Westminster Hall Sitting of 4 April 2000

Preamble
[SIR ALAN HASELHURST in the Chair]

Shipbuilding (River Tyne)
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]
10 am
Mr. Alan Campbell: I am grateful for the opportunity to raise this important subject, and I do so at a time of considerable difficulty for shipbuilding, ship repair and the offshore fabrication yards on Tyneside. Fifteen years ago, as many as 30,000 people were employed in the maritime industries in the north-east, but that figure has been halved. Current estimates suggest that many of those jobs, as well as about 7,000 jobs in related industries, may be under threat. The sector has been dealt a double blow by the maturity of the oil and gas industry in the North sea and generally diminishing defence budgets. Although most people welcome the peace dividend, it nevertheless makes life more difficult for the yards that compete for defence contracts.
Let me make it clear from the outset that we are proud of our maritime heritage in the north-east. Some of the world's greatest ships were built in the north-east. Shipbuilding is part of the great triumvirate, with coal mining and iron and steel, which dominated the region for so long. More recently, it has been estimated that as much as 80 per cent. of the North sea oil platforms involved companies in the north-east as either a prime contractor or supplier. That means that the north-east has a significant concentration of people with the skills and expertise to compete on the world stage.
The north-east is perhaps unique as a region in that it still has all the people, companies and components to design, build and fit out a ship from beginning to end, yet the average age of the work force in those industries on Tyneside is about 49. However, shipyard workers recognise that previous success, the glories of our past and having the skills and expertise to build ships offer no guarantee in a global marketplace. I make it clear, therefore, that this debate is not about recognising shipbuilding as a traditional or sunset industry, but about claiming that shipbuilding and the maritime industries are part of the new economy. Far from being outdated and old-fashioned, the maritime fabrication industries incorporate high technology and world-class skills. We in the United Kingdom are still recognised as being among the best in the world, and we expect the Government to acknowledge that fact.
When the Shearwater platform left AMEC in Wallsend last month, it did so on time and to price. Its owner, Shell, recognises it as a world-class product. Much of the kit on that platform was the result of innovation and creativity that began with the design and grew as the development took place over months and years. That is part of the innovation and creativity of the new economy.
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North Tyneside college, which serves my constituency, has just opened a £2 million high-technology engineering centre which will support the development of specialist engineering skills in the shipyards and the maintenance facilities along the River Tyne. The centre gives training up to national vocational qualification level 4. That includes something called mechatronics, which is a new one on me. Mechatronics develops multi-skilled engineers who can turn their hand to any area of engineering; it is part of the new economy. The facility will support any purchaser of the former Siemens factory in my constituency; it is an investment in the new economy. Companies such as Cammell Laird and Swan Hunter have invested in the new economy and have taken on many apprentices. They are training young people—in some cases, in traditional skills that are to be employed in the new economy. They believe that those skills are relevant to the new economy.
The real issue, however, is how the shipyards on the River Tyne can survive and their skills be renewed to allow the sector to take advantage of future opportunities—and there will be such opportunities.
Mr. A.J. Beith: I support what the hon. Gentleman said about the economic significance of shipbuilding on the Tyne, and I hope that he recognises that its significance extends far into the region. I hope that he recognises that people who work in the yards—including those with particular skills and creativity—and small businesses that subcontract within the industry are found throughout Northumberland, far beyond the radius of Tyneside itself.
Mr. Campbell: I do indeed recognise that. The right hon. Gentleman makes his point well—the matter concerns not only the whole of the north-east, but other regions.
There are clear signs that there will be future opportunities. The Association of European Shipbuilders and Shiprepairers forecasts rising demand in the industry in the early part of this decade. Some forecasters predict the need for more than 2,000 new ships each year until 2010. Four out of five of those will be needed to replace ships in ageing fleets. An upturn is forecast in offshore oil and gas extraction, which will create demand for floating production and storage offshore vessels, which will replace platforms in some respects. A growing consensus suggests that between 25 and 30 FPSOs will be needed, but forecasts suggest that as many as 120 new vessels will be needed worldwide—some, perhaps, in the North sea. The movement of goods in the European Union favours a rise in the number of ships. The number of people in this country who take cruises doubled in the 1990s, so there will inevitably be demand for cruise liners of all sizes. I do not suggest that all those ships could be built on Tyneside. However, there will be demand, and it is important that Tyneside's shipbuilding capacity survives so that the sector can make use of its skills and take advantage of the opportunities that I have described.
I accept that many of the answers to the problems that the shipyards and offshore yards face lie outside the Government's remit. However, I raise these issues as a

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constituency Member of Parliament. I no longer have shipyards in my constituency, but, many of my constituents and their families rely on the work provided by the yards along the Tyne. It is fair to ask what the Government can do and to get them to do it.
Let me give some examples. The Government can place Ministry of Defence contracts with UK yards. The commitment in the strategic defence review to develop and rebuild our ageing fleet is welcome, but it is also important to ensure that we bring that work forward so that it is on stream. In that way, we will ensure as far as we can that there is continuity of work in our shipyards while they look for other opportunities and alternative contracts. I urge the Government to bring forward the two alternative landing ship logistic vessel contracts, which have the capacity to generate 4,000 jobs; 2,000 directly and 2,000 in the wider community.
Companies in the north-east ask for nothing more than the opportunity to bid for the order. Like us, they are confident that Tyneside yards can deliver quality work, reliability and value. In relation to MOD contracts, I shall refer to roll on/roll off ferries, which have caused controversy in the past few days. My right hon. Friend the Secretary of State for Defence has recognised that United Kingdom yards have the expertise and capability to build such ferries, and I welcome that. Even at this late hour, the three British yards with an interest are doing unprecedented work on a proposal involving co-operation and sharing work between yards. They are confident that they can compete commercially with foreign yards.
The MOD rightly requested that bids for such ferries include proposals for building them in UK yards. Will the MOD actively consider any further proposals and do all that it can within the rules, guidelines and the law to bring the work to British yards? Such news would be welcome in the north-east of England, Northern Ireland and Scotland. All our companies ask is that they be allowed to compete on a level playing field.
There is concern that overseas yards subsidise work to win orders. A leading offshore company in the north-east told me that it is currently bidding for a major overseas order for FPSO vessels and is in direct competition with Korean yards, which may receive a subsidy of more than 20 per cent. Ironically, there are strong suspicions that International Monetary Fund Money—which originates, in part, from the pockets of European taxpayers—is used to subsidise Korean yards. Pressure is being put on the Korean Government in relation to that. However, in the circumstances, I would press my right hon. Friend the Secretary of State for Trade and Industry to ensure that the shipbuilding intervention fund remains available for British shipyards beyond the end of the year.
Furthermore, we have been told repeatedly that the real work of the contract is not on the hull of the vessel but on the kit that goes inside. Therefore, British offshore yards could be helped to compete in world markets by imaginative application of the shipbuilding fund—perhaps to the top side of FPSOs, demand for which is expected to grow.
The Government could also announce a review of the moratorium on gas-fired power stations. I share concern about the future of UK pits, and welcome my right hon.
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Friend the Secretary of State's efforts to secure that future, not least for the last deep-mined pit in the north-east. However, once that decision has been taken, I hope that there will be a review of the moratorium on gas-fired power stations. That would be welcomed in shipyards and offshore yards along the Tyne, as it would act as a spur to the development of gas fields in the UK sector and generate activity in offshore yards.
I would also urge a review of how licences are awarded. It is frustrating that companies may be awarded a licence, only to sit on it until the price of gas or oil is right for it. New licences should be awarded only after companies offer a clear schedule for extraction. I do not seek or expect answers to my questions today, but I want my hon. Friend the Minister to consider them.
I shall speak plainly on another matter, which challenges the Government as much as the companies involved in shipbuilding and offshore on the Tyne. Some companies live for the next contract and do not plan for difficult periods. We are in one of those periods now.
One of the workers on the Shearwater platform, which I visited recently before it left the Tyne, said to me, "Platforms are like relatives at Christmas. You like to see them come, but you like to see them go." The assumption is that another visit will inevitably follow, yet in challenging circumstances we cannot be sure that that will happen. The yards on Tyneside need a sustainable future, which means establishing a long-term vision in a time of short-term pressure. Never has there been a stronger case for the stakeholders on Tyneside—employers, employees, trade unions, higher and further education and the regional development agency—to work together, a development that I urge the Department of Trade and Industry to encourage and support.
The first step might be to commission a study of future opportunities to discover how Tyneside can best position itself to exploit them. The issue of employment and training could be addressed, perhaps leading to continuous employment for some of the shipyard workers for the first time. What a difference that would make to their pensions and mortgages. It would also allow overheads to be cut and training to take place in the quiet periods, which would make the yards on Tyneside more competitive. Such a forum could also explore the possibilities of diversification, through decommissioning or recommissioning, alternative energy supply such as offshore wind farms, and the servicing of offshore platforms.
The centre of gravity in the North sea is shifting southwards; it costs as much as £30 million a year to service a single platform offshore, and in the Great Yarmouth area a partnership of the kind that I mentioned is being created in response to the opportunities presented by decommissioning and recommissioning. Tyneside should learn from that lesson.
The Government have already made an important contribution by helping individual companies to identify potential markets and by helping with export orders. A major offshore fabrication company told me that the Secretary of State is extremely supportive of its efforts to win orders and it is grateful for the Department of Trade and Industry's initiatives. We

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must ensure that that support continues and grows, for the benefit of all the yards, so that Tyneside can develop as a centre of excellence for the maritime industries.
There is great anxiety about the current situation, but also confidence that there will be future opportunities in the maritime sector, provided that the yards get through their present difficulty. I urge the Government to do all that they can to help the companies and the work force in their efforts to ensure that there is a future for the industry, and for its work force and their families.
10.18 am
Dr. David Clark: I congratulate my hon. Friend from across the River Tyne in North Shields, the Member for Tynemouth (Mr. Campbell), on his perspicacity in securing the debate, which could not be more timely, in the general and the particular sense. There is great dismay in the north-east on the Tyne, the Wear and the Tees, about remarks emanating through persons unknown at the Ministry of Defence that United Kingdom shipyards no longer have the skills to build a roll on/roll off ferry. That sort of ignorant comment, based as it is on falsehood, demoralises the work force. I am delighted that my right hon. Friend the Secretary of State for Defence has made it clear that that is not the Government's view and that the Government still believe that the UK retains the capacity to build merchant and naval ships in UK yards. I emphasise that because there are people based not a quarter of a mile from the Palace of Westminster who simply do not understand the regions. It is therefore apposite that we, as representatives from the regions, are able to redress the balance here; that adds to the value of the timing of the debate.
I continue on a consensual note by stating a fact: Britain is an island. As such, 90 per cent. if our trade is conducted by sea. The basic logic, therefore, is that it would be crazy of us to throw away our capability to build ships to transport some of that trade. Equally, in the North sea, the Irish sea and elsewhere, there are oil and gas fields within our sovereign area. It would seem crazy not to retain the capacity to build and decommission those oil rigs—but I will come back to that.
There has been a dramatic change in the River Tyne. All of us who know anything about the river know that the trade fluctuates—like a relative at Christmas, as my hon. Friend the Member for Tynemouth said. I support my hon. Friend's call for a long-term strategy for the maritime capabilities on the Tyne and other rivers. He was right also to cite the fact that other rivers and estuarial areas in the UK have faced up to long-termism better than we on Tyneside have done. Mea culpa. I accept that. We must do better.
However, I doubt that anyone could have foreseen the dramatic downturn that has occurred in the River Tyne work force. In 1997, an estimated 14,000 people worked in the various yards on the River Tyne; now there are 800. The Aker McNulty yard is in my constituency. Three years ago, 5,500 were employed there; now there are 300. What applies to that yard applies to AMEC, Austin and Pickersgill, Cammell Laird, Swan Hunter and so on. The "so on" is so important because, as the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said, this debate is
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about not only the river and the people who work in the yards but the wider region and the other skills that service direct work on the river. I make this point on behalf of my constituents: there has been a massive reduction in employment opportunities in our region. The latest Government figures show that male unemployment in South Shields, where industry is largely male-dominated, is 19.8 per cent. My hon. Friend the Minister will therefore appreciate our concern at the plight of our industry.
My hon. Friend the Member for Tynemouth said that it is not easy to put that right. We know that no one can simply wave a magic wand. We know that the Government are constrained by European Union rules and regulations. I hesitate to say this, but it would not be understood on Tyneside if the British Government awarded a contract to build roll on/roll off ferries to a German company at a time when another German company had dealt such a devastating blow to another part of our manufacturing base in the west midlands. I appreciate the difficulties in the EU, but other countries find ways around this problem.
Ms Dari Taylor: Will my right hon. Friend acknowledge, Mr. Heseltine, that the Tees would find it—
Mr. Deputy Speaker: Order. I am not sure what form of address the hon. Lady used, but it was not the right one.
Ms Taylor: I accept your correction, Mr. Deputy Speaker.
Does my right hon. Friend acknowledge that people on the Tees would find it extremely undermining if contracts were awarded elsewhere? They, too, have a skilled work force and unemployment problems. Over 13 per cent. of the men in my constituency are unemployed and seeking employment, so I ask my right hon. Friend to include the Tees in his comments.
Dr. Clark: I will gladly do so. I welcome the support of my neighbour from Teesside. Although we are talking about the Tyne today, clearly we are also talking about the whole of the British shipbuilding industry. We know that there are problems on Teesside, Clydeside, Merseyside and elsewhere. This is a national problem and we need a national policy to tackle it. I want to focus on Tyneside today because that is where my constituency is.
What has so annoyed people on Tyneside about the MOD's comment is that we manage to retain, albeit only just, that critical mass of expertise, capability and companies to build ships. We are still in the process of doing so. Indeed, we have the design staff. We have the skilled personnel, although it is ageing. The average age of the men in the yards is 49, which is far too old. We have just got going again, trying to retain and retrain apprentices. There is a lot of ground to make up to start moving from the short-termism of the past. The past should not be the guide to the long-termism of our future. We still have that critical mass, yet, if orders are not forthcoming soon, we fear that we will shall lose it.
One of the complaints of the Tyneside workers it that they are forced out of the region. I guarantee that, whenever I catch a plane from Heathrow, Gatwick,

