Westminster Hall Sitting of 28 June 2000

Preamble
[SIR ALAN HASELHURST in the Chair]

Organophosphates
Motion made, and Question proposed, That the sitting be now adjourned.[Mr. Kevin Hughes.]
9.30 am
Dr. Ian Gibson: People all over Britain will be waking up today wondering about organophosphates as we debate the subject in this august place. I am sure that we shall impart some information this morning, so that the public know why we take the matter seriously. I welcome the chairman of the all-party organophosphate group to the Chamber. I pay tribute to the Countess of Mar, who has fought a continuous battle and has bombarded Ministers with questions for years. Indeed, she has distinguished herself in that campaign.
The organophosphate group of chemicals causes many problems. They are implicated in the Gulf war syndrome, and they affect agricultural workers. Organophosphates have been the cause of debate in rural communities about their effects on the people who live and work there. The chemicals are the cause of problems in animal welfare, medicine is involved and there are many other aspects to the problem. Indeed, I note that the Sunday papers report that organophosphates can be found in aircraft; not only can one get a pulmonary embolism four days after flying, one can also get a good whiff of organophosphates on the transatlantic flight. That is something for everyone to enjoy.
The subject also creates problems for Ministers. It covers so many areas, and many Ministers have something to say about it. We have got round that problem today by not having five Ministers here. That would have been too much to handle, and, perhaps, too radical. I am pleased that we can concentrate on the agricultural implications of organophosphates and how they affect people's health.
My interest in the use of chemicals in rural communities stems from work that I did some years ago, when young agricultural workers in Norfolk wanted to talk to doctors about impotence and about not being able to start families. That was in the early days of chemical use in the farmyard. Insecticides and pesticides were implicated, because they washed into the Broads and the rivers and fouled up plant life there. We wondered then whether the chemicals could have had some effect on people in rural communities. Although gloves and uniforms were available as a safety measure, I am sorry to say that people had problems with wearing chemical suits to prevent their bodies getting near chemicals. People were found to be using about 20 chemicals a day. We tried to ensure that they took precautions, and many of those young men successfully sired children a few years later.
It was difficult to nail down which chemical could have caused the sterility, and a doubt remains to this day. Because so many chemicals are used, it is often hard
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to find evidence that a particular chemical has caused a problem. I am pleased that organophosphates have been studied and that research has been carried out, but it is sometimes difficult to gain the scientific and medical surety of evidence that is needed to take matters forward.
Organophosphates were first shown to have biological uses in about 1937, and they are now widely used as pesticides in agricultural, public health, veterinary, domestic and medicinal applications. Some organophosphates are used as lubricants and plasticisers. The one thing that is clear, however, is that whenever and wherever they are used, humans are always exposed to them; people come up against them, and take them in through the skin or in other ways.
The organophosphate compounds used in warfare are chemically different. We do not want a chemistry lecture—goodness forbid that. I do not understand chemistry much, anyway. We are not going to talk about the organophosphates said to have had an effect in Gulf war syndrome. They are a different kettle of fish, have different chemical structures and probably work differently from those used on farms.
The use of organophosphates in arable and livestock farming has raised many concerns. People will know especially of the adverse effects on sheep farmers exposed to low doses for long periods while, for example, sheep dipping. Publicity on that subject has come in at a great rate. We also know that it is possible to be affected during crop spraying. It has been suggested that pesticides, including organophosphates, have appeared in water supplies and food. There is much concern about that, and the issue is still very alive today.
Research has shown that many organophosphates work by affecting a key protein or enzyme in the human body, which is involved in nerve function—way in which nerves interact. Brain function and the nerves controlling muscles are affected through contact with the chemicals. Organophosphates are of great use on farms. They are used to eliminate scab disease and they kill insects and plants. They are used around cats' necks to kill fleas and they are used around the home to kill flies, wasps and ants. They are often used in soil to affect living organisms by working through that enzyme. They have a function. Today, however, we are discussing the other side of the issue—the aberrant effects on humans.
It is often asked what the short and long-term effects are. I will not give descriptions using medical terminology, but saying that organophosphates do your brain in might help people to understand. That is how people describe the effects in the media. Organophosphates cause muscular twitching. There can be effects immediately or in the long term on muscle and brain function, memory retention, learning skills and other aspects of life. Chemicals, including lead, have often been shown to affect the intellectual ability of young people in particular, whose brains and cells are forming to function properly in school.
We will no doubt learn much more as research informs us about the way in which the chemicals work. I am sure that different classes of the chemicals will work differently and have different functions. We will have to find a language for describing medically the way in which functions are impaired by different organophosphates.

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There has been much scientific and medical research into the effects of the compounds, both with regard to the Gulf war and to farms. Many reports have been produced by august bodies. The argument has moved forward in some ways, but it has not progressed fast enough. I will illustrate some of the directions in which we might still need to carry out research. The questions being asked about organophosphates concern long-term toxic effects following low-level exposure. That is an area of great debate. There is good evidence that where there is high-level exposure to organophosphates, there are immediate toxic effects on the peripheral nervous system and the skeletal muscle. There is uncertainty about the mechanism of how they work, but there is no real argument that there is an effect on those functions.
As the implications of the human genome project explode around the world and we get more information, we are sure to find that some people are more susceptible to the chemicals than others. That will make it more difficult for us to say that everyone will be affected by organophosphates. It is like an airline that says that it did not create the blood clot on the passenger's lungs because the clot developed four days after the flight. Many delayed effects can happen after the body is subjected to some influence.
It is agreed that OPs have potential long-term effects that justify caution in their use. That is the base line on which we can all agree. There is good evidence, too, for delayed effects. Some effects appear in the short term —a matter of days, weeks or just hours —but exposure to high levels of the compounds can also have delayed effects on the nervous and muscular systems.
An explanation is needed for a range of reactions from different organophosphates. The debate is often clouded by arguments about the difficulty of knowing the extent of someone's exposure to a particular organophosphate. It is difficult to record that information. Studies have been rubbished because of the problem of arriving at figures for the level of exposure, and that compounds the confusion in obtaining evidence that could lead to legislation.
Another problem is defining the effects. Some, such as dizziness and twitching, can always be argued to have been caused by something other than organophosphate exposure. It is hard to tie down such symptoms to a low or high dose of a chemical. Some of the effects that are claimed, such as suicide and depression, are also hard to narrow down to one event in someone's complicated life. There may be multifactorial reasons for those problems. However, when one starts to add all the elements together, a picture emerges. Something is going on with the coming of organophosphates into rural communities and lives.
I am pleased that the Government are investigating ways to increase research. I know that research councils and other bodies are funding research into not just Gulf war syndrome but other aspects of chemical pollution. We need more biochemical research, which raises the question of using animals. I see no other way to obtain the necessary results about the effect on nervous systems and behaviour. We can study the way that mice run in mazes, for example. That is the nearest we can come to
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decent experiments without using human beings. Of course, we can look at tissue culture and ask questions about the enzymes and proteins that are affected and the resulting effects on nerve cells. We can examine brain tissue in post mortems and study the concentration of organophosphates in nerve tissue. We can use electrophysiology to study brain and organ function for the effects of toxic subjection to an organophosphate. At the same time, clinical trials are being conducted —more will be needed —on groups of people who have been affected by the substances, to find out how memory and behaviour develop in the short and long term.
All the research has resulted in many reviews, but the royal colleges and the Medical Research Council tend to focus on symptoms and treatment. The Medical Research Council has gone a little further and suggested in its report that there
may be a correlation between occupations using OPs and learning problems.
The possibility of a correlation is about as far as one gets in this argument. One wonders what one would have to find out to establish a hard and fast link.
It is hard to define, using different studies from different countries, the general phenomenon of good mental health. That makes gathering evidence difficult and accounts for the many disagreements in academic circles. While admitting that there must be some effects from organophosphates, as they are not natural components of the human body, some authorities question their seriousness. They argue that the body has systems for dealing with the many foreign materials in food and that perhaps we can handle a little dose of organophosphate. However, I do not feel that that would ever be good for me and I do not believe that those who work on farms think that it is good for them. That raises an issue relating to those who say that a little new chemistry in the body does no harm.
How should we go about resolving the issues, given that the response to high or low levels of organophosphates is complex? As people agree that high doses can cause immediate, intermediate or long-term toxic effects, the regulations set about minimising those effects by attempting to limit exposure to sheep dipping or crop spraying. Those regulations often involve advising people to wear gloves, and so on. I understand very well why people are not too good at following that sort of health and safety advice. I am sure that every one of us in the Chamber has taken a risk at some time when we know that we should not have done so. I do not just mean by smoking, but when handling things in the home, spraying plants or whatever, because certain chemicals affect the person. Therefore, we have not resolved the problems of chronic and adverse health effects through regulation, and disagreement continues.
Although further research will continue to resolve some of the problems and find better answers so that we can say, "Yes, it does affect the system, so it is no wonder that people are feeling ill", we must have a much more determined approach.
There have been many suggestions about what we should do about organophosphates, especially in relation to sheep dippers. Many people have argued that there should be a moratorium. We have heard about moratoriums in relation to genetically modified crops, which expresses a certain attitude to tackling such

