Westminster Hall Sitting of 8 December 1999

Preamble
[Mr. Michael Lord in the Chair]

Oil Fabrication
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Touhig.]
9.30 am
Mr. David Stewart: Thank you, Mr. Deputy Speaker, for the opportunity to deal with the important issue of the oil fabrication industry in the United Kingdom. First, I shall focus on the Barmac oil construction yards, some of which are located in my constituency. Hon. Members will be aware that more than 3,000 redundancies were announced in the yards. Secondly, I shall focus on the wider issues that affect investment decisions in the UK continental shelf. I am grateful that my right hon. Friend the Minister for Energy and Competitiveness in Europe will reply to the debate. She has an excellent level of expertise on the matter and chairs the oil and gas task force.
I understand that a number of hon. Members may want to contribute to the debate, especially my hon. Friends the Members for Western Isles (Mr. Macdonald), for Aberdeen, Central (Mr. Doran), for Waveney (Mr. Blizzard) and for Stockton, South (Ms Taylor). I am sure that the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) and the hon. Member for Moray (Mrs. Ewing) will also wish to contribute, although that is a matter for you, Mr. Deputy Speaker.
I shall begin with some of the background to the issues surrounding Barmac. As hon. Members may be aware, Barmac is a joint operation, involving Brown and Root and McDermot's. Those corporations are the only two to have survived in their present form since day one of the development of the UK oil fabrication sector. They operate in Ardersier and Nigg in the north of Scotland and their work force statistics will give some context to my points. In 1998, the work force numbered 6,000 people and this year the average work force is 3,500. The work force are skilled, well trained and well managed under the direction of Don Wright, the managing director. They have a comprehensive list of skills, from engineering to IT, fitting, welding, rigging, crane operation, scaffolding and painting.
Barmac's annual wage bill for the highlands and islands is approximately £85 million, which is a substantial sum for the region, and it is the largest private employer in my area and north of the central belt. The joint operation is also one of the largest private employers in Scotland and, interestingly, it is also the largest steel manufacturer in Scotland. Historically, as independent sites, the two yards survived an industry bedevilled by peaks and troughs. Barmac is the largest trainer of skilled labour in Scotland. More than 7,000 people have received training from it, in a variety of skills. Currently, more than 90 apprentices are involved in training.
Oil analysts predict that next year will be the leanest on record for downstream construction work. The
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immediate effect of such changes at Barmac has been the loss of 3,000 jobs. That loss is a tragedy for the work force and for the families who are facing a bleak winter without a wage or job. Both yards face the new millennium with the possibility of care and maintenance costs and near empty books, which may occur in particular towards the middle of next year. If Barmac were to close, the effect on the highland economy would obviously be disastrous. The gross domestic product of the highlands and islands is already less than the European and British averages, which triggered off the area's objective 1 status.
The management and work force have not been waiting for the crisis to happen. They have implemented the CRINE—cost reduction in the new era—regime. They have also opened a dry dock, which gives them a lot more flexibility and for which they had more than £3 million of objective 1 funds. The beauty of dry docks is their flexibility, especially for the construction of floating production vessels.
The management have sought new markets abroad, in Canada, Mexico, Norway and Denmark, and have considered diversification closely, especially in respect of the decommissioning of redundant rigs. Such decommissioning will be an important factor for the UK sector, especially post Brent Spar. The key issue is when it will come on stream. It may be some considerable time before substantial decommissioning work is available to the sector. The management and work force have also looked at renewables, which are very important for the future of the UK sector and not just for Barmac. I refer in particular to wind and wave power.
The campaign to generate new work is very different from that which occurred in the early 1990s, especially for Barmac. In the early 1990s, the game plan was to ensure in the UK continental sector that work went to UK yards rather than to allegedly highly subsidised yards in Spain and Italy. Now, matters are different, and there is little work in the UK sector. The campaign now is to convince the oil and gas companies to bring forward their exploration and drilling work.
What about the wider environment? First, how much oil is there? That is a difficult question to answer. Many seasoned observers, such as Dick Winchester, the director of technology at the Centre for Marine and Petroleum Technology in Aberdeen, estimate that between 4 billion and 4.5 billion barrels of oil remain to be developed. There are also between 80 and 180 undeveloped oilfields. The problem, inasmuch as one exists, is that the remaining fields are very small in the scale of things. Do small fields and large companies go together? Many companies have said that their strategy is to develop much bigger fields, such as the one that is to be developed in the gulf of Mexico. Shell has negotiated a deal in Iran and BP is known to be bidding for 50 licences in the same area.
I am concerned about the UK block leasing terms, which do not provide any incentive to accelerate development work, as ownership periods range from 30 to 40 years. The earliest licences expire in 2010. First, my right hon. Friend the Minister may wish to comment on whether changes should be made to the block leasing scheme to provide greater incentives for oil companies to invest in development in existing and new fields. Such changes may motivate companies to explore and drill.

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My second practical suggestion is that we consider encouraging the establishment of new, smaller companies with fewer overheads and more manoeuvrability than their larger counterparts. Such an approach has worked well in the United States of America, where clusters of small companies have operated a small number of small fields. In the UK, such companies would, of course, benefit from lower corporation tax. Thirdly, I believe strongly that the UK has no national champion or flagship operator in the same way that Norway has Statoil and France has Elf and Total. Despite being free-market companies, those organisations are highly supportive of Norwegian and French industry and technology. I believe that every United States oil company is a United States champion.
I am pleased to have had the opportunity to initiate the debate, to which I know that several hon. Members will wish to contribute. I shall summarise some of my key points. I have faith in the UK fabrication sector generally and in the local Barmac yards. The yards have an excellent work force, are well managed and have world-class facilities. I regret the loss of 3,000 jobs, which is damaging to the fragile highlands and islands economy. I shall meet the major oil companies—Shell, BP, Texaco and Conoco—and my game plan is to bring forward exploration and drilling work. This morning, I met Dr. George Watkins, the chairman and managing director of Conoco and I thank him for arranging such an early meeting.
The investment decisions made by oil companies depend on a series of factors, such as the price of oil, accessibility and geology of fields, demand, level of resources and exploration costs. Perhaps the key issue is confidence. No one can force large companies to invest in the UK sector. I believe that my right hon. Friend the Chancellor kept his side of the bargain, as the fiscal machinery remains unchanged.
Perhaps it is now time for the oil companies either to use their licences or to lose them, although some people might say that I would say that. I want to quote from the September issue of Petroleum Review, which said:
"There is an established production infrastructure and a comprehensive construction capacity close to hand."
That is, in the North sea. It continued:
"There is a ready pool of skill, manpower, sympathetic government and regulation, and a ready market for all that can be produced. Taxation is low (the UK is the second or third most attractive regime in the world, Norway less so)."
We need to encourage smaller companies to enter the market, as in the United States, and to look at the development of a UK champion, as in Norway and France. Let us not forget about gas. Gas-fired power stations may prove to be an important factor and the Minister may wish to say something about the current moratorium on those.
The oil industry is a volatile, cyclical and global market, which has been dominated by multinational companies and the Organisation of the Petroleum Exporting Countries. However, the harsh reality is that decisions by oil companies to mothball exploration in the UK sector condemn thousands of highland workers to the dole over Christmas.
9.41 am
Mrs. Margaret Ewing: I congratulate the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this debate at this particular time because all of us, irrespective of our party-political allegiance, share a deep concern about the implications of events at Barmac and about the long-term future of the UK industry as a whole. We do not need to emphasise the scale of the problem in human terms and the manufacturing implications for the highland economy—the loss to the economy that will result from the closures, or at least the mothballing or care and maintenance, whichever term we care to use, of those yards. It is important to remember that the arguments for objective 1 status did not take into account the cyclical nature of the industry. If we revisited that argument now, we might be in a better situation.
I am sure that the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) and I share a sense of déjà vu because, on many occasions, he and I have taken part in meetings with Ministers, Adjournment debates and interventions on debates on this subject, throughout all of which we have tried to ensure a cohesive approach to this important industry, because it is the sole manufacturing industry in the highlands of Scotland. We were all proud of the work undertaken by Barmac in rationalising the yards at Nigg and Ardersier. I find it strange that people still tell me that there is an itinerant work force in those yards. Gone are the days of the Kishorn commandos. In the highlands, we have built up a skilled and dedicated work force, as we saw during the building of the turret for the Schiehallion field, one of the frontiers of the oil fabrication industry. We shall pay tribute to that skilled work force who live in our communities. I know only too well that, when Ardersier and Nigg are doing well, the small shops and hotels in the villages in my constituency do extremely well. When that purchasing power has gone, there will be a knock-on effect on the rest of the economy. In Moray, it is estimated that 500 jobs will go as a direct result of the announcements and that will have a knock-on effect on other sectors.
I am sure that we all wish to make this a constructive debate and that none of us wishes to score party political points. I want to raise one or two issues with the Minister, who chairs the oil and gas task force. Some of us have been arguing in the Scottish Parliament that there should be a general task force to consider the issue as it relates to the highlands and that the task force should include representatives from the oil industry. As the hon. Member for Inverness, East, Nairn and Lochaber said in his opening remarks, it is important to involve the oil industry in discussions because it has the technical expertise—I do not pretend to be a technical expert in these matters. It is important that, in addition to involving local enterprise companies, Highlands and Islands Enterprise and the councils, we should include representatives from the oil industry, with their skills and knowledge, to talk this through. I should like a specific task force to be set up, as one was set up to deal with the problems at Continental in the Lothians and Kvaerner in Govan. That would reassure many people in the highlands, who still feel at times that they are regarded as being all tartan, haggis, sheep and granny's hielan hame, when, in fact, we have a skilled facility in our communities that we do not want to lose.

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Such a task force should tackle some of the issues relating to research and development in the smaller fields. Much emphasis has been placed on the Clair field and how that might be developed. Can the Minister tell us what is happening with the Clair field development, what the time scale for that is and what the implications will be? Secondly, from her knowledge of the tax regime, can the Minister give some consideration to how some of these issues have been dealt with by the Chancellor? If we go back to the Finance Act 1997, we can see that the allowance for development drilling was then 100 per cent. If we could have an allowance of at least 100 per cent. for drilling, that might be an incentive to oil companies to consider giving work to our yards.
Thirdly, the royalty and tax system impacts harshly on projects in mature fields. A royalty relief, remission or reduced rate and/or some petroleum revenue tax relief for incremental projects, such as uplift on incremental investment or a petroleum revenue tax credit for such expenditure, could provide a reasonably cheap incentive. The gain in tax revenues from incremental projects might exceed the value of the tax reliefs. The Government would need permission to do that because the oil price is currently high, but I think that it would be extremely worth while in the context of the problem that we face.
In terms of dealing with the immediate crisis, at a meeting last week of all the Members of the Scottish Parliament with constituencies in the highlands and islands, the Scottish Minister for Enterprise and Lifelong Learning, indicated that resources would not be a problem if Highlands and Islands Enterprise, which is dealing with this with local enterprise companies, were to require additional resources. Perhaps that needs to be confirmed through Government Departments in England, because it is important. We want to put in place the structures that are necessary to retain the work force in the area. The Department of Trade and Industry and the Scotland Office must ensure that they work closely together, along with the Scottish Executive, to ensure that that will happen. Tomorrow afternoon, there will be a meeting at Ardersier with the Minister from the Scottish Executive and highlands and islands Members of the Scottish Parliament—I am unsure whether Members of Parliament have been invited—
Mr. David Stewart indicated assent.
Mrs. Ewing: The hon. Gentleman says that they have. I wonder what input the Department of Trade and Industry and the Scotland Office have made to that.
We do not need to emphasise the scale of the problem in personal and humanitarian terms. We should like a long-term structure for the yards in our constituencies—the hon. Member for Inverness, East, Nairn and Lochaber and I have argued that case long and hard. I know that there is a problem in the United Kingdom because skills are being sought elsewhere in the world, but we have a responsibility, as an oil and gas producing country, to ensure that we retain our skills and give people a secure future.
9.50 am
Mr. Frank Doran: I am grateful for the opportunity to speak in the debate and I congratulate my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing it.
This is an important issue for the north of Scotland. I stress the north of Scotland rather than the highlands because what is happening in Barmac reflects events in the oil industry in general. My constituency of Aberdeen is recognised as the oil capital of Europe and we are also experiencing difficulties, although they are not as apparent as the fairly dramatic circumstances at Barmac.
I shall speak about employment in the oil industry and how we should proceed. The industry tells us that it employs 380,000 people directly or indirectly in the United Kingdom. That massive number of people reflects the importance of the industry. However, it is wrong to think of the employment as being concentrated in one part of the country. A survey by the Offshore Contractors Association about a year ago showed that 220 hon. Members in the House had more than 500 oil jobs based in their constituencies. The business permeates the whole of British industry. My local council estimates that 40,000 jobs in its area are directly related to the oil industry.
For 30 years, the oil industry has taken workers from all parts of the UK. When it began to develop in the 1960s and 1970s, the bulk of workers came from the traditional heavy engineering and manufacturing industries on Teesside, Tyneside and Clydeside—I see that my hon. Friend the Member for Stockton, South (Ms Taylor) is here to represent that interest—and that remains the case. Any day of the week, the southbound train from Aberdeen is full of Geordies and Teessiders who are heading home after two or three weeks on the rigs. It is important to understand the nature of employment in the North sea industry, which includes onshore facilities such as Barmac. It is a cyclical industry. Some of our major economic crises in the past 20 years stemmed from the oil crisis in the early 1970s. At that time, the UK industry was in its infancy, but when the price collapsed from between $32 and $35 a barrel to between $8 and $9 a barrel almost overnight in 1985–86, industry in my area was devastated. It was estimated that the oil industry lost 50,000 jobs virtually overnight. Investment was immediately stopped and no money was spent on new projects. Drilling, exploration and rig construction were halted, although existing contracts were fulfilled. The industry suffered severely for three or four years, especially the onshore fabrication yards in Scotland, such as those at Ardersier and Nigg.
There is a particular culture to offshore employment that is difficult to find anywhere else in Britain. About 10 per cent. and, in some cases, 20 per cent. of onshore and offshore employees are directly employed by oil companies in my area. The remaining jobs are contracted out. A meeting in my constituency on Friday night was attended by 50 or 60 people who run one-person companies—IR35 companies as they are known. They are highly skilled, but the industry refuses to employ them directly. Instead, it prefers to take on employees through agencies or other contracting

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operations. That shows the way in which the industry operates: it demands flexibility. The other 80 to 90 per cent. are employed through single-person companies or other companies to fulfil contractual requirements—[Interruption.]
Mr. Deputy Speaker: Order. I do not know who owns the machine that is making that noise, but Madam Speaker takes a dim view of such disturbances.
Mr. Doran: Thank you, Mr. Deputy Speaker.
That practice underlines the flexibility of and the insecurity in the industry. The people that I was with on Friday night strongly wanted full-time permanent jobs in the oil industry, but they knew that that was not going to happen. In times of downturn—a year ago, the oil price decreased to about $9 a barrel—those people are dispensed with at little notice. They do not figure dramatically in large-scale unemployment such as that experienced at Barmac, but they lose their jobs as readily. However, they know that there will be opportunities when the industry picks up, as it is doing now—today's price is about $25 a barrel. The industry is cautious and there is little sign of real investment over the next year, so the problems will be with us until it is certain that the oil price is stable and it can make longer-term decisions.
The same culture exists in the rig construction yards, although they have managed to achieve some stability. They went through difficult times in 1985–88. Rig construction yards have been an important resource for the oil industry. One of the major failings of the industry is that it has not trained people. Instead, it has developed its facilities offshore and plucked skilled employees from other parts of the country, such as plumbers, boilermakers, electricians and engineers who were drawn into the oil industry as their traditional manufacturing industries declined. The rig construction yards were used as a training base. Many of the people who work in the oil industry were first trained in the yards. I suppose that that could be considered an indirect subsidy by the oil industry, which paid for the rigs, but the enlightened training policy at Barmac has been important in bringing new recruits into the industry. The oil industry's failure to train must be recognised.
I was pleased to hear the reasoned contribution by the hon. Member for Moray (Mrs. Ewing) who has a long involvement with the industry. Indeed, we have occasionally worked together on issues. Her speech contrasted sharply with the behaviour of some of her colleagues in Scotland on this issue. Fairly hysterical comments have been made in an attempt to pin the blame for the problems on the Government. It is important to understand the way in which the industry operates and I have deliberately spent time spelling that out. I back wholeheartedly the hon. Lady's suggestion that the Government have a role, but it is important to recognise that the oil industry also has a role.
People throughout the UK have benefited from the oil industry, with which I have been pleased to work closely in my area. It has created employment and paid huge taxes into the national coffers, and it has helped to build
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new skill bases, for example in information technology and underwater technology, which we are beginning to export. That will benefit us in the longer term, but the legacy of the oil industry is that there is little sign of any company bedding down in our communities.
The industry is in a long and slow decline phase. Oil companies in my constituency assure me that we have at least another 30 years and some have shown me the long-term plans that demonstrate their commitment. However, those companies are not making major contributions to the community. The perception is that they come in and take what they need in skills and Government assistance. They work within the system and buy what they need. I realise that they pay heavily for what they do, but they do not seem to feel a social responsibility to the areas in which they operate. There is a sense that, when the oil has gone, they will simply up sticks and go to the next great oil province. There have been a number of recent scares in that respect. For example, when the former Soviet Union territories opened up to western investment, it was strongly felt that, as the oil there would be a lot cheaper to exploit than it is offshore in Scotland, we would lose out on new investment. That has not yet happened, mainly because of the political difficulties in the former Soviet Union, but it could happen at any time.
In conclusion, we should learn the lessons of Barmac—as hon. Members have said, we have been here before. It is, however, important that the oil industry, the Government and local authorities work together. We must recognise the important contribution that our local authorities have made. Aberdeen city council is now recognised as a world expert because it has enabled its local area to make the transition from a non-oil, semi-rural economy, which relied on, for example, fishing, agriculture and meat production, to an oil economy. Other authorities in Mexico, Canada, the former Soviet Union, the far east and Australia are learning lessons from the experiences of Aberdeen city council. Local authorities together with the oil industry and central Government must work out a programme or task force to deal with the industry's decline. What happened at Barmac emphasises the importance of planning for that final stage.
10.2 am
Mr. Charles Kennedy: I am grateful for the opportunity to make a brief contribution to the debate. It is fortuitous that the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) secured the debate, although all the hon. Members present—particularly those of us who represent constitutencies in the highlands and islands—would agree that the reasons that occasion the debate are far from fortuitous. Both the hon. Gentleman and the hon. Member for Moray (Mrs. Ewing) outlined those reasons and I do not intend to repeat them. I would, however, underscore from a constituency point of view the overwhelming importance of Barmac's presence, not just the immediate employment, massive though that is—it is the largest private commercial sector employer in the mainland highlands—but equally the ancillary and spin-off employment opportunities and the social and economic underpinning that comes with them.

