Sitting of 31 March 2004

Preamble
The House met at half-past Eleven o'clock
Orders of the Day
  Higher Education Bill
  As amended in the Standing Committee, considered.
  Higher Education Bill

    New Clause 1
    1.21 pm
    Chris Grayling: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this it will be convenient to discuss the following:
    New clause 2—
    General duties of the relevant authority in relation to Wales—

    The relevant authority in relation to Wales must perform his functions under this Part in such a way as to ensure full access to higher education based upon academic ability and potential.

    In performing his functions under this Part the relevant authority in relation to Wales shall also have regard to—

    the desirability of promoting equality of opportunity in connection with access to higher education,

    the requirement to maintain the independence of the procedures for the admission of students of individual institutions,

    any guidance given to it by the Assembly, and

    the desirability of securing that his powers are exercised in such a way as to impose the minimum necessary burdens of cost and compliance with regulation on institutions.'

    Amendment No. 1, in page 14, line 6, leave out Clause 30.
    Amendment No. 2, in clause 48, page 22, line 13, leave out '30(1)' and insert
    '[general duties of the Director]'.
    Amendment No. 3, in page 22, line 44, leave out `30(2)' and insert
    '[general duties of the relevant authority in relation to Wales]'.
    Amendment No. 99, in schedule 5, page 31, line 33, at end insert—
    '(2A) In any report under sub-paragraph (1) the Director shall include an assessment of the factors which most discourage any particular class of person from seeking access to higher education, in particular factors related to income.'.
    Amendment No. 100, in page 31, line 33, at end insert—
    '(2A) Any report by the Director may include recommendations for public policy.'.
    I rise to speak to new clause 1 and the other consequential new clause and amendments, tabled in the names of my right hon. and hon. Friends and me. Four years ago, the Chancellor of the Exchequer began a process of Government interference in our universities that will, if the Bill goes through, establish the mechanism for the Government to dictate to them how they should select students. We all remember the case of Laura Spence, the applicant from the north-east who was turned down by Oxford university and subsequently admitted to Harvard. For some reason—and with what seemed like precious little knowledge of the detail of the case—the Chancellor thought that it was his job to come to Laura Spence's defence.
    I have been looking back at the coverage of the case, and the events, and their consequences for our debate are clear. A report in The Times of 26 May 2000 stated:
    "Gordon Brown embroiled the Government in a class war with Oxford University yesterday by attacking its "old school tie" interviewing system and the "absolute scandal" of the rejection of a comprehensive schoolgirl.
    The Chancellor urged Britain's older universities to open their doors to "people from all backgrounds" after Laura Spence failed to secure a place to read medicine at Magdalen College. She has since won a Harvard scholarship.
    Mr. Brown spoke with the full backing of Tony Blair. But he was promptly criticised by the university, whose Vice-Chancellor, Dr Colin Lucas, accused him of speaking without knowing the facts behind the headlines."
    That is not entirely a surprise. The real message in that story was in the last paragraph, which stated:
    "Last night the row was escalating as government sources made plain that universities could face sanctions if they fail to take more state pupils. 'These people have got to put their house in order', a senior government source said. Oxford and Cambridge have already suffered a cut of £11 million over ten years in the money previously allocated for college tuition fees. Officials say there is plenty of scope to impose further funding conditions."
    Further funding conditions are precisely what are on the table today. They are forcing those people, in the eyes of the Government, to put their house in order. Our new clause and the related amendments seek to challenge that intervention, and to ensure that unwarranted political interference by the Government cannot happen.
    James Purnell: In answer to a question that I asked in the debate on the programme motion, the hon. Member for Westmorland and Lonsdale (Mr. Collins) said that there were hordes of Conservatives waiting for the end of that debate so that they could speak in this one. Can the hon. Gentleman explain why there are only three Conservative Back Benchers supporting him now, given the earlier claim that there was massive interest on the Conservative Benches in this important Bill?
    Chris Grayling: I hate to disappoint the hon. Gentleman, but I think that he will find that much of the interest in speaking today is on his own Benches, where
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    large numbers of people are only too keen to speak against the Government's ill-thought-out approach to higher education. The sad thing is that all too few of them will have the opportunity to do so—if, indeed, they have not already been cowed into submission by the intense efforts of the Government Whips Office.
    It has been noticeable in recent weeks that some supporters of the Prime Minister have, perhaps with his retirement in mind, started to talk about "Blairism" as a political philosophy, although I am not sure whether that is a contradiction in terms. This measure is not about Blairism; it is about Brownism, and it is a sign of things to come if the country should ever be unfortunate enough to see the Chancellor move house from No. 11 to No. 10. The fact that the measure is before the House today is also a sign of just how weak the Prime Minister has become within his own party, and just how strong the Chancellor has become.
    When I challenged the Prime Minister on this issue a year ago, he disowned his Government's own policy. I said to him:
    "There are increasing reports of pupils of high ability and achievement being turned down by universities because of their social background. How would the Prime Minister justify that to the people who are losing out?"
    The Prime Minister's response was:
    "The simple point is that I would not. If universities are doing that, they are wrong. What is more, people should go to university based on their merit, whatever their class or background. That is what should happen."—[Official Report, 26 February 2003; Vol. 400, c. 256–7.]
    The purpose of new clause 1 is to ensure that it does happen, and if the Government are so enthusiastic for it to happen and if Ministers are so keen on it happening, I suggest that we stop the debate now so that they can accept new clause 1 and we can move on. Would they like to do that?[Laughter.] No, I thought not.
    New clause 1 would write into the Bill the simple principle that the access regulator should be mindful of academic achievement and potential, and of that alone. That is where the Conservatives stand on this issue. Only those two factors should be taken into account when deciding who should go to university. The admissions system should not become a system for social engineering.
    kali Mountford: Has the hon. Gentleman had time, since the Bill was in Committee, to consider what he means by "potential"? Can he now give the House a better explanation of what he means by that term, and of what his objection is to fair access, which is something else that he could not get to grips with in Committee?
    Chris Grayling: I suspect that the difference between the hon. Lady and me is that, as a politician, I do not think that it is my job to define "potential". I would rather leave it to the professionals in the universities to decide which young people have the potential to succeed. They do not need politicians to step in and do their job for them.
    Mrs. Lorna Fitzsimons: Does the hon. Gentleman agree that there is something wrong with a system in which, over the last 50 years, no more than 15 per cent. of people from C5 backgrounds have

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    gone into higher education? Is he saying that the vast majority of such people—of whom I represent many—do not have potential?
    Chris Grayling: The hon. Lady makes an important point, but she should be looking elsewhere in the education system to deal with those very real issues. It is not a solution to gerrymander the higher education entrance system.
    How Irranca-Davies: Speaking as someone who was a professional lecturer for six years in the kind of institute that encouraged wider access, may I emphasise to the hon. Gentleman the unseen potential of people who come to higher education through non-traditional pathways? It is not a desirability but a necessity to ensure that such people have equal access to all higher education institutions, because they outperform people who come through with more traditional grade scores.
    Chris Grayling: The hon. Gentleman makes my point for me. He talks about his own experience in higher education and the role that he and his colleagues clearly played in selecting students with academic potential. It is the job of his colleagues who are still in the profession to take those decisions; it is not for politicians to impose those solutions on them.
    Huw Irranca-Davies: Will the hon. Gentleman give way?
    Chris Grayling: No, I want to make some progress, if the hon. Gentleman will allow me. The point is that it is exactly that principle that the Government are seeking to destroy today, and we want to prevent that from happening through our new clauses and amendments.
    The proposal to introduce the access regulator represents all that is wrong with this Government. University vice-chancellors have told us that they hope that the regulator will prove to be a paper tiger, but they should have listened to the Minister when he spoke in a debate on the subject in Westminster Hall earlier this year. He said that
    "this is a regulator with teeth."—[Official Report, Westminster Hall, 6 January 2004; Vol. 416, c. 32WH.]
    Our goal this afternoon is to draw those teeth, and to establish the principle, which should be inalienable, that these matters should be outside the control and involvement of politicians.
    Let us be clear: we believe that entry to university should be based on academic achievement and potential and on nothing else. It is not for politicians to interfere in this.
    1.30 pm
    Mr. Simon Thomas: The hon. Gentleman may recall from Committee that my position is somewhere between his and the Government's on this matter. There is a serious point to be made: the university funding system is already subject to an element of political interference. The Higher Education Funding Council for Wales, for example, already sets a threshold for the number of applicants who must come from the 100 most deprived communities in Wales.
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    Would the new clause weaken existing arrangements, or does the hon. Gentleman think that he is merely tackling the office for fair access? I am a little concerned that he may weaken efforts already being made in relation to access to higher education.
    Chris Grayling: I see no reason why the new clause would have that effect. Nor do I believe that our universities would be enhanced by another layer of bureaucracy, which would make it more difficult for them to do the job that many of them are already doing.
    The important point at the heart of this debate is that there is a need to create opportunity within our education system for those who are let down by it. There was no dispute in Committee about that, and there is no disagreement that there are young people who do not achieve what they could under our current education system. There are young people with the potential to go to university, who, for family or other reasons, such as the social environment in which they are brought up, do not end up doing so. That is wrong. There is agreement on both sides of the House about that.
    In Committee, the hon. Member for Nottingham, North (Mr. Allen), who is sadly not in his place at the moment, made an impassioned and important speech—and quite a long one—about the situation in his constituency, where anyone who stays on in education after the age of 16 is regarded, in his words, as weird. Clearly, that is wrong. I did not disagree with his analysis of the situation in his constituency, nor with the fact that it needs to be addressed, but I fundamentally disagree with him about the solution. The problem that the access regulator is being appointed to tackle is deep-rooted in our schools, and it is there that the change must come. That solution will not be found by gerrymandering the university admissions system, or by requiring university admissions tutors to follow anything other than their natural instincts and expertise in judging academic achievement and potential.
    Jonathan Shaw: Does the hon. Gentleman also recall that we heard in Committee of examples of universities and schools working together in communities, such as that of my hon. Friend the Member for Nottingham, North (Mr. Allen), to expose universities to young people who had no previous experience of them? The regulator will oversee exactly that type of access extension.
    Chris Grayling: The hon. Gentleman is absolutely right and anticipates the next section of my speech.
    The frustrating irony of the debate about the access regulator is that good work is already going on in the university sector to try to attract students from non-traditional backgrounds.
    In Committee, numerous Labour Members praised the efforts of their local universities in this regard. The hon. Member for Cambridge (Mrs. Campbell), who is not in her place today, said:
    "Cambridge University has long been generous in providing bursaries to students from low-income backgrounds"
    The hon. Member for Nottingham, North said:
    "we need vice-chancellors to become far more a part of the education family".—[Official Report, Standing Committee H, 4 March 2004; c.464–71.]

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    But he went on to praise the work done by his two local universities, Nottingham university and Nottingham Trent university, in seeking to extend opportunities for 14 to 16-year-olds.
    Jonathan Shaw: It is right that we gave examples of good practice in Committee, but we also said that it was not uniform, it was not across the piece, and that some universities were doing very well, and others were not. We want all universities to perform to their best in terms of widening access and reaching out into communities to young people who would not have thought about attending university. That is what the regulator will do: it is about spreading good practice.
    Chris Grayling: The hon. Gentleman must understand that the fundamental difference between us is that we do not believe that we should pass laws to do that. One does not legislate best practice; one encourages it. The flaw in this measure is the belief that passing a law is the right way to deal with a genuine problem. That is the difference between Conservative and Labour Members.
    Kali Mountford: I hope that the hon. Gentleman recognises the hard work going on in junior and primary schools as well as in secondary schools and universities. Alongside that good work, does he not recognise that there is a problem with people following their natural instincts, to use his words? Is not the problem that some people's natural instincts may not be benign, and some people's natural instincts may need some encouragement in a more generous direction?
    Chris Grayling: If the hon. Lady is right, and if the hon. Member for Ogmore (Huw Irranca-Davies) is correct that there are potential students out there who will out-perform in higher education, by definition, those institutions that are good at recruiting them will rocket up the academic ladder, and others will realise that they are missing out. Surely best practice is best developed in that way, rather than through clumsy bureaucratic laws from the centre.
    Huw Irranca-Davies: Will the hon. Gentleman give way?
    Chris Grayling: If the hon. Gentleman will forgive me, I want to make some progress. I do not want to take up the whole debate with my contribution.
    The problem is that when the Government feel that something is not right, they rush to pass a law. Although the natural instincts of Labour Members to nationalise everything have long been curbed, those instincts are still to look to interfere in every aspect of our lives. When there is something with which they do not agree, passing a law is their only solution. The introduction of an access regulator, whose job is to ensure that universities are pressurised into changing the way that they shape their future intakes, is based too much on class prejudice and not enough on academic good practice. We do better if we empower people to take those decisions themselves, rather than trying to be prescriptive from the centre.
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    I agree with the hon. Member for Nottingham, North that something must be done to address those failing schools and communities where education is an alien concept—[Interruption.] He has just returned to the Chamber, and he missed my remarks referring to his speech. I very much agreed with his diagnosis of the problem in his constituency. My point is that that problem simply should not exist in a modern society in 2004. It behoves all of us as politicians to seek ways to address it. We differ not on the aspiration but on the solution. Fundamentally, we do not believe that passing laws is the right way to do it. Nor do we believe that creating potentially draconian regimes for the university sector is the right way to do it.
    Several hon. Members rose—
    Chris Grayling: I am going to conclude my remarks, as I want to allow other Members the chance to speak.
    The Government have sought to assure us that they have no intention whatever of trying to become involved in admissions. The measure, they tell us, is all about applications, not admissions. They just want universities, they tell us, to cast their net wider. The problem is simple: we do not believe them. They have form in this area. They know that they have already gone back on a clear manifesto pledge on tuition fees, to which we will no doubt return later this afternoon.
    When the Government tell us that the access regulator will have a light touch and confine his interest to a loose set of guidance in relation to the application process, I do not believe them. Do we honestly believe that two or three years down the road, if by some unhappy accident they are still in office and their goals are not being met by the higher education sector, they will stand aside if the changes that they want have not happened? No one in the higher education sector should he under any illusion about that. When the Secretary of State talks about substantial financial penalties—£500,000 fines for universities that do not conform—that is a threat to be taken seriously. In time, those threats will become a harsh reality.
    There is a simple way of removing this threat. The new clause would limit the ability of the regulator to impose a social engineering agenda on our universities. It would ensure that our universities cannot be forced to admit students on the basis of any factors other than academic achievement and potential. The Prime Minister had it right a year ago when he said that anything else would be wrong. He was right then, this new clause is right now, and I commend it to the House.
    Mr. David Rendel: I shall not detain the House, because I am sure we all want to proceed to the next group of new clauses and amendments.
    The Liberal Democrats will support the new clause, because, as we have said from the outset, we consider the whole system of targets to be nonsense. The idea that precisely 50 per cent. of young people—no more, no less—should go to university is absurd. The target will probably be achieved quite easily anyway; it has already been achieved in Scotland, and the chances are that it will be achieved in England in the near future regardless of whether the Government take any action. What we should be doing is deciding how many university places

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    we ought to be providing, and for whom they ought to be provided. We have long believed that places should be provided for all who have the ability, potential and qualifications to make proper use of university courses.
    We are particularly happy with new clause 1 because the Conservatives, who in Committee tabled an equivalent amendment proposing the removal of the clause in the Bill that insists on fairness, have now included subsection (2) in the new clause. It provides that the system of choosing between applicants must be fair and non-discriminatory. That addition makes all the difference: it enables us to support the new clause.
    While we are thinking about fairness, we should bear in mind that A-levels are not the only measure of ability and potential. I was somewhat surprised, but nevertheless delighted, to find in Committee that the Conservatives held that view as well. There had been some concern about the issue over the past year. Some independent schools had seemed to think that A-levels were the only important measure of ability, and that those with the right A-levels should be chosen on those grounds alone. That, of course, has become impossible in the case of our most prestigious universities: so many applicants are achieving three or four A grades that it is impossible to choose between them purely on that basis.
    Geraint Davies: While we are discussing the central issue of enforcing fairness, may I make a point about Oxford university? I should mention that I went there from a state school. Oxford accepts a proportion of applicants from state schools, but it is also true that more people from state schools will end up with better degrees—the corollary being that those from the private sector will end up with worse degrees. Does that not imply that something is going badly wrong at the margin, and that there should be more factoring in of social backgrounds? That is the job of the regulator, and it should be enforced.
    Mr. Rendel: I do not think that those from state schools necessarily get better degrees. What is certainly true is that those from state schools who have lower A-level grades tend to do at least as well as those from independent schools who have higher grades. I do not think that that is quite the point that the hon. Gentleman was making, but it is my reason for thinking that A-level grades should not represent the only way of choosing between applicants. If we do not have other mechanisms, our most prestigious universities will not have the opportunity to admit applicants with great ability and potential who come from state schools and whose A-level grades may not be as good as those of others in their age group.
    Mr. Barry Sheerman: I think that the hon. Gentleman has misinterpreted my hon. Friend's point. The other side of the picture is that when people who have been carefully nurtured and groomed, and on whom an enormous amount of money has been spent in the private system—who have been glossed up—reach university, the glossing up does not persist. It gets them into university because they look good at their interviews and have plenty of self-assurance—and yes, they have achieved three As at A-
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    level—but when confronted with the rigours of a university degree course, they do not perform as well as people from state schools with similar qualifications.
    Mr. Rendel: I suspect that, in fact, we are all misunderstanding each other. I think that what I was saying is exactly what the hon. Gentleman has just said. Those from state schools will not necessarily get better degrees than those from independent schools, but those from state schools with lower A-level grades tend to end up with the same degrees as those from independent schools with higher grades.
    1.45 pm
    Mr. James Clappison: Will the hon. Gentleman join me in commending to the hon. Member for Huddersfield (Mr. Sheerman)—the Chairman of the Select Committee—and to the hon. Member for Croydon, Central (Geraint Davies) a report prepared for the Higher Education Funding Council? It concerns the effects of schooling on higher education achievement, and concludes that the difference in the degree performances of students with the same A-level scores from independent schools and state schools is very small indeed at the most selective and highly academic universities such as Oxford and Cambridge.
    Mr. Rendel: I think that we are all saying much the same thing, and that I should now make some progress.
    At present, independent schools are selling themselves largely on their ability to produce better A-level grades than state schools for pupils with the same ability. Universities should therefore take the opportunity of choosing state school applicants with lower grades, rather than those from independent schools; but the choice must be made on the basis of a number of criteria. Past exam success clearly makes a difference, and it is one of the measures that universities can use fairly—not just in respect of A-levels, but in respect of earlier exams. Current tests of potential along the lines of the American SATS are a possible method of differentiation. The application form itself may give universities a hint, and pupils could perhaps send examples of written work to show what they had achieved in the past. Interviews are another possibility, as are teachers' assessments. If teachers are at all fair in their assessments, the best way of judging the ability and potential of young people may be what is said by those who have known them best at school.
    New clause 1 would, I hope, produce a fairer way of choosing university students than the methods currently used in some universities. It is only fair to add, however, that a certain level of resources would have to be invested. It is quickest and simplest for universities to choose between applicants on the basis of A-level grades; if these more complex and subtle—but fairer—methods are adopted, universities must put in more money than they do at present.
    New clause 2 would remove from the Welsh Assembly some of its rights to determine how university admissions are handled. That clearly conflicts with the whole principle of devolution to the Assembly. I should like the maximum number of powers to be devolved, and I believe that these powers should be included.
    Chris Grayling: As the hon. Gentleman will know, new clause 2 is effectively consequential on new clause 1.

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    Is he saying that he supports the principle that universities should not be subject to political interference in England, but does not apply that principle to Wales?
    Mr. Rendel: No, I am not suggesting that Welsh universities should not have a fair choice of applicants. What I am saying is that it should be up to the Assembly to determine how it will put pressure on universities to employ a fair and sensible way of discriminating between applicants. We in this Parliament should not make that decision.
    I am not sure whether anyone will speak to amendments Nos. 99 and 100. The hon. Member for Nottingham, North (Mr. Allen), who tabled them, did not seem to want to speak a moment ago. In case he does speak, however, let me say that we consider the amendments unobjectionable but probably superfluous. I suspect that OFFA would work more or less in that way in any event. We see no great need for the amendments, but we have no great objection to them.
    Mr. Graham Allen: New clauses 1 and 2 are important, because they give the House the chance to look very seriously at OFFA. In this context, I must allude to some remarks that I made earlier about Ofsted. Unfortunately, my new clause, which would have made OFFA into a body more like Ofsted, did not get the attention of the Speaker, but new clauses 1 and 2 bring to the House's attention the strength of OFFA. The hon. Member for Epsom and Ewell (Chris Grayling) made some telling points when he spoke earlier, but I disagree with him on the strength of OFFA. If we are to intervene effectively in what is an education market whether we like it or not—whether we would like to reshape it or not, and whether it is imperfect or not—we need the tools to do so. We had a good debate on how people can assess the market and adjust it for the benefit of all participants. OFFA is one of the instruments that could be used to make an imperfect market a little more perfect.
    Mr. Patrick Hall: My hon. Friend will know that the use of the word "market" has heavy political and social implications, especially for Labour Members. Although he accepts that there is now a market in higher education, does he agree that neither the current situation nor that proposed in the Bill will by any means produce a free market? The market is extremely restricted and contained, so that term must be used with the caveat that we do not, and will not, have a free market.
    Mr. Allen: The pretence that there has ever been a wholly free market—which is a theoretical concept—is an offence to logic, but it is equally an offence to logic to pretend that we do not currently have a highly distorted market. The problem is that if we want to clean it up and to the use the language of the market, people unfortunately bring to the discussion a lot of emotional baggage about what that means.
    The hon. Member for Epsom and Ewell kindly alluded to my remarks in Committee on how a distorted market affects my constituency. Nottingham, North

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    sends the fewest young people to university of any constituency in the United Kingdom. The people in Nottingham, North are not congenitally thicker than people elsewhere, but their life chances are perverted at an early stage because the market of brains, ability and talent is not allowed to work. The way to solve that is not to preserve the current system in aspic, but to take on the market, make sure that it works effectively and remove as many of its imperfections as possible.
    One tool that we can bring to bear on that process is OFFA. Unlike the hon. Member for Epson and Ewell—on occasion I have disagreed with Ministers, too, on this—I feel that OFFA is not the tiger that we need, but something of a pussycat.
    Jonathan Shaw: If we all agree that admissions are the sole responsibility of the institution, what additional powers does my hon. Friend advocate that OFFA should have?
    Mr. Allen: I shall gladly explain my request, but my hon. Friend will be bored because he heard it all in Committee. We have heard from Opposition Members, whose view is honest and sincere, that we need a light touch, and my hon. Friend the Minister for Lifelong Learning, Further and Higher Education has taken that further by saying that we should have a light touch but not a soft touch. However, I think that we need a slightly firmer hand on this particular tiller. Statistics tell us that over the past 40 years, working-class kids' chances of getting to university have not improved one jot. There are still only 20 per cent. of working-class kids, and fewer in my constituency, who make it to university. I do not want to rush into legislation, to use the term of the hon. Member for Epsom and Ewell, but concluding a 40-year experiment is not rushing. The need to ensure that the talent that is out there is allowed to breathe, and that talented young people realise their full potential, is long overdue. People whom we represent feel that it is long overdue, as does our party.
    Mr. Sheerman: My hon. Friend knows of my admiration for what he is doing in Nottingham, North to put right what has been wrong for far too long in terms of opportunities for children. However, does he agree that in the period since 1997, we have had the right strategy of intervening as early as we can, with Sure Start, free nursery places, and massive investment in primary, junior and secondary schools and in education maintenance allowances? All of us will agree that in one sense, 18 is too late. We must make the intervention earlier.
    Mr. Allen: My hon. Friends on the Government Front Bench repeat over and over, rightly, that the subsidy for education, which everyone in this country should be proud of, is far higher at the latter end of education than at the earliest moment. I pay great tribute to my hon. Friend the Chairman of the Education and Skills Committee for repeatedly renewing calls on Sure Start, on all our schemes to improve emotional intelligence and social behaviour before school and on the effort to bring literacy and numeracy into play at primary school. When those measures were introduced, none of them found much favour from Opposition Members, but Ministers

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    pushed them through with the support of my hon. Friends on the Back Benches, and they are starting to make a real difference.
    I repeat that the life chances of young people in my constituency and in the constituencies of many colleagues are not falsified at the age of 18; the dice are loaded from birth, and sometimes before. We need to examine a much wider picture and ensure that the money goes in at the earliest possible opportunity. If youngsters are allowed to flourish prior to going to school—we have all read primary school Ofsted reports from difficult parts of our constituency—they will benefit massively from the education on offer. That is how we must look at this particular question, and we must ensure that the process is pursued right up to the age of 18, through an OFFA with teeth.
    Huw Irranca-Davies: Given how my hon. Friend described his constituency and his constituents, does he think that they would agree with the wording of new clause 1, which describes equality of opportunity as desirable? Would he choose a stronger form of words?
    Mr. Allen: I would choose far stronger words, and I did so in Committee. I still hope that the Government might consider my proposal. OFFA is essentially a reactive body. If we look at the way in which it was created through the consultative paper, and the way in which we talked about it in Committee, we see that OFFA is reactive to whatever universities propose in their access plans. However, I want OFFA to make proposals, to be innovative and to tackle some of the problems and their causes, just as we would expect any other body related to educational institutions to do. If Ofsted goes into one of my local primary schools, it comes out and produces not just a bland report on achievement but a sharp report on what is needed in that school, and on how to support teachers and end the problems that have caused under-attainment. Similarly, I want action-oriented proposals from OFFA.
    I know that we have had to compromise to get parts of the Bill through, but we must return to that matter at an appropriate point. That is why one of my amendments in Committee referred directly to a proposal of the Chairman of the Education Committee, which has done such superb work in this field. Although it was able to undertake only brief, if comprehensive, pre-legislative scrutiny of the provisions, one of its proposals was that we review the operation of OFFA and see whether we can take it further and give it more teeth, so that we can assess how the problems are being tackled, rather than just providing a snapshot of those problems. I hope that the Minister will take up that idea informally, even if it is not passed as an amendment to the Bill.
    2 pm
    Mr. Phil Willis: I do not think that anybody in the House would disagree with the premise that the hon. Gentleman is putting forward—that generations of young people in many constituencies have been denied access to higher education as a result of low expectation, and often as a result of low standards in local education authorities and schools. We both start from that point. What worries me about his language is the idea that, in a
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    constituency such as mine, where about 70 per cent. of young people enter some form of higher education, those very young people should be penalised as a result of their efforts and the fact that many of them have been born into lower or middle-class families. Does he agree that it should not be a question of either/or? We are not seeking to replace certain groups of students with others. That is what worries us about the whole issue of social engineering within this framework.
    Mr. Allen: Of course it is not a question of either/or, but let us be absolutely clear about this: social engineering is already happening, and we need to recognise it. There is already a market, and we need to recognise that. If we think that the current market is imperfect, which it is, and if we agree that the current social imbalance, which certainly exists, has not arrived by accident and is wrong, we need to do something about those things. The pertinence to the new clause is that OFFA potentially gives us a way to strengthen the teeth that will allow talent to flourish—not to give anybody an easy ride, not to give anybody access to university who does not have the qualifications, but to ensure that the abilities that are out there are allowed to flourish. It is a way of freeing up the abilities, not forcing people into university. In many ways, the hon. Gentleman is setting up a straw man, because the people who would like that the least would probably be those who were forced into a university when they knew perfectly well that they were not qualified. I accept that he was not intending to say that.
    Mrs. Fitzsimons: I accept the genuine interest and expertise of the Liberal Democrat Front-Bench spokesperson on this issue, but does my hon. Friend share my concern that, over the past 40 years, social engineering has kept able, bona fide candidates out of higher education, as is evidenced by the fact that for 40 years only 20 per cent. of people from lower socio-economic backgrounds entered higher education?
    Mr. Allen: I very much agree with my hon. Friend. Labour Members should stop being defensive about the idea that intervention takes place in a market. That is exactly what this party is about, if we are about anything. The Conservatives practised intervention for decade after decade to the benefit of the people whom they represent. I do not quibble with them for doing that, but Labour Members must accept that, as John Smith used to say repeatedly, a market is a good servant but a bad master. By using methods such as those that OFFA will use, we can intervene to ensure that the market is properly regulated so that talent is allowed to flourish.
    I return briefly to the point that the hon. Member for Harrogate and Knaresborough (Mr. Willis) made. We do of course need to take a comprehensive view of the whole issue. For that reason, I implore my hon. Friends, whatever their views on particular aspects of variability, to vote with the Government tonight. If things do not go as I hope that they will, we might lose the other part of this vital package. The key is to ensure that, now that we have a higher education system in which youngsters can flourish, we allow them to get there.

    1623
    The biggest problem faced by young people is not the prospect of paying back a fiver a week when they are on £ 18,000, or £25 a week when they are on £30,000, as a graduate; the biggest obstacle to kids in my patch, and in the constituencies of hon. Members on both sides of the House, is their fear that if they go to university with no money in their pocket, they will be unable to keep body and soul together. I have already written to the eight secondary head teachers in my constituency to tell them that, if the Bill is passed, they should spread the good news at their assemblies and other places and say, "You can go to university and we will pay you £3,000 to do it, because that is available"—
    Mr. Willis: And charge them.
    Mr. Allen: And they will not be charged. The hon. Gentleman repeats that assertion over and again. It needs to be refuted, even if it is only made from a sedentary position.
    Mr. Willis Mr. Willis rose—
    Mr. Allen: I must answer the hon. Gentleman's sedentary point, and then I may give way to his standing point.
    The scare that is put about that poor students, poor families, rich students or rich families will have to pay back under this scheme, is nonsense. It will be graduates earning a wage—earning £18,000—who will start to pay back at £5 a week, and those earning £30,000 will pay back £25 a week. What the hon. Gentleman does—he does it so often that I begin to doubt that he is doing it inadvertently—is frighten the very youngsters in my constituency whom I want to grasp this opportunity. It is an easy point; it is an easy misrepresentation. This morning I met a number of people who have lobbied us in the House. I corrected them, and they were amazed because they had swallowed the propaganda and thought this was a great debt burden rather than a very modest repayment that will be made only once graduates earn sufficient repay.
    Mr. Willis: Does the hon. Gentleman accept that poorer students currently pay no fees, so when they leave university they have to pay back their maintenance loan, whereas under the new system they will get a £3,000 grant, including the bursary, as they go into university, but they will have a £3,000 tuition fee to repay at the end? So they will actually get a grant of £3,000 and then have to pay back £3,000 in fees. How on earth is that an advantage?
    Mr. Allen: The hon. Gentleman is wrong on almost every particular. I wish that I could take more time to refute the arguments that will be made in the later debate. I will be present in the later debate to do that, as I did repeatedly in Committee. Not every youngster will pay a £3,000 fee—[Interruption.] I am sorry, not every university will charge—
    Mr. Jon Owen Jones: On a point of order, Mr. Deputy Speaker. I seek your protection. How can you help Members who represent Wales in the House, who, it is now clear, will have no opportunity to debate the important issues, which are currently non-devolved, about how the Bill affects Wales? In its ignorance or with its disinterest, the House is about to legislate on Wales without allowing any Member from Wales to speak on that issue. Can you do anything to protect our interests?
    Mr. Deputy Speaker: I understand the points that the hon. Gentleman is raising, but the House has decided the programme motion that we are now working under, and as far as I am concerned in the Chair I have no control over that.
    Mr. Allen: My hon. Friend the Member for Cardiff, Central (Mr. Jones) makes a strong point, and all that I can say to him is that this matter was covered extensively in Committee. I know that is of little consolation to him—
    Paul Farrelly: I have enjoyed listening at great length to my hon. Friend. Given the length of his contribution and in recognition of his efforts, OFFA should perhaps be renamed the Allen key to improve access.
    Mr. Allen: I believe that several colleagues wish to speak and I shall bring my remarks to a close. I simply emphasise that we are creating an instrument for intervention in a highly imperfect market, and we should give it the necessary teeth. Unfortunately, this will not be the opportunity to do that, but I hope that perhaps under the auspices of the Select Committee we shall revisit this matter and ensure that OFFA is a regulatory body worthy of the name.
    Mr. Michael Fallon: The hon. Member for Nottingham, North (Mr. Allen) has just taken a third of the entire debate. I shall certainly be briefer, not least to try to allow some Welsh Members into the debate.
    My hon. Friend the Member for Epsom and Ewell (Chris Grayling) described amendment No. 1 as consequential. It may be, but I think that it also reflects amendment No. 268, which he tabled in Committee, in that it removes from the Bill the clause that allows the Secretary of State to give guidance to the regulator. That is the issue that most concerns me, because it allows the Secretary of State to give the regulator guidance, so the regulator will not be independent of the Secretary of State or of Government.
    One can make a case, when dealing with rail, water or other issues, for the regulator to be directed or guided by the Secretary of State or the politicians of the day, but higher education is not the same as energy, water or railways. On the contrary, universities—even if Labour would wish it otherwise—are not public institutions. They are private institutions, and what is studied at universities and those who are admitted to them should, in the final resort, be matters for universities themselves. That is the principle of academic freedom, which I have yet to hear addressed, on Second Reading or today.
    Peter Bradley: Will the hon. Gentleman give way?
    Mr. Fallon: No, I have very little time.
    The Minister was brutal on that point in Committee. When he answered the debate on amendment No. 268, he said that the Government wanted the powers because
    "we want to direct the regulator."—[Official Report, Standing Committee H, 4 March 2004; c. 523.]
    He made no bones about it: he wants the powers so that the Secretary of State can direct the regulator.
    We have heard today Labour Members say—as they are entitled to do—that they want a regulator with teeth. Indeed, that was the gist of the 20-minute speech by the hon. Member for Nottingham, North. That is fine, but the Bill will mean that we will have a regulator with the Government's teeth. It is wholly wrong of the Government to interfere in the operation of the regulator.
    I shall lay my cards on the table and confess that I do not think that we need a regulator. Better practice could be spread in different ways, and there is no case for a regulator. However, if there is to be one, it should be independent of the Government and of the Secretary of State. It should carry out its duties, subject—of course—to the law and perhaps to review by the courts, but free from political interference.
    Jonathan Shaw: The hon. Member for Harrogate and Knaresborough (Mr. Willis) rightly said that we do not want an either/or situation: we want to promote the opportunities for young people from working-class backgrounds to fulfil their potential and gain access to higher education institutes. We have heard a lot of scaremongering from the Conservatives about what OFFA will do, but the idea that it will involve social engineering is ridiculous—[Interruption.] I am sorry that the hon. Member for Boston and Skegness (Mr. Simmonds) greets that with incredulity. OFFA will, with a light touch, spread good practice to ensure that institutions reach out to communities that are less well represented in higher education. OFFA will not be a punitive weapon that the Secretary of State can use, and that suggestion was clearly rebutted in Committee—and the hon. Member for Epsom and Ewell (Chris Grayling) knows it. The hon. Member for Westmorland and Lonsdale (Mr. Collins) nods, but we remember the language that he used. He said that OFFA would be used if the Secretary of State took offence at an institution and that he could use OFFA in a vendetta against it.
    The Opposition said that OFFA would be the Secretary of State's plaything, but that is ridiculous. Universities UK has been clear about the powers that OFFA will have, especially on the plan that will allow universities to charge fees of £3,000. If the plan is altered, it will be on the say-so of the institutions, not OFFA. It is important that OFFA is not involved in admissions, but the Conservatives want people to think that it will be. The universities know that OFFA will not be involved in admissions, the Labour party knows that and so do the Liberal Democrats. Indeed, the Tories know it, but they choose not to articulate it because it does not suit their opportunism. They constantly use emotive words, talking about social engineering, to create a pernicious impression.
    2.15 pm
    Mr. Ian Taylor: I support the principles in the Bill, which is why I will not vote against it tonight, but does the hon. Gentleman agree that the provisions on OFFA are a cause for concern? The best universities want to try to broaden access: the problem is that only a quarter of 18-year-old A-level entrants get two decent A-levels. We have to find other ways, but that is not what OFFA will be set up to do.
    Jonathan Shaw: One in four youngsters from working-class backgrounds who get good GCSEs do not go on to higher education institutions. Perhaps if those institutions reached out, they might get on the radar of those youngsters. We will pile more money into universities and it is reasonable for a light-touch regulator to try to ensure that they reach out. Some of our universities do a fantastic job, while others do not do such a good job. If universities want to raise their fees, they will have to reach out as the best do.
    Mr. Simon Thomas: If OFFA were to be established, would any student of adequate or good financial means from a middle-class background find it difficult to go to university? I find it hard to conceive that that would ever be the case. It is also pertinent that while universities are independent, they rely heavily on public funding. Therefore, we have the right to ask something in return for that funding.
    Jonathan Shaw: I agree. The judgment that we have to make is the extent of that intervention. The proposals in the Bill are reasonable. A series of amendments in Committee have assured Universities UK that OFFA will be light touch. It will also spread good practice and, together with other measures—not least at nursery level—it will improve access for young people
    Mr. Clappison: In the unfortunately short time left, I shall be brief. I support the amendments tabled by my hon. Friends and I also support in their entirety the remarks of my hon. Friend the Member for Sevenoaks (Mr. Fallon). He was right to draw attention to the lack of independence of OFFA. It will be the creature of the Secretary of State and will act under his strict statutory guidance. Hon. Members should ask how OFFA will work under that guidance, because there will be a clear link between admissions and finance, and that is very disturbing.
    My hon. Friend was right to refer to the £500,000 fine that can be imposed on universities, but whether universities are allowed to impose a variable fee will depend on the approval of OFFA. Whether they get that approval will depend on whether they carry out the activities required under the access agreement. The key point of how they will be judged on whether they are achieving the targets on outreach will be admissions[Interruption.] Whoever said "No" should read the statutory guidance, which sets it out in black and white.
    Chris Grayling: On a point of order, Mr. Deputy Speaker. We have two minutes before the guillotine falls, and clearly the House would like to hear the

    1627
    Minister's response to the debate. Have you received any representations from the Government that they might be minded to extend the guillotine under the programme motion? We would be happy to support such an extension.
    Mr. Deputy Speaker: Such things are not possible at this stage of our proceedings and would simply take more time from the debate.
    Mr. Clappison: For the reasons that I outlined, OFFA is inconsistent with admissions based on merit. That will create a sense of injustice for many individuals, and might well lead to the lowering of standards in universities. It could result in a large number of this country's students going to universities in Germany—we have heard about that today—and perhaps the United States because they cannot obtain a place at a university in this country. They will be joined by those for whom a vast burden of debt will create a disincentive. I shall finish to allow the hon. Member for Cardiff, Central (Mr. Jones) the chance to make his point on Wales, if he catches your eye, Mr. Deputy Speaker.
    Peter Bradley: I have been to Wales.
    I am delighted that the hon. Member for Epsom and Ewell (Chris Grayling) put on the record the Tory view that democracy is an unhappy accident. It is no doubt also his view that broadening access to university will happen only through an unhappy accident. He says that there is a problem with widening access, and new clause 1 says that it is desirable to promote equality, but his solution is to do nothing except to trust the instincts of those in charge of admissions policies, although they have failed over the years to do anything more, for example, than to lead Oxford and Cambridge to admit people from lower-income groups to 10 per cent. of their places. OFFA is necessary not only to help to develop outreach strategies, but to ensure that they make the difference that will be absolutely essential if the Bill is to have any meaning.
    It being one hour after the commencement of proceedings, MR. DEPUTY SPEAKER put forthwith the Question, pursuant to Order [this day].
    Question put. That the clause be read a Second time:—
    The House divided: Ayes 216, Noes 378.

    Division No. 121]

    [2:21 pm

    AYES

    Ainsworth, Peter(E Surrey)

    Beggs, Roy(E. Antrim)

    Allan, Richard

    Beith, rh A. J.

    Amess, David

    Bellingham, Henry

    Ancram, rh Michael

    Bercow, John

    Arbuthnot, rh James

    Beresford, Sir Paul

    Atkinson, David(Bour'mth E)

    Blunt, Crispin

    Atkinson, Peter(Hexham)

    Boswell, Tim

    Bacon, Richard

    Bottomley, Peter(Worthing W)

    Baker, Norman

    Bottomley, rh Virginia(SW Surrey)

    Baldry, Tony

    Barker, Gregory

    Brady, Graham

    Baron, John(Billericay)

    Brake, Tom(Carshalton)

    Barrett, John

    Brazier, Julian

    1628

    Breed, Colin

    Hoban. Mark(Fareham)

    Brooke, Mrs Annette L

    Hogg, rh Douglas

    Browning, Mrs Angela

    Horam, John(Orpington)

    Bruce, Malcolm

    Howard, rh Michael

    Burnett, John

    Howarth, Gerald(Aldershot)

    Burns, Simon

    Hughes, Simon(Southwark N)

    Burnside, David

    Hunter, Andrew

    Barstow, Paul

    Jack, rh Michael

    Burt, Alistair

    Jenkin, Bernard

    Butterfill, Sir John

    Johnson, Boris(Henley)

    Cable, Dr. Vincent

    Jones, Nigel(Cheltenham)

    Calton, Mrs Patsy

    Keetch, Paul

    Cameron, David

    Kennedy, rh Charles(Ross Skye&Inverness)

    Campbell, Gregory(E Lond'y)

    Campbell, rh Sir Menzies(NE Fife)

    Key, Robert(Salisbury)

    Kirkbride, Miss Julie

    Carmichael, Alistair

    Kirkwood, Sir Archy

    Cash, William

    Knight, rh Greg(E Yorkshire)

    Chapman, Sir Sydney(Chipping Barnet)

    Laing, Mrs Eleanor

    Lait, Mrs Jacqui

    Chidgey, David

    Lamb, Norman

    Chope, Christopher

    Lansley, Andrew

    Clappison, James

    Laws, David(Yeovil)

    Clarke, rh Kenneth(Rushcliffe)

    Leigh, Edward

    Collins, Tim

    Letwin, rh Oliver

    Conway, Derek

    Lewis, Dr. Julian(New Forest E)

    Cotter, Brian

    Liddell-Grainger, Ian

    Cran, James(Beverley)

    Lidington, David

    Curry, rh David

    Lilley, rh Peter

    Davey, Edward(Kingston)

    Loughton, Tim

    Davies, Quentin(Grantham&Stamford)

    Luff, Peter(M-Worcs)

    McIntosh, Miss Anne

    Davis, rh David(Haltemprice&Howden)

    Mackay, rh Andrew

    Maclean, rh David

    Djanogly, Jonathan

    McLoughlin, Patrick

    Dodds, Nigel

    Malins, Humfrey

    Donaldson, Jeffrey M.

    Maples, John

    Dorrell, rh Stephen

    Mates, Michael

    Doughty, Sue

    Maude, rh Francis

    Duncan, Alan(Rutland)

    Mawhinney, rh Sir Brian

    Duncan Smith, rh lain

    May, Mrs Theresa

    Evans, Nigel

    Mercer, Patrick

    Fabricant, Michael

    Mitchell, Andrew(Sutton Coldfield)

    Fallon, Michael

    Field, Mark(Cities of London&Westminister)

    Moore, Michael

    Moss, Malcolm

    Flook, Adrian

    Murrison, Dr. Andrew

    Forth, rh Eric

    Norman, Archie

    Foster, Don(Bath)

    Oaten, Mark(Winchester)

    Fox, Dr. Liam

    Öpik, Lembit

    Francois, Mark

    Osborne, George(Tatton)

    Garnier, Edward

    Ottaway, Richard

    George, Andrew(St. Ives)

    Page, Richard

    Gibb, Nick(Bognor Regis)

    Paice, James

    Gidley, Sandra

    Paisley, Rev. Ian

    Goodman, Paul

    Paterson, Owen

    Gray, James(N Wilts)

    Pickles, Eric

    Grayling, Chris

    Prisk, Mark(Hertford)

    Green, Damian(Ashford)

    Pugh, Dr. John

    Green, Matthew(Ludlow)

    Randall, John

    Greenway, John

    Redwood, rh John

    Grieve, Dominic

    Reid, Alan(Argyll&Bute)

    Gummer, rh John

    Bendel, David

    Hague, rh William

    Robathan, Andrew

    Hammond, Philip

    Robertson, Laurence(Tewk'b"ry)

    Hancock, Mike

    Robinson, Mrs Iris(Strangford)

    Harris, Dr. Evan(Oxford W&Abingdon)

    Robinson, Peter(Belfast E)

    Roe, Mrs Marion

    Harvey, Nick

    Rosindell, Andrew

    Hawkins, Nick

    Ruffley, David

    Hayes, John(S Holland)

    Russell, Bob(Colchester)

    Heald, Oliver

    Sanders, Adrian

    Heath, David

    Sayeed, Jonathan

    Heathcoat-Amory, rh David

    Selous, Andrew

    Hendry, Charles

    Shephard, rh Mrs Gillian

    Hermon, Lady

    Shepherd, Richard

    1629

    Simmonds, Mark

    Trimble, rh David

    Simpson, Keith(M-Norfolk)

    Turner, Andrew(Isle of Wight)

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

    Tyler, Paul(N Cornwall)

    Tyrie, Andrew

    Smyth, Rev. Martin(Belfast S)

    Viggers, Peter

    Soames, Nicholas

    Walter, Robert

    Spelman, Mrs Caroline

    Waterson, Nigel

    Spicer, Sir Michael

    Watkinson, Angela

    Spink, Bob(Castle Point)

    Webb, Steve(Northavon)

    Spring, Richard

    Whittingdale, John

    Stanley, rh Sir John

    Widdecombe, rh Miss Ann

    Steen, Anthony

    Wilkinson, John

    Stunell, Andrew

    Willetts, David

    Swayne, Desmond

    Williams, Roger(Brecon)

    Swire, Hugo(E Devon)

    Willis, Phil

    Syms, Robert

    Wilshire, David

    Tapsell, Sir Peter

    Winterton, Ann(Congleton)

    Taylor, Ian(Esher)

    Winterton, Sir Nicholas (Macclesfield)

    Taylor, John(Solihull)

    Taylor, Matthew(Truro)

    Yeo, Tim(S Suffolk)

    Taylor, Dr. Richard(Wyre F)

    Young, rh Sir George

    Taylor, Sir Teddy

    Younger-Ross, Richard

    Thurso, John

    Tellers for the Ayes:

    Tonge, Dr. Jenny

    Mr. Geoffrey Clifton-Brown

    Tredinnick, David

    and

    Trend, Michael

    Hugh Robertson

    NOES

    Adams, Irene(Paisley N)

    Byers, rh Stephen

    Ainger, Nick

    Caborn, rh Richard

    Ainsworth, Bob(Cov'try NE)

    Cairns, David

    Alexander, Douglas

    Campbell, Alan(Tynemouth)

    Allen, Graham

    Campbell, Mrs Anne(C"bridge)

    Anderson, rh Donald(Swansea E)

    Campbell, Ronnie(Blyth V)

    Anderson, Janet(Rossendale&Darwen)

    Caplin, Ivor

    Casale, Roger

    Armstrong, rh Ms Hilary

    Caton, Martin

    Atherton, Ms Candy

    Cawsey, Ian(Brigg)

    Atkins, Charlotte

    Challen, Colin

    Bailey, Adrian

    Chapman, Ben(Wirral S)

    Baird, Vera

    Clapham, Michael

    Banks, Tony

    Clark, Mrs Helen(Peterborough)

    Barnes, Harry

    Clark, Dr. Lynda(Edinburgh Peterborough)

    Barron, rh Kevin

    Battle, John

    Clark, Paul(Gillingham)

    Bayley, Hugh

    Clarke, rh Charles(Norwich S)

    Beard, Nigel

    Clarke, rh Tom(Coatbridge&Chryston)

    Begg, Miss Anne

    Bell, Sir Stuart

    Clarke, Tony(Northampton S)

    Benn, rh Hilary

    Clelland, David

    Bennett, Andrew

    Clwyd, Ann(Cynon V)

    Benton, Joe(Bootle)

    Coffey, Ms Ann

    Berry, Roger

    Coleman, lain

    Betts, Clive

    Colman, Tony

    Blackman, Liz

    Connarty, Michael

    Blair, rh Tony

    Cook, Frank(Stockton N)

    Blears, Ms Hazel

    Cook, rh Robin(Livingston)

    Blizzard, Bob

    Cooper, Yvette

    Blunkett, rh David

    Corbyn, Jeremy

    Boateng, rh Paul

    Corston, Jean

    Borrow, David

    Cousins, Jim

    Bradley, rh Keith(Withington)

    Cranston, Ross

    Bradley, Peter(The Wrekin)

    Crausby, David

    Bradshaw, Ben

    Cruddas, Jon

    Brennan, Kevin

    Cummings, John

    Brown, rh Nicholas(Newcastle E Wallsend)

    Cunningham, rh Dr. Jack(Copeland)

    Brown, Russell(Dumfries)

    Cunningham, Jim(Coventry S)

    Browne, Desmond

    Cunningham, Tony(Workington)

    Bryant, Chris

    Curtis-Thomas, Mrs Claire

    Buck, Ms Karen

    Dalyell, Tam

    Burden, Richard

    Darling, rh Alistair

    Burgon, Colin

    Davey, Valerie(Bristol W)

    Burnham, Andy

    David, Wayne

    1630

    Davidson, Ian

    Hughes, Beverley(Stretford&Urmston)

    Davies, rh Denzil(Llanelli)

    Davies, Geraint(Croydon C)

    Hughes, Kevin(Doncaster N)

    Dawson, Hilton

    Humble, Mrs Joan

    Dean, Mrs Janet

    Hurst, Alan(Braintree)

    Denham, rh John

    Hutton, rh John

    Dhanda, Parmjit

    Iddon, Dr. Brian

    Dismore, Andrew

    Illsley, Eric

    Dobbin, Jim(Heywood)

    Ingram, rh Adam

    Dobson, rh Frank

    Irranca-Davies, Huw

    Donohoe, Brian H.

    Jackson, Glenda(Hampstead&Highgate)

    Doran, Frank

    Dowd, Jim(Lewisham W)

    Jackson, Helen(Hillsborough)

    Drew, David(Stroud)

    Jamieson, David

    Drown, Ms Julia

    Jenkins, Brian

    Dunwoody, Mrs Gwyneth

    Johnson, Alan(Hull W)

    Eagle, Angela(Wallasey)

    Johnson, Miss Melanie(Welwyn Hatfield)

    Eagle, Maria(L'pool Garston)

    Edwards, Huw

    Jones, Jon Owen(Cardiff C)

    Efford, Clive

    Jones, Kevan(N Durham)

    Ellman, Mrs Louise

    Jones, Lynne(Selly Oak)

    Ennis, Jeff(Barnsley E)

    Jones, Martyn(Clwyd S)

    Farrelly, Paul

    Jowell, rh Tessa

    Field, rh Frank(Birkenhead)

    Joyce, Eric(Falkirk W)

    Fisher, Mark

    Kaufman, rh Gerald

    Fitzpatrick, Jim

    Keeble, Ms Sally

    Fitzsimons, Mrs Lorna

    Keen, Alan(Feltham)

    Flint, Caroline

    Keen, Ann(Brentford)

    Flynn, Paul(Newport W)

    Kelly, Ruth(Bolton W)

    Follett, Barbara

    Kemp, Fraser

    Foster, Michael(Worcester)

    Kennedy, Jane(Wavertree)

    Foster, Michael Jabez(Hastings&Rye)

    Khabra, Piara S.

    Kidney, David

    Foulkes, rh George

    Kilfoyle, Peter

    Francis, Dr. Hywel

    King, Andy(Rugby)

    Gapes, Mike(Ilford S)

    King, Ms Oona(Bethnal Green&Bow

    Gardiner, Barry

    George, rh Bruce(Walsall S)

    Knight, Jim(S Dorset)

    Gibson, Dr. Ian

    Kumar, Dr. Ashok

    Gilroy, Linda

    Ladyman, Dr. Stephen

    Godsiff, Roger

    Lammy, David

    Goggins, Paul

    Lawrence, Mrs Jackie

    Griffiths, Jane(Reading E)

    Laxton, Bob(Derby N)

    Griffiths, Nigel(Edinburgh S)

    Lazarowicz, Mark

    Griffiths, Win(Bridgend)

    Lepper, David

    Grogan, John

    Leslie, Christopher

    Hain, rh Peter

    Levitt, Tom(High Peak)

    Hall, Mike(Weaver Vale)

    Lewis, Ivan(Bury S)

    Hall, Patrick(Bedford)

    Lewis, Terry(Worsley)

    Hamilton, David(Midlothian)

    Liddell, rh Mrs Helen

    Hamilton, Fabian(Leeds NE)

    Linton, Martin

    Hanson, David

    Lloyd, Tony(Manchester C)

    Harman, rh Ms Harriet

    Love, Andrew

    Harris, Tom(Glasgow Cathcart)

    Lucas, Ian(Wrexham)

    Havard, Dai(Merthyr Tydfil&Rhymney)

    Luke, lain(Dundee E)

    Lyons, John(Strathkelvin)

    Henderson, Doug(Newcastle N)

    McAvoy, Thomas

    Henderson, Ivan(Harwich)

    McCabe, Stephen

    Hendrick, Mark

    McCafferty, Chris

    Hepburn, Stephen

    McCartney, rh Ian

    Heppell, John

    McDonagh, Siobhain

    Hesford, Stephen

    MacDonald, Calum

    Hewitt, rh Ms Patricia

    McDonnell, John

    Heyes, David

    MacDougall, John

    Hill, Keith(Streatham)

    McFall, John

    Hinchliffe. David

    McGuire, Mrs Anne

    Hodge, Margaret

    Mclsaac, Shona

    Hoey, Kate(Vauxhall)

    McKechin, Ann

    Hoon, rh Geoffrey

    McKenna, Rosemary

    Hope, Phil(Corby)

    Mackinlay, Andrew

    Hopkins, Kelvin

    McNulty, Tony

    Howarth, rh Alan(Newport E)

    MacShane, Denis

    Howarth, George(Knowsley N&Sefton E)

    Mactaggart, Fiona

    McWalter, Tony

    Howells, Dr. Kim

    McWilliam, John

    Hoyle, Lindsay

    Mahrnood, Khalid

    1631

    Mahon, Mrs Alice

    Ruane, Chris

    Mallaber, Judy

    Ruddock, Joan

    Mendelson, rh Peter

    Russell, Ms Christine(City of Chester)

    Mann, John(Bassetlaw)

    Marris, Rob(Wolverh'ton SW)

    Ryan, Joan(Enfield N)

    Marsden, Gordon(Blackpool S)

    Salter, Martin

    Marshall, David(Glasgow Shettleston)

    Sarwar, Mohammad

    Savidge, Malcolm

    Marshall, Jim(Leicester S)

    Sawford, Phil

    Marshall-Andrews, Robert

    Sedgemore, Brian

    Martlew, Eric

    Shaw, Jonathan

    Michael, rh Alun

    Sheerman, Barry

    Milburn, rh Alan

    Sheridan, Jim

    Miliband, David

    Shipley, Ms Debra

    Miller, Andrew

    Short, rh Clare

    Mitchell, Austin(Gt Grimsby)

    Simon, Siôn(B' ham Erdington)

    Moffatt, Laura

    Simpson, Alan(Nottingham S)

    Mole, Chris

    Singh, Marsha

    Moonie, Dr. Lewis

    Skinner, Dennis

    Moran, Margaret

    Smith, rh Andrew(Oxford E)

    Morgan, Julie

    Smith, Angela(Basildon)

    Morley, Elliot

    Smith, rh Chris(Islington S&Finsbury)

    Morris, rh Estelle

    Mountford, Kali

    Smith, Geraldine(Morecambe&Lunesdal)

    Mullin, Chris

    Munn, Ms Meg

    Smith, Jacqui(Redditch)

    Murphy, Denis(Wansbeck)

    Smith, Llew(Blaenau Gwent)

    Murphy, Jim(Eastwood)

    Soley, Clive

    Murphy, rh Paul(Torfaen)

    Southworth, Helen

    Naysmith, Dr. Doug

    Speller, rh John

    Norris, Dan(Wansdyke)

    Squire, Rachel

    O'Brien, Bill(Normanton)

    Starkey, Dr. Phyllis

    O'Brien, Mike(N Warks)

    Steinberg, Gerry

    O'Hara, Edward

    Stewart, David(Inverness E&Lochalber)

    olner, Bill

    O'Neill, Martin

    Stewart, Ian(Eccles)

    Organ, Diana

    Stinchcombe, Paul

    Osborne, Sandra(Ayr)

    Stoate, Dr. Howard

    Owen, Albert

    Stringer, Graham

    Palmer, Dr. Nick

    Stuart, Ms Gisela

    Pearson, Ian

    Sutcliffe, Gerry

    Perham, Linda

    Tami, Mark(Alyn)

    Picking, Anne

    Taylor, David(NW Leics)

    Pickthall, Colin

    Thomas, Gareth(Clwyd W)

    Pike, Peter(Burnley)

    Thomas, Gareth(Harrow W)

    Plaskitt, James

    Thomas, Simon(Ceredigion)

    Pollard, Kerry

    Timms, Stephen

    Pond, Chris(Gravesham)

    Tipping, Paddy

    Pope, Greg(Hyndburn)

    Todd, Mark(S Derbyshire)

    Pound, Stephen

    Touhig, Don(Islwyn)

    Prentice, Ms Bridget(Lewisham E)

    Trickett, Jon

    Truswell, Paul

    Prentice, Gordon(Pendle)

    Turner, Dennis(Wolverh'ton SE)

    Prescott, rh John

    Turner, Dr. Desmond(Brighton Kemptown)

    Price, Adam(E Carmarthen&Dinefwr)

    Turner, Neil(Wigan)

    Primarolo, rh Dawn

    Twigg, Derek(Halton)

    Prosser, Gwyn

    Twigg, Stephen(Enfield)

    Purchase, Ken

    Tynan, Bill(Hamilton S)

    Purnell, James

    Walley, Ms Joan

    Quin, rh Joyce

    Ward, Claire

    Quinn, Lawrie

    Wareing, Robert N.

    Rammell, Bill

    Watson, Tom(W Bromwich E)

    Rapson, Syd(Portsmouth N)

    Watts, David

    Raynsford, rh Nick

    White, Brian

    Reed, Andy(Loughborough)

    Whitehead, Dr. Alan

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

    Wicks, Malcolm

    Williams, rh Alan(Swansea W)

    Robertson, John(Glasgow Anniesland)

    Williams, Betty(Conwy)

    Williams, Hywel(Caernarfon)

    Robinson, Geoffrey(Coventry NW)

    Wills, Michael

    Wilson, Brian

    Roche, Mrs Barbara

    Winnick, David

    Rooney, Terry

    Winterton, Ms Rosie(Doncaster

    Ross, Ernie(Dundee W)

    Roy, Frank(Motherwell)

    Woodward, Shaun

    1632

    Woolas, Phil

    Wyatt, Derek

    Worthington, Tony

    Wright, Anthony D.(Gt Yarmouth)

    Tellers for the Noes:

    Wright, David(Telford)

    Gillan Marron and

    Wright, Tony(Cannock)

    Vernon Coaker

    Question accordingly negatived.

    New Clause 1

      GENERAL DUTIES OF THE DIRECTOR
      The Director must perform his functions under this Part in such a way as to ensure full access to higher education based upon academic ability and potential.

      In performing his functions under this Part the Director shall also have regard to—

      the desirability of promoting equality of opportunity in connection with access to higher education,

      the requirement to maintain the independence of the procedures for the admission of students of individual institutions, and

      the desirability of securing that his powers are exercised in such a way as to impose the minimum necessary burdens of cost and compliance with regulation on institutions.'—[Chris Grayling.]

      Brought up, and read the First time.

    New Clause 5
    Mr. Tim Collins: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this it will be convenient to discuss the following:
    New clause 6—Condition by English funding bodies in relation to fees of prescribed amount—

    A condition under this section requires the governing body of the relevant institution—

    to secure that, in respect of any qualifying course, the qualifying fees in respect of any academic year which begins during the grant period at a time when an English approved plan is in force in relation to the institution are equal to the prescribed amount,

    to secure that, in respect of any qualifying course, no qualifying fees are charged in respect of any academic year which begins during the grant period at a time when no English approved plan is in force in relation to the institution, and

    to comply with the general provisions of any English approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

    1633

    For the purposes of subsection (1)—

    an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

    an academic year which begins with the day on which an English approved plan comes into force is to be taken to begin at a time when the plan is in force.

    A condition under this section must provide—

    in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(a)—

    where the qualifying fees are equal to the prescribed amount, for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a), and

    where the qualifying fees exceed that amount, for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a) and of other financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22,

    in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(b), for the imposition by the funding body on the governing body of financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22, and

    in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(c), for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a).

    Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

    the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

    the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

    the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

    Where—

    a condition is imposed under this section in connection with any grants, loans or other payments made to the governing body of a relevant institution, and

    those payments are to any extent made in respect of persons undertaking a course which is provided in whole or part by any other institution,

    then, for the purposes of this section, fees payable by such persons to the other institution are to be regarded as fees payable by them to the relevant institution.

    The first regulations to be made under subsection (11) prescribing the prescribed amount shall prescribe a single amount, except where subsection (8) applies, in which case a lower amount may be prescribed.

    The Secretary of State may not make the first regulations under subsection (11) prescribing the prescribed amount unless a draft of the regulations has been laid before, and approved by a resolution of each House of Parliament.

    1634

    This subsection applies where the qualifying fees are for—

    the final academic year of a course where that academic year is normally required to be completed after less than 15 weeks' attendance;

    a sandwich course where during an academic year any periods of full-time study are in aggregate less than 10 weeks;

    a course of initial training of teachers, including such a course leading to a first degree, where during an academic year any periods of full-time study are in aggregate less than 10 weeks;

    a course provided in conjunction with an overseas institution where during an academic year the periods of full-time study are in aggregate less than 10 weeks;

    a sandwich course or a course provided in conjunction with an overseas institution where the periods of full-time study at the institution in the United Kingdom are 10 weeks or more, but in respect of the academic year and any previous such academic years the aggregate of any one or more periods of attendance which are not periods of full-time study at the institution (disregarding intervening vacations) exceeds 30 weeks.

    Where regulations under subsection (11) have been made prescribing the prescribed amount no regulations under that subsection may be made increasing that amount unless the Secretary of State is satisfied that the increase is no greater than is required to maintain the value of the amount in real terms.

    For the purposes of subsection (9) the Secretary of State is to have regard to such index of prices as may be specified in, or determined in accordance with, regulations made by him under this subsection.

    In this section—

    "academic year", in relation to a course, means an academic year applicable to the course;
    "funding body" has the same meaning as in section 22;
    "the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 22 relates are made;
    "prescribed" means prescribed by regulations made by the Secretary of State;
    "the prescribed amount" means the amount prescribed by regulations in accordance with this section;
    "qualifying course" means a course of any description prescribed for the purposes of this section;
    "qualifying fees", in relation to a relevant institution, means the fees payable to the institution by a qualifying person in connection with his undertaking a qualifying course;
    qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;
    "relevant institution" has the same meaning as in section 22.'.
    New clause 7—Condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount—

    A condition under this section requires the governing body of the relevant institution—

    to secure that, in respect of any qualifying course, the qualifying fees in respect of any academic year which begins during the grant period at a time when a Welsh approved plan is in force in relation to the institution are equal to the prescribed amount,

    to secure that, in respect of any qualifying course, no qualifying fees are charged in respect of any academic year which begins during the grant period at a time when no Welsh approved plan is in force in relation to the institution, and

    to comply with the general provisions of any Welsh approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

    1635

    For the purposes of subsection (1)—

    an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

    an academic year which begins with the day on which a Welsh approved plan comes into force is to be taken at a time when the plan is in force.

    A condition under this section must provide, in the event of a failure of the governing body to comply with any of the requirements specified in subsection (1), for the imposition by the Higher Education Funding Council for Wales on the governing body of financial requirements determined by the Council in accordance with principles specified by the Assembly in the condition under section 25.

    Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

    the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

    the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

    the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

    Where—

    a condition is imposed under this section in connection with any grants, loans or other payments made to the governing body of a relevant institution, and

    those payments are to any extent made in respect of persons undertaking a course which is provided in whole or part by any other institution,

    then, for the purposes of this section, fees payable by such persons to the other institution are to be regarded as fees payable by them to the relevant institution.

    In this section—

    "academic year", in relation to a course, means an academic year applicable to the course;
    "the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 25 relates are made;
    "prescribed" means prescribed by regulations made by the Assembly;
    "the prescribed amount" means the amount prescribed by regulations in accordance with this section;
    "qualifying course" means a course of any description prescribed for the purposes of this section;
    "qualifying fees", in relation to a relevant institution, means the fees payable to the institution by a qualifying person in connection with his undertaking a qualifying course;
    "qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;
    "relevant institution" has the same meaning as in section 25.'.
    New clause 8—Condition that may be required to be imposed by English funding bodies (No. 2)

    A condition under this section requires the governing body of the relevant institution—

    to secure that, in respect of any qualifying course, no fees are payable to any relevant institution by any qualifying person, and

    to comply with the general provisions of any English approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

    For the purposes of subsection (1)—

    1636

    an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

    an academic year which begins with the day on which an English approved plan comes into force is to be taken to begin at a time when the plan is in force.

    A condition under this section must provide, in the event of a failure by the governing body to comply with the requirement specified in subsection (1), for the imposition by the funding body on the governing body of any financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22.

    Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

    the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

    the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

    the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

    In this section—

    "academic year", in relation to a course, means an academic year applicable to the course;
    "funding body" has the same meaning as in section 22;
    "the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 22 relates are made;
    "prescribed" means prescribed by regulations made by the Secretary of State;
    "qualifying course" means a course of any description prescribed for the purposes of this section;
    "qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;
    "relevant institution" has the same meaning as in section 22.'.
    New clause 9—Condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)—

    A condition under this section requires the governing body of the relevant institution—

    to secure that, in respect of any qualifying course, no fees are payable to any relevant institution by any qualifying person, and

    to comply with the general provisions of any Welsh approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

    For the purposes of subsection (1)—

    an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

    an academic year which begins with the day on which a Welsh approved plan comes into force is to be taken to begin at a time when the plan is in force.

    A condition under this section must provide, in the event of a failure of the governing body to comply with any of the requirements specified in subsection (1), for the imposition by the Higher Education Funding Council for Wales on the governing body of financial requirements determined by the Council in accordance with principles specified by the Assembly in the condition under section 25.

    1637

    Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

    the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

    the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

    the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

    In this section—

    "academic year", in relation to a course, means an academic year applicable to the course;
    "the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 25 relates are made;
    "prescribed" means prescribed by regulations made by the Assembly;
    "qualifying course" means a course of any description prescribed for the purposes of this section;
    "qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;
    "relevant institution" has the same meaning as in section 25.'.
    New clause 10—Access to student loans—
    'In determining eligibility for student loans age may not be taken into account.'.
    New clause 12—Fee repayments for graduates employed in public sector professions—
    'The Secretary of State shall make provision for fee repayments to be met out of public funds for graduates employed as—

    teachers in state maintained schools,

    public law enforcement officers,

    staff in the National Health Service,

    social workers by local authorities, and

    any other public sector worker specified by regulations who is required to have a graduate level qualification to enter that profession.'.

    New clause 13—Repayment of student loans through voluntary service or prescribed employment—

    The Secretary of State may make regulations allowing any borrower to repay any student loan, in whole or in part, through the performance of voluntary service or employment in a particular occupation.

    Any such regulations may prescribe the type of voluntary service or the occupations which are eligible for such repayment, and the minimum period for which the eligible service or employment is to be performed.

    Any such regulations may make different provision for different circumstances.

    Any such regulations shall be laid before Parliament at least two calendar months before they are due to take effect, and shall be subject to scrutiny in such form as both Houses of Parliament may prescribe.'.

    New clause 17—Government interest rate and fee deferral—

    All fees shall be deferred, to be repaid on an income contingent basis at a government rate of interest.

    A government rate of interest shall also be charged on all student loans.

    All monies raised from interest payments shall be used to finance loans to students, to be repaid on terms set out by the Secretary of State, which must take into account a student's personal and household financial circumstances.'.

    New clause 19—Commencement of liability for repayment of loans—

    The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

    After regulation 11(1), there is inserted—

    "A borrower shall not be liable to repay any of his student loan before the first day of the first year of assessment which falls more than fifteen years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

    New clause 20—Commencement of liability for repayment of loans (No. 2 )—

    The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

    After regulation 11(1), there is inserted—

    A borrower shall not be liable to repay any of his student loan before the first day of the first year of assessment which falls more than ten years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

    New clause 21—Commencement of liability for repayment of loans (No. 3)—

    The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

    After regulation 11(1), there is inserted—

    A before the first day of the first year of assessment which falls more than five years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

    Amendment No. 128, in page 8, line 37, leave out clauses 22 to 27.
    Amendment No. 129, in page 8, line 38, clause 22, leave out from beginning to 'a' in line 40 and insert
    'The Secretary of State must, when making any grant to a funding body under section 68 of the 1992 Act or section 7 of the 1994 Act, impose under subsection (1) of the section concerned'.
    Amendment No. 32, in page 8, line 41, leave out '23' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount]'.
    Amendment No. 53, in page 8, line 41, leave out '23' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)]'.
    Amendment No. 33, in page 9, line 11, leave out clauses 23 and 24.
    Amendment No. 19, in page 9, line 25, clause 23, at end insert
    '(d) to ensure that, in respect of any qualifying course, the qualifying fees charged to any eligible student who has received an unconditional offer of a university place through the UCAS system prior to 1st April 2006 shall not exceed the basic amount.'.
    Amendment No. 20, in page 10, line 31, at end insert—
    "'eligible student" means a student eligible for a grant under regulations made under section 22(2)(a) of the 1998 Act;'.
    Amendment No. 130, in page 11, clause 24, leave out lines 19 to 21 and insert—
    '(ii) each House of Parliament has at any time after 1st January 2010 passed a resolution that, with effect from a date specified in the

    1639
    resolution, the higher amount should be increased to an amount specified in the resolution, and the increase is an increase to the specified amount with effect from the specified date.'.
    Amendment No. 34, in page 11, line 30, clause 25, leave out '26' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 54, in page 11, line 30, leave out '26' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 35, in page 11, line 37, leave out clause 26.
    Amendment No. 36, in page 13, line 11 clause 27, leave out '23 or 26' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount] or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 55, in page 13, line 11, leave out '23 or 26' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)] or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 37, in page 13, line 18, leave out '23(6) or 26(6)' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount](11) or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](6).
    Amendment No. 56, in page 13, line 18, leave out '23(6) or 26(6)' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)](5) or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](5)'.
    Amendment No. 38, in page 13, line 32, leave out '23 or 26' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount] or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 57, in page 13, line 32, leave out '23 or 26' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)] or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 98, in page 13, line 33, at end insert—

    'The Secretary of State shall make provision for fee repayments to be met out of public funds for graduates employed as—

    teachers in state maintained schools,

    National Health Service staff,

    civil servants,

    law enforcement officers,

    any other profession which the Secretary of State may, from time to time, determine to be appropriate.'.

    Amendment No. 71, in page 13, line 37, clause 28, leave out
    'Director (as defined by section 29(1)'
    and insert
    'funding body (as defined in section 22(2))'.
    Amendment No. 72, in page 13, line 38, leave out 'person' and insert 'body'.
    Amendment No. 73, in page 13, line 42, leave out 'person' and insert 'body'.
    Amendment No. 74, in page 13, line 45, leave out 'person' and insert 'body'.
    Amendment No. 75, in page 14, line 1, leave out clause 29.
    Amendment No. 76, in page 14, line 7, clause 30, leave out 'Director' and insert
    'relevant authority in relation to England'.
    Amendment No. 77, in page 14, line 8, leave out 'his' and insert 'its'.
    Amendment No. 22, in page 14, line 16, clause 31, leave out subsection (1).
    Amendment No. 110, in page 14, line 20, at end insert—

    'A plan under this section relating to an institution must set out the policy which the institution will observe when determining the level of fees to be charged to qualifying persons.'.

    Amendment No. 23, in page 14, line 21, leave out 'also'.
    Amendment No. 24, in page 15, leave out lines 6 to 14.
    Amendment No. 39, in page 15, leave out lines 6 to 10.
    Amendment No. 40, in page 15, line 12, leave out '23' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount]'.
    Amendment No. 58, in page 15, line 12, leave out '23' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)]'.
    Amendment No. 41, in page 15, line 14, leave out '26' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 59, in page 15, line 14, leave out '26' and insert
    '[condition that may be required to be imposed by the Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 25, in page 16, line 9, leave out clauses 35 and 36.
    Amendment No. 78, in page 16, line 10 clause 35, leave out 'Director' and insert 'relevant authority'.
    Amendment No. 79, in page 16, line 10, leave out from 'institution' to 'has' in line 12.
    Amendment No. 42, in page 16, line 11, leave out '23' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount]'.
    Amendment No. 60, in page 16, line 11, leave out '23' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)]'.
    Amendment No. 43, in page 16, line 12, leave out '23(1)(a) or (c)' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount](1)(a) or (c)'.
    Amendment No. 61, in page 16, line 12, leave out '23(1)(a) or (c)' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)1(1)'.
    Amendment No. 80, in page 16, line 12, leave out 'that requirement' and insert
    'a condition under section 23'.
    Amendment No. 81, in page 16, line 13, leave out 'Director' and insert 'relevant authority'.
    Amendment No. 82, in page 16, line 14, leave out from beginning to 'impose' in line 15.
    Amendment No. 44, in page 16, line 16, leave out '23(3)' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount](3)'.
    Amendment No. 62, in page 16, line 16, leave out '23(3)' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)](3)'.
    Amendment No. 83, in page 16, line 17, leave out 'he' and insert 'the relevant authority'.
    Amendment No. 84, in page 16, line 21, leave out 'Director' and insert 'relevant authority'.
    Amendment No. 45, in page 16, line 30, clause 36, leave out '26' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 63, in page 16, line 30, leave out '26' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 46, in page 16, line 31, leave out '26(1)(a) or (c)' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](1)(a) or (c)'.
    Amendment No. 64, in page 16, line 31, leave out '26(1)(a) or (c)' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](1)'.
    Amendment No. 47, in page 17, line 3, leave out '26' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 65, in page 17, line 3, leave out '26' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 48, in page 17, line 5, leave out '26(3)' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](3)'.
    Amendment No. 66, in page 17, line 5, leave out '26(3)' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](3)'.
    Amendment No. 85, in page 17, line 7, leave out clause 37.
    Amendment No. 26, in page 17, clause 38, leave out lines 18 and 19.
    Amendment No. 86, in page 17, leave out line 20.
    Amendment No. 27, in page 17, leave out lines 22 to 37.
    Amendment No. 122, in page 19, line 3, clause 40, at end insert—
    '(2A) After subsection (2) there is inserted—
    "(2A) The maximum amount of a living cost grant available to any person prescribed by regulations under subsection (2)(b) in relation to an academic year shall not be less than 90 per cent. of the higher amount in relation to that academic year.
    (2B) In subsection (2A) 'the higher amount' has the same meaning as in section 23 of the Higher Education Act 2004.".'.
    Amendment No. 125, in page 19, line 3, at end insert—
    '(2A) After subsection (3) there is inserted—
    "(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

    for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than fifteen years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

    for such loans to bear interest before the day specified in paragraph (a).

    (3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.
    Amendment No. 126, in page 19, line 3, at end insert—
    '(2A) After subsection (3) there is inserted—
    "(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

    for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than ten years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

    for such loans to bear interest before the day specified in paragraph (a).

    (3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.
    Amendment No. 127, in page 19, line 3, at end insert—
    '(2A) After subsection (3) there is inserted—
    "(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

    for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than five years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

    for such loans to bear interest before the day specified in paragraph (a).

    (3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.
    Amendment No. 13, in page 21, line 16, clause 43, leave out paragraph (a).
    Amendment No. 49, in page 21, line 16, leave out '24(1) or (2)(a)(ii) or (13)(ii)'
    and insert
    '[condition by English funding bodies in relation to fees of prescribed amount](7)'.
    Amendment No. 14, in page 22, clause 48, leave out lines 7 to 18.
    Amendment No. 28, in page 22, leave out lines 8 to 10.
    Amendment No. 50, in page 22, line 8, leave out '23(6)' and insert
    '[condition by English funding bodies in relation to fees of prescribed amount](6), (7) and (II)'.
    Amendment No. 68, in page 22, line 8, leave out '23(6)' and insert
    '[condition that may be required to be imposed by English funding bodies (No. 2)](5)'.
    Amendment No. 51, in page 22, leave out line 9.
    Amendment No. 15, in page 22, leave out lines 22 to 25.
    Amendment No. 16, in page 22, leave out lines 30 and 31.
    Amendment No. 17, in page 22, line 42, leave out from beginning to 'and' in line 45.
    Amendment No. 30, in page 22, leave out line 42.
    Amendment No. 52, in page 22, line 42, leave out '26' and insert
    '[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.
    Amendment No. 70, in page 22, line 42, leave out '26' and insert
    '[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.
    Amendment No. 31, in page 22, line 45, leave out 'section 36'.
    Amendment No. 7, in page 31, line 1, leave out Schedule 5.
    Amendment No. 8, in page 32, line 18, schedule 6, leave out paragraph 1.
    Amendment No. 9, in page 32, line 35, leave out from 'Council' to end of line 36.
    Amendment No. 10, in page 33, line 11, leave out paragraphs 7 and 8.
    Amendment No. 11, in page 33, line 25, leave out from 'Council' to end of line 26.
    Amendment No. 12, in page 33, schedule 7, leave out lines 34 to 36.
    Mr. Collins: We come to the heart of the Bill. There is only one place that the debate can commence, and that is with the words:
    "We will not introduce 'top-up' fees and have legislated to prevent them"—
    the clear, categorical, unequivocal manifesto pledge on which all Labour Members were elected and which their Government are proposing to strong-arm them into breaking.
    1644
    New clause 5 and various amendments in this large group attempt to draw out the issue of fees. The new clause would prevent the introduction of top-up fees and tuition fees. Let us consider some of the views expressed about the proposed legislation by outside organisations—[Interruption.] We will come to universities, as the Secretary of State seems to be saying something about them.
    The British Medical Association
    "strongly opposes the introduction of top up fees for any students, including medical students."
    The Secretary of State and others will no doubt say that they are introducing the fees to raise money in part to pay for university lecturers and university employees. The National Association of Teachers in Further and Higher Education has said:
    "Critics of the Bill should hold their ground."
    It goes on:
    "We know that when the lid comes off fees, all hell will break loose."
    The Association of University Teachers opposes the proposals.
    The Secretary of State and Labour Members-or at least some Labour Members-may claim that the package on offer is in the interests of students and that they should welcome it. Presumably they believe that the National Union of Students has organised today's lobby at the House to say how delighted it is with the Government's proposals. I have to disillusion them: it is here to encourage hon. Members to vote not in support of the Bill, but against it.
    The NUS has helpfully compiled considerable evidence from overseas on the attitude of students in other countries. We heard much in Committee, as we have at other times, of the Government's proposals for top-up fees modelling those in other countries, and of how the glorious successes and widespread popularity of what has been introduced in Australia, New Zealand and elsewhere would be eagerly welcomed in the United Kingdom. The NUS has been in touch with its equivalents around the world, and that is not what they say.
    Mr. James Plaskitt(Lab)rose
    Mr. Collins: I give way to the hon. Gentleman, who will no doubt know about legions of students who support his Government's proposals.
    Mr. Plaskitt: The new clause would remove the funding stream from universities. In Committee, the hon. Gentleman was unable to tell us how his party would replace that funding stream. Can he tell us now?
    Mr. Collins: The hon. Gentleman is right in his characterisation of the new clause: it would prevent fees. There is no doubt about that; that is its intention and that is what it would achieve. He is also correct that it is the duty of Opposition parties to produce alternative proposals on how that vital funding for universities would be provided. We will do that, and we will do that earlier in this Parliament than the Government produced their final proposals on the subject in the last

    1645
    Parliament. The difference is that, whereas three months before the last general election the Labour party produced the final proposals that it now plans to breach, we will produce proposals earlier in the life-cycle of this Parliament, which we will implement on coming into office.
    James Purnell rose—
    Mr. Collins: I give way to the hon. Gentleman, who, in a former capacity, may well have had a role in writing the manifesto, which he is cheerfully about to breach.
    James Purnell: On the hon. Gentleman's policies, will he confirm that the envelope has been set for funding those policies by the shadow Chancellor of the Exchequer, the right hon. Member for West Dorset (Mr. Letwin), and that that is a cash freeze and therefore a real-terms cut in higher education funding? If the extra money that will come from tuition fees is to be removed, how will the hon. Gentleman do anything other than cut quality and student numbers?
    Mr. Collins: I suspect that the hon. Gentleman was one of those who was disappointed when he found that the Opposition's proposals on the pupil passport did not turn out to be what he had hoped and expected it to be. He will be extremely disappointed when he learns of our proposals on higher education; I urge him to wait for them. We are debating the Government's proposals, which are in clear breach of the manifesto on which he stood at the general election.
    The Conservative party made exactly the same pledge at the last election. We are keeping our promises and the hon. Gentleman is breaking his. Playing party political games will not help him explain to his constituents why they should believe anything that he says at the next general election, given that he has so cheerfully broken his word from the last one.
    Tony Wright: Does the grand total of nine Conservative Members on the Opposition Benches accurately reflect the commitment of the hon. Gentleman's party on this issue?
    Mr. Collins: Our attendance accurately reflects the eagerness of Opposition Members to allow Labour Members the maximum time for debate. We fully expect them to express more than one view, shall we say, on their happiness to break their manifesto pledge.
    Peter Bradley: I do not know whether the hon. Gentleman reached the end of his list of expert witnesses. What does he have to say to the Campaign for Mainstream Universities? Its statement today reads:
    "The loss of the Bill would deny universities the urgently-needed funding to provide quality education and would cruelly remove the promised improvements in financial support for the poorest students. This would damage the sector as a whole and would be particularly damaging to the Government's aims of widening participation and social exclusion."
    That message is borne out by Universities UK. What does he have to say about that?
    Mr. Collins: It is true—it has been throughout the debate—that the majority of vice-chancellors support
    1646
    the Government's proposals. They are the one and only category of people who do so. The hon. Gentleman should understand that there has been a shift of opinion in the vice-chancellor community in the past few months—from unanimous support of the Government's position to a significant number expressing profound opposition to their proposals.
    Peter Bradley rose—
    Mr. Collins: No, I will not give way; I am responding to the hon. Gentleman's point. He wanted to talk about the attitude of vice-chancellors, so we will talk about that. Let us consider the attitude of Professor Gillian Slater, the vice-chancellor of Bournemouth university, who said:
    "We don't have faith that the cap of —3,000 will not be raised very quickly indeed".
    That is what she believes, and it is what many other vice-chancellors believe. She was one of 15 vice-chancellors, alongside 12 university lecturers, who wrote to The Guardian yesterday to express their opposition to the centrepiece of the Government's legislation. I make no pretence of the fact that the majority of vice-chancellors support the Government's proposals. However, they are the only category of people who have taken that position, and even they are not unanimous. All other organisations, including the Association of University Teachers, the National Association of Teachers, the National Association of Teachers in Further and Higher Education and the National Union of Students, are opposed to the Government's proposals. If all the hon. Gentleman can do is say that about 90 vice-chancellors like the proposal, when 55 million people are opposed to it, bring on the election.
    I was going through the important comments that had been brought to the attention of the House by the NUS as a result of its consulting its opposite numbers in other countries, on which the Government have modelled their proposals.
    2.45 pm
    Mr. Tim Boswell: From the point of view of a vice-chancellor, is there any more plausibility in the Government's assertion about the firmness of their cap of £3,000 on tuition fees than there was about the Labour party's assertion before the last election that it would not introduce top-up fees? If those assertions are equally valid, does my hon. Friend think that the majority of vice-chancellors welcome the breach of the Government's undertaking or are appalled at it?
    Mr. Collins: My hon. Friend makes an important point. No doubt we shall consider the Government's minor concessions on the extent to which their word on the £3,000 cap should be taken. The entirety of the Government's concessions amount to this: "It would require primary legislation, taken through both Houses of Parliament, for us to breach our solemn pledge not to raise top-up fees above £3,000." What is this Bill if not primary legislation designed to breach a clear manifesto pledge? I am at a loss to understand why the Government should think that that should impress Labour Back Benchers or anybody else.
    Mr. Clappison: In the spirit of the intervention of my hon. Friend the Member for Daventry (Mr. Boswell),

    1647
    does my hon. Friend recollect that, in its manifesto, Labour not only promised not to introduce top-up fees but said that the Labour Government had legislated to prevent them?
    Mr. Collins: My hon. Friend is entirely right. The second sentiment of that part of the Labour party manifesto is particularly interesting given the Government's attitude to amendment No. 128. The Government's line is that the amendment would remove the cap and allow universities to charge any top-up fees that they liked. Unfortunately, there is such a thing as the Teaching and Higher Education Act 1998, which was so important that it was mentioned in the 2001 Labour party manifesto. It enabled the Government to say in the manifesto that they had legislated to prevent top-up fees. That legislation, by which they set such store at the last general election, remains on the statute book, and it is therefore an entirely spurious argument that amendment No. 128 would remove the cap and that universities could charge whatever they liked.
    I see that the hon. Member for Rochdale (Mrs. Fitzsimons) is in her place. Given her present and former capacities, I am sure that she will be delighted to know that the co-president of the New Zealand University Students Association is named Fleur Fitzsimmons.
    Mrs. Fitzsimons: That is a good name.
    Mr. Collins: Perhaps it is. Fleur Fitzsimmons points out that the introduction of the scheme in New Zealand, which the Secretary of State says is in part the model for the proposals, has been
    "an unmitigated disaster Fees act as a significant barrier to participation. The increase in debt has forced a fifth of medical graduates overseas."
    We hear similar stories in Canada.
    Mrs. Fitzsimons: Will the hon. Gentleman give way?
    Mr. Collins: I mentioned the hon. Lady, and I promise that I will give way to her in a moment, once I have finished this point.
    We hear that, after 10 years of tuition fees in Canada, fees have jumped by an average of 99 per cent. That reflects precisely the fears expressed by students, the British Medical Association and even some vice-chancellors: once we start on the route of top-up fees, there will be strong, steady and substantial increases. That is justified by the very overseas experience to which Ministers try to turn our attention.
    Mrs. Fitzsimons: My name is Fitzsimons, which is different from Fitzsimmons; anybody who could spell would recognise that. I am not surprised that the hon. Gentleman exchanges assertions for facts. Does he accept that, year on year between 1997 and 2000, the participation of students from lower socio-economic backgrounds in New Zealand rose from 18 per cent. to 26 per cent? The number of Maori students—who, typically, are less advantaged and in lower socio
    1648
    economic groups—rose by 46.1 per cent. between 1994 and 2000. I think that that is pretty impressive, does the hon. Gentleman not think so?
    Mr. Collins: I apologise if I was wrong about the hon. Lady's name. I am delighted that she has made it abundantly clear that she regards New Zealand as a model for what the Government are seeking to do, because it has been reported in New Zealand that, after the introduction of precisely the sort of scheme that is proposed for this country, the result was as follows:
    "Students from the richest schools are five times more likely to attend university than students from the poorest schools."
    It has further been demonstrated that fees have impacted on where students have decided to go to university. New Zealand students therefore continue to oppose top-up fees, and I suspect that, if the hon. Lady was still an NUS office holder in this country—let alone running to become one—she might take the same attitude as all the current NUS office holders take.
    Jonathan Shaw: Can the hon. Gentleman tell the House how many universities there are in New Zealand?
    Mr. Collins: It was the hon. Member for Rochdale who said that New Zealand is a great model. I take the view that it is sensible to consider what is sensible for the United Kingdom and what UK organisations do. It is not the Opposition who have been saying, "Let's imitate New Zealand"; it is the Government and Labour Back Benchers, so the hon. Gentleman is only undermining his own side.[Interruption.]
    Mr. Deputy Speaker: Order. The hon. Member for Chatham and Aylesford (Jonathan Shaw) must contain himself. There is little point in asking a question and not listening to the answer that is given.
    Mr. Boswell rose—
    Mr. Collins:I give way to my hon. Friend.
    Mr. Boswell: I am afraid that I cannot illuminate the House on the precise number of universities in New Zealand. One of the reasons why I cannot do so is that I cannot recall, when I was the Higher Education Minister in 1994 and the hon. Member for Rochdale (Mrs. Fitzsimons) was the president of the NUS, her ever coming to me, saying, "The New Zealand approach is exemplary and we should follow it."
    Mr. Collins: I am grateful to my hon. Friend for that intervention.
    I was going through the list of organisations in the education sector that do not support the Government's proposals. Dr. John Brennan, the chief executive of the Association of Colleges, has said:
    "After 2010, the Bill as it stands allows universities an essentially unlimited ability to increase tuition fees. We believe this freedom will seriously compromise the chances of young people from working-class backgrounds to attend certain universities."

    1649
    As I said earlier, 15 vice-chancellors wrote to The Guardian yesterday to say that Government's measures would
    "disadvantage the majority of students".
    So I am afraid that it is simply not the case that the majority of those in the education sector enthusiastically endorse the Bill. On the contrary, the majority of those who work in education and the organisations that represent students are clearly, unequivocally opposed to the Bill and have called on Labour Members to stand by their manifesto pledges.
    Peter Bradley rose—
    Mrs. Fitzsimons rose—
    Mr. Collins: I shall give way to the hon. Lady, because I have given way to the hon. Gentleman already.[Interruption.]
    Mrs. Fitzsimons: The hon. Gentleman has mentioned me a tiny bit more than he has mentioned my hon. Friend the Member for The Wrekin (Peter Bradley), but there is time. I thank the hon. Gentleman for giving way again, but he makes assertions about my leadership. It is on record that, when I was president of the NUS, I believed that students would have to pay and that we wanted the money to be end-loaded, so that we could increase the maintenance grant. As for what the hon. Member for Daventry (Mr. Boswell) said about lobbying when I was president of the NUS, we were comparing a loans system introduced by his colleagues under which it would have been cheaper to give students the money than to administer the system, rather than comparing a variable system, which is what we are discussing now
    Mr. Collins: It is very interesting that all those former presidents of the NUS believe that they can speak more for the interests of students than the current president of the NUS. I thought that I had made a flippant comment earlier, but Labour Members clearly believe that all those students have come to lobby Parliament today in support of the Government's legislation. I suggest that they go out to listen to them if that is what they believe.
    Since the hon. Lady makes an important comparison about the cost efficiency of measures, let us consider the cost efficiency of the Government's proposals. To raise slightly less than £1 billion a year for universities, the taxpayer will have to spend about £1.2 billion. That does not strike most of us as remotely cost-efficient. In fact, it is an extremely inefficient way to proceed. That arithmetical link—the fact that it will cost the taxpayer about £1.25 for every £1 raised for the university—is clearly even more of a problem if, as is widely expected in the education sector, the £3,000 a year cap is only temporary and will be removed shortly. So the taxpayer will have an even worse deal as time goes on.
    One of the most important aspects of the whole debate is the Government's assumption, which they have often repeated, that graduates will almost universally end up in a massively strengthened financial position compared with non-graduates. The figure of a £400,000 premium in lifetime earnings has been bandied around. That is simply not borne out by the latest
    1650
    evidence that is coming to light. Many hon. Members will have seen the report in The Times this Monday about a forthcoming book by Philip Brown of Cardiff university and Anthony Hesketh of Lancaster university, both of whom are leading political economists. They point out that even three years after completing their studies, 40 per cent. of recent graduates are in jobs that do not require degree-level skills. Their survey indicates that average starting salaries for graduates are falling. They have analysed American data—an example that Labour Members often cite—and they seriously query the Government's assumption that 80 per cent. of all new jobs will require degree-level qualifications. Ministers often cite the United States as an exemplar of graduate participation that we should follow. American data apparently show that just 20 per cent. of American workers—not 80 per cent.—make use of degree-level education.
    Mr. Harry Barnes: Very interesting information has been quoted and some of us would want to make use of it, but do the Conservatives therefore now entirely reject the road that they initially went down with the Education (Student Loans) Act 1990, which introduced the principle of student debt, and thus the problems of people being able to continue in education?
    Mr. Collins: I am grateful to the hon. Gentleman for those comments. It is, of course, common ground among all the parties represented in the House that student loans remain the best way to provide for maintenance. They are not ideal, but no party proposes to get rid of student loans that underpin maintenance. The hon. Gentleman takes a different view, but he has not managed to persuade his Front-Bench colleagues about the issues. The view of both the Conservative and Liberal Democrat parties on that angle is that student loans should continue. We are talking about the principle of fees to pay for teaching itself. New clause 5 would strike out such fees, and we believe that the House would be very sensible to support that.
    Dr. Brian Iddon: I have been listening to the hon. Gentleman for a considerable time. The new clause is about abolishing fees altogether. However, as a former university teacher, I should be delighted if he could tell me how the Conservative party would find the money if not by introducing fees. This is an important debate, and it is right that the House is fully informed of the Conservative policy.
    Mr. Collins: The hon. Gentleman basically repeats a question that one of his hon. Friends asked earlier, and I will not bore the House by giving the same answer. If it is the same question, it will get the same answer.
    It is assumed that the Government's concessions on the Bill would ensure that students from lower-income backgrounds would not suffer adversely. Indeed, it is sometimes said that we can perhaps take a leaf out of the American experience and encourage students to work during their studies, because those who cite the American experience think that that is healthy.The Guardian has referred this week to unpublished research by Professor Clare Callender, who has indicated that those students who work for 16 hours a week in term

    1651
    time have an increased chance—of between 10 and 60 per cent.—of getting no better than a lower second-class degree or worse. Hon. Members on both sides of the House ought to reflect on that.
    By all means, let us talk about the overall spending envelope towards which the Government propose top-up fees should contribute. The Red Book states that the Government
    "will maintain per student spending levels in real terms over the 2004 Spending Review period."
    Labour Members may not be aware of the fact that per-student spending levels are lower now than they were in 1997; that they are lower than they were before tuition fees were introduced in 1998, and that they have been lower every year of this Labour Government than they were any year of the preceding Conservative Government. So a commitment simply to maintain per-student spending levels is hardly an act of extraordinary political generosity.
    3 pm
    Mrs. Anne Campbell: Is the hon. Gentleman aware that when the Conservative Government left office in 1997, the Government spending plans for the following two years involved a 6 per cent. decrease in university funding, and the Labour Government had to find the money to make up that deficit, having adopted the Conservatives' spending plans?
    Mr. Collins: The hon. Lady knows that a large number of vice-chancellors are on record as saying that they felt they were duped—their exact word—by the Government when tuition fees were introduced, because the money was subsequently clawed back by the Treasury through lower than expected levels of public finance. That is why many vice-chancellors are not satisfied that, having done that once before when introducing fees, the Government will not do it again when introducing top-up fees.
    Let us consider what the pledge means. The 2004 spending review period expires in 2007, which is just one year after the Government propose that top-up fees should come in. At that point the income from top-up fees will be well below the maximum levels that are usually quoted, because there will be only one year's cohort within the system paying top-up fees, yet at that point the Government's commitment even to maintain the present very low levels of student spending in real terms expires. So there is a very real reason for universities to fear that what the Government are giving with one hand, they may take away with the other—indeed, they may take away more than they give.
    Kali Mountford: Given his criticism of the alleged claw-back, how can the hon. Gentleman be sure that there will be finances into the future out of general taxation? Can he be sure that his own Government, should there ever be one, would be able to match spending as the present Government can?
    Mr. Collins: As I said earlier, the hon. Lady will have to wait for our proposals. If she has the genuine interests
    1652
    of universities, taxpayers and students at heart, she will have a pleasant surprise when she sees those proposals unveiled. If she merely has her party's interests at heart, I am afraid it will be a very unpleasant surprise indeed. I look forward to seeing her expression when she sees our plans.
    Several hon. Members rose
    Mr. Collins: I give way to the Chairman of the Select Committee.
    Mr. Sheerman: The hon. Gentleman is reluctant to tell us the plans of a future Conservative Government for funding for higher education, but having forensically examined some of the comments of vice-chancellors on our proposals, he has said nothing about what vice-chancellors with any memory at all say about the funding of British universities under Conservative Administrations of the '80s and '90s. Will he enlarge on that?
    Mr. Collins: The hon. Gentleman is entitled to say, as I indicated earlier, that the majority of vice-chancellors support the Government's proposals. That is hardly surprising. What is surprising is that there is a significant body of vice-chancellors who do not, so the Government do not have unanimous support for their ideas from any section of the education community. Most other organisations and most other groups in education are unanimously opposed to the Government's proposals. With reference to funding under previous Governments, I am sure vice-chancellors would have liked to have more funding, but the record shows that funding per student under every year of the last Conservative Government was greater than it has been under any year of this Labour Government.
    Several hon. Members rose—
    Mr. Collins: I shall give way one last time, as I am keen to make progress so that others can speak in this important debate.
    Jonathan Shaw: The hon. Gentleman makes some interesting comparisons. He said that there was no unanimity in the education field about the proposals from my right hon. Friend the Secretary of State. Can he recall a time when there was unanimity on any proposal to do with education put forward by a Conservative Government?
    Mr. Collins: It is rare indeed that the Association of University Teachers, the National Association of Teachers in Further and Higher Education, the National Union of Students and a large bloc of vice-chancellors all strongly in agreement and, as it happens, strongly in agreement that the Government should not proceed with the Bill.
    The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson)rose—
    Mr. Collins: I said I would not give way again, but of course I make an exception for the Minister.
    Alan Johnson: I am grateful to the hon. Gentleman. He has a former higher education Minister sitting

    1653
    behind him. Will he confirm that all those forces—the NUS, NATFHE, the AUT and everyone he mentioned—came together in absolute coalition when a previous Tory Government moved from student grants to student loans?
    Mr. Collins: The interesting point is that the Secretary of State is not proposing to reverse that, is he? So that argument goes both ways.
    Several hon. Members rose—
    Mr. Collins: I give way to my hon. Friend the Member for Wantage (Mr. Jackson), who I know will make a constructive contribution.
    Mr. Robert Jackson: Part of the coalition that opposed us was the Labour party. I remember the speeches in the Standing Committee by the right hon. Gentleman who is now the Foreign Secretary, anticipating many of the speeches that have now been made from the Conservative side in the course of the current debate. With regard to Conservative alternatives, my hon. Friend is a great admirer of Baroness Thatcher, as am I. Does he remember TINA—there is no alternative? There is no alternative to fees.
    Mr. Collins: As is well known, my hon. Friend does not agree with our position on that. He is perfectly honourable about that and has set out his reasons cogently. We must beg to disagree on that point. Those on the Conservative Front Bench intend to invite my hon. Friends to stand by the manifesto commitments we made at the last election. I know that my hon. Friend the Member for Wantage feels, for honourable reasons, that he cannot join us in that, but that will not deter the rest of us from continuing to advance what we believe to be the right course for the future of higher education.
    Peter Bradley Peter Bradley rose—
    Mr. Collins: I will not give way again. I have given way an almost unprecedented number of times, and Labour Members who have been intervening at such great length will no doubt start complaining that they do not have a chance to make their own speeches, so I am keen to bring my remarks to a close.
    However, there are a couple of important aspects that need to be touched on. The first is debt. Why did the Government decide after the 2001 election that they needed to look again at student financing? One of the major factors was the reports reaching them about worries among students about how they would cope with the level of debt that they had. The Government thought carefully about how they could best address the issue of student or graduate debt, and came up with the proposal that the best way of doing that was to triple the tuition fees that students should pay. That seems an extraordinary way of dealing with debt.
    However they slice it, the Government's proposals will result in future graduates leaving with unprecedented levels of debt, which will undoubtedly—academic evidence is unequivocal about this—have the effect of deterring some students from going to some universities to study some subjects. We on the
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    Conservative Benches believe that we should have a system of access to university that proceeds on the basis of ability to learn, not ability to pay. That is why we will vote as we will on these matters.
    I shall say a word or two about amendment No. 128. Our view is that new clause 5, which strikes out both top-up fees and tuition fees, is a powerful and important change to the Bill. Amendment No. 128 would strike out the five clauses that collectively not only provide for top-up fees, but provide the teeth for OFFA, the university access regulator, which rightly is strongly disliked in the university sector.
    The Secretary of State may have a document from Universities UK in which it indicates—reluctantly, I suspect—that it is prepared to live with OFFA, but that briefing note from Universities UK makes it explicitly clear that it believes that admissions policies should be the responsibility of individual institutions of higher education. That is not what the Government have been saying. The higher education Minister has consistently said in Committee and elsewhere that he believes that admissions should be a matter for individual institutions, and admissions policies should be a matter for OFFA. That is not what Universities UK seeks. That is why we invite Members to support amendment No. 128, not least on the grounds that it would defang a very unpleasant piece of social engineering and interventionism.
    Peter Bradley: The hon. Gentleman has one last chance to give way.
    Mr. Collins: The amendments and new clauses before us are, indeed, the last chance for the House to vote to uphold the promises all of us made at the last general election. They are the last chance for all of us to vote to give this and future generations of students the same opportunity of access based on the ability to learn, not the ability to pay, which many of us enjoyed when we were 18. They are the last chance for the House to vote for fairness for all classes and all students. We must say no to fees, yes to academic freedom, and yes to a better way forward for higher education than this dishonest and discredited Bill.
    Dr. Ian Gibson: I wish to speak to amendment No. 128 in my name and those of my hon. Friends, and on which I shall seek to divide the House. It was recommended by he Public Bill Office as the only way to remove the introduction of variable fees from the Bill, and that is the position that I take. We can talk about OFFA in more detail later. It would be a functional organisation and its work with the Higher Education Funding Council for England would be important. If the amendment were agreed to, that would not be eliminated as an arena for discussion where we could ensure that universities had the right access policies.
    Variable fees are a really bad idea because—
    Mrs. Anne Campbell: Will my hon. Friend give way?
    Dr. Gibson: I do not wish to take too many interventions because I wish to give others the chance to speak, but I give way to my hon. Friend.
    Mrs. Campbell: Is it not the case that the amendment would remove any incentive whatever for universities to

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    get their access plans through OFFA, because it will remove OFFA's teeth and make it completely ineffective?
    Dr. Gibson: I have much more faith in the university system than my hon. Friend appears to have. The universities try hard and they have new projects, with science ambassadors, and so on, and we are encouraging that. More and more people will be coming in and are coming in because of such projects initiated by the Government.
    My concerns are not new; they have been voiced many times during the Bill's anguished course, but they have not yet been satisfactorily dispelled. Variable fees will tie students' choice of degree and career to price. The choice of those with the greatest aversion to debt and those who are likely to feel its burden most—those from lower-income backgrounds—will be affected most. It was pointed out in Committee, whose debate on this matter I have read five times—it was an excellent debate and many of these issues were well and truly discussed—that higher education will be seen as a financial investment and a route to a highly paid job, rather than something to be done for love of learning, and that a variable fee makes the student concentrate more on the marketability of the course that they are about to study. I am sure that my hon. Friend recognises those words, which I wholeheartedly endorse.
    It was also pointed out in Committee and by at least 15 vice-chancellors yesterday who wrote to The Guardian—I am aware that others have contradicted this—that variable fees will further widen the difference in income between universities. Those with a higher profile and a smaller proportion of students from lower-income backgrounds, namely the Russell group, will be able to charge higher fees and generate much more income while others will be forced to charge less. There will be no redistribution of income among institutions.
    Mrs. Fitzsimons: Will my hon. Friend accept from someone who as president of the National Union of Students campaigned for him in the seat that he now represents, that it has been an historical anomaly that those people from the lowest socio-economic background have never achieved more than a maximum of 15 to 20 per cent. representation during the past 40 years in higher education, and that 51 per cent. of students studying in higher education institutions—postgraduate, overseas, mature and part-time students—are subject to variability, and none of the matters that he is addressing and which amendment No. 128 will remove, will address the fact that variability has not done what he claims for the 51 per cent. of people studying in higher education, and will not address the issue of getting better representation in higher education for the people whom he and I came into politics to represent?
    Dr. Gibson: I thank my hon. Friend for her creative work in Norwich during that election. She may or may not think it was valuable looking down at me now, but she is absolutely right about this issue in other areas of higher education. I do riot particularly endorse that, but
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    I noticed in the Committee proceedings that some Members said that in those areas that my hon. Friend mentioned, there may not be as much variability as one might think. I see much effort being made to try to eliminate that in terms of part-time students, and others, to try to make it easier for them with bursaries, and so on.
    3.15 pm
    Peter Bradley: Will my hon. Friend give way?
    Dr. Gibson: I really do want to allow others time to speak, but I shall give way one last time.
    Peter Bradley: My hon. Friend made a point about the differential income of universities that he believes would arise from variable fees, and that was my concern before the Government agreed to take responsibility for the cost of the disbursements in grant that the university would have to make. Because of that adjustment, it now seems likely that some of the modern universities, which are teaching-led, will gain up to a 50 per cent. increase on their current income, whereas universities, such as Oxford and Cambridge, that are basically research-led, will have increases in the order of 10 per cent. or less. Therefore, the statistics show that the modern universities, which we all seek to support because they are doing most to widen access, are the ones that will benefit from the new income regime.
    Dr. Gibson: That is a fair point, but if one looks at the whole picture, some universities are enriched, with all the extra money for research from their colleges, and so on, while others do not have such a privileged financial background.
    Mr. Sheerman: My hon. Friend chairs the Education and Skills Committee as I do, and we usually work well together, but what does he say to the general criticism that his amendment has been construed as a wrecking amendment, because he is a bad loser, having lost on Second Reading.[Interruption.] Is that a fair criticism?
    Dr. Gibson: Those are really kind words.[Interruption.]
    Madam Deputy Speaker (Sylvia Heal): Order. Will hon. Members try to contain themselves when others are on their feet so that we can all hear what is being said? I am afraid that I could not hear most of that intervention.
    Dr. Gibson: I shall treat that intervention with the disdain that I and many other hon. Members believe that it merits.
    Part of the argument for variability has been that there are real differences between courses, which should be reflected in their fees. I do not know how we will quantify those differences. Do we match some arbitrary notion of quality to a figure, or do we measure courses against their potential financial pay-offs for the student? Do we judge it by reputation of the institution? How do we think that it will work? The market is unpredictable,

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    and once we further extend the market principle into higher education, we do not know how things will turn out.
    Lynne Jones: Is it not already well documented by Universities UK research that young people from the lowest socio-economic groups invariably attend the modern universities and stay at home because that is the cheapest way that they can study? Is it therefore not clear that such students will always attempt to achieve the lowest cost to themselves and the lowest debt on leaving university? That is the iniquity of variable fees. The Russell group universities will charge much higher fees.
    Dr. Gibson: I do not particularly subscribe to my hon. Friend's conclusions, but I admit that there is a problem there that needs addressing. I am sure that other Labour Members will be glad to take up that issue. I want to bash on to give others a real chance to speak.
    The need to attract students to under-subscribed courses, say in the sciences𠄔others may deal with that𠄔may lead to such courses being offered at a lower price that neither reflects the cost of running the course or what a graduate might earn in the future. If lower fees are to be used as an incentive, can we reasonably argue that higher fees will not act as a disincentive? I welcome the aid packages that have been put in place to reduce the deterrence factor, but I am not convinced that they will be enough.
    Mr. Robert Jackson: On a point of order, Madam Deputy Speaker. I quite understand why the hon. Gentleman is addressing his own Benches, but some Opposition Members would like to hear what he has to say.
    Dr. Gibson: I explained on Second Reading that I had to watch where I turned my back, and nothing has changed much since then.
    I welcome those aid packages, but many students who do not qualify will be basing their decisions primarily on price. Even those who do qualify will still be looking for the so-called best deal—a phrase that has been used often.
    One of the more seductive arguments for variability has been that while it allows universities to charge higher fees, it also allows them to charge less. I have already spoken about why universities might charge less. The argument concerns me because I can see it being used in the not-too-distant future in favour of raising the cap. Universities are already arguing that £3,000 is not enough to close the funding gap. I know that it is some way down the line and that there have been attempts to restrict that, but it is not ruled out for ever. Once that door is opened, it will happen. Those words are not mine, but those of esteemed vice-chancellors who have supported the Bill.
    The same arguments will no doubt be rehearsed again, although the intensity of the debate will depend on which Government are in power. The cap will rise and divisions between rich and poor institutions and students will widen further. The money from the new legislation will only just have begun to reach the universities when the promised review of the system
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    takes place. By then, it will be both too late and too soon to turn back, and we will, most likely, have no option but to continue down the same path, which we still have a choice about embarking on today. Can we honestly expect that the other funding models that we have not been able to debate openly will be considered if top-up fees do not appear to be working?
    Amendment No. 128, which I and colleagues have tabled, has aroused lots of confusion and controversy. I firmly resent the allegation that I have been colluding with the Opposition in an attempt to derail my own Government. I regret that this issue has been turned into a matter of loyalty; it is a matter of principle that strikes at the very core of what Labour Members stand for. The amendment was tabled in good faith by those who wish to keep intact the positive aspects of the Bill, but prevent the introduction of variability as a matter of principle and for the reasons that I have outlined.
    The effects of the amendment were checked with the Public Bill Office. If the amendment is passed, section 26 of the Teaching and Higher Education Act 1998 will remain and prevent universities from raising fees. That will be the case unless the Government themselves repeal section 26. It will be open to the Government to introduce amendments in the Lords to change the level of the current fee should they so desire.
    Alan Johnson: I am grateful to my hon. Friend for giving way. I accept, because he is an honourable man, his assurance that he has not colluded with the Conservative party and does not consider the amendment as seeking to wreck the Bill. Did he hear the hon. Member for South Suffolk (Mr. Yeo), the Opposition spokesman, say on the "Today" programme of the amendment:
    "I think it was quite rightly described yesterday morning … by the Higher Education Minister … as a wrecking amendment. It undermines the Government's whole policy."
    He said that it takes away the powers that the regulator has to impose any kind of sanction on universities. Does he accept that that is the view of Her Majesty's official Opposition?
    Dr. Gibson: I thank my right hon. Friend for that contribution. I am very glad that I am not associated with that particular view. I do not agree with that view at all, as that is not my reason for tabling the amendment.
    Clare Short: Does my hon. Friend agree that, in Parliament, we are supposed to respond to proposals that come from the Government, and we often find ourselves voting with the Opposition on issues such as peace in Northern Ireland? It also happened on the war in Iraq. The suggestion that those of us who want to adhere to our manifesto commitment and ensure equity in access to higher education are playing games with the Opposition is a dishonourable attack.
    Dr. Gibson: I thank my right hon. Friend for that intervention.
    I am told that the restoration of student grants and the proposed repayment scheme that will be introduced by secondary legislation—again, this comes from the Public Bill Office—would not be affected by the

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    amendment and should not be dependent on the introduction of variable fees. I am told that the office for fair access would still be able to monitor access. These are progressive measures that only our Government, a Labour Government, could put forward. The already rising amounts of student debt and increased hardship, as well as widening access, all need to be addressed. I feel that introducing variable fees is a heavy price to pay for these measures that counteracts any improvements that can be made.
    I am told that the Bill would not have to be withdrawn if the amendment were passed. That would be a travesty because of the positive things that it contains. The issue of variability has been presented as non-negotiable from the start. If any issue needed and was crying out for negotiation, variable fees would be it.
    Ultimately, a decision needs to be made on whether variable fees are essential for developing our universities into a truly national system based on excellence where innovation and scholarship flourish. On balance, I believe that the Government would be making less of a compromise if they were to support the amendment, scrap variable fees and prevent a divided and divisive university system.
    Mr. Willis: It is a pleasure to follow the hon. Member for Norwich, North (Dr. Gibson).
    I wish to speak to a series of amendments. In particular, new clause 8 would remove all fees in exactly the same way as new clause 5, which the hon. Member for Westmorland and Lonsdale (Mr. Collins) tabled. New clause 9 is consequential on new clause 8 and would remove fees in Wales. Amendments Nos. 53 to 58 and 71 to 86 are also consequential on new clause 8 and new clause 9. New clause 10 deals with age discrimination, and new clause 12 relates to public services.
    One of the saddest sights in the past few weeks since the conclusion of the Committee stage has been the witch hunt that has been conducted against the hon. Member for Norwich, North because he happens to disagree with those on the Government Front Bench. For any member of the Government party to be called disloyal for supporting his own manifesto seems the most absurd piece of skullduggery from those on the Government Benches that one could imagine.
    May I also say to the Secretary of State and the Minister that the disingenuous comments made on yesterday's "Today" programme, which have been repeated today, suggesting that amendment No. 128 would open the floodgates in allowing universities to charge fees in excess of £10,000, are absolute nonsense. In reality, two amendments have been tabled—[Interruption.] The Minister will have to contain himself. Amendments Nos. 10 and 12 would restore to the Bill those elements of the Teaching and Higher Education Act 1998 that the Government wish to take out and replace. Nevertheless, the Minister and the Secretary of State should be honest enough—I believe that they are honest gentlemen—to say that there is no evidence to show that, before 1998, any university in the United Kingdom charged either tuition fees or differential fees. They did not do so, because measures in the Education (Schools) Act 1992 and the Education
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    (Student Loans) Act 1990 prevented them from doing so. Of course, the Higher Education Funding Council for England and its predecessor bodies had powers allowing them not to give grant funding to universities that misused their charter. Those powers were put into the 1998 Act primarily as a result of Labour Back Benchers' concerns that there was nothing in the measure to limit the powers top-up fees or further fees. That was the reason for it. I suspect that HEFCE's powers will be exactly the same as those before 1998, and I expect the Minister to address that specific issue when he winds up the debate.
    3.30 pm
    New clause 10 addresses age discrimination, which was briefly addressed in Committee, and many organisations that work with older people such as Age Concern and the National Institute of Adult Continuing Education support it. The Government have recognised that, for a variety of reasons, people will work longer in the workplace than was assumed 10 or 15 years ago. When I was working in the late 1980s and early 1990s, we all assumed that we would have so much leisure time that we would scramble around and not know what to do with it. In reality, many people will certainly work until the age of 65 and beyond, and to deny them access to the same conditions as under-55s is fundamentally wrong.
    In October 2000, the UK Government signed the EU directive on equal treatment for older people, and they are committed to implementing age legislation by 2006, but if the Bill is enacted in its current state, it will directly contradict that intention. The Government have moved on supporting students over 55 years of age, and I hope that they agree to examine that issue in their review of the funding arrangements. Although I will not ask for a separate vote on new clause 10, I trust that the Minister will address that issue in his winding-up speech.
    New clause 12 is the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) new clause, and it is the direct response to what he claimed he had achieved when he decided not to support those who oppose top-up fees by voting for the Second Reading of the Bill. On Second Reading, he said:
    "My fear is for the next poorest, particularly those who wish to make a career in the professions and public service and are therefore likely to incur above-average expenses while studying"—[Official Report, 27 January 2004; Vol. 417, c. 191.]
    In the round of broadcasts conducted by him, it was assumed that he had received a concession from the Secretary of State that there would be legislation, or certainly regulation, to allow those people going into the public sector to have preferential treatment on fees and the interest paid on those fees.
    The issue is serious: however income-contingent repayment of debt is presented, we want many of the students who graduate from our universities—the Government anticipate that 75 per cent. of universities will charge the maximum top-up fee—to go into the public services. We want graduates to become policemen, social workers, teachers and health professionals, which is right and proper. As an employer, the Government are right to ask, "What should we put in place to support those people?"