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problems while we do not know much about them. The other argument is to look for alternatives, such as other chemicals that might be less harmful to human beings. Another suggestion is to introduce tighter regulation to ensure that people are protected and that the regulations operate properly. I have spoken about how difficult the latter option is and about how difficult it is to get people to play along. On farms, continuous monitoring would be necessary because activities change daily and are unpredictable; people are in a hurry and so they cut corners. That is sad, but that is the way it is. There are other approaches to dealing with that problem, which I shall not talk about now.
The alternatives have not proved to be very effective. There is evidence that some of the alternatives damage the environment, get into rivers, cause algal blooms and destroy plant life and animal life around rivers. Some people throw up their hands in horror at the idea of a moratorium because they worry about how we would handle the problem of sheep scab. The only answer is that, in some countries where organophosphates are not used, there is no problem with sheep scab, so people argue, "If it all right for them, why is it not all right for us?" That argument is batted back and forth by the warring parties, and we do not seem to move forward.
Science is one way forward, and we are all in favour of good science and understanding things at a deeper level. At the same time, legal cases are pending. Sadly, some of those legal cases are resolved in out-of-court settlements. I say "sadly" because, although I am glad that the cases are resolved, that does not help in bringing cases into the legal system, where other minds and sensitivities can become involved in trying to resolve the problems of people whose health has clearly been damaged by being subjected to such chemicals. I believe that we shall see more instances of that in the next few years. Gulf war syndrome is one such illness that is setting precedents. Farm workers are also bringing forward cases.
We are learning something from Europe —this is something that we have discussed before in the House—from the so-called precautionary principle. That relates to the situation in which 100 per cent. scientific evidence that one thing causes another is unavailable and considers how that situation should be handled until more information is available. I am fascinated by the precautionary principle. I find that there is no definition of the principle in Europe, but there are 14 alternative interpretations of it in Government legislation around the world. I shall mention just two of those interpretations because the principle is relevant in certain situations, and we have used it recently in this country in relation to radio frequency waves for cellular phones and mobile phone bases. In the absence of 100 per cent. scientific evidence, the Stewart report made recommendations to the Government on the basis of the precautionary principle, stating that radiation emanating from phones and bases was causing problems.
In regulating new technologies, whether they are chemical technologies such as OPs or physical technologies such as cellular phones, there must be something in the equation besides science. It is increasingly obvious that public understanding and acceptance that there are problems persuade Governments to take action. For example, the public
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have been extremely influential in fashioning Government policy in the GM debate and we should be grateful for that.
On the precautionary principle, I pick the two extremes that support my argument from the 14 alternatives—I am prepared to elaborate on the other 12, but I hope that no one is too keen for me to do so. When a hazard is appraised, any risk of harm is noted, built into the control measures and taken seriously. If it is assumed that the evidence is indicative of a problem, that will be taken into account in framing legislation. One alternative would be to ban its use, another to limit the exposure but to take it seriously and accept that something is going on, and that what has happened is not an accident or an act of God.
Another view is that there must be reasonable grounds to conclude that there is a risk, although that gives rise to an argument about what are reasonable grounds. Those who support that view believe that there must be a good reason for doing nothing.
The first approach to the precautionary principle is an alternative to risk analysis; it is assumed that something is a problem and that is built into the equation. The second approach is risk analysis. I do not know how people decide which approach to take; to judge from published literature, the second approach is favoured in respect of OPs, but the first approach was taken by the Countess of Mar when she gave evidence to various committees. She is a brilliant advocate of the precautionary principle.
The issue is political as well as socio-economic, and public opinion has a vital role in bringing matters to the attention of Governments. The precautionary principle had to be adopted in the case of cellular masts for mobile phones because Members of Parliament were hammered by their constituents about the issue; people are suspicious about cellular phones, and especially about the masts on school buildings. The OP lobby, although it is laudable, may not yet have been voluble enough to make that kind of impact on political decisions.
In the three years since I have been a member of the all-party organophosphate group, which was formed eight years ago, the balance of the argument on OPs has been swinging towards a ban on their use, and to other methods of handling the problem of sheep, cat fleas and so on. I hope that the debate will support the argument that these harmful chemicals should be eliminated.
I welcome the Government's action on the issue. They are taking it seriously and tackling the problems, unlike the previous Administration. I urge them to take the final step and act to reduce exposure to harmful organophosphate chemicals.
9.54 am
Mr. Paul Tyler: I congratulate the hon. Member for Norwich, North (Dr. Gibson) on securing the debate and on an excellent speech. He has scientific expertise that I, as a layman, certainly do not. That is one of the reasons why he and the hon. Member for Ludlow (Mr. Gill), who is also present, have been such valuable members of our all-party group.
I do not have the scientific background of the hon. Member for Norwich, North, but I want to follow his definition of the precautionary principle in relation to

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long low-level exposure to organophosphates. My simple, layman's translation of that principle is, "If in doubt, don't". I have learned that that principle has not applied in many areas from meeting a huge number of people over the past 10 years who have been exposed to these extremely damaging chemicals.
The focus in the recent past has been on the use of organophosphates in agriculture, but they have a long history and are used in several other ways, both domestically and commercially. I want to consider the use of OPs as a lubricant in aircraft engines. The hon. Member for Norwich, North referred to that subject, but he would agree that it has not received the same attention as the agricultural use. It is worrying that some aircraft that use those lubricants are especially susceptible to problems. One of those aircraft, the BAe 146, is used by the Queen's flight, so the House will recognise that the issue is important. The health of pilots, crew and passengers could be affected.
In its evidence to the current House of Lords inquiry into aircraft cabin environment, the Aviation Health Institute —a reputable body —has admirably summed up the situation. Its document states:
Passengers and crew on some aircraft are being subjected to organophosphates exposure from oil seal leaks into the air conditioning systems. The most common aircraft models involved are Airbus 320 MD-80 and the BAe 146. In the case of the latter, Professor Chris van Netten has demonstrated that filters had sometimes been overloaded allowing fumes to enter the cabin.
It is known that organophosphate pesticides have a significant deleterious effect on the human immune system as well as being a neurotoxin. In the UK the DETR has confirmed that the failure of oil seals occurs in one in every 22,000 flights, resulting in organophosphate exposure. At Heathrow, where there are 440,000 aircraft movements, this could effect 20 aircraft a year or some 2,000 passengers.
That is not a tiny minority. The document continues:
In Australia a senate committee is investigating the neurotoxic effect of BAe 146 and lawsuits are pending in the US and Canada on leakage of organophosphates into aircraft cabins.
I am in touch with the chairman of that Australian senate inquiry, whose report is imminent. He is visiting this country shortly, and I hope that he will have the opportunity to meet others of us who are concerned about the issue.
I find alarming the apparent complacency of the United Kingdom authorities. We have known for some time that those potentially lethal chemicals are used as lubricants in aircraft engines —not only fixed-wing aircraft but in helicopters. I notice from this morning's Hansard that, in the debate about the RAF Chinook crash that took place in this Chamber yesterday, the reason why pilots took the action that they did was not identified. There may be a connection with organophosphates.
Early in 1999, I obtained information from Ministers at the Department of Health and the Department of the Environment, Transport and the Regions. Since then, we have sought assurances about the use of OP lubricants and safety precautions. Last December, I received a disturbing report from Sweden, which stated that, on 12 November, an unidentified toxic gas almost caused a catastrophe in a BAe 146 passenger aircraft operated by Braathens Malmo Aviation. The Minister may be able to correct my Swedish pronunciation, as she is a known linguist.
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On the first leg of a three-part trip, the cabin attendants felt strange and experienced incredible pressure. One attendant described the experience as like a "moonwalk." On the second leg, the discomfort returned, and the two pilots experienced it too. On the third leg, to Sturrup airport, the cabin manager realised that something was seriously wrong, went forward to the cockpit before landing and found that both pilots were wearing their oxygen masks. The captain was so near to blackout, in his words:
feeling dizzy and groggy despite the oxygen
that he had instructed the first officer to take over the controls and land the plane.
The Swedish board of accident investigation, the airline and the aircraft engine manufacturers all treated the incident as very serious, as well they might. The initial investigation pointed to a leak of a potentially toxic engine lubricant. I was anxious to establish whether that was an OP. We already know that they were originally intended only for helicopter engines, which operate at relatively low altitudes—therefore without the air pressure problems —and at lower speeds.
That incident and others have been drawn to the attention of our Ministers, but there seems to have been no effective analysis or dissemination of information to warn aircrews and passengers. In evidence to the House of Lords, the British Air Line Pilots Association writes:
Our concerns have been raised with both the CAA and the DETR, however, their response was that any such contamination could be controlled by either isolating the air conditioning unit or shutting down the affected engine. This action, however, can only be taken after exposure has occurred and this would be experienced by not just one or two individuals, but possibly all of the passengers and crew.
Due to the flight safety issues raised by the symptoms of exposure such as disorientation, blurred vision, impaired memory and altered coordination, attempts have been made to address these problems worldwide. These include changes in design, maintenance and operation procedures. However, while the problem persists, exposure of staff and the public to levels of toxicants that may affect safety and health continues.
Despite the flight safety issues and health risks associated with the use of toxic compounds and reported incidents of cabin air contamination, neither the Industry nor Government has fully investigated this issue. We, therefore, feel that the use of these substances should be investigated and reconsidered.
I apologise for reading a long extract from that evidence, but I think that hon. Members will agree that its influence and importance are considerable, as it comes from such an authoritative source.
However, Ministers still show the most extraordinary and breathtaking complacency. As long ago as last December, I asked the Ministry of Defence and the Department of the Environment, Transport and the Regions to investigate the implications of the BAe incident. A Minister from the MOD replied:
We have no record of any recent military aircraft incidents relating to the use of organophosphate lubricants. The organophosphate compound tricresylphosphate is present in almost all military aero-engine lubricants and, as no viable alternative products are available, appropriate measures are taken to avoid the exposure of air and ground crew to any potential health hazards. We understand that BAe systems is investigating the incident involving a civil BAe 146 aircraft on 12 November and we will consider any recommendations that emerge.—[Official Report, House of Commons, 20 December 1999; Vol. 341, c. 363W.]

