would be disastrous for jobs in many areas, particularly some remote rural areas, and for the public who actually wish to go racing, for whom a few days a year at their local course provides the only opportunity.
  The European Court of Justice is considering a reference by the Court of Appeal following a robust High Court judgment in support of the British Horseracing Board's database rights. That judgment is not expected until autumn when it will go back to the Court of Appeal, so the issue may not be resolved until late this year. Although parts 1 and 2 are important, I have to tell the Minister that their impact on racing cannot be fully estimated until the uncertainty over the Office of Fair Trading and the European Court of Justice decisions is clarified.
  Part 1 deals with the Tote, which can be traced all the way back to 1926 and to the Racecourse Betting Act 1928, which was sponsored by the Jockey Club. In its last financial year, the Tote contributed £10.7 million to racing, excluding its levy contribution. It operates 450 betting shops as well as pool betting throughout the country. It is a key point that the whole of the racing

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  industry—including, I believe, punters—believes that the Tote is part of racing and is for racing. Any suggestion that its contribution to racing could cease or be reduced would be met with universal hostility.
  That brings me to the question about ownership raised by the right hon. Member for Livingston. I take as a good starting point a written answer of 26 May 1999 provided by the then Home Office Minister, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), who stated:
  "The Horserace Totalisator Board is a non-departmental public body whose members are appointed by the Home Secretary. The Board is responsible for the assets owned by the Tote but the Tote itself is owned by no one".—[Official Report, 26 May 1999; Vol. 332, c. 152W.]
  We have a clear, unambiguous Government statement that the assets are owned by the Tote and that the Tote is owned by no one. Yet the Bill creates the power for the sale of those assets, first by taking them into public Ownership—nationalization—and then selling the company that owns them—privatization—leaving the Chancellor with a cash sum.
  Will the Minister confirm whether it is true that the National Audit Office does not consider the Tote as a Government asset? That raises the question whether the Government should take any proceeds from its disposal at all. On what basis will a price be calculated? Will it allow for pension liabilities? I know that the Minister understands the point, but bear it in mind that the more the Tote is forced to borrow to pay for itself, the less will be available for investment in the business.
  That leads me to my next point—the exclusive licence. The Bill is silent on the period of exclusivity. We know that the Treasury and the Department of Trade and Industry both wanted a very short period, which underlines their lack of understanding about the relative balance between the licence length and value of any operation. We also know—the Minister reminded us again this afternoon—that the Department wants a seven-year licence. I must ask again: why is that not in the Bill?
  After the end of the licence, the Bill envisages a free-for-all on pool betting for any licensed organisation, so if the Government's genuine intention is that the Tote continues to provide a flow of money into racing, it is essential that it is given every opportunity to develop a strong enough business to compete in that environment.
  There is nothing in the Bill about future ownership of the Tote; there is not even a requirement for it to be sold to someone with an interest in racing or horses. I hope that the Minister will understand that despite his assurances the industry is a bit distrustful of the Government for not dealing with the question of the shadow racing trust and the future ownership of the Tote in the Bill. Under the Bill, there would be nothing to stop the Secretary of State or any future Secretary of State deciding to sell the successor company to the highest bidder—someone who may have no interest in racing or in putting the profits back into racing.
  The picture is even less clear when we consider the levy, due to the uncertainty relating to the ECJ and the OFT. The Opposition accept that in today's world the levy is anachronistic especially, as the Minister has said,
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  in respect of the Government's role in determining it in the event of an impasse in the bookmakers committee. We support the concept of commercial arrangements as the proper means for the provider of a product—the racing industry—to generate an income from those who exploit that product, that is, the bookmakers.
  The sale of data and media rights is, in principle, correct, but it would be wrong for us not to point out that bookmakers are opposed to the end of the levy. They argue that, due to the change to a gross-profits taxation basis and a straight 10 per cent. levy, there is much, much less likelihood of the Government ever needing to make a determination in the future. They also argue, understandably, that whereas the levy is VAT-exempt the commercial arrangements that replace it will of course carry VAT, so the cost to bookmakers or, indeed, to the industry will be higher.
  It must also be emphasised that because bookmakers have a place on the levy board they have some involvement in how the proceeds are spent. Will the Minister tell the House how he intends to proceed if either the OFT or the European Court, or both, decide that the present commercial arrangements are unacceptable? There is little doubt that, if the sale of data has to be negotiated with lots of smaller groups, proceeds will fall and racing will lose out, which will result in the closure of race courses. If the OFT so rules, is it still the Government's intention to abolish the levy?
  The current uncertainty also raises the issue of timing. The plan was for commercial arrangements to take over from 1 April 2005 with the levy board being wound up over the following six months. However, planning for the 2005 fixture list is already under way and by March the levy board must have devised its incentives scheme for that year so that the BHB and race courses can finalise their fixtures by the summer, yet OFT uncertainty means that no one can be sure of what the money flows will be after 31 March 2005. We would thus have no incentive scheme for three quarters of next year and no fixture list could be drawn up.
  I understand that the levy board and the BHB have agreed to defer the end of the levy until 2006 in the hope that the OFT dispute and the European Court case will have been resolved. Do the Government accept deferment of the ending of the levy until those disputes are resolved?
  The levy board owns two institutions, both of which are in my constituency: the Horseracing Forensic Laboratory, which is at the cutting edge of scientific investigation and the integrity of the racing industry, and the National Stud. Obviously, the transfer plan envisaged in the Bill must include proposals for their future ownership and I know that in principle it has been agreed that the laboratory should go to the BHB and continue to provide integrity services to the Jockey Club while the National Stud will become a freestanding charitable trust. However, as with the Tote, none of that is included in the Bill.
  There is understandable concern among the staff of the levy board about their future employment and pension arrangements. Will the Minister give us an undertaking that no transfer scheme will be approved that does not ensure the protection of existing pension arrangements, especially if the end of the levy is deferred?

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  On the Olympics and the lottery, as the Minister kindly pointed out, the Opposition wholeheartedly support London's bid for 2012 Olympics. There is no reason for us not to do so; we expect to be in office by the time that the decision is made.
  Mr. Caborn: The hon. Gentleman is dreaming great dreams.
  Mr. Paice: We also dream about gold medals—perhaps that is an even stronger dream.
  Despite the Minister's kind remarks, we have some reservations about the level of support from the Government and from their Mayor of London—as he now is. Will they provide the real public support that we need for our bid? It is not yet seen as a whole-London bid, let alone one for Wales and the rest of the UK—the hon. Member for Rhondda (Chris Bryant), who spoke about Wales, is no longer in the Chamber. Many people see the bid as the Mayor's regeneration scheme for the lower Lea valley. Although that scheme is important, it should not be the justification for the Olympics.
  There is no better evidence that the bid is not seen as a pan-London one than the comments of the Government's spokesman in the House of Lords, Lord Davies of Oldham. When he was asked about the use of the dome, he replied:
  "My Lords, the Dome is on the wrong side of the Thames in relation to the proposed bid."—[Official Report, House of Lords, 18 September 2003; Vol. 652, c. 1048.]
  So much for the claim that the whole of London is involved if even the dome is too far away.
  A further problem is that at present there is almost no private sector involvement in the bid, which gives it all the appearance of a public sector activity funded by lottery funds and council tax payers, and even national taxpayers through the London Development Agency.
  My hon. Friend the Member for Surrey Heath (Mr. Hawkins) will address further aspects relating to the Olympics when he winds up. One thing is clear: there will be a very serious cash flow problem if, as we hope, the bid is successful. We must assume that the lottery proceeds will be received on an even basis after a successful bid and that the council tax contributions are to continue until after the games have been held, possibly until 2016. However, it is my understanding that the Government have yet to come up with any ideas about how we could overcome that cash-flow problem.
  We proposed that the lottery begin this summer to coincide with the inevitable surge in public interest during the Athens games. The Government say that the International Olympic Committee has forbidden the start of any lottery until it has taken a decision about the location of the 2012 games, yet they have provided no evidence for that claim. Even if the Government are not allowed to run a lottery specifically to fund the Olympics until a bid is successful there is no reason that the game cannot be started beforehand if there is another purpose. That is the view not only of the Opposition, but also of the British Olympic Association. It is clear that some organisations are already considering the possibility of running scratchcard games to coincide with this year's Olympics if the lottery has not started.
  The Opposition propose that even if the London bid fails—we hope it does not—the money raised by then should be used to support our Olympic and Paralympic
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  competitors or, if that were not possible, it should be directed to the British Paralympic Association to provide a trust fund for disabled athletes. We are concerned that the bid does not yet give much publicity to the Paralympics—although the Minister referred to that event. They are a crucial part of the overall Olympic games and a critical part of our bid for public support.
  My final point about the lottery relates to the tax that the Government will receive from the sale of Olympic lottery tickets. We believe that they should hypothecate that tax so that the extra funds go directly to the staging of the games. At the current 12 per cent. rate of tax, that would raise about £320 million over seven years, which equates to about half the amount that it is anticipated will be raised by the precept on hard-pressed London council tax payers. I note that they face a further rise of 12 per cent. under their Labour Mayor. We hope that the Government will look carefully into that matter.
  In conclusion, I repeat the Opposition's support for the three core intentions of the Bill. However, the Government have shown that they cannot always be relied on to deliver their promises—only about an hour ago, the House saw plenty of evidence of that—so in Committee we shall try to ensure that the Government's commitments are included in the Bill.
  Over recent years, every Bill that has come before the House has provided increasing freedom of movement for Ministers—this Bill is exemplary in that regard—with more and more enabling legislation. The Bill gives the Secretary of State powers to close the Tote at any time, to sell the successor company to anyone and to set the price at any level. It will give her the power to wind up the levy board when she thinks fits and to break it up in any way she wishes—save that it must be in the interests of racing, and even then there is nothing in the Bill to stop her retaining the capital fund of £50 million for other purposes. Yet she and the Minister have said—they repeated it today—that all those details are already settled and announced. All I can say is that, if they are so clear and finite, why are they not in the Bill? The Opposition believe that they should be, and that is our determination throughout the process of the Bill.
  Several hon. Members rose—
  Mr. Deputy Speaker: Order. Before I call the next hon. Member to speak, may I remind the House that Mr. Speaker has put a 12-minute limit on Back-Bench speeches and that it applies from now onwards?
  3.10 pm
  Mr. Robin Cook: I should declare two interests. First, I have a consultancy with the Tote, which is registrable. Secondly, I have a lifelong passion for horse racing, which is not registrable because it rarely produces sufficient net profit to be of any interest to anyone else. It has, though, given me an insight into the growing popularity of horse racing as a leisure industry. It is perhaps worth drawing the House's attention to the fact that, in the past year, we have had more punters going through the turnstiles at British horse races than at any time for the past 50 years, so we would be wise, as politicians, to treat the horse racing industry with the respect that it is due, given that degree of public interest.

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  Against that background, it is right that we should transfer the Tote to be run by racing, so that the benefits of the revenue from the Tote go to racing. That principle has the enthusiastic support of the Tote staff. In fairness to the Tote, we should acknowledge that it has shown phenomenal growth in recent years. In the past two years, the staff of the Tote have managed to take up total pool betting by one third—a remarkable degree of growth.
  I congratulate, my right hon. Friend the Minister on introducing the Bill and on having secured a place for it in the Government's timetable. The interest and support that he and my right hon. Friend the Secretary of State have shown in the horse racing industry are warmly appreciated by that industry. They will understand if I then have to say that my welcome for the Bill is guarded because of the omission of two key figures, both of which are necessary if we are to achieve the success for the Tote that the Bill deserves to produce.
  The first missing figure is what will be the price for the sale of the Tote. The shadow racing trust, which will take over the Tote, I hope, in the fullness of time, is a new animal. It has never traded before. It has built up no capital. It has no money of its own. It will have to borrow every penny for the purchase of the Tote. It will therefore have to repay every penny for the purchase of the Tote. The higher the price, the greater its problem in making a go of it and the less revenue there will be for racing. It is therefore very important that the Tote be sold at a reasonable price.
  What might be a reasonable price is a sensitive point. Some may argue that any price is a windfall for the Treasury, since, after all, the Treasury has no right to sell the Tote at all, unless we pass the Bill and, rather curiously, nationalise the Tote, so that it can then be sold. I warn my right hon. Friend the Minister that he is likely to be pressed on that matter as the Bill passes through Parliament. In particular, many of us would feel more comfortable if we could write it into the Bill that the Tote's successor company should be a racing trust, thereby removing any risk that we are approving a procedure in the Bill that could end up with the Tote being sold at a price that only commercial bookmakers could pay.
  The other missing figure, which would give us some comfort if it were in the Bill, is the period for which the racing trust will enjoy an exclusive licence. What makes it slightly strange that that is missing from the Bill is that we all know what it is. Indeed, my right hon. Friend the Secretary of State and her colleague the Minister are to be congratulated on securing that figure—I know how tough that battle was—and it is to their credit that they did hang firm and secured a seven-year period of exclusive licence for the new racing trust. It nearly vanished altogether thanks to the intervention of the OFT.
  I find it rather strange that anyone should imagine that opening up pool betting to competition helps the punter, because the whole point of pool betting is that the bigger the pool, the more attractive it is to the punter. The greater the competition and the more pools there are, the less attractive it is to the punter. The logic of that, of course, is that I personally would prefer it if we retained an exclusive licence indefinitely, but I
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  recognise where we are at and I applaud my right hon. Friends' success in securing a period of exclusivity. I would just stress that seven years is the very minimum that would make this operate.
  We need the racing trust to establish its brand in the market. It will need to change the commercial culture of the organisation, and it will need to be able to offer security to staff of top quality if it is going to succeed. None of that can be achieved in anything less than seven years. We should be under no illusion how tough the competition will be at the end of that period of exclusivity. I do not mean any disrespect to Ladbrokes when I say that it is likely to enter into competition. I can say that with some confidence because it has made no bones about the fact that it will be its intention to bid for pool betting when the licence expires. If it were to be successful in displacing the Tote as a provider of pool betting, paradoxically, we would end up not with more competition, but with more monopoly and less competition in the betting market. It is therefore very much in the public interest, as well as in the interest of the racing trust, that there should be that minimum seven-year breathing space for it to establish itself.
  I should like to add a word about the abolition of the levy. May I tell my right hon. Friends that I fully recognise that, in the modern world, the era of corporate Britain in which the levy is rooted has passed? Relations between the racing industry and the betting industry will always be characterised by what we might describe as creative tension, but it is not acceptable in the modern world for a Cabinet Minister to try to hold the ring and adjudicate between them. I therefore accept the principle in the Bill on the abolition of the levy, but I echo the note of caution that the hon. Member for South-East Cambridgeshire (Mr. Paice) has just scored.
  The assumption when we agreed to the abolition of the levy was that the income from the levy would be replaced by revenue from the commercial sale of data by the race courses to the bookmakers. That assumption has now been thrown into chaos by a parallel intervention by the OFT, which is showing an unwelcome interest in the racing industry generally. If the rule 14 notice stands, racing will have great difficulty establishing a method by which it can have a collective sale of data from all race courses. If each race course has to negotiate with the bookmakers separately, that will make it very hard for small provincial race courses to secure a fair return, since they have little market leverage on their own. That, of course, it is a matter of concern not just to them, but to the racing industry generally because we depend on the smaller courses to produce the stars of the future for the grand occasions.
  Mr. Laurence Robertson: Does the right hon. Gentleman, like me, find it rather curious that the Government, quite rightly, should want to shed the responsibility of effectively running racing; but are we not, in effect, seeing that responsibility passed to an unelected quango called the OFT?
  Mr. Cook: The hon. Gentleman tempts me into wider waters, which may cause me some difficulty with the occupant of the Chair, but there is a bona fide issue of accountability. If the OFT is intent on making such controversial and dramatic interventions in the future, it may quickly find itself being asked about its

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  accountability for the consequences of the actions that it is taking. Indeed, we are already approaching a situation in which there is a possibility that the National Audit Office may be invited to second-guess the public expense accounts and consequences of the OFT's decisions.
  There is, however, an odd asymmetry about the current rule 14 notice. The OFT has decreed that the race courses should be open to be picked off one by one in negotiation on the sale of their data. The OFT has not turned a hair, however, about the idea that the bookmakers have a cartel for the purchase of that same data. I would not want to do an injustice to Ladbrokes, Hill or Coral, particularly as I am wearily aware that Ladbrokes is very quick to pick up on any sense that it has been misrepresented and to register its objection. It may be that, even as we meet, those three great powers are reflecting on the aesthetic beauty of competition theory as set out by the OFT, and they might come forward with proposals that in future they will buy separately racing data from race courses and bid up the payment against each other. I rather doubt it, however.
  I suspect that in future years the racing industry will be faced with the bookmakers putting up a collective body for the purchase of data, and as long as that is the case, racing would be wise to absorb the same lesson and make sure it also has a collective authority for the joint sale of racing data. I know that my right hon. Friend the Minister for Sport and Tourism appreciates that point, and his support is welcome, but the House will be put in a difficult position if we are asked to pass a Bill that abolishes the levy when, thanks to the OFT intervention, we currently have no idea of what will replace the levy in the longer term.
  I began by saying that racing is a popular sport and is growing in popularity. We should also remember, however, that this Bill is a sober and important measure affecting what is a major industry on which many people depend for their livelihoods. The hon. Member for South-East Cambridgeshire mentioned a figure of 100,000 jobs in the stables, on the race courses and in the betting industry, which is a large number of the employed population of Britain. It puts the racing industry in the same league as the motor car industry and other major manufacturing concerns. We have a responsibility as legislators to do all that we can to make sure that that industry stays healthy. With the reservations that I have expressed, I believe that this Bill will help us to make sure that racing remains a popular sport at home and a centre of world-class excellence abroad.
  3.21 pm
  Mr. Don Foster: Although the Bill is unlikely to get a great deal of media coverage, it is undoubtedly important both for horse racing and for our bid for the Olympics and Paralympics in 2012, which my right hon. and hon. Friends and I support wholeheartedly. We entirely accept the point made by the hon. Member for South-East Cambridgeshire (Mr. Paice): while we, too, fully support the Bill in all its aspects, we have several concerns about some of its finer details, although we can rightly raise those points in Committee.
  I am delighted to follow the right hon. Member for Livingston (Mr. Cook), whose knowledge of racing is legendary, and who points rightly to the crucial
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  importance of this Bill to horse racing, and to the importance of horse racing in the country. As we have heard, horse racing employs more than 100,000 people in this country, but it is also worth reflecting that some 6 million people went racing last year, and the number is growing year on year. In my constituency of Bath, for example, we have an excellent race course which is booming and at which figures are improving. The number of racing fixtures has increased year on year. This year, we have our highest number ever—18—and on average there are 3,400 racegoers at every event. That is an increase of 30 per cent. in just two years. Not only does the race course in Bath create employment, as do all other race courses, but it is an important tourist attraction, and provides a range of facilities that can be used on non-race day events.
  The Tote, which is the main focus of part 1 of the Bill, is crucial to racing. After all, its turnover last year was more than £900 million, and it makes a significant contribution to various aspects of racing, including the work that it does to improve horse breeding, to support veterinary medicine and veterinary education, and to help improve the facilities in the 59 race courses around the country.
  We are not therefore dealing with trivial issues. I am particularly grateful to the staff in the Library of the House for preparing such an excellent brief to cover and help to explain many of the issues. One of the things that became clear from reading that and many other briefs that we have been sent in preparation for this debate is the Bill's long gestation period, which reflects in part the complexity of the issues and no doubt the difficulty that Governments have had in finding a way of tackling them. During that gestation period, we have had Select Committee reports, industry reports, debates and statements in the House, consultation documents, the establishment of the British Horseracing Board, manifesto commitments and even a change of responsibility from the Home Office to the Department for Culture, Media and Sport.
  Despite all that, as other Members have said, what we have before us is only the skeleton of a Bill—an enabling Bill with many blanks left unfilled. As we have heard, we know with absolute certainty, I hope, that the Government intend an industry body, the racing trust, to take over the running of the Tote. That was made clear in what the Minister said today and in the Government's 2001 manifesto, and a shadow racing trust has been established under the excellent chairmanship of Lord Lipsey. There is no mention of any of that, however, in the Bill.
  We know that the Government have been in extended negotiations with the racing industry, which have led to the compromises whereby the new Tote owners will be given an exclusive licence for a period of seven years. As the right hon. Member for Livingston said, however, that is not mentioned in the Bill. We know that the Government want to make money out of the deal, as has been made clear, and we have been given a rough idea of the mechanism by which they will achieve that. None of that is mentioned in the Bill, however. As the right hon. Member for Livingston also pointed out, we know that the Government intend to abolish the horse racing

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  betting levy and the levy itself, which is covered in the Bill, but although we have a rough idea of what is intended to replace that income, the Bill contains no reference to any source of alternative income.
  The Bill therefore has a large number of gaps that remain to be filled by secondary legislation and by decisions by the Secretary of State. I am not entirely critical of that, however. I understand some of the difficulties. For example, the current issues surrounding the recent OFT report mean that it is difficult to decide what mechanism should be introduced to replace the levy. I was pleased to hear the Minister say in the Chamber on Monday that he was confident that if various parts of the industry get together, a solution can be found. I noted that he said that the Secretary of State has written to the OFT on that matter, and I wonder whether he might make public the contents of that letter so that all Members might see what the Secretary of State said. It strikes me, like the hon. Member for South-East Cambridgeshire, that the OFT approach has been one of treating horse racing purely as an industry and totally ignoring the sporting element, the horse breeding element. and its contribution to veterinary science. I also understand why there is no mention of the racing trust in the Bill. I would not want the Government to be put into a situation in negotiations with the racing trust if the only bid that they knew that they could accept was whatever the trust had to offer them.
  Given that I appreciate the difficulties, I am sure that the Minister will recognise the importance of what he has said in the House today and what he will he say in Committee to give people the assurances that they want. They want to know that some of the things that they assume will happen are very much Government intentions.
  I and my party agree that the decision to hand over the responsibility of the Tote to the racing trust is absolutely correct. However, the Minister will be well aware that many people disagree with that line. For example, the bookmakers committee has proposed that the sale of the Tote should be by flotation or by auction. It has argued that that could make a greater sum of money available to racing. I remain unconvinced by that argument and certainly unconvinced by the large sums of money that some bookmakers suggest could be realised from the sale of the Tote. Nevertheless, it is important for the Government to make clear the estimates that they have carried out as to the likely effect of such an approach, so that the evidence is clearly before us to show us why they have rejected it.
  As I have said, I understand why the Government have not put anything in the Bill about the period of time for which the new body will have the exclusive licence for running pool betting. However, this is one issue on which I believe that the Government may have got things wrong. I am not at all convinced that it is sensible to have an irrevocable seven-year time limit, particularly when much of the Government's research suggests that such a limit could be damaging to the sport.
  I understand entirely—the right hon. Member for Livingston referred to this—that there has been considerable pressure from the OFT, the Department of
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  Trade and Industry and from the Treasury to have as short a period as possible. However, I am concerned that the Government are categorically saying that the exclusivity of the licence cannot be renewed after that seven-year period. There is the very real possibility that that could plunge the sport into difficulties after that period has come to an end.
  Let me explain the reasons for my view. It is odd for the Minister to say that the temporary exclusive licence
  "is needed to safeguard the revenue racing receives from the Tote"
  and then simultaneously to abandon any chance of prolonging that licence should the revenue not be safeguarded in the next seven years. What evidence is there for the Minister's claim that
  "it's in the public interest to open up the pool betting market to effective competition"?
  After all, the Department's own regulatory assessment paints a rather different picture. Page 22 shows that the loss of an exclusive licence could lead to the
  "possible loss of pool betting at some race meetings and racecourses"
  and to lower Tote contributions to racing.
  I am not convinced that anyone would benefit from the removal of the exclusive licence. That view was expressed clearly by the Home Affairs Committee report of 1991 which argued that horse race pool betting is an area in which monopoly might actually be in the consumer's interest.
  The Minister will be well aware of the popularity of pool betting with small punters and family racegoers. Forcing pool betting into the open and into the competitive market could lead to the establishment of a large number of very small pool systems that could lead to erratic dividends that would undermine public confidence in pool betting. Surely if it is in the public interest and in the interests of racing, as the Government report seems to suggest, for pool betting to remain a monopoly, it is crazy to end it even with a seven-year transitional period without at least taking any regard of what might happen in future.
  Others Members have asked about the mechanism for determining the price. We get some guidance from the regulatory impact assessment, which states:
  "The Government has indicated that it regards the taxpayer as one of two interests in the Tote, the other being the racing industry. Consequently, the Government would expect proceeds equal to around one half of the Tote's value at sale."
  We have no set formula; it is around a half. What is the justification for that? What will the figure be? We do not have a clear statement as to what the valuation process will be, or as to when and how the valuation will be carried out. There is a great deal of uncertainty. The Minister will be well aware that the Tote is buying new betting shops at a rate of knots. I understand that it has bought 12 in Scotland in the last month alone, and all that has to be taken into account. We need to know how that will be done.
  It is not surprising that the British Horseracing Board, which will be a principle stakeholder in the new trust that will buy the Tote, argues in its briefing that the
  "Minister must make clear on what basis the price for the Tote will be determined prior to the completion of the passage of the legislation".

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  I entirely agree that we need to know that as soon as possible. We have heard from other hon. Members that there is some uncertainty about the legitimacy of the Government's obtaining any receipts from the sale of the Tote. Although I do not support that specific line—I certainly argue that there is legitimate justification for the Government to receive money from the awarding of the exclusive licence—the Minister must make clear the basis on which the Government justify taking money in addition to that which they could expect to get for the awarding of that licence.
  Reference has already been made to rule 14 and the Office of Fair Trading. It is increasingly clear that until that matter is resolved, it will be difficult to find an alternative to the Horserace Betting Levy Board and the levy itself. We know what the intended mechanism was to have been and the way in which the OFT's decision made that almost certainly impossible. The Racing Post quite rightly summed up the situation when it said:
  "The government is hardly likely to sanction a transfer to racing while there are still fundamental uncertainties."
  Surely it makes absolute sense for Minister to make it clear in his winding-up speech that the levy board will continue until the issue has been resolved and a clear alternative has been agreed.
  The first two parts of the Bill are movements in the right direction, but there are nevertheless many gaps to be filled and many issues to be considered in Committee. Part 3, which will establish the new lottery game, is also important. The establishment of the game will be an important element of our bid. Liberal Democrats support part 3 of the Bill only because of our total commitment to support the Olympic and Paralympic bid and because there is a need to demonstrate to the International Olympic Committee that robust funding procedures will be in place if our bid wins. In offering such support, I am conscious of the many worries that Liberal Democrats and others have about the likely impact of such a move on other good causes and the fact that the measure represents further Government interference in the way in which lottery funds are distributed. However, exceptions must be made at times when the entire UK comes together to celebrate and promote what our country has to offer.
  The Olympic project is enormously exciting. Some 11,000 athletes will compete in 300 events over 17 days with something like 500,000 spectators attending every day. The sheer scale of a successful Olympic bid would provide huge potential for social regeneration in London and nationally, for the development of our transport infrastructure and for the growth of tourism throughout the entire United Kingdom. Of course, it would also inspire future generations of athletes from England, Northern Ireland, Wales and Scotland. I was delighted when the Government announced their support for the London 2012 Olympic bid in May last year, and I know that many hon. Members on both sides of the House have welcomed the decision and spoken sensibly in support of the bid. I was surprised to hear the recent snide remarks made by the mayor of Paris about the London bid. He is wasting his time, because I am convinced that the country that wins the process will do so on the merits of its bid alone. Mr. Delanoe's comments will not influence the IOC and will only tarnish his reputation. Our ability to demonstrate sound
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  financing will be crucial to winning the bid. The inclusion of an element of lottery funding will help the bid to be successful.
  Normally, as I have said, we would be inclined to oppose the use of national lottery money for Government spending priorities, and we are prepared to make an exception in this case because we know how popular the hid is and how much cross-party support it has. Coming to that decision has not been easy, because we believe that the Government have a pretty bad record on grabbing lottery funds for their own purposes. A recent YouGov poll demonstrated that one important matter for the public is ensuring that lottery funds remain independent of Whitehall interference. The creation of the new lotteries fund to make grants in line with Government priorities on health, education and the environment was a blow to the independence of lottery funding. The proposed merger, for which legislation is about be introduced, of the New Opportunities Fund and the Community Fund could soon be a further such blow.
  In addition, and I hope that no one would deny this, the inclusion of a new lottery game will have a direct impact on the other good causes. It is therefore vital, as we heard in an intervention, that all parts of the country benefit from the use of the Olympic lottery game receipts. After all, those receipts will be generated by people in all parts of the country. It will be much easier to persuade people in Bath, Belfast, Bangor and even Banff to get behind the new game if they know that their area will benefit, and that London will not get all the rewards.
  I hope that the Minister appreciates that, given all our concerns about the independence of lottery fund distribution and the possible impact on the other good causes, Liberal Democrat support for this part of the Bill is a major contribution towards maintaining the all-party consensus on support for the Olympic bid.
  The Bill is just a skeleton, and I urge the Minister to continue as he started in his introductory remarks, by giving us as much detail as he can on those areas where it is desperately needed. We broadly agree with the principles regarding the future of horse racing and the funding of the Olympic bid. The Bill has had a long gestation and many false starts, but at last we have something to get our teeth into. We will help the Bill to clear its first fence by giving it a Second Reading.
  3.42 pm
  Jeff Ennis: I am grateful for the opportunity to contribute to this important debate. Like most Members who have spoken, I declare an interest: I am joint chairman of the all-party racing and bloodstock group. I am sure that my co-chairman, the hon. Member for South-West Hertfordshire (Mr. Page), will also make a contribution. Ours is one of the biggest and most active all-party groups, and that is reflected in the number of Members who want to speak in the debate.
  I congratulate the Secretary of State and her team on introducing the Bill. There have been calls for the measure since I joined the all-party group in 1996, and indeed, as the hon. Member for Bath (Mr. Foster) pointed out, the Home Affairs Committee called for it as long ago as 1991. I hope that I am not being too

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  presumptuous in saying that my experience of discussing this matter in the all-party group, which we have done a number of times since 1996, indicates to me that the Bill will have a fair passage. I think that there is agreement to it in principle on both sides of the House, and it is just a question of trying to smooth its rough edges as it wends it way through the various parliamentary stages.
  Many of my concerns, which relate to the involvement—or should I say interference—of the Office of Fair Trading in the future of racing, have already been eloquently expressed by the hon. Member for South-East Cambridgeshire (Mr. Paice) and my right hon. Friend the Member for Livingston (Mr. Cook), and we all look forward with trepidation to the likely outcome of that involvement. The future success of racing could well be prejudiced by the outcome of the OFT's deliberations. Like the hon. Member for South-East Cambridgeshire, I welcome the Government's decision to retain the levy board until at least 2006. That is desperately important in light of the OFT report.
  The meat of the Bill is about bringing the Tote under the Secretary of State's control with the intention of selling it on. The Minister gave a commitment today to set up a racing trust for the benefit of racing which is important, given the abolition of the levy board. It is eminently sensible to take both those issues together, as that will allow the Government to withdraw from their direct involvement in horse racing. Over the years, the Tote and the levy board have done a first-class job in channelling funds from betting into racing, but it is in racing's interests to break the link between direct Government involvement and the racing industry, as that will permit the racing industry more control over its destiny and allow it to continue to flourish.
  As one or two Members have mentioned, racing in this country is a growing and successful industry and can stand comparison with the racing industries of other countries. In my opinion, it is the best in the world. The Bill does not deal specifically with the onward sale of the Tote, but hon. Members have referred to it. We do not want to get bogged down in the issue today, but it is important that the sale is pitched at an affordable level to allow the Tote to be successful in its new guise. If anything, the price should be lower rather than higher. Hopefully, the Treasury will deploy common sense when it looks at the issue.
  The Bill deals with the Tote's exclusive licence on pool betting, which will eventually become non-exclusive. We have already been given a commitment that there will be a seven-year licence, which has been agreed with the industry, and a new regulatory structure will be set up under the supervision of the gaming board. Like the hon. Member for Bath, I have reservations about whether that seven-year period is long enough, but I congratulate the ministerial team on securing that agreement.
  As for the successor body, it must have the ability to provide low-interest loans for future race course improvement, as was said in an intervention by my hon. Friend the Member for City of York (Hugh Bayley). A lot of race courses have benefited from low-interest loans, particularly those that they have received from the levy board. My own race course at Doncaster holds
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  the oldest classic in the world, the St. Leger, which has been held since 1776. It wants to redevelop the course so that its facilities are comparable with those at York and Ascot, and has put together a development package totalling £55 million. If the loan scheme fell by the wayside, race courses, particularly the small ones, would experience problems finding alternative ways of financing redevelopment. I hope that the Minister will take on board the need to extend the scheme and continue to offer loans through the new racing trust.
  The League Against Cruel Sports has two concerns that are directly relevant to the abolition of the levy—equine welfare and the future of the racehorses that retire every year from racing. I am glad that, in his introductory remarks, my right hon. Friend the Minister gave a commitment that the funding of vet attendance at tracks will be enshrined in the new arrangements, and the Bill indeed makes provision for that. The League Against Cruel Sports estimates that there are some 4,000 former racehorses. The racing industry has a proud record of dealing successfully with such horses, but according to the league, there are roughly 300 former racehorses for which new homes need to be found. It is important that when the new racing trust assumes responsibility, it ensures that funding is provided to deal with the welfare of former racehorses. I hope that the Minister can make some pronouncement on that in his winding-up remarks.
  I hope that the measure has support in all parts of the House. It is not a party political matter. It is important to the future success of the industry, which, as my right hon. Friend the Member for Livingston pointed out, is one of the biggest industries in the country. It is also important for the future of the country.
  3.51 pm
  Mr. John Greenway: I declare a longstanding love affair with the Tote, which began in 1991 when, as one of the co-authors of the Home Affairs Committee report which recommended the very action that we are putting through today, I hoped that one day we would have a debate when those measures came before the House. Indeed, as the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) said, it has been argued long and hard many times that we should have the Bill.
  Similarly to the right hon. Member for Livingston (Mr. Cook), I have a consultancy with a City public relations company, one of whose clients is the Tote. I was the sponsor of the last Tote Bill in 1996, when we extended the ability of the Tote betting shops to offer fixed-odds betting to other sports, not just to racing. Like a number of hon. Members, I suspect, I am a regular investor in the Tote on course and a less regular investor in the Tote through my Tote credit account.
  I also have a considerable constituency interest. Although none of the nine race courses in Yorkshire is in my constituency, Malton is one of the long-standing historic centres of racing excellence through training and breeding, and if the appropriate persons are listening to the debate, I sincerely hope that before the levy is abolished, we will get a £100,000 grant or loan for the laying of a polytrack at the Langton Wold gallops, which we very much need to attract more horses.

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  I had hoped that when we had this debate, we would be able to use the gushing language of a red-letter day in the 75-year history of the Tote and the 300-year history of racing, and I hope that that is how we will look back on these proceedings. However, I am slightly cautious about that because, as the right hon. Member for Livingston so adequately put it in his speech, although the future of the Tote and the racing industry without the levy has long been on the agenda, we never expected that when we came to debate it the future of racing would have been plunged into such uncertainty by the Office of Fair Trading rule 14 notice. The disputes that that brings with it over the ownership, sale and purchase of media and data rights add to our feeling of uncertainty about what the future holds.
  I hope that we can conclude that, despite those uncertainties, it is right for us to proceed now. We have waited a long time for this slot in the parliamentary calendar. I hope, too, that my right hon. Friend the Minister will understand the need for caution in implementing some of the measures which he, or his successor in the years to come, will be given the power to implement, if the Bill goes on to the statute book.
  As I have said, the concept of a sale of the Tote to a racing trust has long been accepted as the best option, and I welcome the fact that the Minister accepts that we should be talking about the sale of the whole of the Tote's business, including the betting shops, which contribute substantially to the profits that the Tote ploughs back into racing.
  The features that the Minister outlined in his speech, which he has agreed with the industry and which form the basis of the potential successful implementation of the measure, still need to be given stronger force by being included in the Bill. In my intervention, I paid tribute to the fact that he has really fought his corner extremely hard to ensure that the exclusivity will be for seven years, not less. I would have preferred it to have been for longer, and I share the uncertainty of the hon. Member for Bath (Mr. Foster) on what will happen at the end of that seven years. However, our concerns are not about the nature of the promises, but their absolute delivery. In that, we must also have regard to the fact that nothing in the Bill says that the Tote will be sold to a racing trust, although we welcome the shadow trust chaired by Lord Lipsey.
  The more important missing ingredient is the price and what formula will be used by the Government to negotiate that. Every penny that is paid is money that would otherwise have gone to racing. We understand and accept that, but unless the price is reasonable, we could be faced with a situation where even at the eleventh hour the Tote may say that it cannot recommend going ahead on this basis. I hope that, in Committee, the Minister will at least be able to give some indication of what the price will be and how it will be calculated.
  The affection that racing enthusiasts and people in the industry have for the Tote largely reflects the fact that they feel ownership of it already and their gratitude for the fact that all the profits from the Tote go to racing. That is in sharp contrast to the levy, which is paid by bookmakers. That is always subject to tough negotiation, as the Minister knows, and all too often it has been the subject of eventual determination, first by the Home Secretary and now by the Secretary of State
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  for Culture, Media and Sport. I mean no unfair criticism of bookmakers, but the levy was originally voluntary, and it is not unfair on them to say that they have to fight their corner every time that the levy is negotiated. But both racing and bookmakers have long felt that a commercial negotiation was the better option, and that still has to be the best long-term option.
  There are now obstacles in the way. As my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) said, the issue of VAT on bookmaker payments, some £16 million or so a year on the current levy, has not been resolved, and from the racing perspective there is the question that many in racing are asking themselves, which is whether they as an organisation are in a sufficiently strong position to achieve not just more, but at the worst, no less than they get now through the levy by a commercial negotiation.
  When the Home Affairs Committee considered the matter in 1991, it said that there was no organisation within racing capable of making that negotiation. Now there is, through the British Horseracing Board, but the OFT rule 14 notice—its unwelcome intervention—is hugely damaging to the negotiation. Until that is resolved, and until the EU interest, to which reference has been made, is resolved, it is not clear to me by whom and to whom the data rights are being sold.
  If we end up, God forbid, with each race course having to sell its own data, there will not be 59 race courses within five years of that event taking place, and it will be national hunt courses in the north of Britain, particularly in Scotland, that will suffer. I cannot believe for one moment that anyone in racing or bookmaking could possibly want that to happen.
  On balance, therefore, and in spite of those uncertainties, the Government are right to seize this historic opportunity to ask Parliament to pass into law the structural measures needed to achieve what we have all long wanted to see. I hope, however, that the Minister will continue—not just today but as the Bill progresses—to give the assurance that, if necessary, some of these events will be postponed until we are absolutely certain that we are doing the right thing and that the future of racing is secure. That is what everyone in the Chamber wants, and with that spirit of good will in mind, I hope that the cross-party consensus can continue and that we can achieve these long-awaited measures. I wish the Minister and all those who work on the Bill in Committee every success as they attempt to bring that about.
  4 pm
  Mr. Brian Wilson: In view of all the sporting implications of the Bill, I cannot help but reflect that it is a wee bit of a pantomime horse, in the sense that its front end is not very well connected to its back end. That is also a fair description of the horses that I tend to back. I think that most Members who are waiting to speak want to join in the very interesting and necessary dialogue on the future of the Tote, so I apologise for the fact that I am going to talk about the back end of the Bill—the part that deals with Olympic lottery funding. In mitigation, I would say that I want to make just a few brief points.
  I warmly welcome the Olympic and—it is always important to remember that that term includes this—Paralympic bid being made in London's name.

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  Logically, therefore, I strongly support the measure that is being introduced today to provide the necessary funding to support that bid. This will obviously have implications for other beneficiaries of lottery funding right across the country. I know that that point has already been made on Scotland's behalf by its First Minister, Jack McConnell, who has had a meeting with the Secretary of State and, doubtless, my right hon. Friend the Minister.
  Perhaps my next point is so obvious that it does not need saying, but the corollary of the fact that the bid will have national implications is that it should bring national benefits to every part of the United Kingdom. A number of people have raised that point today, and it is surely non-controversial, involving, as it does, common sense and common justice. The reason why I thought that it was worth emphasising is that over the Christmas period, I heard the first murmurings of what I am afraid is the inevitable response from a political minority in Scotland that cannot see a gap without trying to drive a wedge into it. We have heard the first utterances to the effect that this is really not Scotland's business, that Scotland it going to lose out, and that it has nothing to do with Scotland. That is all utter rubbish.
  My general feeling that I should say something about that was reinforced a few minutes ago, when I was sent a copy of a press release put out today by the Scottish nationalists under the inspiring headline, "Scotland Faces" Olympian Rip-Of?". It contained a sentence that, even in the mean-minded world of nationalism, is something of a classic:
  "if London wants the Games, London should take financial responsibility"
  for them.
  Pete Wishart: Hear, hear!
  Mr. Wilson: That is the hon. Gentleman's point of view. It is not, however, the point of view of the vast majority of people in Scotland. It is a narrow-minded piece of thinking that should not be allowed to make an inch of progress in the House or anywhere else. I was pleased to find that the only survey, so far as I know, carried out to determine support for the London Olympic bid showed that 80 per cent. of people supported it nationally, and that two parts of the United Kingdom in which support was at its highest were Scotland and Northern Ireland.
  That might seem surprising if we approach this from a narrow political perspective, but for anyone who knows anything about these societies and their commitment to and interest in sport, it is entirely logical. For the vast majority of people in Scotland, Northern Ireland, Wales and any of the English regions, this is the closest that they will ever get to having Olympic and Paralympic games on their doorstep, so of course they want them to come to the United Kingdom. Of course London is the only credible standard bearer for the United Kingdom, so let us all get behind it, from every corner of the United Kingdom.
  The Scottish nationalists' approach is not only wrong in terms of generosity of spirit and recognition of what is best for the United Kingdom, but wrong for Scotland,
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  and profoundly so. Scotland can, and I have no doubt will, get substantial benefits if the bid succeeds. Here, I want to move on to my more parochial, constituency point. Most attention concerning the possibility of locations around the country being used has tended to focus on football and using the best stadiums in the United Kingdom for that competition. Incidentally, I also welcome the prospect of a British team being in evidence there. Let us see how a British team compares with those in the rest of the world. There is nothing new about that concept, as has been suggested somewhere, because, historically, it was always a British football team that took part in the Olympics.
  Mr. Doug Henderson: Queen's Park.
  Mr. Wilson: As my hon. Friend says, to all intents and purposes the team was Queen's Park with a couple of Corinthians thrown in to make up the numbers. As football was amateur, nobody thought it remarkable that a British team was involved. The idea of having a professional British team taking part in the modern Olympic context is very exciting. I hope that we see those games in Scotland as well as in other parts of the United Kingdom.
  Football offers the obvious opportunity, but my constituency point involves sailing, as there is real potential to bring some events, and certainly a good share of the preparation, to the firth of Clyde. I want to put my remarks in an historical context, because there is nothing new about that idea. Indeed, at the last but one London Olympics—I emphasise that they were held in London—in 1908, when, fortunately, there was nobody putting out press releases with noble-minded headlines such as, "Scotland Faces? Olympian Rip-Off?", the sailing events were shared between Ryde on the Isle of Wight and the firth of Clyde. Obviously, the scale of the event and the infrastructure required have changed beyond recognition.
  Mr. Adrian Sanders: I do not know whether the hon. Gentleman knows this, but in 1948 the yachting events were in Torquay, in my constituency.
  Mr. Wilson: There is nothing against a tripartite split.
  Mr. Sanders: But the events will be going to Weymouth.
  Mr. Wilson: Perhaps the hon. Gentleman's constituency could have a run-off with the Isle of Wight and Weymouth.
  The point is straightforward: the scale of the event has changed beyond recognition since 1908, or indeed 1948, but the firth of Clyde was used because it is one of the best sailing areas in the United Kingdom and Europe—and, some say, the world.
  Pete Wishart: Perhaps the hon. Gentleman would like to read out my press release headline once again in case anybody in the Press Gallery missed it.
  Mr. Wilson: I do not quite catch the wit and wisdom of that point. The only other line that I will quote from the hon. Gentleman's press release is this, said through gritted teeth:

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  "I am happy to support the Olympics going to London."
  I suspect that the truth is that he would be happy to support the Olympics going anywhere in the world except London, but that is the rather miserable political philosophy that he represents.
  To return to the point about the firth of Clyde, although the scale of the event has changed, the area's quality as a sailing venue has not. I make no overblown claims or demands, but the firth of Clyde should be considered seriously to see whether it is still possible to hold events there. Largs in my constituency is a well-known centre for major international sailing events, and the Isle of Cumbrae is the Scottish Sports Council's chosen location for its water sports centre, so this possibility is real. Even if events are not held there, the strong possibility should exist of preparation being carried out there.
  Let me point out to Members from throughout the country that this will not be a one-off "big bang" event in London. It will require long-term preparation, and an infrastructure allowing a couple of hundred teams from all over the world to make their own preparations. The arrangements must be of a high standard, and there is no reason why they should not be decentralised. I believe that when the Olympics were held in Australia much of the preparation took place in Queensland, and the distance between Queensland and Sydney is every bit as great as any distance that could be conceived of in the United Kingdom.
  For all those reasons, this is very much a national undertaking. Although it is in the nature of the Olympics that bids are presented in the name of a city, every corner of the country can benefit—and "the country" includes the four nations of the United Kingdom. Let us all get involved, let us all benefit and let us all support the bid. I welcome the Bill.
  4.10 pm
  Mr. Richard Page: I have been involved with horses virtually all my life. They have given me a great deal of pleasure, a great deal of frustration and a sizeable dent in the wallet. As was mentioned by the hon. Member for Barnsley, East and Mexborough (Jeff Ennis)—I was about to call him my hon. Friend, but I do not want to damage his chances—I am also joint chairman of the all-party racing and bloodstock group.
  I welcome the Bill. The Minister dealt with it in three parts and I shall do the same, but in reverse order. I regard backing for the Olympics as a legitimate use of lottery money. I may be a bit more interested in this than most Members, because Camelot is on the edge of my constituency and employs several hundred people, and the success of the lottery affects their employment prospects. The trouble is that in my view, the Government have not always used lottery money for the right purposes in the past: things that should have been funded by a central exchequer have been foisted on the lottery.
  We all know that lottery, raffle and tombola ticket sales are enhanced if people think they support a good cause, and reduced if they think it is a bad cause. Unfortunately, in one or two instances people have thought the latter, the Dome being an example. When that happens, sales fall and Camelot gets the blame,
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  although it is not Camelot's fault at all. I hope that people will consider backing for the Olympics to he a legitimate use of lottery money and will flood in, buy tickets and improve my constituents' employment prospects.
  Let me make a specific point about the general subject of bureaucracy. Over the years, various lottery distribution groups have grown up. I am sorry to say that I feel they are hoop-builders. There are so many complicated forms to be filled in that a sub-industry of lottery application advisers has evolved. I therefore welcome what the Minister said about the development of a lean and mean bureaucracy. I only hope that that will rub off on the existing lottery money distributors.
  As many Members have pointed out, we are taking the Bill very much on trust when it comes to the levy board and the Tote. I am pleased with the work that the levy board has done: I think that the improvements to race courses and the veterinary work have been marvellous, and must not be lost to racing. Many is the time that I have gone to a race meeting and stood on a concrete slab under a leaking corrugated iron roof, with the wind whistling around me, watching my horse come last again and telling myself that I am enjoying it when I am not. The levy board has behaved very responsibly in raising standards for all racegoers.
  I have had ponies and horses for some 54 years, and I have attended one or two of the seminars run by the levy board. I now realise how little I know about racing and racehorses—but I do know why, all other things being equal, a second foal from a dam will probably be the best. If any Member would like to know the details, I am available for consultation.
  However, I certainly understand why the Secretary of State wants to get shot—if I may use that phrase—of the levy. I agree with the Government's natural reluctance to remain involved in what is a commercial arrangement, so I welcome all the lovely words in clause 16, which effectively says that the Secretary of State can direct how such a transfer scheme might be operated. It states:
  "The Secretary of State shall not make or approve a transfer scheme … unless satisfied that any property or rights to be transferred will be used"
  for certain specific purposes. That is fine, but here I detect a little problem coming, as other Members have suggested. I can do no better than quote from the Racecourse Association, which might be thought to benefit from the administration of the Office of Fair Trading. It says:
  "we have a number of concerns that arise from the current OFT inquiries into racing that have resulted in considerable uncertainty for the commercial future and governance of the industry."
  It continues:
  The Office of Fair Trading's decision to rule against collective selling threatens to undermine the commercial relationships that both the British Horseracing Board and the Racecourse Association have entered into with bookmakers."
  In examining the arrangements, the thought is that the levy board will be passed to a commercial operation, which will be administered and run by the British Horseracing Board. But if the BHB is to be hamstrung by rule 14, it will not have the money to continue to fund the levy. If so, racing will suffer, and none of us wants to see that. I am afraid that the problem originates from the ignorance of the OFT, which just does not understand.

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  The right hon. Member for Livingston (Mr. Cook) used the phrase "creative tension", and that is absolutely right. Racing is a series of strong elastic bands pulling in all sorts of directions, but those bands do create stability. Through its actions, the OFT is cutting one of them, and heaven knows where racing could go. The BHB's revenue source comes from the allocation of fixtures, and from data rights. If that is lost, the funding for racing will be put seriously at risk.
  I am not going to discuss the value of racing to this country, which other Members have mentioned, but it certainly numbers among our top 10 industries. That indicates how important it is, and it must not be lost. I bear scars that were caused by the OFT back in the early 1990s, when it introduced its beer orders. For those who are devotees of Harvester, Chef and Brewer, Blubeckers and so on, that was marvellous. But those who, like me, welcomed the different styles and qualities of our public houses throughout the country regarded the beer orders as a disaster. I am desperately worried that exactly the same thing will happen if the OFT is allowed to lurch on.
  It was stated in 1928 that the Tote was to be created in perpetuity. I have often wondered how long perpetuity was, and I now understand that, from the Government's point of view, the definition is 75 years.
  Mr. Greenway: Plus seven.
  Mr. Page: Indeed. I am not going to get too involved in how the money aspect should be calculated, but the Government have put no money in. They have given a de facto monopoly, which obviously has a value over the years. Equally, we must not forget that the Tote has given racing more than £100 million. Indeed, that was the very purpose of the Tote, and such money could be regarded as an effective rent over the years. As other Members have pointed out, there can be trade-offs, and the greater the cost of purchase, the less will be available for racing. We should remember that the entire object is to give money to racing.
  I must congratulate the Minister on resisting the suggestion—I believe that it came from my favourite organisation, the OFT—of a proliferation of pool betting companies and the separate sale of Tote shops. I cannot go into that subject because of lack of time, but the suggestion shows a worrying lack of appreciation of the whole principle of Tote betting.
  I am schizophrenic in these matters, as I have argued in many Standing Committees for privatisation and denationalisation. Now I am saying that we should nationalise something, but we all know that the Government intend to transform the Tote caterpillar into a state-owned chrysalis and then into the butterfly that will be the racing trust. I hope that the House is impressed by my metaphor, which I have only just thought of. Even so, that transformation is what we all want.
  I shall not rehearse the arguments about what the Bill should contain in respect of licence fees and time periods, but there is no reason why the Minister should not come forward with the mechanism for the calculation of the Tote value while the Bill is proceeding through the House. After all, he has already been able to
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  do a great deal of work on the licence period, so there is no reason why he should not also produce that mechanism, which would give a great deal of comfort to hon. Members. I trust the Minister, but he is a politician and I know that political life is not secure. I have confidence while the Minister is in post, but we all know how people in government get moved around. I sincerely hope that he will be able to deliver on all the promises that he has made.
  I shall draw my remarks to a close by saying that we need to consider what will happen after the seven-year period. This Government were responsible for the dome for the year 2000, and then did not have a clue about what to do with it afterwards. I hope that the Minister will be able to say what will happen to Tote and pool betting at the end of the seven years.
  I have made clear my natural concerns and reservations, but I welcome the Bill and congratulate the Minister on what he has achieved so far. I hope that the Bill successfully completes its Committee stage and becomes law as soon as possible
  4.21 pm
  Mr. John Grogan: I am delighted to contribute briefly to this debate, for three main reasons. First, there is a certain novelty value about being asked, as a Labour Back Bencher, to support a full-blown nationalisation measure, even though it is only temporary.
  Secondly, Yorkshire is one of this country's great horse racing centres, with about 15 per cent. of the country's 59 courses situated there. The world's oldest horse race, the St. Leger, is held in Doncaster, and York—part of which I represent—is looking forward to welcoming Ascot in the north in 2005. The Tote has expanded turnover at all the nine courses in Yorkshire considerably in recent years.
  Like many hon. Members who have contributed to the debate, I am an active punter. I tend to do my case work on a Saturday afternoon while watching the racing on television. I inherited my love of racing from my late father, who sadly died last year. I think that he would have been very proud of the last statement of his account at William Hill's, as it showed a profit of £3.33. After a lifetime's gambling, that is a considerable achievement.
  Horse racing in Britain punches well above its weight. If one goes into a betting shop in Hong Kong, Singapore or Brussels, it is likely that one will end up watching racing from Wetherby, Sedgefield, Doncaster or somewhere else in Britain.
  My third reason for wanting to make a brief contribution to this debate arises from the Bill's association with the Olympics and the establishment of the Olympic lottery fund. I was one of only two Yorkshire Members who belonged to the all-party Commonwealth games group a couple of years ago. The games held in Manchester were a great success, for the north of England and for the whole of the country. That success gave us the confidence to make a credible Olympic bid for the year 2012. The effects of the Commonwealth games were felt in my constituency of Selby, which twinned with the Cook Islands. Before the games started, a bowling match was held between teams from the Cook Islands and Selby. The event was won by Selby's finest, and will be remembered for many years.

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  I want to make four points about the Tote aspects of the Bill. First, the Tote has always had a dual purpose. We have heard a lot about funding, sponsorship and prize money in racing, and a good deal about providing a fair deal for punters. We need to think about the origins of the Tote. We have heard about the Racecourse Betting Act 1928, which, incidentally, was a private Member's Bill promoted by Major Glyn. Winston Churchill, as Chancellor of the Exchequer, replied to the debate. Much of the impetus was the determination to provide a fair deal for punters, and I hope that that will not be lost under the new set-up. Punters' interests must be represented on the racing trust.
  It is worth briefly quoting Major Glyn's peroration in promoting the 1928 Bill. He referred to the saying that all men were equal on and under the turf. I quote him directly:
  "We are not equal on or under the turf to-day, because the poor man is hunted and harried and pushed about if he tries to make a bet in the street, whereas the rich man, who has a banking account, has opportunities to bet on credit with starting price bookmakers in the big centres such as the poor man has not got. By the establishment of the totalisator your millionaire and your poor man out for a day's fun will back their fancy with the machine, and the machine, being inhuman, recognises nothing but cash and treats all men, rich and poor, alike, and pays out accordingly." —[Official Report, 16 March 1928; Vol. 214. c. 22851.]
  The instinct of those promoting the Bill was to ensure a fair deal, which is an important part of the heritage of the Tote.
  My second point is to recognise the opposition of the bookmakers. That is nothing new. The betting industry was greatly opposed to the establishment of the Tote in 1928. Winston Churchill's reply was, basically, "Tough". Clearly it would create competition for the bookmakers of the day and, equally, today, selling the Tote to the racing industry reinforces such competition. However, the betting industry might be protesting too much. It has not had a bad deal in recent years. When the Bill was introduced in 1928, the betting duty had just been brought in. Now, of course, it has been abolished. There has been massive potential for expansion of the major bookmakers in recent years, and I believe that they should accept the overwhelming consensus that the Tote should go to the racing industry.
  My third point about the sale of the Tote is that the racing industry faces a great challenge to get its act together. The Home Affairs Committee, to which several hon. Members have referred, published a report in 1991 that laid the groundwork for many of the measures in the Bill. The report stated:
  "If, under the changes we propose, racing mismanages the Tote, it will bear the consequences of doing so … But our vision is not a gloomy one. We are confident that the racing industry, if united, will be able to create a modern organisation which will run the industry, own the Tote and negotiate with bookmakers an adequate and appropriate fee for racing's services."
  There is now no hiding place for the racing industry. Traditionally, politics in the House has been mild in comparison with the politics of the racing industry, which has seen many knives in the back over the decades. Recently. the industry has begun to get its act together, but that challenge still remains.
  Fourthly, I agree with many hon. Members who have spoken and with the Home Affairs Committee in 1991 that there is a good case for pool betting being a
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  monopoly. It has a monopoly in many other countries. I understand that in Australia the equivalent of our Tote has a complete monopoly, which I am not suggesting. If, however, we want to attract a large pool that is worthwhile and will attract bets, a good economic case can be made—in terms of public goods and so forth—for a Tote monopoly to continue. That may not be possible, but I believe that seven years is essential.
  It will be worth discussing in Committee how the Tote will be valued and what should happen if the Office of Fair Trading and the racing industry do not reach an amicable agreement. Could the levy be extended beyond 2005 if we were at that stage in chaos?
  My hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) referred to the grant that currently comes from the levy board to assist the horses retraining fund. It is a small but important point that 300 horses are supported by that fund at the moment, and racing has a proud record—especially compared with the greyhound industry—in looking after animals when they retire. It is important that that continues.
  Finally, I end with a word about the Olympic bid and the lottery fund, both of which I thoroughly support. Displacement is an issue and, as other hon. Members have suggested, the Government could provide tax concessions to make up for that. However, if we are to make a credible Olympic bid, the opportunity cost will fall somewhere. Funds for the preparation and implementation of the bid will have to come from somewhere. As someone from the north of England, I think that that is worthwhile. The knock-on effects on participation in sport, the country's profile, and the statement that we can do such things in the 21st century and not just in 1908 and 1948, would be so important.
  I will be 50 in 2012 when, we hope, the Olympic games will be staged in London. People of my age could probably only hope for gold medals in shooting events, but for the two weeks of the games I would feel not 50 or even 40, but 21. That is how inspiring it would be to have the Olympic games in our country. I fully support the Olympic lottery fund and I broadly support the Bill.
  4.31 pm
  Pete Wishart: I shall confine my remarks exclusively to the part of the Bill that deals with the Olympic lottery fund, but I wish first to thank the hon. Member for Cunninghame, North (Mr. Wilson), who is unfortunately no longer in his place, for previewing my press release so significantly. I am sure that members of the press are already poring over every word after his thrilling preview.
  I have no problem with London hosting the Olympic games. In fact, I hope that London secures the games for 2012. That would be great for London, but my problem is that I do not believe that the rest of the nation should pay such a significant part of the cost of the games. We certainly should not pay through our good causes and our charities, but that is exactly what will happen if the Bill becomes law.
  Mr. Page: Does the hon. Gentleman agree that people have a choice about whether to buy an Olympic ticket? If they do not agree with the bid, they can buy an ordinary lottery ticket. His argument does not stand up.
  Pete Wishart: The hon. Gentleman makes a good point, but I do not agree that people buy lottery tickets

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  on the basis of the type of game. They buy tickets because they want to play the lottery. Money will be lost, as we have already heard from the Government, and an assessment of the amount has already been made.
  If London wants the games, London should pay for the games. It is not as if London is short of a bob or two. It is the most prosperous city in Europe. It has more millionaires per square mile than anywhere else in Europe. In the City of London, it has the most dynamic and prosperous financial market outside New York, and it can more than afford to pay its way. In gross domestic product alone, it outstrips anything in the regions or nations of the UK. It even outstrips some of our allies in Europe. For example, the GDP of London is more than that of Austria, Sweden, Finland and Belgium. Nor is London short-changed in the public money that it already secures. For example, 80 per cent. of all public spending on transport is in London and the south-east. The cost of extending the Jubilee line was £3.5 billion and the overspend alone on that project was more than the spending on the transport infrastructure in the rest of the United Kingdom that year.
  Mr. Love: The hon. Gentleman will be aware that London makes a net contribution to the rest of the United Kingdom of some £20 billion a year and it is proposed that Londoners should make a specific contribution to any successful Olympic bid through their council tax. Is he asking for even more?
  Pete Wishart: The short answer is yes. As London is the most prosperous city in Europe, I maintain that it can more than afford to pay for the games. Londoners will pay, but London will accrue benefits from the games.
  London's claim that it does not receive its fair share of public expenditure was knocked on the head by Professor Maclean of Oxford university, who found that Londoners received £5,177 per head, compared with £4,724 for people in Yorkshire, and that is only identifiable public expenditure. When we enter the realms of non-identifiable public expenditure—the amount spent on Departments, Whitehall, the BBC, the quangos and the headquarters of many large multinationals—London does very well. That money is unnoticed and unaccounted. Why should the rest of the UK pay for an Olympic games that London can more than afford to finance?
  The proposal is based on the spurious assumption that the games will be good both for London and for the rest of the UK. I have no idea on what that assumption is based although I have no doubt whatever that the games will be very good for London and the south-east. However, it is debatable whether there will be benefits and advantages for the rest of the UK.
  The Government have already commissioned the engineering consultants, Arup, to assess the benefits of the games for London. Arup concluded that the regeneration of east London would create 3,000 jobs. There would be a further £70 million benefit from the fiscal impact of growth in the local economy, and as much as £507 million extra could be generated from tourism for London.
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  I have seen no quantifiable study of the benefit of the London games to Scotland. Wales and the rest of the UK regions. So far in Scotland, all that has happened is that Barbara Cassani has been running around our chambers of commerce and attending business breakfasts telling us that the games will be good for Scotland, so we had better get our finger out or we will lose out. She made the spurious claim that Queensland did very well from the Sydney Olympics, yet she failed to mention that the other Australian states were extremely unhappy and lamented the loss of so much tourist traffic during the Sydney Olympics.
  We are also given the sop that Scotland may host the football games if the Olympics are held in London. Well, whoopeedoo, Madam Deputy Speaker. Unless the Olympic football tournament changes into something remotely interesting between now and 2012, it will not be worth a hill of beans. A local derby in my constituency between the mighty Brechin and the mighty Forfar would be a bigger draw than Azerbaijan versus the Cayman Islands. We do not even have a United Kingdom football team, although I am pleased about that—a United Kingdom football team would be no good at all for us in Scotland. I can just imagine the UK team in their Union jack strips running on to the pitch at Celtic park. What a raucous response they would get.
  The total funding package for the games is to be £2.375 billion; £875 million of that will be borne by London through a £20 increase in council tax and there will be a contribution of about £250 million from the London Development Agency. However, half that money will be paid by the rest of the nation, through our good causes and charities. True, London will pay extra council tax, but we shall pay through our good causes and that is an unacceptable way to pay for the London Olympic games.
  It is estimated that Scotland will lose about £41.8 million of lottery funding for its good causes and charities. That will inevitably lead to long-term damage to Scotland's charity work. A small amount of money goes a long way in a small community, and a lot of good causes can benefit from £41 million. I do not know how the feel-good factor from the London Olympics will help charity work in Scotland.
  Voluntary organisations in Scotland have expressed massive concern about what is being suggested. The Scottish Council of Voluntary Organisations stated:
  "If the Olympics bid is successful, it will inevitably lead to the long-term damage of Scotland's charity work as lottery funds are diverted from good causes here to bankroll another 'Millennium Dome' type project there … SCVO has serious concerns that a new game would divert the already decreasing number of people playing the National Lottery away from the main game further reducing the funds available to 'good causes'."
  I hope that answers the point made by the hon. Member for South-West Hertfordshire (Mr. Page). There are huge concerns about the effects of a London Olympic bid on our good causes and charities.
  In the past few months, we have learned that not only will we pay for the Olympic games through our good causes and charities but also that the UK taxpayer will have to underwrite the total cost—to any amount. We shall have to underwrite the games at any cost, even if it exceeds £2.375 billion.

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  In the DCMS response to the paper on the London Olympic bid, the Government said that, in the unlikely event of the games needing more than £2.375 billion, the extra burden should be shared between the Mayor of London, through the council tax precept, and the lottery fund. Now, all of a sudden, we find in an internal memorandum that was rushed through just before Christmas that the UK taxpayer will underwrite the total cost. When was that decision taken? Why has the underwriting of the Olympic games changed? The Minister owes us an explanation because, for example, the New South Wales government, not the Australian taxpayer, underwrote the Sydney Olympics. There is no obligation to make the national taxpayer pay for the games. According to the IOC rules, a city government could do so and London should therefore be the authority that underwrites the Olympic games.
  The Government tell us that the cost is unlikelytexceed£2.375 billion. Iama Scottish Member—it mightsurprise hon. Members to learn that fact—and when the House decided that the Scottish Parliament would be assembled disastrously at the Holyrood site, we were told that the cost would not exceed £40 million. It is now £450 million. We also have the example of the disastrous millennium dome. The UK taxpayer is still paying for the mistakes of that massive white elephant that sits by the Thames. The simple fact is that our recent history on large infrastructure projects is not very good. Surely, if London gets the games and it all goes pear-shaped financially—there is a very good chance of that happening—the general taxpayer will, once again, have to bail out London.
  I return, however, to the basic, central premise, which is that the games will be good for the whole UK. We are told, for example, that the games will boost sports at local and grass-roots level, but the simple and surely obvious fact is that, if the money is diverted from our grass-root projects supported by lottery funding into large infrastructure projects in London, those grass-roots project will inevitably suffer. I can see no other consequence.
  In Scotland, we have massive health and lifestyle problems. Much of our population is obese and, unfortunately, many of our children are obese, yet for years we have been selling off community and school recreational facilities throughout our land to bolster our public finances. Money needs to be invested in our grass-roots projects, not in massive infrastructure projects in London. Our team sports are in decline. We have nothing in the way of youth academies. We do not invest in community sports facilities. Again, I maintain that, if money goes into the London Olympic bid, it will take money away from good causes and charities in Scotland and, once again, those Scottish charities will be damaged.
  I conclude by saying that I hope that London is successful. I wish London all the best—[Interruption]. I mean that most sincerely. I really do hope that London secures the bid, but London is the most prosperous city in Europe. London can more than afford to pay for the games. If London wants the games, London should pay. Unfortunately, if the Bill suggests anything other than that, we will have to oppose it.
  4.42 pm
  Mr. Doug Henderson: I will return to the contribution made by the hon. Member for North Tayside (Pete Wishart), but first, may I congratulate the Minister and the Department on securing legislative space to introduce these important proposals?
  I want to address the Olympic games issue, but I should first mention the part of the Bill that relates to horse racing. Newcastle race course is in my constituency. I am not hugely knowledgeable about the horse racing industry, although I enjoy my visits to the course, especially for the Northumberland plate in late June. I am happy to know that my right hon. Friend the Member for Livingston (Mr. Cook) has been present there, but after his admission this afternoon that he is a net disinvestor, I shall be just a little bit more hesitant about accepting his tips.
  I should declare some interests, although they are not registrable. I am a member of a number of sports clubs that are lottery recipients and possible lottery recipients. I am a member of Durham county cricket club, Falkland cricket club in Fife and Cambuslang Harriers in Glasgow. I am also a very active member of Elswick Harriers, in my constituency, in Newcastle. I am a strong advocate of sport, and I have strong views about sport. I do not believe that it is right to proselytise about sport, however. The approach needs to be gentle—if we start forcing our views down people's throats, they are less likely to listen to us. In that context, therefore, I am hesitant about over-emphasis.
  Sport does many things for society, which we all recognise. It is hugely important in terms of health, which is a point that the hon. Member for North Tayside missed in his contribution. It is hugely important in bringing together communities, in terms of comradeship between individuals, and in terms of international links. The reason I am hesitant about mentioning the other aspect of enjoyment is that it might be difficult to try to explain to my constituents that it is enjoyable to stand in a huddle of Alf Tuppers on the top of some dale, in a reclaimed pit heap in County Durham, in wind and rain, half-covered in mud and half-covered in liniment. A number of iconoclastic enthusiasts such as me, however, do find that enjoyable. Much of sport is a little like that—it is all about the activism, which must generally be encouraged.
  The hon. Member for North Tayside, who made a lamentable, pessimistic speech, displayed a lot of ignorance about sport—I say that as a Falkirk supporter who went to Brechin City about two years ago and got beaten, so I know a little about his territory, too. It is vital to try to enthuse people. I do not believe that the young girls in his constituency who might be 1500 m winners in the 2012 games do not find Paula Radcliffe an inspiration. That is absolutely key in sport. Sport is about a balance between the elite and the activists. That balance is crucial in allocating public expenditure, which we recognise. Not all Olympic sports, however, are associated with elitism. Many Olympic sports are very participative, and Members who are not interested in a particular sport would probably not know the name of one participant in them. Many Olympic sports, such as swimming, boxing, athletics, gymnastics, the horse events, the sailing events

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  and others, develop elite talents, which is crucial in changing the attitudes of young people, making them more sports-conscious and more health-conscious.
  As I said at the beginning of my remarks, I do not want to ram this message down people's throats, but we need an educational crusade in society to raise health standards and fitness standards. I am not asking everyone to stand up at the top of the reclaimed pit heap in County Durham. It would be nice, however, if people did a little activity and a little sport, in which the Olympic games are crucial in terms of providing inspiration.
  The lottery has now become a crucial part of expenditure in my right hon. Friend's Department. Lottery funding is now a larger part of the funding in the Department than the funding that is raised by taxation, borrowing or other Government sources. Therefore anything that happens to lottery funding ultimately affects all funding. If lottery funding falls, that puts greater responsibilities on non-lottery funding, and if lottery funding improves there is less strain on the rest of the funding.
  As was pointed out in one of the Opposition contributions, if we are to be successful in raising the lottery moneys, we must have a cause with which people associate themselves. If people around the country begin to think that this is a stitch-up to allow a few elite athletes and a few Londoners to have a good time, they are much less likely to support the lottery. That is why we must argue positively about the strong case for holding the Olympic games—I say that as a north-eastern Member of Parliament who did not support the Wembley development, as I thought that there were better solutions in the case of football.
  I very much support the Olympic bid and the development of east London and the location of the facilities there. I also support part funding from the lottery, which is important. However, to carry public opinion with us, we have not only to make the case for sport and for the Olympics, but as hon. Members on both sides have said, we must make sure that we take care of the arguments about it all being for London. I do not believe that it all should be for London. I want some of the investment for the Olympic games to be spread around the country, and I know that we shall all make bids for the venues in our areas. It is important to make the argument for the national and regional distribution of resources.
  It is also important, however, to counter the argument that the Olympics are all about giving money to the elite at the expense of those in the Elswick Harriers, the Falkland cricket club and so on. It is important that the funding for the hundreds and thousands of such organisations around the country continue in at least the proportions that they receive at the moment. If people begin to get the idea that the ordinary bowler on the bowling green in Lemington in my constituency is subsidising the bowlers who are trooping around the world for an Olympic games event, the wrong impression will be created. We must ensure that local investment continues.
  This is not just a matter of public relations, although that is crucial. The people in every sport who, I hope, will take part in London in 2012 could now be 10, 11 or
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  12 years old. If we are to develop their talents so that they become good competitive athletes in 10 years' time, we must make the investment now. In fact, we must make the investment in local sports permanent if we are to achieve our joint ambitions of developing elites and encouraging everyone in the community to be more active.
  Those who support the London bid must be vigorous in ensuring that the bid comes together and in making sure that all the arguments in favour of it are put forward. We must also dispel the reservations—some have been expressed in the debate—of those who are hesitant about the bid. The Bill plays an important contribution towards doing that, and I know that the Department has been vigorous in supporting the Olympic bid. It can be assured of any support that I can offer in the months and years ahead.
  4.52 pm
  Mr. David Rendel: I am delighted to have a chance to take part in the debate, not least because my constituency probably has the second greatest interest in the racing industry in the entire country. Because of our race course, gallops and many training stables, we are perhaps second only to Newmarket. I am also joint vice-chairman of the all-party committee on the issue. As a member of that committee, I took part in a delegation some time ago to ask the Minister to introduce legislation on the Tote. I am therefore delighted that it is being discussed on the Floor of the House today.
  The all-party committee has always worked well and, indeed, I suspect that the whole industry has strong all-party support in the House. The only speech against the Bill was not from a member of the three main parties, and it had nothing to do with racing anyway. There is strong all-party support for what is happening and I am delighted that, on this issue at least, we can work together in the best interests of the people in the racing industry and those who enjoy the sport.
  Given the strong support that there usually is in the Conservative party for the racing industry—I give it credit for that—it slightly surprised me that it came up recently with a set of principles that included one that stated that it did not believe that
  "one person's poverty is caused by another's wealth".
  Anyone who knows anything about the relationship between the punter and the bookmaker knows that that principle does not always hold.
  I had thought that my first speech in the House this year would be against a Government Bill. As a spokesman on higher education, I suspected that I would not necessarily be able to support all the Government Bills this Session, but it is nice that we can at least support this Bill, not least because, as other Members have said, the industry is doing very well. There is no question but that the number of people going racing is increasing and has increased over the past few years, which is welcome to those of us with a strong racing interest.
  It is also true that the racing industry feels vulnerable for several reasons, many of which have been explained this afternoon. It is vulnerable because the situation in which it finds itself is somewhat volatile, especially

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  owing to the questions of the future of the Tote and the betting levy, and what the replacement for the betting levy will be. Additionally, the rule 14 notice from the Office of Fair Trading—I and other hon. Members have made our objections to that known to the Government for some time—has caused considerable unrest in the industry because the future of its financing could be under threat. As the bookmakers appear to be those who are most strongly in favour of the rule 14 notice and its possible effects—if anyone is—they are in danger of killing the goose that lays the golden egg. As many people have said, from the bookmakers' point of view the egg is indeed pure gold. The bookmakers would be sensible to think twice about supporting the notice because their livelihood depends on a strong and vigorous racing industry, but that industry is under threat at present.
  To be fair to the bookmakers, they also face a slightly uncertain future because of the question of how betting exchanges will affect the betting industry. That matter could make them feel under greater threat and perhaps more likely to support the effects of the rule 14 notice. However, that should make us all wary of bookmakers' pronouncements on the matter and of allowing the OFT to get away with its current position.
  As many hon. Members have said, although the Bill's basic principles are correct, it is unfortunate that it lacks detail on how to overcome several of the dangers that hon. Members and I have outlined. I share the worries of the hon. Member for South-East Cambridgeshire (Mr. Paice) and my hon. Friend the Member for Bath (Mr. Foster) about what will happen when the exclusive licence ends in seven years. However, I shall concentrate on one of the problems by picking up a theme on which the hon. Member for South-West Hertfordshire (Mr. Page) was beginning to elaborate: what we can do straight away to try to clarify the price for which the Tote will he sold, and how that should be decided.
  The Government are being perhaps a little feeble—I hope that the Minister will think fit to respond to that in his winding-up speech—by failing to include a statement in the Bill on the principles by which the price of the Tote and the proportion of that price payable by the racing trust will be decided. The racing industry would be given a lot of help and satisfaction if the principles behind the calculations were in the Bill. I do not understand why the Minister cannot negotiate with the racing trust straight away to decide those principles so that they could be added to the Bill in Committee. I hope that he will guarantee in his winding-up speech that he will negotiate with the trust on how the Tote should be valued and the proportion of the value that should be paid when it is sold to the trust, because it could, and should, be done straight away.
  4.59 pm
  Mrs. Jacqui Lait: Long experience has shown me that whatever I regard as a racing certainty rapidly turns into a three-legged nag; indeed, the only time that I went to the grand national was the one time that the race did not start. I therefore feel no compunction in talking only about the Olympics. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) argued that, as someone involved in sport, he could not proselytise about it, and on the other side of the coin, as I am palpably not someone involved in sport, perhaps I can.
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  I have gone from being very sceptical about the Olympic bid, because of what I originally thought would be a significant lack of political will, to being an enthusiastic supporter. I can see absolutely no reason why the UK, and London in particular, should not host the Olympics in 2012. I thought that we saw a typically mean-minded display of nationalism from the hon. Member for North Tayside (Pete Wishart), who could not see the benefits that the Olympics would bring to Scotland. As someone who learned what little I know about sailing on the firth of Clyde, I believe that everybody should be practising their sailing there because they would then beat the pants off any competitor down at Weymouth.
  There are, obviously, benefits for people throughout the UK from the Olympics, but what has not yet been truly appreciated are the opportunities for setting up training camps throughout the country. Regions, towns, cities, universities and sporting facilities of all sorts should get together and make a bid to the countries that want to compete and need to do three to six months' training before the Olympics take place. That is the most obvious way in which people throughout the country will feel a long-term benefit from the games.
  I welcome and support the introduction of the lottery to help to finance the Olympics, and I support my Front-Bench colleagues in the suggestion that, if possible, the game should be introduced this summer on the back of the Athens Olympics, when enthusiasm can be built up. I recognise that there may be technicalities to sort out with the International Olympic Committee, but I am sure that we can get round those if the will is there.
  As a London Member of Parliament, I think not only that we have to consider how the UK can benefit, but that Londoners need to feel that they own the Olympics. After all, they are the ones who will have a special, hypothecated council tax laid on them, ranging from £13.33 for somebody in band A to £40 for somebody in band H. Those are not inconsiderable sums, particularly as the new Labour Mayor of London is planning in the year after the Greater London assembly elections, which I sincerely hope he does not win, to impose on Londoners increases in his precept of 76 per cent., just to pay for the Greater London authority.
  The problem is that people in many places in inner and outer London do not feel that they will benefit from the council tax increase; it is often seen as Ken Livingstone's project to regenerate the Lea valley. Exempting Crystal Palace, because I shall come on to that in a moment—
  Mr. Caborn: Again?
  Mrs. Lait: Again.
  Exempting Crystal Palace, there are areas in outer London that can see absolutely no benefit to them from the Olympics, but they will have to deal with the extra traffic and people in the city.
  The Secretary of State said that there should be benefits to all grassroots sporting facilities from the Olympics. I hope that the Minister can give us some indication of what will be the practical improvement in sporting facilities throughout London. We have to bear it in mind that if we assess a broad range of facilities in London, we find that there is not a high standard of provision.