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Amsterdam, Brussels or wherever, I will meet Tynesiders or Teesiders flying home for a month's break after a period working in Norway, Holland, the middle east or elsewhere. They constantly ask me why they have to go abroad to ply their trade. The skills exist on the Tyne and Tees, and many of these workers would come back and work there if they could.
I cannot add much to the general points made by my hon. Friend the Member for Tynemouth, but I can make a few more points about decommissioning. We are talking about interchangeable skills. They can be used in shipbuilding and in the fabrication of oil and gas rigs. Equally, they can be used in the decommissioning or the recommissioning of oil and gas rigs. The longer term must dominate our thinking at the moment, but to retain our capacity in the long term we are looking for answers in the short term. After about five years there will be a glut of decommissioning or, ideally, recommissioning work from the North sea oil rigs when they are forced to close down, as they must under international law. Some of that work should come to the British yards.
Experts advise that, although most oil and gas rigs are in the British sector, very little decommissioning or recommissioning will be carried out in British yards—unless something dramatic happens—because of the complexities relating to ownership of the facilities. The experts say that all the work will go to Norway or Holland. That is unacceptable. We built most of the rigs and we can take them apart. My hon. Friend the Minister should consider that.
I wrote to my right hon. Friend the Secretary of State for Trade and Industry about whether Aker McNulty, a company operating in my constituency, had applied to the Government for assistance to allow it to carry out research into the task of decommissioning. The company applied for a research grant of £2.5 million in the belief that thousands of jobs on the River Tyne could be retained in the long term. I understand the difficulties faced by my right hon. Friend, who was not able to offer such a grant. I understand, however, that the application may not yet be completely dead.
Just two weeks ago, I wrote to my right hon. Friend the Secretary of State asking about the prospects for success for a grant application from the parent company of Aker McNulty—a Norwegian company—on the basis that the benefits of any research funded by such a grant would be applied only to British yards. I can see that the Government might be worried about using British taxpayers' money to create a centre of excellence in research on the River Tyne, only to find that the parent company takes the benefit from that research across to Norway, and that most of the physical work of decommissioning or recommissioning is done there. I am not asking for an answer on that issue today, but my hon. Friend the Minister might consider it.
I associate myself completely with what my hon. Friend the Member for Tynemouth said, and I reiterate the point that he made. I have been speaking about Tyneside, because that is the subject of the debate, but we all know that what I have said applies also to Teesside, Wearside, Clydeside, Merseyside and other places. It is very important that the alternative landing ship logistic order is brought forward. I understand that
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it has already been delayed. We might not win the order on the Tyne, although I hope that we do, but it would help us to retain that critical mass. My hon. Friend mentioned the roll on/roll off contract. I have made my views known about German companies—that is especially relevant at present.
The DTI is carrying out a review of the operation of the Export Credits Guarantee Department and is considering ways of making it more flexible. The difference between the rate for borrowing money in the United Kingdom and that for the euro makes that all the more important. We can be rather smug about how we have a better rate of exchange against the euro and about how its value has fallen, but the bottom line for industrialists is that the base rate in Europe is considerably lower than in this country, and it is easier for industrialists there to borrow money. That is a problem, and I hope that the Government will take it into account.
My key point is that all the stakeholders in the north-east of England—employers, trade unionists, local authorities, Members of Parliament—accept that there must be a long-term future for our river-related industries and that, perhaps, in the past we have not worked together as we should have. If there is to be a long-term future—and there can be a future in shipbuilding and in the oil and gas defabrication industry—we need to plug the gap in the short term. We look to the Government to help us to work with industry in producing innovative ideas that will ensure that the industry will be retained, so that, when there is an upturn in the shipping industry and the decommissioning work starts, we are in a position to win some of that work, and to provide work for our constituents, who feel rather let down at the moment.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. We have about 55 minutes left and five hon. Members, including the Minister, have indicated that they wish to speak. I hope that the Minister will be allowed sufficient time to wind up this important debate. Moreover, one hon. Member arrived a little late today and I hope that he will bear in mind my request when he contributes.
10.35 am
Mr. Doug Henderson: I congratulate my hon. Friend the Member for Tynemouth (Mr. Campbell) on securing this debate on a crucial issue for the Tyneside region. I echo the points that he has made, and also those raised by my right hon. Friend the Member for South Shields (Dr. Clark): Both made an excellent case for shipbuilding on the River Tyne.
My constituency would not traditionally be described as a shipbuilding constituency; one has to go back about 100 years to find ship assembly taking place there. However, it contains many companies that feed into the shipbuilding industry, and many of my constituents work either on the assembly side of the industry, further down river, or for subcontractors in my constituency. Shipbuilding on the River Tyne is therefore a crucial issue for the people of Newcastle upon Tyne, North.
It would be an omission if I did not pay tribute to the workpeople in the existing shipbuilding and oil rig industry on the Tyne. I felt a great sense of warmth when

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several of my hon. Friends joined the unions on Tyneside in a demonstration of their support for the shipbuilding industry. Tribute must be paid to those unions, including my own union, the GMB.
We were told by the previous Government that the future of the British economy was dependent on the service industries. That might have been true for parts of central London, but I can assure you, Mr. Winterton—
Mr. Deputy Speaker: Order. I know that the hon. Gentleman has been a distinguished Minister, but he may not be au fait with the way in which to address the Chair in Westminster Hall. It is either Mr. Deputy Speaker or Madam Deputy Speaker.
Mr. Henderson: I apologise, Mr. Deputy Speaker. I asked for guidance on that matter from my colleagues, and I am afraid that I was misguided. Although I was always happy with "Mr. Winterton" in other parts of the House, Mr. Deputy Speaker is a most appropriate form of address in this Chamber.
We were told of the importance of the service industries. I know that the hon. Member for South-West Hertfordshire (Mr. Page), who might contribute to this debate on behalf of the Opposition, took a different view on that issue. Others in the Conservative party also disagreed with their Government's view that we could all work in the service industries. That was good, as it strengthens the alliance of those who believe that manufacturing, in its broadest definition, is the key to the success of our economy if we are to be an exporting and trading nation.
The Government believe that manufacturing is a key sector in our economy, and they instinctively believe that shipbuilding should play a crucial role in building and rebuilding the base of our manufacturing economy. However, they need to consider further the advice that they are given. I am not convinced that that advice identifies shipbuilding as a crucial part of the British economy for areas such as Tyneside. I believe that it is an industry with a future. My hon. Friend the Member for Tynemouth said that predictions suggest that there will be a growth in the demand for ships to move goods and people around the world in the years ahead.
The issue that we must face as a nation is whether we are to be a shipbuilding nation. The decision will be crucial for Tyneside. If we are to be a shipbuilding nation, what must we do to make sure that we are in game? The answer is simple. First, we must have the capacity and the investment in future technologies, including e-commerce and other major developments. Without that, we are in difficulty. Secondly, we must have a pool of people with the skills, the application and the commitment to the industry.
As my right hon. Friend the Member for South Shields said, the average age of skilled work people in the industry is 49. I do not think that 49 is particularly old, but I am sure that we all recognise that it would be better for the future of the industry if that average could be reduced and more young people learnt the skills of tomorrow to give the industry a future.
That is where the emphasis must lie. The Government must ensure that we have that capacity, if they believe, as we do, that shipbuilding has a future and is crucial for
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the economic prosperity of areas such as Tyneside, and they must take action to ensure that the skills are retained.
I agree with you, Mr. Deputy Speaker, that all hon. Members who wish to speak should have an opportunity to do so and I do not want to take up too much time. The Government may wish to consider two additional points, which have been partly covered. First, there must be close liaison between Departments on Ministry of Defence orders so that the Government's aims are carried out, rather than the aims of one Department. There must be close liaison between the Treasury, the DTI and the MOD on the way in which orders will emerge, the time scale and the investigations that have taken place to ensure that there is a level playing field and that all bidders for the orders operate on the same terms. It is incumbent on the DTI to demonstrate at the end of the process that the playing field was level. I am confident that, if it does, those who bid for the orders in the British sector will be extremely competitive, including bidders from our own river.
Secondly, I want to reinforce the point made by my hon. Friend the Member for Tynemouth about the international context. There is often reluctance in international agreements such as the trade association agreements between the European Union and Korea to give manufacturing industry a place in discussions as a priority. I am not saying that discussions should not focus on what is important for Frankfurt or for the City of London, but the trade association agreements must also pay more attention to the implications for important industries such as shipbuilding. They are not dead, burnt-out, old industries: they are new and vital industries which are capable of adopting all the new technologies to deliver what we want.
That is why the terms of the agreement between the South Koreans and the European Union are not acceptable. They need to be reviewed and, when they are renewed, a far tougher line must be taken on the subsidy that the Koreans give sectors of their manufacturing industry compared with the subsidies given in the European Union. If the Koreans are not prepared to enter into agreements on that basis, the International Monetary Fund should not take a relaxed a view as it has done on the support that it gives to countries such as Korea. I am not anti-Korean, but any country that competes with us in a manufacturing sector should compete on the same terms.
I know that my hon. Friend the Minister will bear those points in mind, as I suspect that he has sympathy with many of them. He has a difficult task, especially in liaising with other Departments, but I am confident that he will fight hard for our cause on Tyneside and I look forward to his response.
10.44 am
Mr. Jim Cousins: Taking your advice, Mr. Deputy Speaker, I shall be extremely brief.
I support my right hon. Friend the Member for South Shields (Dr. Clark) and my hon. Friends the Members for Tynemouth (Mr. Campbell) and for Newcastle upon Tyne, North (Mr. Henderson). This is an important moment for us, and we should remind ourselves that the