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Although, as a result of redistributions, the Nigg part of the Barmac site is no longer within the boundaries of my constituency—it now lies just over the border in the constituency of my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan)—there is no doubt that over the years one could track, in constituency surgeries and the postbag, the fortunes of the local economy by the employment and contractual fortunes of the Barmac sites—the one is in direct proportion to the other. I fear that we are in for a significant economic downturn next year as a result of the recent shock to the system.
From my dealings in the past decade and a half with Nigg in particular—now Barmac—in its split site and various mutations, there is no doubting or escaping the essentially cyclical nature of the oil industry. One of the lessons that has been learned commendably by those at management level—aided and assisted by the trade unions, which have contributed powerfully and responsibly over the years—is the need for diversification based on substantial investment in forefront technology. The industry has done that to a considerable extent, but of course that in itself is not enough to cushion the blow that has just been felt as a result of the recent downturn in extraction activity in the North sea in particular.
As the debate relates to the UK in general and not just to the local situation—overwhelmingly important though that is to some of us here—it is worth considering the assessment that the United Kingdom Offshore Operators Association has made on likely probable developments as they affect the fabrication sector and oil exploration as a whole. It says that the most recent data from Wood Mackenzie
"suggests that the number of probable new developments is down from 45 in 1998 to 38 in 1999."
It goes on:
"However, few are likely to require major platform structures of the kind that will create major employment opportunities in the fabrication yards. Of the 35 proposed near term developments"—
they are only proposed developments; they are not yet contracts—
"17 are expected to use subsea technology tied back to existing infrastructure"—
so less fabrication opportunity there by far—
"9 may use 'not normally manned platforms'"—
more of the same—
"4 may use fully integrated platforms,
5 are expected to be developed by Extended Reach Drilling."
In other words, even with the diminished number of orders likely to come on stream and assuming that the price per barrel remains more buoyant than it has been of late, the changed nature of the technology means that there is less potential for the Barmacs of this world to achieve the huge fabrication contracts that have been their mainstay hitherto. That poses serious questions for the medium to longer term, leaving aside the fact that there are still several decades of North sea extraction left—I agree with the hon. Member for Aberdeen, Central (Mr. Doran) on that.
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I am, however, critical of the Government in this respect. After the last election, when the then new Chancellor announced his review of the fiscal regime of the North sea, several of us warned that the fact that the price of oil was falling internationally was bound to add to the climate of uncertainty in what is a very reactive business on a global level; and, indeed, it did. Anyone who has dealt with the oil majors over the years knows that the business involves a great deal of brinkmanship—that is the nature of the beast. Some of the companies that announced in lights that they were postponing major developments may well have used the Chancellor's review as an excuse to bring forward an announcement that they may have been likely to make anyway; I am not so naive as to suppose that that was not so. Without doubt, however, the fiscal review, against the backdrop of the plummeting price per barrel of oil internationally, contributed to added uncertainty, which led to some genuine postponements, if not cancellations. That has certainly not helped the domestic fabrication sector.
There needs to be a twofold approach. First, there is the micro-approach. Highlands and Islands Enterprise and Government Ministers sitting in the Parliament and Executive in Edinburgh can attempt to cope with the immediate local economic and social impact. I know that they are trying to do that and they deserve—and will receive—all possible support in their endeavours. However, that is merely Elastoplast after the event. Action is also needed on the macro level, which is where Westminster comes in—the Treasury and the Department of Trade and Industry in particular. There is an argument to be made—we have been here before under Nigel Lawson's tenure—for fiscal stimulus as it affects marginal field extraction and development, not least the satellite technology around existing fields. The high rates of marginal taxation that are applied to existing satellites could be diminished to try to increase the likelihood of further fabrication contracts.
Our approach needs to work locally and regionally, as well as on a macro level, which is why it is appropriate that the debate takes place here, in the presence of the Minister for Energy and Competitiveness in Europe. I have had the opportunity of a brief exchange with the right hon. Lady, whose concern is well documented and whose interest and support are much appreciated, and I also met the Chancellor last week. At a time when the highlands has received such a setback in the cutting edge of technology—coincidental with our traditional sectors all suffering so severely, although for very different reasons—there is an urgent need for the Chancellor to consider in the run-up to the next Budget what tax stimulus he might be able to give. Nigel Lawson's actions some 10 years ago undoubtedly helped confidence nationally and internationally and the flow of orders that followed.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. Before I call the next speaker, I should tell hon. Members that I intend to begin winding-up speeches by calling the Liberal Democrat spokesman at 10.30 am. Three hon. Members who wish to speak have caught my eye; if they are brief, I am sure that they will be able to do so.
10.10 am
Mr. Bob Blizzard: I, too, am grateful to my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) for securing the debate. The name of his constituency might be rather a mouthful, but, unlike the more obscure name of my constituency, it has the advantage of naming the towns and settlements within it so that people know where it is.
Mr first point is that the oil and gas fabrication industry is not just a Scottish industry—there are fabrication yards along the east coast of England, even stretching down to East Anglia and the town of Lowestoft, which I represent. We have two yards in the town—the Odebrecht yard, which is part of an international company, and the smaller but no less successful KYE yard, which is a local company. We must remember that, in addition, there is a chain of small and medium enterprises that make component parts and supply engineering services which feed into the industry. All of them are affected by reduced investment in the North sea; the task force forecasts that that will fall by 50 per cent. by 2002 if no action is taken. That would affect hundreds of jobs in my constituency, as well as the thousands of jobs of which we have already heard.
The oil and gas industry is enormously valuable to our country. We have so far had tax revenues from it of £89 billion and, as has been said, 30,000 jobs offshore and more than 300,000 on land depend on it. I am told that investment in the North sea is equivalent to the cost of building a channel tunnel every two years. We are dealing with a hugely important industry.
The entire industry suffers from the reduction in investment, but those of us connected with the fabrication yards most feel the effect because the greatest concentration of jobs lies in the yards. The yards are vital to coastal towns up and down the country. They took on people from closed shipyards, just as the supply and standby vessels took on people from the fishing industry. Shipbuilding and fishing were the mainstays of the Lowestoft economy until the shipyards were closed and the fishing fleet was decimated. We are now reliant on the fabrication industry.
The Odebrecht yard in Lowestoft is in the centre of the town, at the entrance of the harbour. It is not big enough to build the jackets; instead, it builds the top sides and the accommodation modules. Visitors to the town often ask what those rising structures are. I tell them, and say also that the structures symbolise a barometer of the health of the local economy—while we have them there and while they move up, people are in work. When one project is completed, there is anxiety about whether another contract will follow. We live with that; there is currently less and less work to bid for.
The changes to the oil and gas towns are comparable with those that have affected coalfield communities. We are extremely dependent. We must not forget that real people and real communities are at the end of decisions. People naturally look to Government and ask what Government can do. In many respects, the Government have already acted—my area, like others, has been submitted for assisted area status and objective 2 European funding. It is important that the Government see the negotiations in Brussels through to the end; the
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granting of the status and the funding is vital to my area. Coastal towns suffer from being peripheral. We suffer from poor transport links in East Anglia. The firms and community of my constituency will need that external support.
I should emphasise to the Minister that it is vital, when we have those designations, that the oil and gas industry is able to access assisted area status funds and European structural funds—we have previously had problems with that. It is important that we encourage industries to diversify into related activities. They will need support with capital expenditure to do that. Lowestoft was given those designations by the Government as recognition that, for a long period, it had been one of the top—or bottom—10 travel-to-work areas for unemployment. The problem will be made worse if we also lose jobs in fabrication. I urge the Government to include in the urban White Paper being devised a special remit for coastal towns, and not just to consider the problems of big inner cities. Whole Government policies could then be driven in that way.
Gas represents a big share of activity in the North sea—our gas reserves will outlast our oil reserves. Why do we continue the moratorium on gas-fired power stations? Extra confidence would be given to the industry if it was lifted. I cannot understand why it was imposed, and I do not think that it is necessary. The Government declared that they wanted to reform the energy pool. It takes several years to build a power station; the operator of a power station would have to take the risk of buiding one knowing that there might be a different energy market once it was completed. It would help if that decision were reconsidered. Gas is the best fuel environmentally after renewables, which can meet only some of our needs.
We should consider what the oil companies could do. They were clearly going to be cautious when the price of oil was as low as $10 a barrel—investment was discouraged. The price has returned to $25 a barrel. We do not know that it will stay at that level, but I ask the oil companies to reconsider and to be more positive about investment in the new situation.
We must focus on the big issue—the macro-economic situation concerning the future of the oil and gas industry. We cannot alter geology. It took millions of years for the oil and gas to form, and we must accept that the North sea industry is now in its mature stage. The big fields have been discovered and, therefore, the days of big kit, such as big platforms, are over. The all-party offshore oil and gas group, which I chair, recently saw what might be the last such construction to be built at the Wallsend yard for the Shearwater project. That does not mean the end of our industry—we can exend its life if we fully exploit the smaller and more marginal fields. Thirty years ago, people were saying that the industry would be finished by now. It is not finished; it has not yet peaked because of innovation, technical advance and cost reduction since those early days. We must maximise the life of the industry of the United Kingdom continental shelf in that way.
The Government industry task force, which has been a model of co-operation between Government and industry, is addressing that matter. The Leading Oil and Gas Industry Competitiveness initiative, supported by

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the Department of Trade and Industry, will also have a great part to play. A special section will study fabrication and how we can learn from the gulf of Mexico and get down to the cost levels of the industry there. We shall have a future if we do that.
Developing opportunities in recommissioning and decommissioning will also be important. In East Anglia, we are keen to be involved in those opportunities as they represent a great source of employment. It will be important to maximise the industry's export possibilities, as we are world leaders. The task force has set an ambitious target of a 50 per cent. increase in exports. That is difficult currently because of the high pound. One of the yards in my constituency told me yesterday that it was buying raw materials from Germany and Italy; if it used our raw materials, it would be uncompetitive when exporting the final product.
We must focus on innovation now because the window of opportunity is small. We cannot build satellites once the major installations have gone or have been closed. We must develop our industry now, while the infrastructure is in place.
The Government have their part to play in the actions identified by the task force. I am pleased that they have already acted by introducing more flexible regulations, modernising the licence award system and granting capital gains tax roll-over relief. It is crucial that the Government recognise that not merely oil price but field size will be the key factor in determining investment for the future. I hope that the Treasury will take a long-term view of taxation and realise that, if it can gradually be planed down as the marginal fields are exploited, it will help to stretch the life of the industry, make the fields more viable and keep more people in work. It will mean more overall tax revenues to the Treasury and enable good environmental husbandry of the finite resources if what is there is taken out when the installations are available to do so.
The Government have agreed to keep royalty and petroleum revenue tax under review. The industry must then convince the Treasury that any relief given will bring forward increased investment. It would help if the oil companies could show that they would respond to the higher oil price by keeping their part of the deal.
We must remember that more jobs are with the contractors and the suppliers than with the oil companies. It is important that the fabrication industry is represented in the task force, which is to be relaunched at the beginning of next year. It should reflect the whole industry, including contractors and fabricators, and also have a geographical balance so that all parts of the country have confidence in it. The trade unions, too, should be fully involved. It is for the industry to decide who it puts forward, but I am sure that ultimately the Minister can insist on a fair and balanced representation from the industry.
There must be a national effort. Oil and gas is a great industry, which has cast off the old image of being dirty and irresponsible; it is now a leading-edge, high-tech industry. We must all work together, remember that there are people at the heart of it and do everything that we can to maintain levels of employment.
10.22 am
Mr. Calum Macdonald: I am grateful to my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) for securing the debate and for giving us the opportunity to contribute to it. As you requested, I shall be brief, Mr. Deputy Speaker.
I begin by paying tribute to the work force and management of Lewis Offshore, which operates the Arnish yard in my constitutency. I was closely involved with the reopening of the yard in 1991, which seemed like a leap of faith at that time. The economic context was in many ways even less promising than it appears today. Moreover, whereas the Arnish yard had been operated in the 1970s and 1980s by large multinationals, the new operation, when it was restarted, was unique: it was locally managed and very much locally controlled.
Under that local management, the yard succeeded beyond our most optimistic hopes at the time. Employment was consistently about 200 people, largely drawn from those living locally. At times, the number increased to about 500 people, some drawn from outside, adding to spending power in the local economy. Sadly, the company is now in receivership, but it is to its great credit that it kept the yard active for what was, it transpired, the longest continuous period of operation since it first opened in the early 1970s.
As several hon. Members have said, the industry is subject to ups and downs. Arnish has been caught by the current downturn. Given the yard's excellent record in the past decade and the crisis elsewhere in the industry, there is no shame in its present predicament and I firmly believe that the yard still has good prospects for the future. The qualities of the work force are such that it still has a good chance of attracting new investment when the climate becomes more favourable.
In terms of that more favourable climate, a number of hon. Members have already talked of the need to encourage new development. One of the areas to which people look for new development is off the west coast of Scotland. That development will be technically difficult and hugely expensive, but the shift westwards has already begun. I am told that west of Shetland has the largest producing fields on the British shelf. It will be useful to hear the view of my right hon. Friend the Minister for Energy and Competitiveness in Europe of the prospects for further development off the west coast in the next few years.
Many hon. Members have mentioned the importance of the gas industry. There are anxieties about the impact of the moratorium on development and production and it will be useful to hear my right hon. Friend's view of it. What has been the impact on gas development? It might be appropriate to have another look at the moratorium.
There is also the prospect of large amounts of work decommissioning old, redundant platforms, as my hon. Friend the Member for Inverness, East, Nairn and Lochaber said in his opening speech. The combined value of the work in the next decade and beyond is reportedly billions of pounds. If only a small part of it were won by the yard in my constituency, for example, it would generate contracts even more valuable than have been achieved in the past decade. Again, it would be extremely helpful to know the Department's view of

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how the decommissioning work might develop, how big it might be, when it is likely to start and the likely trend of development.
At the first signs of decommissioning work, British yards face strong competition from Norway. With the help of the Department of Trade and Industry, it is vital that we keep a close eye on the development of that market. An important task for the Government will be to advise and assist British companies to keep abreast of their Norwegian rivals.
The other big tasks for the Government are, first, to keep viable the yard in my constituency and all the other yards that are suffering, so that they continue to be available for future business. The second task will be to maintain the skills and training of the work force so that they can take advantage of any future work in the industry. A third task in my constituency, which is perhaps more directly suited to the Department rather than to the local economic agencies, is to assist Lewis Offshore in its pursuit of outstanding creditors, especially when it is owed substantial sums from companies that are based overseas.
I would welcome the Minister's assurance that the Government are focused on those tasks and that the Department of Trade and Industry will assist the Scottish Executive and Highlands and Islands Enterprise in pursuing these matters. The Government cannot create work, but they can help companies such as Lewis Offshore and the others that have been mentioned this morning to be ready to make competitive bids for work when it arrives. I am sure that such opportunities will come along and I am hopeful, too, that my right hon. Friend will continue to take a close personal interest in the fate of the industry, especially the yards in the highlands.
10.29 am
Ms Dari Taylor: I am grateful to have a few moments to speak at the end of this debate and I am grateful, too, to my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) for securing it.
The Tees is absolutely distraught at the state of the oil and gas fabrication industry, in which more than 8,000 people in that area are employed one way or another. An impact assessment shows that, if the industry goes down, our economy will lose about £220 million. That is a sizeable amount, and it is creating serious trauma.
My hon. Friend the Member for Aberdeen, Central (Mr. Doran) stated that many Geordies travel to the north-east of Scotland on a week-by-week basis. He might have added that so do many thousands of Teessiders, who are boilermakers, fabrication workers, engineers and welders. We have a tradition of travelling to where the work is. The commitment of this work force is to work and they want to hear from the Government that they, too, are committed to giving the oil and gas industry a chance.
So much of what I could say has been said in the debate, so I will not repeat it. We have seen Kvaerner's Triton sail out into the North sea. It is an astounding piece of engineering. We have also heard it said that the industry is finished. That cannot possibly be true or
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acceptable. The workers have inordinately high skills. The industry is value added. We should not be allowed to say goodbye to it.
I listened to my hon. Friend the Member for Aberdeen, Central questioning what the industrialists and the industry are doing. My goodness, was he reading my mind? Last year, the industry achieved record profits. It has had difficult times, but in the past 20 years it made record profits virtually every second year. My community wants to know where the payback is. People ask what is being put back in. What is that industrial community doing about it? What will they help to develop? The skills and the technology are there. The community is looking to the industry—to Kvaerner, Odebrecht, and Heerema, which are very large companies. We do not want them to run to the easy fields of Mexico. We want to hear them say that the shallow beds in the North sea are still worth extracting from; that submersible engineering and other forms of engineering are greatly valued; that the work force are valued; and that they have a commitment to the community, so they will stay.
I have had two minutes in which to speak. This industry is crucial for me and my colleages from the Tees, and for the trade unionists. I am grateful to you, Mr. Deputy Speaker, for allowing me that two minutes.
Several hon. Members rose—
Mr. Deputy Speaker: Order. I am delighted that we were able to fit the hon. lady into the debate. I knew her late father well. He spoke with great passion; so does she.
10.31 am
Mr. Andrew Stunell: I congratulate the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing the debate on a most important issue. Everyone present would agree that we face a tragic loss of jobs. The impact on the local community, the industry and the economy of not only Scotland but the United Kingdom will be devastating, as hon. Members have pointed out.
Broadly speaking, what is happening is part of an overall loss of momentum in the UK oil industry. In part, it is due to the inescapable facts of geological life. Available oil reserves are now smaller and harder to find and they are expensive to extract. The marginal cost of bringing them ashore is also higher. That will have a fundamental and unavoidable impact on the industry in the coming few years, but there is still a good deal of life left in those fields and a good deal of investment still to be made.
Some significant facts of life must also be confronted. This time last year, oil and gas prices were probably historically at their lowest point ever—certainly well below what investment analysts had expected a decade earlier. That has a serious impact on the industry's profitability and the effectiveness and value of investment. The price of oil has multiplied two and a half times, but is clearly in a period of considerable instability. Gas is extremely cheap on the international market.
The industry has also to cope with the political facts of life. Here I join my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy), who