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    If somebody who works in the public sector moves into the private sector, however, it is not the taxpayer's responsibility to support them by contributing to their fees and associated costs, which private sector employers should support. The Secretary of State was bold to state in the White Paper that he and his colleagues must get to grips with that issue. Whether the Home Office pays the costs of graduate policemen, whether other Departments pay or whether the Secretary of State for Education and Skills pays, is not an issue for this debate, but it must certainly be addressed.
    Jonathan Shaw: Does the hon. Gentleman acknowledge that the Government support people who go into public service? For example, teachers engaged in postgraduate training receive £6,000. Indeed, support for the public services in the south-east has been enhanced, and there has been a further announcement on the keyworker initiative, which assists front-line public sector workers with the expensive cost of housing in the south-east—it is all money.
    Mr. Willis: Before the hon. Gentleman gets excited, have always conceded that the Government assist in many of those areas, but that is not the point of my argument. My point is that after the Bill is enacted, top-up fees will result in significant debt from 2006 onwards, which will be a whole new ball game. We should not cherry-pick the way in which we support people who take certain subjects—
    Jonathan Shaw: Why not?
    Mr. Willis: I will tell the hon. Gentleman why not. The housing costs for a teacher of religious education or music in London are exactly the same as those for somebody teaching mathematics. The idea of giving one of them a £6,000 golden hello—
    Jonathan Shaw rose—
    Mr. Willis: I will not give way to the hon. Gentleman; I am answering his question, for goodness' sake.[Laughter]. I am sorry—I sometimes forget that I am not a head teacher any more. [HON. MEMBERS: "You will be."] No, they would not have me.
    The new clause would ensure that once someone has become a key public sector professional such as a teacher or a nurse, where a degree is an entry requirement, the 9 per cent. of disposable income payable and the interest on any remaining debt is paid for by the state, and if that person leaves the profession after two years, as they are entitled to, they pick up the costs. I hope that hon. Members will see that as a simple and positive mechanism for supporting public sector workers. I intend to press new clause 12 to a vote.
    I turn to new clause 8 and amendment No. 128. We support Conservative Front Benchers' basic principle on the removal of fees, as stated in new clause 5, as well as the removal of top-up fees. We certainly support the amendment tabled by the hon. Member for Norwich, North, and we will vote with him on that.
    In his speech, the hon. Member for Norwich, North mentioned the notion of generous grants. That was picked up by the hon. Member for Nottingham, North
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    (Mr. Allen), who accused the Liberal Democrats and the Conservatives of scaremongering. Let us at least understand the basis on which we are having this debate. At the moment, poorer students pay no fees at all. It was a Labour Government who in 1998 introduced up-front fees. Labour Members are now railing against them and saying what a wonderful job they are doing in removing them.
    Kali Mountford: The hon. Gentleman has made many points about fees and debt. Does he accept that the fees and costs combined will be repaid at a gentler rate, which equalises the situation between students and makes the whole situation much easier for them all?
    Mr. Willis: With the greatest respect to the hon. Lady, I have never denied that. The reality is that the debt will be no smaller as a result of the new proposals; graduates will simply repay it for a lot longer. The hon. Lady fails to understand that. In fact, a person's debt gets bigger if over a number of years their income does not qualify them to pay the 9 per cent. of disposable income, because the interest is added every year after that.
    I was responding to the hon. Member for Nottingham, North. At the moment, the poorest students pay no fees and get a maintenance loan of £4,000. They pay nothing up front, and when they have graduated they start to pay it back. I can see that the new system is more generous in terms of paying the money back over a longer period.
    In future, poorer students who go to a top university will pay a fee of £3,000, which will be deferred because they get a loan to cover it. They will therefore not have to pay it up front and they will get another £3,500 in grant. At the end of their time at university, they will have not £4,000 of debt but £6,500 for every year. That is £19,500 of debt for the poorest students. I accept that they have had the money as disposable income during their time at university, but they will be worse off and have a bigger debt than current students. If Professor Callender is right and every study that the Government have carried out is right—
    Several hon. Members rose—
    Mr. Willis: My goodness—I should like to make some progress.
    If every single item of research is right, the Government will know that debt deters poorer students—the very students whom the hon. Member for Nottingham, North and I want to encourage to go to university.
    Mrs. Fitzsimons: Given that the hon. Gentleman is making a great effort to be sincere, will he deal with a genuine point about Liberal Democrat representation on the streets of Rochdale about current provision? It bears no resemblance to his comments. Liberal Democrats in Rochdale claim that all students have to pay up-front fees. Will he disassociate himself from

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    rank-and-file Liberal Democrats who misrepresent policy? Does he accept that students do not have to pay back the grant? His calculations are simply wrong.
    Mr. Willis: The hon. Lady's first comment was unacceptable and I hope that she will withdraw it.
    Mrs. Fitzsimons: What about Rochdale?
    Mr. Willis: What happens on the streets of Rochdale, God only knows. I have never claimed that the £2,700 plus the £300 bursary has to be repaid. I do not believe that any hon. Member has ever heard me say that. However, students will have to repay the loan of £3,500 plus the tuition fee of £3,000. That makes £6,500 every year. So much for generous grants.
    Amendment No. 122 tabled by the hon. Member for Hemsworth (Jon Trickett) hits the nail on the head. When we began the debate, the £3,000 in grant and bursary was roughly equal to the top-up fee of £3,000. However, that sort of balancing equation will not occur in the future. The Minister will correct me if I am wrong, but by 2010, top-up fees may increase to £5,000 or £10,000 but there is no commitment in the Bill to increase grants and bursaries commensurately. The hon. Member for Hemsworth said that he wants a 90 per cent. link. I would be happy with any sort of link to ensure that students get that support in future.
    Alan Johnson: The hon. Gentleman is making a case for no fees, whereas my hon. Friend the Member for Hemsworth (Jon Trickett) presents a rational argument in his amendment. As my hon. Friend knows, because I have spoken to him, the only problem that we have with it is inscribing in legislation a percentage that we might want to change more beneficially. If we were to accept the amendment, we would always be stuck with 90 per cent. That is why we prefer to leave percentages out of primary legislation and put them in regulations.
    Mr. Willis: I accept that there are difficulties, but will the Minister accept later an amendment to include in the measure an affirmative resolution to cover the £3,000 and any cap on the fee above inflation after 2010? It is right to establish mechanisms to ensure that students at the top universities, which charge the highest fees, get commensurate grants.
    3.45 pm
    Jon Trickett: I have been listening carefully to the hon. Gentleman's speech, and I hope to speak later if I can catch your eye, Madam Deputy Speaker. The point of my amendment is to probe the Government. By 2010, a higher rate of fees might well have let rip: the upper limit could be £10,000 or even £15,000. What would then happen to the £3,000 grant and bursary? There is no linkage in the Bill, or in anything that Ministers have said so far, to provide for working-class kids and kids from poorer homes to get the £10,000 to £15,000 that might be being charged by
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    then. That is the point of my amendment, but, so far, the Government have given no indication that any such linkage would exist.
    Mr. Willis: I am grateful to the hon. Gentleman for that intervention. If he does not get the opportunity to speak, at least he has put that point on record. I hope that my description of his amendment was accurate.
    Those Labour Members who intend enthusiastically to support the Bill and oppose the amendments tabled by the hon. Member for Norwich, North (Dr. Gibson) and others must understand that the only way that poorer students will gain any advantage in 2006 will be if they take their £2,700 grant and go to the cheapest university offering the cheapest course. That is the only way in which they will be better off under the Government's proposals, unless they invest the whole £3,000 on the stock market and hope that they make some money.
    Jonathan Shaw: Will the hon. Gentleman give way?
    Mr. Willis: No, I want to make some progress because I appreciate that a lot of people want to speak.
    The hon. Member for Norwich, North rightly said that the Government's proposals would create a market in higher education. We have had many debates on this issue, and I conceded in Committee that there is currently a social market in higher education. Given that students from the lower socio-economic groups make up only 9 per cent. of those who go to Oxford and Cambridge, we should ask whether that is because the lower socio-economic groups are intellectually inferior, as has been suggested.
    Jonathan Shaw: Will the hon. Gentleman welcome the £3,000 bursaries—[HON. MEMBERS: "£4,000.] They have gone up already. Will he welcome the £4,000 bursaries that Cambridge will make available to poorer students? That move has come in on the back of this Bill. The Bill is changing the whole atmosphere, and more and more universities are proposing similar schemes.
    Mr. Willis: May I suggest that the hon. Gentleman spends a little time in the Library and consider the wealth that many of the Oxford colleges have at their disposal? He should consider the £4,000 bursaries in relation to that wealth. He might then like to consider the wealth of Wolverhampton university, 47 per cent. of whose intake is from the three lowest socio-economic groups, or of the universities in Hull. He would see a totally different picture there. If he is saying that every university in the land, even the least endowed ones, will give all students a £4,000 top-up to their grant, then heaven has arrived here in the House of Commons. The reality, however, as he knows, is that that is arrant nonsense.
    Mr. Rendel: Does my hon. Friend recall that the vice-chancellor of Cambridge university recently came to this place and was asked what proportion of Cambridge students come from the lowest socio-economic groups now, and what proportion she expects to come from those groups under the new scheme? She said that the proportion from those groups on which Cambridge is

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    budgeting in order to be able to give this £4,000 bursary is just 11 per cent., and that if the proportion exceeds that, it will not be able to afford any more bursaries.
    Mr. Willis: My hon. Friend makes a most telling point. That is the reality. If a cash-rich university such as Cambridge cannot afford more than a 2 per cent. increase, what chance is there across the piece?
    Mr. Robert Jackson: The hon. Gentleman has been comparing endowments. He should consider the matter more broadly, rather than just what happens in this country. If he compares the endowments of Oxford and Cambridge not just with Harvard, Stanford, Princeton or Yale but with American state universities, which have been building up endowments, he will find that they pale into significance, and yet those are the universities with which Oxford, Cambridge and a few other universities in this country must compete.
    Mr. Willis: As ever, I am grateful to the hon. Gentleman for his intervention. Harvard and Yale, which are the two best-endowed universities in the world—not just in America—achieve through all their glorious endowments and bursaries 4.7 per cent. of students from the lower socio-economic groups in the United States. If that is the vision for the United Kingdom's higher education system, there is no point any of us being here, because it is a travesty in terms of ambition. I want the students whom I have taught for most of my life, who come from very poor backgrounds, to be able to get into the top universities, rather than choosing their course or university on the basis of how much they can afford.
    Fees and top-up fees will create a financial market that will be ruinous to our higher education system. If the Secretary of State were proposing variability that was uncapped, his argument would have real integrity. Some people argue that those who spend £10,000, £20,000 or £30,000 educating their sons and daughters in the sixth form of a private school should not receive tuition for nothing when they go to university. That is not what the Government are proposing, however. They are proposing a cap on variability, which is a contradiction in terms. I said that on Second Reading, and I say it again, because that is the reality. By 2010, that cap, by the Government's admission, will starve universities of the cash that they need now—[Interruption.] Labour Members must not believe all the rhetoric that comes out of fairy house down at Millbank—[Interruption.] That was a Freudian slip.
    In the first year of variable fees, the maximum additional income that universities will get—all our universities, given the Government's figures—is about £300 million—[Interruption.] That is so. In that first year, only one year of students will pay top-up fees. It will take three years before three cohorts are in and the universities get the maximum amount of money.
    Alan Johnson: The hon. Gentleman's proposal would remove £800 million that the universities currently get from fees. He cannot argue that they will have to wait a few years for an extra £1 billion while proposing that they should immediately lose almost £1 billion in revenue, which they receive at the moment.
    Mr. Willis: The Minister has been characteristically honest. but that is not what I am proposing at all. The Liberal Democrat position is clear: we want to raise the higher rate of tax to 50p in the pound. That would apply to incomes of more than £100,000 a year.
    Mr. David Chaytor rose—
    Mr. Willis: I am trying to reply to the Minister. The hon. Gentleman should not get so excited.
    According to the Treasury, what we propose would raise £4.7 billion. The £2 billion that we would spend would give universities £1.1 billion immediately, and would replace the fees now paid by students. The Conservative Front Benchers who tabled the new clause would not give universities a penny extra. They would do no more than decimate the number of university entrants, and they would use the additional resources elsewhere. Please let them not accuse the Liberal Democrats of not having a solution.
    Several hon. Members rose—
    Mr. Willis: I want to finish my speech, as many other Members wish to speak.
    We support the removal of fees and top-up fees, as an issue not of popular politics but of principle. We opposed the introduction of tuition fees in 1997 and 1998, and we stated in our 1997 manifesto that we opposed both top-up and tuition fees. I have here a copy of the Labour party manifesto, entitled "Ambitions for Britain". It states on page 19:
    "We will not introduce 'top up' fees and have legislated to prevent them."
    What is in that document is nothing but a deception of the British public. Page 19, like the rest, needs to be ripped out and torn up.
    Mrs. Anne Campbell: I shall speak to new clauses 6 and 7 and the consequential amendments Nos. 32 to 52. I shall also speak to amendments Nos. 129 and 130. I understand that the Government are prepared to accept amendment No. 129, and I am happy to allow the Minister to speak to it. I am pleased and grateful that the Government have made such an important concession.
    Let me explain what my new clauses are all about and why I cannot support amendment No. 128. New clauses 6 and 7 and the consequential amendments would remove the provision for variable fees and replace it with a provision for a fixed fee. To that extent they are similar to amendments that I tabled in Committee that were defeated, although they were supported by the Liberal Democrats.
    My new clauses and amendments would strengthen OFFA, the regulator. They would remove the basic fee altogether. In order to charge fees at all, universities would have to draw up credible plans to improve access, which would have to be passed by the regulator. Having negotiated that hurdle, they would be able to charge a fee; but it would be a fixed fee. I have not specified the level of the fee, but I would expect it to be set somewhere

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    between £2,500 and £3,000. Once fixed, it could be raised only with inflation. I stress that my proposal would leave the Bill intact.
    Valerie Davey: I congratulate my hon. Friend on her cohesive new clauses and amendments, which offer a constructive alternative to variable fees. Does she agree that the possible polarisation of universities, which variable fees could allow to develop, is an element that is not addressed in the Bill?
    4 pm
    Mrs. Campbell: My hon. Friend makes a valid point, about which I have great concern. I represent a city constituency with two universities: Cambridge university and Anglia polytechnic university. I am aware of the wide differences between those universities and I should certainly not want to see them become wider.
    I want to emphasise that mine are not wrecking amendments, and if the Government wished to, they would be able to operate within the regime defined in the amendments. In proposing my new clauses and amendments, I believe that I am carrying out the wishes of the majority of my constituents. Although in the constituency survey that I conducted there was considerable support for the student support package in the Bill, many people, particularly students, said that they did not want a variable fee. It is true, of course, that some of those people did not want a fee at all. Most students, when asked, say that they would prefer not to pay fees and for all the funding to come from general taxation. However, that is not the view of the rest of my constituents, and I must also take their views on board. I believe that it is right for students to make a contribution towards the cost of their education, which is the only realistic way of getting the extra money that is so desperately needed into universities.
    I do not like variable fees because I do not like the prospect of introducing a market into higher education.
    David Taylor: Does my hon. Friend believe that there are lessons to be learned from the United States of America, whose marketisation of higher education began in 1979? In that year, four times more undergraduates from the top 25 per cent. by income of the population attended university than their less-well-off compatriots. After 25 years, that ratio has now grown to 10:1. Is that not the real risk of marketisation?
    Mrs. Campbell: My hon. Friend makes a valid point, but I do not think that the Government's proposals are as damaging as the provisions in the US. Although marketisation might bring some damaging effects, I do not believe that the damage here will be as great as in the United States.
    I am worried, however, that students might choose courses because they are cheap, rather than because they are really suited to those students' aptitudes and abilities. I am also concerned that some universities might decide to charge a lower fee because they cannot
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    attract enough students with a high fee. They will not then have the cash to pay for good quality staff and equipment, and standards will begin to spiral downwards.
    I am also concerned that the modern universities take by far the highest proportion of lower-income students, and that their ability to pay generous bursaries is compromised to some extent by sheer numbers.
    Peter Bradley: Does my hon. Friend agree that she has just set out the case for why it is highly unlikely that a market will develop in higher education? That is precisely because no university, whether Cambridge, Oxford, Wolverhampton or Huddersfield, can afford to forgo the income that it would secure by charging variable fees—top-up fees or, as they now are, top-down fees, and fixed fees with discounts. Does she have any evidence that a market will develop in higher education?
    Mrs. Campbell: That remains to be seen. If my new clauses and amendments are not successful this evening, and if the Bill goes through, there will be a review after a three-year period so that we can examine the situation that has developed. I have set out the fears, however, and my hon. Friend the Member for North-West Leicestershire (David Taylor) has just pointed out the damaging situation that there has been in the US. The worry is that the same situation, to a lesser extent, might develop here, although, as I have said, I do not think that the proposals will be as damaging here as the United States provisions have been.
    Tony Wright: Will my hon. Friend consider the fact that the Bill offers a highly regulated market in higher education? The consequence of a highly regulated market model failing is a cutting-loose by those parts of the system that want to create an unregulated market. If that happened, we would get not the status quo, but an unregulated market.
    Mrs. Campbell: That is the very thing that my amendment is trying to avoid. I hope that by replacing the variable fee with a higher fixed fee, it will give the universities extra money, which they so badly need, and would at the same time prevent marketisation from developing.
    Paul Farrelly: I just want to probe whether my hon. Friend's amendment is a probing amendment or whether she intends to press it to a Division. If she does press it to a Division, and if the amendment is successful, have the Government already given any indication of what would happen to the Bill? Have they, for instance, indicated that they might withdraw the Bill if the amendment is passed?
    Mrs. Campbell: I would like to press the amendment to a Division and I have said that already. I believe that the Government have made some indications to other people about what would happen in the event of the amendment being passed, but I am afraid I have not had any indication so far of what would occur. However, I stress that the amendment is not intended to be a wrecking amendment. It is a very carefully constructed amendment, which would leave the Bill intact.

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    It has already been mentioned that Cambridge university has proposed paying bursaries of £4,000 to students from lower-income backgrounds. That means, of course, that with the £2,700 that is available from the Government, lower-income students in my constituency would have £6,700 per annum available without any need to take out a loan. I believe that that is very generous. However, students who are fortunate enough to get a place at Cambridge are likely to do much better for financial support than those who go to one of the ex-polytechnics.
    I should like briefly to discuss my amendment No. 129 and then give my support to amendment No. 130, which was tabled by my hon. Friend the Member for Southampton, Test (Dr. Whitehead). Amendment No. 129 is very important as it changes the powers of the Secretary of State into an obligation. Under both the current legislation and the proposed legislation, the Secretary of State has the power to prevent universities from charging more than the cap, but he does not have a duty to do so. This means that if the legislation passes tonight without the amendment, a Secretary of State who does not wish to enforce the legislation has no need to do so and the House could not compel him to do so. If for instance, Dr. Richard Sykes comes along in a few years' time and says, "I cannot manage with a fee of £3,000 so I am going to charge £5,000", we may have a Secretary of State at that stage who thinks that that is probably correct, but does not wish to go through the burdensome process of either secondary or primary legislation or even the affirmative resolution process. That Secretary of State could say, "I do have the power to stop you, but I am not going to exercise that power, so go ahead." There is nothing at that stage that Parliament could do because we have left it to the discretion of the Secretary of State.
    Jonathan Shaw: My hon. Friend is making an excellent speech, as she did in Committee. But is it not the case now that universities can charge as much as they want? Obviously, they would not receive any money from HEFCE, so is there not a real danger that unless universities of the type that my hon. Friend is describing receive a steady income stream now and for the future, some universities might decide to go it alone and charge enormous fees, and the type of access to which we all aspire would simply go out of the window?
    Mrs. Campbell: That is the situation that the amendment is intended to address. My amendment would make it very clear that the Secretary of State is obliged to prevent the university from charging the higher fee—not just having the power to do it, but an obligation to do it. I therefore consider this to be an extremely important amendment—without it, the debates that have raged on the cap and on variability and whether to charge fees at all simply fade into insignificance. It is an important amendment and I hope that hon. Members will support it this evening.
    I also wish to support amendment No. 130, tabled by my hon. Friend the Member for Southampton, Test and others. It would mean that the cap could not be raised above inflation before 2010 without primary legislation, and beyond that point only by amendable resolution on the Floor of both Houses of Parliament. I tabled similar amendments—Nos. 123 and 124——but I have
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    withdrawn them in favour of amendment No. 130. A new higher education Bill would not be the best way to raise the cap, but that would have been the effect of my amendments. I congratulate my hon. Friends on finding a way that makes the condition much stronger than the secondary legislation would have done, because the resolution would be amendable and would give rise to a debate on the Floor of the House. I strongly urge all hon. Members to support that amendment.
    I shall now explain why I cannot support amendment No. 128. As it stands, the amendment would remove clauses 22 to 27, which impose the conditions under which fees can be levied. That would mean, for one thing, that amendment No. 129 would fall, because it relates to clause 22 and the powers and duties of the Secretary of State. I understand that my hon. Friend the Member for Norwich, North (Dr. Gibson) believes that if we passed his amendment we would revert to the current legislation as defined in the 1998 Act. He suggests that the Government would have to introduce further amendments in the House of Lords to raise the fee to a more realistic level. However, given the current state of relations between the two Houses, I do not share his optimism that their Lordships would play ball.
    There is a more important objection. Without any further amendments to remove the repeal measures of the 1998 Act, as defined in schedule 6, the effect of my hon. Friend's amendments would be to deregulate fees completely, because that schedule will repeal the parts of the Act that refer to the current fee regime. The Conservative spokesman pointed out that amendments have been tabled that would remove the repeal of the provisions in the 1998 Act, but they were not tabled by my hon. Friend. To my surprise, they were tabled by the hon. Members for South Suffolk (Mr. Yeo) and for Westmorland and Lonsdale (Mr. Collins). Are those amendments really intended to be consequential amendments to amendment No. 128? If so, how come they were tabled by the Conservatives and not by my hon. Friends? I have to ask what is going on there.
    Clare Short: The purpose of the amendment tabled by my hon. Friend the Member for Norwich, North (Dr. Gibson), and supported by so many of us who wish to adhere to our manifesto commitment, is to take variability out of the Bill. We would like the Government to accept that principle. If some consequential amendments had to be made in the other place, they would be easily carried, given how the different parties line up there. We are talking about a principle, not the technicalities of amendments. Let us be straightforward with each other.
    Mrs. Campbell: I accept what my right hon. Friend says, but those consequential amendments appear on the amendment paper tonight and they were tabled by the Conservatives. I accept that my hon. Friend the Member for Norwich, North has not colluded with the Conservatives, but I find it extraordinary that the consequential amendments have been tabled by them.
    Mrs. Fitzsimons: I know that my hon. Friend has many years of experience lobbying the other place on higher education—as have I—and we have discovered that it has its own mind on that subject and peers often

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    buck the Whip. Therefore, any assurances or blandishments that suggest that the Opposition might co-operate should be viewed with scepticism.
    Mrs. Campbell: Given the present mood of the upper House, I find it inconceivable that any measure that was not passed successfully by this House could be moved successfully there.
    If any of my hon. Friends are tempted to support amendment No. 128, I hope that they realise that to complete the ends that they are supposedly trying to achieve they will have to vote for amendments tabled in the name of Conservative Members. No Labour Member's name is put to those amendments—there are not even any Liberal Democrat or Plaid Cymru Members' names, only Conservative Members' names. I wonder what local constituency parties would think of that.
    4.15 pm
    Paul Farrelly: On the point of principle, does my hon. Friend accept that the effect of her amendments would be exactly the same as that of amendment No. 128, because they would remove variability from the Bill? If either were accepted, the effect would be the same—the Bill would be withdrawn.
    Mrs. Campbell: I spent a great deal of time carefully constructing amendments that would leave the Bill intact. They would not only leave the Bill intact, but strengthen the role of OFFA, the regulator. I would have thought that many Labour Members would want to achieve that, rather than taking the teeth out of OFFA completely.
    Ian Lucas: Has my hon. Friend received any indication from the Government of what their attitude to her amendments would be if they were accepted? Have they said that they would withdraw the Bill?
    Mrs. Campbell: I answered that question earlier. The Government have not given any indication to me, but I understand that the Whips have been talking to people about the consequences of their support for my amendments, although I do not know what that might be.
    A further problem for Labour Members is that the consequential amendments to amendment No. 128 would turn OFFA—the mechanism by which we will increase access for students from non-traditional backgrounds—into a toothless tiger. We would keep OFFA, but there would be no incentive for universities to increase access, so what would be the use of that?
    Let us suppose that sufficient Labour Members vote for amendment No. 128 and then the Conservative amendments relating to schedule 6. What would happen next? I know that my right hon. Friend the Secretary of State has threatened to withdraw the Bill if that happens, and I take his threat seriously. However, he probably would have no need to do that. Given that
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    he would have the powers but not the duty, all that he would have to do would be to make it known that he would not exercise his powers to require universities to charge a regulated fee. Universities could thus charge whatever the Secretary of State deemed acceptable—irrespective of what the House thinks. Hon. Members should also remember that OFFA would have no bite and remain totally immobilised, so universities could thus charge huge fees, have no effective access plans and take all their students from the well-off classes so that they would have no need to dispense bursaries. Is that really what my hon. Friend the Member for Norwich, North is trying to achieve?
    Mr. Gordon Marsden: My hon. Friend is outlining a doomsday scenario that she envisages if amendment No. 128 were passed, so it is only fair to ask whether she shares the touching faith that my hon. Friend the Member for Norwich, North (Dr. Gibson) seems to have that certain universities would play ball and go ahead with an access programme, not least given that many in the Russell group take an alternative view.
    Mrs. Campbell:I am heartened by the way in which universities have responded to even the mere mention of OFFA by introducing much better access and outreach plans than they have ever had. I know that that applies to my own university as well as many others. Removing the teeth of OFFA would not lead to an immediate withdrawal of such plans, but I believe that they would wither on the vine in time.
    Mr. Barnes rose—
    Annabelle Ewing rose—
    Mrs. Campbell: I give way to the hon. Member for Perth (Annabelle Ewing).
    Annabelle Ewing: Given what the hon. Lady said earlier this afternoon, if next year's Labour party manifesto contains a commitment or undertaking not to introduce primary legislation to lift the cap on top-ups, does she expect anyone to believe it?
    Mrs. Campbell: I understand the Liberal Democrat position—[HON. MEMBERS: "She is not a Liberal Democrat."] I apologise; I meant the Scottish nationalist position. The hon. Lady has to accept that the situation is difficult. Universities are in severe financial straits. In those circumstances, it is necessary to look hard at what we can do to raise finance for them. As someone who has been in opposition, I can say with confidence that it is easy for Opposition parties to say anything and promise everything. She will never be put in the position of delivering on her promises.
    Mr. Barnes: Will my hon. Friend give way?
    Mrs. Campbell: I am about to finish.
    I cannot possibly support amendment No. 128 and I hope that my hon. Friends will not do so either. I hope that amendments Nos. 129 and 130 will receive support, and that if there is a chance to vote on new clause 6 that it, too, will be supported.
    Mr. Robert Jackson: I want to explain briefly why I shall vote with the Government to secure the Bill's passage, which in contrast to the hon. Lady and the hon. Member for Norwich, North (Dr. Gibson), I want to succeed.
    I do not want to rehearse the arguments, which have become familiar. Instead, I want to address a word or two of explanation to my party—[HON. MEMBERS: "Where are they?"] I am sorry that so few of my hon. Friends are in the Chamber. My interpretation of their absence is that this is a case of bad conscience.
    Both as a democrat and a Conservative Member of Parliament, I am delighted by the renewed will to win that we have seen in the Conservative party since the change of leadership. I salute the leadership of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard). Our two-party system requires both an effective Opposition and a serious alternative Government. However, I am concerned about the collateral damage that will arise from too bald-headed a pursuit of that will to win, which in itself is a good will to have. I am reminded of a remark by Stanley Baldwin about Lloyd George. He said that he was a dynamic force, and a dynamic force is a terrible thing. What I have is a choice between party interest and national interest. It is right, in such a situation, to take the national view.
    Let me say a few words about the collateral damage that will arise if the amendments are carried and the Bill collapses. The effect on universities would be the postponement of the issue until after the next general election, which gives us two possible hypotheses. The first is that the Conservative party wins. In the process of trying to score points against the Government, it has got into a position from which it cannot escape making a manifesto commitment to oppose the principle of paying university fees. That would be the basis on which it would have to conduct its policy in government. There could be no question of a Conservative Government introducing fees in the next Parliament, and it is likely that it would not happen in the Parliament after that. So we would have at least 10 years in which university fees would not be possible.
    We do not know anything about the alternative policy of the Conservative party. I do not think that there is a serious alternative, for reasons that I set out on Second Reading. What we do know about Conservative policy is what my right hon. Friend the Member for West Dorset (Mr. Letwin), the shadow Chancellor, has said, which is that universities are not a priority. They fall outside the priority for schools and health, and training and universities will be cut. We definitely know that about Conservative policy. I have to ask myself: what will be left of our university system after a further 10 years of starvation during which a Conservative Government forbid what are in law private institutions from charging fees to their customers?
    I turn to my second hypothesis, and that is that the Labour party wins the next general election. I think that we can exclude the hypothesis of a Liberal Democrat win. I assume that the Prime Minister will continue to lead the Labour party. I assume also that the present Secretary of State for Education and Skills will be an important contributor to the Labour party manifesto. I think that the Labour party would commit itself at the next election to introduce fees. Incidentally, I think that
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    it was a great mistake not to have been more honest with the public during the last election. But there is a saying in the Bible about the "sinner that repenteth".
    If the Government lose today, I think that there would be such a commitment in the Labour party's next manifesto. Listening to the debate within the Labour party, it is clear that there is broad consensus for that. People have heard the arguments and have taken them on board. I think that Labour would probably enact such a reform after the next election, but that would mean either a two or even a three-year delay, and our universities cannot wait for that long. Concessions would probably be involved, which would constrain the future of our universities even more than this Bill would do. I regret those constraints but I accept them as being politically necessary. It would probably also lead to an increase in the cost of concessions and subsidies to students, which I and the Select Committee consider unnecessary. For example, there is the interest rate subsidy, which the Select Committee has said is not justified. I do not think that it is justified even though it was introduced by a Conservative Government.
    Clare Short: Will the hon. Gentleman tell us whether he supports the proposal for a cap on raising the top-up fee or whether he supports the Russell group's position of allowing prestige universities to charge what the market will bear?
    Mr. Jackson: It is probably necessary that there should be a cap if the Bill is to get through Parliament. I think that in due course that cap should be raised. I believe that that experience will show that it will be possible to raise the cap without any of the adverse consequences that many Labour Members, and even Conservative Members, affect to fear.
    My conclusion, based on the hypothesis that Labour wins the next election with a manifesto committing itself to this legislation, is that there would be a delay and there would probably be constraints and concessions that would make the deal for the universities rather less satisfactory than the deal that the Bill offers.
    Mr. Gordon Marsden: The hon. Gentleman is evenhandedly and fairly describing potential hypotheses. He rightly talks about the need of the universities for funding now. Has he heard Members on either side of the House at any stage advance a coherent and cohesive argument for an alternative form of funding that would ring-fence and guarantee the universities the money that they need over the next two to three years?
    Mr. Jackson: This is a problem of any system of co-payment, but we must start facing it because co-payment is part of the future of our public services. Co-payment involves co-operation between the private and public sectors. It can be objected to any system of co-payment, that as private income rises, public income will be cut. But we must find a way of trusting one another to make such systems work. They work perfectly well in many countries throughout the world and there is no reason why they should not be able to work in Britain.
    I turn to a second area of collateral damage. I am also concerned—some people may say it is a bit above my pay grade—about collateral damage to the interests of

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    the Conservative party. If the amendment is carried, I think that it will be bad news for my party because it will mean that its behaviour will be noticed. If it is not carried, I rather hope that people will soon forget what we have been doing.
    It is generally agreed that the battleground at the next election will relate to public services. Speaking with a certain detachment as someone who does not propose to stand again, I am struck by the enormous convergence of views in these matters that has emerged between the parties in this place. All or most are agreed on the need for reforms in our public services and the way in which they work. All or most are agreed that these reforms should involve decentralisation and that they should, above all, involve more choice and more tailoring of the service to individuals who use the service. There is also a general consensus about levels of taxation, and that we are reaching the limits of the tax burdens that we can put on people. Even the Liberal Democrats now accept that.
    The Government's proposals for universities draw the logical conclusions from those facts and this convergence of views. What depresses me is that the Conservative party, which makes all the arguments for reform, decentralisation and tailoring services more to users' needs, flinches from drawing the appropriate conclusion. That will not go unnoticed by serious people.
    4.30 pm
    We are living in a post-ideological age. The ideological mountain ranges have collapsed. We have a flat political landscape. People are much interested in competence, leadership and consistency. There will be collateral damage to the Conservatives' reputation among many thinking people because of the line that we are taking on this matter, which a lot of people regard as simply disreputable. I salute the animal spirits and the revived will to win in my party. I like to see the Conservative party with its head down and its dander up, rushing at the goal. The trouble is that today it is rushing at its own goal.
    Mr. John Grogan: It is a life of ups and downs as a so-called Labour Back-Bench rebel trying to stick to the manifesto. It is important not to become paranoid. When I saw the headline in The Guardian this morning—"the Government cracks down on persistent offenders; surveillance will be used"—I was momentarily alarmed and, in preparing my defence, was anxious to say that I have rebelled against the Government on only one other issue. I was then mightily relieved to see that the Home Secretary was planning to crack down on violent criminals, rather than Labour rebels.
    There are carrots as well as sticks, and the night before the House previously voted on the Bill, I was invited to dinner by three Cabinet Ministers. That has not happened before. Seriously, I thank my right hon. Friend the Secretary of State for the way that he has conducted this whole debate. I have tried to attend as many of his seminars as possible. I now appreciate a little better how Maoist re-education worked all those years ago, but I thank him for his courtesy throughout this process.
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    I want to talk briefly about a deal about which the House may be interested. We have heard a lot about deals, but only one deal matters in this process: the deal that we all solemnly made with the electorate at the last election. All three major parties said in their manifestos that they were against variable top-up fees. We said that for very good reasons.
    Alan Johnson: As I understand the logic of my hon. Friend's argument, a fixed fee set at a level that we choose—let us say £3,000—would not break the manifesto commitment. Indeed, we would be welcomed with open arms on the streets. However, if we say that less than £3,000 can be charged, it is somehow a great betrayal. I am confused by that argument.
    Mr. Grogan: I have never said that I support £3,000 fees. I am glad that my right hon. Friend is thinking about the circumstances if amendment No. 128 is passed, because I always suspected that there is a plan B. He is obviously putting his considerable intellectual powers into considering what will happen if that amendment or those tabled by my hon. Friend the Member for Cambridge (Mrs. Campbell) are passed. I am pleased that, under those circumstances, as a responsible Minister, he will not throw the toys out of the pram and that he will return with proposals on what the fee should be.
    Why have we gone back on that pledge? Some interesting arguments have been advanced. On Second Reading, my right hon. Friend the Secretary of State referred to the rapid pace of economic change since the last election. We have heard an awful lot about the increased number of Korean students. None of those are fundamental reasons why we should change our mind on this very important issue.
    We have heard a lot about concessions, but let us remember that some concessions have not been made. I well remember my right hon. Friend the Secretary of State saying on television—I think that it was on "Newsnight"—that he would bet his mortgage that fees would not rise above £3,000 for 10 years. We are now told that it is a marvellous concession that fees will not be raised beyond that level until 2009—three years after the system begins. We were told at one point that there would be a universal bursary scheme, which would apply to every university equally. That offer was made to Universities UK, apparently. Throughout this process, Universities UK has made the parliamentary Labour party look like a great democracy. Ivor Crewe and the leaders of Universities UK have suppressed dissent. They did not even put that offer to the rest of the universities.
    The grants are welcome. Under the amendments tabled by my hon. Friend the Member for Cambridge (Mrs. Campbell) and amendment No. 128, the grants would remain. Let us not forget that the son or daughter of a postman and a nurse would get no grant or fee remission. Those are the very people whose choices would be distorted if the fee level were raised, as it inevitably would be. All the Russell group of universities are not talking about £3,000 or £4,000. The logic of the system is that fees would rise rapidly to £9,000 or £10,000 by 2009.
    Peter Bradley: Does my hon. Friend not accept that the only way the cap can be lifted to any amount—£9,000, £10,000, £6,000 or £7,000—is if he and his colleagues in the House consent that it should be changed? Does he not have any confidence in himself and his colleagues to control the cap?
    Mr. Grogan: I have seen how the debate has gone over the past three or four months. I assume that in 2009 we will have an intellectual debate and we will all be able to make up our own mind. There will be no talk of supping with the devil, colluding and so on. We all know what sort of atmosphere the debate would take place in. We have only to listen to the Russell group and Professor Nicholas Barr.
    I do not want to take up too much of the time of the House. I end by appealing to my colleagues. We are discussing a matter of principle. If the amendment of my hon. Friend the Member for Cambridge is called, I urge support for it. However, it is unlikely to be put to the vote because of the absence of parliamentary support, so we shall be down to amendment No. 128. It is spurious to argue that because the consequential amendments were signed by a particular person, we should not vote for the main amendment. Either we are colluding or we are not. On a matter of principle, I urge all hon. Members who have spoken so long and so loud from the Labour Benches against top-up fees to take courage and vote with their convictions. Vote for amendment No. 128 if it is put to the House tonight by the Speaker.
    Mr. Clappison: I shall speak to the amendments tabled by my right hon. and hon. Friends and on student support in general, particularly the way in which the variable fee structure is being introduced by the Government and the effect that it will have on many families.
    I am concerned about the impact on middle and lower-middle income families and those with modest levels of income. Students from those families will be adversely affected by the proposals. I want to take a little time—not too long—to consider the detail of what the Government propose to do to families on a wide range of incomes. In the previous debate, we spent some time discussing how to encourage students from non-traditional backgrounds into higher education. I do not believe that background should determine whether someone goes into higher education; that should depend upon academic ability.
    The last thing that I want is for someone from what is described as a non-traditional background with the appropriate level of ability to be deterred from going into higher education by the disincentive of the prospect of a mountain of debt for years to come. Labour Members will have to recognise that many students from non-traditional backgrounds are precisely those students from the levels of income that will be adversely affected by the proposals and find themselves faced with just that dilemma.
    For all Labour's intentions with regard to OFFA, and all OFFA's supposed good works and encouragement—much, if not all, of which is already done by the universities themselves—students will be
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    faced with, on the one hand, what they are told by the universities, OFFA and whoever else, and on the other with the prospect of substantial levels of debt for years to come, which they will have to repay over their working lives and during their most productive period of life when they have so many other responsibilities—buying a home, starting a family and so on. I want to speak out on behalf of those students and families today because their voice should be heard. I fail to see just what imposing those debts on those families will do to encourage students into university.
    Yes, it is right that under the Government's proposals there will be help for families on lower incomes. There is help now. But to benefit from the help that the Government are offering in future, students must come from families with very modest incomes indeed. There is help for the poor, but it is fair and accurate to say that it is help for the very poorest. Those who come from families with incomes just a little above that level will lose out. I invite Labour Members to pay a little more attention—
    Mr. David Lepper: Will the hon. Gentleman give way?
    Mr. Clappison: If the hon. Gentleman will just allow me to finish that point, I will happily give way.
    I should like Labour Members to pay attention to the thresholds at which help is available for students under the Government's proposals, because it is a material factor in this debate that has not yet been sufficiently addressed. When hon. Members hear the Government talk of help and promises for the future, they must remember—to echo the hon. Member for Harrogate and Knaresborough (Mr. Willis)—that, today, students from families with joint incomes of £20,970 pay nothing at all. All of their fees are remitted. It is only above that level that they start to pay fees. To be fair to the Government, it must also be borne in mind that at present fees are paid up front, but in future they will be paid upon graduation, and I make that distinction. However, taking that into account, it is appropriate to look at the comparison between the help that is available now and the help that will be available in future, and the very much higher costs that students will have to pay as a result of the £3,000 fee.
    The Government have talked a lot about the full higher education grant and getting that into the hands of students. It is right that that help will be there, but—I will give way to the Minister if he wishes to confirm this—the threshold for the full higher education grant is £15,970, substantially below the present level at which fees are remitted altogether. Between those two amounts there will be help, but it is on a sliding scale and it will diminish. That means that unless university bursaries fully compensate students, which they are not required to do under the Government's proposals, students from families with joint incomes of between £15,970 and £20,970 will pay for the cost of their education for the first time, unless university bursaries are given to help to bring them up to the full amount.
    Even more serious than that, because help is now available below £20,970, in future, beyond a new threshold of £22,270, support for students under the Government's proposals falls off a cliff edge. The

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    support goes down and down and the amount that students have to pay through the tuition fees remains the same. Therefore, a big gap opens up and students are faced with a real prospect of substantial debts way into the future. The Government give a small amount of help now for incomes above £22,270, but expect students to pay an awful lot more on graduation.
    To take one example—it is apposite because it comes from the Government's own document on the grant system—under the present system, a student from a family with a joint income of £25,000—which might comprise a manual worker with a wife who works part-time, and they would soon reach that income level—will over three years pay £1,500 for that student's education. That is an up-front figure; it is the current total figure for three years. As soon as the new system of tuition fees is introduced, a student from a family with a £25,000 income will pay—this is the net figure, taking help into account—£6,300 on graduation, which is a more than fourfold increase.[Interruption.] It is on graduation, but in comparison with the current £1,500, a payment of £6,300 on graduation is not a very good deal. As the Liberal Democrat spokesman mentioned, anyone putting the money in the bank would have to find a pretty wonderful rate of interest to help them.
    4.45 pm
    Mrs. Fitzsimons: Will the hon. Gentleman give way?
    Mr. Clappison: I shall give way first to the hon. Member for Brighton, Pavilion (Mr. Lepper), as I indicated I would do.
    Mr. Lepper: I thank the hon. Gentleman for remembering that I attempted to intervene on him. He suggested that very few people would benefit from the student support system that the Government are introducing. The figures that I have from the Library suggest that 40.86 per cent. of families with youngsters in my constituency will qualify for the full grant, while some 77.67 per cent. will qualify for a full or partial grant. Has he done similar research in respect of his constituency, and does he agree that the figures that I have quoted are by no means negligible?
    Mr. Clappison: The hon. Gentleman needs to look at the help that is now available—I hope that I have made this point sufficiently well; I may not have made it clearly enough—as compared with the debts that will be incurred later. The figures that I have given are net figures. I know that a £25,000 joint income in the south of England in a commuter-belt constituency just outside London is modest indeed. Families at that income level are struggling to house themselves and pay for the cost of living. Students from such families are far from coming from well-off backgrounds.
    Hugh Bayley: The hon. Gentleman says that he would like more generous repayment terms than the Government are offering in the Bill. May I remind him that the last Conservative manifesto said:
    "With us, graduates will not have to pay anything unless and until their income tops £20,000 per year"?
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    Is that still Conservative party policy? If so, how will it be financed, given the party's commitment to reduce expenditure on higher education?
    Mr. Clappison: As I said, the present position is that families on just above £20,000 do not pay anything at all. With all respect to the hon. Gentleman, I do not think that going back over previous manifestos is the strongest suit for the Labour party today.
    Dr. Alan Whitehead: I think that, perhaps slightly unintentionally, the hon. Gentleman misled the House in his claims about what students get at the moment over the course of their student careers. They are remitted £1,125 a year, but under the new arrangements they will receive a maximum of £3,000 up front a year. He rightly said that that still requires the payment of some debt, but has he taken into account the fact that that debt will deteriorate in relative value over a period, whereas the up-front money is valued at current rates? I am sure that he has taken that into account in his calculations, as it makes a 40 per cent. difference in his figures.
    Mr. Clappison: My calculations were based on a written answer given to me by the Minister, who told me that, under the present arrangements, there is a fee remission of £656 from the student each year. Aggregating the balance produces a figure of £1,500 over three years. The other figure that I used came from the Government's own document seeking to illustrate the position under its proposals. It said that for a family with a joint income of £25,000, there would be a grant for fees in future of £900. Over three years, that amounts to £2,700, but the cost of the education is £3,000 each year, which amounts to £9,000, so on the Government's own figures provided in written answers, the final total is £6,300. The fee system is there for everybody to see, and it costs more than four times as much as the current system. It is a fair point that that sum will be repaid in the future rather than its being an upfront fee, but I have taken account of that. Any Labour Member who tries to persuade a student that paying £6,300 in three years' time is better than paying £1,500 now has a promising future career on daytime television selling debt consolidation.
    Mr. Boswell: Does my hon. Friend agree that the total debt that must eventually be repaid will be inflation-linked? Labour Members may argue that that represents a discount against the commercial rate of interest and is therefore attractive on those grounds, but the real resource cost to the Exchequer of supporting students in the future will rise even more—they cannot have it both ways.
    Mr. Clappison: My hon. Friend is absolutely right. Although it has been said that the weekly repayments will be modest, the sum itself is substantial. If the repayments are modest, the debt will extend over years and years, which is a point that students will take into account.
    Labour Members must face up to the point made by the hon. Member for Harrogate and Knaresborough that students who go into important lower-paid public service jobs will spend much longer repaying their debts

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    than those who go into higher-paid employment, which will disincentivise students from taking on socially useful jobs such as teaching on graduation. That depends on students graduating, because facing such debt in future will be a substantial disincentive to students from such families to go to university.
    Geraint Davies: Will the hon. Gentleman give way?
    Mr. Clappison: No, I will not. The hon. Gentleman has only come into the Chamber recently, and if he had been here a little bit longer he would know that I have been generous in giving way.
    The amount of help given by universities is an important point that has been referred to and must be taken into account, and I tabled a written question about it to which the Minister responded. Bursaries will be available to students, and some universities will award bursaries to students from families with an income level greater than that required by the Government, which is £15,970. Universities are not required to pay bursaries to students from families with incomes above that level—the Minister will correct me if I am wrong—but some universities say that they will do so, which is all well and good.
    Relative to other UK institutions—I say that for the benefit of my hon. Friend the Member for Wantage (Mr. Jackson)—Cambridge university has put forward the most generous scheme, which accords with the fact that it is an extremely wealthy institution. Looking across the list of other institutions—again, the Minister will correct me if I am wrong—no university other than Cambridge has made a clear commitment to give bursary help to students from families with incomes above the £22,000 threshold. I have not seen any specific commitments in the literature that I have received from the Minister, but even if there were a specific commitment to provide some help, it would have to be substantial help indeed to make up for the huge extra debts.
    Alan Johnson: The hon. Gentleman is wrong on the threshold limit. All universities must give at least a £300 bursary to students from families with incomes up to the threshold limit at which we set the £2,700 grant, which is £33,000 a year. Cambridge, Imperial, Exeter and Surrey universities say that they will give bursaries up to that level, and not the £22,000 level that he quoted. I believe, although I am not certain, that Exeter and Imperial universities have gone beyond that, and Surrey is the latest university to announce that it will go down the same route.
    Mr. Clappison: I am sure that the Minister is right, but his written answer in February stated that Government proposals do not require a bursary to be given to students from families with incomes of more than £15,970. It is not clear from my correspondence with the Minister or from what has been set out by Universities UK that there will be automatic help for students up to those levels. I will not read out the letters, but no university other than Cambridge has spoken about the threshold going above £22,000. The Minister is nodding. I accept that he has made it clear that help will be available up to the amount of £15,970—in some cases £4,000, or at least the £300 that is required by the Bill.
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    However, that is not my complaint. My complaint is on behalf of families on lower and middle incomes of between £22,000 and £33,000. In my constituency, or anywhere in the country, £22,000 is a modest joint family income on which people may struggle. Students from those families will be daunted by the prospect of a debt of this order of magnitude—thousands of pounds stretching into the future. In response to the hon. Member for Rochdale (Mrs. Fitzsimons), if we gave students—certainly, students in my constituency—a choice between the new system and the old system, they would not queue up to take the new one. It will cost students an awful lot of money, and it will be a particularly hard blow for middle-income families.
    The Government have got it wrong. The introduction of variable fees is oppressive to such families and I am afraid that it will act as disincentive. I do not like discrimination, but I do not like disincentives either. I hope that Labour Members will exercise their consciences over that question. I hope that they will also consider the loss to the country that will result if those students respond to the blandishments that they are receiving from German and American universities to go abroad, where they may receive more generous help or not have to pay any fees at all. The House should seriously consider the fact that this measure will be a substantial blow to a huge wedge of families on middle incomes.
    Peter Bradley: Like many other, but not all, Members of this House, I had a privileged education, and I have been privileged ever since in the salaries that I have earned and the jobs that I have done. Having been one of the 6 per cent. of young people who had the opportunity—although many more had the ability—to go to university in the early 1970s, I want my privileges to be other people's rights. That is why I joined my party and why I welcome the Bill, or rather what it has become.
    I make no pretence about variability. A free market in higher education would indeed entrench privilege—that is why I originally opposed the concept. My hon. Friend the Member for Norwich, North (Dr. Gibson) is right. Under a free market model, the elite universities would get richer at the expense of the poorer universities. If that were still the position, I might be attracted to amendment No. 128, but what is now on offer is a firmly regulated market, if it is a market at all. We are no longer talking about top-up fees, but about top-down fees. We are no longer talking about variability, but about a fixed fee with a discount. In my view, which I believe is shared by others, most, if not all universities, across most, if not all their courses, will charge £3,000. There will be no meaningful market in higher education. The variability, such as it is, is likely to be in hundreds of pounds, not thousands of pounds. It will be an issue for school leavers when they consider which university to attend, but in no way a decisive issue.
    5 pm
    The manifesto commitment must be taken seriously, but it was written before we went out on the doorstep at the last general election. Perhaps my hon. Friends will contradict me, but I cannot think of an issue that was raised more frequently, especially in middle-class areas

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    in my constituency, than the resentment, especially of parents, of having to pay an up-front fee to send their children to university. The up-front contribution makes parents wonder whether they can afford to send their children to university. The Bill abolishes the up-front fee and we should celebrate that. It shows the way in which we have listened and responded to our constituents.
    The language of the debate in the past year or so has been misleading, and we are all responsible for that. We should talk not about student debt but investment in the future. A mortgage is a debt; for many people, it is a lifetime debt. The rights and privileges that the previous Government extended to people under the right-to-buy policy gave them an opportunity to contract a debt, which many regretted when boom turned to bust. That problem will not confront graduates, who, if they lose their jobs in future or take a dip in salary, will no longer have to repay their tuition fee contribution. That is in stark contrast to the debt that the Conservative party invited hundreds of thousands of people to enter into. Those people came to regret it when they found themselves in mortgage arrears and their homes were repossessed.
    Mr. Barnes: It is certainly a question of investing in the future, but another question is: who should do the investing? Should it be done by society as a whole or individual students?
    Peter Bradley: My hon. Friend is right. Society as a whole should make the investment, and that is what we are doing. The taxpayer bears 75 per cent. of the cost of sending a student to university. However, we must choose whether we are content for 6, 10, 20 or 30 per cent. of the young people in our communities who are academically qualified to take up university places to do that. Are we content to cap ambition at 10 per cent. or at 20 per cent.? Should we have a quota, as the Conservatives suggest? Or should we want the best for most of our young people? We should not cap their ambition, because they have a right to university education if they are qualified for it, and our economy needs their skills.
    Mr. Boswell: Before the hon. Gentleman abandons the point about mortgages, does he believe that mortgage providers will take an interest in whether the applicant holds a student loan, with its obligations to repay? If they take no interest, will they not be acting irresponsibly in offering money?
    Peter Bradley: A leading mortgage association has already confirmed that it has no problem with the proposal. Mortgage providers will take an interest in the earning capacity of those who wish to have a mortgage, and a degree significantly advances that capacity. Data suggest that graduates who enter employment have an immediate advantage of £4,000 a year over those who do so without the benefit of a degree.
    My hon. Friend the Member for Norwich, North suggested that variability would discriminate against the modern universities. I challenged him about that in an intervention. The Government have reintroduced maintenance grants, which is a huge step forward, not
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    only for 33 per cent. of students but especially for those from low-income backgrounds. The Government are now taking responsibility for paying those grants and not obliging the universities to do that. That has lifted a difficult burden from the universities with the highest intakes of students from low-income backgrounds and allowed them to keep substantially more of their income from tuition fees than was originally intended. Thus the very universities that contribute most to the widening access agenda will keep most of that new income. The figures that I have seen suggest that, for example, Bournemouth will have a 50 per cent. uplift in its income from student fees, Middlesex will enjoy a 37 per cent. increase, and my nearest university, Wolverhampton, will benefit from a 20 per cent. increase. That is in contrast to the uplift for Cambridge, Oxford and the London School of Economics—which are not known for their contribution to the widening access agenda—which runs at less than 10 per cent.
    Chris Grayling ;rose—
    Peter Bradley: I shall give way to the hon. Gentleman in a moment, but I want to address a point made by the Liberal Democrat spokesperson about Cambridge being an asset-rich university. The hon. Member for Harrogate and Knaresborough (Mr. Willis) will have heard my right hon. Friend the Minister citing other examples, including Surrey, Exeter and Imperial college, not all of which are cash-rich institutions, and there will be more to follow. They are offering students paying top-up fees a further £4,000, on top of the £3,000 available from the Government. That will give those students an income over three years of £21,000, and a repayment to make on graduation—on an income—contingent basis—of £9,000. That is a pretty good deal. When students and school leavers understand what is on offer in the Bill, they come to very different conclusions from those suggested by the hon. Member for Hertsmere (Mr. Clappison).
    Chris Grayling: Does the hon. Gentleman accept that, under the current system, a student from a less well-off background will end up with student loan debts of about £10,000? After the introduction of top-up fees, even taking grants into account, that same student will end up with debts of about £10,000. So, at the end of their university career, their financial position will be no different.
    Peter Bradley: We could trade mathematics, but let me tell the hon. Gentleman why the reintroduction of maintenance grants makes such a huge difference. Although the idea of debts, mortgages—whatever we choose to call them—is an issue for everyone, our society is not half so debt averse as we might think from listening to this debate. Most of us have debts, whether through hire purchase agreements, bank overdrafts or credit cards. Debt is an issue, I grant the hon. Gentleman that, but one of the principal reasons why young people with academic qualifications from low-income and working-class backgrounds have not taken up places at university, even when they are available—which, under the Conservatives, they certainly would not be—is that they cannot afford the up-front student

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    living costs. They have no savings, and their parents have no savings with which to sub them through university.
    The return to the maintenance grant is therefore a measure of which all Labour Members should be proud. It is radical, progressive and empowering, and it will allow universities to welcome those students into higher education, provided that the places that we can pay for through the tuition fees are available. It will also enable people to whom the privilege of going to university has been denied for decades to take up the opportunity to enrich their lives, to enhance their earning capacity, and to underpin our economy for generations to come. That is why the return of the student grant is a crucial part of the Bill.
    Mr. Rendel: I want to return to the point about whether the new universities or the more privileged ones will gain the most. The hon. Gentleman says that, as a proportion of their income, the new universities will gain more than the richer ones. That is simply because the richer ones currently have a much greater income. Some universities will, by the hon. Gentleman's own admission, charge less per student and therefore bring in less in fees per student. I would suggest that those will tend to be the poorer universities, and because they will bring in less per student, the gap will widen in terms of the amount of money per student that universities have to spend.
    Peter Bradley: There is a fundamental misunderstanding on the Liberal Benches.[Interruption.] I was just inviting colleagues to imagine what, among many misunderstandings, that could be. On this particular issue, the reason why modern universities will benefit disproportionately from the steps that the Government have taken to relieve them of the responsibility to pay out in grants what they receive in income is that they are undergraduate teaching led, whereas other universities, principally those in the Russell group, if they are not research led, at least have a high proportion of their funding vested in research. Universities that specialise in educating precisely those young people to whom I have been referring should and will benefit, and will be rewarded by their contribution to widening access.
    Mr. Gordon Marsden: My hon. Friend has rightly drawn attention to the mainstream universities, which are precisely those that are most likely to attract first-generation students. Does he agree that that is why the Campaign for Mainstream Universities has issued a note today saying that any vote that risks the withdrawal of this Bill will be a vote against widening participation and social inclusion?
    Peter Bradley: My hon. Friend is right to draw attention to that important statement. He also gives me an opportunity to use a line that I would have used on the Conservative Front-Bench spokesman if he had allowed me to intervene. He talked about divisions of opinion among vice-chancellors. Of course, he is right: there is no unanimity among vice-chancellors on this issue. Vice-chancellors are unanimous, however, in their contempt for the Conservative party's policy on higher education when it has one, and in their contempt for its
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    opportunism when it has not. That is the unanimity that the Conservative party has managed to engender in the higher education community.
    The benefits that I have outlined are those of a Bill that is radically different from the White Paper, which was rightly and roundly criticised until more or less the new year. I want to pay tribute to Ministers and give them credit for the fact that they have not only listened but responded to constructive criticism from colleagues. They recognised the argument that the real disincentive to working-class school leavers is not debt but upfront fees and living costs. The support package of £3,000 is therefore extremely welcome. Colleagues argued about the adverse impacts of modern universities bearing those costs, and the Government are now bearing the cost of those grants. We argued for the conversion of fee remission to grant, and we had an undertaking from Ministers. That was a brave step, as it meant changing a publicly held position. It was the right decision and I am grateful for it, as future generations of undergraduates and their families will be. We argued that elite universities must broaden their student base, and it is OFFA's task to ensure that they do.
    The Liberal Democrat spokesman contrasted the £4,000 bursaries that Cambridge and other universities will offer with the situation at Wolverhampton. He said that Wolverhampton university would not be able to afford the bursaries. He is probably right. But Wolverhampton's intake, depending on what statistic one reads, is either 47 per cent. or 75 per cent.—or somewhere between those two figures—lower-income students. It will not be required to pay those bursaries, and it will not need to do so. The need and pressure should be on the Russell group of universities, which year on year have signally failed to embrace the broadening access agenda—the latest figures show a reduction in working-class students with academic qualifications being allowed to study at those institutions.
    Mr. Willis: Under the Bill, if Wolverhampton university, 47 per cent. of whose students are from the three lower socio-economic groups, charges the full £3,000 fee, those students will each be eligible for a £2,700 grant from the state, and the university will have to provide £300. Given that it will have to find grants for 47 per cent. of its intake, compared with Oxford, which will have to find grants only for the 9 per cent. of its students who are from those socio-economic groups, how on earth will that benefit Wolverhampton?
    5.15 pm
    Peter Bradley: The hon. Gentleman makes an important point about the Liberal Democrats' fitness for government. In an ideal world, Wolverhampton would not have to bear the cost of the £300. What the hon. Gentleman does not seem to appreciate is that it now has a very high ratio of income that it can keep, certainly compared with what was originally proposed, which will boost its funding—I gave him the figure of 20 per cent. That is why, despite its reservations about variability, Wolverhampton supports the Bill. It will be good for the university, good for its current intake of students, and good for students who are yet to go there. OFFA's task will be to ensure that universities that are not meeting the objectives perform better and achieve more, which is why I support amendment No. 129.

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    We have argued for a three-year review. As the Government have conceded, that is incredibly important. Three years after the new arrangements are introduced, we shall be far better placed to judge whether they have delivered the benefits that we expect them to deliver. If we decide that they have not, it will be up to us to do something about it. I cannot understand why some Members do not have enough confidence in themselves and their colleagues to change, or to endorse, policy if that is the right thing to do. This measure is no different from any other in that regard. Both sides of the House will be whipped, just as they are in the case of other Bills. It is an insult to say that—it would also be unlawful—we will fetter the discretion of a future Parliament because we do not have enough self-confidence to believe that we can either sustain or, if need be, change our own thinking. That is a specious and dangerous argument.
    We will have a debate in both Houses, and for that reason I strongly support amendment No. 130. We must be able to take account of the three-year review and all the other information that comes our way. We need a motion that we can debate, amend and vote on.
    The amendments that the Government have suggested they will accept, along with the huge gains made on Second Reading, have significantly strengthened the Bill. They have strengthened Parliament's control over the future of tuition fees, they have strengthened the Government's obligation to police those provisions in the "duty and power" amendment tabled by my hon. Friend the Member for Cambridge (Mrs. Campbell), and they have strengthened the regulator's powers to enforce the widening of access not just to universities already subscribing and contributing to that principle, but to all universities, no matter how grand they think they are.
    The Bill is not perfect. No one wants to pay the additional taxes proposed by the Liberal Democrats; no one wants to pay the additional charges that we propose. This, however, is not just the best package on the table, or the only package. It is a good package—a radical, progressive set of measures that will help to boost standards in our universities, underpin their competitiveness, and create opportunities for working-class school leavers who never had such opportunities before and, without this package, would not have them in the future. I am not just prepared to vote for the Bill; I shall be proud to do so.
    Annabelle Ewing: On behalf of the Scottish Nationalists and Plaid Cymru, I rise to support amendment No. 128, which would delete what I believe to be iniquitous proposals to introduce variable top-up fees. In my view, they are wrong in principle. They will create a two-tier system, and will treat university education as if it were just another commodity in the marketplace. I think that my opinions reflect widespread concern among parents, students and university principals throughout Scotland. Those people have a great fear of the negative impact of the proposals on the university sector in Scotland. That issue was highlighted in the report of the Scottish Parliament's cross-party Enterprise and Culture Committee, which was produced in December 2003.
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    The committee had spent three months taking evidence from all relevant parties and sectors, and the report's conclusion was that the top-up fee proposals in the Bill would have an adverse impact on Scottish higher education.
    That conclusion has been echoed by the majority of university principals in Scotland, and has even been admitted, although very late in the day, by Scotland's Labour First Minister. The key issue is that because of the Barnett formula, if more private money is levered into the university sector south of the border, that will create in the longer term a chronic funding gap in Scotland because there will be no Barnett consequentials for the Scottish university sector. That is widely accepted in Scotland and is the view of the majority of university principals there, so I do not know quite why the Minister is shaking his head. Perhaps he has not been in communication with the university principals in Scotland.
    The report's conclusion is that there will be a significant and detrimental impact on research in Scotland's universities, which at the moment have an excellent reputation, and deservedly so. There will also, of course, be a significant impact on recruitment. Those facts are incontrovertible. Notwithstanding that, on Second Reading, we saw 46 Scottish Labour MPs troop into the Lobby to support the Government and vote against Scotland's interests. We also saw the solo Scottish Tory MP sit on his hands, although he has managed to vote on some measures that have no impact whatever on Scotland, such as the Mersey Tunnels Bill. The key issue is what the Scottish MPs will do today.
    We have heard much in the debate about international examples, and I asked the Prime Minister at about the time of Second Reading why on earth, if a country such as Ireland could use its powers to abolish all tuition fees, as it did in the 1990s, and secure a participation rate of more than 50 per cent., he could not secure such a result in England. In his answer, interestingly, he pointed to the example of New Zealand, but as we have heard today, that was perhaps not a good example to use in seeking to strengthen the Prime Minister's case.
    I shall keep my intervention brief, because I appreciate that other Members want to contribute, but the key issue for Scotland today is whether the Scottish Labour MPs will put Scotland's interests and their constituents' interests ahead of the political interests of the UK Prime Minister. Is the solo Scottish Tory MP once again going to sit on his hands and abstain? Vital Scottish interests are at stake, and it is noteworthy that not one Scottish MP has even sought to listen to any part of today's debate, with the notable exception of the Father of the House. The House might not know that he is the only Scottish MP to be a university rector—he is the rector of Edinburgh university, and chairs its court. The Father of the House, well knowing the views of the university sector in Scotland, took the principled position on Second Reading of voting against the Bill.
    Given that vital Scottish interests are at stake tonight, I hope that the Scottish MPs who voted with the Government last time will reflect a little further, and will

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    put Scottish interests ahead of those of the Prime Minister. If they fail to do so, their betrayal will not be forgotten or forgiven in Scotland.
    Jonathan Shaw: My hon. Friends have discussed matters of principle relating to manifesto commitments, and we need to reflect on that. We must reflect on the argument about top-up fees put forward at the time of the manifesto, which referred to fees on top of up-front fees. We are in a very different situation now, so I have no problem at all on that. My conscience is clear.
    I am sorry to speak against my hon. Friend the Member for Norwich, North (Dr. Gibson), whom I like enormously. He is a fine fellow. He has had a glittering career both politically and academically and, perhaps more importantly, is a football star as well. We have spoken about the principles of widening access, of increasing numbers—that is, Labour and Liberal Democrat Members have, rather than the Conservatives, who do not believe in increasing numbers—and of providing more student support. It is vital that we bear those principles in mind and make choices for individuals, for the institutions and, very importantly, for our country.
    We must make those choices for our country. Recent figures from the Institute of Employment Research show that of the 13.5 million jobs that are expected to be filled by 2012, 50 per cent.—6.8 million will be in occupations likely to demand graduates. If we look across the world, India is churning out 1 million graduates, who at the moment are doing a lot of back-office work, but in future they will be doing development work as well, so yes they will have—
    Mr. Patrick Hall: My hon. Friend is making an important point about the future estimated need for people with higher education skills. Does he not agree that those who deny the need for 50 per cent. of people to go to university are actually doing down the economy of this country, never mind those individuals who should go to university who have the ability?
    Jonathan Shaw: My hon. Friend is right. So we are talking about the individual, the institution and the country. From the individual's perspective, it is not just a 50 per cent. target; as we have heard, it is a 50 per cent. projection. We are seeing more young people achieve and we know that if a young person gets two or more A-levels they go to university. Show me the queue of parents who will line up and say, "I do not want my young son or daughter to go to university." There will not be one. We all aspire for our sons, for our daughters, and for all the young people. We have continuously increased access in recent years, and that is what we need to continue to do for the individual and for our country. Jobs that require few qualifications will not exist in future. Foundation degrees will be a very important component of the increase to 50 per cent., providing the vital technical skills for our economy.
    The issue about debt has naturally been central to our discussions in the Chamber, but we may not have discussed the fact that if a person takes on a debt to purchase a product, they want the product to be of quality. There has been a decrease in investment in our universities, and class sizes have risen. There have also
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    been difficulties in the recruitment and retention of lecturers, whose pay is appalling. By increasing the revenue stream to universities, this measure will allow them to increase lecturers' pay to assist with recruitment and retention. That is vital because if you are graduating from university and want that qualification, you want the course to be a good quality product. We talk about the fear of debt. We know what we are talking about—
    David Taylor: If a golden dawn is indeed emerging for those who work in higher education, why is it that Association of University Teachers branches throughout the country are so vigorously opposed to what is proposed in the Bill and the financial arrangements that surround it?
    Jonathan Shaw: Perhaps when that dawn, as my hon. Friend describes it, does appear, they will not be so against them. Once people see increases in their salary they will not be quite so against them, but we must take those decisions now, or we stay where we are, or we find finance from somewhere else. If my hon. Friend believes in raising taxes that is fine, but I remind him that we have had issues about our manifesto commitment. We stood on a promise not to raise the top rate of tax, so where would the money come from? After all, we would be asking for a reasonable contribution—a graduate earning £18,000 a year would be asked to pay £5.19 a week. Most of my constituents would think that that was a reasonable starting point.
    If we want to invest in our young people and widen access, this is the right proposal for the country, the individuals and the institutions, which need it for their lecturers. It will provide opportunities for so many young people in our constituencies. However, it is not only the proposals on student finance that will achieve that. It will also be achieved through the Sure Start programme, investment in primary schools, and investment and improvements in secondary schools. The Bill is right for the country, the institutions and the individuals, and I hope that the House will support it.
    5.30 pm
    Mr. Boswell: I shall speak in favour of new clause 5, because it would remove the possibility of charging for tuition fees, which would have an unacceptable impact on students and would be unstable in prospect—as I shall make clear later. My immediate concern is to welcome one aspect of the change in the Labour party. It has begun to take on board some of the principles of a market system. Nor does it wish to put up taxes—as has just been pointed out—at least not by the front door. However, that is not a debate for today.
    I find it odd, however, that the Labour party dissociates itself completely from the impact of the price mechanism. The Bill will impose a charge for the tuition of students, and the fact of that charge—however moderated or explained away—will have an impact on students. If a charge is levied for something, it is less attractive as a result.
    Mr. Robert Jackson: My hon. Friend, for whom I have great admiration, congratulates the Labour party

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    on its conversion to market principles, but it is a little strange to do so at a time when the Conservative party is abandoning them.
    Mr. Boswell: I thank my hon. Friend for his comments and I hope to have the chance to advert briefly to alternative means of finance, although of course this is not a Second Reading speech.
    I make the point about price in relation to disadvantaged students and the discussions they have with their parents and siblings. Any imposition of fees is likely to act as a deterrent, at least for some of them. However much the charge is removed from the time of tuition and applied to graduate level, and however much it is attenuated or made more acceptable by maintenance grants—which the present Government abolished, of course—there will be a disincentive effect.
    Before Ministers pat themselves too much on the back for their generosity, it should be remembered that some of that generosity will be financed by other students. The Government have improved the Bill, but parts of the package remain to be hammered out, with great difficulty and political angst. It will require the imposition of a charge on the universities that will have to be put back into bursaries, and they will in effect be financed by the less indigent students.
    Mr. Barnes: New clause 5 would remove fees for students. Is the hon. Gentleman aware of my amendments, which have not so far been debated? They also try to tackle the student debt problem and are more radical in some respects, in that they would apply to all debt, and less radical in other respects, in that they would not get rid of all the fees in one fell swoop. They would provide for a holiday from debt. What are his feelings about those amendments?
    Mr. Boswell: The hon. Gentleman has introduced his argument without having to make a speech to it. The short answer is that I am aware of his ingenious proposals. They deserve consideration, but I do not, on balance, come down in favour of them. However, at least they encourage discussion on the matter.
    There will be problems for less privileged students, and I am equally concerned about the problems faced by people whose families are on a moderate income, which were set out eloquently and expertly by my hon. Friend the Member for Hertsmere (Mr. Clappison). There will be an impact on such people's families. Their parents may continue to make a contribution, but if they do not, it will add to the student's debt on graduation.
    Angela Watkinson: Does my hon. Friend agree that, when graduates' salaries reach the point at which the repayment of student debt is triggered, they are likely to be taking on other commitments such as marriage, a family and a mortgage? The collective effect of the debts is likely to create a disincentive to enter a college course in the first place.
    Mr. Boswell: I strongly endorse what my hon. Friend says. Her point was enshrined in an intervention that I
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    made on the hon. Member for The Wrekin (Peter Bradley) in which I pointed out that mortgage providers must take account of the overall package of debt.
    Mr. Lepper: Is the hon. Gentleman aware of a statement made by the Council of Mortgage Lenders? It says that it
    "recognises that many graduates will still be paying off their student loans at the time they consider buying their first home. On the basis of the current repayment schedule for student loans, the existence of an outstanding student loan is unlikely to have any negative bearing on the graduate's ability to obtain a mortgage."
    Mr. Boswell: I accept that the council does not wish to discourage people from applying for a mortgage, but whether lenders will be prepared to make well-founded offers on that basis is a different matter. The debt will be a debt that must be serviced by somebody.
    Mr. Rendel: I do not know whether the hon. Gentleman was in the Chamber when I asked the Prime Minister a question on that matter. I pointed out that one of my constituents who has a debt of a mere £12,000, which is much lower than the likely debts of the future, has been turned down for a mortgage simply on the ground of student debt.
    Mr. Boswell: I am grateful to the hon. Gentleman for pointing that out.
    I do not think that enough has been said about the Bill's implications for students on long courses, which I am worried about. Not all those people will go on to be in the private sector, and their burdens will be substantial.
    Let us consider alternatives. It is a matter of record—I do not want to debate it with my hon. Friend the Member for Wantage (Mr. Jackson), for example—that when we were in government, we ran a system that did not charge fees, but that was open to fees. There was a slight disagreement with the hon. Member for Harrogate and Knaresborough (Mr. Willis) about that, but the issue did not arise except on one brief occasion. At that time, we were still able to expand the higher education sector substantially. That approach would provide for significant access to higher education and I shall defend it on another occasion.
    An alternative heroic approach, which is not ruled out by the Bill, would be to go for an all-private system—some universities occasionally talk about that. A university that was prepared to forgo all public funding could go private and rely exclusively on fees or other forms of private income. It could introduce needs-blind support if that could be financed. It is highly questionable, however, whether that would meet the access concerns of the Minister and Conservative Members and whether it could be introduced, because there would undoubtedly be consequences for the student body. However, I emphasise that that approach would not be ruled out by the Bill.
    If universities find themselves in difficulties, despite the package, the Minister does not rule out the possibility of them moving towards unregulated parts of the sector—similar to the way in which public utilities buy businesses that are unregulated, if I may put it that way. I am thinking about part-time students—we had a

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    constructive debate about that in Committee—postgraduates and overseas students. There is nothing to stop a university rebalancing its intake, which some have suggested they might do.
    I was sorry not to be in the Chamber to hear the speech of my hon. Friend the Member for Wantage. Some important avenues could be explored in relation to the contribution that future employers and graduates can make to stimulate alumni contributions and endowments more generally.
    One of my major concerns about stability is not simply the financial stability of the system and whether it will deliver. I am entitled to be at least slightly sceptical about Labour Members' claims. It is interesting that they inherited a system from us that was delivering a more than one-third participation without fees. They announced that it was necessary to make changes, so they introduced tuition fees and abolished maintenance grants. They came up with a system that was supposed to solve everything, yet six years later they are back to the drawing board with a repeat solution, as if the system was never viable in the first place.
    Apart from the financing costs of the system, there will be a heavy regulatory price to pay. The fees regime will come unstuck because of the huge public expenditure cost, which exceeds the value of the fees available to universities. Equally, the regulatory system will not work and will pave the way for further interference in the admissions policies of universities.
    My essential concern on the substance of the matter, as enshrined in new clause 5, is that the fees regime will break down and what has been put in by way of public expenditure to sugar the pill exceeds the amount that universities get. More to the point, the ratio will worsen over time as the level of student debt for most students increases and, ipso facto, the level of subsidised loan outstanding for each student, or for the generality of students, itself increases. Eventually, a future Chancellor will conclude that the promised loan subsidies will be unsustainable and the cost will be excessive. At that point, all bets are off.
    Another pressure that may develop—the Minister will realise that this has been implicit in the debate—is that most universities will charge the market rate. As the Select Committee explained, if they do that there will not be a free market in any substantial sense of the term. A few fees will be discounted, but universities will be subject to a growing pressure to have a higher rate so that they have a greater level of differentiation.
    Dr. Whitehead: Does the hon. Gentleman accept that amendment No. 130 would enable the House to decide, with a debate and by resolution, and with the possibility of amendment, how to deal with a ceiling on the fee charged after 2010? His concerns that the ceiling may well disappear and that we have much higher fees in the near future should be allayed, and I invite him to support that amendment.
    Mr. Boswell: I was about to conclude my remarks, and the hon. Gentleman in a sense anticipates my argument. The Government's safeguards up to 2010 are a clause thick. If they were so minded, it would take only a very short Bill to remove the cap, and I think that the pressures to do that would be irresistible. It makes no
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    sense within the Government's own terms to have a cap of such a nature because it neither contributes enough to universities to bail them out of their financial problems nor does it drive the agenda of social justice. It fails on both counts. It would take legislation only a clause or two thick to change things. I accept the Minister's good faith on the matter; he handled the Committee with panache and made an unacceptable brew a little more acceptable. Nevertheless, Ministers' assurances are about as convincing as they were last time we debated this.
    The path will be clear irresistibly for future increases in top-up fees, which in a sense are beyond the immediate concern of present students but will form the next tranche of concerns that future students will have. That is the basis, in my view, on which the Bill is founded. If it has any supporters or friends, they are probably to be found among the 100 or so vice-chancellors, not all of whom agree but they are giving the Bill their support, fingers crossed, in the hope that it might do some good and that it will not break down while they happen to be in charge, any more than the Minister is, of this difficult and sensitive sector.
    We need to examine higher education funding but we do not need to do so through the means of charging that the Government propose in the Bill.
    5.45 pm
    Mr. Jon Owen Jones: I am grateful for the chance to speak for a few minutes in a five-hour debate on an England and Wales Bill on the Welsh aspects of the measure, which have not been discussed to date. So far we have had more discussion on higher education policy in New Zealand than we have had on that in Wales.
    I intend to support the amendment of my hon. Friend the Member for Norwich, North (Dr. Gibson), who, appropriately for this debate is my former lecturer. I do so because I take the Government at their word. I have been told by many Government sources that if I support the amendment and it is agreed to, it will wreck the Bill. That is why I am supporting it.
    Many of my right hon. and hon. Friends will not understand my point of view because there are many good things in the Bill. If they listen, I will tell them why I am doing what I am. If the Bill falls as a result of my vote, I hope that it will be a salutary lesson. The Government and Parliament have abrogated their responsibility to Wales during the passage of the Bill so far.
    I oppose the idea of variable fees, in particular because of their effect upon Wales. This is an interesting test case for the limits of devolution. To what extent can we have policies that are different from the context of English policies? There will be different issues from policy to policy. On some issues, because of the effect of the market on a particular issue—this is one such issue—it is not possible to devolve effective powers, which would be implemented differently in Wales from how they would be implemented in England. I shall explain why.
    We have an extremely integrated system. About half the students in Wales are English and about half of Welsh students are in English universities. That is because there is a market already, but the Bill will increase the level of marketisation. Students have a right

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    to move from whichever constituency they are in and from whatever side of the border. I note already that, because I am speaking about Wales, there has been a loss of interest in the Chamber. If anything, variable fees will increase marketisation, but just as price differentials between universities will influence the choices of students as between universities, price differentials between England and Wales will influence the decisions that students take in England and in Wales.
    Wales is extremely vulnerable to distortions that will come about through divergent policies. In the 2006 cohort of students, Welsh universities will be charging a £1,250 up-front tuition fee. English universities will be charging up to—the better ones will mostly be charging—£3,000. That will be a variation of £1,750 per student per year.
    If we do the mathematics, the cost to the Welsh Assembly is £48 million a year in total to subsidise its institutions for not charging the variable fee, but they will not be able to charge it for three years, so the cost is £146 million. That money must come from the Welsh block, which is the money for schools and hospitals in Wales. The assumption is that there will be no market distortion, but there clearly will be a market distortion. If Cardiff university—a Russell group university—charges the £1,250 up-front fee, whereas Bristol university charges £3,000, there will be a £5,000 difference over three years. Naturally, Cardiff university will be more attractive to those who need to pay the full amount, so there will be a distortion and English students who have to pay the full amount will move to Wales.
    Given the size of the market—690,000 students in England and 40,000 students in Wales—(Interruption.] No, sorry, I will make these points because they have not been made so far. I have to disappoint the Whips. There will be a distortion and people will move, but about half the students in Wales are already English. The number will rise, so the Welsh Assembly will be put into the perverse position of subsidising the education of the better-off English students—who would otherwise have to pay the full rates but prefer to go to Welsh universities to avoid doing so—from the money that would otherwise be spent on schools and hospitals in Wales.
    What a perverse and ridiculous position to be in, and it could be worse because Welsh universities will not be able to pay the £2,700 bursary grant, which should go to the clever, poor students who can get into university. Poor Welsh students will be unable to find places in Welsh universities because they will suffer increased competition as more English students are tempted into Welsh universities. The Welsh students will have a big incentive to try to get into English universities because that is the only place where they will be paid the grant.
    I put it to Parliament that that consideration is worthy of debate and discussion, and that the Ministers would have some comfort for me if they could explain how the Bill, which will devolve the power that causes
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    that to happen, will work in Wales without resulting in the ridiculous position that I have tried to explain in my shortened speech.
    Mr. Simon Thomas: Will the hon. Gentleman give way?
    Mr. Jones: I will give way once because the hon. Gentleman is another Welsh Member who has not spoken so far is this debate.
    Mr. Thomas: I am grateful to the hon. Gentleman for giving way. He is making a cogent argument. Although it is strange for me as a Welsh nationalist to say this, he is not quite correct to suggest that those arguments were not debated in Committee—they were debated. However, he is nevertheless right to make these arguments on the Floor of the House. I hope that the Minister listens carefully to what he is saying, but I wonder whether the hon. Gentleman has factored something into his consideration that he has not yet mentioned. He refers to the market distortion, but there is surely a further distortion, given that the money that, in effect, will be added to the English university block grant will come directly from the fees raised in England. That will not be reflected in the Barnett formula, thus further distorting the situation.
    Mr. Jones: That point was made by an SNP Member during the debate, so the hon. Gentleman did not need to make it a second time.
    The Bill applies to England and Wales. Every piggyback Bill applying to England and Wales has had the same problem. Ministers and Members believe that it is not their responsibility to discuss Welsh issues. It is their responsibility because the issue is not devolved and Parliament must find a better way to debate such matters.
    Alan Johnson: May I intimate at the outset that the Government are prepared to accept amendments Nos. 129 and 130, with the permission of my hon. Friends who have put their names to those amendments? I shall say a little more about that in the course of my remarks.
    Mr. Barnes: My right hon. Friend mentioned the amendments that he will accept. Presumably, therefore, he does not accept the other amendments, including those that I tabled. It is important for me to know that, so that I can look for a procedural device whereby I can move one of the three sets of amendments in my name, which call for a student holiday from debt of 15, 10 or five years. I hoped that the Minister might be tempted by the five-year provision. I may now seek to move the amendment specifying 15 years and press it to a Division, but I will need to understand the procedural devices available to me.
    Alan Johnson: I cannot help my hon. Friend with that, but as I said that the Government are prepared to accept amendments Nos. 129 and 130, he can assume that we are not willing to accept any of the other amendments. My hon. Friend argued his case on Second Reading. I doubt whether any party in government could accept it. It involves not just fees, but a loan, and calls for a holiday of five, 10 or 15 years before any money comes

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    back to the Government. The problem with that is that it would cost us £100 million to £200 million—money that we could use elsewhere in a student support package. I do not have time to go into detail, but I assure my hon. Friend that we considered the idea carefully and we are not attracted to that amendment.
    New clause 5 is an attempt by the official Opposition—this was not much mentioned when it was moved—to take us back to the period pre-Dearing and pre-1998 when colleges could charge, but when every student had a non-means-tested grant to meet the charge. It is a back-to-the-future proposal. I am amazed at what is going on with the official Opposition. I very much respect their Front-Bench spokesmen. Throughout this debate on the future of higher education, there has been only one Back Bencher on the official Opposition Benches.[Interruption.] Well, the hon. Member for Wantage (Mr. Jackson) is facing the right goal in this match.
    No one has mentioned Dearing or the national committee of inquiry that the previous Government set up. The Opposition say that we should go back to the period pre-Dearing and that there should be no fees whatever. They support amendment No. 128, as well they might—it was originally their amendment No. 21—but they were not always in favour of the position pre-Dearing. When the Dearing report was published, the Conservative party supported its principles. The right hon. Member for Charnwood (Mr. Dorrell), who was then shadow Secretary of State for Education, said that the Conservative party supported all the principles laid out in the Dearing report.
    Some time between that and the 2001 election, that turned into a pathetic statement that the answer to the funding problem in higher education was endowments. The hon. Member for Esher and Walton (Mr. Taylor) pointed out on Second Reading that £30 billion of endowment capital would be needed to raise the amount of money that we are providing for in the Bill.
    6 pm
    So we move from support for Dearing, whose report the Opposition commissioned when they were in government, to a frankly pathetic policy of endowments to solve the problem, to this debate on the future of higher education. To be fair, the Liberal Democrats have a principled stance, although I do not agree with it. I accept that the Government's stance is mildly controversial, but at least it sets out how we intend to tackle higher education. But Her Majesty's official Opposition tell us that they are in a hiatus, with absolutely no policy whatever. That is poor form, to use words that Opposition Members sometimes use.
    If that were not bad enough, we have the five principles that will guide Her Majesty's official Opposition when they do come up with a policy: to increase income for universities; to improve the financial position of students in respect of debt; to increase universities' freedom from central Government; not to increase taxes; and not to increase fees. It is no wonder that it is taking the Opposition a bit of time to come up with a policy when those are their guiding principles.
    The hon. Member for(Mr. Collins)asked us to look across the waters at the system in New Zealand, and I am grateful to my
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    university-educated hon. Friends who know that there are six universities in New Zealand. But since this form of university funding was introduced in New Zealand—albeit with a real rate of interest, which we are not introducing, on which it has had to backtrack—participation among those from lower socio-economic backgrounds rose from 18 to 26 per cent. in three years, and participation among Maori students, the poorest of New Zealand's citizens, rose by 46.1 per cent. in six years. There is a clear record that if this policy is introduced properly, with a balanced package, it will not damage widening participation. Indeed, I would argue, as many Labour Members have argued, that it will support widening participation.
    Mr. Collins: The Minister will know that in New Zealand there was a 38 per cent. drop in the number of working-class males attending the most expensive courses. But on consistency, which the Minister seemed to be urging on Her Majesty's Opposition, if we unveil a policy that meets each of the five tests specified earlier, will he undertake to support it? Given that he refers to Dearing and to 1997 and 1998, why is one of the centrepieces of his argument in favour of this legislation the proposal to remove the up-front fees that his Government introduced in 1998?
    Alan Johnson: I undertake, on the record, to present the hon. Gentleman with a Dan Dare badge if he comes up with such a policy. For ex-Eagle readers, there can be no greater accolade.
    While we are considering new clause 5, which goes back to the position pre-1998, let us spend a second discussing the Dearing inquiry. It is easy in a debate such as this to say what the problems are and what is wrong with our proposals if there is no alternative. Dearing looked studiously at the problem. An NUS representative who served on the national committee of inquiry that looked at all the options said that we could not continue to under-fund our universities as we had done in the past and that we must close the funding gap and tackle widening participation. It was Dearing who pointed out that in 40 years of free higher education with generous maintenance grants, the social class gap widened rather than narrowed.
    Paul Farrelly: Does my right hon. Friend recognise that the capped variable system in Australia has not really improved access because it has had the commonsense result: higher fees have worked one way while improved grants and maintenance have worked the other? For our policy to be generally progressive, we must take access seriously, and all the access measures that my right hon. Friend has introduced must be at the heart of the legislation, not just an add-on.
    Alan Johnson: I agree with my hon. Friend. I would argue that they are at the heart of the Bill, and I shall come to that in a moment.
    Dearing said that there were no easy options. He looked at graduate tax and different ways of proceeding. New clauses 8 and 9, tabled by the Liberal Democrats, provide that there would be no fees anywhere in the UK apart from Scotland. That would be the result of those new clauses: there would be no fees apart from in the one place where the Liberal Democrats are in coalition

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    government. They say—I love to listen to this, because it is a really good line—"Ah, but that contribution of £2,000 is actually for the grant"—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the Minister, but I remind him that he should be addressing the Chair. When he turns to address his side of the House, he is largely cut off from my hearing.
    Alan Johnson: I apologise, Mr. Deputy Speaker.
    The Liberal Democrats argue that the contribution in Scotland goes towards a grant, not towards teaching. We are giving the grant free and putting the money towards teaching, but graduates still make a contribution. However, Dearing said that the real problem with underfunding in higher education is that relying on the taxpayer alone means that underfunding will always materialise. He said that, as well as the taxpayer putting in the lion's share—let us not forget that we are putting in an extra £3 billion of taxpayers' money, which is a 34 per cent. increase—universities need a substantial stream of funding that should be paid for by those at universities contributing once they have graduated. That is the essence of what Dearing recommended.
    Mr. Willis: Does the Minister accept that, after the introduction of the Teaching and Higher Education Act 1998, the Government removed grant funding pound for pound with what students paid in fees? In the United States, which has a similar system to the one that the Government propose, as soon as there is an economic downturn—the latest is in California—the state removes funding and increases fees to compensate.
    Alan Johnson: That is wrong. We explained this issue in Committee. When we came into government, Dearing was told that, for the next two years, there would be a further 6.5 per cent. reduction in university funding thanks to the previous Government. Dearing recommended that it should be a 1 per cent. reduction and said that that was all that universities could take. Given that we had the same spending commitments as the previous Government, it was as a result of our using fees that we managed to meet the Dearing recommendation of a 1 per cent. reduction. Since then, in this spending review and the next one, there will be a considerable increase in funding per student.
    The other point that I want to address relates to amendment No. 128. My hon. Friend the Member for Norwich, North (Dr. Gibson) said that he believed—I accept that this is his belief—that what the amendment would ensure is in effect a fixed fee, deferred. What he means to ensure, and what he argued for, is that we should have no extra money for universities and that we should put in a huge amount from the taxpayer to defer just £1,000, rather than nought to £3,000, as we propose. There would not be a penny extra for universities and, in a sense, we would stay where we were and remain neutral in terms of the higher education funding gap.
    It does not take a Philadelphia lawyer to look at what the amendment would do. It would do what the official Opposition originally intended—take away every aspect
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    of control over fees, as set out in clauses 22 to 27. That would be fine if we were not also repealing under schedule 6 the current rules in the Teaching and Higher Education Act 1998. Her Majesty's official Opposition have tabled two other amendments seeking to retain those provisions, but in the absence of those two amendments, the result of amendment No. 128 would be an unregulated higher education market with top-up fees in their true sense. That is the first crucial point.
    The second crucial point is what the result would be if my hon. Friend's amendment were carried with the support of the Conservative party and we also put back the two provisions that we would otherwise repeal from the 1998 Act. The result would be that we could not have the £2,700 maintenance grant that Labour Members, primarily, have convinced us to introduce by rolling up fee remission with grant. Under the 1998 system, fee remission must always equal the fee, which leaves no money for a grant. It would be possible to increase the fee and the fee remission, but extra taxpayers' money would have to be put in—there is a lot of taxpayers' money in there already—otherwise there would be no single, non-repayable maintenance grant of £2,700.
    Mr. Win Griffiths(Lab): Whatever happens to the amendment tabled by my hon. Friend the Member for Norwich, North (Dr. Gibson), he intended to get rid of the principle of variability. I, too, am worried about variability, although I am heartened a little by the New Zealand experience. I worry that access for students from low-income families will be damaged and that students may not take long courses, such as medicine. If the independent review comes up with proposals to change the system to improve access and overcome problems with long courses, will the Minister guarantee that the Government will accept them?
    Alan Johnson: We have set up an independent commission reporting directly to Parliament because we want to listen to its recommendations. My hon. Friend does not want me to come out with platitudes, and I cannot say what the Government will do in three years' time or that we will accept any recommendation made by an independent commission. However, I assure my hon. Friends that the commission will make its recommendations to Parliament, and any Government that ignored them would be foolish.
    I shall go further: we are setting up an independent commission because we understand some of the concerns expressed by my hon. Friends the Members for Norwich, North, and for Cambridge (Mrs. Campbell) and other Labour Members about variable fees. If variable fees have a negative effect, the review will have happened early enough to change from variable fees to fixed fees.
    Geraldine Smith: Will the Minister accept that it is morally wrong for students from identical backgrounds who have equal ability and who study the same subjects at different universities to pay widely varying fees? That cannot be right—it is not fair.
    Alan Johnson: New clause 6 was tabled by my hon. Friend the Member for Cambridge, and new clause 7 argues the principle of variability without the technical deficiencies of amendment No. 128. New clause 7 also contains a technical deficiency, however, because it does not outlaw anyone charging less than the fee, which would result in the introduction of variable fees.
    Part-time students, who are mainly adults, pay unlimited variable fees, which are not deferred and there is no cap. The majority of part-time students come from working-class backgrounds, and they are looking to get into higher education having not been successful the first time round.
    We say that if universities all want to charge £3,000, they can. It is up to them to set their fees between nought and £3,000, rather than the Government insisting that every course at every university must be priced at £3,000, even if universities say, "We cannot run that course because we cannot attract enough students." Universities could introduce variable fees through the back door by giving discounts, so what is wrong with our saying openly that it is down to universities to decide fees?
    On the principle of fixed fees against variable fees, I presume that the Liberal Democrats will vote against new clause 6 if it comes to a vote. Their Treasury spokesman said in the Financial Times on 22 December, that Professor Giddens, to whom he was replying,
    "is absolutely right in his criticism of flat-rate fees. This is the worst of all worlds: a poll tax on students totally unrelated to the quality of higher education provided or the preferences of students."
    I presume that that is still the Liberal Democrat position.
    Richard Burden: May I take my right hon. Friend back to his comments about the commission? On Second Reading, he gave an assurance that if the commission came up with a proposal to change the rate of variability after 2010, that would require primary legislation, but I do not see that in the Bill. Will he define what he would see to be such a change to the rate of variability?
    6.15 pm
    Alan Johnson: I have only three minutes left. I have spoken to my hon. Friend about this before. I still say that if the commission recommended a change to the rate of variability, that would require primary legislation, and I am writing to him to tell him why I believe that to be the case. Other hon. Members have expressed agreement on the issue, but my hon. Friend and I have developed a misunderstanding. I am absolutely convinced that such a recommendation by the independent commission would require primary legislation post-2010, as well as pre-2010.
    We are prepared to accept amendments Nos. 129 and 130 because we have listened throughout to the concerns that my hon. Friends have expressed about ensuring that the £3,000 cap has a proper grip. We gave an assurance that it would be changed in the course of the next Parliament, and we have added that to the Bill. We gave an assurance that any change thereafter must be subject to an affirmative resolution in both Houses, but we could not see how to guarantee that it would be taken
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    on the Floor of the House. My hon. Friends provided that by tabling amendment No. 130, which proposes an amendable resolution. We are therefore prepared to accept it.
    My hon. Friend the Member for Cambridge is absolutely right on amendment No. 129, which also touches on an important issue in relation to amendment No. 128. Even if that amendment's technical difficulties were resolved, the Bill would still give the Secretary of State a power, but not a duty, to insist that the fee cap is maintained. Amendment No. 129 rightly turns that power into a duty, which is why we are prepared to accept it.
    We have had a long argument, and no one can say that we have not listened. We spent 11 hours in Committee on the issue of fixed fees versus variable fees. In three years, the independent commission will specifically consider that. We are introducing the grant, fee deferral, a much more benign system of repayment for students, and—for the first time—help on fee remission and a grant for part-time students. The extra £2 billion that we are providing to universities on top of the £3 billion that we are making available from the taxpayer will fund not only expansion and extra investment, but, at the centre of our proposals, the ability, through the regulator, genuinely to close the obscene social class gap in our higher education system. I urge hon. Members on both sides of the House to support the Bill.
    Mr. Collins: The Minister gave the game away when he said, "I cannot say what the Government will do in three years' time", because indeed he cannot. He is trying to persuade his Back Benchers that the commission that he promised them on Second Reading will make all the difference. He cannot promise to abide by its conclusions. He cannot promise a level of Government support at the end of the comprehensive spending review, although the Government will spend less per student in every year throughout that period than the last Conservative Government spent in any year. He cannot guarantee that the £3,000 cap on top-up fees will stay for long; indeed, most vice-chancellors expect it rapidly to become not £3,000 a year, but £6,000, £9,000 or even £15,000 a year. New clause 5 is the only mechanism, alongside amendment No. 128, whereby all the Members of this House who stood on the manifesto pledge,
    "We will not introduce 'top-up' fees"
    can keep their word of honour to the electorate.
    It is no good any of us complaining of public cynicism about politicians if Labour Members vote cynically to break in the most outrageous way a clear manifesto pledge.
    The Government's proposals do not have the support of students, university teachers or further and higher education lecturers. They do not even have the support of all vice-chancellors. They are bad proposals that rightly divide the House. They are in clear breach of open and honest pledges to the House of Commons and the electorate. We commend new clause 5 as the way to restore trust in public life.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 227, Noes 378.

    Division No. 122

    6:20pm

    AYES

    Ainsworth, Peter(E Surrey)

    Forth, rh Eric

    Allan, Richard

    Foster, Don (Bath)

    Amess, David

    Fox, Dr. Liam

    Ancram, rh Michael

    Francois, Mark

    Arbuthnot, rh James

    Gamier, Edward

    Atkinson, David(Bour'mth E)

    George, Andrew(St. Ives)

    Bacon, Richard

    Gidley, Sandra

    Baker, Norman

    Gillen, Mrs Cheryl

    Baldry, Tony

    Goodman, Paul

    Baron, John(Billericay)

    Gray, James(N Wilts)

    Barrett, John

    Grayling, Chris

    Beggs, Roy(E Antrim)

    Green, Damian(Ashford)

    Beith, rh A. J.

    Green, Matthew(Ludlow)

    Bellingham, Henry

    Greenway, John

    Bercow, John

    Grieve, Dominic

    Beresford, Sir Paul

    Gummer, rh John

    Blunt, Crispin

    Hague, rh William

    Boswell, Tim

    Hammond, Philip

    Bottomley, Peter(Worthing W)

    Hancock, Mike

    Bottomley, rh Virginia(SW Surrey)

    Harris, Dr. Evan(Oxford W&Abingdon)

    Brady, Graham

    Harvey, Nick

    Brake, Tom(Carshalton)

    Hawkins, Nick

    Brazier, Julian

    Hayes, John(S Holland)

    Breed, Colin

    Heald, Oliver

    Brooke, Mrs Annette L.

    Heath, David

    Browning, Mrs Angela

    Heathcoat-Amory, rh David

    Bruce, Malcolm

    Hendry, Charles

    Burnett, John

    Hermon, Lady

    Burns, Simon

    Hoban, Mark(Fareham)

    Burnside, David

    Holmes, Paul

    Burstow, Paul

    Horam, John(Orpington)

    Burt, Alistair

    Howard, rh Michael

    Butterfill, Sir John

    Howarth, Gerald(Aldershot)

    Cable, Dr. Vincent

    Hughes, Simon(Southwark N)

    Calton, Mrs Patsy

    Hunter, Andrew

    Cameron, David

    Jack, rh Michael

    Campbell, Gregory(E Lond'y)

    Jenkin, Bernard

    Campbell, rh Sir Menzies(NE Fife)

    Johnson, Boris(Henley)

    Carmichael, Alistair

    Keetch, Paul

    Cash, William

    Kennedy, rh Charles(Ross Skye&Inverness)

    Chapman, Sir Sydney(Chipping Barnet)

    Key, Robert (Salisbury)

    Chidgey, David

    Kirkbride, Miss Julie

    Chope, Christopher

    Kirkwood, Sir Archy

    Clappison, James

    Knight, rh Greg(E Yorkshire)

    Clarke, rh Kenneth(Rushclifle)

    Laing, Mrs Eleanor

    Clifton-Brown, Geoffrey

    Lait, Mrs Jacqui

    Collins, Tim

    Lamb, Norman

    Conway, Derek

    Lansley, Andrew

    Cotter, Brian

    Laws., David(Yeovil)

    Cran, James(Beverley)

    Leigh, Edward

    Curry, rh David

    Letwin, rh Oliver

    Davey, Edward(Kingston)

    Lewis, Dr. Julian(New Forest E)

    Davies, Quentin(Grantham &

    Liddell-Grainger, Ian

    Stamford)

    Lidington, David

    Davis, rh David(Haltemprice &

    Lilley, rh Peter

    Howden)

    Llwyd, Elfyn

    Djanogly, Jonathan

    Loughton, Tim

    Dodds, Nigel

    Luff, Peter(M-Worcs)

    Donaldson, Jeffrey M.

    McIntosh, Miss Anne

    Dorrell, rh Stephen

    Mackay, rh Andrew

    Doughty, Sue

    Maclean, rh David

    Duncan, Alan(Rutland)

    McLoughlin, Patrick

    Duncan Smith, rh lain

    Malins, Humfrey

    Evans, Nigel

    Maples, John

    Ewing, Annabelle

    Marsden, Paul(Shrewsbury &

    Fabricant, Michael

    Atcham)

    Field, Mark(Cities of London &

    Mates, Michael

    Westminster)

    Mawhinney, rh Sir Brian

    Flight, Howard

    May, Mrs Theresa

    Flook, Adrian

    Mercer, Patrick

    1704

    Mitchell, Andrew(Sutton

    Spink, Bob(Castle Point)

    Coldfield)

    Spring, Richard

    Moore, Michael

    Stanley, rh Sir John

    Moss, Malcolm

    Steen, Anthony

    Murrison, Dr. Andrew

    Streeter, Gary

    Norman, Archie

    Stunell, Andrew

    Oaten, Mark(Winchester)

    Swayne, Desmond

    O'Brien, Stephen(Eddisbury)

    Swire, Hugo (E Devon)

    Öpik, Lembit

    Syms, Robert

    Osborne, George(Tatton)

    Tapsell, Sir Peter

    Ottaway, Richard

    Taylor, John(Solihull)

    Page , Richard

    Taylor, Matthew(Truro)

    Paice, James

    Taylor, Dr. Richard (Wyse F)

    Paisley, Rev. Ian

    Taylor, Sir Teddy

    Paterson, Owen

    Teather, Sarah

    Pickles, Eric

    Thomas, Simon(Ceredigion)

    Portillo, rh Michael

    Thurso, John

    Price, Adam(E Carmarthen &

    Tonge, Dr. Jenny

    Dinefr

    Tredinnick, David

    Prisk, Mark(Hertford)

    Trend, Michael

    Pugh, Dr. Dr John

    Trimble, rh David

    Randall, John

    Turner, Andrew(Isle of Wight)

    Reid, Alan(Argyll&Bute)

    Tyler, Paul(N Cornwall)

    Rendel, David

    Tyrie, Andrew

    Robathan, Andrew

    Viggers, Peter

    Robertson, Angus(Moray)

    Walter, Robert

    Robertson, Hugh (Faversham &

    Waterson, Nigel

    M-Kent)

    Watkinson, Angela

    Robertson, Laurence(Tewk'b'ry)

    Webb, Steve(Northavon)

    Robinson, Mrs Iris(Strangford)

    Weir, Michael

    Robinson, Peter (Belfast E)

    Whittingdale, John

    Roe, Mrs Marion

    Widdecombe, rh Miss Ann

    Rosindell, Andrew

    Wiggin, Bill

    Ruffley, David

    Wilkinson, John

    Russell, Bob(Colchester)

    Willetts, David

    Salmond, Alex

    Williams, Hywel (Caernarfon)

    Sanders, Adrian

    Williams, Roger (Brecon)

    Sayeed, Jonathan

    Willis, Phil

    Selous, Andrew

    Wilshire, David

    Shephard, rh Mrs Gillian

    Winterton, Ann(Congleton)

    Shepherd, Richard

    Winterton, Sir Nicholas

    Simmonds, Mark

    (Macclesfield)

    Simpson, Keith(M-Norfolk)

    Wishart, Pete

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

    Yeo, Tim(S Suffolk)

    Kincardine)

    Young, rh Sir George

    Smyth, Rev. Martin(Belfast S)

    Younger-Ross, Richard

    Soames, Nicholas

    Tellers for the Ayes:

    Spelman, Mrs Caroline

    Gregory Barker and

    Spicer, Sir Michael

    Mr. Peter Atkinson

    NOES

    Abbott, Ms Diane

    Benton, Joe(Bootle)

    Adams, Irene(Paisley N)

    Berry, Roger

    Ainger, Nick

    Betts, Clive

    Ainsworth, Bob(Cov'try NE)

    Blackman, Liz

    Alexander, Douglas

    Blair, rh Tony

    Allen, Graham

    Blears, Ms Hazel

    Anderson, rh Donald(Swansea E)

    Blizzard, Bob

    Anderson, Janet(Rossendale &

    Blunkett, rh David

    Darwen)

    Boateng, rh Paul

    Armstrong, rh Ms Hilary

    Borrow, David

    Atherton, Ms Candy

    Bradley, rh Keith(Withington)

    Atkins, Charlotte

    Bradley, Peter(The Wrekin)

    Bailey, Adrian

    Bradshaw, Ben

    Baird, Vera

    Brennan, Kevin

    Banks, Tony

    Brown, rh Gordon(Dunfermline

    Barnes, Harry

    E)

    Barron, rh Kevin

    Brown, rh Nicholas(Newcastle E

    Battle, John

    Wallsend)

    Bayley, Hugh

    Brown, Russell(Dumfries)

    Beard, Nigel

    Browne, Desmond

    Begg, Miss Anne

    Bryant, Chris

    Bell, Sir Stuart

    Buck, Ms Karen

    Benn, rh Hilary

    Burden, Richard

    Bennett, Andrew

    Burgon, Colin

    1705

    Burnham, Andy

    Foster, Michael (Worcester)

    Byers, rh Stephen

    Foster, Michael Jabez(Hastings

    Caborn, rh Richard

    &Rye)

    Cairns, David

    Foulkes, rh George

    Campbell, Alan (Tynemouth)

    Francis, Dr. Hywel

    Campbell, Mrs Anne(C'bridge)

    Gapes, Mike(IIford S)

    Campbell, Ronnie(Blyth V)

    Gardiner, Barry

    Caplin, Ivor

    George, rh Bruce(Walsall S)

    Casale, Roger

    Gibson, Dr. Ian

    Caton, Martin

    Gilroy, Linda

    Cawsey, Ian(Brigg)

    Godsiff, Roger

    Challen, Colin

    Goggins, Paul

    Chapman, Ben(Wirral S)

    Griffiths, Jane(Reading E)

    Chaytor, David

    Griffiths, Nigel(Edinburgh S)

    Clapham, Michael

    Griffiths, Win(Bridgend)

    Clark, Mrs Helen(Peterborough)

    Grogan, John

    Clark, Dr. Lynda(Edinburgh

    Hain, rh Peter

    Pentlands)

    Hall, Mike(Weaver Vale)

    Clark, Paul(Gillingham)

    Hall, Patrick(Bedford)

    Clarke, rh Charles(Norwich S)

    Hamilton, David(Midlothian)

    Clarke, rh Tom(Coatbridge &

    Hamilton, Fabian(Leeds NE)

    Chryston)

    Hanson, David

    Clarke, Tony(Northampton S)

    Harman, rh Ms Harriet

    Clelland, David

    Harris, Tom(Glasgow Cathcart)

    Clwyd, Ann(Cynon V)

    Havard, Dai(Merthyr Tydfil &

    Coffey, Ms Ann

    Rhymney)

    Coleman, lain

    Henderson, Doug(Newcastle N)

    Colman, Tony

    Henderson, Ivan(Harwich)

    Connarty, Michael

    Hendrick, Mark

    Cook, Frank(Stockton N)

    Hepburn, Stephen

    Cook, rh Robin(Livingston)

    Heppell, John

    Cooper, Yvette

    Hesford, Stephen

    Corston, Jean

    Hewitt, rh Ms Patricia

    Cousins, Jim

    Heyes, David

    Cranston, Ross

    Hill, Keith(Streatham)

    Crausby, David

    Hodge, Margaret

    Cruddas, Jon

    Hoey, Kate(Vauxhall)

    Cummings, John

    Hoon, rh Geoffrey

    Cunningham, rh Dr. Jack

    Hope, Phil(Corby)

    (Copeland)

    Hopkins, Kelvin

    Cunningham, Jim(Coventry S)

    Howarth, rh Alan(Newport E)

    Cunningham, Tony(Workington)

    Howarth, George(Knowsley N &

    Curtis-Thomas, Mrs Claire

    Sefton E)

    Dalyell, Tam

    Howells, Dr. Kim

    Darling, rh Alistair

    Hoyle, Lindsay

    Davey, Valerie(Bristol W)

    Hughes, Beverley(Stretford &

    David, Wayne

    Urmston)

    Davidson, Ian

    Hughes, Kevin(Doncaster N)

    Davies, rh Denzil(Llanelli)

    Hurst, Alan(Braintree)

    Davies, Geraint(Croydon C)

    Hutton, rh John

    Dawson, Hilton

    Iddon, Dr. Brian

    Dean, Mrs Janet

    Illsley, Eric

    Denham, rh John

    Ingram, rh Adam

    Dhanda, Parmjit

    Irranca-Davies, Huw

    Dismore, Andrew

    Jackson, Glenda(Hampstead &

    Dobbin, Jim(Heywood)

    Highgate)

    Donohoe, Brian H.

    Jackson, Helen(Hillsborough)

    Doran, Frank

    Jamieson, David

    Dowd, Jim(Lewisham W)

    Jenkins, Brian

    Drew, David(Stroud)

    Johnson, Alan (Hull W)

    Drown, Ms Julia

    Johnson, Miss Melanie(Welwyn

    Dunwoody, Mrs Gwyneth

    Hatfield)

    Eagle, Angela(Wallasey)

    Jones, Helen (Warrington N)

    Eagle, Maria(L'pool Garston)

    Jones, Jon Owen(Cardiff C)

    Edwards, Huw

    Jones, Kevan(N Durham)

    Efford, Clive

    Jones, Lynne(Selly Oak)

    Ellman, Mrs Louise

    Jones, Martyn(Clwyd S)

    Ennis, Jeff(Barnsley E)

    Jowell, rh Tessa

    Farrelly, Paul

    Joyce, Eric(Falkirk W)

    Field, rh Frank(Birkenhead)

    Kaufman, rh Gerald

    Fisher, Mark

    Keeble, Ms Sally

    Fitzpatrick, Jim

    Keen, Alan(Feltham)

    Fitzsimons, Mrs Lorna

    Keen, Ann(Brentford)

    Flint, Caroline

    Kelly, Ruth(Bolton W)

    Follett, Barbara

    Kemp, Fraser

    Foster, rh Derek

    Kennedy, Jane(Wavertree)

    1706

    Khabra, Piara S.