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  That brings me, dare I say it, to Crystal Palace. Having had the opportunity of questioning the Minister about the future of that facility on Monday, I have to say that I came away more confused than when I started. There is an obvious confusion and a difficulty, which is the need to separate the running track from the sports building. I welcome the Minister's acknowledgement of the problem, as well as his commitment to put money into the running track so that grand prix events can take place this July, provided that decisions are made by the end of January.
  There is confusion about the sports facilities at Crystal Palace. The Minister and other Members will know that Crystal Palace is the only site with a 50 m swimming pool. However, its sports facilities are also home to many elite athletes in various sports, including basketball, weightlifting, judo, karate and hockey. It is feared that in any transfer of the lease from Bromley council to the London Mayor—a project that I support—sports facilities will be closed before new facilities are provided. Some of the new facilities will have grassroots benefits, as they are community facilities, but there is also a need for top-level athletes to have training resources in the run-up to the 2012 Olympics. It is not clear whether the sports facilities will be closed before any new facilities are opened.
  At the moment, the development of Crystal Palace appears to be funded, in one form or another, by public sector money, including, dare I say, national lottery money. However, there is a suggestion that there could be private sector involvement to deliver high quality sports facilities as part of a regeneration package for Crystal Palace. The Mayor of London supports that proposal, as he has talked about providing hotels at the top site. That is a controversial subject, but it is not impossible to put together a regeneration package that would provide high quality facilities at Crystal Palace and would retain its existing facilities. It is crucial, not just for people in the five boroughs around Crystal Palace but for all of south London, that the impact of the 2012 Olympics on their facilities is made clear as soon as possible. That will help them to feel involved in the developments and will allow them to understand the long-term legacy after 2012. The Olympics will generate excitement and interest, and I expect the games to be hugely successful in London and the rest of the UK. However, it is important that people grasp the legacy created by the increased council tax that they will have to pay.
  5.7 pm
  Mr. Laurence Robertson: I do not have any interests in racing that have to be registered but, like many hon. Members, I have a long-standing love of the sport. Indeed, I have a serious constituency interest, as Prestbury Park race course at Cheltenham is in my constituency. I must correct the hon. Member for Newbury (Mr. Rendel)—Prestbury Park is the greatest race course in the world. The race course and the activities associated with it have a major knock-on effect throughout my constituency and, indeed, beyond, especially in mid-March when the Cheltenham festival is held. I also have a non-registerable but nevertheless close relationship with the Tote, which is partly a matter
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  of friendship and partly a matter of holding a Tote credit account. Like other hon. Members, I am not very successful in my transactions. This morning, I spoke to a friend who asked me what I was doing today. I said, "I've got the Tote Bill", to which he replied, "How much is it this time?"
  This is an important time for racing, as has been said, with the OFT investigation, to which I shall return in a minute; various changes that the British Horseracing Board is introducing in its racing review; the levy board changes; and the Bill, which I shall call the Tote Bill, although I accept that its provisions are much wider. However, I want to concentrate on the Tote.
  It is important to remember the huge contribution that the Tote has made to the country generally and to racing in particular. It has sponsored the Cheltenham gold cup, which is probably—again, I am being parochial—the greatest steeplechase in the world. The Tote has, as we have heard, put millions of pounds into racing and given us many interesting betting products throughout its many shops. It has the placepot, a popular bet that allows people to win rather a lot of money for a small stake, although in my case it is usually a lot of stake for a little return. Nevertheless, people can bet without putting down a great deal of money. What is called the sport of kings benefits people at all levels, and the Tote is a major contributor to racing in that respect.
  I pay tribute to the Tote staff, particularly the chairman, Peter Jones, and Roger Easterby, who is in close contact with many Members of Parliament to provide a great deal of information not only about the Bill, but about all the events in racing generally. Racing would not be the same without the contribution of the Tote, so it is extremely important that we get the Bill right.
  This is a crucial time for racing. Given the importance of the Tote to racing, we must consider the details of the Bill. I welcome it and congratulate the Minister on introducing it. The Bill is long awaited. Many of us who were at the Tote annual general meeting quite a few years ago—I do not remember how many—heard the then Home Secretary, now the Secretary of State for Foreign and Commonwealth Affairs, the right hon. Member for Blackburn (Mr. Straw), announce that the status of the Tote would be changed.
  As we have heard, there are one or two issues that concern us. The first is whom the Tote will be sold. There is no guarantee about that. What guarantee do we have that it will not just be sold to the highest bidder? What guarantee do we have that the Government's finances at that time, which are deteriorating, will not dictate that the Tote is sold to the highest bidder? We are expected to take it on good faith. The purpose of the Bill is not the nationalisation of the Tote, but to sell it on, yet the only thing certain about the Bill is the nationalisation of the Tote. I do not see why it cannot be written into the Bill that it will be sold to a racing trust.
  Secondly, how much will the trust, if the Tote is sold to the trust, be charged for the Tote? The price will determine who buys it—not who wants to buy it, but who is able to buy it. How will that be decided? Who will

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  decide it? I suppose the Minister and the Secretary of State will decide how much the trust will be charged for the Tote, but how will that be decided?
  Mr. Page: Does my hon. Friend agree that it would give all members of the Committee so much more confidence if the Government were to announce, during the Committee stage, the mechanism for determining the purchase price for the Tote? That would enable us to proceed with the Bill with greater confidence.
  Mr. Robertson: I am certain that the Minister will not decide to put that in the Bill and announce it today. The next stage will be the Committee stage, and it would give the members of the Committee and the whole racing world a great deal of confidence if he would tell us the mechanism for reaching the price, if not the price itself.
  I stress that no Government have ever put a single penny into the Tote, and I am not saying they should. The Government cannot expect any receipts from the Tote. As has already been said, every penny the Government charge for the Tote will come out of racing. There is nowhere else that it can come from. So we will end up with a ridiculous situation where the Tote puts its profits into racing and the Government take those profits out. There is no other way of looking at it. It is as simple as that.
  Part of the mechanism, I suppose, will be the exclusive licence. It is extremely important to the Tote and to racing. The national lottery has been a success most probably because of the large prizes that can be won—again, for very little money. That is how the pool operates, in so much as people can win quite a bit of money for a very little stake, as I have said. I do not think that the national lottery would be successful if it were broken down into any number of smaller lotteries, and not only the Tote but other bookmakers recognise that. I do not know whether it is widely understood—in this House it will be—but they can tap into the placepot bet, for example, which thus makes it less of a monopoly. The seven-year period seems to be accepted throughout the industry, but why is that not in the Bill? The length of the licence equals the value of the Tote business, which equals the price, and all that equals who owns it in the end.
  I want to say a word or two about the levy board, not because I want to get involved in the detail of the winding up of the levy and not necessarily replacing it, but having welcomed the Bill, the timing is rather uncertain, given the OFT's investigation. I am sure that I would not be allowed to proceed too far down the road of discussing the OFT's investigation, especially as I have held an Adjournment debate in the House to discuss that, but this is an uncertain time for the racing industry and the OFT's timing is rather bad in so much as the industry is trying to improve itself. As I have already mentioned, the British Horseracing Board already has its racing review—a root and branch look at racing. It accepts that improvements have to be made.
  To repeat what I said in an intervention, it would be rather curious for the Government to give up control of horseracing, as they should, only for that control effectively to pass to an unelected, unapproachable quango, with no interest in racing, no responsibility to racing and, it seems, no accountability to anbody. The
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  Minister, again to give him his credit, in a written reply to me has said that he has great concerns about what the OFT might come up with. The Minister for Employment Relations, Competition and Consumers has said the same. So Parliament does not seem to have any control over the OFT, Ministers do not seem to have any control over the OFT, racing certainly does not, and we cannot even raise the issue with any great success in this House
  Therefore, we must be extremely careful about what we do to racing. We could get it right and we could get it wrong. The Government are understandably changing the levy system and we could also lose money from racing because of the OFT. If the Government charge too much for the Tote, money will come out of racing in a third way. Together, all that would have a devastating effect. It does not need to be that way. We could look at the matter positively, and that is the way that I would prefer to look at it.
  When the Minister replies, I hope that he will address the points that not only I have made but that many other hon. Members have made. However, in general terms I welcome the Bill and I wish it well.
  5.18 pm
  Mr. Andrew RosindellThank you, Mr. Deputy Speaker, for allowing me the opportunity to contribute to the debate. Contained within the Bill are essentially three substantive proposals: to privatise the Tote, to abolish the levy board and to create an Olympic lottery. All three elements are extremely important to the future of gaming and sports in Britain.
  I wish to focus my remarks on the issue of the Olympic lottery. The reason for that is simple. The proposal to host the 2012 Olympics in London is an important part of the future development of Greater London, including my constituency of Romford. Of course, with that we must couple the fact that in 2012 we will be celebrating the diamond jubilee of Her Majesty the Queen, so I am sure that all hon. Members will look forward to that year as being a great national celebration, both in celebrating the Queen's 60th anniversary on the throne, but also the London Olympics. I sincerely hope that through tourism, regeneration and investment, Romford, the rest of London and the south-east, and the rest of the country can truly benefit from the Olympic games, should our bid prove successful. It is therefore essential that every element of the bid, including the associated lottery, should be carefully examined before being implemented.
  The main body of my speech will concentrate on the Olympic lottery, but I would also like to make a few brief points about the Tote and the levy board. Since 1929, the Tote has formed the backbone of horse racing in this country, not only by providing a forum for those who wish to bet but by raising much needed resources to support the industry. At the crux of the debate on whether to privatise the Tote lies an incredibly simple question. It is the same question that was posed throughout the great reforming era of the 1980s: what is so special about this activity that it needs to be controlled by government? I would suggest that, while we all value the work of the Tote, there is nothing in its remit that could not be achieved in the private sector. After all, there are numerous reputable bookmakers in the private sector.

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  I fully accept that pool betting is distinct from fixed-odds betting, but their regulatory needs are not dissimilar. Indeed, senior officials at the Tote have argued that they are disadvantaged by being outside the private sector because they are unable to make "independent commercial decisions". In some senses, this could be compared to the situation faced by some of our old public monopolies, most of which are now flourishing in the private sector.
  Fundamentally, the proposal to sell the Tote is a good one, although I am concerned that the Government have not put a sale price into the Bill. Many other hon. Members have also made that point. I cannot believe that it is wise to remain ambiguous about that, when we are talking about something as significant as the future of racing and the Tote. Concern has also been expressed about the lack of any real assurance that the proposed sale will be to a racing trust consisting of groups from the racing industry. We have heard the aspiration; now we need the guarantee. I repeat that it is potentially deeply damaging to the racing community to allow this proposal to remain so ambiguous. The Government have a duty to the racing industry to clarify those two points, and I sincerely hope that they will do so.
  The proposed abolition of the levy board suffers from similar problems. Yes, it is right that the changes should be made, but we must remove the ambiguities. Thousands of racehorses rely on the money raised by the board for veterinary costs and care after they retire, for example. It is vital that the Government end the uncertainty and give a guarantee that welfare funding for horses will not be cut. Self-regulation must not become a free-for-all.
  Turning to the Olympic lottery, it concerns me that the Olympic bid will rely to a great extent on the lottery, not because I oppose the idea in principle, but because of the way in which this Government have tarnished the idea of lotteries in general, and our national lottery in particular. It is a widely known fact that the national lottery is falling in popularity and that this has had a serious knock-on effect on the sums raised for good causes. Most people have become disillusioned by the fact that the Government have allowed lottery money to be allocated without regard to the needs of so many real people. A number of very worthy groups have been turned down for funding, only to learn that money has instead been handed to organisations that appear to lack any relevance to the vast majority of British people.
  I hope that by supporting the Olympics we can restore the public's confidence that the money raised for good causes through the lottery is no longer likely to be squandered. If we cannot, the proposal will simply mean, once again, that more and more good causes are competing for smaller and smaller sums. More worryingly still, it will leave a huge budgetary hole that this Government will almost certainly not hesitate to fill with yet another tax hike for hard-working families in my constituency and elsewhere. If the Government do not do that, as my hon. Friend the Member for Beckenham (Mrs. Lait) has already pointed out, the Labour Mayor of London will not hesitate to use his power to raise extra revenue that can fill any deficit that might occur.
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  Again, I issue a warning to the Government: if they do not take action to improve the image of the lottery by making it more relevant to more people, its decline will jeopardise first-rate projects such as the proposed 2012 London Olympics. If we are to have an Olympic lottery game, I firmly believe that we need to launch it when the Olympics are in the national spotlight. What better time than during this summer's Olympic games in Athens? All British people will be inspired to support our British sporting endeavours.
  The problem is, of course, that the International Olympic Committee has said that no scratchcards should be produced and no lottery fund raisers should take place until it has announced which city will host the 2012 Olympic games. That announcement is scheduled for July next year—long after the interest in Athens will have faded. On the face of it, that seems to be an insurmountable problem. We will miss a great opportunity if we fail to capitalise on the Athens Olympics, but even if we want to proceed, it seems that the IOC will not permit it.
  I believe that a compromise could and should be made. We should go ahead and launch the Olympic lottery game at the start of Athens 2004. That money would not be ring-fenced for the 2012 bid. Rather, it would be raised to support the development of athletes whom we hope will compete in the games wherever they are held. I also fully endorse the proposal made by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), who suggested that money could be used for disabled athletes. That would be an excellent solution to the problem that we face.
  Under that proposal, sports would benefit either way. If we got the Olympics, we would have more resources; if we did not get them, we would have injected a large amount of money into developing our sportsmen and sportswomen. That would no doubt pay dividends in future sporting competitions.
  The Bill is worth the cross-party support that it is being given, but that is not to say that the Government are getting things completely right. We must have fears regarding the uncertainty over the Tote and the lack of clarity over the levy board. Of course, it also seems that we will miss the best opportunity to launch our Olympic lottery. I urge the Minister, and Her Majesty's Government, to consider those important points of concern before the Bill is dealt with in Committee.
  5.28 pm
  Mr. Adrian Sanders: I rise to support both parts of the Bill. I will talk a little about the Olympics in a moment, but first I want to deal with the Tote. I have one key question. Although I support the Bill, I am not entirely sure why. We know that the Tote is a non-departmental body. It is not owned by anybody. It has an exclusive right to offer pool betting on horse racing. We know that it was founded in 1928 and that the Government intend to sell it to a racing trust with an exclusive licence to run pool betting for seven years.
  We also know from the briefing on the Bill that since the Tote's foundation, there have been numerous proposals to reform it. Many of those are laid out in the substantive document that deals with its history. Nowhere in the document, however, and nowhere in any Government statement issued so far, has anyone said

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  why we are first nationalising and then privatising the Tote. The Government have not made their case. We need to know why we are making such a substantial change to a body whose history shows that it has been a success, in terms of the ethos that established it and in terms of the money it has generated, and continues to generate, for the racing industry.
  In 1991 a Home Affairs Committee report on gambling concluded that horse race pool betting was an area in which monopoly might be in the consumer's interest. There were obvious reasons for its conclusion. As the hon. Member for Selby (Mr. Grogan) pointed out, several pools mean lower jackpots and hence a lower incentive; and that will have a knock-on impact on the overall amount that can be made from one pool. In November 2003, the Minister said:
  "We have concluded that it will be in the public interest to open up the pool betting market to effective competition, but that a reasonable preparatory period is necessary in order to safeguard the policy aims underlying the sale."—[Official Report, 27 November 2003; Vol. 415, c. 18WS.]
  What are the policy aims underlying the sale, other than the fact that the Government can make some money out of it? Is it just about raising revenue? No case has been made in terms of how it will improve the Tote and the service to the customer, certainly after the seven years of exclusivity.
  As for the end of those seven years and the break-up of the pool, there will be a number of knock-on effects. There is no doubt that the bigger race courses will benefit, in terms of the volume of races and of turnover, but smaller courses—such as two in my area, Newton Abbot and Haldon Exeter—could lose revenue as a consequence of losing a single pooled Tote.
  Mr. David Heath: Does my hon. Friend agree that the lifeblood of racing, what makes the whole industry tick, is not the glamorous courses or the glamorous meetings, not Royal Ascot or glorious Goodwood, but the smaller courses that provide National Hunt racing day in, day out, and week in, week out? I am thinking of courses such as Wincanton—and, indeed, courses in my hon. Friend's constituency.
  Mr. Sanders: I could not possibly disagree with that. Some of the smaller courses are part of the attraction of the whole sport. This is not like premiership football. Some of us live hundreds of miles from the nearest premiership club, but we can all participate in horse racing on August bank holidays or on Boxing Day, because there is bound to be a meeting somewhere near where we live. I am not convinced that after the seven-year period consumers' interests will still be served, and I want the Government to make a case.
  I have three big fears about this element of the Bill. First, under European competition law, I cannot see how the Minister can guarantee a sale to a racing trust. I want to know how the Government can do that without any mention of the prospective purchaser in the Bill. Secondly, what is to prevent a purchaser from ending the exclusivity within seven years, if that is not specified in the Bill? Thirdly, if a seven-year licence is enforceable and desirable, why is that no longer desirable after seven years?
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  As for the Olympics, the hon. Member for Cunninghame, North (Mr. Wilson) discussed his bid for yachting events to take place on the firth of Clyde, but unfortunately for him, they will be taking place in Weymouth. The Royal Yachting Association has a major investment in an international sailing school in Weymouth, and has decreed that it wants those events to take place there. That has upset some of my constituents, because in 1948, the Olympic yachting events took place in Torbay, and the yachts were based at Torquay. However, we support the Weymouth bid because it is possible that we could benefit from it.
  All areas need to consider that there are ways of benefiting from the Olympic games, even if they are not the venues for a particular sport. One example is the training of the Olympic teams. The teams will come over here some months in advance of the games, in order to acclimatise themselves and to train. There needs to be a mechanism—I am not sure that the Government have yet established one—to help areas that are bidding to act as training camps for particular sports. Indeed, an entire national team may want to site itself in a particular area or at a particular venue. We need to ensure that there is a spin-off in that regard. Of course, resources will need to be made available in advance, to ensure that the facilities available for those teams and sportsmen and women are first-rate and up to an Olympic standard, even if they are not on the scale of, say, an Olympic-size swimming pool or stadium. We must at least ensure that top-rate facilities are available for them. I hope that the Government will consider that issue.
  From my constituency's point of view, we would have loved to host the yachting. Given that our climate is one of the mildest in the country, perhaps we could bid for the beach volleyball. That could work very well when the tide is out, but not so well when it is in; having holidayed in my patch, the Minister will know what I mean. I hope that all parts of the country will be able to feel that they are part of the games—that they will be not just London games, but United Kingdom games—and that the benefits will be felt throughout the country. I hope that the Minister can respond to the specific questions that I have asked, and I look forward to returning to some of these issues if I am appointed to the Committee.
  5.37 pm
  Mr. Andrew Love: It was not originally my intention to speak in this debate, but given the Minister's suggestion that I should expand on what I said in an earlier intervention, I thought this an ideal opportunity to do so. [Interruption.] I have only a couple of minutes, so I ask Members to keep interventions to a minimum.
  I am the Member for the Picketts Lock area, and having gone through this process, I feel that we face an uphill struggle to win the Olympic bid. We have to have a unique selling point for our bid, which should be that this should genuinely be a people's Olympic games. What do we mean by that? It is a challenging concept, because we have to make it a reality, rather than simply an illusion. A people's games would be a partnership with the people of this country. It would involve their active participation, and there should indeed be a democratic element to that.
  I wrote to the Minister and Ken Livingstone about this issue, saying that there should have been open membership of the bid company to allow individuals to

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  get involved. However, we have now passed that stage, and we need to adapt. But such involvement would allow not only individuals, but communities such as the lower Lea valley, regions such as Greater London and others, and nations such as Scotland and Wales to have a very direct influence on, and say in, what happens. That collective voice, in the context of a mutual structure for the bid company, would make the difference for this country. Elected representatives would he able to represent Scotland, Wales or Greater London directly. Indeed, I suggest that London would need more representation than other parts of the country, simply because there can be no taxation without representation. The bid company would have to recognise that.
  Representation is important for a number of reasons. First, we must mobilise this country's energy and enthusiasm for sport that many hon. Members have noted. In addition, it is commonly assumed that the experts in the field will be the members of the bid company, but the real experts exist out there, in the country. Londoners are greater experts on London than anyone else, and in the same way Scottish people are greater experts on Scotland than anyone else. That is why ordinary people should be represented.
  Most importantly, we need participation. When Sydney made its Olympic bid, it was able to call on 40,000 volunteers. Does any hon. Member have confidence that Britain could produce 40,000 volunteers? We need to produce 50,000 volunteers, and my idea of a people's Olympics with a mutual structure would help us to achieve that. I commend it to the House.
  5.40 pm
  Mr. Nick Hawkins: Like other hon. Members, I want to begin by declaring not so much my financial interests, but my various enthusiasms and links. They may not produce income, but they are of both a personal and a constituency nature.
  I am a long-standing supporter of racing. I have enjoyed many good days at the course, and am an active member of the all-party racing and bloodstock committee. I do not have the detailed knowledge of racing exhibited by my hon. Friends the Members for South-East Cambridgeshire (Mr. Paice), for South-West Hertfordshire (Mr. Page), and for Tewkesbury (Mr. Robertson), but my family has been heavily involved in the sport. My late grandfather, my father's father, spent much of his spare time involved in racing, in various capacities. A number of my farming uncles and cousins on my mother's side of the family have also been involved in racing: one of my uncles was the owner of a horse that won The Daily Telegraph point-to-point championship in the late 1980s.
  I am also a passionate supporter of the bid to hold the Olympic games in the UK. As the House knows, before I took on my present responsibilities, for a number of years I was deputy chairman of the all-party sports committee. I believe that the 2012 bid represents our best chance yet to hold the Olympic games in the UK. I strongly supported the previous Olympic bids, and I was a very strong supporter of the Manchester Commonwealth games.
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  That brings me to a constituency link. Several hon. Members have spoken about the Olympic side of the Bill, and have said that their constituencies could provide training and practice facilities for competitors. However, the national shooting centre at Bisley is in my constituency. If, as we hope, the 2012 bid proves successful, the current state of legislation means that Bisley is the only place where the Olympic shooting competition could be held. For the same reason, there was no alternative venue for the Commonwealth Games shooting competition, even though those games were held in Manchester. That reinforces the point made by several hon. Members that the Olympics could benefit the whole country.
  The National Rifle Association ranges at Bisley straddle the boundary between my constituency and that of my hon. Friend the Member for Woking (Mr. Malins), and I was privileged to be asked to present one of the medals in the Commonwealth games shooting competition. I look forward to the Olympic shooting competition coming to Bisley in 2012, as happened in 1948.
  As my hon. Friend the Member for South-East Cambridgeshire said, we want to improve the Bill. It has received a broad welcome from all parts of the House, but certain gaps remain. We want to fill in those gaps when we consider the Bill in Standing Committee.
  It is regrettable that the Bill's provisions in respect of the Olympic games make far too little reference to the involvement of the private sector. The stage was set for the revision of finances in the modern Olympic movement when Peter Ueberroth and his team made their successful bid for the 1984 Los Angeles games. That bid made extensive use of the private sector, but one of the snags with the Government's planning is that they see the Olympic bid as very much a public sector operation. Given that the potential Olympic sites in the lower Lea valley are so close to the City of London, there is a massive opportunity for increased use of the private sector. We will want to support what Barbara Cassani and her team are doing. I am sure that when the Minister winds up the debate, he will, on reflection, agree with us that there could be a greater role than has so far been revealed for the private sector.
  Conservative Members strongly believe that the new lottery game has to start to coincide with this year's Athens Olympics, when interest in the Olympic games will be at its height. As my hon. Friend the Member for Romford (Mr. Rosindell) said, there must be a way round the difficulties over International Olympic Committee rules. As my hon. Friend the Member for South-East Cambridgeshire suggested, we have an opportunity to start an Olympic lottery game this year to coincide with the Athens games. The funding, however, should not be linked only to the bid itself: the beneficiaries could be Paralympic athletes or sporting competitors in general. That is surely acceptable, even within IOC rules.
  The second major improvement that Conservative Members want to press for in Committee—and it seems to us an acid test of the Government's real commitment to the Olympic bid—is for the Government to forgo what would otherwise be the tax take from the Olympic lottery game. The moneys that would otherwise go to

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  Her Majesty's Treasury should be hypothecated and go directly to help the success of our Olympic bid. If the Olympic lottery game were introduced on that basis, we would then know that the Government were committed in every way to the bid's success.
  As my hon. Friend the Member for Beckenham (Mrs. Lait) and Labour Members such as the hon. Members for Cunninghame, North (Mr. Wilson) and for Newcastle upon Tyne, North (Mr. Henderson) said, the Olympic bid must be seen to represent the whole of the UK. It is not just about the regeneration of east London with the Olympics as an excuse, which is how the newly admitted Labour Mayor of London seems to view it.
  As many hon. Members have said, we have a great opportunity to establish training camps in different towns and cities throughout the UK. As the hon. Member for Torbay (Mr. Sanders) said, there may be opportunities for sailing practice in Torbay or the firth of Clyde even if the final sailing events take place in Weymouth. For other Olympic sports such as rowing, training camps could be established all over the country. I have already mentioned my constituency interest in shooting.
  The all-party group on the Olympics, of which I am proud to be a member, has visited some of the potential sites in the lower Lea valley. We want to ensure that the whole of London benefits from the opportunity to support the Olympics. Fully germane to that issue are the points about Crystal Palace made by my hon. Friend the Member for Beckenham. Not just east London, but the whole of south London, north London and west London must be seen to benefit from the whole process.
  As to the Tote and the horse race betting levy, we believe that it is crucial for the Bill to make it clear that the Tote should be sold to a racing trust. The whole point of setting up a shadow trust to be run by Lord Lipsey is to bring about certainty on the part of the racing industry. It is not acceptable for the Minister to say that it is not needed on the face of the Bill. The gap must be filled.
  We should recognise that the Minister has worked hard. I pay tribute to him, as have other hon. Members, for securing the seven-year exclusivity, but some hon. Members have expressed the concern that even seven years may not be long enough. Several hon. Members supported the view of my hon. Friend the Member for South-East Cambridgeshire that the bigger the pool, the more attractive is the Tote to the punter. My hon. Friends the Members for Ryedale (Mr. Greenway) and for South-West Hertfordshire might say that it would be better if the exclusivity carried on much longer than seven years. As many hon. Members have said, seven years is really the minimum.
  My hon. Friend the Member for South-East Cambridgeshire drew attention to the fact that one of the big bookmakers has already stated that at the end of the seven years—if it is to be only seven years—it would bid for the Tote. That would clearly reduce competition. The right hon. Member for Livingston (Mr. Cook) referred to creative tension in the racing industry. I pay tribute to him and other hon. Members who have played an important part in promoting the cause of racing in the House.
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  There is a need to support the smaller rural race courses especially, as was mentioned by several hon. Members. A huge threat also hangs over racing from the OFT. It is a great shame that that organisation seems to seek out high-profile sporting cases to try to boost its reputation, without appreciating the damage that could be done to such an important industry. The right hon. Member for Livingston made the point that racing is a huge employer. It employs 100,000 people and is in the top 10 of employers in the country.
  We want the Bill to support racing further, protect the position of the Tote and genuinely assist Britain's success in the 2012 Olympic bid. We support the Bill and we will seek to achieve those aims in Committee.
  5.50 pm
  Mr. Caborn: With the leave of the House, I wish to reply to this excellent debate. Some 16 or 17 Members have been able to contribute, and the quality of the speeches was very high. I do not have time to respond to all the points that were made, so I shall address one or two major areas to provide some reassurances. The other issues can be taken up in Committee.
  On the question of the levy system, we had identified September 2005 as the most likely date for abolition. That would have meant that there would be one more levy, for 2004–05, followed by a six-month period for the levy board to achieve an orderly closure. It is the Government's intention to end the levy system, but because of the uncertainties that have been outlined this afternoon by several hon. Members—and that are still felt by the racing industry—about the deliberations of the OFT, we have decided to extend the life of the levy board to September 2006. We have listened to and taken note of what people have said.
  The concerns of the House about the OFT and its relationship with racing were also raised at Question Time on Monday. My right hon. Friend the Secretary of State has been in correspondence with the OFT, although unfortunately I cannot disclose the details—
  Mr. Don Foster: Why not?
  Mr. Caborn: I am informed by officials that that is how it has been done in the past. [Interruption.] That is all the answer that the hon. Gentleman will get, so let us not waste time. I have written to the racing industry to ask for a meeting to discuss the issue. A solution is possible, and the OFT has not been as intransigent as some believe. It is important to find a solution so that we can bring some certainty back to the industry.
  Hon. Members asked about the sale of the Tote. We set up the shadow trust to answer those questions, and it has had a dialogue with the Treasury. The Tote will be sold in the normal way for an asset of the Government. An independent review will be held and a price set. If we fail to set a fair price for the Tote, we will run into various difficulties. For example, the bookmakers will complain to Europe about state aid and unfair subsidies that could distort the marketplace. When the Bill becomes law—and it has had a fair wind from the House today—we will be able to negotiate a price that reflects the worth of the Tote, with the assistance of the work of the shadow trust. That can be done, as it has been done for the sale of many other Government assets.

  493
  The period of seven years reflects the balance that we have, rightly, achieved through discussions with the shadow trust, the Tote and their advisers. They believe that they can raise the purchase price and provide a sustainable business plan to take the organisation into the marketplace, without fearing the competition, in seven years' time. Some Members, including my right hon. Friend the Member for Livingston (Mr. Cook), have argued that the period should be 10 or 15 years; indeed, some people have argued that we should leave the Tote in the public sector as a monopoly. However, that could be a disservice. If the Tote proved, after seven years, that it could not operate in the marketplace so that it could see off all the predators that might want it, it would not have done its job. We have struck a balance; we took advice and took account of the views of the industry. That is why we argued for seven years and that is the course the Government intend to adopt.
  Whether or not such points are included in the Bill, it is clear that there is not much trust of the Government in the House. That surprises me, as my right hon. Friend the Secretary of State has worked so hard on the seven-year proposal. After the discussions that we have held both with the shadow trust and the Tote, it would be naïve to say that we do not want to proceed in that way. Nevertheless, I can understand, to some extent, why hon. Members have made some of their comments. We shall set up discussions and negotiations about the price with the shadow trust when the Act is on the statute book.
  On the 50 per cent. figure, the Government believe that there are two legitimate stakeholders in the Tote: the racing industry and the taxpayer. It is as simple as that. We intend to sell the Tote to the racing trust; it was a manifesto commitment and we want to honour it.
  I shall deal with some of the points that were made about the Olympic games. I thank the hon. Member for North Tayside (Pete Wishart) for his timely contribution. We took account of the views of people throughout the United Kingdom before we made the decision to go ahead with our bid for the games. As has already been indicated, about 81 per cent. of people in Scotland—one of the highest returns—supported the bid.
  The hon. Gentleman concluded his remarks by saying that his contribution was actually in support of the London bid. My strong advice to him is to keep his mouth shut for the next 18 months and he will do us a tremendous amount of good—[Interruption.] He would be doing us a favour.
  Hon. Members asked what the cost would be and suggested that there would be a displacement from the good causes. I can confirm the 5 per cent. figure that we told the House. On the question of when the new game will start, assuming that the Bill is enacted, a number of hon. Members alluded to the fact that the IOC rules say very clearly indeed that such a lottery cannot begin until after the winning candidate has been confirmed, and I would not dispute that.
  Hon. Members have rightly argued about the displacement from other good causes. That is another important point. Broadly speaking, we have agreed with the other good causes that it is right, in the national
  494
  interest, to use the lottery for the Olympics, but they say, with some justification, that they would not want the new lottery to take place until the arrangements have been confirmed at Singapore in July 2005, when I hope that we will win the bid for 2012. So we have to take that on board as well. Again, there has to be a balance, and the good causes have played ball with us very much indeed.
  On the betting levy, we have produced all our costings with a 12 per cent. levy for the Olympic draw—
  Question put, That the Bill be now read a second time:—
  The House divided: Ayes 348, Noes 5.

  Division No. 24]

  [5.59 pm

  AYES

  Abbott, Ms Diane

  Challen, Colin

  Adams, Irene (Paisley N)

  Chapman, Ben (Wirral S)

  Ainger, Nick

  Chope, Christopher

  Ainsworth, Bob (Cov?try NE)

  Clapham, Michael

  Ainsworth, Peter (E Surrey)

  Clark, Mrs Helen (Peterborough)

  Alexander, Douglas

  Clark, Dr. Lynda (Edinburgh Pentlands)

  Allen, Graham

  Amess, David

  Clarke, rh Tom (Coatbridge & Chryston)

  Anderson, rh Donald (Swansea E)

  Arbuthton, rh James

  Clarke, Tony (Northampton S)

  Atkins, Charlotte

  Clifton-Brown, Geoffrey

  Atkinson, Peter (Hexham)

  Coaker, Vernon

  Austin, John

  Coffey, Ms Ann

  Bacon, Richard

  Cohen, Harry

  Bailey, Adrian

  Coleman, Iain

  Barker, Gregory

  Colman, Tony

  Barnes, Harry

  Connarty, Michael

  Barron, rh Kevin

  Conway, Derek

  Battle, John

  Cook, rh Robin (Livingston)

  Bayley, Hugh

  Cooper, Yvette

  Beard, Nigel

  Corbyn, Jeremy

  Beckett, rh Margaret

  Cranston, Ross

  Begg, Miss Anne

  Crausby, David

  Bellingham, Henry

  Cruddas, Jon

  Benn, rh Hilary

  Cryer, John (Hornchurch)

  Bercow, John

  Cunningham, rh Dr. Jack (Copeland)

  Berry, Roger

  Betts, Clive

  Cunningham, Jim (Coventry S)

  Blackman, Liz

  Curtis-Thomas, Mrs Claire

  Blizzard, Bob

  Davey, Valerie (Bristol W)

  Blunt, Crispin

  David, Wayne

  Boateng, rh Paul

  Davidson, Ian

  Boswell, Tim

  Davies, Geraint (Croydon C)

  Bradley, Peter (The Wrekin)

  Davies, Quentin (Grantham & Stamford)

  Bradshaw, Ben

  Brennan, Kevin

  Davis, rh David (Haltemprice & Howden)

  Brooke, Mrs Annette L.

  Brown, rh Nicholas (Newcastle E Wallsend)

  Davis, rh Terry (B ham Hodge H)

  Dean, Mrs Janet

  Browne, Desmond

  Dhanda, Parmjit

  Bryant, Chris

  Dismore, Andrew

  Buck, Ms Karen

  Djanogly, Jonathan

  Burgon, Colin

  Dobbin, Jim (Heywood)

  Burnham, Andy

  Dobson, rh Frank

  Burnside, David

  Doran, Frank

  Burstow, Paul

  Dowd, Jim (Lewisham W)

  Butterfill, John

  Duncan, Alan (Rutland)

  Byers, rh Stephen

  Edwards, Huw

  Caborn, rh Richard

  Efford, Clive

  Cairns, David

  Ellman, Mrs Louise

  Calton, Mrs Patsy

  Ennis, Jeff (Barnsley E)

  Campbell, Mrs Anne (C'bridge)

  Evans, Nigel

  Campbell, rh Menzies (NE Fife)

  Fallon, Michael

  Casale, Roger

  Field, Mark (Cities of London & Westminster)

  Caton, Martin

  Cawsey, Ian (Brigg)

  Fisher, Mark

  495

  Fitzpatrick, Jim

  Khabra, Piara S.

  Flight, Howard

  Kidney, David

  Flint, Caroline

  Kilfoyle, Peter

  Foster, rh Derek

  King, Andy (Rugby)

  Foster, Don (Bath)

  King, Ms Oona

  Foster, Michael (Worcester)

  Foster, Michael Jabez (Hastings & Rye)

  Knight, Jim (S Dorset)

  Kumar, Dr. Ashok

  Foulkes, rh George

  Ladyman, Dr. Stephen

  Francois, Mark

  Lait, Mrs Jacqui

  Gardiner, Barry

  Lammy, David

  Garnier, Edward

  Laxton, Bob (Derby N)

  George, rh Bruce (Walsall S)

  Lazarowicz, Mark

  Gerrard, Neil

  Lepper, David

  Gilroy, Linda

  Leslie, Christopher

  Godsiff, Roger

  Letwin, rh Oliver

  Goggins, Paul

  Levitt Tom (High Peak)

  Goodman, Paul

  Lewis, Ivan (Bury S)

  Gray, James (N Wilts)

  Liddell-Grainger, Ian

  Grayling, Chris

  Lidington, David

  Green, Damian (Ashford)

  Lilley, rh Peter

  Greenway, John

  Linton, Martin

  Grieve, Dominic

  Lloyd, Tony (Manchester C)

  Griffiths, Jane (Reading E)

  Loughton, Tim

  Grogan, John

  Love, Andrew

  Gummer, rh John

  Lucas, Ian (Wrexham)

  Hain, rh Peter

  Luff, Peter (M-Worcs)

  Hall, Mike (Weaver Vale)

  Luke, lain (Dundee E)

  Hamilton, David (Midlothian)

  McAvoy, Thomas

  Hammond, Philip

  McCabe, Stephen

  Hancock, Mike

  McDonagh, Siobhain

  Hanson, David

  MacDonald, Calum

  Harris, Dr. Evan (Oxford W & Abingdon)

  McDonnell, John

  MacDougall, John

  Harris, Tom (Glasgow Cathcart)

  McFall, John

  Havard, Dai (Merthyr Tydfil & Rhymney)

  McGuire, Mrs Anne

  McIntosh, Miss Anne

  Hawkins, Nick

  McIsaac, Shona

  Hayes, John (S Holland)

  McKechin, Ann

  Healey, John

  Mackinlay, Andrew

  Heath, David

  McLoughlin, Patrick

  Heathcoat-Amory, rh David

  Mactaggart, Fiona

  Henderson, Doug (Newcastle N)

  McWalter, Tony

  Hendrick, Mark

  McWilliam, John

  Hendry, Charles

  Mahmood, Khalid

  Heppell, John

  Malins, Humfrey

  Hill, Keith (Streatham)

  Mallaber, Judy

  Hoey, Kate (Vauxhall)

  Mann, John (Bassetlaw)

  Holmes, Paul

  Marris, Rob (Wolverh'ton SW)

  Hood, Jimmy (Clydesdale)

  Marsden, Gordon (Blackpool S)

  Hoon, rh Geoffrey

  Marshall-Andrews, Robert

  Hopkins, Kelvin

  May, Mrs Theresa

  Howarth, Gerald (Aldershot)

  Merron, Gillian

  Howells, Dr. Kim

  Michael, rh Alun

  Hughes, Kevin (Doncaster N)

  Miller, Andrew

  Hughes, Simon (Southwark N)

  Mitchell, Austin (Gt Grimsby)

  Humble, Mrs Joan

  Moffatt, Laura

  Hunter, Andrew

  Mole, Chris

  Iddon, Dr. Brian

  Moran, Margaret

  Ingram, rh Adam

  Morgan, Julie

  lrranca-Davies, Huw

  Morley, Elliot

  Jackson, Glenda (Hampstead & Highgate)

  Morris, rh Estelle

  Mudie, George

  Jackson, Helen (Hillsborough)

  Mullin, Chris

  Jenkins, Brian

  Munn, Ms Meg

  Johnson, Miss Melanie (Welwyn Hatfield)

  Murphy, Jim (Eastwood)

  Murrison, Dr. Andrew

  Jones, Helen (Warrington N)

  Naysmith, Dr. Doug

  Jones, Kevan (N Durham)

  O'Brien, Stephen (Eddisbury)

  Jones, Lynne (Selly Oak)

  Olner, Bill

  Jones, Martyn (Clwyd S)

  Osborne, George (Tatton)

  Jowell, rh Tessa

  Ottaway, Richard

  Keeble, Ms Sally

  Page, Richard

  Keen, Alan (Feltham)

  Paice, James

  Keen, Ann (Brentford)

  Palmer, Dr. Nick

  Kemp, Fraser

  Paterson, Owen

  496

  Perham, Linda

  Spring, Richard

  Pike, Peter (Burnley)

  Squire, Rachel

  Plaskitt, James

  Stanley, rh Sir John

  Pollard, Kerry

  Steen, Anthony

  Pond, Chris (Gravesham)

  Stewart, Ian (Eccles)

  Portillo, rh Michael

  Stinchcombe, Paul

  Pound, Stephen

  Stoate, Dr. Howard

  Prentice, Ms Bridget (Lewisham E)

  Stuart, Ms Gisela

  Stunell, Andrew

  Primarolo, rh Dawn

  Sutcliffe, Gerry

  Prosser, Gwyn

  Tami, Mark (Alyn)

  Rammell, Bill

  Taylor, David (NW Leics)

  Rapson, Syd (Portsmouth N)

  Taylor, Sir Teddy

  Raynsford, rh Nick

  Teather, Sarah

  Redwood, rh John

  Thurso, John

  Reed, Andy (Loughborough)

  Timms, Stephen

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

  Tipping, Paddy

  Todd, Mark (S Derbyshire)

  Rendel, David

  Tonge, Dr, Jenny

  Robertson, John (Glasgow Anniesland)

  Touhig, Don (lslwyn)

  Trickett, Jon

  Robertson, Laurence (Tewk'b'ry)

  Turner, Dr. Desmond (Brighton Kemptown)

  Robinson, Geoffrey (Coventry NW)

  Turner, Neil (Wigan)

  Roche, Mrs Barbara

  Twigg, Derek (Halton)

  Rooney,Terry

  Tyler, Paul (N Cornwall)

  Rosindell Andrew

  Tynan, Bill (Hamilton S)

  Ross, Ernie (Dundee W)

  Tyrie, Andrew

  Roy, Frank (Motherwell)

  Vaz, Keith (Leicester E)

  Ruane, Chris

  Viggers, Peter

  Ruddock, Joan

  Vis, Dr. Rudi

  Ruffley, David

  Walter, Robert

  Russell, Bob (Colchester)

  Wareing, Robert N.

  Russell, Ms Christine (City of Chester)

  Watkinson, Angela

  Watson, Tom (W Bromwich E)

  Watts, David

  Salter, Martin

  White, Brian

  Savidge, Malcolm

  Whittingdale, John

  Sawford, Phil

  Wicks, Malcolm

  Sedgemore, Brian

  Widdecombe, rh Miss Ann

  Shepherd, Richard

  Wilkinson, John

  Sheridan, Jim

  Williams, Betty (Conwy)

  Short, rh Clare

  Williams, Roger (Brecon)

  Winnick, David

  Simon, SiÔ (B' ham Erdington)

  Winterton, Sir Nicholas (Macclesfield)

  Skinner, Dennis

  Smith, Geraldine (Morecambe & Lunesdale)

  Woodward, Shaun

  Woolas, Phil

  Smith, Jacqui (Redditch)

  Worthington, Tony

  Smith, John (Glamorgan)

  Wright, David (Telford)

  Smith, Llew (Blaenau Gwent)

  Wright, Tony (Cannock)

  Soames, Nicholas

  Soley, Clive

  Tellers for the Ayes:s

  Spellar, rh John

  Joan Ryan and

  Spink, Bob (Castle Point)

  Paul Clark

  NOES

  Ewing, Annabelle

  Williams, Hywel (Caernarfon)

  Price, Adam (E Carmarthen & Dinefwr)

  Tellers for the Noes:

  Salmond, Alex

  Pete Wishart and

  Weir, Michael

  Mr. Elfyn Llwyd

  Question accordingly agreed to.
  Bill read a Second time.

HORSERACE BETTING AND OLYMPIC LOTTERY BILL (PROGRAMME)
Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 6 November 2003],
That the following provisions shall apply to the Horserace Betting and Olympic Lottery Bill:
Question agreed to.

HORSERACE BETTING AND OLYMPIC LOTTERY BILL (PROGRAMME)
  Committal
  1. The Bill shall be committed to a Standing Committee.

  Proceedings in Standing Committee
  2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on 29th January 2004.
  3. The Standing Committee shall have leave to sit twice on the first day on which it meets.

  Consideration and Third Reading
  4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings are commenced.
  5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

  Programming Committee
  6. Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings on consideration and Third Reading.
  Programming of proceedings
  7. All proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—[Charlotte Atkins.]

HORSERACE BETTING AND OLYMPIC LOTTERY BILL [MONEY]
Queen's recommendation having been signified—
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),
That, for the purposes of any Act resulting from the Horserace Betting and Olympic Lottery Bill, it is expedient to authorise—

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

(a) expenditure of the Secretary of State in connection with the Act,

(b) expenditure of the National Debt Commissioners in connection with the Act, and

(c)any increase attributable to the Act in sums payable out of money provided by Parliament under another enactment, and

(2)the payment of sums into the Consolidated Fund.ߞ[Charlotte Atkins.]

Question agreed to.

COMMITTEES

  JOINT COMMITTEE
  Ordered,
  That Huw Irranca-Davies be discharged from the Joint Committee on Statutory Instruments and Mr Kevin Hughes be added.—[Charlotte Atkins.]
  6.13 pm
  Mr. Paul Tyler: On a point of order, Mr. Deputy Speaker. I gave notice of my point of order to Mr. Speaker earlier and I understand that you may have a response to help the House on this matter.
  498
  On Tuesday, I participated in a debate in Westminster Hall on a subject that was described on the Order Paper as "Voting rights of honourable Members for Scottish seats". However, while the debate was taking place, I noticed that the Annunciator had transposed this to the simpler title of "West Lothian Question". The debate was then entitled "West Lothian Question" in the Official Report.
  As you will appreciate, Mr. Deputy Speaker, if such a change occurs and what appears on the Order Paper and what happens in this Chamber or, indeed, Westminster Hall is reported quite differently in Hansard, that could be very misleading. I wish to know on whose authority and by what means the change was made.
  I attempted to table a question to find out who could take that decision only to find, on the advice of the Table Office, that there was no one to whom I could pose it. The Father of the House, who also participated in the debate and has a special proprietary interest in the phrase "The West Lothian Question", was taken by surprise, and I suspect that the hon. Member for North Wiltshire (Mr. Gray), who instigated the debate, was taken by surprise too. I understand that the Chairman of the Westminster Hall sitting at the time was also taken by surprise.
  Can you tell us, Mr. Deputy Speaker, who was responsible for the change, on whose authority it was made, and whether there may be important lessons for the future, especially on establishing a precedent about the way in which hon. Members might be misled? I have taken this early opportunity to seek clarification.
  Mr. James Gray: Further to that point of order, Mr. Deputy Speaker. As the instigator, if that is the right expression, of the debate, I have to admit that I had a brief discussion before it with the Hansard Reporter, who asked me whether I thought it more appropriate to use the full title of the debate—"Voting rights of honourable Members for Scottish seats"—or to abbreviate it in one way or another. I made the point to him that I thought that "West Lothian Question" was not exactly identical to the subject that we were debating and that it might be clearer simply to use the full title. I suspect that for the sake of brevity Hansard decided to abbreviate the title to something that approximated very much to the subject that we were discussing, but which was definitely not an accurate representation of it.
  Mr. Deputy Speaker (Sir Michael Lord): I am grateful to the hon. Member for North Cornwall (Mr. Tyler) for giving notice of his point of order. When a debate title is quite long, it is the responsibility of the duty editor of the Official Report to decide on an appropriate abbreviation to use at the head of the columns in the printed volume. I agree that it would have been better to stick much more closely with the words on the Order Paper. The Editor of Hansard has instructed his staff accordingly. In the case of this debate, the heading will be changed in the bound volume.

Bovine Tuberculosis
Motion made, and Question proposed, That this House do now adjourn.—[Charlotte Atkins.]
6.16 pm
Mr. Oliver Letwin: I have a minor emendation, but in this case it cannot be laid at the Hansardistas in any way. When applying for the Adjournment debate, I should have added the words "in West Dorset" to its title because I wish to pose several questions about the situation in West Dorset rather than the wider issue of tuberculosis in cattle. I witness—somewhat to my embarrassment—a vast array of my Front-Bench colleagues in the Chamber whose interest is in the national scene, and no doubt they will interrogate the Minister on that in due course. Indeed, my hon. Friend the Member for North Shropshire (Mr. Paterson) has interrogated the Minister on hundreds of occasions and no doubt further discussions will occur.
I have initiated one or two Adjournment debates a year for the past five or six years about various aspects of farming in West Dorset—alas, I think that you have been forced to sit through one or two of them, Mr. Deputy Speaker. I think that it was three or four years ago when I first mentioned in one of the debates that my farmers were becoming increasingly concerned by TB in cattle. The Minister will be well aware that West Dorset is a dairying area, so it is not surprising that my farmers raised that issue.
In my experience, my farmers conform closely to what Sir Alan Walters described as the "taxi test". I recall working in No. 10 when the Treasury produced enormous reams of computer printouts to prove that there was no problem with the economy. Sir Alan Walters, the distinguished economist who worked for the then Prime Minister, contradicted that information. When the Chancellor of the day asked how that could be, Sir Alan said that he had recently been in a taxi and had inquired of the driver whether he had much custom. He discovered that the driver had not had much custom and decided that that was a better telltale sign of a recession than all the Treasury's complicated computer programmes.
In the same way, I have discovered over the past few years that if my West Dorset farmers register an issue as moving up their agenda, it is a good leading indicator—better, I suspect, than the information available to the Minister from his hundreds, or perhaps even thousands, of officials and experts. That is what has happened. Whereas three or four years ago, in my regular meetings with West Dorset farmers, TB in cattle would be raised low down the agenda as we were about to adjourn for tea, it is now raised first or second. The salience of the issue has risen dramatically, and the reason for that is pretty clear: the prevalence of TB in cattle on West Dorset dairy farms has risen dramatically.
I know that the Minister knows the background to this, but it seems to me important to sketch it out briefly. My dairy farmers are in an extraordinary business, if I can call it that. They have recently achieved the remarkable feat of reaching roughly a zero per cent. return, which is a vast improvement on the past few years. No other business in Britain would survive on a zero per cent. return. It is really for love rather than
500
money that West Dorset dairy farmers remain West Dorset dairy farmers. They have also been through BSE and foot and mouth disease.
If we hit what I insist on calling a serious problem of TB in cattle—a variant that leads to a full-blown crisis—I judge that it will be the last to affect my dairy farmers because I do not think that there would be any West Dorset dairy farmers after such a crisis. The Minister may think that that is somewhat overblown language, but I said some years ago that I thought that what was happening in the pig industry was likely to mean that there would not be much pig production in West Dorset by now, and there is not now much pig production in West Dorset; indeed, there is almost none at all. That is because people did not heed the warnings given then about what was happening to the pig industry as a result of differential regulation and effective dumping from Denmark, Holland and Poland.
Now we face the prospect, if something is not done, of the destruction of the dairy industry in West Dorset. I have to admit that, economically, that will not be terribly important. Britain's economy will not be destroyed by the absence of dairy farming in West Dorset. I have to admit also that other uses will be found for the land. I suppose that is nostalgia on my part, but I will be sad—distraught, in fact, as I suspect others in the country will be—if a land that has had cattle on it for hundreds of years turns into a land destitute of cattle. West Dorset society will change if dairy farming stops.
I accept that if that were the ineluctable result of forces of rationality, we would have to put up with it, but it is not. If it occurs because of a crisis of TB in cattle, it will be an avoidable result of an avoidable calamity, and I do not think that we ought to put up with calamities that are avoidable. Moreover, it is a calamity that we can see coming, and when calamities are both avoidable and foreseeable they really ought to be avoided.
The purpose of our Ministry of Defence is to lay down plans for things that may not happen, and the Ministry has good plans, I believe, for a wide range of contingencies that may not occur. However, this Minister's Department has a long and sorry history of not having plans for things that are almost inevitable. It is only once they occur that the Department realises that the crisis with which it is ineptly dealing is one that, if it had dealt with it some years before, might have been only a problem and possible to tackle with a great deal less public expense and discomfort. We are in exactly that position now.
The national figures are clear, and West Dorset reflects them. We have seen something like a 500 per cent. increase in the prevalence of TB in cattle over the past five or six years. There was a period last year when that was being disguised by the fact that a backlog was being cleared. It has now been cleared, and yet this year we see a vast increase compared with the position some years ago. For my West Dorset farmers, the same bumbling approach to testing that was perfectly tolerable five or 10 years ago still applies. There is a not very effective test and a large number of inclusive results, and farms are then closed for 60 days, with huge, consequential losses for the farmers.

501
From what my West Dorset farmers have said, there is no sense of urgency or crisis in the Department. I do not mean that people are not working hard, or that they are not coming into the office and leaving late. I do not mean to imply that there are not any experts—there are many experts. I do not mean that business is not continuing as usual—there is nothing that the National Audit Office would declare to be a gross inefficiency. However, it is as if people were sitting around just before the second world war and producing a Spitfire every few weeks. That would not have provided a sufficient defence in the battle of Britain. People have to change gear and produce Spitfires at the rate that Lord Beaverbrook managed to achieve. At the moment, the Department is not in war mode on TB in cattle in West Dorset. It is in peacetime mode, but my farmers are fighting a war. It is poor that there should be such a discrepancy.
The Minister is about to conduct a long-term review, which I applaud. Vaccines are expected in due course, but I am told that it may be about 10 years before they are produced. When I first heard about the vaccines, however, I was told that they were expected in 10 years time. People whose experience is greater than mine tell me that, 20 or 30 years ago, effective vaccines were expected in 10 years time. I do not know whether there will be an effective vaccine in 10 years time. In some respects, I hope that there will not be, because there will nothing to vaccinate in West Dorset, as there will not be any dairy farming in 10 years time if things carry on as they are at present. There may not be many badgers to vaccinate either, as they are dying in large numbers in West Dorset. I regularly come across dying badgers on the road as I drive down to my house. They are not dying a pleasant death, and neither, I suspect, are the cattle. This is a very unpleasant business.
The Krebs experiment is under way. I should be aware of that fact as I was an early proponent of that experiment. I had meetings with the people concerned, including Professor Krebs, and argued vociferously with some of my farmers five or six years ago that they should sponsor the Krebs experiment. In my naivety, I said that it would produce conclusive results. Without such results, Ministers would not have the backing for the action that they wanted to take. Just as I supported field trials for genetically modified crops, so I supported the Krebs experiment because I believe that the power of science is considerable. I was gulled into supposing that a simple set of controlled experiments emerging from the original Krebs report—it is not terribly complicated to have assign three different areas of the United Kingdom and treat badgers in three different ways—would expedite a set of concrete results. I do not know exactly what has gone wrong or why the selective cull has been halted. I do not know what the difficulties have been, but as the Department is not on a war footing, any difficulty is likely to have deterred it from proceeding. In any event, the Krebs experiment was meant to be complete by 2003, but it is not.
I know that the Minister was not in post when the experiment began, and has not been in post for most of the period during which it was conducted. He is not personally responsible, but the fact is that this is a shambles. I very much doubt that he will want to give us
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a cast iron guarantee that the Krebs results will be available next year, the year after, or the year after that. Krebs is an interesting commodity—the experiment, I mean; we must not blame Professor Krebs—but when it has been completed and the Department has eventually considered it in its long-term review and come up with a solution, there will be nothing to solve as there will be no cattle in West Dorset, which is an absurd result.
I am not a world expert on these matters. If I were, I would seek employment in the Department. However, it employs enormous numbers of experts who, presumably, know what to do about the problem. I hope they know what to do about it. The National Farmers Union has made 16 recommendations, so it appears to have an idea of what to do. The National Federation of Badger Groups has made a large range of recommendations, some of which, interestingly, overlap with the recommendations made by the NFU.
As in each of the crises that we have faced, which we have not dealt with nationally with distinction, the Department has set up an advisory group. There always seems to be an advisory group, and the advisory group always has a chairman. At this stage in the development of the crisis, before the shambles is fully revealed and the nation mourns the results, the chairman of the advisory group always complains that nothing is being done. True to form, that is what we find in the present case.
Professor John Bourne, the chairman of the relevant advisory group, appeared on "Farming Today" on 20 December and his remarks were illuminating. He was asked what he thought about DEFRA and he said:
"What I get totally frustrated about is … we've been working within the ISG"—
that is, the independent scientific group—
"for five years … we have seen data coming through and we have been trying to get it translated into policy and that hasn't yet happened."
When the interviewer asked:
"Why in your view are they"—
that is, DEFRA—
"still talking and not making policy?"
Professor Bourne said:
"I find the … I just don't know. I find it quite extraordinary that they haven't moved more forcibly in this respect".
So the chairman of the advisory group in DEFRA is in accord with my West Dorset farmers in his view of the speed with which the Department is not moving on an issue that is currently a problem and will shortly be a full-blown crisis. That is not satisfactory.
I hope that the effect of this tiny debate focused on the tiny part of the United Kingdom that I have the good fortune, in all respects except its current state of dairy farming, to represent will enter into the Minister's mind the idea that I wish to plant there—that long-term reviews are of no use. Waiting for Krebs is of no use. Waiting to see whether, at a later time, the Department should move on to a war footing is of no use. We are facing something that is operating as an epidemic operates—on the basis of geometric progressions, but arithmetic activity will not resolve the problem. What is needed is a change of gear to match what nature is doing to us.

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I do not know what the solutions are, but they need to be rapid and effective, otherwise the Minister will face what, if we inherit Government, I as the then Chancellor will face—a mighty great bill for dealing with a ghastly crisis that need not have happened, and which could be prevented from happening now.
6.32 pm
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): I congratulate the right hon. Member for West Dorset (Mr. Letwin) on securing the debate. He ended with a rather refreshing and candid admission that he did not know what the solutions were. The problem with tackling a disease as serious and as long running as TB in cattle is that if I, or previous Ministers from either side of the House, had known what the solutions were, they would have been implemented there and then. I might try to tease some of the solutions out in a little more detail as I reply to the right hon. Gentleman's debate.
I agree that TB in cattle is the biggest animal health problem facing agriculture at present, particularly in the parts of the world that the right hon. Gentleman and I represent. I reread Thomas Hardy's "Tess of the D'Urbervilles" over new year, which reminded me of the historic importance of the dairy industry in Dorset and West Dorset, which he mentioned.
It is right that the problem is at the top of the agenda. This is not the only debate on it that we have had. There have been a number of debates on the subject in the Chamber and in Westminster Hall, and there has been scrutiny in the Environment, Food and Rural Affairs Committee, which has produced reports on it. I begin by reassuring the right hon. Gentleman that I take the matter extremely seriously. We are trying all the time to move forward with solutions to the problem. I always welcome constructive suggestions, wherever they come from, whether from the farming community or from wildlife groups. Where they agree, all the better. Unfortunately, on too many of the difficult questions that we face, they do not agree.
I do not accept that the Government's approach has been bumbling. The issue is extremely difficult and complex, and involves a number of scientific questions that are still not perfectly understood. The Government are determined to tackle it, and a sign of that determination is the fact that we have spent £74 million of public money on TB in this financial year, and we expect to spend a similar sum next year.
It may be helpful to the House if I outline some of the measures that we have adopted in the past 12 years, which I hope indicate that we are not just sitting around on a non-war footing, as the right hon. Gentleman suggested. As he acknowledged, we have reduced the backlog of overdue TB tests, following the foot and mouth outbreak. We have also imposed automatic restrictions on herds with TB tests three months or more overdue, again aimed at reducing the risk of spreading TB. Back in February, we announced a review of the TB strategy. We announced a scientific panel to review the randomised badger culling trial and associated research in April. There was a consultation on a proposal to permit trained and competent non-veterinarians to
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perform skin testing of cattle. There has been consultation on the rationalisation of compensation payments for animals slaughtered for disease control purposes. In December, we published the vaccination scoping study of the independent scientific group on cattle TB, of which the right hon. Gentleman may well be aware. As he also said, in November Ministers made a decision to suspend the reactive culling element of the randomised badger culling trial, and I shall explain later exactly why we made that decision.
We must bear in mind that, distressing and serious as the problem is in West Dorset, Devon and other parts of the country that are badly affected, only about 3 per cent. of the national herd is affected by TB restrictions at any one time. Our major priority at the moment is to try to prevent that geographic spread before we control and reduce the existence of TB in the areas where it is already a problem. I hope that some of the short-term changes that will come out the current consultation will be in place soon, and they will be aimed primarily at trying to restrict the further spread of the disease, which I hope most hon. Members will agree should be any Government's priority.
It will take a bit longer to reach agreement on the longer-term strategy, but we are committed to taking measures that we think will be helpful and necessary, and I hope that we will receive the co-operation of the farming community, the veterinary profession and wildlife groups.
As I have said, we have reduced the backlog on TB testing, and I pay tribute to the work of the state veterinary service, which has done a terrific job in achieving that during the past few months. The movement restrictions on herds with tests three months or more overdue from the start of October has also acted as a powerful incentive to get things done more quickly, and data from November shows that of the overdue tests, 48 per cent. are less than one month and 90 per cent. are less than six months overdue, which is a considerable improvement on the previous position.
There has been some debate and controversy on the lay testing proposal and no decisions have been made at the moment, but there is an argument for suggesting that in order to speed matters up and reduce costs, it may be a good idea to allow lay testing for the simple procedure of the skin test. We are still assessing the feedback from the consultation, and I hope to be able to make an announcement on that to the House shortly.
I suspect that the comments that that right hon. Gentleman quoted from Professor John Bourne on "Farming Today" were in relation to the gamma-interferon test. I have regular contacts with Professor Bourne and he has not made the general point to me that he thought that we were fiddling while Rome burned, but he has had a concern about the speed with which we have extended the gamma-interferon test. The main reason for that is that it has been quite difficult to get farmers to take part in the pilot, partly because they worry that if it is more sensitive it will lead to more breakdowns and more herds being subject to restrictions. But we are making progress. We now have 77 farms that have agreed to take part in the pilot, and we are working hard to increase that number all the time.

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Earlier this year, an Audit Commission report raised concerns about some of the compensation payments made in Wales, which were not necessarily close to market values. As the Government, we have to be responsible for the proper use of taxpayers' money, and we are thinking about how we can ensure that farmers receive the full market value for their slaughtered cattle, as they should. The right hon. Gentleman was right to highlight the difficulties of the dairy industry, particularly in recent years, with the milk price. It is right and proper that farmers should get the full market value for their cattle, but there is disturbing evidence that in some cases, they have been getting considerably more than that. I would like to know why, and to see what we can do to ensure that that does not happen in future.
As for a vaccine, I was not around in politics 10 or 15 years ago, as the right hon. Gentleman was, and I do not remember Ministers in the then Conservative Government saying that a vaccine was at least 10 years away. There is no doubt, however, that although a vaccine would be a holy grail solution, it is not going to happen in the short term, as the vaccine scoping study published in December made absolutely clear. This is not because we are not committing enough resources to the issue. Among the first questions that I asked my scientific advisers when I was appointed were, "Can we speed this process up? Is the problem that we are not spending enough money on it?" I was reassured that that was not the case. The fact is that we cannot force the speed of scientific research. We are also carrying out some very useful collaborations with the Irish and New Zealand Governments on aspects of vaccine research. I hope that, in the medium and long term, vaccines for either cattle or badgers will help us to tackle this disease. The right hon. Gentleman is absolutely right, however, to say that there is no point in raising expectations in the industry that a vaccine solution is just round the corner.
The decision to suspend the reactive culling element of the randomised badger culling trial was taken because farmers could not wait until 2006 for the outcome of the Krebs trials, as was made clear to me by farmers in Devon, among others, when I was first appointed. Ministers cannot pre-empt the outcome of a scientific trial; we cannot jeopardise the authenticity of what that trial will discover. I made it clear to Professor Bourne when I was appointed that if there were any significant interim findings before 2006, I wanted to know about them, because if they were important, we could make policy decisions sooner than that date. However, we had no control over the fact that the interim findings that were dramatic were perhaps not the ones that I, or most people in the farming industry, were expecting. That is science.
There was no doubt, however, about the advice that I was given by my scientists, including the chief scientist in the Department. The research was peer reviewed, and it has since been peer reviewed and published in December's issue of Nature. It found that, in the reactive culling areas, the impact of the culling had been to increase the incidence of TB breakdowns in cattle by 27 per cent. No Minister faced with that figure could sit back and say, "Well, we're just going to carry on and see what happens." The farming industry would have been
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up in arms, and would have said that we were continuing with a policy that was making the problem worse, and the badger rights people would have said that we were continuing with a policy that involved the unnecessary killing of badgers and was also making the problem worse.
We had no choice but to abandon the reactive cull. That does not mean to say that we have ruled out badger culling as a long-term option. The proactive culling is continuing, and I have also said to Professor Bourne that I want to know about any significant data that emerges from that before 2006, which would enable us to make an earlier policy decision.
Mr. Roger Williams: I thank the Minister for giving way, and draw to the attention of the House my interest in livestock farming, which is recorded in the Register of Members' Interests. The implication of the abandonment of reactive culling is surely that there is evidence that badgers are implicated in the spread of the disease between themselves and cattle. That is an advance, and something that farmers have suspected for a long time.
Mr. Bradshaw: Yes, there is a certain amount of truth in what the hon. Gentleman says. There has always been a reservoir of TB infectivity in wildlife, and in badgers in particular. What we have never had is hard scientific evidence relating to the nature of the spread, or the role that badgers play in it, compared with, for example, cattle-to-cattle spread. That is what has fuelled the argument between the industry and wildlife groups. The latter claim that this is all about biosecurity measures and that farmers should bear the main responsibility for ensuring that their cattle do not get infected, while some—although not all—farmers blame the badgers and advocate a badger eradication policy.
The hon. Gentleman is right. The abandonment of the reactive cull has finally shown that there is a connection, although we still do not know the extent. We also know that a reactive culling policy, which many people in the industry prematurely advocated that we adopt before the outcome of the trials, makes matters worse. Those events show that the trials were important, that following the science is important and that it is important not to bow to demands from either side to take premature action. Doing that may give the appearance that one is acting urgently, but it could make matters worse. We have to do the right thing.
We will not only continue to watch carefully the data coming from the proactive trials, but will examine carefully the results of the trials being conducted in Ireland, which we expect to be published fairly soon. They are slightly different in that the Irish have conducted something more like a badger eradication policy over a wider area and they have used snaring, which is a more effective way to cull badgers. We are keen to learn best practice from any other country, because we accept that this is such a serious issue.
In summing up, I hope that the right hon. Member for West Dorset is at least a little reassured that we take this situation extremely seriously. The issue was certainly top of my in-tray when I was appointed about six months ago and, apart from fisheries, I have spent the most time on it, supported by a good team who have

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been working hard to get the consultation out, to get a new long-term strategy adopted and to make changes in the short term, which we hope will help to prevent spread to further areas and begin to contain and reduce infection and herd breakdowns in those areas that are already affected.
I return to the candid way in which the right hon. Gentleman finished his speech: in the absence of a solution, this problem will be difficult for some time. There are no magic solutions. We are as keen as anyone
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else to solve the problem. We do not take the situation lightly as it is serious for farmers and for our Department, which is having to spend a considerable amount of money on TB that we would rather spend on—
The motion having been made after 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 fourteen minutes to Seven o'clock.

Preamble
[MR. JOHN MCWILLIAM in the Chair]

Ministerial Accountability and Parliamentary Questions
[Relevant documents: Ninth Report from the Public Administration Committee Session 2001–02 HC 1086 and First Report Session 2002–03 (Government Response) HC 136.]
Motion made, and Question proposed, That the sitting be now adjourned.—[Ms Bridget Prentice.]
2.30 pm
Tony Wright: I am grateful for the opportunity to introduce the Public Administration Committee's report on ministerial accountability and parliamentary questions. It is the Committee's ninth report of the 2001–02 Session and was published in July 2002. We will also discuss the Government's reply, which was published at the end of the year.
I wish to thank several people, and especially members of the Committee, who are a sterling bunch. I am proud to be their Chairman. We are working extremely energetically and productively together at the moment, and it is a great privilege to be the Chairman of such a Committee. I also thank our Clerk, not least for the amount of work that goes into such a report. He is an outstanding Clerk who serves the Committee in an outstanding way. He is helped by the long overdue arrival of a second Clerk. I also thank all the Committee staff, who contribute so much to our work, and the Table Office, which produces the memorandum and the raw material that enable us to begin work on producing such a report. The hon. Member for North-East Hertfordshire (Mr. Heald), who is speaking for the Opposition, asked me to welcome him, and I am delighted to do so.
This week, a national newspaper, The Guardian, said:
"In recent years the Commons public administration committee has turned itself into a sort of constitutional terrier, yapping loudly at ministers and officials slow to adopt the cause of reform."
Like Princess Anne, I believe that they have got the wrong dog, although in her case at least they got the right breed. I prefer to see us as a retriever—diligent, lively and faithful.
Mr. Oliver Heald: I thank the hon. Gentleman for welcoming me, as
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requested. Does he accept that what we really want is a pit bull terrier that gets stuck into the Government and makes them do their job?
Tony Wright: I have a horrible premonition that our debate this afternoon will be haunted by different varieties of dog, and it is already being borne out.
Mr. Paul Tyler: Unfortunately, both breeds are over-bred and not very intelligent. A mongrel would be much more effective.
Mr. John McWilliam: Order. As someone who has owned a Weimaraner, I ask hon. Members to stop asking dog questions.
Tony Wright: That is a good idea, Mr. McWilliam, although I hope that you will not stop my dog analogy in full flow, as I wish to persevere with it.
Our retriever is diligent, lively and faithful, and constantly seeks out and brings back all those matters that the Government may have mislaid or overlooked. Of course, it does all that on behalf of Parliament, our master. That is what we are doing today in discussing the report on ministerial accountability and parliamentary questions.
The raw material of the report covers the 1999–2000 Session. That is a huge time lag, and I apologise for it, although it is not of our making. I am afraid that it was caused by the difficulty in getting from Departments an account of why they have not answered parliamentary questions once we are equipped with the Table Office material. Paragraph 11 of the report tells the story of how we first asked Departments for the material in May 2001. We asked for a response by June. I accept that a general election came along, but it was not until March 2002 that we received the final departmental response. As we say in our report, notwithstanding the fact that there was an election in that period, it should not have taken Departments up to 10 months to respond to a relatively simple request—not least because some were able to meet our original deadline.
I think that I am entitled to bring that issue to the attention of the House, and I am delighted to see that the Government now promise in their reply to our report to endeavour to meet the same turnaround time that they use in correspondence with Members—20 days. We hope that they can keep to that undertaking, because it would help us enormously in our reporting to the House. Perhaps I should also say that we are busily putting together a draft for the two subsequent years, so we shall be producing a composite report that will enable us to catch up and make a more up-to-date survey of the terrain.
Why do we, in the first place, go through the exercise that prompts the report and the debate that we are now engaged in? The answer is straightforward: parliamentary questions and answers are a basic instrument of parliamentary accountability. In some ways—I think that the report mentions this—they are, if used properly, the most effective and sustained instrument of parliamentary accountability that Members have.
I am sure that it is tiresome for Departments and Ministers to have to answer parliamentary questions, not least because they are sometimes tiresome. The

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undertaking is huge and burdensome, and it is true that Members use and on some occasions abuse questions for a variety of purposes. However, they are fundamental to Parliament's ability to hold the Executive to account, notwithstanding the occasion when a certain Member boasted in a speech to his constituents that he had asked more parliamentary questions than anyone else, and a voice at the back said, "Ignorant bugger."
We all have our own confessions to make in this context, and perhaps I may make mine, which I made in print not so long ago. I described something that happened immediately after I was elected a Member of Parliament in 1992:
"After my first few weeks in the House of Commons, one of my children asked me what was the best bit so far about being a Member of Parliament. I remember saying that I thought there were two best bits…First, the fact that the library research staff would instantly provide you with a brief on any subject under the sun. My son thought this would be very useful for his homework".
Indeed, it has so proven. I also referred to
"the supply of yellow forms on which questions could be written to any Cabinet minister at any time requesting information on anything that came within the minister's area of responsibility, with an obligation for an answer containing the information to be given (and published in Hansard…) within a matter of days.
My son was disbelieving at such an extraordinary facility. So we agreed that we would put it to the test. But what to ask about? After some thought we suggested an esoteric question about the dangers of milk floats, on the basis that when I was my son's age I had crashed into one on my bike early one morning while delivering newspapers…and had long harboured a grudge against them. This was duly agreed, and the yellow form was filled in and submitted. A few days later the following reply was received, as recorded in the Hansard record (30 June, 1992)".
This had been my question:
"Dr. Wright: To ask the Secretary of State for Transport what figures are available on the number of accidents and injuries associated with milk floats."
I shall not go through the whole written answer that I received from Kenneth Carlisle, the Minister for Roads and Transport of the day, as it was quite extensive. First, he told me about milk floats and then he gave me a little table that gave information on
"Injury accidents involving floats and casualties",
and
"float propulsion type".—[Official Report, 30 June 1992; Vol. 210, c. 449W.]
I could see how many people were injured by electric and other kinds of floats, how many people were killed, and so on.
I was moved to write that
"Pandora's box was henceforth to be forever open. The people's representatives had to be answered by the mighty. Accountability was not a stale word, but a continuous practice. The episode had a further twist when a journalist phoned to ask what I thought about the answer I had received and about my general views on the dangers of milk floats. My reply, now that I was warming to the theme, duly appeared in his newspaper. I had become the authority on milk floats. More than that, I realised that I had become someone whose half-baked views on all sorts of topics would henceforth be taken with all the seriousness that they had never previously been thought to deserve. In fact, I was surrounded by people whose utterances were being taken
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seriously, especially by themselves, sometimes for the first time and against the evidence, and solemnly recorded for posterity. Parliamentary democracy was clearly a wonderful thing."
So, we all have our little confessions to make, but none of that should stand against the fact that, if used properly, the ability to ask questions and have them answered by Ministers of the Crown is the most effective tool in the armoury of most Members of Parliament.
The report is the fifth of its kind from the Committee, which in its previous form, as the Public Service Committee, began to issue such reports as part of the reaction to the Scott report. I was on the Public Service Committee at the time, which took evidence on the Scott report and produced a major report on ministerial responsibility, which led to the resolution on the matter that the House made in 1997. The Scott report said that Ministers of the day had failed satisfactorily to answer questions that Members had tabled, and it raised serious issues about the effectiveness of ministerial question answering to Members. The resolution made by the House stated:
"Ministers should be open as possible with Parliament, refusing to provide information only when disclosure would not be in the public interest, which should be decided in accordance with the Government's code of practice on access to Government information".
That period led our predecessor Committee to think that it would be useful to examine and regularly report to the House on parliamentary questions that the Table Office had blocked and were therefore not answered. For that purpose, we have used a list made up of the internal information compiled by the Table Office. On that basis, we write to Departments to ask for information about the questions that have not been answered. That forms the basis of the report.
Over the years, we have reflected on whether that process continues to perform a useful function. The general view, not only among ourselves, but among people who have made representations to us, is that it does so, which is why the practice has become an annual institution. It should be seen as useful to Ministers too, because one of the effects of the exercise is to ensure that Departments are kept up to the mark in providing to Ministers the service that they expect. There have been cases in which Ministers have been let down by their officials. For instance, there was a notorious case recently in the Department of Health, where an official was systematically falsifying parliamentary answers. The ability to keep a log of all that information and to pursue it places an important discipline on Departments and enables Ministers to provide the answers that they are required to give.
One matter that we focused on during that period was the extent to which Departments cited the relevant exemptions under the code of practice on access to Government information when they did not give the information that was asked for. We have worried away at that important issue over the years. I direct hon. Members to paragraphs 15 and 16 of our report, where we say that despite referring to the problem repeatedly, we have to keep returning to it because Departments still do not systematically cite the exemptions under the code when they withhold information. The report gives examples of Departments that do well and of others that do badly. Indeed, in the spirit of the times, we talked

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about producing a league table so that everyone could see which Departments did well and which did not in respect of the citation of exemptions.
We strongly welcome the Government's response to our latest report. They said that they would alter the official guidance—indeed, they have already done so—on the answering of questions. They now insist that Departments cite the relevant code exemptions when questions are not answered. I strongly applaud the Government for accepting our recommendation, and I hope that we shall not have to return to the matter as we had to do in recent reports. It should be a basic building block of the system.
I shall refer quickly to two other matters before making one concluding point.
Mr. Heald: The hon. Gentleman will know that the Leader of the Opposition has recently been extremely concerned about the release of information. Indeed, he made an official complaint to the ombudsman about the Treasury, not in respect of a parliamentary question but in relation to requests for information. The Treasury has been heavily criticised for the way in which it handled those applications. One of the points made in the ombudsman's report was that, in normal circumstances, we have the right to go to the ombudsman if the code is not followed, and the question can then be dealt with fully. Does that apply to parliamentary questions?
Tony Wright: In some instances, hon. Members have sought to pursue the parliamentary question route through other means, in particular through the ombudsman. Indeed, the ombudsman is reporting today on an interesting case that I could refer to in passing and to which other hon. Members may refer. We must consider the system in the round, but the best way to answer the hon. Gentleman is to say that it would clearly be unsatisfactory if Members of Parliament, equipped with all their notional powers and armoured with the 1997 resolution, had to resort to other devices to secure information to which they were properly entitled. That is the essential point.
That leads me to the two other matters that I wish to raise. I have described our original focus, but it has necessarily been widened somewhat in recent times. That is partly because our attention was turned from blocked or unanswered questions to questions that were not answered satisfactorily. I do not mean that people did not like those answers, but that the relevant Department did not provide the answer to the question. In such cases, an answer was given, but it was not satisfactory. Perhaps Ministers answered a different question or simply picked out the part of the question that they wanted to answer and ignored the rest. However, it was clear that if we were concerned with accountability, we could not be concerned only about the failure to answer questions altogether, as we had to consider whether the answers actually answered the questions.
We have been working on that matter. When we first raised it in our report, the Government's reply was, "Well, we're not sure about this, because what do you think an unsatisfactory answer is?" We responded in the Government response document—when we publish a Government reply, we tend to produce a little preface—and stated in paragraph 8:
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"We do not believe that such a definition should be necessary. An answer is unsatisfactory if it does not follow the rules, guidance and conventions on question-answering, which now include the requirement to cite Code exemptions".
We also said:
"It is for Members themselves to decide when they regard an answer as unsatisfactory"
in terms of those rules. That is the answer to the question of when an answer is unsatisfactory—when it does not do what answers should do under the rules on question answering. The issue is that straightforward.
Hon. Members have given us several examples of such answers. I am most familiar with the examples with which I was involved, and I shall cite some of them to give flavour to what we are discussing. I asked the former Minister for the Cabinet Office, now the Under-Secretary of State for Constitutional Affairs, my hon. Friend the Member for Shipley (Mr. Leslie), to list all the bodies that had a statutory duty to report to Parliament. It seemed to me important for Parliament to know which bodies were supposed to report to it, so that it could do something about those reports. Unfortunately, the reply simply said that each body's annual report stated to whom it had to report. I thought that that was an outrageously inadequate answer and I wrote to say so. I am delighted to say that when the current Minister for the Cabinet Office took up the reins, he provided me with a comprehensive answer of the kind that I should have got originally.
I also wrote to the now Under-Secretary of State for Constitutional Affairs, my hon. Friend the Member for Tottenham (Mr. Lammy), about a matter for which he was the answering Minister at the Department of Health. In some Departments, there had been great delays in producing autumn performance reports under the public service agreement system, so I asked when that Department was going to produce its much-delayed report. The answer simply referred me to something completely different. I had to write a rather sharp letter, which included the text of what would have been an acceptable answer. It is not difficult to produce such a text. What makes people cross, however, is a lack of any attempt to answer the question or to provide the information required. It is always better to make that attempt, because one will get into more trouble if one does not do so.
I yield to no one in my admiration and respect for the Prime Minister, as is well known. Last year, I wanted to know whether the example of the 1975 Wilson Labour Cabinet in agreeing to differ on the Common Market referendum was to be regarded as a precedent that would be binding on the conduct of a referendum on the euro. That seemed a perfectly straightforward question. The answer that I was given referred me to an answer given by the Economic Secretary to the hon. Member for Buckingham (Mr. Bercow). I looked up that answer and found that it had nothing to do with my question. It told me about the five tests and the fact that there would be a euro referendum, all of which I know, but it did not tell me anything about what I had asked. I am afraid that I therefore had to table another question asking the Prime Minister to explain the connection between my first question and his answer. He again referred me to an answer that set out the Government policy on the euro. Those are just frustrations. It would

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have been quite easy to say, "We haven't come to a view on that. We will see when the time comes." All kinds of formulations would have served.
That is a trivial example. In other cases, people try to get information and it is not provided. The Committee gives a number of examples of such cases.
Mr. Heald: Does the hon. Gentleman agree that it can often damage the Government to adopt an over-clever approach to answering the questions? Recently, the Conservatives argued that the Department for Work and Pensions does not do anything, but merely consults the whole time. My hon. Friend the Member for Havant (Mr. Willetts) asked how many consultations there had been since 1997. The reply was that the answer
"could only be provided at disproportionate cost."—[Official Report, 9 December 2002; Vol. 396, c. 140W.]
Tony Wright: We could trade examples. We give some examples in our report, and we shall continue to do so regularly in other reports. I thought initially that the hon. Gentleman was going to mention the case of the hon. Member for Northavon (Mr. Webb), who memorably asked the Department for Work and Pensions for some information and was told that the Department did not have it. He pursued the matter under the Data Protection Act 1998 and found that the information did exist. Of course, it was then provided. It is clear that it is as well to be watchful and ensure that Departments are kept up to the mark.
Such experiences and the frustration that they caused hon. Members meant that Mr. Speaker started referring Members who complained about such things to the Public Administration Committee and the Procedure Committee. People looked to the Public Administration Committee to do something about the situation, but there was nothing we could do apart from produce our report, as we did each year. As we say in the report, against that background, we decided to offer a service to Members and take up unsatisfactory answers with Ministers and Departments.
That service does not deal with every dissatisfaction, but it deals with inadequately answered questions. I am pleased to say that hon. Members have sent us a steady flow of examples and that they have all more or less fallen into that category. Hon. Members have used the facility extremely responsibly and, in turn, Ministers have responded positively and constructively. There have been a number of instances—if we have not cited them in this report, we shall do so in our next one—in which Ministers have brought their Departments up to the mark because of what has happened. In such instances, Ministers have tried to ensure that questions are answered more satisfactorily and that apologies are offered when things go wrong.
We think that that innovation is important. We were worried about whether the service would greatly consume time and resources, but at the moment, it helps with accountability. I hope that Members find it helpful.
Mr. David Drew: My hon. Friend is obviously making his case very strongly. I am surprised that he has not mentioned commercial
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confidentiality, which is one of my bugbears when I look back through the report and pick out the questions to which I have not had answers. One question on which I felt strongly sought to identify the recipients of the largest sums of money under the common agricultural policy. Normally it would be wrong for those firms and agencies to be identified, but my question was very much connected with the CAP and its operation. Without going into detail on that particular example, would he care to mention the way in which commercial confidentiality prevents policy development because it obfuscates what is really happening?
Tony Wright: My hon. Friend raises an important point, and various Members have quite properly referred to the same difficulty. I pay tribute to the hon. Member for Lewes (Norman Baker), who produced off his own bat, just a year or so ago, a report on the difficulty of gaining information about commercial confidentiality issues through parliamentary questions. My hon. Friend gave the example of the CAP, but the hon. Member for Lewes placed his question in a context that interests many of us, relating to the fact that so many aspects of government are contracted out, with the public and private sectors working together. That makes it even more essential for Members to be able to probe the basis on which some activities take place. If so much is closed off because of commercial confidentiality, difficulties are raised. Whatever else we do, we must ensure that if that reason is given, it is given as the exemption. We can then test that against the code of access, involving the ombudsman if necessary, as such issues can be tested against a public interest.
Mr. Drew: Does my hon. Friend agree that one way of overcoming that problem would be for the Government to return to the organisations with confidentiality restrictions to ask them whether they mind information going into the public domain? In practice, such information often gets into the public domain through the media, which is why some of us get so upset, and it can also be made available in alternative ways.
Tony Wright: I agree. Those comments take me back a few years to when the Committee was spending much time examining the Government's freedom of information proposals. We took extensive evidence on the White Paper, the draft Bill and the Bill that emerged, and when we took evidence from business organisations, their concern was not to see information protected; they simply wanted to know what the rules would be so that they could play by them.
Brian White: Those businesses also said that they did not mind information becoming available after an appropriate time, but that time sensitivity concerned them.
Tony Wright: That is true, and it is a good additional point. However, the general point is that business was in some ways more relaxed about such matters than the Government. The Committee was struck by that fact, which is why we sought to persuade the Government that they, too, could be more relaxed about their approach to those matters in the legislation. We had some success on that point, but not total success.