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shipbuilding industry, associated industries and even universities—my constituency is one of the largest centres of education and higher education in maritime industries in the country—all depend on the existence of significant industry on Tyneside. We are not talking about an industry of the past; it has to change, but it will be an important industry in the future. The impact of economic and environmental change means that, in future, ships and all the structures in the sea will have to be of a different order, with different capabilities, and be able to work with different technologies. Maintaining access to the opportunities that arise from that is crucial and provides the real subject matter of the debate.
I wish to make two further points to underline the comments of my hon. Friends the Members for Tynemouth and for Newcastle upon Tyne, North. First, the age of the work force is important. Gone are the days when a man with a hammer typified employment in these industries. Secondly, the Government must increase their support for training to higher levels—up to NVQ3—so that young men and women have access to employment opportunities. My hon. Friend the Member for Newcastle upon Tyne, North drew on his own experience when he spoke about that.
The Ministry of Defence does well—in terms of product and people—from the north-east, which provides one of the great recruiting grounds for the British armed forces, yet the region contains almost no significant MOD employment, either uniformed or civilian. In view of the region's current difficulties, our people will not expect us to put up with that for much longer. They will expect us to put pressure on the Government to ensure that in future the MOD has a significant presence in our region. It cannot be right that so much of our defence industry—now very sophisticated and based on modern electronic technology—is concentrated in the south-east of England. As I said, that will not be acceptable to us in the future.
10.47 am
Dr. Vincent Cable: I apologise to you, Mr. Deputy Speaker, and to the hon. Member for Tynemouth (Mr. Campbell) for my late arrival.
Following the closing remarks of the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), I approach the subject with some humility. I represent a prosperous area of the south of England, which has relatively low unemployment. I doubt whether many hon. Members will have heard of the Twickenham shipbuilding industry, but it came as a shock to discover that it now employs more people than some of the great names of the past, such as Swan Hunter. It has become a niche industry and Twickenham has a working boat yard that produces river passenger boats. More important—and reinforcing the point made by the hon. Member for Newcastle upon Tyne, Central—a large and growing consultancy is doing much of the research and development, design and software work for the industry. The industry is developing there, but not on Tyneside.
I wish to focus on the major public policy issues. The right hon. Member for South Shields (Dr. Clark) raised the key issue of subsidy competition, which is important
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for two reasons. First, it is damaging to industries on the receiving end of unfair competition. Secondly, it is damaging to all Governments, who are reaching into a potentially bottomless pit to sustain their respective industries in a world of overcapacity.
I emphasise the importance of the potential Organisation for Economic Co-operation and Development agreement, which brings together not just the European countries, but Japan and now Korea. It is not Korea but the United States that is blocking the OECD agreement. Congressional obstruction is preventing us from reaching an agreement to stop this damaging process. I hope that the British Government will emphasise that in trade negotiations with the United States.
Although Korea has replaced Japan as a major player in the shipbuilding industry, the growing force is China, which is rapidly increasing its role. It has an enormous reservoir of labour, much of which is highly skilled, and an opaque system of Government support. It is crucial that China is quickly brought within the World Trade Organisation so that the WTO's disciplines are applied to its shipbuilding industry. If it is not, another industry will founder on what is often unfair, non-market-based competition.
The right hon. Member for South Shields briefly touched on the economic fundamentals. The appreciating exchange rate—15 per cent. overall since the Government took office and 33 per cent. since the trough in 1966—has caused a loss of competitiveness that swamps any benefit that the industry might gain from the subsidy in the intervention fund, which is 4.5 per cent. for big vessels and 9 per cent, for smaller vessels. The over-valued exchange rate and high base rates put the industry, including manufacturers who are not on the Tyne, such as Harland and Wolff a few years ago, at an enormous disadvantage, as they do to much of our manufacturing industry. That problem will continue until the exchange rate is stable and competitive.
My concluding point is a personal one. Although Twickenham is far removed from the industrial problems of the Tyne, my first venture into public life was as a representative of a ward on Glasgow city council. Most of my constituents worked in the upper Clyde shipbuilding industry before it collapsed. I saw at first hand the effect of a contracting shipbuilding industry on a population of highly skilled mainly male workers, many of whom were middle aged and would never work again.
The lessons of the Clydeside experience—the importance of self-help—should be borne in mind for the Tyne. The Scottish Development Agency did a great deal to turn around the Clydeside economy by encouraging regeneration and pulling together the region's stakeholders. Retraining was crucial. The Government should be generous about retraining. If people might never work again, it pays to invest in trying to get them back to work by providing them with lifetime skills. I urge the Government to be broadminded about intervening in the industry. They should look to the future rathere than the past, and not walk by on the other side.
10.52 am
Mr. Richard Page: I, too, congratulate the hon. Member for Tynemouth (Mr. Campbell) on his luck in getting chosen in the ballot and on choosing this important subject for debate. We should all be grateful to him for raising concerns that are felt on both sides of the House. Although I am now a soft southerner, I was the Member of Parliament for Workington. I am only too well aware of how deep rooted shipbuilding is in the psyche of the north for economic reasons and of the mental well-being of the people who work and live there. We fully recognise the fears of the Tyne's shipyard workers and the problems that affect the whole shipbuilding industry.
Since 1997, the Tyne's order books have collapsed. If reports are correct, employment has decreased from nearly 14,000 to about 800. I say that with some diffidence because we know that there has been a move to temporary working, so it is difficult to pinpoint those figures. Nevertheless, there has been a savage reduction in employment. Having built four fifths of the installations in the North sea, the Tyne has been reduced to pleading for the development of marginal oil fields and the award of an MOD contract for the landing ships to save what is left of that construction capacity.
The bidding results for the two major orders are now eagerly awaited. The first contract is for up to five alternative landing ship logistic vessels worth £350 million. Both the Swan Hunter shipyard at Wallsend and Cammell Laird at Hebburn have made a bid for them. Cammell Laird is also bidding for a £240 million contract to build the six MOD ro-ro vessels. However, hon. Members have been remarkably tactful in referring to controversy about an MOD official's statement that Tyneside, Glasgow and Belfast lacked the expertise to undertake that ro-ro contract. If those remarks were made, they were unwise and prejudicial to the chances of the Tyne yards in the competition with respect to that order. As a wider issue, how will it look when British shipbuilding companies try to bid in the marketplace if MOD officials say that the skills and abilities are lacking? How will it affect Cammell Laird when it bids for orders in the Philippines? It is highly damaging and the Minister should firmly deny that the official had the authority or knowledge to make that comment.
Hon. Members have asked about fairness of competition, particularly from Korea. The Minister will know that Members of Parliament who are concerned about shipbuilding have signed an early-day motion about the fairness of Korean contracts and bids. The figure of 20 per cent. has been mentioned. In 1994 an agreement was negotiated under the auspices of the OECD to eliminate subsidies in world shipbuilding, including the elimination of contract aid in the EU, the lifting of the Jones Act in the United States and, perhaps most important, the acceptance by Korea of an unfair pricing clause. Although that was signed in December 1994, the failure of the US Congress to ratify it so far has meant that it has not come into force. What are the Government doing—including any action that they are taking with the European Commission—to get the agreement ratified and speedily implemented?
Matters have been made worse by the weak euro vis-à-vis the pound. The latter's strength against the euro and the far eastern currencies will make it that much more difficult for our shipbuilding companies to obtain
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orders. This morning, for the first time, the euro's value dipped below 60p. That trend cannot be helpful to our shipbuilding industry.
The fact that we are having this debate—particularly with respect to fabrication—reflects badly on the Government's managerial skills. Their clumsy and ill-thought-out review of taxation on North sea exploration inevitably led to oil extraction companies, which perceived the impact of advance corporation tax and the windfall tax, reviewing their whole programmes. I know from my previous incarnation how marginal some of those programmes were in many respects. The number of orders for fabrication has decreased. Fewer wells have been drilled in the North sea between 1997 and 1998.
Therefore, I ask the Minister whether the financial regime for the North sea has been examined to determine whether help can be given to those fabrication yards involved in making floating rigs for use to the west of Shetland. Platforms are not the right technological solution for extracting oil in the deep sea. What is being done to ensure that those oil extraction companies have the confidence to explore around the west of Shetland and Rockall? Licences have been granted to explore the deep water around Rockall and such exploration needs the new technology.
The right hon. Member for South Shields (Dr. Clark) mentioned decommissioning and the hon. Member for Tynemouth mentioned the loss of fabrication, but the Minister must realise that we will not be able to take advantage of any decommissioning if the ability to fabricate is lost. A huge amount of potentially profitable work could be lost if we do not ensure that our fabrication and shipbuilding capacity is in place.
The hon. Member for Tynemouth rightly mentioned training the young. I am one of the few Members who did not go to university; I did an industrial apprenticeship in mechanical engineering. I would not have swapped that training for all the universities under the sun. Newcastle university has a large engineering department, but without a career path or employment opportunities, the young will not take the first steps to learn about engineering. If skills are not constantly refreshed, we shall have no shipbuilding and fabrication industry.
The Secretary of State for Trade and Industry said:
Tyneside does not want ministerial day-trippers; it wants positive action from the Government.—[Official Report, 12 May 1993; Vol. 224, c. 804.]
He also said:
Tyneside is not using special pleading, but asking for fair play. Shipbuilding is vital to the manufacturing and industrial base of Teesside. If the Government thought that the people of Teesside would sit back and let shipbuilding die, they have made a grave error.—[Official Report, 19 May 1993; Vol. 225, c. 331.]
The Minister of Agriculture, Fisheries and Food said:
It is with enormous sorrow that I take part in the debate on Britain's manufacturing base to plead with the Government that they do something to save what is left of the shipbuilding manufacturing base on Teesside. No community deserves better from the Government.—[Official Report, 24 November 1993; Vol. 233, c. 533.]
I hope that the Minister will answer those questions; I look to him for a response. Several hon. Members have said, very generously, that they do not expect answers

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today; they have asked him to think about the problems. However, the problems are not new; they have grown during the past few years, so there is no reason why he should not answer the questions today. He should give the people of Tyneside some confidence for the future, not knock the problems into the long grass. The hon. Member for Tynemouth asked several very pertinent questions, but he did so delicately. I appreciate his position, but no such restrictions have been placed on me and I hope that I have added to those questions. On behalf of the workers on Tyneside and those in shipbuilding throughout the country, I ask the Minister for some answers.
11.3 am
The Minister for Competitiveness (Mr. Alan Johnson): I congratulate my hon. Friend the Member for Tynemouth (Mr. Campbell) on securing this debate. I am pleased that so many hon. Friends and hon. Members from Teesside are present for what, until the previous speech, has been a fascinating and constructive debate. Debates in Westminster Hall are meant to be less confrontational and it is vital that this issue, more than any other, should not be turned into a Punch and Judy show. I shall respond to the important matters raised by my hon. Friends in the debate, and to the Opposition's petty political point scoring.
The issue is critical to people who live and work on the Tyne. My hon. Friend the Member for Tynemouth referred to two important matters on which I shall respond: the prospects for shipbuilding on the Tyne and the prospects for the Tyne's offshore industry.
I reiterate the comments about the excellence of Tyneside shipyards and their importance to the local economy. As hon. Members have said, the debate is about the United Kingdom shipbuilding industry, although we are referring specifically to the Tyne. I am acutely aware however that all shipyards in the United Kingdom face difficult challenges. There is fierce international competition for orders and global overcapacity of about 30 per cent. The United Kingdom's primary competition is from other European Union countries; I shall refer later to Korea. The contract for Queen Mary II was lost to a French shipyard, which, until the end of the year, has the same subsidy arrangements as are enjoyed throughout the European Union. The challenge is not just from Korea.
It is encouraging that, despite those challenges, the industry has not lost confidence in its future, as was shown recently when my right hon. Friend the Secretary of State opened Cammell Laird's new dry dock and began the process of building a second. My right hon. Friend probably did more for shipbuilding and ship repairing in a week than the hon. Member for South-West Hertfordshire (Mr. Page) and his hon. Friends combined in their lifetime.
There have been several important developments in the past couple of years. Shipbuilding, ship repair and conversion on Merseyside are reviving. Late last year, Cammell Laird won the contract for the conversion of the Costa Classica cruiser, the biggest cruise conversion ever, which is worth £60 million. Conversion is more labour intensive and therefore creates more jobs than
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shipbuilding. Appledore in Devon recently rescinded 300 redundancy notices after receiving a letter of intent for the second Irish navy fisheries protection vessel.
The United Kingdom remains among the market leaders in Europe, especially for ship conversions. I cannot emphasise strongly enough the fact that the British shipbuilding and ship repair industry has a future, and the key to its future success is its competitive performance. The Government are committed to working closely with the industry to help it to face the challenges and to achieve the improvements necessary to win the contracts that it needs.
I pay tribute to my predecessor, my hon. Friend the Member for Leeds, West (Mr. Battle), who in 1998 set up the first shipbuilding forum, which met around the table in the Department of Trade and Industry. It is remarkable that that had never happened before. We asked the shipbuilding forum, which includes Cammell Laird and A & P Tyne, and representatives of suppliers, customers, trade unions and Government, to tell us what the industry needs. It made 40 recommendations, including a recommendation to enhance Government financial support for the shipbuilding industry.
Much progress has been made. Cammell Laird won the contract on Merseyside because we extended the shipbuilding intervention fund to include conversion, something that the previous Government had never done and without which Cammell Laird would not have won the contract. We have enhanced the home shipbuilding credit guarantee scheme in direct response to a recommendation from the shipbuilding forum. We have also funded a suggestion from the forum that there should be an industry-led study tour of the Netherlands, where the shipbuilding industry has done things differently over the past 20 years. Shipbuilders there collaborate in order to compete, and their investment in skills and training started many years ago. They have carefully examined how they involve the supply chain, which is more crucial to shipbuilding and ship repair than to any other industry. To give due credit to those in the UK industry, they came back from that study tour with many ideas and with a positive approach to the changes that could be implemented in this country—that is benchmarking at its best.
We continue to work closely with the industry through the Shipbuilders and Shiprepairers Association on competitiveness and productivity issues. As hon. Friends have mentioned, we offer the industry significant financial support. We continue to pay the maximum rate of shipbuilding intervention fund for new ships. We have agreed to allow an element of up to 9 per cent. profit in the fund calculations—the third recommendation from the shipbuilding forum's first meeting in 1998 to have been implemented by the end of 1999.
We have brought the DTI scheme into line with our European competitors' practice in several other ways. If there is evidence of any European Union country winning a contract by bending the rules on the shipbuilding intervention fund, we need to know about it, as the DTI has often said. No evidence has been produced to suggest that that is happening.
We have extended the scope of the fund to conversion contracts. We have extended access to several previously excluded yards. Military yards were excluded from SIF