    O'Brien, Bill(Normanton)

    Kidney, David

    O'Brien, Mike(N Warks)

    Kilfoyle, Peter

    O'Hara, Edward

    King, Andy(Rugby)

    Olner, Bill

    King, Ms Oona(Bethnal Green &

    O'Neill, Martin

    Bow)

    Organ, Diana

    Knight, Jim(S Dorset)

    Osborne, Sandra(Ayr)

    Kumar, Dr. Ashok

    Owen, Albert

    Ladyman, Dr. Stephen

    Palmer, Dr. Nick

    Lammy, David

    Pearson, Ian

    Lawrence, Mrs Jackie

    Perharn, Linda

    Laxton, Bob(Derby N)

    Picking, Anne

    Lazarowicz, Mark

    Pickthall, Colin

    Lepper, David

    Pike, Peter(Burnley)

    Leslie, Christopher

    Plaskitt, James

    Levitt, Tom(High Peak)

    Pollard, Kerry

    Lewis, Ivan(Bury S)

    Pond, Chris(Gravesham)

    Lewis, Terry(Worsley)

    Pope, Greg(Hyndburn)

    Liddell, rh Mrs Helen

    Pound, Stephen

    Linton, Martin

    Prentice, Ms Bridget(Lewisham

    Lloyd, Tony(Manchester C)

    E)

    Love, Andrew

    Prentice, Gordon(Pendle)

    Lucas, Ian(Wrexham)

    Prescott, rh John

    Luke, lain(Dundee E)

    Primarolo, rh Dawn

    Lyons, John(Strathkelvin)

    Prosser, Gwyn

    McAvoy, Thomas

    Purchase, Ken

    McCabe, Stephen

    Purnell, James

    McCafferty, Chris

    Quin, rh Joyce

    McCartney, rh Ian

    Quinn, Lawrie

    McDonagh, Siobhain

    Rammell, Bill

    MacDonald, Calum

    Rapson, Syd(Portsmouth N)

    MacDougall, John

    Raynsford, rh Nick

    McFall, John

    Reed, Andy (Loughborough)

    McGuire, Mrs Anne

    Reid, rh Dr. John(Hamilton N &

    Mclsaac, Shona

    Bellshill)

    McKechin, Ann

    Robertson, John(Glasgow

    McKenna, Rosemary

    Anniesland)

    Mackinlay, Andrew

    Robinson, Geoffrey(Coventry

    McNulty, Tony

    NW)

    MacShane, Denis

    Roche, Mrs Barbara

    Mactaggart, Fiona

    Rooney, Terry

    McWalter, Tony

    Ross, Ernie(Dundee W)

    McWilliam, John

    Roy, Frank(Motherwell)

    Mahmood, Khalid

    Ruane, Chris

    Mahon, Mrs Alice

    Ruddock, Joan

    Mallaber, Judy

    Russell, Ms Christine(City of

    Mandelson, rh Peter

    Chester)

    Mann, John(Bassetlaw)

    Ryan, Joan(Enfield N)

    Marris, Rob(Wolverh'ton SW)

    Salter, Martin

    Marsden, Gordon(Blackpool S)

    Sarwar, Mohammad

    Marshall, David(Glasgow Shettleston)

    Savidge, Malcolm

    Marshall, Jim(Leicester S)

    Sawford, Phil

    Marshall-Andrews, Robert

    Sedgemore, Brian

    Martlew, Eric

    Shaw, Jonathan

    Meacher, rh Michael

    Sheerman, Barry

    Michael, rh Alun

    Sheridan, Jim

    Milburn, rh Alan

    Shipley, Ms Debra

    Miliband, David

    Simon, Sion(B'ham Erdington)

    Miller, Andrew

    Simpson, Alan(Nottingham S)

    Mitchell, Austin(Gt Grimsby)

    Singh, Marsha

    Moffatt, Laura

    Skinner, Dennis

    Mole, Chris

    Smith, rh Andrew(Oxford E)

    Moonie, Dr. Lewis

    Smith, Angela(Basildon)

    Moran, Margaret

    Smith, rh Chris(Islington S &

    Morgan, Julie

    Finsbury)

    Morley, Elliot

    Smith, Geraldine(Morecambe &

    Morris, rh Estelle

    Lunesdale)

    Mountford, Kali

    Smith, Jacqui(Redditch)

    Mullin, Chris

    Smith, John(Glamorgan)

    Munn, Ms Meg

    Soley, Clive

    Murphy, Denis(Wansbeck)

    Southworth, Helen

    Murphy, Jim(Eastwood)

    Spellar, rh John

    Murphy, rh Paul(Torfaen)

    Squire, Rachel

    Naysmith, Dr. Doug

    Starkey, Dr. Phyllis

    Norris, Dan(Wansdyke)

    Steinberg, Gerry

    1707

    Stewart, David(Inverness E &

    Vaz, Keith(Leicester E)

    Lochaber)

    Walley, Ms Joan

    Stewart, Ian(Eccles)

    Ward, Claire

    Stinchcombe, Paul

    Watson, Tom(W Bromwich E)

    Stoate, Dr. Howard

    Watts, David

    Straw, rh Jack

    White, Brian

    Stringer, Graham

    Whitehead, Dr. Alan

    Stuart, Ms Gisela

    Wicks, Malcolm

    Sutcliffe, Gerry

    Williams, rh Alan(Swansea W)

    Tami, Mark(Alyn)

    Williams, Betty(Conwy)

    Taylor, rh Ann(Dewsbury)

    Wills, Michael

    Taylor, Dari(Stockton S)

    Wilson, Brian

    Taylor, David(NW Leics)

    Winnick, David

    Thomas, Gareth(Clwyd W)

    Winterton, Ms Rosie(Doncaster

    Thomas, Gareth(Harrow W)

    C)

    Timms, Stephen

    Wood, Mike(Batley)

    Tipping, Paddy

    Woodward, Shaun

    Todd, Mark(S Derbyshire)

    Woolas, Phil

    Touhig, Don(Islwyn)

    Worthington, Tony

    Trickett, Jon

    Wright, Anthony D.(Gt

    Truswell, Paul

    Yarmouth)

    Turner, Dennis(Wolverh'ton SE)

    Wright, David(Telford)

    Turner, Dr. Desmond(Brighton

    Wright Tony(Cannock)

    Kemptown)

    Wyatt, Derek

    Turner, Neil(Wigan)

    Twigg, Derek(Halton)

    Tellers for the Noes:

    Twigg, Stephen(Enfield)

    Gillian Merron and

    Tynan, Bill(Hamilton S)

    Vernon Coaker

    Question accordingly negatived.
    MR. SPEAKER then proceeded to put the Questions necessary to dispose of the business to be concluded at that hour, pursuant to Order [this day].
    Amendment proposed: No. 128, in page 8, line 37, leave out Clauses 22 to 27.—[Mr. Grogan.]
    Question put, That the amendment be made:—
    The House divided: Ayes 288, Noes 316.

    Division No. 123]

    [6:34 pm

    AYES

    Abbott, Ms Diane

    Burgon, Colin

    Ainsworth, Peter(E Surrey)

    Burnett, John

    Allan, Richard

    Burns, Simon

    Amess, David

    Burnside, David

    Ancram, rh Michael

    Burstow, Paul

    Arbuthnot, rh James

    Burt, Alistair

    Atkinson, David(Bour'mth E)

    Butterfill, Sir John

    Atkinson, Peter(Hexham)

    Cable, Dr. Vincent

    Bacon, Richard

    Calton, Mrs Patsy

    Baker, Norman

    Cameron, David

    Baldry, Tony

    Campbell, Gregory(E Lond'y)

    Barker, Gregory

    Campbell, rh Sir Menzies(NE

    Barnes, Harry

    Fife)

    Baron, John(Billericay)

    Carmichael, Alistair

    Barrett, John

    Cash, William

    Beggs, Roy(E Antrim)

    Caton, Martin

    Beith, rh A. J.

    Chapman, Sir Sydney(Chipping

    Bellingham, Henry

    Barnet)

    Bercow, John

    Chidgey, David

    Beresford, Sir Paul

    Chope, Christopher

    Berry, Roger

    Clapham, Michael

    Blunt, Crispin

    Clappison, James

    Boswell, Tim

    Clark, Mrs Helen(Peterborough)

    Bottomley, Peter(Worthing W)

    Clarke, rh Kenneth(Rushcliffe)

    Bottomley, rh Virginia(SW

    Clifton-Brown, Geoffrey

    Surrey)

    Collins, Tim

    Brady, Graham

    Colman, Tony

    Brake, Tom(Carshalton)

    Conway, Derek

    Brazier, Julian

    Corbyn, Jeremy

    Breed, Cohn

    Cotter, Brian

    Brooke, Mrs Annette L.

    Cran, James(Beverley)

    Browning, Mrs Angela

    Crausby, David

    Bruce, Malcolm

    Cruddas, Jon

    1708

    Curry, rh David

    Illsley, Eric

    Dalyell, Tam

    Jack, rh Michael

    Davey, Edward(Kingston)

    Jackson, Glenda(Hampstead &

    Davidson, Ian

    Highgate)

    Davies, Quentin(Grantham &

    Jenkin, Bernard

    Stamford)

    Jones, Helen(Warrington N)

    Davis, rh David(Haltemprice &

    Jones, Jon Owen(Cardiff C)

    Howden)

    Jones, Lynne(Selly Oak)

    Dismore, Andrew

    Jones, Nigel(Cheltenham)

    Djanogly, Jonathan

    Keetch, Paul

    Dobbin, Jim(Heywood)

    Kennedy, rh Charles(Ross Skye &

    Dobson, rh Frank

    Inverness)

    Dodds, Nigel

    Key, Robert(Salisbury)

    Donaldson, Jeffrey M.

    Kilfoyle, Peter

    Dorrell, rh Stephen

    Kirkbride, Miss Julie

    Doughty, Sue

    Kirkwood, Sir Archy

    Duncan, Alan(Rutland)

    Knight, rh Greg(E Yorkshire)

    Duncan Smith, rh lain

    Laing, Mrs Eleanor

    Dunwoody, Mrs Gwyneth

    Lait, Mrs Jacqui

    Ennis, Jeff(Barnsley E)

    Lamb, Norman

    Evans, Nigel

    Lansley, Andrew

    Ewing, Annabelle

    Laws, David(Yeovil)

    Fabricant, Michael

    Leigh, Edward

    Field, Mark(Cities of London &

    Letwin, rh Oliver

    Westminster)

    Lewis, Dr. Julian(New Forest E)

    Fisher, Mark

    Lewis, Terry(Worsley)

    Flight, Howard

    Liddell-Grainger, Ian

    Flook, Adrian

    Lidington, David

    Forth, rh Eric

    Lilley, rh Peter

    Foster, Don(Bath)

    Lloyd, Tony(Manchester C)

    Fox, Dr. Liam

    Llwyd, Elfyn

    Francois, Mark

    Loughton, Tim

    Galloway, George

    Luff, Peter(M-Worcs)

    Garnier, Edward

    McCafferty, Chris

    George, Andrew(St. Ives)

    McDonnell, John

    Gibb, Nick(Bognor Regis)

    McGrady, Eddie

    Gibson, Dr. Ian

    Mclntosh, Miss Anne

    Gidley, Sandra

    Mackay, rh Andrew

    Gillan, Mrs Cheryl

    Maclean, rh David

    Godsiff, Roger

    McLoughlin, Patrick

    Goodman, Paul

    McNamara, Kevin

    Gray, James(N Wilts)

    Mahon, Mrs Alice

    Grayling, Chris

    Malins, Humfrey

    Green, Damian(Ashford)

    Maples, John

    Green, Matthew(Ludlow)

    Marsden, Paul(Shrewsbury &

    Greenway, John

    Atcham)

    Grieve, Dominic

    Marshall, Jim(Leicester S)

    Grogan, John

    Marshall-Andrews, Robert

    Gummer, rh John

    Mates, Michael

    Hague, rh William

    Mawhinney, rh Sir Brian

    Hammond, Philip

    May, Mrs Theresa

    Hancock, Mike

    Mercer, Patrick

    Harris, Dr. Evan(Oxford W &

    Mitchell, Andrew(Sutton

    Abingdon)

    Coldfield)

    Harvey, Nick

    Moore, Michael

    Havard, Dai(Merthyr Tydfil &

    Morgan, Julie

    Rhymney)

    Moss, Malcolm

    Hawkins, Nick

    Mudie, George

    Hayes, John(S Holland)

    Murrison, Dr. Andrew

    Heald, Oliver

    Norman, Archie

    Heath, David

    Oaten, Mark(Winchester)

    Heathcoat-Amory, rh David

    O'Brien, Stephen(Eddisbury)

    Hendry, Charles

    Öpik, Lembit

    Hermon, Lady

    Osborne, George(Talton)

    Hoban, Mark(Fareham)

    Ottaway, Richard

    Hoey, Kate(Vauxhall)

    Owen, Albert

    Hogg, rh Douglas

    Page, Richard

    Holmes, Paul

    Paice, James

    Horam, John (Orpington)

    Paisley, Rev. Ian

    Howard, rh Michael

    Paterson, Owen

    Howarth, Gerald(Aldershot)

    Pickles, Eric

    Hoyle, Lindsay

    Portillo, rh Michael

    Hughes, Simon(Southwark N)

    Prentice, Gordon(Pendle)

    Hunter, Andrew

    Price, Adam(E Carmarthen &

    Hurst, Alan(Braintree)

    Dinefwr)

    Iddon, Dr. Brian

    Prisk, Mark(Hertford)

    1709

    Pugh, Dr. John

    Tapsell, Sir Peter

    Randall, John

    Taylor, David(NW Leis)

    Redwood, rh John

    Taylor, John(Solihull)

    Reid, Alan(Argyll&Bute)

    Taylor, Matthew(Truro)

    Rendel, David

    Taylor, Dr. Richard(Wyre F)

    Robathan, Andrew

    Taylor, Sir Teddy

    Robertson, Angus(Moray)

    Teather, Sarah

    Robertson, Hugh(Faversham &

    Thomas, Simon(Ceredigion)

    M-Kent)

    Thurso, John

    Robertson, Laurence(Tewk'b'ry)

    Tonge, Dr. Jenny

    Robinson, Mrs Iris(Strangford)

    Tredinnick, David

    Robinson, Peter(Belfast E)

    Trend, Michael

    Roe, Mrs Marion

    Trickett, Jon

    Rosindell, Andrew

    Trimble, rh David

    Ruffley, David

    Turner, Andrew(Isle of Wight)

    Russell, Bob(Colchester)

    Tyler, Paul(N Cornwall)

    Salmond, Alex

    Tyrie, Andrew

    Sanders, Adrian

    Viggers, Peter

    Sayeed, Jonathan

    Walter, Robert

    Sedgemore, Brian

    Wareing, Robert N.

    Selous, Andrew

    Waterson, Nigel

    Shephard, rh Mrs Gillian

    Watkinson, Angela

    Shepherd, Richard

    Webb, Steve(Northavon)

    Short, rh Clare

    Weir, Michael

    Simmonds, Mark

    Whittingdale, John

    Simpson, Alan(Nottingham S)

    Widdecombe, rh Miss Ann

    Simpson, Keith(M-Norfolk)

    Wiggin, Bill

    Skinner, Dennis

    Wilkinson, John

    Smith, Llew(Blaenau Gwent)

    Willetts, David

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

    Williams, Hywel(Caernarfon)

    Kincardine)

    Williams, Roger(Brecon)

    Smyth, Rev. Martin(Belfast S)

    Willis, Phil

    Soames, Nicholas

    Wilshire, David

    Spelman, Mrs Caroline

    Winterton, Ann(Congleton)

    Spicer, Sir Michael

    Winterton, Sir Nicholas

    Spink, Bob(Castle Point)

    (Macclesfield)

    Spring, Richard

    Wishart Pete

    Stanley, rh Sir John

    Wood, Mike(Batley)

    Steen, Anthony

    Yeo, Tim(S Suffolk)

    Steinberg, Gerry

    Young, rh Sir George

    Streeter, Gary

    Younger-Ross, Richard

    Stunell, Andrew

    Swayne, Desmond

    Tellers for the Ayes:

    Swire, Hugo(E Devon)

    Geraldine Smith and

    Syms, Robert

    Mr. Kelvin Hopkins

    NOES

    Adams, Irene(Paisley N)

    Boateng, rh Paul

    Ainger, Nick

    Borrow, David

    Ainsworth, Bob(Cov'try NE)

    Bradley, rh Keith(Withington)

    Alexander, Douglas

    Bradley, Peter(The Wrekin)

    Allen, Graham

    Bradshaw, Ben

    Anderson, rh Donald(Swansea E)

    Brennan, Kevin

    Anderson, Janet(Rossendale &

    Brown, rh Gordon(Dunfermline

    Darwen)

    E)

    Armstrong, rh Ms Hilary

    Brown, rh Nicholas(Newcastle E

    Atherton, Ms Candy

    Wallsend)

    Atkins, Charlotte

    Brown, Russell(Dumfries)

    Bailey, Adrian

    Browne, Desmond

    Baird, Vera

    Bryant, Chris

    Banks, Tony

    Buck, Ms Karen

    Barron, rh Kevin

    Burnham, Andy

    Battle, John

    Byers, rh Stephen

    Bayley, Hugh

    Caborn, rh Richard

    Beard, Nigel

    Cairns, David

    Begg, Miss Anne

    Campbell, Alan(Tynemouth)

    Bell, Sir Stuart

    Campbell, Mrs Anne(C'bridge)

    Benn, rh Hilary

    Campbell, Ronnie(Blyth V)

    Bennett, Andrew

    Caplin, Ivor

    Benton, Joe(Bootle)

    Casale, Roger

    Betts, Clive

    Cawsey, Ian(Brigg)

    Blackman, Liz

    Challen, Colin

    Blair, rh Tony

    Chapman, Ben(Wirral S)

    Blears, Ms Hazel

    Chaytor, David

    Blizzard, Bob

    Clark, Dr. Lynda(Edinburgh

    Blunkett, rh David

    Pentlands)

    1710

    Clark, Paul(Gillingham)

    Howarth, George(Knowsley N &

    Clarke, rh Charles(Norwich S)

    Sefton E)

    Clarke, rh Tom(Coatbridge &

    Howells, Dr. Kim

    Chryston)

    Hughes, Beverley(Stretford &

    Clarke, Tony(Northampton S)

    Urmston)

    Clelland, David

    Hughes, Kevin(Doncaster N)

    Clwyd, Ann(Cynon V)

    Hutton, rh John

    Coffey, Ms Ann

    Ingram, rh Adam

    Coleman, lain

    Irranca-Davies, Huw

    Cook, Frank(Stockton N)

    Jackson, Helen(Hillsborough)

    Cooper, Yvette

    Jackson, Robert(Wantage)

    Corston, Jean

    Jamieson, David

    Cranston, Ross

    Jenkins, Brian

    Cummings, John

    Johnson, Alan(Hull W)

    Cunningham, rh Dr. Jack

    Johnson, Miss Melanie(Welwyn

    (Copeland)

    Hatfield)

    Cunningham, Jim(Coventry S)

    Jones, Kevan(N Durham)

    Cunningham, Tony(Workington)

    Jones, Martyn (Clwyd S)

    Curtis-Thomas, Mrs Claire

    Jowelli, rh Tessa

    Darling, rh Alistair

    Joyce, Eric(Falkirk W)

    David, Wayne

    Kaufman, rh Gerald

    Davies, rh Denzil(Llanelli)

    Keeble, Ms Sally

    Davies, Geraint(Croydon C)

    Keen, Alan(Feltham)

    Dawson , Hilton

    Keen, Ann(Brentford)

    Dean, Mrs Janet

    Kelly, Ruth(Bolton W)

    Denham, rh John

    Kemp, Fraser

    Dhanda , Parmjit

    Kennedy, Jane(Wavertree)

    Donohoe, Brian H.

    Khabra, Piara S.

    Doran, Frank

    Kidney, David

    Dowd, Jim(Lewisham W)

    King, Andy(Rugby)

    Drown, Ms Julia

    King, Ms Oona(Bethnal Green&Bow)

    Eagle, Angela(Wallasey)

    Knight Jim(S Dorset)

    Eagle, Maria(L'pool Garston)

    Kumar, Dr. Ashok

    Edwards, Huw

    Ladyman, Dr. Stephen

    Efford, Clive

    Lammy, David

    Ellman, Mrs Louise

    Lawrence, Mrs Jackie

    Field, rh Frank(Birkenhead)

    Laxton, Bob(Derby N)

    Fitzpatrick, Jim

    Lazarowicz, Mark

    Fitzsimons, Mrs Lorna

    Lepper, David

    Flint, Caroline

    Leslie, Christopher

    Follett, Barbara

    Levitt, Tom(High Peak)

    Foster, rh Derek

    Lewis, Ivan(Bury S)

    Foster, Michael(Worcester)

    Liddell, rh Mrs Helen

    Foster, Michael Jabez(Hastings

    Linton, Martin

    &Rye)

    Love, Andrew

    Foulkes, rh George

    Luke, lain(Dundee E)

    Francis, Dr. Hywel

    Lyons, John(Strathkelvin)

    Gapes, Mike(IIford S)

    McAvoy, Thomas

    Gardiner, Barry

    McCabe, Stephen

    George, rh Bruce(Walsall S)

    McCartney, rh Ian

    Gilroy, Linda

    McDonagh, Siobhain

    Goggins, Paul

    MacDonald, Calum

    Griffiths, Jane(Reading E)

    MacDougall, John

    Griffiths, Nigel(Edinburgh S)

    McFall, John

    Griffiths, Win(Bridgend)

    McGuire, Mrs Anne

    Hain, rh Peter

    Mclsaac, Shona

    Hall, Mike(Weaver Vale)

    McKechin, Ann

    Hall, Patrick(Bedford)

    McKenna, Rosemary

    Hamilton, David(Midlothian)

    Mackinlay, Andrew

    Hamilton, Fabian(Leeds NE)

    McNulty, Tony

    Hanson, David

    MacShane, Denis

    Harman, rh Ms Harriet

    Mactaggart, Fiona

    Harris, Tom(Glasgow Cathcart)

    McWalter, Tony

    Henderson, Ivan(Harwich)

    McWilliam, John

    Hendrick, Mark

    Mahmood, Khalid

    Hepburn, Stephen

    Mallaber, Judy

    Heppell, John

    Manclelson, rh Peter

    Hesford, Stephen

    Mann, John (Bassetlaw)

    Hewitt, rh Ms Patricia

    Marsden, Gordon(Blackpool S)

    Heyes, David

    Marshall, David(Glasgow

    Hill, Keith(Streatham)

    Shettleston)

    Hodge, Margaret

    Martlew, Eric

    Hoon, rh Geoffrey

    Michael, rh Alun

    Hope, Phil(Corby)

    Milburn, rh Alan

    Howarth, rh Alan(Newport E)

    Miliband, David

    1711

    Miller, Andrew

    Shaw, Jonathan

    Mitchell, Austin(Gt Grimsby)

    Sheerman, Barry

    Moffatt, Laura

    Sheridan, Jim

    Mole, Chris

    Shipley, Ms Debra

    Moonie, Dr. Lewis

    Simon, Siôn(B'ham Erdington)

    Moran, Margaret

    Singh, Marsha

    Morley, Elliot

    Smith, rh Andrew(Oxford E)

    Morris, rh Estelle

    Smith, Angela(Basildon)

    Mountford, Kali

    Smith, rh Chris(Islington S &

    Mullin, Chris

    Finsbury)

    Munn, Ms Meg

    Smith, Jacqui(Redditch)

    Murphy, Denis(Wansbeck)

    Soley, Clive

    Murphy, Jim(Eastwood)

    Southworth, Helen

    Murphy, rh Paul(Torfaen)

    Spellar, rh John

    Naysmith, Dr. Doug

    Squire, Rachel

    Norris, Dan(Wansdyke)

    Starkey, Dr. Phyllis

    O'Brien, Bill(Normanton)

    Stewart, David(Inverness E &

    O'Brien, Mike(N Warks)

    Lochaber)

    O'Hara, Edward

    Stewart, Ian(Eccles)

    Olner, Bill

    Stinchcombe, Paul

    O'Neill, Martin

    Stoate, Dr. Howard

    Organ, Diana

    Straw, rh Jack

    Osborne, Sandra(Ayr)

    Stringer, Graham

    Palmer, Dr. Nick

    Stuart, Ms Gisela

    Pearson, Ian

    Sutcliffe, Gerry

    Perham, Linda

    Tami, Mark(Alyn)

    Picking, Anne

    Taylor, rh Ann(Dewsbury)

    Pickthall, Colin

    Taylor, Dari(Stockton S)

    Pike, Peter(Burnley)

    Thomas, Gareth(Clwyd W)

    Plaskitt, James

    Thomas, Gareth(Harrow W)

    Pollard, Kerry

    Timms, Stephen

    Pond, Chris(Gravesham)

    Tipping, Paddy

    Pope, Greg(Hyndburn)

    Todd, Mark(S Derbyshire)

    Pound, Stephen

    Touhig, Don(Islwyn)

    Prentice, Ms Bridget(Lewisham

    Turner, Dennis(Wolverh'ton SE)

    E)

    Turner, Neil(Wigan)

    Prescott, rh John

    Twigg, Derek(Halton)

    Primarolo, rh Dawn

    Twigg, Stephen(Enfield)

    Prosser, Gwyn

    Tynan, Bill(Hamilton S)

    Purchase, Ken

    Vaz, Keith(Leicester E)

    Purnell, James

    Walley, Ms Joan

    Quin, rh Joyce

    Ward, Claire

    Quinn, Lawrie

    Watson, Tom(W Bromwich E)

    Rammell, Bill

    Watts, David

    Rapson, Syd(Portsmouth N)

    White, Brian

    Raynsford, rh Nick

    Whitehead, Dr. Alan

    Reed, Andy(Loughborough)

    Wicks, Malcolm

    Reid, rh Dr. John(Hamilton N &

    Williams, rh Alan(Swansea W)

    Bellshill)

    Williams, Betty(Conwy)

    Robertson, John(Glasgow

    Wills, Michael

    Anniesland)

    Wilson, Brian

    Robinson, Geoffrey(Coventry

    Winnick, David

    NW)

    Winterton, Ms Rosie(Doncaster

    Roche, Mrs Barbara

    C)

    Rooney, Terry

    Woodward, Shaun

    Ross, Ernie(Dundee W)

    Woolas, Phil

    Roy, Frank(Motherwell)

    Worthington, Tony

    Ruane, Chris

    Wright Anthony D.(Gt

    Ruddock, Joan

    Yarmouth)

    Russell, Ms Christine(City of

    Wright David(Telford)

    Chester)

    Wright Tony(Cannock)

    Ryan, Joan(Enfield N)

    Wyatt, Derek

    Salter, Martin

    Sarwar, Mohammad

    Tellers for the Noes:

    Savidge, Malcolm

    Gillian Merron and

    Sawford, Phil

    Vernon Coaker

    Question accordingly negatived.

    New Clause 5

      ABOLITION OF TUITION FEES CHARGEABLE TO QUALIFYING STUDENT
      This section applies to fees charged by a relevant institution in respect of a qualifying course in connection with the undertaking of that course by a qualifying student.

      No fees to which this section applies may be charged in respect of any academic year unless regulations under section 22 of the 1998 Act (new arrangements for giving financial support to students) make provision in the case of all qualifying students for authorising a grant in respect of that academic year to be paid directly to the relevant institution the amount of which is equal to the amount of the fees.

      In this section—

      "academic year", in relation to a course, means an academic year applicable to the course;
      "qualifying course" means a course which is—

      a designated course within the meaning of the student support regulations, and

      provided by an institution in England within the meaning of section 62 (7) of the 1992 Act;

      "qualifying student" means a person who is of the class specified in Schedule 1 to the student support regulations other than—

      persons who are not eligible for support under the student support regulations by reason of regulations 4(2) of those regulations, and

      persons who are not eligible for a grant for fees under the student support regulations by reason of regulations 10(2) of those regulations;

      "relevant institution" means an institution specified by the Secretary of State in a condition under section 68(1) of the 1992 Act or section 7(1) of the 1998 Act;
      "the student support regulations" means the Education (Student Support) (No. 2) Regulations 2002 (S.I., 2002/3200).'.—[Mr. Collins.]
      Brought up, and read the First time.

    Clause 28

      MEANING OF "THE RELEVANT AUTHORITY"
      Amendment proposed: No. 71, in page 13, line 37, leave out
      'Director (as defined by section 29(1)'(1)'
      and insert
      'funding body (as defined in section 22(2)'.—[Mr. Willis.]
      Question put, That the amendment be made:—
      The House proceeded to a Division.
      Mr. Speaker: I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
      The House having divided: Ayes 63, Noes 369.

      Division No. 124]

      [6:50 pm

      AYES

      Allan, Richard

      Jones, Nigel(Cheltenham)

      Baker, Norman

      Keetch, Paul

      Barrett, John

      Kennedy, rh Charles(Ross Skye &

      Beggs, Roy(E Antrim)

      Inverness)

      Beith, rh A. J.

      Kirkwood, Sir Archy

      Brake, Tom(Carshalton)

      Lamb, Norman

      Breed, Colin

      Laws, David(Yeovil)

      Brooke, Mrs Annette L.

      Marsden, Paul(Shrewsbury &

      Bruce, Malcolm

      Atcham)

      Burnett, John

      Moore, Michael

      Burnside, David

      Oaten, Mark(Winchester)

      Burstow, Paul

      Öpik, Lembit

      Cable, Dr. Vincent

      Paisley, Rev. Ian

      Calton, Mrs Patsy

      Pugh, Dr. John

      Campbell, Gregory(E Lond'y)

      Reid, Alan(Argyll&Bute)

      Campbell, rh Sir Menzies(NE

      Rendel, David

      Fife)

      Robinson, Mrs Iris(Strangford)

      Carmichael, Alistair

      Robinson, Peter(Belfast E)

      Chidgey, David

      Sanders, Adrian

      Cotter, Brian

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

      Davey, Edward(Kingston)

      Kincardine)

      Dodds, Nigel

      Stunell, Andrew

      Donaldson, Jeffrey M.

      Taylor, Matthew(Truro)

      Doughty, Sue

      Taylor, Dr. Richard(Wyre F)

      Foster, Don(Bath)

      Teather, Sarah

      George, Andrew(St. Ives)

      Thurso, John

      Gidley, Sandra

      Tonge, Dr. Jenny

      Green, Matthew(Ludlow)

      Trimble, rh David

      Hancock, Mike

      Tyler, Paul(N Cornwall)

      Harris, Dr. Evan(Oxford W &

      Webb, Steve(Northavon)

      Abingdon)

      Williams, Roger(Brecon)

      Harvey, Nick

      Willis, Phil

      Heath, David

      Hermon, Lady

      Tellers for the Ayes:

      Holmes, Paul

      Bob Russell and

      Hughes, Simon(Southwark N)

      Richard Younger-Ross

      NOES

      Abbott, Ms Diane

      Bennett, Andrew

      Adams, Irene(Paisley N)

      Benton, Joe(Bootle)

      Ainger, Nick

      Betts, Clive

      Ainsworth, Bob(Cov'try NE)

      Blackman, Liz

      Alexander, Douglas

      Blears, Ms Hazel

      Allen, Graham

      Blizzard, Bob

      Anderson, rh Donald(Swansea E)

      Blunkett, rh David

      Anderson, Janet(Rossendale &

      Boateng, rh Paul

      Darwen)

      Borrow, David

      Armstrong, rh Ms Hilary

      Bradley, rh Keith(Withington)

      Atherton, Ms Candy

      Bradley, Peter(The Wrekin)

      Atkins, Charlotte

      Bradshaw, Ben

      Bailey, Adrian

      Brennan, Kevin

      Baird, Vera

      Brown, rh Gordon(Dunfermline

      Banks, Tony

      E)

      Barnes, Harry

      Brown, rh Nicholas(Newcastle E

      Barron, rh Kevin

      Wallsend)

      Battle, John

      Brown, Russell(Dumfries)

      Bayley, Hugh

      Browne, Desmond

      Beard, Nigel

      Bryant, Chris

      Begg, Miss Anne

      Buck, Ms Karen

      Bell, Sir Stuart

      Burden, Richard

      Benn, rh Hilary

      Burgon, Colin

      Burnham, Andy

      Foster, Michael(Worcester)

      Byers, rh Stephen

      Foster, Michael Jabez(Hastings

      Caborn, rh Richard

      &Rye)

      Cairns, David

      Foulkes, rh George

      Campbell, Alan(Tynemouth)

      Francis, Dr. Hywel

      Campbell, Mrs Anne(C'bridge)

      Gapes, Mike(IIford S)

      Campbell, Ronnie(Blyth V)

      Gardiner, Barry

      Caplin, Ivor

      George, rh Bruce(Walsall S)

      Casale, Roger

      Gibson, Dr. Ian

      Caton, Martin

      Gilroy, Linda

      Cawsey, Ian(Brigg)

      Goggins, Paul

      Challen, Colin

      Griffiths, Jane(Reading E)

      Chapman, Ben(Wirral S)

      Griffiths, Nigel(Edinburgh S)

      Chaytor, David

      Griffiths, Win(Bridgend)

      Clark, Mrs Helen(Peterborough)

      Grogan, John

      Clark, Dr. Lynda(Edinburgh

      Hain, rh Peter

      Pentlands)

      Hall, Mike(Weaver Vale)

      Clark, Paul(Gillingham)

      Hall, Patrick(Bedford)

      Clarke, rh Charles(Norwich S)

      Hamilton, David(Midlothian)

      Clarke, rh Tom(Coatbridge &

      Hamilton, Fabian(Leeds NE)

      Chryston)

      Hanson, David

      Clarke, Tony(Northampton S)

      Harman, rh Ms Harriet

      Clelland, David

      Harris, Tom(Glasgow Cathcart)

      Clwyd, Ann(Cynon V)

      Havard, Dai(Merthyr Tydfil &

      Coffey, Ms Ann

      Rhymney)

      Coleman, lain

      Henderson, Doug(Newcastle N)

      Colman, Tony

      Henderson, Ivan(Harwich)

      Connarty, Michael

      Hendrick, Mark

      Cook, Frank(Stockton N)

      Hepburn, Stephen

      Cook, rh Robin(Livingston)

      Heppell, John

      Cooper, Yvette

      Hesford, Stephen

      Corbyn Jeremy

      Hewitt, rh Ms Patricia

      Corston, Jean

      Heyes, David

      Cousins, Jim

      Hill, Keith (Streatham)

      Cranston, Ross

      Hodge, Margaret

      Crausby, David

      Hoey, Kate(Vauxhall)

      Cruddas, Jon

      Hoon, rh Geoffrey

      Cummings, John

      Hope, Phil(Corby)

      Cunningham, rh Dr. Jack(Copeland)

      Hopkins, Kelvin

      Cunningham, Jim(Coventry S)

      Howarth, rh Alan(Newport E)

      Cunningham, Tony(Workington)

      Howarth, George(Knowsley N &

      Curtis-Thomas, Mrs Claire

      Sefton E)

      Darling, rh Alistair

      Howells, Dr. Kim

      Davey, Valerie(Bristol W)

      Hoyle, Lindsay

      David, Wayne

      Hughes, Beverley(Stretford &

      Davidson, Ian

      Urmston)

      Davies, rh Denzil(Llanelli)

      Hughes, Kevin(Doncaster N)

      Davies, Geraint(Croydon C)

      Hurst, Alan(Braintree)

      Dawson, Hilton

      Hutton, rh John

      Dean, Mrs Janet

      Iddon, Dr. Brian

      Denham, rh John

      Illsley, Eric

      Dhanda, Parmjit

      Ingram, rh Adam

      Dismore, Andrew

      Irranca-Davies, Huw

      Dobbin, Jim(Heywood)

      Jackson, Helen(Hillsborough)

      Dobson, rh Frank

      Jamieson, David

      Donohoe, Brian H.

      Jenkins, Brian

      Doran, Frank

      Johnson, Alan(Hull W)

      Dowd, Jim(Lewisham W)

      Johnson, Miss Melanie(Welwyn

      Drew, David(Stroud)

      Hatfield)

      Drown, Ms Julia

      Jones, Helen(Warrington N)

      Dunwoody, Mrs Gwyneth

      Jones, Jon Owen(Cardiff C)

      Eagle, Angela(Wallasey)

      Jones, Kevan(N Durham)

      Eagle, Maria(L'pool Garston)

      Jones, Martyn(Clwyd S)

      Edwards, Huw

      Jowell, rh Tessa

      Efford, Clive

      Joyce, Eric(Falkirk W)

      Ellman, Mrs Louise

      Kaufman, rh Gerald

      Ennis, Jeff(Barnsley E)

      Keeble, Ms Sally

      Farrelly, Paul

      Keen, Alan(Feltham)

      Field, rh Frank(Birkenhead)

      Keen, Ann(Brentford)

      Fisher, Mark

      Kelly, Ruth(Bolton W)

      Fitzpatrick, Jim

      Kemp, Fraser

      Fitzsimons, Mrs Lorna

      Kennedy, Jane(Wavertree)

      Flint, Caroline

      Khabra, Piara S.

      Follett, Barbara

      Kidney, David

      Foster, rh Derek

      King, Andy(Rugby)

      1714

      King, Ms Oona(Bethnal Green &

      Owen, Albert

      Bow)

      Palmer, Dr. Nick

      Knight Jim(S Dorset)

      Pearson, Ian

      Kumar, Dr. Ashok

      Perham, Linda

      Ladyman, Dr. Stephen

      Picking, Anne

      Lammy, David

      Pickthall, Colin

      Lawrence, Mrs Jackie

      Pike, Peter(Burnley)

      Laxton, Bob(Derby N)

      Plaskitt, James

      Lazarowicz, Mark

      Pollard, Kerry

      Lepper, David

      Pond, Chris(Gravesham)

      Leslie, Christopher

      Pope, Greg(Hyndburn)

      Levitt, Tom(High Peak)

      Pound, Stephen

      Lewis, Ivan(Bury S)

      Prentice, Ms Bridget(Lewisham

      Liddell, rh Mrs Helen

      E)

      Linton, Martin

      Prentice, Gordon(Pendle)

      Lloyd, Tony(Manchester C)

      Prescott, rh John

      Llwyd, Elfyn

      Price, Adam(E Carmarthen &

      Love, Andrew

      Dinefwr)

      Lucas, Ian(Wrexham)

      Primarolo, rh Dawn

      Luke, lain(Dundee E)

      Prosser, Gwyn

      Lyons, John(Strathkelvin)

      Purchase, Ken

      McAvoy, Thomas

      Purnell, James

      McCabe, Stephen

      Quin, rh Joyce

      McCafferty, Chris

      Quinn, Lawrie

      McCartney, rh lan

      Rammell, Bill

      McDonagh, Siobhain

      Rapson, Syd(Portsmouth N)

      MacDonald, Calum

      Raynsford, rh Nick

      McDonnell, John

      Reed, Andy(Loughborough)

      MacDougall, John

      Robertson, John(Glasgow

      McFall, John

      Anniesland)

      McGuire, Mrs Anne

      Robinson, Geoffrey(Coventry

      Mclsaac, Shona

      NW)

      McKechin, Ann

      Roche, Mrs Barbara

      McKenna, Rosemary

      Rooney, Terry

      Mackinlay, Andrew

      Ross, Ernie(Dundee W)

      McNulty, Tony

      Roy, Frank(Motherwell)

      MacShane, Denis

      Ruane, Chris

      Mactaggart, Fiona

      Ruddock, Joan

      McWalter, Tony

      Russell, Ms Christine(City of

      McWilliam, John

      Chester)

      Mahmood, Khalid

      Ryan, Joan(Enfield N)

      Mallaber, Judy

      Salter, Martin

      Mandelson, rh Peter

      Sarwar, Mohammad

      Mann, John(Bassetlaw)

      Savidge, Malcolm

      Marris, Rob(Wolverh'ton SW)

      Sawford, Phil

      Marsden, Gordon(Blackpool S)

      Shaw, Jonathan

      Marshall, David(Glasgow

      Sheerrnan, Barry

      Shettleston)

      Sheridan, Jim

      Marshall, Jim(Leicester S)

      Shipley, Ms Debra

      Martlew, Eric

      Simon, Siôn(B'ham Erdington)

      Meacher, rh Michael

      Singh, Marsha

      Michael, rh Alun

      Skinner, Dennis

      Milburn, rh Alan

      Smith, rh Andrew(Oxford E)

      Miliband, David

      Smith, Angela(Basildon)

      Miller, Andrew

      Smith, rh Chris(Islington S &

      Mitchell, Austin(Gt Grimsby)

      Finsbury)

      Moffatt, Laura

      Smith, Geraldine(Morecambe &

      Mole, Chris

      Lunesdale)

      Moonie, Dr. Lewis

      Smith, Jacqui(Redditch)

      Moran, Margaret

      Smith, John(Glamorgan)

      Morgan, Julie

      Smith. Llew(Blaenau Gwent)

      Morley, Elliot

      Soley, Clive

      Morris, rh Estelle

      Southworth, Helen

      Mountford, Kali

      Spellar, rh John

      Mullin, Chris

      Squire, Rachel

      Munn, Ms Meg

      Starkey, Dr. Phyllis

      Murphy, Denis(Wansbeck)

      Steinberg, Gerry

      Murphy, Jim(Eastwood)

      Stewart, David(Inverness E &

      Murphy, rh Paul(Torfaen)

      Lochaber)

      Naysmith, Dr. Doug

      Stewart, Ian(Eccles)

      Norris, Dan(Wansdyke)

      Stinchcombe, Paul

      O'Brien, Mike(N Warks)

      Stoate, Dr. Howard

      Olner, Bill

      Straw, rh Jack

      O'Neill, Martin

      Stringer, Graham

      Organ, Diana

      Stuart, Ms Gisela

      Osborne, Sandra(Ayr)

      Sutcliffe, Gerry

      Tami, Mark(Alyn)

      Watts, David

      Taylor, rh Ann(Dewsbury)

      White, Brian

      Taylor, Dari(Stockton S)

      Whitehead, Dr. Alan

      Taylor, David(NW Leics)

      Wicks, Malcolm

      Thomas, Gareth(Clwyd W)

      Williams, rh Alan(Swansea W)

      Thomas, Gareth(Harrow W)

      Williams, Betty(Conwy)

      Thomas, Simon(Ceredigion)

      Williams, Hywel(Caernarfon)

      Timms, Stephen

      Wills, Michael

      Tipping, Paddy

      Wilson, Brian

      Todd, Mark(S Derbyshire)

      Winnick, David

      Touhig, Don(Islwyn)

      Winterton, Ms Rosie(Doncaster

      Trickett, Jon

      C)

      Truswell, Paul

      Woodward, Shaun

      Turner, Dennis(Wolverh'ton SE)

      Woolas, Phil

      Turner, Dr. Desmond(Brighton

      Worthington, Tony

      Kemptown)

      Wright Anthony D.(Gt

      Turner, Neil(Wigan)

      Yarmouth)

      Twigg, Derek(Halton)

      Wright David(Telford)

      Twigg, Stephen(Enfield)

      Wright, Tony(Cannock)

      Tynan, Bill(Hamilton S)

      Wyatt, Derek

      Vaz, Keith(Leicester E)

      Walley, Ms Joan

      Tellers for the Noes:

      Ward, Claire

      Gillian Merron and

      Watson, Tom(W Bromwich E)

      Vernon Coaker

      Question accordingly negatived.

    Clause 22

      POWER OF SECRETARY OF STATE TO IMPOSE CONDITION AS TO STUDENT FEES, ETC.
      Amendment made: No. 129, in page 8, line 38, leave out from beginning to 'a' in line 40 and insert
      'The Secretary of State must, when making any grant to a funding body under section 68 of the 1992 Act or section 7 of the 1994 Act, impose under subsection (1) of the section concerned'.—[Alan Johnson.]

    Clause 24
    7.9 pm
    Mr. Charles Clarke: I beg to move, That the Bill be now read the Third time.
    This is an important moment for the future of higher education in this country. I believe that the decisions that the House has taken in considering this important Bill secure the future of our universities and enable them to make the economic and social contributions that our society needs. They prepare the country for the future in a way that, to be fair, I believe hon. Members on both sides of the House want to see. As the Bill goes to the other place, we are producing a measure for its consideration that guarantees more resources for universities, that will open and strengthen access to
    1716
    universities and that will ensure that people from the poorest communities in the country get a fair crack in our society.
    Many people deserve thanks, and I should like to take a moment to thank colleagues for what they have done. First, I thank the Minister for Lifelong Learning, Further and Higher Education and our colleagues in the ministerial team, the Parliamentary Private Secretaries and in the Whips Office for what has been an outstanding performance. I know that no one will mind if I particularly thank my right hon. Friend for the tremendous leadership that he has shown throughout the consideration of the Bill.
    Secondly, I thank my official team, the Bill team led by Lesley Longstone, and her colleagues who have given outstanding support, as I hope that colleagues on both sides of the House would agree, to all those hon. Members who have wanted to make points. Thirdly, I want to thank political colleagues on both sides of the House. There have been substantial and difficult debates, with real tension, as everyone has been aware, but throughout people of different opinions have been ready to engage in serious dialogue in a way that I appreciate and that shows the strength of the House as a place where political consideration can properly take place. It would be invidious to name individuals, but I repeat that a number of hon. Members on both sides of the House have been ready to engage in serious dialogue about the important issues that we have discussed. I emphasise that the way in which they have done so is important for the reputation of the House and Parliament and for the future of our universities.
    Finally, I thank you, Mr. Speaker, the Clerks and, indeed, those in the wider university sector for their engagement in the debate on the Bill, which I have the honour to present on Third Reading this evening.
    Mr. Bob Blizzard: Does my right hon. Friend accept that a good number of hon. Members will vote for the Bill with less than full enthusiasm, but they do so because he has responded to some of the deep concerns that people had by introducing a much larger student grant, by putting variability in a cage for a long time and by being willing to review the arrangements? As he will know, I am particularly interested in next year's review—the Langlands review. Will he briefly tell the House how he will deal with the Langlands review when it reports?
    Mr. Clarke: I appreciate that intervention, as it provides a good opportunity to say that we have tried throughout to have a serious debate about the kind of concerns that my hon. Friend and other hon. Members have raised with seriousness. I asked Alan Langlands, the former chief executive of the NHS and vice-chancellor of Dundee university, to conduct a report that we have coded, "Gateway to the professions", as a means of ensuring that people from all backgrounds can get the professional education and training that they need, particularly those who are not from the very poorest families, but over a wider range. When the Bill receives Royal Assent, we will immediately ask him to commence his work, take evidence from people and report as rapidly as he can. That is an example of the kind of work that is very important.
    Mr. Allen: In the context of Royal Assent, will the Secretary of State also ensure that the Department is

    1717
    ready and willing to move very quickly to inform all secondary head teachers and the youngsters at those schools about the advantages that a £3,000 a year grant will give to those who qualify for it—those on incomes of less than £16,000?
    Mr. Clarke: I am happy to give that assurance. One of the sadnesses about the debate in the country is that many people have been worried about the Bill's implications, but not all of them understand in detail the precise meaning for them in their individual circumstances. When we are free to do so—that is, after Royal Assent—there will be a significant programme to explain in the most effective way, certainly to families and particularly to young people, precisely how the system will operate.
    I am glad to give that assurance.
    Mr. Quentin Davies: Will the Secretary of State give way?
    Mr. Clarke: I will not, I regret. Under the agreement that we have made with the Opposition about timing, I must finish in a moment.
    Today's vote was not only for the future of higher education, but for the public sector reform agenda that is so critical for the country. To conclude on a partisan point, the official Opposition, as was brilliantly exposed by the hon. Member for Wantage (Mr. Jackson), were shown to have failed utterly to live up to the challenges of the time. We accept the challenge. I commend the Bill to the House for its Third Reading.
    7.15 pm
    Mr. Tim Yeo: I am grateful to the Secretary of State for allowing me this brief opportunity to take part in the Third Reading debate, although I utterly deplore the fact that the Government did not protect the time for the debate. It is ludicrous to allow only 12 minutes for the Third Reading of such a controversial measure. It is not hard to guess why they have done that. The Government lost the argument about the policy comprehensively on Second Reading. They lost it again comprehensively in Committee, and they lost it yet again comprehensively during the debate on the last group of amendments, when my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) demolished their case in a particularly effective analysis of the consequences of the Bill.
    The Bill is bad for students, bad for universities, bad for the taxpayer and bad for democracy. It is bad for students because it imposes on them such a heavy burden of debt that some will find it hard to get a mortgage, others may have to delay starting a family, and all of them will find it costly to repay the loans that the Government have forced on them. The repayment process for those who do not achieve above-average salaries quickly may continue right through their 30s and until the age of 40.
    Equally important—a point that was made in the previous debate—the prospect of the high loans that students will have to take out, which will be up to £30,000 for a student studying at a university in London, will deter many potential students from applying to university in the first place. Sadly, the evidence shows
    1718
    that it is students from the poorest backgrounds who are most likely to be debt-averse, so the effect of the Government's policy of introducing top-up fees will be to discourage the very group of students about whom they claim to be most concerned.
    Mr. Allen: Will the hon. Gentleman give way?
    Mr. Yeo: No, I am sorry. I have only five minutes.
    The Bill is bad for universities because it attacks their independence in a way that no Government in the whole of our history have ever attempted to do. The access regulator will dictate to universities whom they can admit and whom they should exclude. The regulator will do so not on the basis of academic achievement or the potential of applicants to benefit from university study, but in pursuit of goals that have nothing whatever to do with enhancing the status of any university, and which will actively harm universities that aspire to world class.
    The Bill is bad for universities for a further reason. It does nothing to guarantee that their long-term funding needs will be met. Under the Labour Government, funding per student has been lower at all times than it was throughout the 18 years of Conservative government. Funding from the Department per student has fallen dramatically since 1997. Although Labour introduced tuition fees over five years ago, the Treasury clawed back all the extra income that universities might have hoped those fees would give them. Nothing that the Chancellor of the Exchequer or the Secretary of State has said in the past three months indicates that the same process of clawback will not be repeated.
    The Bill is bad for taxpayers as well, because although initially it may give the universities some extra money—there is no certainty about that—the amount it gives them will be far outweighed by the extra bill that taxpayers have to pay.
    Worst of all, the Bill is bad for democracy, because less than three years ago, Labour candidates campaigned for election on the basis of one of clearest and most unequivocal election promises that I can ever remember—that a Labour Government would not introduce top-up fees and had legislated to prevent them. The cynical and unprincipled way in which that promise is now being broken will further damage the faith of voters in politicians and in the whole political process, a faith that has already been sorely tested under the present Government. If Labour Ministers really wanted to undergo a change of heart about top-up fees, they should have included a pledge in their next election manifesto and campaigned honestly on that.
    The Government might just have got their Bill through the House today, but they have a long way to go before they win the argument in the country. I and my Conservative colleagues are delighted to have this chance to show that when we give a pledge to a voters, our word can be relied on, and I urge hon. Members on both sides of the House to join us in opposing Third Reading tonight.
    7.20 pm
    Mr. Willis: When Government Back Benchers go back to their constituencies, let them realise that tonight they have voted through a Thatcherite Bill. They have changed the face of higher education in the face of a

    1719
    Conservative Opposition who have opposed them root and branch. I am deeply disappointed that we have reached a point where we will have a two-tier higher education system, based on abilityߞ
    It being six hours after the commencement of proceedings,MR. SPEAKER put forthwith the Question, pursuant to Order [this day],
    The House divided:Ayes 309, Noes 248.

    Division No. 125]

    [7:21 pm

    AYES

    Adams, Irene(Paisley N)

    Clarke, rh Tom(Coatbridge &

    Ainger, Nick

    Chryston)

    Ainsworth, Bob(Cov'try NE)

    Clarke, Tony(Northampton S)

    Alexander, Douglas

    Clelland, David

    Allen, Graham

    Clwyd, Ann(Cynon V)

    Anderson, rh Donald(Swansea E)

    Coffey, Ms Ann

    Anderson, Janet(Rossendale &

    Coleman, lain

    Darwen)

    Cook, Frank(Stockton N)

    Armstrong, rh Ms Hilary

    Cooper, Yvette

    Atherton, Ms Candy

    Corston, Jean

    Atkins, Charlotte

    Cranston, Ross

    Bailey, Adrian

    Cummings, John

    Baird, Vera

    Cunningham, rh Dr. Jack

    Banks, Tony

    (Copeland)

    Barron, rh Kevin

    Cunningham, Jim(Coventry S)

    Battle, John

    Cunningham, Tony(Workington)

    Bayley, Hugh

    Curtis-Thomas, Mrs Claire

    Beard, Nigel

    Darling, rh Alistair

    Begg, Miss Anne

    David, Wayne

    Bell Sir Stuart

    Davies, Geraint(Croydon C)

    Benn, rh Hilary

    Dawson, Hilton

    Benton, Joe(Bootle)

    Dean, Mrs Janet

    Betts, Clive

    Denham, rh John

    Blackman, Liz

    Dhanda, Parmjit

    Blair rh Tony

    Dismore, Andrew

    Blears Ms Hazel

    Donohoe, Brian H.

    Blunkett, rh David

    Doran, Frank

    Boateng rh Paul

    Dowd, Jim(Lewisham W)

    Borrow, David

    Drown, Ms Julia

    Bradley, rh Keith

    Eagle, Angela(Wallasey)

    (Withington)

    Eagle, Maria(L'pool Garston)

    Bradley, Peter(The Wrekin)

    Edwards, Huw

    Bradshaw, Ben

    Efford, Clive

    Brennan, Kevin

    Ellman, Mrs Louise

    Brown, rh Gordon(Dunfermline

    Etherington, Bill

    E)

    Field, rh Frank(Birkenhead)

    Brown, rh Nicholas(Newcastle E

    Fitzpatrick, Jim

    Wallsend)

    Fitzsimons, Mrs Lorna

    Brown, Russell(Dumfries)

    Flint, Caroline

    Browne, Desmond

    Follett, Barbara

    Bryant, Chris

    Foster, rh Derek

    Buck, Ms Karen

    Foster, Michael(Worcester)

    Burden, Richard

    Foster, Michael Jabez(Hastings

    Burnham, Andy

    &Rye)

    Byers, rh Stephen

    Foulkes, rh George

    Caborn, rh Richard

    Francis, Dr. Hywel

    Cairns, David

    Gapes, Mike(IIford S)

    Campbell, Alan(Tynemouth)

    Gardiner, Barry

    Campbell, Mrs Anne(C'bridge)

    Gilroy, Linda

    Campbell, Ronnie(Blyth V)

    Goggins, Paul

    Caplin, Ivor

    Griffiths, Jane(Reading E)

    Casale, Roger

    Griffiths, Nigel(Edinburgh S)

    Cawsey, Ian(Brigg)

    Griffiths, Win(Bridgend)

    Challen, Colin

    Hain, rh Peter

    Chapman, Ben(Wirral S)

    Hall, Mike(Weaver Vale)

    Chaytor, David

    Hall, Patrick(Bedford)

    Clark, Dr. Lynda(Edinburgh

    Hamilton, David(Midlothian)

    Pentlands)

    Hamilton, Fabian(Leeds NE)

    Clark, Paul(Gillingham)

    Hanson, David

    Clarke, rh Charles(Norwich S)

    Harman, rh Ms Harriet

    1720

    Harris, Tom(Glasgow Cathcart)

    Mandelson, rh Peter

    Henderson, Ivan(Harwich)

    Mann, John(Bassetlaw)

    Hendrick, Mark

    Marsden, Gordon(Blackpool S)

    Hepburn, Stephen

    Marshall, David(Glasgow

    Heppell, John

    Shettleston)

    Hewitt, rh Ms Patricia

    Martlew, Eric

    Heyes, David

    Michael, rh Alun

    Hill, Keith(Streatham)

    Milburn, rh Alan

    Hodge, Margaret

    Miliband, David

    Hoon, rh Geoffrey

    Miller, Andrew

    Hope, Phil(Corby)

    Mitchell, Austin(Gt Grimsby)

    Howarth, rh Alan(Newport E)

    Moffatt, Laura

    Howarth, George(Knowsley N &

    Mole, Chris

    Sefton E)

    Moonie, Dr. Lewis

    Howells, Dr. Kim

    Moran, Margaret

    Hughes, Beverley(Stretford &

    Morley, Elliot

    Urmston)

    Morris, rh Estelle

    Hughes, Kevin(Doncaster N)

    Mountford, Kali

    Hurst, Alan(Braintree)

    Mullin, Chris

    Hutton, rh John

    Munn, Ms Meg

    Iddon, Dr. Brian

    Murphy, Denis(Wansbeck)

    Ingram, rh Adam

    Murphy, Jim(Eastwood)

    Irranca-Davies, Huw

    Murphy, rh Paul(Torfaen)

    Jackson, Helen(Hillsborough)

    Naysmith, Dr. Doug

    Jamieson, David

    Norris, Dan(Wansdyke)

    Johnson, Alan(Hull W)

    O'Brien, Mike(N Warks)

    Johnson, Miss Melanie(Welwyn

    Olner, Bill

    Hatfield)

    O'Neill, Martin

    Jones, Kevan(N Durham)

    Organ, Diana

    Jones, Martyn(Clwyd S)

    Osborne, Sandra(Ayr)

    Jowell, rh Tessa

    Palmer, Dr. Nick

    Joyce, Eric(Falkirk W)

    Pearson, Ian

    Kaufman, rh Gerald

    Perham, Linda

    Keeble, Ms Sally

    Picking, Anne

    Keen, Alan(Feltham)

    Pickthall, Colin

    Keen, Ann(Brentford)

    Pike, Peter(Burnley)

    Kelly, Ruth(Bolton W)

    Plaskitt, James

    Kemp, Fraser

    Pollard, Kerry

    Kennedy, Jane(Wavertree)

    Pond, Chris(Gravesham)

    Khabra, Piara S.

    Pope, Greg(Hyndburn)

    Kidney, David

    Pound, Stephen

    King, Andy(Rugby)

    Prentice, Ms Bridget(Lewisham

    King, Ms Oona(Bethnal Green &

    E)

    Bow)

    Prescott, rh John

    Knight, Jim(S Dorset)

    Primarolo, rh Dawn

    Kumar, Dr. Ashok

    Prosser, Gwyn

    Ladyman, Dr. Stephen

    Purchase, Ken

    Lammy, David

    Purnell, James

    Lawrence, Mrs Jackie

    Quin, rh Joyce

    Laxton, Bob(Derby N)

    Quinn, Lawrie

    Lazarowicz, Mark

    Rammell, Bill

    Lepper, David

    Rapson, Syd(Portsmouth N)

    Leslie, Christopher

    Raynsford, rh Nick

    Levitt, Tom(High Peak)

    Reid, rh Dr. John(Hamilton N &

    Lewis, Ivan(Bury S)

    Bellshill)

    Liddell, rh Mrs Helen

    Robertson, John(Glasgow

    Linton, Martin

    Anniesland)

    Love, Andrew

    Robinson, Geoffrey(Coventry

    McAvoy, Thomas

    NW)

    McCabe, Stephen

    Roche, Mrs Barbara

    McCartney, rh Ian

    Rooney, Terry

    McDonagh, Siobhain

    Ross, Ernie(Dundee W)

    MacDonald, Calum

    Roy, Frank(Motherwell)

    MacDougall, John

    Ruane, Chris

    McFall, John

    Ruddock, Joan

    McGuire, Mrs Anne

    Russell, Ms Christine(City of

    McIsaac, Shona

    Chester)

    McKenna, Rosemary

    Ryan, Joan(Enfield N)

    Mackinlay, Andrew

    Salter, Martin

    McNulty, Tony

    Sarwar, Mohammad

    MacShane, Denis

    Savidge, Malcolm

    Mactaggart, Fiona

    Sawford, Phil

    McWalter, Tony

    Shaw, Jonathan

    McWilliam, John

    Sheerman, Barry

    Mahmood, Khalid

    Sheridan, Jim

    Mallaber, Judy

    Shipley, Ms Debra

    1721

    Simon, Siôn(B'ham Erdington)

    Touhig, Don(Islwyn)

    Singh, Marsha

    Turner, Dennis(Wolverh'ton SE)

    Skinner, Dennis

    Turner, Neil(Wigan)

    Smith, rh Andrew(Oxford E)

    Twigg, Derek(Halton)

    Smith, Angela(Basildon)

    Twigg, Stephen(Enfield)

    Smith, rh Chris(Islington S &

    Tynan, Bill(Hamilton S)

    Finsbury)

    Vaz, Keith(Leicester E)

    Smith, Jacqui(Redditch)

    Walley, Ms Joan

    Smith, John(Glamorgan)

    Ward, Claire

    Soley, Clive

    Watson, Tom(W Bromwich E)

    Southworth, Helen

    Watts, David

    Speller, rh John

    White, Brian

    Squire, Rachel

    Whitehead, Dr. Alan

    Starkey, Dr. Phyllis

    Wicks, Malcolm

    Stewart, David(Inverness E &

    Williams, Betty(Conwy)

    Lochaber)

    Wills, Michael

    Stewart, Ian(Eccles)

    Wilson, Brian

    Stinchcombe, Paul

    Winnick, David

    Stoate, Dr. Howard

    Winterton, Ms Rosie(Doncaster C)

    Straw, rh Jack

    Woodward, Shaun

    Stringer, Graham

    Woolas, Phil

    Stuart, Ms Gisela

    Worthington, Tony

    Sutcliffe, Gerry

    Wright, Anthony D.(Gt

    Tami, Mark(Alyn)

    Yarmouth)

    Taylor, rh Ann(Dewsbury)

    Wright, David(Telford)

    Taylor, Dan(Stockton S)

    Wright Tony(Cannock)

    Thomas, Gareth(Clwyd W)

    Wyatt, Derek

    Thomas, Gareth(Harrow W)

    Timms, Stephen

    Tellers for the Ayes:

    Tipping, Paddy

    Gillian Merron and

    Todd, Mark(S Derbyshire)

    Vernon Coaker

    NOES

    Ainsworth, Peter(E Surrey)

    Cash, William

    Allan, Richard

    Chapman, Sir Sydney(Chipping

    Amess, David

    Barnet)

    Ancram, rh Michael

    Chidgey, David

    Arbuthnot, rh James

    Chope, Christopher

    Atkinson, David(Bour'mth E)

    Clappison, James

    Atkinson, Peter(Hexham)

    Clark, Mrs Helen(Peterborough)

    Bacon, Richard

    Clarke, rh Kenneth(Rushcliffe)

    Baker, Norman

    Clifton-Brown, Geoffrey

    Baldry, Tony

    Collins, Tim

    Baron, John(Billericay)

    Colman, Tony

    Barrett, John

    Conway, Derek

    Beggs, Roy(E Antrim)

    Corbyn, Jeremy

    Beith, rh A. J.

    Cotter, Brian

    Bellingham, Henry

    Cousins, Jim

    Bercow, John

    Curry, rh David

    Beresford, Sir Paul

    Davey, Edward(Kingston)

    Blunt, Crispin

    Davidson, Ian

    Boswell, Tim

    Davies, rh Denzil(Llanelli)

    Bottomley, Peter(Worthing W)

    Davies, Quentin(Grantham &

    Bottomley, rh Virginia(SW

    Stamford)

    Surrey)

    Davis, rh David(Haltemprice &

    Brady, Graham

    Howden)

    Brake, Tom(Carshalton)

    Djanogly, Jonathan

    Brazier, Julian

    Dodds, Nigel

    Breed, Colin

    Donaldson, Jeffrey M.

    Brooke, Mrs Annette L.

    Dorrell, rh Stephen

    Browning, Mrs Angela

    Doughty, Sue

    Bruce, Malcolm

    Drew, David(Stroud)

    Burnett, John

    Duncan. Alan(Rutland)

    Burns, Simon

    Duncan Smith, rh lain

    Burnside, David

    Evans, Nigel

    Burstow, Paul

    Ewing, Annabelle

    Burt, Alistair

    Fabricant, Michael

    Butterfill, Sir John

    Field, Mark(Cities of London &

    Cable, Dr. Vincent

    Westminster)

    Calton, Mrs Patsy

    Flight, Howard

    Cameron, David

    Flook, Adrian

    Campbell, Gregory(E Lond'y)

    Forth, rh Eric

    Campbell, rh Sir Menzies(NE

    Foster, Don(Bath)

    Fife)

    Fox, Dr. Liam

    Carmichael, Alistair

    Francois, Mark

    1722

    Gamier, Edward

    Mawhinney, rh Sir Brian

    George, Andrew(St Ives)

    May, Mrs Theresa

    Gibb, Nick(Bognor Regis)

    Mercer, Patrick

    Gidley, Sandra

    Mitchell, Andrew(Sutton

    Gillan, Mrs Cheryl

    Coldfield)

    Goodman, Paul

    Moore, Michael

    Gray, James(N Wilts)

    Moss, Malcolm

    Grayling, Chris

    Murrison, Dr. Andrew

    Green, Damian(Ashford)

    Norman, Archie

    Green, Matthew(Ludlow)

    Oaten, Mark(Winchester)

    Greenway, John

    O'Brien, Stephen(Eddisbury)

    Grieve, Dominic

    Öpik, Lembit

    Grogan, John

    Osborne, George(Tatton)

    Gummer, rh John

    Ottaway, Richard

    Hague, rh William

    Page, Richard

    Hammond, Philip

    Paice, James

    Hancock, Mike

    Paisley, Rev. Ian

    Harris, Dr. Evan(Oxford W &

    Paterson, Owen

    Abingdon)

    Pickles, Eric

    Harvey, Nick

    Portillo, rh Michael

    Hawkins, Nick

    Prentice, Gordon(Pendle)

    Hayes, John(S Holland)

    Price, Adam(E Carmarthen &

    Heald, Oliver

    Dinefwr)

    Heath, David

    Prisk, Mark(Hertford)

    Heathcoat-Amory, rh David

    Pugh, Dr. John

    Hendry, Charles

    Randall, John

    Hermon, Lady

    Redwood, rh John

    Hesford, Stephen

    Reid, Alan(Argyll&Bute)

    Hoban, Mark(Fareham)

    Rendel, David

    Hogg, rh Douglas

    Robathan, Andrew

    Holmes, Paul

    Robertson, Angus(Moray)

    Horam, John(Orpington)

    Robertson, Hugh(Faversham &

    Howard, rh Michael

    M-Kent)

    Howarth, Gerald(Aldershot)

    Robertson, Laurence(Tewk'b'ry)

    Hughes, Simon(Southwark N)

    Robinson, Mrs Iris(Strangford)

    Hunter, Andrew

    Robinson, Peter(Belfast E)

    Jack, rh Michael

    Roe, Mrs Marion

    Jackson, Glenda(Hampstead &

    Rosindell, Andrew

    Highgate)

    Ruffley, David

    Jenkin, Bernard

    Russell, Bob(Colchester)

    Johnson, Boris(Henley)

    Salmond, Alex

    Jones, Nigel(Cheltenham)

    Sanders, Adrian

    Keetch, Paul

    Sayeed, Jonathan

    Kennedy, rh Charles(Ross Skye &

    Selous, Andrew

    Inverness)

    Shephard, rh Mrs Gillian

    Key, Robert(Salisbury)

    Shepherd, Richard

    Kirkbride, Miss Julie

    Simmonds, Mark

    Kirkwood, Sir Archy

    Simpson, Keith(M-Norfolk)

    Knight, rh Greg(E Yorkshire)

    Smith, Llew (Blaenau Gwent)

    Laing, Mrs Eleanor

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

    Lait, Mrs Jacqui

    Kincardine)

    Lamb, Norman

    Smyth, Rev. Martin(Belfast S)

    Lansley, Andrew

    Soames, Nicholas

    Laws, David(Yeovil)

    Spelman, Mrs Caroline

    Leigh, Edward

    Spicer, Sir Michael

    Letwin, rh Oliver

    Spink, Bob(Castle Point)

    Lewis, Dr. Julian(New Forest E)

    Spring, Richard

    Liddell-Grainger, Ian

    Stanley, rh Sir John

    Lidington, David

    Steen, Anthony

    Lilley, rh Peter

    Steinberg, Gerry

    Llwyd, Elfyn

    Streeter, Gary

    Loughton, Tim

    Stunell, Andrew

    Luff, Peter(M-Worcs)

    Swayne, Desmond

    Lyons, John(Strathkelvin)

    Syms, Robert

    McDonnell, John

    Tapsell, Sir Peter

    McGrady, Eddie

    Taylor, John(Solihull)

    McIntosh, Miss Anne

    Taylor, Matthew(Truro)

    Mackay, rh Andrew

    Taylor, Dr. Richard(Wyre F)

    Maclean, rh David

    Taylor, Sir Teddy

    McLoughlin, Patrick

    Teather, Sarah

    Mahon, Mrs Alice

    Thomas, Simon(Ceredigion)

    Malins, Humfrey

    Thurso, John

    Maples, John

    Tonge, Dr. Jenny

    Marsden, Paul(Shrewsbury &

    Tredinnick, David

    Atcham)

    Trend, Michael

    Maude, rh Francis

    Trimble, rh David

    1723

    Turner, Andrew(Isle of Wight)

    Williams, rh Alan(Swansea W)

    Tyler, Paul(N Cornwall)

    Williams, Hywel (Caernarfon)

    Tyrie, Andrew

    Williams, Roger(Brecon)

    Viggers, Peter

    Willis, Phil

    Walter, Robert

    Wilshire, David

    Wareing, Robert N.

    Winterton, Ann(Congleton)

    Waterson, Nigel

    Winterton, Sir Nicholas

    Watkinson, Angela

    (Macclesfield)

    Webb, Steve(Northavon)

    Yeo, Tim(S Suffolk)

    Weir, Michael

    Young, rh Sir George

    Whittingdale, John

    Younger-Ross, Richard

    Widdecombe, rh Miss Ann

    Wiggin, Bill

    Tellers for the Noes:

    Wilkinson, John

    Mr. Hugo Swire and

    Willetts, David

    Gregory Barker

    Question accordingly agreed to.
    Bill read the Third time, and passed.

    Clause 24

      REGULATIONS UNDER SECTION 23(6) RELATING TO BASIC OR HIGHER AMOUNT
      Amendment made: No. 130, in page 11, leave out lines 19 to 21 and insert—
      '(ii) each House of Parliament has at any time after 1st January 2010 passed a resolution that, with effect from a date specified in the resolution, the higher amount should be increased to an amount specified in the resolution, and the increase is an increase to the specified amount with effect from the specified date.'—[Alan Johnson.]
      Order for Third Reading Read.—[Queen's Consent, on behalf of the Crown, signified.]

    DELEGATED LEGISLATION
    Mr. Speaker: If it is convenient for the House, I propose to take motions 4 and 5 together.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    DELEGATED LEGISLATION

      REPRESENTATION OF THE PEOPLE
      That the draft European Parliament (Disqualification) (United Kingdom and Gibraltar) Order 2004, which was laid before this House on 11th March, be approved.
      That the draft European Parliament (Number of MEPs) (United Kingdom and Gibraltar) Order 2004, which was laid before this House on 11th March, be approved.—[Paul Clark.]
      Question agreed to.

    SITTINGS OF THE HOUSE
    Motion made,
    That, at the sitting on Thursday 1st April, the Speaker shall not adjourn the House until any Lords Messages have been received or until any Committee to draw up Reasons which has been appointed at this sitting has reported or until he has reported the Royal Assent to any Act agreed upon by both Houses.—[Paul Clark.]
    Hon. Members: Object.

    PETITIONS

      Mobile Phone Masts
      7.34 pm
      Mr. Oliver Heald: This is the petition of Sandra Cole, Councillor Tony Hunter and 1,632 other residents of Royston, Hertfordshire in my constituency.
      The petition states:
      To the House of Commons
      The Petition of Sandra Evelyn Cole, James Richard Cole, Dennis Stephen Geraghty, Anthony Hunter and other residents of Royston, Hertfordshire
      Declares that residents of Royston, Hertfordshire are dismayed by the decision of NTL to site a mobile phone mast in Stamford Avenue, Royston close to a school and people's homes. They seek greater controls over the siting of mobile phone and other masts
      1724
      and are concerned about the impact of these on the health and well being of local residents, particularly children, including those attending the school, and on the street scene.
      The petitioners therefore request that the House of Commons shall urge the Government to give more control over mobile phone masts and other such antennae to local communities through local planning procedures and local councillors, and particularly that councillors should be able to take account of the proximity of schools and the health fears of local residents.
      And the petitioners remain, etc.
      To lie upon the Table.

      Morning-after Pill
      7.35 pm
      Mr. Kevin McNamara: I beg leave to present a petition on behalf of the Society for the Protection of Unborn Children against morning-after pills in schools. The hon. Member for Bournemouth, East (Mr. Atkinson), who will follow me, will present a similar petition. I think that I am the last Member of this House to have voted against the pernicious Abortion Act 1967. I therefore completely support SPUC's campaign against the morning-after pill.
      The petition reads:
      The petition of citizens of the United Kingdom
      Declares that the supplying to school children of abortifacient birth control drugs and devices is ethically and socially unacceptable and that such supply without the knowledge or consent of parents constitutes a serious assault on parental responsibility.
      The petitioners therefore request that the House of Commons do urge Her Majesty's Government to:

      repeal or revoke any legislation allowing the supply of abortifacient birth control drugs and devices to school children, in particular the Prescription Only Medicines (Human Use) Amendment Order 2000 (SI 2000/1917) and section 63 of the Health and Social Care Act 2001; and

      lay the aforementioned legislation again before the House of Commons, re-drafted so as to prohibit the supplying of abortifacient birth control drugs and devices to school children.

      And the petitioners remain, etc.
      To lie upon the Table.
      7.37 pm
      Mr. David Atkinson(Con): Following the hon. Member for Hull, North (Mr. McNamara), I, too, beg leave to present a substantial petition on behalf of the Society for the Protection of Unborn Children against the morning-after pill in schools. I have been proud to work with that organisation during my 27 years in Parliament, and I fully support its campaign against the morning-after pill.
      The petition reads:
      The petition of citizens of the United Kingdom
      Declares that the supplying to school children of abortifacient birth control drugs and devices is ethically and socially unacceptable and that such supply without the knowledge or consent of parents constitutes a serious assault on parental responsibility.

      1725
      The petitioners therefore request that the House of Commons do urge Her Majesty's Government to:

      repeal or revoke any legislation allowing the supply of abortifacient birth control drugs and devices to school children, in particular the Prescription Only Medicines (Human Use) Amendment Order 2000 (SI 2000/1917) and section 63 of the Health and Social Care Act 2001; and

      lay the aforementioned legislation again before the House of Commons, re-drafted so as to prohibit the supplying of abortifacient birth control drugs and devices to school children.

      And the petitioners remain, etc.
      To lie upon the Table.

  Wansfell College
  Motion made, and Question proposed, That this House do now adjourn.—[Paul Clark.]
  7.38 pm
  Mrs. Eleanor Laing: I am most grateful for the opportunity this evening to present the important subject of the proposed closure of Wansfell college, which is in my constituency and lies on the edge of Epping Forest. The way in which a society deals with education funding is a mark of its civilisation. Indeed, we have spent most of today debating that subject—what exciting debates and votes they were. I am grateful to the Under-Secretary for staying on after a long and arduous day of debating higher education. He and I served on the Standing Committee together for many hours. Although that business has not quite concluded, I am glad that he has time to devote to education business, that, although rather more local and particular, is nevertheless as important to all the people who are involved with Wansfell college as the large and nationally important measure that we debated earlier.
  I begin by paying tribute to Marilyn Taylor, the principal of Wansfell college, who, for the past 11 years, has worked night and day and weekends, along with her dedicated staff, to build Wansfell college into a popular and successful institution. I also pay tribute to the governors and friends of the college who work in their free time, out of love and respect for the place, to keep the grounds, gardens and building so beautifully. They also raise money to ensure the maintenance of the fabric of the college to which they are dedicated. It is especially well maintained, not only for the benefit of the people who visit from time to time but as an important asset to the village of Theydon Bois in which it is situated.
  It is sad that we have to face the imminent closure of such an excellent institution. The issue of the future of Wansfell is a classic case of the buck being passed from one authority or Government body to another, of responsibility being denied by all concerned, and of the merits of the case being lost in a pile of official paperwork and financial statistics. That is why it is so important to bring the matter directly to the Under-Secretary's attention on the Floor of the House.
  Wansfell college provides residential adult and community education. I could spend some interesting moments explaining exactly what the college does, but I do not need to do so because that is well documented and I expect that the Under-Secretary is well aware of it. I draw hon. Members' attention to the publication by City and Guilds called "Time to Learn", which lists many courses and which are popular and taken up by a wide spectrum of people in colleges that are similar to, but not exactly like, Wansfell college.
  City and Guilds would not produce such a booklet and Wansfell college would not feature in it if the courses were not popular, there was not a demand for them and a considerable benefit did not derive from them. I commend the booklet to hon. Members. I do not imagine that many people who serve here will have much time for extra learning, but I assure hon. Members that many hundreds of people do.
  Wansfell college is extremely popular, as is shown by the enormous number of letters that I have received from people who live in my constituency and from far

  1727
  and wide. They protest most strongly against the proposed closure. Again, I could read excellent quotations from some letters, which are well argued by people who present their arguments well. Not one argument can be rebutted. There is an enormous range of reasons why Wansfell college should remain open, and why so many people have protested so strongly against its proposed closure.
  Many other Members have received similar letters in support of the work of the college, and I suspect that the Minister knows that because he has replied to a large number of hon. Members who have passed their constituents' letters to him. I know, therefore, that he has been aware of this issue for some weeks. I fully expect him to try to answer my points simply by stating, as he did in his replies to other hon. Members, that Wansfell college is the responsibility of Essex county council and the Learning and Skills Council, and that it has nothing to do with the Government or with him. Thus he can try to pass the buck and to escape criticism, but that is simply not good enough. It is the Government who have made promises about lifelong learning, and they have a duty and a responsibility to keep their promises. The buck has been passed here, there and everywhere on this issue, and when it comes to the House of Commons and to the Minister for Lifelong Learning, Further and Higher Education, the buck must stop here.
  The director of skills and lifelong learning at the Learning and Skills Council has said:
  "The Learning and Skills Council does not directly fund Wansfell College, which is owned and managed by Essex County Council. It is ECC's decision on how and where funding is spent."
  In other words, "It's not us, guv. It's nothing to do with the Learning and Skills Council." Well, I challenge that. What is the point of having a Learning and Skills Council if it does not take positive action to provide learning and skills? By that, I mean learning and skills right across the board, not just the specific qualifications needed by certain people to undertake certain jobs. That is, of course, an important part of the LSC's work—indeed, it probably represents 90 per cent. of that work—but that does not mean that this other part of the council's work is irrelevant.
  Passing the buck is not a reasonable response to such a serious matter as the loss of this unique facility. Wansfell college is unique and it deserves to be treated as such. It has been ignored by everyone concerned: the Government, the Learning and Skills Council and Essex county council. The fact that it is the only adult residential college of its kind in an enormous area of south-east England has been ignored. There is no alternative; there will be nowhere else for people to go if Wansfell college closes.
  The Minister has tried, in his letters, to pass the buck to Essex county council. That is not surprising, as it is the usual ministerial response, but I want to tell him why this case is different. Passing the buck in that way is nothing more than a dereliction of duty. Essex county council is in a difficult position. It has a problem because its funding from the Government was severely cut last year and the year before that. The Minister might argue that it was not cut this year, but finance has to be looked at as an ongoing matter. The world does not stop and
  1728
  start at the beginning and end of each financial year. The Minister looks puzzled; perhaps I should put that in a different way. There is no point in looking at the funding statistics for one year and saying that they have gone up by a certain percentage if, in the previous two years, they went down by a much larger percentage. If we look at the overall position, the facts are undeniable: over a three or four-year period, the Government have drastically reduced their financial support for Essex county council. That has put the council in an extremely difficult position and forced it to consider ways of cutting its budget and maximising its resources, or of massively increasing council tax.
  Essex county council has been a responsible local authority, and it is rightly trying to keep council tax down. Therefore, Essex has had to examine its policy on the provision of adult learning, among other matters, directly because of the Government's financial decisions. I could go over all the arguments about finance and funding for Essex county council, but I will not do so because I accept that that is not the Minister's responsibility, and I will not make unreasonable requests of him this evening. I do not expect him to answer for Essex county council—[Interruption] I am glad that his Parliamentary Private Secretary agrees.
  I want to use the time available to focus on the issues that the Minister can address. I am sure that if he is well briefed on this subject, he will have seen the decision from Essex county council, the reasons prepared for the executive and audit scrutiny committee, and the way in which the matter was looked at on 23 March and subsequently voted on. I will not rehearse the arguments on that.
  However, in a letter to my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), dated 16 February this year, the chief executive of Essex county council rightly said:
  "A target of &#x00A3;90 million"—
  £90 million—
  "to be raised through the sale of property over this and the following two years, has been set by elected Members. The money is to be used in funding service provision, to supplement the Capital Programme and to contain Council Tax increases &#x2026; The county council is therefore reviewing its remit for residential Adult Learning to determine its value in meeting the learning needs of Essex residents".
  He goes on to make two arguments in favour of closure, one of which is valid and one of which is not—that is the crux of the matter.
  First, the chief executive argues that Wansfell college has had a deficit over the past three years. That is technically true if we just look at the figures. The Minister appears incredulous—I do not deny that we must look at the figures, but we must also look at what lies behind those figures and how such a deficit has occurred. The answer is that the deficit occurred because of a sudden and dramatic cut in funding, which came without warning, over the last few years.
  Were the Minister to examine the figures looking forward to the extrapolation of future funding, as well as looking backwards, it would become obvious that the deficit has been made up and that it will be further made up. Wansfell college is a viable going concern. It is a thriving business that makes money. It could be self-

  1729
  funding in its running costs. The argument that Wansfell college must be closed because its running costs must be subsidised is therefore simply not true.
  Anyone who examines financial statistics, in any walk of life, knows that one can prove almost anything by figures. Certainly, one can prove that Wansfell college has been in financial difficulties. One can also prove, however, that because it is so popular it has no difficulty attracting people to its courses. People are willing and happy to pay the prices of those courses, and especially the residential costs—which are very reasonable and cover the costs of residential provision at the college. Because it is not difficult for the college to attract customers, it is not difficult for the college to make money. It will not be difficult in coming years for the college to attract people to pay the fees that it charges to build up even more of a profitable going concern. That argument is therefore simply not valid.
  There is another problem, however, which is increasingly affecting adversely almost every aspect of life in the Epping Forest area and other similar areas in the south-east of England. I refer to land and property prices. One of Wansfell college's great attractions is its location, on the very edge of our beautiful, ancient Epping Forest. I am not biased when I say that Epping Forest is clearly one of the most beautiful areas in the country. That means that the land on which the college stands would be very valuable if it were sold for housing development, for example. If we go in the direction in which we are currently going, there will be an unsustainable balance in our environment. There will be far too many houses and no other facilities, because there is such a drive to sell land for housing development in our area. There will be no schools, hospitals, transport facilities, doctors, corner shops or any other kind of public or, indeed, private service provision. The Government seem to make finance, and nothing else, their criterion for environmental and social planning.
  The Essex county council argument that is valid concerns the significant proportion of people who attend the college and come from outside Essex. I should say, to be fair to the council, that it is not its responsibility to provide education for people from all over the country; that is the Government's duty. By passing the buck to Essex county council, they are avoiding that duty.
  It is no surprise, when it comes to issues such as this, that the Government say one thing and do another. Chapter 1 of the skills strategy White Paper—the Minister sighs, but the White Paper constitutes the Government's promise of what they will do for learning and skills councils and lifelong learning—gave a commitment. It said that the Government would
  "safeguard the provision in each local area of a wide range of learning for adults, for culture, leisure, community and personal fulfilment purposes."
  It does not just say, "We will provide training for jobs for 20-year-olds, or 19-year-olds, or 25-year-olds." The commitment that it gives sounds good, and it is good, but the Government do not follow it through. If Wansfell college closes, that will prove that they say one thing and do another.
  1730
  As usual, the Government are blowing their own trumpet. In that same White Paper, they say:
  "During the course of the past six years, significant process has been made in our quest to make high quality lifelong learning a reality from the cradle to the grave."
  They are taking credit for the progress that has been made, while at the same time halting progress at Wansfell college. If they stand by and let the college disappear for ever—if it closes now it will never be resurrected in any form—they will cut off an educational opportunity for a significant section of the population.
  We must ask ourselves why the Government will not take steps to save Wansfell college. Why will they not direct the Learning and Skills Council, help Essex county council, or take over responsibility for a college that is an asset not just to Epping Forest and to Essex, but to the whole country? Is it because so many of those who attend the college are over 60? If there were discrimination on the grounds of race, sex or ethnic origin, that would be politically incorrect and not allowed, but discrimination on the ground of age does not matter. That will be proved if the Minister does nothing.
  Are the Government failing to act because of location? Is that because Wansfell is not in the inner city and the Government want to put all their education provision into the inner cities, pouring money into certain parts of the country and ignoring other parts, notably Essex and Epping Forest? If the Minister thinks that Wansfell serves only what he might consider the leafy suburbs and the countryside of Essex, he is quite wrong. A large proportion of the people who attend Wansfell college come from inner London.
  It is no coincidence that such an institution is on the edge of Epping Forest, because Epping Forest itself was one of the first facilities provided for the people of the inner cities. Queen Victoria gave Epping Forest to the Corporation of the City of London in 1882, and in the speech that she made in Epping Forest when she did so she said:
  "It gives me the greatest satisfaction to dedicate this beautiful Forest to the enjoyment of my people for ever."
  Queen Victoria spoke those words specifically to encourage people to come out of the dirty city and enjoy the fresh air of Essex. Wansfell college is part of that historic, ongoing provision. It is a great asset, which is about to be lost.
  I am not asking much of the Minister this evening because I know that he does not have the power simply to say, "All right, we'll keep it open." Although he cannot say that, however, I ask him for two things. The first is a delay in the closure of Epping Forest—
  The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): Of Epping Forest?
  Mrs. Laing: I am sorry, a delay in the closure of Wansfell college. Epping Forest college is another matter—it is doing perfectly well.
  I ask the Minister for a delay in the closure of Wansfell college so that it is not lost for ever this autumn. Secondly, I ask him to look at other ways of providing funding for institutions such as Wansfell

  1731
  college, which serve not just a local area but the community and the country as a whole. Will he consider ways of keeping open this valuable asset? If he does not do so, he is reneging on the Government's promises.
  8.2 pm
  The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): I congratulate the hon. Lady on securing this Adjournment debate, although I do not congratulate her on leaving me only a short time—five minutes—to respond. There are few Conservative Members with whom I would like to spend such an historic evening, but she probably comes quite high up my list.
  Where we agree is on the fact that Wansfell college has, over a number of years, provided extremely important learning opportunities to a wide range of people. I pay tribute to the leaders of that college, the governing body and the staff for their work to provide learning opportunities for many people, some of whom might otherwise have been denied them. My right hon. Friend the Secretary of State has mentioned a pleasant few days that he spent there some years ago, tutoring a maths course. He also told me about some of the excitement that he had, singing "Danny Boy" in the early hours and so on; he certainly has fond memories of Wansfell college.
  There is significant consensus that Wansfell is a good college, with good provision, which plays its part in ensuring that we deliver high quality lifelong learning to people in that area and in our country. However, I must part company with the hon. Lady over her attempt to pass the buck and to deflect attention and responsibility for this matter from Essex county council, which has made this decision. I do not make a judgment on whether that decision is right or wrong, but it has been made by Conservative-controlled Essex county council, which the hon. Lady should surely have more influence over as the local Member of Parliament.
  I will expand in a minute on the additional resources specifically being invested by the Government in lifelong learning. I would make the point to the hon. Lady, and through her to her constituents, that when the shadow Chancellor recently committed the Conservative party to future spending plans, he said that it would attempt to match the present Government on schools and the national health service. The consequences for post-16 education, for Sure Start, and for anything that is not
  1732

  schools within the education and skills budget, based on that commitment, would be horrendous—there would be no hope for colleges like Wansfell. Hon. Members should not come here and try to mislead their constituents by pretending that this closure is somehow the consequence of the Government's policy; the hon. Lady's Conservative colleagues on Essex county council have failed dismally to reflect the views that she expressed in this debate.
  The hon. Lady says that the county council has had financial difficulties not just this year, when the amount that it has been awarded has increased, but in the preceding two years, but that does not stack up in terms of the history. In 2000–01, the college deficit was £50,000. By the following year, it had risen to £64,000. In 2002–03, apparently a difficult year, the college was given further additional funding of £37,000 by the county council to help reduce the deficit. It also paid the salary for a year of a full-time co-ordinator to help move the college forward in a year when, as the hon. Lady says, it was having difficulties. In 2003—04, the college has received a total of £93,500 in addition to its core funding of £103,000. The total shortfall carried toward from 2001–02 and 2002–03 was wiped out, apparently by the county council, at the end of the 2002–03 financial year, and in 2003–04 the college moved to the same funding formula as adult community colleges, which actually resulted in a 7 per cent. increase in funding.
  The hon. Lady cannot come here and try to deflect attention. I quote her Conservative colleague, the cabinet member for lifelong learning on Essex county council, Bonnie Hart, who said:
  "I have serious concerns about continuing to fund a residential college which isn't wholly benefiting Essex people. My remit is for Essex as a whole."
  The Conservative council maintains that it is closing Wansfell primarily because of its deficit, but it also cites problems with limited disabled access, the state of repair of the attractive Victorian building, the fact that the college is full only at weekends and the fact that 59 per cent. of learners who use the college come from outside Essex. The county council has considered the case for Wansfell college very objectively, in a very detailed way, and has made a choice at a local level to close this college. What is dishonourable is for the hon. Lady to come here and imply—
  The motion having been made after Seven o'clock, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eight minutes past Eight o'clock.

Preamble
[MR. FRANK COOK in the Chair]

Cast Metal Industry
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Ainger.]
9.30 am
Mr. Adrian Bailey: I am delighted to have secured today's debate in the ballot—a success achieved after several fruitless attempts. I have been particularly keen to debate the subject in Westminster Hall because the cast metal industry faces serious problems, caused mainly by the shortage of scrap metal and the consequential soaring of prices but also due to other increases in the price of raw materials, which are putting additional pressure on the industry. As a result, one cast metal firm has gone to the wall—Keighley castings in Yorkshire. It would not be an exaggeration to say that unless action is taken a number of other companies could find themselves in a similar situation.
About two weeks ago, the Minister for Industry and the Regions met representatives from the cast metal industry to discuss the matter, for which I am grateful. None the less, the problems are becoming more serious week by week, so it is appropriate to have a wider debate, in which other hon. Members with similarly affected companies in their constituencies can express their views.
I declare an interest, Mr. Deputy Speaker: I am secretary of the all-party group on cast metal. I also have a distinct constituency interest, because no fewer than 11 foundries can be found in West Bromwich, West; indeed, I am told that my constituency has the highest number of foundries in the country. I am therefore particularly concerned about the impact of the problem on the welfare of my constituents.
I am proud to say that one of those companies, Eurotech Industries of Wednesbury, won the annual company of the year award, given by the Cast Metal Federation, for having invested and expanded over the past couple of years, and for winning new contracts. Like many cast metal companies, Eurotech supplies parts for the automotive industry, including BMW, Audi, MG Rover and DaimlerChrysler, and it has just won two more contracts to make roof castings for Skoda and BMW. I mention that to highlight the fact that although foundries are often thought of as "old" manufacturing industry, some successful companies have invested in new production techniques and are being very successful in a highly competitive market.
The success of one company cannot mask the real issues that confront the sector nationally. I stress the importance of the industry to the country. It has a national turnover of about £2.26 billion a year, and it employs 34,000 people in 580 companies. Most of those companies are small and medium-sized enterprises. Crucially, many of them are concentrated in traditional
428WH
industrial areas with higher than average unemployment, and the loss of those companies would have a disproportionate effect on the local economy and the local community.
In my constituency, unemployment stands at 5.9 per cent. It has reduced by about a third since 1997, and the local economic situation has improved enormously over the past five years. However, the prospect of local cast iron companies folding, with the resulting unemployment, would be a serious setback. I cannot view it with equanimity.
The cast metal sector's market is hugely concentrated in the automotive industry, and about 50 per cent. of total production goes to the car industry. That is enormously significant in the west midlands, because the viability of the cast metal industry can have an impact on the automotive sector. Nationally, the industry produces 1.2 million tonnes of castings: 970,000 tonnes are ferrous castings, and 900,000 tonnes come from ferrous scrap, so scrap is a vital component of total castings production.
Scrap is vital. The proportion of scrap that we export has gone up from 40 per cent. in 1995 to 70 per cent. at present. Overall, there is sufficient scrap in the country, but the growth in exports is now causing local cast metal companies extreme difficulties. The result has been an increase in dock prices. Between January 2000 and January 2003, the price of low-grade scrap increased by just 30 per cent.—a significant but not devastating increase; but between January 2003 and January 2004, it increased by 130 per cent. The price of cast iron scrap increased by 70 per cent. and it seems to be increasing further.
Those price increases are caused almost entirely by China's economic expansion, which has led to a phenomenal increase in demand for steel and the raw materials used in its production. In 2002, crude steel production in China rose by more than 21 per cent., and it is expected to rise a further 20 per cent. in the coming year. China's production is greater than that of Japan and the United States put together; they are the two next largest producers, and manufacture huge amounts. Significantly, even China's current huge level of production is insufficient to meet its home demand. China's phenomenal growth has had a profound effect on raw materials and steel prices., but nowhere more so than in the scrap metal sector.
A further potential problem needs to be highlighted. Currently, only 10 per cent. of steel production in China involves electric arc furnaces, which use scrap metal. Therefore, with China using scrap in just 10 per cent. of its steel production, we have a world shortage of scrap. If China increases production using electric arc furnaces because of constraints on the supply of raw materials used in the other 90 per cent. of its steel production, there will be further significant pressures on the world scrap metal market.
What has been the reaction worldwide? The South Korean Government have already limited scrap exports. In the United States, an organisation called the Emergency Steel Scrap Coalition has been formed. Its president, Robert Stevens, has warned that the US is
"facing a crisis in many manufacturing sectors".
Liz Blackman: Saint-Gobain Pipelines in Erewash, which employs 1,400 people and deals predominantly in ferrous scrap, has seen its prices for that commodity rise by 40 per cent. over the past year. Does my hon. Friend agree that it is vital that the Government examine how the global market is working, report back on whether it is fair and, if not, suggest ideas to address the inequalities?
Mr. Bailey: My hon. Friend makes an important point. Although it may be argued that the cost of scrap metal has gone up as a result of international free trade, there are other issues, such as the price of coke. We have no indigenous coke producer in this country. We have to import it from Europe or China, ironically, and there is some evidence that China is restricting the export of coke. Our cast metal producers face a double whammy: scrap metal prices are going up because of the pull of the Chinese economy, while the fact that China restricts the export of coke further drives up costs for cast metal companies in this country. The issue obviously has to be explored because there is some evidence that there is not a level playing field. Although we may be conforming to the best principles of international free trade, China, as the main beneficiary, is not doing so. The Government must explore that issue.
I return to my point about the United States. Mr. Stevens also commented that there is provision under US law for a possible remedy for injurious increases in steel scrap exports: the temporary imposition of export restrictions by the US Secretary of Commerce. Although the United States has done nothing yet, we have to recognise that there is a significant lobby in that country for restrictions on the export of steel scrap. If that were to take place, the impact on the international scrap metal market would be huge, over and above the problems faced at the moment.
Let us consider other countries. Italian producers of steel have already called for protectionist measures. Ukraine has a ban on scrap metal export and Russia has export duties. All over the world, there are already significant moves to ban the export of scrap metal or, in one way or another, to preserve scrap metal for particular host countries. The situation is already serious and has the potential to be devastating. As prices continue to rocket, more countries will be under greater pressure to take unilateral action to protect their interests.
Things might not be so difficult for cast metal companies if other raw materials were not also increasing in price. I have mentioned coke. When we consider the range of prices for raw materials used not only in the cast metal industry but in the steel industry as a whole, we find that the pull exerted by the expansion of the Chinese economy is increasing those prices across the board. Whatever elements are used in the production of cast metals and in the wider steel industry, they are all increasing in price and adding cost pressures to production.
Looking at the impact on other industries, there are three major players in the sector. The first is the scrap metal industry. It will not surprise hon. Members to learn that the scrap metal industry is happy with the current situation. It is enjoying prices that it has never had before. The industry legitimately points out that in
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this country it produces more scrap metal than is needed for the domestic market and that the current price is determined by global demand. Of course, that is true, but it prompts the question whether, if the global market price continues to accelerate as it is doing, some of the domestic bread and butter market could disappear. Although the scrap metal industry may be enjoying a boom at the moment, the loss of its domestic bread and butter market could mean that at some time in the future it will be dependent on a far more volatile and risky international market. Notwithstanding the current good times in the scrap metal industry, it is appropriate to exercise a cautionary note.
Soaring raw material prices have affected the steel industry as well as the cast metal industry. Corus has increased prices by 20 per cent., and there is an increase of another 18 to 20 per cent. in the pipeline. It accounts for about 90 per cent. of UK steel production. The industry has been more relaxed about the issue of scrap metal prices, but that is largely because it has contractual agreements with its consumers whereby it can pass on the prices. However, the scale of the price increases is such that even some of the consumers of the raw steel are beginning to complain and there is some evidence that they may be trying to find cheaper alternatives elsewhere.
Malcolm Bruce: Does the hon. Gentleman realise how the problem has become perverted? It has affected us north of the border. On my way to the airport this week, I was faced with a series of cones along the road I normally pass down because all the manholes and grids had been removed. They had clearly been sold to the scrap metal industry. Not only is the situation encouraging theft and resulting in costs to the public authorities, some scrap metal dealers are colluding in crime.
Mr. Bailey: I am grateful to the hon. Gentleman for raising that point. It is a somewhat bizarre manifestation of the problem; I did not realise that it had emerged north of the border. In Gloucester, 40 manhole covers have disappeared and in Cambridgeshire, 150 disappeared over only a couple of days. Even in China, bizarrely, 1,800 disappeared in Shanghai over several days. So, in China, the main manufacturing country and the driver of this increase in prices, manhole covers are being stolen and recycled, presumably to replace the manhole covers that have been stolen. The only beneficiary of that bizarre cycle of economic activity is the thief who steals them.
Mr. Andrew Mitchell: I am listening with great interest to the case that the hon. Gentleman is making. Leaving aside manhole covers, does he accept that scrap metal prices are rising so steeply partly due to the sort of protectionist measures he mentioned, which are being taken in some countries? Such measures limit the international market and lead to price rises.
Mr. Bailey: Certainly, any country that takes protectionist measures and thereby limits the supply of scrap metal on the international market is contributing to the problem. However, it is fair to say that the main cause of the problem is undoubtedly China's economic

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expansion. Obviously, there is potential to ease some of the pressure by negotiating with countries that are restricting export and might be persuaded not to. That is an avenue that the Government should consider.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): Is that not the reason why we need the World Trade Organisation and why we need to operate within its rules?
Mr. Bailey: Yes. All the players in this situation recognise that not to operate within the limits laid down by the WTO could cause problems. We should ensure that everyone who operates in that market situation does so according to the rules, so we are bringing pressure on the Government to work through the European Union and other allies to ensure that that happens, but I shall come to that later.
I was talking earlier about the impact on the steel industry alone. I said that some consumers of raw steel products are beginning to complain, which could affect the basic steel industry itself. Furthermore, UK Steel said in a submission to me that its position would change if the United States took unilateral action to export scrap metal. In that event, UK Steel is anxious that the Government should be in a position to take immediate action.
The cast metal industry is the most affected. For example, raw materials constitute about 22 per cent. of the total costs of cast metal manufacturers, and scrap metal accounts for 60 per cent. of that figure. Price increases on the scale that I have outlined mean that prices must be increased by about 10 per cent. to cover those costs. Many companies operate on tiny margins and cannot pass on that increase, especially those with fixed price contracts. Such companies have experienced huge difficulties, which to date they have met with great resourcefulness. However, as prices continue to rise, the pressure becomes greater all the time. I am not talking about the long term, but about price increases of 10 per cent. per month, which is hugely significant for such companies.
The issue involves not only prices, but the availability of scrap metal. Some companies cannot obtain the scrap metal that they need to operate. I received an e-mail from one company that said:
I have a buyer spending most of his time trawling the local scrap dealers to obtain adequate supplies and the prices are still rising!! As you can imagine this has also resulted in huge increases in the price of pig iron and we are still finding it very difficult to get these costs recovered in higher selling prices.
One company told me that it had come within half a day of having to stop production. I heard a tale of another company that expected a delivery of scrap metal that never arrived. When the company phoned the supplier, it turned out that somebody else had made a bid for that lorry-load of scrap while it was en route and the lorry was diverted to another manufacturer. That conveys something of the knife-edge existence that some companies endure.
Mr. Peter Pike: My hon. Friend says that firms are living on a knife edge, but does he accept that most in the industry suffer from the added burden imposed by the near doubling of insurance, which also makes trading difficult?
Mr. Bailey: My hon. Friend tempts me down a path. That issue has been the subject of much debate. I completely agree with him, but I hope that he will forgive me if I do not develop that point, because I am conscious that other Members want to join the debate.
Other effects will include not only pressure on the margins of companies in the cast metal sector, but increases in the prices of a range of consumer goods, particularly in the automotive industry. We could suffer from a double whammy, because if the prices of castings become too high, the automotive industry might look to other sources, including, again, China. We are looking for a level playing field, to ensure that the costs of finished castings from our local cast metal producers do not become excessively high and thereby provoke that course of action.
I conclude with some observations. I agree with the Government that the free market and international trade are extremely beneficial, and that intervening unilaterally at one point can have unintended consequences that may not be helpful to anyone. I know that the Minister has ruled out export quotas and, as nne who was vociferous in his criticisms of the American Government when they introduced steel tariffs, I cannot logically argue that unilateral action is the most appropriate way forward. However, the Government must recognise that there are certain situations in which industry conditions can change so dramatically in a short period that the potential consequences are dire. That is the situation that the industry faces. If prices continue to accelerate at the current rate, the consequences could be devastating.
The European Union needs to take urgent action and work globally to pre-empt problems that affect not only this country but the whole of the EU. I am informed that about two weeks ago there was a meeting in the EU to discuss the situation and to monitor trends in the industry.
Mr. Sutcliffe: To help my hon. Friend, and because there may not be time at the end of the debate to go into enough detail on all these matters, I can tell him that the meeting was deferred.
Mr. Bailey: That reinforces the need for this debate. The industry is in such a situation that it cannot afford to have people in key positions deferring meetings.
Mr. Dennis Turner: I have been a committed European all my life, but I would just like to advise my hon. Friend and the Minister that they should not place too much store in the collective commitment of the EU on these matters. I have a long memory of the EU and remember the d'Avignon plan, under which we all contributed to a reduction in steelmaking capacity in our country and throughout Europe, but Europe did not honour its commitments. We lost a great deal of capacity in this country, and I ask my hon. Friend to reflect on that fact.
I have very fond memories of Bilston steelworks. We lost that plant, which made wonderful steel for this country, 25 years ago. I ask my hon. Friend to point out to the Minister that we ought to consider production

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targets in this country. Looking after our own economy is crucial and we should not have to depend on so much importation.
Mr. Bailey: I thank my hon. Friend, and I would be the first to defer to his long experience in the sector, which goes beyond any experience that I have had. However, I think that he would agree that it would not benefit anyone to have any sort of international trade war. Action must be taken within a regulatory framework that is best for everyone collectively.
Monitoring is not enough. We need action, and the purpose of the debate is to convey to the Minister the depth of feeling among hon. Members who represent companies in the sector about what is to be done and the implications for the well-being of their constituencies. There is evidence that in certain areas of production, particularly coke, there are imperfections in international free trade. If we cannot do anything about price pressures on cast metal, it will bring some relief to a beleaguered industry if we can relieve such pressures in other areas. Will the Minister also consider the potential of EU industrial policies to enable assistance to be given to small and medium-sized enterprises in the sector?
Mr. Deputy Speaker (Mr. Frank Cook): The Chair is anxious to accommodate all right hon. and hon. Members who want to contribute to the debate, and I will never complain about the brevity of contributions, but I must offer the admonishment that in this Chamber we normally start the first of the three wind-up speeches 30 minutes before conclusion. We therefore have exactly 30 minutes left for Back-Bench contributions. I ask hon. Members to take that into account when making their speeches and when accepting or responding to interventions.
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Mr. Peter Pike: I take note of what you say, Mr. Deputy Speaker. I had in any event intended to be brief, but I did not want the debate to be dominated by the west midlands, although I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on securing the debate. I know that he has taken a great personal interest in the subject since he was elected, and he is a founder member and officer of the all-party group.
The issue is of concern in my constituency, where most people are still employed in manufacturing, although the number is diminishing all the time. As soon as my hon. Friend told me that he had secured the debate, I contacted two companies in my constituency to check exactly how they saw the situation. I spoke first to Stephen Gill at Lupton and Place, a company that I have visited many times. I have had a good relationship with the present boss and his father, Derek Gill, over many years, and I know about the work that they have done to enable the industry to survive through difficult times so that it is still in business now.
Steven Gill emphasised all that my hon. Friend said in his speech about the problems of scrap shortages, including the particular problems for smelters and the fact that aluminium is attracting such high prices. China
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is the main buyer and the main source of problems for the industry locally. The company has a battle to survive and to obtain the raw material that it needs. There is a big impact on prices. Many products that the company makes are now made in China and sold here, so there is a double whammy: they lose the raw material and are not able to sell their products, because cheap labour costs in China mean that it can outbid them.
I spoke also to Mr. Keith Taylor at Lupton Smallshaw. As a result of my conversations I intend to visit the company soon to see exactly what it does. Mr. Taylor said that the price of scrap iron has risen from £85 to £142 per tonne in 12 months; the price of nickel has doubled from £8,000 to £16,000 per tonne in four months. He mentioned China, but he also said that India is increasingly moving into the market. We all know that both India and Pakistan are enjoying GDP growth of between 8 and 9 per cent. Their economies are beginning to move ahead, and things are becoming extremely difficult, for the same reasons that they become difficult when cheap labour moves into the market. Mr. Taylor also mentioned insurance. I accept that we do not want to focus on that, but, for someone who is on a knife edge, the doubling of insurance costs can make the difference between surviving or not.
Europe was mentioned too, as it was by my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner). The argument keeps coming up about Britain enforcing and honouring European regulations and commitments far more than our partners in Europe. I am a strong pro-European, like my hon. Friend, and I believe that we should have entered when the original six members signed the treaty of Rome. If we had gone in with a position of strength right at the start some things that have presented difficulties would have been different.
We want to ensure that all our partners honour European commitments and regulations exactly as we do. We want the industry to survive. I look forward the Minister responding to the debate and showing that the Government are prepared to try to ensure the industry's survival.
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Ross Cranston: I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on securing the debate.
I start by talking about the big theme of economic globalisation and the impact on world markets of the massive industrial revolution that is taking place in China. As my hon. Friend said, the voracious demand for steel is having an impact on the price of ferrous scrap and coke. One only has to look at the figures to see that. Crude steel production in China amounted to more than 220 million tonnes in 2003, which is about a quarter of world output and double what was produced in the United States. It is also 70 per cent. more than was produced two years before.
Economic activity in the US is also increasing, which is leading to more steel production and partly to a demand for scrap. Supply, too, has been very slow to pick up. The US downturn meant that scrap, which to a degree is a by-product of economic activity, was not available, so there was pressure on demand and supply.