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All we are discussing today in relation to those matters is openness in government. We all know where we have come from on that subject. Without wanting to resort to the familiar clichés, I point out that we have come from a culture that loved secrecy, had secrecy bred into its bones and was extremely fearful about approaching matters more openly. I remember the evidence that was given to the Scott inquiry by a former Cabinet Secretary. The way in which he talked about the business of parliamentary answers was extremely interesting. He talked about it as a form of art in which one released as little as possible while maintaining the conventions of parliamentary question answering. It was a sort of elegant, elaborate game, and if you had a first in greats you could play the game better than anyone else. It was great fun for parliamentary branches inside Departments to sign off answers that did not really tell people anything, but did so in an extremely elegant way.
That is the history of where we have come from. It is still around us. Hon. Members may have referred to the fact that in recent times the ombudsman has had difficulties, as the guardian of the code on access, in securing the co-operation of Departments in the way that she has wanted. There was an occasion during the past year when she flagged up in her most recent report the possibility that she might have to discontinue her work in that area because it was proving too difficult to get co-operation. That is obviously serious, although I think she has now reached an understanding with the Cabinet Office that is helping her along.
Another case has been reported on by the ombudsman today, for which she deserves great credit. A public interest test was applied that flushed out information that she regards properly as background information, but which does not impinge on Cabinet discussions. It does not come within the policy process, but it is proper background information. The ability to make such distinctions secured the release of information that was not already available.
That context is changing because of the freedom of information legislation that will finally come into effect next year, and the situation is beginning to produce a change of culture throughout Government. It will be possible for Parliament and others—we would expect Parliament to be at the forefront—to get far more information out than previously, particularly background information, so that we can see far more of the processes, thinking and research behind certain policy positions. That makes for better, more sensible and grown-up policy making in which Parliament is far more of an active participant with Government, which is all to the good.
The example of Hutton hangs over everything at the moment, but the Hutton inquiry showed that it is quite possible to release almost anything relating to a public policy issue, apart from where certain privacies need to be safeguarded, without the sky falling in.
Mr. Ian Liddell-Grainger: Not yet.
Tony Wright: The belief in this country has always been that the sky will fall in if more is given out than is
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absolutely necessary. We will transform policy making and the relationship between Executive and Parliament if there is far more information sharing than in the past. That will be better for government. Indeed, that is the argument. It will be better if we do things in a more grown-up way.
The environment is changing, and we report now in a context that is quite different from that of the mid-1990s, when we first started producing such reports. The day may come when we shall be able to cease producing them, but there is still work for a diligent parliamentary retriever to do, and it is a great pleasure to bring such matters to hon. Members' attention.
Mr. John McWilliam: Before I call the hon. Member for Bridgwater (Mr. Liddell-Grainger), I should like to remind hon. Members of something. Please do not think that I am getting soft in the new year. The hon. Member for Cannock Chase (Tony Wright) used the word "you" on several occasions. He was out of order on only one of those occasions, when he referred to having a first in greats. My qualifications are in electrical and electronic engineering. That was the context in which I had to draft the initial reply to parliamentary questions about the telephone system in the east of Scotland when the Post Office was a Department of State.
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Mr. Ian Liddell-Grainger: I pay tribute to the Chairman of the Public Administration Committee, the hon. Member for Cannock Chase (Tony Wright), and the Committee. It was the first Select Committee on which I served as a new Member of Parliament, and I have never been overwhelmed or underwhelmed by the work. A yapping chihuahua might be a better description of it than those offered before, because we never gave up once the teeth sank in. Having been bitten by one, I have some experience of that.
Like the hon. Member for Cannock Chase, I believe strongly that the privilege of being able to ask questions is fundamental to our job as parliamentarians, not just in our constituencies but across a wide spectrum. I was not a member of the Committee when it started its deliberations, and came in when it was halfway through its report, as did the hon. Member for North Cornwall (Mr. Tyler) for the Liberal Democrats and the hon. Member for Luton, North (Mr. Hopkins) for Labour, but the matter is an ongoing sore that returns time and again. It cannot be beyond the wit of any Government, regardless of complexion, to deal with it, because the officials remain the same for a new Government, so the basis for answering questions already exists.
The Committee expressed the hope that
"we shall not again have reason to complain that Departments are not citing the Code of Practice".
I have had experience of having to badger Departments. I have written to Ministers but not received replies. Although those were not parliamentary questions, I had to resubmit them to Ministers asking for an answer. That is frustrating, and I am staggered by the number of Members who have complained about the quality of answers, the non-answering of question and the number

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of points of order that Members have to make to the Speaker to try to force Departments to reply not only properly—the hon. Member for Cannock Chase referred to that—but in a way that makes parliamentary sense. I asked a question recently about a matter in Somerset, which was natural as I represent a Somerset constituency. I received an answer that was relevant not to my constituency but to the midlands. That may be a lovely idea, but it did not help me and it discredits the system.
The hon. Member for Cannock Chase made an interesting point about helping the Government to be more open. I believe strongly in the ability of Members of Parliament not just to hold the Government to account from the Opposition Benches or support them from the Labour Benches, but to make the Government better. Our ultimate scrutineers are people not in this place but outside the building—our constituents.
I want to draw the attention of hon. Members to the citing of relevant exemptions to which reference is made in paragraph 14 on page 9 of the report. There is a fundamental breakdown concerning the code of practice, access to Government information and relevant exemptions. It is vital that any Government should have an opt-out, but the reason for wanting it should be explained precisely. If the Government want an exemption, they must explain precisely why they are invoking it. Otherwise, they not only do discredit to themselves, but they confuse Members of Parliament.
The back of the report cites page after page of complaints from Members because the Government have asked for exemptions but have not explained why they are necessary or relevant. The report states on page 10:
"Our frustration on this matter is easily gauged by the fact that this is the third time we have made such a recommendation. Despite twice recommending this before (and twice having it accepted by the Government), we recommend again that where departments withhold information under an exemption of the Code of Practice they cite the relevant exemption in their written answers."
I ask the Minister to look at that carefully, because I believe that it is the fundamental problem.
Brian White: The hon. Gentleman is making an effective case about the number of civil servants. Can he explain how his party, which would wipe out most of those positions, would provide answers in the future?
Mr. Liddell-Grainger: Luckily, as the hon. Gentleman knows, I am neither the leader of my party nor at present on the august Benches in front of me. As a humble Back Bencher, I believe that I can safely say that that will not be the case.
There is another area that I found deeply frustrating. The hon. Member for Cannock Chase and the Committee were considering targets. We asked parliamentary questions to try to tease out from the Government information about them. Time and again we asked Departments to come up with the number of targets and what they were. Hon. Members who were on the Committee will remember how frustrating that was, because we never got the same answer twice.
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I asked copious questions. I believe that the answer we ended up with was about 700, but many were sub-targets. We never got an exact number for each Department. The poor old Department for Work and Pensions is in for it today, because again it was one of the main offenders. The Committee was trying to look into the matter of Government targets, which went right across the spectrum, but could it get an answer? I do not believe that we ever got to the bottom of it. There were no exemptions. There was no reason why we should not have received answers. It was the Government's manifesto policy that there would be targets. There is no problem with that—everyone has targets—yet we could not get to the bottom of the matter.
The report is a fundamental step in the right direction, but I have a horrible feeling that the Committee, under the chairmanship of the hon. Member for Cannock Chase, will consider the issue time and again. The Government have a fundamental problem. He is right about unnecessary secrecy. The parliamentary question system is absolutely vital to the role of a Member of Parliament, but until the Government realise that that is the case and that they cannot just send letters saying that the answer is in the Library—we have all received those—or send answers that are not satisfactory or relevant, this problem will continue.
The reply from the Government is very good, but one could take out seven of the 14 pages of the report to get to the salient points. If I were the Secretary of State for Education and Skills, I might say that there is a lot of waffle but little substance, because the Government have missed an opportunity. We were asked by Members to put forward questions on exemptions, the quality of responses, the role of Departments, and the background thinking. That is not rocket science but straightforward stuff.
The Government have missed a golden opportunity to say what they could do for the long term, and their reply is a stop-gap. Why do we not have a commitment for the long term? In five years' time, we may be sitting here talking about the same thing. In fact, I guarantee that we will. That is not acceptable. I would like to tease the Minister slightly by asking why he does not give a commitment rather than merely a "holding answer" to the Committee, so that he and Opposition Members do not have to come back and go over this again. I am afraid that we will sit here for quite some time every year, unless we get this right.
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Mr. Kelvin Hopkins: I am pleased to have an opportunity to speak. Hon. Members will note that I was not a Committee member when the report was prepared, but I am delighted to be a member now. It is a very fine Committee, and I pay a particular compliment to the Chairman, who does a splendid job in Committee and when he presents our reports to the House. His speech today was another example of what a first-class Select Committee Chairman should be like.
I was not a member, but I had strong views on the report, partly because I have worked in bureaucracies for many years. Most significantly, 35 years ago, I started work at the Trades Union Congress. At the

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TUC, the kind of disciplines that were imposed on us bureaucrats, writing letters for Vic Feather, Len Murray and others, would not have allowed us to get away with the things that Departments get away with. There is not only secrecy and resistance to releasing information, but sloppiness. I hope that standards are raised and maintained.
I feel that standards have fallen drastically compared with those of the past. One reason for that feeling is that I used to write many letters on behalf of the TUC to Ministers and officials. The responses that we received 30 years ago were infinitely better than those that we receive now.
A very fine general secretary called Walter Citrine, of whom many of us will have heard, modelled the bureaucracy of the TUC on the civil service. I remember being able to go to the filing system and look up letters that had been sent to the TUC in 1929. Everything was in order. I read letters from Winston Churchill, Sidney Webb and Presidents of the Board of Trade from the 1920s and 1930s. They were all there and all in order; one could find anything at any time.
I did not have a first in greats but I had a university degree, and I thought that I could write English. I was on a very steep learning curve, however, and if a letter was not up to standard, a line was drawn through it and I was ordered, "Do it again, and write it this way." Very quickly, one learned to write a proper letter, and we had a certain pride in the standard of correspondence that the TUC put out.
We were modelled on the civil service, but in recent decades there has been a lack of concern about Members of Parliament and the issues that they raise. There is a certain kind of writing down of Parliament and, more importantly, of the people who elect us, which is now all to do with central Government and what a Minister, and in particular Downing street are concerned about. Members of Parliament are considered lesser people and Parliament a lesser institution in the eyes of Government. The report betrays that, and it is something that must be corrected.
I may be old-fashioned. When I went from the TUC to the National and Local Government Officers Association—NALGO, as was—and found that there was nothing like the same discipline there, I was disappointed. People thought that I was almost authoritarian and militaristic in my approach to correspondence and bureaucracy. Information and policy are precious, however. Words must be weighed; words are important in politics. If we do not have those disciplines in politics, it will gradually deteriorate and disintegrate. We have a proud tradition of discipline in our bureaucracy that we ought to preserve.
As a Member of Parliament and as a member of the Committee before and at the time that the report was produced, my experience was very varied. Some Ministers and some Departments behaved very well, so that one received good responses; others did not.
I remember a letter that I received—I shall mention by name those who responded well and miss out the names of those who did not, to save their embarrassment—from my noble Friend Lord Rooker when he was Pensions Minister. It was clearly written by a civil servant, as is the nature of things, but the way in which it was written clearly reflected the views of the Minister
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and his style. I could read it aloud and it sounded like my noble Friend speaking to me. It was trenchant and it had an edge and a bit of abrasion—just what I would expect from Lord Rooker. It answered the points that I had made; I did not agree with his point of view, but it was a proper answer, which was clearly from a Minister, in his name and in his style. That was the best example.
We then had the feeble responses. I have had several of those over time, written not by somebody with a first in greats, but by somebody with experience as a party press officer, writing a simple press release or a bit of spin for the press. That is not good enough either. The response should be serious political analysis and a serious political answer to issues that Members have raised. I would look forward to a clever answer from someone with a first in greats. Jousting with such a mind would be challenging, but those answers are not like that.
Mrs. Annette L. Brooke: Does the hon. Gentleman think that the answers might vary according to who asks the question?
Mr. Hopkins: I thank the hon. Lady for her intervention, and I was about to make that point. Some questions to the Ministers are of the nature, "May I congratulate my hon. Friend the Minister on once again walking on water?" I do not tend to ask that kind of question. My questions tend to be challenging. I say, "I take a different view from the Government on this. What does the Minister think about these serious points and statistics?" Again, the nature of the questioner and the nature of the question make a big difference to the response.
I do not ask walking-on-water questions; I ask challenging, difficult questions, which are sometimes full of awkward statistics about underfunding of public services. It is the job of civil servants with their firsts in greats and my colleagues who lead their Departments to respond to difficult questions. As a Member of Parliament, I think it absolutely right that I should ask difficult questions, even if I ask them of Labour Ministers.
In addition to the feeble answer, there is the late response. I wrote to the Home Secretary following a request to do so by the chief fire officer of Bedfordshire, who was concerned about the lack of sprinklers and the fire risk at a place called Yarl's Wood. Yarl's Wood is not in my constituency, but all the Members of Parliament in Bedfordshire were asked to write to the Home Secretary—I am sure that the others also did so. I dutifully wrote to the Home Secretary, but I did not get a reply until about five months later. The short letter merely said, "The matter is under review." Yarl's Wood burned down some weeks later. The matter was publicised in the press because someone—not me—leaked the information. The lateness and lack of seriousness of the reply predated a matter of serious national importance. A little more attention to detail on such issues and a less sloppy approach might have saved Yarl's Wood millions of pounds. We are pretty sure that nobody died at Yarl's Wood, and I hope that that is the case.
Finally, there is the answer where one does not receive a reply at all. Again, I will not mention the Minister's name, but he is one of my hon. Friends. I wrote a

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challenging letter about public funding. Not only did I not receive a reply from the Minister, but some six months later I received a humble, apologetic reply from the permanent secretary no less. I did not expect to receive a letter from someone so elevated—a letter written by a junior civil servant and signed by the Minister is fine. The permanent secretary apologised and gave some kind of answer, but he did not really respond to my points, which means that either the Minister was never told or the civil servant responsible lost the letter. If the letter fell off the civil servant's desk and was dug up later on, he would think, "Oh God, I have got to reply to this awkward-squad Member of Parliament asking about funding." I hope that this was not the case, but perhaps the Minister was so irritated by the tone of my letter that he decided not to bother. I am sure that that was not so, but it is at least possible. However, the Minister and I debated the matter on another occasion.
Something clearly went wrong. That would not have happened at the TUC in my day—if a member of staff had got to that point, his job would have been on the line. Indeed, one or two people who repeated that kind of poor performance at the TUC lost their jobs because they were clearly not up to it. These are matters of discipline and rigour.
Mr. Liddell-Grainger: I am following the hon. Gentleman's point, but perhaps he would look slightly further. One of the big problems is that the TUC is a coherent unit—it is quite small—while some Departments are vast and therefore much more unmanageable. Many questions go out across the United Kingdom to get replies—from the Government office for the south-west, in my case, or from wherever. It is therefore much easier for things to go astray and get lost. Does the hon. Gentleman agree?
Mr. Hopkins: I do. However, that simply makes the case for more rigour, for more people taking responsibility, for good management and for adhering to rules. Let us take armies as an example: one can say, "Yes, I know we lost the battle, but it's such a big army and we couldn't really keep track of everything." That is not an excuse. I am talking about military matters because I know that the hon. Gentleman has some experience in such things. As a nation we have to get a grip on our bureaucracies, just as we do on our armies, to ensure that they work properly. My brief experience in this place has suggested that it does not work very well in some areas. The report highlights that, and there have been a number of complaints from other Members.
I want to return to the point made by the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) about the nature of questions and questioners. Some of us do ask difficult questions and some of us are sometimes challenging, even to Ministers on our own side. We have big debates about big issues within parties as well as between parties and across the House. One debate this afternoon is causing a certain amount of stress in Government party circles. However, the job of an MP is to ask difficult questions. For example, if my local police force does not have enough money and
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cannot properly police areas of my constituency, it is my job to go on and on until I get it enough money, and I am not going to ask easy questions, because there is no point. That is just a waste of breath. On the other hand, it is nice occasionally to congratulate a Minister on doing a good job, and I have done that from time to time as well.
Getting such things right is not, to use a cliché rocket science. It is simply returning to some of the disciplines that I think we used to have; some of the disciplines that I have seen and experienced in action. Some 35 years ago, and slightly after that, I used to correspond regularly with civil servants and Ministers. My impression is that standards have fallen severely and need to be raised. I hope that the report and the continuing work of our Select Committee will ensure that standards are raised and maintained for the foreseeable future.
Mr. John McWilliam: Is the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) going to attempt to catch my eye?
Mrs. Brooke: No, I am not.
Mr. John McWilliam: In that case, I will call the hon. Member for Milton Keynes, North-East (Brian White).
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Brian White: First, I apologise for my lateness. However, I was on the Committee when the report was drawn up. I will be brief as I realise that the hon. Member for North Cornwall (Mr. Tyler) wishes to speak.
I have to disagree slightly with my hon. Friend the Member for Luton, North (Mr. Hopkins). There is a great temptation to feel nostalgic for some golden era that did not really exist. There is a myopic view that somehow it was wonderful then and it is terrible today. I do not accept that. A lot more is happening today, with more information and more channels available. We have a different style of writing and it applies to a different set of people. We no longer have the same little elite talking to the same little elite.
Mr. Hopkins: I appreciate that I may have a rosy view of the past, being an ageing sentimentalist. However, I said that some Departments are much better than others. If we could raise all Departments to the level of the best, we might get somewhere.
Brian White: I do not dissent from that at all and have a couple of suggestions. Members are often frustrated when Ministers say that they will write and put a copy in the Library. We have ministerial statements in Hansard. It would be extremely useful if the letters that go to the Library could appear in a section in Hansard, like ministerial statements, so that other hon. Members could see the answers to those questions. Ministers would still be able to write to the hon. Member and to put a copy in the Library, but other hon. Members going through Hansard would be able to see the responses.

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One of my problems with the system of parliamentary questions and ministerial answers is that it is difficult to work out the boundaries between Departments. When we ask the same question of different Departments, we either get the same answer from every Department, including the commas in the same places, which does not tell us anything, or we receive an informative answer from some Departments but not from others. I praise the Government for the way in which they are using Westminster Hall for cross-departmental questions, but the cross-departmental answering system for parliamentary questions needs to be reassessed.
My hon. Friend the Member for Cannock Chase (Tony Wright) mentioned the ideal parliamentary answer. I was at a dinner with Robert Armstrong—he of the terminological inexactitude—when he said that the ideal parliamentary answer is like that received by the guy in Wales who, when he stopped and asked a local person, "Where am I?", was told, after some thought, "You are in a car." It was the perfect parliamentary answer in that it was totally accurate, it was complete and it did not tell him anything that he did not already know. That was an interesting definition of a parliamentary answer.
On cost, parliamentary answers often say that the question is too expensive to answer. However, when we look back to the previous year, we see that there is an answer to the same question. That frustrating inconsistency causes much concern. Will the Minister consider situations for which information is not available, even though it has been previously?
Finally, a lot of the trouble is caused by the design of systems. When they are designed, means should be specified from the start to enable data and information to flow from those systems. Will the Minister, through the Department's review of procurement and IT systems, ensure that accountability is as much a part of the specification as delivery? In that way, a lot of the frustrations of parliamentary questions would be avoided.
Mr. Hopkins: I agree strongly with my hon. Friend about systems. My local authority housing department can, at a moment's notice, show on screen all the letters that it has received from me and when it replied to them. As I said, it is not rocket science. I am sure that similar systems could easily be applied to hon. Members' letters to Departments of State.
Brian White: There are many more parliamentary questions than letters that local authorities have to deal with, but the point is well made. It boils down to using forethought when designing systems. I urge the Minister to take that on board in the guidelines that he is considering. It is important to recognise that there have been some improvements since the report. The Government's response was right. We need to ensure that the way in which Departments react to Government guidelines continues to improve.
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Mr. Paul Tyler: I am glad to follow the hon. Member for Milton Keynes, North-East (Brian White) and agree with the practical points that he made, in particular putting into Hansard the texts that
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are to go to the Library, which is less accessible to most hon. Members. However, I have to take up one point. When we debated these matters on 21 March 2002, the hon. Member for Cannock Chase (Tony Wright) correctly ascribed the anecdote about the driver in Wales to my predecessor as a Liberal Member of Parliament, Mr. David Lloyd George. It was he who, perceptively, said that that was precisely the way in which parliamentary draftsmen approached the issue of parliamentary questions.
Brian White: I stand corrected.
Mr. Tyler: It was on a previous occasion. In any event, I am grateful for the points that the hon. Gentleman made.
Tony Wright: To be accurate, we are talking about the same Lloyd George who was the greatest seller of parliamentary honours in our history. That prompted the Committee to take an interest in these matters.
Mr. Tyler: I warmly endorse the congratulatory note in the hon. Gentleman's voice, because the Government and their Conservative predecessor have conducted the process far less openly and transparently than Lloyd George did. I hope that his Committee will consider the issue seriously, because it is important.
My point was that even David Lloyd George could see that there was something inherently wrong with the civil service's approach to the problem. I warmly endorse everything hon. Members said on the climate in which the problem has been allowed to get worse, not better.
I congratulate the hon. Member for Cannock Chase and all members of his Committee on their assiduous pursuit of the issue. I have two concerns. The first may be of limited interest at the moment, but in a week or two, it may be extremely important. Who knows? The Chairman of the Committee implied that the openness that was so evident in the Hutton inquiry, but that sadly is not so evident in the parliamentary proceedings, did not lead to the sky falling in. As has been said, "Not yet." He pre-empts the outcome. It is extremely important for us to recognise that the parliamentary procedure by which the matter was scrutinised was insufficient, and it had to go outside to a totally independent inquiry for us to get anywhere near the truth.
Brian White: Select Committees do not have access to some of the papers that Hutton had. We should therefore be considering that part of the process, rather than the answering of parliamentary questions and ministerial statements.
Mr. Tyler: I entirely endorse that suggestion. I hope that after the Hutton inquiry, the hon. Member for Cannock Chase and his Committee will have an opportunity to think carefully about ways in which Parliament can perform its scrutinising role and hold the Government more effectively to account in the light of those decisions. My only concern about what the Chairman said this afternoon is the snail's pace of reporting back to the House. As he said, the Committee is now considering the two years subsequent to the ones

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that we are considering. I have concerns about several, more recent issues. I do not blame the Committee, but I do blame the House authorities and the Government for the way in which these matters come back to the House. We must be able to accelerate the process, because what we are discussing is ancient history, which is most unfortunate.
I draw particular attention to paragraph 45 of the ninth report, which mentions an issue that was discussed this afternoon and that I raised in the House on 11 June 2002. It refers to
"the internal guidance of the Department of Work and Pensions (DWP) claiming that civil servants were instructed to determine whether a Member was 'friendly' before deciding how to respond."
In paragraph 47, the Committee took a very strong view. It says:
"We believe that Members have a justifiable concern that the standard of answer to parliamentary questions may vary between departments, and potentially, may vary between different Members…We will report our findings as part of our next annual report on parliamentary questions."
I am disappointed that the Chairman could not refer to that. I presume that that is one of the matters that is still being discussed.
As the hon. Member for Luton, North (Mr. Hopkins) and my hon. Friend the Member for Mid-Dorset and North Poole (Mrs. Brooke) said, it is a scandal that, too often, the input into the answer of a straightforward parliamentary question takes account of the political allegiance or the degree to which the Member is a loyal Government Back Bencher, rather than the integrity of the answer. That is a serious issue. It was serious then, and it is serious now. I hope that the Committee and the Government are considering it very carefully.
One of the Committee's recommendations, to which the Government's response also refers, mentions a recommendation of the Procedure Committee. I am bound to say that I have real misgivings about relaxing or making concessions to the Government on the number of parliamentary questions until we have greater transparency and the Committee's report, which deals with the sort of concerns expressed by hon. Members on both sides of the Committee, is fully implemented. The House should not give way until the ethos to which the hon. Member for Luton, North referred has markedly improved. I and my colleagues are dubious about making such concessions. We want to be sure that the House gains a real increase in transparency, which will allow us more effective scrutiny and accountability, before making any such concession.
Mr. Liddell-Grainger: The Clerks of the House talked to the Select Committee about that matter. They have seen a massive growth in the number of questions and they point out, in an entirely honourable way, that many Members use questions in order to say to their constituents, "Look, I have asked an awful lot of questions." I hope that the hon. Gentleman agrees that that is not what PQs are designed for.
Mr. Tyler: I agree with the hon. Gentleman, but there is a happy medium. We may want to have the restriction suggested, but the quid pro quo should be that all
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Ministers should be prepared to take on board not only the letter of the Select Committee's recommendations but the spirit also. I shall give a number of examples in a moment.
Mr. Hopkins: Is the hon. Gentleman interested in asking whether there has been an increase in letters drafted by special advisers rather than by civil servants? Might not that be part of the problem?
Mr. Tyler: The hon. Gentleman touches on an extremely important point. Indeed, I drew it to the attention of the Wicks Committee because of the important implications. The Wicks Committee has examined the problem, although we have not yet made real progress on the role of special advisers and on ensuring that the integrity and political impartiality of civil servants is properly protected. The hon. Member for Cannock Chase and the Committee recently produced an excellent draft Bill for the civil service. It is long-awaited. Indeed, it was part of the agreement between my party and the Labour party before the 1997 election that there should be such a Bill. It would be inappropriate for me to go off on that tangent during this debate, but I strongly endorse that initiative. It is the answer to the problem.
Brian White: If the hon. Gentleman is praising the report he must know that we praise the role of special advisers, which we put in context. He continues to perpetuate the myth that there is something wrong with special advisers. The report highlights the valuable role that special advisers play in ensuring the political impartiality of civil servants.
Mr. Tyler: Methinks the hon. Gentleman protesteth too much. I have not commented on the role of political advisers, but I have said that it is a proper subject for debate. I am glad that the Committee has considered it. If my memory serves me right, he was alone on the matter, and some sort of minority report was necessary. I shall leave it to him and other Committee members to sort that out.
I will give some examples of precisely what I have in mind. Recently, the Government's real commitment to openness was interestingly revealed by the ombudsman in a response to my hon. Friend the Member for Truro and St. Austell (Matthew Taylor). That interesting case has already been mentioned. The Parliamentary Commissioner for Administration, the ombudsman, ruled on a submission of a colleague of mine about a complaint by a Mr. Rob Blackie against the Cabinet Office. That followed a refusal to give a sufficiently factual basis for an answer to a parliamentary question.
The ruling, which is available in print, stated that all factual information, including briefing notes to Ministers on draft parliamentary answers, should be released into the public domain and that non-factual information should be released if the balance of public interest required it. The ruling also made it clear that, on the issue of non-factual information, each document should be assessed on its merits rather than Departments pursuing a "class approach". It will thus be impossible for a Minister to claim that information does not exist if it does exist, or to ignore for political reasons relevant information provided by civil servants.

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David Hencke, the well-respected correspondent of The Guardian, who reports on such matters, described that as a victory for the Liberal Democrats after a two-year battle with the Cabinet Office. In reality, it is a victory for Parliament, but sadly it underlines the point that has already been made: we should not have to resort to the Parliamentary Commissioner for Administration to do our job properly. We should be able to do it without having to go that far.
It is important for the Government's sake that they fulfil the obligations in question. Otherwise, a stream of requests will go to the ombudsman, which will be far more time-consuming than doing up front what they should have been doing all along. My colleagues and I will be watching carefully to see how Ministers implement the ruling. It will be to their advantage—in cost terms as well—if they are forthcoming with the relevant information rather than waiting for an ombudsman challenge and ruling.
We need some overwhelming evidence that the Government are turning their good intentions into reality. I should welcome hard evidence of the permanent disappearance of the bad habits adopted by Ministers in successive Governments before we agree to any concessions.
On blocking, I asked the Prime Minister on 9 July 2003 what I hope all hon. Members will agree was a perfectly reasonable question:
"how he intends to fulfil his undertaking to make the House of Lords more representative and democratic"—
words, of course, from the Labour manifesto. I was referred to an earlier answer
"to the hon. Member for East Londonderry (Mr. Campbell) on 7 July 2003, Official Report, columns 617–18W." — [Official Report, 9 July 2003; Vol. 408, c. 853W.]
The latter question was specifically and narrowly concerned with the proportionate representation of political opinion in Northern Ireland in a revised second Chamber. That in turn was answered by a reference that went back six months to a reply given
"to the hon. Member for Thurrock (Andrew Mackinlay) on 15 January 2003, Official Report, column 632W."—[Official Report, 7 July 2003: Vol. 408, c. 617W.]
That hon. Gentleman's question was:
"To ask the Prime Minister if it is his policy that the political balance of the House of Lords should be maintained prior to the implementation of legislation completing the second stage of reform."
The answer was a straight bat:
"While the way forward on reform of the House of Lords is still under consideration, arrangements for identifying new members of the House remain unchanged. Membership of the House is kept under ongoing review."—[Official Report, 15 January 2003; Vol. 397, c. 630W.]
That was scarcely very revealing, even on 15 January. Two weeks later—by which time, of course, the Prime Minister had announced a complete change of Government policy and was in favour of a fully appointed House—it would have been misleading. After the debates that took place in the House on 4 February the answer in question was absurdly economical with the truth. To trot it out again, twice, six months after that was not just misleading—it was deliberately designed to deceive the House, and frankly that was ridiculous.
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I hope that the Committee, in its current review of what has been happening in recent years, will consider that sort of example. It does no good to the reputation of the House or the Government. Quite apart from the bizarre attempt to avoid giving an accurate and up-to-date answer, the whole episode appears to demonstrate a refusal to honour the spirit of the promises made to the Committee, and through it to the House, on the issue of ministerial accountability.
Mr. John McWilliam: Before the hon. Gentleman continues, and with the aim of keeping the proceedings in order, will he confirm that he is not implying that the right hon. Member for Sedgefield (Mr. Blair) was deliberately deceiving the House?
Mr. Tyler: I am sure that that cannot be the case, Mr. McWilliam. However, some element of the preparation of answers by those in the Prime Minister's office cannot have taken full account of the six-month delay following the original answer, which meant that the matter had become totally out of date. I hope that even at the highest levels of Government, careful consideration is now under way of the criticisms made by the Committee and by hon. Members of all parties this afternoon.
The Chairman of the Committee raised an issue in relation to questions asked by my hon. Friend the Member for Northavon (Mr. Webb). As he rightly said, an extraordinary situation arose. My hon. Friend sought information that had, I think, been published in a previous year. It was said not to be available, although it was then found that it was available, as the hon. Gentleman said. We cannot have such situations. It may be, as the hon. Member for Luton, North said, that the mechanics—the technical equipment, the methodology—are not in place to ensure that such silly mistakes are not made. I would hope that such matters are receiving proper attention and resources.
The subject of delays is familiar to us all and has caused great concern to the Speaker. Many issues have been raised about delays, so it does not help that, in tackling the subject of delays on questions, the Committee is itself so far behind the experience of Members. Indeed, it has taken from March 2002 until now for the House authorities to find a suitable opportunity to debate such matters, which is a concern.
There are times when Departments use delays deliberately. For example, I mentioned in a previous debate a question that my hon. Friend the Member for Bath (Mr. Foster) had raised. He asked for a decision on funding to fire authorities in England and Wales for additional costs following 11 September 2001. Coincidentally, on the morning of 27 February 2002, the press office of the Department for Transport, Local Government and the Regions—the Department then responsible—issued a news release, No. 2002/0072, entitled "Fire service to get £53 million in new funding". That release said that it was an answer to
"a parliamentary question from David Borrow MP (South Ribble)".
That question had been listed neither in the Order Paper nor in Hansard; furthermore, it was Question 1,623, which was well after my hon. Friend's question, and had a DTLR reference that was 228 after that of my hon.

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Friend's question. The only possible explanation is that my hon. Friend's question was quite deliberately held back until a "friendly" Member who had provided a planted question could get the credit for the answer instead of my hon. Friend.
I am not making a simple party political point: I am saying that hon. Members are all equal in the sight of the Government—or at least they should be. There should not be Members who are entitled to preferential treatment and quicker answers than other Members. With your long experience in the House, Mr. McWilliam, I am sure that if you were an Opposition Member and had found that a Government Member was receiving preferential treatment when you had asked the same question, you would be as indignant as I am. The incident does no good for the reputation of the Government or, indeed, the House.
On maladministration, when we last debated ministerial accountability for parliamentary questions, a Department of Health official had recently been dismissed for repeated falsification of records pertaining to written answers, which stretched back to June 2001. I hope that the Minister will assure us that that could not happen again. What improvements have been made in the Department of Health and other Departments to ensure that there can be no repetition of such incidents? Is there a standard internal audit mechanism in the parliamentary correspondence sections of all Departments? I hope that there is.
The issues are important. As has been said, hon. Members on both sides of the House believe that the Public Administration Committee does an admirable and important job on our behalf. It is perfectly true that our scrutiny of what goes on in the Government will not rise or fall dramatically due to improvements in how parliamentary questions are answered, but it is an element in the important job of accountability. I hope that the Committee's recommendations in the report—indeed, in any reports that will be issued in the next two years—will result in real improvements in the transparency, political integrity and non-partisan approach that we expect from the professional civil service. I particularly hope that we will get more light and less heat out of the system. It would be a welcome development, at least in the short term, if the annual report could appear rather more speedily after the Session in question; if it could be replied to within the time that the Committee's Chairman has said the Government aspire to; and, most importantly, if it could be debated while the period concerned is still fresh in Members' minds, so that we can accurately monitor the Government's record.
It is not satisfactory that we constantly have to raise such issues on the Floor of the House. That is not an effective way of dealing with these problems. It has been a long wait since the previous report, and during that period the improvement we all hoped for has not occurred. Parliamentary questions, whether oral or written, are an important means by which hon. Members hold the Government to account.
The machinery for answering those questions should be improved to a level that is not only genuinely consistent with the aspirations of transparency that we
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so often hear about, but displays the spirit of openness that is called for by Mr. Speaker, by the guidance to Ministers and their officials, and by the Public Administration Committee. I strongly endorse the views of the Chairman of the Committee, and I look forward to an early report on the subsequent years, as he intends.
4.1 pm
Mr. Oliver Heald: I start by echoing the point made by the hon. Member for North Cornwall (Mr. Tyler) that the Committee has been engaged in an extremely important exercise. It is welcome to be able to debate the report today, but we should have been able to debate it more timeously. We should be able to deal with the matter annually, so that the information is totally up to date. The Committee and its predecessor have a proud record going back to the mid-1990s of bringing this matter to Ministers' attention and pressing for improvements. The hon. Member for Cannock Chase (Tony Wright), as Chairman of the Committee, should be congratulated on continuing that tradition.
Parliamentary questions are probably the best tool that a Member of Parliament has to elicit information from the Government, and it is possible, through a series of parliamentary questions, to tackle an issue and really get to the root of what is going on. Having said that, it is nowhere near as effective as the sort of procedure we have seen in the Hutton inquiry, where the powers available to Lord Hutton have been much wider. The ability to conduct serious cross-examination of a witness, whoever that witness may be, is something that our system still does not really provide for.
It speaks volumes that when the Committee wrote to all Departments asking them to explain the reasons behind their refusal to provide information in response to questions, after seven initial responses and a lot of prompting, the final response was only received 10 months later. We should not think of that as some rare aberration, which does not reflect a deep-seated malaise in Government circles.
My hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) raised the issue of the exemption that is used to deny access to information requested in the question. That has been raised three times by the Committee, and the tone of frustration that he described, which comes through clearly in the paragraph of the report that he cited, is all part of the same picture. It is not just in parliamentary questions that we see such examples. As the hon. Member for North Cornwall said in quoting from the ombudsman's case involving the hon. Member for Truro and St. Austell (Matthew Taylor), what we are seeing is a culture in operation.
That was true of a recent ombudsman's case involving my right hon. and learned Friend the Leader of the Opposition. It did not involve a parliamentary question, but the issues are similar. My right hon. and learned Friend asked for early access to some of the detailed technical documents underlying the Treasury's assessment of the euro. The Government denied that request, but what the ombudsman said about the way in which the request was treated is interesting.
The ombudsman said that the Treasury did not regard the Leader of the Opposition's letters as being a request for information and thus for consideration under the code. The ombudsman's letter continues:

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"However, this seems to me to put far too literal an interpretation on Mr. Howard's letter. It is clear that his purpose in seeking a change of approach was to achieve early access for himself and the wider public to the information contained in the studies. I therefore consider that the Treasury should have treated Mr. Howard's letters as information requests to be considered under the Code, and I criticise them for their failure to regard them in that light."
The ombudsman described in the next paragraph the permanent secretary's comment and said:
"since Mr. Howard's request concerned the release of specific documents rather than information, it fell outside the terms of the Code. That is not so. While the Code gives no right of access to documents per se it does give a right, subject to exemption, to the information contained in them; and both the present Ombudsman and her predecessors have taken the view that the release of actual documents is often the best way of making available information that is recommended for release."
The point is that the permanent secretary interpreted the rules literally and narrowly, saying that as my right hon. Friend the Leader of the Opposition was asking for a document, he could not have it, instead of focusing on the importance of trying to provide information to someone who was seeking it in the public interest. That is not the only example of such an approach to the Leader of the Opposition. When he was conducting his campaign on Government targets, every possible excuse was used to refuse to answer parliamentary questions until the Opposition came up with their own figure for the huge number of targets, at which point it was suddenly not a matter of disproportionate cost. The purpose of that approach was to hide the rattling skeletons in the closet.
It is welcome that the Government now say that they will provide information to the Committee within 20 days. Let us hope that that happens. The background is considerable continuing dissatisfaction among Members about the way in which the Government handle such matters. The Procedure Committee undertook a questionnaire and found that 60 per cent. of Members thought that written questions were effective in bringing information into the public domain, but more were dissatisfied with the speed of answers than were satisfied: 45 per cent. were dissatisfied and 44 per cent. were satisfied. In addition, more were dissatisfied with the quality of answers—28 per cent.—than were satisfied.
I shall give some examples of delay. The Opposition Chief Whip, my right hon. Friend the Member for Penrith and The Border (David Maclean), put a written question to the Home Office on 27 January 2003, to which he received a reply on 19 November, 10 months later, stating:
"I will write to the hon. Member and place a copy of my letter in the Library."—[Official Report, 19 November 2003; Vol. 413, c. 1028W.]
Continuing the theme of Whips, on 6 March the Opposition deputy Chief Whip, my hon. Friend the Member for West Derbyshire (Mr. McLoughlin), asked a question of the Home Office about administrative grants in his constituency. On 19 November, eight months later, he received the same reply.
To give another example from a distinguished source, during the debate on a previous report on 21 March 2002, the hon. Member for Cannock Chase reported the difficulties that he was experiencing in obtaining an answer to a parliamentary question. He said:
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"Mr. Speaker's statement suggested that aggrieved Members could get in touch with the Chairman of the Public Administration Committee. Armed with that fact, I immediately contacted myself about the matter, but I did not know what further action to take."—[Official Report, Westminster Hall, 21 March 2002; Vol. 382, c. 140WH.]
I sympathise with the hon. Gentleman. We need some sort of mechanism that will break the logjam.
The Library analysis for the end of the 2003 summer term shows that four Departments each had 200 questions unanswered when we broke up. The right hon. Member for Birkenhead (Mr. Field) has noted the increased use of holding replies to delay the response to questions and the use of "in the Library" responses to avoid putting material on the parliamentary record. In that respect, it is worth looking again at the Library analysis of the delays that follow the sending of a "will write" reply. The truth is that the Department will not write very soon.
At the end of summer 2003, 177 "will write" responses to parliamentary questions had not resulted in replies, 97 of which—about half—had been tabled more than three months earlier.
Mr. Hopkins: Has the hon. Gentleman any evidence of how many of those questions were politically difficult, or how many of the delays were the result of resource constraints such as understaffing?
Mr. Heald: I do not know. That would be a very useful subject for the Committee to examine in a little more detail when it inquires into the matter again, as I am sure it will. What has been happening in the Department for Work and Pensions is interesting. As the hon. Member for North Cornwall said, clearly it was thought in that Department that it mattered whether a question was "friendly".
When I was a spokesman on health matters, my questions were not answered by the Department of Health, in a process for which an official has subsequently been disciplined. Opposition spokesmen such as the hon. Member for Oxford, West and Abingdon (Dr. Harris) and I were tabling questions and they were being marked off in the Department as having had replies, but we were left wondering where the replies were. When our questions were about when we would get answers on certain matters—I think that I listed about eight or nine, and the hon. Member for Oxford, West and Abingdon listed a good number—the result
was that the Minister looked at the questions and thought, "My goodness, what is going on here?" It is possible, however, that the hon. Gentleman and I were asking quite difficult questions because, as spokesmen, we were well briefed on the issues.
It is important that some of the "will write" replies are published. I do not know whether that is necessary for some of the very long ones, but certainly where there is a useful piece of information, it should come out. I agree with the Committee that there should be a record of those items.
When the Freedom of Information Act 2000 comes into force in January 2005, Members of Parliament will be able to seek information by using freedom of information rights as well as by tabling parliamentary questions. It is possible that hon. Members will test that system. What I cannot understand is why a person

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asking for access under that legislation will be entitled to it within 20 days, whereas a Member of Parliament doing so through a parliamentary question will not have that entitlement. Apparently, that is deliberate. During the passage of the 2000 Act, Lord Falconer said:
"As I said, the terms of this Act do not deal with the relations between a Member of Parliament and the Minister who is being questioned; they deal with a member of the public asking a public authority for information quite separately from Parliament. The Freedom of Information Bill has no part to play in that"—[Official Report, House of Lords, 19 October 2000; Vol. 617, c. 1270.]
It would therefore be possible for a member of the public to write in and be told, "Oh, yes, there is information," and to be given it quite quickly, but for a Member of Parliament to ask a parliamentary question and be told, "Oh, no, there isn't any information," or have to wait 10 months for it. It seems odd that members of the public should have better access to information than their parliamentary representatives. Will the Minister tell us what the implications of that are? If the Freedom of Information Act is setting a standard, surely it ought to apply here.
Turning to matters of commercial confidentiality, there is clearly an element that needs protection, but does the Minister agree that if the Government continue using the public-private partnership approach, on which £50 billion of public money is spent each year, they must be extremely careful how they use the commercial confidentiality argument? I note that since 1997 the percentage of questions that Ministers have not answered on those grounds has doubled. If more use is to be made of the private sector—as hon. Members can imagine, I am not against that—surely there must be some give in terms of providing adequate information to Parliament. That point was also made by the hon. Member for Stroud (Mr. Drew).
Does the Minister agree with the point made by the hon. Member for North Cornwall about the deliberate use of delay being wrong, and that Ministers should not do that? Earlier this week, my hon. Friend the Member for Christchurch (Mr. Chope), who was the Opposition spokesman in a debate on the Traffic Management Bill, asked some questions, the answers to which he wanted for the debate. In the House, he made this point:
"I asked the Secretary of State, in a question that should have been answered today because it was a priority written question, what the level of congestion in inter-urban roads and urban roads is against which he intends to achieve"—[Official Report, 5 January 2004; Vol. 416, c. 115.]
the reduction referred to in the Bill. My hon. Friend also asked a question about street works, but neither of his questions was answered in time for the debate, even though Ministers must have the relevant information, or they would not be introducing the Bill that tackles those issues. Does the Minister agree that it is not good enough for Ministers to delay giving that sort of information, which would inform a debate in Parliament?
It is not the first time that such things have happened. My hon. Friend the Member for East Surrey (Mr. Ainsworth) gave evidence to the Committee that he had tabled a question after Second Reading of the Animal Health Bill in November 2001. He received a holding
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reply. The substantive reply was received only after the debate, and simply referred him to the Secretary of State's comments in the debate that had initiated the question. Therefore, the purpose of the question—to inform debate in Committee—was completely avoided by the Minister's delay.
I suppose that this point has come up time and again, but in 2001 the Speaker made the following ruling:
"The House's legitimate expectations are contained in the 1997 resolution on ministerial responsibility. It is the duty of a Speaker to do what can properly be done from the Chair in support of the resolution. It is the duty of Ministers to act in the spirit of the resolution. The resolution says:
'Ministers should be as open as possible with Parliament, refusing to provide information only when disclosure would not be in the public interest, which should be decided in accordance with the Government's code of practice'."—[Official Report, 28 November 2001; Vol. 375, c. 971.]
Is it all weasel words, or do the Government genuinely believe in having a more open arrangement? We need better to inform our debates. In this modern era, when far more information is available, the public expect a better standard than that shown in the examples that I have described.
Finally, would the Minister care to comment on the suggestion that has often been made that the Chairman of the Committee should have a special role? It should be possible for hon. Members to write to him and for him to pass the letters to the Department asking why information has not been provided. The Government should treat that as a serious matter, and a proper response should be made. That would go at least some way to improve the way in which the system works.
Tony Wright: For the sake of accuracy, let me respond to the hon. Gentleman's nice point about my taking the issue to myself—I am sorry if I did not explain it adequately before. It was because I wanted to take the matter somewhere other than to myself and to help other hon. Members that we started doing precisely what he is advocating. We are now in routine correspondence with Ministers after we receive approaches from hon. Members. On the whole, we receive positive responses, so we can point to progress on that front.
Mr. Heald: The other suggestion was that the Committee should publish the letters if it is not satisfied with the responses that it receives. I hope that that might be part of the procedure. I should be grateful if the Minister outlined more fully the mechanism, how he thinks it is working and how it might be improved.
4.21 pm
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr. Douglas Alexander): I am grateful for the opportunity to debate the issues arising from the Committee's ninth report which, as we have heard, covers the period to 2002, and the first report of the 2002–03 Session on ministerial accountability and parliamentary questions.
First, I pay tribute to the work of the Committee under the chairmanship of my hon. Friend the Member for Cannock Chase (Tony Wright). I echo his words of thanks to all members of the Committee for their endeavours. The Committee has made a valuable

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contribution in recent years to our consideration of the issues before us, and I welcome the fact that in many areas we have been able to respond positively and constructively to its many recommendations. I also take the opportunity to welcome my opposite number, the hon. Member for North-East Hertfordshire (Mr. Heald). It may our first debate together, but I fear that it will not be our last, so it would be remiss of me to do anything other than welcome him to his new post.
I shall try to cover the wide range of questions that has been asked, but before I do so I shall answer the questions that were posed by my hon. Friend the Member for Luton, North (Mr. Hopkins). He made a characteristically insightful speech, drawing on his wide experience at the TUC. We had the full sweep of British history—Sidney Webb, Winston Churchill and Stafford Cripps and their respective correspondence with the TUC. However, I would echo the words of my hon. Friend the Member for Milton Keynes, North-East (Brian White), that it is rather dubious to claim that all things were better in the past and that there has been no scope for improvement in recent years. In my historical research for this debate, I uncovered the answer that was given by one of my predecessors as Minister for the civil service, now Lord Renton. In answer to a question from my hon. Friend the Member for Bolsover (Mr. Skinner) about how many members of the civil service were men and how many women, he replied, "All of them." We have made some progress in recent years.
The Committee's ninth report was published in July 2002; it incorporated data from the 1999–2000 Session. In December 2002, the Committee published a further report, its first for the 2002–03 Session, which included the Government's response to the recommendations in the July 2002 report. As was kindly acknowledged by my hon. Friend the Member for Cannock Chase as Chairman of the Committee, the snapshot of performance and the range of issues covered by a debate such as this inevitably come from some time ago. As he observed, it is a huge time lag. The Committee is working on its next report, covering the 2001–02 Session, and that will be published in the coming weeks. I look forward to seeing that report and to continuing with my hon. Friend our dialogue on a range of important issues.
In his contribution of July 2002, my hon. Friend stated that the Government had accepted the Committee's recommendation that Departments should aim to respond within 20 days to the Committee's annual letter concerning ministerial refusals to answer questions. I understand that most Departments have met that deadline in the most recent exercise undertaken. Nevertheless, today's debate is timely in allowing us to consider the issues afresh. In particular, I hope to update the House on our progress since the Committee first published its recommendations in July 2002.
Before turning in more detail to some of the points raised by hon. Members, I propose to restate the framework within which Ministers operate in accounting to Parliament and in answering parliamentary questions. All Ministers are bound by the principles of accountability set out in the ministerial code. As hon. Members will be aware, that code constitutes the set of standards that Ministers are expected to adhere to in the performance of their duties. Ministers also operate in line with the requirements of the code of practice on access to
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Government information, which was first published in 1994. That has been a matter of some discussion this afternoon. The code states:
"The approach to release of information should in all cases be based on the assumption that information should be released except where disclosure would not be in the public interest, as specified in Part II of this Code."
Of course, from 2005, Ministers will be subject to the requirements laid down in the Freedom of Information Act 2000, which will replace the non-statutory code of practice and provide the public with a statutory right to receive information. I shall return to the points made by the hon. Member for North-East Hertfordshire on that matter.
Let me turn first to the code of practice on access to Government information. I referred earlier to the requirements on Ministers to work within the framework laid down in the code. The code will continue to operate on a non-statutory basis until the implementation of the 2000 Act. In its July 2002 report, the Committee addressed several issues about the way in which the code of practice is used in answering parliamentary questions. In particular, the Committee recommended that
"where departments withhold information under an exemption of the Code of Practice they cite the relevant exemption in their written answers".
As my hon. Friend the Member for Cannock Chase said, that is an important point. The hon. Member for North-East Hertfordshire was gracious enough to recognise strongly in his remarks that the Government accepted the Committee's recommendation in their response published in December 2002. The Committee described that as
"an important step towards openness and the protection of the public interest, and we warmly welcome it".
As our response indicated, in September 2002 "Guidance to Officials on Drafting Answers to Parliamentary Questions" was duly amended to make it clear that the relevant exemption under the code of practice should be cited if information is withheld.
Several contributions, not least the last, focused on dissatisfaction with the quality of answers that have been provided by individual Ministers to Members. Of course, Members can raise their concern with the responsible Minister first and foremost, but the hon. Member for North-East Hertfordshire raised a specific point on the role of the Public Administration Committee in that context. As the Chairman of the Committee reiterated today, the Committee continues to play an important role in championing specific cases on behalf of Members with the relevant Department. I am happy to express on behalf of the Government my gratitude for the hon. Gentleman's continued work and for his recognition today that that work is bearing fruit in the responses that have subsequently come from Ministers.
The hon. Member for Bridgwater (Mr. Liddell-Grainger) made a specific point about placing full answers on the record. He was reflecting comments that were made previously by my right hon. Friend the Member for Birkenhead (Mr. Field) and that the Committee raised in its initial report, about answers that referred the Member to material deposited in the Library rather than including the text in the response itself. The Committee recommended in its report that
"wherever practicable the full answer…should be placed on the official record."

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Those observations were brought out today by the hon. Member for Bridgwater and earlier by my hon. Friend the Member for Milton Keynes, North-East.
As we made clear in our response, the Government agree with the Committee on that issue. However, we also stated that there might be occasions when lengthy material would have to be deposited in the Library as it would take up too much space in the official record. Subject to that caveat, the normal practice will continue to be that information will be placed on the record.
On the other point that was raised—the virtue of having a report every year—I can do no better than return to the original recommendations of the Committee, which state:
"We hope that this report, and those in successive sessions, on parliamentary questions will be debated in the House, either in Westminster Hall or in the Chamber."
Clearly, it is a matter for members of the Committee to determine whether they see virtue in a debate such as this, and for the Government to respond to the Committee's request.
The role of the parliamentary ombudsman has been raised many times this afternoon. As hon. Members acknowledged, the parliamentary ombudsman has an important role to play in investigating complaints under the code of practice on access to Government information, to which I referred earlier. I propose to update the House on the progress that the Government have made in recent months in strengthening their working relationship with the ombudsman in relation to handling cases under the code. As I have said, the Government accepted the Committee's recommendation in its July 2002 report that the relevant exemption under the code of practice should be cited when information is withheld. The guidance to officials was altered in September 2002 to ensure that that point was made clear to them as well.
If a Member is not satisfied with an answer, they can, of course, raise the matter with the Minister. However, if the Member remains unhappy with the response received from the Minister, they may ask the parliamentary ombudsman to investigate under the code of practice on access to Government information. Members present who serve on the Public Administration Committee will be familiar with those aspects of the ombudsman's work.
Let me update the House and members of the Committee on developments that have taken place in the months since the Committee's reports were published in July 2002 and December 2002. Last July, in response to another of the Committee's reports—its third report of the 2002–03 Session, on "Ombudsman Issues"–the Government published a memorandum of understanding between them and the ombudsman's office, which set out an agreed framework for handling future cases arising under the code.
The memorandum makes it clear that all requests for information received by Departments should be dealt with within 20 working days in the case of simple requests. The time can be longer if significant searching or collation of material is required. It also makes it clear that when the ombudsman undertakes to investigate a complaint, Departments are expected to respond in full
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to the ombudsman within three weeks of receipt of the statement of complaint. The memorandum reflects our intention that Departments should be as helpful as possible towards the ombudsman, and our intention to ensure that complaints under the code are dealt with promptly and efficiently.
In Ann Abraham's appearance before the Select Committee on 27 November—
Mr. Hopkins: I have a simple request. Would it be possible to respond to all letters with an acknowledgment card by return of post? That would at least show that all letters had been received and were receiving attention.
Mr. Alexander: That is a characteristically interesting observation. Like many other hon. Members across the House, I have some experience of trying to reconcile the virtue of replying quickly to constituents who write to me with a postcard from my constituency office saying that we are in receipt of the letter, and the potential frustration that simply receiving an acknowledgment letter or postcard could cause. Clearly, Ministers are responsible for the conduct of individual Departments. My instinct is to say that the best way forward is to secure as prompt a reply as possible to the substantive issues in the question, rather than simply create another layer of potential bureaucracy in the system.
I have some concerns, however, in relation to the specific points that were raised, not least with regard to the Department of Health. I will say a word or two about the difficulties that were encountered and the Government's response, but for the moment I will return to the appearance of Ann Abraham, the parliamentary ombudsman, before the Select Committee on 27 November. What she says bears repeating in relation to the way forward, and in particular to how far advanced we are in taking forward the memorandum of understanding that I worked for with the Government through the Cabinet Office, which was agreed with the parliamentary ombudsman. In her appearance, she stated:
"I do think that the Memorandum of Understanding that we agreed with government which was published in July was a positive and constructive move and it is helping us and it is helping government to understand what the Code is about and it is certainly helping us in our discussions with government departments on individual complaints to remind them of their responsibilities. It is a bit early given that that in effect has only been going for a few months. What I am doing is monitoring the situation closely and I would hope after six months of its operation to actually be able to do a proper review of how effective the Memorandum has been".
We look forward to receiving the ombudsman's interim assessment of the operation of the memorandum in due course.
Mr. Tyler: In that context, will the Minister address the recent decision by the Parliamentary Commissioner for Administration—the ombudsman—in the case to which I referred? In terms of the quality, rather than the speed, of responses, does he feel that it is satisfactory for Members to have to go to the Parliamentary Commissioner to get the additional information on which answers are based? Does that not also refer to the point made by the hon. Member for North-East Hertfordshire (Mr. Heald) about the need to consult the

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freedom of information legislation to get speedy and accurate answers in future? It is surely unsatisfactory for the Government's position to be that we, as Members of Parliament, must go to external sources to get what we should be able to get directly from Ministers on behalf of our constituents.
Mr. Alexander: By raising that matter, the hon. Gentleman has anticipated me. First, I will set out the Government's position on the substantive point that he made about some of the recent coverage of the ombudsman's report. Secondly, I will endeavour to address the point, which was also made by the hon. Member for North-East Hertfordshire, about freedom of information.
The release of factual information in response to a code request relating to background notes is accepted, but the Government reserve the right to withhold such information where it is not already in the public domain and where the harm likely to arise from disclosure outweighs the public interest. We remain of the view that if background notes to parliamentary questions are routinely released in entirety on demand, it is likely to constrain the ability of officials to offer frank and candid advice to Ministers. It is not always easy to separate facts from opinions in advice.
I would caution against reading the specific conclusion of the ombudsman's report as a general ruling relating to all matters about background briefing notes for parliamentary questions; it was a ruling relating to a specific question raised. Some of the press coverage of the most recent report by the ombudsman did not accurately reflect the more narrow terms of reference that Ann Abraham set for herself when it was released.
I turn to another point that the hon. Member for North Cornwall (Mr. Tyler) made prior to returning to the substantive point on freedom of information. The Department for Work and Pensions has come in for sustained scrutiny by several Members this afternoon. On the conduct of officials and the role of Ministers in marking of notes when preparing to answer parliamentary questions, I return to the point made by the Committee in its report:
"In response to a number of written questions, the new Secretary of State at DWP, the Rt. Hon. Andrew Smith MP, said 'Guidance notes have been produced for many years to assist officials who help prepare answers to parliamentary questions. Until now they have been produced by officials without clearance by Ministers. The reference in the guidance notes to the question being 'friendly' is not appropriate and has been deleted'. Mr Smith also placed a copy of the guidance in the Library."
There is little that I can add to the comments of the Secretary of State. Needless to say, I endorse entirely the sentiments behind the points that he made.
Mr. Heald: Is there not a case for the Cabinet Office to ensure that there is training throughout Whitehall so that officials understand what is expected of them? Perhaps the Cabinet Office could also look at the guidance, so that we have a proper set of rules and people know what they are doing.
Mr. Alexander: I will certainly consider the point that the hon. Gentleman makes. The Cabinet Office is responsible for the guidance issued, and I will bear in mind what he says in relation to that specific point.
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I offer some reassurance to the House about the more general point that the hon. Gentleman made about the Freedom of Information Act 2000. In essence, the questions from the hon. Members for North-East Hertfordshire and for North Cornwall suggested—implicitly, by quoting the noble Lord Falconer—that hon. Members would be at a disadvantage once the Act was established.
The Act is fundamentally blind to those requesting information, so it would be wholly wrong to suggest that its implementation would systematically and routinely disadvantage those Members of Parliament who wished to raise matters directly with Ministers. The Act does not distinguish as to who seeks information; it certainly does not distinguish between Members of Parliament and members of the community. It places an obligation on public authorities, including Departments, to provide information.
Clearly, parliamentary authorities will want to consider whether there is further scope, and whether in years to come the House authorities should give further consideration to the relationship between Parliament and the Executive in the light of the operation of the Freedom of Information Act. It would, however, be wholly wrong to interpret what I am sure most of us would agree is a significant step towards openness and transparency as disadvantaging Members, when we all stand to benefit from the greater openness and transparency that implementation of the Freedom of Information Act will secure.
Mr. Heald: I am very grateful to the Minister; he is being generous with his time. However, does he agree that the absolute minimum for a Member of Parliament is that they should receive information that is as good as that received by a member of the public who submits a request under the Freedom of Information Act? Surely, the rules on replying to parliamentary questions make it clear that an MP will get at least as much information as a member of the public would when submitting an information access request? I hope that one would get a little more.
Mr. Alexander: The fundamental accountability of Ministers to Parliament is a clear constitutional issue. It is inviolable and is in no way undermined by the implementation of the Freedom of Information Act, so we should not regard it as disadvantaging Members. The absolute requirement of holding Ministers to account to MPs of all parties remains in 2003, 2004 and 2005. Any future consideration that must be given to the nature and speed of Ministers' replies must be based on a clear understanding of the enduring importance of the fundamental constitutional principle that Ministers are accountable to Parliament. I do not accept that the implementation of the Freedom of Information Act will in any way undermine that fundamental right of MPs to hold the Executive and individual Ministers to account.
Mr. Tyler: I am very grateful for the Minister's statement, which is extremely helpful. I thank him for it, and congratulate him on it. However, I hope that he will take back to his colleagues throughout Government a firm commitment that any new methodology necessary to implement the promise that he just gave will be in place by this time next year. I am afraid that all the

185WH
evidence suggests that we often lag behind our own legislation in that respect. He gave a valuable undertaking that parliamentarians will not have less access to information than the general public, for which we thank him, but we need further assurance that that undertaking will be implemented. Hiding behind the House authorities is not good enough.
Mr. Alexander: Kind and characteristically generous though the hon. Gentleman's words are, he is tempting me down a path of being unable to follow through the undertakings that he suggests I have made, which I resist. Let us be clear about what I said this afternoon. I said that the inviolable right of Parliament to hold Ministers to account remains and endures. The Freedom of Information Act will be implemented in 2005. It does not distinguish between who seeks the information. However, there is a role for the House authorities, if they are concerned, to question how Parliament holds Ministers to account in the years to come, but that is a matter for the Public Administration Committee, the Procedure Committee and any other body in the House that may have an interest. I assure hon. Members that Ministers accept their responsibility under the ministerial code. There are also long-standing parliamentary conventions under which we are, and continue to be, accountable to Parliament.
Tony Wright: May I try to be helpful? Surely, if the Freedom of Information Act has the consequence that we all hope for, it will produce a change in the way in which Governments do their business, which will have a good impact on citizens' requests. It will also have a good impact on MPs' requests. The most recent case was published by the ombudsman's office and was mentioned today. Its central point concerns the following:
"I have seen nothing in the papers to suggest that the Cabinet Office have considered the harm test in relation to each individual item of briefing."
In other words, the Cabinet Office did not go through the mechanics of applying the harm test to information that sat inside a class of exemption, and therefore did not do what was required under the code—then the Act. I hope that moving into the statutory territory will ensure that all Ministers, whether they are dealing with Members of Parliament or members of the public, will develop a mindset that will make them predisposed—indeed, in law they will have to do it—to going through the procedures that will result in information getting out rather than ensuring that it does not get out.
Mr. John McWilliam: Order. I remind hon. Members that interventions should be just that. The hon. Gentleman's intervention was almost the length of a speech.
Mr. Alexander: My hon. Friend the Member for Cannock Chase raises a characteristically constructive and important point. Indeed, a process of
186WH
transformation and education is under way across Whitehall with a view to implementing the Freedom of Information Act. In the spirit of candour that results from discussing freedom of information, I can inform the House that only yesterday I held a meeting with a ministerial colleague from the Department for Constitutional Affairs, to discuss the readiness of our respective Departments for the implementation of the Act. I was able to assure my colleague at that meeting that work is being taken forward not only at ministerial level but at official level throughout my Department. I am sure that that is being echoed in all Departments.
In that sense, the rather benign scenario set out by my hon. Friend the Member for Cannock Chase has a reasonable prospect of coming to fruition. Officials and Ministers are undergoing a process of education on the effect of the Freedom of Information Act on the internal procedures and workings of Departments. Continuing progress needs to be made between now and the implementation of the Act. However, significant progress has been made—not least in my Department, to which my hon. Friend referred in his question—and that progress is reflected in other Departments.
The final point that I want to touch on was raised by—
Mr. Heald: Will the Minister give way?
Mr. Alexander: To be fair, I have been generous in giving way and I am keen to make progress, not least to respond to the specific point, raised by the hon. Member for North Cornwall and touched on by the hon. Gentleman, about events at the Department of Health.
In its ninth report of 2001–02, the Committee highlighted events that occurred at the Department of Health during the 2001–02 Session. Following criticism in early 2002 about the time that it was taking to answer PQs, the Department uncovered evidence of what appeared to be the systematic falsification of records in the parliamentary section; it also found some procedural defects in the handling of parliamentary questions. We have heard from at least one hon. Member today who suffered as a result of that systematic falsification. However, as the Committee acknowledged, the Department learned from that experience and has put in place several measures to combat the risk of abuse, and to improve answering times. Of course, those matters are now the responsibility of my right hon. Friend the Secretary of State for Health. I would certainly be happy, if hon. Members wished it, to draw those remarks to his attention.
We recognise the important work that has been undertaken by the Select Committee over a number of years. I assure hon. Members of the Government's continuing response to the matters under discussion. We are determined to continue making progress.
Question put and agreed to.
Adjourned accordingly at twelve minutes to Five o'clock.

TREASURY

  Illegal Meat Imports
  Laura Moffatt
  To ask the Chancellor of the Exchequer what progress has been made in intercepting illegally imported meats in the luggage of travellers entering the UK. [146373]

  John Healey
  Customs took over enforcement responsibility for imported products of animal origin (POAO), including meat, on 11 April 2003 and have made good progress in fulfilling their obligations under the Government's Action Plan 2003–04 On Illegal Imports Of Meat, Other Animal Products, Plants, And Plant Products.

  A letter to stakeholders, prepared by Defra in conjunction with Customs, sets out progress against all aspects of the action Plan. It can be found on the Defra website at: www.defra.qov.uk/animalh/illeqali

  I have placed a copy in the Library of the House.

  Information for preceding years was submitted by Defra in its "Annual Review of Controls on Imports of Animal Products: April 2002—March 2003", a copy of which is also available in the Library of the House.

  Industrial and Provident Societies
  Mr. Gardiner
  To ask the Chancellor of the Exchequer what timetable the Treasury has set for reviewing the audit requirements for industrial and provident societies once the Department of Trade and Industry has completed its review of company law. [145525]

  Mr. Love
  To ask the Chancellor of the Exchequer (1) what proposals he has to amend industrial and provident society legislation to make it consistent with existing company law; and if he will make a statement; [145372]

  (2) what steps he has taken to review the law relating to industrial and provident societies; and if he will make a statement; [145495]

  (3) what plans he has to bring forward proposals to update legislation relating to industrial and provident societies; and if he will make a statement. [145496]

  Ruth Kelly
  The Government are keen to see, where appropriate, a level playing field between industrial and provident societies and companies. We are currently examining our options for taking forward this agenda. However, in order to provide for a strategic, consistent and up-to-date approach between companies and societies, the Government believe that the general modernisation of industrial and provident society legislation in this area should be considered in the light of the DTI's planned major reform of company law,424W
  announced in the "Modernising Company Law" White Paper published in July 2002. The timetable for reviewing the audit requirements will be determined by the timetable for the review of company law.

  Leeds, North-West
  Mr. Best
  To ask the Chancellor of the Exchequer what estimate he has made of the number of families in the Leeds, North-West constituency who will benefit from the child trust fund. [146205]

  Ruth Kelly
  All eligible children born since 1 September 2002 in families awarded child benefit will receive a child trust fund (CTF). Based on take-up of child benefit, it is estimated that virtually all children born will receive a CTF. Projected birth figures by Parliamentary constituency are not available, although figures for actual births and numbers receiving child benefit by parliamentary constituency are available in the House of Commons Library.

  The CTF is intended to encourage parents and children to develop the savings habit. It will ensure that every child, whatever their family background, will have access at the age of 18 when they begin their adult life, to a stock of assets which they can invest in their future.

  It will also help children and their parents to understand the benefits of saving and investment and how to engage with financial institutions.

  Leyton Sixth Form College
  Harry Cohen
  To ask the Chancellor of the Exchequer whether it is his policy that the additional sum for research and development announced in his pre-Budget report will be filtered down to local colleges which have good science study courses; whether he expects Leyton Sixth Form College to gain from the additional funds; and if he will make a statement. [146358]

  John Healey
  The additional spending on research and development announced in the pre-Budget report 2003 arose from improvements to the R&D tax credits schemes for both small and large companies.

  The improvements included a new draft definition of R&D and an extension of qualifying costs. These changes will give companies greater clarity and certainty, as well as broadening the scope of expenses on which the credit can be claimed.

  The pre-Budget report also set out the main findings of the Lambert Review into the links between universities and businesses in the UK and the significant benefits to be gained from greater collaboration. Key recommendations included a new funding stream for business-relevant research and the encouragement of new forms of networks between business people and academics. The Government will make a full response to the recommendations by summer 2004.

  Mutual and Co-operative Businesses
  Mr. Drew
  To ask the Chancellor of the Exchequer what plans he has to change the tax regime for mutual and co-operative businesses. [146497]
  425W
  Dawn Primarolo
  The Government keep all taxes under review and any changes are announced as part of the normal Budget process.

  Offshore Tax Havens
  Harry Cohen
  To ask the Chancellor of the Exchequer what estimate he has made of tax revenue lost to the UK Exchequer in each of the last five years due to tax policies of the administrations of(a) the Channel Islands, (b) the Isle of Man, (c) the Cayman Islands, (d) Bermuda and (e) other Caribbean islands for which the UK Government has a responsibility; and if he will make a statement. [146360]

  Dawn Primarolo
  There is no reliable measure of total tax revenue lost to the UK Exchequer as a result of the tax policies of the administrations of the Crown Dependencies and Overseas Territories. However, in order to minimise tax lost, or at risk, the UK is committed to encouraging the Crown Dependencies and Overseas Territories to match international standards on exchange of information for tax purposes and on fair tax competition and welcomes progress that has been made so far.

  The Government also remain determined to take necessary steps domestically to protect tax revenues and have, for example, introduced legislation to counter various offshore avoidance schemes, and are funding additional activity by the Inland Revenue aimed at tackling the exploitation of offshore trusts.

  Pre-Budget Report Summary Leaflet
  Mr. Prisk
  To ask the Chancellor of the Exchequer how many postal addresses in the UK have been sent(a) a copy and (b) multiple copies of the Pre-Budget Report Summary Leaflet, The Strength to Take the Long-Term Decisions: Seizing the Opportunities of the Global Recovery, of December; and what the total cost of postage was to his Department. [145443]

  Ruth Kelly
  [holding answer 5 January 2003]Individual copies of the 2003 Pre-Budget Report leaflet were distributed to around 4,000 addresses. Multiple copies were distributed to around 30,000 addresses. The costs of postage are included in the costs of distribution which I gave in an answer to the hon. Gentleman's Question 145445.

  Mr. Prisk
  To ask the Chancellor of the Exchequer what the total cost was of(a) printing and (b) distributing the Pre-Budget Report Summary Leaflet, The Strength to Take the Long-Term Decisions; Seizing the Opportunities of the Global Recovery. [145445]

  Ruth Kelly
  [holding answer 5 January 2004]The total printing cost for the 2003 Pre-Budget Report leaflets was around £75,000 and the distribution cost was approximately £110,000.

  All costs have been met from within the Treasury's Departmental Expenditure Limits.

  Red Diesel
  Mr. Mike Hancock
  To ask the Chancellor of the Exchequer how many prosecutions there have been in each of the last five years for which there are records for 426W
  (a) the production and (b) the use of red diesel on which duty has not been paid; what the amounts of duty involved were; and what penalties were imposed on those convicted. [145484]

  John Healey
  HM Customs and Excise's prosecution figures for Hydrocarbon Oil fraud over the past three years, including the number of convictions and the average sentence, are set out in their Annual Report (HC 52) published in December 2003. This also contains figures for the total value of fraud detected and identified.

  In respect of prosecution figures for earlier years, I refer the hon. Gentleman to the answer the then Financial Secretary gave to the hon. Member for Glasgow Pollok (Mr. Davidson) on 30 January 2001, Official Report, column 142W. Prosecution figures cannot be broken down between those for the production of illicit fuel and those for its use, nor between those for frauds using different types of fuels.

  Shared Appreciation Mortgages
  Mr. Pickthall
  To ask the Chancellor of the Exchequer what representations he has received from householders who hold shared appreciation mortgages; and what plans he has to assist them. [145408]

  Ruth Kelly
  I have received a number of representations. I cannot intervene in individual cases nor can I direct firms to take action. But if individuals believe they have been mis-sold a product, they may have recourse to the Financial Ombudsman Service.

  Stakeholder Pensions
  Mr. Willetts
  To ask the Chancellor of the Exchequer if he will break down the figures for the take-up of stakeholder pensions released by the Inland Revenue by(a) earnings, (b) age and (c) gender. [146085]

  Ruth Kelly
  Estimates of the number of individuals contributing to Stakeholder Pensions in 2001–02, broken down by earnings, age and gender are contained in tables T7.10 and T7.11 of Inland Revenue Statistics. The latest versions of these are on the Inland Revenue website: http://www.inlandrevenue.gov.uk/stats/pensions/03IR710.pdf http://www.inlandrevenue.gov.uk/stats/pensions/03IR711.pdf

  Tax Credits
  Mr. Frank Field
  To ask the Chancellor of the Exchequer how many people in receipt of one or more tax credits(a) are paying and (b) are not paying income tax. [146741]

  Dawn Primarolo
  The final annual tax credit awards of families, and estimates of their 2003–04 income tax liabilities, will not be available until their awards are finalised on the basis of their actual incomes for 2003–04.

  Tax Evasion
  Joan Ruddock
  To ask the Chancellor of the Exchequer what measures have been put in place
  427W
  to reduce tax evasion since 1997; and what estimates have been made of additional sums collected as a result. [146328]

  Dawn Primarolo
  Activities designed to counter tax evasion are a normal and continuing part of the Inland Revenue's business. Important measures introduced since 1997 include the implementation of the—`Grabiner' recommendations; Proceeds of Crime Act; Savings Directive; Money Laundering provisions and Production Powers for use in criminal cases. Additionally, specifically funded compliance and enforcement packages have been put in place to tackle fraud and protect the Exchequer from non-payment of tax and other duties. In the 2003 Budget the Chancellor announced additional funding of £66 million over three years for such a package.

  Typically, new measures to counter tax evasion are designed to work within the wider compliance regime and in concert with other measures. Consequently, often no meaningful estimates can be made of additional sums collected as a result of particular measures in isolation. Figures of total estimated additional liability flowing from the Inland Revenue's work tackling noncompliance are shown each year in their Annual Reports, copies of which are available in the House of Commons Library.