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assistance, and we have changed that in response to an industry recommendation. We have enhanced the home shipbuilding credit guarantee scheme by providing support for loans in US dollars and euros in response to an industry recommendation.
We recognise the industry's concerns about unfair trade practices, in particular, in Korea—and we should be clear that such practices exist. At least a couple of yards in Korea would, on any impartial analysis, have been declared bankrupt years ago, but they continue to operate. In response to the hon. Member for South-West Hertfordshire, I should mention that we continue to make vigorous efforts to address the industry's concerns. However, we must acknowledge, as the industry does, that Asian shipyards—in particular, those in South Korea—are more competitive than European yards and possess several strengths, such as a highly efficient equipment supplier base. Even without the distortions caused by what are definitely unfair trade practices, European yards would still face a gap in their competitiveness with Asian builders. It is important to say that, because the industry must ensure that it does not fall into the trap of believing that there is only one problem in the British shipbuilding and ship repair industry and that there would be no others if it were resolved. The industry should not delude itself on that issue.
Nevertheless, unfair trade practices are unacceptable and remain a real concern. We continue to strive for a remedy. Thanks to pressure from the Government, the Commission has engaged for the first time in bilateral talks with Korea, with a view to reaching an agreement on the EU industry's concerns. There are positive indications that Korea will accept an agreement, including a consultation mechanism on unfair trade practices.
In the longer term, the only viable solution to anti-competitive practices is to establish effective international trade disciplines, as embodied in the OECD shipbuilding agreement, as my hon. Friend the Member for Tynemouth and the hon. Member for Twickenham (Dr. Cable) said. I reiterate that our efforts on that have been frustrated by the failure of the United States—which, for obvious reasons, has a great deal of influence over South Korea—to ratify the 1994 agreement. Nevertheless, we continue to pursue our objectives.
I am determined to work closely with the industry on Tyneside and throughout the UK to help it to equip itself to meet the tough challenges of the market, boost its competitiveness and improve its success. The Shipbuilders and Shiprepairers Association shares the industry forum's objective of doubling output and building 50 to 60 ships a year within five years. It also aims to improve the annual turnover derived from repair and conversion by at least 30 per cent. Those are realistic targets. As my hon. Friend the Member for Tynemouth said, it has been forecast that more than 2,000 ships will have to be built every year for the next 10 years, excluding tankers and bulk carriers, which are not built in Britain. The industry is taking a positive approach to that market.
We agreed with all other European Union countries—with the support of the industry and the trade unions—to abolish the shipbuilding intervention fund from 31 December 2000. We made that agreement
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on the basis that the SIF has been in existence for 30 years and has had little effect on helping the industry in this country or the rest of Europe.
The SIF provides up to 9 per cent. assistance; by contrast, the gap in the Asian yards is about 20 per cent. It was thought that, rather than carrying on with the SIF, focusing on research and development, building the skills base and improving training would be a step forward for the industry. That has been approved and the EU directive was changed accordingly by a new regulation in 1998. However, only two weeks ago, I met industry representatives who are anxious that the SIF should remain at least until concerns about Asia—and especially South Korea—have been met. Representatives of the Confederation of Shipbuilding and Engineering Unions made the same point when I met them last week.
We shall give those issues serious consideration. The rest of Europe has agreed to abolish the SIF, so hon. Members will accept that we should lead the charge or support it. It may be difficult to change tack now and overturn the position on the SIF, as that would require a recommendation from the Commission. More important, we have told the industry that we must have clear examples of how maintaining the SIF will help us, particularly to get contracts in the face of competition from Asia and especially South Korea. We are still listening to arguments about changing tack on SIF.
I turn to the prospects for the offshore industry. If I have time, I shall address individual points raised by hon. Members, but first I must put on record our ideas and concerns about the offshore sector. As with shipbuilding, it is important to acknowledge the high levels of skills and experience on the Tyne available to the offshore sector. There is a strong tradition of providing complex engineered structures for oil and gas fields in the North sea and abroad. About 80 per cent. of the top sides for more than 70 offshore oil and gas fields in the UK sector of the North sea were fabricated in north-east yards.
However, it is clear that the days of large fabrication orders for the UK continental shelf are over. The offshore discoveries available for development now are only a fraction of the size of earlier fields such as Brent, Forties. It is unlikely that there will be many more huge orders like that for the Shearwater platform, which recently left the Tyne. There is widespread recognition in the industry that there is overcapacity and a need to rationalise; yet there are still orders to be won, even if those for the United Kingdom continental shelf are smaller. The majority of orders are likely to be for smaller platforms and facility work associated with sub-sea development or floating systems, but there is no doubt that the Tyne, and indeed the whole of the northeast, has the capability of producing the quality products required.
A point was raised about the commissioning and decommissioning of oil rigs, which the local industry is considering. We are at a competitive disadvantage with countries such as Norway and Holland, which have the heavy lift barges, but, as we have the necessary skills, the idea now is to work in partnership with the Norwegians or the Dutch so that there is work for Tyneside. That important development is being pursued by the Northern Offshore Federation.

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The work of the oil and gas industry task force last year led to improvements to the offshore licensing regime, actions to improve the UK industry's competitiveness and additional relief from capital gains tax. All those actions were designed to stimulate activity on the UK continental shelf. The task force initiatives are being monitored through its successor, known as PILOT. The task force requested that an oil and gas fabrication support group be set up. A meeting took place last month which was attended by more than 40 representatives of fabricators, the unions, enterprise agencies, training organisations and central and local government. A number of the representatives were from the north-east.
The group examined the opportunities for work from the UK contintental shelf and from export markets, particularly for FPSOs. It also considered prospects in other sectors, including decommissioning, offshore wind power generation and shipbuilding. Regrettably, it was clear that the alternative markets will not produce the volume of work necessary to sustain fabrication activity in the UK at anything like the level of previous years, but it identified major areas of work.
We are also working with the leading agencies in each area. One North-east, the regional development agency in the north-east, has already created an action group for the region, which is chaired by Kevin Curran of the GMB. The national fabrication support group will work with the action group to ensure that any options for maximising employment are considered and pursued.
Two more specific points have been raised recently in the north-east. The first concerns offshore licensing procedures. The licences are awarded on the basis of an agreed programme of work to explore thoroughly the petroleum potential of specified areas on the UK continental shelf. The ability to retain the licence beyond specified points depends on a commitment to future work.
The Government are well aware of the importance to the UK economy of continued exploration and development work on the UK continental shelf. That is why officials have written to the managing directors of companies holding licences on the UK continental shelf that have fallow blocks and fallow discoveries in their portfolios, asking them to review their plans for the licences and to report back by Easter. That is another major initiative that addresses the concerns raised in the debate.
The second specific point relates to gas-fired power stations. Suggestions have been made to have a moratorium on power stations. No moratorium is in place, but there is a stricter consents policy for the oil and gas sector. That is a short-term measure to protect energy diversity and security of supply while the electricity market is reformed. We were aware of concerns that a large-scale switch to gas was taking place in a distorted market, with gas-fired plant coming in even though it was more expensive than the coal that it displaced. Hon. Members will be well aware of those issues.
We must level out the market so that it can function effectively, balancing supply and demand in economically sensible ways. To avoid making things
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worse, we have temporarily restricted consents for new power stations until the market is sorted out. I cannot say how long the stricter consents policy will last, as relaxation is tied in to the programme to reform the market, but the Government are determined that it will last no longer than necessary.
My hon. Friend the Member for Tynemouth made a number of important points, one of which was about the age profile, which was repeated by others in the debate. I agree that 49 is a young age, but it is older than I thought it was 20 years ago. The industry is addressing the problems, almost for the first time, and recognises a serious skill shortage. Modern apprenticeships have begun only recently and it will be some time before they address that problem, but everywhere I go the people in the industry to whom I talk single it out as a major difficulty.
My hon. Friend also said that the maritime industry was a classic example of the way in which high technology and new technology were married to traditional industries and said that the knowledge-driven economy was as much about manufacturing as about mobile telephones: there is no difference in its effect on industry. He also recognised the problems that were outside the Government's remit.
Perhaps I can quickly answer the points made by the hon. Members for Twickenham and for South-West Hertfordshire about the strong currency. In 1997–98, even before there was any reason to consider the strong pound as a factor in these matters, UK yards won just two contracts of a total of 342 won in the rest of the European Union. The shipbuilders and ship repairers do not constantly refer to the strong pound as a problem, but recognise that there are many things that they must do to be more competitive. For the past 50 years, Germany has prospered with a strong currency. Strong currencies do not lead to failure, they are a symptom of long-term economic improvement, as the right hon. Member for Kensington and Chelsea (Mr. Portillo) said on 23rd March 2000 in The Birmingham Post.
The crucial points that were made by my hon. Friend the Member for Tynemouth and others were about the Ministry of Defence contracts. It does not need me to say this, because my right hon. Friend the Secretary of State for Defence, who is bigger and uglier than I am—certainly big enough and ugly enough to look after himself—has made it clear that nobody from the Government said that we did not have the skills in the UK. Not only do we have the skills, but we have skills, talent and commitment in abundance. Therefore, I am happy to set the record straight.
My hon. Friend the Member for Tynemouth also made the important point about the DTI working closely with the MOD and other Departments on these issues. We do that exhaustively, not just on shipbuilding but on aerospace, where the DTI needs to feed in industry's views. Smart procurement means that the contracts will be awarded fairly and on a competitive basis, although the ALSL order will definitely go to a UK yard because it involves a warship. As far as I am aware, although it is a matter for the MOD, invitations to tender for the ALSL went out in March and close in mid-May. It is difficult to see how we can bring that time scale forward, but I shall raise the matter with the MOD.

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As regards the SIF and the suggestion that a forum should be set up on Tyneside to bring all the industry players together, that is an interesting idea. I am attending a meeting of the industry forum tomorrow and I shall float that idea—"float" being the operative word—to obtain its view on whether it thinks that that might dilute or detract from the national industry forum.
My right hon. Friend the Member for South Shields (Dr. Clark) made a number of important points. I agree that the skills and abilities undoubtedly exist in the UK, and his point about Aker McNulty will be carefully considered.
This has been an important debate. I have not mentioned other enterprises on Tyneside. Youth unemployment has fallen by 60 per cent.; tourism in Newcastle has now taken off, and is among a number of developments happening in the city. Shipbuilding may not be the life blood of the Tyne, but it is certainly still the heart beat, and the Government very much appreciate the need to support the industry.