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When, in my hon. Friend's expert opinion, does he think that the market will correct itself? When will prices either plateau or reduce? Significantly, only 40 per cent. of our scrap was exported in the late 1990s, as my hon. Friend mentioned in his opening remarks. The figure is now some 80 per cent.
The change in world market prices is also having an impact on our cast metal industry. Over the years, there have been cyclical downturns. An answer given by my right hon. Friend the Member for Hull, West and Hessle (Alan Johnson) last June, when he was in the Department of Trade and Industry, showed that there has been a long-term downward trend in the number of foundries and in employment. However, as my hon. Friend the Member for West Bromwich, West pointed out when he opened the debate, the current crisis will have an impact on that cyclical downturn which is out of the ordinary.
Let me cite an example at the micro level. The foundry in my constituency, which is run by Thomas Dudley Ltd., was started in 1920. Yesterday, Martin Dudley, the joint managing director, gave me some figures to underline the crisis faced by the foundry. It employs 130 people and has a turnover of some £5 million. This year, that turnover will be the lowest since 1987–88. The price for ductile spheroidal graphite pig iron was £143 a tonne in December and January, but for April delivery, it is £225 a tonne—an enormous increase. The foundry anticipates that the price for delivery later in the year will be about £300 a tonne. Such a rise in prices brings enormous pressure to bear on companies. It is all very well to say that they can increase their prices to their customers, but they are bound, in important respects, to long-term contracts that have fixed prices with, say, the water industry, so they are under severe pressure.
So far, the company has been socially responsible in its actions. As I mentioned, it has long had a commitment to the area. It is a private company, so it is not subject to the stock market demands for returns of 15 or 20 per cent., which the City demands of manufacturing in this country. It has cross-subsidised the foundry from its very successful plastic moulding business. Frankly, however, it would be unrealistic to expect it to continue for long.
If the company closed, 130 jobs would be lost. The work force are multi-racial, but the unemployment caused would accentuate the black country's problem of older, unemployed white males, whose skills are not easily transferable elsewhere in the job market. Those 130 workers would pay the price for globalisation. As well as the impact on their lives and families, there would be a broader impact on the body politic. In my constituency and that of my hon. Friend the Member for West Bromwich, West, extreme right-wing parties have a foothold and often feed on the disillusionment that comes from unemployment among that group of proud men.
What is to be done? The Under-Secretary, who is standing in for my right hon. Friend the Minister for Industry and the Regions, will no doubt tell us, rightly, that World Trade Organisation rules prevent us from taking unilateral action, but that does not cut much ice with people when they see other countries breaking the rules. Other countries do not seem to have the same compunction about complying with WTO rules. My
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hon. Friend the Member for West Bromwich, West referred to Korea, and even the United States acted to protect its steel industry when it imposed section 201 tariffs a couple of years ago.
Mr. Sutcliffe: Surely my hon. Friend recognises that at that time the Government acted with our European partners to take the USA to the WTO.
Ross Cranston: Absolutely. My point is that other countries take unilateral action when faced with a crisis. No doubt my hon. Friend will also tell us about action that is taken with our EU partners. My hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) made the point that my constituents make: they are mightily under-impressed by the EU in many respects. Perhaps the Under-Secretary can give some assurance. I understand that the EU has tried to take action on the ban that Russia and Ukraine have apparently imposed to restrict the export of scrap.
I do not have the answers to the problem, but what I do know is that a family company, Thomas Dudley Ltd., is operating in my constituency under enormous pressure, and its closure would cause the loss of 130 jobs with all the implications that I mentioned briefly. I hope very much that the Under-Secretary can send me away from this debate with something substantial that I can relate to that company and its employees.
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David Wright: It is appropriate that I speak in this debate because I represent Ironbridge gorge, where Abraham Darby first smelted iron with coke and started the industrial revol0ution—
Mr. Dennis Turner: With John Wilkinson.
David Wright: Indeed; he used to be called John "Iron-Mad" Wilkinson.
I want to give a slightly different perspective to the debate and talk about the impact of prices on world-class companies. When people think of this business, they often imagine dirty plant and people working in poor conditions, but we are talking about world-class products and companies that are innovative and flexible, as they must be in a competitive world market. In Telford and Wrekin is Aga-Rayburn, which is a world leader in the production of high-quality cookers that are sold at high prices around the world. They are a world-class product. Around 850 employees work for Aga-Rayburn: 180 in my constituency at Coalbrookdale and 450 in the constituency of my hon. Friend the Member for The Wrekin (Peter Bradley). We have been working jointly with the company to try to see how it can manage the escalation of raw material prices.
It is important to point out that Aga-Rayburn has recently produced its profits table, which shows that profits are up. That is incredibly positive, but its main concern is that if there is continuing pressure on raw material prices, it may be cheaper for it to import materials and assemble the product in the UK. That is my major concern, as it may affect the 180 jobs at the Coalbrookdale foundry in my constituency. That foundry sits within 100 yd of where Abraham Darby carried out the first smelting operation. It would be

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terrible if the Ironbridge gorge and Coalbrookdale area were to lose it. The company has told me and my hon. Friend that it may have to consider importing panels, which are assembled into cookers, from Asia or China. The manufacturing director, Mr. O'Brien, has written to me about that.
I have also spoken to Mr. O'Brien more generally about price increases—an issue that a number of Members have already addressed. He told me that the company was paying about £70 a tonne for cast scrap in January 2003, but that that price had increased to £90 a tonne in January 2004. We have heard today that those costs have increased since then. The cost per tonne of pig iron was £127 in January 2003 and £155 in January 2004. The list goes on. We have world-class companies in the west midlands, and we are concerned that the escalation in the price of raw materials will significantly damage them.
I acknowledge the Government's position on export controls, which the Minister made clear in his interventions. I am not in favour of such controls. I have always been in favour of free trade, and I have made that clear when speaking in debates and in the public arena.
We need to consider three key themes. First, we need to challenge the nations that do operate barriers. We need to look closely, through the WTO, at what other countries are doing. in order to determine whether their actions are affecting overall price increases. We will never be able to cope with some of the economic expansion in Asia, but if other countries are applying barriers, they are falsely escalating prices, and we need to stop that.
Peter Bradley: My hon. Friend makes an important point. It is also important to realise that when we talk about scrap metal we are talking about a microcosm of the global economy. This afternoon we will debate higher education; one reason that we need world-class universities is to keep up with the investments that are being made in China and India. We are talking about keeping up not only with universities such as Harvard and Princeton, but those in China and India.
We must flex every muscle to ensure that the relevant international organisations do their jobs, not just for us in the west midlands and for scrap metal, but for every economic sector. We need also to convince our partners who have let us down in the past that it is as much in their interests as it is in ours to ensure that there is proper understanding, agreements and alliances in the global economy.
David Wright: I agree with what my hon. Friend has said. There is nothing for me to add to that.
My second point is that we need to work through the EU, and I was disappointed to hear that the EU meeting on the issue was recently deferred.
Mr. Sutcliffe: To help my hon. Friend, I can tell him that the meeting has been rescheduled for 21 April. will talk about that in my closing remarks.
David Wright: I am grateful to the Minister. That will encourage those involved in the industry who read the
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record of this debate. They will look forward to hearing a report of that meeting from him or the Minister for Industry and the Regions.
My third point relates to coke prices, which are particularly significant for the industry and have increased substantially in recent months and years. Aga-Rayburn has informed me that the price per tonne of coke has increased from £140 in January 2003 to £160 in January 2004, and that it is still going up. I believe that there may be a degree of protectionism around the world regarding coke pricing. We need to use that as a bargaining tool. We must go to the table at the WTO with a wider perspective and talk not just about metal prices, but about other raw material prices that affect the industry. It would be useful if the Minister went away and considered how coke prices are affecting the industry and whether there is any action that we could take.
Mr. Pike: My hon. Friend makes a valid point on coke, production of which has been eliminated in this country. We cannot widen this discussion to a general debate on energy, but is not it true that that example should be taken as a warning not to make ourselves totally dependent on other nations for gas and other fuels in the years ahead?
David Wright: My hon. Friend is right. We need a comprehensive energy strategy, particularly for industry. Coke prices are important to the energy sector.
Liz Blackman: My hon. Friend, whom I thank for his generosity in giving way, is mapping out extremely clearly some courses of action that the Government ought to take. Does he agree that the cost of ferrous scrap is rising so swiftly that action needs to be speedy?
David Wright: I wholly agree. That is why it is incredibly important that the EU meeting takes place soon and that we rapidly communicate the results, which will influence business decisions in the coming months, to industry.
I do not believe that the situation poses a threat to jobs in my constituency at present. I certainly do not get the impression from Aga-Rayburn that there is such a threat. However, there will be a problem for world-class products such as those that the company produces if the price of raw materials increases, because the price in the marketplace also increases as the costs are directly passed on to buyers. My concern is that that is creating pressure in the United States. Aga-Rayburn sells a lot of its product there—as I said, it is a world-class business—and, as it is difficult at present to export into the US generally, price escalation on raw materials could create problems for the company. I want Aga-Rayburn to remain competitive. I have already indicated that its profits are healthy and, in the global market in which it operates, it is important that the situation is maintained.
Peter Bradley: My hon. Friend is rightly proud of Aga-Rayburn, although 1 point out that it smelts the metal in his constituency but makes the product in mine. He makes an important point: as the price of raw materials increases, there is pressure on either production costs or costs to the consumer. Does not Aga-Rayburn's recent record tell a tale? Perhaps it

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cannot compete on the cost of raw materials or even labour, but it can compete and succeed on quality. There is a lesson there for the rest of British manufacturing.
David Wright: My hon. Friend takes the words from my mouth. That was exactly the point that I was about to make in closing. Quality is crucial: we are not able to compete with the far east on labour costs, so we have to compete on quality. There is a company in Telford and the Wrekin that does just that, so let us ensure that it is able to do so for the next 10, 20 or 30 years and on into the future.
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Mr. Dennis Turner: I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on securing this debate. I feel passionately about the subject. Whatever is discussed in Westminster Hall, I am absolutely sure that there will not be a more important debate for the future of this country. There have been many debates in this House on the steel industry because, clearly, it is a basic industry, and our economy and world trade depend on it. As an industrial country, we neglect it at our peril.
A little bit of history does not go amiss when we discuss the steel industry and how important it is to us, so it is appropriate that we have here a Minister who will tell us about Government policy on that vital industry. I can recall the 1970s, when our steel industry was far larger than it is today. We had massive capacity—too much, I concede—and some of it had to be removed. It is imperative that a country as industrialised as the UK has a steel industry. The Government have to give careful attention to the industry's needs to maintain the country's economy and retain its wealth for the people whom we represent.
Although it is history, the second world war tells us how important the steel industry is. Within a month of the outbreak of war, Mr. Stewart of Stewart and Lloyds, the largest steel maker in the country, was wining and dining with Adolf Hitler. Quotas were allocated at that time, and the quota given to this country was far less than those given to Krupps of Germany or to Italy. We came very close to losing the second world war as a result of that allocation. It was a miracle that with those quotas we were able to produce the steel that gave us the capacity to win the conflict. That indicates the importance of the steel industry to our country.
We have now taken out a lot of the industry's capacity. We invested massively in electric arc furnaces, which have to take very clean scrap. Open hearth furnaces, which we had in this country, could be fed with any scrap, and out of that process came very special steels. The present need for clean scrap explains why we have a supply problem.
In addressing the needs of the interdependent steel, foundry and forging industries, we must ask all countries in the WTO to play their full part in planning the way in which the steel countries operate. If we can do that, we can work on an international level. We must be sure that our home production is such that we can maintain and support the industries that my hon. Friend the Member for Telford (David Wright) talked about
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The steel industry has lost many thousands of jobs. Unless the matter is addressed correctly, not only by the DTI, but by all Departments, we are in danger of losing many more thousands.
10.29 am
Malcolm Bruce: This has been an interesting, topical and important debate. We clearly have a problem that has escalated over the past two years and continues to do so. In a way, the problem is due to global economic success. The main cause of that is economic expansion in China, which means economic benefits for the whole world, but leads to disruption in the process. We all acknowledge that development in China cannot be stopped, and we would not want to stop it. The question is how we accommodate it.
The point has been made that a substantial increase in economic activity in a market such as China causes strategic bottlenecks and problems with commodity prices, which international organisations may not be fully equipped to deal with. It is true, as the hon. Member for Wolverhampton, South-East (Mr. Turner) said, that we were largely self-sufficient in steel in 1970, but the reduction in capacity means that nearly half our steel requirement is now imported. That situation cannot be reversed. It is probably not worth going back over the history to see why we went from there to here, but it is fair to suggest that there is a strategic reason for having sufficient capacity and not being too dependent on imports of steel or the raw materials and fuels that enable us to make it. We are, however, operating in a global market and in a privatised industry, which it is sometimes difficult for the Government to control.
That raises the issue of steel quotas and demonstrates the short-sighted folly of the American Administration in imposing them. We now hear that they may do the opposite, particularly as this is an election year, but we must remember that when steel prices were low, they sought to restrict imports to protect their domestic steel industry. I fear that it was not the EU or the WTO that led to a resolution of the problem, but domestic consumers of steel in the US who, within a relatively short period, were saying that the restriction on imports was disadvantaging their industry by forcing up the price of domestic steel products in the US market.
We now hear that the US is considering a ban on the export of scrap products, and I believe that it will shortly have the same problems as before. I have made that point several times, and I am very much at one with the Secretary of State for Trade and Industry on the issue. The speech that she made in Mansion house a few weeks ago was bang on the button. She said that it is frustrating to deal with the US, which presents itself as the great engine of free trade but is one of the most protectionist economies in the world. We want to be persuasive, not confrontational. We should tell the Americans that trade ultimately benefits everyone, even if it creates short-term difficulties. Providing short-term, knee-jerk political solutions to commercial problems often causes more long-term damage than trying to find ways through them. All hon. Members' speeches today have suggested that we try to do the latter.
I mentioned the bizarre local impact in Aberdeenshire that I observed last week. Each week that the House sits, I drive from my house to Aberdeen airport to fly down

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to London. Every 50 yd for about a mile and a half along the narrow country road that I drive down are cones marking holes where drain covers had been. Such a story gets on to the national news and people think that it is a bit of a joke.
David Wright: In the west midlands, we call it tatting.
Malcolm Bruce: I am grateful to the hon. Gentleman for that black country jibe. The cones were treated as a bit of a joke, but a local official from Aberdeen city council rightly pointed out that the removal of drain covers was extremely dangerous because it left deep holes in the road without warning. The explanation was that the soaring scrap prices were creating a market for drain covers. Apart from anything else, it would be enormously costly if that happened in every local authority area throughout the country, and we would start to see accidents and even fatalities. Although one might consider it bizarre and take a light-hearted view of it, it is a serious point.
As I said in an intervention, there is a concern that scrap metal dealers or users in this country may be colluding in that activity, and it is important that we get to the bottom of it. If one considers that scrap prices have risen, according to the figures that I have, from £49 to £122 a tonne in two years and, according to one contributor, are now rising by £10 a month, one can understand how that strange market is developing.
On many occasions, I have expressed concern about the imbalance of the British economy and in particular the weakness of manufacturing. I do not regard what is happening as anything like turning the corner, but there is evidence of a manufacturing recovery, and, if that is borne out, it is of course welcome. One indicator of recovery is an increased domestic demand for steel, and I am concerned that the international situation could constrain that recovery just as it begins.
As several Members have mentioned, we must address the issue in the EU. The most important thing is to ensure that we do not impose short-term constraints that would make the problem worse. We must consider what can be done to increase the overall supply of ore, steel, scrap and resources. It can be done. Perhaps we have been short-sighted, but we seem to have been taken aback by the impact of growth in China. We had been discussing and acknowledging it for years, but no one was evaluating what its impact would be.
I was privileged to visit India recently, and I will declare in the Register of Members' Interests that effectively my trip was paid for by the Indian Government. They wanted to show us their high-tech developing economy, which includes car making. Tata Industries in Mumbai is making the new, small, commuter Rover, the City Rover, which is an adaptation of one of their Indian-made cars. If Indian manufacturing is moving into the truck, bus, car and other metal-using markets, its increased use of steel will add to the increased use we have seen in China. It is not in our interests to discourage that or to constrain the dynamics of Indian and Chinese success; it is in our interests to find ways to accommodate it and adapt to it.
The population of India is more than 1 billion, but two thirds of the world's poorest people are in India. With 260 million people there living on less than a dollar
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a day, Indian expansion has a long way to go before it transforms the lives of those millions of rural poor. I would not support any policy that placed any constraint on the ability of China and India to improve the standard of living of their population.
This debate has been very good. We must address and resolve the bottleneck problem, but we must do so in a way that does not damage trade or our manufacturing recovery.
10.39 am
Mr. Andrew Mitchell: I am delighted to take part in the debate both as a spokesman for my party and as a west midlands Member of Parliament. I congratulate the hon. Member for West Bromwich, West (Mr. Bailey) on the way in which he presented the debate and on raising a subject of importance to the whole country as well as to the region in which he and I are Members of Parliament.
I welcome the general agreement across the Chamber on the diagnosis that the hon. Gentleman put before us. Although the hon. Member for Burnley (Mr. Pike) widened the debate beyond the west midlands and the hon. and learned Member for Dudley, North (Ross Cranston) returned it to the west midlands, there is agreement among us on what the problem is.
One point that I had not appreciated before the debate was the extent to which there appears to be agreement among us that protectionism is not the right way to proceed and that free trade enriches all nations on the planet. That is perhaps why I, followed swiftly by the Minister, intervened on the hon. Member for West Bromwich, West, to ask him to clarify what he had said about South Korea. It was not immediately clear whether the hon. Gentleman was urging us to follow the Koreans and protect our domestic industry or whether he felt that such activity increased the world price of such commodities and should not be permitted, as I think he was suggesting.
I want to make it clear that I am an unashamed, unabashed supporter of free trade as a way of enriching some of the poorest people on the planet, to whom the hon. Member for Gordon (Malcolm Bruce), the spokesman for the Liberal party, referred. It is free trade that offers them the route out of poverty, not protectionism.
The hon. Member for West Bromwich, West was right about the scale of the problem that he outlined. He said that the cast metal industry employs 34,000 people in the UK and produces 1.2 million tonnes of castings, with an output value of more than £2.2 billion a year. He mentioned the large number of companies involved in the business—about 580—of which 80 per cent. are SMEs and nearly half employ fewer than 50 people.
One of the key issues raised was the price of the furnace charge raw materials used by the industry. Such raw materials are all internationally traded commodities, with prices reflecting changing patterns in supply and demand on a month-by-month basis. The Cast Metals Federation has indicated that, with steelworks using a similar mix of materials, the escalation in international scrap prices is a direct result of the increase in the world demand for steel. The federation has suggested that the increase is due largely to high demand for raw materials in China, which was

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a point that the hon. and learned Member for Dudley, North eloquently made. Another point of common agreement in the debate has been about the massive impact of China and, to a lesser extent, India on our economy and on the world economy. We have only begun to glimpse the effect of growth in China and India. They are huge economies, with high growth rates, which will have a marked effect on the world economy.
I was reminded of an incident involving a senior Chinese tax official—hon. Members may have heard about this—who recently negotiated a bilateral tax treaty with a European country. He told his interlocutor that he employed more people in his department than were resident in the country with which he was negotiating. What is happening in China will have substantial impacts on our economy and Europe's economy.
I reinforce a point that many Members will be aware of and of which I recently became aware, owing to a survey among business men that I conducted in Sutton Coldfield. There are things that the Government can do to help all businesses to deal with the costs that they face. I am talking about regulation and taxation, both of which have a direct impact on the cost base that companies face. In the west midlands there is a feeling, which I am sure Labour Members share, that southern-based decision-makers often make decisions that are southern England-centric. We would like more of the Department of Trade and Industry to relocate to the west midlands so that we can connect much more directly with it and ensure that it fully understands the pivotal importance of manufacturing to our region. About 20 per cent. of jobs in the west midlands are in manufacturing and although it is understood that the number may decline in coming years, I hope that the level of manufacturing by value will not do so.
Transport is very important, and I welcome the Government's decision to make extra funds available to the west midlands. However, I urge the Minister to consider the fact that funds are made available only in a very prescriptive way and cannot, for example, be spent on road or rail. That, too, has a significant impact on the industry.
The road transport directive, which the Government are due to implement by March 2005, will also have a direct impact on the matters before us, and I am concerned about the possible threat to the cast metal industry. The directive, which will increase restrictions on the working hours of mobile workers, is likely significantly to increase costs to the industry and to those who rely on heavy goods vehicles. The Road Haulage Association estimates that the directive will cost companies at least £7,000 per driver and that operational costs in the UK will increase by £3.8 billion in 2005 and £24.8 billion in the period to 2010. The association also estimates that, at a time when it is difficult to attract and retain drivers, at least 60,000 additional drivers, and between 8,000 and 12,000 additional trucks, will be needed. The Quarry Products Association has outlined similar problems with the directive, of which I am sure that the Minister is aware. It is apparent that the directive could present a damaging threat to the industry, and I would like to be
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assured that the Government do not intend to gold-plate the directive, as they have seen fit to do in so many other cases.
Mr. Sutcliffe: The hon. Gentleman will know that the directive is currently with the Department for Transport, and negotiations and consultations are taking place with the various organisations involved.
Mr. Mitchell: I am very much aware of that, but the Minister will know that the issues would be well put by his Department. I hope that he will undertake to ensure that his colleagues in other Departments understand the directive's effects, about which the industry has eloquently told us.
To conclude—hon. Members will want to hear the Minister speak for longer than me—it is important to understand the negative effects of the Government's regulation policies on industry. The Conservatives are committed to a free trade solution to the problems before us and will support the Minister in ensuring that the WTO bites, and that nations that introduce protectionist measures, which cause some of the problems outlined by the hon. Member for West Bromwich, West, are strongly encouraged to desist from implementing them. Such measures neither enhance their trade policies, as was recently shown in America, nor help the poorest people, whom we want to prosper as a result of free trade.
10.48 am
The Parliamentary Under-Secretary of State for Trade and Industry: I thank the hon. Member for Sutton Coldfield (Mr. Mitchell) for giving me a little extra time to respond to the debate, because many issues have been raised, particularly by my hon. Friends, and I want to respond as best and as quickly as I can.
I congratulate my right hon. Friend, or rather I should say my hon. Friend the Member for West Bromwich, West (Mr. Bailey)—I am sure that he will be a right hon. Friend some day—on raising this important issue. Through his involvement with the all-party group on cast metal, he has since he was elected taken the issue forward in as many ways as he can.
I am also grateful for the contributions by my hon. Friend the Member for Burnley ( Mr. Pike), my hon. and learned Friend the Member for Dudley, North (Ross Cranston), my hon. Friends the Members for Telford (David Wright) and for Wolverhampton, South-East (Mr. Turner), and the hon. Members for Gordon (Malcolm Bruce) and for Sutton Coldfield (Mr. Mitchell). There were also extremely important interventions from my hon. Friends the Members for Erewash (Liz Blackman) and for The Wrekin (Peter Bradley). They all showed their knowledge of this major issue. From the tone of the debate, one might think that it principally affected the west midlands, but, as my hon. Friend the Member for Burnley said, it is a national issue.
I know that my hon. Friend the Member for West Bromwich, West met the Minister for Industry and the Regions recently. I am not standing in as her deputy, but as the Minister for Employment Relations, Competition

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and Consumers, I am aware of some of the issues that have been raised this morning in connection with jobs and the industry's culture.
I was sad that my hon. Friend should mention that Keighley castings went to the wall. It was in a constituency that neighbours mine, and I was well aware of the impact of its closure on the industry. However, I was pleased to hear that Eurotech Industries at Wednesbury has received an award. I, too, express my congratulations to the company on its excellent work in a difficult and competitive industry.
I want to talk about my foundry experience. As a 19year-old, I applied for a job in a foundry, never having seen one before. The experience of going round it was a shock, to say the least. I have nothing but awe for those who work in the industry and for the hard work that takes place there.
As hon. Members have said, the cast metal industry lies at the centre of the United Kingdom's industrial heartland—both figuratively and geographically. It plays a crucial role in many of our key manufacturing industries, supplying cast metal components for a variety of consumer and industrial applications. It has a significant input to the automotive supply chain, which accounts for 50 per cent. of the castings produced. It is a significant employer and contributor to the UK economy.
According to official statistics, in 2002 the industry employed 24,000 people, generated a turnover of £1.65 billion, and contributed a gross value added of £708 million to the UK economy. I understand that those totals may be even higher when in-house facilities, and companies working exclusively to a specific end-user industry, are taken into account.
I listened carefully to my hon. Friend's expression of concern for the industry's future, for its employees and for the communities in which they live. I recognise that the cast metal sector remains an increasingly difficult market in which to operate. Traditional markets in UK manufacturing have globalised, and UK producers have become exposed to fierce competition from around the world. That has resulted in significant rationalisation since the mid-1980s. The sector also faces stiff competition from imports, particularly from low-cost countries such as India and the far east, where low labour costs, the exploitation of economies of scale and the latest technology have given those producers a competitive advantage.
I can well understand the industry's concern, which has been brought about by recent developments in the price and availability of raw materials, particularly ferrous scrap, which is the raw material used to produce approximately 40 per cent. of the world's steel. The availability of scrap is related to levels of industrial development. Countries such as the UK, with a long history of manufacturing, are major collectors and processors of scrap. Traditionally they are also exporters. By contrast, newly industrialising countries such as China do not have sufficient domestic supplies of scrap and must therefore import. As my hon. Friends said, it is generally known that China's steel-making capacity is increasing rapidly.
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The growth in the Chinese economy, particularly in steel consumption, has been quite startling. Over the past four years, China has been responsible, either directly or through imports, for over 90 per cent. of world steel growth. According to the Iron and Steel Statistics Bureau, Chinese demand for steel increased by an estimated 22 per cent. between 2002 and 2003, and it is forecast to grow by a further 13 per cent. this year. Overall, world consumption went up by 6 per cent. in 2003, and a further rise of 6 per cent. is expected in 2004.
China currently consumes 50 million tonnes of scrap, 20 per cent. of which is imported. This year, China's imports are forecast to grow to 15 million tonnes—a 66 per cent. increase. Add to that the appetite for scrap in other countries, such as Turkey and South Korea, and the global supply becomes tight, leading to the recent unprecedented price increases.
The rapid expansion of economic activity in the far east has had a similar or even greater impact on the market for other basic materials; for example, coke, ferro-alloys and non-ferrous metals. It seems that the sheer pace of Chinese demand in recent years has caused a considerable upset to the traditional balance of supply and demand.
I accept that those developments are causing problems for all users of scrap. I acknowledge that the situation has brought about hardship for some UK cast metals producers, as they have limited scope to pass those price rises on to their customers. However, no one suggests that it is being caused by anything other than the normal operation of market forces, so I am sure that hon. Members would agree that, in the circumstances, it would be undesirable for the Government to intervene.
Mr. Mitchell: I fully understand what the Minister is saying and he is obviously right. Will he tell us what steps the Government are taking to raise with the South Korean Government the importance of not pursuing a protectionist agenda?
Mr. Sutcliffe: I shall come to that point. I am trying to race through my brief to deal with the points that need to be covered. I will deal with the WTO and the EU; today's debate is vital and I will give whatever answers I can. I will pass on to my hon. Friends in the DTI and the Treasury, and to the Prime Minister, information on the various negotiating routes in the EU or the WTO to ensure that the impact of today's debate, and of future meetings that hon. Friends hold with Ministers, is that we continue to work with the industries involved to find a solution.
Although we are able to diagnose the problems, the solutions are more difficult, as my hon. Friends and the hon. Member for Sutton Coldfield have said. We welcome the WTO rules and it is important to raise concerns with that body if we identify problems. We feel similarly about our EU colleagues, and the meeting on 21 April will be an opportunity to raise industry concerns and ensure that we consider what can be done. Measures have already been taken against non-EU countries that have not been playing the game.
The rate of increase in prices has been a problem for the industry. My hon. Friend the Member for Burnley raised the issue of insurance. He will know that the Department for Work and Pensions and my

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Department have been considering matters such as employers liability insurance. We need to do something about that and we are having discussions on the matter. A document was published in December considering what can be done to solve some of the problems that industry faces.
The hon. Member for Sutton Coldfield said that the matter was all about the burden of regulations; I do not accept that. I do not have time to issue the challenge that I normally issue to Opposition Members: to name which particular employment regulations they do not wish to apply to UK workers which are available in the rest of Europe.
As a member of the European Community, the UK is not able to take unilateral action on trade matters. Decisions that impact on or affect the European Community's commercial policy are taken collectively by the European Commission and member states working closely together. We are liaising closely with the Commission on that important issue.
To obtain a fuller understanding of the issues we have asked the Commission to prepare an analysis of the impact on the European industry of the current ferrous scrap price trends. That document is due to be discussed in Brussels on 21 April. The UK will ensure that the matter is handled with the seriousness that it deserves. We are aware that Eurofer, the trade association representing the interests of European steel-makers, has proposed the establishment of a monitoring system for Community exports of ferrous scrap, but we understand that that has been rejected.
We are aware that certain sectors of the US steel industry are experiencing difficulties similar to those in the UK. The Government are also aware of rumours that the US Administration are contemplating some form of initiative to restrict or limit scrap exports. I can inform my hon. Friend the Member for West Bromwich, West that as of today no such steps have been taken by Washington. We are not aware of any specific proposal from the US industry. We shall continue to monitor the situation in the US and elsewhere closely.
Hon. Members can rest assured that the Government will take all necessary steps, within the WTO and elsewhere, to secure the removal of any measure taken by the US or any of our other trading partners to limit scrap exports. In our view it is in the best interests of all stakeholders that an open and transparent global market for ferrous scrap is maintained. It is important that we respect the free trade rules of the WTO. We did so when the US took the action that it did under section 201.
The debate has been vital, but there is a long way to go. It was important that my hon. Friend raised it in the way that he did. I shall write to hon. Members about the issues that I have not been able to address to ensure that they know what the Government are doing about this important issue. I shall ensure that there is no underestimation of the Government's—
Mr. Deputy Speaker: Order. We must turn our attention now to the next topic on which we must focus today, which concerns the death of Mr. Steven Fitzsimmons.

Mr. Steven Fitzsimmons
11 am
Mr. Brian H. Donohoe: This is an occasion that I wish that none of us had to participate in. However, it is an opportunity to express my sincere condolences to the family of Steven Fitzsimmons. I thank the Minister and her staff for all the work that has been undertaken between my making a request for this Adjournment debate and today's debate. I have found the staff and the Minister most helpful.
When Mrs. Fitzsimmons first came to see me, I treated the matter as one of a mother grieving for her lost son, but on the basis of the inquiry, as it unfolded, and all the information that came my way, I began to have doubts about some aspects of the case and some of the notes that had been taken. It is that issue that I want to concentrate on this morning.
As I understand it, Steven Fitzsimmons left Irvine to watch his two favourite teams play in a testimonial game. Celtic were playing Manchester United. He travelled by train from Irvine and got on a train at Glasgow going to Manchester at 12.30 pm on 31 July. Apparently, he travelled by train and not on the Celtic supporters bus because he had a twisted spine, for which I understand that he was taking quite a degree of medication. He stayed overnight at the house of Brian Gallagher's mother, Irene Gallagher, who lives in Manchester at 226 Graeme street.
The next morning—the morning of 1 August and the day of the match itself—according to Mrs. Gallagher's statement, Steven got up at 8 am, had his breakfast, went for a shower and at 11 am went outside to lie in the sun. According to Mrs. Gallagher's statement, at 2 pm her nephew, Jack Gallagher, and Brian Gallagher, with whom Steven had travelled from Irvine, moved Steven from the right hand side of the garden to the left hand side since it was a very hot day. They put Steven in the shade to prevent him from getting sunburn. She said:
They lifted him and he just made a few groaning noises.
They left him. The first question that arises is: why did they leave him? Why did they not try to do more? Alarm bells should have been ringing at that point.
Steven had, after all, a ticket for the game. That is now a proven fact. As I understand it, he went to see Kenny McCleary, who is the Irvine Celtic supporters club secretary, some two to three days before the game and collected his ticket from him, paying him £21. I have all the verification of that; it is not in doubt. Mrs. Gallagher says in her statement:
At 18.15 hours that day I got in a taxi from my home address to go to Old Trafford"—
the locus of the football game—
to watch the match. Steven was still in the garden.
I think that almost bizarre. We are talking about a boy who has come all the way down from Irvine to watch the game. He has got a ticket and they know that, yet they leave him to lie in the garden and Mrs. Gallagher goes off to the football game.
At approximately 23.15, a neighbour, Mr. Neil McGowan Frame, who had been babysitting for Mrs. Gallagher's grandson, who had travelled down from Irvine as well, apparently calls an ambulance. That

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happened five hours after Mrs. Gallagher had left by taxi. To give him his due, the man had tried to wake Steven on a number of occasions, but he had failed. Again, one has to pose the question why he did not react more quickly.

I also want to know about the conversations between Mr. Frame, Mrs. Gallagher, Brian Gallagher and others. There is no record of them whatsoever. One would have thought that there would have been in such circumstances. However, we just do not know what those conversations were.
One would also have thought that much more would have happened than did. Action should have been taken and more assistance given. One thing that is certain is that it was subsequently discovered that Steven Fitzsimmons's ticket for the game was not on his person. No adequate check has been made to establish whether it was used. Money and jewellery, Mrs. Fitzsimmons alleges, were missing, never to be found. Steven Fitzsimmons died as a consequence of events that are unexplained.
Brian Gallagher does not appear from the record to have been interviewed by the police at the time or subsequently. PC Picton's statement of 22 February 2004 states:
I have attempted to contact Brian Gallagher to ask him about Steven Fitzsimmons' ticket. I have liaised with Irvine police in Ayrshire who attended Brian Gallagher's last known address on my behalf. He no longer lives at the address and unfortunately there is no forwarding address for him. Gallagher's mother states that she has no contact details for her son.
Again, that seems strange, almost bordering on the bizarre. The question has to be asked: why not? I am sure that had Brian Gallagher been interviewed, most if not all the outstanding issues that pose questions and have no answers, so far as Mrs. Fitzsimmons is concerned, would have been addressed. Today's debate would perhaps not have been required.
There were also other discrepancies. The adult postmortem report, under clinical history, indicated
following alcohol and drug intake.
However, the subsequent toxicological report stated "negative for alcohol". Why the discrepancy? Steven Fitzsimmons was diagnosed as having consumed a cocktail of drugs, including methadone. Where did he get the methadone? I have asked Home Office officials to try to establish that. I do not know whether there are any answers, but I know one thing for certain. Having talked to some of those in the medical profession locally who knew him, including his GP, I know that none of them was aware that Steven was prescribed methadone, and there is no record of it having been prescribed. It is my understanding that methadone is normally prescribed and taken on premises, so I do not know how the methadone got into the person as established by the reports. One has to pose the question of where Steven got that methadone.
Mrs. Helen Fitzsimmons, Steven's mother, believes that foul play took place. One can see why, because of the unanswered questions, although one could easily apply the science of the conspiracy theory. We need to get to the bottom of this, to establish what the facts were, and we need a remedy to answer all the questions to satisfy Helen Fitzsimmons in part.
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As a remedy, I would suggest that we look at the whole question of some kind of investigation, say by the coroner, that would reopen the case and establish the reasons for death and the answers to some of the questions. Why do we need that? Well, the facts as we know them need to be explained. The suspicions of the boy's mother need to be addressed. I am looking forward to the Minister's answers and I also want to know something about what action is likely and how, some two to three years after the event, this outstanding matter can be resolved.
11.10 am
The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears): I am very grateful to my hon. Friend the Member for Cunninghame, South (Mr. Donohoe) for raising this matter and expressing his concerns about the death of Steven Fitzsimmons. He has raised important questions and I shall do my best to deal with them. However, clearly those matters do not necessarily concern the Home Office directly. They are also the preserve of Greater Manchester police and the coroner.
It is, of course, important that family and friends can have confidence in the answers that they are given following the tragic death of a loved one. I hope that today's debate will assist in bringing comfort and reassurance to Mrs. Fitzsimmons and Steven's family and friends. I entirely understand that, while these matters are in the air, it is difficult for Mrs. Fitzsimmons, in particular, to feel a sense of confidence in relation to the issues surrounding her son's death.
During any investigation it is for the police to determine their lines of inquiry. They are the arbiters of the most reasonable way to conduct an inquiry. It is part of their operational discretion. I know that my hon. Friend is fully seized from his own experience of the relationship between the Home Office, the police and the police authorities.
When there is a death requiring an inquest, the coroner may guide the police in their inquiries and instruct them to make any inquiries that he or she considers necessary to inform the inquest before a decision is reached on the cause of death. That is what happened in this case, so the coroner has been fully involved.
It would riot be appropriate for me to offer comment or make a judgment on decisions taken by the police or the coroner. There are lines of investigation and review for both of them. However, I am conscious that there have already been numerous communications between my hon. Friend and Greater Manchester police, so that much of what I say now may not be new to him. I hope, nevertheless, for a better understanding between us of the remaining issues.
The coroner's verdict was of accidental death and I am informed by Greater Manchester police that they remain satisfied that that was an appropriate verdict. However, the Manchester coroner has agreed that if my hon. Friend or indeed Mrs. Fitzsimmons make any inquiries of the coroner's office, the coroner will seek to provide any information that might be helpful.
If Mrs. Fitzsimmons is dissatisfied with the outcome of the inquest and the verdict of accidental death, it is of course open to her to seek a fresh inquest. That is the

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appropriate route to take in such circumstances. It is possible for an application to be made to the High Court under section 13 of the Coroners Act 1988, with the authority of the Attorney-General. I would recommend that if such action is being considered, Mrs. Fitzsimmons and my hon. Friend should be informed by discussions with the coroner and by appropriate legal advice.
It is, of course, understandable that loose ends in any case lead to concern and distress for the parties involved, so I shall try to deal with the issues raised by my hon. Friend.
Mr. Donohoe: May I establish whether there is a cost implication to the applications that would be needed to have the case reopened?
Ms Blears: If an application were to proceed to the High Court, I am sure that Mrs. Fitzsimmons would need legal representation, so it would be necessary to explore the possibility of obtaining legal aid or whatever assistance might be available. That is why I would advise Mrs. Fitzsimmons to discuss the matter first with the coroner's office, if she is considering such action, to establish the basis on which it could be pursued, and to obtain initial legal advice before embarking on the significant course of reopening the inquest and seeking a fresh verdict. She may well not want to pursue that course of action, provided she gets answers to some of the issues raised by my hon. Friend. That is the appropriate legal route to challenge the verdict of accidental death if she really believes that that was an inappropriate verdict.
I appreciate the concern that Steven was apparently in the company of other people for a considerable time before it was recognised that anything was wrong and an ambulance was called. I am unable to offer a comment on the circumstances of that, but my hon. Friend was right to raise the issue of what had happened to Steven during the day and in the evening, and that an ambulance was not called until quarter past 11 at night. Those are matters of concern, but I am informed by Greater Manchester police that they still hope to speak to Steven's friend, Brian Gallagher, who was present. They are happy to keep my hon. Friend informed if they can answer any specific questions about what happened in the chronology of events on that day.
I am informed that Mr. Gallagher is not at this time suspected of offences by Greater Manchester police, but they tell me that he has been registered on the police national computer in an attempt to locate him. As my hon. Friend said, Mrs. Gallagher says that she does not have a forwarding address and it is important that Greater Manchester police continue to try to find him with the purpose of interviewing him about Steven's death. He clearly spent a considerable amount of time with Steven, so it is important that the police interview him.
Greater Manchester police are also pursuing enquiries with the Benefits Agency to try to locate Brian. Irvine police have made attempts to locate him by following up his last known address. A great deal of work is going on and the matter has not been laid to rest. Inquiries are ongoing, and I hope that that is some comfort to Mrs. Fitzsimmons.
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At this point, Steven's friend is not a suspect, so the police must be very careful about how they approach Brian Gallagher if he is to provide information that is useful. He may well be fearful of speaking to the police at this point and if my hon. Friend has further information that could be useful to the police, I urge him to share that with them. It is important that the interview takes place and that information is gathered about exactly what happened to Steven on that day if it is to be of assistance to Mrs. Fitzsimmons.
My hon. Friend referred to Steven's match ticket and I understand that there is an issue about missing jewellery. I am informed by Greater Manchester police that both Manchester United and Celtic football clubs have been contacted about the match ticket. Unfortunately, neither club has the means to confirm whether Steven's ticket was used. Inquiries have been made and the clubs have pursued the matter, but presumably neither of them has an information technology system that is able to trace the number of the ticket. At this point, we cannot confirm whether the ticket was used by any other person to gain access to the match.
Property inquiries have also been made at the Manchester royal infirmary, the bereavement centre, the mortuary and the cashiers office, but there are no records relating to the missing property. Again, I assure Mrs. Fitzsimmons that Greater Manchester police made inquiries with all those bodies to see whether the missing jewellery could be found, but, at the moment, there are no records.
The mother of Brian Gallagher has been interviewed. As my hon. Friend said, she occupies the house in which Steven stayed the night before his death. She was unable to provide any further information about whether the ticket had been used or what had happened to the jewellery, so she was unable to give that information to the police.
It seems that the key to providing the answers to many of the questions about this matter is with Steven's friend. His interview is crucial and efforts to trace and interview him are still ongoing. I will ensure that my hon. Friend is kept informed as those inquiries develop and provided with any new information about what happened that day.
My hon. Friend raised the important issue of the coroner's findings on drugs and alcohol. I am informed that the toxicology report referred to a cocktail of drugs—cocaine, methadone, cannabis and benzodiazepines—in Steven's body. At this stage, no one knows where the methadone came from, and my hon. Friend believes that it may be possible to contact the relevant health board to find records of the possible source.
If my hon. Friend wishes to pursue the matter, it would be a good idea to get in touch with the coroner, who published the findings of the post-mortem and toxicology screen. The coroner was contacted by my officials and said that he would be happy to provide any further information that he can about the circumstances surrounding Steven's death. For Mrs. Fitzsimmons's sake, it would be a good idea to get in touch with him to discuss the findings and try to ascertain the reason for the initial reference to alcohol that was then not

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substantiated by the medical tests. That would be a fruitful course of action for my hon. Friend to follow, and I am sure that he will do so.
I have little further to add, other than to express my sincere condolences to Steven's mother, family and friends for their tragic loss. I entirely understand that, because there are still loose ends, Mrs. Fitzsimmons feels that it is difficult to close the case. The fact that the death occurred at a distance from the rest of the family—Steven was hundreds of miles away in the company of others—has caused real problems for them. I hope that the further inquiries of the Greater Manchester police, particularly the interview with Brian Gallagher, will bear fruit and bring reassurance to the family. I also hope that the discussions with the coroner will result in progress and give the family reassurance that the matter has been dealt with properly.
Mr. Donohoe: Can my hon. Friend the Minister give some indication, if not today perhaps by contacting my office later, as to who to contact in the coroner's office? The information that I have gives two or three names, and it is difficult to track down the person to contact.
Ms Blears: I am more than happy to provide that information. I said at the outset of the debate that it would be inappropriate for me to comment on operational decisions of the coroner and the police, but I believe that it is appropriate for me to facilitate my hon. Friend's pursuing the matter on behalf of his constituent. As this is an important constituency case, I shall ensure that my officials and I do everything that we can to provide information and assistance to him. We shall get in touch with his office with the names of the relevant contacts and do whatever we can to facilitate a meeting so that the matter can be properly and thoroughly explored.
I am delighted that my hon. Friend raised this extremely important issue, and I hope that we are able to help the family to achieve some resolution of the outstanding matters. I am grateful to him for the manner in which he has pursued this difficult and potentially contentious issue. His co-operation with all the authorities involved will lead to a better resolution.
11.24 am
Sitting suspended until Two o'clock.

Horse Exports
2 pm
Gregory Barker: Good afternoon, Mr. Deputy Speaker. I begin by declaring an interest. I was brought up with and around ponies; I am today the proud owner and part owner of two horses; and I am actively in the market for a suitable little shaggy pony for my four-year-old daughter. So, I cannot pretend to come to this debate from a dispassionate and objective viewpoint.
I feel very strongly about this issue and so should anyone concerned with not only riding, but the wider agenda of animal welfare. I find the prospect of the live export of British horses and ponies to the meat trade of continental Europe an abomination. Although we can be encouraged by the noises emanating from Strasbourg yesterday, we must be in no doubt that the resumption in the trade must be stopped. The Government will ignore the growing anger of thousands of horse lovers at their peril.
The Minister for Rural Affairs and Local Environmental Quality: The hon. Gentleman and other Members know that the Government's objective is to prevent the development of a trade in live horses for slaughter. Will he explain why he thinks that one might emerge?
Gregory Barker: I am sorry, but I am not at all clear about what the Minister is getting at. I do not think that we disagree about the Government having an objective, however like so many things with this Government, they have targets and objectives but they are very rarely met. We are concerned to ensure that the objective is met and that before the current regime is ended, there is a strong, reliable and robust regime in place. I had exactly that concern last Friday when a Minister in the Department for the Environment, Food and Rural Affairs failed to turn up for my debate on GM crops. In a way, that is a totally separate issue, but it is in fact similar. The Government may share the objectives but everyone concerned must be sure that the objectives are robust and will be followed through.
Mr. James Gray: Will my hon. Friend give way?
Alun Michael: Will the hon. Gentleman give way?
Mr. Deputy Speaker: Order. This is not a bar room. Will you indicate to whom you are relinquishing the Floor, sir?
Gregory Barker: I give way to my hon. Friend the Member for North Wiltshire (Mr. Gray).
Mr. Gray: I was going to suggest to my hon. Friend an answer that he might have given the Minister. Does my hon. Friend agree that not allowing a market in horses to develop on the continent of Europe is quite different from introducing an absolute, outright ban, which is what we seek?
Gregory Barker: That is the point, and I am sure that the Minister will respond when he has a chance a little later.
Alun Michael: The hon. Gentleman asked about whether the Government have objectives. The answer is

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yes, and we deliver on them. We are delivering on the objective of preventing the development of a trade in horses for slaughter. That is the priority, rather than giving an appearance of dealing with the issue, which is the great risk.
Gregory Barker: I do not want to pre-empt our hourand-a-half debate by jumping around from issue to issue. I am sure that the Minister will address those points, but perhaps we may continue in a more logical fashion.
I pay tribute to the remarkable and tireless campaign conducted on behalf of horses and ponies throughout the country by my hon. Friend the Member for North Wiltshire. His arrival at the Houses of Parliament today mounted on a fine-looking horse is just the latest of his efforts to raise the public's awareness of what could be an impending disaster for British horses. He also hosted an excellent International League for the Protection of Horses reception to highlight the dangers of impending changes.
My hon. Friend the Member for New Forest, West (Mr. Swayne) has been equally tenacious in the battle to get the Government to see sense and stand up for British horses and ponies—he even took the issue up with the Prime Minister in the House last week.
Mr. Desmond Swayne: My hon. Friend is very kind. Does he agree that I was right to be surprised when the Prime Minister did not provide an immediate answer to my question, but had to write to me subsequently? Only a few weeks earlier, he had received a 60,000-signature petition on that very question.
Gregory Barker: My hon. Friend's point is extremely well made. The Minister says that the Government have objectives, but last Wednesday the Leader of the Government was totally oblivious to that big campaign and the serious and deeply felt worries of horse and pony owners. That is why those of us who are concerned about animal welfare are worried.
Whatever warm words the Minister comes up with, the matter has not even registered on the Government's agenda and may be bumped out of the way by other priorities and crises as they come along. We are here today, first and foremost, to put the matter at the heart of the Government's agenda for the next 12 months. We must ensure that they do not get distracted, that they take the matter seriously and that they listen to the concerns of horse and pony lovers throughout the country.
Like my hon. Friends the Members for North Wiltshire and for New Forest, West, I believe that hundreds of thousands of people throughout the kingdom, regardless of political persuasion—I am pleased to see Members from other political parties here today to voice their concern—would find it unforgivable if the Government allowed the resumption of horsemeat trading to sneak through. That trade was stamped out by Stanley Baldwin's Government back in the 1930s.
The horse holds a special place in the affections of the British people, particularly our children. Pony ownership is not the preserve of a privileged few, but a
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sport and hobby for hundreds of thousands of people. Indeed, for many young families, it is a way of life, and financial sacrifices are often made to keep the family pony. A wonderful informal network ensures that elderly ponies are often passed from generation to generation and to new young riders, often for next to nothing except a guarantee that a much-loved family friend will be cared for and looked after responsibly by its new owners. In that way, thousands of families—many of limited means—can enjoy all the fun, happiness and responsibility of owning a pony.
That happy status quo is threatened by the exposure of Britain's ponies to the predatory and insatiable demand of the continental horsemeat market. The market for horsemeat in Europe is not a figment of the British imagination, nor a product of Europhobia. Every year, about 165,000 horses are subjected to horrific journeys, travelling thousands of miles to the EU from eastern Europe or being transported long distances within the rapidly expanding EU, which now stretches from the Baltic to the Atlantic. They are frequently transported in appalling conditions with little or no water or rest, only to be slaughtered when they reach their final destination. The majority of those horses are destined for Italy, which annually imports between 85 and 95 per cent. of Europe's market in live horses. We must not allow our British horses and ponies to suffer the same fate.
Let me remind you, Mr. Deputy Speaker, of the basis of the current rules governing the export of ponies and horses.
Mr. David Drew: I thank the hon. Gentleman for allowing me to intervene before he moves on. I entirely support what he and the hon. Member for North Wiltshire are trying to do. I apologise, as I shall not be here for the rest of the debate—I have to chair the Select Committee inquiry on milk. Does the hon. Gentleman accept that it is no good isolating the live export of horses and that we should campaign strongly against the export of all livestock that goes from these shores and elsewhere in Europe? I hope that the Opposition also take up that cause.
Gregory Barker: The hon. Gentleman makes a sensible point, but I want to concentrate on the clear danger facing us today from the live export of horses. I am grateful for his cross-party support, which is much appreciated.
The Exportation of Horses Act 1937 forbade the export of live horses under a certain value from our shores. The minimum limit was deliberately set well above the carcase value and the Act has successfully prevented UK horses from being exported live for slaughter. The European Union granted a dispensation to the UK for that to continue after the creation of the Common Market. That dispensation expired in 1995, but remained part of UK law. Unfortunately, it seems that the Government will not again seek the derogation that we acquired in 1995 with the result that the minimum value legislation is in danger of being lost in the European courts. The overall effect of that would be to allow ponies and horses of any value to be exported from the UK for slaughter. We must not allow that to happen.
Mr. Ian Liddell-Grainger: My hon. Friend is putting the case eloquently, but there is one area that concerns me: the indigenous horses of Exmoor, Dartmoor and Bodmin moor, which do not have any protection at all because nobody owns them. They are herded and used for overseas trade. Does he think that we should pressure the Government to close that loophole as well?
Gregory Barker: My hon. Friend makes a good point, and I know that he probably speaks for the whole west country in raising that issue. I do not for one minute pretend that the minimum value legislation is a satisfactory regime for caring for horses and limiting the trade in live exports in the 21st century. It is without doubt in need of updating, and we need better legislation to govern the welfare of horses, but as things stand it is the only game in town and we do not want those protections for horses to go without having something equally robust, if not better and more appropriate, in their place.
Andrew George: The hon. Gentleman is certainly making a strong case. He mentioned the debate in Europe yesterday and the agreement to accept an amendment with regard to the draft regulation that will go before Ministers in April. Has he sought advice, or made any assessment, in respect of a comparison between the likely impacts of that amendment and of the Government's proposed solution regarding trained-to-halter restrictions for live exports?
Gregory Barker: I have still to see the full details and to be briefed fully on this matter, but from what I have seen that route seems far better than the rather unsatisfactory DEFRA proposition. I would like DEFRA to grip the opportunity with both hands. There is obviously a great distance between cup and lip when it comes to taking up the proposition from Europe, but I understand that there is no fundamental barrier to prevent Britain from going for it.
Mr. Gray: Perhaps I can assist my hon. Friend—this comes hot-foot from Strasbourg. I understand that the amendments state that it would be perfectly possible for member states to
ban exports of certain species for moral reasons.
They would also allow a total national ban
on the export of live equidae…for production or slaughter.
I am pleased to tell him that in response to those amendments Commissioner Byrne said last night that the Commission supports stricter national rules:
I am pleased that this would effectively maintain the UK's restriction on the export of horses destined for human consumption.
So, the European Parliament and the European Commission are happy for us to go ahead with the ban.
Gregory Barker: I am grateful to my hon. Friend for making the point so clearly. What we can be sure of is that the current DEFRA muddle is the least satisfactory alternative to the minimum value legislation. I hope that DEFRA grips this opportunity from Europe and takes it forward in the manner he suggests.
Alun Michael: While we are seriously considering clarity, has the hon. Gentleman examined what the current regulations ban? They do not, for instance, provide a ban of the sort that Commissioner Byrne seems to think they do. Will the hon. Gentleman explain the moral grounds on which a ban might be founded? It is important to understand the principles of the approach that he is adopting. He is wrong to say that the opportunity is not being gripped by DEFRA; it is being gripped very firmly. However, we need to get at the principles that underlie the way forward and he is right to say that there is a need for the regulations to be updated.
Gregory Barker: If the Minister allows me, that will emerge in my speech, which I am trying to make. I will make some progress, but if, towards the end of my remarks, he feels that I have not covered that point I will happily return to it. To summarise, we need something that specifically addresses the welfare of horses and is not just a by-product of European legislation.
The situation with regard to the live export of horses is further complicated by the imposition of horse passports. Last weekend, to help to prepare my speech, I visited the Brown Bread horse rescue centre in the village of Ashburnham in my constituency. The trustee of the centre, Tony Smith, showed me and my daughter around the site, which does fantastic work in rescuing and looking after unwanted horses and ponies from all around East Sussex and well beyond. The centre has even taken in ill-treated animals from as far away as Greece.
From June, however, sanctuaries and retirement and rescue centres, such as the wonderful Brown Bread centre, will come under massive financial threat from the Government's bureaucratic horse passport scheme, which could drive them out of existence. A lot of people do not realise what a shoestring such operations work on. They have the most minuscule of budgets and there is no flexibility to accommodate a sudden surge in costs. Mr. Smith is subsidising the centre out of his own pocket.
Those centres are so worried because, technically, horse passports are being introduced to protect humans who consume horsemeat by ensuring that records are kept of the drugs that horses have been given to prevent those chemicals from being passed on into the human food chain. As horse passports are designed to protect humans rather than equines, they do not fall under the remit of equine charities. That presents charities such as the Brown Bread sanctuary with serious difficulties. About 80 horses and ponies at Brown Bread will require horse passports and many other similar sanctuaries will face such struggles to fund the cost of the new regulations.
To sanctuaries such as Brown Bread, the cost of up to 80 horse passports will be a huge financial strain. The total cost of completing a passport can easily pass £50 or £60. Although the passport costs a lot less than that, the cost of the various consultations and of implementing the paperwork required makes the total much bigger than the initial cost of the passport suggests.
Mr. Owen Paterson: Is my hon. Friend aware that setting up passport schemes is immensely complex and difficult? In the cattle passport scheme, 100,000 cattle were lost at a cost of EIS million a year, according to the National Audit Office. The horse passport scheme will be hugely difficult, but it would be unnecessary if we kept the ban.
Gregory Barker: I wholeheartedly agree with my hon. Friend, who draws a good example giving a major reason why people in the horse world are so worried by this latest bureaucratic initiative from the Government.
Mr. David Cameron: Will my hon. Friend give way?
Gregory Barker: Certainly.
Mr. Deputy Speaker: I call Mr. George Osborne.
Mr. Cameron: David Cameron, actually, Mr. Deputy Speaker. A dangerous mistake is made.
Does my hon. Friend agree that there is a similarity between the issues of horse passports and of the live export of horses? In each case, we are asking the Minister to take a robust stance on behalf of British horse owners and this country. He must stand up for Britain on horse passports and say that they should not be compulsory because we do not need them. He should also say that we will maintain our current position of a virtual moratorium on live exports.
Gregory Barker: I am grateful to my hon. Friend, who is a keen horseman. He speaks with his usual authority and is absolutely spot on.
The passports will load costs on to the informal market in ponies, to which I alluded earlier, which could serve to drive the animals out of the reach of those young families who want to offer them a temporary home and into the arms of those seeking to buy them to make a quick profit by selling them on to the meat trade. I find it extraordinary that a Government—and, indeed, a Minister—who are prepared to risk a constitutional crisis over foxhunting can be so blind on such a burning and immediate issue of animal welfare.
Only by opposing the export of live horses will we show proper care and respect for horses and properly fulfil the cultural traditions and desires of the British public. We must support the hundreds of thousands of horse and pony lovers in Britain. The Government must persuade the European Parliament and other member states to allow the UK to continue to prohibit the export of all equines for slaughter. They will find that if they do they are pushing at an open door, if they are sufficiently robust and clear about what they are trying to achieve. We need regulations that are right for the 21st century. If that will not work, we must be prepared to take unilateral action to preserve our horses and pets.
Moreover, by aligning our rules with those of the EU, we would do something that runs contrary riot only to the interests of horses, but to the sentiments of the British public. In British culture, the horse is regarded as a companion animal, not a meat source. That goes back to the Minister's point about the moral argument that underpins my case.
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In Britain, the horse is a greatly loved companion, not something that we like to see on the table. We do not eat horsemeat in the UK. We understand, of course, that other cultures have different customs and that some people eat horsemeat. We must respect those customs in so far as they do not cause harm to others, but I strongly believe that the British public would be horrified if we allowed our horses, even by default or with the best of intentions, to join the harrowing horse slaughter trade, in which economics dictates that noble creatures suffer a long, terrifying and degrading final journey.
Andrew George: Does the hon. Gentleman accept that the EU regulations must be tightened up with regard to journey times and the welfare of animals, irrespective of the country to which or from which the horse or pony is being transported? The issue affects not just the EU.
2.21 pm
Sitting suspended for a Division in the House.
2.36 pm
On resuming—
Andrew George: I shall continue my intervention, on which I expect the hon. Member for Bexhill and Battle (Gregory Barker) will have sought advice. It is important that there should be controls in EU regulations on absolute journey times and welfare, not only of ponies and horses transported within Europe, but of those brought to Europe for human consumption.
Gregory Barker: I wholeheartedly concur with the hon. Gentleman. Obviously, with enlargement very much upon us, the European Union is that much bigger and the journey time from, for example, the Baltic states or Poland to southern Italy is very long indeed. I am worried not only that the current regulations are not strong enough, but that they are rarely enforced. We must be concerned about proper regulations and proper enforcement.
Mr. Paterson: My hon. Friend should not hang his hat too much on the benefits of a European directive to limit journey times, as the markets for the animals are nearly all well beyond the eight to nine hours travelling time that the European Union is discussing. I believe that the main markets for horses are in southern Italy, for salami. He is absolutely right to mention regulations, but even regulations for a nine-hour journey would not be adequate, as the journey times are much longer than that.
Gregory Barker: That is another very good point.
Mr. Gray: I am deeply sorry to correct my hon. Friend the Member for North Shropshire (Mr. Paterson), but the European Union proposal is not that there should be a time limit for the journey, but that there should be a gap. The animals would remain on the lorry for a short time to rest, then the journey would recommence. It is perfectly possible that the horses could be on the lorry for many days, albeit with rests in the meantime.
Gregory Barker: I am grateful for that clarification. Either way, we would not wish such a trade or fate on

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British horses and ponies. I hope that we use our influence in Europe to get a derogation to prevent our horses and ponies from being shipped to Europe. Even so, we must be equally robust in Brussels in arguing for strong restrictions on the transport times and in levering up the welfare regulations. I hope that the Minister is taking note of the very strong feelings on the issue.
In short, we must recognise the divergence of cultural habits and traditions between the UK and other European countries, and ensure that the law reflects it, but that cannot be at the expense of horse and pony welfare. It would be a travesty if an attempt to harmonise European legislation meant watering down the regulations on horses.
I have not come here with an inflexible proposition. There are different ways in which the Minister could tackle the problem, but we need far greater clarity and a much more direct approach from the Government. We must continue to prohibit the export of live horses for slaughter, and we must do that by front-door regulation, not by thinking that we can play about and achieve those ends by tinkering with other rules and regulations. I fear that that is what he has in mind.
I want a bold, clear-cut prohibition of the live export of horses and an improvement on the current system. The challenge for the Government is to be clearer, more robust and more straightforward in how they tackle the issue.
Ministers have said that the minimum value legislation that underpins the system will not be repealed until something is in place that is equally robust in law, which will either maintain or improve the protection for our horses. I hope that the Minister takes this opportunity to give the House, and the country at large, a cast-iron guarantee that that is the case and that he takes the clear route that seems to have been offered by Commissioner Byrne and the European Parliament, rather than the more complex route that DEFRA has pursued to date.
In an intervention, the Minister asked what is so different, in welfare terms, about horses and ponies. He shakes his head, but when he addressed the moral question he asked what is different about the moral issue of animal welfare. I promised to come back to him on that before I finished speaking.
Alun Michael: I may have misunderstood what the hon. Gentleman has just said, but I did not ask about the difference between horses and ponies. Is that what he says I said?
Gregory Barker: No, no—not the difference between horses and ponies, but the difference in our culture and the moral difference as between horses and ponies and other types of animal. The Minister shakes his head, but I think that the record will show that that was the gist of his intervention.
Alun Michael: Will the hon. Gentleman give way?
Gregory Barker: Let me complete my speech, because we are getting into a rather scrappy exchange.
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Horses and ponies are an integral, almost unique, part of the British way of life and our culture. They appear in our literature, film, folklore and works of art, and they are an incredibly important part of our pastimes, sports and recreation. We are a nation of horse lovers and we need to recognise that the horse occupies a special place in this country—beyond that which it occupies in other European nations. That is why we need a derogation and an extra guarantee, and that is why our ponies and horses must be protected.
Alun Michael: Will the hon. Gentleman give way?
Gregory Barker: I shall allow the Minister to reply fully in his own time, as I am reaching my peroration.
We must send a clear and unequivocal message from this debate to the meat traders of continental Europe that Britain's horses and ponies must be kept off the menu. We want a clear solution to the problem and we will do whatever is necessary to maintain the current situation.
Several hon.Several hon. Members rose—
Mr. Deputy Speaker: Order. Whereas we would normally commence the first of the three winding-up speeches at 3 o'clock, we must now do so at 3.15 pm to allow for injury time. I hope that hon. Members bear that time limitation in mind when they make their contributions and accept interventions, of which there have been many, or respond to them, which has taken even longer.
2.44 pm
Bob Spink: I congratulate my hon. Friend the Member for Bexhill and Battle (Gregory Barker) on securing this important debate on a subject that touches the hearts of many people in Britain. I hope that we continue to push this campaign over the coming years.
The British people have a special relationship with horses and, indeed, dogs. As my hon. Friend explained, they are companion animals, not meat animals. We simply do not eat them. In that, as in so many other things, we are quite different from the French, and from other continental countries, to which I say, "vive la difference".
This is a matter of improper and unnecessary interference from the European Union. The EU Commission decision 200/68 is a disgraceful imposition on this country. Yet again we see new Labour eager to pander to the EU and its regulations and centralised control in a way that the people of this country increasingly seek to resist.
The horse passport is a disgraceful regulation. It is simply being pursued to feed the cruel and poorly regulated European slaughterhouses—largely to provide horsemeat for the salami trade, which is something that people in this country find repugnant. We should seek to stop the live export for slaughter of all animals from this country, not seek to extend it to horses. There are two clear reasons for that. The first is moral, but the second is economic and that has not yet been mentioned today.

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The moral reason circles around animal welfare. My hon. Friend spoke eloquently about the animal welfare issues. I know that our Front-Bench spokesman will be focusing on it, so I will say no more about it so as to be brief, as you requested, Mr. Deputy Speaker. The second issue is that of sound economics. We need to support the added value on the slaughter and provision of animals for food in this country. The export of live animals for slaughter is equivalent to exporting British jobs. I do not want to see this new Labour Government export any more British jobs to continental Europe, even though they consistently seek to do so.
Public opinion is clear on the issue. They want the export of live horses for slaughter to be prohibited. Anything less will be yet another reason for my constituents, like those of many other hon. Members, to seek to vote the new Labour Government out at the next general election.
Several hon.Several hon. Members rose—
Mr. Deputy Speaker: Order. It is time for a small explanation and a large apology. Due to a foul up by our intelligence services, I am afraid that I must apologise to the hon. Member for Witney (Mr. Cameron) for getting his name wrong. On this occasion, I call Mr. David Cameron.
2.47 pm
Mr. David Cameron: Thank you, Mr. Deputy Speaker. I quite understand. The mistake has also been made by Mr. Speaker. If he can make it, it is quite acceptable for his deputies to do so as well.
I congratulate my hon. Friend the Member for Bexhill and Battle (Gregory Barker) on raising an important issue. He has done so with a great combination of reasonableness and passion. I know that, as a keen horseman, he will be riding in his first point to point over the Easter break. Conservative Members do not want a by-election, so we all wish him the best of luck with that.
I start with two clear propositions. First, horses are companion animals and I do not want to encourage the eating of them. Secondly, the transport of horses for human consumption often results in great cruelty and suffering. As I understand it, virtually no horses are exported from the UK to European countries where horsemeat is eaten. I believe that continuing that should be the aim of all those who care about this branch of animal welfare Those are simple propositions that we would all sign up to.
As I understand it, the Government are proposing two things. The first is to introduce the compulsory passport legislation that my hon. Friend the Member for North Wiltshire (Mr. Gray) and I did as much as we could to oppose. I thought it profoundly misguided to have compulsory passports containing a record of every drug taken by the horse just to facilitate the eating of horses. The second thing that the Government are doing is proposing to end the effective moratorium on the export of live horses from the UK. They say that they hope to get such tough welfare standards approved across Europe that that moratorium will effectively remain in place. I will come on to whether that is true in a minute.
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I want to raise another point, however. The Minister wrote a letter to The Daily Telegraph on 8 February, in which he said:
There is absolutely no connection between horse exports and equine passports.
I am not at all sure that that is true. If every horse in Britain has a passport and that passport shows what drugs have been administered, it surely makes it more likely that those horses can end up in the food chain. If, at the same time, the Government say that the current status of the law about live exports has to change—everyone agrees that the current status of the law means that horses exported from the UK are always on the hook rather than on the hoof—changing the law could change the situation. Our fear is that for some horses it will mean, "Have passport, will travel." That is what we are trying to avoid.
What does the Minister propose to do? It seems to me that the European Commission is in the process of introducing new regulations for the live transport of horses and other animals. They will be by no means ideal but they will probably be an improvement. I accept that. They will make a bad situation in the EU rather better. However, the question for us in this Chamber is what the effect will be on the UK. That is the key question for the Minister when he winds up the debate.
Why will the Government not go down the route suggested by the International League for the Protection of Horses, which is to ask for an opt-out for the UK from the EU rules so as to prevent effectively the live export of horses from the UK? I cannot do better than to quote from the very good briefing that the ILPH has given to Ministers:
The new European rules will not be good enough when you consider that there is no export trade at all from the UK now. In short, the rules will make a bad situation on the Continent a bit better. They must not be an excuse to make a good situation in Britain into a bad one.
That is the nub of it.
I want to make one last point. There is another relationship in the Government's proposals relating to horse passports and the live export of horses. It is quite clear from the Adjournment debate that I held, from the statutory instrument Committee on which my hon. Friend the Member for North Wiltshire and I served and from all the questions that we asked that it was unnecessary to bring in compulsory passports for the UK. The Minister could have fought for a different situation for the UK, where only horses going into the food chain would need a passport, yet the Government gave in. They initially said that we could do that and then they said that it was not possible; they then gave in.
The situation with live exports is similar. We do not want to export live horses for meat. We do not think that it should happen. We think that it is an evil trade—I expect that the Minister would agree. I challenge him, or anyone else, to go out on to the street and find five people who want to see the export of live horses from this country to the continent. They will not find them.
The Minister can go to the Council of Ministers, he can do what is easy and convenient and he can negotiate something that will make life a little better in Europe and a lot worse in Britain or he can stand up and defend his country and negotiate something that allows us to maintain our moratorium on the live export of horses.

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The Minister heard from my hon. Friend the Member for North Wiltshire that the relevant commissioner in the European Parliament has now said that an opt-out for Britain is acceptable, and the Minister has no excuse not to make sure that we can get that opt-out. He likes to style himself as the Minister for the horse. If he is, he will fight for that opt-out and will deliver something that is as good as the status quo for this country. Otherwise, he will not be the Minister for the horse, but the Minister for something else—I fear that he will be the Minister for eating horses.
The Minister failed the test on hunting. He promised things to the countryside that he simply did not deliver, such as listening. He then suddenly said that an all-out ban was a jolly good thing, even though that was not what he initially proposed. He failed the test on passports and he let the country down over that. He now faces a third test, on keeping the situation so that horses cannot be exported live from this country for the meat trade. He has got to pass that test, so I look forward to hearing what he has to say.
2.54 pm
Mr. Owen Paterson: Thank you, Mr. Deputy Speaker, for calling me to speak. I congratulate my hon. Friend the Member for Bexhill and Battle (Gregory Barker) on bringing a topic of enormous interest to the House's attention. I should declare an interest: my family has always owned horses, and I have several now. It might interest my hon. Friend to know that I have an ancient, retired Shetland pony who is vicious at both ends and tends to come into the house for cake, but I think that we should discuss that later.
I would like to help the Minister. The Government are engaged in a big conversation, talking to the country and to interested groups, and we all know that an election is not terribly far away. I introduced an Adjournment debate on ragwort about three years ago in which I established that an enormous number of people are involved in the horse world: three million people ride, and 500,000 households own more than 1 million horses between them. I calculated that the horse industry is probably the second-largest industry in the countryside.
I totally endorse the comments of my hon. Friend the Member for Witney (Mr. Cameron). I have not met a single person who would support the proposal to end the moratorium. There are a lot of horses in my constituency, and when I go home at weekends I go racing, but I have met no one who supports the proposal. It is extraordinary how obtuse and pig-headed the Government have been.
I shall not go through the reasons for keeping the moratorium, because my hon. Friend the Member for Bexhill and Battle went through them in depth. I entirely endorse his comments, and I am sure that that will be reflected in the comments of my hon. Friend the Member for North Wiltshire (Mr. Gray), who has fought an absolutely splendid campaign. There are good reasons not to remove the moratorium or, indeed, to relax it in any way. Only 7,000 horses are eaten in this country, and we have a totally satisfactory mechanism, involving knacker's yards and hunt kennels, for disposing of redundant and dead horses.
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One huge advantage of the Minister taking the opportunity offered by the European Union to take up the derogation would be that we would not have to burden the countryside with the ghastly nightmare—the bureaucratic cost and nonsense—of horse passports. Incredibly, the cattle passports scheme has lost 100,000 cattle. As I said, the National Audit Office reckons that that costs us—the taxpayers—15 million a year. We have not even started the scheme for horses, which are owned by a far more heterogeneous group of people and as my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger), who has left the Chamber, said, some horses, including some on Bodmin and other moors, are not owned by a particular person.
If the moratorium were maintained, introducing horse passports would be total nonsense. As the Department for Environment, Food and Rural Affairs website says, the only real reason to have passports is that they
will satisfy the European commission that the UK has a viable method of identifying horses that have been treated with medicines that must not be administered to food producing animals.
If we are not going to export horses for food, the only horses that will require passports will be racehorses, which already have them, and the 7,000 horses that go into the food chain in this country.
Getting rid of the passport scheme would save an absolute nightmare of costs to the countryside. We are talking about a passport possibly costing up to £50, fines of £5,000 for not having one, and the possibility of a month's imprisonment for a second offence. A lot of riding schools are right on the edge of viability, and the passport scheme will push them over the edge, which would be tragic because horses provide splendid recreation; they are a marvellous way for young people to learn about animals and to get into the horse industry, which is, as I said, enormous.
If the Minister screws his courage to the sticking-place and uses the opportunity that the European Union gave him yesterday to maintain the moratorium, he will agree that there is absolutely no necessity to persist with the bureaucratic nonsense of horse passports.
2.59 pm
Andrew George: I congratulate the hon. Member for Bexhill and Battle (Gregory Barker) not only on securing the debate and making a strong case but on timing the debate so fortuitously. A Committee of the European Parliament recently considered an amendment to the regulation that we are debating, and the Council of Ministers is due to debate the issue only two weeks after we return from the Easter recess. In view of the large number of questions that we have for the Minister—to be fair, he has engaged in debate—I shall do my best to keep my comments brief and give him the maximum available time between now and 3.45, when the debate will, sadly, have to end.
I, too, come to the debate happy to declare that in my youth I was the proud owner of a pony. I fully understand the strong passions that the issue arouses. I congratulate the Western Morning News, a newspaper in my region, on mounting a first-class campaign to draw its readership's attention to the potential plight of ponies and horses from the UK. The paper raised a

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66,000-signature petition, which made the Government well aware of the issue and which formed part of an 85,000-signature petition that was presented to the European Parliament only yesterday.
Dr. Julian Lewis: In endorsing the hon. Gentleman's views about the role of the press, I praise The Southern Daily Echo on its efforts. I draw his attention to a headline in today's edition, which states categorically "Ponies off the menu", which suggests that the whole episode as over and done with as a result of the European decision. A Liberal Democrat MEP is even quoted as saying that there is now no question of New Forest ponies being exported for slaughter. Given the hon. Gentleman's more cautious remarks, am I right in thinking that that is not quite yet the position?
Andrew George: The hon. Gentleman is absolutely right. It would be quite inappropriate of me to admonish a fellow member of my party for perhaps being a little hasty in his conclusions. However, it is obviously encouraging that a Committee of the European Parliament has accepted the amendment in its present form. No doubt my Liberal Democrat colleague hoped that the robustness and strength of the case made in that Committee would make the Minister highly likely to take on board the logic of our argument. Perhaps my colleague assumed, on the basis of such robustness and logic, that the two things followed as night follows day. We shall see if that happens.
I congratulate the International League for the Protection of Horses, which has been steadfast in the campaign. The league has provided an excellent briefing for today's debate and has always been forthcoming with information and advice in response to my questions. The league was responsible for part of the 85,000-signature petition delivered to the European Parliament yesterday.
I asked in an intervention whether the hon. Member for Bexhill and Battle had made an assessment of the likely impact of the proposed amendment compared with the Government's alternative. That alternative focuses on the trained-to-halter condition, which would constrain the export to other European countries of live horses for human consumption. That is the nub of the argument, and I hope that the Minister will give a clear indication about the assessments and reassure us that his assessment is that the proposed trained-to-halter constraint on the export of live horses would provide at least the same level of constraint as the current derogation allows. Has the Minister had the opportunity to review the situation since yesterday's debate in a Committee of the European Parliament? Has he come to a conclusion about the position that the Government will take on 30 April, when I understand the Council of Ministers is due to meet to consider this crucial issue? I hope that the Council will come to a conclusion with which the general public in this country, especially horse and pony owners, will be content.
I intervened on the hon. Member for Bexhill and Battle to raise the question of journey limits. Irrespective of the question of the fate of ponies and horses from the UK, journey limits affect ponies and horses from other European nations, including eastern European nations, some of which are accession
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countries. The hon. Member for North Wiltshire (Mr. Gray) rightly pointed out in an intervention that the present draft indicates that the current constraint on journey times is likely to be lifted. As for welfare, under the proposed new regulation the rest, feeding and watering of animals is likely to happen only after 24 hours, or even some time after that—and it will take place on the vehicle. Those who love ponies and horses and have regard for them, whether they are from the UK or Europe, or have been brought into Europe from outside, believe that horses should be treated with consideration. I hope that when the Minister debates the issue in the Council of Ministers on 30 April he will consider it carefully. It is important that the UK stands up in Europe and makes a strong case for robust constraints on journey limits. The majority of people in this country who care about horses and ponies will also be extremely worried and concerned about their treatment in other European nations or those potential accession countries such as Romania, which export horses and ponies into the EU—particularly Italy.
I hope that the Minister will have the time to answer questions on whether he will take up the proposed derogation and the amendment to the regulation proposed yesterday in Committee. I wonder what assessment he has made of that, and what efforts he will make to ensure that much more rigorous and robust controls are introduced to constrain journey limits.
Gregory Barker: I concur with much of what the hon. Gentleman has said. Will he be sure to reiterate the point made by my hon. Friend the Member for New Forest, East (Dr. Lewis), and thus not encourage his colleagues to think that the war is won? There is much more to do. It would be wrong to send a message out now that we can relax and everything will be all right. We must keep up the pressure.
Andrew George: The hon. Gentleman is right. We could have adjourned this debate had the war been won. The fact that we are here and feel passionate about the issue helps to make the point. It is important that we do not give a false impression that the battle is won—of course it is not. We have achieved something important, which members of all parties should celebrate, but the battle is certainly not won and that is why constructive engagement with the Minister and the Department is important. I hope that, rather than bludgeon the Minister into submission, we shall persuade him to accept a logical, robust and sensible measure.
3.8 pm
Mr. James Gray: It is a pleasure, as always, to follow the hon. Member for St. Ives (Andrew George). It is nice to know that the Liberal Democrats are with us on this. I join him in congratulating the Western Morning News in particular, and my local paper, the Western Daily Press, both of which have campaigned long and hard on the issue. There is strong feeling about it throughout the west country. I am glad that the hon. Gentleman has taken part in the debate, and I was glad to hear his words of support.
I pay tribute to my hon. Friends who have made useful contributions to the debate; in particular my hon. Friend the Member for Bexhill and Battle (Gregory

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Barker), whose timing was, as always, immaculate, and who introduced the debate eloquently and elegantly. It is also nice to have the expertise of my hon. Friends the Members for North Shropshire (Mr. Paterson), for Castle Point (Bob Spink) and for Witney (Mr. Cameron), each of whom contributed to developing today's arguments.
I was pleased to exercise the age-old right of a Member of Parliament and come to Parliament today on a horse. I believe that that has not happened since 1920 and the last person to do it was a Conservative MP called Sir Arthur Samuel. I was delighted to be escorted by two outriders from the International League for the Protection of Horses, and I join the hon. Member for St. Ives in paying tribute to that organisation, which has done a fantastic job on campaigning on the issue and changing minds in all parts of the House, in the European Parliament, the Commission and elsewhere. This debate is a tribute to its determination to ensure that the issue is properly aired.
It was a great treat to ride a 23-year-old ex-police horse called ILPH Pascal—three times a winner of the police horse of the year award in the early 1990s. That is exactly the kind of animal that, if we cannot change the Government's mind, will be piled on to lorries, carted off to the continent and turned into sausages. It was an important piece of symbolism that we arrived on horses to show what animals we are seeking to protect.
As several hon. Members have commented, the debate is timely because the European Parliament yesterday agreed to two amendments to which I shall refer shortly. The purpose of the debate is to persuade the Government that their proposals are insufficient and that the vast bulk of the British population are opposed to the proposals, and, in a positive way, to suggest a solution to the difficult problem—a way out of this nasty hole. I hope that, contrary to what the Minister said on the farming programme on which he appeared this morning, he is ready to listen constructively and act on some of our suggestions.
As we have heard, here in Great Britain, we do not eat horses; we never have. Their export to abattoirs on the continent has been banned for some 70 years thanks to the so-called minimum value regulations introduced in 1937 by a Conservative MP, Sir George Cockerill. Those regulations have been extremely effective; they were introduced to prevent the export of live horses, and no horses have been exported from the UK to be eaten. Whatever one might say about the regulations, they work. At this moment, no horses are being exported to the European Union or elsewhere to be eaten.
I accept the Minister's point that it may be time to reconsider those regulations, and that the introduction of the EU transport regulations may make that need more urgent. The purpose of the debate is to try to find an alternative solution to the proposed export of live horses and to replace and replicate the protection of horses afforded by the minimum value regulations.
It is worrying that the Minister seemed to suggest that he could see no moral justification for a ban. He seemed to be saying that, as far as he was concerned, it would be morally legitimate for us to export horses to the continent. No doubt he will say that that will not happen
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and that he will put in place measures to ensure that it does not. However, his comments suggested to me that he sees no moral justification for banning the export of live horses to be turned into sausages. When he said that, he was alone among the 55 million people in Britain. I suspect that the people of Britain, to a man, woman and child, believe that there is an overwhelmingly strong moral objection to the export of live horses to be turned into sausages—the people of Britain do not want it. If the Minister believes that it is morally acceptable for horses to be exported to Italy to be made into salami, he is on his own.
The Minister gave my hon. Friend the Member for Bexhill and Battle a moment to intervene. If he now wants to tell us that we, on this side of the House, have the moral case and that he disagrees with us, he should do so.
Alun Michael: I have a question for the hon. Gentleman that neither he nor his hon.. Friend have answered. Will he set aside his misinterpretation of what I might say and I have not said, and explain on what moral argument he would base a simple ban?
Mr. Gray: That is precisely the point, and I notice that the Minister did not correct us or say that he believes the export of live horses to be immoral. I believe it to be immoral, wicked and scandalous, and something that we must ban. The Minister has not said that he considers it to be wicked, so I shall tell him why I believe that this is a moral issue. There is a simple moral difference that is reflected in European laws: on the continent of Europe, the horse is an agricultural, food-producing animal. All the regulations on horses on the continent consider them to be a food-producing animal. In this country, we have never done that: the horse is specifically not an agricultural animal, although some would like it to be. If it were an agricultural animal, there would be no business rates. It is often said that there would be all kinds of advantages in it being considered an agricultural animal, but we have always resisted that.
Here, as my hon. Friends eloquently said, the horse is considered to be a companion animal—a sporting animal—not a food-producing animal, and with the exception of 6,000 or 7,000 broken-down racehorses among the 1 million to 1.5 million horses in Britain, we do not kill them to be eaten. That is the moral difference. We in Britain love our horses: we do not see them as food-producing animals, and we do not want them to be slaughtered and made into sausages. That is an overwhelmingly powerful moral argument that the people in Britain will almost unanimously accept, and we shall see that in the papers tomorrow.
Gregory Barker: My hon. Friend has put it brilliantly, but would he not agree that the fact that the so—called Minister for the horse has to ask the question in the first place, because he is not clear what the moral argument is, is really quite scandalous? It is a matter of huge concern to anybody who loves horses that he throws the question open for debate.
Mr. Gray: I would not be so harsh on the unfortunate person who finds himself being the Minister for the horse, because he is in an awkward position. He has

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been advised up to now that he must do this because of European law, so he regrettably seeks to make out that that there is no moral objection to what he has been forced to do. We should be gentle with the Minister, not force him into a corner or call him immoral. However, we intend in this debate to offer him an alternative—an escape from his awkward position.
Let me give one analogy. Let us suppose that some madman concluded that we should herd together the many millions of stray dogs and cats on Britain's streets, put them on a ship and take them to Korea. I believe that dogs and cats are eaten in Korea, although I find that nauseating. If that were to happen. would not the Minister consider the herding together and shipment of dogs and cats—live and in horrific conditions—to Korea to be eaten, to be immoral? I most certainly would, just as I consider the export of live horses to be entirely abhorrent and obnoxious.
The Minister will tell us that the minimum value regulations will not stand up in court, and he may be right. It is reasonable that we should seek to assist him in trying to find an alternative to them. He is probably right, too, to say that the live transportation regulations, which are currently under consideration on the continent, may make that even more difficult. Incidentally, the Conservatives welcome much of what is proposed in the new EU transportation regulations. As my hon. Friend the Member for Witney said, we hope that they will make a bad situation slightly better, although we have real reservations about the end product of the regulations, because they will still mean that horses and other animals could be on lorries for many days, albeit with rest periods for food, water and veterinary care. However, we see no reason at all why those slightly better transportation regulations on the continent of Europe should necessarily interfere with the ban on the export of live horses from this country.
Having listened to the Minister on various recent occasions, it would appear to me that his intended solution to the problem is to ensure that the export of live horses is not restarted, and I accept that he has said several times that he does not want it to start again. He seems to be indicating that he intends to prevent that by gold plating the welfare regulations, making them so stringent that the trade will become uneconomic. To be fair to him, he has achieved that in one category of horse: unbroken ponies. The regulations on unbroken ponies will almost certainly make that trade nearly impossible.
What about the other types of horse which are not covered, however? If the Minister has in mind extremely high standards that would, in effect, ban any resumption of the live export of all categories of horse and pony, he must at the very least spell out today precisely what those high standards are. It is no good saying, "I'm going to put in place high standards, which I hope is gold plating. I therefore hope that there will not be a market, because it will be too expensive for live export to start." We want to know precisely and in minute detail what those standards are and why they will be achieved. The horse that I rode to Westminster today is probably worth £500 or £600 in the dead meat market. What standards will the Minister put in place to ensure that traders do not want to sell their horse overseas for that amount?
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The Minister may also argue that he does not believe that there is a market for live export, or that he hopes that there is not, and that in any case there will not be one under these new, stringent conditions. I am not convinced, particularly in the aftermath of the absurd EU regulations that prevent the burial of carcases on farms. Unscrupulous owners and traders are likely to find an alternative market for end-of-life horses on the continent. As my hon. Friends the Members for Bexhill and Battle and for Witney have said, the Minister's absurd, bureaucratic and unenforceable horse passport regulations will make that export much easier. Live export overseas would not be possible were it not for passports. I call on him to abolish the horse passport scheme, which would solve his problem at a stroke.
The Opposition are by no means convinced that the Minister's promised gold plating will replicate the effective ban that the minimum value regulations provided, and we demand an effective total ban. As one or two of my hon. Friends have commented this afternoon, we now have something that gives the Minister exactly the solution that he seeks. As we have heard, yesterday two of my Conservative colleagues in the European Parliament, Roger Helmer and Neil Parish, to whom I pay tribute, secured broad acceptance of two amendments to the draft regulations. New article 1.2(a), inter alia, reads:
This regulation shall not be an obstacle to any stricter national measures, including a total ban on the export of live equidae intended for production or slaughter.

New annexe 1, chapter V, paragraph 1.1 reads:
Journeys by road and rail for slaughter of animals such as domestic equidae
shall
not exceed 9 hours…Member States can apply shorter transport periods … within their own territory or ban exports of certain species for moral reasons.
Incidentally, it was the European Parliament, not the Committee, that passed those amendments in plenary session yesterday. They will go to the Council of Ministers and then to the Commission, which may or may not ratify them. The difficulty is—and here we come to what the Minister must do—that we do not know whether the British Government are asking for those amendments to be passed. We heard that Commissioner Byrne, who has responsibility for these matters, believes them to be perfectly sensible. Last night, he said:
The Commission supports … stricter national rules … I am pleased that this would effectively maintain the UK's restriction on the export of horses destined for human consumption.
The European Parliament has unanimously agreed to the amendments, as have the various Committees. The commissioner says that he understands them, that he is ready to go along with them, and that he believes that the Commission will go along with them. The whole European structure says that we can ban the export of live horses. Only one person says that he hopes that more stringent regulations will somehow ban the trade that all of us, except him, believe to be obnoxious and immoral.
Mr. Cameron: The Minister for the horse.
Mr. Gray: As my hon. Friend says, that comes from the Minister.

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The regulations have been amended to allow the ban to continue. The European Parliament wants that, and the commissioner is perfectly happy about it. We need to persuade the Government of the political urgency of continuing the ban. The Minister cannot shelter behind what he calls the unsustainability of the minimum value regulations. He cannot merely blame the EU, because we now know that it agrees with us; nor can he rely on what he claims are much improved standards of welfare in transit.
The Opposition say that no standards of welfare in transit, no matter how gold plated they may be, are sufficiently humane. We believe that we speak for 99 per cent. of the people of Britain. We demand an absolute ban on the export of live horses for slaughter for human consumption. The Minister should deserve his name as Minister for the horse; he must not become the Minister for the slaughtering of horses.
3.25 pm
The Minister for Rural Affairs and Local Environmental Quality: I shall seek to cover the wide range of issues raised this afternoon. First, however, I congratulate the hon. Member for Bexhill and Battle (Gregory Barker) on securing the debate. He has highlighted an important issue, but he and others are wrong to worry people without justification. Serious issues are involved, but to worry people by suggesting that the Government are going to relax, or somehow allow a diminution in, the protection of horses or their welfare is wrong.
The hon. Gentleman rightly says that we need to improve the regulations and that they need to be based on horse welfare. That is precisely what we have done, but that was not the drift of all the hon. Gentleman's speech although it is an important point.
The hon. Gentleman and one or two others strayed on to the question of horse passports. The Government have not introduced a top-down bureaucratic system; we have worked with the horse industry to strengthen the role of our country's horse organisations and to produce a sensible system. He and others should talk more to the horse organisations with which we worked. They would then realise that they have missed a great deal of the point.
Mr. Gray: The Minister may have consulted the horse industry, but has he consulted the Pony Club, the breed organisations or the Association of British Riding Schools, of which, I should warn him, I am president?
Alun Michael: I am aware of the hon. Gentleman's affection for one or two horse organisations, but we consulted with a wide range of organisations, including the breed societies, the International League for the Protection of Horses and the Royal Society for the Prevention of Cruelty to Animals. Indeed, the hon. Member for Bexhill and Battle is right to highlight that issue, which is one that people feel strongly about. We have received several thousand letters, postcards and petitions from hon. Members, campaign groups and the
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public on the subject, which demonstrates the strength of feeling, but some of those communications were not about anything that we have ever contemplated doing.
Gregory Barker: Does the Minister not agree that, contrary to his opening remark that we have raised the subject to worry people, we are articulating the genuine concerns of thousands of people? This is not an issue that has been whipped up in Parliament; the Opposition are articulating a real concern.
Alun Michael: I have to say that some Conservative Members sought to exploit the strong feeling held by many. Indeed, I welcome the idea of positive engagement, which was put forward by the hon. Member for St. Ives (Andrew George). He, at least, wants proper protection for horses to result from today's debate and from how those issues are addressed in the long term. I invite Conservative Members to engage in such a constructive debate, even though doing so may seem strange to them.
Mr. Cameron: Will the Minister give way?
Alun Michael: In a moment.
Most of those who have written to us expressing such strong views support, without seeming to know it, what the Government are trying to achieve—namely, the prevention of the live export of horses for slaughter. I welcome their support. The Government are working to protect and improve the welfare of horses.
Let us look at the facts. There is no ban on the export of horses for slaughter, and there never has been. The national rules on horse and pony exports, which are sometimes referred to as the minimum values rules, merely place restrictions on the export of certain working horses—that is, horses intended for work abroad, not those sent for slaughter—and some ponies. Those long-standing provisions prevented the export of unfit or worthless older working horses and ponies—that is why they were introduced—but so-called working horses such as shire horses are now more likely to be exported for showing or competition. In other words, the minimum values do not apply. That is why I asked Conservative Members several times whether they had read the rules or understood them.
Some people believe that those restrictions have served to limit horse and pony exports. The fact is that there is hardly any such trade, and because we do not want to see it grow or to send the wrong signal, my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs and I do not intend to relax or remove the minimum values until and unless we have new arrangements that protect horses and their welfare. I have made that absolutely clear in a letter, which I have sent to hon. Members, including Opposition Members here today. I am surprised that they sought to cast doubt on that during the debate.
The minimum values are relatively small. They have not been updated for 25 years, so it is a pretty poor nag that would be protected by the law as it stands, even if it happened to be a working horse that came within the very limited categories to which the rules apply. The current arrangements also provide a bureaucratic obstacle to the legitimate and worthwhile movement of

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horses and ponies for sport and recreation. Increasingly, people go abroad and have to follow the regulations, which is an obstacle for those who have nothing to do with the export of horses for slaughter.
The problem is that the alternatives that Opposition Members are providing do not necessarily do what they think they will do. I have said on several occasions that laws do not always prevent what they forbid. We want legislation that works. We want regulations that prevent the trade and address the issues of horse welfare and animal welfare.
Several hon. Members rose—
Alun Michael: I give way to the hon. Member for Witney (Mr. Cameron), as promised.
Mr. Cameron: When raising this concern with every Member of Parliament, the ILPH said that it is extremely concerned that there is a real risk that this vital legislation will be repealed. Does the Minister think that the ILPH is whipping up trouble?
Alun Michael: I would put it this way: it is interesting that in private the ILPH has congratulated me on what I am doing to protect the welfare of horses. It did that at a large meeting last week. It is interesting that the ILPH and the RSPCA came to talk to me about the need to keep up the slaughter of horses in this country so that meat can be exported to avoid the animal welfare problems that arise from horses travelling abroad for slaughter. I can see their point entirely. It is a good, straight point and hon. Members need to understand it.
It is important to separate the issue of the slaughter of horses—where they go, how we get the value that pays for that slaughter, the horse slaughterhouses and how humane slaughter is dealt with in this country at the end of an animal's life—from the issue of export and the welfare of horses in transit. Those issues are both important, but they need to be understood if Members and the general public—a well-informed general public, I would like to think—are to understand what is necessary to protect horses from the trade that several Members have rightly said that they want to prevent and which we are working hard to prevent.
Several hon. Members rose—
Alun Michael: I give way to the hon. Member for North Wiltshire (Mr. Gray).
Mr. Gray: I am grateful to the Minister for giving way, although I shall draw a blind over the fact that he seemed to be praying in aid the RSPCA and the ILPH, which is quite incorrect. They are both entirely opposed to what he proposes.
The Minister says that the minimum value legislation is ineffectual but, none the less, he is certain to keep it in place until we have something better. Will he answer two questions? If the legislation is so ineffectual, why does it work? Not one horse is being exported at the moment, so it seems to me that it is working pretty well. Secondly, if he is to put something better in its place that has
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exactly the same effect—I welcome the fact that he says that he does not like live export—will he explain in detail what it will be?
Alun Michael: First, the legislation is ineffectual: if the hon. Gentleman simply reads the law he will see that it does not ban what he and his colleagues suggest it bans.
Mr. Gray: It works.
Alun Michael: It does not. Look at the law and what it does. It does not ban what Opposition Members say it does. There has been a general understanding that the minimum values protect a limited range of animals, and to get rid of those regulations would send the wrong signal. That is all I am saying. The idea of a trade in horses for slaughter from this country is abhorrent to people in this country. The organisations that I said have agreed with me have said that controlling the export of horses for slaughter is the issue.
The hon. Member for North Wiltshire cited the RSPCA. That organisation has just written to hon. Members to express its worry about elements of the presidency's proposals for dealing with the issue of animals in transit. I spoke to the RSPCA yesterday to clarify whether the point involves general animal welfare issues and whether it is happy with the situation that we have achieved for horses. It confirmed that it supports the situation that we have achieved for horses. Its concerns relate to the wider issue of the welfare of animals in transit, and it is worried that the presidency's proposals are not strong enough.
Andrew George: The Minister says that he wants regulations that work, but I do not think that we in this Chamber are better than anyone else at second-guessing the likely outcome of the various proposals. He says that his proposals would be as good, if not better, than the current arrangements. Is he prepared to stake his career and reputation on that, is he confident of the outcome and will he support the amendments proposed by the European Parliament? Surely that would directly achieve the outcome that all of us, including him, want.
Alun Michael: There is a lot in what the hon. Gentleman says. First, our categoric intention—I have written to all Members of the House about this—is not to relax the minimum value regulations unless and until something a great deal better is available. We want to achieve what people believe the regulations achieve. One reason for wanting to be sure that that is practical is that instead of just discussing it with DEFRA officials, my officials and I have been discussing it with the horse welfare organisations and organisations such as the RSPCA, and looking at what would work in practice.
A lot of hard work has been done and I commend the willingness of horse welfare organisations to engage with us to try to achieve something that works. A great deal of serious work is going on and the way in which some Opposition Members talk that down shows outrageous opportunism. The emotive language of the hon. Member for North Wiltshire on turning our horses into sausages is the opposite of engagement.
What the European Parliament decided yesterday is interesting and may be helpful. We shall examine that in detail. As I understand the amendment, it would allow

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a provisional ban on horses for slaughter, but subject to an assessment of the legal issues concerning the treaty. We need to know how it would work in practice and what is the relationship between the resolution, to which the commissioner gave a general tick, and other parts of European legislation.
I certainly give a commitment to examine that carefully to see whether it provides something that we can use, and I know that my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs will consider the matter equally seriously. We are not sure that it will do so and I do not want to build up hopes, because it is not the easy stroke that a resolution sometimes seems to be, but we will consider it and what the Commission has to say about it to see where we can get to.
Clearly there are concerns among animal welfare organisations generally about the presidency proposals. We are taking a lead in Europe by working for effective regulation to protect the welfare of horses, not just in the United Kingdom, but throughout Europe, including the accession states.
I shall explain the current EU legislation. A lot has been made of the opt-out clause in the 1991 directive on welfare during transport. That clause was an attempt to acknowledge that the directive did not set welfare rules for horse journeys, so member states were able to make up their own rules. From that clause stemmed our legal basis for retaining the minimum value rules, although they do not do what many people think they do. In 1995, rules for horse and pony journeys were agreed at EU level and implemented in the UK in 1997—not immediately after they were agreed and not by the party of the hon. Member for North Wiltshire, but by the incoming Administration. There was a dragging of feet over the implementation of those rules and some hon. Members will remember the controversy over that.
In contrast, this Government are committed to and put high priority on high standards of animal welfare, but improvement in welfare rules, including enforcement, will really count if they are made at European level so that horses and ponies receive better protection during transport on the continent and not just in the UK. Last year, the European Commission brought forward its long-awaited proposals to amend the transport rules. This is where the issue of the impact of its proposals comes in. We are pleased that both the Italian and Irish presidencies have taken things forward.
During the negotiations, Britain has been seeking high standards for horses, along with better enforcement. Campaigning organisations say that long journeys for horses and ponies take place on the continent. I agree. That is something that we want to prevent. It is the prospect of British horses and ponies being subjected to such journeys that leads campaigners to press for a ban on live exports, and I entirely sympathise with those concerns, but let us be honest: the minimum value rules are out of date and, even more importantly, do not achieve the improved welfare standards for horses. It is not an option to continue to operate those rules unchanged. We want similar or better controls.
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We considered an outright ban, but the problem is enforcement. That is why we have to look carefully at the suggestions made yesterday to see whether they would achieve what we want. There is no prohibition on horses being exported for other reasons—breeding, riding or exhibition. Once exported, we have no control over what happens to those animals. If we were simply to ban exporting horses for slaughter, the regulation would be enforceable only in the case of horses presented as destined directly for slaughter.
The hon. Member for Castle Point (Bob Spink) is right to say that the issue is what is good for business—that is, the slaughter taking place in this country—and good for horse welfare as well.
Bob Spink Bob Spink rose—
Gregory Barker Gregory Barker rose—
Alun Michael: I must give way to the hon. Member for Bexhill and Battle.
Gregory Barker: The Minister is intent on seeing everything to do with horse welfare through the prism of the transport regulations. Would he be happy if, with the introduction of horse passports, there was a large increase in the number of British horses slaughtered to feed the Italian market for horsemeat, but the slaughtering took place in the UK and the horses were simply shipped as carcases? Is he prepared to preside over a regime that produces a major increase in slaughtering horses to feed the salami market?
Alun Michael: Does the hon. Gentleman want to stop the slaughter of horses in this country for export as meat? In that case he would be contradicting the ILPH and the RSPCA. They came to me recently to ask for a variation in relation to horse passports simply because they want the number of horses that are slaughtered in this country and which enter the food chain abroad to be maintained—they believe that that is in the interests of horse welfare. He must come clean about where he stands.
Bob Spink: My point is not that we should slaughter animals in this country to export them for food, but that we should seek to stop the live export of all animals from this country.
Alun Michael: The hon. Gentleman makes a valid point; if animals are slaughtered for export the meat goes abroad. He is right about the animal welfare imperative of approaching the matter in that way. I agree with him—I am delighted to say that I am prepared to make an exception on occasion.
Horses hold a special place in the heart of the British public, but we need to understand the relationship between the different elements. Those who are involved in the welfare of horses understand the issues and understand that the welfare of animals in this country—I am talking about humane slaughter at the end of a productive life—depends on the value of horsemeat after slaughter. That is an animal welfare consideration. It is also a consideration in relation to other animals.

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In this country, we view horses and ponies as sporting animals, pets and companions rather than as food, but we need to be honest about the position of horses and ponies that are unwanted or have completed their useful life. Horses are slaughtered in this country for meat for human consumption abroad. Horse welfare organisations tell me that they want that to continue because it is good for the welfare of horses and it means that there is humane slaughter. Last year, more than 6,700 horses were slaughtered for meat for human consumption. They were slaughtered in this country for their meat to be exported—
Mr. Deputy Speaker Mr. Deputy Speaker: Order.

Drug Rehabilitation Services (Somerset)
3.45 pm
Mr. David Laws: I am very pleased to have secured this short debate about drug rehabilitation services in Somerset, and I am delighted to welcome the Minister. He may be aware that I have already met his colleague, the Under-Secretary of State for the Home Department, the hon. Member for Don Valley (Caroline Flint), and we discussed the issue on 27 January. Therefore, some dialogue has already been opened up, but I appreciate that drug services is an issue on which there is partnership between the Home Office and the Department of Health. I am therefore very pleased that a Health Minister is present.
The Minister knows that I was keen to secure the debate because there is something of a crisis in access to drug rehabilitation services, particularly in South Somerset. I am very pleased that my hon. Friend the Member for Somerton and Frome (Mr. Heath) is present because we both represent that area.
The Minister may know from the briefing that he has received from the National Treatment Agency for Substance Misuse that the waiting time to access drug rehabilitation services in South Somerset is way over the levels set by the agency, way over the targets set by the Government and way in excess of the waiting time that we want for the very vulnerable people we are talking about.
Perhaps I can highlight for the Minister two issues about access to services locally that give me most concern. The first statistic is the national target for the maximum acceptable waiting length for specialist prescribing. The Minister knows that, through the NTA, the Government have set a maximum waiting time of three weeks. That seems to be a sensible figure and it demonstrates that they want to give priority to people with serious drug misuse problems and get them into the system as quickly as possible. In Somerset, against the access target of three weeks, the average waiting time is 14.3 weeks. In South Somerset, the current average wait is 36 weeks, with the longest being 40 weeks. Those figures are very unsatisfactory and way above the time limit that the Government have set.
I received a letter from a consultant psychiatrist in substance misuse who works for the Somerset drugs service and assists many of the individuals who require access to the service. On 9 January, he wrote to me to say:
Whilst access to prescribing is currently determined by an assessment of risk I have been told to prescribe only to those within the Trust's red band on the risk matrix. This is defined by people who are at possible risk of unexpected death or likely or certain of permanent injury or serious assault on others. Excluded are those who are at possible risk of semi permanent injury, violence, aggression or self harm. The threshold … is at considerably above what I would consider to be the clinical requirements for immediate prescribing.
There is therefore a very serious problem in Somerset, and especially in South Somerset.
Mr. David Heath: I concur with absolutely everything that my hon. Friend has said. A third issue is recidivism in the criminal justice system. Recently, I spoke to a constituent who was a

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habitual criminal in order to pay for his drug habit. He had been released from prison and had returned home desperately wanting to get off drugs and find a way of escaping from a life of crime, but he will not receive treatment for the best part of a year. Inevitably, he will slide back into criminal behaviour unless he is helped. Is not that another factor that suggests that we need a much better service?
Mr. Laws: My hon. Friend is right. It is because many individuals with such needs have come to my advice centre in the past three to six months that I have taken up this issue. It is not only the individuals and their families who suffer as a consequence of the lack of timely access to drug rehabilitation services. It is almost certainly the case that the crime levels that we are experiencing in Somerset, in particular, are inflated because many people who have serious drug misuse problems are offending to fund their addiction. What is more, those people tell us that that is precisely what they are doing.
I acknowledge the progress that the Government have made since they came to power in 1997. The prime purpose of this debate is not to apportion blame among the various agencies in Somerset and the Government. I acknowledge that many people across the country are now receiving drug rehabilitation treatment. There has been a significant increase in the number, particularly since 1998.
I also wish to pay tribute to the work of the many agencies in Somerset, not least the drug service, the primary care trust, which seeks to work in partnership with the drug service, and the drug action team. All those agencies are trying to get on top of the problem, but in the past few months there has been too little progress in reducing the scale of it.
As my hon. Friend said, we have seen many individuals in our advice centres in the past three to six months who have come to us because they cannot get access to drug rehabilitation services at precisely the time that they need them. Ministers in the Department are on record as having said during the past few years that they want a service that will allow people, when they are ready, to access in a timely fashion the drug rehabilitation assistance that they need. We do not have such a service at present.
I have seen in my advice centre in the past few months individuals with a serious criminal background who tell me that they continue to offend to fund their illegal drug addiction because they cannot get assistance through the drug service. They have come out of the criminal justice system and are trying to re-establish their lives and their family's stability, but they have gone back on to drugs because they are not able to get support from local services. I have also seen individuals outside the criminal justice system who have been told that their best chance of getting access to drug rehabilitation services is to commit an offence so that they can be put through the criminal justice system and then perhaps be fast-tracked for drug treatment and testing orders.
Most tragically, I have seen individuals such as the parents of a young man who tried to commit suicide a few months ago. He is now in Yeovil district hospital
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with severe brain damage, having failed to get drug rehabilitation assistance when he needed it. Obviously, the details of that case must be investigated to establish precisely the reasons behind his actions, but it cannot have been a helpful factor that access to drug rehabilitation services is as constrained as it is.
Of course, all those individuals have a responsibility to themselves and to society to tackle their problems of misuse. We must not put all the blame on agencies, the Government and others. However, we have a strong interest as a community in resolving the problem, not only because of the effect on individuals but because of the effect on our community of higher crime levels and the effect on families of members who have drug misuse problems.
The figures that the Somerset drugs service sent to me yesterday and which I cited briefly at the beginning of the debate are horrific, particularly for the South Somerset area. I go back to specialist prescribing, which is where much of the pressure is. The waiting time limit set by the Government is three weeks, but the average waiting time in Somerset is 14.3 weeks, and that in South Somerset is 36 weeks, which is horrific. The Government's target for shared-care prescribing is, again, three weeks, but the average for the county is 6.5 weeks and that for South Somerset is 14.5 weeks. The Government want people to have assessments within a couple of weeks, but it takes roughly double that in Somerset and South Somerset. The local agencies and the Government face a huge challenge in dealing with the problem.
The waiting list for access in Somerset at present stands at 118 people, of which three quarters are waiting in the Yeovil area and in South Somerset. Therefore, there are particular difficulties in those areas. As a result, only priority and perhaps even only top-priority cases are being seen. People are being seen for assessment but not for treatment, unless they fall into the category of suicide risks or are pregnant women. That leaves out a huge range of people with really serious needs, some of whom pose a serious risk to society because of their drug addiction habits and the criminal activity needed to fund them. A huge range of people are altogether outside the system, including serious drug addicts, who are having to wait months on end—up to six, seven or eight months—to access treatment.
The Minister will probably know some of the reasons for the problems that we have in Somerset, which are rather well set out in a letter from the consultant psychiatrist in substance misuse whom I cited earlier. In his letter to GPs in the South Somerset primary care trust area on 9 January, he explained the background to the problems there:
Last year we undertook a review of SDS prescribing policy. Our revised approach was consistent with Models Of Care (a National Treatment Agency document which in effect is a National Service Framework for drug services). We moved from an abstinence orientated service to one espousing harm reduction as a primary goal. We now aim to maintain people within treatment whilst offering a range of prescribing options within an evidence based framework. This policy was launched and endorsed at a multi-agency seminar in February 2003. At that stage and indeed subsequently SDS managers highlighted the prescribing cost implications. At an operational level the strategy has proved successful in so far as we have increased the numbers of people in treatment by almost 100 per cent.

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I am afraid, however, that in the first half of the last financial year the Somerset drug service was so successful in getting people into the service and dealing with their needs that its prescribing budget, which was only £130,000 for the whole county, ran out about halfway through the year. At that stage, the service was still willing to continue assessing people but could not provide any treatment. That is why we now have such horrendous figures for waiting times, which are probably among the worst in the country—at least I hope that they are, because I would not want other areas to be experiencing worse problems.
We must consider what some of the solutions to the problem might be. The local agencies are already doing important work to help deal with the problem on the ground. The prescribing budget is to be increased in the next financial year by about 50 per cent., from £130,000 to £200,000. I believe that that uses some of the money from the Home Office's criminal justice drive to improve drug rehabilitation services for offenders. However, that may be of less use to those without an offending history. There will be more work locally with the primary care trusts to provide shared care and nurses. There will also be a shift in the staffing resources in Somerset, away from some of the areas that have lesser problems and towards South Somerset.
Significant problems are likely to remain, however. First, although the increase in the prescribing budget sounds quite impressive, it will be enough only to stabilise the existing number of people being dealt with. It may well not be enough to clear the backlog. Secondly, shifting resources in Somerset to South Somerset may improve the situation, but at a cost to other areas in the county. There is also a wider budget problem, in that the drugs action team budget for Somerset is to increase only by 0.07 per cent. in the financial year 2004–05. That will make it difficult to put the resources into prescribing, residential rehabilitation and other forms of treatment to improve the situation on the ground.
At my last meeting with the Under-Secretary of State for the Home Department, she pledged to look into the problem. She wrote back to me on 26 February to clarify that she accepted that we have a serious problem in Somerset and that she had asked the National Treatment Agency for Substance Misuse to look into the situation and to prioritise the waiting times in Somerset. She said that she had asked to be kept informed about progress on the issue. Does the Minister here today accept that there is a serious problem in Somerset and in South Somerset in particular? What can he do to encourage the NTA to take a proactive approach along with the local agencies to resolve the problem?
At present, we are in an unsatisfactory position, which is putting many people and their families at risk. It is also increasing the level of crime across the Somerset area and in South Somerset in particular. It will undoubtedly cost money to resolve some of the problems, but if we continue to allow them to go unresolved, it will be even more expensive to us in terms of broken families, failing services and the increase in crime that will result.
4.1 pm
The Parliamentary Under-Secretary of State for Health: I congratulate the hon. Member for Yeovil (Mr. Laws) on securing a debate on this important topic. He and the hon. Member for Somerton and Frome (Mr. Heath) raise valid concerns about service levels in their local communities.
From the remarks of the hon. Member for Yeovil, I know that he shares the Government's belief that effective drug treatment is vital if we are to drive down the misery and damage to society that the misuse of illegal drugs causes. The Government have shown themselves to be prepared to back up that belief with substantial extra funding. In this financial year, the pooled drug treatment budget has risen to —243.6 million, which coupled with substantial increases last year means that, in the past two years alone, local drug action teams have received average increases in funding well in excess of 50 per cent.
The Government's view that treatment works is supported by research. The national treatment outcome research study, the most important UK research into drug treatment, shows the enormous benefits to both society and those individuals who complete treatment. From an economic perspective, the findings have shown that every £1 spent on treatment saves £3 of expenditure in the criminal justice system. That finding alone would have been enough to persuade the Government that increasing the public money spent on drug treatment was justified and that helping individual drug users was cost effective for the population as a whole.
In addition, the national treatment outcome research study showed that the longer we are able to retain an individual who misuses drugs in treatment, the more likely it is that a successful outcome will be achieved. One of the key measures of whether additional funding is being used effectively is the Government public service agreement on treatment, which set a target of doubling the number of users in treatment by 2008. I am pleased that the latest figures, published in December 2003, show that the estimated numbers in treatment during 2002–03 increased by 41 per cent. against the estimated baseline of 100,000 in 1998, which means that we are on track to achieve our target.
The new funding that the Government have made available for drug treatment, to which the hon. Gentleman was kind enough to allude, needs to be spent effectively and that is why the National Treatment Agency for Substance Misuse was established in 2001. The NTA was created to set standards for the provision and commissioning of drug treatment performance and to monitor and tackle variations in treatment standards and availability wherever they occur.
One of the areas that the NTA has prioritised is ensuring that there are sufficient trained staff to work within treatment services. To address that issue, the NTA is implementing a work force strategy to encourage professionals to work in the field of drug treatment. That is already having a substantial impact, with the NTA reaching its 2008 target of 9,000 drug treatment workers by December 2003, an increase of more than 30 per cent.
We also recognise that we offer as much support and guidance as is possible for those groups who are providing treatment to drug misusers. Examples include

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the clinical guidelines on the management of drug dependence published by the Department of Health in 1999.
We have also developed guidance on the optimum models of care for drug treatment services. That document is known as models of care. It aims to provide the national framework for drug misuse services in England necessary to achieve equity, parity and the commissioning and provision of substance misuse care and treatment. It has the status of a national service framework.
As part of models of care, the NTA has required all areas to publish local care pathways by April 2004. I believe that that will be a major step forward in the delivery of drug treatment services across the country. In addition, the Department of Health has made £3.6 million available to the Royal College of General Practitioners to allow it to develop a course to assist health care professionals to develop the skills needed to work with drug misusers. The funding has meant that more than 1,000 health care professionals have been able to undertake the accredited training course.
Agreement has been reached for drug treatment in primary care trusts to be subject to the Commission for Healthcare Audit and Inspection star rating system. That means that drug treatment is now one of the national health service's top 10 priorities. As part of the work of setting standards in drug treatment services, the NTA is providing specialist advice to CHAI. The Under-Secretary of State for Health, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), who has responsibility for drug treatment, has also asked the NTA to explore the potential for developing a joint inspectorate programme with CHAI.
Overarching all the work that the NTA does is the need to reduce the time that anyone who needs drug treatment has to wait before their treatment begins. That is crucial as a delay in offering treatment can lead to the drug user losing their motivation to enter treatment, so that by the time a place is available, they are no longer interested and the opportunity has been missed. That is why, in December 2001, the NTA, working with the NHS Modernisation Agency to ensure that the targets were consistent with work going on elsewhere in the NHS, set maximum waiting-time targets against which drug action teams are being measured. Although there is some way to go, with delays in accessing treatment unacceptably long in some parts of the country, the overall trend is positive, with waiting times reduced from eight to 11 weeks to two to four weeks in most parts of the country. We are convinced that those waiting time reductions have had a substantial impact in reducing the numbers of drug misusers who are referred but who fail to enter treatment.
We now come to the issues that will be of real concern to the hon. Gentleman. One of the effects of a reduction in waiting times is that demand for treatment increases, as fewer users drop out while waiting for treatment. That is an issue that has been identified across the country. As part of their planning, drug action teams are expected to include an expectation of increased demand for treatment as a result of a reduction in waiting times.
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That seems to be at the root of the problems that have been encountered by the Somerset drugs service. I accept that local agencies should build in plans to cope with increased numbers seeking treatment as a result of the reduction in waiting times. However, I understand that the increased demand in Somerset was far in excess of anything experienced elsewhere in the country. To put that into context, if drug action teams are to ensure that the Government meet their target of doubling the numbers in treatment by 2008, they need to increase the numbers in treatment by approximately 10 per cent. a year. The Somerset drugs service had 287 active clients in July to September 2002, but the number had risen to 426 clients by the same quarter of 2003. That is an increase of almost 50 per cent. in one year, which is five times the national average increase.
Mr. Laws: I understand the Minister's point entirely, but one could derive two conclusions from that big increase in demand. One could be that there are significantly worse drug problems in part of Somerset than in other parts of the country. The other could be that the Somerset drugs service has been too successful in taking into the service many of the drug addicts out there. In either situation, the solution must surely be more funding to enable the service to deal with those individuals rather than push them away.
Dr. Lady man: The hon. Gentleman is right. In many ways, the problem has been generated by success. It highlights the fact that we needed to start introducing these programmes and these substantial increases in expenditure to try to address what was clearly a hidden problem. We cannot simply turn a tap on and solve these problems overnight. That takes time. A particular problem arose in Somerset that is out of kilter with similar effects elsewhere in the country. We must examine the Somerset experience and ask ourselves how that needs to be managed in order to resolve it.
As I said, the fact that there should have been planning in no way removes responsibility from the local agencies to continue to reduce waiting times and to provide the treatment places needed. The hon. Gentleman voiced concerns about a particular local problem that needs a local solution. The NTA regional office, the Somerset drug action team and the Somerset drugs service have been working together to ensure that that happens. Delays in access to treatment are unacceptable. Delays in being able to offer treatment can lead to the drug user losing the motivation to enter treatment.
I know from a meeting that the hon. Gentleman had with the Under-Secretary of State for the Home Department, my hon. Friend the Member for Don Valley (Caroline Flint) and from a subsequent written response that he is aware of the high priority that has been given to tackling these problems. Partners at a local level have been active in putting in place short and medium-term strategies to address some of these problems. For example, the Somerset drug action team opted into the opening doors programme run by NTA and the National Institute of Mental Health for England, which will help to modernise services and to reduce waiting times. It has improved operating procedures in line with the opening doors programme to ensure a more consistent approach to the delivery of drug treatment services.