  UK-Produced Wine
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list the UK levies applicable to UK-produced wine. [146472]

  John Healey
  UK excise duties applicable to wine are the same irrespective of the country in which the wine is produced. These are applied in bands according to the alcoholic strength of the product as shown in the following tables.

  Most wine is produced in the 5.5 per cent. to 15 per cent. band.

  Rate per hectolitre (£)

  Wine and made-wine

  Exceeding 1.2 per cent.—not exceeding 4 per cent. abv.

  48.91

  Exceeding 4 per cent.—not exceeding 5.5 per cent. abv.

  67.25

  Exceeding 5.5 per cent.—not exceeding 15 per cent. abv.

  158.69

  Exceeding 15 per cent.—not exceeding 22 per cent. abv.

  211.58

  Sparkling wine and made-wine

  Exceeding 5.5 per cent.—less than 8.5 per cent. abv.

  166.70

  8.5 per cent. and above—not exceeding 15 per cent. abv.

  220.54

  Rate per litre of pure alcohol (£)

  Wine and made-wine

  Exceeding 22 per cent. abv.

  19.56

  The final sale price of wine in the UK also includes VAT at the standard rate of 17.5 per cent.

  Work/Benefits
  Harry Cohen
  To ask the Chancellor of the Exchequer what steps he has taken to ensure that people in work will be better off than if on benefits; what timetable he 428W
  has set for increasing the number of people who are better off in work than if on benefits; and if he will make a statement. [146364]

  Dawn Primarolo
  The Government have improved gains to work by reducing the starting and basic rates of Income Tax, and reforming National Insurance Contributions. Recent increases in the National Minimum Wage, which was introduced in April 1999, have also significantly boosted the earnings of low paid workers.

  Tax credits increase the gains to work for working families on low and moderate incomes. The new tax credits improve gains to work for part-time second earners and have extended financial support to many more working families on low and moderate incomes.

  The Government's continuing commitment to making work pay is demonstrated by recent measures in the 2003 Budget and pre-Budget report.

TRANSPORT

  Approved Driving Instructors
  Mr. Swayne
  To ask the Secretary of State for Transport how many responses there were to the Driving Standards Agency's Consultation on Approved Driving Instructors qualifications; and what proportion of the responses came from(a) qualified driving instructors and (b) organisations representing them. [146454]

  Mr. Jamieson
  The Driving Standards Agency issued nearly 3,000 copies of its consultation paper in April 2003. The Agency received 82 responses including from national and local representative bodies for car driving instructors, organisations providing motorcycle training, representative bodies for the road freight and passenger transport industries, the police and those responsible for the administration of justice, road safety bodies, and individual instructors. Of the 82 responses, nine (11 per cent.) were from individual driving instructors and 11 (13 per cent.) from their representative bodies.

  Bridge Strengthening Programme
  Mr. Chope
  To ask the Secretary of State for Transport when the new bridge management system will be operative; and what his latest estimate is of the cost of completing the bridge strengthening programme. [145543]

  Mr. Jamieson
  The information is as follows:

  Bridge Management System

  For motorways and trunk roads, the Highways Agency's Structures Management Information System (SMIS) first became operational in December 2000 and was networked to the Highways Agency's Consultant Agents' offices in May 2001.

  For local roads, the Department for Transport has recently let a contract on behalf of the UK Bridges Board that will produce new advice for local authorities on the management of their bridge stock.
  429W
  Bridge Strengthening Programme

  The cost of the bridge strengthening programme for the motorways and trunk roads in England to meet the EU requirements to carry safely 38 and 40 tonne vehicles from January 1999 was £636 Million.

  The cost of outstanding strengthening and major maintenance for local authority bridges in England was estimated in 2000 to be £750 million. This estimate is currently being revised.

  British Airspace
  Mr. Wilshire
  To ask the Secretary of State for Transport (1) which airlines were banned from using British airspace between January 2000 and December 2003; between which dates in each case; and for what reasons; [146490]

  (2) which airlines are banned from using British air space; and for what reasons. [146491]

  Airline

  Dates of permit restriction

  Reason for restriction

  Aircraft operated by airlines from

  On-going

  Inadequate safety regulation.

  Equatorial Guinea

  Aircraft operated by airlines from Gambia

  On-going

  Inadequate safety regulation.

  Aircraft operated by airlines from Liberia

  On-going

  Inadequate safety regulation.

  Aircraft operated by airlines from Tajikistan

  On-going

  Inadequate safety regulation.

  Star Air Ltd. (Sierra Leone)

  From October 2003

  Adverse ramp inspection findings and concerns about inadequate safety regulation

  RAF-AVIA (Latvia)

  28 March to 26 July 2003

  The airline was using a leased Ukraine registered aircraft but the lease agreement did not properly deal with the issue of operational control or regulatory oversight.

  Enimex (Estonia)

  25 February to 30 April 2003

  The Estonian authorities had identified serious deficiencies with certain aspects of the airline operation but had permitted the airline to continue operating under a temporary Air Operator Certificate (AOC) while those deficiencies were addressed. Permits were refused until the full AOC was restored

  Air Bosna (Bosnia)

  April 2003

  The Bosnian authorities had only issued a temporary AOC as the airline had an number of issues to rectify. Permits were refused until a full AOC was issued.

  Inter Trans Air (Bulgaria)

  August 2000

  Adverse ramp inspection finding on an Antonov 12. Permits refused until corrective action taken.

  Air Memphis (Egypt)

  April 1999 to May 2002

  Adverse ramp inspection findings. There was no response from the Egyptian authorities to the finding, and no further permit applications, until May 2002.

  Cameroon Airlines

  From January 2001

  Non payment of Carriers Liability Act fines for transporting inadequately documented passengers.

  Albanian Airlines

  From January 2001

  Concerns over security and immigration controls at Tirana.

  Central Air Express (Democratic Republic of the Congo)

  From February 2003

  Inadequate safety regulation.

  Air Universal (Sierra Leone)

  From September 2003

  Adverse ramp inspection findings and lack of response from Sierra Leone authorities.

  Kyrgyzstan Airlines

  Summer 2003

  Non payment of Carriers Liability Act fines for transporting inadequately documented passengers.

  In addition, we require permit applicants, where appropriate, to confirm that aircraft 2003 are equipped with certain equipment such as ground proximity warning systems and the airborne collision avoidance systems. Permit applications have been turned down in the absence of such confirmation.

  All applications for a permit are considerd on their merits. The fact that an airline is not listed in the table does not mean that it would necessarily qualify for a permit.

  Civil Servants (Disabilities)
  Mr. Goodman
  To ask the Secretary of State for Transport what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in his Department. [145994]
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  Mr. McNulty
  The UK has one of the most rigorous safety regimes in the world and plays a leading role in seeking to raise international safety standards.

  Any airline from outside the EU or EEA which wishes to pick up or put down passengers or cargo in the UK requires a permit from the Secretary of State. It is a condition of the permit that the airline should be operated in accordance with international safety standards established by the International Civil Aviation Organisation. If we have evidence that international standards are not being met a permit may be refused or revoked. Permits may also be refused for other reasons, such as non payment of fines for offences under immigration legislation.

  Since 1 January 2000 a number of airlines have had applications for permits turned down, or would have had an application turned down if one had been received, because of failure to meet ICAO standards or other concerns. These are listed in the table as follows.

  Mr. McNulty
  Statistical information about senior civil servants with disabilities is available on the Civil Service Statistics web-site at: http://www.civil-service. gov.uk/statistics/documents/pdf/disability-oct03.pdf

  As there are less than five members of the senior civil service in my department with a disability, the actual number is not published in order to protect the privacy of the individual in line with exemption 12 of the "Code of Practice on Access to Government Information".

  Driving Tests
  Mr. Damian Green
  To ask the Secretary of State for Transport what representations he has received about the average waiting time for a driving test; and if he will make a statement. [145331]
  431W
  Mr. Jamieson
  The average waiting time for a practical car test in November (the last month for which there is full data) was eight to seven weeks, against an annual national target of six weeks.

  Figures for the rest of this financial year are:

  Month

  Waiting time (weeks)

  April

  8.8

  May

  9.4

  June

  9.3

  July

  9.8

  August

  11

  September

  10.1

  October

  9.5

  During this period of high demand for practical driving tests the Driving Standards Agency, the executive agency of the Department responsible for conducting driving tests, received some 220 written representations about the waiting time.

  Mr. Damian Green
  To ask the Secretary of State for Transport what estimate he has made of the cost of introducing compulsory hazard perception tests for existing approved driving instructors. [145335]

  Mr. Jamieson
  The consultation paper issued by the Driving Standards Agency in April 2003 contained a draft Regulatory Impact Assessment of the costs of introducing hazard perception testing into the standards supervision arrangements for existing approved driving instructors. The letter issued by the Agency in December that announced our decision contained an Assessment which had been amended in the light of consultation.

  The direct costs to instructors who prepared thoroughly for the new assessment should be minimal. No fee will be charged for the first attempt at the test and training and information support have been supplied free. An instructor will have up to 12 months to take the test at a nationwide network of centres. An instructor who was unsuccessful on the first attempt would be charged £50 for a re-test.

  Mr. Damian Green
  To ask the Secretary of State for Transport if he will publish the responses to the consultation paper, "Driving Test Fees and Other Matters". [145336]

  Mr. Jamieson
  The Driving Standards Agency published a response to consultation letter on 5 December 2003. This summarised the 82 responses received. Copies of the letter were deposited in the House Libraries.

  Where those who responded indicated that they had no objection to their response being made publicly available, the Agency will on request supply copies of individual responses.

  M1 (Mill Hill)
  Mr. Dismore
  To ask the Secretary of State for Transport if he will make a statement on the closure of the access road to Gateway Services on the M1, from Ellesmere Avenue, Mill Hill. [146616]
  432W
  Mr. Jamieson
  The access road is not a public highway. It is temporarily closed during the installation of automatic barriers designed to restrict use to authorised users only. There has been excessive use of the access road by motorists taking a short cut through the service area to join the M1 and there have also been repeated incidents of fly-tipping.

  Mersey Tunnel
  Mr. Frank Field
  To ask the Secretary of State for Transport when the date of the inquiry into the proposed increase in the Mersey Tunnel's toll will be announced. [146744]

  Dr. Howells
  The Merseyside Passenger Transport Authority and Executive (Merseytravel) has withdrawn its application for an Order to revise the Mersey Tunnels' tolls as it has been able to secure alternative funding to cover the initial cost of constructing emergency escape refuges/passageways in the Queensway (Liverpool/Birkenhead) Tunnel. As a consequence, an inquiry is no longer required.

  Road Accidents
  Mrs. Calton
  To ask the Secretary of State for Transport what steps are being taken to reduce the number and seriousness of incidents of motor vehicles striking railway bridges. [146220]

  Mr. Jamieson
  Many measures have been taken to prevent overheight vehicles striking bridges, including improved signing and conspicuity of low bridges, and regulations requiring that the vehicle's height be displayed in the cab. Despite these measures bridges continue to be struck. Such strikes can cause disruption to road and rail traffic, even for minor incidents, and a serious incident could cause injury and damage. The Department let a research contract last year to investigate the causes and possible prevention of bridge strikes, with the aim of identifying which available measures are likely to be worth pursuing so that drivers follow a route that is appropriate for their vehicle. My officials will be discussing the research findings and possible future steps with a wide range of stakeholders who meet with the Department in the Bridge Strike Prevention Group.

  Measures to prevent vehicles from striking bridge parapets on roads over railways are being pursued as part of the general programme to manage the accidental incursion of the railway by road vehicles, following the accident at Great Heck, near Selby in February 2001 and the publication in February 2003 of the Department's report, "Managing the Accidental Obstruction of the Railway by Road Vehicles ".

  Telecommunications Industry
  John Robertson
  To ask the Secretary of State for Transport (1) what plans he has to consult Ofcom in connection with the impact on the telecommunications industry of the Traffic Management Bill; [146329]

  (2) when the next meeting will be held of his Department's working group of representatives of highways authorities and utility companies; and whether Ofcom will be represented at the meeting. [146330]
  433W
  Mr. Jamieson
  During 2003, my Department hosted a series of meetings of the Highway Authorities and Utilities Committee (HAUC) Legislation Working Group, which was set up to consider possible measures for inclusion in the Traffic Management Bill. Those represented on the group included highway authorities and utilities, as well as the various utility regulators such as Oftel. The next meeting of the Group is on 15 January 2004 and those attending will include the new regulator body Ofcom. In drawing up the Bill we have looked closely at its possible impact upon the telecommunications industry and shall continue to do so as the Bill progresses through Parliament and as we draw up the secondary legislation which will be needed to implement some of the Bill's provisions. We will be involving Ofcom closely in this process.

  Terrorism
  Mr. Ancram
  To ask the Secretary of State for Transport what assessment has been made by his Department of terrorist threats to civil aircraft in flight over Saudi Arabia. [145654]

  Dr. Howells
  The Government keep the threat to civil aviation in all countries, including Saudi Arabia, under continuous review.

  Traffic Management Bill
  Mr. Chope
  To ask the Secretary of State for Transport (1) what the level of congestion on(a) interurban roads and (b) urban roads is against which he intends to achieve a reduction; and by how much he expects this to change when the measures in the Traffic Management Bill are implemented; [145531]

  (2) what definition of congestion was used in the regulatory impact assessment for the Traffic Management Bill. [145548]

  Mr. Jamieson
  [holding answer 5 January 2004]For the detailed references to congestion in the RIA, calculations represent estimated time lost in seconds per kilometre travelled for different vehicle types compared with speeds obtained in periods of light traffic flow. In urban areas light flow speeds are usually speeds achieved at night time and would incorporate the effects of traffic signals, pedestrian crossings and other unavoidable constraints on vehicle movement.

  In 2000, the average time lost per vehicle kilometres as a result of congestion was 24.8 seconds on roads in large urban areas and 3.2 seconds on strategic inter-urban roads.

  The Highways Agency estimates that the introduction of Regional Control Centres and Traffic Officers will lead to a reduction in congestion on motorways of up to 5 per cent. We expect that measures outside of the scope of the Bill, such as additional capacity at key points on the strategic road network, many of which will be implemented alongside, will also lead to reductions in congestion on trunk roads.

  The new duties and powers in the Bill provide an incentive and a means for local authorities to reduce congestion on their roads, and for utilities to work with less disruption, especially in urban areas. The level of
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  reduction will depend on the local circumstances and the performance of individual utilities and authorities, including the use that the latter make of the new powers.

  Mr. Chope
  To ask the Secretary of State for Transport what powers of arrest will be available to traffic officers appointed under the Traffic Management Bill. [145538]

  Mr. Jamieson
  Traffic officers will not have powers of arrest.

  Traffic Calming
  Mr. Steen
  To ask the Secretary of State for Transport how much he has spent on installing traffic calming measures in each of the last three years. [145826]

  Mr. Jamieson
  [holding answer 7 January 2004]Installing traffic calming on local roads is the responsibility of the local highway authorities which fund them from block allocations provided by the Department in support of their Local Transport Plans or equivalents. The Department has, however, given local authorities grants totalling £4.6 million in 2002–03 and £5.5 million in 2003–04 for specific local transport schemes that include traffic calming measures.

  Measures that may be described as traffic calming would generally form part of the Highways Agency's programme of small safety schemes on trunk roads. The Highways Agency's opening budgets for safety schemes over the last three years, as published in the Business Plan, are as follows: 2001–02—£47 million, 2002–03—£45 million and 2003–04—£41 million.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Fishing Industry
  Mr. Weir
  To ask the Secretary of State for Environment, Food and Rural Affairs when she next intends to visit Scotland to meet representatives of the fishing industry to discuss the fishing industry in Scotland. [146387]

  Mr. Bradshaw
  I have no plans for further meetings at present, but would expect to discuss the Prime Minister's Strategy Unit Report on the future of the fishing industry when it is published soon.

  Mr. Alex Salmond
  To ask the Secretary of State for Environment, Food and Rural Affairs, when she last met representatives of the Scottish fishing industry to discuss the fishing industry in Scotland. [146385]

  Mr. Bradshaw
  I met representatives of the Scottish industry at the Council of Ministers meeting last month.

  Nuclear Decommissioning Agency
  Mr. Tynan
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent discussions she has had with ministerial colleagues in the Department of Trade and Industry regarding the establishment of the nuclear decommissioning agency. [146389]
  435W
  Mr. Morley
  There are regular meetings and discussions between Ministers in the Department of the Environment, Food and Rural Affairs and in the Department of Trade and Industry. These cover all issues of current mutual interest, including the establishment of the Nuclear Decommissioning Authority.

  Toxic Waste Convention
  Alan Simpson
  To ask the Secretary of State for Environment, Food and Rural Affairs how the Government will implement the Stockholm convention on international trade in toxic waste; and what implications this has for such trade between industrialised nations. [146390]

  Mr. Morley
  The Stockholm Convention controls the production and use of 12 chemicals known as persistent organic pollutants (POPs). Controls on the transboundary movement of hazardous wastes are covered by a separate international agreement, the Basel Convention.

  Current Community legislation covers most Party obligations under the Stockholm Convention, and the European Commission has proposed a Regulation on persistent organic pollutants to give effect to those provisions which are not sufficiently covered. The UK will ratify the Convention during 2004 when this proposed Regulation is in place.

  The Stockholm Convention prevents the import or export of persistent organic pollutants unless for environmentally sound disposal or for a few exceptional uses. Most industrialised nations have already banned the use of the 12 chemicals listed so the impact on trade between them will be negligible.

  Animal Welfare
  Chris Grayling
  To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on introducing changes to the law concerning cruelty to animals. [146356]

  Mr. Bradshaw
  The department is currently undertaking a review of legislation relating to the welfare of captive and domestic animals with a view to introducing an Animal Welfare Bill. Any proposed changes to existing legislation will be based on science and good practice.

  Civil Servants (Disabilities)
  Mr. Goodman
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in her Department. [145993]

  Alun Michael
  Statistical information about senior civil servants with disabilities is available on the Civil Service website at: http://www.civil-service.gov.uk/statistics/documents/pdf/disability-oct03.pdf

  The data shows that one per cent. of senior civil servants in my Department have a disability. As there are less than five members of the senior civil service in my Department with a disability, the actual number is
  436W
  not published in order to protect the privacy of the individual in line with exemption 12 of the Code of Practice on access to Government Information.

  Flooding
  Miss McIntosh
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to purchase Geodesign Pallet Barriers to prevent flood damage in(a) the Vale of York and (b) elsewhere; and what assessment she has made of their effectiveness. [143879]

  Mr. Morley
  We have no plans to purchase such barriers. Purchase would be a matter for the operating authorities to decide.

  The Environment Agency are currently trialling pallet barriers and other temporary, moveable defences on the River Severn. Once these trails are completed the Agency's assessment will be made available to other operating authorities. The usefulness of such moveable defences will be a matter for the Agency and local authorities to determine in light of local conditions.

  Mr. Oaten
  To ask the Secretary of State for Environment, Food and Rural Affairs which agency is responsible for ground water flooding. [146225]

  Mr. Morley
  No agency has direct responsibility for groundwater flooding and any remedial action would generally fall to the relevant landowner. The Environment Agency has powers to undertake works in relation to flooding from main rivers and the sea and also exercises a general supervisory duty over all flood defence matters. For ordinary watercourses these powers rest with local authorities and the internal drainage boards. However, the Environment Agency may, depending on the circumstances, be in a position to offer advice.

  As part of the Department's on-going work to develop a new Government-wide strategy for flood and coastal erosion risk management for England, a project is currently underway to scope the extent of groundwater flooding events and the present administrative arrangements.

  Further information on the strategy is available via www.defra.gov.uk/environ/fcd/policy/strategy.

  Mr. Oaten
  To ask the Secretary of State for Environment, Food and Rural Affairs what account planning authorities are required to take of the risk of ground water flooding; and whether planning permission can be refused in areas where ground water flooding is known to have occurred. [146226]

  Keith Hill
  I have been asked to reply.

  Planning Policy Guidance Note (PPG) 25 Development and flood risk advises that "the susceptibility of land to flooding is a material planning consideration". It advises the use of a risk-based approach based on a sequential test that gives priority to development in lower-risk zones.
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  PPG 25 advises specifically that the flood zones in its sequential test cover only river, tidal and coastal flooding but that locally an assessment may be needed of the risk of groundwater flooding in any of the zones. Such an assessment should be given appropriate weight alongside other material considerations by local planning authorities in determining applications. A high risk of groundwater flooding or failure to provide an assessment of flood risk that is appropriate to the scale and nature of the development and the risks involved can be reasons for refusal of permission.

  Sudden Oak Death
  Mr. Swayne
  To ask the Secretary of State for Environment, Food and Rural Affairs what action she is taking to prevent the importation of plant material that may act as a host to sudden oak death infection; and if she will make a statement. [146456]

  Mr. Bradshaw
  All plants entering the UK from third countries must be accompanied by a phytosanitary certificate and are subject to inspection at import. For a wide range of known hosts of the sudden oak death fungus (Phytophthora ramorum is its scientific name), specific measures must be followed before the authorities in the exporting country can issue the certificate. For trade within the EU, specific disease control measures are applied at the place of production to rhododendrons and viburnums, the two types of plant which have been most often found to be infected in Europe. Plant passports are then issued that travel with consignments allowing their free movement between member states.

  Findings of P ramorum in imported and UK origin plants are of concern and inspections at UK nurseries and ports of entry are to be stepped up to ensure that all consignments of plants moved into and within the UK are free from P ramorum and meet plant passport requirements. Any consignment found to he infected, or not to have the correct documentation, will, as now, be destroyed. The UK will support extension of specific measures against P ramorum to additional types of plant when these are shown to present a significant risk.

  Mr. Swayne
  To ask the Secretary of State for Environment, Food and Rural Affairs what additional resources are being made available to the Plant Health Inspectorate in connection with sudden oak death; and if she will make a statement. [146457]

  Mr. Bradshaw
  Defra's 75 Plant Health and Seeds Inspectors (PHSI) are already employed for around 20 per cent. of their time on inspection and surveillance duties related to Phytophthora ramorum, which is known in the USA as sudden oak death. However, in response to the increasing number of findings of this pathogen in England and Wales, the plant health service is to employ at least 20 additional staff to cover the increased rate of inspections at production nurseries, wild planting areas and ports of entry. This is part of a package of measures announced on 4 December. Wherever possible, suitably qualified field staff will be transferred from elsewhere in the Department. These will be supplemented by recruitment of a small number of staff with appropriate experience and qualifications (e.g. ex-PHSI staff). Transfer and recruitment will start in January.
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  Defra are also funding a substantial increase in sample diagnoses undertaken by the Central Science Laboratory (CSL) which is estimated to cost in excess of £750,000 to the end of 2004–05. CSL are also involved in on-going research into Phytophthora ramorum to the value of £370,000.

  The Forestry Commission has redirected about 23 staff onto a woodland survey in England and Wales, to be completed by April 2004, which will help us to assess whether Phytophthora ramorum is present in the wider environment. Resource has also been redirected within the Forest Research Agency into projects designed to help us better understand the disease.

  Road Signs/Markings
  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what guidelines apply on the use of(a) road signs and (b) road markings in national parks. [145761]

  Alun Michael
  The national requirements for road signs and road markings are specified by the Department for Transport, principally in the Traffic Signs Regulations and General Directions 2002 (SI 3113/02).

  With the agreement of DfT, highways authorities may make limited modifications to meet any special local considerations such as those which might apply within a National Park.

  US Vessels (Decommissioning)
  Mr. Jack
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the Environment Agency's handling of the ghost ships. [146368]

  Mr. Morley
  As the competent authority in England and Wales for the relevant controls, the Agency agreed in July to the import of the ships from the US for dismantling in Hartlepool. It became clear, however, that not all the required permissions for the dismantling facility were in place, and since the arrival of four of the ships in Hartlepool, the Agency has taken steps to prevent any dismantling work on them.

MINISTER FOR WOMEN

  Public Appointments
  Mrs. Curtis-Thomas
  To ask the Minister for Women what recent assessment has been made of the participation of black and minority ethnic women in public life. [146257]

  Jacqui Smith
  The latest assessment (March 2001) showed minority ethnic women held only 2 per cent. of all national and regional public appointments. The Cabinet Office is developing a Public Bodies and Public Appointments database that will include information on diversity. This will underpin information that is held by individual Departments. To mark Black History Month in October 2003 my officials in the Women and Equality Unit produced a fact sheet, available on their website which gives more information about Minority Ethnic Women in Public Life.

  Gender Budgeting
  Mrs. Curtis-Thomas
  To ask the Minister for Women what discussions she has had with the Chancellor of the Exchequer on gender budgeting. [146250]

  Jacqui Smith
  I have had no specific discussions with my right hon. Friend the Chancellor of the Exchequer on gender budgeting, however I have jointly sponsored, with my right hon. Friend the Chief Secretary to the Treasury, a pilot project on gender analysis of expenditure.

  I believe gender analysis of expenditure can be an extremely useful tool in both policy development and evaluation. My officials in WEU have worked closely with HMT during the pilot project, with DTI being one of two Departments taking part. Lessons from this project will be used to inform further work in this area.

  Occupational Segregation
  Mrs. Curtis-Thomas
  To ask the Minister for Women what assessment has been made of the contribution of occupational segregation to the skills gap. [146254]

  Jacqui Smith
  Within the recent Skills Strategy, 21st Century Skills, Realising our Potential, we have highlighted the challenge in making real improvements in raising the skills level of our workforce. We know that the majority of working women are concentrated in just five occupational groups which are often low paid and low skilled. For example 89 per cent. of hairdressers and beauticians are women and in a survey their average pay was found to be the second lowest of all occupations1.

  Some sectors identified as having significant skill weaknesses, such as Construction and Transport and Communications, have extreme occupational segregation. Only 9 per cent. of the workforce in Construction are women and 24 per cent. in Transport and Communications.

  While we cannot entirely influence women's career choices, both the Skills Strategy and our recent Innovation Report identifies some of the levers to improve skills levels and for the UK to have a highly educated workforce with a culture of lifelong learning. To do this we have made a commitment to provide better information, advice and guidance on skills, training and qualifications so that people know what is available to them.

  We have identified that our young people need to be properly prepared for the world of work. That is why we have commissioned a Working Group, chaired by Mike Tomlinson to advise on the development of more coherent vocational programmes for 14–19 year olds to ensure they have the necessary skills for employment and adult life. We want both girls and boys to make informed choices about their vocational routes and our Modern Apprenticeships will help support young people in their career choices and to improve their workplace skills, particularly at craft, supervisory and technician level.

  Our Employer Training Pilots, introduced in September 2002, is designed to increase the demand for training by reducing barriers and providing training in more responsive ways. Over 20,000 learners and over 5,000 employers are now engaged. Trends show that
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  overall there is a high proportion of female learners involved in pilots from all sectors, with a large majority concentrated in education and health and social work which is in line with the national average.
  1Source:
  Women's Incomes over the lifetime-WEU 1999.

  Gender Pay Gap
  Mrs. Curtis-Thomas
  To ask the Minister for Women what steps are being taken to close the pay gap between men and women. [146258]

  Jacqui Smith
  The Government are taking forward a range of policies to tackle the gender pay gap. These include a new questionnaire procedure for use in equal pay cases, and measures to simplify and speed up equal pay tribunal procedures. The Government have led by example in committing all Civil Service departments and agencies to review their pay systems and produce action plans to close any equal pay gaps. The Government have provided funding for the EOC to develop equal pay tool kits so all organisations can carry out equal pay reviews. Measures to help parents maintain links with the world of work and better balance their work and home lives will contribute to a reduction of the pay gap. The Government also welcomes the EOC's investigation into modern apprenticeships and the concentration of men and women in different professions.

CULTURE, MEDIA AND SPORT

  Correspondence
  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport what targets(a) her and (b) her Ministers' offices have for responding to constituency mail; and if she will set out the performance achieved in the last 12 months against these targets. [145603]

  Mr. Caborn
  The departmental target for responding to constituency mail (i.e. letters from hon. Members and the public) is 18 working days.

  The figures for performance against target for the period 1 December 2002 to 1 December 2003 are as follows:

  Percentage answered within 18 working days

  MPs cases

  79

  Members of the public

  73

  The Department produces regular statistics to monitor the performance on answering ministerial letters. These statistics are produced for review and discussion by the permanent secretary and the management board.

  In addition, the Cabinet Office, on an annual basis, publishes a report to Parliament on performance of Departments in replying to ministerial correspondence. The report for 2002 was published on 15 May 2003. The report for 2003 will be published in due course.

  Departmental Christmas Expenditure
  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport how much has been spent by her Department on the postage of Christmas cards(a) in the last year and (b) since 1997. [145596]

  Mr. Caborn
  No assessment of postage was made but the majority of cards were sent by second class post.

  Digital Television
  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport how many more analogue transmitters need to be converted to digital to achieve the same reach as the current analogue transmitters. [145617]

  Estelle Morris
  There are currently 1,154 transmitters in the UK; 80 of those, including all the main stations, are able to transmit both analogue and digital signals. It is estimated that around 1,150 transmitters would be necessary to reach, on switchover, the same level of coverage by digital terrestrial television as previously with the current analogue transmitters.

  Millennium Commission
  Hugh Bayley
  To ask the Secretary of State for Culture, Media and Sport how much the Millennium Commission contributed to Bradford Cathedral's Life Force Exhibition; what checks were carried out on the exhibition's financial viability before the grant was given; who carried out the financial viability study; how many visitors the exhibition expected to attract; how many attended; what plans she has to change the procedures for financial scrutiny of Lottery grant applications; and if she will make a statement. [146234]

  Tessa Jowell
  As detailed issues relating to Lottery funding of Bradford Cathedral's Life Force Exhibition are primarily for the Millennium Commission, I will write to my hon. Friend in my capacity as Chair of the Commission, and place copies of my reply in the Libraries of both Houses.

  On the more general matter of scrutiny of Lottery grant applications, Lottery distributing bodies' financial directions already require them to have clearly developed policies and procedures for the financial, and, where appropriate, economic appraisal of projects, of which risk assessment should be an important part, and to assess applications in accordance with those procedures. Revisions to the financial directions being discussed with distributing bodies will further strengthen these requirements to focus more directly on risk assessment.

  Police Merger
  Mr. Key
  To ask the Secretary of State for Culture, Media and Sport whether she expects that the merger between the Metropolitan Police Service and the Royal Parks Constabulary will be completed in April 2004; and if she will make a statement. [144900]

  Mr. Caborn
  [holding answer 6 January 2004]Merger of the two police forces will require primary legislation which will be introduced at the earliest opportunity but will not be in place by 1 April 2004. The Department is 442W
  working closely with the Metropolitan Police Service to ensure that effective policing of the Royal Parks is maintained until Parliament has approved the merger proposals.

  Television Subtitling
  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport what steps the Government are taking to encourage an increase in the provision of subtitling on television. [145580]

  Estelle Morris
  The Communications Act 2003 has strengthened the requirements for subtitling on television. The Act sets subtitling targets of 90 per cent. of programmes on Channels 3 and 4, and 80 per cent. of programmes on all other channels, by the tenth anniversary of the start of the service. The Act also introduces a fixed, five-year interim target of 60 per cent. for subtitling, to accelerate progress during the early years. Under the Act, these requirements have been extended to digital cable and satellite broadcasters for the first time.

  Tourism
  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport how much funding(a) VisitBritain, (b) the Scottish Tourist Office and (c) the Welsh Tourist Office will receive in 2003–04. [145588]

  Mr. Caborn
  For 2003–04, VisitBritain has been allocated £45.9 million in baseline grant-in-aid by my Department, VisitScotland has been allocated £29.1 million in baseline grant in aid by the Scottish Executive and the Wales Tourist Board has been allocated £22.2 million in baseline grant in aid by the Welsh Assembly Government.

  Miss Kirkbride
  To ask the Secretary of State for Culture, Media and Sport how much of VisitBritain's funding is spent solely on English tourism. [145589]

  Mr. Caborn
  £10.4 million is available to VisitBritain in 2003–04 for the domestic marketing of England. £35.5 million is available in 2003–04 for the overseas promotion of Britain (including England) as a tourist destination.

TRADE AND INDUSTRY

  Regional Development Agencies
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what measures are in place to ensure that regional development agencies share best practice. [146079]

  Jacqui Smith
  The Government believe that much added value can be gained from Regional Development Agencies (RDAs) sharing best practice. One of the measures of RDA performance is an assessment of how effective each RDA has been in working with other RDAs across regional boundaries and sharing innovation and best practice with each other.

  Examples of the sharing of best practice include regular meetings between RDA Chairs. In addition, the RDAs nominated as "in the lead" for particular issues

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  are also important catalysts for sharing best practice. These lead RDAs establish new networks of contacts on particular subjects that enable the efficient sharing of information.

  British Energy
  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry how much additional funding she intends to make available to British Energy as part of the credit facility to the company outlined in her written statement of 14 October; and if she will make a statement. [141540]

  Mr. Timms
  [holding answer 2 December 2003]I refer the hon. Member to the written statement made my right hon. Friend the Secretary of State for Trade and Industry on 1 December 2003,Official Report, columns 50–51 WS.

  Consumer Credit
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry whether she intends to bring forward primary legislation to tackle loan sharks, as outlined in the White Paper, "Fair, Clear and Competitive: A Consumer Credit Market for the 21st Century". [146144]

  Mr. Sutcliffe
  My Department is bringing forward a package of legislative proposals—requiring both primary and secondary legislation—to reform the consumer credit market in the UK. Tackling loan sharks is a key part of this package. We have announced a project concerned with hunting loan sharks, though this relies on existing legislative provision. Primary legislation will be used to address the licensing regime for consumer credit providers; time orders; unfair credit transactions and the provision of alternative dispute resolution for consumer credit disputes. Legislation will be introduced when parliamentary time permits.

  Cross-border Mergers
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what assessment she has made of the impact that the 10th Company Law Directive on cross-border mergers will have on management of United Kingdom companies. [146148]

  Mr. Sutcliffe
  The Commission proposal for a 10th Company Law Directive on cross-border mergers was published on 18 November 2003. My officials met City and business representatives and had other informal contacts with interested parties during December in order to assess the likely impact of the Directive on UK companies, including as regards their management.

  On the basis of these discussions, and internal departmental consideration, an initial Regulatory Impact Assessment on the anticipated costs and benefits of the Commission proposal was prepared alongside the Explanatory Memorandum (153305/03) submitted to the Parliamentary Scrutiny Committees on 15 December 2003 and is available in the Libraries of both Houses.

  Employment Relations
  Mr. Hancock
  To ask the Secretary of State for Trade and Industry what assessment she has made of the effect of the 8-week rule on(a) employers and (b) employees; and if she will make it her policy to abolish it. [146177]

  Mr. Sutcliffe
  During the recent review of the Employment Relations Act 1999, the Government looked closely at the operation of protections from dismissal for employees taking lawfully organised official industrial action. The conclusion of that review, as set out in the response to consultation published last month, is that the 8-week rule should be retained and that the Employment Relations Bill will introduce improvements to the existing protections. These changes are designed to ensure, firstly, that days where employees are 'locked-out' during official industrial action are disregarded in calculating the 8-week period; and secondly that the procedural steps employers and employees must take under the statute to attempt to resolve a dispute are clear.

  Information and Communications Technology
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what estimate she has made of the proportion of employees in the UK information and communication technology sector who are(a) nationals of countries outside the UK and (b) nationals of countries outside the EU. [146136]

  Mr. Timms
  The information is not available.

  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry how many people have been employed in the information and communication technology sector in each year since 1997. [146137]

  Mr. Timms
  The figures for the UK, in thousands, are as follows; the latest year for which information is available is 2001.

  Number (Thousand)

  1997

  n/a

  1998

  1,216

  1999

  1,291

  2000

  1,376

  2001

  1,420

  n/a = Not available.

  Source:

  National Statistics (Annual Business Inquiry).

  Internet Usage
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what assessment she has made of the impact that a lack of trust in security has on use of the internet in the UK. [146139]

  Mr. Timms
  We have long known that users' trust and confidence in the internet would impact on its uptake. This was recognised in the September 1999 report from the Performance and Innovation Unit, "e-commerce@its.best.uk" which identified trust as one of the three pillars which would support the adoption of the internet in the UK. Studies into consumer behaviour in 2001 and 2002 ("Informing Consumers About e-commerce and "Internet and Cross Border Shopping") showed that the perception of credit card
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  fraud was a significant concern to on-line consumers. That said, on-line shopping represented 6 per cent. of all UK retail in 2002, and was set to grow to £14 billion in 2003 as part of a continuing growth in use of the internet throughout the economy. Our latest study—the "International Benchmarking Study" published by DTI in November 2003—showed that the impact of a lack of confidence on internet usage appears to be receding. It was also noted that security and trust were seen as less of a barrier to internet usage by UK business than was the case in previous benchmarking studies.

  Post Offices
  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry how many post offices there were in each constituency(a) in 1997 and (b) currently; and how many of them transact more than 40 per cent. of their work volumes on behalf of the Benefits Agency. [146544]

  Mr. Timms
  I refer the hon. Member to the answer given to the hon. Member for Twickenham (Dr. Cable) on 9 January 2003,Official Report, column 299W.

  Public Sector Contracts
  Mr. Pickthall
  To ask the Secretary of State for Trade and Industry if she will take steps to ensure that small and medium-sized enterprises have the same opportunities to compete for contracts for public sector user-framework agreements as larger firms; and if she will make a statement. [145407]

  Nigel Griffiths
  The Government are working to encourage small firms to secure public sector contracts.

  This includes implementing the recommendations of a recent Better Regulation Task Force/Small Business Council report, which made a number of recommendations to improve SMEs ability to compete against large companies for contracts.

  Private Hire Vehicles
  Mr. Steen
  To ask the Secretary of State for Trade and Industry what the cost was of producing the report, "The Regulation of Licensed Taxi and PHV Services in the UK", OFT 676; and when she expects to respond to its recommendations. [145821]

  Mr. Sutcliffe
  The cost of producing the report is a matter for the Chairman of the OFT—I have asked him to write to the hon. Member directly. My right hon. Friend will respond to the report and its recommendations within 120 days (by 9 March 2004).

  Veterinary Medicines
  Andrew George
  To ask the Secretary of State for Trade and Industry (1) whether she has performed an impact assessment to determine what percentage of veterinary surgeons would be adversely affected by the recommendations contained within the Competition Commission report into prescription only veterinary medicines; [146093]
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  (2) what assessment she has made of the likely effect of the implementation of the recommendations of the Competition Commission's report on prescription only veterinary medicines on levels of veterinary care for pets of low income owners; [146100]

  (3) what discussions she has had with veterinary organisations regarding the recommendations of the Competition Commission's report on prescription only veterinary medicines; and what assessment she has made of their representations; [146101]

  (4) how many complaints were received by the Office of Fair Trading about the price of prescription only veterinary medicines in each of the last five years for which records are available; and what proportion of those complaints were made about (a) large animals practices and (b) small animal practices; [146102]

  (5) what the average profit per veterinary practice was in each of the last five years for which figures are available; [146095]

  (6) what the average profit per veterinary practice was on the sale of prescription-only medicines in (a) large animal practices and (b) small animal practices in each of the last five years for which figures are available; [146096]

  (7) when she expects to publish a Statutory Instrument to implement the recommendations of the Competition Commissions Report into prescription only veterinary medicines; [146097]

  (8) what estimate she has made of the impact on the average cost of a veterinary consultation of implementation of the recommendations made by the Competition Commission in its report on prescription only veterinary medicines; [146098]

  (9) what discussions she has had with the Royal College of Veterinary Surgeons regarding changes to its Guide to Professional Conduct, with reference to the Competition Commission's recommendations on prescription only medicines. [146106]

  Mr. Sutcliffe
  In recent months, I and members of my Department, have had several meetings with representatives of the RCVS, the BVA and other professional bodies. We have listened carefully to the views of the profession particularly in relation to animal health and welfare. These discussions have been helpful and productive and identified opportunities to reduce the potential need for legislation by addressing many of Competition Commission recommendations within the industry's own professional code of practice.

  A consultation document together with a draft impact assessment and the draft legislation we consider is necessary to implement these recommendations is currently being finalised in discussion with DEFRA. This will be issued shortly and will provide all interested parties with a further opportunity to comment on how best to carry forward the Commission's recommendations. Reflecting the Government's better regulation agenda, the DTI would look closely at proposals from the profession to take forward some or all of them within the industry's own professional rules.

HOME DEPARTMENT

  Elder Abuse
  Sandra Gidley
  To ask the Secretary of State for the Home Department how many people over the age of 60 were victims of(a) attacks and (b) abuse in England and Wales in each year since 1997; and if he will make a statement. [145629]

  Ms Blears
  The most recent information available on violent crime victimisation of people over the age of 60 is from the 2000 British Crime Survey, which measures crime in 1999 (Home Office Statistical Bulletin 08/02, Chivite-Matthews and Maggs, 2002). This showed that 0.9 per cent. of women aged 60 and over and 1.1 per cent. of men in this age group were victims of at least one incident of violence in England and Wales that year. There were approximately 132,000 incidents of violence against older people in 1999, however some people may have experienced more than one incident in the year. People aged 60 and over had a lower risk of experiencing violent crime than other age groups, and were also less likely to be repeatedly victimised.

  More recent figures are available for those aged 65 or over. In 2001–02, 0.7 per cent of men aged 65 to 74 and 0.7 per cent. of women in this age group experienced one or more violent incidents, while 0.6 per cent. of men aged 75 and over and 0.5 per cent. of women aged 75 and over did so. In 2002–03, 1.3 per cent of men and 0.7 per cent. of women aged 65 to 74 and 0.4 per cent of men and 0.6 per cent. of women aged 75 and over were victims of a violent crime (Home Office Statistical Bulletin 07/03. Simmons and Dodd, 2003).

  The statistics do not make a distinction between attacks and abuse.

  Alcohol
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department in which areas the alcohol harm reduction strategy will be implemented. [146313]

  Ms Blears
  The Prime Minister's Strategy Unit published an interim analytical report on the harms associated with alcohol misuse on 19 September 2003. This report identifies the following broad areas of policy intervention: education, information and communication; supply and pricing; health and treatment services; and community safety and criminal justice. The findings of this report will be used to inform development of the Government's alcohol harm reduction strategy, which will cover all areas of England.

  Departmental Security Passes
  Mr. Oaten
  To ask the Secretary of State for the Home Department how many security passes have been reported lost or stolen by staff in his Department in the last 12 months. [144268]

  Fiona Mactaggart
  The total number of Home Office Security Passes reported lost or stolen on the London and Croydon Estates for the 12 months ending 11 December 2003 was 291; for London 162, for Croydon 129.
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  The loss of these passes is a nuisance rather than a threat. They do not show that they provide access to the Home Office. They all have a photograph which enables the security guards and others to challenge a person other than the rightful holder. The passes for the central London estate are de-activated as soon as they are reported missing, so that they cannot be used to gain entry through revolving/circle lock doors.

  Disabled Civil Servants
  Tim Loughton
  To ask the Secretary of State for the Home Department how many senior civil servants in his Department are disabled, expressed in(a) numbers and (b) as a percentage of whole-time equivalents. [144978]

  Fiona Mactaggart
  Statistical information about senior civil servants with disabilities is available on the Civil Service Statistics website at: http://www. civil-Service.gov.uk/statistics/documents/pdf/disability-oct03.pdf

  This information is also available in the Libraries of the House. The latest statistics show that in my Department there are no senior civil servants with a disability.

  The Department is concerned that there are no known disabled staff in the Senior Civil Service (SCS) and we are implementing an action programme to address the position.

  There are significant numbers of staff with disability at junior and middle management levels and this should lead eventually in to senior levels. Reasonable adjustments are provided at promotion and selection boards for disabled candidates and we operate a guaranteed interview scheme for disabled staff who meet minimum requirements for vacancies.

  Fear of Crime
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department what recent assessment he has made of the level of public fear of crime. [146272]

  Ms Blears
  The latest published statistics from the British Crime Survey, the quarterly update to June 2003, report that levels of fear of crime in the key categories of burglary, vehicle and violent crime have fallen, compared to June 2002. 14 per cent. of adults had high levels of worry about burglary (compared with 15 per cent. in June 2002), 16 per cent. had high levels of worry about vehicle crime (compared with 18 per cent.) and 20 per cent. had high levels of worry about violent crime (compared with 21 per cent.).

  Firearm Offences
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department if he will make a statement on the change in the number of firearm offences since March 2001. [146267]

  Caroline Flint
  Home Office figures indicate that, in 2001–02, firearms offences (excluding those involving air weapons) increased by 35 per cent. from the previous year. Provisional figures released on 16 October 2003
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  show a total number of firearms offences in England and Wales in 2002–03 (excluding air weapons) was around 10,250 or around 3 per cent. higher than in 2001–02.

  The overall level of firearms offences as a proportion of all recorded crime remains steady, at less than half of one 1 per cent.

  In 2001–02, there were 95 recorded incidents in which injury following a firearms offence proved fatal. Provisional figures show that this figure fell by 16 per cent. in 2002–03. Final figures for 2002–03 will be published soon.

  This remains an appalling loss of life on our streets and in our communities and we are continuing a programme of action covering community engagement, enforcement, legislation and tackling the links to drug supply and crime to deal with it.

  Graffiti
  Ann Keen
  To ask the Secretary of State for the Home Department what steps his Department is taking to reduce the level of graffiti. [146320]

  Ms Blears
  The Anti-Social Behaviour Act 2003 introduces a package of measures to prevent graffiti and to ensure that it is removed swiftly when it does occur.

  The Act will give local authorities new powers to clean graffiti from certain types of property, including cable boxes, post boxes, phone booths, and property associated with public transport. It will also contain proposals to restrict the sale of spray paints to under 16s

  Number of juveniles found guilty at all courts of all offences and number given cautions, North West region, 1992 to 2002

  1992

  1993

  1994

  1995

  1996

  1997

  St. Helens

  Persons aged 10–17 found guilty

  270

  216

  240

  219

  227

  227

  Persons aged 10–17 receiving a caution1

  3—

  3—

  3—

  3—

  3—

  3—

  Merseyside police force area (including St. Helens)

  Persons aged 10–17 found guilty

  2,510

  2,112

  2,260

  2,478

  2,889

  2,789

  Persons aged 10–17 receiving a caution1

  4,602

  3,748

  3,209

  2,495

  2,693

  3,569

  North West region (including Merseyside)2

  Persons aged 10–17 found guilty

  11,912

  9,784

  10,810

  19,461

  12,644

  13,127

  Persons aged 10–17 receiving a caution1

  22,676

  19,110

  11,635

  17,708

  18,446

  16,581

  1998

  1999

  2000

  2001

  2002

  St. Helens

  Persons aged 10–17 found guilty

  224

  373

  373

  408

  346

  Persons aged 10–17 receiving a caution1

  3—

  3—

  3—

  3—

  3—

  Merseyside police force area (including St. Helens)

  Persons aged 10–17 found guilty

  2,780

  2,613

  3,096

  3,142

  3,029

  Persons aged 10–17 receiving a caution1

  3,909

  3,554

  2,177

  1,498

  1,793

  North West region (including Merseyside)2

  Persons aged 10–17 found guilty

  13,866

  14,389

  16,032

  16,455

  16,209

  Persons aged 10–17 receiving a caution1

  19,026

  16,328

  12,501

  11,966

  9,750

  1 Cautions for persons under 18 were replaced by reprimands and final warnings from June 2000.

  2 Includes police force areas of Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside.

  3 not available.

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  and give Local Authorities the power to issue Fixed Penalty Notices for graffiti. This means offenders will have to pay a £50 penalty or be prosecuted through the courts.

  In November we launched the Name that Tag poster campaign which offers a £500 reward for information about targeted prolific taggers. This campaign is a partnership between the Home Office, Crimestoppers, Network Rail London Underground and British Transport Police and runs in London, Liverpool and Manchester.

  Juvenile Offenders
  Mr. Woodward
  To ask the Secretary of State for the Home Department how many(a) crimes were committed by, and (b) cautions were issued to, juvenile offenders in (i) St Helens, (ii) Merseyside and (iii) the North West in each year since 1992. [144323]

  Paul Goggins
  The table gives the number of juveniles convicted of all offences in St. Helens, Merseyside and the North West Region, 1992 to 2002. It also shows those given cautions (reprimands and final warnings from June 2000) in Merseyside and the North West during this period.

  The information collected centrally does not enable cautions in St. Helens to be separately identified. Neither is it possible to give the number of crimes committed by juveniles, only the number of juveniles who are found guilty of all offences.

  Statistics for 2003 will be published in the Autumn of 2004.

  Motor Vehicle Theft
  Mr. Chope
  To ask the Secretary of State for the Home Department how many(a) thefts of motor vehicles and (b) thefts from motor vehicles occurred in each of the last five years; and what proportion of each were committed after a window was broken. [145533]

  1998

  2000

  2001–02

  2002–03

  Total thefts of /thefts from motor vehicle (Number)

  2,527,000

  2,135,000

  1,806,000

  1,703,000

  Of which:

  Thefts of a motor vehicle (Number)

  370,000

  328,000

  315,000

  278,000

  Offender broke window/tried to (Percentage)

  16

  13

  17

  Not yet available

  Thefts from a motor vehicle (Number)

  2,157,000

  1,807,000

  1,491,000

  1,425,000

  Offender broke window/tried to (Percentage)

  49

  47

  45

  Not yet available

  Mr. Chope
  To ask the Secretary of State for the Home Department (1) if he will include in the next edition of the booklet "Steer Clear of Car Crime" a reference to the retro-fitting of security film to motor vehicle windows; [145534]

  (2) pursuant to his answer of 3 December 2003, Official Report, column 71W, on vehicle crime, whether the retro-fitting of security film to motor vehicle windows is recognised by his Department as a means of improving vehicle permitted security. [145616]

  Ms Blears
  We recognise that the retro-fitting of security film to motor vehicle windows has the potential to improve vehicle perimeter security. We will raise motorists' awareness of security film through Government publicity material, including the booklet "Steer Clear of Car Crime", when we are satisfied that products are available that meet Home Office attack resistance requirements and the appropriate standards set out in the Road Vehicles (Construction and Use) Regulations 1986, Directive 92/22/EEC and UN/ECE Regulation 43 to ensure safety and durability.

  Police
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department what assessment has been made of the response of the police to the Getting the Best Leaders to Take on the Most Demanding Challenges project. [146276]

  Ms Blears
  An extensive consultation exercise was undertaken on the key findings contained in the project on "Getting the Best Leaders to Take on the Most Demanding Challenges". A number of regional seminars were held to discuss the key findings with those who would be most affected by any new policies arising from the project report. Approximately 320 people, representing the broad spectrum of the police service attended the seminars and over 100 written responses were also received. The results of the consultation exercise were considered by the Police Leadership Development Board (PLDB) on which all the major stakeholders, including all the police associations and the Association of Police Authorities are represented.

  These responses and the views of the PLDB informed the advice given to Ministers and subsequent decisions on the future direction of policy.
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  Ms Blears
  Estimates from British Crime Surveys (BCS) are set out in the table. In 1998 and 2000 BCS respondents were asked about their experiences of crime in the previous calendar year. Following a change in the BCS sample design, from 2001–02 onwards respondents were asked about their experiences of crime in the 12 months prior to the interview.

  As a result we are taking forward a number of measures to improve the identification, selection, support and development of those with the potential to be chief officers, including establishing a central advisory service which will be an embryonic form of a new body, the Police Leadership Centre, which will bring together all central work on police leadership within the remit of one organisation.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department if he will make a statement on the pay and conditions package for the police implemented from 1 April 2003. [146277]

  Ms Blears
  The package provides improved and modernised pay and conditions of service for the police. It has a number of elements that are important for the wider police reform agenda including modernising the pay system, enabling greater flexibility and targeting rewards for priority work. I am pleased that all parties to the Police Negotiating Board agreement that led to the package are now working to ensure its effective implementation.

  Mr. Chaytor
  To ask the Secretary of State for the Home Department (1) if he will list, for each police force in England and Wales, the total number of(a) male and (b) female police officers in post for each of the last 10 years; [142057]

  (2) if he will list, for each police force in England and Wales, the total number of (a) male and (b) female (i) CID and (ii) non-CID officers in post at each rank, for each of the last 10 years. [142058]

  Ms Blears
  [holding answer 16 December 2003]Available information covers the period 1996 to 2003 for gender and rank. In 2003 new calculations for counting police numbers were introduced so the figures are not comparable with previous years.

  A copy of the statistics have been placed in the Library.

  Proceeds of Crime
  Jim Dowd
  To ask the Secretary of State for the Home Department pursuant to the Answer of 11th December,Official Report, column 621W, whether the net proceeds were £6,635,335; and to whom this money was distributed. [145956]
  453W
  Caroline Flint
  The net proceeds were £602,195, which is the value of cash forfeited by the Metropolitan Police Service (MRS) under the new powers in the Act. The money was remitted to the Consolidated Fund. The sum of £7,237,530 given in my earlier reply represented the total amount of cash seized by the Metropolitan Police. Cash seized can only be forfeited and paid into the Consolidated Fund after a forfeiture order is made by a magistrates' court.

  US Bases
  Alan Simpson
  To ask the Secretary of State for the Home Department what the agreement with the US on bases on UK territory says about the holding of prisoners other than US Service personnel. [145787]

  Mr. Ingram
  I have been asked to reply.

  There is no specific agreement regarding the holding of prisoners. However, the terms of the NATO Status of Forces Agreement (SOFA) 1951 state that the military authorities of the sending state only have jurisdiction over persons who are subject to the military law of that state.

DEFENCE

  Iraq
  Mr. Hancock
  To ask the Secretary of State for Defence in what circumstances the search for weapons of mass destruction in Iraq will be deemed to have been completed. [146184]

  Mr. Hoon
  The search for Iraq's weapons of mass destruction is the responsibility of the Iraq Survey Group. Once the ISG has made its final recommendations concerning the state of Iraq's weapons of mass destruction programmes it will be for governments to decide what, if any, further action is required.

  Legacy Project Study
  Mr. Barnes
  To ask the Secretary of State for Defence when he will respond to the correspondence to his Department containing the Tim Parry Jonathan Ball Trust's Legacy Project study. [144454]

  Mr. Caplin
  The Ministry of Defence was consulted at official level when the study was under way. The Department subsequently received a copy of the Legacy Project's report following its launch on 5 November 2003. The Report and its recommendations are now being studied. Officials have already made informal contact with the Legacy Project and look forward to discussing the Report in the near future.

  A number of my Ministerial colleagues have received letters about the Report and responses are now being prepared.

  Medical Supplies Agency
  Bob Russell
  To ask the Secretary of State for Defence what evaluation he has made of(a) the Medical
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  Supplies Agency as a whole and (b) the specific operational capabilities of medical distribution centres. [145349]

  Mr. Caplin
  The Medical Supplies Agency (MSA) is subject to several formal mechanisms of ministerial and other evaluation. The Agency Annual Report and Financial Accounts is presented to the House of Commons pursuant to Section 7 of the Government Resources and Accounts Act 2000. The latest Report was ordered by the House of Commons to be printed on 16 July 2003 and a copy was placed in the Library of the House on 17 November 2003. In addition to the financial statements, with a certificate by the Comptroller and Auditor General, the Report covers a review of activity, an assessment of performance against agreed key targets and a statement on future strategy. The financial statement is also subject to interim audit by the National Audit Office.

  The principal means by which Ministers can evaluate the MSA, and its Medical Distribution Centres, is through the Key Target process. This involves the agreement with Ministers of wide-ranging performance targets for the MSA. Achievement against these targets is then closely monitored and reported to Ministers, through the Director General Management and Organisation, and shown in the Agency Annual Report and Financial Accounts.

  Naval Courts Martial
  Mr. Gerald Howarth
  To ask the Secretary of State for Defence if he will make a statement on the case of Grieves v. the United Kingdom; what effects he anticipates this will have on naval courts martial; and what further legislation he anticipates will be necessary to protect service law from challenges from the European Court of Human Rights. [145958]

  Mr. Caplin
  I refer the hon. Member to my Written Ministerial Statement of 6 January 2004,Official Report, column 5–6WS.

  Reservists
  Mr. Hancock
  To ask the Secretary of State for Defence how many reservists lost their civilian jobs as a result of serving in the armed forces, in each of the last five years; how many filed claims for compensation; what the average time taken to settle each case was; how much was received by each of the claimants, net of legal expenses; and if he will make a statement. [146178]

  Mr. Caplin
  There is no requirement for reservists to provide the information requested to the Ministry of Defence. There is, therefore, no comprehensive record of the numbers of reservists who may have lost their civilian jobs as a result of service in the armed forces. However, protection is provided by reinstatement under the Reserve Forces (Safeguard of Employment) Act 1985. Over 8,600 reservists were called-out to support Operation TELIC and we are aware of only 11 individuals who needed to bring a case under the 1985 Act. This continues to show the high level of support from both reservists and employers which the Government is pleased to acknowledge.

  Territorial Army
  Mr. Liddell-Grainger
  To ask the Secretary of State for Defence how many Territorial Army doctors are serving in the Gulf. [145767]

  Mr. Caplin
  Eleven.

INTERNATIONAL DEVELOPMENT

  Andrew Smith
  Norman Lamb
  To ask the Secretary of State for International Development pursuant to his answer of 9 December 2003,Official Report, column 830W, what contracts his Department entered into prior to the last 12 months with (a) Avient Air and (b) other companies in which Mr. Andrew Smith has an interest; what services were provided to his Department under these contracts; what the value of these contracts was; when these contracts were entered into; and if he will make a statement. [146418]

  Hilary Benn
  We had no contracts with Avient Air. As far as my Department is aware, we had none with any other companies in which Mr. Smith has an interest.

  Civil Servants (Disabilities)
  Mr. Goodman
  To ask the Secretary of State for International Development what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in his Department. [146006]

  Hilary Benn
  Statistical information about senior civil servants with disabilities is available on the Civil Service Statistics website at: http://www.civil-service.gov.uk/ statistics/documents/pdf/disability-oct03.pdf

  As there are less than five members of the senior civil service in my department with a disability, the actual number is not published in order to protect the privacy of the individual in line with exemption 12 of the Code of Practice on Access to Government Information.

  DFID's target for the proportion of people with disabilities in senior posts is 3.3 per cent.

  HIV/AIDS (Africa)
  Bob Spink
  To ask the Secretary of State for International Development what action he will take to increase access to anti-retro viral drugs for HIV positive people in the African pandemic area. [145160]

  Hilary Benn
  DFID is committed to working with others, including our donor partners, the pharmaceutical industry, investors, developing country governments and non-governmental organisations (NGOs) to improve access to medicines in developing countries, including for the treatment of HIV/AIDS.

  With the World Health Organisation, DFID believes that affordable pricing, sustainable financing, reliable health and supply systems, and the rational selection and use of existing drugs are all essential to improve access to medicines.

  In line with this, DFID has committed over £1.5 billion since May 1997 to support the strengthening of health and supply systems in developing countries,
  456W
  which will help to build capacity to deliver medicines to the poor and to make effective choices about the selection of drugs. The UK has also pledged £280 million to the Global Fund to Fight AIDS, TB and Malaria (GFATM). This will help strengthen health system capacity to deliver effective and affordable prevention, treatment, care and support programmes, based on locally determined needs and building upon countries own national priorities. According to UNAIDS, the UK is the second largest bilateral donor for HIV/AIDS programmes.

  DFID supports a comprehensive response to HIV/AIDS, which includes prevention, treatment and care and alleviation of the impact of AIDS. We welcome recent reductions in the price of both patent and generic anti-retroviral drugs for the treatment of HIV. These reductions have created new opportunities to allow poor people to benefit from the same life-saving treatment that has been available in affluent countries. We will continue to work with the WHO, the patent based and generic pharmaceutical industries and others to further reduce prices. DFID supports the target set by the World Health Organisation and UNAIDS for three million people receiving treatment by the end of 2005. A new policy on treatment and care, to be launched early next year, will set out how DFID will co-ordinate work with partners to promote anti-retroviral treatment for poor people and for women.

WORK AND PENSIONS

  Asbestos
  Simon Hughes
  To ask the Secretary of State for Work and Pensions how many people have died from asbestos-related diseases in London in each year since 1990; and what estimates his Department has made of the number of likely deaths in future years. [146087]

  Mr. Browne
  The numbers of deaths each year from 1990 in the Government Office Region of London due to mesothelioma, and deaths where the deceased had asbestosis are given in the following table. In addition, it is estimated that for each mesothelioma there are one to two lung cancer deaths due to asbestos.

  Deaths from mesothelioma and asbestosis in London, 1990–2001

  Mesothelioma

  Asbestosis (without mesothelioma or lung cancer)

  1990

  116

  16

  1991

  109

  32

  1992

  116

  14

  1993

  140

  14

  1994

  135

  14

  1995

  138

  12

  1996

  137

  25

  1997

  157

  14

  1998

  150

  9

  1999

  158

  12

  2000

  1161

  12

  2001

  1175

  13

  1 Provisional.

  Source:

  HSE mesothelioma and asbestosis registers.
  457W
  Statistical modelling has been used to estimate the future peak number of mesothelioma deaths in Great Britain. Predictions of future deaths are not available for the London region. The annual total number of mesothelioma deaths in Great Britain is expected to peak at around 1,950 to 2,450 deaths some time between 2011 and 2015. (The total number of mesothelioma deaths in Great Britian in 2001 was 1,848; the 175 mesothelioma deaths in London in 2001 represent 9.5 per cent. of this total). It is estimated that the ratio of one to two of the number of asbestos-related lung cancers to the number of mesotheliomas will decrease slightly over time. No estimates have been made of the likely deaths in future years due to asbestosis.

  Attendance Allowance
  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions what proportion of attendance allowance awards were allocated to each disability group as defined by the Department(a) since the new pack was introduced in October 2003 and (b) under the previous system. [146740]

  Mr. Pond
  Information on the proportion of attendance allowance awards allocated to each disability group as defined by the Department is obtained from quarterly extracts from the attendance allowance computer system. The last quarterly extract covered the quarter ending 31 August 2003.

  New attendance allowance awards by medical condition during the quarter ending 31 August 2003

  Thousand

  All

  84.8

  Other unspecified mainly terminally ill

  10.5

  Arthritis

  18.1

  Spondylosis

  0.6

  Back pain—not specified

  0.6

  Disease of the muscles, bones or joints

  3.9

  Trauma to limbs

  0.6

  Blindness

  2.5

  Deafness

  10.1

  Heart disease

  7.5

  Chest disease

  3.9

  Asthma

  0.8

  Cerebrovascular disease

  5.1

  Peripheral vascular disease

  0.6

  Frailty

  14.3

  Epilepsy

  10.2

  Neurological diseases

  0.9

  Multiple sclerosis

  10.1

  Parkinsons disease

  1.8

  Motor Neuron disease

  10.1

  Chronic fatigue syndromes

  —

  Diabetes mellitus

  1.6

  Traumatic paraplegia/tetraplegia

  —

  Major trauma other than traumatic paraplegia tetraplegia

  10.1

  Mental subnormality

  —

  Psychosis

  10.4

  Psychoneurosis

  0.7

  Dementia

  7.3

  Behavioural disorder

  —

  Alcohol abuse

  10.1

  Renal disorders

  10.2

  Inflammatory bowel disease

  10.1

  Bowel and stomach disease

  10.3

  Blood disorders

  10.3

  Multi system disorders

  —

  Skin disease

  —

  Malignant disease

  1.7

  Haemodialysis

  —

  458W
  1Figures are less than 500 and subject to a high degree of sampling variation.

  Notes:

  Figures are in thousands and rounded to the nearest hundred.

  '—'denotes nil or negligible.

  From November 2002, the methodology for producing these figures was changed to allow statistics to be published much sooner. This has resulted in a small increase in the reported caseload. This is because some cases which have actually terminated but have not yet been updated on the computer system are now included.

  Figures represent decisions made on new attendance allowance claims only during this period.

  Source:

  IAD Information Centre. 5 per cent. sample.

  The data for the quarter ending 30 November 2003 will not be available until late February 2004. The next publication relating to November 2003 will be released on 17 March 2003. The delay between data collection and publication is because the information centre must quality assure the data, produce standard tables and make a dataset available for further ad hoc analysis.

  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions what proportion of attendance allowance claims, processed since the new claim pack was introduced in October 2003, have been subject to appeal. [146742]

  Mr. Pond
  The following information shows the number of decisions made on new attendance allowance claims in the months of October and November 2003 and the number of attendance allowance appeals registered in the same months. Decisions appealed in October and November will contain a mix of claims made on the old and new forms. No separate data is available.

  October 2003

  November 2003

  Decisions made

  35,111

  30,957

  Appeals registered

  1,213

  1,120

  Percentage

  3.45

  3.61

  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions what proportion of attendance allowance claimants have been contacted by telephone to discuss their claim since the new claim pack was introduced in October 2003. [146743]

  Mr. Pond
  Statistics on the number of telephone calls made to attendance allowance customers to discuss their claim are not routinely collected.

  Capability Reports
  Mr. Goodman
  To ask the Secretary of State for Work and Pensions what assessment he has made of the piloting of capability reports for personal advisers in jobcentres; and if he will make a statement. [146623]

  Mr. Browne
  Since 2000, the Department has been piloting the use of capability reports by personal advisers conducting work-focused interviews with customers claiming incapacity benefit. The Department commissioned research to assess the effectiveness of this capability report in supporting personal advisers and has undertaken additional in-house evaluation.
  459W
  Research undertaken by the National Centre for Social Research for the Department for Work and Pensions was published in 2002 ("Evaluation of the Capability Report: Identifying the work-related capabilities of incapacity benefit", WP Research report 162), copies of which are in the Library.

  In taking forward findings from this evaluation, a range of activities were put in place to improve the use and effectiveness of the capability reports, including improving training for advisers and piloting a shorter version.

  Formal piloting of the clerical capability reports ended in March 2003; this work has informed the development of an electronic version of the report. The new incapacity benefit pilots will include an evaluation of the role of this new capability report.

  Child Support (Army Personnel)
  Mr. Peter Duncan
  To ask the Secretary of State for Work and Pensions what percentage of army personnel who are required to pay child support were in default with payments in each of the last five years for which figures are available. [145675]

  Mr. Pond
  The administration of the Child Support Agency is a matter for the Chief Executive, Mr. Doug Smith. He will write to the hon. Member with the information requested.

  Letter from Doug Smith to Mr. Peter Duncan, dated 8 January 2004
  In reply to your recent Parliamentary question about the Child Support Agency the Secretary of State promised a substantive reply from the Chief Executive.
  You asked what percentage of army personnel who are required to pay child support were in default with payments in each of the last five years for which figures are available.
  The Agency does have some relevant information about personnel in Her Majesty's Forces but does not distinguish those in the army. The percentage of fully assessed Child Support Agency cases, where the non-resident parent is in Her Majesty's Forces and has some outstanding arrear, is estimated in the table below:

  % with an arrear

  1999

  62

  2000

  57

  2001

  57

  2002

  56

  2003

  63

  I hope this is helpful.

  Disabled Jobseekers
  Mr. Goodman
  To ask the Secretary of State for Work and Pensions how many specialist teams were available to work with disabled jobseekers in jobcentres in each year since 2000. [146624]

  Mr. Pond
  Disability Employment Advisers (DEAs) within Jobcentre Plus provide support to people facing the complex barriers to work associated with disabilities. They can offer help with finding work and can refer people, where appropriate, to occupational health assessments, training and the full range of Jobcentre Plus disability programmes.
  460W
  The information is not available in the format requested, as figures are not collected centrally. However, we estimate there are currently around 650 DEAs employed by Jobcentre Plus.

  Jobcentre Plus
  Mr. George Osborne
  To ask the Secretary of State for Work and Pensions what the terms are of the Jobcentre Plus Programme Procurement Review; what the timetable is for the completion of the Review; and what independent assessment of Jobcentre Plus procurement processes are being undertaken as part of the review. [144600]

  Mr. Browne
  The administration of Jobcentre Plus is a matter for the Chief Executive of Jobcentre Plus, David Anderson. He will write to the hon. Member.

  Letter from David Anderson to Mr. George Osborne, dated 8 January 2004:
  As Jobcentre Plus is an Executive Agency, the Secretary of State has asked me to reply to your questions concerning the terms of the Jobcentre Plus Programme Procurement Review; what the timetable is for the completion of the Review; and what independent assessment of Jobcentre Plus procurement processes are being undertaken as part of the review. This is something that falls within the responsibilities delegated to me as Chief Executive of the Agency.
  The Jobcentre Plus Programme Procurement Review was initiated following two independent consultants reports towards the end of 2002/03 and is an ongoing review with the following aims and objectives:
  1. define and communicate clear roles, responsibilities and accountabilities for all those involved in the procurement, payment and contract management process;
  2. improve procurement capability and professionalism across the procurement value chain at each tier of the organisation;
  3. support more effective use of IT systems, for example by raising awareness of consequences of data input errors;
  4. introduce streamlined, generic procurement processes increasingly supported by e-based approach, for example web based invitations to tender;
  5. review funding models and policy to develop fewer IT supported models and to ensure rates support increased provider performance and share risk appropriately;
  6. ensure that the provision purchased addresses the needs of customers and employers locally through use of standard `requirement' templates in districts;
  7. work jointly with all key stakeholders including Department for Work and Pensions (DWP), Department for Education and Skills (DfES), Learning Skills;
  8. develop and deliver an approved Jobcentre Plus Procurement Strategy, to be incorporated into DWP's Commercial Strategy, which will detail, for example, how best provision should be purchased and paid for, how Jobcentre Plus should interact and develop enhanced relationships with key providers;
  9. provide resource, focus and structure through a Director led steering group to ensure proposals for change are developed and implemented resulting in better value for money and an increase in job outcomes from providers.
  Jobcentre Plus is committed to keeping providers informed of the progress of the review and to seek provider's views on implementation of proposals. Five provider awareness events launching the review, covering six Jobcentre Plus regions, have been held over the last six months. In addition an ongoing progress update has been sent to all existing providers and also made available on the Jobcentre Plus website. Providers will continue to be updated and their views sought through the Provider Liaison Group. This group meets bi-monthly to discuss issues of common concern. The primary purpose of the group is

  461W
  to involve providers in planning and implementation of change, giving them the opportunity to put the provider perspective to policy makers.
  The overall Jobcentre Plus Procurement Strategy for employment programmes is being developed by an independent consultant drawing on a range of expertise including the Office of Government Commerce, DfES, Home Office 'Active Communities Unit' (relationship with voluntary sector providers).
  Changes from the review are being implemented as they are developed and agreed by the Steering Group; the bulk of policy change will be agreed and many changes implemented by April 2004.
  I hope this is helpful.

  Occupational Pensions
  Kevin Brennan
  To ask the Secretary of State for Work and Pensions what recent consultations he has had with the European Commission in relation to whether the Government are meeting their obligations to protect occupational pensions under Article 8 of the European Insolvency Directive 1980; and if he will make a statement. [145726]

  Mr. Pond
  We have not had recent consultations with the European Commission in relation to Article 8 of the EU Insolvency Directive 80/897. However, we have recently sent the Director General for Employment and Social affairs at the European Commission information on the transposition of Article 8 of the EU Insolvency Directive 80/897 and Article 3(4) of Council Directive 2001/23/EC (TUPE).

  We take our obligations under Article 8 of the Insolvency Directive seriously and we fully meet our obligations under the Directive, as successive Governments have done since it was adopted in 1980.
  462W
  In its report of 15 June 1995 on transposition of the Directive (COM(95)164), the European Commission concluded that United Kingdom legislation met the requirements of Article 8. This was further confirmed on 20 December 2002 by Mrs. Diamantopoulou, on behalf of the Commission, in response to a parliamentary question.

  Poverty
  Hugh Bayley
  To ask the Secretary of State for Work and Pensions if he will estimate the number of children living in poverty in(a) the UK, (b) Yorkshire and (c) the City of York in (i) 1997 and (ii) now. [146469]

  Mr. Pond
  Poverty and social exclusion are complex and multi-dimensional issues, affecting many aspects of peoples' lives—including their living standards, health, housing, the quality of their environment—and not just low income. The fifth annual "Opportunity for all" report (Cm 5956) sets out the Government's strategy for tackling poverty and social exclusion and presents information on the indicators used to measure progress against this strategy.

  Specific information regarding low income for Great Britain is available in "Households Below Average Income 1994/95–2001/02". Data is not available at the UK level, or below regional level.

  "Measuring child poverty", published in December 2003, outlines the Government's measure of UK child poverty for the long term. This new measure will begin from 2004–05.

  All publications listed are available in the Library.

HEALTH

  Child Protection Register
  Dr. Tonge
  To ask the Secretary of State for Health, how many children on the Child Protection Register have not yet been allocated a social worker. [145724]

  Margaret Hodge
  The information requested is not held centrally.

  The Government accepted Recommendation 54 of the Victoria Climbie Inquiry Report which stated that "Directors of Social Services must ensure that all cases of children assessed as needing a service have an allocated social worker. In cases where this proves to be impossible, arrangements must be made to maintain contact with the child. The number, nature and reasons for such unallocated cases must be reported to the Social Services Committee on a monthly basis, (paragraph 6.589)".

  The allocation of social workers was included in the checklist of good practice recommendations issued on publication of the report. The resulting Social Services Inspectorate (SSI) audit revealed that a small number of local authorities had children who were not allocated a social worker. The SSI will follow up this issue as part of its performance assessment of councils.

  Genetically Modified Food
  Joan Ruddock
  To ask the Secretary of State for Health pursuant to the answer of 17 December,Official Report,

  Department of Health Vacancies Survey

  Health visitor three month vacancies in NHS trusts by Government office region—three month vacancy rates, numbers and staff in post

  3 month vacancy rate (percentage)

  3 month vacancy number

  Staff in post (whole time equivalent)

  Staff in post (headcount)

  March 1999

  September 1998

  England

  1.0

  99

  10,068

  12,572

  East Midlands

  0.4

  3

  796

  988

  East of England

  1.5

  14

  913

  1,192

  London

  2.2

  36

  1,622

  1,965

  North East

  0.4

  2

  564

  658

  North West

  0.2

  3

  1,591

  1,911

  South East

  1.4

  21

  1,484

  1,984

  South West

  0.4

  4

  946

  1,205

  West Midlands

  0.5

  5

  1,105

  1,346

  Yorkshire and the Humber

  1.1

  11

  1,046

  1,323

  Department of Health Vacancies Survey

  Health visitor three month vacancies in NHS trusts by Government office region—three month vacancy rates, numbers and staff in post

  3 month vacancy rate (percentage)

  3 month vacancy number

  Staff in post (whole time equivalent)

  Staff in post (headcount)

  March 2000

  September 1999

  England

  1.9

  192

  10,161

  12,800

  East Midlands

  1.4

  11

  811

  1,037

  East of England

  4.0

  36

  883

  1,135

  London

  3.3

  57

  1,693

  2,052

  North East

  0.4

  3

  569

  659

  North West

  2.6

  42

  1,588

  1,903

  South East

  1.2

  19

  1,524

  2,084

  South West

  0.3

  3

  920

  1,189

  West Midlands

  1.2

  14

  1,132

  1,420

  Yorkshire and the Humber

  0.6

  6

  1,040

  1,321

  464W
  column 995W, on genetically modified food, whether safety testing for Bt11 sweetcorn was carried out on sweetcorn destined for human consumption. [146327]

  Miss Melanie Johnson
  The safety of Bt11 sweetcorn has been evaluated under the procedures set out in Regulation (EC) No 258/97 and according to the European Community Scientific Committee on Food's scheme for the safety assessment of genetically modified foods. The safety assessment involved detailed analysis of both the Bt11 field maize and Bt11 sweetcorn intended for human consumption. The Scientific Committee on Food was satisfied on the basis of all the information provided that the Bt11 sweetcorn was as safe as its conventional counterpart.

  Health Visitors
  Mr. Baron
  To ask the Secretary of State for Health what the vacancy rates were for health visitors in(a) the UK, (b) London and (c) each region for each year since 1997. [146326]

  Mr. Hutton
  [holding answer 7 January 2003]The Department's annual vacancy survey, which collects health visitor vacancies started in 1999. The three month vacancy rate and number for health visitors and also the number of health visitors in post in both whole time equivalent and headcount in England and in each Government Office Region since 1999 is shown in the table.

  Information in respect of health visitors in Scotland and Wales is the responsibility of the devolved administrations. While the institutions in Northern Ireland are dissolved responsibility rests with Ministers in the Northern Ireland office.
  465W

  Department of Health Vacancies Survey

  Health visitor three month vacancies in NHS trusts by Government office region—three month vacancy rates, numbers and staff in post

  3 month vacancy rate (percentage)

  3 month vacancy number

  Staff in post (whole time equivalent)

  Staff in post (headcount)

  March 2001

  September 2000

  England

  2.2

  227

  10,046

  12,827

  East Midlands

  1.4

  11

  796

  1,028

  East of England

  1.6

  16

  928

  1,210

  London

  6.4

  105

  1,604

  1,968

  North East

  0.7

  4

  593

  691

  North West

  0.9

  15

  1,562

  1,896

  South East

  2.3

  35

  1,512

  2,102

  South West

  1.7

  16

  938

  1,231

  West Midlands

  0.6

  7

  1,107

  1,410

  Yorkshire and the Humber

  1.6

  17

  1,007

  1,291

  Department of Health Vacancies Survey

  Health visitor three month vacancies in NHS trusts by Government office region—three month vacancy rates, numbers and staff in post

  3 month vacancy rate (percentage)

  3 month vacancy number

  Staff in post (whole time equivalent)

  Staff in post (headcount)

  March 2002

  September 2001

  England

  2.7

  281

  10,186

  13,053

  East Midlands

  1.6

  12

  798

  1,038

  East of England

  2.5

  23

  884

  1,187

  London

  7.0

  120

  1,636

  1,999

  North East

  1.8

  13

  565

  655

  North West

  1.4

  23

  1,594

  1,942

  South East

  3.1

  46

  1,496

  2,047

  South West

  1.5

  15

  935

  1,258

  West Midlands

  1.2

  13

  1,140

  1,435

  Yorkshire and the Humber

  1.5

  16

  1,139

  1,492

  Department of Health Vacancies Survey

  Health visitor three month vacancies in NHS trusts by Government office region—three month vacancy rates, numbers and staff in post

  3 month vacancy rate (percentage)

  3 month vacancy number

  Staff in post (whole time equivalent)

  Staff in post (headcount)

  March 2003

  September 2002

  England

  2.3

  229

  9,912

  12,774

  East Midlands

  2.7

  21

  784

  1,016

  East of England

  3.4

  31

  855

  1,148

  London

  5.2

  77

  1,454

  1,763

  North East

  0.8

  5

  570

  668

  North West

  1.2

  18

  1,578

  1,968

  South East

  3.0

  46

  1,546

  2.166

  South West

  1.6

  15

  919

  1,241

  West Midlands

  0.5

  5

  1,108

  1,391

  Yorkshire and the Humber

  0.9

  11

  1,097

  1,413

  Notes:

  1. Three month vacancy information is as at 31 March each year.

  2. Three month vacancies are vacancies which Trusts are actively trying to fill, which had lasted for three months or more (whole-time equivalents).