Mobility Benefits (Northern Ireland)
11.30 am
Rev. Martin Smyth: I express my appreciation through you, Mr. Deputy Speaker, to Madam Speaker for having given me the opportunity to initiate this debate. It concerns a subject of great importance to many people in Northern Ireland, namely the recent claims that the Motability scheme in Northern Ireland is subject to widespread abuse. However, I do not believe that the Motability issue can be taken in isolation. It must be examined as part of the wider duties of Members of Parliament who are elected to represent constituents and their interests. They are also elected to vote supply and to protect the public purse, especially from fraud.
Northern Ireland has faced a 30-year terrorist campaign in which economic warfare played a significant part, through the destruction of the business districts of our towns and cities. There has also been the growth of a mentality among those who opposed the Government that they should take as much as they could from the state. This, coupled with the various terrorist groups' protection rackets and other illegal money-raising activities, led to the establishment of a Mafia state in many parts of the Province, despite the best efforts of the Royal Ulster Constabulary. To make matters worse, the black economy has grown as more and more people have sought to defraud the taxpayer by doing the double and claiming benefit to which they are not entitled.
The central service agency has 1,805,812 people registered with it, yet Northern Ireland's population is only a little more than 1,700,000. Who are the extra 100,000 people? Where are they? What is being done to discover the reason for the imbalance and to root out the fraud that doubtless accounts for much of the discrepancy? It is against that wider background that we must examine the circumstances in which the Motability scheme in Northern Ireland finds itself.
The scheme benefits 22,000 people in Northern Ireland who receive disability living allowance. It therefore provides some of the most vulnerable people in society with the means to get about and lead a semblance of a normal life. In early March, Motability wrote to all the people in Northern Ireland who benefit under the scheme to inform them that the future of the scheme in the Province was in doubt due to suspicion of widespread fraud and abuse, including claims that some of its cars have been used as taxis and for drug smuggling. I was told in a letter from Motability that
some people anecdotally refer to our cars as "DSS taxis".
That is the world in which we live and I am trying to find out more about it.
Some of the statistics that I received from Motability are quite staggering. For example, the vehicle accident rate for the scheme in Northern Ireland is more than double that for the rest of the United Kingdom. Settled claims awards in Northern Ireland are almost treble the amount elsewhere in the UK, and 72 per cent. of the scheme's personal injury claims in Northern Ireland involve seven or more people, compared to 28 per cent. in the rest of the UK. As a result, insurance losses alone amount to some £650 per lease, effectively costing disabled people using the scheme in the remainder of the

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United Kingdom some £70 per lease and raising serious questions about the scheme's long-term viability in Northern Ireland.
After I heard from constituents and others in the Province who were concerned about the letter that they had received, I wrote to Motability, to the Department of Social Security and to the Minister responsible in Northern Ireland. The DSS said that it was the responsibility of the Northern Ireland Department. On the other hand, Motability is a charity. Does it receive any public money, or is everything that it does done through the disability living allowance? I happen to believe that when a fraud is being perpetrated on our community, even if it is a stand-alone charity that depends on public funds, there must be some accountability to the House. These allegations have caused a great deal of distress to many people throughout Northern Ireland, including my constituents.
On 21 March, after I received a letter that had been delayed in the post, I saw an edition of "Spotlight" on BBC Northern Ireland that raised the issue of a suspected widespread fraud and abuse in the operation of the Motability scheme in Northern Ireland. It made for interesting viewing. It even included footage of a car belonging to a Sinn Fein Member of the now suspended Northern Ireland Assembly, Mr. Alex Maskey, parked outside Castle buildings, Stormont. Anyone who has seen Mr. Maskey will wonder just how he qualifies as disabled. I understand that he had an injury in the past, but certainly there are folk who would love to be disabled if that constitutes disability. His mobility seems to be unimpaired. He does not appear to have any difficulty in getting around. He also refused to answer questions unless he could see them in advance and consult his solicitor.
I accept that there may be problems in the way that the Motability scheme operates in some parts of Northern Ireland. However, I cannot accept that the only course of action is to abandon the whole system and punish the innocent along with the guilty. Surely someone, whether in the insurance world or in Motability itself, could carry out some checks. Why are insurance claims made for cars with annual mileages of over 30,000 that suddenly are burnt? In the normal run, that would be a high mileage for a Motability car. Is it just anecdotal that two Motability cars with five passengers in each managed to bump into each other with resulting claims for whiplash and so on? Such claims should be investigated much more carefully. That is preferable to paying out and then challenging innocent people that, if these things do not stop, the Motability scheme in Northern Ireland will have to be stopped.
I know some of the dodges that have gone on in the past. By now, the people who work in insurance and in Motability and, for that matter, those who administer disability living allowance should also have an idea of what is going on. Such abuse and misuse must be rooted out and reported to the lawful authorities, so that a proper investigation can be carried out and the guilty brought to justice. In Great Britain there have been successful prosecutions of people who have defrauded Motability. Why has this not happened in Northern
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Ireland? I understand from Motability that a major investigation is under way but surely these offences should have been drawn to the attention of the police much earlier. The innocent should have nothing to fear and should not be caused alarm and distress. Let us not forget that these people are some of society's most vulnerable.
have alluded to one of the main problems, which is that no one seems prepared to accept responsibility for the Motability scheme in Northern Ireland except Motability itself. I raised the matter with the Department of Social Security and was told to refer it to the—erstwhile—Northern Ireland Department of Health, Social Services and Public Safety. I have no difficulty with the introduction of better controls and eligibility checks to ensure that only those who are genuinely entitled to benefit from the Motability scheme do so. However, I object to the tone and the manner in which the issue has been raised. The suggestion that they be deprived of an asset that enables them to live a reasonably mobile life has created an atmosphere of fear and alarm among many totally innocent people.
I should like to know who has responsibility for rooting out fraud and corruption in the operation of the Motability scheme particularly and in the public sector generally. 1 urge those in charge of the Motability scheme in the Province, and anyone else who has information about or evidence of fraud or abuse, to present it to the police. The bad apples can be then weeded out and dealt with in the courts instead of every person in receipt of Motability benefit being stigmatised by unproven allegations and living in fear of the scheme being withdrawn. I have had anonymous letters from people living in difficult areas who support tightening up but are concerned that they and others will suffer if, as rumour has it, the scheme is withdrawn. Where there is a pattern of abuse, the people who administer the compensation and the insurance should be cautioned to take care rather than pay out the easy way. Mr. Deputy Speaker, you will be aware of cases in the past 30 years of people who had jobs awaiting them who simultaneously obtained social security benefits for their families. We were told that families were not receiving social security benefits when they were, and we were later told that to have admitted it would have endangered the life of some official. Surely such a decision should have been taken at ministerial level, not by an official.
11.43 am
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. George Howarth): I congratulate the hon. Member for Belfast, South (Rev. Martin Smyth) on raising this important issue. His comments show that he agrees that Motability plays an important part in some disabled people's lives and in some instances provides a vital service by giving them greater mobility. He has said that we should be careful to ensure that the scheme remains available to all disabled people in Northern Ireland and elsewhere who have a genuine need. Currently 21,700 people benefit from it.
The hon. Gentleman will appreciate that the Department for Social Development did not have direct responsibility for Motability, which is a voluntary, nonprofit-making organisations. However, as he asked a question, I should tell him that Motability received for

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1999–2000 a grant of £4.7 million from the Exchequer towards administration costs which included a contribution from the North Ireland Office.
As the hon. Member for Belfast, South rightly said, we pay the mobility component of the disability living allowance to Motability at the customer's request. I accept that, because we do so, we have a responsibility to ensure that payments are not fraudulently misused. It is important to put the situation in Northern Ireland into context. It has been alleged that fraud and abuse is higher in Northern Ireland than it is in the rest of the United Kingdom. The hon. Gentleman referred to a recent television programme and a letter sent to all customers by the director of Motability. However, disability living allowance fraud in Northern Ireland is about 2.4 per cent., which is lower than in the United Kingdom as a whole. The hon. Gentleman was worried about the statistics relative to the size of the population. I wrote to him on that complex matter yesterday, and I do not have time to go into it in detail now. However, I hope that my letter will enlighten him on the source of the discrepancies between the two sets of statistics that he quoted.
It is wrong to portray Northern Ireland as more involved in social security fraud than other parts of the United Kingdom, but having said that, it is important not to take that statement as a sign of complacency. In the past two years, there has been considerable investment in tackling benefit fraud, resulting in savings of about £72 million, which should rightly be spent on vital public services.
In the financial year that has just ended, 341 people were prosecuted for benefit fraud, although not in respect of the benefits that we are discussing. However, it shows how seriously the Government take the issue. The emphasis must be on preventing fraud. As a result of our efforts to reduce DLA fraud in Northern Ireland, the number of rejected claims has increased and the number of applications has fallen. That shows that a message has gone out; people realise that fraud is unacceptable and that, if they make fraudulent applications, they are likely to be caught. There is no other explanation for the fall in applications and the increase in applications rejected.
I want briefly to return to the letter dated March 2000, mentioned by the hon. Gentleman, from Mr. Noel Muddiman, the director of Motability, to all customers. The letter threatened to review the scheme's operation in the Province and stated:
If we are unable to drastically reduce the level of fraud and abuse in Northern Ireland…this could include the option of Motability totally closing down the scheme in the Province.
As I said, benefit fraud in Northern Ireland is lower than it is in the United Kingdom, partly as a result of the action taken to detect fraud. Twenty-one cases of suspected fraud were referred to Motability in the year that has just ended. Three of those concerned received written warnings, one person's car was removed completely, one person's lease was not renewed and three cases were unproven. The remainder of the cases are still under investigation. It is clear that action is taken and that the strongest possible action is taken in proven cases as regards the use of the car.
It was unfortunate that Motability singled out Northern Ireland—in particular because our officials
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had advised it that doing so would be inaccurate and misleading. Of course, no circumstances justify fraud, and I would not seek to do so. However, we should not lose sight of the fact that the overwhelming majority of Motability customers are, as the hon. Gentleman rightly said, genuine and deserving cases.
I want to respond directly to the allegations made in the recent television programme to which the hon. Gentleman referred. In common with all right-thinking people, I deplore any abuse in the Motability scheme. Our officials work closely with Motability, and we are determined that that will continue. Motability is investigating the cases highlighted in the programme, and it will pass its findings to the RUC if it feels that it is appropriate to do so.
I had not intended to refer directly to any of the allegations, and I am sure that you understand that it would be inappropriate for me to do so, Mr. Deputy Speaker, because some of those matters are under investigation. However, I should slightly correct one point that the hon. Gentleman made about Assembly Member Alex Maskey. As I understand it, there was no suggestion that Alex Maskey was disabled; the programme suggested that he was a nominated driver for a disabled person. I do not say that to undermine any investigation into the use of the car, and it would be inappropriate for me to comment. However, it is important that we get the specific nature of the allegation right. I know that the hon. Gentleman was not seeking maliciously to misinform anyone, but he might inadvertently have done so.
Rev. Martin Smyth: Did I understand the Minister to say that Mr. Maskey was the nominated driver for a disabled person? I want to be clear about the arrangement because it is part of the problem. Nominated drivers are using cars for their own purposes, rather than to drive people who have the right to use them.
Mr. Howarth: The hon. Gentleman is right—I did use the phrase "nominated driver". I did so to make it absolutely clear that Alex Maskey is a nominated driver for a disabled person. I do not want to go into the complexities of why he was using the car when the programme was filmed, because I do not have the information to hand. That would be inappropriate, given that the issue might be the subject of an investigation.
The hon. Gentleman referred to the fact that no one in Northern Ireland is prepared to take responsibility for investigating abuses. I have given him some statistics to demonstrate that that responsibility has been taken on and that it is being taken seriously. The Social Security Agency is not directly responsible, but it works directly with Motability to improve co-operation on the scheme through an arrangement to which I shall refer in a moment. It is important to urge them to continue to work together.
Rev. Martin Smyth: I welcome those assurances. My concern is on two levels. First, did Motability refer any of the issues to the police? No prosecutions were undertaken. I could understand it if people were not found guilty in court, because the case would have to be proved, but I cannot understand why no prosecutions

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have been undertaken. Secondly, I am worried that some folk in the public service are not taking care in carrying out their work. I asked the Minister how many people were on the central service agency's registers and a clever person gave me a list of doctors, for which I had not asked.
Mr. Howarth: On the latter point, that response was a genuine mistake. It was an inaccurate answer to a parliamentary written question. Although officials provided the information, I take responsibility for the answer. I would not blacken the name of officials. My experience of working with civil servants in Departments in Northern Ireland and the Northern Ireland Office is positive. I am grateful for the help and support that I receive.
As for the lack of prosecutions, Motability and the Social Security Agency work closely with the Royal Ulster Constabulary. The hon. Gentleman will understand that such cases are notoriously difficult to prove. Nevertheless, appropriately drastic action was taken in some of the 21 cases to which I referred. The matter is taken seriously, but getting enough evidence to remove an individual from the scheme requires a level of proof different from that required for a court case. However, I am sure that that option has not been ruled out when appropriate evidence is available, and I would want it to be kept as an option in such cases.
I am mindful of concerns about the operation of the scheme and of my responsibilities. I have established a task force of departmental officials and Motability representatives to consider ways in which co-operation, which is already good, can be improved and the scheme can be made even less open to fraud and abuse. I shall keep a close eye on that work; I hope that that will improve matters. Although that step is necessary, we should not take a disproportionate view of the problem. The hon. Gentleman rightly conceded that the overwhelming majority of people who receive vehicles through Motability are in genuine need. They are proper and deserving cases. It would be wrong to start a campaign against people who are legitimately in receipt of help. I am sure that that is not the hon. Gentleman's intention. However, by the same token, it is important that evidence of systematic abuse or abuse by individuals is properly investigated and, if proven, appropriate action taken. I hope that the hon. Gentleman is reassured that we take such matters seriously and, where sensible or necessary, act appropriately.