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said that the Government must look back at part of their record of the past two and a half years. The uncertainty of the Chancellor of the Exchequer's review of the fiscal regime left the industry unclear about the future economic profitability and viability of its investment in the UK oil sector. His acceptance of that review was a little tentative. In the words of a representative of the oil industry to whom I spoke yesterday, it was acceptance for the time being. This is not the basis on which long-term investment decisions at a marginal and critical level can be soundly based.
The uncertainty of purpose of the fiscal regime was somewhat compounded by another uncertainty—that of developing and exploiting alternative energy systems. The hon. Member for Inverness, East Nairn and Lochaber said that the yard had tried to look at diversification into wave and wind energy fabrication and construction.
We need steadfastness and stability of purpose not only in the oil industry, but in the broader energy market. The key to that is confidence. The industry must have confidence in its investment decisions, not least because it is a global industry and, essentially, perhaps the ultimate market-driven industry. It is not given to sentiment or to spending a great deal of time on its social obligations. Therefore, it is essential for the Government to supply what they can by way of fiscal and investment support and the stable framework so necessary to reassure that investing community.
I make two pleas. The first is to the companies to hang on in there and not give up on the UK industry or the Scottish oil industry. I ask them to have faith in the skills and added value that the Scottish fabrication industry and the wider UK industry have and can contribute to their profitability in the coming decades. My second plea is to the Government—and I want to leave time, Mr. Deputy Speaker, for them to respond. I make three requests. Please will they give a clear signal about long-term fiscal stability and help for the industry based in and around the UK oil and gas sector? Please will they respond to several pleas made this morning for a clear direction to their strategy on decommissioning, where a great deal of investment and creation of jobs will be necessary in the future? Please will they give today a clear signal about how they intend to facilitate the diversification of investment into alternative energy technologies? The skills, manpower and capacity are there and, with the alternative sources of energy, we have a rich environment.
This is not the day for scoring party political points. I simply ask the Minister to respond positively to this tragic set of circumstances.
10.38 am
Mr. Nick Gibb: I add my congratulations to the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this important debate. There is no doubt that the two impending sets of job losses at the Barmac yards at Nigg and Ardersier are personal and economic tragedies not only for the 3,000 individuals directly involved, but for the surrounding community because of the indirect effect of job losses there. The hon. Member for Moray (Mrs. Ewing) pointed out that when the Nigg and Ardersier yards are doing well, the small shops and hotels in her constituency do well, too.
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The reasons for the absence of new orders after the Elf Enterprise Elgin platform, which will be completed in March next year, have been well rehearsed. The UK continental shelf is now a mature development, with remaining reserves confined to smaller fields. The low long-term oil price—recent but temporary hikes notwithstanding—is also a major contributor. Exploration and appraisal drilling are at the lowest level since the 1970s. The 35 proposed near-term developments in the North sea are unlikely to be of the size and type to require substantial new rigs from the fabrication yard. According to the United Kingdom Offshore Operators Association, which the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) mentioned, 17 of the 35 developments are expected to use subsea technology, using existing infrastructures; so there will be no need for further infrastructure there. Nine use not usually manned rigs and five are expected to be developed by the new technology in drilling—the extended-reach drilling techniques.
According to the Department of Trade and Industry's figures, whereas development expenditure was £5.1 billion in 1998, it fell to £3.2 billion in 1999 and is set to fall to £3.1 billion next year and £2 billion for the following two years. Despite that, Barmac remains relatively optimistic about the long term. Its managing director, Don Wright, said:
"We may be down, but we are definitely not out".
He went on to say:
"The heavy engineering end of the oil industry is notoriously boom and bust and the bottom of the cycle will be reached by next spring."
That is odd: I had thought that the Chancellor of the Exchequer had abolished boom and bust, but obviously not in the oil industry. Mr. Wright continued:
"In a worst case scenario, we will be down to 400 next year"—
400 employees, that is—
"But we actually believe that we will have enough success to ensure that we are still employing 800 on average."
There do seem to be some long-term trends, which may be hard to resist. We need to ask whether the Government are doing enough to slow those trends down, or alternatively, whether they are making the situation worse. I pay tribute to the hon Member for Inverness, East, Nairn and Lochaber for his energy in raising these important matters with industry and the Government. More controversially, his exemplary activity on behalf of his constituents contrasts sharply with the insouciance of the leader of the Liberal party, the right hon. Member for Ross, Skye and Inverness, West, whose constituency neighbours the Nigg fabrication yard. Although the hon. Member for Inverness, East, Nairn and Lochaber used his opportunity commendably at Prime Minister's Questions last week to raise the subject of the Barmac fabrication yard, the right hon. Member for Ross, Skye and Inverness, West failed to use either of his two weekly opportunities to raise the issue. Last week, he even made a joke and asked about the London tube instead.
The hon. Member for Aberdeen, Central (Mr. Doran) says that the Government are not to blame. The Government's approach, however, has been confined to establishing the oil and gas industry task force, now to be renamed PILOT, and Leading Oil and Gas Industry

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Competitiveness, which is about lowering costs. As I said, the key question is whether the Government are making matters worse. The answer is yes.
The United Kingdom Offshore Operators Association believes that one of the most important requirements to achieve the goals that the oil and gas industry task force set itself is
"extending the life of existing infrastructure in the UK continental shelf. This provides a large potential for 'brown field' development—but the window of opportunity for incremental investments for maximum reserves recovery is limited.… Currently, such incremental investments are discouraged by taxes as high as 69 per cent."
That 69 per cent. is made up of a combination of petroleum revenue tax, royalties and corporation tax—a combination that still applies to some of the older fields. As the hon. Member for Moray also pointed out, there is scope for the Government to reduce those burdens in the light of changes to the market and, in particular, to the North sea oil sector.
The North sea oil tax review—also referred to by the right hon. Member for Ross, Skye and Inverness, West—which seems to hang dangerously over the industry, has been put on hold. When the Minister said that the review had been put on hold, she referred to the low price of oil as the reason for doing so. Now that the oil price has increased, I hope that the Government do not intend to reignite the threat that the oil tax review presents to the oil industry.
There is also the gas moratorium, a policy implemented by the Government solely for internal Labour party reasons. It has resulted in higher than necessary electricity prices and carbon dioxide emissions, and lower than necessary demand for North sea gas. Even the hon. Member for Waveney (Mr. Blizzard) cannot understand why the moratorium was imposed: the reasons given in the energy White Paper simply do not stack up.
Three Government policies, therefore, are adding to the difficulties of the North sea sector. No one would claim that those three policy solutions could deal with all the problems in that sector, but they would at least be a step in the right direction instead of a step in the wrong direction, which is making matters worse.
10.45 am
The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): May I join right hon. and hon. Members in congratulating my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on securing this debate? He has been particularly active on this issue and those of us who know him would expect nothing less.
I welcome our reasoned and thoughtful debate, marred only by the contribution of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), who gave a singularly ill-informed and ungracious speech. Several important points were raised in the debate and I may not be able to do justice in 15 minutes to the depth of some of them. However, I have been most impressed by the depth of knowledge and the local insights from right hon. and hon. Members and I will convey a copy of the

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Official Report of this debate to the oil and gas industry task force, which will be able to see the ideas and the passion generated in our debate.
Like you, Mr. Deputy Speaker, I pay tribute to my hon. Friend the Member for Stockton, South (Ms Taylor). She had only two minutes, but managed to say what many of us have been trying to say for a long time. I note also that my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) was trying hard to enter the debate, but was unable to do so. I shall seek to converse with him in due course.
I feel a sense of poignancy in this debate, particularly regarding the problems of Barmac at Nigg, Ardersier and Arnish. I recall many years ago visiting Nigg before even a sod had been cut in the grass. The scale of development there has changed considerably now. The history of the Barmac operation in the highlands of Scotland has been put into context for us. We are talking not about metal bashing, but about a major operation with a highly skilled work force. I pay tribute to that work force and to management, who are showing a commitment to the community. The work force are excellent and I know that recent decisions have not been taken easily. I pay particular tribute to the work of the shop stewards at Barmac. I woke up in the early hours of Monday morning to a report from Canada. The convener of shop stewards had been there to look for work opportunities for the Barmac work force.
In common with the hon. Member for Moray (Mrs. Ewing), I am well aware of the multiplier effects of the yards on local communities. The hon. Lady asked about the possibility of a wider task force. She would acknowledge that that is more a matter for the Scottish Executive than for the House. However, I shall liaise with my colleagues in the Scottish Executive, which knows that it can call on my Department's resources to assist in this matter.
I have already met the oil and gas industry task force and I will provide more detail in a moment. I would like to announce now that the oil and gas task force met on 1 December and the main item of discussion was the difficulties faced by the UK fabrication industry. I chaired the task force and was supported by my hon. Friend the Member for Central Fife (Mr. McLeish), who is also a member of the Scottish Executive, and by my hon. Friend the Minister of State, Scotland Office.
Following that meeting, several plans were formulated. I have asked all relevant Government Departments and agencies to meet, with the facilitation of the Department of Trade and Industry, to discuss their existing strategies in response to the challenges faced by the fabrication industry, to formulate a coherent UK-wide plan to mitigate current difficulties. The Scottish Executive, Scottish Enterprise, Highlands and Islands Enterprise, the Glasgow development agency, One North East and representatives from the oil industry national training organisation are to be invited to a meeting in the DTI on 20 December.
Picking up the point made by my hon. Friend the Member for Inverness, East, Nairn and Lochaber about industry champions, one of the great advances since the development of the oil and gas industry task force is the way in which companies operating in an intensely competitive market have sat around a table to examine

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difficulties in the industry to plot a way forward. I want the fabrication industry to enter into that, so that we have a champion for UK fabrication.
Let me try to give some comfort to my hon. Friend the Member for Stockton, South. Much of the debate has been about Scotland. Last week, I spoke at the Northern Offshore Federation, which has a major event planned for February next year, supported by the Prime Minister and my right hon. Friend the Secretary of State for Trade and Industry. It will be a major showcase for the supply industry—not just in the north of England, but throughout the United Kingdom.
Many points have been made today about the decline in the UK continental shelf, but we must separate that issue from the prospects of the industry as a whole. That is what the oil and gas industry task force has been seeking to do. The right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) made the excellent point about the geological challenge of the UK continental shelf. There is significant change in the North sea and we must manage that change.
The Government's initiative in bringing together the oil and gas industry task force has brought about significant progress. The reduced world demand, caused not merely by the dramatic fall in the oil price, but by the changing nature of energy markets, has been recognised. Indeed, the increase in the oil price has changed the situation a little, too. I shall come back to that when I talk about decommissioning, which has been changed by the increased price per barrel of oil. The continental shelf is undoubtedly maturing and is geologically more difficult. It is imperative therefore to reduce the cost of operating on the UK continental shelf, but we must not lose sight of the opportunities for exploration, production and the development of oil and gas.
My hon. Friend the Member for Inverness, East, Nairn and Lochaber spoke about the marginal fields and mentioned that a number of licences have been issued for fields that are not being developed. One exciting initiative by the task force is to set up an organisation called LIFT, the Licence Initiative for Trading, which is a virtual trading market in licences. If a company has a licence for a marginal field that it does not want to develop, it can trade that licence in a way that has not existed before. That initiative will work together with other initiatives such as LOGIC, which stands for Leading Oil and Gas Industry Competitiveness.
My hon. Friend the Member for Aberdeen, Central (Mr. Doran) talked about small suppliers such as one-man companies and self-employed contractors, many of whom have fantastic expertise. I have seen some of that expertise. It is world-leading stuff, but often, because they are small, they are not plugged into the mechanisms of the large oil companies. LOGIC aims to deal with that and to ensure that, right through the supply chain, big businesses can see what small businesses have to offer. Linked to that is the industry technology facilitator. Many of the far-sighted technological ideas come from small operators, who lack the money or expertise to market them themselves. Through the Department of Trade and Industry, we will help both LOGIC and the industry technology facilitator to make sure that those ideas are marketed too. This is about putting a coherent supply chain into place.
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The task force has far-reaching aims. It is aimed at ensuring that investment is sustained at £3 billion per annum from UK continental shelf activity. That should ensure that production remains at or about 3 million barrels of oil equivalent a day. It is about prolonging self-sufficiency in oil and gas. It is also, and this is the bit that I want to work at particularly hard, about a 50 per cent. increase in export in oil and gas supply products. That amounts to something like £2 billion in value. I shall meet the OSO board tomorrow to talk about export opportunities.
My Department, through British Trade International, works hard to exploit the opportunities for a world-class industry. My hon. Friend the Member for Waveney (Mr. Blizzard) mentioned that our industry is world class. We believe that it is possible to secure £1 billion additional value from new businesses supporting up to 100,000 jobs—more than there would otherwise have been. We recognise that there will be a decline in jobs. This has been a sensible and reasoned debate which has acknowledged that change. However, there is the opportunity for the future too. We must deal with the short-term issues that affect communities such as those in the north of Scotland and down the east coast of England. That is a key area for us.
A number of right hon. and hon. Members mentioned the fiscal regime. One of the benefits of the task force is that it has brought together industry leaders, and I include trade unionists as well as representatives of the Government, with the Chancellor. One direct consequence of that was capital gains roll-over relief. The industry can therefore discuss the whole fiscal framework for the North sea directly with the Chancellor, who will keep it under review. It is not for me to speak for him, but he is aware of the difficulties in the North sea.
A number of hon. Members asked what the industry is doing about this problem. I have also asked that question and, indeed, I put it to the industry last week. The reply was that the industry took a bad hit in the past year because of the fall in oil prices. I ask the industry now to show its commitment to the people who made it the great success that it is and to recognise the skills that there are in the North sea. I have found a ready response from the industry, but I will keep in touch and I will keep the pressure on too.
A number of hon. Members raised the stricter gas consents policy. There is an irony here. Two weeks ago, I was replying to an Adjournment debate about the coal industry and was asked to ensure that the stricter gas consents policy was kept in place. The policy was put in place to allow us to reform the energy pool. We know from the Queen's Speech that there will be a utilities Bill in this Session, which will allow us to put in place that reform of the energy pool. I do not underestimate the impact of the gas consents policy on the UK oil and gas industry. I am aware of that, as is the Secretary of State. We wish to give fairness, and not favours, to the coal industry and we seek to give the same to the oil and gas industry. We hear what the industry says about that.
My hon. Friend the Member for Western Isles (Mr. Macdonald) talked about the problems of Arnish. I am sad that the company is in receivership, which is largely due to a commercial dispute. The local work force are excellent—like the Teesside work force they are international and have transformed their abilities

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over the lifetime of the Arnish development. My officials will do everything that they can to assist the yard. The company and yard are well regarded and the management has respect throughout the industry. We will do what we can to help.
The hon. Member for Moray asked about the Clair field and a number of hon. Members referred to the need to look at development west of Shetland. The field is very difficult geologically. It operates in difficult weather conditions and is the only field awaiting development there. A large number of licences are involved. BP Amoco is leading attempts to align the various interests but, as to timing, we must take into account the serious environmental impact on the area west of Shetland. The earliest possible approval and contract award would be mid-2001. Regrettably, I cannot suggest anything earlier.
I listened carefully to the points that have been made. Hon. Members know that I am available to them at any time to discuss the difficulties that the industry is experiencing. I do not want to hear us talk about the decline of the UK oil and gas industry: we are talking about managing change from the UK continental shelf in a way that secures an oil export industry that is for the benefit of all of us.

European Legislation (Parliamentary Scrutiny)
11 am
Mr. Peter Atkinson: Mr. Deputy Speaker, I hope that I have the right protocol, because, like many hon. Members, I am somewhat of a novice in that regard. None the less, it is a great pleasure to appear before you for the first time in this new Chamber.
I also thank the Minister for coming here today and for getting off his bus. I understand that he has been touring the country in it and that it is called Eunice—perhaps it should be called EU nice. I suspect that he will have discovered the European Union's deep unpopularity as he travelled in his bus outside the world of Westminster and Whitehall. He shakes his head, but he might not have visited the parts of the country that I and my hon. Friends inhabit. In any case, I welcome the Minister, who is off his bus and, no doubt, off to Helsinki. I hope that he will not sign up to some of the changes that have been forecast for the new intergovernmental conference agenda.
I hope that the Government will not sign up for more qualified majority voting and that they do not move into areas such as the European defence structure. In particular, I hope that they will not deal with the revision of the treaties, about which we have read in today's papers, because that would give the European Union some competence over our tax affairs. The Government want to limit the IGC agenda to matters that are called the leftovers from Amsterdam. However, my fear, and that of many of my colleagues, is that the Minister will not succeed and that the European Union will manage to advance integration and federalism at the next IGC.
One issue that will be missing from the IGC agenda next year will be the power of national Parliaments and their ability to scrutinise the European Union's affairs. That is a great pity, and the Government should seek to strengthen Parliament's role in scrutinising European legislation.
The European Union reminds me of one of the old London Routemaster buses which still run past this building. They were designed in the mid-1950s, at about the same time that Europe was born, to replace trolleybuses in the city. London Transport has a wonderful desire to keep them for ever and over the years it has re-engineered them in one form or another, keeping the same old pre-war design, which is totally unsuitable for the modern London traveller. The European Union is doing exactly the same.
Mr. Michael Jack: As a user of the type of bus that my hon. Friend described, I have just one question. Does he agree that the ability to hop on and off while the bus is on the move matches the flexibility that our party seeks in its dealings with Europe?
Mr. Atkinson: That is an ingenious way of taking the Routemaster further into the question of Europe. The problem is that, although my right hon. Friend might be able to hop on and off, it is quite difficult to do so if one has a child, a pushchair or some shopping, or if one is somewhat infirm.

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Europe is doing exactly what I have described: it is repeating the mistakes that it made in the past. On the important issue of enlargement, the machine that Europe is seeking to build simply will not work.
The new democracies of eastern Europe, which we shall, I hope, welcome into the European Union, are relatively fragile. The countries in that area have not long had proper democracy. Their political parties have still not properly bedded down or coalesced. There is a danger that they will lose their enthusiasm for their new democracy if the European Union forces too much acquis communautaire on them. That is the great danger in the proposals for the intergovernmental conference.
The problems were well identified in the report by the three wise men—Mr. Dehaene, Mr. von Weizsäcker and Lord Simon. That paper is worth reading, if only because it identifies the problems very well. It does not, of course, identify any of the correct solutions. The authors stress that the European Union should find ways of connecting or reconnecting to the people of Europe. That is important for the way in which we scrutinise the affairs of Europe.
The present system is wholly inadequate to deal with the volume of rules, regulations and decisions that come out of Europe. I speak as someone who had some experience in the previous Parliament of serving on the Select Committee on European Legislation. It has now been renamed the Select Committee on European Scrutiny, although it works in much the same way. I attended a meeting—you may have been to such a meeting yourself, Mr. Deputy Speaker—at which we completed our agenda in four minutes. We had about 60 or 70 items to consider, as my hon. Friend the Member for Stone (Mr. Cash) will recall. We whizzed through the matters without any sensible debate. That is not to criticise those who work in the Department. Some of our most excellent staff work is done by those who have joined the European scrutiny process and who examine European legislation. Previously, those involved were largely retired civil servants who had rejoined us and who thought of nothing better than getting back at their masters. They had the knowledge to do so and they provided an excellent service.
Mr. William Cash (Stone): I have been on the Scrutiny Committee since 1985 and have seen quite a wide range of activity on it. The people on the Committee—I mean no disrespect to them personally—appear to have been hand-picked to encourage the process of integration. In the previous Parliament, the views of a significant number of people were well known to be favourable to the direction in which the establishment wanted to go. That is a great pity. We need to be sure that people in the Scrutiny Committee, as in the Public Accounts Committee, are intent on asking serious questions all the way down the line.
Mr. Atkinson: I echo my hon. Friend's comments. That is correct. I got some instructive figures from the Library about the number of pieces of paper that emanate from Europe. For instance, in 1996, 39 directives, 2,341 regulations and 2,806 decisions came from the Commission. Among the papers from the Council, which are more important, were 58 directives, 247 regulations and 179 decisions. It is totally impossible for our existing scrutiny system to deal with
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those. The Scrutiny Committee considers about 1,000 documents a year, which sometimes go round in circles, perhaps two or three times. It reports on about 475 documents and recommends debate on about 60. It recommends that 12 of those debates should be held on the Floor of the House. I have not discovered exactly how many of those recommendations are carried out. My suspicion is that far fewer than 12 of those debates take place on the Floor of the House.
Mr. Anthony Steen: I have had the honour and privilege of being on the Select Committee on European Legislation. I forget how long it has been, but it has been a long time. Is my hon. Friend aware that the Committee is supposed to approve directives, rules and regulations that add up to a couple of hundred sheets of paper most weeks? Does he agree that there must be a serious question mark in our minds as to whether it can have any value at all when it simply rubber-stamps hundreds and thousands of documents, which it is quite incapable of reading and studying and on which it is quite incapable of making any judgments? Even if it disagrees with the subjects of the rules and regulations, it has no powers. All that it can do is write a letter to the Minister to ask for more information or that the matter be debated in a Standing Committee. Does the Committee have any value at all? Is it just a front and a pretence?
Mr. Atkinson: My hon. Friend reinforces the point more eloquently than I am making it. I agree entirely, but I do not want to imply any criticism of members of staff, because we rely on them to make decisions on our behalf.
Mr. Donald Anderson: I apologise to the hon. Gentleman because I must shortly leave on an urgent constituency matter. However, I want to interject one matter from the viewpoint of the Select Committee on Foreign Affairs. Following recommendations made by the Modernisation Committee in 1998, the Scrutiny Committee no longer only pursues bits of paper, as he suggests: it is entitled to examine related matters. That raises the question of the parliamentary scrutiny of European affairs as a whole. For example, the Foreign Affairs Committee, on which I serve, has in its remit the intergovernmental conference. The Scrutiny Committee went ahead without consulting us. There is a clear need to clarify the roles of different Select Committees, even if we do not go down the road of having a full European Committee.
Mr. Atkinson: No one knows scrutiny byways better than the hon. Gentleman. He put his finger on precisely the point that I was trying to make. There is so much material to debate that we cannot concentrate on the key issues. We do not separate the wheat from the chaff, and there is too much to deal with properly.
The gold-plating of regulations is an additional problem that occurs after we have dealt with them. Legislation may be nodded through the Scrutiny Committee; it may go through a brief debate in a European Standing Committee; but it may be thoroughly gold-plated when it eventually comes into force. The directive on abattoirs is an example. It originally took up two sides of A4, but the final version