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I will not repeat the DETR's answer, because other hon. Members want to speak, but I hope that they will accept that it is similar. Again, acute exposure high-level dosage is mentioned, but there is no recognition of the damage that can be caused to human health by low-level exposure over a long period.
What conclusions have been reached? It is now many months since the incident, and presumably there has been at least an interim report. What advice has been given to airlines that operate those planes or, indeed, those who operate the Queen's flight? Are there maintenance or flying instruction implications? Who knows? Ministers continue to disclose the minimum of information. I have again questioned them and received equally sketchy answers. I tabled written questions to ask the Secretary of State for Defence and the Secretary of State for the Environment, Transport and the Regions whether their reviews of the incidents involving possible organophosphate air pollution on board aircraft had reached conclusions. On 13 June, the Minister for the Armed Forces said:
We have no evidence of organophosphate pollution on military aircraft affecting personnel, but we will consider carefully any conclusions from an on-going BAe Systems investigation into an incident involving a civil BAe 146 aircraft last year.—[Official Report, House of Commons, 13 June 2000; Vol. 351, c. 564W.]
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Sunderland, South (Mr. Mullin), said:
The investigation of these incidents is still under review. The report will be published following its outcome. I am unable to comment until that stage has been reached.—[Official Report, House of Commons, 13 June 2000; Vol. 351, c. 555W.]
The emphasis is on allowing the commercial operators or manufacturers of the aircraft or the engines to do their own research. It worries me that there is no sign of any external, objective and authoritative analysis of that incident.
In the meantime, I have received an interesting letter from BAE Systems. It does not deny any of the information that I have related, but, in a revealing phrase, it claims that the implication in a recent report that the issue is specific to the BAE 146 is inaccurate. In other words, other craft may be involved. Two wrongs, let alone 2,000 wrongs, do not make a right. There was no attempt to suggest that the media or those directly involved as air crews had encouraged the concern. BAe Systems accepted that a problem exists. Of course, it, too, awaits the outcome of the Swedish investigation.
As the hon. Member for Norwich, North said, official research reports dating back to the 1950s identify OPs as potentially extremely dangerous toxic chemicals. In concentrated form, they have been proved to have acute effects on human health. Low-level dosage over long periods is still being investigated, and I, too, pay tribute to the Government for accelerating such research in the past three years. There is widespread evidence of chronic effects in at least a substantial proportion of those exposed to OP vapour.
If the legal and official inquiries produce firm evidence that the health and safety of aircraft crews and passengers are being risked regularly by exposure to toxic fumes, the consequences will be far-reaching. This summer, tour operators, those responsible for military aircraft and perhaps the officials responsible for the
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Queen's household should be made aware of the facts. I hope that as soon as the current investigations are complete, the Government will produce a full report.
Investigations by the OP Information Network, an extremely effective voluntary organisation which has done much pioneering work, have revealed a hiatus at the heart of the Government. The Department of Health, the Department of the Environment, Transport and the Regions, the Health and Safety Executive, the Environment Agency and the Civil Aviation Authority do not accept responsibility for threats to human health once an aircraft has left the ground. People are on their own. A request that the application of the Control of Substances Hazardous to Health Regulations 1999 be checked has remained unanswered.
The OP saga remains a chronicle of disinformation, dither and delay over many decades. The continuing failure of the United Kingdom authorities to insist on a withdrawal or moratorium on the use of OP products until they are proved to be safe will expose Ministers to renewed claims for compensation. Meanwhile, as the hon. Member for Norwich, North said, research at Imperial college London, and University college, London shows new evidence of damage to human brain and nervous systems, even from long-term low-level exposure to OP sheep dips. The many victims are now asking, "When will Ministers ever learn?"
10.9 am
Mr. Christopher Gill: As a fellow vice-chairman of the all-party group on organophosphates, I congratulate the hon. Member for Norwich, North (Dr. Gibson) on having obtained this important debate.
I also congratulate the hon. Member for North Cornwall (Mr. Tyler), who was the driving force behind the formation of the all-party group. I should like to voice my appreciation of all the time, effort and sheer hard work that he has put into the topic over a long period. It is rare in this place for compliments to be handed across the Chamber, but I would like to give credit where it is due, and he deserves some recognition for his work on this issue.
The hon. Gentleman spoke about OP use in relation to aircraft, and I am sure that hon. Members were interested in what he had to say. I will confine my remarks to OPs in the sheep industry, of which I have first-hand experience. Colleagues will recognise that the sheep industry is valuable and important in the Ludlow constituency.
Based on my experience and from talking to many farmers, I can say that a generation of farmers, shepherds and others involved in sheep dipping were totally unaware of the risks of using organophosphates for a long time. Although it might be feasible for the Government to claim that individual users of OPs should have taken greater steps to satisfy themselves that they used materials safely, the investigation of the past few years has shown that successive Governments have failed to impress the dangers on the users. To this day, it is emphasised that the user should take all reasonable precautions and, for example, read the instructions on the label. I shall describe in a moment how the guidance is not practical and has not had the desired effect. I shall mention some cases of people in my constituency affected by OPs.

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As an officer of the all-party OP group, I welcome the decision made by the Ministry of Agriculture, Fisheries and Food in December to put a temporary ban on the production and sale of OP sheep dips, pending the industry designing safer containers. I was surprised at the reaction of the National Farmers Union, which I gathered from the farming press was critical of Ministers' decisions. I understand why; there is no question but that OP sheep dips have been efficacious and relatively cheap. If a product that is effective and cheap is taken off the market, sheep farmers and their profit margins ߞif they have any —will obviously be affected.
I have received no representations from the NFU or individual farmers to say that the Government were wrong to make that decision. That puzzles me somewhat. I would have expected some of my sheep-farming constituents to approach me, knowing my involvement in the all-party group. The fact that I have received no such representations suggests that the majority of sheep farmers, at least in my constituency, recognise that the decision may have been right and understand the serious effect of the chemical on the health of their colleagues.
I shall quote three examples: first, the case of Mr. Evans of Lydbury North who kindly convened a meeting of farmers in my constituency who had various tales to tell about OPs. Mr. Evans believes that his health was impaired as a result of using organophosphate sheep dips, and one of his greatest difficulties was that the medical profession refused to accept that. For a long time, doctors said, "You have all the classic symptoms of Parkinson's disease. Go away and do not trouble us again." That is a common experience. One of our problems in the industry has been persuading general practitioners and others in the medical profession to accept that the symptoms displayed by sheep farmers are more likely to have been caused by the use of organophosphate sheep dips than by more conventional, recognised diseases or illnesses.
Another case involves a constituent who drank from a work mate's pop bottle on a very hot day. Unfortunately, the contents were not pop but sheep dip, which had been bottled by the farmer for use on another occasion. That case, which will shortly come to court, is technically sub judice, so I shall say only that between drinking the contents of the bottle, which my constituent thought was pop, and his life being saved in hospital a few hours later, technically the man "died" several times, because the effect of concentrated OPs on the human body is dramatic and devastating.
My next case concerns a constituent who suffers from a condition caused by low dosage absorption of OPs over a long period. The man ran a pregnancy testing service for sheep farmers. He went round farms testing the ewes to see whether they were in lamb, which helped the farmer to decide on their nutritional requirements. They need less feed if they are not in lamb and more if they are carrying twins or triplets.
My constituent operated the sheep pregnancy testing service for 10 or 11 years until he began to feel unwell. He concluded that he became ill as a result of his contact with sheep, especially their nether regions, to which the
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sheep dip migrates. The man possibly never saw the sheep dipped because he would be carrying out the pregnancy testing at a later, indeterminate stage. It is unlikely that he ever saw a tin of dip with the instruction on the label that Ministers are keen to tell farmers that they should have read. That man was not technically a sheep farmer or a shepherd, but he was closely involved in the sheep industry. He is convinced, as I am, having heard him speak about his experiences, that his health has been impaired because of his provision of that service.
As the hon. Member for Norwich, North has said, organophosphates potentially affect the human body in all sorts of ways. They are obviously invasive of the nervous system and there is no doubt that they affect memory. They cause intolerance to alcohol, affect muscular processes and, as the hon. Gentleman said, lead to mental health problems. There is circumstantial evidence that such health problems lead many farmers and shepherds to take their life.
People suffering from the ingestion of OPs are shy about telling others about another aspect of the symptoms. The chemicals can affect libido. Such people might not feel quite themselves. I was going to say that they might feel under the weather, but that would take us back to the pregnancy tester. Naturally, someone in that situation would not want to tell their family and local community that they had lost their sex drive. He might be thought to be rather an odd fish. We are considering just the tip of the iceberg. For that reason and others, there is great reluctance among people affected to declare their concern about the use of organophosphates.
Has the Government's reaction to OPs been proportionate? How does the action taken compare, for example, with the action on BSE or CJD? As the hon. Member for North Cornwall said, it appears to many people that there has been complacency on the issue, even though there has been so much circumstantial evidence suggesting that people's health has been seriously impaired by the use of the chemicals.
10.23 am
Dr. George Turner: I congratulate my hon. Friend the Member for Norwich, North (Dr. Gibson) on introducing the debate on what is an important topic for me and my constituency because organophosphates are produced in King's Lynn.
As ever, my hon. Friend has given a balanced view of the topic. However, that is not always what we find in the media. I have been made especially aware since my election of the dangers of hype and of what I refer to as junk science. For their own reasons, the media, businesses, politicians and individual scientists sometimes wish to use faulty scientific data and, in particular, to group together chemicals that should not be grouped together. I would like to make it clear that I do not want to argue with the need for caution or that some organophosphates are not dangerous. We must not conclude that we should be frightened of using chemicals because some are dangerous, but we must be careful to act on real evidence and not to be pushed or harried by exaggeration into actions in our role as regulators that are detrimental to the wider interests of not only agriculture, but all our constituents.