Western Sahara
11.59 am
Mr. Jeremy Corbyn: I welcome the opportunity to have this debate. It comes at a crucial time in the history of Western Sahara. I am sorry that my hon. Friend the Member for Gloucester (Ms Kingham) cannot be here, because of child care commitments for young children. She has done much to raise in the House of Commons the issue of Western Sahara and the Saharawi people, as did Lord Redesdale before he fell victim to the cull of hereditary peers.
Today's debate is important because of the serious danger of war breaking out again in Western Sahara. Jane's Intelligence Review has discussed current problems there and the danger of war if a referendum is not held in the near future, within the timetable established by the United Nations to bring about a peaceful solution. A heartfelt editorial in Africa Commentary states:
It is obvious that the Saharawis have lost confidence in the UN because of its inability to organise the referendum. But at the same time, the Saharawis are not prepared to accept anything that does not respect their right as an independent people.
What will happen after May 31 is anybody's guess. The feeling is that the UN is abandoning the territory. In his latest report on Western Sahara the UN Secretary-General, Kofi Annan, expressed "doubts about the possibility of achieving a smooth and consensual implementation of the settlement plan".
It is for those reasons that I have been keen to raise the issue today. Hon. Members will be aware that an early-day motion that I tabled last week expressed concern at the continued occupation of Western Sahara by Moroccan forces and for the safety of Saharawi citizens fleeing violent clashes in towns across Western Sahara in March. A case of great concern, also, is the issue of British military export licences for items including CS gas grenades and rubber bullets for Morocco, in contravention of criteria 2 and 4 of the European Union code of conduct on arms exports.
Dr. Jenny Tonge: I apologise for my breathlessness. I am not very fit. The hon. Gentleman has touched on something about which I am particularly concerned. He must know that several agencies believe that there is a substantial risk of armed conflict in Western Sahara in the near future, especially if the referendum does not go ahead. Does he think that the Government have contravened criterion 4 of the European code of conduct in selling the arms to Morocco?
Mr. Corbyn: The evidence that has been given to me is that we have—perhaps the Minister will deal with this when he replies—because it could be considered that they are being used for internal repression or to control the situation in Western Sahara ahead of a possible UN referendum.
Mr. George Galloway: There are few occasions on which I would disagree with my hon. and good Friend, but I am genuinely puzzled about this part of his speech. I shall have something to say about the broader issue, if I may be allowed, but Morocco has one of the best human rights records in the Arab world and beyond. That is recognised by Amnesty

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International. Also, it happens to have—though one would detect no hint of it in my hon. Friend's discourse—the only socialist Government in the middle east, as well as a new king, who is trying to use a new broom to solve some of the problems from the past. It is rather strange for a progressive Member of Parliament to mount such an attack on Morocco at this, of all times.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. Before the hon. Member for Islington, North (Mr. Corbyn) replies, I remind the hon. Member for Glasgow, Kelvin (Mr. Galloway) that it is normal for hon. Members who want to participate in a straightforward half-hour Adjournment debate to clear it with the hon. Member who initiated the debate, the occupant of the Chair and the Minister. I am not sure if that convention has been honoured in this case.
Mr. Corbyn: I am surprised and disappointed at my hon. Friend's intervention. My examination of what has happened in Western Sahara and Morocco's behaviour since 1974 is not an attack on Morocco as a state, or a blanket criticism of everything that happens in Morocco. It is specific to the right of the people of Western Sahara to determine their future in accordance with United Nations policy and the mandate of the United Nations Mission for the Referendum in Western Sahara, or MINURSO.
In 1974, Western Sahara ceased to be a colony of Spain—Spain withdrew. In 1975, the then king of Morocco personally led 350,000 people to occupy Western Sahara. The People of Western Sahara did not wish to be occupied; they wished to be independent, and they made that very clear. There followed a brutal war, in which many people died. Eventually, a large number of people from Western Sahara escaped to refugee camps in Algeria; they still live there.
In the 1980s, the United Nations became involved, because it was, quite rightly, concerned about the loss of life. MINURSO was established in 1988, and managed to obtain a ceasefire in 1991. The proposal—then, as now—was that there should be a referendum on the future of Western Sahara. Thus, the Saharawi people would have the right to determine their future.
Dr. Alan Whitehead: Does my hon. Friend accept that the issue of who may vote in the referendum—crucial to the outcome—may not be one of human rights? The possible attempt by people who, clearly, have no right to vote in the referendum to add their names to the roll is crucial in the context of plans to ensure that a referendum can be carried out in a way that is fair to the Saharawi people.
Mr. Corbyn: The question of who votes in the referendum is, obviously, central to the long-term objective and to the result of the referendum. The agreement made through MINURSO was that the 1974 Spanish census should be used as the basis for deciding who would be eligible to vote in a referendum on the future of Western Sahara. Names were put forward, and the Moroccans also put forward the names of large numbers of settlers whom they had moved into Western Sahara.
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For the past nine years, there has been a great deal of dispute about who would be on the electoral roll and, thus, eligible to vote in the referendum. MINURSO has sent people in, registration has taken place, appeals and objections have been heard and dealt with. One gains the impression at every stage, that Morocco has been desperate to prevent the referendum. That is depressing, because holding a referendum in the near future represents the best hope for preventing another armed conflict in Western Sahara.
Morocco should, at least, understand that many people around the world are looking carefully at its behaviour and would challenge the assertion that Western Sahara is an integral part of Morocco. Indeed, I received a letter only yesterday from the Moroccan ambassador making that claim, to which I replied that, as far as I was aware, Western Sahara was not an integral part of Morocco. History will bear me out on that. The area was not an integral part of Morocco before colonialism, and has been an integral part since the end of colonialism in 1974 only because of the military occupation.
I ask the Government to say what role they are prepared to play in promoting a peaceful settlement. The EU Africa summit is taking place in Cairo. I do not know what discussions are going on between Morocco and other states, but I know that the Organisation of African Unity—peculiarly and uniquely—has supported the case for independence of Western Sahara, and has never supported any kind of border change or any independence movement in any other part of Africa, other than those seeking to break away from European colonial powers. It is significant that the Organisation of African Unity has supported the right of the Saharawi people to determine their own independence in a referendum.
James Baker has been appointed to look into the situation, has undertaken some discussions, is due to visit Morocco again in the near future and will be in touch with all parties. However, circumstances are becoming more desperate. Many refugees live in camps in Algeria. The Polisario have toured the world trying to gain diplomatic support for their efforts to bring about a peaceful solution. They have gained considerable support in many European capitals and among legislators in the United States and other parts of the world. They argued that MINURSO must be allowed to bring about a settlement.
Morocco now has a new King and a new Government. Now is the ideal time to turn back from
the policies of 1975—invasion, landmines, massive walls around Western Sahara—and to encourage a UN-supervised settlement to bring about a peaceful solution to the region's problems.
Last year, I was privileged to attend the UN referendum on the future of East Timor. Many lessons can be learnt from that experience. The Indonesians did not want the referendum to take place. There were continual delays and the UN made great efforts to bring about a peaceful solution. Registration was continually delayed, so it was not clear who would be eligible to vote, whether the occupied military forces could vote and so forth. The circumstances are similar, as Portugal withdrew from East Timor at about the same time as Spain withdrew from Western Sahara.

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Kofi Annan played an important role. He recognised that unless the UN took action and insisted that the referendum took place on a particular day, the delays and the killing would continue—a disaster waiting to happen would happen. The referendum did take place and the people of East Timor voted overwhelmingly for independence. Partly due to a lack of support and the lack of an effective policing presence on the ground, a humanitarian disaster took place immediately after the referendum. East Timor is now trying to recover through a reconstruction programme but, sadly, nothing can bring back the people who died.
I do not want to see a similar outcome in Western Sahara, but the alternatives are stark. If we continue to delay holding a referendum and allowing the people of Western Sahara to decide their own future, what will happen? No entreaties from the leadership will stop the people being fed up with living in refugee camps in Algeria; with living on food parcels from western agencies, welcome though they are; or with having to bring up their children in refugee camps. Their pressure may lead back to war.
I hope that the British Government and Morocco fully understand the dangers. What are the alternatives: to continue to delay and prevaricate, spending huge resources on the military occupation of Western Sahara; to continue to be criticised heavily throughout the world for what goes on specifically in Western Sahara; or to come to the table and bring about a peaceful solution? I hope that the British Government will ensure that MINURSO has sufficient resources to carry out its duties and that a date is set for the referendum, which should be before 31 July this year, even though it is one of the hottest periods of the year; and ensure that it actually takes place.
It is essential to learn the lessons of the referendum in East Timor to ensure that registration is accurate. I believe that it is—or at least, after enough years of discussion, debate, challenge and counter-challenge about the names, there is reason to believe that it is. We must see to it that there are sufficient staff on the ground to ensure that the campaign and the voting are fair and open and, crucially, that there is sufficient international policing to ensure that whatever the result, it is accepted and respected by all sides and that there are no militia activities of the tragic kind seen in East Timor last September and October. I make no apology for raising this issue, which I have raised many times since being elected to the House in 1983. I raised it for the first time at about three o'clock in the morning some time in 1984; the Chamber was not packed at the time any more than this Chamber is today.
I believe that we have an opportunity to bring about a peaceful settlement to the situation facing the last colony in Africa. The possibility exists for the United Nations to establish itself firmly as a facilitator of a peaceful transition for the people of Western Sahara as they decide their own future. I hope that the Moroccan Government will recognise that if they continue their delaying tactics, they will not do themselves much good in the court of public opinion around the world because doing so will lead to greater isolation. The best way forward is to allow the UN to settle the problem. I hope that when the Minister replies he will respond
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satisfactorily to the concerns that the hon. Member for Richmond Park (Dr. Tonge) and I and many others have about the supply of arms to Morocco. I hope above all that the hon. Gentleman will be able to assure me and others—most importantly, others—that sufficient police and resources will be available to ensure that the referendum takes place in the time frame that has been suggested, and with sufficient security to allow a fair voting system for all and, above all, respect for the result of the referendum. The alternative, tragically, will be that many more people will lose their lives, many more arms will be exported and there will be no peace.
12.16 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): I am grateful to my hon. Friend the Member for Islington, North (Mr. Corbyn) for securing the debate. I know of his great interest in these matters, and he spoke with enormous passion. I am glad to see my hon. Friends the Members for St. Albans (Mr. Pollard) and for Southampton Test (Dr. Whitehead) and the hon. Member for Richmond Park (Dr. Tonge) here for the debate. It is fairly unusual to see my hon. Friends the Members for Islington, North and for Glasgow, Kelvin (Mr. Galloway) on different sides of the Chamber, but I suppose it shows the intense rivalry that exists among various groups and the strong passions that the issue arouses.
The war in Western Sahara has been called the forgotten war. With this debate we are doing our bit to ensure that the issue is kept on the international and domestic agendas. My hon. Friend the Member for Islington, North raised a number of points about this long-standing dispute. I shall come back to some of them at the completion of my speech.
I shall begin by explaining the Government's policy on Western Sahara. Even by African and middle eastern standards, Western Sahara is one of the more intractable problems. Time does not allow me to dwell too long on its history. I have not been exposed to all shades of opinion in the region, nor have many hon. Members, so it is worth looking at some of the background.
When Spain withdrew from Western Sahara in the mid-1970s, there followed a bitter and protracted conflict between the two main claimants to the Western Sahara, Morocco and the Polisario Front. The conflict drew in other countries in the region, as my hon. Friend the Member for Islington, North said. Suspicions became entrenched and the economic potential of the whole region was put in the deep freeze.
The conflict in Western Sahara benefited no one citizen and no one country in north Africa. It merely held back its people's aspirations for a more stable and prosperous future. After 15 years of conflict in Western Sahara, the United Nations took on the role of making peace and finding a just and durable solution. We should recognise the contribution that the UN has made to the peace process in the region. The UN remains the one organisation with an unchallengeable reputation for objectivity in this difficult dispute. The British Government do not take sides in the Western Sahara dispute. We have consistently supported the UN mission in Western Sahara. We have provided civilian administrators, peacekeeping contingents and substantial funds to underpin them.