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produced by the Ministry of Agriculture, Fisheries and Food was a book. My hon. Friend the Member for Ludlow (Mr. Gill) knows all about that.
Mr. Christopher Gill:: I want to talk not about the abattoirs directive specifically, but about directives in general. Would it not be a good idea for Members of Parliament to see the original directive and compare it directly with what is translated into legislation in this country? Both documents should be made available at the same time so that a useful comparison may be made and Members of Parliament can see the score, determining to what extent the directive has been gold-plated by our own Departments.
Mr. Atkinson: I agree absolutely. There is still too much material from Europe for us to scrutinise it properly.
Things can be done. For example, the Danes have a system that may be applicable to ours: Ministers are called before their scrutiny committee and must face questions. In essence—and this is the heart of our policy—we should be doing far less in Europe. That is one of the central differences between the Opposition and the Government. We believe that the only way in which we can scrutinise Europe properly and citizens can have confidence in their national Parliaments is for Europe to do far less.
The national Parliament—which voters elect and kick out—is one of the great safety valves of democracy. Kicking out the Government is one of the ordinary citizen's greatest democratic weapons. Without doubt, my backside is still smarting after 1997; that, however, is the nature of the democratic safety valve. If more and more decisions are apparently taken by an unaccountable Commission or institution in Europe, the public will experience genuine frustration at not being able to influence decisions.
One of the worst things for a Member of Parliament is having to say, "I'm awfully sorry, but I can't do anything about this because it's a European matter." In that context, it is depressing to face a farmer suffering genuine financial problems. Even if the Government wanted to help, they cannot because of the European structure. I urge the Minister and the Foreign Secretary—when he goes to Helsinki—to press the case for a wider, shallower Europe, which does less, but does it better.
Mr. Steen: I am most grateful to my hon. Friend for giving way: he will be doing so again to many of my hon. Friends, who have valid points to make.
Two matters concern me. Is my hon. Friend aware that the Scrutiny Committee sits in private? The public and press are not given an opportunity to learn about some of the directives, rules and regulations that it considers. For example, there was a draft directive aiming to change the technical specifications on farm tractor passenger seats to take account of the wide and varied work now undertaken by farm tractor passengers. Should the public not hear about those absurd rules and regulations?
Mr. Atkinson: That is exactly the trouble with Europe's image. For the majority of people—as the
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Minister will discover when he is driving around in Eunice—the image of Europe involves tractor seats, square bananas and carrot jam. Of course, that is quite wrong and damages Europe's reputation.
Several things must be done, apart from Europe doing less and doing it better. Europe needs some proper institutions and should look across the Atlantic for ideas about that. For a start, Europe needs an equivalent of the National Audit Office; the European Parliament could create something strong along those lines. Also urgent is reform of the European Court of Justice, which polices the single market and is of enormous importance to this country's role as a free trading country, but is ultimately a cumbersome and almost hobbled institution. The fact that French defiance in relation to the importation of British beef may take the court up to two years to deal with makes nonsense of the whole procedure. Substantial reform of the court is required, and that, again, may reduce the burden of material emanating from Europe.
The most important thing to set up is an independent competition authority, as outlined in a speech last week by my hon. Friend the Member for Stratford-on-Avon (Mr. Maples), who is shadow spokesman on foreign affairs. We need a competition guardian to snuff out regulations such as those on tractor seats, thus stopping them coming to national Parliaments.
Mr. Steen rose—
Mr. Atkinson: Several of my hon. Friends wish to speak, so I would be grateful if my hon. Friend keeps his intervention short.
Mr. Steen: Does my hon. Friend agree that we need to worry about more than the lack of transparency in the Scrutiny Committee? I mentioned tractor seats, but the Committee has just approved, by the Chairman's casting vote, a £5 million grant enabling the 11 official EU languages to be learned by all member states. As a result, Lëtzebuergesch, the language of Luxembourg, can be taught in Ireland—
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. It is improper to raise in this debate proceedings of Select Committees that have not been reported to the House.
Mr. Steen: On a point of order, Mr. Deputy Speaker. The item that I mentioned was considered, voted on and approved by the Scrutiny Committee, so it is now part of that Committee's legal arrangements. Surely it is not a secret matter and may be referred to. There is nothing wrong in mentioning in Westminster Hall an item that has already passed through a Select Committee.
Mr. Deputy Speaker: Regardless of whether a vote has taken place in Committee, the matter has not been reported to the House, so it is not relevant to raise it in this Chamber. In any event, we do not want overly lengthy interventions.
Mr. Atkinson: Thank you, Mr. Deputy Speaker.
I believe that the lack of efficient scrutiny damages the reputation of national Parliaments. If the reputations of national Parliaments are damaged, the reputations of

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the institutions of Europe are also damaged, by proxy. A proper system of scrutiny is vital. The avalanche or blizzard of legislation that comes to Parliament cannot be properly scrutinised. We have to turn off the tap. It can be turned off by having a wider and more flexible system in Europe.
Mr. Deputy Speaker: A number of hon. Members have sought to catch my eye. The winding-up speeches, which will start with the representative of the Liberal Democrat party, will be about 12 o'clock, followed by speeches from the main Opposition and then the Government.
11.20 am
Mr. Michael Jack: May I first congratulate you on your appointment, Mr. Deputy Speaker, and express my delight at seeing you in the Chair for our proceedings this morning?
I come to the debate as a former Fisheries Minister who had a lot of dealings with European business involving both the Council and the United Kingdom Government, and now as a humble member of European Standing Committee C, which is the tail-end Charlie of scrutiny procedures before Ministers go to Council to agree various matters. My hon. Friend the Member for Hexham (Mr. Atkinson) is right to draw our attention to the volume of European paper. Anyone who goes to the Vote Office daily can pick up a yellow piece of paper which lists sometimes hundreds of documents on which we might wish to comment. It is difficult enough for us to keep up with the volume of UK legislation, never mind trying to keep up, understand, comment on and react to the volume of European legislation.
If we look at such documents, we are struck by one area in which our current parliamentary scrutiny procedures do not act. Our present system is centred on legislation that is making its way through the institutions of Europe—usually the Council or the European Parliament. When the Government of the day produce a White Paper or a Green Paper, we can comment and shape the Government's views before final legislation becomes cast in concrete. Any legislature always finds it easier to change its mind before it has come to firm and final conclusions. Our parliamentary scrutiny procedure does not cater for dealing with draft material. Given the volume of stuff coming from Europe, one way of heading off some of the material at the pass would be for us to become involved at an earlier stage. That raises the fundamental question of how to keep track of all the material.
I have been impressed by a publication which the European Commission makes available to Members of Parliament and the public, called "The Week in Europe". Two sides of A4 are produced, summarising some of the key events that are taking place in Europe. As a result of the changes introduced by the Modernisation Committee, the House of Commons has established an office in the European Parliament to try to develop links and liaison with Europe to keep an eye on what is going on. Over time, we shall develop an expertise in keeping better track of European business. In view of our electronic communication—the parliamentary intranet—we should start to develop the
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equivalent of the weekly bulletin that we have in the UK Parliament. In one document, we can keep track of what is happening in this Parliament. Sensible editorial control would help to keep us better posted about what is going on from the inception of a consultative document through to the passage of legislation in the European Parliament. However much we may desire to comment on everything, we cannot do it. We need more help to be able to comment on the issues that matter to our constituents. To do that, we need to keep better track on what is going on.
Even within the Scrutiny Committee, there is difficulty in keeping up with the volume of legislation. My hon. Friend the Member for Hexham made that point. One of the new developments, which I welcome, is post-Council scrutiny. A Minister reports back on what has happened. I caught sight of a contribution made on 10 December 1998 by a former Treasury Minister, now the Minister for Small Business and E-Commerce. In the negotiations on the European budget, a measure that would have cost the UK £500 million had been successfully fought off. One of the tasks of scrutiny is to help parliamentarians and the wider public to become better acquainted with the workings of the European institutions. I am sure that other hon. Members found it as frustrating as I did, during the general election campaign, trying to show that national Parliaments had at least some ability to temper the activities of the Commission and the European Parliament. The extent to which that can be done should be the subject of another debate at another time. To help in the process of educating people on how Europe's institutions work, the more we know about what is happening, the better.
I shall now make some observations about the way in which European Standing Committee C operates to highlight some of the difficulties that right hon. and hon. Members who are not Ministers or members of the Select Committee on European Scrutiny, have in dealing with these matters, some of which are extremely sensitive, and which arouse deep passions in our constituents.
In the end of vehicle life directive, for example, there was a point of detail that could have affected the future prospects of the TVR car company, which manufactures sports cars and is adjacent to Fylde. As a result of probing that directive, two meetings were arranged between the Department of Trade and Industry and the company to develop further some of the points of detail that Ministers were going on to discuss. That cameo illustrates one of the problems. We lift the scrutiny reserve in the House when we have dealt with a particular matter, but it is often only the beginning of a very long process. Sometimes the House returns to the matter, but sometimes it does not. We must become more disciplined about reviewing how Ministers are getting on as a directive or regulation progresses.
We poor members of European Standing Committee C are usually given about 10 days' notice about business, if we are lucky. The Selection Committee informs us that we shall be dealing with that particular business 10 days hence. As a result of a huge amount of work by the parliamentary Clerk and the DTI, a vast file of papers appears. We then have a limited amount of time to wade through it and call for other information from the Library to try to get up to speed on the detail.

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Every Department needs to make a major improvement in its explanatory memorandums. Too often—I also plead guilty—Ministers who receive a draft explanatory memorandum from their Departments give it an occasional look, but it is usually only a cursory glance. It does not contain the detail that is required to enable Members of Parliament to have the equivalent of notes on clauses, so that we can really understand what the directive means. Many directives and documents from Europe are written in a language that I describe as Euro-speak, which is a formulation of words designed sometimes to be flexible and fuzzy at the edges to accommodate 15 different points of view. It is difficult for Members of Parliament to understand the difference that should be attached to the recitals at the beginning of a directive or a regulation, as opposed to the body of the text. To know what it really means—in our language, rather than the language in which it is written—requires a better quality of explanatory memorandum and, whenever possible, a better overview.
The best that we have is the Scrutiny Committee's report, but that report is the distillation of the work of a group of people working under pressure of time. They are able to pose various further questions to be asked of Ministers; but, as we heard, they do not have the power to ask for documents to be revised or to comment in more detail. Explanatory memorandums should be improved to help us better understand and cope with the technicalities of European legislation.
My hon. Friend the Member for Hexham mentioned gold-plating. That takes us into a wider area, which is further investigation on how Parliament handles statutory instruments. We have an objective legislative system; by and large, Europe operates a purposive system. We need to give serious consideration to that difference in our analysis of how we implement European legislation. We should avoid overdoing it.
The House has little opportunity to scrutinise the implementation of European legislation. At the risk of imposing yet another burden on ourselves, once a piece of legislation has been agreed in Europe and before we implement it, we might consider giving guidance to officials before they cast it in concrete.
Time will not permit me to go into more detail about what happens in the European Parliament. However, just as I asked for a weekly bulletin on what is happening in Europe, so I ask for guidance about proceedings in the European Parliament. We need to be better informed about our links with it. It is time that we had a directory of the members of the European Parliament, with their telephone and fax numbers. We should be told how to keep in touch with them and how to obtain information from parliamentary officials. We also need to know how to obtain more information and data from within Europe other than through the internet.
The more transparency, the more knowledge and the more contacts that we legislators can develop, the better we shall be able to improve our scrutiny of what is going on in Europe. The House must continue to take the matter seriously, but Members need more help and better information. I hope that my suggestions find favour with both the Scrutiny Committee and the Minister.
11.33 am
Mr. Owen Paterson: I congratulate my hon. Friend the Member for Hexham (Mr. Atkinson) on securing this debate. It is a most important subject.
This is my first speech in this Chamber, but I must point out that we would all have fitted into the familiar surroundings of Committee Room 14. That would have saved the British taxpayer £800,000. However, the move is in some ways symbolic, because in recent years we have seen a complete change in the way in which legislation is imposed on our afflicted citizenry.
Many people believe that all law is made by their Members of Parliament. They are sent to London from the counties; indeed, apart from the first two Parliaments, which were held in Shropshire itself, people have been sent from Shropshire since the 1240s. They came with good ideas for legislation, which was initiated in Parliament. In close collaboration with interested parties, they worked through legislation line by line, scrutinising it so that, when it was finally handed on to civil servants, it was workable and had the approval of those affected by it and those who had to pay for it.
Another huge merit of our traditional system of making law is that, if the legislators get it wrong, we have ways of amending or repealing it. Our system for dealing with European legislation is an extraordinary parody of the Westminster original. Legislation is cobbled together in secret by civil servants, it is rubber-stamped by exhausted peripatetic Ministers in a secretive Council and then sent here for a charade of a scrutiny process. The House is not involved in the initiation of that legislation. I wholeheartedly concur with my right hon. Friend the Member for Fylde (Mr. Jack), who pointed out that we are reactive and ought to be involved in the making of European legislation at a much earlier stage.
On paper, we have many safeguards. A resolution of the House is always printed in the minutes of the Scrutiny Committee. It clearly states:
"No Minister of the Crown should give agreement in the Council or in the European Council to any proposal for European Community legislation or for a common strategy, joint action or common position under Title V or a common position, framework decision, decision or convention under Title VI of the treaty on European Union—
(a) which is still subject to scrutiny … or … which is awaiting consideration by the House".
One might think that to be a clear safeguard but, as my hon. Friend the Member for Hexham pointed out, we run immediately into a time problem. Protocol 3 of the treaty of Amsterdam states:
"A six-week period shall elapse between a legislative proposal or a proposal for a measure to be adopted under Title VI of the Treaty on European Union being made available in all languages to the European Parliament".
Protocol 1 states:
"All Commission consultation documents (green and white papers and communications) shall be promptly forwarded to national parliaments of the Member States."
That puts appalling pressure on the staff in London who receive those documents.
About 900 new European documents a year are deposited in Parliament—that is 2,750 documents since the previous Parliament was dissolved. On average, the

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Scrutiny Committee judges about 450 of those to be of legal or political importance, and makes a substantive report on them. In recent years, about 40 documents a year only have been recommended for debate, with a feeble 10 on average being debated on the Floor of the House. So far, in this Parliament, 83 documents have been debated, of which 15 have been taken on the Floor of the House.
Shortly after I was elected, I had the honour of being made a member of European Standing Committee A, but it has not yet met. It has not discussed any European documents since 16 June 1999. After the recess, I had the honour of being asked to serve on the Scrutiny Committee. I would have much preferred this debate to have happened a few months hence, when I would have had a little more experience of what goes on. However, my initial reactions have some value.
It is obvious that a huge responsibility and burden are placed on the Scrutiny Committee staff, because six weeks is an extraordinarily short time. It has only 16 full-time staff and one full-time Clerk. One Clerk is shared with the Deregulation Committee, and four Clerk advisers and two legal advisers are shared with that Committee and the Joint Committee on Statutory Instruments. Of the eight secretarial staff, two are shared with the Deregulation Committee.
My initial reaction to serving on the Scrutiny Committee was awe at the sheer volume of paperwork. It is clear that the staff are enormously stretched by that volume of work, and they are forced to make a hasty precis or summary of the documents that pass through the Committee.
The procedure sounds simple. The Council secretariat in Brussels sends a document to UKREP, the United Kingdom representation in the European Union. UKREP sends that document to the Foreign Office, which forwards it to the relevant Department, which then deposits it in Parliament. Documents should in theory be deposited within two days of receipt in London and, as my right hon. Friend the Member for Fylde said, the appropriate Department should provide Parliament with an explanatory memorandum within 10 days thereafter.
The staff of the Scrutiny Committee immediately hit a problem. Should they pass on documents and memorandums as they stand? Documents are often faulty or unsatisfactory. As my right hon. Friend said, the memorandums are not always correct. The result is immediate haggling and delay. However, that process is relevant only for draft directives. Now that we have co-decision, many directives are amended at some length and in some detail by the European Parliament. As a result, the six-week delay allowed by the protocol of the treaty of Amsterdam can be easily eaten up. Regulations go straight through, because they are not amendable.
Already the effectiveness of the Scrutiny Committee is gravely limited. It is reactive only and reacts to only a limited proportion of the documents that it has to consider. Sitting on the Commitee is a strange experience. We meet every Wednesday and consider what is, in effect, a summary or a precis of the original documents that the staff have drafted in haste under tremendous pressure. They do a remarkable job in the circumstances.
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Receiving the papers is a problem. Sometimes I have received them minutes before the sitting starts. Although the Clerks have taken trouble to remedy that problem, the best that I can hope for is to be sent a slug of documents, probably half an inch thick, by Monday evening, probably with a follow-up on Tuesday and, sometimes, another on Wednesday, because the staff are under terrible pressure to ensure that the discussion takes place within the six-week time frame. That pressure is also felt in the Committee.
The Chairman, the hon. Member for Clydesdale (Mr. Hood), is admirable in his effectiveness in getting the business through. However, without divulging too many secrets, last week I passed a comment to my hon. Friend the Member for Stone (Mr. Cash) and, in that moment, missed a couple of papers on which I wanted to comment. We are under pressure not to interrupt so that the documents are approved.
Last week, a document, which is now in the public domain—I do not think that I am breaching protocol—mentioned making the temporary ban on bovine somatotropin permanent. I represent the largest milk field in western Europe, so surely I should be involved in anything that affects my dairy farmers or makes them less competitive. BST has been used in Canada and America. I received the document only on Tuesday. I should have liked to have the time to contact the National Farmers Union and the Royal Society for the Prevention of Cruelty of Animals.
By chance, the next day I received a copy of an RSPCA document that made a good case against the use of BST and showed that it is not used in other countries. I have since contacted the NFU to find out its opinion. All that action was a complete waste of time; the horse had bolted. We had a three or four-minute discussion on BST, the document was agreed to, and I had lost my chance to have an input. The point is that we are reacting to proposals; we are not initiating them, nor are we applying our knowledge and having an input, as Members of Parliament have done through the centuries.
Mr. Steen: Does my hon. Friend agree that, even if we object, it does no good?
Mr. Paterson: That is right. We are involved in a charade of reactive scrutiny. At best, we may get Ministers to return to the Council, if there is still time, to put their point of view, but they are also under pressure, because of the great drive to ensure that the Council passes the legislation.
Mr. James Paice: Is not the problem the fact that Ministers are not obliged to return to the Council even if they have the time to do so and whatever the Scrutiny Committee says? Ministers are members of the Government, who have their own policy, and whatever the view of the Scrutiny Committee—whether or not it is dominated by members of the governing party—Minsters will follow the Government's agreed policy.
Mr. Paterson: That is true in many cases. Of course, the attitude of some of the members of the Committee does not help. At one of the first meetings that I