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A data collection system has been established to monitor waiting times more accurately. This has also meant that we have, for the first time, accurate data on geographic areas that were not available before. The team also invested in two peripatetic nurses for the Somerset drugs service in 2002–03 to help to reduce waiting times. They are currently working in the high waiting time areas to increase capacity. In addition, the drug action team commissioned a strategic review of the adult drug treatment system. The final report makes clear recommendations about reconfiguration of service provision, and the team will act on those recommendations in 2004–05.
Mr. Laws: Will the Minister give way?
Dr. Ladyman: I have only a couple of minutes left, and I have a few more comments to make.
There has also been additional funding from the drug action team. In 2002–03 and 2003–04, increases in funding were made available to the Somerset drugs service. In 2004–05, –205,600 will also be made available for prescribing, which will provide another 74 places. That represents a growth in capacity of 56 per cent. since last year. Further increases in investment are expected in future years.
The NTA and the strategic health authority will work together to strengthen the commissioning of drug treatment services in Somerset to ensure that this particular local problem is overcome and that commissioning arrangements are as robust as possible. I have been asked to ensure that the hon. Gentleman and Ministers are kept fully informed of developments. I will also ensure that the hon. Member for Somerset and Frome is also appraised of progress and that they are both consulted on planned changes when appropriate.
It is always easy to blame a lack of resources for any problems that occur in the provision of services, but I do not believe that the concerns that the hon. Member for Yeovil expressed today about drug treatment services in Somerset can be explained simply by a lack of funding. The formula used to allocate funds will always mean that those areas with the greatest social and economic need will receive the largest increases, and I am sure that all Members will appreciate why that is so. This has meant that Somerset does not receive as large an increase in its pooled drug treatment budget allocation as some other areas of the country. Nevertheless, investment in drug treatment services in Somerset has increased by 47 per cent. in the past two years. The increase in 2004–05 may be very modest, but it was announced in advance so that it could be planned for, and Somerset will receive an additional 11 per cent. in 2005–06.
I again thank the hon. Gentleman for giving me the opportunity to speak on this important issue. I hope that what I have said today makes it clear that the Government are committed to access to effective drug treatment services throughout the country, and that we are committed to helping to ensure that urgent remedial action is taken where that access is lacking. I hope that he is at least partly reassured that we are aware of the problems in Somerset and that we determined to put them right.

Print Cartridges
4.15 pm
Mr. Huw Edwards: I am pleased to be able to raise the issue of the recycling of printer cartridges and the waste electrical and electronic equipment directive, known as the WEEE directive. The purpose of the debate is to urge the Government to incorporate print cartridges in the implementation of the directive by the UK and to consider printer cartridges as electrical equipment rather than consumables.
I raise the matter because of the threat to the recycling industry that remanufactures printer cartridges, and the threat to the environment. The threat arises from the anti-competitive practices of some major manufacturers of printers and print cartridges, which use smart chips and, worse, killer chips, to prevent the reuse of printer cartridges. That could have a serious impact on the recycling industry in the next two years. Unless printer cartridges are included in the implementation of the WEEE directive as electrical equipment, killer chips and devices that thwart recycling will be considered permissible, despite the intentions of the European Union.
I acknowledge the help that I have had in preparing for this debate from the United Kingdom Cartridge Recyclers Association, and especially Mr. Malcolm Kerman of LaserXchange, in my constituency. I am also grateful to Friends of the Earth for its support for the campaign. It has said:
The Government must support the reuse of printer cartridges by ensuring that they are covered by the WEEE directive.
I have written to my hon. Friend the Minister about the matter a couple of times and tabled some parliamentary questions. I am grateful for the opportunity that I had to discuss the matter with him at the recent meeting of the all-party group on sustainable waste. Like many other hon. Members, I signed early-day motion 512, which has been supported by hon. Members from both sides of the House.
One of the companies in the industry is based in my constituency. It is called LaserXchange and was formed in 1990. It now employs just under 100 staff. The company specialises in collecting used printer cartridges, mainly from charity shops. Those cartridges are taken to the factory, opened and refilled with toner. The remanufactured cartridges are then sold to consumers as cheaper alternatives to new cartridges.
The practice benefits consumers, who find the cost of recycled print cartridges substantially less than the cost of the new product. Typically, a new black cartridge for the printer in my office in Westminster would cost £23.50, whereas a recycled or reused cartridge from LaserXchange would cost only £9.95 plus VAT. The prices for colour cartridges are £36.72 plus VAT, or £16.95 for a re-used cartridge.
The main products remanufactured at LaserXchange are laser toner cartridges that are used mainly by businesses, but the firm also manufactures inkjet cartridges, which are generally used by individuals with home computers. I have visited the LaserXchange factory twice in recent months—most recently with my

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right hon. Friend the Secretary of State for Wales, who is also, of course, the Leader of the House. He asked me to consider to what extent recycled cartridges are used in the Palace of Westminster and in the Departments. I shall come to that matter a little later.
Collecting used cartridges from consumers and supplying the remanufacturers is a valuable source of income for charity shops such as Oxfam, Cancer Research UK and the British Heart Foundation. Seventy per cent. of the cartridges collected by LaserXchange come from those three charity shops. The remainder come from scout groups and schools. The charity receives about £2.50 for each cartridge collected. The industry therefore supports the developing world and the voluntary sector in the United Kingdom. Last year, LaserXchange distributed £162,000 to those three charities.
Apart from LaserXchange, there are several other major printer cartridge remanufacturers, including Green Man Toner in Epsom, IT Imager in Hemel Hempstead, PBTI International in Wells, Somerset, Applied Film Industries in Newcastle-under-Lyme and Cartridge World Ltd. based in Harrogate. There are also about 80 other companies in the industry. LaserXchange believes that its industry is under threat from increasingly sophisticated microchips, which are inserted into the cartridges. These are called antiremanufacture devices, and according to the UK Cartridge Remanufacturers Association, nearly all new laser toner cartridges sold by international companies, such as Hewlett Packard, Lexmark and Xerox, contain such microchips, which can prevent or make uneconomic their remanufacture and use.
Current practices include using highly encrypted microchips to control cartridge functions, which prevent cartridges from being used a second time. These are referred to as killer chips, and use highly sophisticated microchips, operated by radio signals to control cartridge function. They are extremely difficult and costly to copy and make most of the cost of remanufacture prohibitively expensive. Article 4 of the WEEE directive makes the use of such devices illegal. I shall touch on that subject later.
According to one argument, substitute chips are available, so why we should worry? The Minister will know there is a concern that, with ever more encryptions being applied to the chips, the time and cost of producing a substitute mean that it is increasingly likely that they will not be available in future. The Minister's officials suggest that this will be addressed under the energy-using products directive, but can he guarantee that that will be the case? Can the remanufacturing industry wait until 2008 or 2010? From my own discussions, I hear that the industry might well not be in a position to benefit from the EUP directive if the Government do not act quickly. When I raised the matter on the Floor of the House during the Welsh affairs debate just before 1 March, I quoted some examples, including that of Hewlett Packard using killer chips. However, I have met officials of Hewlett Packard and received correspondence from them, and I withdraw that comment. It was inaccurate, and the officials assure me that, although they use smart chips, they do not use killer chips.
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Notwithstanding that correction, companies such as Hewlett Packard are clearly in competition and consider the remanufacturers to be a threat, although perhaps not a major one. However, the remanufacturers consider Hewlett Packard's devices, and those of other companies, to be a very serious threat to their industry. Unfortunately, there is no formal definition of a "killer chip", and that will be subject to much debate.
The WEEE directive aims to reduce the amount of electrical and electronic equipment becoming waste, and to achieve that through reuse, recycling and other forms of recovery. It also seeks to improve the environmental performance of all parties involved in the life cycle of electrical and electronic equipment. Member states must comply with the directive by 13 August 2004. Under article 4,
equipment must not include any designed features that prevent it from being reused, unless there is a safety or environmental reason for doing so.
The Government's position, as I understand it, is that printer cartridges are considered to be consumables, and are outside the WEEE directive's scope. That has been set out in letters to myself and other hon. Members, and in answers to parliamentary questions. However, the Minister will be aware that that view is contested by a number of legal and technical experts, who question, first, whether consumables are automatically excluded, and secondly, whether printer cartridges are not waste electrical and electronic equipment in their own right. He will also know that, if printer cartridges were included, it would not mean that all consumables had to be included, as there is no campaign for other consumables, such as batteries or CDs, to be included.
There are a number of key questions. Are consumables specifically included or excluded from the WEEE directive, or is that just the Government's interpretation? On what basis are printer cartridges deemed to be consumables? Does the directive provide the Government with the scope to include cartridges if they choose to do so? That last question is absolutely critical, because if the directive allows printer cartridges to be included, the Government must explain why they refuse to do so. I understand that as the directive is a minimum harmonisation measure it does indeed allow the Government to include cartridges.
I have made the point about whether cartridges are consumables, or whether the WEEE directive has been disputed by European legal and technical experts. According to Cornelius and Judge, in an article in the June 2003 edition of Imaging Spectrum magazine, modern printer cartridges are dependent on electrical currents and electromagnetic fields to work properly and are to be considered as IT and telecommunications equipment. They therefore should qualify as electrical and electronic equipment and should be considered under the WEEE directive. In effect, that means that although a printer has to be recycled, the printer cartridges that it uses do not. However, a printer is of no use without a printer cartridge; they are inseparable items and pieces of equipment.
The volume of waste from cartridges over the normal life cycle of the printer is 10 times that of the printer. The implication is that if cartridges cannot be considered as equipment, there may be severe environmental consequences and they are likely to end up in landfill sites rather than being remanufactured and reused. Such

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a practice is environmentally damaging and contrary to Government policy on sustainability and waste management, particularly the September 2003 publication "Changing Patterns: UK Government Framework for Sustainable Consumption and Production". Yet the Government state that they want to support the recycling of cartridges.
I wrote to every Department asking for their policy on recycling. The responses were interesting—varied but encouraging. My hon. Friend the Minister for Energy, E-Commerce and Postal Services stated:
I agree that the remanufacture and recycling of printer cartridges is important for the environment and the safeguard of the remanufacturing industry. We have a system in place whereby used cartridges are deposited at dedicated collection points, local at several points on each floor of our buildings. The cartridges are collected on behalf of our stationery supplier. Wherever possible, these cartridges are reused and made available as products re-branded by our supplier.
The Serjeant at Arms also gave me an encouraging answer, as did Baroness Amos at the House of Lords, and an Under-Secretary from the Office of the Deputy Prime Minister. The Department of Health provided the only disappointing response. A reply from an official stated:
After consideration your letter has been passed to the Department for Environment, Food and Rural Affairs who have responsibility for these matters and they will reply to you directly.
That missed the point of the request, which was to ask the Department of Health what its policy was, not about wider Government policy.
In conclusion, the Government are clearly committed to recycling and the minimisation of waste, and Departments have indicated their support for recycling printer cartridges. I acknowledge that the subject is complicated and that the Minister has received much representation. I understand that his Department recently held meetings with both sides of the debate—the original equipment manufacturers and the remanufacturers—and I would be grateful if he could comment on the outcome of those discussions.
I urge the Minister to consider the position of the cartridge remanufacturing industry and the threat it is under from the use of anti-remanufacturing devices and other anti-competitive practices. Will he also state whether he believes that the EUP directive will protect the industry? How can he guarantee that and will it come into force in time?
The issue has been drawn to my attention because of the threat to a company in my constituency. I raise the matter on behalf of the 100-odd employees of LaserXchange, but also on behalf of thousands of individuals who want the right to buy recycled equipment for use with their computers and printers at home and at work, and of all those groups and individuals committed to the principles of recycling and sustainability. Encouraging recycling and the ending of anti-competitive practices that thwart the industry is in the interests of consumers, businesses and the environment. I urge the Minister to consider the points that I have made.
4.30 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)rose—
Dr. Doug Naysmith: I wonder whether my hon. Friend the Minister would give way before he starts speaking.
Mr. Timms: I give way.
Mr. Deputy Speaker: Order. It is a strange way of doing things, but the hon. Gentleman may carry on.
Dr. Naysmith: I intervene because we have an interesting situation, with two constituencies containing manufacturers of printer cartridges. Hewlett Packard is a major manufacturer and employer in my constituency. It is a high-tech industry—an example of the sort of employer that we attract. I want to reinforce the point made my hon. Friend the Member for Monmouth (Mr. Edwards): Hewlett Packard does not use so-called killer chips, or any other device to prevent the refilling or remanufacturing of cartridges, nor does it seek to inhibit the activities of that industry. It tells me that it supports the right of consumers to choose its products in that field, or to recycle products from other manufacturers, and believes that it can compete successfully on quality. Of course, that is a matter for the consumer. I hope that the Minister will take those comments into account in his reply.
Mr. Deputy Speaker: I hope that the hon. Gentleman will take advice on how best to make such an intervention in future.
Mr. Timms: I am grateful for the opportunity to respond to what has been said. I am particularly grateful to my hon. Friend the Member for Monmouth (Mr. Edwards), who has followed this issue with great interest and energy, and played an important part in drawing it to the attention of a wider audience.
This important issue has aroused strong feelings. In recent months, I have received many parliamentary questions—some of which were from my hon. Friend the Member for Monmouth—and an extremely large number of letters from hon. Members on this matter, which I take seriously.
It is important to note at the start that cartridge refilling is flourishing in the UK. About one third of the printer cartridges sold have been refilled. There is nothing in planned legislation that would put that at risk. I am told that a large expansion of the recycling operations is proposed. For example, one of the companies that my hon. Friend mentioned, Cartridge World, which has 210 outlets, lists on its website the sites where it plans to add another 90 locations. That will increase its number of outlets by 40 per cent.
Clearly, nothing in current regulation or technology is proving to be a barrier to the growth of that activity. I am pleased about that, because I agree with my hon. Friend about the important benefits of cartridge recycling, such as extra competition in the market, and environmental benefits. I am grateful to him for referring to the framework for sustainable consumption and production, which I launched with my noble Friend

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Lord Whitty last year. The framework sets out important aspirations on which the Government, the Department of Trade and Industry and the Department for Environment, Food and Rural Affairs work together.
The independent printer cartridge refill sector has raised concerns that innovation in cartridge technology could make competition harder. At the heart of the issue is the question whether third-party refilling will be made more difficult. Two things are clear. First, the issues surrounding the development of chip technology in printer cartridges and the reuse of chipped cartridges are complex and certainly not as clear-cut as some think.
Secondly, the Government have been worried by the absence of a dialogue between independent refillers and equipment manufacturers, such as Hewlett Packard. I am pleased to be able to tell the Chamber that DTI and DEFRA officials were able to bring together representatives of the United Kingdom Cartridge Remanufacturers Association with several of the leading manufacturers last week. The meeting was held in confidence, at the request of both sides, but it was the beginning of what I hope will prove to be a constructive discussion between the parties on those issues. Both parties told us that they found the meeting helpful, and there are high hopes that the dialogue can be taken forward so that there can be more of a common understanding of the issues surrounding cartridge reuse. I have arranged to meet UKCRA representatives on 29 April to take that discussion further.
UKCRA has pressed the Government to use the WEEE directive to address its concerns. The directive was agreed in February 2003 and is due to be transposed into UK law this summer. It sets requirements for the separate collection, treatment and recycling of electrical and electronic equipment and makes the producers—manufacturers and importers—of that equipment responsible for meeting the costs of those activities.
UKCRA has asked the Government to use the directive to address the killer chip issue. It argues that cartridge manufacturers would have to comply with the product design requirements of the directive which aim to prevent manufacturers from designing out reuse and recycling. The cartridge refillers are concerned that, in a fast-moving market, it would be difficult to source replacements for chips used by cartridge manufacturers, although they might be replaced and the cartridge reused. The refillers have said that they are concerned that the increased rate of technological development in that context will squeeze them out of the market, as the chips will become more difficult or more expensive for them to replace.
I believe that it is important to make a distinction between killer chips and other types of smart chip, although I agree with my hon. Friend that this is rather a fraught area in which to reach consensus on a definition. I suggest that a killer chip is one that is designed to burn out the print-head mechanism of a cartridge so that it cannot be used again. As far as I know, only one manufacturer has developed and patented such a killer chip. However, I am assured that that chip has not been used in any products on the market.
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Smart chips are often used to enhance the performance of cartridges for consumers; for example, they may assist in monitoring ink or toner levels in a cartridge. Their purpose is to provide an additional benefit to the user, and not to render the cartridge unrecyclable. Such chips do not prevent the refilling or reuse of the cartridge, although they may not be so easy to reset without proper equipment, to which refillers may not always have access.
We will continue to monitor the use of chip technology in cartridges.
According to our information, the technology for killer chips exists but there are currently none on the market, and there are no strong grounds for believing that that situation is about to change. Customer demand for more information on cartridge performance, partly driven by an investigation by the Office of Fair Trading into the pricing of new cartridges, has led to an increase in the use of smart chips in the past few years, and no doubt that trend will continue. However, so far, there is no sign of the sector's growth being seriously impeded by that trend.
I agree with my hon. Friend on the benefits of recycling, and I am keen to see those benefits harnessed. The refilling and remarketing of cartridges helps to mitigate environmental damage. There is a healthy refill industry in the UK, and I want to see that continue. I made the point earlier that reused cartridges currently represent just over 30 per cent. of the replacement cartridges on the market today. As my hon. Friend said, the DTI has a policy of actively encouraging the reuse of our printer cartridges.
The Government have a good deal of sympathy with the views of the cartridge remanufacturing industry. Many of the companies involved in that industry are small businesses competing with large manufacturers; they provide a valuable service, which gives real environmental benefits and minimises waste. They also help in providing consumers with a wider choice of cartridges than might otherwise be the case and, as my hon. Friend illustrated, often at lower prices. I also agree with him about the benefits from their support for charities.
However, the WEEE directive is not the right way to address concerns about competition in this area. The directive is based on article 175 of the EU treaty, which deals with environmental protection, and it might technically be possible for us to add cartridges to the scope of our UK implementation. However, I suspect that if we did we would be open to challenge because—this is the view of the specialists whose advice I have access to—it is very hard to define a cartridge as a piece of electrical or electronic equipment. There is certainly no requirement to do that in the directive, and I have not seen a strong case for gold plating the directive in the way implied.
I shall set out why that would not be helpful. First, there is a legal view that the directive applies to whole products placed on the market, not individual components or consumables. Computer memory chips, graphics cards, CD-ROM drives and others are in the same category. They need to be recycled only at the end of their life while still retained in the whole device, and it is the producer of the original whole product who is

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responsible, not the manufacturer of each component. It is clear that printer cartridges fall into that category, and the European Commission takes that view as well.
Secondly, the printer cartridge remanufacturing industry needs to consider the other effects on its operations of including printer cartridges in the scope of the directive. There are obvious cost implications for the manufacturers of the cartridges, which would need to take on the directive's producer responsibility obligations for supporting collection and recovery of the cartridges sold to domestic consumers. That would be likely to mean that the original equipment manufacturers had a strong incentive to take back cartridges when supplying new ones, which they would then have to reuse or recycle themselves instead of those cartridges being available to recyclers.
Lastly, printer cartridge remanufactures may become obligated under the WEEE directive. They would be liable for the end-of-life costs for any cartridges they refilled and put back on to the market. They would have to fulfil the various registration requirements and provide financial guarantees for the future recovery of their products. All those factors would mean that there would be fewer cartridges available for the remanufacturers to refurbish, and the refilling industry would have to take on a number of additional burdens that it does not currently have.
All cartridges currently on the market are capable of being refilled and reused, which I welcome. We are currently considering the approach that we should take to the implementation of the directive's provisions to require that producers do not prevent reuse of products in the scope of the directive. We are weighing the fact that the majority of respondents to our recent consultation on implementation supported our
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proposals for a voluntary non-legislative approach, with a suggestion of a business forum to consider eco-design.
Should killer chips appear on the market, the right way forward would be for the Office of Fair Trading to examine evidence of abuse on competition grounds. I am not convinced that a smart chip used on a cartridge to tell a user the ink levels in the cartridge is an anti-reuse or anti-competition device. It seems to be a useful innovation, and I would be reluctant to see legislation passed against such innovation on the basis of the evidence that we have seen so far.
Mr. Edwards: Will my hon. Friend accept that some of the smart chips will be smarter than we are assuming? They are likely to become more sophisticated. I wonder whether the Minister has visited any remanufacturing plants himself. Would he like to come to LaserXchange in Abergavenny?
Mr. Timms: I have not yet had the opportunity to visit one of the plants, but I am looking forward to a meeting next month with UKCRA. I am not in a position to accept my hon. Friend's kind invitation, but I will certainly bear it mind.
I think that my hon. Friend would agree that we should not use the directive to hold back the sort of technological improvements that are appearing in the industry, which some of those chips do provide in printer cartridges. If there is an issue of competition, it should be addressed in another way. The energy products directive that he mentioned is currently being negotiated and that would be—
Mr. Deputy Speaker: Order.
It being fifteen minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

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  The business plan highlights the agency's achievements in 2003–04 and sets out the key tasks and targets for the coming year.

  This comprehensive plan has been formulated within the context of the agency's ongoing remit to lead the modernisation of the NHS purchasing and supply function. The agency has a strategic role to set out a major development agenda for purchasing and supply in the NHS and working with the commercial directorate has developed a co-ordinated implementation plan for doing so. The business plan sets out clearly how the agency will achieve these aims.

  Medicines and Healthcare Products Regulatory Agency
  The Minister of State, Department of Health (Ms Rosie Winterton)
  The 2004–05 business plan for the Medicines And Healthcare Products Regulatory Agency has today been presented to Parliament. The plan contains the agency's key targets for the year.

  Copies of the plan have been placed in the Library.

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  The Chairman of the Independent Regulator of NHS foundation trusts has today announced that, in accordance with section 6 of the Health and Social Care (Community Health and Standards) Act 2003, the Independent Regulator has authorised the following NHS trusts as NHS foundation trusts from 1 April 2004:

  Basildon and Thurrock University Hospitals NHS Trust

  Bradford Teaching Hospitals NHS Trust

  Countess of Chester Hospital NHS Trust

  Doncaster and Bassetlaw Hospitals NHS Trust

  Homerton University Hospital NHS Trust

  Moorfields Eye Hospital NHS Trust

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  Royal Devon and Exeter NHS Trust

  The Royal Marsden NHS Trust

  Stockport NHS Trust

  Decisions on the remaining 15 applications that I have approved will be made at a later date.

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  Immigration Rules
  The Minister for Citizenship and Immigration (Beverley Hughes)
  Today I am making changes to the immigration rules that enable participants on the sectors based scheme (SBS) to extend their leave in the UK to those people whose original permit was for less than the maximum period of 12 months. Permits can be issued for a maximum of 12 months, but in many cases they are shorter. One of the key aspects of the SBS is that participants who have been granted leave for less than one year, and whom the employer wants to retain, can extend their leave, in country, for the remainder of the 12 months that the initial leave did not cover. As hon. Members already know, from 1 April there will also be a new charge of £121 for those who wish to extend their leave under the sectors based scheme. This charge may be picked up by the employer.

  This procedure has been operating administratively since the launch of the scheme, and the changes to the immigration rules will simply put extensions of stay on SBS on a firmer footing within the rules.

  Prisoner Suicide Prevention Strategy
  The Parliamentary Under-Secretary of State for the Home Department (Paul Goggins)
  The Home Secretary and I are determined to reduce the incidence of suicide within prisons. These tragic deaths devastate families and deeply distress both prisoners and staff. We are also committed to tackling the related but separate issues that arise from self-harm.

  The ministerial roundtable on suicides, which I chair, includes representatives from the Prison Reform Trust, the Howard League for Penal Reform, Samaritans and Inquest; from HM Inspectorate of Prisons, the Independent Monitoring Boards and the Prisons and Probation Ombudsman; from the Prison Service, the National Probation Service and the Department of Health; and from prisoners themselves. The roundtable brings together a wide range of expertise that has helped to influence and support the current suicide prevention strategy launched in 2001. More recently, it has helped with the development of a strategy for the longer term and I am grateful for its important contributions.

  I pay tribute to the relentless efforts of staff to save lives. Last year staff resuscitated over 211 prisoners who had made serious attempts at self-harm. In 87 of 138 prisons there were no self-inflicted deaths in 2003–04. The suicide rate (per 100,000 of average prisoner population) is 9 per cent lower than it was in 1999–2000, and the three-year rolling rate has stabilised at about 128 per 100,000.

  Sadly, there are large numbers of people in prison with characteristics that contribute to a risk of suicide. These include problems with mental health, drugs and drink, troubled relationships and social exclusion, as well as a previous history of self-harm and suicidal thoughts or attempts. Identifying and caring for these prisoners is very challenging work, not least as they represent over half the prison population. It is important to note, however, that prisoners have similar rates of suicide to offenders in the community.

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  Central to the suicide prevention strategy that I am announcing today is the need to reduce the level of distress in prison and promote the well being of all staff and prisoners. This applies both to public and privately contracted prisons. We intend to build on current good practice and continue with the commitment of the Prison Service to treat prisoners with decency and dignity. This approach has strong support from Roundtable members and from other external organisations.

  This approach forms part of the Government's national strategy for reducing suicides in the community, and is being developed in partnership with the Department of Health, which is increasingly responsible for improving health care standards in prisons. This includes the provision of mental health services as well as substance abuse interventions and maintenance programmes.

  The approach is evidence based. The final evaluation of the safer local prisons programme is due in the summer. Emerging findings from the research undertaken by Dr. Alison Liebling of the Cambridge Institute of Criminology indicate that levels of distress in a prison correlate closely with suicide rates. The revised strategy will therefore concentrate on measures likely to reduce distress and promote the well-being of prisoners and staff. We will build on our existing programme which includes work on resettlement, drugs detoxification and continuing care and support, staff care and welfare, healthcare, purposeful activity, staff and managementoutlook, leadership and training.

  Alongside our plans to improve the quality of prison life for both prisoners and staff, we will also target additional support for the most vulnerable. Research findings underline the importance and effectiveness of a number of specific measures. These include the appointment of suicide prevention co-ordinators in prisons; the development of in-reach mental health provision and day care centres; good case reviews; and appropriate first night centre and induction procedures.

  Our strategy will include specific interventions to identify those most at risk. In January five establishments began to pilot a new assessment procedure that will be reviewed later in 2004. We will continue to put in place safer cells and other changes to the physical environment in order to minimise impulsive acts of self-harm and suicide.

  This developing strategy will link existing programmes and planned investment in five broad areas of work across the Prison Service and Department of Health. These are:

  Regime, activities and care planning for all prisoners;

  Improved knowledge and outlooks of all staff at all levels;

  Meeting the special needs of the most vulnerable prisoners;

  Training and support for staff;

  Design solutions to minimise impulsive acts.

  The integration with the health agenda is crucial. Mental health in-reach to selected prisons and new triage-based, reception health screening arrangements have been linked to the suicide prevention strategy. Between now and March 2006 NHS mental health in-reach investment is expected to double to £20 million
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  with in-reach services available in every prison. All local prisons are implementing the new screening system during 2004.

  I attach great importance to the contribution that can be made to preventing suicides by learning from what has gone wrong in the past. From 1 April the Government have decided to transfer responsibility for investigating deaths in jails, probation hostels and Immigration and Nationality Directorate detention centres to the Prisons and Probation Ombudsman. Learning from deaths, and consistently applying those lessons, will be an important strand of the developed strategy.

  The strategy that I have outlined above will continue to develop and expand. The National Offender Management Service, which becomes operative in June, will provide a focus on offender management and a wider organisational framework that will boost the work in prisons and facilitate its eventual expansion into offender management in the community.

NORTHERN IRELAND

  Independent Commissioner for Detained Terrorist Suspects
  The Minister of State, Northern Ireland Office (Jane Kennedy)
  I have today arranged for copies of Dr. Bill Norris's annual report for 2003 to be placed in the Libraries of both Houses.

  I welcome Dr Norris's report and I will consider it carefully. I will respond as soon as possible.

FOREIGN AND COMMONWEALTH AFFAIRS

  Iraq Survey Group
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  Charles Duelfer, the special adviser to the Director of Central Intelligence for Strategy regarding Iraqi weapons of mass destruction programs, presented a further report to US Congressional Oversight Committees on 30 March 2004. As with the previous report presented on 2 October 2003, this is a status report on work in progress. I have arranged for a copy of the unclassified text to be placed in the Library of the House.

  Great Chagos Bank
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  The Great Chagos Bank, which lies within the waters adjacent to the outer islands of the British Indian Ocean Territory (BIOT), is an exceptional example of a submerged coral atoll, providing a valuable contribution to the marine ecology of the Indian Ocean. On 17 September 2003, in order to help to conserve the natural resources of the bank, the Commissioner for
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  BIOT proclaimed an area including the Great Chagos Bank to be an Environmental (Preservation and protection) Zone. A copy of the proclamation, together with the relevant chart and co-ordinates, has been deposited with the UN under Article 75 of UNCLOS, and will be published in the Law of the Sea Bulletin No. 54.

  Guantanamo Bay Detainees
  The Secretary of State for Foreign and Commonwealth Affairs (Mr.Jack Straw)
  A team of FCO officials, RAF personnel, British police officers and independent observers visited Guantanamo Bay between 8 and 9 March 2004.

  The purpose of the visit was to return five British detainees to the UK; and to check on the welfare of the four British detainees who remain there and to explain their position to them. The camp authorities were cooperative and helpful during the visit.

  An FCO official, accompanied by a police officer, informed the five British detainees on 8 March that they would be returned to the UK. Their return took place the following day, 9 March.

  An FCO official also met the other four British detainees individually. A US official observed the meetings. The FCO official delivered mail for the detainees personally and brought messages back to their families. Detainees are able to send and receive mail through the camp authorities and the ICRC. Delivery remains irregular. We are considering with the US Government ways for them to improve the mail arrangements.

  The FCO official asked all the British detainees about their health, diet, accommodation, opportunities for exercise and other camp facilities.

  The British detainees appeared to be in satisfactory physical health but are increasingly frustrated by their continued detention. Individual welfare issues are being pursued by British officials with the US Government.

  The FCO official informed the four British detainees that:
  following discussions between the British and US Governments, five other British detainees were to be returned to the UK;
  discussions between the two Governments on their own future continued.

  The FCO official also informed Mr Abbasi and Mr Begg, both of whom have been designated by the US authorities as eligible for trial by Military Commission, that:
  if they were to be tried, the British Government has told the US Government that the trial should be fair;
  the two Governments continued to explore this and other possible courses of action.

  The legal proceedings against Mr Abbasi and Mr Begg were suspended in July 2003 pending discussions between the British and US. The British Government's position remains that the British detainees should either be tried in accordance with international standards or they should be returned to the UK. The British Government continues to work to resolve their position.

DEFENCE

  International Security Assistance Force
  The Minister of State, Ministry of Defence (Mr.Adam Ingram)
  Since the inception of the International Security Assistance Force (ISAF) in December 2001, the United Kingdom has been a key contributor: we have maintained a continuous presence in Kabul where our troops have once again established a high reputation. That useful work has been complemented by our provincial reconstruction team (PRT) in Mazar-e Sharif, currently operating under the command of the coalition across the five provinces of Balkh, Faryab, Jowzjan, Samangan and Sar-e Pol. No-one should doubt the United Kingdom's commitment to Afghanistan.

  The United Nations Security Council resolution 1510 authorized ISAF to expand beyond Kabul and offered the opportunity to start to bring the ISAF and the PRTs together. Since December 2003, NATO has operated its own PRT in the north-eastern city of Konduz as part of ISAF. Building on that experience, and that of coalition PRTs, NATO's detailed operational planning to expand the ISAF across Afghanistan is nearing completion. In view of the parliamentary recess I believe the House would wish to be informed of developments that are likely to occur shortly.

  Within this planning, and in conjunction with our international partners, we have offered to NATO to lead the expansion process in the north of the country, where we already have a significant presence through our own PRT. As part of our expanded commitment, and once NATO has agreed its operational plan we shall lead a second multinational PRT that we intend to establish in the Northern city of Meymaneh. Again, in co-operation with our international partners, we shall establish and maintain facilities to support PRTs across the North of Afghanistan. Finally, we plan to transfer command of the PRT in Mazar-e Sharif from the coalition to the ISAF.

  This will require some increase in the number of British troops routinely deployed in Afghanistan, although until negotiations with our international partners are complete I am not in a position to indicate what the precise total will be, but I will keep the House informed as this develops. I can confirm, however, that this commitment, which will utilise forces allocated to but not deployed forward in Afghanistan and some other enabling elements in the initial stages, is sustainable.

  The expansion of the ISAF will be a major challenge. The United Kingdom, in line with our determination to help the Afghan people rebuild their country, is resolved to play its full part in meeting that challenge. By leading expansion in the north we shall do so in a sustainable and effective manner to the long-term benefit of Afghanistan and her people.

  Chemical Protection Programme
  The Minister of State, Ministry of Defence (Mr.Adam Ingram)
  The UK's chemical protection programme is designed to protect against the use of chemical weapons. Such a programme is permitted by the chemical weapons convention, with which the United Kingdom is fully compliant. Under the terms of the convention, we
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  are required to provide information annually to the Organisation for the Prohibition of Chemical Weapons (OPCW). In accordance with the Government's commitment to openness, I am placing in the House of Commons Library a copy of the summary that has been provided to the organisation outlining the UK's chemical protection programme for 2004.

  NATO Response Forces
  The Minister of State, Ministry of Defence (Mr.Adam Ingram)
  From mid-July 2004, the United Kingdom's routine Destroyer or Frigate (DD/FF) contribution to the standing element of the NATO Response Force (NRF) will be a single ship. This replaces our previous commitment of two—one to Standing Force Atlantic 98WS
  and one to the Standing Force Mediterranean. We have also given greater priority to enduring additional commitments in the Arabian Gulf.

  When, from July 2004 until June 2005, the UK fulfils the role of High Readiness Force Commander (Maritime), we will provide a broad range of maritime capability to the NRF When this duty passes to another nation, UK will revert to our routine commitment of 1 DD/FF.

TREASURY

  "Review of Statistics for Economic Policy Making"
  The Chancellor of the Exchequer (Mr.Gordon Brown)
  Christopher Allsopp's final report "The Review of Statistics for Economic Policy Making" is published today. Copies are available in the Vote Office and the Library of the House.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Falconer of Thoroton): My Lords, before business begins, may I take the opportunity to inform the House that I will be undertaking a ministerial visit to Leicester on Monday 19 April? Accordingly, I trust that the House will grant me leave of absence.

House of Lords: Select Committee Reports
2.37 p.m.
The Countess of Mar The Countess of Mar asked the Leader of the House:
How she will ensure that adequate and suitable time is made available for the House to debate Select Committee reports.
The Lord President of the Council (Baroness Amos): My Lords, the usual channels do their best to offer time to committees, but it is partly in the hands of the committee chairmen. If chairmen want prime time, it will require flexibility. This Session, prime time was offered to committees that no chairman took up.
The Countess of Mar: My Lords, I thank the Leader of the House for her reply, but I am a little disappointed by it. I understand that the usual channels are responsible for making arrangements for debates to take place at convenient times, but I had not appreciated that the chairmen of committees were also involved in agreeing the time.
Given that scrutiny cannot be lifted until after a debate in your Lordships' House—particularly with regard to the European Union sub-committees—will the noble Baroness use her good offices to prevail on the usual channels and the chairmen of committees, if it comes to that, to make sure that the debates are held in good time, so that scrutiny can be lifted and Ministers can go to the European Council and deal with matters appropriately?
Baroness Amos: My Lords, I recognise the concerns that are being expressed by the noble Countess, Lady Mar. I know that the noble Countess recognises that there is no such thing as government time in this House. Everything is done by agreement and, of course, in consultation with the relevant chairmen of the committees. It requires flexibility. Of course, I will use my good offices with the usual channels, but we also require the chairmen of committees to be flexible.
Lord Crickhowell: My Lords, does the Lord President of the Council agree that it is extremely
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satisfactory that important reports from the committees and sub-committees—I declare an interest as a member of Sub-Committee D—are never reported in the House? One of the consequences is that some of the responses from government departments are wholly inadequate. A recent response from Defra to Sub-Committee D is an example. Would not government departments take the reports more seriously if they had to defend their position in the House?
Baroness Amos: My Lords, my understanding is that the Government agree to respond to committee reports within a reasonable time. There have been occasions on which those responses have been late but, once the responses are received, there is an agreed debate in which Ministers will defend the Government's position. I do not entirely agree with the noble Lord that there is no opportunity for the view of the committee to be put and for the Government to respond on the Floor of the House.
Lord Tordoff: My Lords, unless things have changed in the past two or three years, the first Answer that the noble Baroness gave is not entirely accurate. The chairmen of committees can hardly be blamed for the fact that the Government Whips' Office can never find enough time for such matters. I know that the Government have a heavy programme, but Select Committee reports get squeezed into the gaps between government business. The Government are not in control of all the business but, for all practical purposes, they are.
Baroness Amos: My Lords, there may be some confusion. I am speaking about the chairman of the committee whose report is to be debated. Recently, for example, a five-hour prime time slot was offered to committees and was not taken up.
Lord Peston: My Lords, the Economic Affairs Committee has just had a response from the Government. My noble friend the Chief Whip is looking far too happy on the Front Bench: l have just written him a letter saying that I must have a debate right this minute and lasting at least five hours. As my noble friend knows, I am the most flexible and reasonable of chairmen.
I am not sure that this is an easy problem to solve. We do not debate the reports until the Government produce a response. One of the problems with the subsequent debate is that the Government, having produced a response, feel that they must stick to their response, rather than listening to the voice of the House and saying, "Maybe the committee was right". It is not clear what we should do. Does my noble friend agree that we ought to find a way of not allowing the

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Government to get entrenched in a position in which they find it impossible to be sympathetic to the views of the House?
Baroness Amos: My Lords, I hope that my noble friend recognises that this is a caring, friendly, flexible Government.
Lord Strathclyde: My Lords, was not the noble Lord, Lord Tordoff, right in saying that the Government must bear more responsibility for this? Is it not also true that in the first two Sessions of the Labour Government all but four of the published Select Committee reports were debated? However, by the end of the Session last year 13 were left undebated and already in this Session seven are awaiting debate, three of them from before the Summer Recess.
Under the experimental procedures that we are currently undertaking, there was an agreement that if more Bills were debated in Grand Committee, there would be more time on the Floor of the House for this sort of prime-time debate. There were a record number of Grand Committee sittings last Session and there are a record number this Session. Should not the Government start to fulfil their side of the bargain?
Baroness Amos: My Lords, I do not think that we have a bad record on debates this Session. We have had two full days on Select Committee debates, plus two part-time, prime-time debates on Select Committee reports, with another one planned for 22 April. I am aware that if you look at the Minute, there can be a perception that some Select Committee reports have been waiting for a long time. But in at least one case, the committee does not want the report to be debated until it has done some further work.
Lord Williamson of Horton: My Lords, while I support the noble Countess, Lady Mar, I recognise the difficulties of the usual channels—-and will probably recognise them even better in the future. Does the Minister agree that because many of these reports are very well seen outside the House, the possibility of more debates on the Floor of the House—and I understand the difficulties would be good for the reputation of this House?
Baroness Amos: My Lords, first let me congratulate the noble Lord, Lord Williamson. I look forward to working with him in his new role. The noble Lord is quite right that the work of the Select Committees in this House is taken very seriously. However, I draw the noble Lord's attention to the fact that the average number of speakers in this House on the debate of a
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Select Committee report is eight. We really need to look at the interest that is being generated around specific issues.
Lord Acton: My Lords, is my noble friend aware that the noble Lord, Lord Williamson, is to be the new Convenor of the Cross Benches? A lot of people sitting around me do not know that.
Baroness Amos: My Lords, that was the reason why I congratulated the noble Lord, Lord Williamson.

Medicines and Foods: Interaction
2.46 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton asked Her Majesty's Government:
What information is given to patients and carers to enable them to identify drug interactions and interaction between drugs and certain foods.
Baroness Andrews: My Lords, all medicines must be accompanied by a patient information leaflet, which sets out any recorded interactions between the medicine prescribed and other medicines or foods. The Government are continuing vigorously to encourage manufacturers to provide clear and accessible information about their products to enable them to be used safely and correctly. In addition, a range of advice will be given to patients at the time of prescribing and dispensing.
Baroness Masham of Ilton: My Lords, I thank the noble Baroness, Lady Andrews, for her Answer and give special thanks for her hard work. I declare a personal interest as my husband has had exceedingly complex and difficult problems. He is on warfarin, and his INR blood coagulation has gone over 10 twice. It is today very dangerous indeed. Is the noble Baroness aware that he was on antibiotics, which can result in problems, and also on grapefruit juice?
Baroness Andrews: My Lords. I am sure that everyone will want to send their best wishes to the noble Baroness's husband for a speedy recovery.
Warfarin is a powerful anti-coagulant; there are some known interactions with certain antibiotics. There is also a potential reaction with cranberry juice, which has come to light very recently, and doctors have been informed about it. But I can assure the noble Baroness that the patient information leaflet, which should be provided with every medicine prescribed, should give all information about known interactions, so the doctor involved should also be able to give that information.
Lord Clement-Jones: My Lords, does the Minister agree that the interaction of medicines and the administration of medication is particularly important in care homes? I am sure she will have noted the National Care Standards Commission's report,

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The Management of Medication in Care Services, which shows that out of 16,500 care homes, some 2,500, for children and for older people, are failing to meet those standards. What is the Government's response to that report?
Baroness Andrews: My Lords, the noble Lord has drawn attention to a very important issue. We are very concerned that the National Care Standards Commission's report showed that so many care homes did not meet the standard. However, we were encouraged by the fact that the figures for this year are an improvement on last year. There is clearly room for improvement. We will be looking carefully at the recommendations and following them up as soon as possible, wherever possible.
Earl Howe: My Lords, will the Minister undertake to look at this issue as it affects mothers who are breastfeeding? Pharmaceutical companies are not currently required to provide information about the safety of drugs in lactation. The majority of newly developed medicines are labelled "not to be taken by breastfeeding women", not because they are necessarily unsafe but because there are no data to support such approvals. Will the Government encourage the pharmaceutical industry to collect data from GPs on this very important issue?
Baroness Andrews: Yes, my Lords, it is important. My advice is that information on whether a drug passes into breast milk is included in the summary of product characteristics and the patient information leaflet, when it is known. Of course, the BNF—the British National Formulary—also contains detailed information on medicines that will be present in breast milk if the mother is treated. I undertake to write to the noble Earl with any other information that I have on the specific issues that he raised.
Baroness Goudie: My Lords, does the Minister agree that should there be not only a list of potential foods that are dangerous when taking drugs but information about combining alcohol and drugs? In many cases, that can cause very bad side-effects, and in some cases it can be fatal.
Baroness Andrews: Yes, my Lords, the noble Baroness is absolutely right. Alcohol is a very powerful drug in itself and, when there is a known interaction with a particular medicine, that information should certainly be in the information leaflet. I remind noble Lords that the patient information leaflet is required by law to be provided with every medicine prescribed.
Baroness Gardner of Parkes: My Lords, we have had all the negative side of the question—and, of course, it is a very important matter. However, the effect of some
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drugs is enhanced by combining them with other drugs. We have all read, I am sure, about a marvellous pill that we shall be able to take: six different tablets a day will keep us alive for long enough to see this place out! When will we receive information about that magic pill, which has been talked about so widely?
Baroness Andrews: My Lords, I have very extensive briefing, but I have absolutely nothing on this magic pill. I doubt very much that I shall live long enough, with the stress of this particular role, to see it. But I shall see what I can do and provide some further information.
Baroness Hayman: My Lords, on the issue of the dearth of data referred to by the noble Earl, Lord Howe, does my noble friend agree that it is a particular problem in relation to paediatric prescribing, and therefore the information that can be given in that regard? There has been a lack of non-therapeutic clinical trials for children, for understandable reasons, but has any progress been made on getting better information on prescribing for children?
Baroness Andrews: My Lords, prescribing medicines for children has been constrained traditionally by ethical considerations. It has been a concern that we have not sometimes been able to provide appropriate medicines for children because of that. However, the UK is supporting a European proposal to set out a framework for requirements and incentives for research and development into appropriate medicines. That is a very important step forward. We expect to take a leading role in that.
We are also developing our own national strategy. We want to encourage more paediatric research_. I am sure that the noble Baroness will be as pleased as I was to see that one of the five areas that has been prioritised for additional funding for medical research in the next few years will be paediatric medicine. We aim to bring together the paediatric research centres to ensure faster progress. That, plus the national service framework for children, is very good news.
Baroness Sharples: My Lords, can the Minister assure us that the information will be written in extremely simple language?
Baroness Andrews: Yes, my Lords. The labelling of medicines is absolutely crucial. By law, labels are supposed to be understandable and readable. That should apply for everyone. We have had a report from the Committee on Safety of Medicines, which considered ways in which to provide clearer information, by colour-coding packages to distinguish between medicines, and so on. We are very alert to the issue and to involving patients more in the management of their own medicines. For that, they really do need a lot of information.

House of Lords: Legislative Conventions
2.53 p.m.
The Earl of Onslow The Earl of Onslow asked the Leader of the House:
Whether the House of Lords has broken any conventions between the two Houses of Parliament on the consideration of legislation over the past two Sessions; if so, on what occasions; and what were the conventions.
Baroness Amos: My Lords, I shall focus on the most recent of many examples—the extended ping-pong on the European Parliamentary and Local Elections (Pilots) Bill. This House has refused to accept Commons amendments four times, despite the strong convention that the elected House gets its way in the end. That convention was recognised by the Opposition last Session, during ping-pong on foundation hospitals, and was indeed recognised by the noble Earl, Lord Onslow, when he said:
"On something like this, eventually the Lords will give way. They must do".
The Earl of Onslow: My Lords, normally one thanks the Minister for her reply.
Noble Lords: Always!
The Earl of Onslow: My Lords, not always. On this occasion the Minister has not said what the convention is. She has invented it. She quite accurately quotes what I said on television, which I stand by, but the conventions as I understand them are this: the Salisbury convention, done in different circumstances. Are the Government now saying that when circumstances are different, they can continue to break the word of honour given by a Lord Chancellor on the grounds that there was a change of circumstances? Is that still a convention?
Baroness Amos: My Lords, the noble Earl has been in this House much longer than I have, and he will recognise—as, indeed, I did when I came into this House—that there are a number of conventions that are not written down anywhere. They are conventions that are understood, accepted and worked through between the two Houses; and, indeed, within this House. The first attempt to codify those conventions came in the Wakeham Commission report, which set out absolutely clearly the primacy of the House of Commons and the fact that the House of Commons should have its way.
Baroness Williams of Crosby: My Lords—
Lord Craig of Radley: My Lords—
Noble Lords: Cross Bench!
Baroness Williams of Crosby: My Lords, I thank the Minister for her reply. Does she agree that the prime role of this House is not only to scrutinise legislation from another place but also to protect the fundamental
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liberties and rights of citizens in our constitution? Does she further agree that, while we all recognise that at the end of the day the Parliament Act can be used to stress the basic superiority in terms of power of the Commons over the Lords, a very special responsibility rests on this House with regard to electoral matters, given that the majority in the House of Commons under almost all governments does not reflect a majority of the views of electors who elect that government?
Baroness Amos: My Lords, I have to say that I would be more ready to accept that if it were something that had come down historically over many years. There was no consensus when the party opposite was in government and abolished a whole tier of local government. On the basis set out by the noble Baroness, Lady Williams, we certainly would not have had the Parliament Act; we certainly would not have had an extension of the franchise; and we certainly would not have had votes for women. The protection of fundamental liberties of the people of the United Kingdom, to which the noble Baroness has referred, is something that has gone against the grain in this House rather than with it with respect to some electoral matters.
Lord Campbell-Savours: My Lords, I wonder if my noble friend the Minister can explain how she understands how the noble Earl, Lord Onslow, and, in particular, the noble Baroness, Lady Williams, a Liberal life Peer, can argue that 10 Earls, seven Viscounts, one Duke, a Countess and 24 hereditary Barons can overturn the decision of 357 elected Members of the Commons? That decision was to give the people of the north-west of England and, in particular, the people of Cumbria, where I live, the right to an all-postal ballot. If that is within the convention. I think that it is about time we changed it.
Baroness Amos: My Lords, my noble friend is well aware that our party and the Government feel very strongly that the hereditary principle has no place in Parliament. We made that absolutely clear in our 1997 manifesto. On the specific point with regard to the European Parliamentary and Local Elections (Pilots) Bill. I share my noble friend's concern. The proposals that have been put before this House will increase the turnout; local pilots have demonstrated that there is around a 15 per cent increase in the turnout. All parties have an interest in ensuring that the electorate can vote and can do so in a variety of ways.
Lord Strathclyde: My Lords, this Government have torn up more constitutional conventions than any government in the preceding century. Is it not a little rich to lecture Parliament that it must keep those conventions that suit the Government but must tear up those that do not? Speaking of conventions, should

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there not be a new convention that changes to electoral law should, at worst, be introduced only after wide public debate, should be supported by the Electoral Commission and, at best, should require cross-party support? All of these are sadly lacking in the European Parliamentary and Local Elections (Pilots) Bill.
Baroness Amos: My Lords, I would take more notice of what the noble Lord, Lord Strathclyde, said if I had not already made the point in answer to the question from the noble Baroness, Lady Williams of Crosby. These are conventions that the noble Lord's party took no notice of when it was in power. Indeed, I repeat the comments that were made by the noble Lord, Lord Strathclyde, in relation to the House of Lords Bill on reform, which will not now come before this House:
"If the Bill is ever presented to this House, the noble and learned Lord and his colleagues can be assured that he can expect a major fight on his hands, and it will not be confined to this Bill".—[Official Report, 18/9/03; col. 1062.]
If that is not breaking a convention, I do not know what is.
Lord Craig of Radley: My Lords, can the Minister inform the House what percentage of votes were cast from those on the Benches behind her for the last series of ping-pong? Is she not aware that in no case did the Government achieve more than a 60 per cent turnout of their vote on the many amendments that they lost in the last Session?
Baroness Amos: My Lords, the noble and gallant Lord, Lord Craig, is aware of the figures. This party carries some 28 per cent of the vote, as do the Cross-Benchers. The Conservative Party has some 31 per cent of the vote. Averaged over last Session, Labour got out 51 per cent of its vote, with the Liberal-Democrats achieving 45 per cent and the Conservatives 31 per cent.
Earl Russell: My Lords, does the noble Baroness remember the case of Scottish tuition fees where ping-pong extended through five rounds? While this House may usually give way. does she understand that the moment that the Government are able to translate "usually" as "always", this House might as well pack up and go home?
Baroness Amos: My Lords, if that were the case under every government of whatever complexion the noble Earl would have a point. I draw his attention to the following quote:
"When the Conservative Party is in power, there is practically no House of Lords: it takes whatever the Conservative Government brings it from the House of Commons without question or dispute; but the moment a Liberal Government is formed, this harmless body assumes an active life, and its activity is entirely exercised in opposition to the Government … It is in fact a permanent barrier raised against the Liberal Party".
That was Lord Rosebery in 1894. What has changed?

Government Communications
3.3 p.m.
Lord McNally Lord McNally asked Her Majesty's Government:
Who will have direct ministerial responsibility for the newly appointed Permanent Under-Secretary of State for Communications and where the post will be located.
Lord Bassam of Brighton: My Lords, following an open competition, Howell James has been appointed to the post of Permanent Secretary, Government Communications. He will report through the Cabinet Secretary to the Minister for the Cabinet Office and the Prime Minister. He will be located in the Cabinet Office.
Lord McNally: My Lords, does the Minister recall that the Phillis committee, which set up this new arrangement in Whitehall, set out its objective as being to address the breakdown in the level of public trust in, and credibility of, government communications? It saw, as part of the answer, the restoration of the tradition of Civil Service impartiality as a key bulwark on which to build trust. Is he aware that the three men given major appointments under the new regime—the political appointment of Mr David Hill; the Permanent Secretary, Government Communications, Howell James; and the No. 10 spokesman, Tom Kelly—were all members of the Phillis committee, which gives it a good record in terms of job creation? Does he really think that this new structure, which now puts three spin doctors where one spin doctor operated before, addresses the central point of Phillis: that we have to restore the tradition of Civil Service impartiality to government communications, which was destroyed under Alastair Campbell.
Lord Bassam of Brighton: My Lords, I thought at first that the noble Lord approved of the findings of the Phillis committee. It is my view, and I thought that the noble Lord shared it, that the Phillis committee neatly defined the way in which responsibilities should be separated out, so that a Permanent Secretary for government communications has a different job from that of the director of communications who advises the Prime Minister or the Prime Minister's official spokesperson. On the basis of that appointments experience and background, we have every confidence in the ability of the new Permanent Secretary to deliver high quality communications to high professional standards across the government information service.

Children: Attendance at School
3.6 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
What lessons they have learnt from the repeated imprisonment of Patricia Amos for failing to prevent the truancy of her daughters from school.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I cannot comment on a particular case. As with any prosecution, it is for the courts to decide on the appropriate sentence, having taken into account all the facts. However, we believe that parents must take responsibility for their children's attendance at school and prosecution can be an effective mechanism for securing attendance in the most intransigent cases.
Earl Russell: My Lords, are the Minister and those who brought the initial prosecution aware that Mrs Amos's daughter first got into the habit of staying away from school in order to check up surreptitiously whether her mother collapsed after the arrival of the heroin dealer? Does she regard this as responsible behaviour on the part of the daughter? Does she agree that a government who decide the penalty without considering the circumstances of the case is like a batsman who plays his shots with his eyes shut?
Baroness Ashton of Upholland: My Lords, it is for the courts to determine the penalties and not the Government. I shall make it absolutely clear to the noble Earl that, in the view of this Government, the attendance of children at school is critical for the life chances of those children. We believe that we should have at our disposal and at the courts' disposal the opportunity to ensure that that can happen.
Lord Marsh: My Lords, will the Minister take this more widely? What is a parent supposed to do to constrict a teenage child? I speak as one who was a somewhat difficult teenager, whose parents suddenly discovered that when I was aged 14, and attempted to impose discipline, which was extremely foolish of them and could have resulted in serious problems. It is not a practical proposition. I do not understand what the Government expect parents to do.
Baroness Ashton of Upholland: My Lords, I find it hard to envisage the noble Lord as a difficult teenager. It might give him some comfort to discover that I too was quite a difficult teenager. I accept that it is difficult to be a parent. I recognise that. We have discussed many times in your Lordships' House the array of different ways in which it is our responsibility to try to support parents when children are very young and as they grow up. We do have many opportunities to discuss that. At a previous Question Time, I referred to the fact that I had recently received a leaflet from my children's school, offering me, along with all other parents, the chance to attend courses to support my parenting. I wholeheartedly endorse those types of moves. But I make it plain: it is the responsibility of parents, with our support, to ensure that children get a good education.
Lord Elton: My Lords, this action was taken for the benefit of the child, Jackie. Can the Minister tell us what steps have been take by the authorities
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responsible for depriving her of her mother's care to see that her care continues to be satisfactory and loving?
Baroness Ashton of Upholland: My Lords, I must repeat that I am not able to comment on individual cases. The courts take all circumstances into account in their work.
Lord Northbourne: My Lords, will the noble Baroness tell the House whether, in the context of this and similar problems, the Government are planning to expand the availability of affordable parenting education and support?
Baroness Ashton of Upholland: My Lords, through the work on the Children Bill, as the noble Lord will know from yesterday, and through the work that we are developing for children and families, we are looking at how best to support, through the work of the parenting fund, for example, organisations that work with parents. As I have already said, we recognise that it is critical to offer support to parents. I repeat that it is absolutely essential that all children receive the benefits that a good education can bring.
The Earl of Listowel: My Lords, is the Minister concerned that female prison numbers have risen by 194 per cent over the past decade? Might that suggest that perhaps one should sit on one's hands a little longer and ask whether there should be more constructive interventions than resorting to imprisonment—much as we all would wish that every child should go to school—and recognise the importance of education to children?
Baroness Ashton of Upholland: My Lords, it is for the courts to determine the appropriate action in all cases. I am not sure that I can link the comments of the noble Earl with the Question, except in one context: we know that children and young people who do not receive the benefit of a good education are more likely to become offenders and are therefore more likely to be imprisoned.
Lord Elton: My Lords, I accept that the noble Baroness cannot comment on particular cases, but she can comment on general arrangements. Can she assure us that arrangements are in place to ensure that, where a child is deprived of the care of a parent—particularly a single parent—the authorities that impose that deprivation will make arrangements for the care of that child? The noble Baroness will be aware, although she may not be able to comment on the case, that, according to the sister of the child in question, those arrangements are not working.
Baroness Ashton of Upholland: My Lords, I have said that I am not prepared to comment on an individual case. It would be wholly inappropriate. I agree with the noble Lord that it is important to ensure that children are cared for, as appropriate.
Lord Greaves: My Lords, I am sure that the whole House would agree entirely with the Minister that it is

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vital that all children receive the best possible education and that for that to happen they should turn up to school. But does she not understand that by simply repeating those comments she has not answered the basic question as to whether a particular punishment—the mother going to prison—and repeating that punishment is appropriate in a case where the parent is clearly unable to enforce the condition that the children go to school?
Baroness Ashton of Upholland: My Lords, I understand entirely what the noble Lord is saying. I hope that equally lie understands that it is for the courts to decide the appropriate action to be taken—not for me, as a Minister, or the Government. It is an appropriate course of action if the courts decide that it is. What lies beneath the Question is how we view the importance of education. I believe that it is critical, for all of the reasons of which noble Lords are fully aware, for the life chances of children that we ensure that children receive an education. Under the 1996 Act a variety of different options are available, which we have supplemented, to try to ensure that that happens. One of those is the right of the courts to imprison.
Earl Russell: My Lords, when the Minister says that it is for the courts to determine the appropriate penalty, is she making a commitment to abandon the mandatory sentence?
Baroness Ashton of Upholland: My Lords, I am making no commitment, as the noble Earl is fully aware.

Business
3.14 p.m.
Lord Grocott: My Lords, I wish to comment on today's Order Paper. Those noble Lords who follow such matters will know that yesterday we moved three orders to today to try to make yesterday's business more manageable. For reasons that have been explained to me, but occasionally baffle me, the way that the Order Paper has had to be printed today puts the three orders ahead of the Unstarred Question in the name of the noble Lord, Lord Astor of Hever. However, the Unstarred Question will be debated before the three orders. I do not believe that that will cause any inconvenience. Although the reason for printing in such a way might be baffling, that is how we shall proceed. The appropriate explanation will be given at the time and, "You know it makes sense".

Business of the House: Debate this Day
Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Baroness Williams of Crosby set down for today shall be limited to five hours.—(Baroness Amos.)
On Question, Motion agreed to.

Assisted Dying for the Terminally Ill Bill [H.L.]
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the following Lords be named of the Select Committee on the Bill:

E. Arran,

L. Carlile of Berriew,

B. Finlay of Llandaff,

B. Hayman,

B. Jay of Paddington,

L. Joffe,

L. McColl of Dulwich,

L. Mackay of Clashfern (Chairman),

L. Patel,

Bp. St Albans,

L. Taverne,

B. Thomas of Walliswood,

L. Turnberg;

That the committee have power to appoint specialist advisers;
That the committee have power to adjourn from place to place;
That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed; and
That the committee do meet on Wednesday 7 July.—(The Chairman of Committees.)
Lord Alton of Liverpool: My Lords, before we approve the Motion, perhaps I may ask the Chairman of Committees two short questions. Will he confirm that when the Joint Committee on Human Rights met on Monday last, it declined to give the Bill a compatibility certificate, as it was incompatible, as it currently stands, with the European Convention on Human Rights? Should not such matters be resolved first, before Bills are committed to Select Committees? What weight did the Committee of Selection place on the issue of disability when it arrived at the composition of the committee? Can he confirm that there were nominations for Members of your Lordships' House who have particular experience or expertise in the area of disability? Given the outright opposition of disability awareness groups and the Disability Rights Commission to the legalisation of euthanasia, does the Chairman of Committees not agree that it would have been helpful for one of those Members of your Lordships' House to be appointed to that committee?
The Chairman of Committees: My Lords, regarding the first point made by the noble Lord on the Joint Committee on Human Rights, I have not seen its report. But it is an issue that the Select Committee will take very much into account when it sits. As noble Lords will see from the Motion that I have proposed, the committee will not sit until July, so there is ample opportunity for that matter to be taken into account.

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Regarding the disabled, the membership of the committee was selected in the usual way by the usual channels. I know that a great deal of care was taken by the usual channels in putting forward the list of names that is before your Lordships. I do not know whether any Members of your Lordships' House who are disabled volunteered to be on the committee, but when the committee first meets it will be calling for evidence. That is the opportunity for the disability groups that the noble Lord mentioned to submit their evidence.
Baroness Knight of Collingtree: My Lords, is it not significant that the BMA and virtually all of the medical colleges have come out strongly against the Bill'? Does the Chairman of Committees not agree that they are the people who will have to bear the heat, the burden and the strain if the Bill were to be passed? Bearing in mind those points, it may not be wise to go forward with the Select Committee at this stage, given the cost and difficulty of meeting during the Summer Recess and the attendant difficulties of the situation.
The Chairman of Committees: My Lords, it is not for me today to go through the rights and wrongs of the Bill. I know that the noble Baroness has strong views on the issue. As I have said to the noble Lord, Lord Alton, the usual channels took great care in choosing the Members of the Select Committee who have been proposed in this Motion. I am sure that, particularly under the chairmanship of the noble and learned Lord, Lord Mackay of Clashfern, the Bill will be given very serious consideration. It is for the BMA and others to submit their evidence.
There is more than one member of the medical profession on the committee. I do not believe that there is any proposal for the committee to meet in the recess. It will meet for the first time in July before the House rises, but there is no reason to suppose that it will meet during the recess. It is likely that when the committee meets in July it will request written and oral evidence and I assume that its next meeting will be when we return—either in September or October.
Lord Elton: My Lords, I apologise for asking a question to which I ought to know the answer. Can the Chairman of Committees say at what stage, if any, the withholding of a certificate of compatibility becomes a bar to the progress of legislation? Does it hang in the air as a comment even up to enactment or is it a structural necessity that it be acquired before that takes place? I apologise for not having given the noble Lord notice of the question.
The Chairman of Committees: My Lords, the noble Lord, Lord Elton, catches me out completely. Frankly, I have no idea of the answer to his question. I shall do what I can to find out and I will let the noble Lord know.
Lord Tordoff: My Lords, I hesitate to correct the noble Lord on the number of medical persons associated with the matter. On my count there are four members of the medical profession on the Select Committee.
The Chairman of Committees: My Lords, I did not say how many there were, but that there were some. I am grateful to the noble Lord, Lord Tordoff, for giving us the precise number.
Lord Goodhart: My Lords, is the noble Lord aware that the comment by the Human Rights Committee is not a requirement for legislation? It simply indicates that if an Act is enacted it may be subject to challenge and declaration of incompatibility. That does not in itself invalidate the Act.
The Chairman of Committees: My Lords, I am grateful to the noble Lord—who is not a member of the committee—for his information as no doubt the noble Lord, Lord Elton, will be. As I said originally, this is obviously an issue which the committee will look at with great care when dealing with the Bill.
On Question, Motion agreed to.

London Local Authorities Bill [H.L.]
3.21 p.m.
The Chairman of Committees: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(The Chairman of Committees.)
On Question, Motion agreed to.

London Local Authorities Bill [H.L.]

  COMMONS AMENDMENTS
  [The page and line refer to the Bill as first printed in the Commons, brought from the Lords on 8 April 2003.]
  1 Clause 1, page 2, line 8, leave out "2003" and insert "2004"
  2 Page 2, line 8, leave out from "and" to end of line 9
  3 Page 2, line 12, leave out from "Act" to "the" in line 13 and insert "and"
  4 Page 2, line 13, after "2003" insert "may be cited together as the London Local Authorities Acts 1990 to 2004"
  5 Clause 3, page 2, line 22, leave out Clause 3
  6 Clause 4, page 3, line 14, leave out "current"
  The noble Lord said: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 6.
  Moved, that the House do agree with the Commons in their Amendments Nos. 1 to 6.—(The Chairman of Committees.)
  On Question, Motion agreed to.
  7 Page 3, line 14, after "displayed" insert "on the date on which it is proposed that the vehicle should be disposed of"
  The Chairman of Committees: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7.

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  Moved, that the House do agree with the Commons in their Amendment No. 7.—(The Chairman of Committees.)
  Lord Jenkin of Roding Lord Jenkin of Roding rose to move, as an amendment to the Motion that, the House do agree with the Commons in their Amendment No. 7, to leave out "agree" and insert "disagree".
  The noble Lord said: My Lords, I shall explain very briefly why I ask the House to disagree with another place in their Amendment No. 7. I can assure the House that this will not give rise to a serious constitutional crisis. The promoters of this Bill, the Association of London Government, of which I have the honour to be a co-president, had intended to delete Amendment No. 7 from the Bill. Unfortunately, that was not done in another place due to a drafting oversight. I now ask noble Lords to disagree with the amendment so that it can be sent back to another place so the oversight can be rectified. I beg to move.
  On Question, amendment agreed to.
  Motion, as amended, agreed to.
  8 Page 3, line 18, at end insert—
  "(b) in the case of a vehicle on which a licence is displayed and to which paragraph (a) (ii), (iii) and (iv) above does not apply, at any time after the expiry of the period of 28 days beginning with the date on which the licence expires;
  9 Page 4, line 8, at end insert—
  "( ) Subsection (2) is omitted."
  10 Clause 6, page 5, line 3, leave "subsections" and insert "subsection"
  11 Page 5, leave out lines 9 to 12
  12 Clause 10, page 6, line 25, leave out Clause 10
  13 Clause 11, page 9, line 2, leave out "Railtrack PLC" and insert "Network Rail Infrastructure Limited"
  14 Page 9, leave out line 3
  15 Page 9, line 7, after "subsidiaries" insert "(within the meaning given by section 736 of the Companies Act 1985 (c.6))"
  16 Clause 14, page 10, line 10, leave out Clause 14
  17 Clause 15, page II, line 28 Leave out Clause 15
  18 Clause 19, page 13, line 34, leave out "3" and insert "2"
  19 Page 14, line 4, leave out "3" and insert "2"
  20 Clause 20, page 14, line 38, leave out "4" and insert "3"
  21 Clause 21, page 15, line 8, at end insert—
  "( ) Different levels may be set for different areas in Greater London and for different cases or classes of case."
  22 Page 15, line 22, leave out "(4)" and insert "(5)"
  23 Page 15, line 24, leave out from "means" to end of line 26 and insert—
  "any joint committee established under section 101(5) of the Local Government Act 1972 (c.70) and comprising at least one member from each borough council."
  24 Clause 24, page 17, line 8, leave out "5" and insert "4"
  25 Clause 26, page 17, line 37, leave out "or"
  26 Page 17, line 37, at end insert—
  "(c) premises which the council are satisfied are being, or within the last 7 days have been, used for the provision of—

  (i) entertainment of a description falling within paragraph 2 (e), (f) or (g) of Schedule I to the Licensing Act 2003 (c. 17); or

  (ii) entertainment facilities falling within paragraph 3 (1) of that Schedule, and in respect of which a premises licence under Part 3 of that Act is required but not held; or"

  27 Clause 28, page 18, line 18, leave out "£1,000" and insert "£750"
  28 Page 18, line 19, leave out "£2,000" and insert "£1,500"
  29 Page 18, line 21, leave out "£1,000" and insert "£750"
  30 Page 18, line 21, leave out "£2,000" and insert "£1,500"
  31 Clause 31, page 19, line 21 after "repealed" insert "and the provisions of that Act shall apply in the area of the London Borough of Barnet"
  32 Clause 32, page 20, line 19, leave out "6" and insert "5"
  33 Clause 34, page 20, line 25, leave out Clause 34
  34 Schedule 2, page 22, line 21, leave out Schedule 2
  35 Schedule 3, page 23, line 4, leave out "3" and insert "2"
  36 Schedule 4, page 24, line 1, leave out "4" and insert "3"
  37 Schedule 5, page 24, line 29, leave out "5" and insert "4"
  38 Page 25, line 26, leave out "Railtrack PLC' and insert "Network Rail Infrastructure Limited"
  39 Schedule 6, page 28, line 22, leave out "6" and insert "5"
  The Chairman of Committees: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 8 to 39.
  Moved, that the House do agree with the Commons in their Amendments Nos. 8 to 39.—(The Chairman of Committees)
  On Question, Motion agreed to.
  Bill returned to the Commons with an amendment.

Middle East
3.24 p.m.
Baroness Williams of Crosby Baroness Williams of Crosby rose to call attention to recent developments in the Middle East; and to move for Papers.
The noble Baroness said: My Lords, in introducing this very important debate I point out that at the other end of these great Houses of Parliament there is extreme interest, concern, public and media involvement in the subject of higher education fees. I suggest that the debate that we are having at this end of these great Houses of Parliament is of least of art equal degree of importance concerning as it does one of the most difficult international problems that exists, one that increasingly threatens the peace of the whole region and one in which the United Kingdom and her allies are so intimately involved.
I begin this debate with a very brief quotation from what I believe was an inspiring and very moving article by the former Speaker of the Knesset from 1999 to

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2003, Mr Avraham Burg. I beg Members of this House to read the article because I believe that it goes to the heart of the tragedy of the Middle East. He said,
"The Jewish people did not survive for two millennia in order to pioneer new weaponry, computer security programs or antimissile missiles. We were supposed to be a light unto the nations".
Israel has an astonishing record of achievement. Its citizens are among the most innovative and well educated of any country in the world. I do not often make personal remarks. I am absolutely certain of one thing. As someone married to a leading Jewish American who died recently, both of whose parents were on the Gestapo black list, which had on it only a few hundred names in the United Kingdom, nothing on Earth would persuade me to be anti-Semitic or to be other than a strong champion of the survival and the safety of the state of Israel.
Like many other Members of this House, I have the right to be critical of the leadership of the present government of Israel. It is not because I wish to damage the state of Israel, but because I believe that the leadership is profoundly ill advised in the way it is trying to go about creating peace and security for that country.
I would not for one moment treat it lightly. Israel has suffered outrageous atrocities. I saw a picture in Haaretz a few days ago when I was in Israel which moved me very deeply. It was of a father and a brother, their heads turned away from the funeral corpse of their son and brother who had been killed by mindless and uncaring suicide bombers. It was a picture that one could not see without feeling ones own heart moved. So I do not make any excuse for the outrageous behaviour of some of the Palestinian extremists.
I also cannot make an excuse for what I have seen of the occupation of the West Bank and Gaza by the state of Israel. We spent some eight days there in an all-party group, which was led by Christian Aid and a non-governmental organisation, which consistently works in the field of humanitarian relief in the West Bank and Gaza. We went out of our way to speak to Israelis, Palestinians and members of the Israeli Government as well as to members of the Israeli opposition. I did not know until I went there that, for example, the West Bank is honeycombed by marvellous roads with highways paid for in part at least by outside donors, which link one settlement with another, but which are not available for use by Palestinians at all.
I did not know that the settlements, which now contain some 198,000 people in the West Bank and Gaza, and another 170,000 in east Jerusalem, now cover one hill after the other with their handsome, regimented, white-painted houses. I did not know that Palestinian villages are blocked off from access to the major roads by a series of heavy boulders rolled into place so that one village after another cannot even use a truck to gets its produce out.
I did not know that in many areas on the grounds of security—I understand those grounds—citrus groves and orchards had been grubbed up and then
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bulldozed, leaving the hapless folks who are the victims of collective punishment with no legitimate means of survival. I did not know that many of the villages close to the border between the West Bank and Israel have been made virtually unliveable in because of sniping on both sides. I met a lady in Beit Hanoun, which is close to the border, with nine children in her care, not all her own—some of them were her sister's and her brother's children. All were under the age of 11—the Palestinians have large families—and were so terrified at meeting strangers that they all fled behind their mothers' skirts when we arrived. That woman was somehow trying to keep that family alive but all her citrus groves had been destroyed.
I did not know that in place after place medical centres, education centres, schools and even churches are divorced by the wall from the people they are meant to serve. I have seen the wall, as have other noble Lords. In many places it is three metres high and has very few gateways punctuating its grim perception.
All of this continually adds to the bitterness on both sides. What we are looking at right now is a vicious spiral of retaliation and revenge from which absolutely no one gains. I have to add to that one other thing which I find profoundly saddening. So far, at least, the Arab states that should be profoundly concerned in solving this problem find themselves so divided that they seem unable to be effective. The collapse of the Tunis summit is a tragedy for all of us because many supposed that at that summit the attempt to try to launch a new peace process would be initiated.
This very day the situation has taken yet another turn for the worse, not just due to the argument over the assassination of Sheik Ahmed Yassin, but perhaps equally disturbing the cutting off, just today, of all United Nations aid to Gaza because the United Nations has said that it is no longer able to get food into that place through the many checkpoints on the way. Seventy per cent of the people of Gaza depend today on the World Food Programme and on humanitarian aid, but that programme has, as of today, had to stop altogether. God knows what they will live on.
But this, bad as it is. could be an opportunity and not just a tragedy. Perhaps out of all this horror, the proposal that Mr Sharon has made for unilateral withdrawal from Gaza could be turned into the first stage of the long walk back to peace. It is just possible that if it could be brought within the structure of the road map and of multinational commitment, instead of being the end of a road to disaster, it might be the first step back. Why do I say that? I say that because on both sides of the border in the past few days there has been a courageous declaration in favour of peace from both the Palestinians and the Israelis.
On the Palestinian side, the declaration—published in both Palestinian and Israeli papers—of 17 outstanding Palestinian leaders and intellectuals led by Hannah Asrawi, calls on their side to show restraint and not to go back to the cycle of violence. On the Israeli side, as many of your Lordships will know, there is an astonishingly courageous opposition to

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Mr Sharon's policies. Five conscientious objectors are serving time in prison—most of them have not yet even reached the legal age of adulthood. Many, many Israelis have courageously committed themselves to trying to help Palestinians as doctors, human rights workers and so on.
All this gives us some slight hope. I come now to the last part of what I want to say, which concerns what we can do about the situation. I pay tribute to the Minister and, indeed, to the Government for their very hard work to try to draw the world's attention to the need to get back to a peace programme in Israel and the Palestinian territories. I pay tribute to the help they have given in supporting the restoration of security by the Palestinian Authority so that when it is called upon to deal with terrorists it at least has some means to do so. Many of your Lordships will know that it has not had those facilities recently because many have been destroyed.
There is one more step that Her Majesty's Government ought to take. When I was in Gaza one of the most outstanding human rights lawyers of that area, Dr Raji Gourani, told me that one of the deep tragedies for moderates in Palestine who call upon their fellows not to revert to violence and who condemn suicide bombing was the failure of the West to support the referral of the wall, which is built almost entirely within West Bank territory, to the United Nations. Your Lordships will know that the General Assembly passed by a very clear majority a decision to refer the line of the wall to the High Court at the Hague. Your Lordships will also know that the United States voted against that. We, along with our EU partners, abstained. When we call upon both sides to recognise the rule of law, we must not apply double standards.
All is not lost. There is some chance to build upon the passionate desire of both sides to create a peace. There is some chance to build on the good will and decent commitment of ordinary men and women, both Israeli and Palestinian. I conclude by asking your Lordships to consider how best we might help in any way we can to bring the peace process back to the start, for if we go the other way, there is no hope for us. I beg to move for Papers.
3.37 p.m.
Lord Howell of Guildford: My Lords, it is a pleasure to follow the noble Baroness, Lady Williams of Crosby. I agree with her totally about the critical importance of the subjects we are discussing today; namely, developments in the Middle East. It is a measure of our times that almost every current issue, domestic and international, seems to lead back to developments in the Middle East at the moment. I can scarcely think of one that does not.
Whether it is global terrorism, domestic terrorism, Al'Qaeda, divisions in Europe and chronic anti-Americanism, the Iraq war or the political fortunes of President Bush or, indeed, for that matter, the fortunes of our own Prime Minister, the Israel/Palestine conflict, about which the noble Baroness just spoke so
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movingly, and which is still spiralling downwards, the state of affairs in Iran, Syria, Saudi Arabia, Egypt, Libya or any of the Mahgreb countries, or the overall alleged confrontation—one that I do not believe really exists—between Islam and western civilization, in every case the trail leads back to the Middle East labyrinth.
Of course, it does not even stop there for the same thing goes for current debates about weapons of mass destruction and nuclear proliferation. It applies to questions about the reform of the United Nations, which is now deeply mired in the oil-for-food scandal with Iraq. It applies obviously to OPEC and to key questions about oil and gas markets and prices and, therefore, to the whole world economy. All these are directly related to Middle East affairs and Middle East developments. Indeed, even history itself is being reopened as arguments rage around us from the British imperial role back to the Crusades and, indeed" to the story of Islam in Europe long before that.
It is no wonder that it is extremely difficult to decide in this debate on which aspects to focus. In making my selection I can make a confession straight away, which is that I am determined to be on the optimistic side about the whole Middle East region. Despite all the horrors, I believe that the case for hope and therefore for pressing on with current efforts is broadly the right one to make. I know it is obviously very hard to be optimistic in face of the sheer horrors that the noble Baroness, Lady Williams, has described: the horrors of the suicide bombing, which I see is now brought to a new low point of evil by Hamas with the ultimate sickness of using young children to wear explosives; or when faced with the ill judged killing of Sheikh Yassin, however much blood was on his hands as a Hamas leader—and there obviously was some; or to be positive after the Ashura slaughter at Karbala in Iraq, or indeed the equally appalling slaughter in Madrid which had A1'Qaeda's fingerprints on it.
I know, too, that the debate will continue—maybe not this afternoon, or maybe it will—about the question of whether the original coalition invasion of Iraq was right, legal, or well timed, or whether the arguments deployed by the Prime Minister at the time were wise or not so wise. I personally think that the invasion was right, but I am not so sure about the arguments that were used; I think they had the wrong emphasis. But to me it is just common sense that the renaissance of a better Middle East has to begin, and had to begin, with the removal of Saddam Hussein, a tyrant who spread instability and hate throughout the entire region, besides killing his own people in Stalinist numbers—many of them killed by gas and poison weapons. The world is unquestionably a better place without him in power. I believe we will yet live to see the Middle East region in all its aspects—including those to do with the Arab-Israeli conflict—a better place as well.
We are all constantly assured by those who claim to know—that there is no connection and never was between Saddam and Iraq on the one hand, and the promotion of global terrorism and the stirring up of the Arab-Israeli conflict on the other. I believe that

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evidence may well show otherwise. What about Ansar al-Islam, which is a killer organisation to whom Saddam gave ample space and which undoubtedly had loose Al'Qaeda links? Was not the whole terrorist network of the region undoubtedly set to run through Baghdad even if its origins were in the training camps of Afghanistan? Was not money from Baghdad helping to fuel the hatred and bitterness which has led to the disaster that the noble Baroness, Lady Williams, has rightly described in the Arab-Israeli conflict?
But now—after Iraq, but still facing the horrors in that conflict—we are where we are. Whatever the past arguments, I want briefly to offer two propositions on which we should base our next steps forward, because forward it is that we have go. The first is that although it will take far more time than the impatient media experts and commentators will allow or even understand, Iraq will slowly over several years come good as a peaceful, prosperous and pluralist society, provided that the coalition stays firm and committed. If I am asked why I am so sure of that, the answer is because there are strong signs of recovery already. Of course we just get the news of the horrors and deaths—that is inevitable—but behind the grim headlines the facts are quite different.
Today, a year after the Iraq invasion, the majority of children in Iraq are back at school with better-paid teachers, often in better schools; hospitals are all open and many are re-equipped; Baghdad's streets are crowded and the wheels of commerce are spinning; a new financial and banking system is up and running; shrewd investors are already putting in their money; there are 100,000 Iraqi policemen back on the streets and the numbers are rising fast; and there are also contingents of Iraqi soldiers working under the coalition command to restore stability.
Experts all predicted that there would be civil war between the factions, but despite grave provocation that has not happened. The vast majority on all sides, including the Kurds, want to keep Iraq united. All the big players in the region want the same thing. Experts also said that there would be a massive refugee problem and widespread starvation; none of that has happened either. The infrastructure investment is roaring ahead and I hope that we get a good, decent share of it. Electricity production is said to be higher now than it was under Saddam. Waterways are being cleared, sabotage is falling and oil exports are overtaking pre-war levels.
Are not all the signs that, despite many of the poisonous difficulties, other Arab states are drawing some of the right lessons: that sponsoring terrorism does not pay and that reform in the direction of pluralism and democracy, plus integration with the global market system—each country at its own pace, no uniform pattern—is the path that pays? That surely is the lesson that is being learnt in Tehran, in Damascus, in Tripoli and in Cairo, and, in a different form, in Riyadh, as well as up through the Gulf States?
Of course little of this gets reported, but what it adds up to is that the long-term vision of a more stable Arab region is not just a mad American dream. With the
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exception, I admit, of the Israel-Palestine struggle, it really could be that in the next few years the Middle East hotbed of terror and Islamic fanaticism could become the more prosperous, democratic, engaged and tolerant Islamic world it certainly is fully capable of being. It may even be that the noble Baroness, Lady Williams, is right—she often is on these things—that there is some hope even in the misery of the Palestine question. It certainly continues to baffle me that the powerful Jewish community in the United States—most of whom are enlightened people who realise the dangers of Israeli extremism and the dangers of the Sharon policy, which may well destroy his country and not save—it seem so quiet and so ineffective in bringing their political weight to bear. I hope that they change their view and carry forward the right case for Israel and not the wrong case for Israel which so often seems to come to the fore.
That brings me to my second proposition, because there are plenty of people around who deny that democracy and stability can ever break out in the whole of the Middle East region. Both at the radical end of Islam and outside it there are plenty of voices saying that Islam and democracy cannot live together, that they are incompatible. I believe that that depends on what one means by "Islam" and what one means by "democracy".
Islam is not just a contained system of governance ordained and directed by Allah, as the radical extremists who distort the Koran and the divine texts wrongly keep arguing. Similarly, democracy is not just about majority rule and votes—as some people rather closer to home appear to believe as well. Moderate Islam is perfectly suited to operating alongside democracy, tolerance, pluralism and indeed the high-tech age—all within the Islam rubric. Democracy is certainly not just an exclusive western model, or a single formula; it has been rightly called "a contested system", and it is about constitutionalism and the rule of law as much as it is about votes. That I believe is something that all wiser Muslims understand and welcome when surveying the Middle Eastern scene.
We have to build on the links with moderate Islam, and we have to now build hard and fast. I would just add that I believe that that starts very largely not in the Middle East but at home. London, with a million Muslims, I am told, is one of the larger Muslim cities of the world. Because we are still an open society we allow all kinds of extreme, radical, fanatical Islamic expression in this country of a kind which would certainly never be permitted in most Islamic lands and Islamic societies. So that makes it all the more important that now—particularly now—we unite with the vast majority of Muslims who reject all that extremism and denounce it as superficial, as it is, and a distortion of the Koran, as it is, and who want to be both British and Muslim, and who deplore and reject terrorism in all forms or as a solution to the Palestine tragedy or any other conflict.
Arab-Israel conflict may be one of the worst poisons in the Middle East well. But terrorism and Western hatred have, I think, still deeper roots and are based on deeper misunderstandings, by both sides, which we

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have allowed to develop. These we can overcome by understanding how Islam can work perfectly well together with modernity. Indeed, it may even provide a better grounding for the information technology revolution and modern industrial patterns than crumbling Western values. As I said, we can overcome that by working with and learning from, and not patronising, separating or fencing off, the Islamic community here in our own country.
As I suspect today's debate will show, the Middle East problems are as many-sided and as seemingly intractable as ever. They will take years to calm down, let alone solve. My contribution to this debate is to say that we can start here at home, and that we should do so with vigour, hope and confidence.
3.51 p.m.
Lord Clinton-Davis: My Lords, I am delighted to speak after the noble Baroness, Lady Williams of Crosby, and the noble Lord, Lord Howell of Guildford. They have injected into the debate not only passion but common sense, two essential ingredients if we are ultimately—and I stress "ultimately"—to see peace in that area.
The noble Baroness spoke of the tragedy of the Middle East and I share her view—I think it is a tragedy. When Israel was formed, and despite the incursions of various Arab states, the atmosphere was very optimistic. There was a sublime idea that, somehow, Israel could offer the world an example. I think that, basically, that is still true. She spoke also of her right to be critical of the leaders of Israel, and to some extent I share that view as well. Perhaps we can also agree that the present leaders of Israel are not wholly wrong. Ultimately, however, I endorse the opinion of Shimon Peres, who spoke movingly the other day about Israel's mission, a mission which I wholly support.
The noble Lord, Lord Howell, spoke of his optimism. I share that view, too. In the long term, however, we have to be patient. It will not happen by next June. It may take several years before the situation in the Middle East settles down. As the noble Lord rightly emphasised, however, the situation is by no means confined to Israel. If Israel did not exist, the avarice of some Arab leaders would not, in my view, disappear. Barbarism would simply be transferred to other countries and other places. Saddam Hussein was, sadly, not unique. I can recall going to Saudi Arabia in 1996. In Riyadh, the first thing I was shown—shown with pride—was the execution locations. I was absolutely horrified and my hosts were gratified by what they were able to show. That is all too common among some tyrannical Arab leaders today.
Although I have reason to doubt the purposes stipulated for the invasion of Iraq—a view which the noble Lord, Lord Howell, advanced today—the removal of Saddam Hussein has been beneficial for the people of Iraq and the people of the whole world. Iraq is a much better place without him. But why, oh why, do we have to pretend about the weapons of mass destruction that the Iraqis are supposed to have had? In my view it is an absolute irrelevance.
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I believe that a durable peace will ultimately be possible in that area, but I doubt whether it is advisable to pretend that it can be achieved by the end of June or in July of this year. As I said, I think that it will take many years. It follows, therefore, that Iraq must be given time in which to settle down. Although I think that immense difficulties will confront that country, I share the noble Lord's ultimate optimism about it. The welfare of that country and its people must now be given precedence over the convenience of the United States and other occupying countries. The election in the United States must take second place to that.
Regrettably, however, the situation in the Middle East is far more volatile than it has been for some 50 years—the assassination of Sheik Yassin. Hamas's attacks on defenceless Israeli men, women and children, the Israeli assaults on Gaza and other outposts occupied by Palestinian Arabs it goes on and on and on. Will there be an end to this dire escalation of violence?
I believe firmly in a Jewish state—a state which embodies all the democratic values for which the founders of Israel stood and fought. They were compelled to fight to exist, and exist they certainly did. Over several years, Hamas has refused to come to terms with this unalterable fact. In my view it still does. Its former leader, Sheik Yassin, vowed its destruction. He was not simply a spiritual leader, as some would suppose. He was far removed from being a benign figure in a wheelchair. He believed in the destruction of the state of Israel. He supported the idea of suicide bombing to achieve that. He opposed vitriolically any possibility of agreement between the two sides. That was the nature of the man. Nevertheless, I wholly oppose his assassination, on two essential grounds. First, it was inimical to the long-term viability of a democratic Israel. Secondly, it would have been more likely, if he had died from natural causes, that his supporters would not be able to pretend that he was a so-called martyr.
I do not think that Sharon's potential political demise, followed by the possible election of Benjamin Netanyahu, would represent a real improvement. Both support the barrier. I think, like several Likud ministers, that it is the antithesis of a durable peace. That is also the view of the majority supporting settlement evacuation who, tellingly, have also pointed out that this appeared to be consonant with Sharon's own plans.
I do not conceal from the House that Israel and the Palestinians face turbulent times. It is idle to think that Israel should turn the other cheek when confronted by vicious assaults from Hamas. Would we, if faced by a similar situation? We certainly did not when faced by the murderous ambitions of Al'Qaeda. After all. Israel cannot ignore its own electorate any more than we can. But it is one thing to repel attacks, another to behave proportionately and have a more positive response than sheer violence. That is the stance of the Israeli Labour Party, Shenui, Arab parties and all those who support the view that, ultimately, it is in the interest of Israel to have a lasting peace.

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Unfortunately, that will not happen rapidly. It is vital that, somehow or other, Palestinians must be identified who are prepared and disposed to negotiate. That is a condition precedent for any advance. I do not accept the doctrine, promulgated by some in the Israeli Government, of being able to eliminate violence first and speak later. Dialogue with moderate Arab Palestinians is an absolute prerequisite. It is essential to give them a distinct role. It may be difficult to do it at the present time but, ultimately, it has to be done.
Israel's position needs to be more widely understood, not least by the European Union. Trade between the expanded European Union and Israel is vital, especially if we are to witness peace in that area. Ultimately, it is better to talk than to engage in bloody war.
4.4 p.m.
Lord Wright of Richmond: My Lords, I am sure we should all be grateful to the noble Baroness, Lady Williams of Crosby, for having initiated this debate on a situation which is, in many ways, perhaps the most dangerous and sensitive of any in the world today. I would also like to say that the noble Lord, Lord Clinton-Davis, once paid me the compliment of saying that, to his surprise, he had agreed with something I had said in a speech. I return the compliment by saying that I agree with almost every word he said in that preceding speech.
I do not propose today to rehearse the many reasons why I and many others still maintain the view that last year's invasion of Iraq has never been convincingly or honestly justified by either the United States Administration or Her Majesty's Government. So long as the full case put forward by the Attorney-General is withheld from us, it is difficult to judge the arguments by which the Cabinet were persuaded to enter the so-called coalition, given the fact that we had repeatedly been assured that regime change was no part of the British Government's policy.
The revelations by Mr Richard Clarke over the past week do not surprise me. Several of us have argued that the obsessive determination of the Bush administration, if not of the President himself, to invade Iraq and change the Iraqi regime long predated the horrors of September 11. Attempts to justify the invasion by linking Saddam Hussein with those horrors are not only dishonest, they also seriously detract from—or, as Mr Clarke has put it "greatly undermine"—the credibility and effectiveness of the so-called war on terror. In those pre-invasion debates, many of us asked "Why now"? Iraq was the wrong target at the wrong time.
I do not know how many of your Lordships will have read a devastating critique of the failure of the Bush Administration's diplomacy towards Iraq, by the former Under-Secretary in the State Department, Mr James Rubin, in the New York Review of Books last year. Mr Rubin underlined the disastrous consequences of placing United States policy towards Iraq solely in the hands of Mr Donald Rumsfeld and
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the Pentagon, and of failing to use—indeed, refusing to employ—the experience and skills of American diplomats, many of whom, as I know from my own contacts, have a deep understanding of Iraq and the Middle East. The most serious error was to have linked the war on terror with the attack against Iraq, thereby negating the immediate upsurge of sympathy for the United States after September 11 from virtually every country in the world—some of whom then found themselves branded as members of the infamous Axis of Evil.
But I do not want to concentrate on the past. In Iraq, the top priority must be to ensure security, to enable the Iraqis to take over responsibility for their country again. An early withdrawal of troops—whether American, Spanish, British or from other coalition partners—could have very serious and dangerous consequences for the Iraqi people, some 10,000 to 15,000 of whom are believed already to have lost their lives as a direct consequence of our invasion and occupation of their country. The old lesson that the history of the Middle East should have taught us—that it is easier to enter than to exit—is, I fear, coming home to roost.
Elsewhere in the Middle East, I welcome Her Majesty's Government's continued perseverance in their attempt to maintain tolerable relations with the governments of Iran, Syria and now Libya, against many odds. In this respect, at least, the Government have not been afraid to distance themselves, with our European partners, from the more hard-line antics of the neo-conservatives in Washington. I also suspect, but do not know, that the welcome decision by the United States to withdraw, at least for the time being, what they describe as their "Greater Middle East Initiative" may owe something to the more balanced reservations voiced from this side of the pond.
The Prime Minister is to be congratulated on taking the risk, as he himself put it, of going to Libya last week to talk with Colonel Gaddafi—something which would have been regarded as totally unthinkable even two years ago. I was particularly struck by the positive reaction to his initiative from bereaved relations of the Lockerbie victims, in spite of attempts by some of their interviewers to get them to denounce it. Is the lesson of that visit that we should never regard any mutual hostility as immutable? If we remember our own post-colonial history of dealing with leaders such as Jomo Kenyatta, whom we had once regarded as beyond the pale, is it so unthinkable that both the Americans and the Israelis might soon be prepared to reopen negotiations with the Palestinians, whom they currently denounce as terrorists or whom they have isolated in the ruins of Ramallah?
It is, as always, the situation in Palestine which holds the greatest dangers for all of us. I am glad to see some signs that President Bush may himself be prepared, even as the date of the presidential elections draws near, to take a modest initiative by inviting Prime Minister Sharon to Washington. I do not underestimate—none of us should—the political difficulties of removing illegal Jewish settlements from

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Palestinian territory or of dismantling the appalling security fence that cuts deep into Palestinian territory beyond the green line.
It has always amazed me that successive Prime Ministers of Israel, with American approval, have persisted in encouraging more and more illegal settlement in the Occupied Territories. Surely it must have been obvious to all of them that they were creating a rod for the backs of themselves and their successors? If, as Prime Minister Sharon has suggested, all Israeli settlers are to be removed from Gaza, where will they go? I hope that the Minister can reassure us that we will make every effort, both bilaterally and through the Americans, to ensure that they are not transferred to swell the numbers in existing illegal settlements in the West Bank or around Jerusalem. If they are, and if the security fence remains in place, I see no prospect of a viable Palestinian state as part of the two-state solution which President Bush claims to support.
As the noble Baroness, Lady Williams, said, we all deplore the continued use of suicide bombers and, in particular, the sickening spectacle of young children tricked into believing that killing Israelis will win them a reward in paradise. But the continued Israeli practice of targeted assassinations—rightly condemned in public statements, if not in Security Council votes, by Ministers as illegal—is not only a flagrant breach of international law by a country which prides itself on obeying the rule of law; more tragically, neither targeted assassinations nor the security fence are doing anything to protect and preserve Israel's security or to contribute to the war on terror. Quite the contrary: they are whipping up a surge of resentment against Israeli occupation, expropriation, deprivation and intimidation in the West Bank and Gaza, which no Palestinian authority can possibly be expected to control.
Tragically, the assassination of Sheikh Ahmad Yassin appears to have contributed to the decision to postpone this week's Arab summit in Tunis at which the Saudi Government had apparently been ready to revive their peace initiative agreed two years ago at the Arab summit in Beirut.
So is it too late to expect any early and realistic progress on the road map to peace? I think that I agree with the noble Baroness and the noble Lord, Lord Howell, that all is not lost. I hope that I am right. But I also hope that, when she comes to sum up the debate, the Minister will be able to give us some reassurance on this vitally important question. Let us hope that President Bush is now ready, as he promised the Prime Minister in Belfast, to put as much personal energy towards the Arab/Israel situation as the Prime Minister put, and continues to put, towards Northern Ireland. A genuine, determined and balanced American commitment to peace in Palestine, if supported and encouraged by their partners in the quartet, would do more than any military operations or assassinations to contribute towards winning the so-called "war on terror".
4.15 p.m.
The Lord Bishop of Coventry: My Lords, I am both delighted and humbled to follow the masterly exposition of the noble Lord, Lord Wright. Today, I was wondering whether to speak on Iraq or on Israel/ Palestine, but the noble Lord's contribution has enabled us to see the two in very clear connection and we are most grateful.
I am also very grateful to the noble Baroness, Lady Williams, not only for initiating the debate but also for the very moving way in which she introduced it. Sadly, a number of us could provide examples similar to the stories that she gave so movingly today. The sadness is that there is no shortage of examples such as those to quote.
I am also grateful to the noble Baroness for making it clear that to be critical of the Government of Israel is not necessarily to be anti-Semitic. That, I believe, is a lie that needs to be nailed again and again. I remind your Lordships that the word "Semitic" is a generic term. It applies to peoples and languages across a broad region. Whatever else the relationship may be between the Jews and the Arabs, they are, at the very least, first cousins, if not brothers, both in terms of their language and their culture.
I want to say something today about the religious elements of the Middle East conflict and something about the importance of inter-faith dialogue. I speak about the religious elements in this conflict as, in a sense, a professional. As a professional, I want to say at the outset that I believe that religion can be an incredibly dangerous and tyrannical force when it is wrongly used. We see examples of that in many different parts of the world, and there is no shortage of examples of it in the Middle East situation that we are addressing today.
Riah Abu El-Assal is the Anglican bishop in Jerusalem. He was born an Arab, a Christian and a Palestinian. He is still an Arab and a Christian, but his passport tells him that he is now an Israeli citizen. That is because the town in which he was born changed its status in about 1947–48. For some time, and until fairly recently, a considerable number of Arabs within the state of Israel were also Christians but most have now left. They have done so for a variety of reasons, some of which are quite complex. But there seems to be a single thread running through all those who have emigrated from that part of the world. It concerns their inability to live with what they describe as a "hybrid" identity in a situation where polarisation has taken place to such a point that they no longer find themselves with any place at all. One is either an Israeli or an Arab; and one is either Jewish or a Muslim.
Bishop Riah cannot bring himself to speak of Israel/ Palestine as the Holy Land—a term which many of us westerners use with nostalgia, and perhaps with sentimentality, to describe the place of the birth of Jesus. At best, Bishop Riah can speak only of the "Land of the Holy One". He asserts, not only that holiness is a moral and spiritual quality, most appropriately used of persons rather than places, but also that the actions taking place on his soil are anything but holy.

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And yet there is no escaping the fact that so much of the territory in question is regarded as sacred by adherents of all the three Abrahamic faiths, who regard this plot of land—that is no bigger than the size of Wales, a former Prime Minister reminded us—as their spiritual home. These so-called "holy sites", not least those in Jerusalem, form part of the ongoing territorial dispute, not least because they are regarded as having supreme religious significance for all—or in some cases for just one—of the faith communities.
It is for this reason that I wish to plead for a better understanding of the religious issues that form an integral part of the Middle East conflict. Just one month ago the American ambassador to Israel, Dan Kurtzer, spoke of the religious dimension in the peace process, as one which,
"threatens to transform what is essentially a political and territorial conflict into an ideological one, and one that will be even more difficult to resolve".
That kind of scenario certainly seems to apply to some Muslim extremists as well as to some Christian Zionists. They claim divine authority for the violent acts of aggression or for the criminal acts of murder that are perpetrated. That same divine authority is often claimed by those who are settlers on the West Bank.
When Sheikh Yassin was assassinated last week, he was on his way home from morning prayer. While it is true that he was a terrorist leader, it is equally true that on the ground, among his own people, he was regarded as a spiritual leader. There is no escaping that fact. To acknowledge that simply serves to heighten the religious dimension of this conflict.
It was in an attempt to address such extremism that the Alexandria process was set up. After considerable preparatory work by the International Centre for Reconciliation in Coventry, and by Canon Andrew White in particular, the then Archbishop of Canterbury, now the noble and right reverend Lord, Lord Carey, chaired a three-day meeting in the Egyptian city of Alexandria.
This meeting was attended by senior religious leaders representing the three Abrahamic faiths in Israel/Palestine. It was co-chaired by the Grand Immam of Al-Azhar, Sheikh Mohammed Tantawi. The resulting declaration contained a joint condemnation of all violence in the name of religion, and a call for implementation of the Mitchell and Tenet recommendations.
In the weeks following this declaration of January 2002, tension increased on the West Bank, with IDF operations in Jenin and other refugee camps. The most acute tension centred on the Church of the Nativity in Bethlehem, and significant numbers of those religious leaders who had taken part in the Alexandria consultation were actively involved in the eventual resolution of that stand-off.
One of the most moving long-term consequences of the Alexandria consultation has been the deep friendships across traditional boundaries. Michael Melchior is a Jewish rabbi and a former deputy
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Foreign Minister in the Israeli Government. Sheikh Tal al-Sidr was a founder member of Hamas; he is now a peace activist in Hebron. These two men now embrace each other publicly as brothers, acknowledging the shared roots of their faith and risking constant opprobrium from their more extreme compatriots.
Sheikh Tal al-Sidr spoke last year at the German Kirchentag, and he was proud to declare:
"'Rabbi Michael is my brother and we will walk this long and difficult path of reconciliation together. We can only walk it together. And as we walk our task is to pull up the thorns and to plant flowers for those who will come after".
Religion can be a terrible master, but genuine faith can be a dynamic liberator into a fuller experience of what it means to be human. As I end, I can do no better than to quote the exhortation of the psalmist that we should,
"pray for the peace of Jerusalem".
4.26 p.m.
Lord Hogg of Cumbernauld: My Lords, I join in complimenting the noble Baroness, Lady Williams, on her choice of subject for today's debate. It is appropriate because it is so necessary to keep the issues of the Middle East before Parliament, the Government and the country. This debate helps to achieve that.
I should state that I am chair of the Britain-Israel Parliamentary Group, which is in effect the all-party group concerned with all matters pertaining to Israel and its relations with the United Kingdom.
The problems and issues of the Israeli/Palestinian conflict have been with the world for decades. It is not to the credit of the world community that the problems continue and seem as far from solution as ever they have been. The road map on which so much hope was invested seems to have led nowhere. Agreements and concordats brokered by the United States have not, regrettably, had a continuing momentum. However, the search for a just solution must go on and the policy of Her Majesty's Government must be to support that end. We cannot have further decades of conflict.
The largest single hindrance to the peace process is the terrorist war waged on Israel. Over the past three years, there have been 21,033 terrorist attacks against Israeli targets, claiming the lives of 916 people. That is the equivalent of 16 terrorist attacks per day. Of those attacks, 425 have been carried out by Hamas, murdering 377 Israelis and injuring 2,076.
The figure of 377 murdered Israelis equates to 8,621 British people, or 43,136 citizens of the United States, or 58,963 citizens of the European Union. That puts in true perspective the appalling carnage wrought by a merciless terrorist organisation owing nothing to humanity or civilisation. No political objective can justify such inhumanity.
I was amazed to hear the BBC describe Sheikh Yassin as a "spiritual leader"—-although nothing that the BBC says about the Middle East should amaze me. No real and genuine spiritual leader could surely preside over such a murderous record. He encouraged

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the cult of martyrdom in Palestinian society—a notion that for decent people is totally abhorrent and beyond comprehension.
There is an international war on terrorism and Israel must be allowed to fight it. Prosecution of the war is not confined to the United States of America and western democratic powers. Israel has to fight it, for it is surely in the front line. Its civilian population is targeted by Hamas and the other terrorist groups.
Yassin and his like stand in the way of any peace process. His position was impossible to achieve. Israel cannot be eliminated from the map either as a geophysical entity or as a people. The world community will not wear that ever and at last there are signs—the noble Baroness, Lady Williams, made reference to this—that more moderate counsels are beginning to make themselves heard within the Palestinian community. We must pray that they prevail.
Last week my right honourable friend the Chancellor of the Exchequer instructed the Bank of England to direct financial institutions to freeze any funds they hold on behalf of five senior members of Hamas. Those people are believed to facilitate acts of terrorism. Mr Brown is to be congratulated on that action which, it is to be hoped, will be replicated in the financial capitals of the free world. For too long we have differentiated between the military and political wings of Hamas. The Foreign Secretary played a key role in ensuring that both wings were outlawed in EU policy determined last September, and now we have frozen the financial assets of those whom we believe are involved in terrorism. At least three of those individuals would be classified as members of the political wing of Hamas.
The time has come for us to take the additional step of including Hamas in its entirety in the list of terrorist organisations outlawed by the Terrorism Act 2000. We must take that action as a matter of haste, before those who support the goals of Hamas find further British men or women—I mean British men or women—who are willing to follow in the footsteps of the two British suicide bombers who killed three and injured 55 in a bar in Tel Aviv on 30 April last year.
Her Majesty's Government have a record to be proud of in working for a peaceful, just and lasting settlement to the Israeli/Palestinian conflict. Last week I chaired a meeting of the Britain-Israel All-Party Parliamentary Group here in your Lordships' House. The speaker was His Excellency Her Majesty's Ambassador to Israel, Simon McDonald. He gave an upbeat, optimistic and hopeful exposé of the problems facing the world community in seeking to resolve the conflict. It was an encouraging experience to hear him. We are fortunate indeed to have such an outstanding diplomat in such a difficult and sensitive posting. I wish to place on record the thanks and appreciation of our group for the time that he gave to us.
The arguments surrounding the Middle East and in particular the Palestinian/Israeli conflict have been well rehearsed in this Chamber over many years—-probably from the time of the Balfour declaration onwards. We know, as the world knows, what needs to
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be done. The two-state solution that gives each state secure borders and a viable infrastructure, most notably in the provision of water supply, can be achieved. The way forward is clear, but without an end to Palestinian terror little can be achieved. Prime Minister Sharon has stated his willingness to withdraw fully from Gaza. The Government should welcome that plan, support it in every way possible, and encourage the Palestinian leadership to work with the Israelis to make this move an opportunity for peace, within the road map, and not an opportunity for terrorists like Hamas.
This country has a history in the region and now must make history again by encouraging an end to terror and every possible route to peace. Fences, walls and settlements are removable: human lives lost to terror are irreplaceable.
4.34 p.m.
Baroness Northover: My Lords, as I listened to my noble friend Lady Williams introducing the debate, tears came to my eyes and I thought, "What can I possibly add?". The case that she made for peace in the Middle East and the balance that she struck a re surely unanswerable. My noble friend Lord Russell, who is not in his place at the moment, persuaded me that we all have to speak up, so I was not let off the hook.
People warned that the Middle East would become a tinder box if the US and the UK attacked Iraq. President Bush said that that would not be so, arguing that the road to peace in Jerusalem lay through Baghdad and that Saddam Hussein's removal was key to a settlement there. At the very least, the jury must surely be out on that. Our Prime Minister emphasised that renewed efforts would be made to try to bring peace to the Middle East. I have little doubt that he did, and does, mean that, but with all the pressures of Iraq, tuition fees and other assorted distractions, I hope that the Minister will be able to assure the House that the Middle East is extremely high on the Government's agenda.
We have already seen a distraction from the Israel/ Palestine and the Afghanistan situations to Iraq. Iraq has proved a much more difficult country in which to establish unity, security, order and democracy than was predicted. Has the US exercised its considerable influence in the Israel/Palestine conflict? When the Israelis assassinated Sheikh Yassin, it was the US who vetoed the UN resolution condemning it as an illegal act.
Between September 2000 and June 2003, 74 Israelis and 2,494 Palestinians have died. Israel has suffered over 100 suicide bombings and there have been attacks on settlers. Anyone with any historical knowledge can understand just how threatened Israelis feel. But is their present government right in their current strategy? The Palestinians point to their own casualties and to their imploding economy. Naïve young people use what is happening as an excuse for extremism.
If we look at the Occupied Palestinian Territories, it is very clear that Israel's security measures, the curfews, movement restrictions, the wall and the

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network of settlements are having a devastating effect. The International Development Select Committee of the House of Commons has described the impact of those as being,
"so severe as to bring about a situation which is best described as de-development".
Malnutrition is increasing rapidly in the Occupied Palestinian Territories, not because of the shortage of food, but because it is difficult to obtain food. As my noble friend has said, the UN said yesterday that it will have to halve food deliveries to the Gaza Strip from tomorrow because of restrictions imposed by Israel on the movement of staff and supplies. The head of the UN's aid agency for Palestinian refugees, Peter Hansen, said that it was unable to cope with the impact of increased Israeli security at crossing points. The World Food Programme estimates that 150,000 people in Gaza are dependent on that food aid. Hansen has also protested about Israeli measures that were forcing staff to cross in exposed areas, prompting his agency to prohibit some aid workers from entering the Gaza Strip because of "unacceptable risk and danger". He has said that there had been no response following repeated complaints to the Israeli authorities this month.
Closures have broken up the West Bank. Settlements and their segregated access roads also help to fragment because the Palestinians cannot use those roads. Land has been confiscated and agricultural lands are cut through. Settlement activity, with its associated road building, as the Select Committee has concluded,
"threatens…the viability of a future Palestinian state".
Despite agreement to freeze settlements, they continue to be established and expanded. Now we have the wall as well. It does not follow pre-1967 borders: it extends into Palestinian territories, encircles Palestinian communities and splits Palestinian areas.
It has cut people off from basic services, it has damaged infrastructure such as electricity and water supplies, land has been confiscated and crops have been destroyed or rendered inaccessible. Goods cannot be brought to market and people cannot reach the markets to buy the goods.
The wall has already enclosed entire towns and villages, directly affecting more than 200,000 people; 14.000 Palestinians living in 17 villages between the wall and the green line are now effectively trapped. A further 35,000, who live close to the wall, have been separated from their land, losing their access to a livelihood, as well as to water supplies and basic services such as health and education.
The most fertile agricultural areas in the West Bank have been confiscated and lie outside the current route of the wall, effectively denying Palestinians the potential to develop a modern agricultural economy. The building of the wall has reduced access to medical services to a critical level. Oxfam reports that village clinics have assumed the full burden of emergency and chronic cases without having either the trained staff or the equipment to cope. There have been a number of
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deaths, including 14 children, which have allegedly occurred as a result of delays in obtaining medical treatment due to restrictions in movement. Medicines are not readily available where and when needed.
Is this destruction of the Palestinian economy deliberate and, if so, why? Whatever Israel's obviously genuine and well founded fears, do the Israeli Government really think that their strategy will lead to peace?
Oxfam notes that during the past three years, there has been,
"a dramatic deterioration in the humanitarian situation".
For example, Israeli policies of closure have prevented Palestinian communities, particularly those in remote rural areas, from accessing clean water. There has been a predictable increase in the prevalence of waterborne diseases.
Water has been a problem, and it is a symbol. Agreements under the Oslo peace process that Palestinians and Israelis should take joint responsibility for water resources through the Joint Water Committee have never worked, according to Oxfam. For any activity such as digging wells and repairing systems, the JWC needs to give permission. It rarely does so. The result is that the Palestinian communities are not permitted to build new water infrastructure. Yet the Israeli water company immediately connects new Israeli settlements in the West Bank to the mains water supply network.
On average, settlers in the West Bank consume up to five times more water than their Palestinian neighbours; 40 per cent of Israeli water comes from aquifers beneath the occupied West Bank and Gaza Strip; and 80 per cent of water in the West Bank goes to Israel, leaving about 20 per cent for Palestinians.
The effect of the conflict on upcoming generations cannot be underestimated. Save the Children has reported more than once on the effect on children in the region. In the past three years, 465 Palestinian and 104 Israeli children have lost their lives. Currently, there are 350 Palestinian children detained by Israel, often in conditions that Save the Children describes as "cruel, inhumane and degrading".
Children see the wall as being like a prison that separates them from friends and family. It makes it harder or impossible for them to lead a "normal" life—to reach their schools, to play and to mix normally. The culture of violence, in which children grow up. pervades schools. Children and teachers report increasing levels of violence. In the Save the Children's latest report there are many comments from children. A typical comment came from a Palestinian child, who said:
"One day when we were in school taking exams, there was a curfew and when the (Israeli) army went into the school our hearts beat fast and we were scared. They threw tear gas but thank God we survived".
Another child described the wall as,
"a snake that spreads its poison".