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We continue to believe that a just solution to the problem depends on the people of Western Sahara having the right to express their will at the ballot box. We also believe that a durable solution requires all parties to be constructive, flexible and committed to peaceful means. Any violence from whatever quarter harms the search for peace, and those who provoke violence only weaken their own cause.
I share my hon. Friend's desire to see a just solution for the Saharawi people, including those in the refugee camps in Algeria. At the same time, a solution must be workable and durable. It cannot ignore the regional political environment. We share the widespread international concern that, after 10 years, a UN-sponsored referendum to resolve this problem is still a long way off. To make clear what Britain stands for, I can do no better than quote the UN Secretary-General. He said that the implementation of the UN plan
has been impeded by fundamental differences between the parties over the interpretation of its main provisions. Of these, the issue of the establishment of the electorate has been, and may remain. a core problem which could eventually prevent the holding of a referendum as provided by the plan. The … two parties seem to share the belief that the composition of the electoral body will predetermine the outcome of the referendum. At different times. therefore, one or the other party has withheld cooperation from the identification procedures, in the belief that they may eventually skew the composition of the electorate.
Neither we nor the UN believe that Morocco alone has undermined the settlement plan. The Secretary-General made that clear in a report on 17 February, and the UN, which is active on the ground, is better placed to assess those issues than part-time observers sitting in western capitals.
Despite the various obstacles that both sides have at times put in the way of a solution, the UN has remained impartial throughout. We continue to have every confidence in the UN staff. British officials regularly visit their offices in the region and admire the work that is being done there in very difficult circumstances. There are those who complain that the UN mission in Western Sahara and the Secretary-General's statements are partisan. Those people usually want the UN to be partisan in their favour.
A number of commentators on Western Sahara, including some in the House, have questioned the UN's handling of voter registration for the proposed referendum. We believe that the registration criteria for the referendum are a matter for the UN. To date, the UN has investigated 198,469 applications to vote in the referendum. It found that 86,386 were eligible. A substantial proportion of those who were rejected have appealed, as they are entitled to do under the settlement plan. The UN has now begun the task of investigating the legitimacy of these appeals, as it must if we are to ensure that the process is free and fair.
My hon. Friend mentioned the United Nations criteria for appeals, and I do not want a long, legalistic debate on the matter. The UN is best placed to decide what is allowed within the letter and spirit of the plan.
At its latest extension of the United Nations mandate in Western Sahara, the Security Council called on James Baker, the Secretary-General's personal envoy, to engage the parties to find a way through the problem. We expect him to visit the region soon. We urge all sides to listen to what he has to say and to respond positively to him.
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It has been suggested that the United Kingdom has been selling arms to Morocco, which enables it to suppress human rights and to assert a territorial claim, thus breaching the European Union code of conduct. I assure hon. Members that we examine all export licences for Morocco carefully and adhere to the EU code of conduct. Yes, we have approved exports of some riot control equipment; hon. Members will know that the quadripartite commission on arms exports is currently examining some of the licences. I also assure hon. Members that we have no evidence that the Moroccan police have used such equipment to suppress human rights and/or to assert a territorial claim. It is an on-going process; we monitored recent incidents in Laayoune and Smara and found no evidence that such crowd control equipment was used. No non-governmental or other organisations have produced verifiable evidence to support such claims.
I want to say a few words about recent reports of incidents in Western Sahara. There was an incident in Laayoune, Western Sahara last September, when protesting students were joined by a group of local workers with separate grievances. Regrettably, local police response was heavy handed and we clearly registered our concern at the time. The Moroccan king responded swiftly to news of the incident by setting up a royal commission on Western Sahara. That was a decisive, mature and laudable response; the Interior Minister responsible was removed shortly afterwards.
The initial press reporting of the incident was partisan and designed to raise tension in the region. For example, it alleged that there were several deaths, but no evidence supporting that claim was provided. There were also incidents in Laayoune and Smara in March. One incident began when youths stoned UN vehicles and the Moroccan police intervened to protect UN staff. British officials were in the area soon afterwards and spoke to several contacts on the ground. Their assessment was that press reporting of the incidents had exaggerated the true picture.
Mr. Corbyn: Like my hon. Friend the Minister, I deplore the incidents that took place and hope that peace will continue to be maintained in the region. When does my hon. Friend expect that it will be possible to hold a referendum on the future of Morocco? When does he expect James Baker to report to the Secretary-General?
Mr. Vaz: We fully support James Baker's mission and ask others to do so too. We shall have more information when he is in the country; he shares the British Government's view that there should be a referendum as soon as possible.
My hon. Friend mentioned Morocco's record on human rights, which has improved dramatically recently, as has the professionalism of its police. Morocco's record on both counts is probably the best in Africa and the middle east. My hon. Friend should not just take my word for it but listen to what Amnesty International and other NGOs say on the subject. Yes, some problems remain, but the Moroccans are openly tackling them. We must give credit where it is due. We should also take seriously allegations of human rights abuses by the Polisario Front.

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I conclude by restating the key elements of our policy: we remain committed to a just and durable solution to the problem, which is acceptable to the Saharawi people. We do not take sides; we will not support one side's claim over the other. We will continue to back the UN Secretary-General in his efforts to find a way around the current impasse in the UN settlement plan. We have assured him that James Baker has our full support on his visit. We urge all sides to respond positively to Mr. Baker's mission.

Education (Developing World)
12.30 pm
Mr. Mark Oaten: I am pleased to have a chance to raise the issue of education in the developing world. The debate comes at an appropriate time, as those who have followed The Guardian campaign over the past couple of days will know. It also comes on the second day of an action week that has been organised by the Global Campaign for Education. That is a joint initiative, which involves Oxfam, ActionAid, Save the Children and the National Union of Teachers. Activities will be staged in 76 countries to raise awareness about the scale of the education crisis which is developing.
I acknowledge the hard work that is being done and the campaign research that is being carried out. Oxfam, in particular, has done a lot of work to bring the most recent concerns to light. I thank its representatives in my constituency, who have regularly attended my surgery to raise this and other issues.
It is perhaps grossly inappropriate to talk about bringing the issue to light, because the concept of achieving universal primary education is not new. Ten years ago, at the Jomtien world conference, 155 countries pledged to ensure that all the world's children would have access to basic education by 2000. It is now 2000, and it is clear that those countries have been unable to keep that pledge. The current figures suggest that 125 million primary school age children across the world are not in school; that is double Britain's entire population. Those children are denied their right to education, which is one of the fundamental rights enshrined in the 1948 universal declaration of human rights. It is unacceptable that, 50 years after that declaration was established, many of the world's children are missing out on basic education.
At the end of the month, there will be an opportunity to pay more than lip service to solving the problem. In a little more than three weeks' time, a United Nations conference on primary education will take place in Dakar. It will, I hope, deliver a strategy to meet the new target of achieving universal primary education by 2015. It also represents an opportunity for the Government to take an important leadership role, and I welcome the Prime Minister's article in The Guardian this morning, which set out clearly some of his personal objectives on the issue. Achieving those will, however, involve mobilising the resources of the international community and promoting the will among Governments to provide primary education for all their children.
The Government are well known in this country for their catchphrase "Education, education, education". The Prime Minister and the Government now have a good opportunity to take that message on to the world stage.
Dr. Jenny Tonge: Does my hon. Friend agree that the wars and civil wars that are raging all over the world, and in Africa in particular, are one of the factors that militate against children receiving primary education? I am thinking of southern Sudan, where the most recent wave of the war has already lasted for 12 years and where children have received hardly any education. We often hear about education being carried on in the refugee camps, but does my hon. Friend not

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think that the Government should pay more attention to the education of children at a time of war? Otherwise, whole generations will go without any education.
Mr. Oaten: My hon. Friend makes an important point. Clearly, a lot of evidence links military conflict to the lack of education. Let us hope that increased access to education will lead to a decrease in conflicts as individuals consider ways other than conflict to deal with their difficulties.
Achieving primary education for all by 2015 is one of the United Nation's major goals for the 21st century. Other organisations and agencies are also committed to that. I was at the United Nations in New York last November and also met representatives from the World bank. I was taken by their commitment to use their resources to tackle education issues. However, the problems are enormously difficult ones for Governments throughout the world to tackle.
In much of sub-Saharan Africa and south Asia, classes are taught in dilapidated buildings without roofs, toilets or access to clean water. Millions of children are taught in classrooms that do not even have basic equipment such as a blackboard or chalk. The fact that children miss out on education lies at the heart of the poverty cycle, frustrating economic growth and human development. Getting education right is the key to tackling the serious problems gripping the developing world, including poverty, HIV/AIDS and, as my hon. Friend the Member for Richmond Park (Dr. Tonge) said, civil conflicts.
It is significant that girls make up two thirds of the 125 million children currently not in school. The international community has set a target date of 2005 to close the gender gap. That will involve more than simply throwing money at the developing world. Increasing the number of school places will not, on is own, close the gender gap, because important demand-side factors need to be individually addressed. For example, girls in many parts of the developing world are required to work at a young age to help to support their families. Oxfam quote a 1994 study of rural families in northern Ghana, which discovered that girls were often the sole breadwinners in the family.
The role of women in many developing countries is still narrowly defined in terms of marriage and child rearing. Families often view girls as a short-term investment that provides no return, because they marry and move away and someone else benefits from it. Consequently, very little value is placed on girls receiving an education.
Such cultural barriers cannot be removed through primary education programmes alone. However, they must be challenged if the benefits of education are to have a knock-on effect on the other problems in the developing world. In the Indian state of Kerala, for example, where 86 per cent. of women are literate, female life expectancy is 73. That is in stark contrast to Uttar Pradesh, where less than 25 per cent. of women can read and female life expectancy stands at 45. The generational impact of educating girls suggests that they marry later, have fewer children, provide better care and nutrition for their families and seek medical attention more promptly. There are real gains to be made by closing the gender gap.
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Where are the examples of this happening in practice? Last week, I met Bill Katenga Kaunda, the secretary general of the United Democratic Front in Malawi, a very charismatic individual. He told me how, when his country became democratic and he took control in the ruling party, its priority was "education, education, education". It has put that into practice by abolishing user fees for primary education, which has had an enormous impact. That has also happened in Uganda, where the development budget should more than double from $60 million in 1997 to $125 million by 2002. That is an inspiring example of what can be achieved when political will is combined with aid and debt relief. Meanwhile, in Sri Lanka, the introduction of flexible school hours to allow girls to do their household tasks before going to school has increased attendance. Dealing with such practical issues can lead to success.
Universal primary education cannot be achieved only by addressing the individual circumstances of each developing country. In Pakistan, for example, the Government spend 27 per cent. of their budget on defence and only 4 per cent. on education. That suggests that the problem there is less a matter of finance than of the national Government's political will. In contrast, Tanzania spends six times more on debt repayment than on education, which shows that debt relief and extra resources would make an impact in helping education in that country.
How much money is needed to achieve education for all, and who would provide it? UNICEF estimates that it would cost about £4.5 billion a year over 10 years to achieve universal primary education. It was reported—rather amusingly, I thought—in the national press yesterday that this figure represents less than Americans spend in a year on cosmetics. The total amount is equivalent to four days' global military spending. Oxfam proposes that half the money should be raised by national Governments and the other half by the international community.
For developing-country Governments, that would involve increased resource mobilisation, the redistribution of wasteful public spending and the reallocation of money in education budgets towards basic education. Meanwhile, the international community would be able to provide more money through a combination of debt relief, increased aid, contributions from private capital and the reallocation of aid from higher to lower levels of education.
Many charities and organisations have been working hard to address the education crisis. I was impressed on a recent visit to the BBC World Service to see the valuable projects that its trust carries out in countries such as Tanzania, Somalia and Zambia on issues such as leprosy, smoking and sexual health. Those are welcome initiatives.
The article in the national press this morning by the Prime Minister was encouraging. I know that Oxfam and other organisations have launched campaigns saying that the Prime Minister himself should go to the conference. I recognise that he has pressing issues to deal with, both domestic and international, and that it is wrong to put pressure on him to go, but it is encouraging that in today's article he says that he wants to prevent Dakar from becoming another international talking shop, and we welcome the commitment that he will raise this issue at the G8 summit later this year. Can the