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attended, a Government Member referred to an intervention made by my hon. Friend the Member for Stone and said that it was not our business to make life difficult for Ministers when they negotiate on behalf of the United Kingdom in the Council, as though our role was to shut up and whiz the document through.
All parties are in favour of enlargement. We have a strategic and moral obligation to enlarge the European Union. Last week a report on the status of every applicant country was produced, but we received only a brief summary stating that the report existed. If any of us had had time, we could have picked up a copy of it from the Vote Office. After all, there is no point in going to the Vote Office to ask for a lengthy document that has already been agreed to and is a matter of only academic interest. The problem is worse than that because Departments are not performing as requested. They are not adhering to the 10-day limit; they are not sending documents to the staff in time, exactly as my right hon. Friend the Member for Fylde said.
Annexe G of the Modernisation Committee's report on the scrutiny of European business, published on 9 June 1998, says:
"11 November, DfEE asks for three items to be taken urgently at the next day's meeting, because they will be considered at the Special Employment Council the next week. This has been known for some considerable time, but nothing has been said to the Committee."
That trick is intended to get measures through the Committee. Documents are held back in the Ministry, then released to the Committee just inside the six-week deadline.
Annexe G continues:
"17 November, Tessa Jowell writes about advertising of tobacco products, on which the Committee is due to take evidence on 19 November."
Her letter is addressed on the envelope to the Chairman by name, and is sent second class. It arrives on 20 November, the day after the evidence session. The annexe continues:
"26 November, Dawn Primarolo takes debate in European Standing Committee B on harmful tax competition; appears unaware of any difference between the Select Committee and the Standing Committee, quoting EMs that have been referred to 'the committee'… and assuring the Standing Committee that it will have a full opportunity to scrutinise future EMs.
28 November, John Battle's letter of 1 September on renewable sources of energy is faxed at our request. The original was addressed to the Chairman and never received. No Clerk's copy received. Existence of letter only discovered afer a subsequent letter referred to it."
Not only do we have an unhappy system of scrutiny, which is under terrible pressure, but the Government are not delivering documents to the relevant people on time as they are required to do under their own standards.
I shall refer to three measures that have dramatically damaged businesses and people in this country, the first of which barely touched Parliament—the introduction of the working time directive. The directive came into force on 1 October 1998. The then Secretary of State for Trade and Industry, now Secretary of State for Northern Ireland, laid the regulations before Parliament on 30 July, but the House went into recess on 31 July. The House of Commons did not debate the
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regulations until 27 October and the House of Lords did not do so until 4 November. That shows total contempt for Parliament.
The working time regulations could be described as the most expensive legislative measure ever imposed on the British citizenry. The Government estimate that the regulations will cost £1.9 billion in the first year and £2.3 billion a year after November 1999. It is assumed that the enforcement of working time regulations could increase the work load of industrial tribunals and the number of tribunals could rise from 3,000 to 6,000 a year.
The measure has caused total consternation in business groups, to which the Government are supposedly so friendly. The Construction Federation believes that the measure would increase labour costs by 2 to 3 per cent. The Federation of Small Businesses argued that the measure would require burdensome record keeping. The Institute of Directors undertook a survey and found that only 3 per cent. said that the directive would help their business. Overall, the IOD said that the working time directive would harm British companies' competitiveness and ability to create jobs.
The Government's favourite business man, Lord Haskins, described the measure as "a dog's dinner", asserting that the Government had ignored the warning that the directive could result in a plethora of law suits. The problem is worse than that because the interpretation and implementation of the directives are entirely in the hands of civil servants. No mechanism for amendment or repeal exists.
The Federation of Small Businesses stated in its annual report:
"the major worry was that the final regulations were only published on 30th July 1999, just two months before they became law, which left many business owners unaware of the full provisions … Employers' understanding of the regulations was further affected due to the Department of Trade and Industry's original guide containing serious errors. The guide included the wrong formula for working out compliance with the 48-hour week and an arithmetical error in an example of night work calculation."
Ruth Lea, the head of the IOD's policy unit said that the measures
"impose costly new obligations and to make matters worse … business has only had two months to comply with the new regulations, some of which are far from clear."
That could not have happened under our traditional system, in which such slack drafting and faults in the original legislation would have been ironed out in our exhaustive system of Second and Third Readings and in Committee.
The working time directive shows how Parliament can be effectively excluded from serious participation in a measure that will have huge consequences for millions of people. The Pollution Prevention and Control Bill shows that, despite a Bill having been considered in both Houses of Parliament, all the effective discussion had taken place when drafting the directive, which reflects what my right hon. Friend the Member for Fylde said. Parliament proved incapable of amending the Bill in any worthwhile way, because Ministers always fell back on the argument that the amendment in question was incompatible with the directive—directive 96/61, which gives enormous powers to the Environment Agency to

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introduce virtually any regulation that it wants and to change the nature of certain substantial industries. In the other place, Lord Peyton said:
"I do not believe that I have ever seen a Bill which shows more manifestly a deep and profound contempt for Parliament."—[Official Report, House of Lords, 15 February 1999; Vol. 597, c. 471.]
Back in the real world, I received a fax yesterday from a substantial poultry producer on the Welsh border. It was originally thought that the poultry industry would not be covered by the environmental legislation. However, the effect on him is catastrophic. He said:
"The expected cost to our business at current rates will be approximately £100,000 registration fee and £40,000 annually thereafter."
He also said:
"Nobody can tell me what is involved and what impact this will have on my business bearing in mind we are meeting all current environmental legislation."
He is worried about the
"Cost of registration and ongoing fees being completely out of line with current agricultural cost."
I have received similar comments from the National Pig Association, which points out that integrated pollution controls were not conceived for agricultural industries, the pig and poultry industries being arbitrarily specified at the last minute. The National Farmers Union makes an even more telling comment in a memo to me on the integrated pollution prevention and control directive. It refers to
"the difficulty of interpreting European environmental directives"—
which brings us back to the issue of gold-plating—
"which are phrased in very broad and imprecise terms with no statement of how they are intended to actually operate. This contrasts with UK legislation whch tends to be much more precise and detailed, and is backed by formal government guidance as to the intention of how the details should operate."
The memo ends by stating:
"A significant problem with European environmental legislation is that where unintended or unanticipated effects arise, changes can only be implemented where member states are unanimous. This means that for practical purposes, most mistakes or unintended consequences cannot be remedied. The Commission's zealous attitude towards compliance with the letter of the law means that the financial consequences of mistakes or unintended consequences from European environmental legislation tend to fully impact on the affected sectors. In combination with UK legislation requiring the costs of regulation to be fully recovered from industry, this means that in the agricultural sector farmers bear the full financial consequences of deficiencies in the drafting of European environmental legislation."
Two critical points should be made. First, there is no means of repeal or amendment; and, secondly, hon. Members have no say in the implementation of such hugely costly and vindictive measures for our constituents.
Even more bizarrely, the new system allows laws that all three parties oppose to be imposed on this country. As topical examples, I would cite droit de suite and the withholding tax, on which the Scrutiny Commitee has touched. There is no demand for the former in the art world—I should declare an interest, as my wife works for Sotheby's—and it could cost the art world £68 million in revenues. The auction trade will disappear to New York, because works of art are easily
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transported. The latter could have a catastrophic effect on the City of London and could change the nature of the south of England. Bizarrely, the Labour party, the Liberal Democrats and the Conservative party all oppose it. As I said at the beginning, we are reacting to legislation initiated in another place, and we have no role in the initiation procedure.
The Scrutiny Committee's report was taken up by the Modernisation Commiittee. Improvements have been made, the terms of reference have been expanded, and Ministers are now required to report before and after Council meetings, although we have had the pleasure of seeing only one Minister, who sits before us.
Select Committees should have a much stronger role to enable them to call Ministers before and after Council meetings. The big democratic hole is that Council meetings are held in secret. It was a pity that the proposal for five Standing Committees was reduced to three, but, having sat on one, I realise that they do not change anything. As my right hon. Friend the Member for Fylde said, hon. Members can listen to a long debate, go to the Library and mug up after 10 days, but after the vote. The Minister returns to the Council and nothing is changed. It is shameful that the Government's business managers rejected the Scrutiny Committee's recommendation that measures proposed to be debated on the Floor of the House should be, and that a special motion should be necessary to enable them to be debated in Committee.
The real place for reform is Brussels, at the time of initiation. It is entirely positive that we have now established a parliamentary office in Brussels and that Members of Parliament should be involved at the very earliest stage, when legislation is being drafted. Once legislation has gone to the Council, it is almost invariably too late. MPs should work very closely with that new office—which is independent of UKREP—on the development of legislation from the beginning.
If a measure presented to the House were subject to a free vote, and 100 Members opposed it, that should constitute a veto, and the Minister should not be allowed to propose the measure in the Council. I cannot conceive of a stronger weapon than for the Minister to go to Brussels next week to discuss the withholding tax and say that 100 Members of the oldest continuously running Parliament in western civilization had voted in a free vote against it. That would concur with the Modernisation Committee's summary:
"We agree with the Government that any review of the Scrutiny system should strengthen the role of Parliament, improve democratic oversight, and increase transparency and Parliamentary awareness."
That should be debated at the IGC and built into the next treaty.
Mr. Deputy Speaker: I fear that the next speaker will be the last before the winding-up speeches, unless those who are winding up for the Liberal Democrats or for the official Opposition are prepared to donate some of their time.
11.57 am
Mr. William Cash: After 15 years on the Scrutiny Committee, this is the first opportunity that I have had to speak in such a debate, and I have three

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minutes, if I am lucky. Having said that, I am sure that hon. Members who have not yet spoken will be good enough to take account of the fact that I have accumulated a certain amount of experience and anxiety, as well as judgment, on the scrutiny of European legislation and its impact on our constituents.
The fundamental question is who governs us and how. The scrutiny of legislation is the result of the system that has evolved since we entered the European Community in 1972 and is at the heart of the future conduct of our parliamentary system. I am sure that we shall need another opportunity to consider the matter.
I speak as one who took a fairly active part in resisting encroachments on our national sovereignty under the previous Government, and who regards the matter as one of national interest rather than exclusively of party politics. I am woefully aware of the resistance on the part of Governments of all shapes, sizes and varieties to any attempt to scrutinise effectively and amend legislation that emanates from the system that has evolved since 1972 for the United Kingdom. I had to cross-examine the Leader of the House of the previous Parliament on resistance to holding important debates on the Floor of the House, and got absolutely nowhere. The same applies to this Government and the current Leader of the House.
There is a serious resistance to holding proper debates on European legislation, because the Government want to manipulate it. We wanted to debate fisheries in the previous Parliament, but we were refused. There was no doubt whatever in my mind that the delivery of the papers in relation to fisheries and matters concerned with monetary union was orchestrated so that the minimum amount of time would be available, and so that decisions would be taken in the Council of Ministers at a time that would preclude our being able to organise debates on the Floor of the House. The issue relates to the manner in which the Leader of the House organises business in conjunction with the Whips.
I am glad that my hon. Friend the Member for North Shropshire (Mr. Paterson) mentioned the free vote, an issue that I raised in a previous debate. If we are to be governed in a democratic system in which the people of this country have confidence, it seems absolutely fundamental that they should not have laws imposed on them under section 2 of the European Communities Act 1972 without those laws being properly scrutinised after the Council of Ministers has considered them. There should also be a verifiable pre-Council system to give the people of this country confidence that, if enough Members of Parliament resist the Council's proposals, there will be an opportunity at the avant-projet stage to consider them on the Floor of the House, in the national interest and without regard to the whipping system.
I am being blunt about that. In the words of Lord Hailsham, we are faced with an elective dictatorship, and it is made much worse by the introduction of the European aspect. We have an elective dictatorship not only in terms of legislation that comes through the British Cabinet, in the name of the electorate and those elected in general elections who represent and are
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accountable to them, but in terms of the majority voting of other countries, which denies us any real means to put up some resistance or serious diversion of the proposals.
If we argue, as we did in Amsterdam on the declaration on national Parliaments, that those Parliaments have an important role to play, it is axiomatic that muscles should be provided to enable them to have a free vote. If that were laid down by Standing Orders, as it should be, the Whips would be in breach of parliamentary procedures and privilege if they put pressure on hon. Members to vote in a specific way.
That may seem radical, although perhaps only to the Whips Office. I suggest that the same rules should apply as normally apply to Select Committees. We are dealing with a cascade of legislation over which we have increasingly less control. If 100 or 150 Members of Parliament tabled a motion, a free vote should be allowed under Standing Orders. We would then have a proper and effective means of demonstrating that the veto must be used in such circumstances.
I propose a fundamental and radical solution. It is essential for us to remember that what was relevant in 1972 is not relevant now. We have had a vast engagement in European government since the Maastricht treaty, which was why I opposed it so vigorously. Now we have the Amsterdam treaty and a new IGC to come.
I do not buy the argument that we are not in European government yet. We are. We have to stand up for our constituents in the national Parliament, and we should devise procedures that will be effective in dealing with European government. We must not merely end up with a talking shop.
12.4 pm
Mr. David Heath: I, too, congratulate the hon. Member for Hexham (Mr. Atkinson) on securing what is an apposite debate, coming shortly before the Helsinki meeting. It is also an appropriate time to reconsider the seventh report of the Scrutiny Committee, which has changed some of our procedures. Many of us think that it has not gone far enough.
I did not feel, however, that the hon. Gentleman developed the theme of the effect of scrutiny to any great extent. I am indebted to the right hon. Member for Fylde (Mr. Jack) and the hon. Member for Stone (Mr. Cash), who addressed the issue of how we effectively or otherwise scrutinise European business. The hon. Member for North Shropshire (Mr. Paterson) was not entirely generous to his colleagues in his use of time, but he amply demonstrated the difficulties that he has experienced in keeping pace with European scrutiny.
What do we want in a system for Parliament to do its job effectively? We need to be able to scrutinise the vast quantity of material that emerges from the European Union—I agree with the hon. Member for Hexham that there is far too much of it. We must deal with the legislation effectively before it becomes part of British law.
As the right hon. Member for Fylde mentioned, we should also consider effectively the pre-legislation material, such as the draft directives. We need to see what is coming down the track. If we do not do so at that

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stage, as a Parliament we have no means of influencing decisions taken or positions adopted on behalf of this country by the Government. We must also consider the foreign policy aspects and the diplomatic interface that we have with our European partners.
Effective scrutiny and information are required so that all hon. Members—not merely those involved in the relevant Committees—have access to information that they need to do their jobs on behalf of their constituents and to be aware of events. We must have intelligence as to what happens elsewhere. We need to know not only what is proposed by Ministers in this Parliament, but what other Parliaments say about legislation and what is likely to appear before us in future. Too often, we react to proposals far too late, rather than being proactive in taking positions of our own or influencing decisions at an early stage.
We need to know what Her Majesty's Government's intentions are in negotiating on our behalf. We must be able to judge their performance in meeting their intentions as stated before a Council meeting.
The mechanism to scrutinise foreign policy effectively is provided through the Foreign Affairs Committee, of which I was pleased to be a member for some time. Its position should be clarified, vis-a-vis other Committees. The consideration of the presidency's intentions and the proceedings of the European Council should clearly be matters for the Foreign and Commonwealth Office and its Committee.
The new Scrutiny Committees are rightly constituted to consider the details of legislation but are far too general in scope. They are built on the architectural notion of Europe's three pillars, which I dislike and which is not what the Modernisation Committee first recommended. It suggested that the Scrutiny Committees be closely focused on specific subject matters. If that were so, they would do their job much more effectively. They are overwhelmed by a mass of material on which they cannot be expert. Can there be appropriate scrutiny of, for instance, the detailed agricultural measures proposed by the European Union in a Committee that has so many other responsibilities?
There is a danger of ghettoising European issues in establishing Scrutiny Committees to do the job. Many hon. Members do not have the privilege of serving on them, so they become something that merely involves someone else. That is not a satisfactory way in which to proceed. We need a much clearer mechanism than that to ensure that matters are discussed fully on the Floor of the House. When certain matters are of concern to a wide range of hon. Members, it should be for Parliament, not for Ministers, to decide whether they are debated by the House. There should be a better mechanism by which such decisions are taken.
One of the main problems concerning information is filtering the quantity of material so that we have in a digest form that which is relevant to our business as Members of Parliament. I agree with the right hon. Member for Fylde: something along the lines of the regular publication "The Week in Europe" would be of enormous help to us. The parliamentary office in Brussels must be one of the best kept secrets in the House. It is almost as though it had been considered to be exempt material under the Freedom of Information Bill. Few hon. Members know of the existence of that
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new office, and even fewer know how to access it. I know that it exists, but I do not have the slightest idea how to access information from it, or to relay information to it. It needs to be publicised much better than it has been and there must be a more transparent mechanism for getting in touch with it.
It is absolutely essential that, before Ministers attend Councils of Ministers, they give an account to Parliament about what they are to discuss and report back after those discussions have taken place. We must have the option of interrogation. I am no longer a member of the Foreign Affairs Committee, but I remember when that Committee interrogated the Foreign Secretary. Such action has not become commonplace by the Scrutiny Committees. Our proceedings in Westminster Hall give us more scope in how to work out ways in which to present such matters to Parliament and will allow for a wider position to be taken.
If the subsidiarity protocols are to mean anything, the House must occasionally be able to affirm the principle of subsidiarity and say that a matter is one on which it wants to make a decision. If we do not have the mechanisms for property scrutiny, Parliament cannot do that and we will be less well served as a result.
12.12 pm
Mr. Archie Norman: I congratulate my hon. Friend the Member for Hexham (Mr. Atkinson) on securing this debate and other right hon. and hon. Friends for their powerful contributions to it, some of which I shall refer to in my remarks. Important issues have been raised that affect all hon. Members because they concern the effectiveness of the House and our role in it. As my hon. Friend the Member for Stone (Mr. Cash) said, it is a question of who governs us and how. It is also important to recognise that that issue is becoming more important as the volume of regulation and directives from the European Union increases.
In Amsterdam, the Government surrendered our veto in 16 areas and it is evident that they propose in the next treaty to surrender our veto in a further 19. As a result, as Mr. Prodi, the President of the Commission, said, qualified majority voting will become the norm. It was interesting that, in last week's European debate, the Foreign Secretary said that majority voting was already the rule in the European Union.
Given that many proposed directives are being cooked up in the Commission, the volume of regulations and directives from Brussels will increase, not diminish, in the next two years to a new high, so how we scrutinise, get ahead of, examine and discuss those new regulations and laws more openly with people throughout the country is fundamental. Let us remember that there is a substantial democratic deficit in that regard.
The Minister will no doubt have experienced on his bus trips the widespread disillusionment that is felt in the business community about the whole conduct of regulation from Brussels. Regulatory issues for small and large businesses, as I know from my experience, pose a bigger problem than any other matter that concerns the future of the European Union. A poll published in the Financial Times last week showed that 51 per cent. of the population would like to withdraw from the European Union—an opinion that we should