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Another child made a request to Prime Minister Blair and Britain—to us—by saying:
"I request to move this wall far from our school because it causes danger and fear. I really hope this comes true and thank you".
I am sure too that Israeli children echo the call for peace, security and normality.
Oxfam has argued:
"The humanitarian situation [in the region] is already bad and will not improve without a political solution that guarantees protection and justice for all the citizens of the region".
In its view the British Government should play an important part as they are,
"an important donor in the region, an influential member of the EU, and a key partner of the US in the Middle East. It is therefore well placed to use its influence in order to bring about such a solution".
Will the noble Baroness tell me what hopes they have that Israel could, for example, be persuaded to change the route of the wall? Are they encouraged by any reasonable voices coming from Palestine? And, what discussions are the UK having with the US over Sharon's visit to the United States?
The Israeli Government reject the notion that as an occupying power they have responsibilities under the Geneva Convention. Our Government have urged them to change that view. Is there any possibility that they might? Should we not do what we can to ensure that international human rights monitors, including child protection monitors, are deployed in the occupied Palestinian territories?
It has been said that the US will take no action against Israel prior to the presidential elections. Whatever the results of that election, neither Mr Bush nor Mr Kerry seem to have a commitment for taking any action thereafter. It is most depressing to read that. Surely, therefore, the EU has a role to play.
Ariel Sharon negotiated trade agreements with the EU earlier this year. Surely, they should be suspended pending action on Israel's part to try to implement the road map for peace, to which the EU is a signatory? The EU has, after all, tried to put pressure on the Palestinians to abandon terrorism. Will the noble Baroness tell me whether there are discussions with our EU partners to suspend these upcoming trade agreements?
We agree with the Government that a two-state solution is the only route to peace. There are those in Israel who think likewise. The Peace Now group in Israel has done brave work in trying to bring peace to the region. It is encouraging to see that there is a newly established Peace Now group in the UK, which is also arguing for such a two-state solution. It has sister branches in France and Italy and has plans to establish such an organisation in the United States. We wish it well.
Surely, it is in the interests of all in the Middle East to advance solutions that seek justice for both sides in this long and intractable conflict before it is too late.
4.48 p.m.
Lord Hannay of Chiswick: My Lords, it is appropriate and timely that we should be discussing the Middle East; and not just one country in the region—Iraq—as we have done so often over the past two years, but taking a wider perspective. At no time in modern history have the prospects for that region been so cloudy; have the chances of achieving peace, prosperity and stability for all its peoples been so overcast by the deep shadows of war and terrorism; and have the optimists been so outnumbered by the pessimists. So the noble Baroness, Lady Williams, is to be warmly thanked for providing the House with this opportunity to stand back from the day-to-day news from Baghdad and Basra and to look at the region in the round.
It seems fashionable just now to speak about a vague entity known as the "wider Middle East". I have never heard it precisely defined: does it stop at Iran or Afghanistan or Pakistan in the East? Does it include Central Asia? How far does it go into Africa? It sounds all too much like one of those Washington speechwriter's constructs—"the axis of evil" was one—which cause more friction and trouble than they bring enlightenment, focus and precision. Let us hope that if the G8 summit this summer is to focus on the Middle East, it will do so with its feet planted firmly on the ground of reality, and will deal with the region as it is, and not as we might wish it to be.
Realism surely tells us that if we are to address the overall problems of the Middle East with any prospect of success, we must face squarely two inescapable challenges; the need to see Iraq through its present travails, and the need to return without delay and with determination to the search for a peaceful, two-state solution to the problem of Palestine and Israel. If we try to proceed without addressing those challenges, if we try to brush them aside or ignore them, any words that are written about the future of the Middle East will be written in sand.
The Iraqi challenge will not be easy to resolve, but it is not impossible. No one can watch the fortitude with which most Iraqis are facing up to the dangers and insecurity of their daily lives, no one can hear of the optimism with which they seem to be looking to the future, and of their joy at being rid of Saddam Hussein, without a feeling of admiration and a realisation that the course on which we are set, of bringing that country to a prosperous, democratic and stable future, is the right one, and one of which we must not tire. To leave Iraq to slip back into anarchy, perhaps to split up, or to fall back into the hands of another egregious dictator, would be unpardonable.
That is what makes the recent change of heart in Spain so worrying. It is not that the Spaniards do not have every right to change their government, and we every need to respect that change. But the proponents of withdrawal from Iraq are, like so many here in London, still fighting battles over last year's war, and they, like those who do so here, risk doing that at the expense of the future of Iraq. Certainly, the Spanish demand that the UN be established as a central player

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in the phase which will follow the return of Iraq's sovereignty, planned for 1 July, is an entirely legitimate one. Let us hope that it can be met. The failure to involve the UN at the heart of the political future of Iraq from the moment the war ended, as it was involved in Afghanistan, was, I believe, a major error, and one for which we and the UN too have paid dearly.
The sanguinary stand off between the Israelis and the Palestinians will be even more difficult to bring to an end, and is even more necessary to remedy. It will not he done by building walls on territory that international law says does not belong to Israel. It will not be done by extra-judicial killings, nor by suicide bombers. It may be helped by unilateral withdrawals, both of Israeli troops and settlers; but even that will not in itself amount to a solution. A solution will be found only by returning to the negotiating table, and doing so without giving the men of violence a veto on any such negotiating process, and without trying to pick and choose with whom one will negotiate. It is truly tragic to see the Israeli people, in whose predicament and suffering we would be wrong to lose interest or sympathy, being led into a dead end. It may be that a further major international effort to resume negotiations will now have to await the outcome of the US elections, but it is crucial that thereafter it should become the first order of business for whoever is elected. The British Government and the EU should surely set that as a key objective of our foreign policy.
So much for the two essential components of any broader approach that we may take towards the region. But what should we be working for in the Middle East? Last year's human rights report on the region was a salutary reminder of how much is wrong and how much needs to be righted. It was all the more salutary in that the report was written by Arabs, for Arabs, and about Arabs—that is a fundamental point. We should not be seeking to impose some Western, democratic template on the region. We will anyway not succeed, even if we try. Look what happened in Iran after the fall of the Shah: a reminder, if ever we needed one, of the law of unintended consequences. So we should be working for evolutionary change, not mighty upheavals, and we should be working for peaceful change, which will take time and patience, and which will need to be brought about by the peoples of the region, not by outsiders.
Nor should we ignore the security policy dimension of what has been for decades a singularly insecure region. There is, I would argue, a golden opportunity to remedy in the Gulf region the absence so far of any sub-regional security arrangements. So long as Saddam Hussein ruled in Baghdad, that was inconceivable. Now that he is gone, it should be possible to negotiate regional confidence-building measures and security guarantees based on the triangle of key players in the Gulf: Iran, Iraq and Saudi Arabia. Later, if there were an Arab-Israel peace settlement, it should he possible to go wider, but we should not wait
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for that in the Gulf. Will the Minister say something about the Government's thinking and plans in that respect?
Iran needs a special and separate mention. It is not an Arab country, and in many ways its situation and problems require different prescriptions and a different perspective. Last month's elections were a setback for all those who hoped for a steady, democratic evolution there, but they did not mark the end of democracy in that country, nor the extinction of all hope for peaceful, democratic change. We should not therefore be too discouraged, nor should we he diverted from our policy of critical engagement, which I believe to be the right one. The indications in the press of yet another setback in attempts to get some sort of dialogue going between Iran and the United States are worrying. If the United States can have a dialogue with North Korea, and can contemplate giving that country security assurances, what is the insurmountable obstacle to their doing just those same things with Iran? Perhaps the Minister could tell the House about the Government's views on that matter.
The temptation to give way to pessimism when looking at the Middle East is often hard to resist. It is so easy to draw worst case scenarios and to sink into mutual recriminations over the events of last year. But we really cannot afford such an approach. The Middle East is on Europe's doorstep, and we will have to live with whatever occurs there, for better or for worse. If the terrorists get their way and propel the West into a confrontation with Muslim countries, it is the Europeans who will bear the brunt of the extensive damage that will ensue, whether from the activities of terrorists in our midst, or from an interruption in energy supplies. So we really do need to exert ourselves and to pursue a positive and constructive agenda. We will succeed only if the Europeans can put behind them the disagreements of last year. We will need to speak up with a single voice in Washington and to stand our ground there in the face of those neo-conservatives who would pursue policies which they may sincerely believe are in their interests but which are certainly not in ours.
4.58 p.m.
Lord Turnberg: My Lords, I too am grateful to the noble Baroness, Lady Williams, for introducing this debate, and for speaking so clearly and in such a balanced way. I much appreciated what she had to say.
Everyone involved in the Israeli-Palestinian conflict is suffering terrible hardship. The Palestinians feel helpless and hopeless and are suffering badly, while the Israelis are damaged, fearful and desperate. No one is winning, and everyone suffers. The situation seems to worsen day by day. Virtually everyone seems to believe that a just, two-state solution is the answer. Here in the UK and in Europe, there is a tendency to believe that Israel is largely to blame, and that if only Israel pulled down the fence, withdrew from the West Bank, and allowed free movement of Palestinians in and out of Israel, all would be well and the conflict would end. However, while the conflict would be over, it would be because Israel no longer existed. Not only Hamas, but

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Fatah, and other terrorist groups have repeatedly made clear that their avowed aim is the total destruction of Israel. One just has to look at Fatah's official web site to see that. It states:
"Complete liberation of Palestine and eradication of Zionist economic, political, military and cultural existence … armed public revolution is the method to liberating, and this struggle will not cease unless the Zionist state is demolished".
That seems fairly unambiguous to me.
"Have no mercy on the Jews and wherever you meet them, kill them",
and so on; was the message that poured out of Palestinian television in the wake of 9/11. That sort of propaganda inciting hatred, death and destruction continues day after day in the kindergartens, schools and mosques. Much of it was inspired directly by Sheikh Yassin. Is it any wonder that the young are brain-washed into violence; and is it any wonder that cynical terrorists can send out 12 and 14 year-olds as human bombs in that most cowardly and despicable of acts?
It is the terrible and long-standing antipathy to the existence of the state of Israel constantly inflamed by propaganda and the deliberate grooming of kindergarten children that fuels the terrorism, rather than the poverty and deprivation which the Palestinians undoubtedly suffer but which alone has never been a justification for terror anywhere else in the world. In any event, many of the suicide bombers turn out to be educated and relatively better off rather than deprived.
It is against that background that I come to the killing of Sheikh Yassin which was greeted with such an interesting range of responses. In the EU and UK it seemed often condemned as the assassination of a crippled old man in a wheelchair, a spiritual leader coming away from his prayers in a mosque—what could be more dastardly?—and among Hamas and in other Muslim countries as a disaster with vows of revenge and extreme retaliation. But can anyone doubt that Hamas is uncompromising in its implacable opposition to Israel and that its avowed aim, constantly reiterated, is the total destruction of Israel? The key point here is that it wants no truck with the idea of a negotiated agreement. Withdrawal of Israel from the West Bank is merely the first step on the way to the complete extinction of Israel and its people. That is Hamas's message and that is what Sheikh Yassin inspired his followers constantly to achieve. He would never have dreamt of denying it and he revelled in the fact that his hands were steeped in the blood of Israeli citizens. He continued to inspire his followers to pursue these ends until the day he died.
However, given that he was built in the mould of Osama bin Laden, it has been questioned whether it was wise to kill him now or indeed at any time. Would not it just inspire further terrorist activities? But terrorism against Israel is a daily way of life and death; and no doubt that will continue so long as it is not prevented. Indeed, one could say that our own Government's efforts to remove Osama bin Laden will
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not stop terrorism but we cannot simply roll over and leave him to get on with his activities; nor could Israel be expected to leave Sheikh Yassin.
To paraphrase Ferdinand Mount in the Sunday Times in a somewhat different context, Israel feels "damned if it fights terror, dead if it doesn't". We cannot uncouple Yassin from Mr Sharon's proposal to remove the settlers from Gaza and some of the West Bank. Here in Europe and the UK this has been greeted with a mixture of suspicion and anxiety and something less than enthusiasm. One might have thought that a little encouragement would not have been out of place, but instead there is suspicion that, first, Sharon did not mean it. While he can be accused of many things, and often is, I do not think that he can be said not to be blunt, outspoken and to mean exactly what he says. He does not prevaricate. Furthermore, he risks his political future by pressing ahead with this idea. So he means it and he has been saying it for over 12 months. It is also said that it is far too little and limited. But surely it is an important first step towards a negotiated settlement and deserves more generous recognition.
If that is the response in Europe, the response in Gaza has been even more confused. The Palestinian Authority has found it difficult to come to terms with and is uncertain how to respond, as it must now be seen to respond, while Hamas has greeted the news as a great victory. While Israel desperately wants peace, Hamas desires victory and the withdrawal from Gaza is seen as a victory for terrorism. It provides great encouragement to press on with more terrorism. If' they can achieve withdrawal without negotiation, who needs to negotiate?
I imagine that in this war with Hamas—and it is a war—Israel has to show that withdrawal from Gaza is not only not a sign of weakness, as withdrawal from Lebanon was construed, but is a sign of strength and a willingness to take the first step in a negotiated agreement. That, too, is another reason for targeting the Hamas leadership now; and, furthermore, it might also help to redress the balance in favour of the moderates in the Palestinian Authority who, with a little more help from the West, might begin to exert some pressure on the terrorist infrastructure. It was encouraging to read of that brave group of Palestinian intellectuals who called for a repudiation of terrorism as a way of achieving a just settlement for the Palestinians. It was encouraging, too, to read of the UK Government's efforts to bolster the Palestinian Authority for this purpose. I hope that the Minister may give us some details of what we are doing to help improve security in Gaza and to provide more aid to those unfortunate people caught in the middle.
It is also against that background that the security fence has to be viewed. I do not refer to the barriers we have been putting up around the Palace of Westminster to prevent the possibility of a terrorist attack but to Israel where that possibility has been realised every week for the past couple of years. It is an everyday fact; and Israel's right and indeed responsibility to try to defend its citizens seems entirely proper.

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The objections raised are, first, that it is a wall although less than 10 per cent is a wall—and that incidentally was built a little while ago and is right on the Green Line, as I recently learned from our ambassador to Israel—and the rest is a fence. It is undoubtedly a strong, secure fence and one which has proved to be pretty effective—hence the outcry from Hamas. Nevertheless, it is one which can be moved given the possibility of negotiation between the Palestinians and Israelis. Indeed, some of the fence has already been moved. But negotiation is the key. Once the threat of terrorism is removed, there would be no need for a fence. Its position is negotiable if anyone were willing to talk without the threat of violence.
The potential dividends for both sides, given only the beginning of a meeting of minds, are enormous. Even a modest reduction in the language of terrorism could bring tremendous benefits. Within Israel, the fact that Muslim and Jew can live together is shown in innumerable ways every day. When in Israel recently, I visited a number of hospitals and the Hebrew University of Jerusalem. In contrast to the right reverend Prelate the Bishop of Coventry, I was struck by the fact that large numbers of patients, staff and students from both religions were living and working together. I learnt that of the Members of the Knesset some 10 per cent were Arab Muslim. That seems rather larger than the proportion in any of the political parties in this country or, indeed, in any other western democracy.
The head of the transplantation services at Hadassah Hospital was a Muslim. While I was there, I heard about a Muslim patient who was receiving a liver transplant from a Jewish patient who had died. A Supreme Court judge is a Muslim. I am not sure that we have any. Sixteen per cent of the heads of departments at Afula Hospital are Muslim. No less than 34 per cent of the new medical student intake at Hadassah Hospital this year are Muslim. That is twice the proportion in the population.
There are myriads of examples of Arab and Jew living, working and playing together within Israel. Israel has shown, too, that it can live in peace with its neighbours in Jordan and Egypt. It is also the unfortunate case that no such admixture of Jew and Arab can exist in other Middle East countries when we know that over 700,000 Jews have been driven out of Iran, Iraq and Syria in the past few years.
But Israel is showing that it is possible for the two to live together and it is that which we must try to build upon. So I ask the Minister, first, for more details of the UK Government's efforts to bolster moderate Palestinian Authority leadership as it strives to improve security. There is time before Israel starts to withdraw from Gaza. Secondly, will my noble friend give more details about the humanitarian effort that the UK and the EU are making to relieve some of the grinding poverty in much of Gaza? Finally, can she indicate what efforts the United Kingdom Government are making to persuade Syria and Iran in particular to cease their support for training and funding for terrorists in Gaza and the West Bank?
5.10 p.m.
Lord Hylton: My Lords, I thank the noble Baroness, Lady Williams of Crosby, for the way in which she introduced this debate. Like her, I was able to visit Jerusalem, Bethlehem and some surrounding places early last month. The atmosphere was quite tense, with Israelis suffering fear as a result of random suicide attacks, while Palestinians tended towards despair as a result of military occupation and attendant humiliations. Both fear and despair all too easily lead to more violence. Both sides also see themselves as victims—of terrorism and hostile neighbours, on the one hand, and of military force and great injustice on the other.
Despite this gloomy situation, a strong will for dialogue and effective negotiations exists. Evidence for this lies in the Ayalon-Nusseibeh agreed principles, the Geneva accord and the work, at senior professional level, of the Israel/Palestine Center for Research and Information, known as IPCRI. Let me say to the noble Lord, Lord Turnberg, that IPCRI has done, and is doing, excellent work on cleaning up educational material and removing from it what one might call sectarian prejudice.
From these positive and negative experiences which greet any visitor to the region, can one give advice to outsiders? I believe that the message to Europe and the United States should be, "Do not allow yourselves to become polarised in favour of one side or the other. Do not be swayed by the politics of the latest atrocity. Devote your whole energy to working for peace through a two-state solution".
What can we do in our own right? I suggest, above all, that we should be realistic, as suggested by my noble friend Lord Hannay. There is disillusionment caused by the failure of the Oslo agreement and the sense that all dialogue since 1993 has proved fruitless. Further disillusionment arises from the derailing of the road map. Both these were essentially top-down plans and both ignored the religious dimension. I therefore follow the right reverend Prelate the Bishop of Coventry in suggesting that we have to take religion very seriously as the motivating force of some of the most extreme people.
We should support the Alexandria declaration by religious leaders in the region and the follow-up work now being done. It is vital to agree on the common values of the three great monotheistic faiths. Religious harmony on the future of the holy places would be an enormous help. Religious principles for handling the intractable issue of refugees would be a boon. Religious mourning, even, with commemoration and repentance for the many atrocities on both sides, would pave the way towards peace.
Realism also prompts us to understand how the political leadership on both sides is widely distrusted. It demands that we accept the difficulties caused by the American presidential election this year. Despite these factors, the issues will not go away—neither the Israel-Palestine conflict nor the wider questions surrounding Israel and the neighbouring Arab states. We should therefore do our best to keep these issues at the top of

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the agenda for the European Union, the G8, the Arab League and the United Nations, if only because the Middle East is capable of unsettling the whole world.
Realism indicates that 2004 is unlikely to be the year for big negotiations or big agreements. It should be used to improve the situation in small ways. Now is the time for conflict management and for seeking détente. We should learn from the methods used to end the Cold War, looking closely also at the relations between Israel and Syria after 1974, and between Jordan and Israel in the years leading to 1994. Co-operation between all parties is most urgent on security and intelligence, leading, if possible, to truces and ceasefires. Co-operation can be informal, asymmetrical, but reciprocal. This can lead to a lowering of the risks and to informal "rules of the game" emerging. Confidence-building over practical matters is essential. Tripartite working parties have already had some success. Verification and monitoring are most likely to be needed. Analytical problem-solving workshops, independently facilitated, may prove useful, perhaps at the level of presidential advisers.
I conclude with some thoughts on the European Union. I agree somewhat with the noble Baroness, Lady Northover—the European Union should develop its common policy towards the middle eastern states in as much detail as possible. This should build on economic strength both in terms of trade and of aid. We should use every possible instrument to promote détente and co-operation. To give one small example, the ERASMUS programme for students and scholars should be extended to both Israelis and Palestinians, including those living outside the West Bank and Gaza.
The common approach of the EU needs to be explained to the people of Europe. How, otherwise, can they know what it is? There are already links between many NGOs in Europe and the Middle East. There is endless scope, therefore, for developing such connections for the benefit of all. With clear exposition of policy, many individuals can become involved and begin to have a helpful role.
History is highly relevant in relation to the present impasse. I therefore venture to suggest that leaders, both at the European Union level and in its member states, should begin to acknowledge, in public, that we have all had a certain historical moral responsibility for allowing Hitler's genocide to happen. This had lamentable consequences in Israel's expulsion of part of the Palestinian population and its subsequent move into the occupied territories. I say this not to inspire feelings of guilt but to encourage the taking of responsibility for the present, so as to help produce a just and peaceful future. The European Union can make a big contribution, and we all have our parts to play.
5.18 p.m.
Lord Desai: My Lords, perhaps one ought to separate the rest of the Middle East from Israel and Palestine. I agree with the noble Lord, Lord Hannay,
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that some optimistic things are happening in the rest of the Middle East. Iran, despite all the setbacks that it has had recently, is evolving its own pastoral democracy. It may yet submit to good international practice about its nuclear programme and perhaps improve its record on human rights. Iraq, after the removal of Saddam Hussein, may—with patience and a lot of imagination—become a federation with lots of autonomy for different parts of Iraq.
With respect to what the noble Lord, Lord Hannay, said, I do not know how far the Middle East extends, but I am also very cheered that Libya has now decided to give up its nuclear programme and submit itself to international routes. Those are causes for optimism, but when we look to the core of the problem. I am afraid that I am completely pessimistic. I do not believe that any of the road maps or extended road maps that are about to be proposed will solve the problem in the slightest. We shall still be discussing the Middle East problem—with regard to Israel and Palestine—in 10, or perhaps 15, years from now.
I say that because, like many noble Lords, I have taken part in lots of debates about this question, read lots of books and thought about both sides. There is so much justice and injustice on both sides that it is hard to see where the virtue lies and where the problem is. It is possible to fear for the existence of Israel, given the history of previous Arab attacks and the recent spate of terrorism; but it is also possible to criticise Israel for its behaviour towards Palestinians within the Occupied Territories and elsewhere.
It is possible to understand the injustice done to Palestinians over their territory, and possible to understand why Muslims around the world feel that to be rank injustice—greater than any other injustice in the world. It may be a deeper cause of terrorism than any other that one can think of. At the same time, one can see the weakness of the Arafat regime, and the sort of terrorist tactics used by Fatah and Hamas are obviously not the way in which to solve the problem of Palestine. Indeed, I do not think that even moderate forces on both sides, such as they are, could possibly gather together and make the slightest impact on a solution to the problem. Not only are extremists in charge but, on both sides, the more extreme forces are more in power than ever before.
While I respect the right of Israel to live and hope that it will prosper, it is possible to distinguish between Ariel Sharon and Israel. It is possible to say that Israel deserves a better government than the one that it has; perhaps if it did have a better government, the prospect of peace would be better. It is possible to say that if Arafat was not the weakling that he is—if he had followed democratic practices and had a vibrant Palestinian national assembly—with a lot of local support, enough to be able to rule over terrorist forces and stop them, perhaps we would be better off. But that is not the situation. Indeed, the weakness of Arafat and all that has happened since 1999 has worsened the situation and made the terrorists more powerful. Given that that is the case—and either we are all to blame for it or none of us is to blame for it—it seems wildly optimistic to think that there is a

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solution to this problem that will be arrived at through negotiations. I say that because I do not actually believe that the two-state solution is a stable one.
The problem with the Israeli-Palestine situation is that some of the ideas on both sides are rooted in a land-obsessed nationalism, and there is not enough land to accommodate both Israeli and Palestinian demands. There just is not enough land—that is the end of the matter—especially when one considers the potential entrance to both those entities by Palestinian refugees abroad and the number of Jews who might want to settle in Israel, as is their right. I do not know how one can accommodate all those people in the amount of land that there is. While the notion of the state that each side wants is based on land, I do not know how one can reconcile the demands of both those peoples and hope that some reconciliation will take place. That has nothing to do with whether Israel should withdraw from occupied territories, whether a wall should be built or any of those things. The problem is that a rather old-fashioned 19th-century nationalism is now playing out its final tragedy in the Middle East.
This was the case in Europe, once upon a time, and millions died for Alsace and Lorraine. Now those places are completely irrelevant, and nobody knows where the border of France begins and the border of Germany ends. However, that took 90 years of war before it was settled. The key that Europe found was that prosperity comes not from territory but from trade and economic growth. Once one begins to believe in the possibility that one can have a win-win solution through trade and economic growth, one can stop being obsessed about land. We are nowhere near that situation in the Middle East. Unfortunately that is the case—and we cannot actually start dreaming of some sort of economic union for Israel, Palestine, Jordan, Syria, Iraq and so on.
It is hardly something that any government can accept, but, given the current pressures that there are on both sides, from within and from without, I do not see how a solution can be arrived at. As has already been said, 2004 is not the right year to expect a solution, because of the American presidential elections. I do not know why we should believe that in 2005 and 2006 American presidential policy on Israel should improve in any way. I do not know why either Mr Kerry or Mr Bush, were he re-elected, should make any difference, given that Mr Bush was unable to make any difference after being in his most powerful position, having won the Iraq war. If, in that position, he could not move either side an inch from their positions, I do not know what should make us optimistic about a solution.
Just because there is a problem does not mean that there is a solution. I am increasingly beginning to think that if a solution to the problem arises it will not be because the US or EU or anybody in the outside world intervenes in the Israel-Palestine question. I am sorry to say this, but I believe that it will come when, eventually, after the exhaustion of continuous killing, both sides realise that if they do not live together they
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will not live apart. There is no other way except for an internal solution, without outside interference. When that will arrive, I do not know; but I certainly do not see it arriving within the next decade or so.
5.28 p.m.
Lord Skidelsky: My Lords, in thanking the noble Baroness, Lady Williams of Crosby, for initiating the debate, I agree with those noble Lords who say that we should look forward and not back. The question whether the Prime Minister deceived himself, was misled by the intelligence services or deceived the public on the question of weapons of mass destruction remains important and troubling for our domestic politics, but it is irrelevant to the future of the Middle East. We can also agree that the issue of weapons of mass destruction was not central to the decision to overthrow Saddam Hussein; together with the farfetched claim that the invasion of Iraq was in fact mandated by the Security Council, it furnished the legal pretext for a war decided on grounds that could not be openly avowed.
I have heard so often in this House the words that we have heard today—so eloquent, and appropriately so, in their expressions of outrage and horror at the suffering and in reciting the statistics of suffering, and so sensible in their prescriptions. There was unanimous agreement on the desirability of a two-state solution, with the notable exception of the well reasoned dissent of the noble Lord, Lord Desai. However, those words seem a world away from the ambitious design to reshape the Middle East, which has been hatched in the corridors and environs of the White House and the Pentagon over the past few years.
At an early stage in the run up to the war, the Prime Minister committed himself to the American project, with Britain cast in its now familiar role as junior partner, and it is about the sustainability of that project that I want to say a few words. I believe that that is the essential context of the debate that we are having in the House today.
The project has two aspects. The first is to change the balance of power in the Middle East in favour of the United States and its allies. The key interests here are the security of oil supplies, the security of Israel, as defined by the Israelis, and security against terrorism.
The second aspect is more idealistic. It is to westernise the Middle East, starting with Iraq, by spreading the western values of democracy, free markets and the rule of law throughout the region. This is the Wilsonian side of the project. I am not saying that idealism is simply a cloak for realpolitik. The two motives co-existed in different proportions in the minds and hearts of all of those who undertook this audacious adventure. In fact, the two aspects are connected. As the Prime Minister said in a speech in Chicago in April 1999:
"The spread of our values makes us safer".
To anyone with a sense of history, this combination of motives recalls nothing so much as late 19th century imperialism. There is the same mixture of commerce, security and moralism and, I should add, adventure.

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Moreover, in the ethical version of imperialism, to which the Prime Minister is heir, forcible interventions were not ends in themselves, but merely the means to spread western standards, a form of trusteeship later made explicit in the League of Nations mandates established in the Middle East and elsewhere after the First World War. Ethical imperialism was to be a preparation for independence.
The question is whether a project of this kind makes sense at the start of our own century; whether, in the modern phrase, it is sustainable. I do not think so. Let me consider first the idealistic aspect of the project of forced westernisation. America has never had an imperial vocation. The United States was horn in an anti-colonial war, and the identity forged in that struggle has shaped its outlook ever since. In fact the agreement signed by the Iraqi interim governing council and the US-UK Coalition Provisional Authority stipulates the restoration of full sovereignty for Iraq on 30 June of this year, with a coalition contingent remaining,
"at the request of the transitional administration",
solely to help to guarantee stability. Yesterday's imperialists never thought that democracy could be brought about in one year.
The second point is that in its idealistic form imperialism was a failure. With the notable exception of India, the post-colonial world filled up not with the peace-loving democracies of the liberal imagination but with unstable dictatorships and failing states, which exhibit a rich patchwork of repression and revolt, war and civil war, brigandage and random violence. We run a huge risk of recreating this cycle by our intervention in the Middle East.
I think that the Americans have in their minds the more successful interventions in Japan in 1867 and 1945 and in Germany after the end of the Second World War. But there will be a high degree of scepticism as to whether these are useful precedents for coercive intervention in the Middle East.
Nor do I think that the Realpolitik aspect of the American project can succeed. I do not think that the security of oil supplies can be assured in face of the radical instability in the regions through which the pipelines run. I do not think that the security of Israel can best be protected by planting American bases in Iraq. In fact, it is a fair bet that the main effect of the American military presence will be to harden the intransigence of both sides. It will suck the Americans into underwriting Israeli expansion and, contrary to what one or two noble Lords have said, that is a serious project, entertained by powerful groups in Israel and it is not a two state solution, but a solution that many Israelis see as being the only solution. No one hears much about the Middle East peace process today. On the contrary, Israel's programme of targeted assassinations is a disturbing sign that it now feels let off the leash. I am not sure what the implications are of Sharon's offer to withdraw from Gaza. I hope that the noble Lord, Lord Turnberg, is right in his optimism about that.
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Further, the American project brings no security against terrorism: it inflames terrorism and makes us a prime target. I agree profoundly with George Soros when he writes that international terrorism should be treated as a crime, not as an act of war, requiring for its prevention or punishment good police work—such as we have just seen in London—not military action.
Finally, the unilateral nature of the project will, sooner or later, conjure up a world balance of power against the United States. The world does not consist of one giant and a collection of pigmies. China, Russia, India, and France and Germany in combination are great powers and they will draw closer together to resist overweening American pretension, for the simple reason that they will feel less secure. Do we want a new arms race? That is one of the implications of American unilateralism.
For all these reasons, I conclude that the fruits of the project are likely to be bitter. I think the best that can be hoped for is the emergence of quasi-legitimate client states in the Middle East with sufficient protection by the coalition forces to maintain a semblance of order and to allow some economic progress to take place, and, therefore, some gradual healing of wounds. But that is the best outcome, in my view, and not the most likely.
Having been so critical of the actions taken by the United States and by my own country, I would not wish to deny for a moment that the world does face problems of security and human rights that should be tackled effectively. I believe, with the Prime Minister, that the doctrine of national sovereignty does need to he qualified on account of the spillover effects of national policies and that terrorism does pose a security threat. But I insist, as I have said many times, that there has to be international agreement—at a minimum among the great powers themselves—about when it is right to intervene, and about the purposes and machinery of intervention. The Security Council of the United Nations remains the best forum for hammering out the terms of such an agreement. Further interventions of the kind we have seen in the Middle East carry the grave risk of igniting the flames of religious and racial hatred and destroying our best hopes for a secure and peaceful future.
5.38 p.m.
Lord Mitchell: My Lords, I have listened to many speeches given by the noble Baroness, Lady Williams, both in your Lordships' House and elsewhere. Her words are always wise and leave us all with much to think about. This afternoon we have heard the noble Baroness describe in vivid and moving detail the harrowing conditions in Gaza. I must thank her for sponsoring this debate.
I want to start by continuing where my noble friend Lord Hogg left off by quoting statistics. Two weeks ago in Madrid an offshoot of Al'Qaeda simultaneously exploded 10 bombs, killing 200 people and injuring over 1,000. It was an act of pure evil. In the past three years since the second intifada began, nearly 400 Israeli civilians have also been killed by

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terrorist bombings. As in Madrid they were going about their business: dancing in a nightclub, eating pizza, travelling on a bus, or sitting down for dinner to celebrate Passover.
Four hundred dead Israelis is equivalent to two Madrids. Spain's population is 40 million—seven times that of Israel. So, on a proportionate basis, Israel has suffered 14 Madrids. Closer to home, in 1998 a bomb set off by the Real IRA killed 29 of our own citizens in Omagh. Our population is 60 million—10 times that of Israel. On a pro rata basis, Israel has suffered the equivalent of 130 Omagh bombings. Fourteen Madrids or 130 Omaghs. Which democracy could withstand such an unremitting onslaught and what government could stand by and do nothing when faced with such an existential threat? Israelis, unlike Spaniards, do not have the luxury of throwing in the towel. Have the Israelis over-reacted? Probably. Is the situation for Palestinians in Gaza and the West Bank truly awful? Certainly.
However, we must be clear. Abject terror is the cause. Without it none of the horrors that the noble Baroness has described would exist. I have no particular liking for Prime Minister Sharon. To me, he is a man without vision and a bully, to boot. But in the face of terror he has acted like any other Israeli Prime Minister would under the same circumstances.
I wish to turn to two events that have been discussed in your Lordships' House today, that are relevant—the Yassin assassination and the building of the security fence. Sheikh Yassin had a sordid history. He had previously been arrested by the Israelis for the murder of two Israeli soldiers. He was serving two life sentences. Several years ago, in a prisoner exchange, he was released from captivity. After his release he resumed his activities as the leader of Hamas—not its spiritual leader, but its political leader. He directly planned and authorised many of the suicide bombings that killed many innocent Israelis. Yassin said the following:
"Islam is against the killing of all civilians. But Israelis are not civilians. We will continue our fight and kill Jews until Israel is an Islamic state".
One might call us over-sensitive, but we Jews are somewhat touchy when people say that they are going to kill us. We tend to believe them. Based on the history of the 20th century we have good reason for doing so. Sheikh Yassin kept to his word and he paid the price. The Israeli strategy with respect to the terrorists is clear. "If you kill our civilians we will attack your leaders—those who institute brute terror will pay the price and pay it personally". Is that not what we believe too?
At this moment in Afghanistan and Pakistan, are not our special forces working with the Americans in trying to track down and eliminate bin Laden and the rest of his terror network? And will we not feel just that little bit safer when they, too, pay the price of their evil? Perhaps my noble friend the Minister will explain to me, because I really do not understand, why my right honourable friend the Foreign Secretary described the Israeli assassination as "unacceptable and
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unjustified"? In Britain, are we not attempting to do exactly the same to another global terrorist? To me that seems somewhat hypocritical, or am I missing something?
The security fence is a measure of last resort. Since the intifada began, Israel's economy has been in the doldrums. The fence is costing over 1 billion dollars, an amount that the country can barely afford. But again, what other option do the Israelis have? The fence that has been built in the north has already reduced the incidence of bombings, just as the fence that surrounds Gaza has almost eliminated terror attacks from that area. The mistake that the Israeli Government have made has been to build a fence that encroaches beyond the green line. It is a provocative move, although it must be said that under international pressure the Israelis have backed off and rebuilt parts of the fence.
That is no way for the Israelis or the wretched Palestinians to live. We have two obdurate old leaders in Prime Minister Sharon and Chairman Arafat, both forged by many years of conflict. Sharon is brutal and ungiving. Arafat is corrupt and slippery. But there are Israelis and Palestinians who are younger and wiser. Those people who negotiated the Geneva accord are such people. The accord differs from many other attempts at peace, in that it is not an opening salvo, but a final peace treaty negotiated, line by line by brave Israelis and Palestinians. The accord sets out a two-state solution that offers Israel permanent security and offers the Palestinians the viable state that they yearn for. The accord has much to commend it.
I pay particular tribute to Daniel Levy, the son of my noble friend Lord Levy, for originating that project and helping to drive it to reach its conclusion. In the end, the Geneva accord, or something like it, will be the final peace treaty that the Palestinians and Israelis will sign. What a pity it is that today neither side has the men of vision or courage to make that happen.
Egypt and Israel signed their historic peace treaty in Washington 25 years ago this week. A brave man, Anwar Sadat, came to Jerusalem offering peace. The treaty was signed, but Sadat paid with his life. Today, a cold peace exists. Whatever else has happened in the region since 1979, the Israeli-Egyptian border has remained quiet.
Ten years ago Jordan and Israel signed a peace agreement, also in Washington. Another brave Arab leader, King Hussein, made his peace with Israel. The two countries have also both kept to their commitments. It is often forgotten that Lebanon and Israel also signed a peace agreement in 1983, but Syria, consistent to its hard line and destructive role, forced its neighbour to rescind and tear up the treaty. Several years ago even Syria itself came close to a peace deal with Israel and even now that is not out of the question. Israel does want peace and has shown that it will not only sign peace treaties, but will stick by them.
I want to end by making a comment about Arab society—not my usual area of expertise, but something I feel that needs to be said. A report published in 2002 by the United Nations Development Programme

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looked at Arab human development. For the most part its authors were Arabs. It highlighted three deeply rooted shortcomings in Arab society. They were lack of freedom, lack of equality for women and lack of knowledge.
The Arab people 600 years ago were the light of world civilisation. Today, despite their huge natural resources of oil and gas, the 22 Arab nations are at the bottom of the league by any measure of human progress. Growth per capita is less than 0.5 per cent per annum; 27 per cent of Arab men are illiterate as are 51 per cent of women. In 1,000 years, the Arab nations have translated fewer books than Spain translates in a year. Only 1.6 per cent of Arabs have computers, compared with 7.8 per cent of people in the rest of the world. Internet access is almost non-existent. Nowhere in the 22 Arab countries is there a universal franchise, or any form of democracy as we would understand it. Out of 250 million Arabs, only 1 million have the full franchise for men and women. And, irony of ironies, all of those live in Israel as fully participating citizens.
The Arab peoples are poor, repressed, unempowered and kept in the dark. No wonder they are driven to excess. They are also fed the most virulent anti-Semitic propaganda. On Arab television, in schools and in newspapers, Jews are demonised. The material would make Dr Goebbels very proud. Stopping that would send out a very positive signal to Israelis and to Jews world-wide.
Yesterday in Britain our security forces prevented what might have been a terrible catastrophe. All of us, particularly those of us who spend our time in this Palace of Westminster, live in the expectation that something terrible is going to happen in our midst. In Israel, the same sense of doom hangs over its population. It is expecting a terrible revenge for the Yassin assassination. Passover is next week and, no doubt, the terrorists will try to outdo last year's gruesome bombing at an old people's home.
Whether it is Al'Qaeda, the Moroccan Islamic Combat Group, Hezbollah, Islamic Jihad or Hamas, these people all march to the same beat. Their terror is universal and indivisible—they do not distinguish between Christians, Jews, Hindus, or even moderate Muslims. They will continue their war. It is up to us to stand firm.
5.49 p.m.
The Earl of Sandwich: My Lords, we are all once again in the debt of the noble Baroness, Lady Williams of Crosby, not only for introducing this debate but for bringing back her first hand and well considered impressions from the Middle East. I have noticed that when replying to debates Ministers take more than usual care to balance evenly what they say about Palestinians and Israelis. I can understand that and accept that there is violence on both sides. But I hope that as speakers we do not conform too much to that convention and measure our column inches so precisely. Neither do I believe that we should belong to one side or another, although that tends to happen in debates.
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We all take up our positions based on our personal experience. In my own case, having worked with aid agencies, I am normally professionally concerned with people who live in acute poverty. That means that I am talking mainly about one group, the Palestinians. I have no doubt that there are some Israelis in that category, but they are not so obviously suffering from a lack of homes, jobs, food or water.
For example, Palestinians in Gaza now have an unemployment rate of 70 per cent and as a result the proportion of people living there in poverty has come close to 85 per cent. In Rafah alone, 9,970 people have been made homeless by demolition or other Israeli actions since the start of the intifada. These are the figures which persuade aid agencies and the United Nations that the Palestinians, for all their educational and other known advantages I disagree to sonic extent with the noble Lord, Lord Mitchell, because the Palestinians have some of the most highly educated people—in their present plight can be compared with some of the poorest in sub-Saharan Africa and Asia. In addition, they suffer from a national identity crisis which Israel, thankfully, no longer has. One glance at the map reminds us that in spite of their expanding population, Palestinians have to live in an area which is less than one quarter of the size of mandated Palestine. The country was twice the size of Wales, but it is now only as big as two English counties. With the encroaching security wall, it is shrinking in size all the time.
On the political front, Palestinians are also suffering from a loss of leadership, which has been mentioned, not only through extra-judicial executions but through their own divided loyalties which the Israeli Government exploit mercilessly. They also have to live under the government of Prime Minister Sharon, assuming that he survives the latest corruption charges. I tend to agree with Sa'ib Urayqat, the Palestinian negotiator, that there are at least two Sharons for the Palestinians to deal with. There is the familiar old warlord Sharon who ignores the outside world and flouts international law when he decides, for example, to wipe out a whole Hamas leadership. Last week's assassination of Sheikh Yassin was in my view deplorable and counter-productive. How can this act possibly cure suicide bombing? Is it not likely to perpetuate it?
But let us not be hypocritical. The West is just as capable of assassination, if in a more subtle form, as Israel and he knows it. But that does not condone the action. The security wall and the expropriation of more Palestinian land are only the latest immoral and illegal acts of the government.
There is the Sharon of peace who is trying to play along the United States and satisfy Egypt and his own moderates through gestures such as abandoning the Gaza settlements and the partial dismantling of the wall. The jury is still out. The EU and the UN do not matter to Sharon, but the US is his lifeline and President Bush is looking for something in his election year.

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While Bush condones anything which can be called anti-terrorism—and Prime Minister Blair seems to go along with that—he will not wish to hand Mr Kerry any card which is even loosely called democracy in the Middle East. This is also Prime Minister Sharon's internal political game. On the one hand he needs to keep Mr Netanyahu and his group in Likud and the settlers at bay and on the other he needs to show the centre and the international community that he has his own alternative to the road map. He is a master at the game, which while preserving Israel will also ensure his own survival.
But the stakes are very high. The pressure on President Bush to force a settlement on Israel, as part of a new diplomatic offensive leading up to the election, can only increase in the coming months. Meanwhile, as far as concerns Europe the road map remains dormant, if not dead, not least because of one fundamental snag. One cannot have a two-state solution without two states. As Tony Benn said on "Question Time" very aptly last week, there is no Palestinian state and it is impossible for the Palestinians to negotiate without the apparatus of a state. To its credit, the United Kingdom is doing its best to bolster the negotiating team, but that is only on the surface.
Again and again the European Union has been humiliated by Israel's demolition of the Palestinian infrastructure it has created—its communications, security forces and political institutions, not to mention the appalling human cost every day at checkpoints in the Gaza suburbs and in local Palestinian communities affected by the illegal wall. What is the European Union doing about that? We who are at one or two removes can easily make suggestions, but it is time for European leaders to offer something new and to say something more than "We are implementing the road map".
I accept the caveats of the noble Lord, Lord Desai, but I believe that the European Union could take more initiative this year in the area of economic development and trade. That was touched on by my noble friend Lord Skidelsky in his final prediction. This is where it does have some muscle if it were only prepared to show it in the Middle East, as it has demonstrated in successive WTO rounds against the United States.
Surely, as the noble Baroness, Lady Northover, said, it is time that the Council of Ministers reviewed and even suspended the EU/Israel Association Agreement. No doubt the Minister will have noticed that the International Development Committee has taken up this issue in its recent excellent report Development Assistance and the Occupied Palestinian Territories. I quote from the IDC's report, Volume 1, conclusions 23 and 24:
"Israel's restrictions on the movement of Palestinian goods, its destruction of Palestinian infrastructure and its total control of the OPTs' borders are denying Palestinian exporters access to EU markets."
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It is a simple statement. The committee goes on to urge the Government to propose through the Council of Ministers that it suspends the trade agreement with Israel until it lifts its restrictions on Palestinian trade.
The human rights clause alone would justify its suspension, but the committee is raising a more fundamental principle of fair and reciprocal trade, which this Government hold dear. In her capacity as the responsible Minister, can the noble Baroness say whether this option is now under consideration and why it has always been successively blocked by Britain, Germany and others in the Council in the past?
I note that the Government's response to the committee, which was published yesterday, says rather predictably and understandably that constructive engagement is the best approach and that suspension would not lead to a peaceful resolution. And yet one has to ask what possible political outcome for the Palestinians has come from such an engagement. Why are we still applying double standards as regards Israel?
I know that Israel is a friend of this country. Ministers sometimes speak as though Israel is regarded as the pariah state in the Middle East and deserving of our friendship when even without US backing, it has so many obvious defence and trading advantages over all its neighbours. Surely, "rogue state" would be a more appropriate title.
Noble Lords will also know that for the past three weeks nearly all United Nations and other humanitarian agency vehicles have been prohibited from crossing through the Erez checkpoint. In addition, the movement of food containers through Karni, which is the only commercial crossing point in Gaza, is still being obstructed. Today we have heard that all food aid is now affected.
What are the EU states doing to resist and counter this flagrant and illegal action by Israel? Does it not provide an immediate reason to suspend the trade agreement? Why should the UK deal with a government who make terrorism the pretext for actions which can only terrorise and alienate half of their population?
Finally, what is the UK doing to improve its own relations with the Middle East, to support the wider coalition against terrorism and to encourage peace initiatives by Arab states? This is a vast subject. The noble Lord, Lord Mitchell, was quite right about the priorities in education. I am glad that the Foreign and Commonwealth Office is addressing some of those issues through the British Council and the Global Opportunities Fund.
The noble Baroness may well say that she is sorry that the Tunis summit was cancelled and that the Arab League is in some disarray. But that failure should be a warning for all those engaged in peace, and a further catalyst for some form of EU action, without which the US will continue to block initiatives from the international community.
On behalf of Christian Aid, of which I am a trustee, I again thank the noble Baroness, Lady Williams of Crosby, for undertaking that visit.
6 p.m.
Lord Janner of Braunstone: My Lords, I join in thanking the noble Baroness, Lady Williams, both for introducing this subject so that we can discuss it and for giving her views on it, albeit I did not agree with many of them. However, she and I have been friends for so many years without agreeing on everything that I am sure that friendship will continue.
I was fascinated to hear the remarks of the noble Earl, Lord Sandwich. I managed to agree with one-half of one sentence when he referred to what had happened since the start of the intifada. We should not forget that the intifada started after Arafat turned down the chance of peace. He did not say merely, "I do not accept what Barak has put forward. I do not simply leave Camp David saying that I shall come back with other suggestions". He said, "No", and he started the intifada. He started the terror.
When that happens we have to think how we would react. I thought about that when listening to Sir John Stevens saying how inevitable it was in his view that we in the UK would be subject to attack and how we would have to be prepared to deal with it. Governments have a responsibility to their own people to save their lives and to protect them. That which we expect our Government to do is what the Israeli people expect their Government to do. Whether we would agree with the steps that they have taken is not totally relevant because we do not elect that government. The extraordinary thing about the Israelis is that they elect their government. They are the only democracy in the area. As I used to say during 18 years sitting on the opposition Benches, the problem with democracies is that they so often elect the wrong people. But eventually, of course, we got it right. Sharon, whether we like it or like him or not, is Israel's elected Prime Minister. I do not think that it helps at all to try to demonise the man. What we must do is to try to help the parties to get together.
That is a job that I have been doing for a very long time. It started with my trying to learn the Arabic language, which I do not recommend to anyone other than a total masochist. However, I learnt a little and it has helped during visits to most of the Arab countries on the trail of seeking common ground. I have been to the Yemen, Syria, the Gulf, Morocco, Tunisia and Jordan. I have just come back from a visit to Jordan where I had the opportunity to meet the King, Prince Hassan and other leaders. I went on to the Territories and to Israel.
We have to keep doors open. The verbal attacks on other people that we have heard today will not help. They will not advance the cause of peace. The constant attacks on Sharon will not help him to do what he has to do. Whether he gets it right or wrong is a different question. In the view of my family who live in Israel, Sharon's job is to try to save their lives. They believe that he should try to prevent their children from being murdered on the school bus and to ensure that when the children go off to school in the morning they come back home alive in the evening. That is his job.
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Did Sharon get it right with Sheikh Yassin? It seems to me that a majority of noble Lords consider that he did not. However, the majority of Israelis who elected him think that he got it right. They reckon that you cannot deal with these people. They reckon that Sheikh Yassin was not just a murderer but the organiser of murderers. He was not a man who would commit suicide himself, but one who would send others to do it. He has killed, and been responsible for the murder of, hundreds of people. Most Israelis took the view that that man should be taken out. We took that view with the sons of Saddam Hussein. I am sure that we would take that view if we managed to get hold of Osama bin Laden's people. That is a case of double standards. We would take out bin Laden's people to try to save the lives of hundreds of people—British people and others. That is what the Israelis believed that their taking out of Sheikh Yassin achieved and will achieve. That is how they have to handle the matter. It is not what they want to achieve in the long run. They know that they want peace.
The Israelis do not like the security fence. I have visited it with them. I visited the wall in Jerusalem with an Israeli soldier. It is a most unpleasant place. I asked the soldier how the wall could be justified. He replied, "Easily. Nineteen terrorist suicide bombers came through this exit within the past 12 months and killed and maimed hundreds of people. Since the wall has been built, there have been none. That is what we have to do. We do not like it either". That is their view—that if they need to have a fence in order to protect the lives of their people, they as the elected government will do that, just as we would if we had to protect our people.
I hope that we shall not be faced with that kind of problem. However, the question is: how do the Israelis move towards peace? To suggest that the Israelis do not want peace shows a total, absolute, abject lack of understanding of the Middle East and of the Israeli people. To suggest that they are a bunch of sadists who want to cause harm to the people who live next door to them is rubbish. What they want to do is to have safety, security and peace. They want safety and security for themselves and their children, and, ultimately, to be able to live in peace with their neighbours. The problem concerns how we can help them to achieve that. How can our Government help to create peace between these peoples? How can the international community work to achieve that? How can we as individuals help? Some of us have very good contacts. Indeed, I suspect that the noble Earl, Lord Sandwich, has much better contacts than I. He probably has contacts with people with whom I have none. But each in our own way must do what we can. We must try to help to get peace.
Meanwhile, we should understand what is happening. Today I asked the Library staff for a list of terrorist attacks and suicide bombings in the past year. There were 44, some in Israel, others in Saudi Arabia, Colombia, Iraq, Chechnya, Morocco, Bogota, Kirkuk and south Russia. That is what is happening in our world. I believe that we in this place should do everything in our power first to recognise the reality as

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it affects others, and, secondly, to understand that it is flowing over into our world. As regards the Middle East, we should strive for understanding.
A little while ago I wrote a book entitled, One Hand Alone Cannot Clap. That is an Arabic proverb. One hand alone cannot clap and one people alone cannot get peace. I submit that our task should he to try to bring people together so that both hands can clap and we can help the people in that area to achieve peace for themselves and for others.
6.9 p.m.
Lord Weidenfeld: My Lords, I am grateful to the noble Baroness, Lady Williams of Crosby, for an opportunity for plain talk—plain talk about the Middle East. The catastrophe of these events on the Israeli-Palestinian front no longer brooks evasion and half truths. Cobwebs of clichés and stereotypes must be removed. After listening to the noble Earl, Lord Sandwich, I submit, more convinced than ever, that the constant demonising of Israel, the Israeli Government and General Sharon—and the very view that there is a moral equivalence between barbaric terrorist attacks of suicide bombers and self-protective actions of retaliation—is not only unfair, it is also injudicious and unhelpful. It is unhelpful if you want the Israeli electorate overwhelmingly to press for negotiations and make major sacrifices.
Let us take the reaction to the killing of Sheikh Yassin. If British Intelligence and Czech resistance could justly earn their laurels for killing Reinhardt Heydrich, the Gestapo leader; if Special British Forces, commandos and SAS in successive wars can be justly praised for their lethal sorties behind enemy lines; if Prime Minister Blair and President Bush can urge their forces to get Saddam and bin Laden alive or dead, why are the people of Israel denied their basic right of self-defence? Yassin was the plotter and planner of a thousand deaths of men, women and children—Jewish and Arab children; Arab children, whom he sent into voluntary death, and Arab women. On 14 January this year Yassin issued a decree that entreated women to join the menfolk and become suicide martyrs.
I assure your Lordships that I have no doubt that there are many cases of gross injustice and utter folly committed by successive Israeli governments, but I submit to you the words of Chaim Weizmann, that moderate and wise first President of Israel, when addressing a British Royal Commission in 1935. He said:
"The Jewish/Arab conflict is not a conflict between a right and wrong but between two rights and two wrongs. However".
he continued,
"ours is the smaller wrong".
These words have stood the test of time and are valid right up to the present.
The other day a leading Palestinian said to me in a private conversation that every time an Israeli describes the West Bank as Judea in Samaria any self-respecting Palestinian winces and clenches his fist.
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I fully understand his feelings, but what muscular motion or body language should express the feeling of an Israeli or indeed a Jew, who searches in vain for any Arab school atlas or wall map with any sign of the existence of the State of Israel?
The noble Baroness, Lady Williams, has come away with very distressing images of Palestinian suffering in Gaza as a result of the unending Jewish occupation. By focusing on effect we tend to neglect the cause of the tragedy and the course of history. The continuing occupation is the result of the continuing intifada, and not the other way round.
The Camp David and Taba discussions, and the resulting outline agreement, were supported by 80 per cent of the Israeli electorate, yet they were brought to nought by Arafat and not by Barak. Unless you call liars and cheats President Clinton, Ehud Barak and the majority of all those present, this is the very truth. That the settlements in the West Bank and Gaza are a major, terrible road block to peace is clear, but they can, to a meaningful extent, be removed through negotiation—as they were after the peace with Egypt. And it was the much abused Ariel Sharon who, with settlers kicking and screaming, dismantled the settlements.
Terror existed before the first settler set foot in the West Bank. Before 1967 the terrorists were known as Fedayeen.
The mistrust between Israelis and Palestinians while Arafat is in power excludes in my view any real prospect of serious negotiation. Why do I mention only Arafat and not Sharon? Because, while Israel is a democratic society and the electorate responds to terror with unshakeable solidarity, it would equally respond to real, confidence-building initiatives on the Arab side by a moderate Palestinian leader supported by the majority of the Arab world. So far, confidence-building gestures from the Israeli side, such as the withdrawal from Lebanon, have been interpreted as weakness and have only put more heart into the intifada.
The United States must soon revive with full vigour the negotiations prescribed by the road map. Europe, Russia and the UN must follow suit, but let Europe speak openly and gravely to Arabs as well as to Israelis; let it not simply see itself as a counterweight to an allegedly wholly pro-Israeli America but weigh honestly charge and counter-charge without bias and bile. That applies particularly to the media in Europe and this country. The story of an all-powerful Jewish lobby in the United States is a popular myth, or at least a very simplistic concept. The support for Israel in the United States, where I have been recently and visit constantly, is deeply embedded in the public and by no means confined to Christian fundamentalists and the much derided neo-conservatives. Throughout the USA, in the middle west, the south and on the east coast, sympathy for Israel and the rejection of Palestinian terror is much in evidence. Paradoxically, the most potent critics of the Israeli case are the media controlled by Jewish shareholders. In America there are lobbies of every kind and description as part of the

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political system. Arab Americans are financially very potent and politically very influential; American think tanks and academic centres of Middle East Studies are awash with Saudi money, not to speak of the numerous religious centres which propagate the Wahhabite sect of the Islamic faith.
The defection of Gaddafi's Libya from the circle of terror-supporting Arab regimes is a landmark of progress. Gaddafi's son, in a recent interview, firmly insisted on radical reform in the Arab world as the order of the day. The right honourable gentleman the Prime Minister should be congratulated on this diplomatic success. But when he speaks of the next steps in the war against terror, encouraging Middle East regimes to accelerate the progress of democracy, and when he throws a lifeline to those variously described as rogue states, failed countries, tyrannical dictatorships, he should not waver but ask for positive action before admitting new members to the club of respectable countries. He will soon be receiving the Foreign Minister of Syria, a country whose regime has hideous credentials and is a veritable dinosaur in the zoo of the tyrants.
Only a few days ago, one of Sheikh Yassin's disciples, who operates out of Damascus, spoke from there by telephone relayed by loudspeaker to the people of Nablus. He threatened death and apocalyptic revenge on the Jews. Syria's young dictator might or might not favour reform; he is in practice captive to the influence of his father's old vassals. Gaddafi's earlier misdeeds pale before the massacres committed by Assad the elder. America's presence in the neighbourhood caused Damascus to co-operate and to expel Iraqi extremists, but as soon as Bashir Assad scented an American reverse he returned to his old stance.
In a recent debate in your Lordships' House the noble and gallant Lord, Lord Guthrie, referred to the brutal and systematic incitement of schoolchildren through textbooks and obscene films. Syria can and must be influenced. The intellectual class feels oppressed and is beginning to raise its voice against the Ba'athist regime, which still operates on an emergency law dating from March 1963. In the north of Syria the Kurds, long suppressed, are battling for their human and civil rights. When Her Majesty's Government see the Syrian envoy I hope that they will not mince words and insist on Syria expelling the terrorists from Damascus—which is not, as the Syrian Government contend, a mere address for their information services, but one of the headquarters of international terror. Syria must also give genuine guarantees that its army will one day leave Lebanon, a country which it has economically exploited and, through making the Bekaa valley a centre for the international drug trade, also morally perverted. If the Syrian Government do not comply, the United States must not be discouraged from applying sanctions against the Syrian regime.
And so here the circle closes: if Hamas and Hezbollah can be contained and disarmed and Israel's borders be secured, the work and prospects of the quartet would stand a much greater chance of success. They could then influence, indeed lean on, Israel to
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negotiate with the Palestinians and reach a fair settlement on the basis of two states and a compromise on Jerusalem. But this presupposes a sense of purpose and iron will and a measure of unity between Europe and America, an aim for which no sacrifice is too great.
In conclusion, I appeal to the noble Baroness, Lady Williams—whose staunch and convincing defence of human values at one time influenced me to cross the Floor and join her new party—to pause and reflect that in the Israeli/Palestinian crisis settlements can be relocated, protective fences re-routed, but innocent civilians, women and children, who are purposely and systematically murdered or maimed, cannot be brought back to life.
6.19 p.m.
Lord Wallace of Saltaire: My Lords, it is a pleasure to follow the noble Lord, Lord Weidenfeld, who I know has devoted a great deal of time to promoting better relations between the people of the three great faiths and to working for peace in the Middle East.
This debate has been of a consistently high quality. I differ from the noble Lord, Lord Howell of Guildford, only in being rather more pessimistic and in setting out the potential for the situation to deteriorate and the urgency of the need for more British and European engagement. The noble Lord, Lord Hannay, spoke of two intractable problems, but I would add a third. The whole question of the development of the Arab world, and the failure of Arab political, economic and social development—-of which one or two people have spoken; such issues are raised in successive Arab Human Development Reports—is a third problem which may get worse.
The situation is not stable, with further deterioration possible not only in Iraq but also in Israel and Palestine. In Iraq we face the risk that some European governments may wobble in their commitment to what will necessarily be a painful and long-term engagement in rebuilding. The United States continues to resist full multilateral engagement, and Washington's illusions after the war that democratisation could be imposed remarkably quickly, remain in some sectors of the Bush administration. Clearly we are going to have to work in Iraq with a succession of' imperfect regimes, as indeed post-Ottoman Turkey was a succession of imperfect regimes. We will not get a fully democratic Iraq, and that is something with which we will have to negotiate, deal and engage other Arab states in coping with.
On Israel/Palestine, the settlements continue to expand, as my noble friend Lady Williams remarked, and Palestinian infrastructure continues to be destroyed. Both sides are becoming increasingly embittered. One now has to ask whether a two-state solution remains possible. The Palestinian Authority scarcely exists any longer, and so the question of how one starts to negotiate a two-state solution becomes ever more difficult. Those of us who see ourselves as good friends of Israel worry about the deterioration in the quality of Israeli life, Israeli culture and Israeli democracy.

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Then there is the problem of the development of the Arab world as a whole, about which the Bush administration wishes to launch a major initiative for the June G8 summit, which is another clock that is ticking. Rapid population increase; failures of economic development; deterioration in the quality of education about which the Arab Human Development Reports made some very sharp criticisms; the mixed record in terms of government-controlled media; and the fearful nature of so many regimes, mean that we have tremendous difficulties in coming to terms with how we encourage their slow progress towards more open societies.
The confused response of different Arab regimes to the Americans' first draft initiative demonstrated just how fearful they were. So did the collapse of the Arab League summit last weekend, which seems to me a very serious development. I was encouraged by the quality of the Alexandria document produced at a meeting two weeks earlier of a limited number of people from civil society organisations in those parts of the Arab world where it is possible for such organisations to operate. However, some of the questions posed in the Alexandria document about the encouragement of civil society across the Arab world were clearly more than many Arab regimes could stomach. There is rising anti-Americanism across the Arab world. There is a perception that the West is at war with Islam—something which could translate into reality if we are not careful.
There are conflicting rationales for not tackling all of these problems at once. We hear from Washington that we cannot tackle the Arab-Israeli peace process until democracy has been promoted across the Middle East. We hear that now in place of the old argument that we could not deal with Jerusalem until we had conquered Baghdad. The whole democratisation of the region is very much the flavour of the month in Washington, without a full understanding of just how long-term a project that is.
From Arab regimes, in turn, we hear that political and economic reform is not possible until there is a Middle East peace—a good excuse for kicking the difficult problems of modernisation to the side. But we have to move together on all of these fronts.
In that respect, current American policy and the current quality of the American debate is not helpful to those of us who wish to move forward constructively. Many of us are concerned about the fundamentalist undertones in the Washington debate. Several times a week, I receive from the Middle East Media Research Institute an e-mail report about the extremist language one hears in the Arab state-owned press—against the West and against Judaism, and so on. But I also receive from a number of American websites some pretty good examples of extremist anti-Islamic language used in the right-wing talk radio in the United States and in the think-tank community in Washington.
I read Charles Krauthammer's speech in January to the annual dinner of the American Enterprise Institute—one of the most influential institutes in the
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current Administration in Washington. Some of the language that he used was about what he called the "existential enemy"—which is,
"Islamic fundamentalism in both its secular and religious versions".
I am not quite sure what "secular Islamic fundamentalism" is, but he clearly believes that it is for the same thing. Had I been reading that from an Arab government's point of view, I think it would have persuaded me that I could not trust the Bush Administration on the greater Middle East initiative. That sort of extremist hard-line language, talking about a war between the West and Islam, is not one with which I would be comfortable. If I were advising an Arab government, I would certainly be extremely nervous about it.
There is a risk that Europe's secular societies will find themselves caught between contending fundamentalisms—three narrow and negative versions of three great religions, each claiming exclusive possession of the same sacred sites and Holy Land. We must be careful not to let the long-term struggle to combat Islamic terrorism deteriorate into a war against Islam. We hear in some parts of the West suggestions that we are engaged in a war against Islam. In this respect, I agree strongly with the noble Lords, Lord Desai and Lord Skidelsky, that we have to look at ourselves and the problems that we went through in our states and societies during the painful process of modernisation, to recognise the difficulties which traditionalist Arab regimes now face.
We want the Arab states of the Middle East to go through the process, from traditionalism to open societies and democracy, without the sort or wars, expulsions of minorities and genocides of the fascist and communist regimes that European societies themselves went through. That is difficult, and we are asking them to go through it more quickly than we did.
As we criticise Islam, we have to recognise the history of our own religion—and I say this as a Protestant—including the witch hunts by the narrow Protestant sects in Britain, the Netherlands and the United States in the 17th and 18th centuries. We should recognise that the Roman Catholic Church regarded Catholicism as incompatible with democracy as recently as 60 years ago. The Spanish Roman Catholic Church really came to terms with democracy only 30 years ago. So suggestions that Islam is entirely different and incompatible with democracy slides over our own mixed history.
Many noble Lords have talked about Israel and Israeli responsibilities. I want to say one thing to those who have spoken passionately in support of Israel's current position. We are entitled to judge Israel by higher standards. That is precisely because—and I was brought up to believe this Israel—and the Jewish tradition is so much one of culture, civilisation and, recently, democracy. That means we must ask the Israeli Government to resolve the deliberate confusion about whether they want to occupy the entirety of Israel/Palestine. The expansion of the settlements, the expansion of the roads across the West Bank, the building of the wall where it is now, all look as if Israel

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wants to occupy the whole of Israel/Palestine west of the Jordan. I was glad to hear the noble Lord, Lord Mitchell, say that Israel should change the route of the wall. That is something we all now have to say loud and clear. A wall on the 1967 boundaries would be acceptable in a way that the current wall is not. The alternative—to face up to possibility that the two-state solution is no longer possible—is hardly thinkable: either the expulsion of the Palestinians, or a secular state in the long run, with a Palestinian majority.
So where do we go from here? What should we be doing? Many of us have welcomed Her Majesty's Government's engagement with Arab states across the region. We think it was right for the Prime Minister to go to Libya—not a very pleasant state, but we have to deal with states that are imperfect. It was similarly wise to engage with Syria, another extremely unpleasant state in many ways, but we have to try to encourage them where we can, as with engagement with Iran.
I also agree with the noble Lord, Lord Hylton, that the European Union as a whole needs to become more active on all fronts. We cannot safely leave the initiative to the United States, especially under this Administration. That means we need to revive the old European Union's Barcelona process, even with all the obstacles that process has faced. We should be putting more effort into encouraging education at all levels across the Arab word, perhaps with a new Euro/Arab university. We should be providing Arabic materials for the Internet, which all of the reports on the region say are most desperately needed. We should be promoting economic development as far as we can, and we should be making the difficult case that women's rights are essential for economic and social development. We have to revive the road map, through the United Nations, and to maintain our deep commitment as it moves forward. We have to recognise that, as it moves forward, the cost in terms of financial assistance—and potentially in terms of troops to police an interim settlement—would be very considerable. But conflict prevention is cheaper than state rebuilding, as we are now painfully discovering in Iraq.
I repeat: the situation is not stable. It has the potential to get worse rather than better. That is why we urge Her Majesty's Government to give this region the highest priority.
6.32 p.m.
Lord Astor of Hever: My Lords, I also thank the noble Baroness, Lady Williams, for introducing this very important debate. It was a real pleasure to hear the noble Baroness's masterly overview of what she described as the most difficult international problem.
This has been an excellent and very wide-ranging debate. Clearly the two key issues were the Israeli-Palestinian dispute and the Iraq conflict. The noble Lord, Lord Weidenfeld, thanked the noble Baroness, Lady Williams, for the opportunity for plain talk. I think there has been plenty of plain talk today.
Any eventual solution to the Israeli-Palestinian problem must be based on a peace process and dialogue, not conflict. As the noble Lord, Lord Janner,
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said, we must do all that we can to help get the parties together. A secure Israel, free from terrorism and suicide bombings, alongside a viable, independent Palestine: balance is the key to our approach. We must understand the fears and anxieties of both sides if we are to understand the dispute. Israelis feel vulnerable to terrible and regular acts of violence and, as the noble Lord, Lord Turnberg, said, threats to its very existence. Palestinians feel humiliated and stateless.
Like the noble Baroness, Lady Williams, I am a strong champion of the survival and safety of Israel. But the war on terrorism cannot be won by military means alone. While terrorism must be effectively engaged, the deeper reasons for its existence must also be addressed. What are the resentments that lead people to be sympathetic to terrorist acts? Why are young men and girls prepared to blow themselves up? As the right reverend Prelate the Bishop of Coventry pointed out, religion can be a dangerous and tyrannical force. We must try to understand, and be tolerant of, other religions. Several noble Lords mentioned the killing of Sheikh Yassin. The noble Earl, Lord Sandwich, argued that the killing will not bring peace any closer—in fact, the opposite. Other noble Lords argued that his killing was essential for the security of Israel.
The noble Lords, Lord Turnberg and Lord Mitchell, mentioned the security wall. Israel has a right to defend its citizens against terrorist attacks. But while the wall may reduce the means available to Palestinians to commit terrorist acts, the hardship caused does stoke up the will to do so. Both the means and the will must be reduced in parallel, with security measures and dialogue to effect a long-term settlement.
Rebuilding the trust required for dialogue will not be easy, but it is paramount. I think all speakers tonight have made this point. Along with the noble Lord, Lord Clinton-Davis, I share my noble friend Lord Howell's determination to be on the optimistic side. The noble Lord, Lord Desai, took a more pessimistic view.
In the event that a peaceful solution can be found, are Her Majesty's Government preparing plans for a stabilisation force? What role is envisaged for NATO, or the European defence army, in any peacekeeping operations to the Middle East?
Iraq has changed the geopolitical landscape. The action there has removed a regional threat, removed an enemy of Israel, the wider Middle Eastern region and any peace process, and also opened up Iraq's political and economic development. It has sent a message to other regimes—for example, Libya—and encouraged Iran to open itself up to IAEA inspections.
It is vital that we continue to build security and stability in Iraq, and rebuild the country's infrastructure. The noble Lord, Lord Hannay, spoke of Iraqi optimism in looking to their future. Amid all the apparent gloom, there has been impressive progress there.

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The Middle East is often viewed through the prism of these two conflicts, in a negative light. However, while the wider Arab world has much to wrestle with, there are positive developments. Much has changed, and is changing, in the Middle East. This we applaud and encourage.
In Saudi Arabia, we see the first stirrings of representative government, with moves towards elected local government. Crown Prince Abdullah has encouraged economic reform, and Saudi Arabia has applied to join the World Trade Organisation. This has involved opening some sectors of the economy, such as the gas industry, to foreign investment.
Syria is showing signs of adapting to the new geopolitical reality in the Middle East. It is a key player in helping to resolve the future of Iraq, and has announced its willingness to co-operate in restoring stability there. The relationship between Britain and Syria is developing steadily, and we should be positively engaging it to that end.
The noble Lord, Lord Hannay, pointed out that we should not be discouraged by the, hopefully temporary, setback in Iran. Democracy is still alive there.
Kuwait has bounced back economically from the Iraqi invasion. British exports to Kuwait were up by 30 per cent last year. Lebanon, which has for so long been synonymous with war and destruction, is now reasserting itself as an economic tourism and entertainment centre with a free market and liberal economy. Its democratic political system, freedom of speech and freedom of the press are nurturing a diversified political life.
Oman is a good example of a successful, measured and undemonstrative process of transition in the Middle East. Under Sultan Qaboos, Oman has been transformed into an economically successful, stable and highly prosperous country with a strong rule of law. It possesses a highly developed system of government, allowing for an ordered transition to an increasingly representative system. The pace of change is adapted to the needs of the country so that a balance can be struck at all times between modernisation and a preservation of traditions and values.
We must encourage transition to democracy throughout the region and wider. But, at the same time, we must make it explicitly clear that the export of cultural values is not part of our aim. The fear of their culture being diluted, or even replaced, by the encroachment and dominance of western ideas colours the attitude of many in the Middle East towards Europe and America. I do not share the concerns of the noble Lord, Lord Skidelsky, that we are trying to do that.
There is political and economic progress in the Gulf states. Enormous trading opportunities are being created for British companies in Dubai, Qatar and Bahrain, as examples. Dubai is planning to nearly quadruple the number of its tourism visitors from 4 million to 15 million in the next six years. Qatar has
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announced plans to build one of the world's largest airports, costing 2.5 billion dollars. It is also hosting the Asian Games in 2006.
In the past 18 months, world-class motorsport facilities have been built, safely and efficiently, in Dubai, Qatar and Bahrain, creating new markets for high-performance motorsport engineering. I am fortunate to be President of the Motorsport Industry Association, which has been very active there from the outset. In May, we shall be hosting the first-ever DTI-backed motorsport trade mission to the Middle East.
This weekend, British engineering talent will be showcased to 200 million TV viewers as a result of the inaugural Bahrain Formula 1 grand prix. British companies have played a major role in that. We are warmly regarded in the Gulf region and we must build on that goodwill.
There are problems in the Middle East. Every effort should be made in the rebuilding of Iraq and in attempting to bring about a solution to the Israeli-Palestinian dispute. However, too often, the focus is on the negative. Many positive changes are under way in the region and we should recognise and welcome them.
6.43 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I, too, thank the noble Baroness, Lady Williams of Crosby, for introducing the debate today. I am sure that on every occasion that we have discussed this issue over the past few years, we have expressed a blend of hopes and fears about the future of the Middle East and, in particular, about the Middle East peace process.
As the noble Lord, Lord Hannay of Chiswick, said, the debate today is, indeed, timely because we are at a number of turning points in relation to the Middle East: in our relationship with Iran; over Syria; in relation to WMD in Libya; and, of course, we are now contemplating the hand-over of sovereignty in Iraq in three months' time. In addition, we are hoping for more discussion on development and reform in the region in the run-up to the G8 in June, although, as the noble Baroness, Lady Williams, said, we very much regret the collapse of the Arab League summit in Tunis.
However, perhaps most tellingly, as the noble Lord, Lord Wright of Richmond, said, we are also seeing a real possibility that the vision of a two-state solution to the Palestinian/Israeli question will be undermined. That two-state solution vision is one that has been shared by many people of good will in the region and elsewhere.
As usual, not only have your Lordships demonstrated a wide range of knowledge and expertise on this longstanding and seemingly intractable issue, but we have also heard strong views, passionately held, eloquently expressed and, of course, diametrically different from each other. They varied from the optimism of the noble Lord, Lord Astor of Hever, to the pessimism of my noble friend Lord Desai.

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Like many of your Lordships, including the noble Baroness, Lady Williams, I visited the region very recently. I have been not only to Israel and the Palestinian territories but to Syria, Lebanon, Jordan and farther afield—the Gulf, the Maghreb countries, Egypt and Iraq—where I have heard views forcefully expressed on the subject.
I believe that it is only by seeing and talking to Israelis and Palestinians at home that one can really understand the political complexity, the historical context and, indeed, the current bitterness and grief caused by this deeply difficult situation. I agree with much of what the noble Lord, Lord Wallace of Saltaire, said in that there is a sense of reaching a political crossroads. However, there is also a sense of a looming humanitarian crisis, as the noble Baroness, Lady Northover, described.
That sense of anxiety is evident among both Israelis and Palestinians. The relentless stream of suicide bombings has destroyed families and brought an ever-present fear to Israeli citizens going about their everyday lives, whether it is attending school or work or simply going to the shops.
On the Palestinian side, there is growing poverty; the destruction of homes, sometimes involving injury or death to those around; the collapse of law and order; the construction of the barrier; and, of course, increased settlements on Palestinians' land, which has made them ever more desperate. Too many Israelis and too many Palestinians are beginning to lose hope. The fact is, sadly, that neither side sees in the other a real partner for peace.
I hope to touch on some of the issues raised by your Lordships but, like the noble Baroness, I shall concentrate most of my remarks on the peace process. I begin with where we, the British Government, feel that it is right to concentrate our efforts.
As the noble Lord, Lord Wallace of Saltaire, argued, the road map remains the best way of working towards a peaceful settlement. The two-state solution lies at the heart of initiatives to solve the Middle East conflict. The Arab peace initiative, conceived by Crown Prince Abdullah of Saudi Arabia, offered peace on that basis. And the vision of two states, Israel and Palestine, living side by side in peace and security was set out eloquently by President Bush in June 2002 and the renewed international action that he started towards that goal. The result was the road map. I remind your Lordships that the road map was agreed by a quartet—that is, not only that great country, the United States, but also the European Union, the United Nations and Russia.
The road map makes sensible and realistic demands on both sides. However, sadly, it is painfully clear that neither side has fulfilled its obligations under even phase one of the road map. The international community is unanimous in wanting both sides to honour the undertakings that they made. Each side must decide for itself, in pursuit of its own interests, to take the steps which have been laid out.
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The fact is that Israel has not stopped building settlements. More houses, more roads and other settlement infrastructure have been built, despite Israeli undertakings to freeze development; nor has Israel removed settlement outposts, which are illegal even within Israeli law. The noble Baroness, Lady Williams, was right. The new settlement outposts have sprung up on numerous hilltops. Efforts to remove them have failed or they have quickly been replaced. Therefore, despite repeated Israeli commitments to remove them, the number of outposts is almost exactly the same as it was last June at the time of the Aqaba summit.
But let us look at the other failures, too. Let us look at the Palestinian side. The Palestinian Authority has not fulfilled its obligations either. There is more that Palestinians can do to tackle security more effectively and to prevent terrorist attacks on Israel. Many will argue that Israeli actions such as shutting down police stations and refusing to allow Palestinian police to wear uniforms have prevented the Palestinians from dealing with these problems.
My noble friend Lord Hogg of Cumbernauld expressed himself very forcefully on this issue and on the issue of Hamas suicide bombings. Those of us who are dealing with these matters on the ground and talking to the Palestinians acknowledge the simple fact that the Palestinians have not done all that they could, despite the restrictions that have been placed upon them. They have not done what they could in reforming the way the security forces are paid, for example; nor have they worked to resolve the question of the tunnels through which weapons are brought; and they have not relinquished their Qassam rockets. That is why we have been talking so intensively to the Palestinians, in order to encourage and support their efforts to tackle the security issues.
That was on the top of my agenda when I went to Jerusalem and saw Yasser Arafat, and it was on the top of the agenda when Abu Ala'a came to London three weeks ago. He was positive in his response to these issues. Nabil Sha'ath, Saeb Erekat and Salaam Fayyad have also been energetic in trying to make headway on this issue. There also needs to be reform in the way that the Palestinian Authority operates, in order to make it more open, less corrupt and less dependent on personal patronage. The British Government will continue to work hard with the Palestinian Authority on these issues.
The United Kingdom Government played a leading role in the development of the road map and pushed hard to get it agreed by all sides. We have also been heavily engaged in encouraging progress and pressing both sides to fulfil their obligations to it. Whenever I travel to the region, or speak to visitors from the region here in London, they are unanimous in their wholehearted recognition of the commitment of this Government—including the Prime Minister and my right honourable friend the Foreign Secretary—to work hard for peace in the Middle East.

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We set our hand to this task, and I freely admit that it has not been a good start. But we must not lose hope. In the current climate it is difficult to find positive signs to cling to. However, I do not think that the picture is as bleak as that portrayed my noble friend Lord Desai.
A number of noble Lords, including the noble Baroness, Lady Williams, and my noble friends Lord Turnberg and Lord Mitchell, were concerned about the barrier. I will say a few words on that matter.
Israel has legitimate security concerns. It believes that the barrier will enhance Israeli security. The state has a right—and its citizens have a right as individuals—to that security. I agree on that point with my noble friend Lord Janner of Braunstone. We have to be clear on this matter, not only in Tel Aviv—where it is easy to be clear—but as clear in Damascus, Jerusalem and Hebron as we would be in London or Paris.
The route of the barrier is the problem. We believe that the route is unlawful because it is on the wrong side of the 1967 line. Security may mean separating Jewish settlements from Arab towns—as my noble friend Lord Janner implied—but I find it hard to see a realistic explanation for cutting through the heart of a Palestinian community, as it does in the Abu Dis district.
I hope that the barrier helps security because there is a heavy price being paid for it—in the destruction of precious agricultural land and in limiting access for some Palestinians to their land and water supply. In some areas it has created enclaves, cutting off Palestinian towns from their surrounding villages and drawing a seemingly arbitrary line that separates families from each other and makes it even more difficult for people to access basic services, such as schools and hospitals.
The noble Lord, Lord Wright of Richmond, thought that our position on the case before the ICJ was inconsistent. I have been more polite on that matter than he was to us. We and our European partners have stated our belief that it was not right to pursue the matter at the International Court of Justice, because in order to go there we should have to have the consent of both sides. Otherwise the International Court of Justice would be being asked to arbitrate on a political conflict.
We have, however, made it very clear—not least to the International Court of Justice itself—that we believe that the barrier is unlawful. I am pleased to report that in some areas parts of the barrier have been removed or building work has been suspended. Within Israel voices are growing for building the future stages along the green line. We should support those heavily.
A more recent development was touched on by my noble friend Lord Turnberg. That is the proposal by the Israeli Prime Minister Sharon for a unilateral withdrawal from the Occupied Territories. Like my noble friend, I believe that this is a serious plan. Mr Sharon's advisers and Ministers have been very busy over the past few weeks travelling to capitals to discuss the idea and gauge reactions to it. In some
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ways, it could be argued that it has succeeded in drawing the United States back into an active role in the Middle East peace process.
The noble Baroness, Lady Northover, may be right in implying that the US preoccupation elsewhere in the recent past has distracted from what is going on in Israel/Palestine. I assure her that they are now engaged on this point.
The plan is by no means finalised. It is not yet clear precisely what it might entail. At the moment it seems that the proposal will entail withdrawal from the Gaza Strip and possibly parts of the West Bank. But there are unanswered questions on the future of the northern settlements in Gaza. We have not yet heard precise plans for where the Israeli settlers would go, upon withdrawal.
When the noble Lord, Lord Skidelsky, asked whether the plan is a positive or negative development, we hope—and at the moment it is a hope—that it will be a positive one. We do not know whether all, or just some, of the Israeli defence forces would withdraw. Clearly, a full withdrawal of troops, without prior co-ordination, could leave the Occupied Territories in chaos. Hamas has already stated its willingness to fill any void left by IDF withdrawal. That is an offer that is not entirely welcome to the Palestinian Authority, let alone to anybody else.
Finally, the timing is not clear for any real developments on the ground, although given the process required within Israel to enable such a move, it seems unlikely that we will see practical progress much before the end of this year.
All of this has, of course, created its own tensions within Israel. Prime Minister Sharon risks losing the support of his right-wing coalition partners. If that happens. he will need to look for alternative support. Much will, naturally, depend on how the proposals for Israeli withdrawal from the Occupied Territories are carried through. The British Government believe that this must be in line with the road map, that it must get us closer to the vision of two states—Israel and Palestine—living side by side in peace, and that it should not prejudice the final status negotiations on the borders.
Any withdrawal needs to be co-ordinated with the Palestinian Authority and the international community. A unilateral path is not a practical option. The Palestinian Authority should also be gearing itself up to respond positively to the opportunity that may be presented by Israel through its withdrawal from Gaza, and that it has to be building its capacity to take responsibility for security and law and order if those areas are vacated. The United Kingdom is prepared to help the Palestinians build up their civil peace capacity and will provide advice and technical assistance to the Palestinian police.
The EU also has a role here. Last week the European Council agreed to examine the requirements for further assistance. The great concern is the continuing level of violence. The Government have condemned this loudly and consistently. As the

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noble Lord, Lord Hogg of Cumbernauld, said, we have frozen the assets of Hamas and we shall continue to try and persuade our partners in Europe to do the same.
We understand Israel's duty to defend itself against such atrocities as suicide bombing. But, as my right honourable friend the Foreign Secretary has made clear, Israel needs to make sure that its response is within the bounds of international law. I strongly agree with my noble friend Lord Clinton-Davis that targeted killings are unacceptable and unlawful and are unlikely to achieve their objectives.
My noble friend Lord Mitchell asked me to explain this point. Sheikh Yassin was no friend of peace. I acknowledge that a person can be as wicked from a wheelchair as they can from anywhere else. But Israel is a democracy under the rule of law. There was something of this in the comments of the noble Lord, Lord Wallace of Saltaire. We expect better of Israel. We expect Israel to uphold the standards that we hold dear.
I agree with much of what my noble friend Lord Mitchell said about the Geneva accord and the brave and sensible way in which the Israelis and the Palestinians have been able to come together. I agree with much of what the noble Baroness, Lady Northover, said about the humanitarian and economic situation in the Occupied Territories being bleak. Poverty has increased dramatically since the intifada began. During the past two years the Palestinian economy has shrunk by half. Real incomes are 48 per cent lower than in September 2000, leaving 60 per cent of Palestinians living on less than the UN poverty threshold of two dollars and 10 cents a day.
I shall answer the specific points made by my noble friend Lord Turnberg. Emergency donor support has helped to prevent total economic collapse: the UK alone has spent between £30 million and £40 million in each of the past three years and the European Commission disbursed more than 270 million euros in 2003. But longer-term economic recovery is dependent on the lifting of closures and the free movement of goods and people. Yes, we are raising those points in relation to the World Food Programme, mentioned by a number of noble Lords, directly with the Israeli Government.
I strongly agree with the point made by the noble Lord, Lord Weidenfeld, about going forward and trying to find a partnership for the future in relation to Palestine between Europe and the United States of America. We want to work with our G8 partners in examining measures to reconstruct and revitalise the Palestinian economy when the time is right.
I turn to other issues now. I listened very carefully to what the noble Lord, Lord Wright of Richmond, said in his critique of the military action in Iraq, and in particular the link that he made between military action and the tight against terror. His point was very different from the argument put forward by the noble Lord, Lord Howell of Guildford, who reminded the House of his argument that terrorist organisations had links with the Saddam Hussein regime. I am sure he will recall that about this time last year we disagreed on
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that point on a number of occasions. However, I agree with him strongly that there are strong grounds for believing now that Iraq has a very real future.
Ten days ago I returned from Iraq, my previous visit having been towards the end of last year. I saw a marked difference in Iraq from my previous visit. There was more confidence, more focus and more steadfastness among Iraqis about their future. There are only about 100 days until the hand over takes place. Already more than 50 per cent of Iraqis believe that their lives are better than they were under Saddam Hussein and more than 70 per cent believe that life will improve further still.
I was struck by the extraordinary steadfastness of many Iraqis in the face of the violence. They reflected a stoic and determined community, with eyes firmly fixed on the elections next year, the new constitution and the improving standards in their schools, hospitals and in civil society. In the three days that I was there, almost everyone whom I met thanked the British Government and the British people for our action in Iraq. In press interviews, some of which were fairly robust and to the point, not a single person raised the issue of weapons of mass destruction. Instead they raised issues such as their future. They wanted to talk about trade, investment, education and the hard work that would be needed over the next 18 months.
My noble friend Lord Clinton-Davis was right to say that it will take time to achieve all of this. There is no doubt about that. June 30 will be a very important date. However, there will be other important dates in the next 18 months: the elections in January, the drawing up of the constitution, the referendum on that constitution and the next elections next year Iraq will emerge as probably the most democratic, the most forward-looking state in the region with welt educated people, Shia, Sunni, Turkoman and Kurd living together side by side in one state, with normalised relationships with their neighbours.
The noble Lord, Lord Howell of Guildford, spoke of the Arab desire for development, democracy, prosperity, improving their economies and dealing with the serious problems of poverty, human rights, security and terrorism. I agree with him. I agree that those are huge issues and ones that my right honourable friend the Foreign Secretary set out cogently in his speech on the subject a few weeks ago.
The noble Lord, Lord Hannay of Chiswick, asked how far the Middle East extended. I believe I was asked that question a few weeks ago in your Lordships' House. To be frank, I am of the school of thought that it extends as far as the Arab Middle East. Trying to extend it further towards Afghanistan, towards Pakistan, simply undermines, rather than reinforces, the work that we are trying to undertake at the moment. We have been discussing those issues for quite some time.
In my view there is a real appetite for taking forward those issues, but on the basis that reform comes from within a country. It cannot be imposed from outside. The one-size-fits-all idea on reform is simply not tenable in the Arab world. Dialogue and partnership

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are the right ways forward. The noble Lord, Lord Hannay, and my noble friend Lord Mitchell were quite right to remind the House that the UNDP report on the Middle East was a report by Arabs and for Arabs. The Gulf, Iran, Iraq and Saudi Arabia are the key players, but there are very important and crucial roles for Syria and Egypt.
The noble Lord, Lord Hannay, asked what this country was able to do in that respect. One reason why I have been absent from your Lordships' House for a few days virtually every week for the past few weeks is that I have been discussing not only Iraq and the Middle East peace process with the countries in the region, but also the issues concerned with reform in the Maghreb countries, in Morocco, in Tunisia and in some of the smaller countries of the region such as Qatar and Bahrain as well as the bigger powers. I have seen all the Arab League ambassadors together to discuss the issues and I shall be seeing them again in smaller groups.
I am trying to practice what I preach—"preach" is a nasty word, but that is a good formula. It involves consultation, discussion and partnership to discuss a wide range of issues. I agree strongly with what the noble Lord, Lord Wallace of Saltaire, said: if we are to make any real progress we must talk to those with whom we disagree as well as to those with whom we agree. Perhaps later this year we may consider a broader-based discussion involving noble Lords and others and those involved.
I strongly agree with the noble Baroness, Lady Williams, that it is such a pity that the summit collapsed. I believe that was a lost opportunity for an important statement not only on the Middle East peace process, but on the issue of Arab reform. I advise the noble Lord, Lord Wallace, not to spring to conclusions as to why it collapsed. A number of different reasons have been put forward in the region.
The noble Lord, Lord Wright of Richmond, focused attention on Iran, Syria and Libya. I thank him for his remarks about the Government's efforts in relation to those three countries. Of course, he is right. I hope he reminded the noble Lord, Lord Skidelsky, about how different our policy has been from that of our friends in the United States.
In answer to the specific point made by my noble friend Lord Turnberg, the Secretary of State has persevered with remarkable stamina in relation to the nuclear issues in Iran, visiting five times in the past three years. That dialogue continues through the IAEA, bilaterally and of course through the troika that has been set up within the European Union.
In Syria we continue to try to make the case for further engagement to discuss border security, terrorism and trade. We would like to see a new Syrian-EU agreement, but it must be an agreement that acknowledges the issues that still need to be tackled, including human rights.
I listened very carefully to the points made by the noble Lord, Lord Weidenfeld, on Syria. I assure him that the issues that he raised are issues that I too have
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raised when I have spoken to President Bashar recently. I thank the noble Lord, Lord Wright, for his remarks about Libya. Like him, I was struck by the support for the Prime Minister's visit that came from the families of those who were killed at Lockerbie and their hopes that the normalising of our relationships with Libya will reveal more about that terrible tragedy. The real message from the Libyan situation has been that the country has turned away from weapons of mass destruction and is turning towards the destruction of its arsenal. We hope that that may inspire others and show them what can be achieved through quiet negotiation rather than through loudspeaker politics.
I was very taken with the remarks of the right reverend Prelate the Bishop of Coventry. Many noble Lords, including the noble Lord, Lord Hylton, and the right reverend Prelate reminded the House of the religious dimension of the Middle East conflict. I confess that I did not agree with the whole analysis of the right reverend Prelate, but I strongly agreed with him and with the noble Lord, Lord Hylton, about the work of the International Centre for Reconciliation and the work of the noble and right reverend Lord, Lord Carey, and Canon Andrew White through the Alexandria process.
I have met many of those who are involved. I have met Rabbi Michael Melchior and Sheikh Allal on a number of occasions. I regard both with great respect and with some affection as well. I believe that they are engaged in a genuine effort at reconciliation and that is making a real contribution to the peace effort. I thank my noble friend Lord Hogg of Cumbernauld for his kind and entirely accurate tribute to Her Majesty's Ambassador in Tel Aviv, Simon McDonald. I pay tribute to the outstanding and dedicated work of our consul-general in Jerusalem, John Jenkins. Both of them lead very able and committed teams of diplomats and we should not forget the locally engaged staff who often work in very difficult circumstances. Those diplomats and their staff have two of the toughest jobs anywhere in the world and they acquit them extraordinarily well.
I agree with what the noble Earl, Lord Sandwich, said about Europe and the need to be proactive this year. I think that we have to stand back from the events of the past few months. We must ask ourselves some honest questions about whether we did enough to support the Abu Masim government. I think we have learned from that by the way that we are now dealing with Abu Ala'a's government. We recognise that there is a real need for help in security but also in other developmental issues. The noble Lord, Lord Weidenfeld, was of course right to say that we should try to work in partnership on these points.
Perhaps my noble friend Lord Desai and the noble Lord, Lord Hylton, were right: 2004 may not be the year for finding the solution we need to the problems in the Middle East, but it is a year for keeping the hope of a solution alive and for some reflection on our own history, as the noble Lord, Lord Wallace, reminded us.

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I hope that in doing that we shall not lose sight of the important and practical measures that are needed on the ground, because there is a lot of work to do.
I recognise that at a time of high tension and violence in Israel and the Palestinian territories, looking ahead to the steps needed for the peace process can be hard. But progress needs vision, courage and a positive approach from leaders on both sides. Both sides need to show clearly that their strategic choice really is for peace; not just to say it at every opportunity, but to take the action that makes us all believe it. That means that difficult compromises will have to be made. But this is the moment for hard decisions. The Israeli Government's plan to withdraw from the settlements could indeed be a breakthrough, if it shows the way towards the creation of a viable Palestinian state.
However, Israel cannot disengage from the process of seeking a negotiated solution: one side imposing its will on the other will not reach a lasting peace. The Palestinians also face tough decisions. Their society is on the brink of something approaching anarchy in cities like Nablus where law and order is undoubtedly breaking down. This has to be the moment when the Palestinian Authority shows it is serious about security and that wherever it has the capacity to act—and I fully acknowledge that it is not everywhere—it does so.
Both sides must show that they really are capable of being each other's partners for peace. A failure to return to negotiations now would condemn Israelis and Palestinians to more years of violence and instability. Leaders on both sides owe it to their people to take the initiative and to restore hope that a better life is possible. It will take courage to stand up against the voices that constantly argue for aggression, blame and revenge; but that courage is needed more now than ever before.
7.12 p.m.
Baroness Williams of Crosby: My Lords, perhaps I may offer my thanks to your Lordships for a very serious, responsible and thoughtful debate. Although there are still substantial differences of opinion in the House, I think that every Peer who has spoken has addressed this terribly difficult issue with a real sense of trying to contribute to a peaceful and lasting outcome.
A number of noble Lords have suggested, not least the noble Lord, Lord Clinton-Davis, that we have to recognise that some things take time; in particular, the implantation of any kind of democracy in a culture which is not used to it or accommodated to it. It is also true that there is very little time. One reason for that is that attacks are continually being made on the ground on both sides in this tragic dispute.
We are indeed at a crucial moment, as a number of noble Lords have said. It is a crucial moment when we could continue the spiral downwards or seize the opportunity and turn it around into something that could be really constructive and helpful. In this context one of the important questions is whether Dr Sharon
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proposes to withdraw from the West Bank as well as from Gaza, because Gaza on its own is little more than a basket case.
I offer my very warm thanks to the noble Baroness, Lady Symons. We know that she gives a very substantial part of her undoubtedly great energy and thought to the Middle East crisis and to how to move in the right direction. I thank her for the way in which she invariably listens very closely to debate in this House—that is not always true of everybody, but it is certainly true of her—and the way in which she tries very carefully to address every one of the detailed issues raised.
I conclude simply by saying that I hope the noble Baroness will do her very best to try to make sure that food aid resumes. To add hunger to all the other desperate things in this region of the world might be enough to push even more people over the brink. I should like to thank her and the House as a whole for what I believe has been a very useful and constructive contribution to an extremely difficult problem. I beg to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Business of the House: Arrangement of the Order Paper
7.15 p.m.
Lord Davies of Oldham: My Lords, I beg to move that the three Motions in the name of my noble friend Lord Filkin be postponed until after the Unstarred Question.
Moved acccordingly, and, on Question, Motion agreed to.

Engineering
7.16 p.m.
Lord Astor of Hever Lord Astor of Hever rose to ask Her Majesty's Government whether enough is being done within the educational process to attract young engineers to industry, and in particular to the automotive and motorsport industries.
The noble Lord said: My Lords, I declare an interest as president, unpaid, of the Motorsport Industry Association. In that position I have become increasingly aware of the decline in numbers of young engineers entering and remaining in the engineering sector, particularly in the automotive industry.
At present, there are around 800,000 people in the UK employed in the design and manufacture of vehicles and components or in the directly linked supply and distribution chain. The automotive manufacturing sector alone contributes around £9.1 billion to the economy.
At the heart of Britain's successful automotive manufacturing industry lies the specialised field of motorsport engineering. Motorsport has long been an intrinsic and dominant feature of UK industry, with

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the UK's "Motorsport Valley" being the world's leading motorsport engineering and services cluster. commanding around 70 per cent of the world market. The motorsport industry has an annual turnover of £4.6 billion and employs around 40,000 people, of whom 25,000 are highly trained engineers.
This weekend British engineering will be showcased to 200 million television viewers at the inaugural Bahrain Formula 1 grand prix. British companies have played a major role in the construction of this unique circuit, and in the whole staging of Formula 1. Precision engineered components and methods developed for the motorsport industry are increasingly exploited by the mainstream, mass producing automotive industry. As such, major automotive companies have been keen to cement their links with motorsport in order to be associated with its popularity and transferable technology.
The kudos and popularity inherent in motorsport also helps to bolster interest in engineering as a whole. Recently, the UK has suffered a decline in interest in technology-based degrees, and a reduction in the numbers of students going on to pursue a career in engineering, despite the increasing needs of UK employers for skilled engineers and technical staff. To help arrest this alarming trend and encourage students into engineering, several universities and colleges have initiated motorsport based degree courses. They include Cranfield University, which provides an MSc in motorsports engineering and management, with an available bursary funded by Williams Fl. Oxford Brookes University offers an undergraduate degree in automobile engineering, as does Swansea Institute, with the world's first BSc in motorsport.
Higher and further education have also recognised that motorsport is a powerful attracter of young people towards the engineering sector and have developed courses to cater for that demand. In the 2004–05 session there will be 15 universities and colleges offering 41 motorsport engineering or management courses. Three further institutions have masters degree provisions. All these new courses were initiated during the past five years by the MIA.
In the commercial sector, new initiatives have been implemented to address the disparity between the skills required by employers and those taught by educators. Ford has adopted a unique approach to this problem, and has formed an agreement with the universities of East London and Loughborough to teach accredited vocational foundation degrees to its employees. While these educational undertakings are commendable in using the pull of motorsport as a tool, these efforts do not appear to strike at the heart of the matter. Is it not the case that the public's perception of what an engineering qualification requires, and what it qualifies a person to do, is the real issue that must be resolved, not simply the provision of more courses?
Professor Chris Taylor, the president of the Institution of Mechanical Engineers, believes that there is a,
"Shortage of role models to promote the excitement of engineering",
and that,
"We don't do enough to enthuse about our subject".
Professor Taylor further observes that salaries are not necessarily the defining factor, and,
"In reality salaries within the engineering sector are comparable to those of other sectors".
The skills that engineers can offer other sectors, such as the finance industry, mean that competition for these skills remains fierce. Professor Taylor concludes that:
"The growth of the finance and management sectors have seen a steady decline in the number of engineering graduates remaining in engineering. The UK is inherently different from other countries—we are the exception. The fundamental difference goes back to the Industrial Revolution; power never resided in the hands of the engineers".
In an attempt to reverse the current trend whereby fewer students obtain higher level engineering qualifications and fewer engineering graduates remain in the field, a number of initiatives have been proposed by the Government. The Roberts report, SET for Success: the Supply of People with Science, Technology, Engineering and Mathematical Skills, commissioned by the Treasury, the Department for Education and Skills, and the DTI, outlines the skills shortages in the sector. The findings demonstrated emerging shortages in the supply of high level maths, physics, chemistry and engineering skills at all levels of education, due to fewer students taking these subjects and an increased demand from employers. The report outlined the areas where increased Government spending is required—these recommendations include increasing the level of remuneration offered to teachers in shortage subjects, improving the public perception of science, engineering and technology, and providing funding for better equipment in educational laboratories. The report was published in April 2002. Can the Minister confirm what progress has been made since the objectives stated in the report were first proposed?
A further Government measure intended to improve opportunities and funding within the engineering sector was proposed in October 2002. In this instance, the motorsport industry was the subject of a DTI competitiveness panel review. As a result of this review, £16 million was made available for motorsport business opportunities. The Motorsport Development Board was assembled in November 2003 to implement recommendations made by the DTI panel. A Government Motorsport Unit was established to link this board to the Government, which has only recently sanctioned two new projects, namely the establishment of the Motorsport Academy and the development of the Learning Grid concept.
The Engineering and Technology Board and the Motorsport Industry Association will work together to deliver the Learning Grid—a series of motorsport-themed educational initiatives and competitions to

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promote engineering careers to children and students up to and including higher education level. Formula Student is one such initiative being run by the Institution of Mechanical Engineers, and it provides an ideal introduction to a career in engineering. These initiatives must be urgently delivered.
In December 2003, the noble Lord, Lord Sainsbury, announced that a £2.4 million contract to run a new national resource centre promoting women in science, engineering and technology had been awarded to a consortium led by Bradford College and Sheffield Hallam University, including Cambridge University and the Open University. I warmly welcome this proposal, and other similar initiatives, and I pay tribute to the work done by my noble friend Lady Platt, patron of the WISE campaign, which this year celebrates 20 years encouraging women to enter science and engineering degrees.
A further initiative, launched by the Government in December 2003, concerns an innovation plan which outlines details of how to exploit the UK's expertise and develop new ideas, particularly in relation to new technologies such as nanotechnology, biotechnology and IT. Businesses, academics and innovators have all been consulted to provide a framework that is to be underpinned by £150 million, including £90 million allocated for nanotechnology. Is it not the case that the increasingly extensive list of units, bodies and panels established under these various initiatives serve only to diffuse interest and funding? This is a sector that already has a number of bodies with which engineers themselves have difficulty keeping track.
The task of encouraging young men back into science and engineering-based education and commerce is a huge challenge. The reputation of engineering in this country is still undervalued by the public at large, and is only partially improved by the glamour injected from its association with the global success in motorsport. Over 50 per cent of young people associate engineering with a dirty working environment, and motorsport, if properly used, can attract young people into clean types of engineering.
It is a vital strategy to promote and finance motorsport, in the hope that some of the sheen will rub off on the engineering sector as a whole—although this strategy alone will not be enough. We must ensure that the promising initiatives that have been put in place to educate children and adults alike are pursued urgently with immediate effect, and funded fully, so that the fallacy that engineering is a dirty, antiquated industry is dispelled once and for all.
7.27 p.m.
Lord Paul: My Lords, I am delighted to take part in this important debate so ably introduced by the noble Lord, Lord Astor of Hever.
Noble Lords will be aware of my interest in engineering and manufacturing, as chairman of the Caparo Group. We constantly hear about the doom and gloom in UK engineering and manufacturing. Although times have been tough, there are successes that must be highlighted. The noble Lord, Lord Astor,
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has already mentioned that the UK automotive manufacturing sector contributes around £9.1 billion added value to the economy. It also accounts for 1.1 per cent of the GDP; 6.2 per cent of the manufacturing added value and 9.5 per cent of the total UK export of goods. The UK is home to the world's most successful motorsport industry, as well as a range of smaller producers serving specialist markets such as sports and luxury cars.
The automotive industry is a pivotal part of the UK manufacturing sector. Automotive firms are leaders in global best practice in many areas of manufacturing, and provide a key source of improvement for the manufacturing sector as a whole. Britain leads the world in advanced technology in motorsport engineering. Constructors include McLaren, Williams, Benetton, Jordan, BAR and Reynard. Engine designers and manufacturers, such as Cosworth, Ilmor and Hart—all based in the UK—meet the requirements of teams in Formula, Cart, Formula 3000 and other prestigious international events.
The UK motorsport engineering and services industry has an estimated £4.6 billion annual turnover, of which over 50 per cent is export sales. The Government have rightly supported this key sector, with an announcement last year of £16 million to help to sustain and develop the UK motorsport cluster. This money will implement the recommendations of the Motor Sport Competitiveness Panel, one of which is for the creation of a motorsport academy to improve the skills of the industry.
One of the main problems in attracting young people to engineering and manufacturing has been their poor image. Industry has a role to play in reversing that image. I am delighted that many companies up and down the country, together with various organisations, are working hard in all sectors of education to demonstrate how rewarding a career in that sector can be.
I highlight in particular two organisation: F1 in Schools; and Formula Student, which is for students in further and higher education. These organisations, which are heavily dependent on companies and organisations for financial support, provide students with a real-life exercise in design, manufacture, and the business elements of making a car, giving them opportunities to work as a team, under pressure and to tight time-scales.
An important part of the Formula Student experience is to develop talented engineers, many of whom will in time take up challenging roles in the global motor industry. Those of us who work in engineering and manufacturing know just how important it is to maintain a supply of high quality of engineers into our companies and organisations. Regrettably, many of us have been concerned for a long time by the evidence that engineering courses at universities have had difficulty filling their places and, arguably, have at times appeared to struggle to demonstrate the attractions of careers in engineering against more obvious attractions in other professions.

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Earlier in my speech, I said that one of the reasons that young people are put off entering engineering is the perceived image of the sector. I believe that three other issues need to he addressed in order to attract more young people and people from different backgrounds. However, first, perhaps I may congratulate the Chancellor of the Exchequer on announcing recently a long-term strategy for supporting British science and engineering—an announcement welcomed wholeheartedly by industry.
The first point I should like the Minister to consider is that of careers advice and guidance. The business community has been for a while extremely concerned that not all young people are receiving the right amount of guidance when choosing qualifications and careers. The Connexions Service was primarily set up to concentrate its efforts on those at risk of disengagement from education. However, the time required to address the issues that most disengaged individuals present means there is little or no resource for the majority of young people who are engaged fully with the education process.
Industry requires all young people to receive timely, accurate and unbiased advice about engineering and manufacturing opportunities and vocational education options. Given the number of Connexions advisers and the total number of students they should be supporting, each student would receive only around 20 minutes' guidance per year if the time were evenly distributed. Resources must be found to increase the number of advisers and the quality of the advice they are able to provide.
My second point is on the modern apprenticeship programme. The combination of vocational education, on-the-job training, linked with rigorous workplace assessment and employed status, is a well-recognised and respected route to development of high-level skills within the industry. The limitation of funding for modern apprentices to the under-25s continues to be a problem for engineering and manufacturing. Employers already commit significant resources to apprenticeship programmes, with some advanced modern apprenticeships costing as much as £50,000 over four years. I call on the Government to fund modern apprenticeships for all ages at the nationally agreed 16 to 18 rate, currently around £14,000 for an Advanced MA.
My third point relates to the bleak and unwelcoming environment which is found in many of the UK manufacturing areas. Many of those industrial regions are rundown and depressing locations in which to live and work; and such derelict areas are not appealing to our young graduates, or anyone else for that matter. I believe that the Government should work in partnership with local authorities to regenerate those areas so that they are more attractive places for people to be.
Engineering and manufacturing are key to the future prosperity of this country. High-tech, high-value and high-productivity engineering and manufacturing require well-educated, pragmatic and
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experienced people—young people—the future of our country. I want to see more young people, more women, and more ethnic minorities attracted to and involved in this exciting and challenging sector.
7.36 p.m.
Viscount Goschen: My Lords, I congratulate my noble friend Lord Astor on initiating this debate. Perhaps I may say what a pleasure it is to follow the noble Lord, Lord Paul, with his great experience and expertise in the field of engineering. I am sure the Government would do well to listen to his recommendations.
I wish to concentrate on the motorsport industry. It is a considerable British success story, as we have heard. Vital to the continuance of that success is a supply of talented young engineers. We should bear in mind in the debate at all times that motorsport is above all competitive and international. Talents, whether drivers, engineers or financiers, can move freely around the world, as can the businesses. However, it so happens that the UK is the world leader in motorsport. Even with the performance of a certain German over the past few years driving a certain Italian car that is still very true. Indeed, Ferrari as a team has had over the years a heavy British influence in design and engineering.
I understand that in 34 of the past 43 years, British teams have won the Formula 1 World Championship. But motorsport is about so much more than Formula I. The United Kingdom has had a great record in motorcycle racing, saloon cars and rallying all of which are important disciplines; and in the starter motorsports, for example, carting, through which so many of the great drivers have started.
Of the 11 teams which took part in the Formula 1 series in 2003, eight are based in Britain and all the others employ British engineers, managers and British built components. Professor Michael Porter of Harvard University said:
"The UK is global leader in the sport and business of motorsport—the success of which is based on the long heritage of motorsport in the UK".
Slightly closer to home, we must not forget that the former Captain of the Gentlemen-at-Arms, Lord Hesketh, took his team to Formula 1 victory in Zandvoort in 1975.
We have heard about the so-called "Motorsport Valley". I suspect that it is more an association of companies rather than a geographical feature: I was unable to find it in the atlas. It is remarkable that the cluster of world-leading firms are gathered together. There is a community of firms with Jordan, BAR, Jaguar, Renault, Williams, McLaren and Minardi. We have also heard about the engine builders, Cosworth and Ilmor. The rally teams with such English-sounding names as Mitsubishi, Subaru and Hyundai have all chosen to base their teams in the UK.
I suggest that the industry is important in its own right, even though it is, in the great scheme of things, small and highly specialised. It is also important as a centrepiece of the wider automotive and general

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engineering sector and, I suggest, as a champion of research and development. Williams, for example, states that its R&D spend is in excess of 40 per cent, which compares with the industry average—taking into account all industry in the UK—of only just over 2.2 per cent.
All of this sounds tremendous, and we can stand here and congratulate the country on this great achievement, but I suggest that complacency could be extremely dangerous. 1 has to think only of the transformation of the British motorcycle industry—from global master to lame duck within a very few years—because Honda, Kawasaki and other manufacturers suddenly demonstrated that to manufacture engines that were smooth, powerful, reliable and did not leak oil was not an impossibility. Motorsport engineering hubs are developing around Cologne—which has attracted a 500 million dollar investment from Toyota—as well as in Italy, France and, of course, the USA.
So what about the role of government? Motorsport is essentially about competition, and the last thing that is needed is for governments to intervene where they should not. We do not want the DTI designing the next engine any more than we want the Secretary of State for Culture, Media and Sport fronting the British entry in the Eurovision song contest. But there are some areas in which the Government should take a strong interest, and one is education. Equally valid is to look at what the motorsport industry can do for the wider engineering sector as well as what the Government can do for motorsport.
The industry requires a supply of very high quality engineers. There has been considerable concern from the industry in the past about where these young people would come from. There has been co-operation between the representative body—the Motorsport Industry Association—as we have heard, and the Government, notably with the launch of the Motorsport Academy, as described by my noble friend Lord Astor and the noble Lord, Lord Paul.
Most sport has a huge advantage over, say, sanitary engineering in the glamour and money stakes, and no doubt there are many more applicants than can possibly be employed, so one might wonder what the problem is. However, what the sector really needs is a healthy and vibrant general engineering industry from which it can attract great talent. I understand that engineering attracts only 2 per cent of graduates in the UK, against some 12 per cent in the United States.
Motorsport clearly has a role in attracting students into the wider field from which they may—or, probably, may not—go into this highly specialised discipline. The industry can be used as a tool to promote engineering more widely. For example, five years ago, Swansea University had three undergraduates for its engineering course. It took the rebranding step of calling it a motorsport engineering course, and had 300 applicants. That demonstrates the power of the petrol-heads. It is a two-way street.
This debate is an excellent opportunity to ask the Government what importance they attach to the engineering sector more widely and to more
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specialised fields in particular. What tangible results are they hoping to achieve with their £16 million of funding in support of the industry? What are the deliverables? How will the success or otherwise of these schemes be judged? Perhaps most importantly, how do they propose to leverage the success of the industry to maximum effect? How are they trying to co-ordinate their activities in the automotive sector with those in related fields, such as aerospace?
I make no apology for concentrating on a highly specialised field this evening. We should celebrate and make the most of this country's excellence on the track and in the wind tunnel, in software and in the workshop. We should make every effort to safeguard our competitiveness.
7.44 p.m.
Lord Methuen: My Lords, I, too, welcome the debate on whether enough is being done within our education system to encourage young engineers into industry and into motorsport.
The noble Lord, Lord Astor of Hever, and the noble Viscount, Lord Goschen, have given us impressive statistics on the impact of motorsport on the UK economy and the support it has had within our universities. I echo the comments of the noble Lord, Lord Paul, on the UK's motor industry's contribution to the UK economy.
Motorsport offers an extreme testing ground for new developments and innovation which subsequently feed through to benefit the whole motor industry. The current reliability, long life and safety of the modern motor vehicle owe a lot to this approach. However, I shall concentrate on education issues.
We have a general problem about the training of engineers in this country. Traditionally, there have been two routes into the profession: first, via a university degree, followed by membership of the appropriate chartered institute. Often in the past, students were sponsored by firms, especially by the nationalised industries or by the Armed Forces. The Armed Forces also had their own dedicated colleges: the Royal Naval Engineering College at Manuden in Plymouth—now closed—the Royal Military College of Science at Shrivenham and the Royal Air Force College Cranwell. Many firms have withdrawn their sponsorship packages or limit them to paying the upfront £1,125 tuition fee. Sandwich courses are much less frequent than of old; I certainly benefited from doing such a course, as a practical hands-on engineer.
The second route into the profession is via the work-based apprenticeship starting at 16 or 17, with day release to the appropriate further education college, followed by a part-time college-based training for an HND for those who had the capability and wished to pursue a higher qualification. In due course, this could lead to a further full-time course and to membership of a chartered institute.
While both routes still exist, neither is attracting the number of entrants we need. The number of engineering students was down by 7 per cent between

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1995 and 2000, a period when university enrolments went up by 12 per cent. Perhaps the Minister has more up-to-date figures. I hope they show an improvement.
As I said in column 734 of Hansard in the debate on British industry and the global economy on 3 March, smaller university departments are closing. In replying, the noble Lord, Lord Sainsbury, acknowledged the seriousness of the situation.
Traditional apprenticeships have largely disappeared and been replaced by the modern apprenticeship. The Government are trying to build this up so that about 28 per cent of school leavers are trained under the scheme. A foundation modern apprenticeship requires one to two years' training and achieves a level 2 NVQ. The Advanced Modern Apprenticeship is the craftsman equivalent; it requires three to four years' training and achieves a level 3 NVQ.
While the Government claim they are close to achieving their 28 per cent target, many participants drop out before completion and, in particular, relatively few continue through to complete the full craft qualification, the Advanced Modern Apprenticeship. Most AMA course are college-based and many colleges have great difficulty in finding suitable industrial employers to take on the apprentices for work experience. Notable exceptions are large employers such as Ford, BAe Systems and Rolls-Royce. Far too many companies rely on someone else to do the training and then poach them by offering them higher salaries which those who do the training cannot afford.
The problem is, how do we attract more young people into the engineering field? There are fundamental difficulties which prevail in our education system. Science and mathematics are seen as difficult subjects, tough A-levels. Maths is an essential prerequisite for engineering, but its teaching is in crisis in our schools, with an ageing workforce and insufficient recruitment to replace those leaving or retiring. Increasing numbers of pupils—now over 30 per cent in maintained secondary schools—are being taught by non-graduates and/or those with no specialist qualification. The whole thing is becoming a vicious circle. To quote Ray d'Inverno in a recent TES article:
"Because the teacher isn't very good, pupils don't like doing maths, so fewer of them come to university. In turn fewer go into teaching, and the whole thing gets worse".
The result is that poor maths teaching means fewer pupils able to cope with science subjects at advanced level, let alone at university. Pupils obviously wish to maximise their chances of high grades for university entrance. The school staff, in turn, are anxious to maximise their position in the league tables. All that conspires to make maths, physics and chemistry—the hard subjects—less popular than other subjects. We need inspired teachers to inspire our children, and we have too few of them.
February 2004 saw the publication of the Smith report, Making Mathematics Count. The report calls for a number of measures including paying off student
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loans, introducing differential pay for maths graduates, and the extension of programmes using students and post-graduates as assistants and mentors in school, in an attempt to reverse the decline. The same TES article from which I quoted earlier commented on the success of the undergraduate ambassador scheme promoted by Sam Singh, which involved some 28 students. Schemes of this nature and others using people actively involved in industry going into schools, and reciprocal visits to industry, enable our children to see the benefits of an engineering or scientific career.
Can the Minister indicate to what extent the Government agree with the diagnosis of the report, and whether they intend to implement any of its recommendations? Would the Minister also agree that we are perhaps offering too wide a choice of subjects at A-level, leading to a further reduction in those who might otherwise take up maths and science options? There are other considerations, however. First, we need a balanced workforce of craftsmen and professionals; the one cannot operate successfully without the other. Secondly, we need to ensure that the status and salaries of the professional chartered engineers and scientists are commensurate with their positions and peers in other professions. Many of our engineering graduates gravitate to accountancy, financial and business management at inflated salaries, denying the engineering profession their talents, and reducing the pool of engineers.
Another point is the failure of some companies to provide a proper career path for their professionals; such paths exist for the managers, but not for those who wish to design and create, and whose expertise may be wasted in the management stream. During my time in IBM, senior professional salaries were on a par with those of senior managers, which is as it ought to be.
Finally, careers in engineering are seen as boring. Perhaps that is an area where motor sport has an edge on the rest of us! I had 45 years in engineering and enjoyed most of it. The satisfaction of seeing one's design come to fruition takes some beating, but we have to convince our children. Engineering degrees are usually a four year course, leading to a Master of Engineering degree. That means an extra year at university, extra fees and extra debt. Are the Government confident that the introduction of top-up fees will not bias students yet further against the choice of an engineering career? Will it again encourage those graduating in engineering to go into the City? It is interesting to note that the University of Berlin is wooing UK students with free tuition. I hope that the Minister takes note.
7.52 p.m.
Lord Luke: My Lords, I very much welcome this short debate and congratulate my noble friend Lord Astor of Hever on providing an opportunity to discuss whether enough is being done to encourage young engineers to come into industry.