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This morning's debate is timely because the product that is made in King's Lynn has been in the international news. In the United States, the Environmental Protection Agency, through agreements with Dow Chemical Company, has introduced changes to its regulations, which remove the single most used insecticide from the domestic market in the US and restrict its use in agriculture. I was aware that chlorpyrifos was part of an insecticide named dursban, which has been produced in King's Lynn since 1978. Last year, as a result of scare stories, I checked what was made at Dow Chemicals and looked at some of the chemicals' properties.
Chlorpyrifos is not emitted into the air during manufacture. It has low vapour pressure, and I was assured that there is no danger to those who work in the plant or to the local community from the manufacturing process. It is not listed as a human carcinogen. Extensive tests are required around the world, including in the US and Europe, and the tests for carcinoginicity, mutagenicity and teratogenic activities were all negative. Therefore, I have no concerns about my constituents who live or work near or at the plant. However, like all hon. Members, I am anxious that we should heed good science and protect consumers.
The announcement was made in the United States on 6 or 7 June. On 9 June, a press release was issued by a pressure group in the United Kingdom,
demanding that Britain follow the American lead and bans the dangerous pesticide chlorpyrifos, which has been associated with brain damage…UK consumers are regularly exposed to this chemical in their diets.
The press release quotes documents from the Ministry of Agriculture, Fisheries and Food as saying that the chemical has been found in apples, grapes, strawberries, oranges and celery. It goes on to say,
New research by the US Environmental Protection Agency has shown that it can cause brain damage in rats.
The pressure group comments:
This filthy pesticide should be taken off the shelves at once. If it's too toxic for the US, it's too toxic for us. Next week is Food Safety Week —the Government will be telling people how to prepare their food safely. But the Government has to set an example —and make sure that food is grown safely in the first place.
That sort of press release is not untypical of pretty junky science. I took the trouble to look up some of the original documents to see what was said in the press reports and by scientists about the decisions taken in the United States. I also looked at the summaries of the pesticides monitoring data published by MAFF to see what was actually said. The fear expressed in the press release is that people are regularly exposed to the chemical, are finding it in their fruit and that it must be taken away.
The independent chairman of a working group on the subject said that it was not possible to detect the pesticides in almost 99 per cent. of the samples examined. The legal limits are set so as to include large safety factors. The chairman said that none of the residues that exceeded those limits were high enough to cause concern. He said:
The extremely small proportion of samples which exceeded the legal limits would not cause harm to consumers.
Similarly, it has been said that the results show that consumers would be at negligible risk from the small proportion of samples where maximum residue limits
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were exceeded. Of course, samples that show that the legal limits have been exceeded are cause for concern, but they are not necessarily cause for panic if we have gained efficacy in the product. The reason that such products have been used for 30-odd years is that they are known to be efficient.
In looking at the US decision, I was particularly interested in an article in The Seattle Times by William O. Robertson, who was head of the Washington poison control centre for 30 years. He explained that he did not recall a single incident of dursban-caused illness. He went on to explain that that chemical was withdrawn because safety factor was piled upon safety factor. The US Environmental Protection Agency decided that it would not use human test data; it was thought to be ethically unacceptable. It decided instead to base the safety factor on animal doses. It worked out the dose that seemed to cause an effect on the animal, multiplied it by 10 for safety and then by a further factor of 10; it also took account of the size of the animal compared to humans to allow for the possibility that we might be more sensitive than the animal, and then added another factor of 10 because children might be involved. That is a safety factor of 1,000.
I know that time is pressing, Mr. Deputy Speaker, but I want to balance the argument. I accept the precautionary principle, but I want to add a little common sense. A safety factor of 1,000 is leading to the removal of goods from the shelves. That may be correct, and I am happy for our regulators to consider it, but we should not automatically assume that we need a safety factor of 1,000 between what the tests show to be harmful and what we allow. There is room for debate.
For instance, I shall consider the precautionary principle in relation to the poison that I know best —alcohol. If we tested how much alcohol could be given to a dog before it became affected and then applied a safety factor of 1,000, I would not be allowed even a teaspoon of beer. That is not reasonable, because we have thousands of years of experience of alcohol. The precautionary principle depends on a degree of ignorance. It might be argued that, because children are damaged in motor vehicle accidents and exposed to risks on the roads, we should introduce a further factor of 10 as a precautionary principle and reduce the speed limit on motorways to 7 mph.
A balancing act is needed. I hope that the Government will take it seriously. Of course we must listen to what science has to say, but we must use a modicum of common sense in balancing efficacy against knowledge. We have 30 years' experience. I hope that the Government will distinguish between chemicals, consider the evidence and not be bulldozed into making decisions across broad spectrums because of the trash science that we too often read in our media.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Frank Cook): Order. I appeal to the remaining speakers to take account of the reduced time left for Front-Bench spokesmen.
10.34 am
Mr. Colin Breed: Successive Governments have shown a remarkable unwillingness to act on any sort of precautionary principle in the

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handling of OPs. Indeed, as early as 1951, it was recommended that dye be added to organophosphate sheep dips to enable farmers to identify splashes, and that labels reading "Deadly poison" be used. What we are talking about has been known for a long time.
I believe that OP sufferers have gone for years without being properly diagnosed. General practitioners and hospitals have received little guidance in diagnosing the symptoms, and many victims have been diagnosed with different problems, such as myalgic encephalomyelitis or Parkinson's disease. It is only recently that, following the report of the Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment and the recommendation of the Veterinary Products Committee, it has been decided to ban OPs pending the improvement of their containers, to prevent exposure to concentrate.
At present, no one is really winning. Farmers are suffering because of sheep scab in their flocks while OP dips are banned. More importantly, they suffer ill health after years of inadequate precautions. There seems to be no doubt that OP sheep dips are dangerous and toxic. Surely, all the evidence that has been available for some time is sufficient to conclude that the precautionary principle in some form—and I accept that there are various forms —demands protection for all those who work with OPs as well as substantial Government support for the development of alternative, and less risky, methods of preventing sheep scab in particular. Like many of my colleagues, I was a little disappointed by the failure of the Agriculture Committee's report to expose the area of need that I have outlined. By focusing chiefly on the containers issue, the Committee has deflected attention from the crucial need to investigate alternatives.
The Government have sought to deny any risk, claiming that most of the people in contact with concentrates such as OPs would have been environmental health officers, technicians or individual regimental hygiene duties personnel, who are appropriately trained in procedures and the use of equipment. However, it is clear that many people use OPs without that training and without an understanding of the precautions that are needed. Indeed, an answer to a recent parliamentary question stated:
there is currently no reason to believe that Gulf veterans who might have been in casual contact with dilute pesticide…or with the malathion dust used to de-louse Iraqi prisoners of war, are at increased risk of long-term ill health. —[0fficial Report, House of Commons, 20 January 2000: Vol. 342, c. 536W.]
Surely, however, the crucial word in that passage is "currently". Constant use of such language leaves the door open. The scientific jury is clearly out, and there is a need at least for further investigation of such poisoning.
What all kinds of sufferers want is real action by the Government. I have three quick suggestions. First, we should clearly and immediately adopt the precautionary principle, and Government policy should in every way possible take account of the lessons of the past when insufficient precautions have been taken. Secondly, we should undertake a scheme properly to assess the risks associated with OPs. Those are jumping up in all sorts of areas, such as aircraft lubricants, as mentioned by my hon. Friend the Member for North Cornwall (Mr.
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Tyler). There are all kinds of ways in which OPs can become a part of people's lives without their knowing about it. Thirdly, I am concerned about funding for research and development. We heard earlier about the genome project. The money available to investigate that was enormous. That is because of the enormous commercial benefits. Research and development today seem to be driven more by the commercial benefit imperative than by some other considerations such as the health of people who come into contact with chemicals.
Mr. Lembit Opik: Will my hon. Friend give way?
Mr. Breed: I am afraid that I do not have time.
10.39 am
Mr. Malcolm Moss: I shall be brief, to allow the Minister time to respond. I add my congratulations to those already given to the hon. Member for Norwich, North (Dr. Gibson). This is an important debate and he has given a comprehensive presentation on this problem.
It is no surprise to me that the Minister of State, Ministry of Agriculture, Fisheries and Food is responding to the debate. However, the issue straddles more than one Department, and the need for co-ordination between Government Departments is one message that has come out of the debate. The matter should be addressed from several different angles, not only from the MAFF perspective.
I shall restrict my comments to the MAFF decision taken in December 1999 and announced through a written answer in the Lords to withdraw all organophosphate sheep dips in response to fears that the chemicals posed a danger to human health. We should be clear that the ban is not a blanket ban on OP dip chemicals, but a withdrawal of the OP dip containers. The Government appear to be saying that OPs will be reintroduced when the containers have been redesigned to minimise operator exposure to OPs. Many anti-OP campaigners, including the Pesticides Trust, welcomed their move, as have most of this morning's speakers, but the general reaction from the agricultural community has been more hostile.
Many livestock producers believe that OP dips are the most effective means of controlling common ectoparasites on sheep, such as scab and blowfly. The alternatives are all problematic owing to lack of effectiveness, expense and time restrictions on releasing treated animals into the food chain. The main alternatives are synthetic pyrethroids, greater use of which is likely to increase resistance to parasites.
Farmers are concerned about their animals' welfare and fear the effect of worsening animal welfare on their livelihoods. Although parasitic infection may not cause premature death, there is a direct read-across from it to rate of maturation, the value of by-products such as sheepskin and increased veterinary expenses. The greatest fear is of an outbreak of scab. The hon. Member for Norwich, North said that there was little sign of that at the moment, but the use of illegally held stockpiles of OP dips may be keeping such an outbreak in check.

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Although farmers are primarily concerned with the animal welfare consequences of withdrawal of OPs, concerns have also been expressed about environmental consequences. The problem lies in the lack of suitable alternatives to OPs. The Environment Agency, which monitors pollution levels in watercourses, warns of a much greater risk of groundwater pollution from the use of synthetic pyrethroids, which are the main alternative to OPs for sheep farmers. Those chemicals are 100 times more toxic to aquatic life than OPs, and pose a particular threat to invertebrate creatures that sustain larger aquatic animals such as salmon.
The Agriculture Committee report was critical of the Government and took MAFF to task over its handling of the decision. The Committee said that
much of the confusion surrounding the announcement of 20 December could have been prevented if more effective procedures had been in place for consulting manufacturers, farmers' representatives and statutory agencies and for disseminating advice and information after the decision had been made public.
The Committee was also clear about the consequences of the Government's actions, stating:
We remain concerned that users of sheep dips are without their preferred means of combating sheep disease for the foreseeable future and there are likely to be severe economic, environmental and animal welfare implications as a result.
Mr. Richard Livsey: Does the hon. Gentleman not agree that the horns of the dilemma are that either the chemicals used seriously damage human health or they devastate the environment? Should not objective, non-commercial research be carried out to produce new products as soon as possible to overcome both those problems?
Mr. Moss: The hon. Gentleman makes a good point, but the Government are not saying that at the moment. They have acted merely because doing nothing would not have been acceptable. There are no real alternatives to OPs apart from pyrethroids. Research, not least into the effects on human health, is important in regard to every aspect of OPs.
I wish to ask the Minister several questions, some of which she might not be able to answer today; if not, I would welcome answers in writing. First, why did not MAFF Ministers consult more widely before announcing the ban on OP dips? Which organisations did the Government consult in the months between receiving the report from the Institute of Occupational Medicine and making their decision to withdraw OPs? Does MAFF have any contingency plan in the event of a major outbreak of scab occur? If MAFF intends to reintroduce OPs, will it publish a timetable for that? What advice will MAFF give farmers on alternatives to OP dips? Why did not the Government consider the environmental impact of OP withdrawal before making their announcement? Finally, will the Government accept and implement the recommendations of the Agriculture Committee?
10.46 am
The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): I am pleased to respond to the debate, which is on a subject of interest and concern to many people. I begin by emphasizing
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that the Government take those concerns seriously. Two years ago, we initiated the most rigorous and transparent scrutiny of OPs ever undertaken.
I appreciate the way in which the debate has been conducted, beginning with the balanced introduction of my hon. Friend the Member for Norwich, North (Dr. Gibson). He pointed to the wide-ranging nature of the debate and said that the concerns that have been expressed relate to a number of different Departments. I do not accept the criticism of the hon. Member for North-East Cambridgeshire (Mr. Moss), who speaks for the Opposition on such issues, that we do not have a co-ordinated approach to the matter. The Government set up an official group on OPs, which is co-ordinated by my department and which reported in June 1998. Since then, all Departments with an interest have been involved —the Ministry of Defence, the Department of the Environment, Transport and the Regions, the Health and Safety Executive, the Cabinet Office, the territorial departments and so on. We are anxious to ensure co-ordination on the issue, different aspects of which come under the responsibility of different Departments, and to ensure that the matters are properly considered. The existence of the all-party group helps in that respect because it offers a way of bringing together interested members from all parties who may be interested in different aspects of the issue —that has certainly been reflected in the varied contributions that have been made this morning.
We all know that OPs are toxic chemicals, acute exposure to which has ill-health effects. The question that needs to be answered is whether long-term exposure to low levels of OPs has similarly detrimental effects —a point that was made by my hon. Friend the Member for Norwich, North in his introduction. It is the question that we put to the Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment —COT—in 1998. It set up a working group of the best specialists in the field, which took evidence from those with an interest in the problem, including representatives of sufferers' groups. Its report was published last November. It concluded that ill-health effects from prolonged low-level exposure to OPs remained unproven, although there is still a question about whether a small group of individuals may be especially susceptible to OPs.
The three regulatory committees that advise the Government on the subject are the Veterinary Products Committee, the Advisory Committee on Pesticides and the Committee on Safety of Medicines. We asked them to consider the implications of the report. They all advised that, on the basis of current scientific knowledge, there should be no general withdrawal of OPs from the market. However, they endorsed the need for further research to tackle the identified points of uncertainty.
Simultaneously, the Veterinary Products Committee advised us on the results of a three-year study by the Institute of Occupational Medicine in Edinburgh into sheep dippers' exposure to OPs. It suggested that the greatest hazard arose when handling the concentrated dip.
We took immediate action to implement the committees' advice through a four-point plan. First, marketing authorisation holders were required to withdraw all OP sheep dips from the market pending the