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take extremely seriously. A complete failure of the democratic process to scrutinise and examine European legislation is part of the reason for that disillusionment.
How Governments of both parties have implemented European legislation leaves much to be desired. My hon. Friend the Member for North Shropshire (Mr. Paterson) referred graphically to examples when this House failed the country because of its inability to examine in detail regulations and directives as they are proposed. Our standard of implementation is poor. We have a global reputation for gold-plating, which is nothing to be proud of; it has affected small businesses, jobs and individuals. The problem is not confined to Conservative Members. The hon. Member for Somerton and Frome (Mr. Heath) made an extremely insightful and thoughtful speech and I agree with much of what he said.
It is also true that Ministers have previously expressed concern about the matter. I wish to cite one example. Six months ago, in his Jean Monnet lecture, the Secretary of State for Trade and Industry gave a commitment and stated specifically:
"I want to see all new European regulation independently appraised for its impact on small businesses and certified as being small business friendly. I think this would make a real difference to small businesses here and in the whole of Europe."
Most of us—both Government and Opposition Members—would endorse this view. Given the fact that six months have now elapsed and that we have heard precious little since then, I hope that the Minister will tell us what progress has been made towards the establishment of that independent appraisal process.
Although our parliamentary process is often held up as a model of modern western democracy, in the area of European legislation, which now accounts for a large proportion of total new regulation in Britain, the record is poor and is arguably worse than in some other member states. For example, Denmark and Sweden have adopted the approach of ensuring that they are more proactive and that their Parliaments can get ahead of the regulation as opposed to reacting to it after it has been passed.
Serious questions have been raised in the debate by my right hon. Friend the Member for Fylde (Mr. Jack), as well as by my hon. Friends the Members for North Shropshire and for Stone about the workings of the Scrutiny Committee and Standing Committees and I hope that the Minister will deal with them specifically in his response. It is hard to avoid the impression that the whole process adds up to regulation by stealth and is tantamount to contempt for parliamentary practice. We have heard about the failure to debate important issues on the Floor of the House and to provide papers in advance of discussion and adequate briefings. As my hon. Friend the Member for North Shropshire said, the process is close to a charade and degenerates to a farce.
I trust that the Minister will address such matters seriously and that he will depart from the prepared text that is in front of him. Important questions have been asked, and to refresh his memory I shall summarise some of them. What steps will he take to strengthen the
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role and effectiveness of the House of Commons in the context of enlargement and the forthcoming increase in European regulations? Given the institutional changes in Europe, now is a good time to deal with that. What assurances can he give us that the inadequacies of the scrutiny process will be dealt with? How will he address the need for a better mechanism for getting issues on to the Floor of the House? What is being done to implement the commitment of the Secretary of State for Trade and Industry to hold a business-friendly audit of EU regulation?
Will the Minister deal with the serious proposals raised by my hon. Friends the Members for North Shropshire and for Stone for pre-discussion and proper scrutiny of our negotiating position prior to meetings of the Council of Ministers and provide us with a better opportunity to hold Ministers to account for their conduct at the Council of Ministers? What will lie do to encourage more openness in the conduct of the Council of Ministers and in the publication of voting records, agendas and so forth? Will he demonstrate a greater appetite to address seriously such issues than he has been able to do in the past few weeks? We appreciate that he has been on a bus trip around Europe and we much enjoyed the ribald remarks that he made in previous debates about that, about European issues and about my business career, but the time has come for him to deal specifically with the issues that we have raised. They are fundamental and I hope that he will respond to them.
12.20 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): As this is my first appearance in this new Chamber, I welcome you, Mr. Deputy Speaker, to the Chair and congratulate you on your appointment.
The debate has been good, and I do not usually attract the amount of support that is present today when I make winding-up speeches. I congratulate the hon. Member for Hexham (Mr. Atkinson) on his good fortune in securing the debate. As with all European debates, the Eurostars—or perhaps I should call them the anti-Eurostars—are present, including the hon. Member for Stone (Mr. Cash). For him, Europe and the world are not enough, and he often comes to debates such as this one to remind us of his experience. The hon. Member for Boston and Skegness (Sir R. Body) is also present. I am sorry that he was unable to participate in the debate, as I had looked forward to hearing his remarks. We also heard a contribution from another noted participant in debates such as this, the hon. Member for Ludlow (Mr. Gill), who has unfortunately had to leave.
I shall come to other hon. Members' comments in a moment. I should restate at the outset the Government's position on Europe and the scrutiny of European legislation. I think that we all accept that Britain's position in Europe is hugely important and that decisions made at EU level have an impact on us all. That is why parliamentary scrutiny of EU legislation is so important, and why I welcome this debate. Parliament must be promptly and fully informed about European legislation and about the Government's approach to the imminent negotiations—I shall speak about Helsinki at the end of my remarks. That is why the Government conducted an overhaul of our domestic

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scrutiny processes. We want European decision making to be brought closer to the people whom it affects, and transparency and democratic oversight of new legislation are vital to the process.
The United Kingdom is acknowledged to have one of the most highly developed systems for scrutiny of EU business. That is why I was disappointed to hear so much criticism from members of the Scrutiny Committee. The hon. Member for Stone may find this surprising, but I pay tribute to people such as him for their work on the Committee. When I was in Brussels recently, members of the Commission were disappointed that he was not part of the team that went to meet them, because they had heard so much about him. I do not know whether his criticism of Europe extends to a refusal to visit it, but Commission members were disappointed not to meet him. All hon. Members who serve on the Scrutiny Committee play a valuable and important part in the scrutiny process.
Mr. Laurence Robertson: Will the Minister give way?
Mr. Vaz: No. I am left with seven minutes, and, although I am happy to respond to hon. Members' concerns, I want to respond to at least some of the points that have already been made.
As hon. Members will know, arrangements for parliamentary oversight of European legislation have been in place since 1973. The Government built on those arrangements in our White Paper of November 1998, which was endorsed by the House on 17 November 1998. The new scrutiny arrangements, which have now been in place for almost a year, allow the House to consider new European legislation arising across the three pillars of EU activity. The commitment made by Ministers not to agree legislation that is still under scrutiny has been extended to the second and third pillars.
We have also introduced a new system of pre and post-Council scrutiny, which is enabling the Scrutiny Committee to keep abreast of developments in the Council of Ministers. The hon. Member for Stone will remember that my right hon. Friend the Foreign Secretary was able to speak to the Committee last week, before the Helsinki summit. We had a six-hour debate on the very issues that are to be discussed in Helsinki. No hon. Member can say that he or she is suffering from a lack of scrutiny of European legislation. I have spent the past two weeks heavily engaged in these matters, as have other hon. Members. The initiative undertaken by the House to establish a national parliamentary office in Brussels will also enhance Westminster's awareness of EU issues. The Government welcome the strengthening of the role of the United Kingdom Parliament in the European Union.
The right hon. Member for Fylde (Mr. Jack), a distinguished former Minister of Agriculture, Fisheries and Food, made several points. As a recently appointed Minister for Europe, I share some of the concerns he expressed, having had to get to grips with everything that is happening there. I found, however, that I was extremely well served by the civil servants at UKREP. During the past eight weeks, we have been served by an effective machine made up of the best civil servants
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dealing with European legislation of any country in the European Union. I am surprised that the right hon. Gentleman does not share my view. I know that civil servants served him well and that he was able to do an effective job. I am glad to see that he joins me in paying tribute to them, as they provide an effective means of ensuring not only that Ministers are informed but that we receive and pass on documents released through Brussels mechanisms as quickly as possible. The right hon. Gentleman also asked about MEPs. I, too, would like to make better use of Members of the European Parliament. I remind the right hon. Gentleman that they regularly come to Westminster when their advice is sought and to give evidence to Select Committees.
The hon. Member for North Shropshire (Mr. Paterson) has had an unfortunate first six weeks as a member of the Committee. I hope that things can only get better for him. My civil servants make every effort that is humanly possible to ensure that Clerks receive information about European legislation as quickly as possible. I shall look into the hon. Gentleman's points about mislaid letters. As a Member of Parliament, I believe that if hon. Members are considering important legislation, relevant letters and documents should not be lost. We shall examine the system to see how it can be improved, but I do not think that it can be. The hon. Gentleman has to read the papers in question, so he knows that we have to deal with thousands of documents every year. It is very regrettable if one or two go missing, but we shall look into the reasons and try to ensure that it does not happen again.
We shall do our best, as the Clerk of the Committee tries his or her best, to ensure that improvements are made. I have discussed the possibility of telephoning Clerks to say that documents are on their way, but we could be in permanent conversation as there are so many such documents. We shall consider presentational aspects and reflect on comments about making the language of the documents even more effective.
Points were also made about procedure and about the way in which draft directives are deposited. As only two minutes remain, I shall write to all the hon. Members who expressed concerns—I am sorry to place a greater burden on those assisting me—but to whom I have not had the opportunity to reply because of the fruitful discussion that we have had.
I am looking forward to going to Helsinki and to attending tomorrow's historic European Council meeting. Hon. Members are right to say enlargement will affect the way in which the Commission is run. The Government are at the forefront of ensuring that the Commission is run as efficiently and as accountably as possible. We will ensure that such transparency is at the forefront of our campaign to improve Commission institutions.
It is sad that the message sent out by Opposition spokesmen to Poland, Hungary and Czechoslovakia is so negative. Last night, I met European ambassadors from central and eastern European countries. They think that the Conservative party does not want them in Europe, because of the language that it uses. The hon. Member for Tunbridge Wells (Mr. Norman) should carefully consider his comments and those of other Opposition Members. The message that they are sending out to the rest of Europe is negative, and I hope that they will retract some of their remarks.

Grammar Schools (Lincolnshire)
12.30 pm
Sir Richard Body: I am grateful for this opportunity to express a concern that is felt by many thousands of people in Lincolnshire and shared by many people in other counties that still have the grammar school system. I also want to apologise to the Minister for School Standards for having caused her some inconvenience the other evening. As so often, on such occasions, the fault rests with the Foreign and Commonwealth Office, where I was waiting for a summons to come to the House, but it was not delivered.
I do not know whether the Minister is new Labour or old Labour, but it may not matter much because, whichever she is, one suspects that there is a natural antipathy to the independent sector—a feeling that those who can afford to give their children a private education should not do so. If that is the case, surely the answer is to raise the standards of the state sector so high that parents no longer need to send their children to independent schools and spend tens of thousands of pounds in so doing. That is exactly the position in Lincolnshire.
Lincolnshire is one of our largest counties. Its population includes many thousands of parents who could afford to send their children to be educated privately in one of our famous schools. However, one of the county's distinctive features is that it has no independent schools at secondary level, with the possible exception of Stamford, which is tucked away in the south-west corner of the county and attracts most of its pupils from ouside the county. Therefore, within the county itself, tens of thousands of parents who could afford to send their children to independent schools do not do so because they know that the standards in Lincolnshire are so high that it is unnecessary. Surely, that is the paradigm at which the Government should aim—a state sector so good that parents do not need to use the private sector and sacrifice much of their income to do so.
In Lincolnshire there are many grammar schools, which are open to pupils from whatever background and contain the widest possible social mix. In my constituency, there are many pupils whose parents are out of work and receiving state benefits. Sitting beside those children in the classrooms are children from affluent families. I would have thought that the Minister would approve of that desirable social mix.
Skegness grammar school was the first to apply for, and to receive, grant-maintained status. Having done so, it began to admit boarders. It now has 69 boarders, many of whom come from areas where the comprehensive system operates and is failing pupils. Parents feel that their children would be disadvantaged were they to send them to those schools, so they make the journey to Skegness, where they have found a school of the highest standards. Furthermore—I ask the Minister to bear this in mind—it is not only parents in the United Kingdom who send children to Skegness grammar school. Remarkably, there is now a waiting list of parents from outside the United Kingdom who want to send their children to the school. They come from as far afield as the far east—Hong Kong, for example. The school already has some pupils from the far east and
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from Germany. I do not know whether the Minister can think of any comprehensive school that attracts pupils from abroad because their parents believe that its standards are so outstandingly high that they wish to send their children across the seas to be educated there, but parents are sending their children to Skegness grammar school from abroad.
I have had the honour to represent the Skegness area for only the past two years. It is a smallish town of about 14,000 people. It is a holiday resort, the air is bracing and it is an excellent place in many ways, but it is not a town that would be instantly known to many people abroad. Despite that, parents are willing to make the journey from Germany and other countries to take advantage of the high-quality education offered there. I put it to the Minister that that is a remarkable fact. Skegness grammar school must be one of the only state sector schools that attracts pupils from outside the country, and has a waiting list of such pupils. Its headmaster has to turn people away and say, "I am sorry, but I cannot take any more pupils from abroad."
In case the Minister suggests that there is any form of elitism there, I emphasise that there is a very good social mix at Skegness grammar school, to which I have already alluded. Children whose parents are on social security are educated alongside children whose parents are extremely well off.
There are two other grammar schools, or the equivalent, in my constituency: Boston grammar school and Boston high school, both of which have extremely high standards. For many years, Miss Webb was the headmistress of Boston high school, and she attracted staff from the private sector who wanted to teach in her school. I am glad to say that the present headmaster is maintaining that high standard and is attracting staff from other countries to teach there. That also is remarkable.
The staff at those three schools—I suspect that the same applies to other grammar schools in the county—are apprehensive about the future. They have come to Lincolnshire to teach in those schools because they offer an intellectual challenge, and the staff appreciate the ambience—to use a somewhat overused word—to be found there. There might be an emphasis on academic work in those schools, but that encourages staff to apply for jobs there, and they would be reluctant to apply if the schools were part of the comprehensive system. Indeed, many of those staff have come from the comprehensive system, albeit the more academic streams of that system. I say to the Minister—I hope that she will bear this in mind—that many of those staff are worried about what the future holds and wonder whether they would be wise to start looking for posts in the private sector. We all know that morale among teaching staff is not high in the state sector at the moment. They believe that there is bureaucracy and that they have too little control over the decisions that are taken in their schools. That is not the case in the private sector, where staff morale is high. Too many teachers in Lincolnshire's grammar schools will look for new posts if they believe that the decision has been taken to merge their schools with secondary moderns. That would be a tragedy. The high standard in Lincolnshire's schools is due to high-quality staff. The danger is that if that quality is lowered, the schools will suffer.

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The Minister could mention the ballot to allow the public to decide, but she knows, as I do—I shall not rehearse the arguments—that that will be loaded against the grammar schools. She might be interested to know that Lincolnshire county council has not always been Conservative. For four years, until two years ago, we had a Labour-Liberal coalition that was a little ambivalent about grammar schools, but it is mute now because it would be politically unpopular to raise the subject.
We have debated the issue in Lincolnshire. The debate began when Shirley Williams, as Secretary of State for Education, threatened the closure of our grammar schools. We fought and won a great battle, and I can detect no substantial feeling in the country against grammar schools, which are seen as a wonderful opportunity for boys and girls—however poor and disadvantaged they may be—to receive a first-class education that is as good as any in the private sector. Many have gone on to Oxford and Cambridge and, from there, to distinguished careers in the professions and elsewhere.
It would be a total tragedy to lose the remarkable blend of excellence without elitism. Elitism plays no part in education in Lincolnshire. I hope that the Minister will have kind words for our education system and assure both parents and staff that it will not be threatened. The issue has been debated over the years. Even the Liberal Democrats and the Labour party are quiet on the subject. We want to retain grammar schools without the threat of their closure. If the Minister is in doubt, she should visit the schools in Lincolnshire, which would impress her greatly.
12.44 pm
Mr. John Bercow: I support the remarks of my hon. Friend the Member for Boston and Skegness (Sir R. Body). Grammar schools are beacons of excellence in our education system. It is high time that their opponents learned the fundamental lesson that we shall never improve the rest of our schools by destroying some of the best of our schools.
The simple truth is that the ballot procedure is weighted against the grammar schools. I know that the Minister has strong views on this matter, but it would be unconscionable, under a Government who spout the mantra of support for the many, not the few, if we were, as we approach the next millennium, to replace selection according to ability to achieve with selection according to ability to pay. That would be a disgrace and a scandal, and the Conservative party would have nothing to do with it. We shall fight as the only national political party unequivocally committed to the retention of the outstanding grammar schools, some of which are in the county of Lincolnshire and one of which is in the constituency so admirably represented by my hon. Friend.
12.45 pm
The Minister for School Standards (Ms Estelle Morris): I congratulate you, Mr. Deputy Speaker, on your appointment to chair these trial Adjournment debates. I also congratulate the hon. Member for Boston and Skegness (Sir R. Body) on securing the debate and thank him for his apology for failing to turn up the last time that we discussed a similar matter.
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I accept the sincerity of the hon. Gentleman's words and what he says about the quality of education in the schools in his constituency. I join him in congratulating all nursery, primary and secondary school teachers in Boston and Skegness, and throughout Lincolnshire, on their work. It was interesting that we heard little about the schools in Boston and Skegness that are not grammar schools. We know, by definition of the system, that where there are grammar schools, there are secondary modern schools, which I think are called high schools in Boston and Skegness. I also want to record, as the hon. Gentleman did not, that in the non-grammar schools in his constituency there are strong teacher commitment, good teacher skills and a lot of student progress. We should appreciate all that teachers do in his constituency.
The Government have no antipathy to the independent sector. We have made more efforts to forge links and join partnerships with the independent sector than the Conservatives did. The sector has welcomed the independent-state school partnership funding that we have made available. However, I agree that it would be intolerable if parents believed that the only way to get a good education was to go to the independent sector. I defend a parent's right to buy an education for their child. Our responsibility is to ensure that parents are not forced to make that choice because there are no good schools elsewhere.
Where I differ from the hon. Gentleman is that I do not believe that the only way to assure parents that they need not buy education is to offer them a selective school system. Throughout the country, non-selective local authority comprehensive schools are getting good results even though they teach children across the ability range. The hon. Gentleman asked whether parents who live abroad are queueing up to send their children to comprehensive schools. Funnily enough, on a radio interview about primary performance tables this morning, which I did not know about before 7 am, I was asked what I thought about a small maintained nonselective school in Oxfordshire which parents from America were queueing up to send their children to because of its good literacy and numeracy results.
Let us not fall into the trap of thinking that the only good schools are those in the selective system. If we take the view that the only way to get high standards is to have grammar schools, we must admit that we cannot meet the challenge of raising standards for every child. The hon. Member for Buckingham (Mr. Bercow), who seems to be the Opposition spokesman on grammar schools, is vociferous on this issue. He pledged that his Government, if there ever is one, would be committed to keeping grammar schools. That is the Conservatives' problem. This Government are committed to raising standards in 24,000 schools, not to keeping good standards in only 164 schools. That is the challenge. I accept that there are good standards in grammar schools, but the crusade for our school service is greater than that; it is about how we meet the needs of the country so that we have a work force, a population and a learning community in which standards rise for everyone.
There is a debate about whether the best way to raise standards and achieve excellence for everyone is to have