  3. Rates are three month vacancies expressed as a percentage of three month vacancies plus whole-time equivalent staff in post.

  4. From 2001, rates are calculated using staff in post from the Vacancy Survey. Prior to this, rates are calculated using staff in post from the previous September's workforce census.

  5. Staff in post data is as at 30 September each year.

  Source:

  Department of Health Vacancy Survey.

  Department of Health Non-Medical Workforce Census.
  466W

  Waiting Lists/Times
  Mr. Brady
  To ask the Secretary of State for Health what estimate he has made of the waiting time for a routine MRI scan in each NHS trust in England. [145184]

  Mr. Hutton
  [holding answer 5 January 2003]Data on waiting times for diagnostic tests are not collected centrally, however data may be collected locally. The central returns capture consultant speciality level data on waits for a first outpatient appointment and for inpatient admissions.

  However, it is the Governments' priority to ensure that all patients are seen quickly in the first instance so that if diagnostic tests are required they are requested sooner. Where this is not the case we are determined to speed up the process. The National Health Service is committed to reducing the length of time that people wait before their treatment starts and the NHS Plan set targets for staged reductions in waiting times.

  Public Health Nurses
  Mr. Baron
  To ask the Secretary of State for Health whether public health nurses are employed within the NHS. [146323]

  Mr. Hutton
  [holding answer 7 January 2003]Health visitors, school nurses, communicable disease control nurses and occupational health nurses are employed as public health nurses within the National Health Service. These disciplines focus on preventing ill health and operate at a population level as well as undertaking preventive work with individuals and families.

  Old Runwell Hospital
  Mr. Francois
  To ask the Secretary of State for Health when he expects to complete the sale of the Old Runwell Hospital site for partial redevelopment; and if he will make a statement. [145064]

  Mr. Hutton
  [holding answer 5 January 2003]It is intended to settle a disposal strategy for the Old Runwell Hospital site once outline planning permission has been achieved.

  Social Workers
  Dr. Tonge
  To ask the Secretary of State for Health what action he is taking to increase the number of social workers with a child protection background. [145723]

  Dr. Ladyman
  The Government are funding a national social work recruitment campaign aimed at raising awareness about what social workers do and increasing the number of applications to social work training. The campaign has been successful so far in reversing the trend of falling numbers of applications to social work courses: in 2002 the applications rose by 6.5 per cent. A post-qualifying child care award was developed in 1999 to ensure that social workers are equipped to undertake complex child care work and provide high quality services to children and families. Child protection is one of the areas covered by the award.
  468W
  Since January 2000, specific funds have been provided through the Training Support Programme Grant to help support child care social workers who undertake the award.

NORTHERN IRELAND

  Departmental Staff
  Mr. Russell Brown
  To ask the Secretary of State for Northern Ireland what percentage of staff employed within his Department are over 55 years of age; and what(a) number and (b) percentage of staff recruited over the last 12 months are over 55 years of age. [1459281

  Mr. Pearson
  7.2 per cent. of those employed by the Northern Ireland Civil Service and the Northern Ireland Office are aged over 55. 29—or 0.9 per cent.—of those who were recruited in the year to September 2003 were aged over 55.

  Civil Servants (Disabilities)
  Tim Loughton
  To ask the Secretary of State for Northern Ireland how many senior civil servants in his Department are disabled, expressed in(a) numbers and (b) as a percentage of whole-time equivalents. [144980]

  Mr. Pearson
  Eight senior civil servants in the Northern Ireland Civil Service and the Northern Ireland Office have declared a disability. This amounts to 3 per cent. of those senior civil servants who have provided information on whether or not they have a disability. Staff provide information on disability voluntarily.

  Fair Trade Products
  Mr. Bercow
  To ask the Secretary of State for Northern Ireland whether it is the policy of his Department to use fair trade products, as a matter of course, in(a) sales on departmental premises and (b) receptions and meetings involving staff and visitors. [142810]

  Mr. Pearson
  The sale and use of fair trade products by Departments of the Northern Ireland Administration and the Northern Ireland Office is limited to food products used in catering. Almost all staff catering services have been contracted out since the early nineties and the sale of food products on departmental premises, and their use in receptions and meetings involving staff and visitors, has therefore become the responsibility of the private sector suppliers.

  There is no requirement to provide fair trade products. Government Departments in Northern Ireland are free to make their own decisions on such products against a background of obtaining best value for money, the European Community Procurement Directives and individual departmental objectives.

  Giant's Causeway
  David Burnside
  To ask the Secretary of State for Northern Ireland if he will make a statement on the development of tourist facilities at the Giant's Causeway in County Antrim. [146648]
  469W
  Mr. Pearson
  On 14 April 2003 I, along with my ministerial colleague Angela Smith MP, announced proposals to deliver new facilities at the Giant's Causeway which would be capable of offering a world class experience to visitors.

  Our proposals centred on the commissioning of an international competition to design new visitor facilities which would complement the Giant's Causeway as a World Heritage Site. This international competition, which will be initiated in early spring, will seek designs from around the world and I am confident that by proceeding along this path we can deliver a world class solution that will continue to capture the imagination of visitors in 20 years time.

  The Government are committed to seeing visitor facilities at the Giant's Causeway that are genuinely world class, conform to the highest standards in terms of economic and environmental sustainability and which will greatly enhance Northern Ireland's place on the International map as a tourist destination.

  Over the past number of months my officials, in conjunction with colleagues in the Environment and Heritage Service, the Northern Ireland Tourist Board and the Department of Finance and Personnel, have been exploring a number of options with regard to the most appropriate method of delivering the solution. These discussions are ongoing. The National Trust and Moyle District Council, the owners of the site, have also been kept informed of developments.

  Prison Service
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland how much it has cost to date to transport the(a) Director General and (b) Director of Operations of the Northern Ireland Prison Service in armoured vehicles when they are in the Province on business. [146176]

  Jane Kennedy
  It is inappropriate for me to comment on the security arrangements of individuals.

  Students graduating from teacher training colleges

  Institutions

  1998–99

  1999–2000

  2000–01

  2001–02

  2002–03

  Stranmillis University College

  134

  127

  145

  149

  167

  St. Mary's University College

  160

  151

  146

  150

  170

  Queen's University

  159

  172

  184

  190

  199

  University of Ulster

  169

  169

  181

  185

  187

  Open University

  27

  25

  1—

  1—

  2—

  1Course withdrawn.

  2No graduates until March 2004.

EDUCATION AND SKILLS

  School Behaviour and Attendance Funding
  Mr. Luff
  To ask the Secretary of State for Education and Skills how many schools in each local education authority area received behaviour and attendance funding in the current financial year; and what the total funding made available in the current financial year under the programme was in each local education authority area. [145433]

  Saville Inquiry
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland what the cost has been of the Saville Inquiry so far; and what his estimate is of the eventual overall cost. [144450]

  Mr. Spellar
  On the figures available at the end of December 2003 the total cost of the Bloody Sunday Inquiry has been £127 million. The Northern Ireland Office has spent £103.5 million. My right hon. Friend the Secretary of State for Defence advises me that his Department has spent £23.5 million. The overall cost of the Inquiry is estimated to be £155 million.

  Sinn Fein-IRA
  David Burnside
  To ask the Secretary of State for Northern Ireland if he will make a statement on the relationship between Sinn Fein's elected representatives and the membership of the Provisional IRA and its Army Council. [146646]

  Jane Kennedy
  The Provisional IRA remains a proscribed terrorist organisation, Sinn Fein are not—they are a political party. However, it is the Government's view that both organisations are inextricably linked. Information about the links between individual members of Sinn Fein and the IRA is an intelligence matter and in line with Part II, Paragraph 4 ("Law enforcement and legal proceedings") of the Code of Practice on access to Government Information, it would be inappropriate to comment.

  Teacher Training
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many students graduated from teacher training colleges in each of the last five years; and how many were employed in a school within one year of graduating. [1453041

  Jane Kennedy
  The number of students who have graduated from the Higher Education Institutions in each of the last five years are shown in the following table. The Department does not maintain statistics on the number of graduates employed in schools within one year of graduating.

  Mr. Ivan Lewis
  The behaviour and attendance strand of our Key Stage 3 Strategy provides audit and training materials and expert advice. These are freely available to all secondary schools. In addition, our Behaviour Improvement Programme (BIP) funds a range of measures to support schools in disadvantaged areas facing the greatest challenges. 60 BIP local education authorities (LEAs) are each receiving about 1.4 million in the current financial year to fund these measures. Individual LEAs and Excellence in Cities partnerships
  471W
  decide which measures to adopt and which schools to involve in the light of local needs. They give priority to a core group of schools, typically four secondary schools and about 20 linked primary schools in an LEA. But in many LEAs other schools also benefit from BIP measures, which include multi-agency Behaviour and Education Support Teams and extra Learning Support Units, Learning Mentors and Education Welfare Officers as well as locally-devised initiatives.

  Child Poverty
  Tim Loughton
  To ask the Secretary of State for Education and Skills (1) how many children in(a) England and (b) Wales lived in poverty in (i) 2001–02 and (ii) 2002–03; [145659]

  (2) what definition he uses of child poverty. [145660]

  Mr. Pond
  I have been asked to reply.

  Poverty and social exclusion are complex and multidimensional issues, affecting many aspects of peoples' lives, including their living standards, health, housing, the quality of their environment and not just low income. The fifth annual 'Opportunity for all' report (Cm 5956) sets out the Government's strategy for tackling poverty and social exclusion and presents information on the indicators used to measure progress

  1999–2000

  2000–2001

  2001–2002

  Subject Area

  Enrolments

  Achievements

  Enrolments

  Achievements

  Enrolments

  Achievements

  Construction

  780

  590

  850

  710

  920

  290

  Computing

  8,580

  5,040

  9,190

  6,760

  9,140

  3260

  Electronics

  90

  40

  100

  20

  190

  160

  Manufacturing Engineering

  180

  150

  210

  160

  70

  30

  Hospitality. Catering and Tourism

  5,130

  770

  5940

  1,770

  5,460

  4710

  Source:

  Individualised Student Record

  Further Education
  Mr. Djanogly
  To ask the Secretary of State for Education and Skills what proportion of 16 to 18 year olds in Huntingdon(a) started further education courses and (b) completed such courses in each year since 1999. [146437]

  Alan Johnson
  Data on the percentage of students participating in post-compulsory education are not calculated for areas smaller than Local Education Authorities (LEAs) as reliable estimates cannot be made. Furthermore, participation rates at sub-national level are only available for 16 and 17 year olds. The percentage of 16 and 17 year olds participating in full-time education and in education and training in Cambridgeshire LEA for end 1998 to end 2000, the latest available year, is shown in the table.

  Participation in education and training of 16 and 17 year olds in Cambridgeshire LEA, 1998 to 2000

  Year

  Full-time education (percentage)

  Total education and training1 (percentage)

  1998

  65

  76

  1999

  67

  77

  2000

  66

  76

  472W
  against this strategy. The Welsh Assembly also publish their own annual report on poverty and social exclusion, the latest of which is 'The Third annual report on social inclusion in Wales'.

  Specific information regarding low income for Great Britain is available in 'Households Below Average Income 1994/95 to 2001/02'; data are not yet available for 2003–03.

  'Measuring child poverty', published in December 2003, outlines the Government's measure of UK child poverty for the long-term; this new measure will begin from 2004/05.

  All publications listed are available in the Library.

  Mr. Djanogly
  To ask the Secretary of State for Education and Skills how many(a) enrolments and (b) graduations there were in each of the last three years in Cambridgeshire further education colleges in (i) construction, (ii) computing, (iii) software engineering, (iv) electronics, (v) manufacturing engineering and (vi) hospitality, catering and tourism. [146442]

  Alan Johnson
  In the last three years, there were no learners enrolled on Software Engineering courses at further education colleges in Cambridgeshire. The number of enrolments on courses in the other subject areas requested, and the number of qualifications achieved in those subjects, are shown in the table.

  1Includes participation in full-time education, part-time education and government supported training

  Source:

  DfES Statistical Bulletin, published 16 December 2002.

  Completion (retention) rates are only available for Learning and Skills Council (LSC) funded learners at further education and sixth form colleges. The proportion of courses studied for at colleges in Cambridgeshire by 16–18 year olds that were completed in the three years to 2001/02 is shown in the table.

  Retention rates in LSC funded FE provision for 16–18 year olds studying at FE and sixth form colleges in Cambridgeshire by expected end year

  Expected end year

  Retention rate (percentage)

  19992000

  82

  2000–01

  83

  2001–02

  86

  Source:

  Individualied Student Record

  School Funding
  Mr. Hoban
  To ask the Secretary of State for Education and Skills if he will list for each programme funded by the Department for(a) primary schools and

  473W
  (b) secondary schools introduced in each year since 1997 the funding available in the year the programme started and in each subsequent year; and whether at the end of the life of each programme it was expected that the school would continue to fund that programme. [145613]

  Mr. Charles Clarke
  [holding answer 5 January 2004]It is not possible to answer the Question in precisely the way it has been asked. Table 3.2 of the Department's Annual Report sets out the Departmental funding for schools since 1997 and that shows an increase from less than £2 billion in 1998 to almost £9 billion this year. A copy of the Report has been placed in the Library. However, most programmes were not specifically for particular types of schools and local education authorities were free to distribute the grants between schools in their areas.

  In 2003–04, the Department stopped paying grant for programmes which were worth £800 million in 2002–03 as part of our commitment to reduce ringfenced funding for schools. However much of this funding relates to time-limited courses that had run their course. Having regard to the £250 million headroom between the £2.7 billion increase in general funding for schools which took account of the overall pressures on schools, including the £800 million grant reduction, we intended that each school should choose for itself whether to continue the programmes previously supported through specific grant.

  Over the next two years, we have announced that we will be making available additional non-ringfenced resources to reverse the reductions in the Standards Fund which were previously planned. For 2004–05, schools will generally receive a 4 per cent. cash increase on this year's Standards Fund allocation so there should be no reason for any school to decide on financial rather than educational grounds not to continue a particular programme. In total I am making an additional £820 million extra available over the years 2004/05 and 2005/06.

  School Leavers
  Tim Loughton
  To ask the Secretary of State for Education and Skills how many children left school in 2002–03 without a GCSE pass. [145663]

  Mr. Miliband
  The provisional figures for 2002/03 show that 5.4 per cent., or 33,506 pupils aged 15, failed to achieve a GCSE or GNVQ equivalent pass.

  School Trips
  Mr. Gardiner
  To ask the Secretary of State for Education and Skills if he will assess the(a) educational and (b) social benefits for pupils from low income backgrounds of taking part in school trips; and if he will take steps to provide specific funding for such trips. [145526]

  Mr. Miliband
  My Department recognises the benefits of educational visits for all pupils. Such visits which take place during term time are available to all maintained school pupils, regardless of the parental income.

  Student Finance
  Simon Hughes
  To ask the Secretary of State for Education and Skills what the average student loan taken out by students in(a) each region and (b) England was in each year since 1997–98. [146092]

  Alan Johnson
  The tables show the average full-time income-contingent loan taken out by students in the English Government Office Regions and in England and the average mortgage style loan taken out by students in England.

  Average income-contingent1,2 loan taken out by domicile of student—academic years 1999/2000 to 2002/033

  Academic year

  Government Office Region4,5

  1999/2000

  2000/016

  2001/027

  2002/038

  North East

  3.060

  3,020

  3,060

  n/a

  North West

  3,130

  3,090

  3,130

  n/a

  Yorkshire and Humberside

  3,110

  3.080

  3,130

  n/a

  East Midlands

  3,190

  3,120

  3,170

  n/a

  West Midlands

  3,140

  3,090

  3,150

  n/a

  East of England

  3,180

  3,150

  3,190

  n/a

  Inner London

  3,540

  3,470

  3,500

  n/a

  Outer London

  3,240

  3,200

  3,240

  n/a

  South East

  3,180

  3,130

  3,160

  n/a

  South West

  3,240

  3,190

  3,250

  n/a

  England

  3,180

  3,160

  3,190

  3,240

  n/a = Regional breakdown not yet available.

  1 New student support arrangements were introduced from academic year 1998/99. New students in 1998/99 (apart from certain specified exceptions) received support for maintenance expenditure through means-tested grants (comprising about a quarter of the support available) and non income-assessed student loans (comprising about three quarters of the support available). From 1999/2000 students who entered higher education after 1998/99 received support for maintenance expenditure through loans, of which approximately three quarters of the value was non income-assessed. Loans made under these arrangements are repayable on an income contingent basis.

  2 Excludes the fixed rate loans (£500) for eligible part-time students, introduced in September 2000.

  3 Figures have been rounded to the nearest £10.

  4 Government Office Region of domicile of student.

  5 Regional level data have been taken from available information and may include a small number of loans which have been authorised for payment but not paid.

  6 The apparent fall in the average value of income-contingent loan taken out in 2000/01 can be explained mainly by the fact that this was the third year of this loan scheme; students on the third year of a three year course will receive the final year rate of loan which is at a lower rate as it does not cover the summer vacation. This effect is not present in 1999/2000 and has been levelled out in the years subsequent to 2000/01. Additionally, this is likely to be the first year in which those students on sandwich courses have their placement year and are therefore in receipt of the reduced rate of loan.

  7 Latest year for which data by region are available.

  8 Provisional.

  Source:

  Student Loans Company.

  Average mortgage style1 loan taken out by domicile of student—academic years 1999/2000 to 2002/032

  Academic year

  Domicile—England

  1999/2000

  1,470

  2000/01

  1,460

  2001/02

  1,520

  2002/033

  1,580

  475W
  1Loans available to students who entered higher education up to academic year 1997/98 and those who entered in 1998/99 under existing arrangements. These loans are non-income assessed and are repayable on a fixed term, mortgage style, basis.

  2 Figures have been rounded to the nearest £10.

  3 Provisional

  Source:

  Student Loans Company.

  Data on income-contingent loans at a regional, or England level are not available for academic year 1998/ 99; data on the domicile of students taking out fixed rate mortgage style loans (normally those who entered higher education before 1998/99) are only available at a UK level for 1997/98 and 1998/99. For subsequent years, data are not available below England level because applications are made through the students' education institution.

  Teaching Methods
  Mr. Gibb
  To ask the Secretary of State for Education and Skills pursuant to his answer of 11 December 2003,Official Report, column 613W, on teaching methods, what the specific provisions are in the (a) primary and (b) key stage three strategies in relation to the way pupils are grouped. [145475]

  Mr. Stephen Twigg
  The design of effective lessons is fundamental to the pursuit of high quality teaching and learning whatever the age of the pupil, their level of ability, or the subject or skill being learned.

  The Primary Strategy recommends that literacy and mathematics lessons begin with whole class teaching sessions followed by guided reading and writing activities, during which pupils are grouped according to their individual learning needs.

  The Key Stage 3 National Strategy recommends a consideration of pupil grouping as part of classroom organisation which is one contributory factor towards effective lesson design. Furthermore, the Strategy has produced a range of materials for schools (such as critical teaching units, literacy progress units, Springboard 7, learning challenge and booster materials) to use in meeting the needs of pupils below expected levels. These allow schools, depending on their particular local circumstances, the flexibility of being able to provide whole class teaching; to re-group pupils according to their needs and abilities; provide within-class pupil grouping and one-to-one coaching or mentoring.

  Truancy
  Mr. Forth
  To ask the Secretary of State for Education and Skills pursuant to his answer of 4 December,Official Report, column 194W, on truancy, if he will list the programmes within the Behaviour Improvement Programme 2002 to 2004; and what the (a) purpose and (b) cost of each was. [R] [144138]

  Mr. Ivan Lewis
  The Behaviour Improvement Programme funds a range of measures to improve behaviour, reduce exclusions, provide full-time education for excluded pupils, reduce truancy, improve attendance and provide key workers for children at risk of exclusion, truancy and crime. Different measures are 476W
  adopted by local education authorities and Excellence in Cities partnerships to reflect local priorities. They typically include:
  Behaviour and Education Support Teams, which bring together education, health and social care professionals to provide multi-agency support for pupils with serious behaviour problems, their families and their schools;
  expanded Learning Support Units, which provide in-school education for disruptive pupils outside mainstream classes;
  additional Learning Mentors, who provide support for individual pupils with behaviour and attendance problems;
  additional time for senior school staff to focus on behaviour and attendance issues;
  electronic registration systems for schools;
  enhanced Pupil Referral Units and other forms of alternative provision for excluded pupils;
  additional services on school sites to increase community involvement; and
  support for parents of disaffected or excluded pupils.

  Each BIP LEA is receiving about £1.4 million in 2003–04 and will receive a similar level of funding in 2004–05.

CONSTITUTIONAL AFFAIRS

  Correspondence
  David Winnick
  To ask the Parliamentary Secretary, Department for Constitutional Affairs pursuant to his answer of 18 December 2003,Official Report, column 1115W, when the hon. Member for Walsall, North will receive a reply to his letter of 13 November to Lord Filkin; and why the reply was not sent by 22 December. [146618]

  Mr. Leslie
  Lord Filkin wrote on 7 January 2004 to my hon. Friend the Member for Walsall, North in response to his letter of 13 November 2003. I apologise for the delay, unfortunately administrative errors prevented an earlier reply.

PRIME MINISTER

  LNM Holdings
  Adam Price
  To ask the Prime Minister what representations he and members of the Government have received from LNM Holdings in the last year. [146649]

  The Prime Minister
  As far as I am aware I have received none and my office has made inquiries with the Foreign and Commonwealth Office, the Department for Trade and Industry and the Department for International Development, who are also not aware of any representations.

  Proportional Representation
  Mr. Viggers
  To ask the Prime Minister what discussions he has held recently with representatives of political parties on the subject of proportional representation. [146620]

  The Prime Minister
  I have had no recent discussions on this issue.

  Steel Industry (Romania)
  Adam Price
  To ask the Prime Minister what representations his Government have made to the Romanian Government regarding the steel industry since January 2003. [146650]

  The Prime Minister
  The Government have made no bilateral representations to the Romanian Government regarding the steel industry since January 2003.

  The Government have had contacts with the Romanian Government on steel in the context of adherence to existing trade agreements and EU accession negotiations on competition and state aid.

DEPUTY PRIME MINISTER

  Brownfield Sites
  Jane Griffiths
  To ask the Deputy Prime Minister whether his Department designates former mineral workings as brownfield sites; and if he will make a statement. [145388]

  Keith Hill
  The Government's definition of brownfield land includes land used for mineral extraction and waste disposal where provision for restoration has not been made through development control procedures. Specifically this relates to minerals and waste sites which have remained unrestored after use. All other such sites will be restored to `greenfield' status, by virtue of the planning condition.

  Community Facilities
  Dr. Whitehead
  To ask the Deputy Prime Minister how much land has been acquired by(a) English Partnerships and (b) regional development agencies since January 2002 to enable the provision of (i) public transport, (ii) public open spaces, (iii) schools, (iv) hospitals and (v) other community facilities in each of the (A) four growth areas in the South East and (B) nine pathfinder areas announced in the Communities Plan. [145751]

  Keith Hill
  Since January 2002, English Partnerships and the regional development agencies (RDAs) have acquired land for regeneration activity within the boundaries of the four Growth areas and the nine Market Renewal Pathfinder areas, as follows:

  Quantity of Land acquired (hectares)

  English Partnerships

  Regional development agencies

  Market Renewal Pathfinder areas

  26.5

  145.2

  Growth areas

  5.25

  54.3

  These acquisitions include sites within urban regeneration company areas that fall within the boundaries of the Pathfinder and Growth areas. Land has not yet been directly acquired as part of the Market Renewal Pathfinder schemes.

  In his statement on 30 July 2003, my right hon. Friend the Deputy Prime Minister announced that we had agreed in principle to provide funding to help English Partnerships and the relevant RDAs acquire land
  478W
  for remediation and eventual release for future development in the Milton Keynes/South Midlands and Ashford Growth Areas.

  Sustainable mixed use will be promoted for acquired sites but until further master planning and development agreements have been finalised, their precise use will not be known.

  Deprivation
  Mr. Betts
  To ask the Deputy Prime Minister what progress has been made in taking housing costs into account when measuring income levels in revised indices of deprivation. [146109]

  Yvette Cooper
  The possibility of making an adjustment for the 'cost of living' including housing costs was considered as part of the project to update the Indices of Deprivation 2000. The main source of comprehensive data on this subject is the Retail Price Index compiled by the Office for National Statistics. This Index, however, is only available at national level and would not allow adjustments to the Income domain at sub-district level. It is therefore not possible to make any adjustment for housing costs in this update.

  Mr. Betts
  To ask the Deputy Prime Minister what progress has been made in publishing indices of deprivation by Super Output Area level. [146110]

  Yvette Cooper
  The proposal to publish the Index at Super Output Area level (SOA) was overwhelmingly supported in the recently concluded consultation on updating the Indices of Deprivation. The Office of the Deputy Prime Minister's ability to publish the Index at SOA Level 1 (between 1,000–3,000 population) is dependent on the provision of the SOA boundaries and testing of the data to ensure that there are no concerns over disclosure or data reliability at this level. The relevant boundaries have now been received from the Office for National Statistics and testing of the data has begun.

  Firefighters
  Mr. Djanogly
  To ask the Deputy Prime Minister how many regular firefighters were employed by the Cambridgeshire Fire and Rescue Service on 1 December 2003. [146436]

  Mr. Raynsford
  Information provided by the Cambridgeshire Fire and Rescue Service shows that there were 283 wholetime firefighters employed by them on 1 December 2003.

  Housing Stock Transfer
  Mr. Drew
  To ask the Deputy Prime Minister what plans he has to monitor the performance of tenants' advisers in the process of stock transfer; and which organisations will undertake this work. [146498]

  Keith Hill
  The Office of the Deputy Prime Minister has no plans to monitor the performance of Independent Tenants' Advisers (ITAs) involved in the stock transfer process. Guidance published in December 2001 by the Office makes clear that an ITA is expected to provide good quality, tailored and flexible services that meet tenants' needs.
  479W
  Mr. Drew
  To ask the Deputy Prime Minister how many complaints have been received on the role and probity of tenants' advisers involved in discussions on transfer of council stocks. [146499]

  Keith Hill
  While the Office of the Deputy Prime Minister may receive comments in relation to the work of Independent Tenant Advisers, in general there have been no formal complaints received on the role and probity of tenants' advisers involved in discussions on transfer of council stock.

  Local Authority Funding
  Mr. Tyrie
  To ask the Deputy Prime Minister if he will publish the(a) calculations and (b) assumptions used to reach the revised levels he has set for grant floor and ceilings following the Chancellor's announcement in the pre-Budget Report on 10 December. [144633]

  Mr. Raynsford
  I refer the hon. Member to the answer given on 16 December 2003,Official Report, column 856W.

  Local Referendums
  Bob Russell
  To ask the Deputy Prime Minister what procedures are available to residents of shire boroughs and districts to request a referendum on a major local issue. [146571]

  Mr. Raynsford
  Residents may make representations to their local authority about holding referendums on any matter, including finance, which relates to the services for which the local authority is responsible, or to its power to promote the well-being of its area. The decision on whether to hold the referendum is for the local authority.

  Millennium Dome
  Miss Kirkbride
  To ask the Deputy Prime Minister how much public money has been spent on the Millennium Dome in each week in the last three months; and if he will make a statement on the total amount of public money spent on the Dome since 1 January 2001. [145811]

  Keith Hill
  The New Millennium Experience Company (NMEC) was responsible for maintaining the Dome from its closure on 31 December 2000 to end of June 2001. During this period NMEC, funded by the National Lottery and not taxpayers, incurred costs of £8.2 million; although this was partially offset by £3.9 million of income from the sale of assets during the decommissioning stage.

  English Partnerships (EP) took over responsibility in July 2001. Up to end of September 2003 EP incurred, net of VAT, expenditure of £26.6 million, after deduction of income from fee-paying events of £0.9 million. This figure (before deduction of income) is broken down as follows: management and maintenance (including staff costs) £6.5 million; decommissioning and site preparation for its long-term use £6.7 million; current sale process £7.6 million; earlier competition to find a long-term use for the Dome £6.7 million.
  480W
  Weekly figures are not readily available, and final cost figures are not yet available for the last quarter of 2003, as English Partnerships is awaiting a number of outstanding invoices. EP's costs incurred for the three months up to and including September 2003 were £1.05 million, comprising £385,000 on the current sale process and £665,000 on management and maintenance. The incurred monthly breakdown is as follows:

  (£)

  Month

  Current Sale Process

  Management and Maintenance (including staff costs)1

  Total

  July

  131,000

  188,000

  319,000

  August

  95,000

  252,000

  347,000

  September

  159,000

  225,000

  384,000

  Total

  385,000

  665,000

  1,050,000

  1 Monthly costs include rates, utilities, security and maintenance, and English Partnerships' staff costs on management and maintenance of the Dome. Costs are calculated on an accruals basis and may be subject to reassessments, by the relevant authorities, of rates or other charges included in the cost of managing and maintaining the Dome.

  All costs incurred by EP since it took over financial responsibility for the Dome in July 2001 and including the costs of the sale process will be recovered from eventual sale proceeds.

  Houses in Multiple Occupation
  Ms Oona King
  To ask the Deputy Prime Minister if he will list those local authorities in England who do not operate a discretionary notification or control registration scheme for houses in multiple occupation under Part XI of the Housing Act 1985. [146462]

  Keith Hill
  On the basis of the Housing Investment Programme 2003 returns, a total of 150 local authorities in England have yet not adopted Houses in Multiple Occupation (HMO) registration schemes. These local authorities are listed below:

  Adur

  Amber Valley

  Bassetlaw

  Bath and North East Somerset

  Bedford Berwick-upon-Tweed

  Blaby

  Blyth Valley

  Boston

  Bradford

  Braintree

  Breckland

  Brentwood

  Broadland

  Broxbourne

  Carrick

  Chesterfield

  Chichester

  Chiltern

  Chorley

  Christchurch

  City of London

  481W

  Congleton

  Corby

  Cotswold

  Craven

  Crawley

  Crewe and Nantwich

  Dacorum

  Dartford

  Daventry

  Derbyshire

  Dales

  Derwentside

  Dudley

  Durham

  Easington

  East Devon

  East Hertfordshire

  East Lindsey

  East Staffordshire

  Eastleigh

  Eden

  Ellesmere Port and Neston

  Elmbridge

  Epping Forest

  Epsom and Ewell

  Exeter

  Fenland

  Fylde

  Gedling

  Gloucester

  Great Yarmouth

  Halton

  Hambleton

  Harborough

  Hart

  High Peak

  Hinckley and Bosworth

  Horsham

  Hyndburn

  Ipswich

  Isle of Wight

  Islington

  Kennet

  Kerrier

  Knowsley

  Leicester

  Lewes

  Lewisham

  Liverpool

  Macclesfield

  Maldon

  Manchester

  Merton

  Mid Suffolk

  Mid Sussex

  North Cornwall

  482W

  North Dorset

  North East Derbyshire

  North Kesteven

  North Tyneside

  North West Leicestershire

  Northampton

  Norwich

  Nuneaton and Bedworth

  Oadby and Wigston

  Oswestry

  Plymouth

  Poole

  Reading

  Reigate and Banstead

  Restormel

  Ribble Valley

  Richmond upon Thames

  Richmondshire

  Rochford

  Rotherham

  Salisbury

  Sandwell

  Sedgefield

  Sedgemoor

  Sefton

  Selby

  Sevenoaks

  Shrewsbury and Atcham

  Slough

  Solihull

  South Cambridgeshire

  South Kesteven

  South Lakeland

  South Northamptonshire

  South Oxfordshire

  South Shropshire

  South Somerset

  South Staffordshire

  Spelthorne

  St. Helens

  Stevenage

  Stockport

  Stoke-on-Trent

  Stratford-upon-Avon

  Stroud

  Suffolk Coastal

  Swindon

  Taunton Deane

  Teignbridge

  Telford and Wrekin

  Three Rivers

  Thurrock

  Tonbridge and Mailing

  483W

  Tunbridge Wells

  Tynedale

  Vale of White Horse

  Vale Royal

  Walkefield

  Wandsworth

  Waverley

  Wealden

  Wellingborough

  Welwyn

  Hatfield

  West Berkshire

  West Dorset

  West Lindsey

  West Somerset

  West Wiltshire

  Wigan

  Windsor and Maidenhead

  Woking

  Worcester

  Worthing

  Wychavon

  Wyre

  Ms Oona King
  To ask the Deputy Prime Minister what his most recent estimate is of the number of(a) households and (b) people in privately rented houses in multiple occupation (HMOs) dwellings in England, broken down by (i) traditional and bedsit HMOs, (ii) shared houses and flats, (iii) households with lodgers and (iv) HMO buildings converted into flats. [146463]

  Keith Hill
  The most recent estimates for private rented houses in multiple occupation are from the 1996 English House Condition Survey:

  Private rented HMO in England 1996

  Thousands

  (i)Traditional and bedsit HMOs

  (ii) Shared house/flat

  (iii) Household with lodger2

  (iv) Buildings converted into flats1

  (a) Number of households

  165

  188

  202

  302

  (b) Number of people

  267

  547

  253

  472

  1Shared converted flats, households with lodgers in converted flats and bedsits in converted flats are included in the respective columns not in the converted flat total.

  2 The number of people refers to the number of lodgers and excludes the members of the landlord's household.

  Source:

  DETR (1999) "English House Condition Survey 1996 Houses in Multiple Occupation in the private rented sector".

  Ms Oona King
  To ask the Deputy Prime Minister what his most recent estimate is of the number of private houses in multiple occupation (HMOs) accommodation units and dwellings in England, broken down by (i) traditional and bedsit HMOs, (ii) shared houses and flats, (iii) households with lodgers and (iv) HMO buildings converted into flats. [146464]

  Keith Hill
  The most recent estimates for private houses in multiple occupation are from the 1996 English House Condition Survey.
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  Private rented HMO in England 1996

  Thousands

  (i)Traditional and bedsit HMOs

  (ii) Shared house/flat

  (iii) Household with lodger

  (iv) Buildings converted into flats1

  Number of accommodation units

  219

  189

  202

  337

  Number of dwellings

  56

  189

  202

  337

  1 Shared converted flats, households with lodgers in converted flats and bedsits in converted flats are included in the respective columns not in the converted flat total. Source:

  DETR (1999) "English House Condition Survey 1996 Houses in Multiple Occupation in the private rented sector".

  Starter Home Initiative
  Mr. Dhanda
  To ask the Deputy Prime Minister what plans he has to extend the Starter Home Initiative for key health workers; and if he will take steps to ensure that a wider range of health care professionals working in the NHS, including radiographers, are eligible. [146495]

  Keith Hill
  Under the Starter Home Initiative, assistance is available to a wide range of health staff including radiographers. Priorities for assistance depend upon the recruitment and retention difficulties being experienced. From 1 April 2004, a new key worker programme will succeed the Starter Home Initiative. This will provide assistance to first time buyers and existing homeowners who need to move to a larger home. It will also provide homes for key workers at below market rents. Funding will be targeted in areas where the high cost of housing is undermining recruitment and retention. Full details of the new programme, including the eligible key worker groups, will be announced by the beginning of March. Employer contributions will supplement assistance under the new programme.

  Thames Gateway
  Sir Sydney Chapman
  To ask the Deputy Prime Minister what initiatives are in place to improve professional planning and regeneration skills and capacity in order to deliver his plans for the regeneration of the Thames Gateway; and when the Government expect these initiatives to yield a major improvement in the availability of such professional skills and capacity. [146465]

  Keith Hill
  Improving the skills of planning, design and regeneration professionals will take time and will require the long-term commitment of a wide range of public, private and voluntary organisations.

  As part of this process Sir John Egan is currently undertaking a review of the professional skills required, to deliver the strategic objectives of our Sustainable Communities Plan. We are currently awaiting the outcome of this review. The conclusions of Sir John's report will be used to inform our longer-term strategic approach vis-a-vis the development of professional planning, design and regeneration skills as these relate to the built environment in the Thames Gateway and elsewhere.
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  Through our Sustainable Communities Plan, we have earmarked £17.0 million over the next three years, in order to improve the quality of skills associated with the Built environment. Of this the Commission for Architecture and the Built Environment (CABE) have received an initial allocation of £ 1.6 million to carry out a specific programme of skills related work. The experience and best practice developed as part of this work will be used to inform our longer-term strategic approach.

  Sir Sydney Chapman
  To ask the Deputy Prime Minister how the Government will ensure that new housing developments in the Thames Gateway meet high standards of design. [146466]

  Keith Hill
  The Office of the Deputy Prime Minister is committed to improving the quality of the built environment in the Thames Gateway and elsewhere. To ensure that this happens, Planning Policy Guidance 1 (PPG 1) "General Policy and Principles" requires that "good design should be the aim of all those involved in the development process and should be encouraged everywhere". This policy is supported by our good practice guidance, "By Design". We are currently in the process of updating PPG1 and will take this opportunity to restate our commitment to good quality and sustainable design.

  The Office of the Deputy Prime Minister is working with a wide range of partners to deliver this through a number of policy initiatives. Our Sustainable Communities Plan is central to achieving this and the comprehensive agenda this sets out includes significant extra funding for the Commission for Architecture and the Built Environment (CABE). This will be used to drive up design standards and to improve associated skills.

  We have increased funding for CABE from £0.5 million in 2002–03 to £17.75 million over the next three years. CABE are currently working with a range of key partners to ensure that strategies comprehensively incorporate robust requirements for good design. For example, CABE, in partnership with English Partnerships and the Housing Corporation, are scheduled to launch the Growth Areas Housing Quality Forum in March 2004. The Forum will bring together representatives from all key agencies involved in commissioning and procuring new housing, including local authorities, development agencies, mortgage lenders and landowners and will encourage the active participation of private sector house builders and Registered Social Landlords.

  Sir Sydney Chapman
  To ask the Deputy Prime Minister how many planning applications for housing or mixed use development in the Thames Gateway have been refused since March 2000 on the grounds of poor design quality. [146467]

  Keith Hill
  Information relating to the number of planning applications refused in the Thames Gateway since March 2000 on grounds of poor design is not recorded centrally and could be provided only at disproportionate cost. All local planning authorities within the Thames Gateway and elsewhere, are 486W
  statutorily obliged to keep information relating to the status of individual planning applications within their area of operation.

  Sir Sydney Chapman
  To ask the Deputy Prime Minister what plans the Government has for local planning authorities in the Thames Gateway to adopt specific quality criteria for housing and other developments; and what role the Government has in encouraging planning authorities to adopt such criteria. [146468]

  Keith Hill
  Planning Policy Guidance 1 (PPG1) "Planning Policy and Principles" requires that "good design should be the aim of all those involved in the development process and should be encouraged everywhere". This policy is supported by our good practice guidance "By Design". PPG1 also encourages Local Planning Authorities to draw up their own clear policies vis-a-vis the built environment and to prepare supplementary design guidance where appropriate. In preparing local policy and/or guidance, Local Planning Authorities are expected to take full account of any regional guidance that may impact upon their area of operation. For example, London Authorities would need to take account of guidance/criteria contained within the London Spatial Strategy.

  To this end, we have no plans at this stage to issue any specific quality criteria for housing and other developments in the Thames Gateway.

  The Office of the Deputy Prime Minister is currently in the process of updating PPG1 and will take this opportunity to restate our commitment to achieving good quality and sustainable design vis-a-vis the built environment.

  Waste Electrical and Electronic Equipment Directive
  Clive Efford
  To ask the Deputy Prime Minister what discussions he has had with the Department of Trade and Industry regarding the introduction of the Waste Electrical and Electronic Equipment Directive. [146984]

  Phil Hope
  Ministers and officials from the Office of the Deputy Prime Minister (ODPM) continue to discuss this issue with those Departments who have an interest in this Directive. This includes involvement in an official level inter-departmental project team led by the Department of Trade and Industry (DTI), which is planning for implementation of the Waste Electrical and Electronic Equipment Directive.

  Water Pollution
  Jane Griffiths
  To ask the Deputy Prime Minister (1) what instances there have been of oil and fuel-related pollution of water from(a) industrial and commercial premises and (b) domestic premises in each of the past five years; [145784]

  (2) how many (a) category 1 and (b) category 2 instances of oil and fuel-related pollution of water there were from (i) industrial and commercial premises and (ii) domestic premises in each of the past five years. [145785]

  Mr. Morley
  I have been asked to reply.
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  The Environment Agency will be able to provide some data for the years 2001–03. This will take a little time to compile but will be made available to the Library of the House as soon as possible. I will write to let you
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  know when that is. Comparable data for earlier years is not available and cannot be provided without incurring disproportionate cost.

DEFENCE

  Duke of York's Royal Military School and Queen Victoria School
  The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin)
  The Quinquennial review into the Duke of York's Royal Military School and Queen Victoria School has been discontinued before the production of a report in view of the constraints imposed by the royal warrants underpinning both foundations that effectively ruled out the review team's main recommendations, which involved removing the schools from Government control. The review did, however, identify a number of issues for further study. These will be taken forward by the Adjutant-General's headquarters in conjunction with the chief executive or head of each school. In the meantime, the two schools will remain as agencies of the Ministry of Defence.

HOME DEPARTMENT

  L21A1 Baton Round
  The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears)
  I have placed in the Library of the House a statement by the Defence Scientific Advisory Council (DSAC) on the ricochet potential of the L21A1 baton round. This baton round is used as a less lethal option by the police and the Army.

  The Ministry of Defence has carried out research on the post-ricochet trajectories and kinetic energy of baton rounds. The Sub-Committee, Defence Scientific Advisory Council has assessed the medical implications of the ricochets and has made a statement.

  The DSAC statement concluded that the experimental studies and analysis undertaken were an acceptable technical approach to the prediction of the risks.

  DSAC has recommended:
  Users should be made aware that L21A1 baton rounds can ricochet in some circumstances with high energy, and that the presence of obstacles and of personnel other than the intended target should form part of their risk assessment in the decision to fire the weapon;
  A desire for a reduction of the ricochet potential should be stated in the research and operational requirements of future kinetic energy weapon systems, and be evaluated experimentally.

  The Association of Chief Police Officers tell me that police firearms training addresses the ricochet potential of ammunition used by the police service. However, in order to ensure that this issue is specifically addressed, the results of these studies will be brought to the attention of persons responsible for firearms training in
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  all forces throughout the United Kingdom. Current Army training on the use of baton rounds already addresses the issue of ricochet potential.

FOREIGN AND COMMONWEALTH AFFAIRS

  NATO Parliamentary Assembly
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  The hon. Member for Hereford (Mr. Keetch) has replaced the hon. Member for Portsmouth, South (Mr. Hancock) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.

TRADE AND INDUSTRY

  Small Business
  The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)
  The Small Business Service (SBS) is today publishing a Government action plan for small business. It builds on existing Government support for small business, marshalling the whole of government behind the small business agenda. I am placing copies in the Libraries of both Houses.

  In December 2002, the SBS published Small Business and Government—The Way Forward—a strategic framework for a Government-wide approach to helping small businesses based around seven core themes: building an enterprise culture; encouraging a more dynamic start-up market; building the capability for small business growth; improving access to finance for small businesses; encouraging more enterprise in disadvantaged communities and under-represented groups; improving small businesses' experience of Government services; and developing better regulation and policy. These themes were identified as key drivers for economic growth, improved productivity and enterprise for all.

  Since then, partners at national, regional and local level have worked together using the strategic framework to develop a set of practical actions focused on improving policy and delivery as it affects small business.

  Actions identified in the plan, include:
  Consideration being given to extending the concept of common commencement dates for legislative and regulatory changes subject to the results of the employment law pilot now underway. Government will consult business on the priority areas and preferred dates;
  A review of the routes off benefits into self-employment to establish if more can be done to encourage and facilitate moves into self employment;
  The launch of a "core offer" for start-ups defining the service that all start-up businesses, wherever they are located, can expect;
  Completion of the establishment of a Council for Graduate Entrepreneurship;
  The publication of a "no nonsense guide" to access to finance for small businesses;
  A second phase of the Government's Phoenix Fund, to encourage specialist business support and entrepreneurship in disadvantaged areas;

  13WS
  The development of a small business procurement concordat, to be signed by public sector bodies; and
  Further work to improve the coherence, accessibility and quality of Government services for small businesses building on the success of the cross-Government www.businesslink.gov.uk portal available since November 2003.

  Implementation of the Action Plan will require the involvement of a wide range of Government Departments and agencies and delivery partners. A web-based implementation programme is being made available at www.sbs.gov.uk setting out milestones and target dates for the implementation of the new actions. It will be updated on a regular basis to show the progress that is being made.

  Gas Quality
  The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)
  My predecessor, the hon. Member for Cunninghame, North (Mr. Wilson), launched a three-phase strategy on 5 June 2003 to look at the issue of gas quality, as the UK becomes increasingly import dependent. Phase one was a scoping study on whether there would be a gas quality problem, in particular but not exclusively in relation to the Wobbe number. ILEX Energy Ltd was appointed to take this work forward. This study is now complete and an edited version of this report, without commercially sensitive information, is available on the DTI/Energy Website[www.dti.gov.uk/energy shtml/domestic_markets/gas_market/index]

  ILEX approached this study by carrying out a supply-demand analysis and identifying the main sources of gas required to meet the forecast demand. An assessment was then made of the likely quality of the various sources of imported gas and the implications of those gas supplies for Great Britain's entry terminals. ILEX had a number of meetings with future and potential future suppliers to gather quantitative data on the likely quality of gas from new import sources. These data, much of which are commercially sensitive, will be used by DTI, HSE and Ofgem to inform this exercise.

  During Phase 1 the DTI, HSE and Ofgem held a workshop to engage industry at the early stages of this exercise. The workshop was successful in providing a forum for industry to discuss gas quality issues.

  ILEX's work confirms that the future Wobbe1 specification of much gas imported into the UK before processing, is likely to fall outside the current upper Wobbe limit in the Gas Safety Management Regulations (GSMR). The UK's increasing dependence on imported gas does therefore raise the question whether the current upper Wobbe limit should be increased.

  In the light of this result I have asked my officials to proceed with phase 2. Phase 2 will be a tripartite (DTI, HSE, Ofgem) consultation on the appropriate policy response. As my predecessor said, our broad policy options appear to be: the default option, to retain the current Wobbe limit (this would avoid the need to remove household appliances, but it would have the

  1The Wobbe Number represents a measure of the heat release when a gas is burned at constant gas supply pressure. The Wobbe limit range in The Gas Safety Management Regulations is between 47.20 MJ/cubic metre and 51.41 MJ/cubic metre.
  14WS
  disadvantage of limiting UK access to the global gas market); or to change the current Wobbe limit (this would require the identification and removal of non-compliant gas appliances, but with an advantage in terms of facilitating gas imports).

  My officials, together with HSE and Ofgem, will be working over the next months to prepare the ground for a consultation exercise on the policy option. My officials are also in discussion with the European Commission and representatives of the gas industry in the EU, about the work being carried out at the EU level on gas quality and the interaction with the present exercise.

  I shall make a further statement to the House in due course to announce the forthcoming public consultation document. My Department would propose to hold a further workshop at that time.

  This exercise has been developed by the DTI as a member of the Sustainable Energy Policy Network (SEPN), which is working to deliver the Energy White Paper "Our Energy Future—creating a low carbon economy".

INTERNATIONAL DEVELOPMENT

  CDC
  The Secretary of State for International Development (Hilary Benn)
  On 27 November 2002, the then Secretary of State for International Development made a written statement to the House on the plans to reorganise CDC. This set out how CDC was to be reorganised into two separate organisations; an investment company and a new management company. I am now submitting a further written statement to inform the House on how these plans are being carried through.

  The purpose of the reorganisation of CDC is to maximise the creation and long-term growth of viable businesses in poorer developing countries, by making responsible investments and mobilising private capital alongside public funds. These objectives, which were set out in the 1997 and 2000 White Papers on International Development, remain unchanged.

  CDC's business now focuses on regions (South Asia and sub-Saharan Africa) and sectors where more investment is needed in order to help meet the Millennium Development Goals. It follows a set of pioneering responsible business principles that commit it to ethical, environmental and social best practice. CDC is also subject to an Investment Policy, which sets out the countries (the "CDC Universe") in which it may invest. The Policy includes two targets; that 70 per cent. of new CDC investment should be made in poorer developing countries, and that 50 per cent. of new investments should be in sub-Saharan Africa and South Asia.

  In order to improve CDC's performance and enhance the mobilisation of private investment in poorer developing countries, I have recently approved a reorganisation proposal on behalf of the Government.

  CDC is to be separated into two corporate entities and a family of Funds.
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  Firstly, an investment company, which will continue to be named CDC and will be wholly-owned by the Government, will hold the existing and future cash and investment assets of CDC and its subsidiaries. This company will be responsible for ensuring that our capital is used in accordance with the investment policy. Secondly, a new independent management company, to be known as Actis, will be formed as a limited liability partnership between its management and staff (who will together have majority control) and the Government. Actis will raise and invest capital from CDC, from other development finance institutions and from private investors. It will follow responsible business principles and provide leadership and supervision for a family of Funds,

  The Funds will focus on Africa, South Asia, power, and SMEs, with smaller funds for China and Malaysia. Each will be managed by a dedicated fund management subsidiary of Actis or on a joint venture basis, and will be run on a commercial basis in order to attract capital from private investors and development finance institutions. This structure of a management company and a family of Funds is an accepted norm in the international fund management industry. It will allow Actis to manage Funds with a range of objectives, from
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  strongly developmental to fully commercial, according to the requirements of target markets and the objectives and return requirements of investors including CDC.

  This dual company approach will help to establish Actis as an independent investment manager specialising in developing country markets, especially the poorer ones. It will also enable CDC, after an initial five year contract with Actis, to select its future investment manager(s) and thereby strengthen CDC's and the Government's ability to hold Actis and any other investment managers to their targets.

  I have agreed to the appointment of Malcolm Williamson as Chair of the Board of the new CDC. He has an admirable track record in the banking and financial sector and I expect that he will take up this new position within the next few weeks when the two new companies are formally established. The current Chair of CDC, Lord Cairns, has agreed to become Chair of Actis. I am very pleased that two such experienced and highly qualified professionals will be leading the new companies.

  I am writing to the Chair and members of the Select Committee on International Development about these changes. Later today, I will be making a public announcement about the new arrangements.

Preamble
The House met at eleven of the clock: The DEPUTY SPEAKER (Lord Boston of Faversham) on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Prison Service: Race Relations
Baroness Howe of Idlicote Baroness Howe of Idlicote asked Her Majesty's Government:
What is their response to the Children's Society report Playing the Game on the experiences of young black men in custody.
The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, the Prison Service is fully committed to tackling all aspects of racism and is concerned by the findings of this report. It accepts fully that there are improvements still to be made in many areas of race relations practice. A comprehensive joint action plan to combat all aspects of racism has recently been agreed between the Prison Service and the CRE.
Baroness Howe of Idlicote: My Lords, I thank the noble Baroness for that encouraging reply. However, does she agree with me that, given that the 45 black young people interviewed were all preselected by the three institutions visited, is it not likely that the findings of that report are but a tip of a very unpleasant iceberg? Can the Minister give the House more detail about what the Government will do to protect young people in custody from intolerable racist treatment of this kind? Will she reassure your Lordships that young people will be better informed about their rights, about the existence of the race relations officer and about the process for making complaints without them being further victimised, and above all that police officers are regularly retrained on required behaviour?
Baroness Scotland of Asthal: My Lords, I say straight away that, as I said before, the research is very worrying. We do not know the basis upon which the young people were preselected. The research upon which the Children's Society's findings were based has not as yet been disclosed to the Prison Service. That is a matter of real importance. I certainly assure the noble Baroness that we have taken steps to ensure that prisoners are able to complain much more easily than has been the case hitherto. The forms are available. A box is placed at the end of a corridor. Prisoners take the forms, which are subsequently placed in sealed containers so that no one
248
can interfere with them. We take these incidents very seriously indeed and we vigorously pursue the issue of racism in our institutions.
Viscount Bridgeman: My Lords, will the Minister give the House specific guidance on what the Government are doing to make the Prison Service have regard to its anti-racism staff training?
Baroness Scotland of Asthal: My Lords, training has been a very important part of the Prison Service's work. There has been clear leadership on the matter. We have a very diverse workforce. Board members and area managers were trained jointly in June 2001. The existing training for the race relations liaison officers and the race relations management teams was overhauled in 2000 to make it more focused on management. Since October 2001, the initial training for all prison officers has included a minimum of four hours on race issues, made possible by removing previous training in drill. Training for all other staff has been developed using external expertise. Entry training for officers now has a dedicated module. There has been a total review and there is commitment. I reassure noble Lords that these matters were audited. The ratings demonstrate major improvements over time. From 2002 to date there is a 96 per cent acceptable or better scoring for the establishments, which is a major improvement from the position in 1996–97 when they scored 84 per cent.
Lord McNally: My Lords, although the Minister's expressions of confidence are reassuring, is not the brutal fact that this report is realism in counterpoint to the optimism of the Statement made two days ago on managing offenders? Is she really confident that there is not institutionalised racism in the Prison Service? Will the Minister give figures on the recruitment of' black prison officers? If we are to get to the root of the matter, officers from the ethnic communities must work in the new National Offender Management Service and voluntary organisations must participate so that this kind of charge cannot be levelled against the new service. Will she assure us that this is an "action this day" matter for Martin Narey and the new service?
Baroness Scotland of Asthal: My Lords, I reassure the noble Lord that it is very much part of the Government's objective to ensure that we have a more diverse workforce. The figures and the report are not the antidote to what we discussed two days ago; they go hand in hand. We must put in place both measures. We have had great success in improving diversity in our workforce with a robust recruitment programme backed by a series of outreach events. We have significantly bettered targets set by the Home Secretary. In 1998–99 the figure for ethnic minority staff was 3.2 per cent. The figure for 2001–02 was 4.9 per cent. There has been a massive improvement in relation to recruitment. I wish to make it clear that we think that more needs to be done. We are on our way but we can do better.
Lord Laming: My Lords, will the Minister give the House an assurance that taking these matters seriously—

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I absolutely accept her statement in that regard includes following proper disciplinary procedures and making clear that managers have a responsibility to ensure that people who behave in this way are subject to disciplinary procedures?
Baroness Scotland of Asthal: My Lords, I absolutely accept that that is right.
The Lord Bishop of Southwark: My Lords, knowing that the reoffending rate is disproportionately high among young black people, does the Minister give her support to such initiatives as the resettlement programme to be launched by the Feltham chaplaincy next week? In such ways will the Minister encourage all those disturbed by the Children's Society report to get involved themselves with positive action for young black people?
Baroness Scotland of Asthal: My Lords, I wholeheartedly endorse that. The incidents of racism have been very disturbing and the resettlement issues incredibly important. We very much support such initiatives.
Lord Elton: My Lords, on Tuesday the Minister repeated a Statement announcing a single service to manage offenders. What proportion of adult black prisoners have previously been convicted and served custodial sentences? As juveniles are not covered by the new single service, how will the management of those children be made consonant with what is to follow when they are adults?
Baroness Scotland of Asthal: My Lords, the figures collated are not collated in a way that would enable us to give an answer on the first issue. We are making sure that we adopt a holistic approach to the management of offenders generally, be they minors or adults. The whole purpose of the changes that we are bringing about is to enable that synergy to take place. It is a challenging agenda, but one that we now believe that we have the tools to address, and there is the commitment to do it.

Royal Mail: Proposed Redundancies
11.14 a.m.
Lord Hoyle Lord Hoyle asked Her Majesty's Government:
What consultations took place between Royal Mail and the relevant trade unions before the reduction in managers was announced, which is to take place by March 2004.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the decision on whether to reduce the number of managers in Royal Mail is an operational matter for the board of the company. The proposed reduction in managerial jobs will be part of the 30,000 redundancies announced at the start of the
250
company's three-year renewal plan in 2002. Royal Mail is complying, and will continue to comply fully, with its obligations under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 as regards consultation with the unions.
Lord Hoyle: My Lords, I thank my noble friend for that reply. Does he agree that for the Amicus communications association to be informed on 21 November that there would be a further review of managers, followed on 2 December with a verbal statement and on 11 December by a letter saying that there would be 3,000 redundancies in the region, does not comply with Section 188 and is not consultation? It is obvious that the partnership with Royal Mail is not working, so what will he do about it? May I suggest that he cuts the substantial funding from the DTI partnership fund to Royal Mail until the managers agree to introduce a genuine partnership with trade unions?
Lord Sainsbury of Turville: My Lords, the official announcement that there would be an overall reduction in managers' jobs of 3,000 was made on 12 December. It was not then possible to have the detailed consultations required under Section 188 of the Act, because obviously, at that point, one does not have the information necessary for the consultation under that Act, which has to be undertaken on a specific location and job basis. As that information has become available, it has been used to have those consultations, so some consultations have taken place already. The Act is being complied with in a proper way.
As for the partnership, I think that I am right in saying that it was the unions that withdrew from the partnership arrangements. It would be highly desirable for the two sides to come together again to drive forward the agenda.
Lord Clarke of Hampstead: My Lords, is my noble friend aware that the union that represents the largest number of people employed by Royal Mail was not consulted in any way on the decision to axe 3,000 managerial jobs? That decision will present very serious problems for staff below managerial level as they strive to maintain an efficient service. Will he address the problem of the lack of consultation with those people? I ought to declare an interest as a former postman, and a member of my union which has not been consulted at all on the issue.
Further, does my noble friend agree that such shabby treatment of loyal workers is not conducive to the improvement in industrial relations that everyone connected to the Post Office, especially on the industrial side, is trying to ensure? Will he make arrangements to see that the gaps created by the sackings or redundancies will be managed properly, so that the public service can be maintained properly?
Lord Sainsbury of Turville: My Lords, it has to be the job of Royal Mail's management itself to take decisions about balancing operational requirements against the needs of having more managers. No meaningful discussions can take place on that until one has a specific

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list of jobs by particular areas. Until that is made, it is not possible to have serious operational discussions. As the information comes through, consultations are taking place. However, I totally agree that we must do everything that we can to encourage better industrial relations and a more partnership-based approach in Royal Mail.
Lord Razzall: My Lords, does the Minister accept that this Question, and a number of other Questions that noble Lords have asked in recent months, demonstrate the seriously unsatisfactory nature of the relationship between the Government and the Post Office, particularly Royal Mail? Does he not accept that it is not a satisfactory way to carry on for the Government to claim the credit whenever anything goes well with Royal Mail but, when it goes badly or there is a problem, for him to say that it is an operational matter for the management of Royal Mail?
Lord Sainsbury of Turville: My Lords, a more appropriate response would be for the noble Lord, having constantly asked the Government to give commercial freedom to the Post Office, not to ask the Government to intervene when it comes to issues of commercial freedom.
Baroness Wilcox: My Lords, it is a difficult time for Royal Mail, and a very difficult time for the unions. It is a big organisation and one for which I and many noble Lords have great affection, so it is very hard to see the organisation going through such a difficult time. I speak almost in sympathy with the Minister. Given that the Government are the major shareholder in the company, can he reassure us that it is being run properly and in a right and timely fashion?
Lord Sainsbury of Turville: My Lords, without giving an answer that covers the entire range of activities of the Royal Mail, and having considered this particular instance, it was regrettable that the Royal Mail did not tell the unions that it would make an announcement on a particular day; and it has already apologised for that. However, in every other way the matter has been handled perfectly properly.
Lord Hoyle: My Lords, why were the 3,000 redundancies not discussed with the unions? As the Royal Mail knew there would he 3,000, it must have known where they were to occur. That shows, once again, the deplorable state of industrial relations at the Post Office. I ask again, what is the Minister going to do about it?
Lord Sainsbury of Turville: My Lords, there were informal discussions between the management and the unions on a general basis before the announcement. I repeat, it is extremely difficult to have meaningful discussions about the impact of particular job losses until one has a firm view of what the job losses are and where they will take place. That information was not available at the time of the announcement on 12 December.

Household Energy Efficiency
11.20 a.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
What has been the outcome of the Treasury's two consultations, in July 2002 and August 2003, on economic instruments to improve household energy efficiency.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, as set out in the recent Pre-Budget Report, the Government agree that there is a case for using economic instruments to promote energy efficiency. However, in the light of the European Union VAT negotiations and the review of corporation tax, the Government will give further detailed consideration to what such measures entail. A further announcement will be made around Budget 2004.
Lord Ezra: My Lords, I thank the noble Lord for that Answer, but are there not a number of recommendations emanating from those two consultations, to both of which I responded, that could have been adopted? In view of the importance that the Government attach to improving energy efficiency in the domestic sector, is it not surprising that such an apparently leisurely approach is being adopted?
Lord McIntosh of Haringey: My Lords, I resist the suggestion that there is a leisurely approach. There are important changes, economic instruments and initiatives which can be taken that are involved in the EU VAT negotiations and in the corporation tax review. But many other actions are being taken at the same time, as the noble Lord well knows because he is well versed in those matters. For example, that has not stopped us having reduced VAT rates for energy-saving materials. It has not stopped the Warm Front programme of £150 million a year that helps 400,000 households with the installation of heating. We have not been prevented providing money for the Carbon Trust and the Energy Saving Trust. I could go on. They are not matters on which we are taking a leisurely approach.
Lord Jenkin of Roding: My Lords, is it not clear that by far the most effective economic instrument to secure energy saving is a realistic price for the supply of energy? Would it not be much better if the Government, instead of seeking to keep electricity and gas prices down to protect the fuel poor, made increases in social security benefits to compensate those families who would find it difficult to pay an economic price for gas and electricity?
Lord McIntosh of Haringey: My Lords, I rather suspected that the noble Lord, Lord Jenkin, hankered after the old pool arrangements whereby there was an auction every day. Instead of the contract going to those who offered the lowest prices, it went to those who offered the highest. That was an extraordinary

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way of conducting capitalism and I am astonished that the noble Lord should hanker after that, rather than the new electricity trading arrangements.
Lord Jenkin of Roding: My Lords, may I make it clear that I said nothing of the sort?
Lord McIntosh of Haringey: My Lords, what does "realistic" mean other than "higher"?
Baroness Gardner of Parkes: My Lords, as the Minister has raised various possible actions to save energy—taking the Question slightly wider than the economic issues—why are we reading in the newspapers this week that everyone will have to install a mixer tap to prevent people being scalded by the temperature of their hot water? Why are the Government not suggesting reducing the heat of the water to a point where it would not scald? Would that not save energy?
Lord McIntosh of Haringey: My Lords, I am not sure that even the most nannying government—this is not a nannying government—would send in inspectors to control the level at which householders have set their water temperature. That would be the implication of the suggestion.
Baroness Wilcox: My Lords, given that both the UK Business Council for Sustainable Energy and the National Home Energy Rating responded to the Government's consultation of August 2003 by suggesting that stamp duty rebates would be helpful in stimulating the general demand for energy efficiency, why did the Government rule out those proposals?
Lord McIntosh of Haringey: My Lords, that is exactly the kind of matter that the Chancellor will be considering in his Budget and I have given an undertaking that they will be referred to at the time of the Budget.
Lord Ezra: My Lords, reverting to the importance that the Government attach to savings in the domestic energy sector, would it not be desirable for them to plan a major campaign to stimulate users to save energy, rather than dribbling out incentives from time to time in various ways, issued by various government departments?
Lord McIntosh of Haringey: My Lords, I am not instinctively opposed to that suggestion. I am sure that there are ways in which we could co-ordinate our campaigns more effectively.
Lord Campbell of Alloway: My Lords, which department of state is in charge of energy efficiency? Is it the DTI, as it always was? If it is not, why?
Lord McIntosh of Haringey: My Lords, different aspects of energy efficiency are the responsibility of different departments. Energy generally is the
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responsibility of the Department of Trade and Industry. The Question comes to me from the Treasury because of the tax implications.

Special Advisers: Civil Service Legislation
11.27 a.m.
Lord Sheldon Lord Sheldon asked Her Majesty's Government:
What measures they propose to take in a forthcoming Civil Service Bill concerning the exercise of executive powers by special advisers.
Lord Bassam of Brighton: My Lords, in their response to the ninth report of the Committee on Standards in Public Life, the Government committed themselves to publishing a draft Civil Service Bill for consultation, once they had received the Public Administration Select Committee's proposals. We now have its proposals and will give them very careful and detailed consideration. We will publish our draft Bill in due course.
Lord Sheldon: My Lords, I thank my noble friend for that reply and the promise of the draft Bill which we still await. But will he respond to the comments of Sir Nigel Wicks that there need to be proper boundaries between the roles of Ministers, civil servants and special advisers? He said that a special adviser should be a source of additional advice, not a replacement. Is the Minister aware that there is real concern that giving executive powers to special advisers is a serious step away from the political neutrality of the Civil Service, about which the Fulton committee on the Civil Service warned so many years ago?
Lord Bassam of Brighton: My Lords, we are well aware of the concerns of Sir Nigel Wicks, which have been expressed clearly. That is undoubtedly one of the issues on which we shall consult when the draft Bill is published. Sir Nigel Wicks was also very positive about the role of special advisers. I quote from the amendment to the code of conduct which the Government published:
"Special advisers must ensure that while they may comment on advice being prepared for ministers by officials, they do not suppress or supplant that advice".
The role of special advisers is well understood by the Government and, of course, we must respect the impartiality that civil servants bring to the nature of their advice to Ministers.
Lord McNally: My Lords, I listened carefully to the Minister's reply. "In due course" is Whitehall-speak for mañana, without the same sense of urgency. Is he aware that the idea of a Civil Service Act was first recommended by Northcote-Trevelyan in 1854; it was further recommended by Cook-Maclennan in 1997; and it is now recommended by the Public Administration Select Committee in 2004? Even with the Fabian influence on the Government, is not that taking the inevitability of gradualness too far? Why on

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earth do this Government not bring forward a radical Civil Service Act for which they could take due credit? Instead, the Prime Minister is stuck in his bunker at No.10, surrounded by his policy wonks and refusing movement. However, everyone knows that, when he left office, the noble Lord, Lord Wilson, left a draft Civil Service Bill ready for the statute book. When will the Government return to their radical roots and give us a Civil Service Act?
Lord Bassam of Brighton: My Lords, this is a radical Government. As a former policy wonk, I am sure that when he was at No.10 the noble Lord had the opportunity to advise the Prime Minister of the day about the importance of having a Civil Service Act. Our process of advice to Ministers, which, as the noble Lord said, goes back to the Northcote-Trevelyan report of 1854, is very good. I believe your Lordships will agree that, in the 150 years that have passed since then, our Civil Service has provided some of the very best advice to Ministers.
Lord Marlesford: My Lords, returning to the Question asked by the noble Lord, Lord Sheldon, which surely has not been addressed at all, does the Minister agree that the role of the special adviser is to help Ministers to do what they want to do, often in the face of much intrinsic obstruction from civil servants, particularly in departments such as the Home Office? Does he recognise that it is for Parliament to stop Ministers doing what they should not do?
Lord Bassam of Brighton: My Lords, I cannot do other than agree with the noble Lord. Of course, he is right: that is exactly the role of special advisers. Civil servants respect that role and understand its importance. They understand, too, that special advisers give to Ministers a distinct quality of advice in order to cut through the sometimes mind-boggling bureaucracy.
Lord Clark of Windermere: My Lords, will the Minister confirm that governments from both sides of this House have used special advisers? Will he also confirm that, used correctly, they aid and assist the Minister in carrying out his work? Will he further confirm that many civil servants welcome the addition of special advisers in helping the department to progress its work?
Lord Bassam of Brighton: My Lords, the important point to remember is that, because of their special nature, special advisers offer a measure of political protection to civil servants. I believe that civil servants understand and respect that and rather value it.
Lord Cope of Berkeley: My Lords, we all agree that special advisers have an important and special role, but that role is not to supervise the Civil Service or to take executive decisions. That is what the provisions of the Civil Service Bill, to which we are referring, are all about. Has the order of, I believe, 7 May 1997, which gave executive power to special advisers in various circumstances, been rescinded yet?
Lord Bassam of Brighton: My Lords, my understanding is that only two or three special advisers are to have any executive powers. I believe that the noble Lord will recall that the Prime Minister accepted the recommendation of the independent review of government communications—the Phyllis review—that it was no longer necessary for the Director of Communications to have executive power. Therefore, only a tightly defined group of special advisers will benefit from that.
Lord MacGregor of Pulham Market: My Lords, I declare an interest as a former member of the Committee on Standards in Public Life, which drew up the last report and the one before that and which recommended just such a Bill. Is the Minister aware that we took substantial evidence not only from Sir Nigel Wicks but from a wide range of sources? They all recommended such a Bill, not least because of the problem of the blurring of responsibilities and powers between civil servants and special advisers, although that was not the only reason. Thus, does the Minister agree that this Bill should command widespread all-party support in both Houses? Will he therefore consider whether the Government should bring forward their draft Bill this Session in time for a Joint Committee of both Houses to consider it with a view to speedy implementation in the next Session?
Lord Bassam of Brighton: My Lords, I have certainly heard the noble Lord's view expressed, and it was expressed very forcefully in your Lordships' House. It is a matter that we are actively considering, but I do not believe that it is right for me, at the Dispatch Box, to give a timetable which could be misleading. We are considering the draft Bill very carefully and we shall also consider carefully how we may best consult on it. As the noble Lord rightly said, there are many wide-ranging views on this issue and those views need to be carefully judged and balanced.
Lord Alton of Liverpool: My Lords, does the Minister accept that the principle of a Select Committee bringing forward a draft Bill rather than simply a report is a very welcome development in itself? Does he also accept that at the heart of these recommendations is a shift away from the Government and back to Parliament in who will decide on the number of special advisers? Will he say whether that principle, enshrined in this week's recommendations, is one that the Government accept?
Lord Bassam of Brighton: My Lords, I cannot go so far as the noble Lord would like with regard to the second part of his question. I acknowledge that this is a very novel, if not unique, departure by the Select Committee and that is welcome. I believe that it certainly helps the Government to focus on the primary issues to be considered in bringing forward their own draft legislation.
Lord Peyton of Yeovil: My Lords, is the noble Lord aware that his comment that the role of the special

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adviser is to cut through mind-boggling bureaucracy is one that is not calculated to allay the alarms and suspicions which are widely felt?
Lord Bassam of Brighton: My Lords, I am not always here to allay alarms and suspicions.

Business
11.35 a.m.
Lord Grocott: My Lords, I have two brief pieces of information. The first is to remind the House that today is the first time that we shall implement our new arrangements for Thursdays. There are two Second Readings today and the target time for the completion of business is 7 p.m. I simply advise everyone that Back-Bench speeches on those two Second Readings would need to last for around seven minutes in order to meet our target rising time.
The second announcement is that, with the agreement of the House, at a suitable moment after 3 p.m. a Statement will be repeated by my noble friend Lady Ashton on student support in higher education.

Assisted Dying for the Terminally III Bill [H.L.]
Lord Joffe: My Lords, I beg to introduce a Bill to enable a competent adult who is suffering unbearably as a result of a terminal illness to receive medical help to die at his own considered and persistent request, and to make provision for a person suffering from a terminal illness to receive pain relief medication. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time. —(Lord Joffe.)
On Question, Bill read a first time, and ordered to be printed.

Gender Recognition Bill [H.L.]
Lord Evans of Temple Guiting: My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move the Motion standing in his name on the Order Paper.
Moved, That it be an instruction to the Grand Committee to which the Gender Recognition Bill has been committed that they consider the Bill in the following order:

Clause 1,

Schedule 1,

Clauses 2 to 4,

Schedule 2,

Clauses 5 to 10,

Schedule 3,

Clause 11,

Schedule 4,

Clauses 12 to 13,

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Schedule 5,

Clause 14,

Schedule 6,

Clauses 15 to 28. —(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

Companies (Audit, Investigations and Community Enterprise) Bill [H.L.]
11.38 a.m.
Lord Sainsbury of Turville: My Lords, I beg to move that this Bill be now read a second time.
A recent book argued that the limited liability joint stock company was,
"the greatest single discovery of modern times".
Your Lordships will not be surprised to hear that, as Minister for Science and Innovation, I have other suggestions for that accolade. However, no one can deny the importance of the company in the modern economy. The company is more popular than ever, and this Government are committed to reforming current companies legislation. We are taking forward the work of the independent Company Law Review in order to remove unnecessary regulation in the current law, to simplify the law, particularly as it affects smaller firms, and to make the law as a whole more flexible for the needs of the 21st century. Meanwhile, the much smaller Bill before your Lordships will increase the variety of companies by creating the community interest company, as well as making some amendments to ensure better financial reporting and conduct by companies.
There are now nearly 1.8 million companies in Great Britain. Companies account for around 80 per cent of economic activity, measured by turnover, and provide some 60 per cent of employment. But today's large companies have a double significance. They are the source of most goods and services and of many jobs, but they are also where much of our savings are invested in the form of pension contributions, life assurance and unit trusts, as well as individual shareholdings.
The extent to which our economy depends on companies makes it essential that they are run effectively and honestly and that we can rely on their accounts and reports as a guide for investors and for those doing business with them. When a company fails, it may trigger a chain of collapse as other businesses—especially small undertakings—are brought down by a bad debt or the sudden loss of a key customer or supplier.
The spectacular collapses in the United States in recent years, most notably of Enron, WorldCom and accountants Andersens, sent shock waves through the business world. If the audited accounts of large and apparently profitable companies were little more than works of fiction, what else was waiting to be uncovered? The situation at Parmalat, where accounting fraud is again a central feature, shows that similar problems can happen in Europe. We cannot be certain that a comparable situation could not occur in this country, despite the differences in the business and regulatory

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environments in Italy and the UK. In any event, Parmalat underlines the importance of the reforms—legislative and non-legislative—which we have made and are making in corporate governance, accounting and audit regulation.
We had already asked Derek Higgs to review the role of non-executive directors. He subsequently made important recommendations aimed at improving corporate governance, some of which were then reflected in changes to the Combined Code on Corporate Governance. But when the Enron and WorldCom scandals broke, confidence was shaken here almost as much as in the United States. The American reaction was to rush through the Sarbanes-Oxley Act. We thought it right in our circumstances to take a different approach.
Once the details of the Enron scandal started to become known, the Government set up the Co-ordinating Group on Audit and Accounting Issues to review the UK's arrangements for audit and accountancy regulation. The group was jointly chaired by the Financial Secretary to the Treasury and the then Minister for Competition, Consumers and Markets. Its membership comprised independent regulators such as the Accountancy Foundation, the Financial Services Authority and the Financial Reporting Council, and independent academic experts. It also discussed its proposals with representatives of the accountancy profession to ensure they were workable.
The group reported in January 2003. Some of its recommendations are reflected in the Bill we are considering today. Overall it concluded that we have,
"a sophisticated and effective system of oversight in this country. "
Some changes were needed, but I think it is fair to characterise these as adjustments, building on and strengthening a system which is basically sound. Many of those changes are now in place. The role of the audit committee has been strengthened through revisions to the combined code. Audit firms have introduced more frequent rotation of audit partners, and a longer "cooling-off" period before an auditor can be recruited by a client. Audit firms are providing greater transparency in their annual reports. The Financial Reporting Council has been restructured and strengthened, with the Auditing Practices Board as the standard setter fully independent of the audit profession; and the Auditing Practices Board has just published its first draft set of tough ethical standards on independence and objectivity for consultation.
One early recommendation from the co-ordinating group was that there should be a separate review of the regulatory regime of the accountancy and audit profession. That review started immediately and also reported in January last year. It found that the current regulatory regime worked well, but that it would be desirable to increase the perception of its independence from the accountancy profession. I shall explain shortly how the Bill achieves that. The review also recommended that the regulatory structure should be simplified. The Financial Reporting Council should assume the role and functions of the Accountancy Foundation, thus creating a single, independent regulator responsible for setting, monitoring and enforcing accounting and auditing
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standards and overseeing the regulatory activities of the major accountancy bodies. This restructuring did not require legislation and is already largely in place.
In short, instead of a British Sarbanes-Oxley Act, we have had a period of tough and detailed analysis by the Government in partnership with business, institutional investors, independent regulators and the accountancy profession. That reflection has led to a package of targeted measures, few of them requiring legislation, aimed at ensuring that we have very high standards of financial reporting and independent audit. The first part of the Bill implements the final pieces of that package as well as measures to strengthen the company investigations regime and make it more effective in uncovering misconduct.
Clauses 1 and 2 will ensure that there are independently set standards for auditing, and independent arrangements for monitoring and investigating auditors and imposing disciplinary measures where necessary. The professional accountancy bodies that are recognised to supervise auditors will have to sign up to such standards and arrangements.
Clauses 3 to 5 enable the function of recognising the audit supervisory bodies to be delegated to an existing body. We expect that this will be the Public Oversight Board for Accountancy, which is part of the Financial Reporting Council. It is an expert independent body which also has responsibility for oversight of the major accountancy bodies. The Government believe that the combination of these two functions will improve the effectiveness of oversight of the supervisory bodies.
Clause 6 amends the existing provisions on the approval of overseas qualifications for auditors. It will provide greater flexibility to approve those overseas qualifications that are at an equivalent level to those in the UK. For example, where an overseas qualification is approved, it will be possible to recognise auditors who gained the qualification after the date when it reached equivalence with British standards but not those with earlier qualifications.
Clause 7 implements a recommendation of the Co-ordinating Group on Audit and Accounting Issues and provides a power to require larger companies to publish a breakdown of the non-audit services which they buy from their auditors. That will increase company transparency, and enable interested parties to judge whether the auditors could be subject to a conflict of interest through the different aspects of their work for a client.
Clauses 8 and 9 will help auditors to obtain all the information they need to carry out an effective audit. Clause 8 enables auditors to obtain relevant information from specified persons who hold it, while Clause 9 requires the directors' report to contain a statement about the disclosure of relevant information to the company's auditors.
Clauses 10 to 12 and Schedule 1 are concerned with the enforcement of accounting standards, which is a task carried out by the Financial Reporting Review Panel. Clause 10 makes technical changes to reflect the reorganisation of the Financial Reporting Council. Clause 11 enables the Inland Revenue to pass

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information to the panel. Clause 12 enables the panel to require information from companies and their auditors where there is a question whether the accounts comply with the law.
Clause 13 extends the power to specify a body to issue standards for financial reporting purposes. That paves the way for a standard for the new operating and financial review which the Government hope to introduce later this year and on which we shall soon be consulting.
Clauses 14 and 15 enable a body—in practice the Financial Reporting Review Panel—to be empowered to review the interim accounts as well as annual accounts of those companies for which it already has responsibility. Clause 14 also allows the panel's remit to be extended, so that it may examine the accounts of issuers which are not Companies Act companies but are listed in the UK. This will enable the same body to examine all major accounts, and will ensure better coordination between company and financial services law.
Clauses 16 and 17 are concerned with funding arrangements for the Financial Reporting Council, including a power to levy listed companies and the accountancy profession, in case the current voluntary arrangements for tripartite funding with the Government should ever break down.
Clauses 18 to 21 strengthen the powers of the DTI's company investigators to obtain documents and information and give them powers to enter and remain on premises. They also provide statutory immunity from liability for breach of confidence for individuals and businesses volunteering information in specified circumstances.
Clause 22 and Schedule 2 deal with minor and consequential amendments relating to Part 1 of the Bill.
Part 2 is concerned with a different subject, namely community interest companies. These were recommended by the Strategy Unit report Private Action, Public Benefit, as a new, purpose-made vehicle for some social enterprises. That idea drew on earlier work by several people and groups, including Stephen Lloyd, Roger Warren Evans, the Charity Law Association and others. My noble friend Lady Thornton, who is chair of the Social Enterprise Coalition, expertly explained social enterprise in the debate on the Queen's Speech. I do not need to add anything to her speech, other than to say that consultation has confirmed a real demand for the community interest company as an additional form for social enterprises, an alternative to charities, industrial and provident societies and ordinary companies.
We believe that the creation of the community interest company will help those people—and I am pleased to say that there are many of them—who want to start, and work in, organisations which do business for the ultimate benefit of the community or part of it. The community interest company will be the right vehicle for many organisations which wish to trade and to supply goods or services for a social purpose, such as local regeneration or providing training within
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a community. It will be clearly identified as a community interest company so that everyone who deals with it will be able to see instantly that it has social aims. It will be subject to regulation at the minimum level necessary to maintain confidence in the form and to ensure that it uses its assets and profits for the community interest.
Clauses 23 to 26 and Schedules 3 to 5 define the community interest company and the main elements of the regulatory structure. Clauses 27 to 32 and Schedule 6 deal with the key distinguishing features of this new type of company, including the power to cap dividends and interest, the community interest test, which will help to decide whether an organisation can become a community interest company, and the annual community interest report which such companies will make.
Clauses 33 to 37 deal with the ways of becoming a community interest company: by formation or conversion from an existing company, including a charitable company. There are special provisions for Scottish charities as charity law is a devolved matter.
Clauses 38 to 48 and Schedule 7 set out the regulator's powers to intervene to ensure companies operate properly in the community interest. There are some obvious similarities with the powers of the Charity Commission in England but the level of regulation is intended to be much lighter than for charities and the regulator will be under statutory constraints to ensure that this is so.
Clauses 49 to 53 deal with conversion from a community interest company. The only way to cease being a community interest company, apart from winding up, will be to convert to another form which has a similar "lock" on assets to ensure that the proceeds of the business cannot be diverted to private benefit. These clauses therefore provide for community interest companies to convert to charitable status. They also enable the future introduction of a mechanism to allow conversion to an industrial and provident society with a lock on assets. The Government plan to consult shortly on the introduction of such a lock for certain industrial and provident societies.
Clauses 54 to 60 are supplementary provisions, covering matters such as the relationship between the new regulator and the registrar of companies. These clauses also specify the information gateways between the regulator and other bodies.
The final four clauses of the Bill are largely technical provisions and Schedule 8 contains repeals.
The clauses on community interest companies will need to be supplemented by regulations setting out more of the detail, especially on matters which are likely to require amendment from time to time in the light of experience and changing circumstances. The Government will make available a preliminary draft of the main regulations before the Bill reaches its Committee stage so that the House can see more of the detail of the proposal. The Government will, of course, welcome the assistance of the social enterprise sector in improving the draft regulations before they are formally laid before both Houses for approval.