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introduction of modified concentrate containers designed to minimise the risk of operator exposure. Secondly, we revoked the approval for three OP pesticide compounds for which data packages had not been submitted as part of the review on OPs by the Advisory Committee on Pesticides. Thirdly, we implemented measures to promote best practice and, fourthly, we are developing a targeted research programme to implement the research recommendations of the committees. The importance of research was rightly emphasised by several hon. Members in the debate.
Many views have been expressed. The hon. Member for North-East Cambridgeshire mentioned the report of the Select Committee on Agriculture. The hon. Member for Ludlow (Mr. Gill) referred to concerns in his constituency and to his contact with the farming community, especially sheep farmers. He signalled the fact that there has been a mixed reaction to the Government's decision. Some people have supported it, but we know that the National Farmers Union did not welcome the procedure or the substance of the decision. Nor did other organisations such as the National Sheep Association.
Hon. Members will be aware of the views that were expressed to the Select Committee on Agriculture. It concluded that, although it did not want to dismiss the sufferings of those whose ill health had been linked to OP sheep dips, it would be of general benefit if OP sheep dip concentrates were restored to the market in suitably designed containers as soon as possible. It is fair to say, therefore, that many different views have been expressed on the subject. It is the Government's responsibility to listen to representations and to act on the basis of our scientific advice, which we have done. However, I would not underestimate the complexity of some of the issues involved, and my hon. Friend the Member for Norwich, North did not do so either.
Mr. Öpik: As a member of the Select Committee, I want to remind the Minister that the view expressed in the report was mainly based on the fact that at present no alternative product balances the interests of preventing sheep scab and not wrecking the environment.
Ms Quin: I understand the hon. Gentleman's point. Some products are used as alternatives; the hon. Member for Ludlow spoke about their cost and efficacy and the question of long-lasting effects in controlling the parasites and the relevant diseases. That explains many of the representations that the Government have received.
I understand that hon. Members are concerned to know whether OP sheep dips might return to the market and, if so, when. All that I can say is that we expect to receive further advice from the Veterinary Products Committee shortly, and, in common with previous practice, we shall make an announcement to Parliament before informing the marketing authorisation holders of the Government's decision.
The hon. Member for North-East Cambridgeshire asked several questions that were also raised in the Select Committee's report. Obviously, the Government
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have a responsibility to respond to that report and shall do so shortly. If that response does not answer the questions that the hon. Gentleman asked, I shall write to him and, given the interest that has been shown this morning, ensure that my letter is available in the House of Commons Library.
The precautionary principle was mentioned, and I accept that there is no universally accepted definition of the principle, either domestically or across Europe, where many such regulations are negotiated and agreed. None the less, the authorisation procedures for veterinary medicinal products and pesticides take a generally precautionary approach to risk assessment. The thrust of our precautionary approach is that exposure should be reduced well below the level that might cause problems.
The Health and Safety Executive evaluates the practicality of recommended proportions. Surveys of dipping practice and inspections have taken place, so we believe that there is evidence of improved practice. That is borne out by the fact that the number of incidents investigated has now fallen from its peak in the early 1990s. We must pay tribute to those who expressed concern about the products. Their action brought about some extra controls and extra precautions. As a result, an approach that is generally more responsible has emerged. I would not like to under-emphasise that.
The risk from pesticides was mentioned, and, in that regard, the Government's primary aim is to protect people, animals and the environment. Like veterinary medicines, all pesticides are assessed for safety in use, and no pesticide may be sold or used unless approved by Ministers. All pesticides are subject to routine review if evidence emerges about their safety. In response to public concern, our current domestic review programme has focused on the use of OP compounds.
I shall briefly refer to the research programme that we are undertaking. Hon. Members present, particularly those in the all-party group, are familiar with the research programme, but the hon. Member for Brecon and Radnorshire (Mr. Livsey) asked about research into alternatives to dips, and I feel that neither he nor the hon. Member for North-East Cambridgeshire recognised the work that we are doing.
We are funding a major programme of research into alternative strategies for controlling sheep scab, costing £1.6 million. The projects include basic studies on the biology of the scab mite, aimed at identifying aspects of the mite's physiology that could be targets for alternative control methods. They could include vaccines, fungi pathogenic to the mites, means of altering the allergic response of the sheep or means of interfering with the mite's feeding process. It is important that hon. Members recognise that the Government are focusing on that and are keen to deal with the issue seriously
I welcome the fact that this debate has taken place. Ministers in other Departments who are interested in the subjects raised will be aware of it, but I shall draw their attention to the comments made by hon. Members about the responsibility of other Departments. I hope that, in attempting to answer at least some of the questions that have been asked, I have persuaded hon. Members that the Government are dealing with the issue with the utmost seriousness.

Fraud (European Community)
11 am
Mr. Deputy Speaker (Mr. Frank Cook): We come now to the next issue for our consideration. I call David Michael Davis.
Mr. David Davis: Thank you, Mr. Deputy Speaker, for giving my full title.
The fact that the European Commission suffers from fraud, corruption, incompetence and nepotism is a matter of public knowledge and public record a little more than a year after the pseudo-resignation of the Commission. I say "pseudo-resignation", because it was designed to protect rather than punish the guilty. The pay, perks, pensions and powers of all the Commissioners were maintained until their eventual replacement by the current Commission.
I raise the issue of fraud because of an event that took place before those resignations that makes me worry about the extent to which the European Union takes the issue seriously. A year before those dramatic events at the Commission, the Public Accounts Committee had for the second time raised the problem of fraud in the European Union. The European Court of Auditors had raised the matter more than once. I took part in a debate with Jacques Santer, the President of the Commission at that time, on the "Today" programme. His first response —admittedly, a year before the crisis, but after he had received at least two ECA reports on the matter —was to deny that there was any significant fraud, despite our criticisms and the fact that it had been raised at the Council of Ministers.
Secondly, when that argument failed, Mr. Santer said that fraud was the fault of the member states —that more than 80 per cent. of the fraud related to members states, not the Commission, so the member states should solve the problem. Thirdly, he said that the mechanisms available to deal with fraud were perfectly okay and that OCLAF—the office of the Commission that was supposed to co-ordinate anti-fraud efforts—was doing its job and there was no need to make it more independent. All that was contrary to the eventual findings of the committee of wise men appointed by the European Parliament.
I mention that individual event, because historically the tendency of the Commission and all the institutions of the Union has been to sweep uncomfortable issues under the carpet. I am one of those—perhaps we are in the minority in this Room —who do not believe that we should leave the European Union. We must build a Union that can hold the faith of the public whom it serves. The current Union does not do anything like that. I do not want the Union to be allowed to forget about the problem, so that it returns in five or 10 years' time in an even more unpleasant and virulent form.
I have seen no reference —this may be my fault —in the intergovernmental conference preparations or in the agendas of Feira or for Nice in December to deal with the problems of fraud, incompetence and corruption in the European Union. What are the Government's plans? I, and many others, have no intention of letting the issue be forgotten.
I have several questions for the Minister: first, what immediate action has been taken on the frauds that we know about? Such action is a test of the resolve of this
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Government and of those throughout the European Union to deal with the issue, rather than being a conclusive answer to the problem. Secondly, what reforms will Vice-President Kinnock introduce to resolve the issue, and how speedily will they be made? Thirdly, what further actions will be taken to deal with the issue? Will they be on the IGC agenda in December?
I have my tongue in my cheek when I say "immediate action" because I am basing my comments on data from the 1998 European Court of Auditors report, the most recent one available. It is two years since the matters that we are discussing were aired and three years since the actions were committed. That is an aside, but it has implications for the European Union.
The ECA raised the matter of frauds and irregularities in individual countries; this country was not perfect as there was fraud totalling some £12 million. However, far and away the biggest irregularity was in Italy, where the total reached £106 million, mostly in four major olive oil scandals. As the United Kingdom is one of the few net contributors in the European Union, those scandals cost British taxpayers tens of millions of pounds. The Treasury should therefore take an interest on behalf of the British taxpayer. Was a penalty levied on Italy for the £106-million irregularity? If so, has it been paid?
The second issue raised in the ECA report was a substantial fraud relating to the export of meat to Jordan. A subsidy of £46 million was involved, but it was not really for export to Jordan—it was an embargo-busting operation for Iraq. European Union taxpayers' money was used in defiance of a United Nations resolution and western nations' actions to control the evil dictatorship in Iraq. I want to know whether a prosecution has been brought against those who defied almost every national policy in the European Union and used significant sums of British taxpayers' money to do so.
A third issue in the ECA report was the contract awarded for guarding the European Commission buildings. That is poignant because it was awarded by the security department, which is responsible for protecting the integrity —in every sense —of the European Commission. The contract was found to be fraudulent; it involved ghost workers and criminal false accounting. The ECA report stated that four members of the department would be disciplined and the case was handed to the Belgian police for prosecution. Has that prosecution been completed, and if so has anyone has been punished as a result? As I said, we should bear in mind the fact that the issues I have raised are three years old.
I raised those cases as symbols of how seriously we take the matter. The Chamber will note that one of them relates to a national failure, one to an individual contract, and one to something done by the Commission. I picked them because the way in which they will be dealt with is interesting.
I am also concerned about the strategic reforms that the European Union is undertaking. I should say up front that I approve of the fact that Vice-President Kinnock has been put in charge of the reforms. I might upset my Conservative colleagues by saying that, but he is a tough and honest politician; nobody would deny him that. He knows the European system. Some would