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selective education, but that is the wrong question. We have successfully announced and published performance tables for literacy and numeracy at primary school level. They show that, with good teaching and good strategies, and working from best practice with properly funded schools, training and support for teachers and, above all, clear, high expectations of everyone in the education service, we can raise standards in every school. Today's literacy and numeracy results show that, whether in urban or rural areas, poor or affluent areas, areas where they thought they could not do it or areas where they have always been sure that they could, with the right mixture of good teaching and proper leadership we can raise standards across the board. We must achieve that for the whole system.
I mention that because it proves that our task is do-able. I am not content to leave this country's future—or its children's future—to the risk of whether children can get into a grammar school. If the hon. Member for Boston and Skegness had said that his constituency had a system of grammar schools and secondary modern schools all of which raised standards for all children, we might have had a different debate.
Mr. Bercow rose—
Ms Morris: I will give way shortly, because I promised, but I remind the hon. Member for Buckingham that in his note he said that he would not make a speech—and he has had the opportunity to do so.
If the hon. Member for Boston and Skegness had made the argument that I described, the debate might have been different. However, clearly that our challenge is not to defend the future admission arrangements of 164 schools, but to ensure that we raise standards in 24,000 schools. We must do that. Grammar schools were set up when this country needed only a few children to achieve the highest levels, and they delivered that, but the debate has moved on and the task now is to construct a system that raises standards for everyone.
I want to make one more point; then I shall give way to the hon. Member for Buckingham. I assure the hon. Member for Boston and Skegness that he should not feel downhearted. I appreciate that his experience as a Member of Parliament representing an area with selective education; on the whole, that is not my experience, though there are a small number of selective schools in my constituency. My teaching experience took place in an authority that was highly comprehensive. Across a range of local authorities and schools, the highest-achieving 24 per cent. in comprehensive schools achieve at the same level as those in grammar schools—the figure is about 24 per cent. in most local authorities. Therefore the bright children who are educated in local education authorities with no selection achieve at the level of those who are taught in selective schools. The evidence shows that children who achieve at high levels can do so whether they go to a selective or comprehensive school.
Mr. Bercow rose—
Mr. Deputy Speaker (Mr. Frank Cook): Order. I feel compelled to point out that this is not a general debate. It is a 30-minute Adjournment debate which, under the conventions of the House, is an opportunity for individual hon. Members to speak directly with and gain responses from Ministers; it should not be an opportunity for Front-Bench Opposition spokesmen to intervene. On this occasion, as the Minister has allowed it, it may happen, but it is extraordinary and it will not create a precedent.
Mr. Bercow: I am grateful for that guidance, Mr. Deputy Speaker, and I shall take note of it. I am also grateful to the Minister for her generosity in giving way. Will she accept that she cannot get away with painting the Conservative party as the supporter of only grammar schools? I myself attended a comprehensive school and I accept the importance of supporting good schools of whatever structure. The Minister said that it was standards, not structure, that mattered.
I think that it is clear that the Minister is hostile to selection, but will she now answer a question that she has previously always ducked? If she had a vote in a grammar school ballot, would she answer the ballot question yes or no?
Ms Morris: The hon. Gentleman has put on the record his views about what the Conservative party defends. I am happy for people to read the record and compare his intervention with what he said earlier.
I turn to the current arrangements for grammar school ballots. We have set up a mechanism whereby local people can decide what a school's future admission arrangements should be. The hon. Member for Boston and Skegness rightly said that this has always been an issue. As far back as I can remember, the presence or absence of selective admission arrangements has been a political and an educational issue that has never gone away. It was an issue for Mrs. Thatcher when she was Secretary of State for Education—that is why she changed the admission arrangements in more grammar schools than anyone else—it was an issue for the Labour party when it was last in government and it is an issue now.
Given that the issue will not go away, there are three ways of deciding whether to change admission arrangments. We can decide on it as a Government; we can let the local authority decide; or we can give the power to decide to parents. We have said that we shall give that power to parents. It is not an option to decree that there should be no more debate on the future admission arrangements of grammar schools; that will just not happen. I shall explain why I think that we have done the right thing, and I shall also answer the question asked by the hon. Member for Buckingham.
We have made our decision because, as a Government who are committed to education in a way that no previous Government have been committed to it, we shall succeed or fail by what we do for the school system, not what we do about the admission arrangements in 164 schools. If we take our eye off the ball to join that hugely contentious debate, we risk wasting our resources, energy and time. I am glad that I have spent

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the past year supporting schools in their introduction of the literacy and numeracy strategies, which the hon. Member for Buckingham would not make schools maintain. I am also glad that I will—if it is what my right hon. Friend the Prime Minister wants me to do—spend the next year raising standards through "Excellence in Cities", and education action zones rather than arguing about grammar school ballots, which is what would have happened. We have taken the pragmatic view that our time is better spent on other matters.
One can argue that we should not have given parents the right to determine admission arrangements, but one cannot say that we should not have the debate and there should be no mechanism for changing those arrangements. The issue is contentious, but we cannot deny parents who want to change admission arrangements the right to do so. We must give someone somewhere the authority and the mechanism to allow that change to be made if that is what people want.
Nothing is set in stone. Politics must always allow for a mechanism for change. I am happy to defend our decision to put the potential for change in the hands of parents. It would be silly if, having spent considerable legislative time on that and having been determined not to get personally embroiled in the argument about selective schools, I fell into the trap of the hon. Member for Buckingham by answering his question directly. He knows—because we say it—that the Government do not want more selection and we do not think that more selection is the key to raising standards across the board. We are, however, happy to do our best with the school system that we have to raise standards for every child. I am not a parent, so I will not answer the hon. Gentleman's question—although it is difficult not to, because I keep being asked it.
I shall finish by paraphrasing what the hon. Member for Boston and Skegness said, because I strongly agree with him. Reflecting on the good schools in his constituency, he said that they were good because they had good teachers. He is dead right. Those schools are good because they have good teachers, not because of their admission arrangements. If a school has to rely on its admission arrangements to achieve good results, I would question its quality of teaching, learning and management as well as its focus and curriculum. I pay tribute to the schools about which the hon. Member for Boston and Skegness talked and I am confident that if their teachers were to teach in schools without selective admission arrangements, their skills and professionalism would serve any child well. I leave the future of the admission arrangements of the schools in the hon. Gentleman's consituency exactly where they should be: in the hands of the parents whose children will be most affected.

Fireworks
1 pm
Mr. Barry Gardiner: Older and wiser parliamentary heads advise me that the crafty Member begins his Adjournment debate by praising the Minister for all that the Department has achieved. The effect of such a eulogy is doubly beneficial: it sets the Minister off feeling well disposed towards that hon. Member and therefore less likely to savage his arguments and, more importantly, it makes any self-respecting Minister self-conscious about repeating what one has said about her Department's achievements. Such repetition normally comprises at least one third of the speech that civil servants have prepared and so the eulogy liberates a good five minutes in which the Minister will feel obliged to answer the Member's questions.
That is the theory; we must see how it works in practice. I begin with fulsome praise for the Government's Fireworks (Safety) Regulations 1997, set out in SI 2294. All fireworks sold to the general public must comply with the regulations, which stipulate that all fireworks on sale to the public must comply with British standard 7114 and that the minimum age for purchasing fireworks is 18—previously, it was 16. Sixteen-year-olds can now buy only party poppers, caps and cracker snaps. Perhaps most significantly, the regulations have banned the public supply of aerial shells, aerial maroons, shells-in-mortar, maroons-in-mortar, bangers, mini-rockets and fireworks of erratic flight, such as helicopters, squibs and jumping jacks. In addition, some large and powerful fireworks have been banned from sale except to exempted professional pyrotechnic display organisers.
The regulations were passed speedily by the new Labour Government and are most welcome additional controls on what was becoming a fireworks free-for-all. I have only praise for the Minister and her Department in that respect and I do not doubt that, in her speech, she will tell us that, following the introduction of the regulations, the number of serious injuries requiring treatment at hospital casualty departments fell from 1,233 in 1996 to just 908 in 1997—a drop of more than 26 per cent.—with a further drop of 10 per cent. in the following year. Or rather, I do not doubt that she would have told us that had I not already done so.
I suggest a more helpful line for the Minister to take. Instead of repeating the list of regulations, she could tell us about their enforcement, an obligation placed on local authority trading standards officers. Suppliers who breach the regulations can be prosecuted in a magistrates court and fined up to £5,000, imprisoned for up to six months, or both fined and imprisoned. Will the Minister advise us not of the regulations but of how well and how thoroughly they are being enforced? Will she tell us how many prosecutions have been initiated against suppliers of fireworks in each of the past three years? How many of those prosecutions have led to a conviction and how many convictions have led to the imposition of either the maximum fine or a custodial sentence?
When I requested such information from my local trading standards office—the office for Brent and Harrow—I discovered that in 1998–99, in an area with a population of more than 500,000, there were only eight

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prosecutions, all for sales to minors. The largest fine was for £500, there were two fines for just £100, and there was one conditional discharge. During the previous year, there were only three prosecutions. Hon. Members should remember that the figures were for an area of 500,000 people. Of the three prosecutions, two were for sales to minors with fines of £250 and one for selling on the streets with a fine of £300.
The local trading standards officer was keen to note that shops needed no licence—they simply had to pay £11.70 to register as vendors of fireworks. He said that that fee did not even cover the administration cost and that, what is worse, there was no power to refuse or to evoke someone's registration. Overall, he continued, the office's role was reactive rather than proactive because it was understaffed.
The simple point is that the best regulations in the world are only as good as the enforcement officers. Enforcement is at best patchy, and at worst inadequate, to put it politely. The supply of fireworks is a commercial enterprise in which the rewards are so great that the risk of a £5,000 fine may be deemed an acceptable business cost. Does the Minister consider present levels of enforcement to be acceptable? If not, what will her Department do about them?

Enforcement problems are compounded because the United Kingdom has no register of firework delivery. Unlike many of our European counterparts, the United Kingdom allows hundreds of tonnes of explosives to be delivered to a shop or warehouse with no obligation to notify the local authority or even the fire brigade. How are local trading standards officers supposed to do their job—to check compliance with British standard 7114 and to check that no prohibited fireworks are being sold—when they do not even know where the fireworks are?
At a fireworks industry conference in September, one trading standards officer from Essex reported that four tonnes of fireworks had been delivered to a private householder. When contacted, the firework company that had made the delivery retorted that, as far as they were concerned, the purchaser could have had 20 tonnes had he so wanted. Sadly, the law would allow that. Private individuals may take delivery of vast quantities of explosives and store them for up to 14 days, without having to notify a competent authority and without an official record being required.
Does the Minister not consider protection of the public to require the establishment of a fireworks register? Trading standards officers and fire brigades throughout the country could then track the whereabouts of large volumes of fireworks in the community.
I return to the case of the Essex householder. What qualifications did he have to prove and what training did he have to show to persuade the firework company that he was competent to handle safely four tonnes of fireworks? The answer is none. Were the Minister to find herself living next door to such a gentleman, would she not expect him to have had training and some qualification before he was given custody of four tonnes of explosives?
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I pay tribute to the work of my hon. Friends the Members for Plymouth, Sutton (Mrs. Gilroy), for Motherwell and Wishaw (Mr. Roy) and for Lincoln (Gillian Merron), who have actively campaigned on the issue. The private Member's Bill of my hon. Friend the Member for Sutton proposed such a national training scheme for those operating fireworks displays. Sadly and disgracefully, her Bill was talked out by two Conservative Members, despite receiving all-party support and Government assistance. Given that the Government supported such a scheme under that Bill, why do they not implement one? Will the Minister consider establishing powers whereby local authorities could regulate public fireworks displays to ensure safety?
I turn now to the most pressing and depressing part of the matter. I am not the only constituency MP to receive an annual flood of complaints from residents about disturbance from fireworks. My local authority, Brent council, informs me that its environment department received more than 400 complaints last year. Constituents cannot understand why the law does not empower someone—they do not care whether that is the council or the police—to stop the constant nightly bombardment that they experience.
One of my constituents described the situation in this way:
"Dear Mr. Gardiner, as I write this letter at 11 pm, it sounds like World War III has been going on outside since 5.30 pm and that it will go on to midnight.
It started last Thursday 15 October and how long it goes on for I don't know. My neighbour tells me all through November."
The lady continues:
"Neither I nor my four cats have ever experienced anthing like this. I had a severe migraine over the weekend and my cats are terrified and distressed."
This year, I lodged an appeal in my local newspaper, the Wembley Observer urging residents to be more considerate of their neighbours and to finish their firework parties by 11 pm, to give some respite to the elderly, to babies, to pets and to ordinary people who just want to go to sleep in their own homes so that they can get up for their job of work the next morning without feeling that they have spent the night as film extras in the movie "Saving Private Ryan". I believe that my appeal had some success, but unfortunately the bombardments continued.
I am aware that the regulation-making powers under the Consumer Protection Act 1987 do not allow the Minister to restrict the periods during which fireworks can be legally sold or let off, but that is precisely why further legislation is needed. The public simply do not accept that legislation can go into immense detail about noisy machinery, amplified music and even, under the Noise and Statutory Nuisance Act 1993, specify that a car with a faulty vehicle alarm can be towed away and impounded, yet nothing can be done to relieve the nightly misery for thousands of residents throughout the country from firework parties that produce enormous noise, cause huge distress and disrupt people's lives.
The Minister will, no doubt, have been advised that noise from fireworks could be deemed a statutory nuisance under part III of the Environmental Protection Act 1990. Sadly, the reality is as described to me by my local director of environmental health. I quote from his letter:

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"While the Environmental Protection Act 1990 is particularly effective at dealing with noise from loud amplified music, noisy machinery or plant and intruder alarms, it is not effective or appropriate to deal with noise from fireworks."
In those remarks, the director of environmental health was supported by the Metropolitan police service, which wrote to me as follows:
"Thank you for your letter dated 20 October in which you bring to my attention the inconvenience caused to your constituents by noisy fireworks. Unfortunately, police have very limited powers to deal with such incidents, especially when they occur on private premises. The local authority Noise Abatement Section of the Environmental Health Department also has very specific and limited powers which do not enable them to deal effectively with these problems."
I urge the Minister to put in place an effective means of dealing with these problems.
This year, the fireworks industry has rejected the Department of Trade and Industry's call for a ban on firework sales until three days before the new year celebrations for the millennium. What that means is that in 23 days' time one family in this country will face the next millennium with a family member, possibly a child, having been injured, maimed or perhaps killed by the use of an unsafe firework, or by the use of fireworks at a display that was unsafely operated. The Department of Trade and Industry calculates that the cost of each injury to the national health service is £6,000, but the cost to the family involved will be considerably more.
1.14 pm
The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): I congratulate my hon. Friend the Member for Brent, North (Mr. Gardiner) on his success in securing the debate on an important subject that is of concern to many members of the public, especially parents, at this time of the year. I am grateful to my hon. Friend for the courtesies with which he began his speech and for his praise for the officials in my Department who are responsible for considerably strengthening the regulations on the subject. My hon. Friend successfully did as he intended and pre-empted many of my briefing notes, prepared by the same helpful officials for the debate. I congratulate him on his research before opening the debate.
I reinforce the point that my hon. Friend acknowledged that we have taken steps to strengthen the regulation of fireworks. There is no doubt that the new regulations that we introduced in 1997, which came into effect on 1 January 1998, have significantly reduced the number of firework injuries—certainly those that were treated in hospital accident and emergency departments. We can measure that by the reports from hospitals in the four-week period around the 5 November firework season last year. We do not yet have the figures for this year's season. They will be available early next year and will be published in the usual way at the time. I hope that the figures for this year will continue to show a fall in the number of accidents resulting from inappropriate or dangerous use of fireworks.
It is important, too, to remember that every year, millions of people safely buy and enjoy fireworks for their own entertainment in their back gardens and those of their friends, or as part of public displays. I am glad that several authorities, including my local authority,
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Leicester city council, have put on highly successful public displays of fireworks, to encourage more families and members of the public to enjoy firework displays without running the risks often associated with the private use of fireworks in people's back gardens. However, I do not think that the Government should prevent the safe and thoroughly enjoyable use of fireworks in people's private property and at public displays.
The difficulties, which my hon. Friend the Member for Brent, North described extremely vividly, arise from people who are either careless or positively dangerous in misusing fireworks intended for their own enjoyment, which tragically injure, maim or occasionally kill one of their own family members.
The other problems to which my hon. Friend referred, and from which his constituent suffered so seriously, arise from thoughtless youngsters, hooligans and vandals using fireworks of various kinds to make other people's lives a misery. That is a real problem, but it is only a small part of the overall picture of the use of fireworks.
There are people—my hon. Friend made it clear that he was not one of them—who are really calling on us to ban the sale and purchase of fireworks for private use. I do not believe that that is a sensible way forward, and I am glad that my hon. Friend shares that opinion. As he said, my Department undertook a review of firework sales in 1996 and rejected the option of a total ban, not least because of fears that a total ban on the sale of fireworks for private use might lead to the development of a black market for fireworks and also to the possibility of people obtaining the ingredients and making their own devices. Neither of those situations would impove public safety; indeed, both would severely jeopardise it and would not be acceptable.
We decided instead to act in the way that my hon. Friend accurately described through the introduction and implementation of the Fireworks (Safety) Regulations in 1997. My hon. Friend referred to the registration of shops selling fireworks. The Health and Safety Executive is reviewing the Explosives Act 1875, which dates back more than 100 years, to see whether we need to strengthen the powers to refuse or to revoke registration to a retailer selling fireworks.
An important issue arises there. A voluntary code of practice with the fireworks industry deals with the period during which fireworks may be sold. Under the code, the fireworks industry has agreed that they should be sold only for three weeks before 5 November and for a couple of days thereafter. The industry reinforces that message to retailers at the beginning of every season. As my hon. Friend said, the agreement this year, with the millennium weekend coming up, was that fireworks would be displayed for sale only from 27 December. Like my hon. Friend, I am disappointed that some newsagents and other shops have continued to sell fireworks right through since the 5 November season in anticipation of the millennium weekend. Looking ahead to that weekend, preliminary indications that I have had are that, compared with the normal pre-new year period, sales are less than 20 per cent. higher than usual for the time of year. Most additional sales are accounted for by high-value firework purchases, obviously made by people who plan large public displays. These are in a different category from private purchasers.

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The Government do not have powers under the Consumer Protection Act 1987 to control anything other than the intrinsic safety of the goods themselves and we use those powers. The period of sale of fireworks is an issue for the voluntary code of practice. We have discussed this problem with the British Pyrotechnics Association. I hope that it will take further action with its members to try to reduce the number of retail outlets that defy the code by trying to sell fireworks in the weeks before Christmas and before 27 December when, under the code, firework sales would be expected to begin again.
My hon. Friend also raised the controls on the storage of fireworks by private individuals. This, too, is a matter for the Health and Safety Executive under the Control of Explosives Regulations 1991. The regulations allow up to 5 kg of fireworks for private use to be kept on individual premises. The case that my hon. Friend mentioned clearly falls well outside the scope of the regulations. If he will let me have further details of the report that he has procured, I shall be happy to ensure that the matter is properly investigated.
The regulations also permit unlimited quantities of fireworks to be stored for up to 14 days. This may be the source of the problem to which my hon. Friend referred, although the regulations stipulate that fireworks must be kept in a safe and suitable place and all due precautions taken for public safety. A back garden shed or garage may not fit the regulation's requirements.
As I said, the Health and Safety Executive is reviewing existing explosives legislation and the review may result in changes to existing conditions for the keeping of fireworks for private use. I shall ensure that my hon. Friend is kept up to date as the review progresses.
My hon. Friend quoted from a letter from a constituent who had suffered badly around 5 November. All hon. Members know that trouble with noisy neighbours and local vandals—and worse, positively criminal neighbours—is one of the most intractable problems that we face in our advice surgeries. There will always be limits to the powers of the police and local authorities and to their resources for dealing with the problem.
The Fireworks Bill—a private Member's Bill promoted by my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy)—would have introduced many sensible additions to the regulatory package now in place for the control of fireworks. The Government supported her Bill, and I greatly regret that two Conservative Members chose to talk it out. It would have given the necessary powers to provide for mandatory training of people who operate large public displays. It would have dealt with the times during which fireworks could be sold—now purely a matter for the industry's voluntary code of practice—and provided powers to limit the letting off of fireworks except at specified times. These problems cannot be tackled under

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the current powers available to us, be they in the Fireworks Bill or the Consumer Protection Act 1987. It is a pity that that private Member's Bill failed. I hope that in a future private Members' ballot, any hon. Member who has an interest in this issue will succeed in reviving the Bill.
As my hon. Friend knows, the pressures on legislative time are enormous. When I became a Minister last year, I assumed that the biggest difficulty that the Government would face would be finding sufficient money to do all the things that we need to do. That is always a challenge, although one that is brilliantly discharged by my right hon. Friend the Chancellor. The big difficulty is finding time. I am afraid that I cannot give my hon. Friend the Member for Brent, North the comfort that he seeks. There is no immediate or medium-term prospect of the Government introducing fireworks legislation. The legislative priorities to fulfil our manifesto commitments are such that, as he is aware, Bills with an even higher priority than one on this subject are already fighting for parliamentary time.
None the less, possibilities are available under secondary legislation. I have already mentioned the review being undertaken by the Health and Safety Executive. I can also reassure my hon. Friend that officials from various Departments and agencies work closely on this subject. My Department, the Health and Safety Executive, the Home Office and the Department for the Environment, Transport and the Regions work closely together, as we did when drawing up the 1987 regulations and will do again when we consider the recommendations that follow the Health and Safety Executive's review.
Finally, my hon. Friend the Member for Brent, North questioned whether trading standards officers and the police were successful in enforcing the current regulations and statutory provisions, and suggested, no doubt on the basis of his constituency experience, that perhaps they were not. I do not have to hand figures for prosecutions and convictions, but I shall try to obtain those from the co-ordinating body for trading standards officers and send it to my hon. Friend. However, it must be a matter for local authorities, within their resources, which we are increasing every year, to determine local priorities. There are a large number of regulations—many people would say too many—and we have constantly to review regulatory burdens. With many regulations we look to trading standards officers for effective enforcement. Local authorities must decide on the most effective use of resources and determine priorities.
I can reassure my hon. Friend that we shall work closely with the industry and with local authorities to reinforce the message about safe use and enjoyment of fireworks. For the millennium weekend, we shall carry forward the "alcohol and fireworks do not mix" message that we successfully introduced for this year's 5 November weekend. I end by congratulating my hon. Friend on securing this important debate and on participating in the steps that we are taking to ensure that fireworks are enjoyed safely.