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Finally. I should mention one matter which is not in the Bill, namely the issue of auditors' and directors' liability. It is no secret that some in the auditing profession have lobbied the Government to use the Bill to change the law to allow auditors to limit their liability to companies for negligent audits. However, the Government wish to hear a wide range of views on the related issues of auditor and director liability and therefore published a consultation document on this subject on 16 December. The consultation runs until 12 March and the Government will decide any further steps in the light of responses.
This is an important Bill, the product of much consultation and expert input. The provisions on financial reporting and investigations will support non-legislative action already taken and will help to maintain confidence in the financial integrity of companies. At the same time, the provisions on the community interest company constitute a useful addition to the forms available to social enterprise. I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Sainsbury of Turville.)
11.54 a.m.
Lord Hodgson of Astley Abbotts: My Lords, I thank the Minister for his characteristically comprehensive introduction and for allowing us to have a brief meeting earlier this week for a preliminary canter over the ground.
I begin by declaring some interests. I am a non-executive director of Britain's largest regional brewer, a company listed on the Stock Exchange, and of a mutual building society; I am also a non-executive chairman of an engineering company listed on the alternative investment market and of three private investment companies. In several of those companies I serve variously on audit, compliance, remuneration and nomination committees.
On 27 November, the debate on the gracious Speech, which was devoted to the economy and industrial affairs, was opened by the Minister and closed by the noble Lord, Lord McIntosh of Haringey. The noble Lord, Lord McIntosh, teased noble Lords on this side of the House about what he saw as the small number of speeches which focussed on the macroeconomic position of the country by referring to this as, to use his phrase,
"the dog that did not bark". —[Official Report, 27/11/03; col.85.]
Today we have another dog that did not bark. Because what we are discussing here are but two small—very small—parts of what should be two major Bills that the Government have yet to bring forward regarding the reform of company law and the reform of charity law.
As regards company law, the Government have taken the easy course and focussed on a narrow part of the reforms in a way which, no doubt, they hope and believe will win them the plaudits of their Back-Benchers in the other place. Directors and auditors are always easy targets. But the Government are only too aware that company law as a whole urgently needs an
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overhaul. We know this because the Secretary of State has told us so. In the preface to the paper Modernising Company Law published in July 2002, Patricia Hewitt wrote:
"When British company law was created in the 19th century, it was a source of competitive advantage. Now it has become a competitive disadvantage. The law has become encrusted with amendments and case law over generations. It has failed to adapt to meet the changing role of small enterprises, IT and international markets…So the law needs to change. It needs to modernise and reform. It needs to be fit for the 21st century and beyond".
If one leaves aside the ghastly, cliché-ridden style—if I have to listen to anyone else talking about "fit for the 21st century and beyond" I shall go mad—this is a fairly ringing endorsement of the need. It was written in July 2002 and we are now in January 2004. So where is this reform that the Secretary of State says is so urgently needed?
This strategic failure has a knock-on impact even on the narrow measures we are discussing today. The first impact is that these measures, if enacted, will increase the burden of responsibilities carried by company directors. If we are to attract men and women of quality to serve on company boards, they are entitled to seek protection by means of insurance. Yet not only is insurance increasingly expensive or simply unavailable, but Section 310 of the Companies Act 1985 is also unhelpfully drafted.
That section is also of relevance when considering the issue of auditor liability. As the Minister said in his opening comments, the DTI has issued a consultation paper on both director and auditor liability. I note that the closing date for consultations and submissions is 12 March. It would be helpful if the Minister could indicate more clearly than he was able to do in his opening remarks whether the Government have any intention of tacking on provisions as regards this issue at a later stage in the progress of the Bill—assuming the outcome of consultation is satisfactory.
The second impact of the failure to reform company law is the incomprehensibility of the legislation as a result of its successive layers of change and amendment. Reference to the Companies Acts 1985 and 1989 require one to crawl over a multitude of other texts, with cross-referencing and outdated sections littered everywhere. The Bill should have, as all Bills should have, a careful scrutiny in your Lordships' House. But it is extremely hard to unpeel the layers of legislation to find the real impact. The Minister, with his team of officials, may not find this too hard but we certainly do.
I hope that when the Minister winds up the debate he will be able to give us more definite news as to when the Government expect the good ship "Company Law Review" finally to reach harbour.
Before I turn to the specifics of the Government's proposals, I shall make a couple of important points that are an important background to our discussion of the first part of the Bill. The first is that all new regulation comes with a cost attached. The regulation may be entirely laudable, but there is a cost—a cost that has an impact, however marginal, on the

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competitiveness of UK plc. It is important for us always to bear in mind that an accumulation of costs, each of which may individually be marginal, can result in an increase in total costs that is not marginal.
An example is the Licensing Act 2003, which your Lordships passed in the most recent Session. Ministers were inclined to downplay the costs of those new regulations, but I must tell the House that the brewery of which, as I said, I am a non-executive director is putting aside £1 million in the current financial year to cover the costs of the new Act.
I shall not re-run the arguments about the Act, but I draw your Lordships' attention to the practical results of our work in this House. For that £1 million does not come out of thin air: it must be paid for. It is paid for by shareholders in the form of reduced profits; by customers in the form of increased prices; or by staff in the form of loss of jobs, because efficiencies have to be made up in other ways. The effect on their business for UK companies, which are competing on an international stage with companies based overseas that do not have to bear those cost burdens, can be substantial.
The second general point is the need always to distinguish between fraud and risk. Fraud is unacceptable: it is theft that causes agony and heartache to employees, shareholders, suppliers and customers. It must be rooted out. But risk is another matter. Risk is an important part of the market economy by which new ideas, products and services come into being. Some succeed but, inevitably, many fail. A risk that does not work is not a fraud. Our economy will work better if there are what my business school professor used to call—I think that he was in turn citing Professor Schumpeter—"gales of creative destruction", however painful they may be in individual cases.
The issue of risk is addressed fairly and squarely in the combined code to which the Minister referred, and which I suspect we shall discuss at length in Committee. Section A.1.1, which addresses the role of the board, reads:
The board's role is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls".
I emphasise the use of the word "entrepreneurial", which indicates and implies a preparedness to take risks. Accordingly, where the Government propose legislation that effectively targets fraud and malfeasance, of course they have our support, but if the proposals are no more than box-ticking exercises that inhibit entrepreneurial flair and increase the regulatory burden for UK plc, we shall be less happy.
So we shall measure the Government's proposals against four tests, the first of which is: are the proposals proportionate? The final report on the regulatory regime of the accountancy profession, published in January 2003, some of which the Minister quoted, but not all, states:
"The UK's existing regulatory system is widely acknowledged to be among the best in the world. During the course of our work, we found no evidence that the system was seriously flawed".
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So we must be certain that the proposals meet real needs and are not just knee-jerk reactions to one-off events.
Secondly: are they balanced? For example, Section 447 of the Companies Act 1985 already gives considerable investigatory powers to the Secretary of State. Do those powers really need the enhancement that is found in Chapter 3? For example, how are we to prevent them being used in future for fishing expeditions and how do we ensure a proper level of confidentiality?
Thirdly: are the proposals clear and workable, from the point of view not just of the director, whether executive or non-executive—and that difference is itself an issue—and the auditor, but of more junior employees who are for the first time to be swept up in the provisions of Clause 8? Fourthly and finally: are they effective? For example, there is the issue of how to deal with overseas subsidiaries. I understand the serious issues involved in extra-territorial jurisdiction and in no way do I minimise them. But, as the Minister said, so far in this country we have had few Enron-type scandals. The case that probably came the closest was the collapse of Barings Bank. How did that come about? Not because of anything done in the UK but because of an overseas subsidiary—on that occasion, in Singapore.
The Minister referred to the well publicised problems with Parmalat in Italy that have emerged during the past few weeks, which on present evidence seem to revolve around money held in offshore banking centres. Is he convinced that the Bill will provide an adequate net to catch such cases?
It is no good creating a system so detailed that it becomes a box-ticking exercise in which directors have to commission reports on reports to protect themselves. Such a system corrodes trust and undermines the willingness of directors to take risks and exercise judgment. We need high quality, knowledgeable and experienced people as directors of companies. We may be reaching a position where people are discouraged from putting their names forward because the personal and financial risk and that to their reputation is too high.
Further, in their zeal to avoid conflicts of interest, the Government may create a situation where the only qualification for being a non-executive director of a company is to know nothing about it. In many—although not all—cases, conflicts of interest can be perfectly satisfactorily addressed by disclosure. In that way, one can use the expertise and knowledge of those with an interest in the success of the company to the best advantage of the whole.
This is not an issue for party-political point-scoring. I can conclude, summarising our concerns about this part of the Bill, by quoting from an article by Patience Wheatcroft which appeared in the Times on Thursday 27 November. She wrote:
"The same contradiction between the Government's claimed intention of reducing red tape and its unstoppable practical drive to add more control, regulation and cost at every turn is evident in its plans for company law. Expert and indefatigable efforts have been made by various inquiries over the years, including lengthy

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and detailed recommendations from this Government's own commission, to simplify and modernise company law. Some widely agreed proposals date back decades.
Patricia Hewitt, the Trade and Industry Secretary, used to sound terribly keen on this modernising project. Yet it seems to have been relegated to an as yet unscheduled Part 2 of proposed legislative changes. Part 1, which takes precedence this year and may be the only part that reaches the statute hook, adds more burdens and controls …The emphasis of the Part I Companies Bill will be to strengthen regulatory powers, which seems unnecessary. It will force directors to make legal statements that they have not forgotten to disclose anything, which mainly increases potential punishments and will put off more potential non-executive directors. "
So, although we do not object in any way in principle to what the Government have in mind, we shall be tabling amendments to tease out the thinking behind the provisions to ensure that our tests of proportionality, balance, clarity, workability and effectiveness are met.
I turn now to the second part of the Bill, which concerns the establishment of community interest companies. In passing, I note that that, too, is a minor—some would say very minor—part of the Government's proposals to reform the law on charities. There is a sense of carts before horses. It would probably have been better and more effective to have a debate on CICs after the major debates that will undoubtedly take place on charity law reform. It is hard to believe that those debates will not throw up issues and concerns that will affect CICs. Sadly, by that time, the legal shape of CICs will be enshrined in statute and one hesitates to estimate how long it will be before parliamentary time can be found for any statutory changes that may be needed.
Accordingly, it would be helpful if the Government could outline their thinking on the likely scale of the CIC movement. In his opening remarks, the Minister referred to there being a "real demand", but presumably, in drawing up the legislation and preparing the financial numbers given in the Explanatory Notes, the Government made some estimate of the number of CICs that are likely to be set up during the next few years. Perhaps the Minister would care to share those figures with the House when he responds.
That having been said, we approve of legal structures that have the flexibility to respond to local conditions. So we are happy to give them a welcome in principle. However, we have areas of concern that we will want to discuss in Committee. First, will there be a level regulatory playing field for CICs and private limited companies? I had the pleasure of listening to the knowledgeable speech made by the noble Baroness, Lady Thornton, on CICs during the debate on the gracious Speech. She said that she hoped CICs would compete with limited companies—quite right, too. But that means that there must be no regulatory advantage or disadvantage to one side or the other.
Secondly, the new CICs will need the right regulatory. touch. Many will be set up by groups of people relatively unversed in company law and possibly also in commercial activity. They will need advice, particularly in the early years, before custom and practice have evolved. When I was involved in
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setting up the original regulatory regime in the City, as a founder director of the Securities and Investments Board (SIB), one of the issues that most infuriated smaller firms was the SIB's inability to give helpful advice. When asked about a particular course of action, our only answer was to the effect of, "We cannot help you. We suggest that you go ahead, and if we don't like it we will test it in the courts". If a similar situation prevails here—from my reading of Clause 34, I think that it may well do—it will represent a considerable disincentive to the emergence and development of CICs.
The third issue is skeleton primary legislation, which has bedevilled our debates on many Bills in the past year. To have an informed debate about the proposals, we need to see more detail about what the Government propose. The Minister said that the Government intended to have draft regulations available by Committee stage. That is good news, for which I thank him and his officials. We look forward to having a chance to read those regulations, preferably some way ahead of Committee stage, so that we can get appropriate responses from external bodies affected.
In summary, we want the United Kingdom to be a good place to do business. That means striking the right balance between too much and too little regulation. We shall want to be sure that the proposals in the Bill achieve that difficult reconciliation. We are disappointed at the continuing delay in the overhaul of company law. That long-overdue change would certainly improve the United Kingdom's competitive position. We see many advantages in CICs but wonder, if the regulatory regime is kept as proposed, how many will emerge in the event. We look forward to giving those important issues a thorough airing in Committee.
12.12 p.m.
Lord Sharman: My Lords, I declare an interest as chairman of two companies listed on the London Stock Exchange. I am on the board of two other companies, in which I variously function as a member of the audit committee and the remuneration committee.
I generally welcome the fact that the Government are addressing the subject matter covered by the Bill. But I make no apologies for returning immediately to the subject matter raised by the noble Lord, Lord Hodgson: there is a major concern about where we are on the desperately needed overall reform of company law. The Government seem to be taking a "nibble" approach to the reform of company law. In the previous Session, we nibbled off a piece with the Enterprise Bill, which dealt with insolvency, bankruptcy and such matters. This time we are looking at audit regulation and creating a new type of company—another nibble, imposing yet further burdens on those concerned with the management of companies, their officials and offices.
The Bill contains 17 clauses on the reform of regulation, five clauses on improving company investigations and 37 clauses establishing community interest companies, and incidentally creating yet

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another regulator. But it does nothing to help the beleaguered company director, who, as the noble Lord, Lord Hodgson, said, must dig his way through reams and layers of legislation enacted by way of amendments to previous legislation to find out what he should or should not be doing. That is all very well if you are learned in the law, but most company directors are not. That only provides for the future wellbeing of the legal profession—something that my colleagues may endorse but which I do not find necessarily good. It is critically important that we help our directors by modernising company law. We must reach that position very quickly. An enormous amount of work and consultation has been done on the matter, and the proposals should not sit waiting to be enacted.
My three comments on the Bill's contents almost certainly arise from the complexity of the layers of amendments to legislation. First, I simply cannot understand from reading the Bill how the standard-setting process will work. The Bill requires all sorts of people to become involved; it mandates them to do work. It mandates the institutes, where relevant, to participate. But who will set the standards; who will ensure that they get set; and who will be responsible for paying for that?
That leads to the second issue—costs. Very wide-ranging powers are being vested in the Financial Reporting Council and the Financial Reporting Review Panel. The information states that in 2006–07 we are looking at costs of some £12 million. My immediate reaction to that figure was that it was low. It might be useful to look at what the much-quoted Sarbanes-Oxley Act provided for in the United States. The Public Company Accounting Oversight Board in the United States, which was established by Sarbanes-Oxley, had a budget for 2003 of 68 million dollars, and for 2004 its budget is 103 million dollars; in 2003 it had 126 staff, and in 2004 it plans to have 284. Those are significant figures. I do not suggest for one moment that the Bill takes us to the position of Sarbanes-Oxley, but if we are not very careful, as in all such situations the costs will grow and grow. Will the Minister comment on the future funding of the costs? I understand that the existing informal arrangement is for one-third funding from government, one-third from the accounting profession and one-third from listed companies. Is it intended that that should be adhered to in future, or what provisions will there be for funding the costs?
The third issue on the content of the Bill regards the obligation that the Bill imposes on individuals to provide information to the Financial Reporting Review Panel and, in Clause 18, the Secretary of State. What appears to he missing is a reasonableness test. Perhaps the complexity of the legislation causes me to say it, but my reading is that there is no requirement for a reasonableness test in pursuing an allegation. Does that mean that the FRRP will pursue every allegation, whatever its foundation, or will it be obliged to take a test of reasonableness first? Otherwise, I foresee a situation in which boards of directors are inundated with requests for information
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because of spurious allegations through all sorts of channels. If that arises, we will quickly ensure that the £12 million estimated costs will be on the low side indeed. Will the Minister, in his winding-up speech, say whether the reasonableness test will be there?
The Minister touched on the operating and financial review, on which I wish to ask him a question. He said that the Government intended to consult on that part of the annual report later this year. Can he tell us more about the timetable for that; when the likely imposition of the new requirement for company reporting will take place; and, most importantly, the degree to which the Government envisage that it will form part of an annual report that will be verified or attested to in some way? Here, again, we are looking at further burdens on boards of directors without necessarily helping them by simplification of company law.
There are a number of matters of detail within the Bill, in particular with regard to the establishment of community interest companies. We shall pursue them in Committee, but I shall not raise them now. In his opening remarks, the Minister referred to the public consultation that has been embarked on regarding director and auditor liability. He said that the consultation period ends on 12 March. I shall assume that in normal circumstances—from my perspective, it is highly unlikely that the consultation will come forward with a consensus or a clear answer—there will be time to include amendments in the latter stages of the Bill to reflect any changes that need to be made. But, more importantly, can the Minister confirm, or otherwise advise us, what would be a likely timetable to enact the results of the consultation on liability?
With regard to auditor liability, it was my understanding that the Department of Trade and Industry had embarked on a discussion with the major accounting firms regarding further transparency of their affairs. What progress has been made on that? In that context, perhaps I may explain that I am not just looking for information about the operating performance. It is very important that the market-place should understand the quality processes and internal disciplinary procedures under which these firms operate. I should be very interested to hear his comments on that.
In summary, the Bill tackles a number of issues that need to be addressed. They are a little piece of the total picture of company law reform that needs to take place. I welcome it for that. But I leave the question: what about the rest? How long does the British business community have to wait for a modern framework of company law, which it so desperately needs?
12.20 p.m.
Baroness Thornton: My Lords, I welcome the introduction of the Bill. I think that it is safe to say that this is a Bill in two parts. As one of the DTI Ministers said at a recent meeting, this Bill concerns saints and sinners. I intend to address my remarks to the more saintly part of the Bill—Part 2—that concerns the

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establishment of a new type of company; namely, the community interest company. I should also like to declare an interest as the unpaid chairman of the Social Enterprise Coalition, the national voice of social enterprise representing all the major organisations that promote and develop social enterprises. I should like to thank my noble friend the Minister and others who have mentioned the work of this organisation.
We have before us a proposal that has already benefited from wide consultation. As has already been mentioned, the Bill needs to be seen in the wider context of both the reform to charity legislation and the updating of IPS legislation. So we have the DTI, the Treasury and the Home Office working in harmony—I hope and expect—to drive forward an agenda which will encourage the growth of enterprise co-operatives and community regeneration.
I believe that we can look forward to an interesting debate on both the principles and the detail of CICs when the Bill moves into Committee. I was very pleased to receive, in the past two days, briefings from both the CBI and the Local Government Association that welcome the introduction of the CIC. Interestingly, both organisations recognise the contribution that CICs might make. Perhaps I may say that the CBI has stated that it would be,
"for the benefit of the local community … such as in childcare provision, social housing, leisure and community transport".
Indeed, the CBI continues:
"This will be of interest to some member companies wishing to set up CICs for their corporate responsibility activities".
I think that that is a very interesting comment. Indeed, the Local Government Association states:
"This form of company could be a useful tool for local authorities, particularly in asset based economic regeneration and in developing the role of the voluntary and community sector in service delivery".
There appear to be three key features of the new company that distinguish it from either a charity or a traditional company form. First, CICs will have an asset lock. Secondly, they will be expected to work for a community. Thirdly, they will be expected to report on the work that they do for that community. For many people, the single most important feature of the CIC is a strong, transparent lock on assets and profits, along with the power to ensure that the lock is meaningful. That is intended to give people real reassurance about what CICs are set up to do.
At present, many social enterprises are set up as companies limited by guarantee, sometimes with a custom-made lock on assets in their constitution. That is not an easy process. Few lawyers are familiar with it and their advice can be very expensive. Often, it is a case of reinventing the wheel over and over again. From the work that has been carried out by the Social Enterprise Coalition and its members, I know that this is a major barrier faced by newly emerging social enterprises. It also creates real uncertainty among third parties, such as banks, funders and investors, about the status of this type of enterprise. So the asset lock not only will provide a lock for the assets but also is intended to give the new
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company a brand, which would give confidence to third parties. During the course of the Bill, we will need to test whether the proposals, as outlined, will do the trick.
The second key principle of CICs is that they should serve community interests and should he transparent in what they do. Serving the community means that there will be a test before one can join the CIC "club". It is called the community interest test. The key issue will be to strike a balance between creating a slow, bureaucratic process and having a community interest test that is robust enough to protect the good name of the CIC. It is proposed that aspiring CICs should have to make some declarations when they apply. We will need to test whether the declarations, as outlined, will do the trick.
The real focus will be on community interest; it is what CICs are meant to do. In many ways, the test will be what they will do when they are up and running. If there is a genuine concern about whether a CIC is serving the community within the meaning of the Bill, the new CIC regulator will be able to take rapid action to address that—for instance, by safeguarding assets or removing directors. So CIC status is not something to be taken on lightly. Will the Bill ensure that the regulator will hold people to the promises that they make?
The third key principle is that CICs should be transparent. It is proposed in the Bill that CICs should report each year on what they are doing for their communities and that that should go on the public record. Again, it is vital that that does not just produce red tape. The report should be straightforward to produce and integrated with the current company reporting process. It should be able to give the public a feel for what CICs are doing to deliver on their aims. But it will also show how CICs are engaging with the people affected by what they do—that is, their "stakeholders"—and it will address concerns, such as directors' pay, which are sensitive not only in the wider world but also in the social enterprise context.
There are further questions. Will the sector that has been involved in bringing the Bill forward also be involved in the appointment of the regulator? We will need to examine how the proposed asset lock will work. What information should be included in a CIC's annual report? Where will the cap for the dividend payable on "investor" shares be set? The regulatory framework that will follow from the Bill will be very important. I am pleased to have the Minister's assurance that the consultation process will start immediately.
I believe that the Bill is the product of a successful consultation process. Certainly, the Social Enterprise Coalition has felt that that was the case. Also, all the way through the process we have stressed the importance of the reform of the industrial and provident societies' legislation, which must go in tandem with the creation of the CIC. In the same way that there needs to be a level playing field with traditional companies, so there should also be a level playing field with the industrial and provident societies, which cover co-operatives, housing co-operatives and other forms of social enterprise. It is

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not acceptable that there should be a nice, new, cheap, easy-to-use vehicle in the shape of the CIC when the legislative and regulatory framework governing cooperatives and others is, at best, somewhat creaky. However, I hope that the Treasury will build on the work that my honourable friends Gareth Thomas, Mark Lazarowicz and Mark Todd have done in the past two years in their Private Member's Bills and that some proposals will come forward from the Treasury soon.
Our job, therefore, is to test and improve the new CIC in its passage through the House and, when the Bill is enacted, to add it to the family of different ways to set up social enterprises, co-operatives and community enterprises. The Government will then have the task of promoting that new form of company across government departments and industry. I would like some reassurance that resources will be made available to do that, because if the new law is not widely promoted, it will fail. I look forward to working with your Lordships on the Bill in due course.
12.30 p.m.
Lord Patten: My Lords, I am glad to follow the noble Baroness. She will forgive me if I do not follow her remarks on community enterprise for I intend to restrict mine to audit and company law issues. In so doing, I should remind your Lordships of my relevant interest as a company director as declared in the Register of Members' Interests. For the sake of completeness, I should perhaps declare also the interests of my wife. She is a company chairman who serves on the board of four public companies, two of which are in the FTSE 100. However, I assure your Lordships that her Ladyship and I operate a strict Chinese duvet policy as far as disclosure matters are concerned at home.
Perhaps I may join my noble friend Lord Hodgson, who made an excellent speech, and the noble Lord, Lord Sharman, in expressing my disappointment that the DTI has yet again failed to bring forward a proper company law reform measure in a seemly and timely way. It is not the first time that I have said that I find the DTI asleep on the job in such matters. It aestivates in the summer months and it hibernates in the winter months.
What do the Ministers in the DTI do all day long? Your Lordships should be told. The Minister should give a pledge that there will be a company law reform measure before the next general election. If he is not able to do that, it will clearly be a matter for the incoming Conservative government under the leadership of my right honourable friend Mr Michael Howard, who has extremely detailed experience of taking complex and complicated financial measures through the other place, going back to the 1980s. He and the rest of my noble and right honourable friends understand business in a way in which it is clear less and less, alack, this Government now do. They have produced a headline-grabbing measure.
As a backdrop to my remarks, I should join my noble friend Lord Hodgson in saying that capitalism and markets are a great force not only for material
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good, but also for moral good, when properly conducted. I take as my touchstone the valedictory remarks of the Bishop of Hereford to this House during the debate on the gracious Speech on 27 November. The much-missed Bishop said,
"as far as capitalism is concerned, my opinion is that, if properly regulated, like hunting, it is morally all right". —[Official Report, 27/11/03; col.71.]
That is good enough spiritual guidance for me.
However, the question is: what kind of regulation is right and to what degree? In corporate life, as in any other part of public or private life, people sometimes do bad things to enrich themselves. That is part of human nature, but in market economies, accidents happen. Failure is a natural part of a market economy, whether that failure is innocent, bad luck, misjudgment or due to blatant corporate theft.
When scandals blow up, governments tend to respond by introducing legislation to make sure "this never happens again". There is scant chance of that. All too often, ill-thought-out regulations are introduced that do not prevent malfeasance happening again. Therefore, we need to test the Bill's proposals very carefully. My noble friend on the Front Bench set down four criteria. I have four slightly different ones: need, effectiveness, common sense and cost—but while always reaffirming the benefits of the market system.
As the Minister said, certain issues must be addressed. One has to go no further than the current issue of the Economist. Page 5 features a billboard not just of companies in trouble, but also of accountancy firms under some stress. Halfway down the page, we learn that KPMG has quit as auditors of Hollinger Incorporated. Further down, we read that Grant Thornton has claimed that it was the "victim" of a fraud, some time before it could possibly have conducted an internal investigation of what went on in its Italian partner. However, that is what it claimed. Those two stories offer the inelegant spectacle of two otherwise distinguished professional services firms publicly running for cover—of auditors running to the hills as fast as they can.
The noble Lord, Lord Sharman, referred to a strong feeling among many audit practitioners, some of whom I count among my friends, that they need to have their responsibilities and liabilities limited. I hope that my noble friend Lord Freeman, who comes from that background, will continue to regard me as a friend after I have finished my speech. The Minister referred to the consultation process on liability that was launched on 16 December. I advise the Government to approach liability reform with extreme caution. Why should auditors have that protection, while others in business, be they executive or non-executive, are perhaps denied it?
Related to that issue is the fact that 97 or 98 per cent of the top 350 companies in this country are audited by just four auditors. All of the top 100, and all bar eight of the next 250, are audited by the "big four". That is perilously close to 99 per cent. Some people see that as unhealthy or anti-competitive; others put it down to the excellence of the "big four"—they do contain many

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great auditors, to whom I pay tribute. Others attribute it to fashion, or even to the fact that company finance directors think that they had better play safe and go to the "big four", because the "big four" have big pockets and if liabilities do arise, they stand some chance of having some of them met. However, capping liabilities would greatly diminish those firms that audit risk-takers. Risk is extremely important, as my noble friend pointed out. No risk, no profit. Auditors should not he allowed to become the cosy, cosseted species in the way in which some people are lobbying.
I end on a note of further disappointment that the DTI seems to be doing so little to promote better and more widespread ethical practices in this country. Sometimes, alas, there is a thin line between ethical or unethical behaviour, whether in business or in politics. When the rewards are big enough, no amount of ethics training or corporate ethics officers will deal with the issue. However, what makes the market system work is trust, and individuals and companies doing what they say they are going to do. Building an ethical code into a company's life helps to make sure that people pause and think, often about simple things. They may ask themselves: "Hang on. Would I like to tell my wife and children what I am about to do and why I am doing it?" Or "Just a moment, would I like to read about this action I am taking in my office in the media tomorrow?" One reputable US company of which I have personal experience has taken ethical training and ethical matters so seriously that everyone has ethics checks and training every year, not just for the shop-floor but also for the chairman, the chief executive and the whole of the board. In companies such as that, ethical considerations become part of the warp and weft of corporate life. It is not a matter for PR-conscious, corporate special interest areas such as corporate social responsibility or corporate environmental policy, worthy and important though they are.
I therefore conclude by urging on the Minister more encouragement of that approach. I mean "encouragement", but please, at all costs, not some new, government-inspired, Higgs-style report on ethics that is all about process and box-ticking rather than substance. Business has had quite enough of that, as it has had of over-regulation.
12.40 p.m.
Lord Phillips of Sudbury: My Lords, I am grateful to the Minister who, in opening this debate, paid tribute to Roger Warren Evans and Stephen Lloyd for having invented the concept of the community interest company, the CIC. The Bill before us follows substantially the skeleton form that they produced three years ago. It is not often that we are in the business of creating a new corporate vehicle and I think this could be the first entirely new corporate category since the 19th century.
So fascinating is the Bill that over the past 24 hours I have managed to miss one train and, on two other occasions, travelled past my intended station—including this morning. It is a riveting read. And a period of around seven minutes is not long enough to cover all I want to say at this stage of our consideration. I suspect that the
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noble Baroness, Lady Thornton, and myself may be the only speakers to address Part 2, covering community interest companies.
Before turning to my main points, I want to say briefly that I believe that there should be a greater entitlement to information for members of such companies than is the case for normal companies, and that we should provide for that. Further, we should consider providing for a more open memberskp of such companies than is the case for traditional business entities. Again, no provision has been made for that. I should also be grateful if the Minister would consider making gifts from one CIC to another exempt from stamp duty because on distribution following a winding-up, surplus assets will have to he sent to another CIC or a charity rather than put in the pockets of the members. Will the Minister consider allowing capped interest paid by CICs to be treated as pre-tax charges, as is the case for industrial and provident societies? Finally, could capped dividends enjoy the same tax relief as that allowed under enterprise investment relief schemes?
The first and most important point I want to consider relates to the whole principle of preventing a CIC also being a charity. Clause 23(3) states that:
"A community interest company established for charitable purposes … is to be treated as not being a charity".
Complicated provisions set out in Clauses 36.37, 51 and 52 deal with this confusion this paradox, as I see it—together taking up some three-and-a-half pages of text. This is the first time in English history that a body established for exclusively charitable purposes, with a constitution entirely in accordance with the requirements of charity law and which operates exclusively as a charity, is to be prohibited from registering as such.
The existing law has always been simple. Whatever the form of the charity, the factor which determines whether it is or is not one is the substance—its activity and purposes. That is why in this country we have a wider range of charitable options than any other in the world, and it is why the other Anglo-Saxon jurisdictions have followed us. That is in stark contrast to the Napoleonic code countries where entitlement or status follows form. The freedom that this has given the charitable sector in this country, along with the unique protection afforded to the public, will be subverted if the clause is passed.
I think I understand the reasoning: I suspect that there is a desire to prevent what might be seen as confusion in the public mind over the nature of a CIC. However, I urge Ministers to look at this again, no matter how attractive that argument may be at first blush. If the prohibition stands then let us make no mistake: we will then have the bizarre state of affairs whereby the type of company most distant from that which the public conceives of as a "charity"—namely, a typical company limited by shares, which is the standard vehicle for a private benefit business—will continue to be permissible as a vehicle for charity, while a CIC—expressly a community interest entity

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with controls on the distribution of its assets—cannot be used as a vehicle for a charity. That is extremely confusing.
What is more, we may get into an "Alice in Wonderland" situation whereby a CIC with charitable purposes—that is admitted as a prospect in Clause23—will not be able to be a charity, but none the less will be able to blazon abroad as much as it likes the fact that it has charitable purposes. I put it to noble Lords that that is daft.
Furthermore, if CICs are allowed to be charities, as are all other forms of company, trusts or unincorporated associations, they will also have to comply with charity law. They will not be able to pay directors and they will be subject to many other provisions that will inhibit their freedom of action.
Not only do I see no downside to continuing with the age-old system vis-à-vis charities, but there is a huge advantage in it. In time, I believe the CIC will prove to be a more popular vehicle for corporate charities than any of the existing forms, given the ethical match between a CIC and a charity. It should also considerably shorten and simplify this Bill. A number of noble Lords have already referred to its length and complexity.
My second main point concerns the absence from the protection provisions in the Bill of any control over remuneration. Part of the Government's case set out in paragraph 159 of the Explanatory Notes declares that they want to provide the public with,
"a clear assurance of non-profit-distribution status".
To allow the unlimited remuneration of the directors or employees of CICs would be to drive a coach and horses through any attempt at controlling the distribution of the assets of a CIC. That is because Clauses 27, 28 and 29 as drafted only inhibit levels of dividend payments and interest payments. They also control the distribution of assets on a winding-up, but they do nothing at all to constrain the remuneration, level of bonus payments or salaries of members of a CIC board. I urge the Government to deal with that.
Perhaps I may refer briefly to the discretionary power given to the regulator under the terms of Clause 27(3)(b) to,
"set different limits for different cases",
by which it means that the regulator will be able to say, "I am going to allow this particular CIC a capped interest rate of 10 per cent", while all other CICs are being allowed to pay only up to 5 per cent. Alternatively, he could consider different categories of CICs and put limits above and below the norm on the distribution of dividends and interest. That would be a first in English law and I see no reason at all why either the regulator or the Secretary of State should have such a power. What are his or her qualifications, and why should the state be able to favour one kind of activity over another? That is as invidious as it would be to allow the Registrar of Companies to set differential corporation tax rates between one type of business and another. I urge the Minister to review this point.
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I want to toss out the thought that the regulator should be subservient to and part of the registry of company arrangements. Nothing in the Bill makes it necessary to create another free-standing bureaucracy. The Registrar of Companies has a good reputation and I believe that significant administrative and cost savings could be made if the Bill is reconsidered so that much, if not all, of the bureaucracy could be put into the companies registry.
Finally, I want to refer briefly to the definition of a "community interest company". I wonder whether we need to have one at all. The definition proposed in Clause 32(2) is astonishingly wide indeed, the whole Bill needs to be looked at because so much is expressed in bland and widespread terms; namely:
"A company satisfies the community interest test if a reasonable person might consider that its activities are being carried on for the benefit of the community".
That is very helpful! But since many of these companies will be new and will not have undertaken any activities—they will have merely a constitution—and in particular since this should concern not simply the type of business being conducted but the manner in which that is done, I suggest that we could do without such a definition.
Of one thing we can be sure: no one seeking to line their pockets will set out on the road of business or enterprise in the form of a CIC, because of the controls on dividends and interest and, I suggest, remuneration. Again, this would save a whole lot of hassle, bureaucracy, frustration and expense. What is wrong with that?
12.49 p.m.
Lord Brennan: My Lords, the Bill is a welcome step to strengthen corporate governance through reform of auditing and accounting procedures. I regret to say that I consider it to have been a necessary step. It was a little less than two years ago that we debated in this House, in the aftermath of Enron, the effect of such a collapse on the public interest—the public interest expressed in the investment of pensions and public funds into major enterprises. The year after that we debated the progress that had been made in this country after the Higgs, Smith and other reports. So now we debate the legislation, which is a consequence of these matters.
This legislation has the task of trying to reconcile private interest—commercial, capitalist—with public good. That balance is expressed in what meets the public interest. I commend the Bill as a sensible step to meet the concerns that affect the public interest, the need for trust and integrity of companies in this country.
I propose to deal with two central matters to do with auditing and accounting. The first is the supervision and regulation of such work. In the first few clauses of the Bill, the Government seek, through the means of regulatory and supervisory bodies, to establish proper standards. That involves, it seems to me, two requirements. The first is that the standards should be reliable. What I am about to say might sound—or

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might have sounded—trite before Enron and Parmalat, but it now needs to be said. The standards should enable those investing to understand the balance sheet of a company and to assess the true extent of its liabilities. It is remarkable that in 2003, at the beginning of the 21st century, we should have to express such a need in such simple words. Only a year ago, Merrill Lynch advised investors not to invest in Parmalat because its finances were so opaque. How on earth can we allow such a state of affairs to persist?
Secondly, in reaching for reliable standards that involve transparency, surely we must identify, as a competent, innovative commercial society, the devious means by which companies can seek to avoid serving the public interest and achieve reliable standards that prevent that. Why should we discover, in 2000–2001, the vehicle of a specific purpose entity which hides the debt obligations of Enron as if it were some wholly unconceived attempt so to achieve an internal result for the benefit of the company, the directors who were involved as guilty parties, rather than the community in general?
The first issue is reliable standards; the second is international standards. It is inconceivable that we can balance American standards through the FASB and European standards through the IASB if they are different in such a way that will serve the public interest. I give two examples. The first is stock options, with which I had a fateful encounter years ago in trying to understand the Black-Scholes formula for valuing them. Stock options are a major aspect of company life—surely the existence of those options and their value as an expense should figure in a company's accounts. Not so in America, but it is the case here. On the contrary, in Europe we value derivatives at purchase price, often next to nothing, whereas in America they apply a market valuation.
I have chosen stock options and derivatives as examples because each—probably the latter more than the former—plays its part in the way in which those who are determined to make a wrongful profit from a company can achieve it. We must have international standards and guard against those risks.
My third point on supervision and regulation in terms of standards is that the grant that the Government give to bodies concerned with such standards should be properly spent. We want a results-based analysis. Is the system working? If not, how can we best change it?
Next, for my second main theme, I turn to the enforcement of accounting and reporting standards. On overseas subsidiaries, Clause 8(3), as I read it, gives a full power to a UK auditor to investigate a UK parent company's activities wherever it may be carrying them on, through whichever subsidiary. That is to be welcomed.
Secondly, in dealing with international finance and enforcement, surely auditors, as professional men and women, should exercise competent judgment. How can a cash-strapped conglomerate like Parmalat produce, if it is correct, a sheet of paper saying that in an offshore account of a company somewhere in a tax
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haven there is a holding of several billion euros in cash without the auditor questioning it? It seems very difficult to understand. Moreover, how can so much money transfer itself from one part of an entity to another without explanation being demanded?
I close by inviting the Minister and, through him, the DTI, to consider the broader picture. None of these events could have occurred without the client/banker relationship existing, as it must have done, in Enron, Parmalat, and so on. When are we to expect standards from the banking system? It is difficult to understand how Citigroup, JP Morgan and Deutsche Bank could have failed to have had any questions to ask about the derivative deals they were carrying out for Parmalat to the tune of hundreds of millions of euros. I close.
Lord Freeman: My Lords, I am very grateful to the noble Lord for giving way before he sits down What about the credit rating agencies and their role in this?
Lord Brennan: My Lords, the noble Lord is in rightful anticipation of my two other institutions for checks. Financial advice to investors clearly should be the subject of standards, as should credit ratings. Standard&Poor's credit rating for Parmalat was good up to the beginning of December. All that picture is the financial picture; it is not just auditing and accounting.
As I have suggested before, I invite the Government to consider founding here in London, financed by accounting firms, City firms and/or the Government, a centre for financial standards and corporate governance. Its role would be to scrutinise the present regulatory state of affairs and determine whether change was needed, to educate the commercial world about proper standards and to promote, wherever necessary, reform.
I welcome the Bill. Two years after Enron, action has been taken by wide consultation, by balanced consideration of what is necessary and a piece of effective legislation. It is the stuff of effective government—we should have more of it.
12.59 p.m.
Lord Freeman: My Lords, it is a particular pleasure to follow the noble Lord, Lord Brennan. I agreed with both the thrust and the detail of what he had to say. Obviously, he speaks as a lawyer and not an auditor or an accountant, but his summary was excellent. He touched on the key point of why the legislation is welcome in principle—because it helps restore confidence and sets standards.
I declare an interest as an accountant, but my brief remarks today are my own. I do not speak for the profession, or for my firm, PricewaterhouseCoopers, of which I am still a consultant, or for any of the companies of which I am a director. I strongly agree with the comments of my noble friend Lord Hodgson, on the Front Bench. I shall not repeat any of his points except strongly to endorse them from the Back Benches.

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This is a modest Bill, but its principles are correct. Detailed examination in Grand Committee, if that is where it goes, is extremely important. There is one very small point: I hope that, in future, when regulations are introduced, particularly for companies, they can be introduced simultaneously on fixed dates in the course of the year. That is a small point but, I understand, the Government are now working on such a reform.
I believe that your Lordships had hoped that in this Session we would debate a major company law reform Bill. The noble Lord, Lord Sharman, always uses his words very carefully, and I noted what he said—he said that such a Bill was desperately importantly needed. I find it very difficult to explain to my colleagues in the accounting profession, in the City and in business why we are going to spend weeks and weeks on a House of Lords reform Bill, when we are still not able to proceed with a company law reform Bill, although much of the legislation is in excellent shape in draft form.
I shall make three very brief points on the Bill, which I welcome. The simplification of the oversight procedure through the Financial Reporting Council and the Financial Reporting Review Panel is exactly right. The previous system was complicated, and the Bill makes progress in that regard. Secondly, the provisions on the duties of directors not to mislead auditors are correct and welcome. Finally, the devil will be in the detail of the provisions on community interest companies. Your Lordships will want to look not only to the Minister but also to the noble Baroness, Lady Thornton, to ensure that we do not end up with complicated legislation that is difficult to understand and over-regulated for those whom it is intended to benefit.
On the issue of liability of auditors and directors, my noble friend Lord Patten spoke in typically robust fashion, although he was a trifle unfair in his remarks on the accounting profession. He may have misunderstood what should happen and what should be the correct response from the profession to the consultation paper. No one is suggesting that one should not deal with auditors' and directors' liabilities simultaneously; I believe that to be right. No one is saying that either should avoid liability for their errors. The issue is the extent of the liability.
The Financial Times editorial of 7 January fell, if I may say so, into the same error, in misunderstanding the calculation of the liability, about which there is real concern in the profession. The liability is joint and several. When a company goes bust, one of the big four accounting firms will probably be sued first, because they are deemed to have the biggest pockets. Often the accounting firms end up as the only source of recompense for those who have lost money. That cannot be right. What surely is correct is that the liabilities of both auditors and directors should be proportionate—and, in my judgment, capped as well. Otherwise, even when the liability is proportionate, if the auditors or the board of directors are the only people who can afford to make recompense and there is no one else to share the blame, the amounts could be very considerable.
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I believe that the noble Lord, Lord Sharman, has already referred to the fact that the European Union commissioner is considering placing responsibility on the auditor of the top holding company for the audit of all the subsidiaries within the group, irrespective of whether they have actually carried out the audit—for example, in countries abroad. That increases the responsibility and liability of the auditor.
The comments made about liability are clearly part of the consultation process, because the consultation will run until 12 March. I suggest for consideration that if the liability of directors and auditors is to be changed from the unlimited nature at present and should be both proportionate and capped, that the Minister by regulation asks the Financial Reporting Council to devise the methodology for capping. If that proceeds, I suggest that shareholders should approve the procedure in a general meeting. It would be perfectly possible for the Minister, at a later stage, when the Bill has gone to another place and has perhaps come back here, to propose a simple clause to remove the offending Clause 310 of the existing Companies Act. That clause could be repealed with very simple language, and the legislation would be enacted only when there was a proper methodology for introducing capping and proportionality. There is still time for that to be done.
I briefly turn to the question of non-executive directors. Part of the problem for the directors of smaller companies is that the cost of insurance against unlimited liability is now prohibitive. We are failing to deal with the problem of recruiting non-executive directors not only to large listed companies but also to smaller companies. That is an urgent matter, and I hope that the Government will deal with it.
1.7 p.m.
Lord Grantchester: My Lords, I congratulate my noble friend the Minister and the Government on introducing this timely update to corporate regulation. I speak merely as a layman and an investor, but also with some experience of sitting as a non-executive director on several audit committees, although at present I sit on only one—Dairy Farmers of Britain.
I find it interesting when I hear noble Lords talk about the dangers of being an auditor. Some people find auditing the least inspiring aspect of accounting. Indeed, I have heard auditors described as similar to those who go round at the end of a battle checking the dead and bayoneting the wounded. However, that is not to deny that it fulfils a very important role in safeguarding the integrity of business.
The Bill is part of the Government's strategy to help restore investor confidence in companies and financial markets following various recent high profile corporate failures, most notably Enron and WorldCom. A new failure, Parmalat, is unravelling as we speak. While purposeful fraud will always be with us, lessons can always be learnt and procedures tightened up, so that non-compliance will flag up potential wrongdoing. That process has been continuing since the cases of BCCI, Polly Peck, the Maxwell companies and Wickes, among others.

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The legislative changes amend relevant provisions of the Companies Acts 1985 and 1989. They are intended to complement various recent non-legislative measures designed to strengthen corporate governance and audit practice. Part 1 is intended to strengthen the independence of the system of supervising auditors by placing new requirements on the recognised supervisory bodies; the enforcement of accounting and reporting requirements; the rights of auditors to information; and the company investigations regime.
The new requirements placed on the recognised supervisory bodies are that they must participate in independent arrangements for the setting of auditing standards to underpin professional integrity and independence and the setting of technical standards; the monitoring of audits of listed companies and certain other companies; and the investigation and taking of disciplinary action in certain cases.
Clause 2 seeks to ensure the independence of these arrangements by providing that the recognised supervisory bodies, for example, the Institute of Chartered Accountants in England and Wales, cannot be involved in the selection and appointment of those who carry out the standard setting, monitoring and disciplinary functions—that is, the Auditing Practices Board (APB) and the Accounting Standards Board (ASB). Most importantly, it also provides for transparency in the disciplinary arrangements by requiring that independent disciplinary hearings must be held in public. The practical effect of these clauses is to make the recognised supervisory bodies subject to a more independent regulatory regime in respect of the setting, monitoring and enforcement of auditing standards.
Part 2 makes provision for the establishment of a new corporate vehicle, the community interest company. This is intended to make it simpler to establish a business whose profits and assets are used for the benefit of the community. Social enterprises bring together the expertise and dedication of the voluntary sector with the flair and flexibility of the commercial world, and can be particularly relevant in the many activities where commerce and public service meet.
There are three major types of reason for accounts to be incorrect, which leads to investor lack of confidence. These are, first, quite obviously, error; secondly, deliberate fraud, on which I have already commented; and, thirdly, manipulation of accounts. It is to the third aspect that I shall address my remarks.
Manipulation of accounts includes the bending of accounting policies, the massaging of accounts, and the manipulation of profits—for example, capitalising brand values, the treatment of goodwill and so on. The work of the FRC in this area is crucial, so it is important that both its role and the extent of its reviews are going to be strengthened.
The main area of investor concern focuses on the potential compromising of the audit function brought on by a disproportionately high level of auxiliary non-audit services. Disclosure of fees for non-audit services, as opposed to fees for audit services, is a step in the right direction. However, it does not stop the problem. I do not suggest a complete block on auditors
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carrying out non-audit services, as often it is the auditor who is best placed to give this other advice. It may be that some sort of cap is needed on these non-audit services. There is a need for the FRC, or the regulatory bodies, to look at the large level of non-audit fees in a set of accounts. No doubt an investigation could be triggered by a high level of such fees. The Bill seeks to address that issue somewhat. The FRC will he policing, to a greater extent than currently, inappropriate accounting policies and will have added powers.
Inappropriate accounting policies have been central to certain high profile corporate failures, notably Enron and Wickes. In both cases, a key issue was the organisation's policy on income recognition. The FRC has an increased role in monitoring the work of auditors, which must be a step in the right direction in this regard. This is bound to encourage auditors to check more carefully the compliance with basic and fundamental policies, such as income recognition.
Increasing the auditors' access to information, a matter with which the Bill assists, is also a step in the right direction. However, giving the auditors wider access may not stop a Maxwell recurring. Whistle-blowing should surely be made easier and more effective. It may be sensible for auditors to be required to have discussions with a certain number of employees each year. I note with dismay the treatment of whistle-blowers in the European Commission. I remind noble Lords that the EU auditors have refused to sign off the Commission accounts for the past nine years—surely a scandal that dwarfs the combination of all the most recent corporate failures put together.
Recognising the importance of the ASB and having it controlled by the FRC is also hugely beneficial. It should ensure that speedy and effective responses are made to large corporate failures, such as Enron, where the importance of income recognition accounting policies was heightened following the failure, causing auditors as a result to become more sensitive to the appropriateness of income recognition policies. Fast and effective responses to problems, and the plugging of holes, should occur under a stricter and more robust regime.
Also as a result of Enron and the lessons now learnt from it, warning lights are now triggered for auditors where there are large, complex group structures. Auditors now have to look hard behind the structure to understand the movement of transactions around the group and the reasons for those movements, to ensure that there is transparency in this regard.
Audit committees need to be more robust, to stop cases of executives bullying and controlling companies in a manipulative way. It is essential that auditors meet with the audit committee without the executives present and can have confidential discussions with it. It is also important that at these private meetings probing questions are asked of the auditors by the audit committee. The improvements to corporate governance brought about by Higgs and Smith have been steps in the right direction, though more are probably needed.

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It may, for example, be sensible to have a list of questions for audit committees to ask their auditors because, in practice, it can be difficult for auditors to get their concerns across. Particularly where there are strong, dominant characters involved, auditors can find it inhibiting to initiate criticism. It is likely to be easier for them to address concerns in response to questions and in a more informative way. It can be difficult for them to get their concerns or suspicions across with no tangible basis without it sounding like a personal attack on management.
Examples of the sort of questions that would be useful are, "Do you feel the accounts department and its staff are suitably qualified and competent? Do you feel there are sufficient resources in the finance department? Do you have any concerns about bullying by management or executives? Have you had any indications from staff about bullying? Do you feel there has been a desire to manipulate the accounts in a particular direction?" That is particularly relevant if there are profit-related or share option schemes in place.
The mere existence of sample questions would better aid corporate governance, as management would be made aware that such questions are to be asked and that such issues are to be considered by the auditors and discussed with the audit committee.
Executives should not have anything to do with the appointment of auditors, but in practice they often manage to have an input. If, for example, an auditor is critical of management or of the chief executive and the audit is going to go out to tender in the short or medium term, the chances are that that auditor will not be reappointed. It is vital that the appointment of auditors is seen to be independent of the executives. It may be an idea for the auditors to have to include in their report reference to the extent of their private meetings with the audit committee each year.
The audit threshold is about to rise from £1 million to £5.6 million. I understand this change is due to come into force through a statutory instrument later this month and to be operative for company accounts for the year ending March 2004. My only reservation regarding the changes we are now contemplating is that raising audit thresholds is likely to be the most significant in removing the major deterrent against fraud and money laundering. That needs to be carefully considered in a strategy of raising investor confidence.
Creditors are one of the major users of audited accounts of companies with turnovers of less than £5.6 million, and arguably they are the ones who are likely to have concerns about the lack of an audit. Small and medium-sized companies are a growing part of the enterprise culture that we are seeking to improve. These company failures can impact on companies of all sizes due to the knock-on effect. Perhaps the £5.6 million threshold should be reconsidered and any future changes limited to the amount of increase in inflation.
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While the audit threshold is not strictly relevant to the Bill, it is nevertheless part of the picture. Large companies can go under if a major debtor defaults—credit worthiness having often been assessed by reference to audited accounts. As a director of Dairy Farmers of Britain, I can confirm that checking customer accounts is a very important part of determining whether and to what extent Dairy Farmers of Britain will trade with small companies. I may not have to remind the House of the difficulties in the dairy sector in recent times, where there have been company failures, notably Lancashire Dairies, Amelca and United Milk.
The relevance of audited accounts is usually that third parties rely on them to confirm the accuracy of accounts and the strength of companies' balance sheets. Often the audit report will also give an indication of any going concern problems or other problems, which a simple review of the accounts might not otherwise reveal. Disclosure of financial information may not be complete if the accounts have not been subject to an audit, in that an audit, as well as looking at the accuracy of the figures, also looks at compliance with recent relevant legislation and accounting standards. It may be that certain important financial information is omitted from the company's accounts, either deliberately or through lack of knowledge for example security of borrowings, loans to directors or transactions with related parties. Such omissions should not exist where an audit takes place. I applaud the commendable changes being proposed in the Bill and the strengthening of existing measures to raise investor confidence. I welcome the support given to the Financial Reporting Council, and I wish the Bill a safe passage.
1.20 p.m.
Baroness Carnegy of Lour: My Lords, I will not follow the noble Lord, but I shall confine myself to just two brief, general points and ask the Minister two questions on Part 2 of the Bill. My noble friend on the Front Bench has already commented that this is a somewhat strange time to introduce Part 2. The community interest arrangements are closely linked with charity law. The Government, we understand, are planning shortly to bring Parliament's attention to the matter of charities again. It appears that they are perhaps putting the cart before the horse, entirely unnecessarily.
From the Scottish perspective, the Government's timing of Part 2 is even more peculiar, if not constitutionally wrong, I might suggest. Under the Scotland Act 1998, company law is a matter reserved to Westminster. As the Minister pointed out, Scots law for charities is devolved and is already different from charity law south of the border. It is absolutely right that this Bill, a company law Bill, should, as it does, include Scotland as well as the rest of the UK. At the same time, it happens that the Scottish Executive, like the Westminster Government, I think, hopes to change charity law in Scotland, and issued a consultation paper in May 2003, with a view to legislating. What do the Government do here at Westminster? For their own good reasons, they go ahead with this Bill, drafting it so that, provided the

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Scots Parliament does what it is expected to do on charities, Part 2 can in these respects be brought into line in Scotland.
The relevant powers to achieve this are in Clause 23(3) and Clause 27(9). An explanation is given in paragraph 205 on page 48 of the Explanatory Notes. Unlike in England and Wales, any changes to Scots charity arrangements will be made by a different parliament from the parliament responsible for this Bill. That is self-evident. Who knows what the Scots Parliament will decide? Their current charities culture and system is a different starting point from that south of the border. There are no charity commissioners in Scotland. Decisions are made by the Revenue and the courts. The Scots Parliament may, I suggest, when the time comes, disagree with its Ministers. It has already been known to do that several times in its short life. It may wish to make charities decisions that render much-needed community interest companies inoperable in Scotland. What happens then? It is surely not Westminster's job to hem the Scots Parliament in on a devolved matter just because of bad timing on the United Kingdom Bill. One could say that the timing is not only inapposite; it may even be constitutionally wrong. That is my first point.
My second point is that the so-called social enterprise culture is particularly strong in Scotland. It forms an integral part of local economies and cultures. Since the early 1990s, much of the pioneering work being built on elsewhere has begun in Scotland. There is a long-standing desire north of the border for a statutory framework for the sector. In spite of all that, the Government seem to pay less attention than they should to Scots' needs. In Scotland, because of the lighter-touch charity law, most social enterprises are registered charities. As the law stands, those charities cannot change their status; they simply cannot apply under the Bill. Should they, as the Government intend, become legally able to apply, few, if any, could, in practice. afford to do so, as they depend on tax and rates relief to survive.
From my many years of experience chairing a quango that was a company limited by guarantee, I know that there is a deep belief in Scotland that social enterprise should be governed by voluntary unpaid boards and should involve stakeholders in a democratic way. Those characteristics are, as far as I can see, allowed for under the Bill, but, undoubtedly, they will not be the norm.
During the consultation on the Bill, those and other important points were made to the Government by the sister organisation of that chaired by the noble Baroness, Lady Thornton, the Scottish Social Enterprise Coalition. It seems to me that the coalition has been largely ignored by the Government, so I have some questions for the Minister. First, how do the Government justify the timing of the Bill, when its operation in Scotland depends on future legislation in the Scots Parliament being framed in a certain way? Is that somewhat bullying approach, in fact, unconstitutional? Secondly, why have the Government ignored the advice of the Scottish Social Enterprise Coalition, making it likelier that few, if any, existing social enterprises in Scotland will be able to avail themselves of the new arrangements?
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I hope that the Minister will be able to answer those questions. If he feels that he cannot, will he, perhaps, write to me?
1.28 p.m.
Lord Razzall: My Lords, it is noticeable that virtually every speaker in the debate has begun by declaring an interest either as a director of a listed or unlisted company or as a chairman or member of an audit committee. I join those who have done so and declare my interest, as set out in the Register of Members' Interests. In passing, I must take up the reference made by the noble Lord, Lord Freeman, to House of Lords reform. It is a great shame that, in debates such as this, some Members of your Lordships' House who accept the honour and title associated with being a Member of the House and have significant high-profile business careers never seem to find the time to come and give us the benefit of their expertise. I want to record that, and I know from remarks that have been made from other Benches that several of your Lordships share that view.
In effect, as noble Lords will have understood and several have said, this is two separate Bills. Apart from the fact that they both come from the Department of Trade and Industry, they seem to bear no relation to each other. I suppose that that is a modern trend, as the Minister fights for his share of legislative time, and there has been a brilliant accretion of DTI Bills in recent years. However, I think we have to accept that the two Bills reflected in this one Bill have nothing whatever to do with each other.
I turn to the first Bill, as it were, which concerns audit and investigations. As my noble friend Lord Sharman indicated, noble Lords on these Benches broadly welcome that part of the Bill. I believe that the CBI said that no one could fail to support a robust system of company law and governance based on integrity, openness and transparency. I believe that all noble Lords share that objective. Indeed, at the weekend I wondered why that did not appear in the credo of the Leader of the Opposition, if not to the strains of a Batchelors' song. No one can doubt that action has to be taken to ensure that the scandals typified by Enron and WorldCom in the United States cannot be replicated here. To that extent no one could object to the Government taking the necessary steps.
The strength, however, of the United Kingdom system, not particularly the English system—I bow to the noble Baroness, Lady Carnegy, in this respect—is a combination of statute, common law and a voluntary code. The recent company law review recommended the continuation of that approach. I believe that all the different parties in your Lordships' House accept that that should continue to be the approach towards these matters. However, the company law review stated that that required the immediate modernisation of company law.
It is noticeable that speaker after speaker in the debate has tried to get the Government to say when we shall see the comprehensive reform of company law that we all wish to see and that industry and the public demand. I

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have no doubt that when the Minister replies to the debate, he will not be able to give us a commitment on that. I have no doubt that he will say that the Government remain committed to reform of company law. However, the decision on when a comprehensive Bill will be brought forward is undoubtedly out of the Minister's hands and will, I suspect, be subject to the vagaries of electoral politics as his lords and masters consider the timing of the next election and decide whether the Bill can be introduced in that period of time. Nevertheless, the Minister should take on board the overwhelming view of your Lordships that we need a comprehensive reform of company law; and that we need that Bill soon.
There is clearly a danger of a piecemeal approach reacting to the scandals of the day or the fears of the day. An example of the continuation of that piecemeal approach to which a number of noble Lords referred is the current position on auditor and director liability. A consultation paper was issued in the autumn. We now have a Bill to deal with the audit and investigations element of company law reform. We do not know whether or not the Government will decide that they can tag on to the end of the Bill recommendations regarding auditor and director liability if the consultation period is completed before the Bill is passed and indicates a conclusive view regarding what the Government should do. That is an unsatisfactory state of affairs. If the Bill is passed without the question of auditor and director liability being dealt with, the Government will be faced with exactly the same problem in the next Queen's Speech; namely, whether there will be legislative time to deal with it. That cannot be a satisfactory way to run a railroad or even the Department of Trade and Industry.
As I indicated at the beginning of my speech, we, of course, support the Bill. We support its general aim and its general principles. In Committee we shall seek to check that the Government have the balance right between catching wrongdoers and imposing unreasonable burdens on business. Every clause needs to he looked at to check that that balance is right. Without going into the detail there are three particular areas on which I believe that we shall need to probe the Government.
First, in Clause 9 we shall need to probe whether or not the obligations of disclosure have a reasonable materiality test to avoid unnecessary burdens being imposed on perfectly honest businesses and businessmen. Secondly, in Clause 8 we shall need to probe how the mandatory disclosure requirements, particularly regarding subsidiaries, foreign subsidiaries and subsidiaries in the United States, can be squared with the obligations being imposed on directors. Thirdly, we shall need to probe the extensive provisions that permit Inland Revenue information to be made available to auditors and other bodies to check whether and to what extent appropriate protection is given to individuals regarding invasion of
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their privacy. Those are three critical areas on which we shall want to test the boundaries of reasonableness as against the necessity to catch wrongdoers.
I turn to the second Bill, as it were, which concerns the community interest company. Again, noble Lords on all sides of the House welcome this part of the Bill. As my noble friend Lord Phillips indicated, we shall want to probe a number of areas in Committee, particularly the interrelationship between charitable law in its existing or potentially reformed state and the community interest company.
I should like to press the Minister on a substantial point. He will be aware that a number of local authorities responded to the consultation last summer in a very welcoming manner. A large number of local authorities have expressed an interest in using the CIC format to develop public services. Shall we pronounce it "kick"? The noble Baroness, Lady Thornton, used that pronunciation. Looking round the Chamber, I suspect, however, that we shall not continue to use that pronunciation. I am not sure how Hansard will record that. The Local Government Association specifically drew the attention of a number of noble Lords to Somerset County and Taunton Deane borough councils that think that the CIC format is a very good means of delivering a range of community based leisure and cultural services.
It appears that local government will regard the use of the CIC as a very essential part of their work in the community. The question that I should like to put to the Minister is, does he or does he not agree with the statement that I understand the Home Secretary made that, so far as he is concerned, the CIC will not be used in any way to provide services that are the responsibility of central government? If the Minister agrees with that statement, it appears that a big opportunity will be lost. In the National Health Service in particular, as the Government develop their proposals for devolution to community hospitals, CICs could play a major part in the development of those hospitals. I hope that the Minister will say whether I have misinterpreted the views of the Home Secretary, or, if I have not, that he does not share them.
1.39 p.m.
Lord Glentoran: My Lords, this has been a very good debate. I wish to make a few brief points. It is the Government's duty to ensure that company law creates an environment where risk taking and entrepreneurs can flourish and where public confidence can be maintained in the knowledge that fraud and malpractice will be detected, controlled and punished.
Before I continue, like other noble Lords I need to declare some interests that I believe are relevant. Until I retired I was a director and chief executive of a number of Redland plc companies, some offshore. I am in my 10th year as a member of the Millennium Commission and chair both its audit committee and finance committee. I am also currently a non-executive director of the National House-Building Council and sit on its finance and audit committee. The NHBC

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comes within the remit of the FSA as an insurance company. In the past, I also served on the board of the Ocean Youth Club, a national sail-training charity. The noble Lord, Lord Sharman, was at one time chairman of that board.
That is a varied mix of businesses, with some commercial, some charitable and some for the public good. However, they have one thing in common; namely, that they all are or were in the risk business. In one way or another, a number of noble Lords have supported the cliché of no risk, no profit.
Some people might like to think that the Bill is a technical Bill, the business of lawyers and accountants. It is not. It will impact on everyone, as the Minister pointed out. It is a people's Bill. It will affect jobs, pensions, SMEs, big businesses and, perhaps most importantly, the competitiveness or not of UK plc. We think it doubtful whether, in its present form, Part 1 gets anywhere near achieving what we had hoped were its intended aims. That has been clearly supported by noble Lords around the House.
The second part of the Bill proposes the establishment of a new type of Companies Act company which would exist primarily for community interest purposes. We welcome that. When first reading about the proposal for the creation of CICs I was quite excited. I thought that their creation could add something very positive to the community sector, with more flexibility for small enterprises and local companies focusing on the public interest. However, the implications of CICs are significant, especially as they cannot be charities and would be subject to a more stringent level of oversight than normal companies.
In practice, as a result of the establishment of a regulator, the Bill is effectively establishing an entirely new sector of community and company activity. That was pointed out by the noble Lord, Lord Phillips of Sudbury. The aim of the Bill appears to be to produce a form of corporate body which occupies the space between a Companies Act company and a charity. It would presumably have greater financial freedom than a charity and could borrow money or sell shares. We applaud that concept if it can be made to happen. However, the role of the regulator and his ability to intervene in payments or to transfer assets leads us to wonder whether a bank, or indeed any creditor, would feel that sufficient security could be obtained against loan capital. We wonder whether that would inhibit the desire not only of lenders to fund CICs, but of contractors and suppliers to trade with them.
It is also questionable how popular shares in CICs would prove, as opposed to other ethical investments. The regulator's powers could, in certain circumstances, constitute a significant infringement of normal shareholders' rights. Shareholders could find directors removed, management changed and new directors appointed, all without their approval. The use of the powers is carefully circumscribed in the Bill, but they are none the less very significant.
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We must also wonder about the role of directors of CICs. Some noble Lords have already talked about remuneration of directors. Their ability to carry out their fiduciary duties could be compromised by the regulator. The regulator is specifically empowered to intervene in transactions and disposals if he believes that the community interest test is not being met. What if, for example, a C1C can balance its books only by compromising its community activities? Would the regulator prevent directors from doing so? Would that be recognised in company law? If not, could they find themselves unable to manage the CIC as they believe necessary or to meet their fiduciary duties? Presumably, they would have no option but to resign.
It is therefore difficult to understand the incentives for establishing a CIC from the Bill. The structures do not seem to offer any particular advantages per se, and the level of oversight and potential interference is significant. However, that is not surprising, as the Bill establishes only the legal framework, and we have not yet seen any regulations. As other noble Lords including my noble friend Lord Hodgson have pointed out, we have been promised the regulations. It is vital that we have them before Committee, or the debate will be fairly meaningless.
The CIC would seem to be a vehicle tailor-made for the kind of private-public joint ventures which the NHS is keen to establish, and which local authorities look excited about developing, as the noble Lord, Lord Razzall, pointed out. One area of control which could be problematic for CICs is the eligibility restriction on political parties or political campaigning organisations. That is a very broad definition. What is a politically campaigning organisation? Depending on the political issues of the day, that could vary from Greenpeace to asylum seekers' rights and the Ramblers' Association.
Under the proposals, CICs would be Companies Act companies and therefore subject to the Companies House regime. However, additional levels of oversight would be applied. Indeed, the Bill proposes the establishment of not one but three new offices—the regulator, the official property holder and the appeals officer. We understand that CIC directors would be appointed in the usual way for Companies Act companies. However, another significant issue with regard to the directors of CICs is the ability of the regulator to appoint new ones and dismiss existing ones. Although those powers can be exercised by the regulator only if the company default condition is satisfied, that could occur if the CIC puts financial concerns before community ones. I referred to that idea earlier.
We support the basic concept of CICs, but feel that that good concept is at risk of being undermined by detail and possible over-regulation, a point made by my noble friend Lord Freeman. Would it not have been wiser to have waited for the long overdue revision of the whole of charity law before launching this excellent initiative? Other noble Lords have also made that point.

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We have had a wide-ranging and interesting debate at Second Reading of this rather inadequate Bill. We on this side of the House agree with many noble Lords who have spoken that, as a whole, company law urgently needs reforming. As the Bill stands, however, it will not lead to the modernisation and reform that is required to make it fit for the 21st century and beyond, as called for by Patricia Hewitt in 2002, and mentioned by my noble friend Lord Hodgson. The Bill increases the regulatory burden on directors. The noble Lord, Lord Sharman, pointed out that there was little clarification of company law to help directors.
Although we support all necessary regulation where justified, we do not support onerous regulation for regulation's sake. My noble friend made clear the tests that we shall apply to the Bill, and the noble Lord, Lord Razzall, made some very clear comments on the tests that the Liberal Democrats will apply to it in Committee.
It has been stated that the UK's regulatory system is widely acknowledged to be among the best in the world. By the time that the Bill leaves your Lordships' House, we must have ensured that the balance is fair and just.
1.49 p.m.
Lord Sainsbury of Turville: My Lords, from what has been said today we can be certain that the Bill will be subject to a high level of detailed and expert scrutiny. The Bill has been the subject of extensive consultation with business, the accountancy profession and other interested parties. Yet today we have had a number of new perspectives and insights from speakers. Many interesting points have been raised. I shall try and deal with the key issues in taking the Bill forward.
The noble Lord, Lord Hodgson, instantly raised the question of the main Companies Bill as did the noble Lord, Lord Sharman. We are committed to such an important reform. We want to modernise and simplify UK company law to provide a flexible law with quicker and simpler processes for companies, reduce burdens particularly for smaller firms and start-ups and make the UK a good place to set up and run a business. We intend to publish a draft Bill for comment before we introduce it into Parliament.
However, there is an essential requirement to the main Companies Bill, which is that we obtain the right balance between giving companies stability, so that we do not put aside a whole raft of common law precedent while moving the law forward. That is a difficult balance to achieve. It is one that we are working on and we are committed to introducing the legislation as soon as possible. I do not think that anyone would want us to bring it in if it led to instability in that area.
Lord Patten: My Lords, I am grateful to the Minister for going that far. Would he reflect on the fact that company law reform has been pledged as forthcoming since 1998 by the DTI? Would he go
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further and define when "as soon as possible" is to be? Will the draft Bill be published before the next general election?
Lord Sainsbury of Turville: My Lords, it was with great care that I said "as soon as possible". If we could say precisely when that would be, it would mean that we had removed all the uncertainty about how easy it is to establish the correct balance and I cannot say, at this point, that we have done so. Therefore, we do not wish to introduce the new law until we have that balance right because it would be no help to the financial or industrial communities if a great deal of uncertainty were raised.
The noble Lord, Lord Sharman, described our approach as being "liberal", which he went on to define as being fragmentary, disorganised and dilatory. That was not my normal definition of "liberal". What we have done in this first piece of legislation is to tackle the difficult regulatory issues and try to make them right, with a careful balance between cost and effectiveness.
In answer to the noble Lord, Lord Hodgson, work has begun on a draft charity Bill, which is due to be published in this Session. The Treasury has already initiated changes to the industrial and provident society form, resulting from the Private Members' Acts in the past two Sessions of Parliament.
The noble Lord, Lord Patten, gave us an interesting dose of ideology and then went on to demonstrate that we actually need not ideology, but careful legislation for proper controls. I would have thought that it was an area where we can all agree that the financial and industrial systems need to have careful and thoughtful regulation that is both cost-effective and effective if that sector is to grow and be profitable.
My noble friend Lord Brennan, in his thoughtful speech, explained why the legislation was required and why we should look wider. That is a point we take on board—as he said, this is the stuff of effective government. That is to give such careful legislation to control the situation. My noble friend also raised the question of international accounting standards. I very much welcome his comments on the need for those and I hope that the one positive consequence of the Parmalat affair will be a greater impetus to implement international standards. The Government are working hard in the EU for the adoption of international accounting standards.
The noble Lord, Lord Hodgson, also raised the question of auditors' powers and other burdens on directors that I referred to in my opening speech. The new requirements could give a disincentive to non-executive directors.
I do not accept that Clauses 8 and 9, which deal with the auditors' rights to information and the statements in directors' reports, are overly burdensome or should discourage anyone from becoming a director. It must be right to require directors to tell the truth to auditors and to ensure that directors focus on whether they have provided the relevant information to auditors. These clauses strengthen existing requirements and I cannot see that a requirement to give this information

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would in any way be a burden which would discourage anyone one would want to have as a non-executive director.
The noble Lord, Lord Hodgson, also asked about the costs of the legislation and proposed four tests. They were that it should be proportionate, balanced, clear and workable, and effective. I accept all those criteria, but I point to a slight note of complacency in his comments. We cannot be certain that such a collapse cannot happen in this country. Any costs of the legislation, which are minor, must be set against the costs and loss of investment to individuals were there such a collapse. If the noble Lord was speaking in that context. I am happy, but to describe it as a cost without putting anything on the other side of the balance sheet is a mistake. We should not be complacent that we will never see this kind of collapse in this country.
Equally, I say to the noble Lord, Lord Glentoran, that I see nothing in the Bill which would in any way stop people being entrepreneurial or risk-taking. It is not about people setting up new businesses, taking risks and developing new products. It is about people manipulating balance sheets and financial statements in order to mislead other people. I do not see that as being what entrepreneurship or innovation is about.
Also in that context, the noble Lord, Lord Hodgson, asked how many CICs there were likely to be. I see no way in which that can be calculated in any meaningful sense. All we can say is that during the consultation a large number of people expressed an interest in setting up CICs and this will create a new option for people to do so.
The noble Lord, Lord Sharman, raised the important question of accounting firms and where we are on that. The commitment by the major accounting firms to increase the transparency of their own reporting was one of the most important parts of the final report of the Co-ordinating Group on Auditing and Accounting Issues. A number of firms have already produced the report and a number of others are about to do so. We will be writing to all auditors of listed companies to obtain confirmation of what they are doing and to encourage those firms which have so far been reluctant to agree to such reporting to change their minds.
The noble Lord, Lord Sharman, also asked what would be included in the reports. That is set out in the final report of the Co-ordinating Group on Audit and Accounting Issues. In summary, the report should cover financial information, such as that already required for limited liability partnerships; an operating and financial review; governance, including international relationships; the basis of partner remuneration; and arrangements for quality assurance.
The noble Lord, Lord Sharman, also asked who is responsible for the standard setting process. In practice, we expect that the recognised supervisory bodies will comply with the additional standard-setting requirement set out in Clause 1 by requiring
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their registered auditors to follow standards set out under the aegis of the new Financial Reporting Council specifically by the Auditing Practices Board.
The noble Lord asked whether there will be reasonable tests by the Financial Reporting Review Panel when it receives allegations about accounts. Yes, it already conducts such tests. All complaints are considered by the chairman and deputy chairman of the panel who decide whether there is a prima facie case for the panel to pursue. Of course, it can pursue the powers in Clause 12 to obtain information only where there is or may be a question whether the accounts comply with the requirements of the Act.
The noble Lord, Lord Sharman, also asked about the likely timetable for the operating and financial review. As I said, in the early part of this year the Government will consult on the draft regulations to introduce the requirement for economically significant companies to prepare an operating and financial review. To some extent, the timing of the introduction of the OFR will depend on the results of that consultation.
Another major issue is that of auditor and director liability—a matter raised by a number of noble Lords and, in particular, by the noble Lord, Lord Freeman. The department recognises that issues relating to liability are of concern to many people in business, including auditors, directors, investors and users of accounts. This is a serious and difficult issue and one where we must ensure that, if we are to maintain high auditing standards, the question of auditors' liability does not get in the way of good audits taking place.
We have listened to those who are concerned about this matter. My honourable friend the Minister for Industry, who has responsibility in this area, has already met the president of the Institute of Chartered Accountants in England and Wales to discuss liability and she has also had a separate meeting with representatives of the "Big Four" auditors. My officials have also held a series of discussions with preparers of accounts, users of accounts and regulators, as well as with auditors.
The upshot of that is that on 16 December we launched a formal consultation on auditor and director liability. The consultation is necessary for a number of reasons, among them the concerns recently raised by the auditors in relation to their potential liability and those raised by Derek Higgs in relation to that of non-executive directors. The Company Law Review examined many of the issues but considered that more work needed to be done. There has also been a significant change in the audit market with the demise of Andersen.
Ministers will, of course, carefully consider the responses to the consultation and, as I indicated in my opening speech, will decide on any further steps in the light of those responses. In answer to the noble Lord, Lord Hodgson, I can confirm that if the consultation shows that there is a clear case for reform, and if the case for reform is urgent in that sense, the Government will seek to bring forward amendments to the Bill.