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consider that a vice rather than a virtue, but in this context it is a virtue. More importantly, he knows our system, which is one of the best for maintaining propriety in public life. We are not necessarily alone in that: one or two other systems in Europe are comparable. Vice-President Kinnock does not have to reinvent the wheel in what he is doing in the European Union. He has lived in a system that puts propriety at the top of the priority tree.
However, no matter how good, determined or tough he is, he cannot do the job alone. The Comptroller and Auditor General and the Public Accounts Committee have sought to help him. He will need UK Government support. Sometimes, support takes the form of pushing as well as helping. I will return to that point.
I will focus on the nature and speed of what Vice-President Kinnock intends to do. I disagree with him about the new anti-fraud office. The National Audit Office's staff are not civil servants. They are independently recruited; there might be secondment arrangements, but there is not an integrated career path by which a member of the NAO's staff could look forward to working in, for instance, the Department of Social Security or the Ministry of Defence. That is so for a good reason —it means that there is no social or career pressure on an individual to pull punches in criticising the body that he is investigating. That is not true of the new European Anti-Fraud Office —OLAF. I am not criticising any individual. I do not know the new head of OLAF, Franz-Hermann Bruener, but, as far as I can tell from studying his curriculum vitae, he is well qualified and independently minded, although he has previously been employed by the European Commission in other respects.
Simply being a part of an organisation can make it difficult for an audit body or an anti-fraud body to be as impartial as it ought to be. That situation can render it open to corruption or to pressure. After all, one of the issues that I raised earlier concerned the security arm of the Commission. OLAF should properly have been a completely separate body, accountable either to the European Court of Auditors or to the European Court of Justice. I am concerned about the situation, especially because the pressure to prevent that from happening came from two sources. Surprisingly, it came not from the Commission in the first instance. Instead, it came from the European Parliament—I am afraid that there is no surprise in that, to put it bluntly —and from the Council of Ministers. What stance did the British Government take on the matter? If we did not support the British parliamentary model and the other best models, most of which come from northern Europe, why not, and what was the logic behind the position? That situation is a flaw in the system. There is supposed to be a superstructure to protect the system, but it will not prevent the pressures about which I am concerned.
Some of what I am about to say with regard to the European Parliament's role might be an important component of possible proposals for the next IGC. A Parliament —certainly our Parliament —is a fierce and largely independent scrutineer of Government, although there are obviously party pressures within it, which I shall discuss in a moment. The European Parliament has a peculiar problem, which is not entirely
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its fault. As a result of the relative power in Brussels, a dependency relationship has developed between the European Parliament and the Commission. The Commission has always been the source of most power. Therefore, if a European parliamentarian wanted to get something done, it was useful to have a contact at the Commission. In a sense, that is sensible politics, but it means that there is not the same separation between the Executive and Parliament as exists in our system—even though we have the Executive within the Parliament—when challenges are made over spending, corruption or whatever.
Moreover, no single party is in power, which is a natural outcome of the arrangements in Europe. What tends to happen is that natural alliances are formed between parts of the European Parliament and individual Commissioners, either on the basis of national
origin or, more often these days —perhaps this is a fitting European ideal—on the basis of party. I am afraid that the Minister might find this uncomfortable, but we saw something of that in the affair of Madame Cresson, which led up to the great crisis that produced the change in the Commission. Madame Cresson is a socialist French Commissioner, and there is no doubt that socialist Members of the European Parliament attempted to protect her. I do not hold that against any one party. It is a structural element of the Parliament that right-wing or Christian Democrat parliamentarians will tend to form alliances with Christian Democrat Commissioners, and that socialist parliamentarians will tend to form alliances with socialist Commissioners. That means that the whole concept of having a separate, impartial Parliament is flawed.
Gladstone dealt with that issue by setting up the PAC. To my great benefit today, he ensured that the Chairman of the PAC —the principal scrutineer in Parliament—is a member of the Opposition, who is clearly not a member of the Executive. We might suggest to the European Parliament or to the IGC a series of reinforcements of the budgetary committee of the European Parliament, one of which would be a rotating chairmanship, so that whenever a Commissioner from any party was in front of the Commission, the chairmanship for that session or report would be held by a member of an opposing party; a Christian Democrat in the case of a socialist Commissioner or a socialist in the case of a Christian Democrat Commissioner.
Mr. Mark Oaten: The right hon. Gentleman makes an interesting point, but would he extend that idea to require opposites in terms of the countries from which individuals come?
Mr. Davis: That is a fair point. I have considered that, but have to say that I ducked it because I was not at all sure how it would work with the oath sworn by Commissioners on taking office, in which they undertake to give up all their national affiliations. All of us who have worked in Europe know that the oath is a complete nonsense because Commissioners look to their national origins, but I was unsure whether such a proposal would be at odds with some fundamental part of the treaty. I have not had a chance to re-read the treaty to check that, having read it too many times. However, the hon. Gentleman makes a fair point and I would be inclined to agree that his suggestion would

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reinforce the independence of the budgetary committee. In addition, I strongly believe that we should give the budgetary committee of the European Parliament the right to summon persons and papers—the same right as we have in the House. Over the years, the Government have stressed that the first duty of the European Parliament should be financial scrutiny. We cannot ask it to perform that role unless we give it that power.
Mrs. Teresa Gorman: My right hon. Friend's analysis fascinates me. I am sure that he would agree that the role of independent employees of the Commission should be taken into account, one of whom blew the whistle on the latest fraud. Will my right hon. Friend acknowledge the role of Brian Connolly, who worked in the European Commission treasury department and who wrote a marvellous book entitled "The Rotten Heart of Europe" in which he described those practices? Those who work inside the system should have the opportunity to declare their concerns.
Mr. Davis: I entirely take my hon. Friend's point. Like the hon. Member for Winchester (Mr. Oaten), she has caught me on something that I had decided not to mention, but I shall deal with the issue now. If my hon. Friend will forgive me, I shall focus more on Mr. van Buitenen, because although Mr. Connolly made some interesting points, he would have been in breach of British civil service rules as he was writing about policy matters outside his remit.
Mr. van Buitenen, the Dutchman who blew the whistle, was badly treated. Indeed, his treatment still seems shocking. It does not reflect well on the Commission, the EU or its member states. I believe that whistle blowers should be protected. Vice-President Kinnock's proposals include such a provision, but I would have made it retrospective. I believe that we should compensate Mr. van Buitenen for the way in which he was treated. I would even consider compensating Mr. Connolly, because, even though he was in breach of British civil service rules, the treatment that was accorded him was inappropriate.
The answer to my hon. Friend is yes —I would write that into the IGC. It is an area where the EU has, in my judgment, been in breach of its much-vaunted commitment to human rights. One of the fundamental human rights is not being asked to do something that is immoral or improper; that right was not provided.
My next proposal might shock some of my hon. Friends. I have tussled with the problem at length because I do not believe in giving more power to the EU. It has enough power for the moment, but, in this context, I would give it one more power relating to the budgetary committee. In cases of malpractice, such as those of the past year or two, I would allow it to dismiss a Commissioner. I would not allow dismissal for policy issues or other matters; but for malpractice it is implausible to ask a Parliament to oversee financial expenditure and not to allow it to penalise those who engage in malpractice. I agonised over the issue, but I concluded that if an action was justiciable as malpractice, removal should be available.
The third item of Mr. Kinnock's proposals is not greatly known; indeed, even as a Minister for Europe, I barely heard reference to it. I speak of European staff
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regulations. Hon. Members may not be aware of them, but they virtually have the force of law within EU institutions. They would make our labour laws of the 1970s look progressive. [Interruption.] I have struck a chord with the right hon. Member for Birkenhead (Mr. Field). They limit what can be done when a malpractice is found. The best example is one of the earlier frauds discovered in 1990 by Edward McMillan-Scott MEP, in the tourism directorate, which has yet to be brought to court. If my memory is correct, the sum of £5 million was involved and the people concerned —I cannot call them the guilty people, because we do not know about that, the case not having come to court —are still in receipt of pensions and full benefits from the Commission.
The staff regulations have been an impediment to resolving fraud and malpractice problems all along. The Kinnock reforms, the timetable for which I have before me, and which, incidentally, incorporate the whistle blower protection that we discussed earlier, do not even involve consultation on the question of proposed changes to staff regulations until the first quarter of next year. It is not proposed to bring those reforms of staff regulations before the Council until the end of next year. The earliest point at which we could conceivably obtain a change to one of the most fundamental impediments to proper management of the Commission would be four years after the crisis that led to debates such as today's. That is altogether too slow. Why is there such a delay? If the Government do not agree with it, will they do something to speed matters up? Given that there has not even been any consultation for a year, the problem is clearly not one of negotiation or proper practice. It is more a problem of failing to make the issue enough of a priority.
The European Court of Auditors pointed out that many of the problems that we are discussing arise because the European Union tries to do too much. The worst example of that —the Cresson failure—demonstrates that the lesson has been completely ignored by the current Commission. The European Commission Humanitarian Office —ECHO—was the site of the worst of the problems exposed a couple of years ago. Hundreds of millions of ecus or pounds were improperly accounted for. We do not know that they were fraudulently disposed of, but we do not know where they went, either. However, we know that at least one contract, for —2.4 million, was completely fictitious; there was no other contracting party. The money was being leached out of the system to be used at the discretion of various members of the Commission. That arose directly from the fact that the European Union was trying to do too much and had created a culture of going around the rules. Perhaps that might be done in the first instance to achieve worthwhile aims, but from then on the rules become irrelevant. The barrier against malpractice, fraud and criminal activity then vanishes.
What I have described happened a few years ago. What is happening now? Only six weeks ago, Chris Patten made some cogent comments about his directorate of the Commission. He showed that staff are trying to spend two, three or four times as much money as would be normal in an international development department. That led our Secretary of State for International Development to describe the European Union as the worst aid agency in the world. I do not