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The term "engineering" incorporates many different components within one larger industry. These sectors include aeronautical engineering—developing future air travel—automotive and motor sport engineering, among newer disciplines such as nanotechnology, which challenge the more traditional classical approaches to engineering problems. As diversification within the engineering sector occurs primarily at an educational level, the actual process of education becomes increasingly important.
I am particularly pleased that this debate has focused on the educational and training aspect of the industry. There are many career paths that potential engineers are able to follow, yet those opportunities are not highly publicised. Modern apprenticeships offer an alternative route for those who do not wish to embark upon full-time study. They allow young engineers to earn money while completing their vocational and theoretical training. Initiatives such as those should be welcomed and encouraged. However, such schemes are often perceived as a step down from the traditional academic route, despite providing a challenging and enjoyable alternative.
A solid background in science and mathematics is an essential prerequisite at GCSE or A-level for any youngster wishing to train as an engineer. I note that earlier this month the noble Lord, Lord Haskel, asked Her Majesty's Government what action is being taken to bring science to the attention of the public. In reply the noble Lord, Lord. Lord Sainsbury stated:
"There is unfortunately a shift from mathematics, physics and chemistry".—[Official Report, 16/3/04; col. 136.]
What is the reason for that decline? Would the Minister agree that such a decline will impact directly on the engineering industry and that action needs to be taken to address this predicament?
The status of the engineering profession within this country is not comparable, and never has been, with other countries such as Germany or the United States or Spain, where professional engineers are regarded as highly as doctors or lawyers. Indeed, in Spain an engineer is called Ingeniero, just as doctors in this country are addressed by the title Doctor. Perhaps that would be a good thing to do in this country. That said, even those countries are suffering a decline in interest from those wishing to train as engineers. Interest in this diverse and rewarding career must be stimulated to ensure that the decline in numbers entering engineering does not fall to a level that is detrimental to the industry's future.
Concerns have been raised about the future of the engineering industry in the UK, and a solution needs to be achieved to prevent an exodus of manufacturing overseas. It is imperative that the UK retains a vibrant and strong manufacturing base in all sectors of engineering, in particular in areas of research and development where we are so strong.
There are many bodies and initiatives that work to assist in the development and sustainability of the engineering industry. Founded in 1976, the Royal Academy of Engineering promotes the engineering and technological welfare of this country, primarily
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focusing on the relationship between engineering, technology and quality of life. The academy also provides a voice between Parliament and the UK's engineering community. The most high-profile sector of engineering, after defence, is that of motor sport, which is highly popular with all ages in society and provides an excellent medium through which the inventiveness and expertise of talented engineers can be demonstrated.
Many companies belonging to the MIA make some parts for vintage cars. Vintage car racing is the fastest growth area of motor racing; I, personally, believe that it is by far the most exciting to watch. The Motorsport Industry Association and its associate members actively encourage participation by students in the motor sport industry through funding initiatives such as "formula student" and "formula schools". The skills needed by engineers—good spatial awareness, cogent thought processes and an ability in science and mathematics—are transferable through all engineering sectors. Yet a recent MORI poll for the Engineering and Marine Training Authority showed that more than half of young people associate engineering with an unclean working environment rather than the cleaner, demanding disciplines such as design engineering.
In March 2001, the Government commissioned a review to examine the supply of scientists and engineers into the UK. The Roberts report SET for Success; The supply of people with science, technology, engineering and mathematics skills was published in April 2002 and sets out a number of recommendations to encourage the growth of science and engineering innovation in the UK. The main recommendations once again reflect the decline in the adoption of science subjects in higher education and university. On publication of the report, Sir Gareth Roberts stated that:
"The UK has a strong scientific tradition … which in the past has not always translated into economic benefit. To do this effectively we need highly skilled scientists and engineers capable of matching the best in the world".
In responding to the report's recommendations, Paul Boateng stated:
"Sir Gareth's report is important in identifying further ways of boosting the contribution that science can make to improving productivity and growth".
My noble friend Lord Astor asked the Minister whether he could clarify the progress that has been made since that report was first published. I echo this request, particularly in relation to careers in engineering.
One organisation that has recognised the importance of education for the future is the charity Young Engineers. This organisation, funded solely through business-led initiatives and projects, aims to encourage children of all ages, including primary school children, to consider a career in engineering through competitions and after-school clubs. These clubs spark the interest of girls as much as boys; at present, approximately 40 per cent of participants in the scheme are female. The main emphasis is on fun but importance is also placed on the relevance of

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engineering in people's everyday lives. Technical skills provide only part of this learning experience. Students are given the opportunity to develop their core skills such as communication, numeracy and teamwork.
However, the charity is desperately under-funded. Despite running nation-wide initiatives in 1,700 schools to 58,000 pupils, Young Engineers has only four members of staff and receives most of its revenue from four main sponsors. Organisations such as Young Engineers should be seen as central to the debate concerning improvements in the engineering education process. While we welcome recent government initiatives, such as the unit to promote science, engineering and technology to women, further action is required if a long-term solution to the overall problem is to be reached.
There appears to be a consensus throughout the industry that, in the main, not enough is being done to stimulate the interest of our future engineers and to raise the profile and status of the profession, despite the commendable work of bodies such as Young Engineers. The industry needs to work in partnership to address the many problems that it faces and I look forward to hearing the Minister's response.
8.2 p.m.
Lord Davies of Oldham: My Lords, we all owe a debt of gratitude to the noble Lord, Lord Astor of Hever, for introducing what has been a very well informed and interesting debate. All the contributions will repay reading after this debate by noble Lords who are not present because we are discussing an area of great importance to the nation. There is no doubt that the issues of skills shortages and our lower levels of productivity in comparison to other nations need to be addressed and have been a salient point of the British economy for many decades. We need a concerted strategy to improve this situation. There is no doubt at all that engineering is one of the more important dimensions of this.
As noble Lords have rightly emphasised this evening, motorsport plays an important part in this. It is not just the conspicuous success of motorsport, which has been adduced on a number of sides. In very many dimensions, it adds glamour to engineering. It is the fact that, because of that relationship and because it is held in high regard by so many of our young people, we have a route by which we can address them on the desirability of following engineering careers through various routes. I was grateful to the noble Lord, Lord Methuen, who described the routes that had obtained in the past to produce high-level engineers and technicians with technical skills. We know that we must be more imaginative today and have wider ranges of opportunities because we are aware that not enough engineers have come forward in the more recent past. There is no doubt that motorsport plays its part. I play tribute to the noble Lord, Lord Astor, for his role as president of the MIA. The work of that body in developing initiatives, on which I shall comment in a moment, that help to fill the
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gap that has opened up in certain areas of our engineering provision, gaps which are partially the result of increased opportunities in other areas.
The noble Lord, Lord Methuen, invited me to reduce A-level opportunities in some subjects. I do not think that that would be a suitable response to the problem but I appreciate the fact that we must make the sciences, mathematics and developing engineering skills more attractive to young people in order to improve skill levels in those areas. I have no doubt that the initiatives that have been suggested this evening would help to a considerable degree.
I was grateful to my noble friend Lord Paul for identifying how crucial this issue is to the broader economy. I also agree with him that there is a pronounced regional dimension to the skills issue. We recognise that, with regard to certain aspects of motorsports, skills are concentrated in the valley that the noble Viscount, Lord Goschen, had great difficulty identifying, although he knows that a great deal of this activity takes place in the area that goes roughly westwards from Northamptonshire towards Oxfordshire. Motorsports do produce opportunities for young people and put a face upon engineering that we need.
One of the aspects that has come out of the debate—I think it was first mentioned by the noble Lord, Lord Astor—is the question of the limited number of young women who go into engineering. I have one or two optimistic and encouraging statistics to present to the House. The number of women qualifying in engineering skills in higher education is increasing, while the number is going the other way for men, but noble Lords will recognise that we are starting from a rather low base with regard to women engineers. That is an enormous pity. Modern engineering has so many facets—the noble Lord, Lord Methuen, brought out the excitement of seeing projects through to fulfilment—that are exciting in terms of achievement and are also light-years away from the grime, dust, oil and, perhaps, smoke, of yesteryear. Engineering opportunities ought to be attractive to young women.
I went to some very interesting electronic engineering courses, which are the way in which people learn to become competent with support systems for music gigs. That is an extremely attractive area and is different from motorsport. We all know how young people can be switched on to music. To my complete horror, every single participant on those courses, with very attractive engineering and many opportunities in our expanding leisure industry, was male. It shows how many barriers we have before us and the challenge we face in improving our engineering base.
I want to reassure the House that we are fully aware of the skills gap that has occurred and of the need to develop the skills strategy that we announced in July last year. It had the central ambition that
"employers should have the right skills to support the success of their businesses, and that individuals have the skills they need to be both employable and personally fulfilled".

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The strategy makes a real step change in the way that we approach skills by putting employers' needs for skills at centre stage, managing the supply of training, skills and qualifications so that they respond to their needs. The strategy also aims to raise demand for higher level skills, which we all recognise need to be encouraged.
There are a number of key initiatives. The noble Lord, Lord Astor, referred to one when he talked about the learning grid. Engineering is an applied science, as the noble Lord, Lord Methuen, described in detail. It deals with the real world, with physical objects and with making things happen. If we are to attract people into the sector they need to be able to experience engineering at first hand. That is why we need to translate a plethora of school initiatives, which seek to give some opportunities, into a coherent strategy.
That is why my right honourable friend the Secretary of State for Trade and Industry resolved to address that problem and why, through chairing the Motorsport Panel, she has taken significant steps. She has agreed to make available £4 million over the next five years to give a real boost to this work—not to the plethora of small scale initiatives, but to ensure that we concentrate on a select group of companies that are judged to be the most effective. That work is led by the Engineering Technology Board. The learning grid will bring a new focus and greater impact to those activities, which in the past have been well meant but disparate, for young people.
The sector skills councils have an important role to play in developing skills, and the council relating to the motor industry is making significant developments. There are a number of other initiatives that show the Government's earnest attempt to put flesh on the bones of a strategy that has been demanded by all sides of the House this evening. The Science and Engineering Ambassadors Scheme, which is a joint project by the DfES and DTI, provides role models who work in science and engineering, and who can show how science and engineering taught in the classroom can be applied to industry—to achieve some relevance for school and industry from people who, like the noble Lord, Lord Methuen, have played their part in the industry and can communicate the excitement of achievement that engineers enjoy.
At this stage I should declare an interest. Both of my sons are engineers, although I fear that one of them has followed that dreaded path to which the noble Lord, Lord Methuen, referred, of being taken into management science and moving away from engineering. But my younger son works for Ford. If I have not learnt enough from noble Lords this evening about such issues, I assure them that my education will continue when he and I next meet, because he identifies areas in which we still have to make considerable progress.
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Two years ago we introduced a GCSE in engineering. I recognise that the problem is that the debate is about "education" and engineering. Education is, by definition, a protracted process. We cannot achieve results overnight when we are seeking to plant new ideas and encourage new excitement in our schools and in higher education. It will take time before the results come through. We are delivering, we recognise the step change that needs to be made in education and I am giving examples of some of the initiatives that are being taken. The specialist schools programme means that some schools will concentrate on developing technology and engineering excellence. That, too, will guarantee that within those schools there is a greater emphasis on the development of engineering qualifications.
Reference has has also been made to modern apprenticeships. The Government are committed to them as high quality work-based options for young people. Engineering and manufacturing is the largest area for modern apprenticeships, making up around a fifth of young people on such training schemes—around 68,000. That is encouraging, but I recognise what noble Lords, including my noble friend Lord Paul, have said—that it may not look too robust a figure against international comparisons. We all know how much needs to be done in such areas.
We are also developing centres of vocational excellence between the public and private sectors, including a motorsport technician training centre at Silverstone, in conjunction with the British Racing Drivers Club, to provide trackside experience for students and contribute to the circuit's development as a centre of excellence. I cannot think of a more exciting way to bring people into that area of engineering.
I also recognise the very important point that my noble friend Lord Paul made about careers advice. He is right in that we do need to structure into this opportunities that are presented to young people in schools. We all know that choices are made irremediably early and that is why there is great strength in broadening the base of our A-level and post-16 studies and also in insisting that mathematics and science play a very significant part in the curriculum in order that young people have the base for making choices in engineering.
This has been an enormously stimulating debate. It has ranged across one area of very conspicuous success, the motor sports industry. It is not just success on the track, but also in terms of the very high level technological skills and expertise that we have developed. It has ranged to the broader issues of how we extend and develop engineering as a crucial aspect of British education in over to support the standard of living which our nation has the right to expect. There is no doubt at all that we cannot expect improvements in productivity in the development of our industry and economy without that crucial base of engineering excellence.

Courts Boards Areas Order 2004
8.16 p.m.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin)The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin) rose to move that the draft order laid before the House on 26th February be approved [11th Report from the Joint Committee].
The noble Lord said: My Lords, in moving this order I shall speak at the same time to the Courts Boards (Appointments and Procedure) Regulations 2004.
In November 2003, the Courts Act received Royal Assent. The Act fulfilled the Government's commitment announced in July 2002, to legislate to integrate the management of the courts within a single courts agency to replace the Magistrates Courts' Committees and the Court Service in England and Wales.
The role of the courts boards is to work in partnership with the new agency and to advise and make constructive recommendations to enable the agency to improve the services it provides. They will provide an opportunity for magistrates, judges, users of the courts and members of the local community to have a real say in the way the courts are administered. They will maintain a local focus for the delivery of court services within the new agency.
Each courts board will work with the agency's area director, the senior court administrator for their area, and it will scrutinise, review and make recommendations about the way in which the Crown Court, county courts and magistrates' courts in the area are run. It will consider the draft business plans for the courts and review area performance against those plans throughout the year.
The courts boards will work with the new agency from its launch in April 2005. These instruments will be brought into force from 1st June 2004. The courts boards will operate in shadow form from this October. This will allow them to consider draft business plans for the new agency. Having the boards in place in advance will ensure that they are ready to provide the level of scrutiny envisaged by the Courts Act from day one.
Turning specifically to the draft guidance and the code of practice, the Courts Act requires the Lord Chancellor to issue guidance to further define the role of courts boards. The Government undertook in this House to make that guidance available when these regulations were debated. Copies of the draft guidance and the accompanying code of practice have been made available in the Printed Paper Office. They have benefited from the comments of key stakeholders including the Magistrates' Association and the Central Council of Magistrates' Courts' Committees.
The regulations have been developed following extensive consultation. The consultation paper was issued last September and its proposals were developed following regional discussion groups involving magistrates, judges, court staff and court
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users. Two conferences were held for the magistrates' Bench and branch chairmen. Discussions have also taken place with national representatives of the magistrates' courts and the judiciary.
The provisions contained in the regulations and the post-consultation report, both published in February, have benefited from these views. Moreover, the Joint Committee on Statutory Instruments has seen the regulations and the order and they have been considered in another place.
The Courts Boards Areas Order sets out the 42 courts boards areas for England and Wales. The Courts Act provides that the Lord Chancellor shall have regard for the desirability of specifying areas which are the same as the police areas under the Police Act 1996. On 31 July 2003, the Lord Chancellor announced that there would be 42 local management areas in the new agency following the Police Act boundaries and that each one would have a courts board. The new areas would be the same as the areas used by other criminal justice agencies and will be coterminous with local authority boundaries. I very much hope that the House will welcome this for the obvious benefits it should bring.
During debate of the areas order in another place, some inconsistencies in the way in which the 42 areas are described and defined were highlighted by the right honourable Members for Surrey Heath and for Colchester. I make it plain that the areas set out in the areas order are correct and all the courts within those 42 areas will fall within the remit of that area's courts hoard. However, there is not a full description of all the accurate local authorities within some of the relevant 42 areas. We will therefore bring forward amending regulations to come into force on 1 June 2004 at the same time as this order and the regulations to make that absolutely clear.
Turning to the Courts Boards (Appointments and Procedure) Regulations 2004, these regulations make provision as to how courts boards members will be appointed and the basic procedures under which the boards will operate.
During the passage of the Courts Act, the Government undertook to follow the code of practice on public appointments of the Office of the Commissioner for Public Appointments (OCPA). That commitment is reflected in the regulations.
The regulations provide for the Lord Chancellor to publish the qualities for which the lay and magistrate members of courts boards will be selected; and having sought the views of an OCPA trained independent assessor. This will mean that the selection criteria are open and transparent.
The regulations provide for applicants to be assessed against the published criteria by a three member appointments advisory panel, normally comprising the area director, an independent assessor and a courts board member who will chair it. The regulations require the Lord Chancellor to consult the panel before making appointments.
The appointment of judges to the boards will, at least initially, be from the circuit bench and will normally be a designated civil judge, designated family judge or a resident judge in the area. The pool of potential judge members is small and a proportionate appointment process has been agreed with the Commissioner for Public Appointments. The Lord Chancellor will appoint judge members on the recommendation of the Lord Chief Justice.
The regulations provide for the selection of a chair for each board by applying further criteria to interested lay and magistrate members, with the Minister taking a final decision. It has been agreed with the judiciary that the judge member will not chair. Assessing potential chairs against objective criteria will ensure that the chair is competent to undertake that role and provides a transparent process by which the best person is chosen.
The regulations also set the maximum number of members at 12 and allow the boards to set their own quorum, subject to a minimum of four people. They provide that members may sit on the courts board for a maximum of three terms of three years although two terms will be the norm. They also provide for circumstances in which a member may be suspended or dismissed.
These regulations set out an open and transparent system of appointment for courts boards members and the order sets out courts boards areas that are in line with the wishes expressed by this House during the passage of the Courts Act. I commend both orders to the House. I beg to move.
Moved, That the draft order laid before the House on 26 February be approved [11th report front the Joint Committee].—(Lord Filkin.)
Lord Goodhart: My Lords, I have no comments on the Courts Boards Areas Order. It was agreed at the time that the Courts Bill was going through your Lordships' House that the initial areas would correspond with the existing police areas and with the existing magistrates' courts committee areas. That has plainly been done. Subject to the amendment to the titles of those areas being introduced, we are entirely happy with them.
However, a point somewhat concerns me regarding the appointments and procedure regulations. Regulation 4 provides that the courts board appointments advisory panel, which advises on the appointment of the members of the courts board, shall comprise:
"(a) … a person in the civil service of the state who appears to the Lord Chancellor to be appropriate for this purpose".
As the Minister has just said, and as is also disclosed in the response paper published in February this year, it is the intention of the Government that that civil servant should be the area director. That is a matter which causes me some concern because one of the statutory duties of the courts board will be to monitor the work of the area director who is carrying out the responsibilities of the Lord Chancellor in that area. It seems to me to be prima facie inappropriate that one
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of the three people who are responsible for making the appointments to the courts board, and, indeed, a person who because of his or her standing may well have a particular influence in the work of the appointments board, should be the person whose work is to be monitored by the courts board. I believe that there is a problem there with conflicts of interest.
I hope that the Government, as they are going to have to introduce an amendment order anyway in relation to areas, may be prepared to reconsider that point and introduce an amending order to alter that provision. It would be less inappropriate to have an area director from another area, though even so I would prefer that the civil servant should be somebody who has no current responsibilities as an area director. Having said that, I have no concerns with other parts of these regulations, though my noble friend Lord Phillips of Sudbury has some points that he wishes to make.
Lord Phillips of Sudbury: My Lords, I wish to make three brief points. The first concerns Regulation 5 of the Courts Boards (Appointments and Procedure) Regulations. Regulation 5 deals with appointments of members of courts boards who are not judges. Paragraph (3) states:
"Where he is considering making an appointment, the Lord Chancellor must—
(a) identify, and publish …
(i) the qualities and abilities which in his view are likely to be the most relevant"—
and that is perfectly clear—
"(ii) any experience and qualifications which in his view are likely to be relevant".
It then goes on in the following paragraph to say that,
"(4) Before taking the steps"—
that I have just referred to, that is, identifying and publishing those matters—
"the Lord Chancellor must consult a person who has been trained … to act as an independent appointments assessor".
Is the right and capacity of the Lord Chancellor to consult vis à vis the matters dealt with in paragraph 3—qualities, abilities, experience and qualifications—confined to consulting someone trained "as an independent appointments assessor"? I rather think and hope not, and that, for example, on the experience criterion, which seems crucial—people with the right experience to sit on these boards—the Lord Chancellor will be free to consult whomsoever he wants. That might mean consulting people in the area for which the board will be responsible.
My second question is in respect of paragraph 7, which states:
"The Lord Chancellor must supply a courts board appointments advisory panel with such further information as it reasonably requires for the purpose of discharging its functions".
My question is whether the only person whom the courts board can consult in discharging those functions is the Lord Chancellor, or whether the courts board can reach beyond the Lord Chancellor if it

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requires other information or advice. Again I think the answer in common sense should be "yes", but it would be helpful to have that clear.
Finally, we have in Regulation 9 the important and necessary provision for resignation, suspension or removal of members of courts boards. One of those grounds is that a person has been charged with a criminal offence. On the face of it, if someone is charged with a criminal offence and is acquitted—let us say on the ground that it is the wrong person—it would be extremely harsh if someone was removed from a courts board, especially with the damage that would then follow to his or her public reputation. Is the Minister in a position to describe the sort of basis on which the Lord Chancellor would exercise a power to suspend, which I hope it would be?
What I hope the Minister is free to say is that this provision would enable the Lord Chancellor to state—where there was a rather scandalous charge against a member of the courts board—that he felt on grounds of public confidence that he needed to suspend a member of the courts board until the matter was cleared up, thus leaving the person to resume his or her position if he or she was acquitted. I hope that the Minister can confirm that that is the way in which this power will be exercised.
Finally on Regulation 9, will it be possible to appeal a person's removal on the grounds that he is "unfit", which is a ground for removal? Thinking of the public reputation of the person concerned, it could be extremely harsh to have no warning of why one is being removed, no chance to put one's case on the issue of unfitness, and no right of appeal once the removal has taken place. I well appreciate that we are dealing here with the Lord Chancellor, whose interests are of the most proper and sensible kind. However, I hope that the Minister will see the point that I am concerned about. If he can lend any reassurance on that, I would be grateful.
8.30 p.m.
Lord Filkin: My Lords, I turn first to the interesting probing question asked by the noble Lord, Lord Goodhart, about whether it is appropriate for an area director to sit on the panel. Clearly there are benefits in area directors being part of the process. They are the people within the administration with the best understanding of the needs of the court in their area. If that were the extent of it, I think there would be an understandable continuing concern as expressed by the noble Lord. However, there are in practice checks within the process to prevent the area director exerting undue influence.
Area directors will not chair the panel; for the first appointments, that will usually be done by the panel member who is already a courts board member and by a person with knowledge and experience of the courts. The area director will not make the actual appointment; that will be done by the Minister. Apart from the initial appointments, a member of the courts board will sit on the interview panel for a new area
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director. Finally, and perhaps most importantly, an independent assessor will be involved at every stage of the process to ensure that the process has been fair and open.
I do not think that what I have said or the process debars what the noble Lord, Lord Goodhart, further suggested about the possibility of an alternative area director sitting in on the appointments panel. For the reasons I have given, I do not want to go as far as saying that that should be an automatic rule; I think that that might be unwise. However, there are benefits in enabling a person with local knowledge to take part in the process, which is governed by the checks that I have signalled.
Lord Goodhart: My Lords, the member of the courts board who sits on the appointments panel would presumably be a person with local knowledge.
Lord Filkin: My Lords, that would often be the case, but perhaps not always, depending on how recently people had been appointed to the process. I will say no more on that for now, but I shall reflect on whether we need to go further in looking at those issues—without wishing to raise an expectation that we necessarily will.
It is essentially a balance. There is benefit in having a person with responsibility for that as part of the process. I hear the worry about whether a weak person—we hope that such a person will never be appointed—might be partial and not choose people of the talent and vigour to bring the most pressure. However, I should hope that the processes I have indicated will limit that relatively remote risk.
I turn to the issues raised by the noble Lord, Lord Phillips of Sudbury, the first of which was the identification of the qualities and experience of the courts boards members. As he said, the Lord Chancellor must publish the qualities and abilities, including the experience and qualifications, for courts boards members. Before doing so, he must consult an independent assessor. The question was whether the Lord Chancellor's ability to consult was confined to an assessor. The answer is "no"—which I think is the answer that the noble Lord had hoped for. It is not confined only to consulting an independent assessor. For example, we have consulted external bodies setting the criteria for the current exercise, such as the Association of Disabled Professionals and the Society of Occupational Lawyers.
I turn to the question of dismissal. In a sense, this is a power; it is not an obligation to rigorously enforce that. One could envisage a situation in which a person had been charged and had been convicted of a criminal offence—driving without due care and attention, for example—but it was not seen to be of such moment that it would necessarily undermine confidence in that position. I am not saying that this would mean that anybody so charged and convicted would in all circumstances continue, but it is a signal that there is a discretion for the Lord Chancellor, if he thinks it appropriate, to remove a person in such circumstances. You could perhaps go to the other extreme, where a person had—this is an extreme

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circumstance—been charged with murder, for example, and had been acquitted on a technicality. In that circumstance, one would wish the Lord Chancellor to have the power to remove. Because, clearly, having a person in such a situation might go to an issue of public confidence in his fulfilling a function which is essentially supervising the administration of justice.
I do not wish to speculate in detail. In short, it is a discretionary power that is with the Lord Chancellor for good reasons. Of course, there is an obligation on the person to make sure that natural justice is done to him, as well as upholding confidence in the process of the law and the functions that the courts board is intended to do.
There is no appeal of removal, as such. The powers expressed are discretionary, and the Lord Chancellor will be required to act fairly and reasonably under the ordinary principles of public law.
I trust there is nothing else that the noble Lord, Lord Phillips, raised that I have omitted. I am sure he will remind me if that is so. I hope that this has addressed the issues concerned.
On Question, Motion agreed to.

Courts Boards (Appointments and Procedure) Regulations 2004
8.37 p.m.
Lord Filkin: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on 26 February be approved [11th Report from the Joint Committee].—(Lord Filkin.)
On Question, Motion agreed to.

Community Legal Services (Scope) Regulations 2004
8.37 p.m.
Lord Filkin Lord Filkin rose to move that the draft regulations laid before the House on 12th February be approved [9th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move that the draft Community Legal Service (Scope) Regulations 2004 be approved. The regulations are made under section 6(7) of the Access to Justice Act 1999, which enables the Secretary of State to make regulations to amend Schedule 2 to the Act. These regulations will remove,
"attending an interview conducted on behalf of the Secretary of State with a view to his reaching a decision on a claim for asylum"
from the scope of the Community Legal Service. The regulations are subject to parliamentary approval under the affirmative resolution procedure. They were debated in Committee in another place on 8 March and were agreed without opposition.
I should explain to your Lordships why we are making these regulations. This change is part of a wider package of reforms to asylum legal aid that we first consulted on in June last year, in our "Public Consultation on Proposed Changes to Publicly Funded Immigration and Asylum Work". We proposed changes because of concern over the rising cost of asylum legal aid, which had risen from £81·3 million in 2000–01 to £174 million in 2002–03. At the same time, there was general concern about the level of control over quality, duplication and waste within the asylum legal aid system. Too many unmeritorious claims were being made and being pursued. There were, frankly, too many suppliers of insufficient quality doing the work. This had contributed to an increase in cost per case and an unsustainable level of expenditure.
We announced our response to the consultation on 27 November 2003. We made some significant changes to our original proposals; for example, introducing variable thresholds where we had initially proposed fixed caps on the amount of time that could be spent on cases. Our new proposals on thresholds and the accreditation of suppliers and the unique client number are being introduced from April this year by changes to the Legal Services Commission's contract with suppliers and by administrative changes. The regulations that we are considering are concerned only with removing the attendance of a representative at the substantive asylum interview. Perhaps I may explain why we are doing that.
At present, funding is available for a representative, who, in practice, is usually an agent or outdoor clerk working for a legally aided organisation representing an asylum seeker, to attend the substantive interview with the Home Office. However, as we said in our consultation paper, we believe that, in the majority of cases, attendance by the representative at those interviews is unnecessary, of no benefit to the client and, as a consequence, a waste of public funds. In reality, in most cases, the role played by the person accompanying the asylum seeker is simply that of a note-taker.
That is confirmed in the Immigration Law Practitioners' Association's Best Practice Guide to Making an Asylum Application, which states at Chapter 7:
"It has been accepted practice for many years that a client may have a clerk from his legal advisers present at substantive interviews with IND officials".
At this point, perhaps I may stress that we do not propose to remove the publicly funded attendance at the interview in all cases. There are important exceptions—unaccompanied minors; applicants going through the fast-track initial decision processes; those suffering from a recognised and verifiable mental incapacity, which makes it impractical to undergo an interview without support; applicants being interviewed

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at a police station or under the Police and Criminal Evidence Act 1984; or applicants alleged to pose a threat to national security.
Lord Avebury: My Lords, can the Minister tell me whether the words "mental incapacity", which he used just now, have the same meaning as they have in statute?
Lord Filkin: My Lords, essentially we have taken the definition of the words "mental incapacity" from the draft Mental Incapacity Bill. I am sure that in a moment I shall be able to put my hand on that and shall be able to quote the exact section. Therefore, the lawyer must make a judgment within that confine.
In all but the cases that I instanced, which we estimate are about a third of all interviews, funding for attendance by a representative at the substantive asylum interview will not be authorised. The Legal Services Commission will introduce rules to ensure that in the exceptional cases that I listed, where attendance at interview is authorised, this will be by the advisor in the case or the immigration supervisor, and not by an agent or outdoor clerk, until accreditation is introduced.
As the regulations remove funding for the attendance of a representative at all asylum interviews, the Secretary of State will issue a direction under Section 6(8) of the Access to Justice Act for 1 April 2004 to bring these exceptions back into scope. Therefore, we are removing attendance in unnecessary cases and ensuring quality representation in the exceptional cases.
Further, accreditation for publicly funded legal advisers will be introduced from April 2004 and will become compulsory by April 2005. This scheme will give additional assurance to the public that those unable to meet the required quality standards will have been properly excluded from providing services. Individuals who meet the standards will be able to put themselves forward as offering fully accredited services. In addition, those accredited to the top tier of the accreditation scheme will be awarded a 5 per cent uplift on normal rates because it is judged that they are offering particular value for money and a good service both to their client and to the public purse. The necessary regulation change to effect the uplift was laid before Parliament on 9 March 2004. All these changes were set out in our November announcement.
The Legal Services Commission will continually monitor the effectiveness and success of each aspect of the reforms following its introduction and report back to my department. In particular, we shall monitor the effect of these regulations with the Home Office to ensure that the non-attendance of representatives at interview in non-exceptional cases does not reduce the level of assurance of access to justice.
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Perhaps I may give a little further clarification on the question raised by the noble Lord, Lord Avebury. "Mental incapacity" is defined in the Legal Services Commission new immigration contract as:
"A person who lacks capacity in relation to a matter if, at the material time, he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in, the functioning of the mind or brain".
That definition is taken from the draft Mental Incapacity Bill, Volume 1.
I confirm to the House that, in my view, the regulations are compatible with rights under the European Convention on Human Rights, and I commend them to the House.
Moved, That the draft regulations laid before the House on 12 February be approved [9th Report from the Joint Committee].—(Lord Filkin.)
Lord Kingsland: My Lords, I understand the Government to say of representation at the interview stage that in the majority of cases it is unnecessary, of no benefit to the client and a waste of public funds.
Our position mirrors that of the Constitutional Affairs Select Committee in another place. Legal aid should be available to solicitors for attending interviews, provided that it is established in each case that the presence of a qualified solicitor is justified and does, indeed, occur.
The evidence furnished by the applicant at the interview stage forms the basis on which the Secretary of State takes a decision about an asylum application. Yet it is at this stage that false impressions or misunderstandings about the applicant's conduct and motives are most likely to appear. This is especially true since interviews are not recorded, there are frequent language difficulties and statements are not read back to interviewees after they have been made. Since so many asylum decisions depend on an assessment of the asylum seeker's credibility, the presence of a qualified lawyer is often vital to ensure accuracy and procedural fairness at an interview.
We fear that if legal aid is withdrawn, it will further undermine the already fragile basis for rational decision making at the interview stage, thus increasing the likelihood of successful appeals. Although we do not intend to vote against the order, we shall seek to amend the Asylum and Immigration (Treatment of Claimants, etc.) Bill that is currently before your Lordships' House to reflect the view of the Constitutional Affairs Select Committee in another place to which I have already referred.
Lord Phillips of Sudbury: My Lords, I should declare an interest. My firm—at least until tomorrow—has always been a legal aid provider of immigration and asylum services.
Sadly, when the new regime comes into effect on 1 April, we will cease to do legal aid work for the first time since I started the firm 34 years ago. That is because the present regime has become bureaucratically heavy-handed. It is implemented by conscientious staff, but none of them has first-hand

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appreciation of the realities and problems of the processes which currently provide a system of application by claimants.
That is a good starting point—and a good example of the generalisation that I have just made—for pondering for a moment on the Government's repeated assertion that legal representation is not needed at what the Explanatory Note to the order correctly calls "the substantive interview".
Many organisations have briefed Members of the House on the order, including the Refugee Legal Council, the Law Society, the Coalition Against Legal Aid Cuts, the Churches Commission for Racial Justice and, of course, ILPA, the Immigration Law Practitioners' Association.
I particularly commend the briefing by the Refugee Legal Centre, because it derives from as deep and impartial an experience of the workings of this part of our legal system as is owned by any organisation in the land. It is an extremely clear and persuasive explanation of why the passage of the order will, first, achieve both significant and important unfairness—which will blemish this country's record—and, secondly, be self-defeating in legal aid savings.
Perhaps I may return to the issue of the substantive interview, not forgetting that that first interview is with an immigration officer who is often as inexperienced as the legal clerk attending the same. That forms the crucial factual ground upon which the decision will be taken by the senior immigration officer which, in relation to asylum, can be a real issue of life or death.
I hope the House will excuse me referring to what the Refugee Legal Centre says as it is basic to this matter and to the central assertion that lawyers are not necessary at such interviews. It states that there are several ways in which an interview may prove inappropriate or unsafe. First, conduct on the part of the interviewer or interpreter may be deliberately or unintentionally intimidating. Secondly, the interviewer—that is the immigration officer—may fail adequately to follow up answers or explore the substance of the asylum claim. Thirdly, the interviewer may use technical terms in questions or pose very long questions that may be summarised in the record so that the technical nature or complexity is not there disclosed. One must not forget that the person being interviewed is often fearful, unaccustomed to the culture, often having to use an interpreter and very often in a state of high anxiety. Fourthly, the interpretation may be inaccurate, or otherwise inadequate, for the interviewee. Fifthly, the record made by the interviewer may be inaccurate, either because it wrongly records what was said, or it fails fully to record what was said. Sixthly, the record, even if accurate as to what was said, may fail to record or may wrongly record important aspects of demeanour of the interviewee. Finally, even where the record records some aspect of demeanour, it is nevertheless unlikely to reveal the true extent of any such behaviour and, thereby, not disclose its true implication. Those last points tie in with Clause 7 of the Asylum and Immigration (Treatment of Claimants, etc.) Bill,
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which introduces credibility in a way that will be extremely damaging to the claimant in the kind of interview to which the Refugee Legal Centre refers.
Perhaps I can compare the system that will prevail after these regulations come into effect with the system that prevails for any citizen of this country, or indeed a foreigner, charged with any criminal offence—let us say a shoplifting offence. Such a person has a right for a solicitor to be present in the police station when the police take a statement. Note too that the statement taken by the police in the presence of a legal adviser will not be passed to another member of the police force for a decision but to the Crown Prosecution Service, an independent body that will reach its own decision on the evidence as to whether to prosecute. By contrast, in the asylum interview, the immigration officer will pass his or her statement to a person further up the line in the same organisation. So there is no separation or Chinese wall that will ensure due impartiality.
In the criminal process, if the Crown Prosecution Service decides to prosecute, the matter goes to a magistrates' court. There the accused will have the opportunity to give afresh his or her evidence in open court, subject to cross-examination. By contrast, in an asylum case the statement will pass from one immigration officer to a senior immigration officer who, without any further contact with the claimant, has to make a decision.
One needs only to look at the radically different treatment of comparable situations to see why so many people outside this House are deeply anxious about the consequences. I say "comparable situations" because although one is a criminal process and the other is plainly not, the consequences for the person seeking asylum, if he or she has his or her case rejected at that stage, are potentially devastating.
I shall briefly refer to what I described as the self-defeating effect of this order in terms of cost. Two things will follow. First, the number of appeals that will be made in the future is bound to increase radically. A solicitor to whom the claimant goes, the first substantive interview having taken place, is bound to say to the client—as he or she will then be if he or she has not already been deported—"I wasn't at the interview. No one from my office was at the interview. Now that I explain to you what the statement says you are not satisfied that this reflects fairly either what you said or your case. We must appeal". The cost of that is likely to be very serious.
The second cost is of the appeal itself. The asylum and immigration tribunal, as it will be called, will not be dealing with a statement where someone has represented the claimant at the substantive interview and was able to help make it a true, accurate and full statement—there is no point in a representative being present unless it is to hone that statement into an acceptable form. Instead we shall be presented with a situation where at every turn that substantive statement will be challenged. There is going to be argument about what it meant—what the claimant now means or says. I do not think that one needs to be

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a lawyer to understand the consequences of that. It will mean an extreme extension of time for the hearing of these appeals.
At the moment it is proposed that the new tribunals should handle four cases per day. My bet is that it will be three or even two hearings a day if they are going to be extended and complicated because there is no remotely agreed statement on which the appeal is proceeding. So, in terms of cost, these proposals seem to us to be counter-productive.
I was most grateful to have a meeting with the Minister, David Lammy, and his officials where some of these matters were discussed. However, I am bound to say that one of the impediments to reaching an agreed forward path—no one is trying to score points off anyone; we all seek to deal with an extremely difficult problem in the way that best serves the public interest and justice—is that the Government say, and go on saying, "But the representatives at these substantive interviews are useless. They are a waste of time and money". There is some truth in that.
However, I must make two points. First, by failing to increase the rates of legal aid remuneration year after year, the firms dealing with these cases cannot afford to send experienced people to the interviews. There is no doubt about that. Secondly, the Government cannot have it both ways. They cannot on the one hand convict the legal profession of failing to provide quality services while failing to provide for those services. So, whichever way we go, there must be more sense on that front. I believe that if this order proceeds there will be serious injustice. There will be serious costs by way of appeal and the length of those appeals. There will be judicial review cases, and there will be a considerable blot on our escutcheon as regards the standards that we all seek to maintain in dealing with what, after all, is a singularly vulnerable group of people. It is no good for the Government to say that there are a lot of shysters among this lot who are swinging the lead, telling a pack of lies and just trying to get away with it. No doubt there are, but we must come up with a system that gives justice to the honest claimant. We cannot set our sights according to those who abuse the system. We need to deal with the abusers, but in the process we must not damage the justice due to the genuine claimant.
9.00 p.m.
Earl Russell: My Lords, I believe that it can be argued that the asylum entrance interview is the most important interview in English law. Since I had the very great pleasure of assisting Lord Williams of Mostyn, speaking in his private capacity, in amending the Human Rights Bill to incorporate the protocol prohibiting the death penalty, no purely domestic legal proceeding has threatened life. If a genuine asylum seeker is returned to the country from which he came, his life is threatened.
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I agree with my noble friend Lord Phillips. It is curious that this should be the only instance that does not attract legal help. The Government says in the Explanatory Memorandum:
"The Government believes that in the majority of cases this is unnecessary, of no benefit to the client and a waste of public funds".
I listened with some interest to see what reasons the Minister had for that belief. If he has any more than he has given us, I would be glad to hear them.
He had two things to say, as I understand it. First, that there were some suppliers of inferior quality, that is to say that there are some bad lawyers. Measures have been taken about that, which is one of the few things in this field on which we and the Government have wholeheartedly co-operated. I also remember in this Chamber a group of eminent QCs conducting a Dutch auction about what a hash they had made of their first case, how little they had been paid, and how awful the consequences were for the client. It was won by a former Chancellor of the Exchequer, who said, "I got seven and sixpence, and my client got seven years". The Government's principle does a little too much. It is an argument against having any lawyers anywhere. From Jack Cade onwards, there have been those who have wanted that. I do not think that this House is among them.
Secondly, the Government also said that they give aid to unmeritorious persons. That is simply another way of saying that the Minister does not agree with all their decisions. In fact, it is saying, like Mr Bumble, that,
"The law is a ass".
It did not do Mr Bumble any good, and it will not do Mr Blunkett any more good.
We all agree that the weakest point in the whole system of asylum is the poor quality of initial decisions. That is why cases take so long, why there are so many appeals, and why there are so many judicial reviews. Would it not make sense to try to improve the first stage of initial decision? The Government are always introducing measures designed to induce haste, which have the opposite effect. They remind me of a former neighbour of mine, who was once in a hurry to open the wine for dinner, but he could not find his corkscrew. Being an old cavalry officer, he slashed the bottles open with his old sword, and then had to strain it through muslin to get the glass out. It took a lot longer than it would have done otherwise. That is a fair parallel for the Government's asylum policy.
There are plenty of examples of this. I remember one of the Campsfield Nine, whose case had been through umpteen stages of proceedings, until Lord Williams of Mostyn and I finally got together on it. It instantly appeared that the man's claim was genuine and should be allowed. This was after about nine months of proceedings and a day or two before he had been about to be sent back to West Africa. That is far too common a story.
There are far too many cases where it depends on the use of a wrong dialect or an inaccurate opinion about the country concerned—like the belief that the Roma

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were not persecuted in society at precisely the moment that the Foreign Office was advising that they could not he admitted to the EU because it did persecute the Roma.
The Minister says that there are exceptions. I have always been puzzled, especially as a boy, by the proverb that the exception proves the rule. However, the full proverb makes a great deal more sense. "Proves" is used in the sense of test. The full proverb is that the exception proves the rule in those things which are not excepted. Should I grant my noble friend Lord Addington all my trees, I would be held to have excluded my orchard. But should I grant him all my trees except my pear tree, I would be held to have included my apple trees. Therefore, let us look at what is not in the Government's list of exceptions.
There is no mention of victims of rape or victims of torture although we all know how difficult it is to get them to tell their story. There is mental incapacity but not severe illness. I think of one case personally known to me who arrived in an open canvas lorry with a temperature which was found, once she had made her claim, to be 106. I do not think that she was in a fit state to tell her story. Another claimant personally known to me, who saw her grandparents shot dead in her sight, did not speak of anything for three months. I do not think that she was fit to tell her story. She is not included in the list of exceptions either.
There is no inclusion of the case which is distressingly common of raping the wife in the sight of the husband. I could go on. I shall not. There are plenty more of these cases. The exceptions are not particularly generously construed. So if the exception proves the rule, it does not prove very much.
All of these things are liable to create further judicial proceedings. I do not know whether the initial asylum claim could be held to be a judicial proceeding but I ask the Minister this. Has he taken advice on whether the absence of a right to legal representation might possibly engage ECHR Article 6 on the right to a fair trial? It is a question I raise tentatively but I should rather like to know the answer.
As regards the prosecutor interviewer, I have in my papers one case from an interviewer in Gatwick where the interviewer referred sneeringly, sarcastically, to every mention of a case where someone had tried to shoot the applicant. The Home Office held the claim not to be genuine but it was overset on appeal and ultimately the person was allowed in. That is just the sort of case in which the Home Office's attitude to the initial claimant ends with taking a great deal more time and letting the person in at the end.
We have a case here also of a Kurdish hunger striker who was barely fit to speak. The record was totally incoherent. He was rejected also. He was ultimately accepted on appeal. When any government get desperately frightened of something, they always end up doing things which make that particular thing work. This is not an exception.
Lord Avebury: My Lords, as my noble friend has just said, the exceptions do not cover many categories of people such as torture victims and victims of rape,
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whose cases have been reported in shocking detail by many of the practitioners who have written to us prior to this debate. Even with the categories that have been mentioned, the noble Lord, Lord Filkin, worsened my fears when he gave the definition of mental incapacity. That is an extremely severe test. Has the noble Lord consulted any of the mental health organisations about whether people who do not come within the definition of mental incapacity but do suffer from mental illness are capable of giving the right sort of answers or making the right sort of statement on their own behalf at the crucial ordeal of the first statement?
It has been agreed on all sides, particularly in the debates on the Asylum and Immigration (Treatment of Claimants, etc.) Bill, that the initial decision-making process is seriously defective. That is the main reason why thousands of decisions are reversed by the appellate authorities. Is it not perverse, therefore, to make it even more likely that uncorrected errors will be made at the first interview, increasing the number of decisions, as my noble friend Lord Phillips of Sudbury, has explained, which have to be corrected higher up and at much greater cost than the savings achieved by the order? Even if serious procedural mistakes were not being made at the interview stage—we have many dozens of examples to show that there are—the absence of representation could lead to a lowering of standards for those who do not come within the exceptions mentioned.
I take it that we are all agreed that full disclosure at the earliest possible stage is in the interest of the applicant, the Home Office and the public. The presence of the representative, even though he may not be legally qualified, gives the timid applicant the confidence to speak freely. That seems to have been acknowledged by the Home Office; it announced at a recent stakeholders' meeting that certain vulnerable individuals—I take it that that means people who are not covered by the exceptions—would be allowed to have a friend or relative present at the interview. Would the noble Lord, Lord Filkin, care to say anything about this in his reply? Will he deal with the awkward questions that, to my mind, it raises about confidentiality and about reducing the applicant's willingness to make full disclosure—for example, where she does not want the friend or relative to know that she has been a victim of rape or torture?
As both my noble friends have said, it is in the nature of the asylum process that the interview is of peculiar significance. Unlike in criminal cases, it is almost always the only direct evidence of the case to be proved the rest is all background information about the situation in the country of origin and about the experience of other people who belong to the same group as the applicant, as checks on the credibility of her story. In asylum cases, moreover, the interviewer, as my noble friend Lord Phillips, explained, represents the authority that investigates, decides on, and, in appeal proceedings, will be the opponent of the case made out at interview.
Because of the vulnerability of the asylum seeker and her unfamiliarity with the process, she will not necessarily be able to identify inappropriate conduct

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on the part of the interviewer or interpreter which an experienced representative would pick up at once. My noble friend went into some detail on the excellent note that we all had from the Refugee Legal Centre.
None of the flaws which occur at the interview stage can be satisfactorily addressed unless the applicant is represented at the interview. Many of them, such as errors of interpretation and errors in the record are beyond the applicant's knowledge in the very nature of things. When the written record comes to her attention, she will not necessarily be able to pick up the fact that a particular error in interpretation has been made. Yet the interview, which is already a crucial element in the initial decision-making process, is about to be given even greater weight because the Bill before your Lordships provides that the applicant's "behaviour" may be taken as giving an adverse indication of her credibility.
Such "behaviour" may include her conduct or demeanour at interview and, as my noble friend explained, if there were questions about that later on, it might lead to the representative undertaking careful inquiry about any such matters that might be relevant to the decision. As of now, that would be unnecessary, because the representative is present at the interview; but after the Bill comes into effect, the time needed to cover those matters properly might be equal to, or even greater than, the time it would have taken to be present at the interview.
The importance of the interview record means that there is likely to be more litigation concerning the record or the conduct of the interview. My noble friend Lord Phillips has already explained that. In some cases, that might even possibly lead to judicial review challenges to the interview itself—but routinely, the extension of the litigation of the interview process in the course of any appeal. The consequent increase in cost is likely to be compounded by the fact that removing the representative from the interview lessens the incentive for the interviewer and interpreter to ensure that it is conducted fairly. In some cases, that may lead to abuse and, in others, it may encourage or allow the interviewer or interpreter to be less scrupulous than he would otherwise be in observing principles of fairness. In addition to the necessity of exploring these matters in appeals, there may be administrative delays while arguments about what actually happened at interviews are explored—in some cases, leading to new interviews.
I want to ask the Minister whether he has considered what was said in another place about the use of tape-recording for interviews. He may remember that, when we debated the 2002 Bill, I moved an amendment for that purpose. The noble Lord, Lord Bassam, said:
"The current system works reasonably well and there are fairly good and accurate records of interviews".
But he also said, in answer to the noble Lord, Lord Hylton, who asked him about first interviews that,
"it might have some greater potential benefit in those kinds of cases".—[Official Report, 15/7/02; col. 1072.]
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The noble Lord, Lord Bassam, and the Home Office concluded, however, that with the existing safeguards, and particularly the presence of a representative, tape-recording was unnecessary. Now that there is not going to be a representative, the case for tape-recording becomes overwhelming.
If all interviews were recorded, something like 12 million interviews would have been involved; but at the time when the noble Lord, Lord Bassam, was speaking, there were some 76,000—and, of course, the number would be much smaller in 2004. Will the Government take another look at the idea so as to provide an accurate record, in cases when any dispute arises, and ensure that it would not simply be a case of the applicant's word against that of Home Office officials? Mr David Lammy was asked to consider the matter in the Standing Committee on Delegated Legislation, but he dismissed it on the grounds that it would be unusual in civil rather than criminal proceedings. When pressed by Mr Dominic Grieve, he replied:
"I have said what I want to say to the hon. Gentleman on that point".—[Official Report, Commons, Delegated Legislation Standing Committee, 8/3/04; col. 8.]
That closed the discussion.
I also want to ask the Minister how, when there is doubt about the applicant falling within one or other of the exceptions, the matter is to be resolved. Let us suppose, for example, that there is some doubt as to whether a person claiming to be 17 years old is in fact that age, or whether he has reached the age of majority. Would the only safe course of action not be to say that where the applicant claims to belong to one of the exempted categories, representation will be allowed so as to avoid argument on the matter later at appeal stage?
The Home Office are trying to discourage asylum seekers from seeking legal advice at any time and, in the DVD that is going to be used for briefing those asylum seekers at the start of the process, it is emphasising that representation is not really necessary at all and that the initial interview is the only chance that the applicant has to tell the officials about his case. If he has forgotten something, or is advised later on that something he omitted is relevant, is that to be ignored?
In case number 8—to which I drew the Minister's attention—cited by the Coalition Against Legal Aid Cuts, the immigration authorities agreed to consider a full statement prepared with the advice of a solicitor following many complaints about the conduct of the interview. In that case, if there had been no representative at the interview, the applicant would probably not have complained, or if he had done so, he would not have been able to substantiate the complaint with independent corroboration.
This proposal in this order is based on the notion, as the Minister has explained, that the presence of a representative at the initial interview is unnecessary, of no benefit to the client, and a waste of money. The overwhelming majority of practitioners disagree with the noble Lord. I remind him that most of them are not

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in it for the money. As my noble friend Lord Phillips of Sudbury has explained, he and many other practitioners are leaving because they cannot give their clients the service that they need. Practitioners have sent us many examples of the benefits of representation at this stage and of how the errors that they pick up can actually save money later on. We believe that these proposals will lead to injustice and to further delays and expense at the appeal stage.
Lord Goodhart: My Lords, I rise very briefly to say first of all that I fully concur with what my noble friends have said. I do not think it is necessary for me to add to that because they have said everything that could possibly be said. A very powerful case has been made.
I would draw attention to the point raised by my noble friend Lord Avebury about tape recordings. That is something that is not inconsistent with this order. Indeed, it is something that I think is made necessary by this order. I hope that the Government will he prepared to give consideration to tape recording all interviews and providing copies of the tape to asylum seekers. It is quite clear that in the absence of a tape it will be very difficult indeed, and in many cases impossible, to challenge misunderstandings, unfair or inadequate procedure, or the accuracy of the note taken on behalf of the interviewer.
We have reluctantly decided not to challenge the making of this order, but like the noble Lord, Lord Kingsland, we will seek to amend the Asylum and Immigration (Treatment of Claimants, etc) Bill now before your Lordships' House in order to reverse the effect of this order.
Lord Filkin: My Lords, I rise to address the questions raised by both Opposition Benches. If I do not cover them all, I shall drop a line to noble Lords setting out further thoughts on the questions.
The noble Lord, Lord Kingsland, set out the challenge which the noble Lord, Lord Goodhart, echoed, seeking to change the Bill that we will consider on a subsequent occasion, to make available, if justified, qualified lawyers, at the initial interview. That is exactly what the Government believe that this order does. Where there is a representative in the exceptional cases, which are about a third of all cases, he will be a qualified person, rather than unqualified. The debate will therefore turn on when it is justified. We will perhaps leave that to a later date.
Lord Phillips of Sudbury: My Lords, I am most grateful to the Minister for giving way and I am sorry to interrupt at the beginning of his speech, but will he accept that the exceptions that the Government are providing for in the order do not cover the classes of case that my noble friend has enunciated: torture, rape and a myriad others.
Lord Filkin: My Lords, with the greatest of courtesy to the noble Lord, Lord Phillips, if he will give me a little space I shall do my best to address all of the issues
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that have been raised. Please do not assume that when I have not covered them all in the first 30 seconds, I shall not do so. Please come to your feet, as I am sure that you will, at the end on those that I have forgotten, which I am bound to do.
The first point, in response to the noble Lord, Lord Kingsland, is that written evidence submitted by the applicant for refuge, which is a fundamentally important part of the process and is submitted to the Home Office official, usually benefits from specialist legal advice that is funded under the system and will continue to be. So the submission of the case as to why asylum should be granted will benefit from that advice.
Secondly, the applicant will he given a copy of the transcript at the end of the interview. He will have what the caseworker recorded. Therefore, he is in a position to take it away and to discuss it with his adviser and, if he feels it appropriate, to raise a challenge on that.
The noble Lord, Lord Kingsland, argued that the presence of a qualified lawyer was vital for justice to he done. I do not wish to engage at length with the noble Lord on this matter, but that is not the present situation. It is not happening now and I do believe that we have seen evidence that it has led to injustice.
The case for an increase in successful appeals has also been referred to by the noble Lord, Lord Kingsland, and others. It has been considered as part of these measures. We would be foolish if we believed that that was the case, partly because there is already a high proportion of appeals against decisions and therefore an appeal process is engaged. Clearly, a person who is appealing is not doing so twice through the same process. However, I have said, and I repeat, that it is important for the system to be monitored closely to see how it works in practice, because governments can make what they believe to be wise prospective moves, but they have to be tested in practice to see how they operate.
There are very few formal complaints against the initial interview. I must emphasise that even after the changes are implemented we will have a system of legal aid and advice to asylum applicants that is greater than that operated by the vast majority of other European countries under ECHR. That does not mean that we are perfect, but it does not mean that there is a self-evident case that we are failing in our responsibilities.
The noble Lord, Lord Phillips of Sudbury, said that the Legal Services Commission has no front line experience. The nationality, immigration and asylum team that oversees the system is staffed and led mainly by immigration lawyers recruited from firms. So the noble Lord's assertion was somewhat harsh.
It is difficult for me to comment on the briefing by the Refugee Legal Centre, because I have not seen it. It would do me good to read it and I will ask officials to see whether we can trace a copy. I also agree with the noble Lord, Lord Phillips, that the first interview with an immigration officer is a crucial factual ground. It is fundamentally important to have the facts of the applicant's case clearly set out and established as early as possible in the process. The noble Lord,

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Lord Avebury, may have made a similar point. I totally agree with him on that and it is what a skilled interviewer seeks to do.
I have just been given the Refugee Legal Centre's advice to read, but I shall resist that temptation as it might delay the House.
I was saying that it is important to set out the facts of a case as early as possible so that the evidence of the case is there and considered. I have partly touched on the written representations that have already been submitted by an applicant as part of that.
The noble Lord, Lord Phillips, gave a list—conduct, failure to follow up the use of technical terms, interpretation, inaccuracy of the record, failure to record demeanour—of reasons why there was concern that the process might be at risk or flawed. I would not argue that there will automatically be no risk at all. There is risk in any system, but one would expect that a person who had undergone an interview with a Home Office official would be asked by their adviser whether they felt that the process had been fair, whether they felt that they had been listened to, and whether they felt that they had been given the opportunity to express their evidence. If they felt that the process was flawed a complaint could be made; or if they felt that there was evidence that had not been accurately reflected in the note, there would be an opportunity for further submissions or representations to be made.
It has been argued that it is not comparable to a criminal procedure and that is true. But it is not a criminal procedure. I do not expect this to be welcomed, but I suggest that the system we are proposing is better than the status quo. Under the current system, as I believe has been accepted, in most cases one has present an unqualified person, a legal clerk. Under the system that we are introducing by this regulation, in the cases where it most matters, there will be a qualified lawyer present who has qualifications and skills in asylum matters. That is reinforced by the fact that we are bringing in an accreditation scheme which will ensure that we have qualified legal practitioners. I believe that there is a general welcome for that provision throughout the House.
Clearly, if as a consequence of the process the applicant or the adviser believes that the claim has not been given proper consideration or the outcome or the decision is inappropriate, there is the right of appeal. I have touched on the argument about it being self-defeating on costs because of more appeals. The noble Lord, Lord Phillips, signalled that the appeals themselves might be longer if there was a substantial amount of debate about the accuracy of the statement. That is one of the issues we should bear in mind and monitor as we see how it works out. If the noble Lord is right, that will be a cause for concern.
Lord Kingsland: My Lords, I am most grateful to the noble Lord for giving way. How does he envisage that the monitoring will take place?
Lord Filkin: My Lords, both the Department for Constitutional Affairs and the Home Office have a
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joint interest in the monitoring process. I envisage that it will be active monitoring from the beginning of the process. One would expect any system of monitoring to try to identify what were the criteria of a system working well or poorly. One would have to have some explicit criteria for evaluating any scheme which would include any increase in complaints against the interview, an increase in appeals as a consequence or an increase in disputes at appeal stage. That was touched on by the noble Lord, Lord Phillips. Those would be some of the criteria, but there would be others.
I would expect such a system to have explicit criteria. There should be a process of gathering evidence, either by sample or spot checks, over a period of time so that informed judgments could be made as to whether it was working. That would he necessary to have an effective monitoring system.
Earl Russell: My Lords, in judging the system by the presence or absence of complaint, is the Minister making adequate allowance for the overwhelming pressure on the applicant to please the people on whom the whole of his future rests?
Lord Filkin: My Lords, no. I shall never take the view that any public service function can be judged simply by whether there are complaints, for self-evident reasons. That is one of the criteria that one should look at, and there are others. I was seeking to sketch some of the criteria which I believe would be relevant, and there will be others.
The noble Lord, Lord Phillips of Sudbury, used the term "shysters". I am not sure that I can spell it, but I know exactly what he means. We are optimistic that those legal representatives or firms who did not appear to uphold good standards of practice in this crucially important area of law, advice and practice will be removed by the process of accreditation. I believe we have taken appropriate steps. I believe that has been well recognised and welcomed by most specialists in the field as it is important that there are high quality legal advisers. Bad quality legal advisers discredit the system, which is against the interests of the applicant as well.
The noble Earl, Lord Russell, is right to remind us that genuine asylum seekers risk life if they are returned to a place where they are at genuine risk. That is why we have to be thoughtful and conscious of the interests of justice and that there are adequate appeal processes.
I do not believe that it is on that issue that we shall see injustices significantly hinge for the following reason. As the House knows, the role of the unqualified clerk in these interviews is essentially a silent and a passive one. He is not an active participant in the process. He sits there, listens and perhaps makes notes. He does not actively intervene.
I turn to the issue of poor quality initial decisions. It is undoubtedly correct that IND has recognised the importance of improving the quality of its initial decisions. Much work has been done on that in the

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past two years. The significant reduction in the number of applicants coming into the country for asylum also gives them greater scope to concentrate on raising the quality of decisions and ensuring that the quality of staff carrying out interviews and taking initial decisions is as high as we would expect.
The noble Earl, Lord Russell, touched on wrong advice. Clearly there have been occasions when, certainly with the benefit of hindsight, one has seen a lag between advice catching up with reality. If I recollect correctly, some of the measures that were put in place under the 2002 Act concerning independent country advice processes are intended to try to ensure that such situations are utterly exceptional.
Comments were made about the level of exceptions. That is one of the issues that will need to be kept under review. What one is asking applicants to do is, essentially, to tell their story. One is asking no more than that. One is asking them to tell what happened to them, why they consider it is unsafe for them to be in the country from which they came and why they are at risk. That is essentially what a good interviewer does. He or she does not try to catch them out but to hear their story and then, by further probing, to see whether the veracity of the story can be tested and whether it constitutes a well made case. An interviewer who seeks not to put an applicant at ease and seeks to make it difficult for him or her to debate their case, is clearly a had interviewer. One would hope that the quality assurance processes in IND would increasingly weed out any such interviewers.
Where a client is suffering mental incapacity as a result of torture, interview attendants will be permitted under the arrangements that we have discussed. I can perhaps go slightly further on that point. I have not pleased the noble Lord, Lord Avebury, by what I have said on that ut essentially the judgment on mental incapacity will be made in practice by the solicitor who is interviewing the person. He or she will clearly have a professional obligation to exercise that judgment in accordance with the regulations but nevertheless they have the freedom to make that decision themselves and therefore to make an application for exception on that count.
Lord Avebury: My Lords, I asked the Minister to tell the House whether he had taken any advice from the organisations concerned with mental health on the threshold which has to be attained before someone falls into the exception category.
Lord Filkin: My Lords, I assure the noble Lord that that matter is covered in my rather extensive pile of briefing notes. However, I turn to it now. We certainly consulted a whole range of organisations, including mental health organisations, about the general changes to the process. We have not consulted specialist mental health organisations on the specific definition of -mental incapacity", which I believe was the question that the noble Lord asked.
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The noble Earl, Lord Russell, asked about Article 6·1 of ECHR. As I said in my opening remarks, we have taken advice and I made the statement that we are compliant with ECHR. I could say more but I think that it would be more helpful to write to the noble Earl giving further detail rather than ad libbing at this point in time.
A number of noble Lords touched on the issue of people who are particularly vulnerable; for example, victims of torture, illiterate applicants, traumatised victims and mentally disturbed applicants. The IND guidance on interviewees requires particular care to be taken in those circumstances and is explicit in that respect. It sets out how the interviewer has a duty to try to work to ensure that they are put at ease. Again, because time is limited, I will be pleased to write to the noble Lord, Lord Avebury, setting out what is expected of interviewers in those respects as part of their casework guidance and training.
On the issue of whether criminal interviewees get legal aid, the asylum interview is a civil fact-finding interview and the representative—normally a clerk—is not able to play the same role as in a criminal interview. The representative can still make representations after the interview if issues arise or are thought to have arisen in the process.
As regards tape-recording—again I think that point was raised by the noble Lord, Lord Avebury, correct me if I am wrong—the noble Lord is right. It was last costed, I think, in 1999 when it was estimated at about £8 million, plus running costs of £1.2 million. I would have to check what the level of asylum intake was at that point, because I think we have probably gone up from then and then down. I do not know whether we are at the same point as we were in 1999, but I am certain that I can give the noble Lord a rough figure as to whether we are still in the same ball park on costs.
The further point as to why we do not believe tape-recording would be desirable or necessary is that a written transcript still needs to be produced. The processes of recording, translating and transcribing would delay the decision-making process. I studied that in 1998 and the evidence of a feasibility study suggested that some asylum applicants were less willing to participate when an interview was tape-recorded, leading to a rise in non-compliance refusals. I share with the House what we know of that process. Nevertheless, I will do a further note on that so that we touch on some of those costing points in that respect.
On the question of who decides which category if any applies as an exception, the lawyer will make the decision. Lawyers operate under codes of practice; they will be expected to make that decision in accordance with the law. Nevertheless, I think that gives some measure of discretion in this instance in perhaps the way that would have been hoped, so that one is not driving a cruelly hard dividing line.
I have touched on the different view of a number of appeals, but again I will signal that we need to monitor that. It is important that we make two matters clear. First, that we are convinced, for the reasons that I set out, that this is a necessary and reasonable step which

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will not compromise justice. But, secondly, that we will look at the points that have been made in this debate and try to ensure that they inform the monitoring that I have affirmed, because these are issues of justice, issues of importance, and we have to try to do two things at once: to make effective use of public money
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so as not have a wasteful asylum process, but also to try to ensure that justice is done to asylum applicants in our society. I commend the regulations to the House.
On Question, Motion agreed to.
House adjourned at seventeen minutes before ten o'clock.

Official Report of the Grand Committee on the

  Horserace Betting and Olympic Lottery Bill
  (First Day)
  The Committee met at half past three of the clock.
  [The Deputy Chairman of Committees (Lord Geddes) in the Chair.]
  The Deputy Chairman of Committees (Lord Geddes): Before I put the Question that the Title be postponed, perhaps I may remind the Committee about two points of procedure: noble Lords will speak standing and the House has agreed that there shall be no Divisions in a Grand Committee. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
  Title postponed.
  Clause 1 [Dissolution of the Tote]:
  Lord Moynihan moved Amendment No. 1:
  Page 1, line 8, at end insert "and must not be made unless a draft of the statutory instrument containing the order has been laid before Parliament and approved by a resolution of each House"
  The noble Lord said: Before I address the Committee on Amendment No. 1, in keeping with my previous incarnation in another place, perhaps I may welcome the noble Lord, Lord Geddes, to the Chair.
  The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): We normally do not do that.
  Lord Moynihan: I know we do not. But I intend to do so because I think it is an excellent tradition. It is one of the few that we can learn from another place. It reflects good manners, which are common throughout proceedings in this House, and is a recognition of the time that the noble Lord is giving us this afternoon.
  In speaking to the amendment, I say straightaway that the Bill before the Committee, regrettably, does not go as far as we would like in laying out the detailed provisions that Parliament requires not only for the nationalisation of the Tote but for the valuation and subsequent privatisation of the Tote. The purpose of the amendment is to ensure that Parliament has the opportunity to approve the decision to nationalise the Tote.
  It is there because the Bill does nothing more than nationalise the Tote. It stops as a classic, old-style, old Labour nationalisation measure. I deeply regret that. Our duty is to consider in detail what is on the face on the Bill—but what is on the face of the Bill is not what the Government aspire to for the Tote. The noble Lord, who is an honest, straightforward, competent
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  Minister, will tell us that this is a stepping-stone towards the privatisation of the Tote and yet he is unable to demonstrate anywhere on the face of the Bill that that is in fact the Government's intent.
  Intentions are not commitments if commitments do not warrant legislative force. Without legislative substance, commitments are hollow. They simply remain, at best, wishful thinking; at worst. a whim. Otherwise, why not give powers to privatise on the face of the Bill? Why simply stop with a nationalisation measure? This is a theme to which I shall frequently return for, in many respects, the Bill is a slice of Emmenthal cheese, a threadbare patchwork guilt, and not a comprehensive measure brought forward for Parliament to consider not only the nationalisation but the nationalisation as a precursor, hopefully immediately, to the privatisation of the Tote.
  As it stands, the purpose of Clause I is simply to nationalise the Tote. It can be nationalised and remain in state control ad infinitum. There is no commitment on the face of the legislation to privatisation. If we pass the Bill as it stands, that is potentially exactly what can happen. We understand from the other place and from a whole series of commitments given by Ministers in both Houses that that is not the intention. But, if that is not the intention, let us write onto the face of the Bill exactly what is the Government's intention If we do not do that, we have a duty to ask the Government to come back to Parliament once they have gone through the process of negotiating with the Racing Trust as to the price and the terms necessary in order to ensure privatisation to the Racing Trust. Once that has been done on a fair and equitable basis and in the interests of racing—and this is all about the interests of racing—the Government should return to this House and request its approval.
  As I said on Second Reading. those on the Conservative Benches in another place and we on our Benches in this House welcome the principle of the Bill. We are only concerned that we have to take so much of what the Government intend on trust. I add that if we had always taken on trust what the Government intend on matters sporting, we would have got it sadly wrong.
  I recall only in 2000, the Prime Minister's intention in sport when he announced that he intended that £750 million would be spent within three years on the development of school sport facilities. Three years passed. How much was spent? Only £8·5 million of a manifesto commitment, backed by an announcement in the year 2000. to support school sport to the tune of £750 million. That was a hollow intent. As much as I understand, recognise and respect that Ministers have stated that their intention is to privatise, the Bill before us is a nationalisation measure and nothing further.
  It may be helpful if I place those comments in the context of the most recent statement from the chairman of the Tote who, in the recent annual report, stated that the 12 months covered by that report may best be described as a roller-coaster year. That is a

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  minor understatement, given what is in the Bill, especially in Clause 1. The chairman was right to focus on what is critically important when he stated:
  "The status of the Tote as a statutory corporation created by Act of Parliament is relatively unusual in that no one actually owns the Tote. The first stage of the legislative process will be for the Government to take the Tote into public ownership. It is clear, therefore, that the starting point for the price to be paid by Government is nothing and not full market value as some commentators would suggest. Government has never provided any funding for the Tote, nor has it ever guaranteed or provided the Tote with loans. Equally. Government has not received any money from the Tote other than standard company taxation".
  Yet in Clause 1, we have a proposal to nationalise the Tote and to pay nothing for it—to pay nothing at all to the Tote and, through the Tote, to racing—in recognition of the fact that the Tote has real and significant value. Indeed, it has so much value that the Government will argue that when they have nationalised it—although that word is to be found nowhere in the Bill—they then want to sell it back to the Racing Trust for a significant sum. If it is 50 per cent of £160 million, it will have been valued at £80 million.
  Whatever the figure, it is not to be found in Clause 1, which concerns nationalising the Tote. The Government want to nationalise the Tote and pay nothing in compensation or recognition of the value of the Tote, although they recognise—although this is nowhere to be found in the Bill—at a later stage that it has real value by insisting that the Racing Trust or the successor body pays to acquire it.
  None of the detail is in the clause. It simply nationalises one of the most successful Totalisers in the world, one of the most successful businesses in racing, admirably led by Peter Jones, superbly assisted by a first-rate board, to which we will return later, helped no end by the excellent work of the noble Lord, Lord Lipsey, when a member of the Tote and in a seamless transition, I hope, to play a significant future role in the Tote's work. It is a great pity that the Government simply ask our support, permission and backing to nationalise that entity without any recognition of its value and do not intend to return to Parliament when they have had the opportunity to enter detailed negotiations and reach what will hopefully be a satisfactory resolution in the interests of racing to gain the approval of this House.
  The purpose of the amendment is to ensure that when the Government finally decide to nationalise the Tote, they will have had time to work with the Racing Trust to ensure continuity in the interests of racing and that they will not, as they can under the Bill, sell it to Ladbrokes or whatever they please or, indeed, not sell it at all and retain it within Government as a nationalised industry.
  I would argue that none of those objectives would be anything like as beneficial to the interests of racing as to satisfactorily conclude negotiations with "the" shadow Racing Trust, not "a" racing trust, which was frequently referred to by the Minister in another place. Once the Government have concluded those negotiations, they should return to your Lordships'
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  House and seek, through approval of both Houses of Parliament, a timetabled programme both to nationalise and subsequently to privatise. I believe that that is an eminently sensible suggestion. I trust that the Minister will respond accordingly. I beg to move.
  Viscount Astor: First, I apologise that I was unable to be at Second Reading; I was abroad. As some Members of the Committee know, I have had a longstanding interest in the Tote. Some years ago, I produced a Bill that sought to privatise the Tote and pass it to racing, which had a few interesting results. It made the Government concentrate on the issue. It made racing consider the value of the Tote. I think that it caused a great deal of chaos among members of the Tote board. They regarded it as a rather dangerous step from someone on the Back-Benches because they thought that it might ruin the rather cosy relationship that they were trying to build with the department at the time. However, that is history. The Tote board seems to have come around to agreeing that the Tote would be better under racing.
  The amendment is important. The Bill nationalises the Tote. It does not give anything to anyone. I do not want to raise the argument about who owns the Tote particularly. I have always agreed with the noble Viscount, Lord Falkland. who said at Second Reading that the Tote is rather like the TSB and its depositors. I rather wish that I had had time today to place a bet on the Tote, so that I could turn up today and say, "Actually, I regard myself as an owner of the Tote". I think that anyone who has a bet with it is probably classified as an owner at the time.
  The Government and the Minister in another place said that they fully intend that the Tote should go to racing. But they have scrupulously avoided giving any thoughts to the price, the terms and so forth. There is nothing in the Bill. While I would always accept any assurances that the noble Lord, Lord McIntosh, gives, I am never fully prepared to accept the assurances of the Treasury. which has always had a different agenda. We know that there has been arguments between—as there always is in these matters—the Treasury and the noble Lord's department. I know that the Minister will bat away on behalf of his department and racing when it comes to those negotiations.
  The amendment gives the Minister an extra bullet in his defence to try out the Treasury should it be necessary. Everyone knows that at some point this has to come back to Parliament for approval. That is important.
  3.45 p.m.
  Lord McIntosh of Haringey: Like the noble Viscount, Lord Astor, I apologise to the Grand Committee for the fact that I was unable to be present at Second Reading. I, too, was abroad. But my sorrow at not being present at Second Reading has been diminished by the excellent Second Reading speech that the noble Lord, Lord Moynihan, has given to the Committee. It had nothing to do with his amendment but it was a good piece of rhetoric and I admire him for it.

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  Unfortunately, it is my duty as the Minister responsible for the Bill in this House to respond to the amendment rather than to the speech because that is what is before us. I shall do my best to do that.
  This is one of several amendments that the Opposition have tabled to bring the Government back to Parliament for further approval before various parts of the Bill can be implemented. I understand their motives, which the noble Lord, Lord Moynihan, has made very clear, but I cannot accept that further parliamentary approval is necessary before the Government proceed with the dissolution of the Tote, which is the subject of Clause 1.
  By the way, we are not talking about nationalisation of the Tote; the Tote is already nationalised. It was set up in 1928 as a body that is effectively controlled by government through the power to appoint the board. It is a non-departmental public body and therefore a body in the public sector. When the noble Lord, Lord Moynihan, says that there is no reference in the Bill to the powers to privatise, I can assume only that he has not read Clause 5. That is a bit odd, as he proposes to oppose the Question that Clause 5 stand part of the Bill.
  The Bill makes provision for dissolution to take place on an appointed day, and for that appointment to be made by statutory instrument without any private parliamentary procedure. That is not unusual in the circumstances. If it had been unusual or in any way controversial, the Delegated Powers and Regulatory Reform Committee, under the noble Lord, Lord Dahrendorf, would have commented to that effect. It is a perfectly normal and appropriate way to proceed; it is not even as though the Government could proceed with the appointed day without anyone knowing, because Clause 3(9) would require the Secretary of State to,
  "consult the Board and the successor company before appointing the appointed day".
  As I said, the amendment is one of a number that would require the Government to return to Parliament during the process of selling the Tote set out in the Bill. Without making a Second Reading speech, I shall address the general points underlining the amendments. It has been suggested that our reluctance to come back to Parliament for further approval before proceeding with a sale to a non-racing buyer gives the Government an unfair advantage in our negotiations with the Racing Trust. I cannot accept that that is the case. The Government did not have to identify the Racing Trust as the preferred buyer. If our intention had been to seek the maximum possible return from the sale of the Tote, we would have adopted a different strategy altogether.
  The Bill as drafted is completely neutral. It puts both sides in the same position when negotiations begin. Any amendment that committed the Government to a set price or model—such as a 50 per cent discount, which is the subject of a later, related amendment—must by definition unfairly strengthen the position of the other side, the Racing Trust, in negotiations. I am more than happy to say again that we will adopt a transparent approach to the pricing of the Tote. The
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  noble Viscount, Lord Astor, seemed to think that we had given no thought to the price. I assure him—it is well known—that we of course took advice on the pricing of the Tote. The Tote and the Racing Trust themselves took advice. We are a good deal further forward than some people are prepared to accept.
  The transparent approach will be based on the valuations undertaken both by our advisers and by those working for the Racing Trust. It is well known that a 50:50 split will broadly be the starting point for negotiations, but such commercial transactions are never cut and dried. Our commitment to a sale to the Racing Trust has manifested itself in deeds rather than words alone, and I ask that we be judged on that.
  There have been suggestions that we have some ulterior motive to pull the rug from under the feet of the Racing Trust; that is what is implied in the accusation by the noble Lord, Lord Moynihan. that this is only a nationalisation Bill. No one who looked at the evidence could concur with that. Let me give a few examples. Sale to the Racing Trust is a manifesto commitment. We worked over a long period with the Tote, the Racing Trust and the racing industry to bring the sale about. We laboured long and hard within the Government to gain agreement to a seven-year exclusive licence that we intend will be issued only if there is a sale to racing. We set up project groups to begin preparations for the sale. A dedicated liaison group is made up of officials and representatives of the Racing Trust and the Tote, and its first meeting will be before the end of next month.
  It has been said both here and in the Commons that we have brought forward the Bill and sought support for it on the basis that it is there only to enable a sale to racing to take place. Indeed, the noble Lord, Lord Moynihan, said just that. I am disappointed if that is the impression that has been given, because we have never said that. Let me make it very clear: we seek Parliament's approval for this part of the Bill on the basis that it will empower the Secretary of State to sell the Tote. Having said that, we are completely focused on the longstanding strategy of selling the Tote to racing. That is not, and cannot be, our only option.
  We have been open with the Racing Trust about process and what will be required, but it will have to meet us halfway. We want a fair price for our share of the Tote. That must be right, but beyond that we have never been in the business of seeking to squeeze every penny out of the deal. If we were, we would have proposed a quite different sales strategy.
  I apologise for going wide of the amendment. I did so because this and later amendments are inextricably linked. However, I have been talking about amendments that are before the Committee at present, and I have, I hope, given a suitable answer to this amendment.
  Viscount Astor: The Minister said that this was not a nationalisation because in effect the Government owned the Tote by virtue of the Home Secretary's having the power of appointment. Does he accept that, when the Tote was set up in 1928, the Home Secretary had the power to appoint the chairman, with one

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  member of the board to be appointed by the Home Department, one by the Secretary of State for Scotland, one by the Minister of Agriculture and Fisheries and one by the Chancellor of the Exchequer? But out of the other members, three were appointed by the Jockey Club, two by the National Hunt Committee, one by the Racecourse Association and one by the Committee of Tattersalls. At that stage, the Government were in a minority, so it has always been my view that the Home Secretary may have had the power to appoint the chairman but has never formally controlled the Tote.
  Lord McIntosh of Haringey: It is a non-departmental public body and is classified as such in the national accounts. It is certainly true that there is doubt whether it would be possible to sell the Tote by ministerial action alone; that is why we have come to Parliament instead.
  Viscount Astor: I am grateful to the Minister for acknowledging that there is a grey area regarding the Government's ownership of the Tote.
  Lord Lipsey: Is the Minister contending that, because something is classified in the national accounts, that determines its status? He will have read the opinion of Mr Kerridge QC and his colleague about ownership of the Tote, which cannot be read as sustaining that view at all. I am afraid that the Office for National Statistics does not yet determine the state of law in this country.
  Lord McIntosh of Haringey: I have acknowledged to the noble Viscount, Lord Astor, that there is a grey area, which is why we are coming to Parliament rather than taking ministerial action.
  Viscount Falkland: We are seeing the rare machinery of a transfer from a non-departmental body, as the Minister has correctly described it, to the private sector for a consideration. What he said is interesting. I am not sure whether, even now, we are discussing what is in the amendment—perhaps I will be corrected on that.
  I do not intend to make a Second Reading speech, but everybody in racing is concerned about what will be the likely consideration. I took the Minister to be saying that we are looking at a normal commercial transaction. That would be a simple matter: you would put a value on the Tote—which should not be too difficult for betting shops and the pool—and other assets that it might hold; you would give a 50 per cent discount, and there would be no problem at all. We are not looking at that; we are looking at a figure that will be plucked from the air by the Treasury, which the department will then argue with or accept and pass on. If the price is too high, the trust will be saddled with a burden that it cannot bear. That would hit very badly at those who contribute to the Tote and those who have done so. In reality, the Tote is owned by those who have contributed to it—the punters of this country—since 1928. I thoroughly approve of the machinery that the Government are putting forward,
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  as I said at Second Reading, but I am not in a position to say whether I support the amendment, because I do not understand how any of the argument so far relates to it.
  Lord McIntosh of Haringey: I did at least begin by responding to the amendment that would bring the matter before Parliament again and I ended on it. I concluded by saying that although the Tote is a public body under the 1963 Act—let me make it clear that I am not departing from that—there could be a query whether the Government were entitled to dispose of it without the approval of Parliament. That is what we are proposing to do. Where I contend with the amendment is that because we are seeking the authority of Parliament for this Act, it is not necessary to include the further reference to Parliament that the amendment proposes.
  Lord Moynihan: I am grateful to the Minister for his reply. I congratulate him on an excellent speech at Second Reading. It covered many of the issues, and indeed more, that I covered in my brief remarks when I spoke to the amendment standing in my name.
  I tabled it because I felt that it was vital that, in the absence of the detail of the privatisation process, the Minister came back to the House with details of what had been agreed. The House could then judge, assess and, if necessary, vote on his words about returning the Tote to racing, because on the face of it, Clause 1 is a nationalisation measure.
  What the Minister said was in stark contrast with Mr George Howarth. He stated on 26 May 1999 that the board was responsible for the assets owned by the Tote, but that the Tote itself was owned by no one. The whole purpose of the Bill is to nationalise that and to ensure that it is owned by the state. That is where the Bill stops. That is precisely the point where it stops. The amendment would allow the Minister and his colleagues to conclude the negotiations—not to intervene in them—and then to return to this House and demonstrate that all the good intentions, which are not evident in the Bill, have been satisfied. They would then seek permission from Parliament to move forward with the privatisation of the Tote to the shadow Racing Trust in the interests of racing. That is very clear. That is precisely what my amendment would achieve. I regret that the Minister believes that the Tote is already owned by the Government.
  Lord McIntosh of Haringey: I did not say that the Government owned the Tote. I said that it was a public body and that it was therefore inappropriate to describe it as being nationalised by Clause I. The Betting, Gaming and Lotteries Act 1963 makes it clear that all of the board, not a part of it as in 1928, is appointed by the Secretary of State—as we would now say—rather than referring to individual Ministers. Since it was not possible for me to claim that the Government owned the Tote, I admitted a grey area and said that it was appropriate that we should come to Parliament, as we are doing, to dispose of it.
  Lord Moynihan: I have to disagree with the Minister. There is no grey area. The Tote is owned by no one. For it to be privatised, I fully appreciate that the Government believe that they need to bring forward primary legislation in order, first, to nationalise it, then to negotiate its sale and then, one hopes, to return it to the interests of racing through an agreed, negotiated sale to the Racing Trust. Unless they come back to this House, the Bill allows them to nationalise the Tote and do nothing further. There is no time limit or price; no successor body is identified. A panoply of clauses is connected with the Government's ownership of the Tote.
  The Minister referred to Clause 5, but however good the intentions, nothing can be done without Treasury approval. Clause 5(6) and (7) make it very clear and explicit that the Treasury has to approve this. Whatever the good intentions of the Minister for sport in another place and of the Minister here, I have to say that my confidence in the aspirations of Ministers for sport as opposed to my knowledge of how the Treasury can react is such that I would wish to press this amendment at a later stage of our consideration of the Bill. However, for today I am happy to
  Lord McIntosh of Haringey: Before the noble Lord, Lord Moynihan, withdraws the amendment, can I respond very specifically to the claim that in not specifying the Racing Trust on the face of the Bill, this is something unusual or unprecedented. I say that because there are a number of precedents for the same procedure. Indeed, the noble Viscount, Lord Falkland, was good enough to say that he supported this way of proceeding. Precedents have been set under governments of both political persuasions. Paragraph 14 of Schedule 2 to the Atomic Energy Act 1995 provided for exactly this sort of procedure, as did paragraph 15 of Part 2 of Schedule 2 to the Commonwealth Development Act 1999—which I had the honour of taking through this House—as did Section 80 of the Postal Services Act 2000. It is not unprecedented for governments to put in legislation the first stage of a process but, for good reasons on which I can expand, not putting in the next stage, rather making clear their intention. Here, this is not only an intention; as far as we are concerned it is a manifesto commitment.
  4 p.m.
  Lord Wakeham: I have come here really to listen to the Minister's commitment. If I were in his position I, too, would be resisting this proposal. However, it is very important for racing that we get this right. I took it that while the Acts the Minister cited to my noble friend indicate a number of precedents, in each one of those, so far as I can recall—I have not yet had a chance to look at them—the end buyer was not the Racing Trust, as everyone intended it to be in this case. In those other cases, the Government quite rightly took powers to make disposals, but they had an open mind about to whom they would make them. We are concerned most about the commitment to the Racing Trust.
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  Personally, I would not seek to persuade the Minister necessarily to accept this amendment, but I am concerned about the commitment to the Racing Trust. I want to hear that commitment voiced loud and clear. That would satisfy me that we are going in the right direction.
  Viscount Astor: My noble friend has made the same point that I was about to raise. However, I shall go a little further and say that the reason why the commitment is so important, and the reason why I support the amendment moved by my noble friend is that in most cases, in privatisation the aim has been for the Treasury to secure the best deal for the taxpayer; that is, the most suitable body paying the most money which is the most capable of running the business. That does not necessarily mean the highest bid because other factors must be taken into consideration. But, as I have said, the aim has always been to get the best value for the taxpayer.
  This case is entirely different. We all know that the value the Government could realise by putting the Tote on the open market is vastly in excess of whatever a racing trust might stand—three or four times. or perhaps even more than that. Therefore this is a very different process. I would support the Minister completely if he were going through with a simple nationalisation and seeking a sale. However, that is not what he is doing. The Government have given a commitment that the Tote will go to the Racing Trust and I accept that.
  But the devil is always in the detail, and the detail here is going to be the price. It will not be the market price because we will not find two people who agree on it; rather, it will be an artificial price. On the one hand the Racing Trust will have to decide what it can afford to pay without strapping itself into such a financial straitjacket that it can no longer contribute to the benefit of racing, while on the other hand the Treasury will want to secure best value. That is why the amendment is so important. This is a different scenario from the precedents just mentioned by the Minister.
  Lord McIntosh of Haringey: I was in fact too precise in my references to earlier legislation, because I was referring to one aspect of the two-stage process, which was the appointment of shadow directors. I apologise for being too precise on that point, but the fundamental point remains the same. We are transferring a corporation into a company and then selling the shares. The noble Viscount, Lord Astor, is of course entirely right to say that we do not specify the Racing Trust or the price in the Bill. No doubt there will be debate on those points when we reach the relevant amendments.
  Viscount Falkland: It will be revealed on close examination of Hansard that there is a basic difference between the Minister and the noble Lord, Lord Moynihan. For clarification, it may be helpful if the Minister would say a few more words about it. That is, the Minister says, if I understood him, that to be a non-departmental public body—within the responsibility of government although operating in the strange way

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  that it does—it is de facto a nationalised company. The noble Lord, Lord Moynihan, said that in no way did he agree with that. It would be helpful for the Committee if we could have that cleared up.
  Lord McIntosh of Haringey: I did not say that it was a nationalised company or owned by the Government; I said that under the 1963 Act the Secretary of State is responsible for appointing all the directors of the Tote and that therefore it is a non-departmental public body, but a public body. It is therefore inappropriate to say, as the noble Lord, Lord Moynihan, was saying, that what we are doing is nationalising it.
  Lord Moynihan: If ever there was a non-sequitur. I am grateful to the Minister because he is answering a whole range of questions. Perhaps I may pick up on the invaluable intervention of my noble friend Lord Wakeham, not least because in the panoply of historical precedent that has been given to the Committee by the Minister, the one on which he might have best focused was the case raised by my noble friend at Second Reading. That was the 1985 Trustee Savings Bank Act. The format used for that, which was to privatise at zero profit to the Treasury, was legislation that restructured the TSB. The Government knew what existed, where it sought to go, and sought Parliament's approval to go down that road.
  We know where we are today with the Bill, we have promises about where the Government want to go—but they are airy commitments; they are not in the Bill—but, unlike the process of restructuring the TSB, which would make a first-rate precedent for what we are attempting to do today, we are going down a nationalisation route with no commitment, as was just said again by the Minister when he stated that he was not specifying that it will be sold to a racing trust. Can the Minister tell us whether it would be perfectly legitimate, should the Treasury and the Government so wish, for the Bill to be used for the sale of the Tote to Ladbrokes at a price to be determined by negotiation? Would that be possible under the Bill?
  Lord McIntosh of Haringey: I have said that it is our intention to sell the Tote to the Racing Trust. What I have not said is that we are content for that to be written into the Bill. But it is our intention to sell the Tote to the Racing Trust.
  Lord Moynihan: I appreciate that, but I seek to assist the Committee and myself in understanding the Government's position. In fairness, that was not the question that I asked. The question that I asked was: under the Bill, would it be possible for the Government, after consideration and following its enactment, either to retain ownership of the Tote within the new structure as a nationalised industry for as long as they want or to sell it to whomever they so wished at whatever price they so wished? Would that be possible? I think that the Minister knows that the answer to that is "Yes"—I shall not urge him to rise to his feet other than to confirm that I am wrong—and that is how I understand the Bill to be drafted.
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  I repeat, whatever the good intentions, the job of legislators is to look at legislation for Parliament. Those commitments, however benign, however well intentioned, may mean nothing in six weeks' time or six years' time. If it is the absolute desire and absolute intent of the Government to nationalise the Tote in order then to privatise it and sell it in the interests of racing to the Racing Trust, which exists in shadow form, then why not place it on the face of the Bill? Or why not take the legislation away, review the TSB model, which is an excellent model, and reintroduce a Bill which allows for a restructuring of the Tote so that it can then be returned to the Racing Trust in the best interests of racing? If it is so much the intent of the Government to do this, why should not it be written on the face of the Bill rather than leaving open the prospect, which could happen in the future, of it being sold to whomever, at whatever price, at whatever time?
  Lord McIntosh of Haringey: The noble Lord knows very well the answer to his question: we are not going to get a better deal than the seven-year exclusive licence for the Racing Trust. The literal answer to his question is that if we cannot sell the Tote to the Racing Trust we shall have to find a means of recognising racing's share in some way. But I think he will recognise that our commitment to racing's share in this is not in doubt.
  Lord Moynihan: Once again I am grateful to the Minister. I shall be covering some of this ground, hopefully, when I oppose the Question as to whether Clause 1 should stand part of the Bill. I simply conclude my remarks on this nationalisation clause by reminding the Committee that the Government have never provided any funding for the Tote, nor have they ever guaranteed or provided the Tote with loans. This surely should be an overt restructuring of the Tote in the best interests of racing. To achieve that, we do not need to leave the legislation so open-ended, nor should Parliament be required to pass legislation which, frankly, goes nowhere near the good intentions stated by the Minister and his colleagues in another place. With that very real concern, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  4.15 p.m.
  On Question, Whether Clause 1 shall stand part of the Bill?
  Lord Moynihan: I am in danger of a mild repetition. If that should be the case, I sincerely apologise. I shall try to restrict my comments on clause stand part to issues that I have not raised previously.
  The key issue is the flip side of the coin. My purpose in opposing Clause 1 is because nothing in the Bill commits the Government to privatise the Tote. It is important to lay out the Government's position as stated in another place and, indeed, touched on by the Minister today. In the other place, the Minister stated:
  "A series of commercial negotiations is necessary that can determine the survival and development of the Tote. It is far better to leave that to a commercial negotiation, as long as the government have set out clear parameters".

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  The problem is that there are no clear parameters. And without clear parameters, in my view, it is very difficult to support that Clause 1 stand part of the Bill.
  The Minister in another place further stated:
  "Many commercial considerations will he necessary. The more politicians keep out of those, the better; and the more they are kept out of the Bill, the better".—[Offical Report, Commons Standing Committee D, 20/1/04; col. 10.]
  No one is arguing about contractual terms, debt servicing, pensions arrangements or due diligence. However, we on these Benches are arguing that we need clear parameters within which negotiations can take place with the Racing Trust. I am afraid that I am unable to share the Minister's optimism when I read the Bill before the Committee.
  The Government are asking Parliament to approve the nationalisation of the Tote on five key principles. There is the wing and a prayer that the Government will not unduly interfere with the running of the nationalised Tote. There is an aspiration that the Government will not own the nationalised Tote for too long—although we have no idea of the definition of "too long" in this context. It is not a day, a month or a year as no time limit is specified. There is the promise that it will then be privatised, although that is absent from the legislation. There is the wish that the Racing Trust will buy the Tote but consistent repetition in another place of "a" racing trust puts into doubt whether we are talking about the Racing Trust with which the noble Lord, Lord Lipsey, is so intimately concerned. There is the broad commitment that the price in exchanges will be approximately 50 per cent of the market value if it is sold to a racing trust.
  Those are interesting promises, but we need cast-iron commitment before the Tote is nationalised under the clause. Many Members of the Committee exchanged views on why they are aware of the difficulties governments can sometimes face in fulfilling their promises. I stress that any lack of trust in the Government delivering on their promises is in no way related to the Minister. That point bears repetition.
  It is worth highlighting the comments of the Minister for Sport and Tourism in another place, when again he showed how much we will be taking on trust. He admitted that in the unlikely event that the Government are unable to sell the Tote to a racing trust, we would need to consider how to give the racing industry the benefit of the stake that we acknowledge it has in the Tote. How we do that will depend on the circumstances. The Government will discuss with the industry how best to achieve that.
  That is simply unacceptable. If we are going to move forward with the nationalisation clause—Clause 1—we must recognise that we must move forward with equally strong clauses with regard to the mechanism for sale and privatisation at a later stage in the Bill. Having read the rest of the Bill, and in the absence of that, I cannot recommend to the Committee that Clause 1 shall stand part of the Bill.
  It is clear that the Government are in danger of making policy on the hoof. It is, frankly, embarrassing that the Government will not commit to sell to the
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  Racing Trust under the chairmanship of the noble Lord, Lord Lipsey, yet have not considered what they will do if they are unable to sell to the Racing Trust or anyone else. It is a shame that the Government are proposing to abolish the Tote, with all its history and its admirable record of returning money to racing without the guilt-edged commitment to what will replace it.
  I accept that in the context of our deliberations, this is a probing question. However, I hope that the Minister will respond by saying that should we keep Clause 1 in the Bill, he will come forward with strongly worded clauses, supporting the privatisation process and the commitment of the sale to the Racing Trust at a later stage.
  Lord Jopling: I, too, apologise for not taking part in the Second Reading of the Bill. I was representing this House at a NATO committee on Moldova, the poorest country in Europe. I have a primary interest in the Bill with regard to Part 3.
  Sitting listening to the discussion, my memory went back to a period 10 years ago when the national lottery was being proposed. I well remember that the football pool companies were in fear and trembling about its implications to the football pool industry. In an attempt to stave off the creation of a national lottery, they created the Football Trust, into which the pools firms promised to put a great deal of money.
  Having heard what the Minister said, it occurs to me that the Racing Trust would have to come a long way in the price it paid in order to acquire the Tote. It seemed clear to me, remembering the way in which the Treasury operates, that if it were a one-horse race between the Government and the Racing Trust, the only group with any interest in hiking up the price would be the Treasury. One can imagine the Treasury dogging the Home Office in insisting that a better price was paid.
  I can envisage the bookmakers seeing an opportunity to create a different kind of Racing Trust on the lines of the Football Trust which I mentioned. The bookmakers must see the Tote as their principal competitor. I look around the room at fellow Members of the Committee and I am confident in the view that I know less about racing and spend less time on race courses than almost anyone in the room. The Minister and I are joined in that. I have never had an account with a bookmaker and I detest betting. Life is full of gambles, without going into it without thinking.
  I can envisage the bookmakers, who I have always thought were an abomination on racing, doing everything they can to forestall a purchase by the Racing Trust of the Tote. I can see clearly that it would be in the interests of the bookmakers to make difficult a sale of the Tote. I hope that in these deliberations the Government will not encourage the bookmakers to create a smokescreen by setting up a pseudo-trust to support racing and then to divert a small proportion of the huge amount of money that that parasitic industry takes out of racing.

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  I hope that the Minister has understood my comments and I shall be interested to hear his.
  Lord McIntosh of Haringey: I should make it clear—I thought that I had done so in response to Amendment No.1—that if we were simply seeking to maximise the return to the taxpayer, we would not be introducing Part 1 of the Bill. We would do that in a different, straightforward way by nationalising—we could use the word used by the noble Lord, Lord Moynihan—the Tote and selling it to the highest bidder and no one could do anything about it.
  However, the noble Lord, Lord Moynihan, is reading Clause 1 by itself. He is not reading the rest of Part 1 in which the whole argument, in so far as it is appropriate to be placed on the face of the Bill, is set out.
  Lord Moynihan: For the sake of the record, it would not simply be a matter for the executive to do that. Any Bill coming forward from the Government would be thrown out by both Houses—I hope that it would be—because there would be no basis for the nationalisation of the industry and sale to the highest bidder without considering the interests of racing. That is the principle behind everything we are considering today and subsequently.
  I pause to remind the Minister that the purpose of the legislature is to consider proposals made by the executive and in that case, I hope that he will agree that the proposal should be thrown out without further consideration.
  Lord McIntosh of Haringey: That is a political statement which the noble Lord, Lord Moynihan, is perfectly entitled to make. Looking at the history of the Tote since 1928, one sees that racing and the taxpayers have been in it together. The Tote was originally set up in 1928 with an exclusive licence to conduct pool betting. Any exclusive licence—as James I or Charles I would have said—can be worth a lot of money if it is properly exploited. Since then, the Tote has been a beneficiary of that exclusive licence, which was conferred on it by Act of Parliament
  The Tote has been able to build its business to the benefit of racing on the back of that exclusivity. When it faced bankruptcy—the noble Lord, Lord Carlisle of Bucklow, will clearly remember, as will the noble Lord, Lord Wakeham—the Government again legislated to enable it to diversify into off-course betting. So the interests of the taxpayers and racing have been involved in the history of the Tote from the beginning.
  Largely for that reason, it is not our intention to sell it off to the highest bidder, regardless of the interests of racing. I do not refer to the interests of betting—that is quite different—but we are talking about the racing industry and that is set out explicitly in the Bill.
  We have said that if we can proceed with the sale to a racing trust—and it is better not to say "the" Racing Trust because "a" racing trust has been set up and it is logically conceivable that there could be another—we
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  will give that racing trust an exclusive licence for seven years. We can debate the terms of that licence when we come to appropriate amendments.
  But the commitment of the Government to protect the interests of taxpayers and racing is without doubt. Clause 1 is the first essential part of that process. If we were in Committee on the Floor of the House and it were successfully moved that Clause 1 should not stand part of the Bill, there would be no Bill.
  Viscount Falkland: Again, anyone reading Hansard would be somewhat mystified after the last exchange. At Second Reading, I said that I had great doubts which were allayed by the noble Lord, Lord Lipsey. I consulted with him at length on the matter following the remarks of the noble Lord, Lord Jopling. It needs to be repeated that the commercial valuation of the Tote relates to the 300 fixed-odds betting shops.
  I did not know how the Government would proceed on the matter or what attitude they would take. I must say that I have been encouraged and heartened by their attitude and I accept the Minister's remarks that his intention, representing the Government, is that the matter should be dealt with entirely for the benefit of racing. Nevertheless, the interests of the bookmakers would be only in the betting shops. Indeed, William Hill has said that it would like to acquire the betting shops.
  One could well take the betting shops out of the deal and sell them separately—and I have been persuaded by the noble Lord, Lord Lipsey, that that would not be a good move because for the future of the Tote it needs the betting shops. He is able to explain the reason for that and he has explained it to me, but it is wide of our present discussion. However, the position needs to be explained so that anyone reading the debate will understand about Tote betting, pool betting, which has a wonderful but somewhat tarnished brand image after the crazy decisions of the Office of Fair Trading about Tote monopolies.
  A view is now widely bandied about by people who seem to know about these things—but I doubt it—that Totes are anti-competitive and therefore it is necessary to have many small pools to compete with one another. Only 22 per cent of the pool turnover, as a constituent part of what is being proposed for sale, is represented by the pool betting. The rest is all betting shops. Therefore, when anyone reading our exchanges is trying to understand what on earth we are talking about, I want to come clean on what it is—although perhaps one cannot in parliamentary circles. It is that the Government have found a clever device—and I congratulate them—for getting the Tote into the private sector, into a trust operated by sensible people for the benefit of racing. The only problem is the amount due to be paid to the Treasury for the pleasure of completing the transfer. That is the doubt that hangs over us all.
  I do not know what conversations the Minister has had with the Treasury or any of his colleagues. He has better experience of the Treasury than I have. But everyone in this room and in the country is waiting agog to know what the Treasury thinks is the proper

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  amount as a consideration for moving the Tote to the trust via the excellent mechanism that the Government have thought up. And I trust them—if that is the right word—absolutely in their intentions.
  Equally, I understand what the noble Lord has said. We live in a world where legislation has to be scrutinised correctly. We must take all the safeguards that we can. I say that only so that those who read this may have some idea of what we are talking about.
  4.30 p.m.
  Lord Donoughue: Perhaps I may follow up on the very valuable contribution made by the noble Viscount, Lord Falkland. The noble Lord, Lord Jopling, put his finger on a central point. The Minister has outlined again and again his personal and departmental commitments. I accept that completely. As the noble Lord said, the problem is the Treasury. How can we accept the commitments if the Treasury is not accepting? People are looking to this Bill to screw the Treasury down.
  The noble Lord, Lord Jopling, mentioned what the bookmakers might do. I do not view them with the hostility with which the noble Lord does. Indeed, for many years they have contributed to the standard of life that I enjoy and have come to take for granted. Although it was not picked up at the time, one leading bookmaker floated the thought that the Tote was worth at least £500 million to them. That is all that it said. Closer to the time, there is nothing to stop it thinking that it might be worth closer to £1 billion.
  My point is that those of us who know the Treasury—there are people here who know it better than I do—know that the mention of such numbers produce in the Treasury the kind of excitements and palpitations that blue films produce in men in raincoats. At that point, the Treasury will start to think that it is being forced to compromise down. It may think, "My God, we could get £1 billion for this, but we are kindly saying that we are willing to take £500 million".
  As the noble Lord, Lord Lipsey, knows, that is not a figure on which the Racing Trust can build a viable business: it would either bust at the beginning or would commit to such debt that it cannot invest in the future. Given that real political situation, I understand that the amendment is trying to pin the Treasury down. Although I consider the Minister a most daunting figure who rightly gets most of what he wants in life, my experience is that dealing with the Treasury, coming from a relatively small department such as the Minister's, is itself a daunting process. I do not think that this is possible other than the way that is being approached through the amendment. Can the Minister tell us how we bring the Treasury in line to accept a figure that is a viable figure for the future of the Tote and the Racing Trust?
  Lord Wakeham: Before the Minister replies, I am probably the only person here who has worked as a Minister in the Treasury. In support of the Minister, the fact is that he is here speaking for the Government. He had jolly well better not say something that will be
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  repudiated by the Treasury tomorrow. There would be an awful lot of trouble if he does that. When I listen with bated breath to the assurances that I want to hear—I think most of us want to hear—I know perfectly well that, as a Minister in the Government. he speaks for the Government. The Treasury had better make sure that he does not say what he should not say.
  Lord Donoughue: While that is true, having served many years in No. 10 my impression was that the Treasury did not always consider itself part of the Government, and certainly did not take statements made by mere Ministers as committing it in anything.
  Viscount Astor: Following the point made by the noble Lord, Lord Donoughue, could the Minister perhaps bear one thing in mind and comment on it. In normal privatisation processes or in normal sales, if I came to buy a business from the noble Lord and we agreed on a price, he would say, "Have you got the money?". It is to be hoped that I would say, "Yes". In this case, the Racing Trust will go along; if it agrees a price, and someone will say, "Have you got the money?". Then it will say, "Of course, we have not got the money". When it walks in the door it will not have any money. It will have to borrow the lot.
  That is the difference. That is what makes it even more different and puts even greater pressure on the whole process. The Racing Trust will not have a penny to its name when it goes into those negotiations. It will borrow 100 per cent of the purchase price. If I came along to the Minister and said, "I would like to buy your house but, unfortunately, I've got to get 100 per cent mortgage", I think that I know what he would say to me.
  Lord McIntosh of Haringey: I do not think that I shall speculate on that possibility. What the noble Viscount, Lord Astor, has just said is evidence of why we cannot spell out the financial terms in the Bill. That is exactly the case. If we were to negotiate a commercial contract across a Committee, we would be in terrible trouble.
  My answer about the Treasury is very simple. If the Treasury had simply wanted to maximise its return—Treasuries have been known to want to maximise their returns—it would never have agreed to the Bill in its present form. In particular, it would never have agreed to the very complex arrangements in Clause 8 about exclusive licences for seven years and all the references to support for racing. Why should it?
  Lord Lipsey: I am grateful to the Minister for giving way because 1 shall tell him why it should. The Treasury will get this Bill through because it knows that no other plan to sell the Tote would work. Without a commitment to sell it to racing, the Government could not produce legislation. If they were merely proposing to privatise the Tote, the legislation would not get through both Houses of Parliament, particularly in the face of the manifesto pledge.
  The fear of those of us who have concerns in this area is precisely that. The Government will get the Bill through on the first basis. On the day that it is passed,

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  they will move over to the second basis, which is the maximisation of return. That is what the Minister is not addressing.
  Lord McIntosh of Haringey: If I were the chairman of the Racing Trust, I would not enter negotiations on those terms. The Government have made very clear the basis on which they are prepared to move towards an exclusive licence for a body that is set up for the benefit of racing, as set out in Clause 8. We have even gone so far as to confirm in a Cabinet decision a figure of 50 per cent. There is no question about our good faith and our ability to adhere to the statements that Ministers have made. It would be unwise for any element that would compromise negotiations to be put in the Bill.
  Viscount Astor: I am grateful to the Minister for giving way. He said something very important, which perhaps he could briefly explain. He described a Cabinet decision of 50 per cent. It would be enormously helpful to the Committee if the Minister could explain to what the 50 per cent refers.
  Lord McIntosh of Haringey: I have already said that I shall not spell that out on the face of the Bill or in Committee a figure for the sale of the Tote. If a figure was to be put in the Bill or if passing the Bill were conditional on a figure that I stated and, for some reason, that were to go wrong, the legislation would be defective.
  Viscount Astor: Obviously, my question was not clear. I was not asking for a figure in terms of an amount of money. The noble Lord referred to 50 per cent. My question is: 50 per cent of what? I do not mean in terms of money, but what does the Minister mean by 50 per cent? What is 100 per cent? In terms of how the Government decide value, what aspects are being considered?
  Lord McIntosh of Haringey: In arriving at a value, we are considering the fact that the Tote is historically a collaboration for the benefit of taxpayers and the racing industry. The figure of 50 per cent recognises that the actual valuation is a matter for professional advice. We are taking professional advice; the trust is taking professional advice. Here, we are referring to 50 per cent of the fair market valuation of the whole business. It would be most imprudent of me to go any further than that.
  If the noble Viscount, Lord Astor, would like me to write to him about the process by which a Cabinet committee reached that decision, I shall gladly do that.
  Baroness Noakes: I was unable to speak at Second Reading. I must declare some interests, which I hope will take me through the whole of the process of the Bill. I am an unpaid independent member of the Racing Trust. I am also interested in the Tote being preserved for racing due to my interest in the four-legged variety, which consume a large amount of my income.
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  I am keen to press the Minister on this 50 per cent of what. The Minister said 50 per cent of market value. If the market value is to be the large figures that we have heard bandied around—the market value to a bookmaker—that may cause a very significant problem. Therefore, it could cause the Government's intent to transfer to a racing trust to fall apart. The value would be unsustainable. That is why it is crucial to understand the entire parameters.
  As drafted, the Bill simply gives the Treasury power to sell. The Treasury is not constrained in any way; it is not constrained by 50 per cent; it is not constrained by 50 per cent of any kind of market value. Therefore, if the Minister can do this from the Dispatch Box, it is extremely important that we pin down the parameters within which it would have to operate.
  Those of us who are concerned to see the effective transfer of the Tote for the benefit of racing have severe concerns that there would be some kind of action taken by others who do not want the Tote to be transferred for the benefit of racing to create the impression of a market value that could derail the process of transfer of the Tote. That is why it is extremely important that we should try to button this down in Committee.
  Lord McIntosh of Haringey: What the noble Baroness, Lady Noakes, has just said shows why it is so important that we do not button down the price or the terms. Of course, it is the price and the terms that matter. Clearly, the Racing Trust, as established, does not have enough money to pay 50 per cent of the fair market value that I described. We are talking about 50 per cent of the fair market value in a sale to a racing trust. We are not talking about a sale on an open market because we have made it clear that that is our first option. That is not the same as the price on the open market.
  The question is: what is a racing trust prepared to pay and able to pay? It will be the combination of a figure and of terms of payment which we will come out with in the end. In practice, we are a very long way towards that agreement, but it is not a matter on which I should comment in Committee. It is not a matter that should be declared in the Bill.
  Viscount Falkland: I think that we have moved significantly forward after the Minister's last remarks. Fifty per cent of the market value is too high for the Racing Trust. The Minister has just referred to what it can afford, but it has no money. It will be servicing a debt that will be to the detriment of racing. That is the crucial point.
  Perhaps the Minister may go further; I am quite encouraged now. I think that the public may be beginning to understand. Can the Minister go a little further and confirm that he is in full realisation, and that there is an inter-departmental realisation, that the trust is not in a position to pay more than £X because if the amount is more than that, the whole exercise will be pointless because no one will have anything of value?
  4.45 p.m.
  Lord McIntosh of Haringey: The phrase that the noble Viscount wishes me to emphasise is, "50 per cent of a fair market value in a sale to a racing trust".
  Viscount Falkland: It is a racing trust with no money.
  Lord McIntosh of Haringey: I do not think that it is strictly true that the Racing Trust has no money. Even so, it is for that exact reason that I am not saying what a figure should be. The negotiations are on a combination of a figure and payment terms. Let us be open: PricewaterhouseCoopers is advising us, and Rothschild is advising the Racing Trust. Do noble Lords think that we should involve ourselves in those negotiations in this Committee or on the face of the Bill? I think not.
  Clause 1 agreed to.
  Clause 2 [Successor company: transfer]:
  Lord Lipsey moved Amendment No. 2:
  Page 1, line 12, at end insert—
  "( ) Any transfer to a successor company other than one whose primary purpose is the improvement and support of horse racing shall not take place unless the transfer is approved by a resolution of each House of Parliament."
  The noble Lord said: I declare an interest, although it is palpable by now, as the chairman-designate of a racing trust, or the Racing Trust—who knows whether it is one or the other? I am puzzled by the debate that we have had. I thought that the matter had been resolved in the Commons, or so it seemed to me as I sat in the Gallery in another place. Precisely the same arguments were put to the Minister's colleague Mr Caborn, the Sports Minister, who dealt with them with the utmost clarity. He stated:
  "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".—[Official Report, Commons, 8/1/04; col. 443.]
  It does not come much clearer than that. You could say that that might mean a totally new Bill—at which, as chair of the shadow Racing Trust, I tremble a bit—or it might require a positive resolution, as the amendment proposes. But it is absolutely clear that the Minister gave a commitment in another place. We shall return to that.
  Unless the Minister says that he has changed his mind since, or that ministerial commitments do not count in this regard, I am not sure why we must debate the matter at this stage. All the Minister has to do is accept the amendment: however, as he does not yet seem minded to do so—I hope that he will after this debate—I wish to speak to it at slightly greater length. Of all the amendments tabled, this is one on which many attitudes to the Bill as a whole will hang.
  I do not think that I need to make the case for the amendment. We need to consider the cases against it that Ministers have made. The first, which was put by the Minister in another place, was that the amendment was unnecessary because the Government would sell the Tote to a racing trust anyway. Not everybody in racing feels confident of that. I have no doubt about
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  the motivation of DCMS; indeed, on my good days, I am prepared to give the Treasury the benefit of the doubt. From the Treasury's point of view, selling the Tote to someone else would result in higher revenue; but, on the other hand, selling to the Racing Trust would achieve the certainty of getting it out of the public sector, which it would dearly like to do. I am therefore prepared to believe that the Treasury is going along with the proposal at present.
  However, there has always been a minority view in government in favour of a different approach—I am perhaps talking more about Treasury officials than anyone else. Their view has been to flog the Tote to the highest bidder and give some of the money to racing to buy it off—we do not know for how much. The idea was not to sell the Tote to racing but to sell just some of it. That is contrary to the Government's manifesto pledge, but the Treasury does not always worry too much about manifesto pledges.
  I believe that the Government still want to sell the Tote to a racing trust, but I cannot say that the Minister gave me as much comfort as I had hoped for today. I heard him say that sale to a racing trust was not the only option, and he talked about the share that racing would get if the Tote were sold to someone else. That shows that the matter has at least been thought about.
  Taking his remarks as a whole—one could perhaps read them as a negotiating position, but I shall come to that shortly—I would not like to lay them before racing and say, "That's clear, isn't it? He really is going ahead to sell it to a racing trust". There was more ambiguity in his remarks than would comfort racing or this House.
  I shall not dwell long on the Government's second argument. The Minister's noble friend used it at Second Reading; namely, that to seek a positive resolution of both Houses would be a waste of Parliament's time. When governments reverse manifesto pledges or go back on everything that Ministers have said, that is precisely the moment at which parliamentary responsibility must bite. I shall return to that later in my remarks.
  The Government's third argument related to their negotiating position. They feel that the amendment would weaken their negotiating position. The absence of my provision would unfairly weaken the negotiating position of the Racing Trust. Any time that they do not like what we say, they can stand up, walk out of the room and say, "Well, we're going to go off and sell to Ladbrokes unless you boys come into line". That is not a fair mode of negotiation. We should be able to say, "Well, if you want to sell to Ladbrokes, you must justify it to the House". If the Government are offering an inadequate price, if they have fallen apart and are not providing good governance, they will be able to justify it to both Houses. That is not a lot to ask. Ministers are very successful in getting their way with both Houses of Parliament, but they must justify it. They cannot just do it as a piece of negotiating bravado.
  Moreover, that argument misunderstands the negotiation that I think I am going into. It is not a negotiation between the private and public sector over who gets how much money, with both sides trying to screw each other—although that does not always work terribly well as the air traffic control negotiations showed. In this negotiation, we are trying to find a fair division of the benefits between racing and the Government, with all the various considerations to make the deal work. It is not push and shove. We are trying to find a way forward that is fair to everyone. In those circumstances, to speak of prejudicing one's negotiating power is an entirely wrong approach that will not help us forward.
  I turn to my final point. It is quite a small Bill. A number of us have devoted large slices of our life to talking about it and working on it, but as a Bill, it is a rather small element of government policy, though it fulfils a manifesto pledge. However, if the Government resist the amendment, they are turning a small Bill into a matter of constitutional principle. I repeat: manifesto pledge. Let us consider the Minister's statement at Second Reading in another place; our debate and the emphasis that has been put on the sale to the Racing Trust; the suggestion that the Government might be performing a sleight of hand and that, afterwards, they will suddenly change engines and sell to the highest bidder. If all those were to happen and the Government said, "We're not going hack to Parliament", Parliament would be failing in its duty if it did not force the amendment on the Government. It will be failing in its duty to ensure that our constitution works in the way that it is designed to work. If we reach that stage, many of us will elevate the debate beyond the question that is before the Committee today. We will elevate it to a matter of constitutional principle. Even following the press and public opinion that we have heard today, there would be wide dismay if the Government were to be found to be proceeding in such a way.
  For that reason, I beg the Minister to look carefully at what has been said to him in our debate and at ways forward—among which the amendment offers by far the most straightforward. Before we get into a constitutional argument in this House and another place, he should make the necessary changes that will bring comfort to those of us who care deeply about Parliament's scrutiny of the executive. I beg to move.
  Lord Donoughue: I will not detain the Committee long, but I support every word that my noble friend Lord Lipsey said. He set out all the arguments clearly. He pointed to the potential consequences if the Government were to renege. I have no need to point out the consequences on the Government's own Benches, among their most loyal supporters, who would find it intolerable were the Government to do that. I should declare an interest as the chairman of the Starting Price Regulatory Board, which monitors prices in the fixed odds field, not in the Tote.
  Lord Wakeham: I declared all my interests at Second Reading—various things in racing—but the Minister
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  suggested to me that there is another that I had not realised. I was for many years a director of Rothschilds, but fortunately I had retired from that job before its present engagement. I should like to put the problem as I see it to the Minister in a slightly different way. I fully accept that, speaking on behalf of the Government, that is what he intends to do.
  However, let us assume that they have negotiated what they consider to be a reasonable and acceptable deal both to the Racing Trust and to the Government. Another offer is very likely to be made by an outside party at a higher level. The Government might then find themselves in some difficulty about what to do. Might not the Government be challenged in the courts? Someone might say, "Here you are doing this quiet, comfortable deal that the noble Lord, Lord Lipsey, with his charming words has persuaded you to do at this price in a successful negotiation; and here are we, wanting to pay considerably more money to buy the assets from the public". The Government may find themselves in some difficulty, challenged in the courts for that reason.
  Under the amendment, the Government could say, "But if we have to sell to someone else, we must come back to Parliament for approval". It may well be a reasonable assessment that that will be difficult, if not virtually impossible. So, rather than a hamstring on the Government, I look on the amendment as a possible protection for them to enable them to achieve what they want, despite what would be some difficult times ahead in negotiation. There may be an alternative bid on the table which, in view of their undertakings and in the interests of racing, they would not want to accept but might be pressurised to do so by court action.
  Baroness Noakes: My noble friend Lord Wakeham said earlier that he is probably the only person here who has been a Treasury Minister. I may well be the only person in Committee who has been a Treasury civil servant—I was on secondment for a couple of years many years ago. If we consider how civil servants give advice to Ministers, they must cover their backsides—to give the shorthand version. If they are put in a position where the Racing Trust offers something that is modest, in line with its available means, compared with something more extravagant proposed by other bidders, it will be extremely difficult for any civil servant to advise Ministers to accept the lower amount.
  We must add on top of that the natural instinct of Treasury civil servants, which others have mentioned before, to maximise the value for the public purse. The Bill contains nothing to say that the right course of action is to transfer to the Racing Trust, so there is nothing that anyone can point to other than the Minister's statements. The Bill is silent, which is why we are looking for some way for the Bill to enable the sale to go through in a proper process without being derailed by the actions of others who may want a different result.