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Minister give us more information about the issues that the Secretary of State for International Development will raise at the Dakar conference, now that it has been confirmed that she will attend on behalf of the British Government?
The Prime Minister's article sends a positive message that the Government understand the key issues involved and want to achieve universal primary education and eliminate the gender disparity. However, it is still not clear whether they will use that position to play an international leadership role in this matter, and I hope that the Minister can give us some comfort on that. If they do not, in a debate in 10 years' time we shall look back on the Dakar conference in the same way as we are looking back at the Jomtien conference of 10 years ago. That is not acceptable, and I hope that the Minister will give us more encouragement to build on the good news in the Prime Minister's article this morning.
12.42 pm
The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): I pay tribute to the hon. Member for Winchester (Mr. Oaten) for the knowledge and concern expressed in his speech. Having listened carefully to everything that he said, I shall try to respond to all his points and answer his questions.
I also want to congratulate the all-party group on overseas development and the non-governmental organisations that support it on the excellent meeting on "Education for All" which was held in the House of Commons last Thursday, when we were privileged to have President Museveni from Uganda as the main speaker. He made clear his country's commitment to achieving universal primary education by 2003. My right hon. Friend the Secretary of State reiterated at that meeting the Government's determination to provide strong support to developing-country Governments who are fully committed to providing effective primary education for all. I shall expand on that later.
I join the hon. Gentleman in welcoming the spotlight that Oxfam's global action plan for education and the excellent "Read the World" campaign in The Guardian have shone on raising our awareness of the plight of about 130 million children who should be and are not receiving education. Education opportunity for all, especially at the primary level, is not just a fundamental human right but a precondition for progress in development and the reduction of poverty. To deny children education puts a massive block on their country's development prospects.
The development case for investing in primary education is, as the hon. Gentleman said, unanswerable. Education helps people to become more productive and to earn more and leads to improvements in health, nutrition and child mortality. People are enabled to transform their own lives and their own society, and acquire the basic skills of literacy and numeracy, as well as the capacity to use that knowledge and information.
As the hon. Gentleman said, those benefits are even more pronounced in the case of girls. Research into girls' education shows that women with as little as four years of education are more likely to have smaller,
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healthier families, to work their way out of poverty and to send their children to school. World bank research suggests that the education of girls is the single most valuable development intervention that a country can make, but we must overcome ingrained attitudes in some countries towards the education of girls and the perception that it is a waste of resources.
The hon. Members for Richmond Park (Dr. Tonge) and for Hertford and Stortford (Mr. Wells) will remember the expression used by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) in our debate last Thursday. He said that, on its visit to the sub-continent, the Select Committee on International Development heard the expression
educating a girl is like watering another man's garden.—[Official Report, Westminster Hall, 30 March 2000; Vol. 347, c. 133WH.]
We must overcome that attitude if we are to achieve our aim. I thought that last Thursday's discussion was extremely valuable. I do not know whether the hon. Member for Winchester has had an opportunity to read the debate in Hansard, but I commend it to him.
All the evidence about the development benefits of investing in primary schooling should help us to forge greater political will behind the goal of universal primary education. That is one of the key targets in our White Paper; it is a goal that is increasingly accepted. The political will is building up, but greater effort must be put into it.
The Government believe that four things need to be done if we are to make gender equality and universal primary education a reality and to achieve the UPE target by 2015.
First, we need a sustained commitment from the Governments of the developing countries to universal primary education.
Secondly, as the hon. Gentleman rightly said, in looking at the balance of developing countries' budgets, we must address the issue of resourcing for education and the need to increase the resources that developing countries commit to primary and basic education. The hon. Gentleman gave a particular example. The developed countries can also play a vital role. Through the Department for International Development budget, the British Government have current commitments to education of about £800 million, a substantial amount, of which 77 per cent. is for basic and primary education. Two thirds of those resources are concentrated in 11 of the poorest countries of sub-Sahara Africa and south Asia.
Thirdly, we must move away from the project-based approach of schools with Union Jacks on them—the gift of the British people—to a sector-wide approach, giving the country resources that enable it to provide all the basic primary education that it needs. We must co-ordinate the work of the different development donors around a focused, agreed strategy drawn up by the Government of the country concerned. They know the country's needs; they can best assess them and draw up a plan. We must drive forward with a new, more collaborative agenda for education and development co-operation generally, which means all the relevant donors working together with developing countries in a much more joined-up way.
As the hon. Gentleman said, Uganda provides an excellent example. In collaboration with key partner agencies and the Government of Uganda, the DFID has

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played a key role in establishing this sector-wide approach to education, resulting, in 1998, in its largest ever commitment to a programme in Africa—£67 million towards the education sector support programmes. That will provide flexible budget support to the Government for five years. That is spelled out in more detail in a country study in the briefing document produced by the Department. If hon. Members have not already seen it, I hope that they will take the opportunity to look at it.
The fourth thing that we must do if we are to achieve universal primary education by 2015 is to link education policy with the country's wider development strategy, including policies on health, sanitation, livelihoods and rural transport. Members of the Select Committee know the importance of that. Countries cannot and will not secure universal primary education if they focus simply on education. They must deal with the other aspects.
The hon. Gentleman referred to the Dakar forum. He is to be congratulated on initiating this debate in the run-up to the forum, which is to be held on 26 to 28 April. Governments, development agencies and non-governmental organisations from the north and south will have an opportunity to re-commit themselves to education for all and to achieving the target of universal primary education by 2015 and the gender equality target in primary and secondary education by 2005. As the hon. Gentleman said, my right hon. Friend the Secretary of State for International Development will lead the British delegation. Hon. Members and you, Mr. Deputy Speaker, know of the strength with which she can deploy these arguments. With gender equality being an important issue, it is good that a female Secretary of State is leading our delegation.
We are working closely with the forum convenors to ensure that the process leading up to Dakar and the conference itself focus on a set of key objectives—specific actions that will extend educational opportunity for the millions of children to whom the hon. Gentleman and I have referred. In preparing for the forum, the DFID has drafted a paper entitled "Education for All: The Challenge of Universal Primary Education", which will be published on Friday. I shall send a copy to the hon. Members who are here today, and it will be available to other hon. Members who would like it. We plan to consult widely on the document, and I hope that those hon. Members who are here and others will let us have their views.
The hon. Gentleman asked what the Government believe the Dakar forum should pay particular attention to. We think that it should analyse why some countries, particularly some of the poorest, have managed to achieve considerably more than others since the 1990 world conference in Jomtien. We have set seven priorities for Dakar.
First, there must be collective reaffirmation of the "Education for All" goals, allied to focused strategies for their achievement, and particularly the attainment of the international development targets.
Secondly, it must be reaffirmed and stated in Dakar that developing country Governments must give priority to basic education. As the hon. Gentleman said, in some cases that will involve changing their spending priorities.
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Thirdly, Dakar must send a clear signal that the international community will back the developing countries' reforms. The new framework for action should make it clear that funding agencies will allocate significant additional resources to primary and basic education, provided that the developing-country Government are committed to that objective and have put in place appropriate policies. As the hon. Gentleman rightly said, some of those additional resources can and should be made available by debt cancellation, in which Britain is again taking the lead. No Government seriously committed to universal primary education should be thwarted in achieving that ambition by a lack of resources. It would be terrible if countries could not achieve it because they did not have the necessary money, so we in the west must make a commitment to making that money available.
Fourthly, Dakar should focus on gender equality. We must move beyond the language of awareness to the language of action, as we heard last Thursday.
Fifthly, sub-Saharan Africa and south Asia should be accorded international priority.
Sixthly, we need better monitoring of progress towards the goals and targets. That requires investment in developing national capacity for monitoring, allied to efficient international monitoring systems. We must be able to see that we are making progress. We heard on Thursday about phantom schools, so monitoring is vital.
Seventhly, Dakar should seriously consider whether the existing inter-agency "Education for All" structure will be adequate for its future purpose.
The hon. Gentleman mentioned the Prime Minister's article in today's edition of The Guardian. That article illustrates my right hon. Friend's commitment to the issue. Of course, it will not be possible for every Prime Minister to attend, and I understand that other European Heads of Government will not be attending. It is right that the key Ministers should attend, and our Secretary of State has the Prime Minister's full backing. However, as my right hon. Friend the Prime Minister said at the Okinawa summit, he will himself be involved in the follow-up to Dakar, and he has already made it clear that we must make the best possible use of new information and communication technologies in education. He wants Britain to take the lead in ensuring that those technologies are used to bring the world together, not to widen existing divisions, and that they are used to deliver real practical improvements in education in the developing world. ICT-based distance learning can be cheaper, better and more accessible than traditional teaching methods, and the internet provides new ways to share information and knowledge and to pool experiences. Wireless technology, which I have seen in operation, can be used in areas with limited—or no—telecommunications infrastructure. Last week, my right hon. Friend the Prime Minister asked DFIID to put together a project team including people from the private sector and the development NGOs to take the work forward. Already, we have had significant support from Cisco Systems, and that is an important element in our overall strategy.
Universal primary education is the fundamental building-block of our support for education in developing countries, but primary education cannot

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stand alone in an education system. We need a balanced view of the whole education sector, including the provision of adult literacy and lifelong learning. In many developing countries, it is not unusual to find that less than five per cent. of the work force has some form of secondary schooling. Such a lack of skills is clearly a drag on the development of the economy, as well as on the individual's earning capacity, but the answer is not that donors should invest large sums in the construction of secondary schools, providing expensive bricks and mortar, but no recurrent funding to pay for teachers and books. We have been down that road before. Along with relevant Governments, we need to look at different ways to provide education at that level that are more efficient and less costly. Distance learning, which uses new technologies to extend access to secondary education and skills training, is one possibility. For many years, we have supported the commonwealth of learning, which provides training, institutional networking and expertise in distance course development for Commonwealth countries. Information technology provides major new opportunities to increase access to such courses.
Trade and investment can have a much greater impact on development than aid, as the Select Committee pointed out. Developing countries must create the conditions to attract investment; that is the only way to achieve the growth necessary to reduce poverty by their own actions. A skilled labour force will facilitate such
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investment. Too many poor countries suffer from a desperate shortage of skills and of unemployed graduates. Those skills cannot be provided without some kind of policy framework or institutional base, which is why we have committed £25 million over the next two years to a new skills for development initiative. The initiative will facilitate the stimulation of the entrepreneurial skills required by the poorest countries to allow their economies to grow.
I return to the principal subject of our debate—the provision of basic, primary education for all. Although the internet and new technology are hugely significant potential tools for spreading educational opportunities, many people may never learn to read, and millions of children may not have the opportunity to go to school unless we take more effective action. The hon. Gentleman said that, if we look back over the past 10 years, we do not see a huge improvement. Over the next 10 years, there must be a real improvement. In 2000, we have a great opportunity to do that; the start of the new millennium is the moment to turn all the fine words uttered at United Nations conferences and in the Chamber into action, into real deeds. The Government are strongly committed to bringing the benefits of educational opportunity to those millions of children—especially, to the girls—and to helping the spread of skills and knowledge, so that all countries can accelerate their development, reduce poverty and give everyone the chance to realise their potential.
Question put and agreed to.
Adjourned accordingly at one minute to One o'clock.