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often agree with her, but she has a point. As Mr. Patten said, it can take as long as nine years for it to fulfil a promise. To a Nicaraguan whose home has been swept away by a flood or an African peasant whose family is dying in a famine, nine years is eternity.
The issue is not simply one of fraud, but one of people dying because of our incompetent system. What Mr. Patten has talked about shows that we still have the same problems as we had two or three years ago. He has come up with 23-point plan to try to spend the money that he has. Having looked at that plan, I have no confidence that it will stop any fraud whatever. Mr. Patten talks about relocating decisions to EU posts around the world—which, invariably, will mean less control —and a series of things of that nature, none of which will resolve the problem of fraud. That is a serious weakness in the system.
I have no confidence that we have made any progress. The lesson of the Cresson behaviour was learned, namely that the European Union should do less and do it better. As long as the EU focuses more on politics and promises than on good management and delivery, two things will happen: on the one hand, British and other taxpayers' money will be wasted and, on the other, the reputation of the European union will go down. That cannot be a good thing, whatever one's view of the EU.
11.31 am
Mr. Edward Leigh: It is a great honour to follow my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) both as a friend and as a member of the Public Accounts Committee, which he chairs and on which I am honoured to serve with him. As always, my right hon. Friend has done a great service to Parliament in the way in which he presented his speech.
I am happy to speak on the issue because agricultural fraud has had a major impact on my constituency. I shall return to that in a moment. Of course, no one really knows how much fraud there is in the EU as, by its very nature, it is impossible to quantify. Klaus Tiedmann of Freiburg university in Germany thought that it might be anything between 7 and 10 per cent. of the total EU budget. If it is, we are talking about very large figures indeed. Needless to say, the European Commission has a far lower figure and says that fraud could be as low as 2 per cent. However, even the Commission acknowledges that the cash figure is much higher than the EU's reported figure, which is based on auditing agricultural spending exclusively. By any measure, the problem is enormous and costs all of us who live in Europe a very large sum indeed, which is why our debate is important and timely.
My right hon. Friend dealt with some of the major scandals that have afflicted the EU over the past 10 years. He mentioned that our colleague, the Conservative MEP Edward McMillan-Scott, detected the tourism fraud which amounted to some £3 million. As my right hon. Friend said, we are still waiting for that to come to court. In November 1995, the Court of Auditors refused to certify the EU's annual accounts on discovering that nearly £3 billion was not properly accounted for. My right hon. Friend mentioned that, in
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early 1998, the Commission's anti-fraud unit revealed that some £600 million of its humanitarian aid budget between 1993 and 1995 could not be accounted for, of which £1.5 million had been intended for refugees from the genocide in Rwanda and Burundi. That £1.5 million had simply vanished into the ether. To make the episode worse, the incident only came to light years after the fact, allegedly because the Commission did not inform the Court of Auditors when irregularities in the aid programme were first noted in 1994.
Some explanations of why that money went astray are sublimely pathetic. Some reports, such as one in The Sunday Times in October 1998, maintained that money intended for field workers in areas of conflict was spent on hiring more bureaucrats in Brussels. Another reason, according to a report in The Daily Telegraph in October 1998, was that the money was not necessarily misspent or wasted, but that no one either knew or could trace where it went. Clearly, fraud can take place in many areas under many guises and we must find a system that will ensure that we try to reduce it.
In my few short remarks, I want to deal with agricultural fraud and the major problem of fraud in the common agricultural policy. Agra Europe, the European independent weekly, summed up that problem rather well. It said:
The essence of the major —and minor—frauds … is either claims for subsidy payment on products which do not exist or the misrepresentation of a less valuable form of a commodity as a more valuable one. Almost all CAP frauds are variations on these essentially simple stratagems. The more it becomes necessary for the EU to support and protect every part and sector of the agricultural market, so these measures become more comprehensive and more complex.
Commenting on why fraud is so closely associated with the CAP, Agra Europe said:
The reasons are obvious: the CAP still accounts for almost half of the EU's expenditure and spending within the…budget essentially involves payments to individuals and companies involved in trade in agricultural commodities. Expenditure in other sectors of the budget tends to involve payments to government and other official bodies and fraud is therefore much more difficult to perpetrate on these types of payments.
That article sums up why fraud in the CAP —accounting, as the policy does, for half the EU's budget —is such a great problem. It also explains why so much of the EU's expenditure is diverted directly to individuals, small companies, farms and so on.
How can we deal with that? Last Friday, I got some insights when I visited Mr. James Walgate, who farms in Swallow in Lincolnshire. Turning from the rather esoteric arguments in which we talk about millions and billions of pounds, I shall take matters right down to the farm gate and give an example of how fraud affects farmers in our constituencies. I sat in Mr. Walgate's farmhouse and talked through some of the issues with him and his colleagues who, as a group of English farmers, are tearing their hair out at the amount of regulation and red tape with which they have to deal. They told me that they feel that they are not farming barley, wheat, cows or sheep, but brown envelopes, filled, not with cash —sadly for them —but with forms. Indeed, they showed me form after form after form.
No doubt, all those forms are considered necessary to combat fraud, the very issue discussed by my right hon. Friend. The farmers showed me page after page of the

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set-aside form, much of the information in it duplicated. They showed me a folder full of all the enforcement notices on health and safety at work with which they must deal. My right hon. Friend may tell me that all those issues show that the Ministry of Agriculture, Fisheries and Food is doing its best to ensure that the subsidies that are available to our farmers are not misspent fraudulently. However, one must ask oneself whether those farmers' competitors in other EU countries, especially Mediterranean countries, face the same degree of regulation and oversight. Our own farmers are convinced that they do not.
I do not want to get into that debate too much as that ground has been well ploughed in the past. Essentially, the argument is negative, as it is difficult to quantify exactly how much fraud is going on in Spain, Portugal, Italy or wherever. We have heard about olive oil scams and so on, and the Government argue that, in any event, such matters are not their responsibility. However, they are responsible for ensuring that the money is spent correctly with minimum regulation and bureaucracy being imposed on our farmers.
I shall offer a practical solution to finding a way out of the appalling level of fraud in the common agricultural policy. As the article in Agra Europe sets out, that fraud is the result of the very nature of the subsidy system in Europe which, essentially, is based on a long series of production costs and units, such as the suckler premium scheme, the beef special premium scheme, the veal calf premium scheme, and so on. Such a large number of complex support schemes, which are distributed to many individuals, small companies and farmers, means that fraud is inevitable.
The only suggestion that I can make is that we should change the whole subsidy mechanism so that we subsidise incomes rather than production. The Government have introduced the working families tax credit in this country, so why can we not have a working farms tax credit in Europe? That would shift subsidies from the series of complex support mechanisms into simple support for farmers' incomes, especially those that are relatively low.
I know that our Government have argued against such a scheme in the past because our farms tend to be larger than those on the continent, where there are many more part-time farmers. However, I should have thought that one could create a mechanism based on the farm's working population so that the subsidy would depend on whether the farm employed an individual, a family or farm labourers. It would then be far easier to track where the money was going and to deal with fraud. I can see no other way to solve the problem.
I am impressed by what my right hon. Friend has said, and I warmly support all his points about trying to support Vice-President Kinnock. I share his view that Mr. Kinnock is probably the right man for the job—anybody who could sort out the Labour party in the early 1990s is surely capable of having a good go at fraud in the EU. I am sure that my right hon. Friend is right to say that we can try to develop mechanisms within the European Parliament which mirror this country's effective mechanisms such as the National Audit Office.
We must ask, "Who guards the guards?" How can we have a genuinely independent office in the EU, with independent staff and oversight by independent
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politicians, which can delve into the inner recesses of the EU? These matters are detailed and complex, and we need a body as independent and professional as the National Audit Office to cope with them.
I have no argument with anything that my right hon. Friend said, but I would just point out that, in dealing with the CAP and an area as wide as the EU, in which farming stretches from Sicily up to the north of Scotland, simply tweaking the mechanisms in the European Parliament or the Commission will never enable us to get to the root of evil in the system. It is difficult to root out fraud when such complex, wide-ranging and different subsidies apply to the whole range of production. I end with a plea: will the Government argue for a complete change of the support mechanism which gets to the heart of fraud and moves the basis of subsidy from production to people?
11.43 am
Mr. Frank Field: I apologise, Mr. Deputy Speaker, for being late to the debate; it is a discourtesy to the Chamber, but I did tell the Speaker that I would be delayed. It was a double blow because I missed half of the speech by the Chairman of the Public Accounts Committee.
I want, first, to centre on why this is such an important issue, whether one is for or against Europe or the euro, and, secondly, to make some suggestions to my hon. Friend the Economic Secretary, who is to reply to the debate. There is no reason why she should respond immediately, but I would be grateful if she corresponded with me and put her replies in the Library.
This issue is so important because there are large sums of British taxpayers' money at stake. Taxpayers are forming a view of Europe as a result of our ability or inability to satisfy them that we are safeguarding their hard-earned cash. In Birkenhead some time ago, we had a debate, not about Europe but about the euro, and very strong views were expressed. It is to the credit of those who were pro-euro that when they went out to try to get the Labour vote out in the European elections, they came back and reported honestly Labour voters' response to the idea of Europe and to voting in a European election: the voters summed up what they saw in Europe as a thieves' kitchen.
That is worrying for those who are serious about the long-term prosperity of Europe. It is more worrying for those who are madly in favour of all that Europe does than it is for those of us who may have some questions, particularly about the euro. It is therefore crucial that the Government respond properly and effectively to the issues that we are raising today.
I would like the Government to take certain steps. We should learn from our efforts in this country to counter fraud, which are admirable compared with those in Europe. It would be sensible for us to give up thinking that we can devise a grand strategy which will deal with fraud with a big bang. We need to learn from one another about the steps that we can see working in member countries and implement those measures across Europe to protect the taxpayers' money that feeds the European machine.
I shall make five brief suggestions. First, given that we do not know whose hand is in whose pocket over there, let alone whose hand is in our pocket over here, it is