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  The amendment is one way to do that; there may well be others. If the Minister could find another way to achieve that end result. we would all be receptive. The real problem is that, taken at face value, the Bill simply allows sale to the highest bidder. Indeed, for a Treasury civil servant, it would probably encourage that.
  5 p.m.
  Viscount Astor: The Minister was helpful in the previous debate when he said that the value would be the value of a sale to a racing trust rather than of a sale on the open market. That was an important statement. However, so much relies on commitments given by Ministers in Parliament. I have to say that I have always been rather dubious about such commitments.
  I do not say that particularly as a party-political point because, when we were in government, I saw my colleagues make commitments which I am sure they genuinely believed at the time. But then what happens? There is a reshuffle or circumstances change, a new Minister comes in and the commitment disappears. One then goes along to one's colleague and says, "Your predecessor made a commitment"; he looks blank and says, "I'm very sorry, that was his decision and it is nothing to do with me".
  My nervousness is made even worse, of course, when I recall that the former Lord Chancellor, the noble and learned Lord, Lord Irvine of Lairg, made a commitment in the House that he described as being on Privy Council terms—I do not remember the exact words—and the Government broke it almost immediately. I never quite realised that a commitment on Privy Council terms was so very important, but I understand that it is. We have some Privy Counsellors in Committee who I am sure could explain why that is so. However, that commitment was broken just like that, and the current Lord Chancellor said, "I'm very sorry. Circumstances have changed. It's all off".
  I believe that the noble Lord, Lord McIntosh of Haringey, has given assurances in entirely good faith. I know that he means them and I accept them. Unfortunately, I do not accept the totality of the assurances given by the Government because I have seen them break assurances before. That is why the matter is important. It is also why the arguments of my noble friends Lord Wakeham and Lady Noakes are important. The amendment would help the process, not hinder it. It would make the Bill better and I firmly support it.
  Lord Moynihan: I also support the amendment. I am concerned about the issue of a potential challenge in the courts raised by my noble friend Lord Wakeham. The Minister now has a golden opportunity to respond in some detail to that point.
  For the first time we have heard that there has been a Cabinet decision to sell at 50 per cent of the fair market value to the Racing Trust. That decision has been taken by the Cabinet and, I suggest to my noble friend. is important not only in terms of being challenged in UK courts. I had the privilege of serving under my noble friend in the Department of Energy, as it was
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  then, when we were more than aware of the potential challenges in European courts on a whole raft of directives which were specifically put in place in Europe—and which are now trumpeted by Commissioner Monti and his colleagues. We needed to ensure that state aid was not granted in a manner that could be interpreted as being granted under a decision similar to the one that the Government have taken at Cabinet level to sell at 50 per cent of a fair market value to a racing trust. I also fear that the way in which the legislation is drafted would open to challenge in the courts any transfer or sale to the Racing Trust.
  We are all aware that excellent work is being undertaken, not least by the noble Lord, Lord Donoughue, on a proposed gaming Bill. It is alleged that bookmakers are not averse to the smooth passage of this legislation given that, if the Government. come forward with a comprehensive gaming Bill in future, the benefit that will accrue to them will be significantly greater than any value conceded in the transaction considered by the Government as their preferred route; namely, a transfer of the Tote to the Racing Trust.
  The gaming Bill will not come before Parliament this Session. I hypothesise that a number of leading bookmakers would be less than happy at the prospect of that legislation not being enacted in this Parliament. They may well respond by arguing, on wholly commercial grounds, that the transfer, and in this case the sale, of the Tote to the Racing Trust at 50 per cent of fair market value was ultra vires and capable of being challenged in the courts, particularly the European courts.
  Although this has arisen a little earlier than I had thought, I would therefore he grateful to the Minister if he would take the opportunity to clarify for the Committee what consultations have taken place with the European Commission, the detailed outcome of those consultations, on what basis it has accepted that a 50 per cent sale at fair market value to the Racing Trust could be concluded without legal challenge, and when those discussions took place.
  I return now to the point that builds on the earlier intervention made by my noble friend Lord Wakeham. Had this legislation been framed in the form of a transfer of ownership, I feel that that would have been by far the most favourable method. The reason for that is that it has already been agreed that this is not a negotiation of normal commercial terms. As we understand it, this is an agreement where, if we take fair market value, which should not take too long to identify, and we come to an agreement on what a reasonable evaluation of fair market value is, at 50 per cent it would be capable of being sustained in terms of debt servicing by the Racing Trust. Legislation could then have been introduced to ensure a smooth and swift transfer in the interests of racing. That would have met with no opposition whatever, I believe, from either side of the Chamber. We could have saved the Minister a great deal of time during which he will have to address these issues, not only in Grand Committee, but also on the Floor of the House.

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  However, that is not the position. We now have a Bill which, it might be argued, would best be deferred for a number of months until these negotiations have been completed. We must arrive at a fair market value, one that is agreed by both parties with a 50 per cent discount put on that fair market value. We must also have absolute clarity so that there is no risk of legal challenge. If there were such a risk, we should be able to place in the legislation a sufficient comfort to avoid any protracted legal battle that could easily arise. There is no question about the fact that it could occur should an offer of £500 million be forthcoming against a fair market value that might be £160 million, of which 50 per cent would be £80 million. In terms of debt servicing that would be manageable by the Racing Trust—I hypothesise; I do not want to enter into those negotiations, but I seek to give an example to assist the Committee—so that we would then see the smooth transfer that we are all looking for, resulting in a vital and growing business which can serve the interests of racing and benefit from its licence period in order to be a significant contributor to racing, as it has been over the years.
  However, that is not where we are. When he comes to respond, I would be very grateful if the Minister can take up the point made by my noble friend Lord Wakeham and address in detail and to the satisfaction of the Committee that there will be no grounds for legal challenge, given the Cabinet decision to sell at 50 per cent of fair market value to the Racing Trust, that being the preferred route even if, as I have hypothesised, that fair market value is £160 million and £500 million was on the table from one of the leading bookmakers.
  Turning to the specific amendment before us, I believe that it would help to resolve the problem. For that reason, and with all-party support, I urge the Minister to accept it. I cannot believe that, of all the amendments which have been tabled, this one would not generate the most widespread support across your Lordships' House if it were pressed to a Division at a later stage. My reading of the amendment is that it requires the newly nationalised Tote to be set up as a body which guarantees the return of any surplus in income to horse racing. Such a body sounds very similar to the shadow Racing Trust already in existence and, in that context, is a welcome step forward.
  It is also clear from my reading of the debates in another place and at Second Reading in your Lordships' House that Parliament is prepared to provide the Government with a mandate on this Bill—thus supporting their plans for the Tote to be privatised—if and only if it continues to return money to racing. That point is very important and we need more than an oral assurance on it. Unless the Bill contains support for the manifesto commitment, for the words given to the Committee by the Minister here and for the words given to the Committee in another place—that the privatisation will go ahead only if the successor body, which in this case is the shadow
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  Racing Trust, continues to return money to racing—we should not be considering this measure in the first place.
  Surely it is right, in a Bill where so much is being taken on trust, that we put in place the appropriate checks and balances. In this case, those are universally agreed as principles behind the Bill, not least by the Minister and the Government. It can only be right that those be placed in the Bill. The amendment will ensure that the wishes of Parliament are carried out.
  It is essential that the Government commit to ensuring that, although the Tote is owned by the Crown, it will continue to return money to racing. The amendment does no more than ensure that the nationalised Tote returns money to racing. It does not inhibit negotiations or intervene with the discussions taking place, although they should be very straightforward, particularly in the light of the Cabinet decision that the Minister shared with us. I am slightly concerned that, even if the Government accept the amendment as I am sure that they will, there is little to prevent the Government selling the successor body on to a strictly-for-profit organisation, even within the remit that some of the proceeds from that would be directed towards the improvement and support of horse racing. I would like the Minister to comment on that.
  Have the Government considered whether it would be better to establish the successor body as one of the Chancellor's new community interest companies, rather than as a company formed and registered under the Companies Act 1985? The CICs are intended to be a new type of company, designed for social enterprises that want to use their profits and assets for the public good. In my view, the body fits very neatly into that context. Has due consideration been given to that and, if not, why not?
  The edifice on which the Bill is built will crumble unless there is clarity in it along the lines suggested by the noble Lord, Lord Lipsey. I warmly support the amendment.
  Lord McIntosh of Haringey: I have a minor problem and a number of major problems with the amendment. The minor one is that it does not say what it means. It seeks to ensure that the Tote is transferred under the vesting mechanism to a successor company whose main purpose is the improvement and support of horse racing. Actually, the main purpose of a successor company will be to carry on successful and profitable bookmaking, so that the proceeds go to the improvement and support of horse racing.
  The successor company will inherit the Tote's business, and the intention is that it will continue to function as the Tote does but without the constraints that apply to a non-departmental public body. It will continue to function chiefly as a bookmaker. If it were to do what the amendment says, that might be unhelpful to both the Tote and the Racing Trust. That is a minor and picky point that I am sure could be corrected.

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  The fundamental point needs to be responded to; indeed, I anticipated it in what I said in response to Amendment No. 1. I made it clear then—I shall make it clear again, and it was made clear in the Commons—that the Government intend to sell the Tote to racing interests. Those are currently represented by the Racing Trust. Every action that we have taken over the past few years has been geared towards the sale of the Tote to racing. If we had intended to do anything else, we would not have gone along the path at all.
  We would consider an alternative only if that option were closed off to us. I cannot say with 100 per cent certainty that it will not be closed off to us, not because of any change of mind on our point, but because of "Events, dear boy". That is what happens. Legislation has to be framed to protect against the unintended consequences of events that might arise.
  The principle is well established that operating the Tote in the public sector is no longer appropriate and is constraining the Tote's development. If something were to go wrong, we would be left with only one viable option: a sale on the open market. Under those circumstances, I fail to see what benefits further parliamentary approval would bring if, as must be the case, the sale were conducted in a legal and transparent manner. In those circumstances—they are not what we desire—the matter would be of real interest to both Houses of Parliament, and of course we would make a Statement to Parliament. As things stand, however, it is hard to see that we will need to go down that route. A sale to racing is our sole aim, and we will do everything in our power to achieve that.
  5.15 p.m.
  Lord Lipsey: My noble friend said that the Government would make a Statement to Parliament, which of course is welcome. However, he may have overlooked what his right honourable friend said in another place. He said that they would,
  "come back to the House with new legislative proposals".—[Official Report, Commons, 8/1/04; col. 443.]
  Will the Minister affirm that that remains government policy?
  Lord McIntosh of Haringey: I cannot anticipate everything that may arise. That is why we are framing legislation in such a way. If we could predetermine everything that would take place, we would put the provision in the Bill; but we cannot, so we cannot put it in the Bill.
  A number of points were raised, and I shall try to deal with them as best I can. The first is that of the European Commission and state aids. We have made the Commission aware of the basis on which we propose to sell the Tote. It has so far indicated that it will be content if a fair market valuation is obtained. That indication has now expired, and we are putting in a new submission to it. Of course we must ensure that we do not breach European Union rules under state aid. We are saying to the Commission in the context of a state aid notification that the market price will be to
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  a non-trade buyer—in other words, not to a bookmaker. The price does not depend on what a racing trust can afford.
  I shall not expose the negotiations with the European Union in the detail that the noble Lord, Lord Moynihan, would want. If he were in government, he would not wish to expose such negotiations. We have already been to them, and we have already been given some indication of the Commission's view in principle. We are going to it again to seek more detailed assurances. However, we cannot expect it to give conditional assurances.
  Lord Moynihan: Unless I misheard, I am even more worried than I was when I heard my noble friend's speech. I understand that we are considering the Bill when the advice from the European Commission has expired. In other words, there is no live submission from the Commission. The conclusion that one can reach from that is very straightforward: that there is absolutely no current basis that would prohibit a challenge under European legislation of a large bookmaker offering £500 million and having a case heard in court.
  Now that the advice has expired it is redundant. It was time-limited, and was before the consideration of the Bill in Committee. As such, I am deeply concerned that the speech made by my noble friend was not only valid, but casts a great cloud over the Government's intention to sell to a racing trust at 50 per cent of fair market value.
  Lord McIntosh of Haringey: The Committee can see now why I do not think that we should conduct either commercial negotiations or negotiations with the European Commission in a Committee of the House of Lords. The previous notification expired, but the European Commission has indicated that its view will be the same as before. There is no reason for the fears expressed by the noble Lord, Lord Moynihan.
  Lord Moynihan: The issue is nothing whatever to do with conducting negotiations in Committee. It is to do with a comprehensive understanding of the current status as we consider the legislation. Why did the Government not simply get an extension to the advice that they sought from the European Commission, rather than allow it to expire, enter new discussions and hope that there would be no changes to the advice formerly given? Why was that notice not extended, particularly in light of the fact that it would be a serious issue for the consideration of this Committee, given that we are looking at primary legislation?
  Lord McIntosh of Haringey: Because the current notification being prepared will be more definite than we were able to be at the time of the previous notification. In other words, we are going further in the current negotiations. There is no difficulty about the matter at all. The conspiracy theory expressed is a little inappropriate for the purposes of the Bill.
  The view was expressed that we had done some sort of deal with the bookmakers—that they would let the Bill go through on condition that the gambling Bill

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  went through. On the contrary, the gambling Bill brings new regulation to bookmakers that did not exist before. I suspect that, if we asked them, they would be quite happy if the gambling Bill were not passed, as it would further restrict them.
  The position is that we had not clearance from the Commission, but an indication that it would give clearance when it had the final notification. It is the final notification that we are now giving to it. There is no reason to suppose that it will go back on the indication that it already gave. The fact that the previous advice has expired does not affect the issue.
  Lord Moynihan: Would the Minister be so kind as to place a copy of that notification, and of the letter that supports his comments, in the Library so that we can examine them in detail and assess the exact position of the European Commission with regard to state aid notification in this context?
  Viscount Astor: Perhaps the Minister ought to say when the Government expect to hear from the European Commission. He might also say what would happen if its advice changed—would that bring a halt to the Bill?
  Lord McIntosh of Haringey: I shall do what I can to place on record the negotiations that have taken place and are taking place. I am not convinced that everything is necessarily in a form that it is possible for me to place on record, but I shall certainly do my best. I imagine that there will be significant parts of the negotiations that are commercially sensitive and that I could not place on record. That is really the difficulty in which I am placed in Committee. It is not that anyone disbelieves what we plan to do, that we can do it or that we are going to do it. However, Members of the Committee appear to want commercial negotiations and European Commission negotiations to be included in the Bill. That is clearly not a way in which government can work.
  Lord Wakeham: I—
  Lord McIntosh of Haringey: The noble Lord, Lord Wakeham, of all people knows that.
  Lord Wakeham: I am trying to be helpful to the Minister. I accept everything that he said and all the assurances that he has given. I do not know whether he will say something more about a legal challenge, but he has not begun to answer the question that I put to him. In my view, the amendment would be helpful for the Government in dealing with a legal challenge, because they would be able to say, "We are not in a position to sell to someone else unless we go back to Parliament".
  I do not want the Minister to reveal all his negotiations, and he is wisely not going to. I do not quarrel with that at all. We are trying to give him as much protection as we can, to help him to achieve a policy of which we approve. All I suggest is that the amendment helps the Government, in the sense that they would be able to say to Ladbrokes or whoever
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  comes along, "I am very sorry, old chap. We are not in a position to do a deal with you, because we would have to go back to Parliament and it will not agree". I am not being difficult; I am trying to be helpful.
  Lord McIntosh of Haringey: I have two comments on that. First, remember that what we say in the Bill is that we propose to give an exclusive licence for seven years. The basis of the exclusive licence is a sale to the Racing Trust, which will give money for racing purposes. We are not obliged to give that exclusive licence. If we were talking about someone other than the Racing Trust, which will benefit the racing industry, we probably would not. My second answer is that we are not obliged to sell to the highest bidder. Like any private individual, we can sell to a lower bidder if we wish.
  Viscount Falkland: When the Minister told us about the European Commission's views on the matter, the phrase he used was that it would be happy if a fair market value were obtained. There is some ambiguity in that. Will he clarify what he means by "obtained"? Is that the fair market value obtained from the purchaser or from the advisers?
  Going back to my remarks earlier, if we simply had a Tote pool as originally in 1928, there would be little problem in transferring that to the private sector. The fact is, however, that we have 300-odd betting shops. I have a fairly clear idea in my mind, as many other Members of the Committee have, of what a fair market value is likely to be. Perhaps I am quite wrong and the Minister can enlighten me, but if the bookmakers see that their shops are being transferred at a discount or a notional price, that raises some alarms on the basis of the discussions that we have had.
  Lord McIntosh of Haringey: I think not. The Bill as drafted gives the assurance that we need to resist such a challenge. The noble Lord, Lord Wakeham, knows that we cannot stop there being a challenge. However, on legal advice we believe that the Bill as drafted allows us to do what we proposed. I remind the noble Viscount, Lord Falkland, that I said that we had notified the European Commission that our intention was to sell to a non-trade buyer—that is, not to a bookmaker.
  I cannot go much further on the valuation than I have already gone. I have already said that independent advisers will provide a value. It will probably be within a range of prices, and the final price will have to be within that range for there to be freedom from an accusation of state aid.
  Lord Donoughue: My noble friend has understandably not answered the question asked by the noble Lord, Lord Wakeham, which was unquestionably and unanswerably true. His was a helpful suggestion. I come back to the simple content of the amendment, which says nothing about having to include the details of the negotiation. I shall really repeat what my noble friend Lord Lipsey said. In January, Richard Caborn said that the Government would come back to Parliament if the negotiations

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  were not completed with fresh legislative proposals. Today the Minister said that they would make a Statement. Those are two quite different things.
  What is the current government position? Is it that Richard Caborn's promise and commitment no longer stand—that they are replaced by what the Minister said? If his statement stands, the amendment is useful but quite in line with that. It merely puts into the Bill what Richard Caborn said. If his statement has been replaced by today's statement—that is, that the Government would merely make a Statement in the House—the need for the amendment is much more acute. However, it would help me if my noble friend would tell us what the Government's current position is. Has Richard Caborn's statement been replaced?
  5.30 p.m.
  Lord McIntosh of Haringey: I think that my noble friend Lord Donoughue is assuming that what Richard Caborn and I said had exactly the same trigger. That cannot be assumed, so it is not possible for me to answer that question. I shall look carefully at Hansard, both for today and for January, and 1 shall write to him and all others who have taken up that point. It is not my understanding that there has been any change in policy.
  Baroness Noakes: The Minister spoke earlier about "events, dear boy" taking over. That could happen if the European Commission states that it is not prepared to approve the particular terms of the transfer to the Racing Trust; or it could be that the Racing Trust, for one reason or another, fails to live up to the Government's expectations in negotiations.
  Let us assume that, for whatever reason, the sale to the Racing Trust, as we are contemplating it, does not immediately go ahead. As the Bill stands, the Government would then have complete permission to sell the Tote, on pretty much whatever terms they like. Clause 1 would effectively allow them to take ownership of it—my noble friend mentioned the nationalisation element of it—notwithstanding the fact, as was mentioned during the debate on my noble friend's earlier amendment, that racing believes to this day that it has not just a 50 per cent interest in the Tote, but significantly more than that. Therefore, the Bill provides no protection for racing.
  What do we say to racing, having allowed Parliament to take full ownership of something that racing believes that it created at least to the extent of 50 per cent? There is no safeguard in the Bill. If, for any reason, the transfer that is being contemplated, which is to a racing trust for the benefit of racing, falls down, what longstop is there in the Bill to meet the needs of racing? We are trying to ensure that the interests of racing are given some protections in the Bill, but there are none. If this amendment is not to provide them, we need some form of protection. Otherwise, we will allow the Government to steal racing's assets. That is how it will be viewed throughout racing. It is a serious issue.
  Lord Smith of Leigh: Before my noble friend responds to that, perhaps I may express my agreement
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  with the comments of the noble Baroness. I am confused by the Government's rejection of the amendment. They state that they intend to sell the Tote to a racing trust—that is what Parliament wants—but the Bill does not specify that as the outcome.
  The Minister rightly said that, even with the best intentions, the negotiations may fail and that the European Commission or the courts may intervene. The only outcome then is the open market sale. In the interests of racing and of the Tote as an organisation—I have a personal interest in it, not because I am a member, but because of its activities in my own borough—Parliament would not approve of that. That is a simple matter of fact. Parliament would not approve that as an eventuality.
  I and other noble Lords who have spoken, as well as Parliament, would prefer the status quo to a short-term sale where the Government say, "Well, we've no other option now. We've got to sell on an open-market basis". It seems that we will go round in circles until we resolve that problem. Parliament wants to support the Government, to give them the opportunity to fulfil their manifesto commitment and to sell to the Racing Trust, but we are not sure that the legislation will allow that to happen under all circumstances. If that cannot be achieved, for the best reasons, the Government should come back to Parliament and seek approval for plan B.
  Lord McIntosh of Haringey: I do not see the benefit of that. What would Parliament's approval of plan B do? We have made it absolutely clear that our sole aim is to sell the Tote to a racing trust for the benefit of the racing industry. The Racing Trust may not work; all its members might be struck down by bubonic plague, including the two present—that is not intended as a threat—in which case it would take a few months to reconstitute the trust.
  We cannot force government into commitments about something outside our control. That must be the basis of all legislation. We must give the Secretary of State powers to do what we have declared as our objective. We have set out a number of protections, particularly in Clause 8, for the racing industry; and we should go ahead as best we can with the options. open to us and the intention that we have made clear.
  I cannot do better than conclude by repeating Richard Caborn's remarks:
  "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".—[Official Report, Commons, 8/1/04; col. 442.]
  I agree wholeheartedly.
  Viscount Falkland: In answer to the noble Lord's first, rhetorical question, the reason that we are concerned is that we want racing to be confident that, if for any reason the sale falls through, we will revert to the status quo. As a result of the discussion today, at least we have some idea of the areas where it could possibly fall through. It is nothing to do with bubonic plague; it is to do with the conditions of the sale that

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  we have envisaged, which I hope will go through, although it may not—I share the hope of the Government and the Minister. Forgive me for being naïve, if I ask a naive question: why is it not possible to provide in the Bill that if, for any reason, the sale founders—whether because of the European Union, bubonic plague or whatever—we will revert to the status quo and sit back and think about what we will do next? That would give confidence to the racing public.
  Lord Wakeham: Compared with the situation faced by some of us, the Minister is very lucky; he is surrounded by many colleagues who support what he wants to do. We are absolutely on his side. Earlier he said, wisely, that he would read the debate and consider what was said. Having been around a long time, perhaps I might humbly offer him the following advice: I suggest that he read the debate very carefully with his advisers. Here there is a whole bunch of people with racing's best interests at heart, who do not disagree with the Government's aims, but are concerned that the legislation does not quite meet the circumstances in which we might find ourselves. I would be very surprised if the Government, in all their wisdom and with all their wise advisers—it is more than some of us have these days—cannot find a solution to meet the parliamentary wish to back up what the Minister wants. I hope that he will look carefully at the debate to find a way of meeting the worries expressed so much around the Committee.
  Lord McIntosh of Haringey: The noble Lord, Lord Wakeham, is most kind. I have worked with legislation for quite a long time, too; indeed, in my previous position I did almost nothing else for seven years. I am well aware of the implication of saying that I will take something away and think about it further—it is, of course, an easy way out of any debate, because both sides can put off a decision until later. I do not wish to do that unless I have some assurance in my own mind that something practical can be done as a result. I am grateful for the support expressed for the principle of what we are trying to do, and for the expressions of confidence that we mean to do it. I think that I have heard from parts of the Committee expressions of confidence that we can do it. But we cannot ever be certain, and we cannot legislate on the basis of uncertainty. If, having said that, there is anything that I can do in discussion with colleagues on both sides before Report, I will ensure, as I always do, that I have such discussions.
  Lord Lipsey: I am grateful for the Minister's last remarks. What he could do practically is accept this amendment. Many of us who have listened with extreme admiration to the Minister in dealing with various Bills know him to be a highly rational man. We also know it to be extremely difficult to tell the difference between when he truly believes the arguments that he has been put up to advance and when he does not. I would not make a firm judgment
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  into which camp those come today. However, if the Minister re-reads Hansard, he will find tremendous force in what has been said.
  Perhaps I may delicately make an observation to the Minister: some of the things that he has said about the arguments do not relate to the amendments before the Committee. It was said that we were trying to negotiate in this Committee; the Minister has done quite a bit of negotiation and has said some very useful things about it, but none of us has. All we want to say is what should happen should negotiations break down.
  Perhaps for a minute the Minister could put himself in my place as the person conducting the negotiation on one side. He seems to see a weak and timorous government faced with a mighty negotiator able to determine the price. I do not have any money; I have a Bill that enables the Government to decide not to sell the Tote or to flog it to anyone else they might choose at the drop of a hat; I do not have a job if I do not get a deal through; and I have in mind—this is the most serious point—the interests of all those who work for, and benefit from, the Tote. At present, the 70,000-odd people in racing and 1,700 people working for the Tote are in a state of insecurity as regards their future. I must weigh all those factors; it is not an easy negotiating position. I would find it easier if I could at least say to those people that, if the Government decide to do something else, they must go back to Parliament and I can give my judgment.
  There would be cases in which I would tell Government not to sell the Tote to me; I would just withdraw from the negotiations. If the racing officials fall out with each other—that has not happened at all; my trust is as harmonious, charming and logical a group as one could hope to meet—I would say, "I am sorry, Minister, but we are in no position to buy. We will have to work out what is most appropriate, and you must come back to the House with the right proposals to do so and I would co-operate with that".
  Incidentally, the Minister has disposed of one argument against the amendment. He promised that Ministers would make a Statement to Parliament. If the worst suspicions of racing—I do not share them—were realised, it would be one of the most unpleasant Statements that any Minister had made in either House. However, it would take up just as much time as a process that ended with a vote and a decision—more in primetime. At least that argument has now fallen by the wayside.
  I feel sure that when the Minister re-reads the debate and consults his officials, and, perhaps most importantly, when the Treasury re-reads the arguments and appreciates that this Bill's smooth passage is being impeded by this rather theological objection, he will return on Report with an open mind. As a strong supporter of the Government's Bill, I very much hope that that will happen. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  5.45 p.m.
  On Question, Whether Clause 2 shall stand part of the Bill?
  Lord Moynihan: I had very much hoped to be able to withdraw notice of my intention to oppose the Question that Clause 2 stand part of the Bill, convinced as I was then that the Government would accept the Committee's arguments on the legislative consequences of what they have consistently said. This is an important opportunity for the Committee to be absolutely clear whether the Government have examined all the alternative mechanisms for achieving their aim for the Tote; in that respect, this is a probing measure.
  I wish to pick up on a point that may inadvertently have misled the Committee. Everything that I have read about the tremendous work undertaken under John Greenway MP in another place, with significant assistance from experts in this House, is that the Gaming Bill intends to liberalise not restrict the gaming market. Rather than restrict it, there are proposals that create additional commercial opportunities for the industry. But if we are about to see a new Bill that is heavily restrictive of gaming—or gambling, as it is now called—I stand corrected. I would like to know that from the Minister, because it is critically important in the context of horserace betting.
  The exploratory issue that I would like the Minister to address is the question of the alternative mechanisms. We have not heard from the Government why the TSB route was not looked at carefully and used. I would be grateful if he could analyse that in some detail in his response.
  The second issue is a point that was raised by the noble Lord, Lord Lipsey, in the context of Clause 2 at Second Reading. Here the Government are not remunerating racing for the nationalisation of the Tote. I would be grateful for an explanation of how the Government can justify, through the Treasury. earning a substantial sum of money from the subsequent sale of the Tote, despite freely admitting that it does not own the Tote and has put no money into it. Indeed, the Treasury intends to take a significant profit from the nationalisation and subsequent privatisation of the Tote. Some have argued that that is racing's equivalent to daylight robbery, because the money that would otherwise have to be paid would go back into racing, which was the intent. Others have argued that they have seen a few rogue bookies in their time, but fleecing the Tote for £80 million—I hypothesise on the figure—before they can lay a bet takes some beating. It cuts to the very heart of the Bill.
  Will the Minister tell us how the Government justify commandeering something that they do not own, without compensation reflecting the value of something that they have nationalised, and, possibly the very same day, selling it on at a significant profit? In effect, the Government will take the money and run. The price that the Government charge the Racing Trust through negotiations is a charge on every punter
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  and race enthusiast, and every racecourse the length and breadth of this country. In many respects it is another stealth tax. It will have an immense effect on the money that the Tote brings into racing, money that goes to every one of Britain's 59 racecourses. As many Members of the Committee will be aware, the Tote is the largest sponsor of British horse racing. As many noble Lords highlighted at Second Reading, the more the Government charge for the Tote, the more the successor body will have to borrow and the more interest the successor body will have to pay, which means that less is left for the Tote to return to racing.
  In the context of our earlier discussions about the reference of my noble friend Lord Wakeham to the TSB legislation and the restructuring that I regard the Bill as being about, I echo the remark that we are all on the same side as the Government if their intent is reflected in the Bill and in their actions: that is, to see a smooth transfer from the existing Tote, in the interests of racing, to the shadow Racing Trust. Why do the Government feel that they can nationalise the Tote on one day, without any compensation or recognition of its value, and then sell it at a significant turn to the Treasury?
  I appreciate one point on which the Minister may come hack to me: that there is difficulty in working out who to pay for the Tote, particularly as it is not owned by anyone and is being abolished by the Bill. Again, there are noble Lords around this table who can address that subject and, I am sure, come up with an answer. Perhaps I can help the Government in that respect. I suggest that the same organisations that make up the shadow Racing Trust—the Jockey Club, the British Horseracing Board, the BHB Industry Committee, the Racecourse Association and the Racehorse Owners' Association—should be compensated on the strict commercial undertaking and understanding that those moneys would constitute the value paid to government to privatise the Tote. Appropriate contractual documentation can reflect that agreement.
  This is a probing issue, but I look forward to the Minister's response because it is fundamentally the case that the Government have not generated the value of the business. It has been generated by the people who, year in year out, have worked assiduously and highly professionally within the Tote to develop a successful business, which is now subject to this Committee's consideration. The intervention by the noble Lord, Lord Lipsey, on that point at Second Reading deserves an answer. Why have the Government chosen this process rather than a restructuring Bill, which would have been far more appropriate? Far be it from me to speculate that it is a way in which the Treasury seek to make an easy turn, but at least that would be a reasonable explanation. And why have the Government not taken the opportunity to look at alternative methods of avoiding so many of the complex issues that are taking the time of the Committee in bringing forward legislation?
  I finish by highlighting the fear injected into any parliamentarian on hearing that the justification of the way in which a Bill is drafted is "Events, dear boy—

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  it is the policy of unintended consequences. That should not be the basis for primary legislation. Exactly what the Government intend to do should be on the face of the Bill. Had that been the basis on which the Government approached the issue, then instead of facing "Events, dear boy", we would have had the outcome—it is to be hoped, successful—to negotiations with the shadow Racing Trust. Furthermore, we would have had before us a Bill that we could consider and then judge whether it is in the best interests of racing in totality.
  Sadly, we cannot do that; we have an enabling measure that throws every conceivable possibility up in the air—from nationalisation, no sale, sale at £500 million, possible sale to a racing trust, one that may not be the racing trust chaired by the noble Lord, Lord Lipsey. It is so wide open as to warrant a strong explanation from the Minister of the various issues that I have raised. I hope that all those issues are regarded as they are intended to be: a helpful contribution to enable the Minister to construct this legislation to allow a smooth transfer, possibly at no cost to the Racing Trust, so that the interests of racing can continue to be well served by the Tote, as they have been for many years.
  Viscount Astor: I have just one question to put to the Minister; it relates to timing. If the Government get it right and do a deal with the noble Lord, Lord Lipsey, on favourable terms to racing and the trust, we will be the first to applaud them and the result. Our concern is what happens if things goes wrong. One of the difficulties is that we do not have any indication from the Government or the noble Lord, Lord Lipsey, whether they feel that some meeting of the minds has been achieved so far. We do not know. When will negotiations start between the two? Will they have to wait until after Royal Assent? Can they start beforehand, so that there may be some process at least in which Parliament may be involved? Can the Government start the conversations, or indeed reach some agreement, with the shadow Racing Trust before the end of the Bill? When do they intend to start negotiating with the trust chaired by the noble Lord, Lord Lipsey? They may even have started; I would be grateful for clarification. Perhaps the noble Lord, Lord Lipsey, can help me.
  Lord McIntosh of Haringey: I think that, in his closing remarks, the noble Lord, Lord Moynihan, gave me all the arguments that I need. He was entirely right to say that you cannot frame legislation on the basis of "events, dear boy". It is precisely because of that that we are not seeking to frame legislation on the basis of things that we do not know and cannot control. If we were willing to do so, to move forward on the basis of matters that we do not know and cannot control, then all the things that Members of the Committee would like to see on the face of the Bill could be put there. But we do not do that and we are not going to do it.
  Lord Moynihan: I am grateful to the Minister, who I am sure will forgive my amusement. The point I
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  sought to make was that it should be never be the case that governments bring forward legislation on the basis of "events, dear boy" and their attendant uncertainty. The Government should pause, set out their recommended route, undertake whatever negotiations are necessary, and then present to Parliament legislation which has been framed as a result of that consideration which can then be either approved or rejected. Not for a moment was I arguing in favour of giving the Government a blank cheque to do what they like with the future of the Tote which, I regret to say, in its present drafting is precisely what this Bill constitutes.
  Lord McIntosh of Haringey: Again, the noble Lord, Lord Moynihan, is precisely making my point. We have gone as far as we can to place on the face of the Bill those parts of our proposals which we can ensure will take place. We have a Racing Trust which has barely been formed. On what date was it formed?
  Lord Lipsey: The full Racing Trust does not yet exist. It is a shadow body.
  Lord McIntosh of Haringey: I thank my noble friend Lord Lipsey for that because, again, it makes my point. Of course, when we have a Racing Trust, we can negotiate formally with it, but we cannot put on the face of legislation the nature of our negotiations with a body that does not even exist. Everyone is asking for assurances that cannot be given because the Racing Trust does not actually exist.
  I hope that the noble Lord, Lord Moynihan, will not mind my saying that the basis of his request for this is entirely mistaken. He used a phrase to the effect, "take the money and run". The Tote exists because in 1928 the then government gave a monopoly over pool betting to an organisation. Monopolies are worth money. The Government and the taxpayer have put in their ability to create a monopoly, as James I and Charles I used to do, and they have invested in it. The noble Lord said that they have put nothing into the Tote. The then government put the power of exclusivity into the Tote right from the very beginning in 1928. After the war, when the Tote faced bankruptcy, the then government went even further and gave it the right to compete—the public sector, if you please—against private bookmakers. If that is not making a contribution, I do not know what is.
  The phrase, "take the money and run", is entirely inappropriate. It has always been the Government's intention that the Tote should reflect the interests of racing in so far as there is an interest of racing and, of course, racing has taken money out of the Tote rather than putting money into it. As I say, that should be reflected in the discount received. Under those circumstances, the procedure we are proposing, starting with Clauses 1 and 2, is the only practical procedure available to us. If the noble Lord, Lord Moynihan, or any other noble Lord wants to propose an alternative, they are welcome to do so. However, I have made it clear that this two-stage procedure is necessary, that it has precedents, and that it is our firm intention that it should end in the result which all Members of the Committee want to see.
  6 p.m.
  Viscount Astor: The Minister has not answered my question about when negotiations will start.
  Lord McIntosh of Haringey: When the Racing Trust comes into being we will start immediately. We do not have a racing trust.
  Lord Lipsey: Before I support the Minister, I should like to say that it seems a bit thick for us to pay money for the Government to remove a legislative impediment that has existed for the Tote and for no other bookmaker. That does not seem to us to be the kind of thing you should pay for.
  In support of the Minister, I should say that the process will not cause any difficulties to the Tote and the shadow trust. Let me explain briefly where we are. The Government have not yet appointed their advisers formally although I believe they have them in mind. We have appointed Rothschild but it will not be able to prepare a valuation until the Tote's year end figures are available at the end of March. So we cannot do anything much before then.
  There is a structure of committees, both internal to government and with the Tote, and there is a liaison committee on which both the Tote and the shadow trust will sit to bring the process together. Its first meeting is scheduled for 26 April.
  I hope that the negotiations will not wait until the full trust is set up. There is a parallel process by which the trust/government arrangements are being put into place by the trust. However, the reason for setting up a shadow trust—we all remember the shadow Ofcom—is that everything should not wait on that. To reinforce the point, we do not want the period extended unnecessarily because of the uncertainty and danger to the business it would cause.
  The noble Lord, Lord Moynihan, would carry through this process in an entirely different way and is making his arguments for it, hut, as far as the practical arrangements are concerned, we have found from working with the DCMS that the process is perfectly satisfactory.
  Lord Moynihan: I am grateful to the Minister. I thought that would be the explanation he would give. It led me immediately to the question of why was it that the Government had not charged for the operation of the monopoly over so many years? In practice, what we have now is retrospective charging for the benefit of having had the monopolistic powers that were granted so long ago. It is a useful clarification.
  The Minister did not address the issue I raised in regard to the Trustee Savings Banks Act 1985 and why merely ordering a reconstruction of the TSB is not wholly appropriate in this context, particularly given the unanimity about the direction in which we wish to see the Tote move. There was no need for us to nationalise the TSB, with a promise to subsequently privatise it, but there was an opportunity significantly
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  to restructure the TSB. It would be much appreciated if the Minister could comment on that before I conclude my remarks.
  Lord McIntosh of Haringey: The TSB had depositors, The depositors thought that they owned the whole of the TSB and were prepared to take legal action on that point. The Government refunded the depositors their deposits. This caused a great deal of resentment at the time, as some people will remember. In that case there were people who could be compensated. Who should be compensated for the sale of the Tote?
  Lord Moynihan: If time permitted, I would be more than prepared to draw on that analogy in the context of racing feeling aggrieved.
  Lord McIntosh of Haringey: But racing took the money out. It did not put the money in.
  Lord Moynihan: The point I am making, which I think is an explicitly clear comparison with the TSB, is that, through the Tote, this is an ideal way of bringing forward legislation after clarifying all the questions of the "events, dear boy" clause that we discussed earlier—namely, not coming to the Committee and to Parliament without having sorted out all those issues well in advance of bringing primary legislation before the House.
  That said, I am grateful to the Minister for his comments and to noble Lords for their contributions.
  Clause 2 agreed to.
  Clause 3 [Sections I and 2: supplemental]:
  Lord Moynihan moved Amendment No. 3:
  Page 2, line 39, at end insert—
  "( ) The Secretary of State shall ensure that the directors of the successor company are the same people as were members of the Board before the appointed day, save to the extent that any individual member does not wish to continue as a director."
  The noble Lord said: This matter was raised in another place. I return to it, not least because the answers given by the Minister for Sport were somewhat unclear. I fear that we have a whole raft of conflicting messages given by the Minister for Sport in another place and it is incumbent on the Government to clarify them. It may therefore be helpful to the Committee to reflect on the statements made by the Minister in another place with regard to the purpose of the amendment, which is to ensure continuity by keeping the same board for the period when the Tote is nationalised. I am referring to the board of directors.
  On this subject, the Minister in another place made the following three comments on different occasions. He stated:
  "I repeat what I said: the Tote board members on the appointed day of dissolution will continue to be board members of the successor company".—[Officied Report, Commons Standing Committee D, 20/1/04; col. 15]

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  Later that day he stated:
  "For the record, we will not necessarily appoint the Tote board as first directors of the successor company. I may have misread my notes"—
  I assume that he was referring to what he said earlier—
  "so I want to correct that for the record".—[Official Report, Commons Standing Committee D. 20/1/04; col. 17.]
  So the Committee in another placed faced a significant problem. First, the Minister had stated that he wanted to repeat the fact that the Tote board members on the appointed day of dissolution would continue as board members of the successor company, which is what we thought was the position—had that simply been the statement there would have been no need to table the amendment—but then he immediately moved on to say that they would not necessarily appoint the Tote board as first directors of the successor company. What is worse is that the erroneous statement, as I understand it to be, that they would not necessarily appoint the Tote board members as first directors of the successor company, came from his notes. So clearly his officials quickly gave him those notes, which he read, and I, for one, on reading the Hansard transcript, was completely misled. I thought it was absolutely clear that they intend to take the Tote members, put them on a new board and hope to sell it quickly to a racing trust.
  Later on the same day, we had that assurance from the Minister when he stated:
  "I reassure the Committee that we intend to take the Tote members, put them on the new board, and, we hope, sell quickly into a racing trust".—[Official Report, Commons Standing Committee D, 20/1/04; col. 18.]
  Which is true?
  I hope the first statement, principally because of the high esteem in which the membership of the Tote board is held and because of the importance of continuity. I very much hope that it is not the Government's intention to take the Tote into state ownership and immediately appoint others to the board without recognising the importance in many respects, which I will cover, of continuity of service among directors.
  The purpose behind the amendment is to ensure that when the Tote is nationalised the board of directors remains the same for what we all hope will be a seamless and swift transition to privatisation. The principal reason for this is to ensure continuity of operation for the Tote. I hope everyone supports that principle. Even if the Tote is owned by the Crown for less than an hour, we want to ensure that the board retains the previous directors and that there is a clear corporate chain of responsibility with the necessary experience to deal with any crisis that may occur. In the unfortunate event of a delay in privatising the Tote, it is even more important that we have a board that can best represent the interests of the Tote.
  I am not suggesting any mischievous intent on behalf of the Government to replace the existing directors and appoint a wholly new board for the period when the Tote is owned by the Crown.
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  Similarly, I am not for one moment suggesting that the Bill should restrict who the newly privatised Tote should appoint as its board of directors. I am trying to limit the powers of the Government over the newly nationalised Tote. From reading the Bill, we recognise that the Government feel the need to nationalise the Tote but we on these Benches feel duty bound to limit the role of the state in running what we all agree should be a privatised entity as soon as possible which is run in the interests of racing.
  In many respects this is a technical amendment but there is a serious reason for wanting to clarify the Government's position. That serious reason is not only to keep the hoard in place to ensure a smooth transfer of staff from the Tote to the successor body but also to cover the very important TUPE arrangements. The transfer of undertakings and protection of employment clauses are on the face of the Bill and I would hope that having continuity of directors would significantly assist in ensuring that those arrangements are adhered to.
  For those arrangements to be in place there needs to be continuity of management; there needs to be the continuity of a board overseeing the process from a strong knowledge and working experience of the staff. For example, if the Government were minded to change the directors, could they assure the Committee today that employees employed by the Tote, when the undertaking is nationalised, will have automatically the right to become employees of the new employer on the same terms and conditions? Is it also the case that representatives of employees affected will have a right to be informed about the transfer?
  These matters are covered in some detail in TUPE. Again in the interests of time, I simply ask whether the Minister can give a clear undertaking that all the conditions in PL 699, the sixth provision on the transfers of undertaking, are to be adhered to, in full. by the Government, irrespective of whether the conclusion of the Minister in another place—that they will not necessarily appoint the Tote board as first directors of the successor company—is realised and we lack the continuity so essential to a successful transition?
  This will be my only opportunity to give due recognition to the quality of the board members who serve on the Tote. It is an admirable board, and I cannot see any reason why it would need to be changed during this process. In terms of Sarbanes-Oxley, the board has financial expertise, a significant and widespread knowledge of the industry, an admirable understanding of M&A transactions, and good. strong legal advice. It is a first-rate board led by a first-rate chairman. It would be remiss not to pay tribute to that board of directors, which has given such excellent service over the years to the Tote and, indeed, to racing.
  No doubt the Minister will be able to accept this short technical amendment. If he cannot, at least he will be able to clarify whether it is absolutely incorrect for the Minister in another place to say that it is not

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  necessarily the case that the Government would appoint the Tote board as first directors of the successor company. I beg to move.
  Lord McIntosh of Haringey: I start by echoing what the noble Lord, Lord Moynihan, said about the current and former members of the board. There will, in due course, be an opportunity to pay tribute to them more formally.
  It is our wish that the Crown should own the successor company for as short a period as possible. If that were to be, as the noble Lord, Lord Moynihan, suggests, a period of even a few hours, it is highly likely that the existing board would carry on. But, of course, as soon as the Crown yields the ownership of the successor company to a racing trust, the Racing Trust will have something to say about who will be the directors. That seems entirely reasonable.
  If there is any delay in the transfer of the ownership of the successor company to the Racing Trust—which is not what we want, but we have to allow for the possibility—or if the Racing Trust has a different view, then under those circumstances it would not be the case that all the members of the board would continue as members of the successor board. So both statements made by Richard Caborn were correct.
  Lord Lipsey: Perhaps I may add to the Minister's remarks. The shadow trust has considered the question of continuity. It is our intention that the existing members should continue, if they are willing to do so, and be replaced under the terms of our articles of association as their terms of office fall due.
  Lord McIntosh of Haringey: That is very helpful. It is not of course a matter on which the Government would seek to intervene.
  I forgot to answer the point made by the noble Lord, Lord Moynihan, about TUPE. It will apply to all staff, including the executive directors.
  Lord Moynihan: I am grateful to the Minister. He has not clarified which of the contradictory statements made by the Minister for Sport is accurate. I take it from his intervention that, despite the wholly contradictory reports from another place, the Government have no intention of changing the board of directors. But, as he wisely and rightly said, it would be wholly appropriate for the Racing Trust, as it would then be, rather than the shadow Racing Trust, to give due consideration to the composition of the board in the light of its future strategic plans. As a result of those exchanges, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  6.15 p.m.
  Lord Moynihan moved Amendment No. 4:
  Page 3, line 2, at end insert—
  "( ) The successor company shall be wholly owned by the Crown for not more than one year after the appointed day unless a draft order permitting an extension has been laid before, and approved by a resolution of each House of Parliament."
  The noble Lord said: Amendment No. 4 seeks to place a check on the Government's ability to keep the Tote as a nationalised body. It is a little more than a probing amendment because we see it very much as a safety measure which needs to be put into the Bill.
  As mentioned during Second Reading, the Bill requires the Committee to take a great deal on trust. We accept that it is the Minister's personal intention—echoed again today—that the Tote will be privatised and that the Government believe that this is best achieved by first nationalising it. We also accept that the Minister fully intends that the Tote should remain nationalised for only the briefest period.
  However, it is worth reiterating that I can find absolutely nothing in the Bill that requires the Tote to be privatised. nor can I find any limit on the time the Tote can remain a nationalised industry. So I turn, as I so frequently do, to the Minister for Sport in another place to throw light on this subject. He recognised that the situation could occur, which he rather inelegantly described as the "nuclear option", where it is not possible to sell the Tote to a racing trust and the Government would have to go away and think about how best to proceed.
  Given the Government's intention to sell the Tote to a racing trust, it may take Ministers some considerable time to work out how best to honour this manifesto commitment—if, indeed, the Chancellor of the Exchequer of the day intends to honour that commitment at all. A new racing trust may have to be developed. All of this could take time.
  The intention of the amendment is to place on the Bill a check on the length of time that the Tote can remain a nationalised industry without the approval of Parliament. I have decided on a maximum period of one year, which, in my view, is more than generous. Indeed, I was initially tempted to go for a period of a month. I can assure the Committee that the choice of a year is not because there is likely to be another government in charge at that time—although that is highly likely and would certainly speed up the process—but if in a year they failed to privatise the Tote, there would be a serious case of incompetence added to a breach of faith by the Government.
  Before noble Lords protest that such incompetence is unlikely, I should like briefly to reflect on the fact that on many occasions in the sporting world—for which I have the honour to be my party's spokesman—a series of commitments are given which are simply not delivered. I regret to say that one was highlighted earlier today. A sum of £1.5 billion of lottery money has been invested in sport with the intention of' increasing participation. With £1.5 billion spent on sport, one might expect to see a 10 or 15 per cent increase in participation. But what has happened over that period? There has been a 0.3 per cent increase in participation in sport in this country.
  So I am hesitant to say that commitments are honoured by the Government. That is a clear case of a commitment that has not been honoured. In this context, it would be helpful to learn how long the Government anticipate the Tote would be a

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  nationalised industry in the "nuclear option" scenario. Similarly, can the Government give the Committee any guarantee that there will be a limit on the amount of time the Tote will remain nationalised? If, as I anticipate, we will have good words and support from the Minister, I hope he will indicate that it is inconceivable that the Government will not get their act together and privatise the Tote within a year and that my amendment can be readily accepted. It would be a useful backstop and in the interests of racing.
  I hope that the Minister will say that, because of the competence of the Government, such a scenario is inconceivable and that he will accept the amendment. If he is unable to give such a guarantee, we may have to come hack to the amendment at a later date. Once again that would underline the fact that the Government have very serious worries about seeing through their aspirations and commitments in the context of this legislation—so serious that they are not even prepared to place a backstop on the face of the Bill, which all reasonable men would agree was a very long period. We trust that the measure will never be needed, but the world of racing would sleep more soundly at night if it were known that a check was in place. I beg to move.
  Lord McIntosh of Haringey: We do not want to retain Crown ownership of the Tote for more than a day. A few hours was suggested, and that would do very well. There is no reason why we should retain Crown ownership of the Tote for this period; there would be no benefit to us in doing so. This is not nationalisation, as the noble Lord, Lord Moynihan, very well knows. We intend that the sale to the Racing Trust will occur as soon as the Tote is vested, under the appointed day order, in the successor company.
  More to the point, we can ensure that that is the case because we will not transfer the assets of the Tote until a deal is ready. So there will be no question of the Crown being the owner of the successor company for a year. Even if there were, referral back to Parliament would not do any good. It would not make any difference because the deal would still have to be done in an open and transparent way.
  Lord Moynihan: I am grateful to the Minister for that response. The only issue with which I disagree is his last point. It is unquestionable that, should this scenario of a year take place and the incompetence of the Government were such that we did not have an appropriate plan for the interests of racing to put before Parliament, there would be an outcry on the Floor of the House. It would be absolutely right and appropriate if there were. In such circumstances, the political fall-out and the significance would be very considerable.
  I regret that the Minister has not accepted this very tame and helpful amendment. In the circumstances, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 3 agreed to.
  Clause 4 agreed to.
  Clause 5 [Pre-sale issue of shares, &c. to government]:
  Lord Moynihan moved Amendment No. 5:
  Page 4. line 6, leave out subsection (7) and insert—
  "( ) Where a security is issued in accordance with a request under subsection (1) to the Secretary of State or his nominee, neither the Secretary of State nor his nominee shall dispose of the security without—

  (a) the consent of the Treasury, and

  (b) a draft order setting out the mechanism for establishing the price for the security being laid before, and approved by resolution of, each House of Parliament."

  The noble Lord said: The amendment seeks to ensure that Parliament agrees that the mechanism for establishing the price of the Tote, and the process for such agreement, is placed on the face of the Bill. I regard it as an exceptionally important amendment.
  I fully understand that in the discussions we have had to date it is not possible for the Government to outline the price. I fully appreciate that it is not possible for the Government to reflect details of the commercial negotiations on the face of the primary legislation. But I do think that it is reasonable for the Government to place on the face of the Bill the mechanism for establishing the price and the way in which they are setting out their stall in the context of the negotiations.
  It is important that this should be done. It cannot be overestimated how important horse racing is in this country. I have mentioned that there are 59 horse race courses in Great Britain. The arrival of television in the sport in the 1950s and the 1960s, which brought it into the living rooms of the country as horse racing became a regularly televised sport, has led it to become today the second most widely televised sport after football.
  It is incredibly important as an industry and a sport. Attendance is increasing as it becomes more popular. There was a drop in the 1970s and 1980s, but racing boasted an attendance figure of 5.5 million in 2002, the highest figure since 1959. In 1996, the horse racing and associated breeding industry employed some 35,000 people, including 11,000 related to the work of race courses, 20,000 in breeding and training, 3,000 on-course bookmakers and about 750 jockeys and support staff.
  The reason for stating that is so that there can be no doubt about the importance of the industry and its popularity in the country. Central to the success of the industry and to returning proceeds to racing is the Tote. We have heard a good deal about the Tote today, but the turn-over from the Tote and the importance of pool betting cannot be overestimated in terms of the vital contribution it makes to racing in the United Kingdom.
  I seek once again to place as much detail as possible on the face of the legislation to ensure that all the aspirations outlined by the Government are translated into reality and that money is ploughed back into racing, which is such an essential part of our sporting life. Indeed, it is an essential part of community life the length and breadth of the country, particularly towns and villages dependent on racing.
  The more the Government charge racing for the Tote, the more damage to such communities there will be. The more the Tote has to borrow to pay the Government for its freedom, the higher will be the annual interest charges and the less there will be returned to racing, on which these communities depend. The amendment would ensure that the House had the opportunity to approve the pricing mechanism the Government will use, which is an essential part of the process of privatising the Tote. We have heard a good deal about it but there is very little detail in the Bill. In fact, there is no detail in the Bill at all on this subject. I believe that there should be.
  The pricing mechanism is fundamental to the whole of Part 1 of the Bill, yet in another place the Minister for Sport said,
  "I reiterate that further details on the mechanics of the sale and, in particular, the identity of the purchaser cannot be provided in the Bill. Parliament is asked to support the Bill on that basis".—[Official Report, Commons Standing Committee D, 20/1/04; col. 35.]
  As has been mentioned previously by many noble Lords, there are reservations about taking the Government on trust. If the pricing mechanism is such that the price required by the Treasury is too high, the whole edifice on which the Bill is constructed will collapse.
  What will be tragic for racing is that Parliament will have no say in what happens thereafter. We will have provided racing with firm legislation that relinquishes any parliamentary control or influence over the way that the Government move forward on that basis. In those circumstances, the shadow Racing Trust would be unable to afford the Tote and we shall be left in a situation where the Government must choose between keeping the Tote as a nationalised industry and selling it off to a body other than a racing trust.
  Both options would involve breaking manifesto commitments. I firmly believe that the purpose of Parliament is to act as a check on government and to provide our considered responses to proposed legislation. It is not about opposing the will of the other place but about ensuring that the other place does what it promises. I see absolutely no reason why the Minister should refuse to allow Parliament the right to approve the pricing mechanism for selling the Tote. The amendment does not insist that Parliament should micro-manage the sale of the Tote; rather it ensures that a proper pricing mechanism is in place to best look after the interests of racing and taxpayers. I beg to move.
  6.30 p.m.
  Viscount Astor: I shall speak to Amendment No. 8, which is in this group. I apologise to the Committee because it is not what I meant it to be. It is probably my fault that it does not say the right thing, but the principle is there. I had hoped to cover the issue of pricing in the amendment, but one sentence was missed out. I wanted it to say that the amount the Tote could be sold for would be a multiple of its contribution to racing; in fact the amendment states that it would be its single contribution to racing in that year.
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  I seek an assurance from the Government about pricing. My noble friend said how important the Tote is for racing. It is absolutely crucial for racing. Racing is under threat at present. The Committee will have noticed that "At the Races" has ceased to exist and that we run the risk of television not covering as much racing as in the past. Although the bookmakers are doing very well, the Committee will also have noticed the rise in the numbers of those who make spread bets. The Minister will know that the Treasury take from spread bets is much smaller than that from normal bets. The greater spread betting grows, the less money goes into racing. So racing needs the Tote.
  My amendment is intended to place a maximum price on the sale, although I am not sure that my amendment necessarily provides the right one. I seek an assurance from the Minister, which I hope he will be able to give, that the purpose of the Bill is not only the privatisation of the Tote and its handing over to a racing trust, but to do so in a way that benefits racing. Does he accept that if the price that is negotiated is so high—and we must remember that all the money will be borrowed—the Tote's contribution to racing will be cut? In that case, surely there would be no point in doing it. There would be no benefit to racing and so we might as well leave the Tote where it is.
  The assurance I seek from the Government is that during the negotiations they will keep in mind that their laudable ambitions contained in the Bill will not succeed if the trust that owns the Tote is burdened with such high borrowing on the price it has to pay that it must significantly cut its contribution to racing. If that happens, racing will be worse off and we will all begin to wonder why we are doing this. I am sure that the Minister would rather give a helpful assurance than include any words on the face of the Bill. If he can therefore give me an assurance on the terms that I have outlined, I would be happy not to move my amendment.
  Lord Lipsey: The case for the amendment would be hugely weakened if the Minister had accepted Amendment No. 2. In that case, the Racing Trust would have had its negotiations obviously with the interests of racing firmly in mind. If we did a deal, I am sure that everyone would expect—coming from where we are and comprising racing bodies—that it would be in the interests of racing. If not, Ministers would have to come back to justify themselves. The most likely reason for negotiations breaking down would be that the Government had asked far too high a price, and they would have to come back to justify that to the House.
  The reason that we cannot leave that perfectly excellent mechanism in place is because the Government will not say that they will come back to this House. Therefore the instinctive desire of the House is to tie them down on the mechanisms. I would rather avoid tying them down on the mechanisms.
  Noble Lords: Oh!
  Lord Lipsey: This is an earnest of the vote we will get on the Floor of the House when we return with Amendment No 2.

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  I would rather have the flexibility in negotiation, on which the Minister has placed such a strong emphasis today, but we can only have it with a clean conscience if he will accept Amendment No. 2, or something like it, when we reach the next stage.
  Lord McIntosh of Haringey: Amendment No. 5 would require us to specify the price mechanism of the Tote presumably in an affirmative order that would have to come before Parliament. Amendment No. 7 would require us to dispose of the security at a 50 per cent discount to the market value. Amendment No. 8 would not allow the Tote to be sold for a sum exceeding £11 million. The noble Viscount, Lord Astor, has agreed that that is not what he intended.
  Viscount Astor: However laudable.
  Lord McIntosh of Haringey: We really are seeking to put in the Bill, or, in this case, into regulation, matters that should be part of negotiations. Indeed, I can assure the Committee that they are already part of negotiations. I said that the Racing Trust had appointed Rothschild. We have already appointed PriceWaterhouseCoopers. Those advisers are working on the negotiations. The valuation will use methods known to both parties and already used by both of them. There is nothing underhand about it. That is the way in which negotiations should take place. They should not take place in Parliament. They should not be, and could not be, the subject of debate on an affirmative resolution. The Select Committee on Delegated Powers and Regulatory Reform did not suggest that that would be an appropriate matter for an affirmative resolution and I hope that we will agree with it.
  Viscount Astor: I do not seek in any way to negotiate in this Committee or to bind the Government only to the terms of negotiation. I seek from the Minister a confirmation of something that I think that the Government believe; namely, that when they go into the negotiation, their aim will not be to conclude the negotiation in a manner by which racing would be worse off as a result. That is my simple point. The aim of the negotiation should be that racing is no worse off. The whole process should be for the benefit of racing. Therefore, will the Minister offer me some words of comfort that that is the case? I am sure that nobody would want to see the Tote's contribution to racing severely diminished as a result of the Bill.
  Lord McIntosh of Haringey: The noble Viscount, Lord Astor, is being helpful by saying "as an aim". It is our aim that the outcome of these negotiations for an exclusive licence for seven years should be that support for racing from the Tote continues. Whether it can continue at exactly the same level depends on the commercial success of the Tote under the Racing
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  Trust's ownership, so we cannot guarantee a figure, but our intention is that it should continue on broadly the same basis.
  Viscount Astor: I am extremely grateful to the Minister. That is very helpful.
  Lord Moynihan: I am slightly disappointed by the Minister's response because he has missed an opportunity, particularly in light of the comments of the noble Lord, Lord Lipsey, about the Committee's regret at the Government's unwillingness to accept his Amendment No. 2. The noble Lord said that we should find alternative opportunities to place in the legislation what we assumed was agreed by everyone concerned with this privatisation, and particularly by everyone who was concerned to ensure that the maximum return for racing could be made.
  In the context of Amendment No. 7, the Minister for Sport stated in another place that there would be broadly a 50:50 split of the asset between the taxpayer and the racing industry, because he believed that that was fair. He went on to say that the Government have given an absolute commitment that there will be an independent valuation. Should that commitment be included in the legislation, it does not seem that it would impact in any way on the negotiations. On the contrary, it would give far greater comfort to all Members of the Committee if that were the case.
  My noble friend Lord Astor took an equally strong position. In the absence of any other protection, it is right that the Committee should put a ceiling on the amount of money that the Government charge for selling something that they do not own. I therefore regret, once again, that the Government are resisting amendments to clarify their intentions. They should not in any way intervene in the negotiations. but should make it extremely clear in the legislation how best they can achieve a maximum return for racing as a result of the privatisation process.
  As the Committee will be well aware, and as my noble friend helpfully pointed out, the Racing Trust must pay for the Tote with money that it will have borrowed and the interest payments will come directly from money that would otherwise he returned to racing. My noble friend has done a huge amount of invaluable work on the subject right back to his Private Member's Bill in 2000 and should be congratulated not only on his foresight about the importance of privatising the Tote but on his consistent representations on this subject and his expertise.
  It is therefore with great regret that our sensible set of amendments could not at least be accepted in principle by the Government, taken away and brought back on Report in the form that would meet the Government's expectations. After all, they reflect everything that the Minister has been saying. I am even more disappointed about Amendment No. 7, because it is self-evidently clear that we should place the 50:50 split, the 50 per cent discount, in the Bill which, we are now told, is a clear commitment by Cabinet. That is not even an aspiration of the Minister for Sport,

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  however important he may be in another place; that is something that has been to Cabinet and is now policy at Cabinet level—not Cabinet sub-committee.
  Lord McIntosh of Haringey: The DA Cabinet committee.
  Lord Moynihan: Well, there was absolutely no reference to the Cabinet sub-committee in an earlier intervention from the Minister. Some rapid historical revisionism may take place, but it was the Cabinet that was referred to. I see nodding around the Committee. A sub-committee of Cabinet is second best, but I hope that that at least should give the Government sufficient comfort to place in Clause 5, which goes right to the heart of the Bill, the appropriate parameters that would reflect the will of both Houses to maximise the interests of racing in the whole process.
  I am disappointed. I fear that there may be a vote on the amendment tabled by the noble Lord, Lord Lipsey, although I took careful note—again, I hope that I have not misheard what was stated earlier—that the Minister was at least willing to take it away to consider it. He said that he would reread the transcripts of the debate that took place on that important clause. I hope that that rereading and consultation with his advisers will allow him to come back on Report and reflect the will of both Houses. After all, that is the whole basis on which the legislature is here: to assist the executive and the Minister. In the absence of that, I will certainly again raise these parameters—not intending in any way to intervene in the negotiations—on the Floor of the House later. In the mean time, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  6.45 p.m.
  Lord Moynihan moved Amendment No. 6:
  Page 4, line 8, at end insert—
  "( ) Where a security is issued in accordance with a request under subsection (1) to the Secretary of State or his nominee. neither the Secretary of State nor his nominee may dispose of the security unless satisfied that any surplus of income arising from the use or exercise of the security will be used for the purposes of the improvement of horseracing."
  The noble Lord said: Amendment No. 6 is very interesting. It relates to ensuring that when the newly nationalised Tote is sold, it is sold to a body that will continue to invest the profits in racing. We have covered this issue, so I can brief. But my brevity will not detract from my strong view that we want to ensure that the improvement of horse racing is paramount in this legislation, and that it is the heart of the Government's intention and the will of Parliament to ensure that that is reflected. It is important that the Government's commitments in public are in the Bill.
  We have a duty to ensure that the Bill does not undermine the unique contribution from the Tote to racing. As has been pointed out, that was worth more than £10 million last year. As the noble Lord, Lord Davies, said at Second Reading, the Bill,
  "provides for the vesting of the Tote's assets in a successor company wholly owned by the Crown and then the subsequent sale of that company.—[Official Report, 2/3/04; col. 553.]
  There is nothing in the Bill about to whom the successor company will be sold. There is nothing to stop the Treasury deciding that it needs to maximise its revenue, which it will certainly do if it continues with its spending plans, and sell the Tote to the highest bidder, regardless of the benefits to racing.
  Noble Lords will be only too aware of instances where the Government have not always honoured their commitments. I know that eyes were raised towards the screens in the Committee Room noting that there was a classic example of a manifesto commitment that has slipped being considered in another place; namely, on the question of tuition fees. The amendment does not suggest that there should be only one potential buyer, as the noble Lord, Lord Davies, feared at Second Reading. Rather, it would ensure that the Tote is sold to a not-for-profit body, which will return a surplus of income to racing. There could be any number of such bodies wishing to bid for the Tote.
  I should very much like to tie the Government's hands tightly so that there is only one potential buyer. But I appreciate that it is not Her Majesty's Government's wish on this occasion. Nevertheless, given that there is disagreement on that and that we shall not reach accord on that point, we have a duty to ensure that the legislation reflects what the Government intend. We would very much welcome the Government's clarification of a point raised in another place when the Minister for Sport and Tourism said:
  "If we cannot sell it into a racing trust, and the House of Commons has said that it wants to sell the Tote. we will be in some difficulties. We would have a piece of legislation instructing us to sell the Tote, and would therefore have to consider options".—[Official Report, Commons Standing Committee D. 20/1/04; col. 26.]
  First, does the Bill instruct the Secretary of State to nationalise and then sell the Tote or does it merely make provision for the sale of the Tote? I believe that we all know the answer to that, but it is worth reinforcing in the context of the amendment before the Committee.
  Secondly, can the Minister confirm that the Government are clear that they want to retain the right to sell the Tote to whomever they so choose? Again, in the context of the clause, I regret that that is the case, which mitigates against all the commitments t hat have been given. I am strongly of the opinion that it is the responsibility of the House to hold the Government to their promise to sell the Tote to a shadow racing trust. That is what my amendment seeks to achieve. I beg to move.
  Lord McIntosh of Haringey: I have little to add to what I have already said. The noble Lord, Lord Moynihan, admitted that he had very little to add to what he had already said, although he did add it. We made it quite clear that the Government intend to sell the Tote to racing interests. Currently, those interests are represented by the Racing Trust. Every action that we have taken over the past few years has been geared towards the sale of the Tote to racing. If we had

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  wanted to do something else, we would have had a different Bill. We would consider an alternative only if that option were closed off to us.
  In those circumstances, we would know that we have two choices; either to keep the Tote in the public sector—we have discussed how that is undesirable—or to sell it to someone else. The principle is widely accepted that state control is not appropriate. The only viable option would be to sell in the open market. For the life of me, I cannot think what benefit there would be to have a prohibition of this kind, the only effect of which could be that if there were no alternative that helped racing to keep it in the public sector.
  A sale to racing is our only aim. We will do everything in our power to achieve that. But we cannot put a statement of this kind in the Bill.
  Lord Moynihan: Again, I am disappointed. I regret that there will be a consistent theme running throughout our discussions of the Bill or, rather, Part 1—we will be relieved from the consistent theme when we reach Parts 2 and 3, where we have more substantial issues of disagreement. It is all well and good to accept the principles, but it is inadequate for legislation to pass through Parliament without as high a degree of clarification about intent as possible. That is bad law. It does not reflect the will of Parliament. It is an enabling measure. It is a blank cheque.
  Here, we have an opportunity to write into the Bill modest indications of direction—indications of direction that have been made patently clear by the Minister and in another place and would be completely comfortable, if I may use that rather unusual legislative expression, in the Bill. So it is deeply disappointing, in the context of broken promises elsewhere in another Chamber concerning manifesto commitments, that we cannot have a clarification that there could conceivably be no broken promise on the Bill. But so be it. We have the opportunity to return to the subject later. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 7 not moved.]
  On Question, Whether Clause 5 shall stand part of the Bill?
  Lord Moynihan: I do not hesitate to address the subject as frequently as I can because I believe very strongly that it is in the interests of racing to encourage the Government to clarify in the Bill their position on the sale of the Tote. However, I shall take a different approach, a different angle, on clause stand part. My approach is again probing and offers the Government the opportunity to think about the points that have been raised.
  I shall do so by recapping the comments made by the Minister for Sport in another place when he was asked by the MP for Bath whether there were any circumstances in which the Government would be prepared to sanction the sale of the Tote to a body that did not intend to put its profits back into racing. I have
  GC 482
  heard from the Minister this afternoon that the answer to that is no: the Government absolutely intend the sale of the Tote to be made to a body that will put its profits back into racing. The Minister for Sport said yes:
  "The answer is yes, we would sell into something. If we cannot sell into a racing trust, and the House of Commons has said that it wants to sell the Tote, we will be in some difficulties. We would have a piece of legislation instructing us to sell the Tote, and therefore we would have to consider options".—[Official Report, Commons, 20/01/04; vol. 26.]
  That drives a coach and horses through the Bill. Members of the Committee have said, rightly, that they would prefer to have the Tote as it is today than to move to a position where it was not sold to a racing trust. The Government are on record as saying, "Yes, it is possible that if we do not sell into a racing trust, because we are mandated by the legislation to nationalise and because it is our policy to sell, albeit that we will be 'in some difficulties', the answer is yes, we would sell into something". That "something" is not defined. I assume that they would take the best market price when it came to an offer from one of the big bookmakers. That quotation from the Official Report should be repeated, analysed and considered again on the Floor of the House because it does not say, "We will leave the Tote as it is with all its benefits if we cannot sell it on agreed terms to a racing trust in the interests of racing". It says, "Yes, pass this legislation and we will sell it"—to something, anything, nothing defined. That is absolutely unacceptable, as I shall argue later. The Minister in another place then got very upset. He became agitated and emotional, saying:
  "If people want to debate this matter in the Oxford debating society, that is fine but this is not the Oxford debating society; it is the real world. I am not prepared to tic the hands of our negotiators so that they are limited in their negotiations".—[Official Report, Commons, 20/1/04; col. 27.]
  Indeed, it is the real world. The fact that the Minister for Sport could say that the answer is, "Yes, we would sell it into something. If we cannot sell it into a racing trust and the House of Commons has said that it wants to sell the Tote, we will be in some difficulties", is extremely serious. I suggest to the Minister that if that statement cannot be comprehensively refuted, we should draw up an amendment stating that if it is not sold to a racing trust, it will not be sold.
  This issue has arisen as a result of some extremely helpful contributions this afternoon. It is important and, in the context of Clause 5, I suggest that we give it further consideration if the Minister cannot give an absolute undertaking that the Tote will be sold in the interests of racing. If he can give that absolute undertaking, let us find a way to write it into the Bill, because there is no reason not to. My reading of the Long Title is that it makes provision for the sale of the Tote. In making provision for the sale of the Tote, I hope that the Government would not be prepared to sell it to a private company that does not return any profits to racing.
  The Committee deserves a categorical statement to that effect. Because of the comments made by the Minister for Sport in another place, if a categorical

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  statement to that effect cannot be written into the Bill, we will need carefully to consider the further passage of the Bill on Report and Third Reading. At least one of Parliament's roles is to focus on such points. This clause stand part debate gives us the opportunity to hear further clarification from the Minister. I hope, unequivocally, that the Government would not sell the Tote and change its current status if it meant that the profits and proceeds would not go back into racing. If they cannot say that, much of the good will and support that has been expressed in Committee for the Minister will evaporate.
  Are the Government really saying that their negotiators must have a free hand to get the best price possible, irrespective of the impact on racing? Surely, and hopefully, Ministers have told the negotiators that they would not countenance selling to any body other than one which would ensure that money goes back into racing and that that is the only way in which the ministerial team would approve the negotiations.
  Lord Lipsey: This is yet another debate that we would not need if the Minister had only accepted Amendment No. 2. If it had been accepted and if the Government were going to sell the Tote to someone else, they would have had to come back to Parliament. make their case and explain how racing would benefit from an alternative method of sale. That would be fine and there would be no point in discussing it now because we hope that we would not go down that route. We enter all this time-wasting complication simply because of the Government's failure so far to see the desirability of the change proposed in Amendment No. 2.
  Lord McIntosh of Haringey: I do not think that I have anything to add to what I said a few minutes ago. I said that our intention is to sell the Tote to racing interests, which are currently represented by the Racing Trust. In response to the previous amendment, I said, "I think the principle is widely accepted"—now I have to say that I thought the principle was widely accepted that state control is no longer appropriate and is constraining the Tote's future development. That means that we would be left with only one viable option: a sale in the open market.
  If the noble Lord, Lord Moynihan, thinks that returning the Tote to its existing state is better than an onward sale, failing a sale to a racing trust, he should table an amendment to that effect. Removing Clause 5 would not achieve that.
  Lord Moynihan: I immediately respond to the Minister by saying that I understood that that was the Government's position. Let me put the question bluntly and directly: are there any circumstances in which the Government would be prepared to sanction the sale of the Tote to a body that does not intend to put its profits back into racing? The answer is "Yes" or "No".
  Lord McIntosh of Haringey: It is not possible to answer questions with a "Yes" or a "No" just because it is convenient to ask them in that form. Any betting
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  operation, in a sale on the open market, would then have to bring money into racing because it would have to pay for access to race courses and pictures. I n any case, we have always said that racing will be compensated in some way, and we still take that view. There is no possibility of holding a sale which would not bring some benefit to racing.
  7 p.m.
  Lord Smith of Leigh: Will my noble friend concede that, along with the interests of racing. there are the interests of the Tote as an organisation and an employer? Clearly, if a sale was made to a third party which we do not know, it could well be that the organisation is broken up and the Tote itself closed down. The buyer could simply asset strip the organisation. That is why noble Lords are unwilling to give the form of blanket approval required here.
  We know what the Government would like to do and we concur with that. But if it does not happen, for whatever reason, I am afraid that, in my view, the alternative is worse than the status quo. Perhaps we should take a little time to come back with a different plan from the one put forward.
  Viscount Astor: I rise to support the noble Lord, and I refer back to the previous amendment. The purpose of what we are doing is for the benefit of racing and the Tote: to enable it to expand and do all the things that it cannot do while constrained in its present form. The Tote should be able to grow and thus benefit racing.
  Should the scenario arise, for any reason, in which a sale to the Racing Trust does not succeed, there would be no benefit in a sale to a third party for whatever the sum of money. The Minister has said that racing would in any case get some money. Perhaps the Government would hand out a sum of money. but who is to know what that would be? Would it be some millions, or even hundreds of millions? However, we do not know who to hand it to and we do not know how racing would benefit from it.
  The Minister has also talked about how a sale to a third party would benefit racing because of data rights and television rights. However, we have just seen a total collapse in the value of television rights. "At the Races" has ceased to broadcast. Everyone thought that the rights would be hugely valuable, but what happened was quite simple: the programme producers thought that when they broadcast live pictures, viewers would then click and use their betting service; however, while everyone watched the programme, they would use their own telephones to contact their spread-betting bookmakers and thus did not use the television betting service. No income came in and that is why we no longer have "At the Races".
  So all those data rights which form part of extremely complex negotiations being conducted at the moment between the BHB, the racecourses and so forth are going forward when their value is an unknown quantity. The only thing we do know is that whatever was the value put on them a year ago, it is a great deal less now.

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  I support the noble Lord who has just spoken. Racing would not benefit in any way from a sale on the open market, however much a third party paid and even if the Government stepped in saying, "We have done brilliantly. We have sold the Tote for much more than we ever thought possible. So, here you are, horse racing interests, that is your pot of money". Who would get the money, how would it be spent and what good is that to racing in the long term? On that basis, racing would not benefit at all.
  Viscount Falkland: I want to add my piece to this debate. I support the noble Lord because it is obvious to me and to other Members of the Committee that should the sale founder, the interests of other buyers would lie in the betting shops which form 78 per cent of the overall turnover of the Tote. At present, aside from taxation, all the profits from those betting shops are put back into racing. If they were acquired by other parties, their profits would go into international hotels, casinos and God knows what else. So there is obviously an interest within racing, one that is reflected in the almost unanimous views expressed in this debate, that should this sale not take place, racing would suffer.
  This has been a useful debate because we have been able to identify at least a shadow of the problems that may arise. As I have said before, if the sale does not take place, the most reasonable thing to do would be to go back to square one and consider the position. I cannot see why it is not possible for the Government to embrace this concept in the Bill.
  Lord Moynihan: I, too, am grateful to the noble Lord. I am slightly surprised, as I had thought that the Government had accepted everything that he has said, and which has been repeated around the Committee. I had thought that the absolute principle of moving ahead with this nationalisation—the Minister objects to my using that word—was that the subsequent privatisation arising from the sale of the Tote would be to ensure that it smoothly transferred to a racing trust because the principle of putting profits back into racing was a fundamental of the Government's approach to the sport. I had thought that that was a condition. It may be difficult to write such a condition into the legislation, but I had thought that it was an absolute commitment made by Ministers.
  That is why I was so worried that, when the question was addressed in another place by the Minister for Sport, instead of responding immediately by saying "No, we do not intend to sanction a sale of the Tote to a body that does not put its profits back into racing", he said, "Yes". I find that unhelpful to the Committee—to use parliamentary language suitable to the House of Lords rather than the Commons. It is unhelpful that the Minister is not prepared to give a "Yes- or "No" answer. If he could repeat what his colleagues have been saying, except for what I assume was just a slip of the tongue on the part of the Minister for Sport on 20 January, and if they said that the Government would not be prepared to sanction a sale of the Tote to a body that does not intend to put its
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  profits into racing, and that they would not be prepared to sanction a sale to a body that would asset strip the Tote, get rid of pool betting and maximise the value of the shops, we would be satisfied. But if the Minister is not prepared to stand up and make those two commitments then he is driving a coach and horses through all the other commitments that we have been given both this afternoon and in another place. That would be unacceptable.
  Does not the Minister recognise that all he has said mitigates towards a successful sale to the shadow Racing Trust and, in the absence of that, neither he nor this Government will countenance a sale to any body that does not put the profits back into racing or is prepared simply to asset strip for a cheque that will go to the Treasury? That will deeply damage the future of racing, because we will lose £10 million after £10 million—even more under the licence, it is hoped—of funds on which the sport so desperately depends. It is not a difficult question. Can the Minister give a clear commitment to the Committee that the answer to the question whether the Government are prepared to sanction a sale of the Tote to a body that does not intend to put its profits back into racing is "No"?
  Lord McIntosh of Haringey: I have given the answer already. It is our intention to sell the Tote to a representative of the racing industry, being the Racing Trust. If that were not possible for reasons beyond our control, we would have to consider the possibility of a sale on the open market. To say other than that would be to tie our hands in negotiations in a way that would be quite unacceptable.
  To say that one would rather that the Tote should stay in public ownership than be sold on the open market is to express a legitimate point of view, one that I understand and am prepared to deal with in debate. But that is not what would be achieved by deleting Clause 5.
  Lord Moynihan: This is very important. I shall press the Minister until we are absolutely clear. If I say something with which the Minister disagrees, I hope that he will intervene. What he has just said is that, ultimately, this is a privatisation that will take place irrespective of whether or not racing benefits from it. This is a straightforward sale. The Minister hopes that it will not be. The aspirations of all Members of the Committee are based on the hope that it will not be, but there is no position beyond which the Minister and the Government will not go to sell the Tote, irrespective of the benefits that will or will not accrue to racing.
  I say to the Minister that that is now very clear to the Committee. It mitigates against all the aspirations that have been expressed, because the position is now overtly clear: the Government are prepared to sanction the sale of the Tote to a body that does not intend to put its profits back into racing rather than continue with the status quo. I am grateful to the Minister for making that clear.
  Lord McIntosh of Haringey: What is clear is that the Government cannot legislate to control things which are beyond their control. They cannot legislate for other people; only for their own decisions.
  Lord Moynihan: But the Government have every opportunity to establish control over the sale process. They can do that on the face of this legislation. There is nothing to stop them from coming forward with an amendment saying, "We will not sell the Tote to any body that does not put the profits back into racing". That is absolutely within the control of Ministers. Officials can write a dozen amendments to that effect, all of which, if presented to Parliament, I anticipate, would be well received. I repeat, that is totally within the control of the Minister. To say that it is not within his control is to be misleading.
  I know that the Minister would never wish to mislead the Committee, but he has every opportunity to table amendments to this legislation which would ensure that under no circumstances would the Government sanction a sale of the Tote to a body which could asset strip the organisation, pocket the profits and proceeds from a sale of the shops—which is where the real financial benefit accrues to whoever owns the Tote—and the pool disappears overnight. Given what the Minister has said, that would be perfectly possible.
  It would be equally possible for him to draft amendments to prohibit any future government, acting on the basis of this primary legislation, from so doing. Instead, he could accept the proposal made by his noble friend which would allow—in circumstances which we very much hope will not arise—the Minister to come back to Parliament and say, "We have not concluded a successful negotiation. The status quo at the Tote will continue".
  Lord McIntosh of Haringey: Apart from the fact that no government can legislate to bind their successors, which I am sure was just a slip of the tongue, the Government cannot legislate to secure a buyer who will devote the proceeds from the Tote to the racing industry. They cannot do that because it is not within their control. All that the noble Lord, Lord Moynihan, is saying is that if that is not possible, he would rather the Tote were kept in public ownership. That is a legitimate point of view.
  Lord Moynihan: I have to press the Minister on this. Why cannot the Government introduce an amendment to that effect?
  Lord McIntosh of Haringey: The Government cannot produce a buyer for the Tote. That is not within our control.
  Lord Moynihan: I am not asking the Government to do that. I am asking for conditions for the sale of the Tote to be put on the face of the Bill, which the Government are absolutely entitled to do. I hope that they will do so because, in various circumstances, we have been pressing for that all afternoon.
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  For the Minister to say that he cannot do that implies that there is some legal reason why it is not possible. There is no legal reason why the Minister cannot come before the Committee with amendments which seek to place on the face of the legislation the conditions which the Government are proposing to Parliament should apply to the sale of the Tote. I have to say to the Minister that that is a fact. The Minister says that the Government cannot come forward with amendments to that effect. Would he be kind enough to explain to the Committee why not?
  Lord McIntosh of Haringey: If no one comes forward with an offer that delivers a return of the profits that would benefit the racing industry, there are then only two alternatives. The first is that the Tote is sold on the open market; and the second is that it is kept in public ownership. The noble Lord, Lord Moynihan, is saying that he would prefer to see the Tote kept in public ownership rather than he sold on the open market. He is entitled to his point of view, but Clause 5 does not secure that.
  Viscount Astor: I do not expect an answer today, but had the Minister accepted Amendment No. 2. moved by the noble Lord, Lord Lipsey, we would not need to go over this point so often because it would all be irrelevant. We have come down to one important issue—I hope I have got it right; the noble Lord will correct me if I have not—and that is that should a sale to a racing trust fail then, rather than keep the Tote in public ownership, the Government would prefer to put it on the market and sell it to the highest bidder. If that were to happen, can the Minister tell Members of the Committee how racing would benefit? Would it benefit from the money accrued, a point to which the Minister alluded earlier? I ask that because, ultimately, we are all trying to do something that will be of benefit to racing.
  If the Minister is offering that alternative, he must be clear. He must say how racing will benefit from a sale to a third party which may do anything with the Tote. How would racing benefit in future?
  Lord Lipsey: I am sorry that this is holding us up so much. No doubt it is very annoying for the Minister, too. I have explained my diagnosis of why we are getting so bogged down. I can imagine that if the Racing Trust fails—if they all fall out with each other—Ladbrokes offer £1 billion for the Tote and the Government say that racing can have half the money, racing may decide that that is preferable to the status quo.
  I can imagine another situation where the Government sell the Tote to bookmaker X. Bookmaker X announces that it is closing the pool operations of the Tote which, under present rules, would make racing impossible. The Jockey Club rules state that the Tote must be present at every racecourse. The Government might say that they will give £50 million of the offer to racing, in which case the status quo would be infinitely more desirable. That is a judgment that can be made only in the light of the full facts at the time.

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  We have been forced into this ridiculous position of trying to make judgments about hypothetical circumstances because the Minister will not give the commitment to come back to Parliament and say, "Here is the deal. Do you support it or not?", if there cannot be a sale to the Racing Trust. This will take an awfully long time if we are to keep having this debate.
  7.15 p.m.
  Lord Moynihan: It would not be in the interests of the Committee to pursue this matter further. The position has been clearly established. The contributions to this clause stand part debate have been invaluable. It is something that will tax our minds later. I conclude by thanking the Minister for his ever-robust and professional manner in answering the points that I have put to him. I also remind Members of the Committee that I have never argued that the Tote should be a state-owned enterprise on the grounds that the Tote is owned by no one. We should consistently remind ourselves that that is presently the case with regard to the Tote. It was made very clear in parliamentary Answers by the Government. We should not continue to take the rather erroneous view that somehow it is currently owned by the state. It is not. It is made explicitly clear that it is owned by no one. That is the reason for the nationalisation proposals in Clause 1. As a result of the interesting exchange of views and the time, I thank the noble Lord.
  Clause 5 agreed to.
  [Amendment No. 8 not moved.]
  Clause 6 agreed to.
  Clause 7 [Shadow directors]:
  On Question, Whether Clause 7 shall stand part of the Bill?
  Lord Moynihan: This should be less controversial, not least because it is a probing objection to ensure that the Secretary of State and the Treasury retain their responsibilities as shadow directors. I fully appreciate the distinction between shareholders and the role of directors. For that reason this is a probing objection to elicit a response from the Minister.
  Effectively, Clause 7 exempts the Secretary of State and the Treasury from their responsibilities as shadow directors under the Companies Act. In another place, the Government argued that because the Government only owned the Tote to facilitate its sale, Ministers should not have any of the obligations incumbent on shadow directors. That is an argument with which I could have some sympathy.
  However, if there were a guarantee in the Bill that the Tote would not remain within the ownership of the Crown for more than 24 hours, I could see the reason for Clause 7. But, as we have heard in another place,
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  there may be instances when the Tote remains a nationalised company for a significant period. As the Minister for Sport and Tourism, again on the famous date of 20 January, stated:
  "If the time involved lengthens … there may be a point at which new directors have to be appointed to the board".—[Official Report, Commons Standing Committee D, 20/1/04; col. 18.]
  It is that combination of a prolonged period of state control and the chance that directors would change as a result of the Secretary of State's appointments that leads me to seek continuity about the roles of the Secretary of State and the Treasury to be placed in the Bill. It may be very helpful to learn some of the responsibilities that the Companies Act will place on the Secretary of State for the period when the Tote is nationalised. I look forward to the Minister's response.
  Lord McIntosh of Haringey: As the noble Lord, Lord Moynihan, rightly says, the purpose of the clause is to secure that neither the Secretary of State nor the Treasury should be treated as shadow directors of the Tote's successor. There are precedents for that; I cited them in more detail than I should have done previously. If the noble Lord looks back in Hansard to my references to the colonial development corporation Act and the United Kingdom Atomic Energy Authority, he will find that I cited specific places in the Act, which I do not now have in front of me. that are precedents for the exemption of the Secretary of State and the Treasury from shadow directorships. That means that the Secretary of State and the Treasury are exempted from the controls and obligations incumbent on shadow directors—those relating to wrongful trading.
  The noble Lord rightly referred to the proceedings in the Commons on the role of government, which is only to facilitate the sale in line with policy, not to become involved in the operation of the Tote's business. I have already given an assurance that goes further than anything said before by saying that it is our intention not to transfer the Tote's assets to the successor company until a deal is ready. The scenario that he puts forward of a lengthy period in which the Tote's assets are in the hands of a Crown-owned successor company will not happen.
  Lord Moynihan: The undertaking given earlier was exceptionally helpful, and for it to be repeated in the context of Clause 7 is of significant value to the Committee.
  Clause 7 agreed to.
  Clause 8 [Exclusive licence]:
  Viscount Astormoved Amendment No. 9:
  Page 5, line 16. leave out "seven" and insert "ten"
  The noble Viscount said: After being pressed, the Minister in another place put the length of the licence into the Bill; when the Bill first arrived in another place, it was not there. The licence is for seven years. My amendment suggests 10 years, but I am not wedded to any particular time. It is really a probing amendment.

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  We know that there were extensive negotiations between the Office of Fair Trading and the Department of Trade and Industry, which wanted a rather short licence. With its competitive hat on, it argued for three years. Presumably the Treasury had a view, although I do not quite know what it was as one could argue two ways. One could say that the longer the licence, the more valuable it was, so the greater the money that the Racing Trust might pay. Alternatively, one could say that if one cut the period down to a year, one could auction it every year and that might be even better. 1 do not know what angle the Treasury came from, but the Minister's department pressed for as long a licence as it could get away with. I commend it for getting seven years; I wish it had been and think it should be longer, but seven years is not too bad.
  We will come on to another amendment—I thought that it was grouped with this one, but it is not—about whether the exclusive licence can be extended. I do not see why the Government so categorically say in the Bill that the exclusive licence can never be renewed. That seems a mistake. That decision should be made by the Government depending on the circumstances in future. They should not categorically now say that it can never he extended. If that later amendment were accepted, this amendment would not be necessary.
  Therefore, I commend the Government. The seven years, rather like my 10 years, is an arbitrary term that was achieved out of negotiation between government departments. What consideration did the Government give to whether the seven-year term is compatible with any European legislation or European rules on competition? Given that a seven-year licence will be granted to the new entity, which will no longer be a public body—that body will be the Racing Trust—will the Minister assure us that the Government are confident that nobody will seek the opinion of the courts on whether it is right to give the new body an exclusive licence? Will they offer some assurance that they have received robust legal advice on both UK and European law? That assurance would be enormously helpful. I beg to move.
  Viscount Falkland: Although it is not particularly relevant to the amendment—the noble Viscount, Lord Astor, said it was a probing amendment—I add my support to the questions that he asked. When the Racing Trust comes into being, as we hope it will do in light of the discussion that we have had, the licence will last for seven years. The trust will no doubt operate it with great efficiency and great success and then the end will come. All that will happen, therefore, is that the Tote will become the punters' bookmaker, if that is not a contradiction. That is all that will be left.
  It seems extraordinary to the man in the street—or men on the turf—that that should be the case. The Tote has been an institution in this country for many years. The idea of a Tote monopoly is accepted throughout the world. Only here do we see it as uncompetitive. It has similarities with the lottery. If one reduces the monopolistic characteristics of the lottery, one does not generate the profits that in our case go to good causes. In the case of a Tote monopoly,
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  one does not see the big pools and no one is interested in the slightest. Everyone bets with fixed-odds bookmakers and the whole thing withers on the vine. The whole business is very sad. It represents a crazy. British academic view, far removed from reality.
  To bang on the head with a ridiculous theory of this kind the history of this country, where the Tote and racing have worked so well and been modernised together since 1928, is a disgrace to the public. Apart from regular betters, there are those who bet on the Derby and the Grand National. The Grand National is soon upon us. I doubt that very many people in this country could follow the logic of what has happened. I support—in vain, I suppose—the entreaties of the noble Viscount, Lord Astor. More in hope than expectation, he pressed the Minister to confirm that there is a possible scenario in which the licence could be extended.
  Lord Lipsey: Perhaps I may add a point from the perspective of the shadow Racing Trust. The seven-year term was not arbitrary; it was the minimum. We would not have bothered, I hope, to debate the Bill if we had not been granted a seven-year licence, because a transaction for any substantial price would not have been fundable. That was the clear advice of Rothschild and the financial advisers. Nothing less than seven years would have been feasible. That is why it was so important that the Government granted the seven-year term. I have made the theoretical argument for an eternal licence and I sympathise with the arguments of the noble Viscount, Lord Falkland, but we are where we are. We can live with where we are.
  The trust sometimes comforts itself by saying that at least there is the advantage that it concentrates minds on a rather short-term horizon in which we can still develop the pools and build them up, as we have great ambitions to do, so that after seven years they are impregnable. That gives us an incentive to get on with the job. My basic point is that without the seven years we would have had no Bill.
  7.30 p.m.
  Lord Moynihan: It is always good to finish four hours' intensive consideration of a Bill with brilliant. incisive rhetoric from all three parties of your Lordships' House, making yet again a compelling argument that will be irresistible to the Minister. I am pleased to support the amendment. It complements the others that we have discussed and will discuss on the subject. It is clear that most of the Committee would like to see scope in the Bill for extending the time limit for an exclusive pool betting licence. If, sadly, the Minister is unable to accept the amendment as it stands, I feel sure that at least we will have the opportunity to come back to the issue at a later date.
  Lord McIntosh of Haringey: Those who want to secure racing's finances on a long-term basis want a longer licence; those who want to introduce an element of competition to pool betting want a shorter licence. This is a deal between the two. The noble Lord, Lord Lipsey, was good enough to say in print a couple of

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  months ago that if the Racing Trust could not get its act together within seven years it did not deserve the licence. He has not quite confirmed that but is very close to doing so. This is the only deal on the table; there is no alternative. I cannot give an absolute assurance that there will be no challenges, but our best legal advice is that we are well placed to resist any challenge under British competition law or European law.
  Viscount Astor: I am grateful to the Minister for his answer. He has given me more determination that when we debate Amendment No. 13, tabled in my name and that of my noble friend Lord Moynihan, we will be robust in our arguments.
  Lord McIntosh of Haringey: I will be using the same arguments.
  Viscount Astor: Then we shall have to be even more robust and even cleverer in deploying our arguments.
  Lord McIntosh of Haringey: Is this the Conservative Party preferring to protect racing against competition? I just want to be sure.
  Viscount Astor: I can best answer that by quoting one of the noble Lord's colleagues in another place, Robin Cook. He said that,
  "the whole point of pool betting is that the bigger the pool, the more attractive it is to the punter. The greater the competition, the more pools there are, the less attractive it is to the punter".—[Official Report, Commons, 8/1/04; col. 453.]
  GC 494
  I agree with those sentiments.
  Lord McIntosh of Haringey: Robin Cook is free to prefer racing to capitalism; the Conservative Party is not.
  Lord Lipsey: Let us be careful here. The Labour Party appears to be giving full reign to the forces of capitalism against very sound arguments concerning the public realm, natural monopolies and so on that have always so appealed to we socialists.
  Viscount Falkland: The Liberal Democrats as a party do not pay an enormous amount of attention to Totes, gambling or anything of that kind because they are so clean living. I hope to persuade them that the idea of competition between pools does nothing but cut throats and reduce the efficacy of the pool.
  Viscount Astor: I am delighted to confirm to the Minister that we do not believe that by having a multitude of pools there will be either any benefit to racing or any competitive improvement to the punter.
  Lord McIntosh of Haringey: This may be a convenient moment for the Committee to adjourn until 3.30 p.m. on Monday.
  The Deputy Chairman of Committees (Baroness Lockwood): The Committee stands adjourned until Monday 5 April at 3.30 p.m.
  The Committee adjourned at twenty-six minutes before eight o'clock.

  Ulster-Scots Agency
  Ulster-Scots Agency
  Waterways Ireland
  Waterways Ireland
  Police Service of Northern Ireland
  Police Service of Northern Ireland
  Belfast Education and Library Board
  Belfast Education and Library Board
  Northern Ireland: Young People and Suicide
  Northern Ireland: Young People and Suicide
  Niger and Ethiopia: Debt Relief
  Niger and Ethiopia: Debt Relief
  House of Lords: Members' Expenses
  House of Lords: Members' Expenses
  Parliament: Legislative Powers
  Parliament: Legislative Powers
  Kosovo: Belgrade-Pristina Negotiations
  Kosovo: Belgrade-Pristina Negotiations
  Belarus: Disappearances
  Belarus: Disappearances
  Motoring Offences: Prison Sentences
  Motoring Offences: Prison Sentences
  Women Prisoners
  Women Prisoners
  Undocumented Arrivals: Originating Airports
  Undocumented Arrivals: Originating Airports
  Framework Convention for the Protection of National Minorities
  Framework Convention for the Protection of National Minorities
  National Centre for Policing Excellence
  National Centre for Policing Excellence
  Football Hooligans
  Football Hooligans
  Housing Corporation
  Housing Corporation
  Physical Education Teaching
  Physical Education Teaching
  Sports Colleges
  Sports Colleges
  Iraq: Legal Advice
  Iraq: Legal Advice
  Legal Services Consultative Panel
  Legal Services Consultative Panel
  Airline Passengers: Data Records
  Airline Passengers: Data Records
  Olympic Games 2012: London Bid
  Olympic Games 2012: London Bid
  EU Accession States: Workers' NICs and Tax Position
  EU Accession States: Workers' NICs and Tax Position
  National Savings and Investments: Ordinary Accounts
  National Savings and Investments: Ordinary Accounts
  ASPIRE Contract
  ASPIRE Contract
  Research Ethics Committees
  Research Ethics Committees
  Committee on Radioactive Waste Management
  Committee on Radioactive Waste Management
  Foot and Mouth: Payments to Qualified Personnel
  Foot and Mouth: Payments to Qualified Personnel
  Genetically Modified Crops
  Genetically Modified Crops

  Independent Commissioner for Detained Terrorist Suspects: Annual Report 2003
  The Lord President of the Council (Baroness Amos)
  My right honourable friend the Minister of State for Northern Ireland has made the following Ministerial Statement.

  I have today arranged for copies of Dr Bill Norris's annual report for 2003 to be placed in the Libraries of both Houses.

  I welcome Dr Norris's report and I will consider it carefully. I will respond as soon as possible.

  Iraq Survey Group: Second Interim Report
  The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
  Charles Duelfer, the special adviser to the director of central intelligence for strategy regarding Iraqi weapons of mass destruction programs, presented a further report to US congressional oversight committees on 30 March 2004. As with the previous report presented on 2 October 2003, this is a status report on work in progress. A copy of the unclassified text will be placed in the Library of the House.

  Guantanamo Bay: British Detainees
  Baroness Symons of Vernham Dean
  A team of FCO officials, RAF personnel, British police officers and independent observers visited Guantanamo Bay between 8 and 9 March 2004.

  The purpose of the visit was to return five British detainees to the UK, to check on the welfare of the four British detainees who remain there and to explain their position to them. The camp authorities were cooperative and helpful during the visit.

  An FCO official, accompanied by a police officer, informed the five British detainees on 8 March that they would be returned to the UK. Their return took place the following day, 9 March.

  An FCO official also met the other four British detainees individually. A US official observed the meetings. The FCO official delivered mail for the detainees personally and brought messages back to their families. Detainees are able to send and receive mail through the camp authorities and the ICRC. Delivery remains irregular. We are considering with the US Government ways for them to improve the mail arrangements.
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  The FCO official asked all the British detainees about their health, diet, accommodation, opportunities for exercise and other camp facilities.

  The British detainees appeared to be in satisfactory physical health but are increasingly frustrated by their continued detention. Individual welfare issues are being pursued by British officials with the US Government.

  The FCO official informed the four British detainees that, following discussions between the British and US Governments, five other British detainees were to be returned to the UK; and that discussions between the two governments on their own future continued.

  The FCO official also informed Mr Abbasi and Mr Begg, both of whom have been designated by the US authorities as eligible for trial by military commission, that if they were to be tried, the British Government have told the US Government that the trial should be fair: and that the two governments continued to explore this and other possible courses of action.

  The legal proceedings against Mr Abbasi and Mr Begg were suspended in July 2003 pending discussions between the British and US governments. The British Government's position remains that either the British detainees should be tried in accordance with international standards or they should be returned to the UK. The British Government continue to work to resolve their position.

  Great Chagos Bank: Environmental Protection
  Baroness Symons of Vernham Dean
  The Great Chagos Bank, which lies within the waters adjacent to the outer islands of the British Indian Ocean Territory (BIOT), is an exceptional example of a submerged coral atoll, providing a valuable contribution to the marine ecology of the Indian Ocean. On 17 September 2003, in order to help to conserve the natural resources of the bank, the Commissioner for BIOT proclaimed an area including the Great Chagos Bank to be an environmental (preservation and protection) zone. A copy of the proclamation, together with the relevant chart and co-ordinates, has been deposited with the UN under Article 75 of UNCLOS, and wilt be published in the Law of the Sea Bulletin No. 54.

  NATO Standing Naval Forces and Response Forces: UK Maritime Contribution
  The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)
  My right honourable friend the Minister of State for Defence (Mr Adam Ingram) has made the following Written Ministerial Statement.
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  From mid-July 2004, the United Kingdom's routine destroyer or frigate (DD/FF) contribution to the standing element of the NATO Response Force (NRF) will be a single ship. This replaces our previous commitment of two—one to Standing Force Atlantic and one to the Standing Force Mediterranean. We have also given greater priority to enduring additional commitments in the Arabian Gulf.

  When, from July 2004 until June 2005, the UK fulfils the role of high readiness force commander (maritime), we will provide a broad range of maritime capability to the NRF. When this duty passes to another nation, the UK will revert to our routine commitment of one DD/FF.

  NHS Foundation Trusts
  The Parliamentary Under-Secretary of State, Department of Health (Lord Warner)
  My right honourable friend the Secretary of State for Health has made the following Written Ministerial Statement today.

  The chairman of the independent regulator of NHS foundation trusts has today announced that, in accordance with Section 6 of the Health and Social Care (Community Health and Standards) Act 2003, the independent regulator has authorised the following NHS trusts as NHS foundation trusts from 1 April 2004:

  Basildon and Thurrock University Hospitals NHS Trust

  Bradford Teaching Hospitals NHS Trust

  Countess of Chester Hospital NHS Trust

  Doncaster and Bassetlaw Hospitals NHS Trust

  Homerton University Hospital NHS Trust

  Moorfields Eye Hospital NHS Trust

  Peterborough Hospitals NHS Trust

  Royal Devon and Exeter NHS Trust

  The Royal Marsden NHS Trust

  Stockport NHS Trust

  Decisions on the remaining 15 applications that I have approved will be made at a later date.

  Arm's Length Bodies
  The following Written Statement corrects the Written Statement made on this subject on 30 March 2004.
  Lord Warner
  My right honourable friend the Secretary of State for Health has made the following Written Ministerial Statement today.

  Two new regulatory bodies, which will operate at arm's length from the department, come into being on 1 April: the Commission for Healthcare Audit and
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  Inspection (CHAI) and the Commission for Social Care Inspection (CSCI). A third regulatory body, the Office of the Independent Regulator (OIR), came into being in January this year. The inception of these new bodies will change the department's role in the provision and inspection of healthcare and social services. The effects that this will have on accountability arrangements are set out below.

  The role of the OIR is to authorise, monitor and regulate National Health Service foundation trusts (NHSFTs). The independent regulator is directly accountable to Parliament, and the department will not be able to comment on the details of the OIR's day-to-day management. For any questions that might arise in this area, we would provide information on the independent regulator's behalf, but not directly.

  NHSFTs are themselves independent of the department, and are directly accountable to their local populations and to Parliament. Because of this independent status, and NHSFTs' separate and local route of accountability, we will no longer be in a position to comment on, or provide information about, the detail of operational management within such trusts. Any such questions will be referred to the relevant NHSFT chairman.

  Notwithstanding these changes, matters of national policy (including the statutory framework for the NHS, and its resources, standards and targets) will of course remain the responsibility of the department. We will therefore continue to respond directly on these issues. We will also continue to respond directly on the services commissioned by the NHS locally, as these remain the responsibility of primary care trusts.

  As with the OIR, CHAI and CSCI are independent of the department. We will therefore provide information to Members on behalf of these bodies about their activities, but not directly. Two areas of their operations warrant particular notice. The department has traditionally had a much closer involvement in the performance star ratings system. From 1 April, it will be CHAI's and CSCI's responsibility to devise the form of performance ratings, and their criteria and methodology. The department will approve the criteria devised.

  NHS Purchasing and Supply Agency: Annual Business Plan
  Lord Warner
  We are publishing today the NHS Purchasing and Supply Agency's annual business plan. Copies have been placed in the Library.

  The business plan highlights the agency's achievements in 2003–04 and sets out the key tasks and targets for the coming year.

  This comprehensive plan has been formulated within the context of the agency's ongoing remit to lead the modernisation of the NHS purchasing and supply function. The agency has a strategic role to set out a major development agenda for purchasing and supply in the NHS and working with the

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  commercial directorate has developed a co-ordinated implementation plan for doing so. The business plan sets out clearly how the agency will achieve these aims.

  Medicines and Healthcare Products Regulatory Agency: Business Plan 2004–05
  Lord Warner
  The 2004–05 business plan for the Medicines and Healthcare products Regulatory Agency has today been presented to Parliament. The plan contains the agency's key targets for the year. Copies of the plan have been placed in the Library.

  Review of Statistics for Economic Policy Making
  The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
  My right honourable friend the Chancellor of the Exchequer has made the following Written Ministerial Statement today.

  Christopher Allsopp's final report, The Review of Statistics for Economic Policy Making, is published today. Copies are available in the Printed Paper Office and the Library of the House.