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However, the first stage is to see whether there is any agreement on the case for reform, but I do not believe that that will he a very easy process.
The noble Lord, Lord Phillips of Sudbury, raised a number of important and detailed points which we shall need to consider as we go through the Bill. Perhaps I may deal with just one or two of the key issues that he raised. He asked about the need for the new regulator. Our intention is that, for the most part, CICs will need to interact only with Companies House. They will submit their registration documents and annual returns to Companies House, which will pass them on to the CIC regulator. In effect, a onestop-shop will operate, with CICs having direct contact with the regulator only when he exercises his supervisory powers.
The Government considered whether an existing body should take on that role. Companies House maintains the register of companies and carries out related functions but does not otherwise have a regulatory role. The Charity Commission has a regulatory role, but our consultation confirmed that there should be a clear differentiation between CICs and charities. The CIC regulations are also not intended to be as proactive as charity regulation, which must maintain the confidence of public donors and beneficiaries. However, the CIC regulator will be able to draw on the expertise of the Charity Commission when performing his functions.
The noble Lord, Lord Phillips, also raised the question of the lack of controls on the remuneration of CICs directors and employees. In drafting the Bill, the Government had to take into account the need to protect assets in the community interest while not unduly restricting the ability of companies to compete in the markets. We recognise that directors' remuneration is a key concern, especially for a sector with strong ties to the voluntary and community sector, where, of course, in many cases remuneration is the exception. However, we believe that CICs should be able to attract the best people available for the job, and we intend to ensure that all CICs report directors' remuneration in the annual community interest report. That report will be available to the public so that concerns can be raised and addressed.
The noble Lord, Lord Phillips, also raised the important and interesting issue of the regulator not being able to set different limits on dividends in different cases. Responses to the public consultation on CICs stressed the need for flexibility in the arrangements in order to cap dividend payments. Clause 27 is intended to provide that flexibility. I should emphasise that the Bill also requires the regulator to undertake appropriate consultation before setting those limits and to have regard to their likely impact. For example, it may be considered reasonable by the social enterprise sector for CICs operating in a particular sector to have a different limit.
The noble Lord, Lord Freeman, raised the question of the timing of subordinate regulation. I listened with interest to what he had to say on the timing of
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subordinate legislation so that it comes into force on only a couple of days a year. My department is already adopting that approach for employment law and we shall be considering this matter carefully to see whether it is a model that we should use in other areas such as company law.
My noble friend Lady Thornton asked that resources be provided to promote CICs. I can say that the Government are committed to promoting social enterprise widely. Making those who benefit from it aware of CICs and of the other changes to legal forms that are planned and under way will be an important part of that work.
The noble Lord, Lord Grantchester, raised the question of the audit threshold bringing increased risks that are not in line with our intentions for the Bill. This proposal will reduce the burden on small companies and release a further 69,000 companies from statutory audit. However, it will not be a free-for-all. Shareholders will still be able to require the company to audit its accounts if they consider it necessary. Creditors, such as banks, may want to look closely at company accounts before lending money.
I thank the noble Baroness, Lady Carnegy of Lour, for putting forward the Scottish perspective. She asked how the Government justify the timing of the Bill in relation to Scotland. New companies in Scotland and other parts of the country will be able to take advantage of this form. The noble Baroness is correct in identifying that Scottish charities will not be able to convert to CICs. The Bill acknowledges that and provides scope to make changes if the Scottish Parliament decides that Scottish charities can cease to be charities. The Government do not intend to bully the Scottish Parliament in this action; they are merely building in flexibility in order to avoid a situation whereby the Government must introduce primary legislation if changes are made in Scotland.
In conclusion, I believe that today's debate augurs well for the progress of the Bill. I look forward to detailed debate in Committee. In spite of what has been said, I believe that it is very largely a technical Bill and not one which engenders controversy on party lines. Nevertheless, it is an important measure which will help to ensure that our company regulation and financial markets continue to be regarded as among the best in the world. That is a source of considerable competitive advantage to Britain. We have not achieved that position through what is often termed "a race to the bottom". On the contrary, in many respects, our standards of financial reporting and corporate governance are significantly higher than those of our competitors. However, we combine high standards with flexibility and a minimum of bureaucracy, which makes it easier to set up and run a company in Britain. In other words, the law broadly strikes the right balance between freedom and protection.
The amendments in the Bill will reinforce the controls designed to achieve full and honest reporting. They will help to ensure that those who seek to abuse the privileges of the company form can be exposed

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and dealt with. They will encourage and assist the development of a social enterprise sector. But they impose minimal additional burdens on business. Many of the provisions on financial reporting will apply only to larger listed companies and the community interest form will be voluntary. No one will be forced to use it, but we believe that some businesses will judge that the extra regulation is justified by the clear status that the new form will confer.
The Bill has been developed through partnership between the Government and interested parties, and I hope that it can pass through this House in a similar spirit of partnership.
Lord Razzall: My Lords, before the Minister sits down, I am not sure that he answered my question on whether he agreed with the Home Secretary's remarks that the CIC form should not be used in relation to the provision of public services.
Lord Sainsbury of Turville: My Lords, the noble Lord is quite right: I did not. I thought I was running out of time so I would give the issue a miss. The noble Lord is quite right to direct me back to the matter.
The Government's view on community interest companies is that they should be developed to meet the needs of local communities and complement core government services in areas such as childcare provision, social housing, leisure and community transport. In public services, where non-core ancillary services may be provided by third parties, it will be possible to use CICs to provide such services.
However, our view is—and this includes both the Home Secretary and the rest of the Government—that CICs should not deliver essential public services in core sectors such as hospitals and schools.
Lord Phillips of Sudbury: My Lords, I begin by thanking the Minister for his extremely careful response to a great many points made. As he reasonably said, he did not have the opportunity to respond to all the questions asked of him. Will he have an opportunity to do so before the Committee stage of the Bill, or, indeed, will he have consultations?
Lord Sainsbury of Turville: My Lords, I am very happy to have consultations with the noble Lord, who is obviously a great expert on this area, at any time before Committee. Indeed, I shall read his speech with great care. If there are any general points of principle which I have not answered, I shall write to him. I suspect we shall consider most of the noble Lord's points in very great detail in Committee. I shall leave those for the Committee stage because I think that that is the appropriate way to deal with them. If the noble Lord has a desire for consultation, I shall be very happy to talk to him.
On Question, Bill read a second time and committed to a Grand Committee.

European Parliamentary and Local Elections (Pilots) Bill
2.12 p.m.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin): My Lords, I beg to move that this Bill now be read a second time.
An important part of the Government's programme has been our focus on democratic renewal. We have endeavoured to bring government closer to the citizen by listening to people and giving them more opportunities to influence the decisions that affect how they live their lives.
Through measures such as the development of national, regional and city government, as well as the modernisation of local government, we have sought to empower individuals and communities. Through the introduction of postal voting on demand, improved accessibility to voting for those with disabilities and the piloting of innovative voting methods, we have sought to make participation in the democratic process easier, more convenient and more in line with modern lifestyles.
This is all being done against a backdrop of decreasing democratic participation, one aspect of which is the reduction in the number of people turning out to vote. In the 1999 European parliamentary elections, just 24 per cent of those eligible to vote did so. That compares to a poor turnout even then of 36.2 per cent at the previous election in 1994.
In local elections turnout figures have fluctuated. But we have gone from a situation in the 1980s when turnout almost every year was more than 40 per cent nationally to a situation where turnout was 34.9 per cent last year and 32.8 per cent in 2002. Clearly. there is a problem.
It must surely be a fundamental responsibility of any government to attempt to address a situation where only between one-quarter and one-third of people are taking part in important elections. Doing so, however, is complicated and involves looking at the many and varied reasons for people not voting or not bothering to vote.
One part of our strategy has been the modernisation of the electoral system. The European Parliamentary and Local Elections (Pilots) Bill forms part of this wider programme. Pilots of innovative voting methods, including all-postal ballots and electronic voting, have taken place at a number of local elections over the past three years. The evidence so far is that postal voting has increased turnout by an average of around 15 per cent and, in some cases, turnout has doubled.
The Bill, if passed, will provide for the programme to be extended to a European parliamentary election for the first time, enabling piloting on a far greater scale than ever before.
Our programme of piloting began with the Representation of the People Act 2000. Both all-postal and electronic methods of voting were piloted successfully in 2000, 2002 and 2003, and a great deal of

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experience has been built up. The independent Electoral Commission has evaluated every pilot scheme since 2002. Its surveys have shown that people have found new methods of voting to be convenient, quick and easy to use.
In the most recent pilot schemes, which took place last year, 61 local authorities took part. In the 33 all-postal ballots, the average turnout was 49 per cent. That again compares extremely favourably with turnout in the same local authority areas in the previous comparable elections, in which only 33 per cent of electors turned out to vote.
Although electronic voting pilots have not provided the same jump in turnout, they have also been extremely valuable. Electronic voting, where people can vote through a number of channels including the Internet, telephone, digital television or text messaging, is likely to increase in importance as more people become comfortable with the relevant technology. Electronic voting, therefore, can offer the electorate a choice as to how they cast their ballot. Across the 15 pilots held in May 2003, where electors could choose between using one of the e-voting channels and more traditional procedures, more than a fifth of voters chose to cast their vote electronically.
We have taken the view that an incremental approach to introducing all these new voting methods is the right and prudent course to take. We have learned much from the pilots that have already taken place and expect to learn more from the scaled-up pilots that the Bill will allow. This approach means that we must always take matters forward with a sense of caution and responsibility.
On electronic voting, although we were keen to hold a limited e-voting pilot this June, the Electoral Commission has recommended to us that no area is yet ready for this innovation at a regional level. As announced last month, we intend to follow the commission's advice and run all-postal schemes only.
We have said that our long-term aim is to hold a general election at which voting is available in a number of different ways, using both conventional and new technologies. Electronic voting therefore remains an important part of our future programme.
I turn to postal voting. It may be useful if I briefly explain the mechanics of how all-postal voting would work if used at elections in June. At all-postal elections, ballot papers will be delivered to an elector's home or a specified alternative address no later than one week before the close of poll, and usually between two or three weeks in advance.
To vote, an elector simply completes his ballot paper, places it in the envelope supplied and puts it in the post. To combat fraud, secrecy warnings will be included in voting literature and voters must sign a security statement in order to confirm their identity.
Alternatively, people can choose to go to a staffed delivery point. At these points, electors are able to deposit their ballot paper in person. A secure area where ballot papers may be completed in an environment similar to a polling station is also provided.
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It is likely that we shall require at least one staffed delivery point to be provided in each principal local authority area, and that in each area at least one of these points will remain open until the close of poll.
When arguing the merits of all-postal voting, some say that the current system of polling stations and ballot boxes works perfectly well and that it is entirely easy and convenient. For many that may be true, but it is not the case for everyone for example, people with limited mobility or those who work long hours or unpredictable shift patterns. For those people it may not be easy or even possible simply to walk to the nearest polling station on election day. The same may be true for people who commute long distances to work or for those with care responsibilities.
I now turn to the Bill and briefly outline how the legislation is structured. Clause 1 provides a power for the Secretary of State to make an order requiring that the 2004 European parliamentary election should, in certain regions, be conducted as a pilot of innovative voting methods. The order will set out the regions chosen for piloting and, in broad terms, the method of voting to be used. So that there is proper opportunity for parliamentary scrutiny, this order is to be subject to the affirmative resolution procedure.
The Bill states that the order cannot be made unless the Electoral commission has first been consulted. The Government therefore wrote to the commission last September, asking it to recommend up to three regions suitable for holding an all-postal ballot, and additionally to advise which of those regions might be suitable for the piloting of electronic channels alongside the postal vote.
The commission conducted a public consultation and reported on 8 December. It recommended the north-east and east Midlands regions as suitable to hold all-postal pilots. It also stated:
"there are a number of other regions which could potentially be suitable for conducting an all-postal pilot scheme".
The Government are currently considering in more detail each of those further potential candidates. We hope to announce shortly whether or not we intend to proceed with any other region.
Although the order to be made under Clause 1 will provide the essential framework for where and how pilot schemes are to be run, the pilot order provided for by Clause 2 will set out the detailed mechanics of the scheme. We are engaging stakeholders in the process of developing the content of the pilot order. In particular, representatives from the pilot regions, the Electoral Commission, political parties and groups representing people with disabilities have been engaged. We are seeking to ascertain their views on the issues that arise from the pilots and to develop the policy and mechanics in a way that best meets the needs and practicalities for both electors and administrators.
Clause 2 also provides that a so-called marked register will be made available to political parties and candidates prior to the close of poll. In amending the Bill in another place to include that provision, we have been responsive to a request by all the main political parties. A marked register in this context means a list

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of those electors who have returned an envelope purporting to contain a ballot paper, which political parties can cross-reference with the electoral register.
The purpose of providing that information is to facilitate the parties in their role of getting the vote out. While in a standard election, parties can use tellers to gain a picture of who has or has not voted and target resources as a result, with an all-postal vote that is not possible. Targeted campaigning helps the parties better to engage the public, which is in the interests of everyone who wants to live in a healthy democracy. Provision of a marked register is intended to aid that and is something on which the Electoral Commission will specifically report.
One issue often raised in relation to remote voting methods in general is that of security. In its extensive evaluation of the pilots held at the 2002 and 2003 local elections, the Electoral Commission found no evidence of an increase in fraudulent activity. Nevertheless, we consider that there is no room for complacency on the issue. The Bill therefore includes provisions extending two offences. Those are general measures that have been informed by the Electoral Commission's recommendations on the future of all-postal voting.
First, Clause 6 extends the power of arrest without a warrant for the offence of personation to activity outside a polling station—clearly helpful where remote voting is widely in use. Personation is the name given to the offence committed under Section 60 of the Representation of the People Act 1983 when someone votes as someone else but without the other person's consent. At this stage, that extension applies solely to regions where pilots are taking place in the 2004 European parliamentary and combined local government elections.
The second offence provision is contained in Clause 7. That clause provides that the magistrates' court is given a power to allow an extension of time up to a maximum of 24 months after the date of an offence for a prosecution to be commenced. The application must not he granted unless the court is satisfied that there are exceptional circumstances and that the investigation of the offence has been pursued with all reasonable diligence. Those additional measures will improve the security of postal voting and aid us in building confidence and trust in the new system.
An important part of our approach is to maximise the lessons learnt while minimising the risk. That is why London, where mayoral and Greater London Assembly elections are taking place, and the region to be combined with Gibraltar under the European Parliament (Representation) Act 2003—which the Electoral Commission has recommended to be the south-west—are excluded from holding pilots this year. It is also why, in pilot regions, by-elections for Westminster and other bodies will be prevented from taking place within a six-week period around the date of the European parliamentary election. It is felt that each of those exclusions is required to avoid unnecessary complexity.
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The situation for local government by-elections in England and Wales is slightly different, in that they may be combined at the discretion of the returning officer. That will not add unduly to complexity, as local elections will already be taking place.
A key aspect of piloting is learning lessons, and in this the role of the Electoral Commission is vital. Its evaluation of previous schemes has helped shape and develop policy, and Clause 4 provides that that, will continue. The provisions of Clause 4 are modelled closely on the relevant section of the Representation of the People Act 2000. The main difference is that the Bill also provides for the assessment of the impact of marked registers, on which it will be essential for candidates and political parties to feed back their views and experiences so that proper evaluation may take place.
In conclusion, the Government have never pretended that the problems of low turnout can be solved simply by altering the way in which we cast our vote. Declining democratic participation matters enormously, but it is being experienced worldwide, with many and varied explanations for why that is. The key to our approach must always be to attempt to engage better with the public, to show that voting matters and makes a difference and that the participation of an individual can force real change.
However, it is also legitimate and important to consider whether the methods by which we cast a ballot are the best available. It is important that we measure our institutions and practice against the needs of people today. Where change is warranted, we should not shy away from acting.
Some say that the current system of polling stations and ballot boxes works perfectly well and that it is entirely easy and convenient. For many of us this is true, but it is not the case for everyone. The evidence is clear that all-postal pilots appear to lead to a significant increase in turnout, which is why it is important to make steady, progressive investigation of them.
I present to your Lordships a Bill with the purpose of seeking how best to engage the electorate and to investigate how we can improve participation in our democracy. I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Filkin.)
2.26 p.m.
Baroness Hanham: My Lords, as the Minister accepted, the Bill is the latest of the Government's efforts to increase voter participation in elections. Various pilots have been undertaken in local government elections since 2000, including all-postal and e-voting. Voting hours and venues were increased for both local and general elections as a result of the Representation of the People Act 2000. The result so far seems to show that more electors vote if there is no option but to do so by postal ballot, but that neither e-voting nor extended voting hours and venues have much role to play in improving turnout figures.

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Although the Bill does not specify the exact nature of the pilots to be undertaken, as the Minister said, the Electoral Commission was asked to consider a number of matters, including the possibility of putting two pilots on to a larger canvass: e-voting and all-postal. I thank the Minister for clarifying what Mr Leslie, the Minister in the other place, said, when he accepted the arguments of both the Conservatives and the Liberal Democrats, supported by the report from the Electoral Commission, that there was neither sufficient time to bring a large pilot forward for e-voting nor sufficient evidence of beneficial effect, and agreed that that aspect would not be taken further.
If the Government had decided to proceed with e-voting, I should have had to say that we would oppose it in Committee. Given that the Minister has, I believe, made clear today that they will not, we will probably be satisfied, although we will need to consider whether it would he better to state in the Bill that we will not pursue that option.
We accept that there is evidence that all-postal voting has had an impact—at least at local level, because that is where it has been tried so far—and that there is justification for trialling it on a larger plain, but we do so with considerable reservations. First, we should not jettison our tried and tested form of personal presentation at polling stations lightly. That has been the bedrock of our democratic election process for years and has stood the test of time and probity well.
Secondly, there is still no evidence that other methods of voting bring in to the system anyone who did not intend to vote in the first place. What it did was to make it easier for them to do so—a fact that in itself may be a good thing, but should not lead us to the delusion that any increase in numbers is demonstrating that recalcitrant voters are attracted to vote by changes in the method. We must understand that, whatever we do, people will not vote if they do not want to.
That is the nub of the problem. It is the basis of all the relevant legislation, including this Bill. As the Minister admitted, the problem has not yet been satisfactorily analysed or answered. But there is more than a little evidence that electors do not vote because they see no effect for themselves from doing so. The relevance of electing to office representatives with little ability to deal with the problems affecting the people may escape them. Disaffection with local politics has barely been touched on by the major reorganisation that took place introducing Cabinet members and ranks of councillors.
The Government's ability or unwillingness to control European laws and regulations that are beginning to make Parliament look effete does not encourage participation. There is perceived to be little evidence, particularly in European elections—which we are mainly talking about—of a direct relationship between the people and those seeking election. The closed-list system removes the vital link between the voter, the representative and a constituency, and reduces the choice to one of party rather than person. We spent a little time debating that matter last Monday.
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One of the difficulties of the Bill, in seeking to ensure that the order is practical and proper, is that it addresses only the fact that there is to be an order after consultation with the Electoral Commission. That consultation has now taken place, so the Bill is slightly deficient already. The Bill gives details, but no timing, of the elections. I must therefore assume that the Bill is confined to, and will be completed by, the end of polling day of the last election, and that it takes into consideration only elections in 2004—the regional and local elections in June. I assume that that is the length of application and status of the Bill. As the Minister said, London is excluded from consideration as a pilot area, as is the south-west and Gibraltar, which has been tagged on.
There are, however, fundamental practical considerations to be addressed. The Bill will have to give us the opportunity to do so, as the only other possible opportunity will be when the order comes forward for affirmative consideration, at which stage it would be too late to make changes. The first consideration is the electoral regions to be included in the order, followed by the confidentiality, security and probity of any pilot scheme. We must consider an electoral region's ability to handle not only the European elections but also any local elections taking place within it.
On the first point, unlike the other place, where the Electoral Commission report was available only at the end of the debate, this House has the advantage of seeing it at this early stage. The Electoral Commission was asked by the Government to give its views on which three European electoral regions would be in a position to cope, not only with European elections but also with local elections involving voting for all those authorities within the area. Another consideration is how regions could deal, at what is now very short notice, with the innovatory procedures, when they get the official sanction to go ahead.
The Commission has recommended that there be just two regions: the East Midlands and the north-east. The East Midlands has a small number of local elections, and the north-east has considerable experience of such pilots. It was on that rationale that the Electoral Commission based its recommendations. However, the Minister has now confirmed what was said in the other place: the Government are still looking for a third region, and they do not accept that just two regions should take part—that is the only interpretation that I can make.
The Minister in the other place gave no further indication of which other region he might wish to promote. However, given the people who took part in the debate in the other place, there are suspicions, or at least a smidgen of an idea, that the region might be Scotland. But that proposal has already been rejected, not just by the Electoral Commission, but by Scottish local government and electoral officers themselves, for perfectly cogent reasons. The Minister has said that he is still considering the matter. I hope that the decision will be in the pipeline before we consider the Bill again—it cannot be taken until we deal with the legislation—and that there will be some indication

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whether there will he three regions or two. I suspect that it will not be long before we go into Committee; if it is too far off, the Government will not get through their timetable.
There are concerns over the process. All postal voting is totally reliant upon the expertise of Royal Mail in delivering without error papers to all those entitled to receive them and to return them to the election office in good time, again without fail. We can all recall missed letters and strike action, which has meant no mail at all. Recently, in London, we had a strike for more than 10 days—practically an entire electoral period. What would be the fall-back position if that happened in any part of an electoral region, and what statutory responsibility would there be for setting up alternative methods of delivery that could be implemented at short notice?
There are also concerns about the method used for verification of voters, and about houses in multiple occupation and student hostels, to which votes may be delivered that are no longer relevant but that could be scooped up and misused. There are questions, too, about timing and the ability of political parties to make their views known to the electorate before they vote, in what I assume will still be a three-week campaign. Other concerns relate to the role and timing of election broadcasts and the necessity to provide practical, straightforward and non-partisan explanatory material to enable voters to know how to vote—the Minister did not mention that today. The need for provision of daily marked registers, which caused much concern and discussion in the other place, has now been accepted. I hope that they will be available daily; otherwise they will be of no use.
My final question relates to the security of the poll. When are envelopes to be opened? Will it be days in advance of the close of poll, as they come in, or on the day itself, as happens now? Who will be in attendance when they are opened? What are the arrangements for verification and identification of the voter, and how will that process be separated from the vote itself? How can people be assured that their ballot papers have been received—that is important in an all-postal vote rather than one where just a few people have postal votes? The problem of impersonation has been dealt with in the Bill, and has quite rightly become a matter of considerable sanction.
A further question is the practicality of providing a secret ballot for those with disabilities, who will have to rely on someone else to help them to either complete or read the forms, That has never been an easy issue, but I understand that the Disability Rights Commission has made recommendations on how postal voting could be handled, and that in previous pilots they have not been issued.
For generations we have voted in polling stations with the option of a postal vote, the availability of which has been increased over time to encompass all those who have requested it. This next step stops the option of having a discreet local station in which to go and place one's vote. That choice would be gone. I am not at all clear that it is replaced by the announcement
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that there will be one delivery point in each ward. It might be fine for delivery, but will people be able to complete their postal vote there should they want to?
We must therefore be sure that the Bill is strong enough to ensure that problems do not arise, and that the received wisdom for completing a voting paper—sitting at home, in an office or wherever encourages greater voting—is borne out, and carried out in a way that does not enable a criticism of fraud to be levied at it.
This may be a small Bill; it is certainly not a perfect one. But it is one which will receive not only considerable scrutiny, but should also, as I said, include far more detail on the face of it than appears likely at present, rather than leaving all that to the orders that are implicit within the legislation. It will undoubtedly pave the way to the Government's ultimate goal of all-postal voting at a national election in the future.
It is, too, the first time that a national election will be held with different electoral regions voting in different ways. There must be the possibility that, ostensibly, the results could be skewed. We shall be moving amendments in Committee to deal with the matters that I have outlined today. My noble friend Lord Attlee and I look forward to the ensuing discussions.
2.41 p.m.
Lord Rennard: My Lords, my overall view of the Bill is that, at present and on balance, it may put forward as many problems for our democratic system as it puts forward solutions. It proposes a mechanism for changes to voting systems that are, I think, at least premature. Since those advocating changes also advocate safeguards, and those safeguards cannot all be in place in time for elections in June, I am not convinced that the changes should be made now. There are also significant other problems with experiments such as all-postal voting elections that I shall address.
But first, perhaps I may say that I believe that experimentation is important in voting methods. My party and I have generally supported the principle of pilot projects. It is particularly welcome to us that the Electoral Commission, whose establishment we so strongly supported, is able to put forward proposals independently of the Government and parties. But it is still for Parliament to approve changes. Wherever possible, changes to voting systems should carry greater consensus than simply the support of the governing party.
By combining this year's elections, a major electoral experiment has already been agreed for this year. It is one that my party and I wholly support, even though a significant number of colleagues in local government had strong views that it would not be in their interests to do so. Nevertheless, we supported the Local Government Act 2003, allowing the postponement of the local and the London elections from May to June. We thought that it would be far better to have one polling day for all the elections rather than to have two sets of elections five weeks apart, which is something

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that undoubtedly contributed to the voter fatigue that resulted in the 24 per cent turnout in the European elections of 1999.
We would have supported a significant further level of experimentation had the Government shown willingness to learn some of the lessons from the unpopularity of the closed lists in the 1999 elections and decided to allow voters to have slightly more freedom in choosing, if they wanted, to rearrange the order of the lists presented to them by the parties in the European elections. Giving more power to the voter and less to the parties must be good for democracy and good for participation. But we did not see government willingness to consider what I believe would have been a very worthwhile experiment this time around.
Incidentally, it seems strange to me that we are dealing with an issue today that, perhaps, could have been dealt with earlier when we were considering the Bill on European elections extending representation in the European Parliament to the people of Gibraltar. It seems that there must have been somewhere in the process of government a last-minute change of mind about the issue of postal voting in 2004. I fear now that at this late stage we are in danger of acting in haste with insufficient time to prepare for experimental methods of election by 10 June, especially if the Government—as they may—seek to go further than the Electoral Commission has recommended and try to adopt postal voting in the third pilot region.
Indeed, in discussions with Ministers about the principle of the elections being combined on 10 June, I thought that it was clearly understood that the combining of the European, the local and the London elections this year would be the only departure from previous practice, and that the issue of all-postal voting in certain regions, as a further level of experimentation at the same time, would not be raised at all by the Government. I wonder whether the Minister might explain this apparent late change of mind.
On the general issue of experimentation in this year's elections, my own representation to the Electoral Commission argued for consideration to be given to a different area of experimentation altogether. The further experiment that I would like to see this year is weekend voting. Before we consider issues such as widespread extension of compulsory postal voting, we should have had a good opportunity to look at weekend voting. The elections in June would have been an ideal opportunity to do that.
Rather than opening polling stations between 7 a.m. and 10 p.m. on a Thursday—often causing disruption to many schools and, therefore, disruption to pupils' education—it would have been practical to find suitable venues to open during the day on a Saturday and Sunday giving a choice of polling day, and over a period of time, when many more people are free than on a week day.
I understand that returning officers and electoral officials were consulted but were not enthusiastic about issues such as storing ballot boxes securely on the Saturday night. But I do not believe that that
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problem could not have been overcome. The interests of the voter should be paramount. That is the experiment that should be in this Bill.
Perhaps I may now turn to some of the problems with all-postal-vote elections or "compulsory postal voting", as I prefer to call it, as put forward in the Bill. Some of these problems need to be addressed before there is much more widespread all-postal voting. Some issues are fundamentally problematic. The trade-off between increased turnout and other problems with the democratic process may not be worth it. Of course, all-postal voting has generally raised turnout, but it has not always done so. The health of our democratic process cannot be judged by turnout alone.
One of my principal concerns with all-postal-vote elections is the lack of secrecy for many voters. The Secret Ballot Act 1872 was one of the most important democratic reforms in the history of this country. There is a danger that compulsory postal voting undermines it fatally. It may even be an issue under Article 3 of the European Convention on Human Rights, and this should be scrutinised carefully by the Joint Committee on Human Rights.
Of course, a voter can do what he or she likes in the privacy of the polling booth. Members of the same family may go to the polling station together, but they vote individually in conditions of secrecy. When the postal votes all arrive at home, there is no such guarantee. In my experience, I have often canvassed voters who have said, for example, that they vote for our party but that their husband does not know. It may be possible for them to keep that information from their husbands in future, but they may find themselves voting in another way altogether for the sake of a quiet life. The principle of a secret ballot would have been destroyed.
Concerns about privacy apply to all voters, but they have been raised by organisations representing disabled people. Thanks to changes introduced a few years ago, a blind person may he assisted in a polling station by a presiding officer on how to fill in their postal vote. But a blind person receiving a postal vote at home may not be able to vote without a visitor, a friend, a relative or someone filling in the ballot paper for them, and so undermining their right to secrecy.
Homes in multi-occupation are a particular problem, as raised by the noble Baroness. Lady Hanham. In areas where many students live, or in areas such as where the Brent East by-election recently took place, I have often delivered literature to houses with a huge number of residents—sometimes in double figures. How do we really know what happens when 10 postal votes are left in a communal hallway? It is often the case in those places that the 10 residents are a different 10 people from those on the electoral register to whom postal votes will have been sent.
There may be very few problems in many areas and there may have been few problems with the pilot schemes so far. However, what would have happened in a closely fought and important by-election such as that in Brent East last September if it had been an all-postal vote election? I canvassed large numbers of

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households in that election, where many people told me that the person who was on the electoral register had moved away from the district. In an all-postal vote election, a postal vote would still have been delivered to the previous occupant.
A huge concern for me about the principle of all-postal vote elections is connected to the timing of the election campaign. Traditionally, parties and candidates, the media and all those involved in the election campaign, including the Royal Mail, who deliver to election addresses, know that their work should be completed by polling day. However, in an all-postal vote election, ballot papers are supposed to be delivered at least one week before polling day and usually two to three weeks in advance. Experience from pilot schemes suggests that most voters return their ballot papers almost immediately after receipt.
When are people best able to judge between the parties and election candidates? Surely it must be when they have the most information at their disposal and have been subject to the most intensive campaigning and debate between the parties and candidates. That time is on polling day and not two or three weeks before it.
There is no doubt that many election results would have been different if voting had taken place a week or two earlier. Perhaps the 1992 election might have been a totally different story and Neil Kinnock might have become Prime Minister if the ballot had taken place a week or two earlier. Perhaps some would have welcomed that and others regretted it, but the results of elections will change if one changes the time at which people cast their votes. It is unhealthy to change the time at which people cast their votes to a period that is two or three weeks before the normal polling day and before the parties have been subject to proper campaigning scrutiny. We will reach a situation where people will have voted before the media have covered the election issues, before the parties have delivered their literature, before the election broadcasts have been transmitted and before there has been a proper and democratic discussion of the issues. Is that wise for the health of a democracy?
There are also many logistical difficulties with the all-postal vote process. Above all, we may reach a point where politicians avoid the detailed scrutiny of an election campaign by having voters cast their votes at such an early point.
Political parties and agents are often familiar with the failures of the Royal Mail to deliver election addresses by polling day. That failure was widespread in the 1999 European elections, when the Royal Mail was given for the first time the task of delivering perhaps two or three million election addresses across entire regions. It will be asked to carry out a similar task in this process. How can we be sure of its capacity to deliver postal votes in time for them to be completed, posted back and counted?
Let us look at some of the lessons from the pilot schemes. Last year, hundreds of voters in Stockport were disenfranchised by a failure to deliver their postal votes. In Liverpool at the last general election, a
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wildcat postal strike meant that many postal voters were simply unable to return their votes. In one ward in the Metropolitan Borough of Dudley last May, 52 postal votes were delivered only on polling day itself and a further 58 were delivered after the election was over. There is no proper redress in our system for those voters or for affected candidates. Last month, the candidate who lost that election by a mere 40 votes failed in his legal action to have the election result overturned and re-run on the grounds that the returning officer had done enough by giving the postal votes to the Royal Mail. The fact that they had not been delivered to the voters could not change the result of the election. In a by-election in the Hill Rise ward of Islington last October, industrial action was taking place in the Royal Mail and a large proportion of postal voters was disenfranchised. Concern was expressed at the time and assurances were given by the Royal Mail that special measures would apply to make sure that postal votes were returned in time to be counted. However, one in three postal votes was returned to the returning officer after polling day and too late to be counted.
I ask noble Lords to imagine a national election where one-third of the votes was not counted. It would make the conduct of the 2000 US election in Florida seem like a model of perfection, with its hanging chads and all its other problems, if it became known that so many votes in our system were not counted because of a postal problem. We have witnessed recent industrial action within the Royal Mail and we know that an election that uses postal votes may be a tempting target for some people.
Of course, there are some answers to some of those problems. A declaration of identity, with a witness signature, to accompany a postal vote may not an infallible means of avoiding fraud, but it is a necessary minimum safeguard and acts as a significant deterrent to fraud. That is one change that could be made to the Bill. There should be no all-postal vote experimental elections in June without that as a minimum safeguard.
In the longer run, the Electoral Commission is right to argue for individual registration of voters, to be accompanied by a signature of that voter, thereby enabling at least a cursory check to be made that a postal vote has been returned by the person to whom it was dispatched.
More use of postal voting should mean a change in our system to allow more days after the normal polling day for postal ballots to be returned and counted. It was not until the scandal of the theft of the US presidential election in 2000 erupted that many voters there became aware that absentee ballots were still supposed to be counted several days after polling day and usually after what is called the "result" is known.
In Australia, for example, absent votes can be counted up to two weeks after polling day. The votes cast at a polling station are counted and declared immediately. The postal votes are then counted as they come in, each day, for a two-week period thereafter

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and the results published on a website. The final outcome in a close election may not be known for two weeks.
For election junkies such as me, it is quite fascinating to watch the changing results. I remember seeing an Australian politician destroy her career by denouncing her electorate and her party for voting her out, only to find that the postal voters actually made the difference and that she had been elected by a small margin.
That system may of course leave a short period of uncertainty about the final outcome of the election. However, more importantly, it helps overcome the fundamental problem of people having either to vote before they have experienced the campaign or to vote so late that their vote is not counted.
Postal votes should not be dispatched until seven days before polling day at the earliest. There should then be a week for them to be counted afterwards. We should also have systems that ensure that postal voters do not lose out on the last week of campaigning. There should be a facility for election candidates to have a sample of their literature included in the postal vote mailing.
I have expressed strong reservations about the extension of all-postal voting or "compulsory postal voting". I have suggested some measures that may mitigate the problems, only some of which could be in place by June. The Bill must therefore be amended to provide for what safeguards can reasonably be provided in postal ballots, such as a declaration of identity and a witness signature.
The Government should also indicate that they will go no further than the Electoral Commission has suggested in having the two proposed all-postal pilots in the northern and east Midlands regions. I welcome their acceptance of the Electoral Commission's view that experimentation with Internet, text and telephone voting is not appropriate at this stage. The evidence so far is that there are problems with the secrecy and reliability of those methods, but no compensating benefits in the form of increased turn-outs.
In conclusion, the fundamental problems that we are seeking to address lie rather with ourselves as politicians and our political system than with particular voting technologies. We should not lose sight of that.
3 p.m.
Baroness Gould of Potternewton: My Lords, it gives me great pleasure to follow the noble Lord, Lord Rennard, with whom I have worked in the past. I have enormous respect for his experience, but I do have certain very fundamental differences from him in respect of this Bill. I do not intend to go into those today, but I am sure that we shall be able to debate them in Committee.
First I declare an interest as chair of the HS Chapman Society, an organisation that provides a non-partisan forum for election junkies such as myself and the noble Lord, Lord Rennard, electoral practitioners from all parties, electoral administrators,
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party solicitors, the Electoral Commission and anyone interested in the UK's electoral systems and practices. The society has a particular interest in increasing democratic participation and the legislation designed to bring that about.
As has already been said, this Bill marks a further stage in the scaling-up process of introducing innovative election methods, some of which many people scoffed at when we first introduced them in 2000. No one would argue that changing voting methods is a panacea for increasing the level of voting. The noble Baroness, Lady Hanham, referred to the reasons why many people no longer vote and she was right to point out that they are complicated and not simply about how you go to the polling station.
The reasons for the fall in voting turnout were identified by the Electoral Commission as: circumstances on election day that prevent people from going to the polls; distrust of politicians; the inability to distinguish between the parties; and the belief that a vote will not make any difference. However, the commission's investigation also showed that, when presented with the chance to exercise a right to vote from home, more people took up that opportunity. That is something which we must take very seriously.
A 16 per cent increase in the ballot may not be a triumph for democracy, but it proves the validity of the process of change and cannot be ignored. Therefore it is right that we now build on the experience we have already gained and continue to develop it, as proposed in the Bill.
We should look closely at the position in New Zealand, which offers a proven example. New Zealand has developed all-postal voting at local elections, a process built on since 1965. However, in 1992 one council reverted to polling station voting. Turnout fell from 46 per cent to 26 per cent, but rose back to 45 per cent at the next all-postal vote election.
In Committee in the other place it was suggested that, rather than select specific pilot areas, a pilot postal ballot should be conducted nationally. I consider that a flawed argument. Political climates change over time and the only comparison which could be made with a national pilot would be with a national election held at some other time. That would be absolutely the wrong way to make a comparison. The only true comparison and valid means of testing the system is to compare the turnout in adjacent areas with one region having a postal ballot and the other using the traditional method of voting at polling stations. Such an incremental approach would help to build up electoral confidence in the system, which is extremely important.
I think that the Government want to respond positively to the demand made in the other place for a marked polling register. Such polling progress information is of value not only to political party campaigning and to electors by eliminating unnecessary calls on those who have already voted and helping each party target its canvassing activity—which may again help to increase turnout—but it is also a useful tool for returning officers by assisting in the prevention of double counting and fraud, a point to which I shall return.

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I refer now to the issue raised by the noble Lord, Lord Rennard, about the canvassing practices of political parties and the effect of early voting by post. It is up to political parties to re-examine how they conduct their electoral campaigns so that they fit in with the system rather than the system having to fit in with them.
Returning to the marked register, concerns have been expressed about voter privacy, but there has been a long tradition in this country of number takers outside polling stations identifying electors after they have voted. I stress the word "after" voting. Although it has sometimes happened, it is illegal to interfere with electors on their way into a polling station. The same principle would apply here. There will be no identification of how the elector voted, merely that they have returned their ballot paper envelope.
The Electoral Administrators Association, of which I am a member, is generally in support of this legislation but is concerned that the necessary resources must be provided to cover the administration and cost of distribution of the marked register. It is an extra job that will require further resources and staff. My honourable friend Chris Leslie gave an assurance in another place that extra resources would be made available, but in order to reassure electoral returning officers, I should be grateful if my noble friend on the Front Bench could confirm that extra moneys will be made available to cover the costs of the pilots.
The noble Lord, Lord Rennard, also talked about people being disenfranchised. I think that one of the largest contributors to disenfranchisement is the fact that people do not register to vote in the first place. It has been suggested that we should wait for individual registration before bringing in these additional pilot studies. I have discussed this matter with electoral returning officers, whose view is that the two issues should be tackled quite separately. They see no reason for delaying the Bill until we have individual registration. EROs have also expressed the view that it would take a considerable time successfully to implant in the minds of the electors the concept of individual registration. Therefore it would not be appropriate to introduce it at this point.
A further concession rightly made by the Government is that to enable ballot papers to be delivered to a specific polling place on the main polling day—a "staffed delivery point". I must admit that I have a problem with that phrase. People understand the concept of polling stations and so to overcome that minor problem perhaps we should have two lines, one for the polling station and one for the delivery point. However, I hope that it will be stressed to electoral returning officers that care must be taken in determining the site of these delivery points, that they must be accessible and should be well publicised.
I hope also that there will be some flexibility as regards numbers, so that we shall not be restricted to the present suggestion of one in each local government area. Account must be taken of the geography of each local area, as well as the type of population. If it is an area with a high proportion of elderly people, then that should be taken into consideration.
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The most contentious issue has already been identified by previous speakers; that is, the possible increase in the opportunity for fraud, impersonation and malpractice. Every effort has to be made to reduce the opportunity for these and the question is whether the Bill achieves that. I believe that we should welcome Clauses 6 and 7 which lengthen the time limit for the prosecution of malpractice to a maximum of 24 months and extend the offence of impersonation to outside the polling station. It is also encouraging to note that other measures will be taken through the piloting order and secondary legislation. I hope that, if necessary, further widespread consultation will be undertaken to make absolutely certain that maximum security is achieved for our elections.
I was also pleased to read what the Minister had to say on 4 November last year in Standing Committee B. The Government, through the Electoral Commission, do take action positively to test whether systems are prone to malpractice and fraud by means of spot checking whether people on the marked register have actually voted and by checking the signatures on declarations of identity.
I do not always agree with the Electoral Commission. although like the noble Lord, Lord Rennard, I fought very hard for its establishment. However, credit must be given to it for the many measures which have been taken and will continue to be taken to alleviate the possibility of fraud and to improve the facilities for reporting allegations of election offences. It must continue to be stressed that there will be severe penalties for taking such action.
The potential for fraud exists in any system. It is not a new problem resulting from postal voting. Those of us who were involved in the elections at the time will remember the scandalous misuse of the proxy vote in the late 1980s and 1990s. We must look at such examples so that we find ways of making sure that such misuse does not happen again.
Until now, there has never been a process for ensuring that people presenting themselves at a polling station are who they say they are. I was saying to my noble friend Lady Gibson that I was not certain whether I could tell this little story, but maybe I can, because it is so very old. I was standing in a local government by-election many years ago when one of my supporters came to me at the end of the day and said, "I'm sorry you didn't win because I voted for you nine times". So I know from practical experience that this has happened in the past.
A MORI poll conducted for the Electoral Commission showed some concern by electors but, in the main, voters in the pilot areas generally had positive things to say about the trials that had taken place last May. Nearly 90 per cent of electors agreed that all-postal votes made the whole process easier to use and more convenient. Importantly, they also felt that it allowed voters not to worry about missing polling day. We all know how often someone says, "Oh gosh, was it last Thursday? I'd forgotten". So I hope that that problem will be solved.
The Polls Apart report by Scope noted that postal voting appealed to the majority of disabled people who completed the survey. Some 91 per cent of those who

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responded found it very easy and 84 per cent found postal voting very convenient. Only 4 per cent did not find it convenient.
I close with two quotes from focus groups that were conducted by MORI. The first is:
"My wife she never votes, I always do. But she did this time with a postal vote".
The second is:
"I think that if it is going to increase turnout even just slightly so that more people are being represented, then it can be a good thing".
If the electors are reassured that postal voting is a secure method to use—and I believe that every effort is made to ensure that—then more people will respond positively, and we will see an increased participation rate at elections. Ultimately, we have to transform our electoral process so that people feel the value of going out to vote, widen access and modernise democracy.

Student Support in Higher Education
3.13 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Education and Skills. The Statement is as follows:
"Today the Government will introduce a Bill to reform higher education. Before we do so, I wish to make a Statement about the related matter of student support.
"Change in higher education is necessary because the barriers to access to university need to be lowered. The measures I am announcing today mean that disadvantaged students will get financial support to study what they want where they want.
"Universities need more investment. Vice-Chancellors will tell you that these proposals generate hundreds of millions of pounds of new money for them to spend on improving the quality of teaching and compete with the best universities in the world.
"We need to move towards treating students as financially independent from the age of 18.
"I believe that there is a broad consensus that universities need more resources and that it is reasonable for students to make some contribution, after they have graduated, to those resources. Where there has not been consensus is about the fairest way to raise this new funding, so that access from the poorest communities is promoted and not undermined. The Government have listened carefully to the concerns which have been raised and have discussed the matter widely. These concerns very much inform the proposals I make today.
"Our original proposals were set out in the White Paper I presented to the House on 22 January last year. We will remove up-front fees for full-time
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undergraduates, so that higher education is free at the point of entry. We will provide loans with a zero real rate of interest, paid back through the tax system at a rate dependent upon earnings, beginning at a threshold of £15,000 per year rather than the current £10,000. We will introduce the new higher education grant from September this year.
"We will establish the new Office for Fair Access to ensure that universities support students from the poorest backgrounds. The focus of OFFA's work will be those universities with the poorest track record in widening participation. No university will be able to put up its fee without OFFA's agreement. OFFA will not concern itself with admissions.
"Universities will be able to set fees from zero to £3,000. We will maintain the £3,000 cap in real terms, through the next Parliament.
"Today I add the following commitments to meet concerns which have been expressed by some colleagues. First, on variable fees, I accept that some colleagues have genuine concerns about their impact upon our university system. Therefore, the Government will establish an independent review, working with OFFA, to report to this House, based upon the first three years of their operation.
"Moreover, our legislation will require that any proposal to raise the fee cap in real terms is subject to affirmative resolution. There will be the opportunity for a debate on the Floor of both Houses so that every Member can vote upon such a proposal, dependent on discussions through the usual channels. However, I have to make it clear that we do not agree that a substantially higher fixed fee would be the way to raise additional resources. It would be deeply damaging. We would be denying universities the freedom to incentivise industrial, vocational, scientific, technical, engineering and sandwich courses, or foundation degrees, which are vital for the economic future of this country.
"Secondly, I want to emphasise the Government's strong commitment to promoting access to higher education by part-time and mature students. We will provide, from September 2004, improved fee support and a grant for part-time students. I welcome the changes recently announced by HEFCE to support part-time and foundation degree courses. My honourable friend the Minister for Higher Education and the Funding Council will consult on how the funding system might further support the development of part-time study in higher education.
"Thirdly, for full-time undergraduates entering higher education from 2006, we will write off any student loan repayment which is still outstanding after 25 years. On average, we expect graduates to repay their loans in 13 years, but those who have taken on family responsibilities or are on low incomes could need more time. This gives rise to real concern, and I think that a 25-year limit is fair.
"Fourthly, from September 2006, maintenance loans will be raised to the median level of students' basic living costs, as reported by the student income

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and expenditure survey. This increase will be modest for most students but it will be significant for those studying away from home in London. This principle will ensure that students have enough money to meet their basic living costs.
"I should emphasise that this student loan is free of real interest. Repayments will be based upon money earned, not money owed. It is much better for students to be able to borrow on these terms than at commercial rates.
"Over tune, although this cannot be afforded at this stage, the Government's aspiration is to move to a position where the loan is no longer means tested and is available in full to all full-time undergraduates, so that students will be treated as financially independent from the age of 18.
"My fifth and final intention is to ensure that every student from a poor economic background has enough resources to meet even the highest course fee without incurring additional debt. This £3,000 package is achieved by maintaining fee remission at around £1, 200; by raising the new higher education grant from the £1,000 which I originally proposed to £1, 500 a year for new students from 2006; and by, through OFFA, requiring universities to offer bursaries for students from the poorest backgrounds so that the full fee cost of the course will be covered, which means, for example, a minimum bursary of £300 for a course whose fee is £3,000.
"The effect of this commitment is that no student from a poor background will be worse off as a result of our proposals, whichever university they attend and whatever the fee charged for the course.
"Moreover, this commitment will align the level of the HE grant with that of the education maintenance allowance for 16 to 18 year-olds. Around 30 per cent of students will receive a full grant and a further 10 per cent a partial grant.
"A major advantage of this approach is that those modern universities which have strong records in recruiting students from poorer backgrounds will be able to use at least 90 per cent of any increased income from fees to improve course quality, rather than the about 70 per cent which was implied in some earlier discussions. These universities have made, and are making, a first-class contribution to this country's higher education and economy and I want to encourage, and not discourage, that commitment.
"On the bursaries, I have invited Universities UK to work with universities and ourselves to develop model bursary schemes to provide a clear offer to students.
"In addition I accept in principle the argument of some of my honourable friends that there is a very strong case for combining the HE grant and fee remission in order to give students greater choice up front about how they use the financial support they receive from Government. This would be a further move towards financial independence at 18.
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"However, this approach raises real policy, financial and practical issues. We are examining them in detail and if they can be resolved we will adopt this approach.
"From the outset I have emphasised that our changes, which mainly come into effect from 2006, will not adversely affect the level of public funding for teaching and research.
"My proposals provide universities with resources they urgently need; they improve access by abolishing up-front fees and re-establishing student grants; and they raise the threshold from which repayment begins from £10,000 to £15,000. Moreover they move us towards the day when students become financially independent at 18.
"The abolition of up-front fees, the HE grants and bursaries, the raising of the interest-free loan, the higher repayment threshold, and the 25-year write-off of debt, mean that students will have the money that they need while they learn, and can afford to contribute when they earn.
"And universities get the sustainable funding stream they need to deliver world-class higher education. This is a coherent package to be taken as a whole or not at all. If not supported by this House, none of these benefits will arise. It is not a pick and mix menu.
"I commend these proposals to the House".
My Lords, that concludes the Statement.
3.22 p.m.
Baroness Seccombe: My Lords, I thank the Minister for repeating the Statement made earlier in another place. However, it causes me great concern to see the haphazard way in which the Government are approaching the funding of our higher education institutions. The Statement that we have just heard is the culmination of days of arm-twisting and negotiations, which has resulted in a hotchpotch of concessions and damage limitation by the Government. That is not the way to make policy.
The measures introduced by this Government are nothing short of a disaster for our universities. They are having their independence stripped away with the introduction of the access tsar. That will dictate to universities that admissions should no longer be based on the ability to learn. It will hold back funding from those institutions that select applicants according to their potential as opposed to their postcode. It is a travesty that our universities are being blackmailed in such a way, and we on these Benches are wholly opposed.
Furthermore, the Bill introduced in another place today can provide no cast-iron guarantee that per-student government funding to universities will increase at all in real terms following the implementation of these measures. I am sure that the Minister will say that I am wrong on that issue, but there is a clear precedent that suggests otherwise. When this Government introduced tuition fees in 1998, a great deal of the income earned by the

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universities was later clawed back by the Treasury. Perhaps the Minister can tell the House why it will be any different this time.
We are told that the top-up fees will be capped at £3,000, but I am afraid that, given the Government's decision to have 50 per cent of 18 year-olds attending university, the sums do not add up. Could the Minister say whether the two commitments are compatible? Can the Minister also confirm that variable fees are an unamendable principle in the package?
The Statement repeated by the Minister this afternoon concedes that universities need more resources. That is said to be a fundamental objective of the Higher Education Bill, but even while the Bill is in the process of being printed, any possibility of it being financially viable is undermined by the concessions announced in this Statement.
The Government need to take a fresh look at how to find a solution to the funding needs of higher education. Pushing on regardless down this road would be a grave error for all parties concerned. Students will have to pay a lot more to go to universities now. Much was said in the Statement about 18 year-olds becoming financially independent. The way I see it, precisely the opposite will happen if they are the verge of accumulating £30,000 worth of debt. Taxpayers' money will be wasted by creating this highly bureaucratic system. Perhaps most worrying of all is that the independence of universities is at risk.
In conclusion, is it not the truth of the matter that this will not provide extra resources to universities and will cost taxpayers more?
3.26 p.m.
Baroness Sharp of Guildford: My Lords, I thank the Minister for repeating the Statement. It is not often that a Bill is published with a full Statement of this type. However, on this occasion, the White Paper that preceded it and which was published more than a year ago, has been changed very substantially through time. On top of that, the negotiations on the change have taken place in the past few days as much as in the past few months. Therefore, until today, we did not quite know what was going to come forward in the package, so it is interesting to see precisely what has come through.
It is somewhat sanctimonious for us to preach to the Benches opposite about broken promises. It is up to them to decide how economical with the truth their Government are being when, having promised not to introduce top-up fees in their manifesto, they then have a Bill that does precisely that.
There is also a certain irony in the current situation. We may cast our minds back to the general election campaign in 2001. One feature of that campaign was the desertion of the student body from its traditional support for a Labour government. When students were asked about it, the main issue was fees—in this case, the Dearing fee that had been introduced—and maintenance grants. In particular, the switchover from maintenance grants to loans was very unpopular.
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Immediately after the general election, the Prime Minister set in train an inquiry to discover how best to cope with the problem of student dislike of the loans system. The Government wanted to come up with a better way and, in particular, some form of grant to help with the maintenance costs—the hotel costs—of students. This package has come out of that process but, ironically, far from relieving the problem of debts that the students disliked, the package increases the problem.
There are some genuine worries about the package that is being proposed. In spite of the comments by the Secretary of State yesterday on the absurdity of the idea that fees might be allowed to rise to the £10,000 or £15,000 mark in the Russell group universities, the fact remains that the expectation is that variable fees, when they are introduced, will be the thin edge of the wedge. The £3,000 fee, variable as it may be, far from providing a sustainable source of funding for universities, does anything but.
There is a wholesale expectation that we shall see much greater variability introduced later. Yes, the matter is going to come before a vote of both Houses—but, in spite of that, there will be pressure, just as there was with the Dearing fee. We were promised that the Dearing fee would be all we saw—but now what are we seeing? Now the fee is going to be £3,000. We are being promised that, before anything else is done, we shall consider the matter again. This issue will come back because, if the universities are to have the resources that they want to have, fees in Russell group universities will approach the £10,000 mark. If we see some of the universities with fees at that level—Oxbridge, the leading London colleges, Bristol and so forth—then there is a genuine fear that many students—not those from Guildford or Westminster, but those from Moss Side and those from St Paul's in Bristol—will perceive those universities as beyond their ken. They will not even bother to apply. This two-tier system is a very real problem.
I shall put forward some other worries that we have. First, how much new money is coming forward to the universities as a result of these fees? How much genuinely new money are the universities going to get from this? If all universities charged the £3,000 fee, it would raise about £1.5 billion. As we know, however, by no means will all universities charge that amount. How much new money do the Government reckon will come to the universities from this? They need £2 billion a year to be sustainable, but this is nowhere near that amount. If we are lucky, we shall see £500 million coming into universities from the present proposals. How much are the extra concessions costing? What will be the cost of the extra maintenance grant and the deferment of payment? The Institute for Fiscal Studies calculates that the deferment of payment over 25 years will cost £250 million. So how much new money is coming forward?
Secondly, what is the cost not just of these concessions but of the total package? We are looking at £500 million coming into the universities. Is the House aware that as we are moving from up-front payment to post-graduation payment, which we

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welcome, the Treasury will have to pay the loans to universities if they are to receive any money at all? The Treasury sold on the first tranche of loans to the private sector at a 50 per cent discount. In other words, it is costing us, the taxpayers, £500 million in order to provide every £1 billion of loans. Those figures are provided by the Institute for Fiscal Studies. In its own calculations, the institute reckons that the cost of providing £1 billion-worth of loans is £400 million. So we are having to pay out almost £500 million to provide the same amount to universities. Is that really sensible economics? What are the precise costs?
Maintenance grants are the third issue. We were told in the White Paper that maintenance grants are for maintenance—for hotel costs. Now they are not for maintenance but to help pay tuition costs. That is a straight switch-over from what was proposed in the White Paper, a point to which the Statement alludes. We are continuing this concept of an educational maintenance grant for students from low-income families. The grant is now £30 per week for those who are post-16 and in a low-income family. The concept is now being carried forward to university level. Although I am delighted to see it, the grant is not for maintenance but to help pay the extra tuition costs. We are counting it as part of the package. Those students are being told, "You will not have to pay it because you come from a low-income family and we are knocking it off". But will they receive any help at all with maintenance?
Filially, I should like to ask about part-time students and those from the Open University. I believe I am right in saying that while concessions are being made in loans and grants for part-time students, no help is being provided to those who have to pay fees. Part-time university students, particularly students at the Open University, will have to pay fees. The Open University is not receiving help for part-time courses equivalent to the help being offered for full-time courses. If we want to open up participation in higher education. we have to realise that those who will participate are looking for the opportunity not only to study part-time, but to work, earn and learn all at the same time. That is the great opening and the area in which we are currently so lacking. We want to open up opportunities for such students, but these proposals are not the way to encourage them. I hope that the Government will look at this again.
3.35 p.m.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Baronesses, Lady Seccombe and Lady Sharp, for some if not all of their comments. I say to the noble Baroness, Lady Sharp, that what she describes as a hotch-potch I describe as serious debate. This is a very difficult and I dare say controversial subject. It is very important that the Government continue the dialogue and discussion with all interested parties, not least universities themselves, to ensure that we get the proposals right. I believe that we have reached a conclusion that addresses the concerns that have been raised with us.
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I say to the noble Baroness, Lady Seccombe, that this is about the independence of universities. As the Statement makes clear, and as I have often made clear in your Lordships' House, OFFA's role is not about admissions—a matter properly within the jurisdiction of universities. We are very clear that they must retain their independence. However, we are looking at ways of ensuring that our students who can apply to university do so. That means working closely with our school system and involving our universities in the type of outreach work that noble Lords have from time to time joined me in praising in your Lordships' House.
There is a very strong commitment across the Cabinet, not least by the Chancellor, to ensure that we fund and support universities. I think that noble Lords should be aware of that important point.
I believe that there is a real compatibility between wanting to provide the opportunity of a higher education to about 50 per cent of those aged 18 to 30 and wanting to ensure that our universities are viable. We want high-quality courses for all those attending university, and we want universities to be well funded. We need to move towards that as quickly as possible. This is about recognising our place in the global economy. It is about recognising our people's need to receive the high-quality education they deserve.
I think that in talking about "a bureaucratic system", the noble Baroness, Lady Seccombe, has underestimated the way in which we are introducing OFFA. It will not be bureaucratic. Further information will be published today as a result of publication of the regulatory impact assessment Bill. I shall also make available details on resources. It is important that we link this very closely with the work of HEFCE, while ensuring that we have a clear and definable objective in working with universities to help our students receive the high-quality education I described.
Both noble Baronesses asked about the sum we think will be raised. Our estimates are based on 75 per cent of courses being at the £3,000 level—a figure which I think fits perfectly with the £1 billion figure cited by the noble Baroness, Lady Sharp. That is important new money which will go to universities. It is not about having to compete against other priorities—another issue which we have discussed in your Lordships' House.
The noble Baroness, Lady Sharp, talks about our manifesto commitment. My right honourable friend has frequently addressed that issue. I would refer noble Lords who have not heard enough about that to the article written this weekend by my right honourable friend the Home Secretary in which he describes the circumstances in which that commitment was made. We have been very open and clear about what we are doing. I do not believe that anyone is under any illusion about why we have reached our conclusions or the rightness of those conclusions for the development of our universities.
The noble Baronesses talked about increasing debt. It is important that we are clear about what we are describing. The package we are putting forward will ensure that 30 per cent of students do not pay and that another 10 per cent do not pay all the fees. This is not

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debt in the traditional sense as noble Lords and I understand the concept. It is about paying according to means and only when one is able to pay back. For those who choose to have a low income because of the work they do or who choose to have a different lifestyle, after 25 years the debt will not have to be repaid at all.
It is important, because the principle that we stand behind is that students should contribute to their university education. We are not in the position that we were in 30 years ago. This is about recognising those who benefit: the Government; the economy; our businesses; our industry and our individuals should make those contributions. We have done this in a way that ensures that we protect our poorest students and encourages them to go on to university.
Often, our debate is about those universities that are described as elite universities—I find that phrase difficult, but noble Lords will know which universities I am referring to—and their role in this. Some of them have exemplary records of working with students. We have noted before in your Lordships' House that Cambridge University is proposing a bursary scheme that, on top of this package, would give £4,000 to each student from a poor background. These are important moves forward, which I am grateful to universities for considering.
The noble Baroness, Lady Sharp of Guildford, talked about our move from maintenance grants to fees and loans. It is partly that we are trying to think about the totality of student debt. There has been some interesting work by Members of another place in looking at what we mean by the "totality". We have tried to think more about what we can offer students and enable them to think about the package that they will be receiving and the package that they will be repaying. I make no apologies for that, because it is important.
The noble Baroness, Lady Sharp of Guildford, asked about the increase to universities. Just to complete the answer to her question about how much would be coming in, it is about a 30 per cent increase, on average, per student for those universities that will charge that, which is an important part of that. I am not able to give her the definitive answer on our dialogue with the Open University about part-time students, which has been going on. I will write to her on that.
3.41 p.m.
The Lord Bishop of Portsmouth: My Lords, we on these Benches broadly support this strategy, although we have questions. Whipping bishops is about as difficult as herding cats. We have questions, but we support the strategy broadly given the present situation, which is far from ideal. I speak from a perspective of having been a university chaplain in the early 1980s. The Government have listened to many of the concerns. Obviously there has been a great deal of bargaining, but that is part of the real world that we are all in because we are dealing with money. Higher
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education needs resourcing, and this is perhaps, for some of us, the least worst option, next to reintroducing a further income tax.
Noble Lords will want to take part further in this question session, so I simply want to put four questions to the Minister. What about those who will just miss qualifying for extra help? That grey area has been addressed, but—though noble Lords who know me will realise that I am innumerate and cannot add up—I am concerned about those grey areas. I heard on the radio this morning a prominent person gently chiding the front page reportage of one of our prominent newspapers, which led me to believe that that newspaper clearly has as much difficulty handling higher education as it does with issues and appointments in the Church of England. I wonder whether this issue of communication is deep seated. I have raised this before. It can be described as "debt aversion". That does not appear in the Statement, but there is quite a mountain to climb on communication. I wonder whether the Government realise just how high that mountain is.
Will the Government really keep a watchful eye on the pressure to remove that £3,000 cap? I noticed in the Statement that there was a kind of hidden fear, which reminds me of what we call in the trade, "argument weak, thump pulpit". I would not for a moment suggest that the Minister thumps the pulpit, nor would I suggest that any of her arguments are weak, but I wonder whether there is an inner scepticism there that some of us have picked up. That will mean that fees might move beyond the ability of poorer people to pay.
My final question is not about the Statement, but I believe that it is important. The Statement is about financing and resourcing, but we want to say firmly that the Bill must say something about what education is for, not just what it does. There is an ideal in higher education, but, if we assume it, we will easily slip into taking it for granted. I ask the Minister to give that matter her active consideration. I know that she has done so already, because we have talked about it.
Baroness Ashton of Upholland: My Lords, I am grateful to the right reverend Prelate for his comments on the Bill. I am also grateful to him for the discussions that he has had with me and with my right honourable friend the Secretary of State and for his careful deliberation of the issues.
The right reverend Prelate is right to raise the issue of what happens at the margins. We know that, under our proposals, 30 per cent of students will be directly assisted with the total amount that we have proposed and that a further 10 per cent will be assisted partially. The right reverend Prelate could then ask me about the person at 41 per cent. That is part of the reason why we wish to review how the system works after three years. We will be mindful of that.
My right honourable friend is keen to consider the issue of how we recognise people as becoming independent at 18. In part, that is because of evidence, of which noble Lords will be aware—albeit that some of it is anecdotal—that some young people are unable

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to persuade their family to support them with the upfront fees and with other things. They will need to be able to receive that income independently.
I agree that communication is critical. My right honourable friend plans, as soon as the Bill receives Royal Assent, to do a lot more work on communication that would not be appropriate until the Bill has passed into law. We recognise that there is a mountain to climb, not least because of some of the words that are bandied around about debt and so on. Young people must recognise what the system is. It is not the same as buying a car with a loan. If someone buys a car but does not have enough money to pay back the loan, the car will be taken away. Our system is not like that; people will pay as long as their income allows. It is a very different proposition, and we must communicate that. I hope that, during the passage of the Bill, we will do that. We must deal with misinformation.
I am not shaking about the pressure to remove the cap. my right honourable friend has said that the matter will be dealt with by affirmative resolution of both Houses. That is about as good a guarantee as possible, if the debates that we have had so far are anything to go by.
I am aware of the right reverend Prelate's desire that we should think about what education is for, as well as what it does. There is some overlap, but we should not lose our recognition of the intrinsic value of education.
Lord Renton: My Lords, is it the Government's policy that the students who are shown by their examination results to be the best educated should be given priority of application to become undergraduates at universities? That is my first question, and I have a second. The noble Baroness will no doubt recollect that, early in the Statement, there was a reference to an independent body. What would that independent body consist of? What power would it have to recommend changes to what the Government have put forward?
Baroness Ashton of Upholland: My Lords, the categoric answer to the noble Lord's first question is "yes". We also know that when universities are oversubscribed with students who have very good qualifications, they look beyond that. That is for them to do.
Some of our students get the kind of qualifications that could lead to university but do not go. The challenge for all of us is to ensure that students who are capable of getting to university go to university and that they enjoy and relish the experience and gain from it. The universities must play their part in reaching out to them. Some universities have been felt to be out of the reach of people in some schools and in some parts of the country. They must recognise their role in helping to ensure that students realise that they are not out of reach. The biggest part of the job is getting the best school system for all children, so that we can ensure that they get the right results. That is the responsibility of government.
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I am not sure that I quite understand what the noble Lord, Lord Renton, was looking for with his second question. We plan to review, and, as the details become clear, I will, of course, notify your Lordships. OFFA will be independent and will work closely with the Higher Education Funding Council. We work closely with independent bodies such as Universities UK. If I have not clarified that, I shall discuss it with the noble Lord and place a copy of my reply in the Library.
Baroness Blackstone: My Lords, I very much welcome the changes that the Government have made since the White Paper was published and believe that they will lead to an improved Higher Education Bill. However, does my noble friend agree that we need not only world-class universities but also a world-class system of higher education? That means that we need high-quality courses in all of our higher education institutions not just in some of them. If we are to achieve that, the gap between what universities are able to raise under this new package and what they have to pay out should not be too great.
If the Minister accepts that, will she give a commitment that between today and Second Reading of the Bill in another place further modelling will be done—perhaps it has already been done—to demonstrate the differential impact of this package on different kinds of universities? That would show us what its impact will be and how it will affect in particular the modern universities that will have the problem of a larger number of students needing bursary support and the likelihood that the amount that they can raise through variable fees will be considerably less than some of the research universities. If the Minister could reassure us on that point, and say that work could be done and published in the near future, that would be enormously helpful and would perhaps provide people who are particularly concerned about the effects of variable fees with the information that they might need.
Baroness Ashton of Upholland: My Lords. I could not agree more that this matter is about high-quality courses and a world-class system. Ensuring that universities have adequate funding to achieve that is absolutely critical and at the heart of the matter. It is all well and good for students to go to universities but the courses must be of the quality that we would expect.
I am not able at this moment to commit my right honourable friend to publish material on the matter we are discussing but we are considering the impact of the bursary schemes with Universities UK. We are undertaking modelling and discussing the matter with individual universities. I shall come back to the noble Baroness with the correct answer to that matter.
Lord Naseby: My Lords, is the noble Baroness aware that for those of us who went to university in the 1950s, basically free of charge apart from the county maintenance grant, the step that the Government propose today is essentially a retrograde one? Furthermore, it is for us as politicians very difficult to keep track of the latest bribe that is offered to the Labour

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Back-Benchers in the other place. Given that scenario, the request of the noble Baroness, Lady Blackstone, for modelling to be undertaken of what is and is not on offer is of some substance. Therefore, I suggest to the Minister that it is not adequate to say that she is unable to fulfil that request. How can anyone outside evaluate what is being proposed unless we know the substance of what is actually being offered and, furthermore, are given a guarantee that there will not be further salami slicing of additional incentives to those in another place to support the package?
Baroness Ashton of Upholland: My Lords, in reminiscing about his time at university, the noble Lord will recognise that the number of students attending university in the 1950s and 1960s was considerably lower than now. I believe that the figure was of the order of about 7 per cent. The figure is now of the order of about 43 per cent with an aspiration of 50 per cent university attendance. I make no apology for wanting to see all those capable of obtaining a higher education, contributing to our economy and gaining from the inherent value of education being able to do so. One has to live in the world in which we live. That means that if we are to provide high quality university education to a high number of people, we have to fund it in a different way from that which pertained in the 1950s.
It is also very important to recognise that we seek to ensure that we have a fair and equal system that allows all those capable of obtaining a university education to do so. I shall not apologise for that. I do not consider that this is a matter of bribing Labour Back-Benchers. It is about ensuring that we have a package that works for our students. They are the focus of this department and of this Government. We seek to ensure that our students go to university, obtain a high-quality education and follow high-quality courses from high-quality institutions in a way that is fair and just. We seek to ensure that they also play their part in contributing to the quality of education that they receive.
As I said to my noble friend, I believe that we have done a huge amount of work on modelling. However, I am not at liberty to say what I can and cannot put in the public domain. Much of that modelling was carried out by the department or through Universities UK and so on. Much of it involved discussions with individual universities. Those discussions and that modelling continue. I have given a commitment regarding a review within three years to examine in detail the impact of all these policies.
Baroness Lockwood: My Lords, I very much welcome the Statement repeated by my noble friend today. I congratulate the Government on the general thrust of the Bill and in particular on the measures set out for student support and the emphasis on access. However, I still have one concern that is similar to the concern of my noble friend Lady Blackstone. As the Statement indicates, all universities need extra resources. I am afraid that the variable fee element
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means that some universities will be able to benefit considerably from the variable fee while others will be less able to do so. Some modelling, as suggested by my noble friend Lady Blackstone, would be helpful.
When the Government look at the general disbursement of funding to the universities, will they look again at the element of funding that goes to teaching and to research to make sure that all universities are in a position to benefit from the premium to be paid on these two elements? I think that it is a fact—I am sure that my noble friend the Minister would agree—that if we are to maintain a world-class research system in our universities, we need to have a constant feed-in element to the so-called "top" universities. That very often comes from some of the universities that will not gain much benefit from the top-up fees but nevertheless do a lot in terms of training and preparing some of our best researchers and scientists.
Baroness Ashton of Upholland: My Lords, I believe that I have already paid tribute to the work of many of the new universities in terms of the high-quality, world-class education that they provide for young people not only from this country but also from overseas. Each university will make its own decisions about the opportunities to set fees between £0 and £3,000 that the Bill will give them. They will make those decisions based on a whole range of factors including how they consider that will benefit their university. A number of the new universities were concerned that the high numbers of students from lower socio-economic groupings would leave them with less income. That in part has influenced the package that noble Lords see today which will allow a minimum of 90 per cent of any new moneys to be fed into the new universities to ensure that they are able to develop as they wish. As we have said, we have ensured within the package that students from lower socioeconomic backgrounds will not have to find the relevant moneys. That should have, and will have, an impact on how universities think about the way in which they develop.
The noble Baroness made important points about research which I shall not attempt to deal with now. However, I take the point that it is important that we recognise in all we do that the funding of research and teaching is continued and is highly valued.
Baroness Howe of Idlicote: My Lords, I am one of those who welcome the Government's proposal as a step in the right direction towards greater independence for universities. That does not perhaps apply to the setting up of OFFA, but no doubt there will be plenty of opportunities to consider that in detail. Are the Government, through tax incentives, contemplating any way in which they could make it easier for companies to donate to universities regarding bursaries? There will clearly be a need for more money. One way in which the Government could facilitate greater funds into universities would be in that direction.

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My other very quick point is on incentives for part-time education, a subject raised by the noble Baroness, Lady Sharp. Part-time education and e-learning will be very important. We need to encourage on an equal basis the same funds for universities for it. There are incentives for the students in the Statement, but I am talking about the universities.
Baroness Ashton of Upholland: My Lords, I am grateful for the noble Baroness's comments. She has raised the issue of companies in the House before. We are looking at it already; we have a task force to do so. During the passage of the Bill and our debates, I hope to provide more information on how that work is going. It is an important factor in our debate, in terms of the potential to recognise the benefits that industry receives from graduates and the opportunities that it has to work more closely with universities, which we would wish to see.
In the Statement, I reiterated that my right honourable friend the Minister for Higher Education was working with the funding council in consulting on how the funding system might further support the development of part-time study in higher education. I will, of course, pass on the noble Baroness's comments to him and ensure that they are part and parcel of the work done.
Baroness Warwick of Undercliffe: My Lords, in welcoming the Minister's Statement, I declare an interest as chief executive of Universities UK, which, as she said, has been closely involved in the development of the Higher Education Bill. I want to welcome very much the way in which the Minister and her colleagues have engaged with Members of this House and the other place, as well as representatives of the higher-education sector. From what she said, they have clearly listened to our concerns. The scheme proposed will, in my view, prove an important step towards addressing the financial crisis in all our universities.
The scheme will not resolve the universities' problems overnight, and nor will graduate contributions. Sustained and increased public funding will continue to be necessary. However, the package of measures that the Minister has set out will enable universities to improve the quality of what they are offering students, without leaving the poorest students any worse off than they are under the current system. It is progressive and fair.
I have a question about the Office for Fair Access, or OFFA. It is vital that universities retain responsibility for their own admission decisions. I believe that the House will share some of my concerns on the matter in relation to the position of OFFA. Will the Minister guarantee that the plans for OFFA will not in any way open the admissions process to political interference?
Baroness Ashton of Upholland: My Lords, I can say to the noble Baroness unequivocally that we would not
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wish to see that happen under any circumstances. Universities remain responsible for their own admissions, and so they should be.
Lord Puttnam: My Lords—
Lord Rix: My Lords—
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I am afraid that we have come to the end of the official time for questions. Perhaps we ought to remember that the briefer the questions, the more people are able to join in.