Housing Benefit
1.30 pm
Mr. Simon Hughes: Outside our Chamber, carols are being played and the spirit of Christmas is in the air, but I am not going to be able to tell such a cheerful tale here.
I received this morning a policy research briefing from the National Housing Federation entitled "Housing benefit system in crisis". It certainly is in a crisis, which is entirely unacceptable. Many of the poorest and least advantaged people in Britain—though our debate deals with England—are suffering, while many local councils incompetently handle housing benefit and while the Government, despite promises and fine words, incompetently fail to make them do any better. In some parts of the country, the system is a shambles and in other parts it is a disgrace. In my borough of Southwark—I know that you live there too, Mr. Deputy Speaker—housing benefit administration is both a shambles and a disgrace.
I hope that this debate will encourage the Government to answer some questions. Instead of merely promises of reviews, monitoring, assessments and injunctions on local authorities to do better, we want action and answers, so that our constituents do not have to contend with such a consistently awful service. We are sick of people passing the buck; sick of councils engaging contractors who then are passed the blame; sick of contractors working on the basis of contracts that can never be produced; and sick of constituents being passed around from pillar to post, day after day, week after week, month after month.
I was in my constituency office this morning when I received a phone call from a lady who is entitled to £88 housing benefit a fortnight, but she has not been paid since 26 July and we are now in December. She has had to pay £58.50 to the council out of her pension while she waits for the arrears.
Every day, more people in north Southwark and Bermondsey complain about housing benefit—people such as an old lady of 81 living alone in west Walworth, with no immediate family, dependent on state pension and related benefits. She wrote to me in April this year. She moved to a new property, after which her housing benefit stopped, and she received demands for payments of £253.56. She has written to me seven times altogether, since first contacting me in April. In September, she wrote:
"I am out of my mind with worry … I hate being in debt."
In October, she wrote that the housing officer
"has received all the proof he needs yet he still insists I have to pay full rent of more than £63.00 per week plus council taxes. Just how does he expect me to do this out of my pension? He should try doing it. I am really suicidal, Mr. Hughes, over this lot. I have always paid my debts,—more so the rent".
On November 25, she wrote again:
"I cannot understand why I am having all this trouble, both from"
the neighbourhood housing office
"and now the council tax department. I had a letter threatening me unless I pay what they say I owe they will take action. I am worried sick, it is making me confused … How am I able to pay full rent, heating and water charges and council taxes out of my total income of £82.25?"
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She has yet to hear about her renewal claim, and she is not assuaged by the answer that it is all the fault of the new verification process.
A private tenant—the previous lady was a council tenant—applied to renew his claim for housing benefit on 21 September this year. It was due to expire on 28 November, giving the authorities two months to deal with it. Due to continual errors, he has yet to receive confirmation of renewal by the beginning of December. His last payment was on 16 November.
For a final example, I take two constituents who are private landlords, a couple who own two neighbouring houses. They wrote to me when they were owed £8,000 from their two properties. It took 11 weeks to process one renewal claim because of inaccuracy and delay. They still await the other claim being processed.
That is just not acceptable. The figures that I am about to give will shock even some of the least shockable Members of Parliament. There are rules that set out what councils should do, according to which local authorities should seek to promote the well-being of the local community and help those that they can into employment. According to the framework rules for the administration of housing benefit and council tax benefit, councils should "operate an efficient system", provide an "efficient service", provide "best value" to taxpayers and claimants, provide an effective service in terms of quickly and accurately determining and paying genuine claims, provide a "customer-focused service" to communicate clearly and effectively with clients, provide advice and information, treat people with courtesy and respect their dignity and privacy. The experience of my 81-year-old constituent is hardly an example of that.
The rules are clear. There are also regulations, the most important of which are that determinations should be made within 14 days of supplying the relevant information and the first payment should be made 14 days after receipt of the claim. There are other dates and timetables, but those are the two crucial dates.
I interject that a further problem arises from the existence of different systems for applying for housing benefit and for council tax benefit and income support. People may not provide the right information the first time and may be confused as to what information they should supply. We should consider establishing a common form of application so that those who are entitled to income support as well as housing benefit and would normally have to go to the Department of Social Security as well as the council office could have their claims examined at the same time. It would be better to streamline procedures as much as possible.
Let me deal with Southwark first and then widen the context. Southwark has a Labour council hanging on by its fingertips. Control is through the casting vote of the mayor, as in Islington, which we hope will cease to be Labour-controlled this month with Southwark falling not long afterwards. My party is currently in opposition in both boroughs. In 1996–97, Southwark's system was run in-house by the internal contractors and 97 per cent. of claims were processed within two weeks. Charter marks and awards were conferred. What happened the following year is a reflection of the result of the pressure put on councils by the previous and the present Government to do less themselves and contract out

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more. As soon as the contract went out, payment within 14 days went down to 60 per cent., and last year it was down to 22.4 per cent.
I raised that matter across the Floor of the Chamber last year with the Under-Secretary, the hon. Member for Wallasey (Angela Eagle). She answered:
"I am aware of the problems being experienced in Southwark. My officials have received a detailed report"—
and I would be grateful if it were published—
"which confirms that there are delays. An action plan has been drawn up to clear the arrears of work that have been implemented. I have asked to receive reports from the authority so that progress on the action plan can be monitored"—
and I would grateful if they could be published too.
"Southwark and the private contractors are … working together … I am told that the arrears of work have been reduced considerably and that the authority expects to make further progress on the workload until the situation returns to normal in November."—[Official Report, 19 October 1998; Vol. 317, c. 948.]
My colleagues on the council—including Councillors Derek Partridge and Nick Stanton and our housing spokesman, Councillor Niko Baar— have pursued this matter persistently in other committees, as the council records show. We forced an additional meeting of Southwark council last November with requisitioned business in order to deal with those matters and there are perpetual promises of further reports and further investigation.
I would like to tell hon. Members the result of the "return to normal". The council decided that it could set a target for this year of 102 per cent. of its rent due to be collected—that means some of the arrears plus 100 per cent. of this year's rent. So far, according to the report presented to last night's meeting of Southwark housing committee, it has collected 93.63 per cent. The rent collected in Southwark is about £150 million a year. Rent arrears were targeted to be under £20 million, but are already running at £26 million. The target percentage for the assessment of new claims within 14 days is 100 per cent., yet only 5.4 per cent. of new claims are being assessed within 14 days.
Last night, the majority group on the council tabled a motion asking for a further report to be brought to the council in March 2000 saying what would be done and how performance targets would be met. My Liberal Democrat colleagues tabled an amendment that was accepted, saying that if the targets were not met by 31 January, appropriate action should be taken in liquidated damages against CSL, the contractors, and a report should be submitted to the committee in March 2000 on the possibility of terminating the contract. Had it not been for my colleagues, we would simply have been given the same complacent answer that we have received for over a year. If returning to normal means that 5 per cent. of the claims are processed in time, Southwark residents do not think much of normality.
In a letter in October concerning a specific inquiry about the private sector tenants and their landlords who were owed £8,000, the chief executive of Southwark wrote:
"I can confirm that Southwark Legal Services will not commence possession proceedings until a document known as `HP pre-court pro forma' has been obtained. This document confirms that the tenant named is not awaiting the outcome of any application for Housing Benefit."
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The figures he then gave me showed that 6,600 claims were outstanding on 1 October compared with 3,500 in June. A paper before last night's meeting of the housing committee confirmed that at Lambeth county court, 35.3 per cent. of the 168 cases listed by Southwark for possession between 13 and 27 October this year were adjourned specifically because the housing benefit had not been processed. The judge said that the court was appalled by the large number of cases being adjourned, particularly those adjourned more than once for the same reason. The court told the council that, if the position was not remedied quickly, it would consider simply dismissing any case brought back to it that had originally been adjourned because of housing benefit and in which the issues had still not been resolved.
Every sum not collected and every instalment of rent not paid because the housing benefit is not paid means that repairs and maintenance are not carried out. Not only are my 81-year-old constituent and thousands like her identically nearly driven to suicide, but much less maintenance and for fewer repairs are done. Southwark refuses to show its contract with CSL even to members of the council who have a right to know. I ask the Minister to direct the council or to take other powers to ensure that the contract, even if not its financial terms, is published so that the reason why Southwark will not take action against CSL to terminate the contract can be out in the open for all to see.
The contract was apparently so badly drafted that anything that could be defined in court as outside the responsibility of the council would allow CSL not to be liable. Therefore the verification procedure introduced this April, which is a checking procedure to avoid housing benefit fraud, might prevent CSL from being liable. Blame just gets passed to and fro. CSL remains in place. In contrast to the in-house contractors who did the job excellently, we now have an outside firm which is doing appallingly in Southwark and elsewhere in the country, yet no one is willing to take action. A report is brought back regularly to the council, yet the council does not respond. That happens not just in Southwark, but elsewhere. Yesterday, the Freedom of Information Bill received its Second Reading. Freedom of information should mean that contracts like this are not secret but are out in the open. If we can have more openness in local government for these matters, we might have a more satisfactory conclusion.
In its letter of 6 December, the National Housing Federation says that, according to the survey that it has just completed, the average claim time for its housing association properties around the country is 7.3 weeks. The league table for local authorities around the country shows that Southwark is bad, but it is not the only one in that position. Lambeth, which is next door, is worse. That is another Labour-controlled council. It has the poorest performance indicators in inner London, and over the last financial year it processed only 29 per cent. of claims within 14 days. Colleagues in Lambeth have told me about an 85-year-old woman living in sheltered accommodation and in remission from cancer whose renewal form was lost and who was therefore sent a £500 demand for arrears.
The league table for last year shows that Lambeth processes 29 per cent. of applications within 14 days, Islington processes 49 per cent. and Southwark 60 per cent. The national average is 84 per cent. Other councils

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in the west country which also have CSL as their service provider have criticised its performance. My hon. Friend the Member for Taunton (Jackie Ballard) drew attention to the practice in Taunton Deane council. Kingston upon Thames has returned its housing benefit administration to its in-house team and has terminated its contract with CSL. If more people terminated their contracts with CSL and took it to court for liquidated damages, we might get somewhere.
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): In preparing for the debate, I looked at the question that the hon. Gentleman is addressing. Kingston has not terminated the contract but has given the contractor notice of its dissatisfaction. In fact, just one Labour council has terminated its contract with this supplier.
Mr. Hughes: I stand corrected. My information was that it had. I was aware that it was considering it and I was told that it had. The Minister's information may be more up to date.
Newham, because of the backlog, now answers only emergency phone calls. In Norwich last year, 58 per cent. of housing benefit overpayments were misclassified as fraud. The picture is clear. Although I obviously have a constituency interest, which is where the issue began, my inquiries reveal that similar problems around the country are not uncommon. Another test is the number of complaints to the ombudsman. Last year, for this one element of council activity, there were 74 complaints in Brent, 43 in Islington, 53 in Wandsworth, 123 in Southwark and 296 in Lambeth.
I saw the report of the speech given by the Under-Secretary, the hon. Member for Wallasey, to a conference in Bournemouth in October where she said that local authorities were vital to the success of welfare reform and that they should take more responsibility for improving customer service, reducing errors and cutting fraud in benefit claims. She said:
"Some local authorities provide a very high quality service. But the picture is inconsistent. In far too many cases people claiming benefits receive a slow and inefficient service."

We know that, but who will do anything about it is now the question.
There are a couple of ways forward. First, the Government must address the question, which they have not yet addressed, of the supply and price of rented accommodation. I served on the Committee debating the Bill that became the Housing Act back in 1988. The Conservative party was in power and it was clear that we would eventually reach a stage where property prices would rise but housing benefit would not keep pace. That has now come to pass. Chancellors do not write cheques to fill the gap when a private landlord raises the price. We need to answer that question.
Secondly, the Government must do something about the national housing benefit system. There were promises of a great reform, but I read in Sunday's newspapers that there will now be no great reform. The Government have decided that they cannot now do anything and that it is all too complicated and difficult, so the issue will be put on the back burner. I hope that that is not the case. I therefore have the following list of further questions.
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First, will the Minister please ensure that his officials contact the local authorities that I named—in particular, Southwark—to ensure that the contracts are published and that all the information comes out into the open? Will he publish all the correspondence between Southwark and the Department since last October, when I raised the matter in Parliament. We shall then be able to see exactly who said what to whom and who did or did not do anything.
Secondly, will the Government please back off from insisting—this would be odd from a Labour Government, but new Labour Governments never surprise me in this respect—that everything that is efficient must be done outside the public sector and that everything that is inefficient is inefficient because of the public sector? When Southwark ran these matters itself, it did so very well; when these matters were contracted out, they were handled badly. There is a moral there somewhere, which might be that we should sometimes let councils get on with the job themselves and not force them always to contract out. I am aware of the change from compulsory competitive tendering to best value. That is progress, which I welcome. None the less, can we please take the pressure off and allow local authorities to make the choices that they think are best, rather than forcing them to contract everything out into the private sector because of a dogmatic view in central Government?
Thirdly, will Ministers ask Southwark council to apologise to Southwark residents?
Fourthly, will Ministers review the procedures and the timetable, not to make them longer, but to ensure that determinations and payments are made on time? Will Ministers ensure that the timetable works and the penalties are stronger?
Fifthly, will Ministers examine the remedies for delay? If our trains are late nowadays, we can get damages. If I do not pay my tax on time, I must pay a penalty every day that goes by. Why does no increasing penalty have to be paid if a case is not processed in 14 days? At the moment, if the 14-day deadline is missed, it gets put on one side and no one takes much notice.
Next, will Ministers please re-evaluate the verification process? Of course we want to eliminate housing benefit fraud. However, if we introduce provisions that suddenly put the whole national system into crisis, something is wrong with the planning and practice of the implementation.
Lastly, will Ministers please note that I shall respond to inquiries in a simple way from now on, as other colleagues probably will? I shall suggest that people with a complaint seek payment from the ombudsman of the fullest possible remedies—£100 if they get a notice seeking possession, £250 if the case goes to court and £50 if they get a warning letter. The cost to the public purse will increase more and more because of an incompetent system.
Sometimes people ask why some of us are anti-Labour. Some of us are anti-Labour because our experience of Labour local and central Government and that of many of our constituents is so appalling. This is a disgrace and must not be allowed to continue. I hope that any remedy takes effect sooner than the promised

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remedy of a year ago. Since that promise, things have got worse, not better. I shall return to the issue until we get adequate answers.
1.54 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): The hon. Member for Southwark, North and Bermondsey (Mr. Simon Hughes) knows the procedures of the House well, and it is unfortunate that I am left with six minutes in which to answer 24 minutes of charges. Obviously, I cannot do as much justice to the hon. Gentleman's serious questions as I would have done if he had left longer for my reply.
In an attempt to be helpful, I should say that I welcome the fact that the hon. Gentleman raised such an important issue. At the start of his speech, he described some extremely worrying individual cases and raised issues with which all of us in the House would want to deal. He made some trenchant criticisms of everyone, including his local authority, the Government and contractors. In fact, he said that he was sick of the council, the Government and the contractors. However, with great respect to him, making charges against others and spotting the errors is the easy part. The Government want to find the solution, and I hope that the hon. Gentleman does, too.
The hon. Gentleman is not suggesting that it would have been a good idea to return the Southwark housing benefit system to the previous contractor. I do not think that he is suggesting that it would be a good idea to return it to an in-house bid, although he raised the possibility later in his speech.
We need to address ourselves to what the Government are doing and to examine the extent to which our programme to tighten up and to squeeze fraud out of the housing benefit system will solve the problems that the hon. Gentleman raised. We must work in partnership with local authorities on housing benefit to achieve our aim of a modern and effective welfare state that is secure against fraud and abuse. Of course, housing benefit must be fitted within the Government's wider policy objectives and our wider housing policy of providing a decent, affordable home for everyone. I agree with the hon. Gentleman on that.
We are already putting in place policies to increase the administrative efficiency of housing benefit, to combat
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fraud and to improve work incentives for people who are out of work and who therefore claim housing benefit. We shall introduce further proposals as part of our housing Green Paper, which will be published in due course.
In the couple of minutes that I have left, I want to talk about some of the things that we are doing. We have introduced remote access terminals or RATs—that is the only acronym that I quite like—in local authorities to give them controlled but direct access to information that is held on Department of Social Security computer systems. Some 400 local authorities, including the London boroughs of Southwark and Lambeth, have the terminals. If they make adequate use of those that they have and want additional ones, those will be made available. We are considering providing more information than we currently provide through those terminals.
We are taking action to cut down on the paper chase. Millions of bits of paper flow between housing benefit administrations and the Benefits Agency. The large volume of paper transactions contributes to delay and errors. We have carried out tests, which show that we can achieve significant improvements in housing benefit clearance times by transferring information electronically. We are currently piloting the scheme in 20 local authorities and intend to roll it out in the new year for local authorities as a whole.
The hon. Gentleman mentioned best value. From April next year, we are introducing a duty on councils to obtain best value. That is a key part of our drive to modernise local government in ways that allow local authorities to measure their achievements. Best value will replace the discredited system of compulsory competitive tendering.
The hon. Gentleman asks me to take specific actions, including requiring the local authority to publish certain documents. That is a matter for the local authority, although the hon. Gentleman will be aware that the Government have sent the benefit fraud inspectorate to inspect Southwark. I shall ensure that the inspectorate gets the Hansard report of this debate so that all the hon. Gentleman's representations to me will be made to the inspectorate. If he wants to make further representations to it, he is perfectly at liberty to write to me—
lt being Two o'clock, MR. DEPUTY SPEAKER adjourned the sitting, without Question put.