European Parliamentary and Local Elections (Pilots) Bill
Second Reading debate resumed.
4.4 p.m.
Lord Norton of Louth: My Lords, when the House began to fill up at three o'clock, I began to think that a great many of its Members were actually interested in what I was going to say on the Bill. It is very encouraging to see so many noble Lords still present. I want to make one general observation and to raise two specific, but I think very important, points. In so doing, I will reinforce some of what has been said already in the debate, especially by the noble Lord, Lord Rennard.
My opening observation is basic but fundamental. Voting is at the heart of the democratic process. The Bill provides for the use of innovative voting techniques in elections to a legislature—in this case the European Parliament—for the first time. As the Explanatory Notes state, at paragraph 6:
"Ministers intend to continue the programme of pilot voting as part of a programme working towards a multi-channelled, e-enabled general election some time after 2006. Piloting at next year's European Parliamentary elections would represent a scaling up from previous schemes and would be a further step towards this goal".
It is a point also made by the noble Lord, Lord Filkin, his very helpful letter to the Constitution Committee.
In drawing attention to that, I am not passing judgment on the merits of what is proposed, but rather calling attention to the fact that it constitutes the initial step on the path towards a general election in which voters do not necessarily go to the polling booths in the traditional manner. That final goal will constitute a fundamental change to our electoral arrangements.
As I say, I am not arguing against that. If a new method, such as all-postal voting, is employed that has the effect of increasing voter turnout, there is clearly a case for it. Indeed, if more electors vote, in terms of democratic values it would be difficult to argue against all-postal voting. I might also add that there is a case for welcoming it on political grounds. Some research findings suggest that my own party will benefit from all-postal voting. Before the Minister rushes to withdraw the Bill, I should point out that other

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research suggests that the effects will be neutral. An even higher voter turnout in British parliamentary elections would also help take some of the wind out of the sails of those who argue for a new electoral system.
Before we take the steps proposed by the Bill, we need to look carefully at the detail, as several noble Lords have mentioned. The first of my two points concerns a provision embodied in the Bill, while the second is concerned with what is not in the Bill and picks up very much on the point made by the noble Lord, Lord Rennard.
The noble Lord, Lord Filkin, very briefly touched on my first point when he opened the debate. It concerns Clause 8 and the schedule, which precludes by-elections from being held within three weeks before or after the combined European Parliament and local government elections. The Constitution Committee, which I chair, has drawn attention to that provision, as it fulfils the committee's "two Ps" test: that is, it raises an issue of principle affecting a principal part of the constitution.
The committee reaches no judgment on the matter; that is for the House. What it notes is the fact that electors are by statute denied the opportunity to elect a parliamentary representative—other than to the European Parliament—in a six-week period, should a vacancy occur. I quote from our report, at paragraph 14:
"So far as we are aware, there is no direct precedent for the imposition of such a restriction, which could cause the electorate in the affected constituency to be without a representative in Parliament for longer than would otherwise be the case. This may be perceived as setting a precedent with constitutional implications".
My personal view is that there needs to be a compelling case for such a provision which limits the rights of electors. One argument for the provision, as advanced by the Minister in the other place, Christopher Leslie, is that it avoids additional complexity. The noble Lord, Lord Filkin, referred to it today as "unnecessary" complexity. I do not necessarily regard that as a compelling reason. It may be inconvenient but, as long as it is administratively feasible, a by-election should not be excluded during that time period.
Another reason advanced by Mr Leslie is that there would be insurmountable complexity if a Westminster by-election were to be held at the same time as the pilot elections. He did not elaborate so I am not sure if the complexity would be insurmountable because electors would be confused—voting by post for MEPs and councillors and going to the polling booths to elect an MP—or because returning officers would not be able to cope, given the resource implications. We need to know which it is, I suppose it could be both, and provided with a fuller and persuasive justification. The clause requires very careful probing.
I turn to the second point—one of omission—and I do so purely in a personal capacity. There have been exchanges in the other place and some Questions tabled about electoral fraud. My noble friend Lady Hanham and the noble Baroness, Lady Gould, have addressed it. I recently tabled a Question about security of the vote in elections held by all-postal ballots. The noble Lord, Lord Filkin, replied, making clear that the Government
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took the issue seriously and outlined the provisions of the Bill dealing with the offence of personation. I have no complaint about the Answer, nor with Clauses 6 and 7—quite the reverse, I very much welcome them. My concern is with a different aspect: that of the secrecy of the ballot, which was raised by the noble Lord, Lord Rennard. I agree strongly with his comments.
The purpose of the Parliamentary and Municipal Elections Act 1872, better known as the "Ballot Act", was to ensure that when one voted, whatever promises may have been made to others, no one knew for certain how a person had voted. It was a crucial means of getting rid of bribery and undue influence. Indeed, I quote from Robert Blackburn, in The Electoral System in Britain, at page 103:
"The Ballot Act did away with the traditional, open method of voting, and instead introduced the modem system whereby no-one except the voting citizen him or herself need know how he or she in fact voted. As a direct and immediate result, intimidation and fear of reprisals were radically undermined".
Section 66(3) of the Representation of the People Act 1983 provides that no person shall interfere with a voter when recording his vote. The problem with postal voting is that we cannot guarantee the secrecy of the ballot. Like the noble Lord, Lord Rennard, I refer here not to the secrecy in respect of receipt by the returning officer but secrecy in the casting of the ballot. Lack of secrecy may give rise to vote buying, though I suspect the biggest problem is likely to be that of undue influence being exerted in properties where there is multiple occupancy. For example, parents putting pressure on sons and daughters of voting age or the owner of a care home encouraging residents to vote for a particular party. The polling booth guarantees secrecy. The sitting room does not.
As the Explanatory Notes record, what is proposed raises a problem in respect of the European Convention on Human Rights—again noted by the noble Lord, Lord Rennard—which embodies the principle of,
"free elections at reasonable intervals by secret ballot".
The Explanatory Notes go on to say, at paragraph 24:
"The effect of the innovative voting systems on the secrecy, security and accessibility of the ballot is something on which the piloting scheme is designed to generate evidence, in order that decisions on the wider use of these or other systems can be proportionate and soundly based".
I would like to know what means will be employed to determine the effect of all-postal voting on the secrecy of the ballot. What mechanisms will the Electoral Commission employ in order to test for any undue influence of the sort that I have mentioned? To what extent has that been thought through?
I also wonder why secrecy is to be addressed as a "consequence" of this pilot scheme. I appreciate that it is a pilot, but, given the ECHR concerns, should not the issue have been anticipated and some provisions included, the pilot elections serving to test the robustness of those provisions? Certainly, in respect of disabled voters, proposals have been put forward by the Disability Rights Commission. What is being done, for example, to ensure that visually impaired

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voters are sent tactile voting forms? Implementing such proposals, I would have thought, would help make the Bill more convention-proof.
Those are the principal points I wish to raise. I do have some concerns about subsections (4) and (5) of Clause 2. As the Explanatory Notes concede, providing "polling progress information" to the political parties may cause concern under the ECHR, not least in respect of privacy. I appreciate that the provision of the information will be helpful to the parties and save them no end of time. I am not surprised that the Minister said that all the parties support that particular provision.
However, under existing arrangements, citizens are under no obligation to tell a canvasser whether they have voted or, if outside a polling booth, who they are. Under this provision, one does not have that option. I can understand the argument that voting should be deemed a civic duty and therefore the fact that one has done one's duty should be a matter of public record. None the less, I have some concerns on privacy grounds.
From my earlier comments, the Minister will have realised that I am not unsympathetic to the Bill. However, it is a Bill of some constitutional significance. I think we would be failing in our duty if we did not give it the most careful scrutiny. I believe that some things can be achieved before the Bill completes its passage. I consider it essential that we see a copy of the order as soon as possible. In the mean time, I look forward to the Minister's response to the concerns that I have raised.
4 p.m.
Lord Greaves: My Lords, this is the second time in a week that I have had the privilege of directly following the noble Lord, Lord Norton of Louth. On this occasion I agree with a great deal more of what he said than I did last Monday. Whether that makes me some form of Conservative, I am not sure. People can make a judgment on that.
I do not accuse the Government of deliberately seeking a system which will lead to fraud, corruption and intimidation. However, I believe that they are walking blindfold, with earplugs in their ears, towards such a system. I believe that it is our job in this House at least to flag up some of the problems which universal postal voting has in store.
In expectation of this Bill, I made a speech on this subject in the debate on the Queen's Speech at col.250 of the Official Report for 2 December 2003. I shall not repeat what I said then, except to say, once again, that turnout may mean different things to different people. The number of ballot papers returned may not necessarily equal the number of people who fill in those ballot papers.
Whatever the Electoral Commission and the Government believe, a great deal of evidence suggests that, in all-postal voting for elections, a significant number of votes are filled in by people who are different from those to whom the votes were addressed. Much such activity is not malicious and it
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is not deliberately fraudulent; nevertheless, it is wrong. There is much evidence of people voting on behalf of their husbands, their children or postal voters who are away. There is evidence of people taking ballot papers and filling them in at the bus stop and so on. Yet, in his introduction, the Minister quoted the Electoral Commission as saying that there is no evidence of an increase in fraudulent activity.
The problem is that no one has checked systematically to see whether there is such evidence; there is simply a reliance on people to complain. No one has carried out a proper survey to find out how much of the increased turnout in many elections is real and how much is simply due to all the ballot papers from a particular household being sent back by one or two people in that household.
I give an additional example of a friend of mine—Councillor David Roberts-Jones in Stockport—who stood in a by-election in Stockport some 14 or 15 months ago. He reports:
"I spoke to a nice old lady, who said she had already voted for me by post. I then asked her about her husband. She burst into tears and told me he had passed away two months previously. I apologised profusely. 'Don't worry', she said, 'You weren't to know, and anyway he's voted for you too'".
That happens all the time.
Until now, postal voting has accounted for a small proportion of the number of votes cast. Anyone who has been involved in elections knows that that type of thing goes on, but it has not been a significant factor. The problem with all-postal voting is that the scale of the problem will suddenly increase dramatically.
For many years, we have all known of the minor scandal that has occurred in, although by no means all, many old people's care homes. I remember canvassing in the Brecon and Radnorshire by-election nearly 20 years ago for the person who is now my noble friend Lord Livsey of Talgarth. I came across an old people's home in the middle of the countryside. The person with whom I spoke was not the owner but she was employed to look after the old people. She said, "There is no point coming here. Mrs so-and-so makes sure they always vote Conservative". I asked, "All of them?". She replied, "Yes, they all vote Conservative, but don't worry, me and my husband are voting for your man".
That type of activity has always occurred. A few years ago, I made inquiries of a friend of mine who was a care assistant at an old people's county home in my ward. I asked her the best way to arrange to spend half an hour there in order to chat to the residents. She said, "It's a waste of time. None of them will even recognise you now". Therefore, I did not go. A few days later, she said, "The postal votes came but don't worry, they all voted for you". This happens all the time. It has occurred on a small scale and many care home organisations have tried to clean up the practice a little. Nevertheless, it has happened. However, the current scale of the operation leads me to believe that the incidence of fraudulent voting may he large. Certainly much anecdotal evidence suggests that that is the case.

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All postal voting is wide open to scams. A recent case in Hackney came to court. It was one of the few ones that ever reached court. People were punished. I believe that Liberal Democrat and Conservative councillors were involved. So it is not just the Labour Party that does this kind of thing. I am not making political points. In that case, they had registered a significant number of voters at houses where no one lived and had then applied for postal votes. It is very easy. One does not have to apply for the postal votes, all one needs is the registration. That is why the Electoral Commission has suggested that individual registration and a much tighter registration system is necessary before we can consider moving to all-postal voting. There is useful experience of that in Northern Ireland. In my view, it would be entirely wrong to have all-postal voting in elections of this scale without individual registration.
Noble Lords have already explained the problem with houses in multiple occupation, student houses and student colleges. There is huge potential for misuse of piles of votes coming through the letter box on to the table inside the door. Who will do what with them? Unscrupulous people will simply hoover them up and send them back. There is no way, so far as I can see, that that can be prevented.
There are many details in the Bill, such as declarations of identity, marked registers and so on that we shall discuss in Committee. I believe that the fundamental problem without individual registration is that all-postal voting is a recipe for fraud and corruption. There are political parties in this country—we were talking about the British National Party yesterday—which do not seem to have discovered postal voting and how to organise it. After the last general election the BNP's organiser in Burnley was put in prison for forging the nomination paper. If that party is prepared to do that, what will it do with postal voting once it decides what to do with it? I think I could make a great deal of money explaining how to rig the system. Of course I shall not.
The noble Lord referred to the Ballot Act. In it there are three fundamental principles: first, one votes in person; secondly, one votes in secret; and, thirdly, as a result of those two items, one is protected from bribery and intimidation. The noble Lord, Lord Norton, put his finger on the issue—that secret voting is not something that is offered to people as an option, it is made compulsory for people because it is only by making secret voting compulsory that one can stop other people intimidating and bribing them. Even if people want to show how they have filled in their ballot to other people, that is illegal and must remain so. It is a fundamental part of the system.
My view is that the safeguards of the secret ballot do not need to be relaxed at this stage. The evidence is that more people are finding ways, particularly through postal voting—but not only through postal voting—to corrupt the system and to defraud the rest of the electorate of a true election result. It needs strengthening now and not weakening. I believe that the system, as set out in the Bill, will sooner or later lead to fraud and
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corruption in our electoral system on a large scale. Perhaps that will not occur in these pilots, but eventually if the Government move to a comprehensive all-postal voting system we shall undermine the very basis of our democracy.
4.23 p.m.
Baroness Gibson of Market Rasen: My Lords, I am very pleased to be making a short intervention on what I think is an extremely interesting Bill, especially for those of us who have taken an active part in parliamentary and local elections and their processes from a tender age.
I first helped to run a political committee room in Lincolnshire in the late 1950s. I have continued to help up to the last election—now in Greenwich and Woolwich—and I have no doubt that I shall continue into the future.
It is slightly ironic that in many parts of the world a democratic process—that is, a freedom to vote for the party of one's choice—has been only a dream for so many people for so long. When in such countries people get an opportunity to vote, they will put up with any inconvenience to participate. Will any of us forget those long lines of black South Africans standing in very hot sun in order to vote for the first time in their lives? Some of those people were quite elderly. It was a very moving sight. And yet today, we, who have had for so very many years the right to vote, have to worry now about the low turn-out at elections and what it means for our democracy.
I welcome the Bill and its pilot proposals, which I hope will pave the way for future innovative methods of voting, a number of which have been mentioned already. The main aim of the Bill is to encourage people to vote and to allow the use of different methods of attracting voters.
When I think of the different places in which I have cast my vote over the years, I get a picture in my mind of drab and draughty village or civic halls, schoolrooms, church outhouses, which are usually quite bare, or even, in rural areas, the front room of a helpful villager. Most were not particularly welcoming environments. So, in an era when comfort is part and parcel of most people's lives, anything that can be done to make voting more attractive must be done.
The Bill allows participating regions to consider different initiatives to pave the way for an updated voting system. One obvious place to start is the provision of facilities for voting in places where people normally congregate—supermarkets and chain stores, for example. We should try voting over two or more days. This happens in a number of other countries and it may be particularly helpful in rural areas.
Unlike the noble Lord, Lord Greaves, I like the idea of everyone voting by post. I believe it would prove to be popular. It is easy to understand and gives everyone a chance to vote without too much effort and at a time of their convenience.
I understand the worries expressed in relation to fraud, but please let us not believe or pretend that misdemeanours have not occurred in the past. I speak

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here as a past Labour Party organiser. Misdemeanours are not new. I shall mention only two of the milder forms of naughtiness.
Like others, I am sure, I remember the days when a doctor had to sign to certify that a person was unable to attend a polling station in person and therefore should be eligible for a postal vote. Some of the doctors' signatures on the postal vote application forms were, to say the least, suspect. For one thing, they were legible—and most doctors' signatures are not legible. I shall say no more on that particular area.
As regards proxy voters, how many have cast a vote in line with the wishes of the person they were asked to represent? Not all by any means. So it is not a new phenomenon we are faced with in ensuring that in any future legislation safeguards against misdemeanours are well in place.
Finally, I end in the same vein in which I started my short contribution. I welcome the provision in the Bill that allows information relating to voting to be available to political parties prior to the close of the polls. Like other active Members of the House, I cannot count the number of cold and rainy evenings that I have spent knocking on doors urging people to go to vote before the polls closed. Those in the houses in question became particularly angry if they had already voted, and especially if they were watching their favourite television programmes. Over the years I have been threatened by dogs, received a barrage of verbal abuse, and on one occasion I was even threatened with a gun. I am pleased to inform your Lordships that I was younger then and could run faster than I can today.
The main aims of the proposals in the Bill are to encourage more people to use their democratic right to vote. I, for one, sincerely hope that it will succeed and that we can learn from it, build upon it and improve the number of our citizens who vote accordingly.
4.29 p.m.
Lord Goodhart: My Lords, we in my party opposed the Bill in the other place. We did so for a number of reasons: partly because we believe that in elections held across the nation as a whole—such as the European parliamentary elections—all constituencies should vote on the same basis. We did so also, and perhaps more importantly, because we believe that it is premature to introduce all-postal voting even on a pilot basis. As my noble friends Lord Rennard and Lord Greaves pointed out, the safeguards against abuse simply do not exist at present, even if it is assumed that they can be provided.
Of course, it would not be appropriate to oppose the Bill unconditionally in your Lordships' House. That would be inconsistent with the practice of this House, which is to seek to improve Bills rather than to reject them, but this Bill certainly needs improvement.
We accept that if pilots are to be held in 2004, the north-east and east midlands regions are indeed the appropriate ones. We also believe that there should not be a third region. Two is enough and the region
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that may be the runner-up—Scotland—is one of great size where there are obvious difficulties with postal deliveries to some of its more remote inhabitants.
We welcome the Government's assurance that they will not introduce any other voting methods, such as e-voting, following the Electoral Commission's report, which stated that the technical and security problems for e-voting have not yet been solved. The safeguards are simply not in place; nor was there any evidence that e-mail voting significantly increases turnout. Indeed, it is doubtful whether we should in any case use a voting system that is available only to those who have home access to the Internet, which in most regions is less than 50 per cent of the electorate and in others not much more. That is entirely different from the telephone, for example, which has a much higher access ratio.
There is evidence that all-postal voting significantly increases turnout. It is the only method so far tried that has succeeded in doing that. I can think of some other methods. I hesitate to suggest that all television companies should be required to air their most boring programmes all through election day, but that might have some effect.
As the noble Lord, Lord Norton of Louth, pointed out, there is serious concern about the secrecy of the ballot, which was an historic battle won by Gladstone's government in 1872. That is an issue of great importance. There is a real risk of pressure from within a voter's household: parents putting pressure on children, husbands putting pressure on wives or the other way round.
In some circumstances, there may be pressure from outside the household to vote in a particular way and therefore to show someone a completed form before it is returned. That practice is not unknown among Labour MPs, who have in the past been required to show ballot forms for party elections to their Whips before returning them. That may be a hypothetical risk in Great Britain, but it is plainly not in Northern Ireland. Frankly, it would be unthinkable to have all-postal voting there, but who can say that what happens in Northern Ireland now could never happen in any other part of the United Kingdom?
There is the risk, especially in houses in multiple occupation, of people getting hold of and completing voting forms meant for other people. Again, that is a real risk and I wonder whether the Government intend to take any steps to find out whether there has been such abuse. Of course, measures could be taken to reduce that risk—especially registration on an individual basis, not on that of the household, with a signed registration form from each elector.
The noble Baroness, Lady Gould of Potternewton, referred to Clauses 6 and 7. They are welcome, but they do not go nearly far enough to deal with the problems, particularly in houses in multiple occupation. We accept that it is impossible to change the registration system before next June's election. But will the Government accept the Electoral Commission's view that pilots should not be rolled out on a permanent basis until the safeguards—in particular, an individual registration system—are in place?

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My noble friend Lord Rennard drew attention to the problem of the late return of postal votes. It is plainly right that postal voters should be entitled to vote by post on polling day. I suggest therefore that, whether or not it is desirable to extend the counting of postal votes for a further period, any postal votes received on the day after polling day, which must therefore have been posted on polling day, should necessarily be counted in all postal-only elections. That might delay counting, but there would be no problem in the European elections, in which votes cast on Thursday are not counted until the following Sunday. That change in the system would cause no problems on this occasion. It may be possible and desirable to delay counting of local election votes until Friday afternoon, Saturday or even Sunday. Are the Government prepared to consider allowing postal votes received on 11 June to be included in the count for EU and local elections this year?
There have been complaints from the Disability Rights Commission and the RNIB. All-postal voting makes it easier for some people with mobility problems to vote, as they do not have to make a special application for a postal vote or arrange for someone to assist them in getting to the polling station. But some disabled people, especially those with a visual impairment, will suffer from the lack of assistance available in polling stations. The Disability Rights Commission complains about the lack of a right to require a ballot to be issued in Braille or with a voting template. Are the Government prepared to act on those complaints either for the pilots or before the more general roll-out following them?
The Government say that a staffed delivery point at which ballots can be handed in will be made available in each local authority district. But the Local Government Association and the Electoral Commission say that there should be a delivery point in each local authority ward, not just in each local authority district. One point for a whole district would be inadequate even in an urban area and would be totally useless in a large rural district. The noble Baroness, Lady Gould, supported the call for accessible and publicised delivery points. Will the Government accept that there should be one delivery point per ward as an interim step, at any rate, unless and until it becomes apparent that there is no significant need for it?
The noble Lord, Lord Louth, and the Constitution Committee in its report have drawn attention to the fact that the Bill excludes the possibility of Westminster by-elections for a six-week period. The reference to a six-week period is an underestimate; it should be seven weeks—three weeks before 10 June, on the 10 June and for three weeks after that date. Assuming that elections are held, as customary, on a Thursday, that would exclude the three Thursdays before 10 June and the three Thursdays after it, as well as 10 June itself. That means that the last date on which a by-election could be held before 10 June would be 13 May, after which the next date would be 8 July. I can see that a by-election—particularly, perhaps, if it is held before the European election—might distort
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the result of a pilot scheme by reducing the turnout. But excluding all dates between 13 May and 8 July is too long. I wonder whether the period should not be reduced by a week at each end.
My next point is that the Bill has not yet gone to the Delegated Powers and Regulatory Reform Committee. Clause 10 proposes that the order under Clause 1 should use the affirmative resolution procedure. The order under Clause 1 is the order that identifies the pilot regions. That, of course, is correct. That is a very important order and it should use the affirmative resolution procedure. An order under Clause 2—the pilot order that implements the main order—will also include some very important provisions, but, as the Bill is now drafted, it will require no parliamentary procedure at all. Therefore, should the Bill not require at least the negative resolution procedure before an order under Clause 2 can be implemented?
Finally, I turn to a point raised by the Local Government Association. Will the Government undertake to pay all additional costs that are incurred in local authorities in the pilot areas? As I said, this is not a Bill with which we are happy. We will not, in your Lordships' House, set out to wreck it. But we think that there are important and significant changes that should be made: we shall do what we can to ensure that those changes are made.
4.41 p.m.
Earl Attlee: My Lords, I, too, am grateful to the Minister for his usual clear and lucid introduction. I have an interest to declare: I have lived in the East Midlands region since July 1993. Both Bills pilot alternative voting methods in order to increase voter turnout. Noble Lords will be very interested to hear that despite my obvious interest in current affairs and politics, and despite having canvassed during general elections in adjacent constituencies, I do not have the foggiest idea who my MEP is, what his or her party is or what he or she has been doing in Europe.
If I do not know, it is not surprising that the electors do not know or do not care. Has the Minister done any research on what proportion of the electorate knows who their MEP is? The noble Lord, Lord Rennard, talked about the effects of the infamous closed list. I think that he is entirely right. We cannot expect the Minister to answer all our questions or points when he responds, but will he undertake to write to us in response to all the questions identified, as such, by a question mark in Hansard?
I listened with interest to the speech made by the noble Lord, Lord Rennard. Of course, he is not an election junkie; he is a genuine expert. During later stages of the Bill, his experience, wisdom and counsel will be of great benefit. I just wish that we had someone of his skill in our party. He identified a number of difficulties with all-postal voting—in particular, the lack of secrecy.
I disagree with the argument put forward by the noble Baroness, Lady Gould. She pointed out the role of the tellers at the polling station. However, in that

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situation, voters do not need to give information to anyone who is not an election official, as pointed out by my noble friend Lord Norton of Louth.
The noble Lord, Lord Rennard, also made interesting observations about the situation inside a family. I can see very severe difficulties possibly arising; we may not actually see them, but they may occur. The noble Lord also talked about the problem of voting too early in the campaign to make an informed decision.
The noble Baroness, Lady Gould, raised a number of interesting points. She touched on the issue of possible fraud, about which she appears relaxed. But I think that the purpose of the pilot is to determine whether there is a problem with fraud. I agree with the negative view that she takes of a national pilot. Apart from it being a contradiction in terms, it would make it much more difficult for the Electoral Commission to study the results of the pilots. She was also relaxed about the problem of personation. She pointed out that there is no identity check at the polling station. She is right. However, at a polling station, there is a real risk of detection of personation.
Baroness Could of Potternewton: My Lords, I am sorry to interrupt the noble Earl. I am not relaxed about any of those points as he suggests. I am certainly not relaxed about personation. My point was that personation has continued. The Bill is likely to prevent it occurring in the way in which it has occurred in the past. I am certainly not relaxed about it.
Earl Attlee: My Lords, when I selected that word, I wondered whether I would come unstuck. I entirely agree with the contribution of the noble Baroness.
In a home in multiple occupation, there is a risk of immature youngsters thinking it merely being a bit naughty to post all the votes on the carpet. There is a real danger that they could find themselves in serious difficulties.
I assure my noble friend Lord Norton of Louth that we are all interested in his views. He raised the problem of the prohibition of by-elections for a six-week period. I believe that the noble Lord, Lord Goodhart, touched on that problem too. My noble friend Lady Hanham and I will have to consider that matter with great care.
The noble Lord, Lord Greaves, also was concerned about fraud. Perhaps we should consider putting a greater duty on the Electoral Commission to investigate whether any fraud has taken place and providing it with the necessary tools to do that. The noble Baroness, Lady Gibson, made some interesting suggestions based on her practical experience of elections. Of course, I am a complete newcomer to the business. I am not sure what returning officers would feel about keeping polling booths open for two days, but I take it that she is referring to a conventional election rather than to a postal one.
It is quite clear that there is only just enough time for the authorities to make the necessary arrangements to implement the Bill. The Electoral Commission's report of December 2003 indicated that firm decisions were
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needed by mid-December. We on these Benches will he as helpful as possible, while properly scrutinising the Bill as my noble friend Lady Hanham has indicated. We therefore intend to help the Minister by tabling amendments in Committee that would specify the north-east and east Midlands regions in the Bill. As the Bill may be considered in Grand Committee, we could not force a Division, but the Government can remove any uncertainties for the authorities by accepting our amendments or by tabling their own.
More controversially, we should also consider excluding other regions, as recommended in the Electoral Commission's report. I am sure that all noble Lords have found the report to be good reading and very useful. My noble friend Lady Hanham touched on the issue of using Scotland as a pilot region. The report refers to the risks identified by the regional returning officer for Scotland. They are cumulative and centre on: the legislative timetable; the general lack of experience in Scotland of all-postal ballots; the lack of time available for forward planning; the recent busy electoral history in Scotland; issues relating to the security of the ballot; possible problems of delivery and return of ballot papers; the very significant staffing implications of an all-postal ballot; concerns about the ability of suppliers to deliver effectively; lack of time to test critical computer systems—although we do not mean e-voting—and resources to plan for and deliver the election. Those risks were identified by the returning officers, who would have to implement an all-postal ballot in Scotland.
On Scotland, the report concludes,
"and in the light of the unanimous views of the returning officers, the Commission does not feel able to recommend that Scotland is suitable to undertake a pilot scheme in 2004".
Considerable uncertainty and nugatory effort could be avoided if Ministers were to accept our suggestions now.
E-voting makes voting and counting easier, but it does not increase turn-out, for reasons identified by all noble Lords and in various reports. We oppose e-voting for now. The Minister in another place indicated that no e-voting will take place in 2004 and we wish to see that confirmed in the Bill. That is not merely because our confidence in Ministers' assurances at the Dispatch Box has been shattered as a result of recent events, but also because it would remove any uncertainties and lingering thought in industry that there might be e-polling. As a result, entrepreneurs would not waste their efforts and resources.
Much concern has been expressed about the secrecy of postal voting systems. This applies both to casting and counting. As suggested by my noble friend, we will need to look very carefully at the arrangements for opening postal votes, the possibility of using two envelopes to separate the ID from the ballot paper and, of course, the scrutineering arrangements.
My noble friend Lord Norton of Louth was extremely concerned about the security of voting, as were other noble Lords. He said that:
"The polling booth guarantees secrecy. The sitting room does not".

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The Minister will tell us that the detailed arrangements are to be covered in two orders. These orders must be in draft form now; they must exist. If they are not ready, I suggest that the Minister should withdraw the Bill now because there will be insufficient time to make the necessary arrangements.
If noble Lords were able to consider the draft orders before Committee, many of our amendments would be unnecessary because we would know the answers. We would know that the Minister had already covered various points. Seeing the orders would be extremely helpful because we do not want to waste time, we want to get on with the Bill.
As observed by the noble Lord, Lord Goodhart, the Bill provides for two orders, one subject to affirmative resolution and one to negative resolution. It may have been appropriate to have two orders when the Bill was originally drafted, but presumably both of the orders will be tabled almost immediately after the Bill receives Royal Assent. This Bill provides for a "one off" event, the pilots, and will not recur. I cannot understand why there is not one, all-encompassing affirmative order.
The Minister may say that he needs a negative instrument facility to correct and amend any possible errors that might arise. But if he finds that an error has been made in the order, we will regard that as a serious matter since the time-scales are so short. There is no margin for error and if anything goes wrong it will be extremely difficult to make the pilots a success. So we would certainly ensure that any negative amending order was fully debated on the Floor of the House. Conversely, if the Minister takes the single affirmative order route, I am confident that the House would be sympathetic to the need for speed in the unlikely event of an error arising.
I, too, received the interesting brief from the Disability Rights Commission. At the very least, I know that all noble Lords will seek to ensure that the Bill does not make matters worse for the disabled. However, I think that we should be able to make some improvements. The pilots provide a good opportunity to trial improvements, provided—this is the big caveat—that there is no chance that those improvements might distort the data to be captured from the trial and analysed by the Electoral Commission. In view of the relatively low numbers, that is unlikely to be a problem.
In conclusion, I look forward to working with the Minister on this important, if simple, Bill. Deliberations at later stages will be far more straightforward if the Minister lets us see the draft orders that must be available now. If they are not, then I suggest that the Minister is in deep difficulties already.
4.53 p.m.
Lord Filkin: My Lords, in rising to respond to what has been a good debate I should like to thank all noble Lords who have taken part in it in such a thoughtful and reflective manner. That will do us proud as we move towards our consideration in Committee. As I normally do, I undertake to write to all Members whose questions I fail to answer either from want of
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time or wit so that there will be an opportunity to consider those before we get to Committee. However, I will not go as far as the noble Earl, Lord Attlee, adventurously sought to suggest; that is, to respond to every comment with a question mark set out in Hansard. I would be trapped into answering rhetorical questions, which would burden us both.
I turn first to the point raised by the noble Baroness, Lady Hanham. Yes, the Bill applies only to the European Union and local government elections to be held on 10 June. She also mentioned the report of the Electoral Commission and was quite right to say that the commission made positive recommendations about the two regions which we have already announced. It then set out a hierarchy of other regions where it had varying levels of doubt. So positive recommendations were made about two regions and the issue was left open with doubts on others. I shall say no more on that at this point because we shall consider it further in Committee. However, I wanted to avoid leaving the impression that the commission had made positive recommendations for every region, because that was not the case.
The noble Baroness also raised the issue of Royal Mail capacity. She is absolutely right—that is a crucial issue. There have been considerable discussions with the Royal Mail. Adam Crozier, the chief executive, has affirmed to us that its contribution to a postal election is the highest priority the Post Office has, apart from the delivery of money to the post offices themselves. One will understand, therefore, what a high priority that is. So it is aware of the importance of this to its reputation and already has a strong central team in place.
The planning process has gone as far as considering what would happen were there to be local postal strikes and how the Royal Mail could be sure that it still fulfilled its obligations to democracy, which is what it is doing in this case. We will no doubt come back to that issue in Committee but, just as an opener, I wanted to make it clear that an important issue was concerned. We had had discussions with the Royal Mail and it is taking the matter very seriously.
The noble Baroness, Lady Hanham, raised important issues about the Disability Rights Commission. We have met representatives from a range of disability organisations which have, quite rightly, expressed concerns about using only one channel. Provisions are made within the pilot orders for accessibility of delivery points and the equipment that must be provided to assist disabled voters. We will be looking to address the concerns expressed by these organisations in consultation with them during the development of the pilot order. I hope to be able to say more on that in Committee.
On the important, if complex and technical, issue of envelopes in one-piece mail, as I would not pretend to be a world expert in this matter, we will debate it in Committee. It is an important issue. Electoral administrators and suppliers have extensive experience of producing secure and effective forms of ballot papers and enveloping systems, and we intend to work closely

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with the administrators in the regions, the Electoral Commission and others to ensure that secure formats and systems are used in these pilots. Again, we will be learning from our experience on the three previous rounds of pilots.
The noble Lord, Lord Rennard, gave, not unexpectedly, a thoughtful contribution to the initial stages of the Bill. He suggested that the Bill was premature. Let me say one or two words about why I ask him at least to keep an open mind. This is a significant change in electoral arrangements. We should proceed with caution, but the evidence of the scale of improvement in the voting would mean that we would be wrong not to continue progressive experimentations in the way we are doing. By that I mean that the increase is not 15 or 16 per cent on 60 per cent, but 15 or 16 per cent on 35 per cent or so. Proportionately, it is a very significant increase in the turnout response, and we hope it will be sustained.
I do not think the best way of proceeding is to wait until the utopian position when we know the answer to every single question about fraud, security and secrecy, which have been quite rightly raised in this debate. Doing so would probably mean that we would never move at all. The way in which we are moving, which I think is right, is step by step, with a process of research and evaluation at each step. We are using the processes of piloting to address the questions raised in debates such as this and using the Electoral Commission and other mechanisms to do so.
In other words, not being able to give a perfect answer to every question at this stage is not a reason for not moving forward but is a reason for marking those concerns and trying to use the process of progressive, incremental piloting, the mechanism by which we seek to rebut or address concerns and issues. I will say no more on that at this point, but that is why I think the proportionate and progressive approach we have adopted on the Bill on piloting to date is right in principle, rather than waiting until we have a perfect and total system. Having said that, I have noted the points made by the noble Lord, Lord Rennard, and others, to which we will come back subsequently.
The noble Lord made a point about the difference between a postal voting timetable and the campaign timetable. That is a point for reflection, but our electorate are grown-up and mature and can use their own judgment about when they want to vote. I can conceive of situations in which people will know in which direction they want to vote, as there are life-long Conservative, Lib Dem and Labour voters, who will vote without thinking. Others may not do so, and they have the opportunity to delay their vote right until the end, when they have heard and, one hopes, benefited from the election material and the debate in local or national media.
People also have the opportunity to vote on the day itself. That touches on, without totally addressing, the point raised by noble Lords. They can vote on the day itself by going to the particular local delivery point—or whatever ghastly term we have invented—to put their vote in the box. They could also go to that place
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and vote there and then put it in the time-honoured box. People have a choice, and they can make their judgments about when they believe it appropriate to vote.
There is not a self-evident or simple answer to the problem of HMOs. We are fully aware of the issue, which is most important for registration officers, the Government and the Electoral Commission. We may be able to say more in Committee, or it may be one of the issues of which there must be very serious evaluation afterwards, to see whether exceptional measures are required in such circumstances.
The noble Lord, Lord Rennard, raised the question of being surprised at there being a combination of the EU and local government elections, with the piloting process happening at the same time. I would have to look back into the history, but I trust that there was no misapprehension in that regard. However, that process is important because it gives us the Ability to test two things at once. First, there is the application of an innovative voting method of all-postal voting at a regional level, which has never been done before. I nod with due obeisance to the noble Lord, Lord Norton of Louth, for recognising that this is an election to a legislature. He made that point clearly and well, and I respect it. Secondly, we are looking at piloting for two elections at the same time—or two or more. Two measures are being dealt with in a novel way, which is potentially important to evaluate. There is much to be learned from the set of pilots that we propose.
The noble Lords, Lord Rennard and Lord Goodhart, if I recollect correctly, raised the issue of secrecy. It is clearly a fundamental issue, and I would be foolish frivolously to say that there is no conceivable situation in which there could not be a problem. One can conceive of the possibility of pressure, although it may not be extensive. Certainly, under Clause 4, the Electoral Commission will be required to report on the elections, and in doing so we shall expect it to consider issues of secrecy. Any such issues would normally be considered by the commission, and it is a particularly important issue.
We have also been working with the electoral administrators to ensure that literature and systems are used that provide for secrecy, and that people are reminded of the importance of secrecy. Time will not allow me to say more, but I mark the importance of that matter.
A number of noble Lords spoke on the issues of fraud and security. Again, I cannot do justice to all the points made, for reasons of time, but I shall do my best to come back with written responses. However, I shall give a quick menu of some of the issues that we are considering. No final decisions have been taken, but the menu will give noble Lords a flavour of the issues that we are reflecting on. Among these are the facility for people to report instances of fraud or coercion by telephone; security statements that require a voter's signature, which will be mandated, as I indicated before; comparing signatures on security statements with signatures on file; checks with a sample of people marked as having returned a ballot paper to check that

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they did send in a paper; inclusion of secrecy warnings on voting and proxy voting literature; repeated warnings as to the penalty for fraud; extending the scope of the secrecy rules to cover all postal provisions; and so on. We shall return to those issues in more detail.
I note the interesting point on weekend voting made by the noble Lord, Lord Rennard. Although it is a point, he will not be surprised to hear me say that I do not think we are likely to introduce it at this point. No doubt, however, we will reflect on it.
The noble Baroness, Lady Gould, asked whether extra money will be available. The short answer is "Yes". The Government will cover the additional costs that result from holding the elections on a pilot basis. As one would expect, however, local authorities will be expected to pay the costs that they would have incurred if the elections had been held on the traditional basis. That is the normal agreement with local authorities on new burdens, as the noble Baroness, Lady Hanham, knows better than I do.
I thought that the noble Lord, Lord Norton, made a very measured and thoughtful contribution. I thank him and the committee for marking up these important constitutional points for us. I think that, in a sense, I have already referred obliquely both to the issue of secrecy and to the legislative point.
I have not yet referred to the exclusion of Westminster elections, to which I shall return in more detail. However, the central point, as I think the noble Lord inferred, is the concern about complexity and confusion. We will reflect on whether it is possible to reduce the period of exclusion in the light of concerns that registration officers might have if, late in the process, they suddenly found that they had another election on top. That is part of the problem—no one knows when there will he a by-election, whereas people can plan for the elections that will be legitimated as a product of the Bill.
Visually-impaired voters are part of the issues on disability that we will come back to in more detail.
The point about marked registers was extremely interesting. I know of some people who have been reluctant to give their names outside polling booths—maybe they are cussed people, or not. The point is that going to a polling station is effectively a public act. It does not mean that you will necessarily be seen, but you will have been seen to go in there. It is true that no one knows whether you actually voted or not, or whether you spoiled your ballot paper, but it is a fact that you have been seen. So it is not a private act, even though, quite rightly, your vote is private.
I thank the noble Lord, Lord Greaves, for the tone of his speech. It was reflective and deeply concerned about some of the issues. I respect that he is deeply concerned about some of the issues. I think the best way to identify these issues is to have pilots. A point that I do take, and on which I shall reflect, is whether a system of identifying problems that relies fundamentally on complaints is sufficient. I think that
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that is a good point. I do not think that that is exactly the position, because the Electoral Commission has a duty to look proactively as well.
However, I think that we must look particularly at the kinds of concerns that are unlikely to manifest themselves through complaints and see whether there are identification mechanisms for addressing them. This is not a process of having an academic debate about the extent of fraud; it is to try, through the pilots, to find ways of reducing fraud so that we all have more confidence about taking innovative voting methods that work forward into the future. I take that strongly, and I take the challenges in relation to the ballot Act as well.
I thank the noble Baroness, Lady Gibson, as ever, for her thoughtful, enjoyable if slightly frightening and open candour about some election processes. The noble Lord, Lord Goodhart, also urged that the television companies should be encouraged to put on boring programmes. I hope not; I do not think they need any encouragement.
Lord Greaves: My Lords, perhaps they could be encouraged to put the Parliamentary Channel on all channels that day.
Lord Filkin: My Lords, I have even met people who have watched it, which surprises me.
The point about the entitlement to vote on polling day is interesting and we will reflect on it. In a sense, I gave an answer already. They can vote on polling day. It requires them to walk down the road and vote in the place that exists as a consequence.
I must turn to the noble Earl, Lord Attlee, and I apologise to other Lords for racing past. I note his warning about putting the two regions in the Bill. I mark the point that the Electoral Commission was not excluding consideration of other regions: it was only making a positive recommendation about two, while leaving some questions open—perhaps the next three or four—with a number at the bottom where it was clearly saying "no". There were three broad categories and gradations within those categories.
I hope that the noble Earl does not move an amendment on e-polling. I make it clear, and I give the statement from the Dispatch Box, that this Bill does not allow e-polling. It will not be done, but he will take his own counsel on that. I hear, as ever, the encouragement to get the draft orders in place. Although I would not want to raise his hopes excessively on that, we will give as much information as we can as soon as we can—I make that promise.
I look forward to working on this Bill with other Members, both on the Front Benches and Back Benches. We are dealing with important measures upon which we ought to seek as much cross-party unity as we can, because they affect our democracy. I look forward to the Committee stage.
On Question, Bill read a second time and committed to a Grand Committee.

European Border Guard (EUC Report)
5.11 p.m.
Baroness Harris of Richmond Baroness Harris of Richmond rose to ask Her Majesty's Government, further to the report from the Select Committee on the European Union, Proposals for a European Border Guard (29th Report, Session 2002–03, HL Paper 133), what legal controls and parliamentary oversight they believe should apply to new European Union structures for co-ordinating border management and to joint operations between the member states.
The noble Baroness said: My Lords, I am glad to have the opportunity to introduce this short debate on the European Union Select Committee's report on proposals for a European border guard. The debate is particularly timely because the European Commission has recently brought forward a proposal for a new agency to co-ordinate operational co-operation at the European Union's external borders. It gives the House an opportunity to look at this proposal alongside our report.
Before addressing the substance of the report, I would like to pay tribute to all the members of the subcommittee who have worked so hard on this and other recent inquiries, particularly those who have recently left the committee under the rotation rule. I am delighted that so many members of the sub-committee are participating in the debate this afternoon. I also pay great tribute to Professor Jorg Monar, our specialist adviser. Professor Monar has helped us with several previous inquiries, and we were again deeply indebted to him for his wise advice and unrivalled knowledge of the European scene. I also wish to thank our excellent clerk Tony Rawsthorne, who with Valsamis Mitselegas, our legal assistant, gave us the usual efficient, helpful and valuable advice. We are enormously indebted to them.
I make no apologies for inviting the House to debate this report. As it says, frontiers are not only hugely symbolic, they are also of great practical significance, as the place at which checks on a person's admissibility to a country or territory are made. For the European Union, and particularly its Schengen members, effective control of the external border is of paramount importance in view of the abolition of internal frontiers between the Schengen member states. Once a person is admitted to one member state, there is no physical obstacle to his or her moving on to any other. It is self-evident that the strength of the external frontier is only as strong as its weakest link.
Every Schengen member state has an intense interest in ensuring a uniform level of control with no significant weak points. The addition of 10 new member states on I May will mean that the external border is not only greatly increased in length, but pushed much further eastwards. Although controls at the borders between the existing Schengen territories and the new member states will not be abolished overnight—there will he a transitional period of some years—the new member states are all required to adopt the full Schengen acquis and work towards implementing it.
In addressing the terms of the Question, I will focus on three main areas: the idea of a European border guard; the Commission's proposals for a new agency; and the United Kingdom's role in external border cooperation. What exactly would a European border guard consist of? I have to say that we received several different answers to that question. For some it seemed to be no more than the co-ordination of operational co-operation between member states. We were sceptical of that view. Whatever else it might he, a European border guard would surely be a body with some personnel and the responsibility for supporting and overseeing the border control authorities of member states. That is certainly how others saw it.
It is clear from our visit to the German Ministry of the Interior that it favoured a Council body in Brussels that had the power to direct national border authorities. The Commission itself was guarded about its ultimate objective and the Commission's director-general for justice and home affairs assured us that it would be a unit in support of national border guards and not a supra-national body replacing them. It seems clear from other Commission documents, however, that its ultimate aim is some sort of supranational force. One of these refers to the creation of a European corps of border guards, which could hardly be anything other than that. For our part we were strongly of the opinion that the case for a central command structure based in Brussels, let alone a fully fledged multi-national force, had not been made. It would be a major extension of Community competence at the expense of national sovereignty. There is no reason to believe that a centrally managed body would be more effective than the member states acting in concert and there would be legal difficulties to be resolved relating to border guards exercising powers outside their own jurisdiction.
I am pleased, if not entirely surprised, that the Government take the same view. Perhaps I may take this opportunity to thank the Minister for the Government's detailed and generally helpful response to our report. Although we were opposed to the creation of a European border guard, we strongly endorsed the need for effective co-operation between the member states to provide a more uniform level of security at external borders. As I have already explained, the security of the Schengen area is largely dependent on the effectiveness of the controls at the external border. Even for non-Schengen members like the United Kingdom and Ireland, pressure on their borders is reduced if these controls are enhanced. We were heartened to see the extent of current co-operation and of the United Kingdom's participation in it.
A measure designed to improve co-ordination in this area is the draft Council regulation establishing a European agency for the management of operational co-operation of the external borders—that is rather a mouthful, I am afraid—which the Commission brought forward last November. The agency's task will consist of promoting operational co-operation in such areas as the training of national border guards, the provision of technical and operational assistance, carrying out risk assessments and research and co-ordinating the removal of illegal immigrants.
The Government submitted their views on that proposal in the form of an explanatory memorandum in the usual way and my committee examined the draft regulation in the light of that. There is no doubt that there is a need to pull together the many strands of existing operational co-operation that have grown up piecemeal. We believe that in general the proposal represents a sound basis for doing so. Moreover, despite our suspicions of the Commission's long-term intentions in this area, to which I referred earlier, we are satisfied that the proposal does not represent the first step on a slippery slope to a fully fledged European border guard. The Commission has given an unequivocal assurance that the agency's activities will he purely supplementary to those of the national services of the member states and that it will not carry out actual controls of the external frontier.
There remain some points of detail that require clarification. In particular, it will be important to ensure that the agency does not have exclusive responsibility for joint operations. Also, the Government have some concerns about the structure and financing of the agency. We will continue to keep the document under scrutiny until the issues have been satisfactorily resolved.
One advantage of an agency of the kind proposed would be in terms of accountability. In undertaking the border guard inquiry, and while supporting the cooperation already going on between member states, we were struck by how little scrutiny there was of them. That concern is reflected in the terms of the Question.
We pointed out that the existing co-ordination mechanism—the common unit—was not established by law. Its tasks and powers were not defined, and its activities were subject neither to scrutiny by the European Parliament or national parliaments, nor to judicial control. The proposed agency would, on the face of it, provide a much better basis for scrutiny of the activities than the present ad hoc arrangements. I hope that the Minister will indicate what form of parliamentary scrutiny of the agency's activities she foresees and whether, more generally, the Government are satisfied that it will be properly accountable.
The most immediate issue for the United Kingdom is not the substance of the proposal, but the question of the United Kingdom's participation or non-participation in the agency's work. As drafted, the regulation excludes the United Kingdom and Ireland from participating in it, on the basis that it is a Schengen-building measure and is caught by the protocol to the Amsterdam Treaty, which exempts the United Kingdom and Ireland from participation in the frontier aspects of Schengen.
That is an unwelcome development. It is important that the United Kingdom should continue to engage closely with its partners in operational co-operation against illegal immigration. I assume that the Government will wish to participate, although they have not yet made their intentions clear in that respect. I hope that the Minister can confirm the Government's position when she replies.
We believe that, under the Treaty of Amsterdam, the United Kingdom and Ireland can choose to participate, and that the Government should make use of that possibility. That brings me to a more general point about the United Kingdom's opt-out from the Schengen agreement, and the retention of its borders with other member states. It is one that will be familiar to those who have followed the work of my subcommittee. On this occasion, however, I shall not question that opt-out as such, if only because I know how strongly committed the Government are to it.
I must again draw attention to the inconsistency that the committee identified of seeking to participate fully in action to strengthen controls at the external borders while maintaining the Schengen opt-out. The Government cannot have it both ways. By maintaining the United Kingdom's internal border controls, the Government are saying, in effect, "We do not trust the ability of the controls at the external border to protect us from illegal immigration and security risks". The reasons for that policy—they are related to the United Kingdom's island geography—are well known. But, given the Schengen opt-out, was it really appropriate for the Prime Minister to lecture his colleagues at the European Council in Seville on the need to improve external border controls?
I have to say that, as my committee has observed on several occasions, such difficulties are inevitable given the United Kingdom's awkward position, half-in and half-out of Schengen. They highlight the continuing tension between the United Kingdom's advocacy of action to improve external border controls, and its opt-out from the external border elements of Schengen. The Commission's decision to exclude the United Kingdom from participation in the new border agency is unwelcome, but hardly surprising given that the United Kingdom does not operate the EU external border regime.
I realise, as I said earlier, that there is no immediate prospect of the United Kingdom becoming a full member of Schengen, but I would be interested to hear from the Minister whether the Government have any plans to align their border control procedures more closely with Schengen's. It would help the United Kingdom to co-operate more closely with its partners if it operated the same procedures at its external borders, as we suggested in our report. For example, it could adopt the Schengen common manual, even if it maintained its frontier controls with other member states.
I look forward to hearing the Minister's response to that and other points that I have raised, and to the views of other speakers.
5.25 p.m.
Baroness Gibson of Market Rasen: My Lords, I am very pleased to be taking part in this debate as a member of Sub-Committee F, and I, too, thank those who have helped us so efficiently and with such good humour. I pay tribute to the noble Baroness. Lady Harris of Richmond. She is an excellent chair. She shows great patience and tolerance with what can be, on occasions, a somewhat volatile committee.

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The effective management of the external borders of the EU is naturally a matter of concern to all member states, increasingly so as the EU becomes larger. Border control is obviously not the only way to make countries safe, but any laxity in that area must increase the risk of illegal immigration and must also increase the possibility of cross-border crime. The noble Baroness, Lady Harris, outlined the key points in our report and I know that other committee members and colleagues today will speak to the report and about those who gave oral evidence to us. I shall concentrate on a slightly different matter. I shall draw attention to some of the relevant points raised in the written evidence that was presented to us. Sometimes such points can be hidden away in a report of this kind. Written evidence is important to us as committee members, in particular because it provides supportive background to our considerations. Sometimes it gives information about issues in other geographical areas beyond the EU, but such knowledge is helpful.
I shall concentrate on two particular written submissions that are on pages 93 and 96 of the report. The first is the written memo from the National Criminal Intelligence Service. Sub-Committee F has worked with the NCIS on other investigations and has much respect for its work and for the information it provides. Like the NCIS, we recognise that organised crime is international in character and, as such, operates in and through many jurisdictions. Law enforcement is not structured in the same way in each EU country. Therefore, the role of Europol, which the NCIS raises, is crucial. Europol plays a key role in overcoming obstacles and a central part in addressing serious criminality affecting all member states.
Among the most worrying crimes we have discussed with the NCIS in the past, for example, is the crime of smuggling across borders women and children who are then used for prostitution purposes. Usually those unfortunates have been promised better jobs, better education—indeed Utopia. What they receive is degradation, fear, humiliation and even death.
In the NCIS written evidence the relationship between two European countries is highlighted: Portugal and the Ukraine. Here we come to helpful information from beyond the direct EU borders. Currently the NCIS tells us that a large criminal group of Ukrainians is facilitating illegal immigration into Portugal. I have a particular interest in that issue because, having visited the Ukraine last year, I found the Ukrainians warm and welcoming and very positive about increasing their links with European countries. The Ukrainian Government are doing a great deal to build up such links and to attract people to their country. Tourism is an important part of their new economy. They need crackdowns on anything which is threatening links and co-operation between their country and those in the EU.
The second written memo to which I draw attention is that of the R ail Freight Group. I declare an interest as a member of that group, the aim of which is to increase the volume of freight carried by rail in Europe. The group raises issues which inter-relate with
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other reports that Sub-Committee F has undertaken and which highlight problems in relation to European borders.
In recent years, rail freight has had a very difficult time because of the problem of illegal immigrants trying to board freight trains—and often succeeding—and travelling through the Channel Tunnel. The Rail Freight Group considers it to be the duty of all member states, governments and the European Commission to reduce the number of illegal immigrants smuggling themselves on to trains and lorries. However, the group is very clear that it does not believe that transport operators should be regarded as the equivalent of border guards or the police. Therefore, the group believes that there is no substitute for proper border controls operated by the national governments so that rail freight operators can carry out their businesses unimpeded.
I hope that by those two brief illustrations I have shown that written submissions do provide important background information to our work and should not be overlooked in the overall debate surrounding the safeguarding of member states' borders.
5.30 p.m.
Lord Wright of Richmond: My Lords, it has been a genuine privilege to have served, even as a volatile Cross-Bencher, on Sub-Committee F under the chairmanship of the noble Baroness, Lady Harris of Richmond, during our inquiry into proposals for better co-ordination in external border management and joint operations between member states, including the accession states due to become full members of the European Union this year.
I do not propose to repeat the points made by the noble Baronesses, Lady Harris and Lady Gibson, other than to commend to your Lordships what I believe to have been a useful and well balanced report. It will, I hope, have had a positive effect in steering our European colleagues towards more practical and effective policies and controls in the management of our external borders.
At the same time, I echo remarks previously made by the noble Lord, Lord Grenfell, about other reports from his Select Committee in expressing my personal regret that it has taken just over six months for our report to be debated in this House, even if the delay has fortuitously given us the opportunity to consider the agency proposal, to which the noble Baroness, Lady Harris, referred. Delays of this kind surely reduce the effectiveness of parliamentary oversight, to which the Question refers.
However, I want to draw one or two points to your Lordships' attention this evening. First, I welcome, as our report does, the greatly increased level of practical co-operation between the member states on external border issues and particularly the United Kingdom's active participation in them, in spite of our continued and, to my mind, regrettable non-participation in the main elements of Schengen.
My second point is to draw attention to the memorable visit which our sub-committee made to the German/Polish border in March last year and which is

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referred to in paragraph 54 of our report. Not only did that visit impress all of us as a remarkable example of co-operation and exchange, which had overcome the predictable political and historical sensitivities surrounding that border; it also underlined the very real problems of achieving effective co-operation between border authorities speaking two different languages and, in many cases, having real difficulty in oral communication.
In that context, I want to emphasise the importance of the pioneering work being done by Dr Edward Johnson of Wolfson College, Cambridge, with which my noble friend Lord Quirk has been personally associated. It may be of interest to your Lordships that this work was first brought to my personal attention by someone who will be well known to many Members of this House—Baron Hermann von Richthofen, the former German Ambassador in London, who has been closely involved in a project to devise a common language—or police speak—to facilitate co-operation between different border authorities.
My final point—I want to keep this very brief—is to reiterate the importance of continuing close British involvement and co-operation in the management of external border controls by our Schengen partners—a problem which will, of course, gain even more importance as enlargement comes into effect in a few months' time.
5.34 p.m.
Lord Corbett of Castle Vale: My Lords, it is a pleasure to follow my committee colleagues who have spoken earlier in the debate. I join them in commending the chairmanship of the noble Baroness, Lady Harris of Richmond, the work of our Clerk and adviser, all those who took the trouble to give both written and oral evidence to us, and those who helped us on our brief and hectic travels.
I echo the point made by the noble Lord, Lord Wright of Richmond, about the unhappy delay before the report could be discussed by your Lordships. I do not think that it meets the purposes for which these committees exist and I hope that there are people listening who can do something about it.
The establishment of an armed elite multinational force, trained to common standards and kitted out in a common uniform—even if this is one version of what a European border guard might look like—has some superficial attractions.
Now that there are no internal borders in the EU—with the sensible exception for mainly geographic reasons of the UK and Ireland—the notion of a force, standing shoulder to shoulder around the external land borders and coastal waters of the EU might attract praise even from the Daily Mail. But it did not from us.
There are, I think, three main arguments against the idea. First, as the noble Baroness, Lady Harris of Richmond, said, it would erode national sovereignty. I am not too concerned about that in principle—there are circumstances in which it is right to pool sovereignty and
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we have done that over the past 50 years or more—but it would erode national sovereignty for unproven and, I believe, unlikely gain.
Secondly, it may encourage some member states to become less vigilant on the need to counter terrorism, cross-border organised crime and people smuggling, on the grounds that someone else is going to do it, so we need not bother.
Thirdly, we know from our work at ports of entry by both Customs and Excise and the Immigration Service that legions of uniformed officers do not bring success. Although the extra officers and new equipment provided during the past five years have been welcomed, are important and have made a difference, what brings results is the collection and analysis of intelligence. Only a tiny proportion of those millions of people entering the UK at out ports of entry pose any threat. Focussed and careful intelligence stands a better chance of obstructing and detecting these people than any amount of random checks.
I have to say that—although I speak only for myself—whatever the other arguments, the UK public would find it unacceptable if they thought that a government were trying to walk away from what I regard as their legitimate security responsibilities and handing them over to other bodies.
The committee agreed on the need for effective cross-border multinational co-operation focussed on areas of common concern. It is highly pleasing to note that the UK has been at the forefront of so many of these projects. It is unfortunate that this has received so little publicity. But, as ever, the bad news has got its boots on before the positive facts have got out of bed.
I want to mention a few of these valuable projects. The UK has devised and is leading a project based at Dover to pool expertise in detection technology with other member states. The aim is to deploy a joint mobile team using the latest detection technology at selected weak spots on the EU external border. Nine nations are involved. The United Kingdom, unhappily, has a deal of experience of how people traffickers are modernising vehicles in a bid to avoid detection and improve concealment. We were able to see some of that at Dover port. Sharing these technologies should enable better detection along earlier parts of the route to the UK and other EU states.
The United Kingdom has taken the lead in operation Deniz which focuses on sea-borne illegal immigration from the eastern Mediterranean and is aimed at detecting movement by ship or boat of clandestine migrants, largely from Turkey.
The UK has joined a Finnish-led project involving 10 nations to introduce a model for the analysis and prioritising of risk. This is an essential part of any future joint action to better control the EU's external borders. The committee believes that co-operative efforts such as these and trying to agree and implement common standards is the better way forward.
In a world where the UNHCR is concerned with protecting 20 million refugees—I stress, 20 million refugees—Nye also need surrounding policies on development assistance, legal immigration routes and a

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UN-led, long-term campaign to overcome hunger, water shortage, disease and illiteracy. While we insist upon the right to protect our borders we neither can nor should try to shut ourselves away from the world's problems, because they affect us all.
5.40 p.m.
Lord Dubs: My Lords, I join in the thanks to those who have helped the committee and to the noble Baroness, Lady Harris, for the way in which she steered our work, kept us in order and encouraged us in what we have done.
Virtually all the key points have been made already and I shall be very brief. When a proposal is put forward that has significant implications in terms of national sovereignty and whether or not civil liberties will be breached, the onus is on those who make the suggestion to justify so doing. That justification has not been forthcoming. It is not up to us to prove why it is not a good idea; it is up to them to prove it is a worthy idea at all.
For example, there is no clarity as to what will be the legal basis of a European border guard corps. There is no indication of what accountability there would be. Above all, there is no indication of whether or not it would improve on the effectiveness of the existing system. Indeed, there are many reasons for believing that the new system would be less effective.
We are dealing with what would be potentially a very powerful body. Perhaps I may give a brief indication. These people would have the power to check the identity papers, travel documents and visas of persons crossing an external border, legally or illegally. They would be able to question foreigners on the reasons for their stay in the common area of freedom of movement or why they have crossed the external border outside the official crossing points. They would be able to go on board a civilian ship or boat in the territorial waters of a member state to question the captain as to his route and to verify the identity of passengers. They would have to notify a person that he or she had been admitted or refused entry to the common area. They would have the power to apprehend a person and to hand that person over to the competent national authorities and to take such other measures as necessary.
These powers, which were listed clearly in the evidence given by Statewatch, are very strong indeed. We should not hand over those powers to a supranational body unless we are absolutely clear that there is a need to do so and that the powers will be exercised properly in relation to data protection rights and human rights legislation and be properly accountable to democratic bodies. None of this has happened.
However, we do have a good basis for international co-operation. Indeed, the committee, as my noble friend Lord Corbett indicated, saw good evidence of international co-operation taking place. We had the evidence of a person from Finland, who indicated what good co-operation there was across the Finnish/Russian border. We saw the co-operation between Germany and
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Poland. Such co-operation can be helped and improved upon. Indeed, our report suggests that that is the way ahead.
But there has to be a great deal of co-operation to enable this to work effectively. Within a country there needs to be co-operation between the people at the external borders and the people at the airports, who have another kind of border control. There needs to be co-operation between immigration and customs where these are separate bodies, as they are under the UK system. There needs to be co-operation between the people at the borders and the police of a country because of people trafficking and other illegal activities, as well as co-operation across a border from one country to another. I believe that all of this can happen. It can happen by improving the basis of cooperation. It would not necessarily he enhanced by having a corps of European border guards.
Finally, it is important to consider financial burden-sharing. If we consider the eastern geography of Europe now that we will shortly be joined by the latest bunch of accession countries, we can see that whereas the German border will no longer be external for much of its length—except possibly on the northern sea coast—the Polish border with countries to its east will be extremely long. It is only right that countries such as Poland, which will bear a great deal of the existing brunt of border controls, should be helped financially by the EU as a whole, because it will be acting to protect the borders of the EU. There are other examples—not only from among the accession countries, although they will play an important part.
I hope that the people in Brussels will listen and say, "We will not go ahead with this". If they want to go ahead, I want them to advance arguments more persuasive than those that we have heard. In the mean time, the report points the way forward clearly and suggests that co-operation, rather than a corps of border guards, is the way forward for all European countries.
5.46 p.m.
Lord Wallace of Saltaire: My Lords, I suppose that I should declare some sort of interest as a former chairman of the sub-committee and as someone who realised as soon as the noble Baroness, Lady Harris, joined the committee, that she was clearly a potential chairman. As we would expect, this is an excellent report. I agree strongly with the balance of its conclusions.
We recognise from where the proposals come. The German Government are often in favour of stronger central control in this area. The German Government were in favour of a European federal bureau of investigation. From Chancellor Kohl's first speech on it in 1988, they have been in favour of a stronger Europol. There is a tendency within the German Government to assume that if everything is centralised under proper control, other people will do things in the proper, German fashion. There is also a bias within the Commission towards greater centralisation and supra-nationalism.

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What emerges clearly from the report is that the case for that has not been made and that there are real advantages in local forces and local knowledge. We need Polish-Ukranian co-operation for the Polish border guards; as the Finns remarked in their evidence to the committee, Finnish-Russian co-operation also rests on detailed local knowledge. There are also tremendous problems, as I can recall Polish border guards telling an earlier delegation from the subcommittee, with paying people rates that are too high for the local economy. So a whole host of issues suggest that the proposal is premature.
However, the case for closer co-ordination, shared training, better exchange of information, common practices and a common manual is clear and has been well made in the report. The argument for a legal base, as set out in paragraphs 59 to 60, is also strong.
As the noble Lord, Lord Wright of Richmond, reminded us, the British approach to integration is always to stress the practical, but it has also often been to avoid the question of accountability. It is important that, as we move towards a co-ordinating unit, we ensure that it is accountable. Part of the problem with the third pillar is that it has been dominated by policemen, who love co-operating with each other but do not like other people to interfere with what they are doing. We need to ensure that mechanisms of accountability exist that can at least attempt to keep up with what they are doing.
We all recognise that this is an important and sensitive area for the United Kingdom. Indeed, our Prime Minister wrote to the Spanish Prime Minister just before the European Council that it is,
"one of the most pressing issues of our time, which is the issue of immigration and asylum and how we make the external borders of Europe more secure".
If that is the case, the British Government must ensure that they are making the most constructive contribution, not just demanding that others do more.
British ambivalence towards Schengen continues. There is even hypocrisy about the extent to which the British Government participate in Schengen. Having declared that they are opting out, they have opted back into most aspects of Schengen except border checks. That demonstrates one of the most unfortunate aspects of our Government: fear of admitting to the Daily Mail what they are doing, thus a willingness to pretend that immigration is all the fault of the French, that we are the only country in Europe threatened by immigrants and that therefore we stand alone against the dreadful Continent.
It is also increasingly difficult to justify Britain's reluctance to distinguish between internal arrivals in Britain, from within the EU, and those across its external border, particularly in airports and, I suspect, across our sea border. Previously, when the matter has been raised, the Government have always said that it would be too difficult and costly to make that distinction, and that they would have to re-model airport arrangements. The Government certainly ought to be planning for a distinction in terminal five between arrivals from outside
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the EU and those from inside it. Our aim should be to operate as closely as possible with our Schengen partners, including bilateral co-operation with our neighbours on the other side of the Channel.
Rather more co-operation goes on with the French, Belgian and Dutch forces of law and order than is admitted to the press. Nevertheless, I found the evidence given by German border guards about how closely they co-operate with their French colleagues on the open Franco-German border a useful reminder that weakening your internal border controls does not mean abolishing your border checks. It would be better if the British Government were willing to talk more openly about how far they are co-operating with their colleagues.
There is a need for the Government to be more honest. First, they should admit that border controls cannot stop everyone getting through, so other measures need to be taken. Secondly, they should admit that Britain is not the only target of immigrants within the European Union. The noble Baroness, Lady Gibson of Market Rasen, remarked on the Portuguese experience, with Ukrainians and Moldovans in very large numbers. The Netherlands has also suffered from a rapid rise in the number of asylum-seekers and people trafficked into the country, as has Italy and, astonishingly, Greece. Over 10 per cent of Greece's population is from outside the country, which has been a real transformation over the past 10 years. We are not alone. Thirdly, they should admit that Her Majesty's Government already co-operate very closely with Schengen and that that is not a matter of national sovereignty. My noble friend Lord Roper has pointed out that when the Norwegians are leading one of the inquiries we should not be too concerned about centralisation and integration. If the Norwegians can do it, surely we can be a little more positive.
I suspect that the committee should also revisit the question of the UK's external border. The House of Commons Home Affairs Committee had some very interesting things to say about co-ordination among UK border forces. I notice reference to Customs-cutters different from the coastguard. We are very good in Dover, but I suspect that we are very bad in small ports. The reduction in the British Coastguard over the years has meant that yachts coming in and out of small harbours in the south-east and south-west of England can easily smuggle people and drugs from outside Europe. We need to look at how we handle our external borders more strongly.
The case for common funding is clearly very strong. The poorer new members that will handle the green eastern border deserve support. That is the sort of thing for which the EU budget should be used, rather than support for farmers in France, Britain and elsewhere. Her Majesty's Government should therefore argue for that.
There is a real difference between the green border on the east and the blue border to the south. In many ways the blue border is the most difficult one. The Royal Navy and others have already taken part in exercises in the Mediterranean on those attempting to enter the European Union illegally by sea.

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The push factor from the south is, in the long run, much stronger. After all, the population of the Ukraine and Moldova is going down. The population of Libya, Egypt and Morocco continues to rise radically and rapidly. The push factor, as well as the pull factor, is one with which we have to be concerned. Therefore, the link between this issue and the broader issues of common foreign and security policy has to be recognised and ought to be given more attention and recognition by Her Majesty's Government.
When we look at the countries from which people have been trafficked—Sri Lanka, Ukraine, Moldova and Kashmir—we are talking about countries which have severe internal conflicts. It is not surprising that people want to get out and are willing to pay to get out if they have to. The case for a more effective common foreign and security policy is therefore strengthened by the problems that we face from the pressure to enter the European Union by desperate people from outside.
The pace of change is remarked on in this report. The pressures that we face from those outside to enter into the European Union will not lessen—that is, from desperate migrants, desperate asylum seekers and, of course, a few terrorists. I therefore suspect that this sub-committee will need to return to this issue—perhaps under a new chairman—again and again.
5.56 p.m.
Viscount Bridgeman: My Lords, I, too, am most grateful to the noble Baroness, Lady Harris of Richmond, for initiating this debate. The House must be also grateful for so many of the members of the committee taking the trouble to take part. Perhaps I may state from the outset that my party is satisfied with the present opt-out status of the United Kingdom secured at the Amsterdam summit. The UK is one of only two island states in the EU and advantage has rightly been taken of its geographical situation.
There are a number of reasons why we are unwilling at present to have a total association with a Schengentype union, of which I do not need to remind your Lordships today. To begin with, we are a particular focus for immigrants, whether asylum seekers or others, and we have a particular interest therefore in ensuring that the borders are as watertight as possible.
To take that analogy further, some borders are distinctly porous. Italy, through no fault of its own, with its long coastline has a particular problem, but there are others where the entry arrangements are not at all clear. The noble Lord, Lord Wright, drew attention to the Polish/German issue. The committee raised another point. We are told that the German border guard estimates that 50 per cent of illegal immigrants had entered from another Schengen country. Noble Lords should bear in mind that this is the existing relatively small group and not the Union as it will be as it is proposed to be enlarged. This debate rightly has addressed the problem, largely independently, about whether or not the United Kingdom is fully involved.
I am pleased to note that while new applicant states will be required to sign up to the full Schengen acquis, border controls between them and the existing
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member states will remain until the Schengen Ministers are satisfied that adequate controls at the external borders are in place.
The report makes clear that the old-fashioned formal sense of border control now has to be strengthened both before arrival in the form of visa regimes and carrier liability, and after entry in the form, primarily, of the identity card system. That leads to the other complication for the United Kingdom; namely, that at present we are one of a small minority of states in the European Union where there is no statutory requirement for identity cards. Until that matter is sorted out, it is a bar to full Schengen participation. Those problems will be magnified as the borders of the EU are pushed steadily eastwards. We must remember that Romania and Bulgaria, for example, have applied for admission in 2007.
Since the tone of this debate has been one of constructiveness, let us turn to the matter of smoothing out what one might call the "porosity" of eliminating, as far as possible, those parts of the external borders where illegal entry is something of a "soft touch". Clearly, some form of common control and, indeed, common accountability is almost a prerequisite.
The latest council plan is a more realistic version than its predecessors, placing less emphasis on common legislation and financing, and referring only in what the committee described as "rather vague terms" to a later possible decision on the setting up of a European corps of border guards, which would support, but not replace, national border police forces.
That is a sensible and measured approach as far as it goes, but it is important to note that a number of the proposed measures are subject to precise deadlines. I refer in particular to the envisaged creation within five years of common units at sensitive land and sea borders, which sounds suspiciously like the first move towards border guards. I was pleased to note that the noble Baroness, Lady Harris, shares my approval of that measured approach. Such an approach adopts a sensible pace and I hope that the United Kingdom, from its special position, can observe it in its own time.
I do not have to reiterate my party's views on the draft constitutional treaty. Suffice it to say that any pressures from the Union to attack the current opt-out by the United Kingdom will of course be strongly resisted.
There are a number of initiatives under SCIFA-plus in which the United Kingdom is a participant. The noble Lord, Lord Corbett, has drawn attention to one or two of them. The UK also participates in Ulysses and Triton, which implements sea border controls in the Mediterranean, as well as in Rio IV, which is a Finnish initiative to improve border controls in designated parts of candidate countries. Will the Minister assure us that those initiatives will not form part of a creeping acceptance of Schengen by the back door?
The noble Baroness, Lady Harris, drew attention to the findings of the committee and primarily to the growing anomaly of maintaining internal controls while taking part in negotiations about external controls. She

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also raised the whole question of the financial burden on the United Kingdom of keeping its internal controls. The committee noted that the Government had slightly underestimated the cost of that, while bearing their share of the cost of the external controls. The noble Baroness referred thirdly to the difference in status between the United Kingdom's immigration service and the more structured police forces of the border guards of member states of the European Union.
I support the measured approach that the report clearly endorses, despite the United Kingdom's exclusion from the latest initiative of the European Union. That is a disappointment, but despite that, we should proceed at a measured pace.
6.3 p.m.
The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, I warmly welcome the tone of the debate and I thank the noble Baroness, Lady Harris, for initiating it. It is timely. I know that the usual channels may have been a little slower than some would have liked in finding a spot, but I agree with the noble Baroness that the timing is felicitous as it enables us to widen debate in an appropriate way.
I commend the assessment of the noble Lord, Lord Wright, who described the report as being useful and well balanced. Indeed it is. I hope that I shall be able to offer certain reassurances in response to the concerns that noble Lords have outlined. I also commend the whole committee on the tireless way in which it has undertaken its work. I am pleased that so many of its members are present this evening.
The United Kingdom supports the move to improve co-operation at the EU's external border. An effectively managed frontier is in the interests of all member states. As the noble Baroness, Lady Harris, made plain, that can have a significant impact on reducing the numbers of illegal immigrants who arrive in the UK.
I reassure my noble friends Lord Dubs and Lord Corbett and the noble Lord, Lord Wallace of Saltaire, that we firmly believe that borders are best maintained by national border services, but that integrated work at EU level can deliver significant benefits. That is why my right honourable friend the Prime Minister proposed accelerated work at Seville and why we have actively participated in this area.
Therefore we do support the border agency, both in terms of what it is and what it should do. As the noble Baroness, Lady Harris, made plain, it does not pave the way for an EU border guard and as it will replace the Common Unit, it will not be an additional layer of bureaucracy.
The noble Lord, Lord Wallace of Saltaire, was right to say that accountability is extremely important. The EU border agency will provide a more accountable framework for operational co-operation within EU Council structures. It will also provide a more strategic and intelligence-led approach to the management of the EU's external border and will assist in the spread of
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best practice. A single structure will enable intelligence and decision-making functions to work together more closely.
The United Kingdom has participated in around three-quarters of recent operational activities at the EU's external borders. We fully support projects which are intelligence-led, cost-effective and aim to strengthen vulnerable points on the EU border. We have contributed resources in the form of technical equipment, new technology and staff, and our intelligence capability and expertise is highly respected.
We want to continue that high level of operational co-operation with our EU partners in the framework of the agency. However, we do not agree with the interpretation of the UK's position as outlined in the agency proposal. Our participation is a matter for negotiation and ongoing discussion with other member states. The border agency's work is, of course, partly linked to the United Kingdom's position on Schengen. I know that I will give pleasure to my noble friends and to the noble Viscount, Lord Bridgeman, when I say that our position has not changed, and I hope that I will not cause too much disappointment for the noble Baroness, Lady Harris, and the noble Lord, Lord Wallace of Saltaire.
The Government are committed to active and effective co-operation where this does not prejudice our national frontier controls, which are a fundamental component of our immigration policy. We will continue to seek to maximise mutual operational co-operation in combating illegal immigration. The immigration liaison officers network, the mutual recognition of expulsion decisions and joint returns are all examples of measures to combat illegal immigration in which we have been able to participate effectively.
However, there are other elements of border management work in which it is not appropriate for us to participate. For example, it would be inappropriate for us to adopt the Common Manual in the United Kingdom, although I know that is something which the noble Baroness, Lady Harris, has indicated that she would very much welcome. The reason for that is that the Common Manual sets out guidance on the rules and procedures which apply to Schengen borders. The UK does not operate Schengen external border rules and use of the Common Manual would be inconsistent with our policies.
Perhaps I may turn specifically to the Question tabled by the noble Baroness, Lady Harris, which asks what legal controls and parliamentary oversight the Government believe should apply specifically to new European Union structures for co-ordinating border management and to joint operations between member states.
The EU border agency is a new structure for coordinating border management and joint operations between the member states and that proposal is rightly subject to domestic parliamentary scrutiny. The Government believe that the agency must have a clear line of accountability, reporting within the existing EU

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Council structure and informing the European Parliament of its activities. In carrying out its tasks, it should follow the strategic direction set by the Council.
The agency will be able to recommend joint operations and will consider member state proposals. However, it will not be able to insist on an operation taking place without the consent of all states involved. I hope that I can reassure the noble Viscount, Lord Bridgeman, by saying that operations will take place, as at present, in line with both national and international law. The relevant national law of the territory in which the operation is being carried out will apply. Under national laws, there are sanctions and penalties in place for those who exceed their powers in the execution of their duties. All officers are also fully accountable to their own national service. International law has been and will be strictly adhered to, as was demonstrated in Operation Ulysses, which the noble Lord mentioned in his remarks, when participants complied with international maritime law while on the high seas. I can reassure noble Lords that this is not a slippery slope; it is a very clear direction.
Additionally, specific rules are clearly set out before each operation takes place, and participating officers are made aware of the national law with which they must comply. The arrangement works well and there is no need for separate legislation.
We have now come to the end of the first phase of developing integrated management of the EU's borders. During this time, we have been carrying out joint operations at external borders. It has been a learning experience, and some operations have been more successful than others. But the indications are that the projects and joint operations have been worth while. This is not just in terms of building relations with our EU partners and near neighbours but also in delivering real, practical results. I assure my noble friend Lord Corbett that the Government will not walk away from their responsibility.
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In addition to the initiative about which my noble friend has spoken, another example is the two parts of the UK-led Project IMMPACT, which achieved widespread international recognition for its efforts. The United Kingdom made significant resource commitments to the project, which aimed to stem flows of irregular migrants through the western Balkans into the EU. During the first 12-month phase, which ran until September 2002, the number of potential irregular migrants passing through Sarajevo airport en route to the EU was reduced by 95 per cent in comparison with the first eight months of the year.
The second part of the project, which took place in the latter half of 2003, built on this success by establishing a consistent regional approach for border management in both Serbia and Montenegro. The six-month joint EU project delivered specialist immigration training to more than 1, 400 officers through 100 training sessions. This has laid the foundations for greater trust and effective working relations. So the agency will add value by providing a more co-ordinated focus for such joint operations. It will also take on the important function of evaluating the operations. Projects and operations are not the only way in which we co-operate with our EU partners on border management issues.
My noble friend Lady Gibson of Market Rasen gave us a very practical explanation of why these measures are so important and outlined the sort of issues that we must bear in mind. Other important work, such as sharing intelligence and joint risk analysis, will also be co-ordinated by the agency.
We look forward to being able to continue to work effectively with our EU partners in tackling illegal immigration, because it is in our mutual interests to do so. If the tone, nature and content of what has almost been a unifying debate is anything to go by, I think it augurs very well for the way in which we will work together in the future.
House adjourned at thirteen minutes past six o'clock.

  Zimbabwe: Assisted Voluntary Return Programme
  Zimbabwe: Assisted Voluntary Return Programme
  Police: Disciplinary Procedures
  Police: Disciplinary Procedures
  Work Permits: Professional Sport
  Work Permits: Professional Sport
  Gulf War 1990–91: Vaccines
  Gulf War 1990–91: Vaccines
  Autism and Dyslexia
  Autism and Dyslexia
  School Sport
  School Sport
  IVF: Techniques and Research
  IVF: Techniques and Research
  Vaccines: Unlicensed Use
  Vaccines: Unlicensed Use
  Commission for Equality and Human Rights Task Force
  Commission for Equality and Human Rights Task Force
  Brucellosis
  Brucellosis
  Sudden Oak Death Virus
  Sudden Oak Death Virus
  Railways: Platform Extensions
  Railways: Platform Extensions
  Government Publications
  Government Publications

  NATO Parliamentary Assembly
  The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
  The honourable Member for Hereford (Mr Paul Keetch) has replaced the honourable Member for Portsmouth South (Mr Mike Hancock) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.

  Duke of York's Royal Military School and Queen Victoria School
  The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)
  My honourable friend the Parliamentary Under-Secretary of State for Defence (Mr Caplin) has made the following Written Ministerial Statement.

  The quinquennial review into the Duke of York's Royal Military School and Queen Victoria School has been discontinued before the production of a report in view of the constraints imposed by the Royal Warrants underpinning both foundations that effectively ruled out the review team's main recommendations, which involved removing the schools from government control. The review did, however, identify a number of issues for further study. These will be taken forward by the Adjutant General's headquarters in conjunction with the chief executives or head of each school. In the meantime, the two schools will remain as agencies of the Ministry of Defence.

  Commonwealth Development Corporation: Reorganisation
  The Lord President of the Council (Baroness Amos)
  My right honourable friend the Secretary of State for International Development has made the following Written Ministerial Statement.

  On 27 November 2002, the then Secretary of State for International Development made a Written Statement to the House on the plans to reorganise CDC. This set out how CDC was to be reorganised into two separate organisations: an investment company and a new management company. I am now submitting a further Written Statement to inform the House how these plans are being carried through.

  The purpose of the reorganisation of CDC is to maximise the creation and long-term growth of viable businesses in poorer developing countries, by making responsible investments and mobilising private capital alongside public funds. These objectives, which were set out in the 1997 and 2000 White Papers on international Development, remain unchanged.
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  The CDC's business now focuses on regions (South Asia and sub-Saharan Africa) and sectors where more investment is needed in order to help meet the Millennium Development Goals. It follows a set of pioneering responsible business principles that commit it to ethical, environmental and social best practice. CDC is also subject to an investment policy, which sets out the countries (the "CDC Universe") in which it may invest. The policy includes two targets: that 70 per cent of new CDC investment should be made in poorer developing countries, and that 50 per cent of new investments should be in sub-Saharan Africa and South Asia.

  In order to improve CDC's performance and enhance the mobilisation of private investment in poorer developing countries, I have recently approved a reorganisation proposal on behalf of the Government.

  The CDC is to be separated into two corporate entities and a family of funds. First, an investment company, which will continue to be named CDC and will be wholly owned by the Government, will hold the existing and future cash and investment assets of CDC and its subsidiaries. This company will be responsible for ensuring that our capital is used in accordance with the investment policy. Secondly, a new independent management company, to be known as Actis, will be formed as a limited liability partnership between its management and staff (who will together have majority control) and the Government. Actis will raise and invest capital from CDC, from other development finance institutions and from private investors. It will follow responsible business principles and provide leadership and supervision for a family of funds.

  The funds will focus on Africa, South Asia, power, and SMEs, with smaller funds for China and Malaysia. Each will be managed by a dedicated fund management subsidiary of Actis or on a joint venture basis, and will be run on a commercial basis in order to attract capital from private investors and development finance institutions. This structure of a management company and a family of funds is an accepted norm in the international fund management industry. It will allow Actis to manage funds with a range of objectives, from strongly developmental to fully commercial, according to the requirements of target markets and the objectives and return requirements of investors including CDC.

  This dual company approach will help to establish Actis as an independent investment manager specialising in developing country markets, especially the poorer ones. It will also enable CDC, after an initial five-year contract with Actis, to select its future investment manager(s) and thereby strengthen CDC's and the Government's ability to hold Actis and any other investment managers to their targets.

  I have agreed to the appointment of Malcolm Williamson as chair of the board of the new CDC. He has an admirable track record in the banking and financial sector and I expect that he will take up this new position within the next few weeks when the two new companies are formally established. The current

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  chair of CDC, Lord Cairns, has agreed to become chair of Actis. I am very pleased that two such experienced and highly qualified professionals will be leading the new companies.
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  I am writing to the chair and members of the Select Committee on International Development about these changes. Later today, I will be making a public announcement about the new arrangements.