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crucial that we have an independent system of auditing, separate from the main Departments because, clearly, some of the problems are in the Departments themselves. The one organisation that shines out among all others is the Court of Auditors, which is beginning to show the independence that one would expect from a body within the British political tradition. I suggest that the independent audit office that is to operate in Europe should not report to any of the Departments or even to Commissioner Kinnock, although I totally agree with the comments that have been made about him. The office needs to report to the body that has begun to show its independence, as it did in supporting Paul van Buitenen, who has already been mentioned.
Mr. Oaten: I agree in principle with what the right hon. Gentleman is saying, but will he expand on his remarks? If the body is not reporting to the Commission, but only to the Court of Auditors, where is the democratic accountability? How do we get the report and recommendations before elected politicians?
Mr. Field: I have problems about whether the institution is democratic anyway, but I shall deal in a moment with how we can make the EU more accountable to all of us, in Europe and here at home.
My second suggestion is that we should draw attention to the Government's success on whistleblowing. The measures that this country has to protect whistleblowers should operate in Europe as well, where there is an appalling state of affairs. The guy who bravely and effectively drew our attention to what was going on in the thieves' kitchen was set upon by people, many of whom were the thieves themselves, who were trying to make sure that he did not continue to speak. Moreover, he is already back in the dock as a major suspect for leaking papers in another area of fraud. How much pain can one individual take if he is not protected properly by the safeguards for whistleblowers that we in this country think are important? [Interruption.] There is clearly a European fly trying to dive-bomb me. I hope that he does not have one of those sharp umbrellas with which to attack me, or I may keel over.
My third point is that we know that the Commission returns some of our money to us to spend in this country. There is now concern about whether the employment programme funds have all been spent as they should in this country. I ask my hon. Friend the Economic Secretary to look into that matter and report on whether we have followed up the complaints that the relevant Departments in Europe have made about the spending of money that went from this country to Europe and has been recycled back again.
Fourthly, may I suggest, as a method of increasing confidence in what goes on in Europe, that the Government regularly publish the names of those who are charged with fraud offences in Europe; when they were charged; what action is being taken and the final outcome, both internally and then, I hope, in the courts. That would boost morale in this country and show that we are attempting to get to grips with the problem of fraud, the size of which is unclear.
Fifthly —this touches on the point made by the hon. Member for Winchester (Mr. Oaten) —never mind what the European Commission comes up with, could the
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Government present an annual report to Parliament on what new moves are being undertaken to protect our funds and then find time for us to debate it?
I am pleased to have the privilege of speaking in the debate. I do not think that there is a grand strategy or that we can sit around for decades trying to work out how to deal with fraud, in Europe or elsewhere. The method must be to find out what works and then to build on that. I have made five suggestions, but I have not had a chance to warn my hon. Friend the Economic Secretary about them. I shall understand if she cannot respond to them at the moment. However, I should be grateful to her if any correspondence could be placed in the Library so that we could all draw on it.
11.51 am
Mr. Christopher Gill: I shall make but a brief contribution to the debate. I congratulate my right hon. Friend on obtaining this important debate. In previous years, I have been a regular contributor to the debate on the Court of Auditors report. I have concluded over the years that fraud is endemic in the European Union, and I do not have much hope that it can be eradicated. I shall ask a question that goes to the root of the matter: what is the EU doing with the funds that are available to it that could not be done by nation states?
My right hon. Friend has said that the EU does not have the means or the mechanisms with which to control its funds adequately to ensure that fraud is reduced to an acceptable level. I do not say that fraud can be non-existent, because we shall never live in that perfect world. He was right to say that there is a great difference between what goes on in the European Parliament and the Commission and what happens in the United Kingdom, where our system ensures that there is little dishonesty or fraud in the body politic.
The explanation for that is that we are all directly answerable to our electorates in a way that continental politicians simply are not. If we were caught up to mischief, the electorate would wreak their vengeance on us and we would no longer be Members of Parliament; indeed, the whole Government could suffer a similar fate. In contrast, from time to time on the continent, those whom the electorate have rejected reappear not only as members of their parliaments, but as members of their administrations. Of course that removes one of the important checks and balances of our system, which I believe to be absolutely invaluable.
Rather than Europe trying to drag us into its system of doing things, there would be great virtue in our persuading Europe not only that our system works and ensures that there is little fraud, dishonesty or corruption in our body politic, but that we have the blueprint that the rest of Europe would be well advised to follow.
What does the EU need the money for? I contend that the functions that it discharges that involve or require large sums can and should be carried out by individual nation states. The answer to that question is that the EU needs the money because it needs largesse, without which it could not persuade individuals and individual countries to do things the way it wants.
My hon. Friend the Member for Gainsborough (Mr. Leigh) has mentioned fraud in farming. In my experience, when we crack down on such fraud, the poor

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take the blame. I have a letter with me this morning about one of my constituents who has 42 cows. She is in desperate trouble because of a crackdown. She has made an error in her paperwork and will forfeit what to her is an important part of her income. That is not the source of the fraud; the source is in the big time. The Mr. Bigs of farming —more particularly, the Mr. Bigs of farming on the continent —get away with massive fraud, and that is the system there. It is probably more than an inspector's life is worth to take issue with the big-time fraudsters who prosper under the system.
My solution to the problem would be to repatriate the spending to the nation states. This country certainly has much tighter controls. If we did not, we as politicians would pay the price by losing our seats, or the whole Government would collapse. My contention is that such money is necessary not for the good that it does, but simply to ensure that the EU has a hold over those on whom it wishes to force its views. That is shown very much in this country's farming industry, where those who might otherwise comment on those matters in the context of agriculture in Britain are in receipt of large sums—some of the cheques are for more than £1 million. Clearly, they will not bite the hand that feeds them. They will not lead the industry in opposition to what I believe is a corrupt regime. That explains, in a roundabout way, why the EU needs that largesse; it buys off its opposition, so it can continue with the systems that many of us think are totally unsatisfactory.
11.58 am
Mr. Mark Oaten: I begin by congratulating the right hon. Member for Haltemprice and Howden (Mr. Davis) on initiating the debate. I note that other hon. Members have avoided mentioning his constituency. I shall refer to him as the Chairman of the Public Accounts Committee, because that is easier. I agree entirely with the remarks that he made in his speech, which were powerful coming from the Chairman of that Committee. I hope that the Economic Secretary will deal with some of the points that have been made.
I agree with all the speeches that have been made, except the previous one. We have heard some thoughtful ideas, certainly from the right hon. Member for Birkenhead (Mr. Field), and the hon. Member for Gainsborough (Mr. Leigh) made some good points about the common agricultural policy, to which I shall refer later.
I welcome the opportunity to discuss fraud. The EU could deal with fraud in one of two ways: it could adapt and ensure that its public administration goes through the motions of reform, or it could tackle the problem and put in place genuine reforms so that it begins to revitalise the rather tarnished reputation that it has not only in this country but among the citizens of Europe.
As we have heard, it is now 15 months since the European Commission resigned en masse, so it is critical to find out what has happened in that period. We have heard this morning that the Neil Kinnock reforms are in place and bedding down. Whatever our views on Europe, we all hope that Kinnock can draw a permanent line in the sand by creating a much more transparent and accountable Commission.
Before I deal with the reforms and where they are going, it is worth reflecting on the scale of the problem. I speak as someone who is pro-European. I am
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passionate about our country's role in Europe, but, while researching my speech, I began to feel slightly Euro-sceptic, because the scale of fraud that is taking place brings out the worst in anyone.
This morning, we have heard that there are different debates about how much fraud there has been. The Court of Auditors, which I think is respected on the issue, has estimated that 5.5 per cent. of the EU budget is lost every year through what it describes as mismanagement, wastage or outright fraud. The amount is nearly the same as the UK's contribution to the EU in the first place. There are some who believe that that figure is somewhat conservative and that the real figure is nearer 10 per cent.
Frankly, whether it is 5 or 10 per cent., the figures are outrageous and totally unacceptable. How can any European citizen have faith in a system in which the budget is approved by a democratically elected Parliament, only to be squandered by bureaucratic, centralistic and unaccountable institutions, which is, sadly, what we have in the EU at the moment?
The Court of Auditors has had to deal with large amounts of EU money. I am concerned that there have been delays in the way in which it has been able to sign off accounts. We have heard that it does good work, but it cannot be right that it cannot sign off accounts even, sometimes, many years in arrears. It is not a good process and system to have in place. The Court of Auditors itself cannot work with the type of systems that we have in this country.
In March, I met Paul Van Buitenen, whom we have discussed and who is widely known as the whistleblower. He and I had an hour-long meeting. I was appalled at some of the stories that he told me about the intimidation and difficulties that he had had to face. I was shocked to learn that the Commission had in place what were effectively gagging order regulations against individuals such as him to prevent them from talking about the irregularities that he had discovered. It epitomised the culture of the Commission that an official was forced to put his position and career on the line and to breach confidentiality to expose the substantial mismanagement and fraud.
Although I admired Paul Van Buitenen's courage, I was astounded by the absence of checks and balances that should have been there in the first place. That raises the question: if he had not had the courage to intervene as he did, would the Commission not have resigned? Would it be shielding some of the things that had taken place? I suspect that that would still be the position.
We have had evidence not only from whistleblowers, but, in April, from Sir John Bourn, head of our National Audit Office, who reported to this Parliament, identifying "significant weaknesses" in the management of the Commission's budget. The NAO found that there may have been errors totalling £3 billion in European payouts in 1998 alone. Together with new clear accounting policies to improve the reliability of the Community's accounts, he called for a simplification of the CAP.
I was interested that the hon. Member for Gainsborough said that the system was complex, and then suggested that we consider a farm tax credit. I am all in favour of simplifying the system, but that sounded

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like a more complex system. I am not entirely convinced that it would crack down on fraud, but we know that the CAP is badly in need of reform.
What are the solutions? Last November, for example, Neil Kinnock launched the whistleblowers charter for the European Commission, which aims to put in place procedures to protect whistleblowers. I hope that that to some extent deals with the concerns that the right hon. Member for Birkenhead raised about putting the processes in place.
The charter mentions the European anti-fraud office, also known as OLAF, as an external channel through which officials can safely report their suspicions to a body that is independent of the Commission. The new OLAF office organises and conducts administrative investigations to detect fraud and irregularities connected with the financial interests of the Community.
Between 1 June 1999 and 31 May 2000, 68 administrative investigations were opened, 30 others were closed and 67 reports were filed. The Chairman of the Public Accounts Committee said that he wanted more of those issues to be aired and some of the details to be available to the public. I welcome the fact that much of OLAF's work is now available on the internet. That is an important step towards much greater transparency and accountability, but, picking up on the points that were made by the right hon. Gentleman, it is important that OLAF's work is monitored independently, so that we have proper accountability.
The Kinnock White Paper detailed a promising reform programme, which was started in March and is expected to continue until the second half of 2002. It focuses on three key areas: comprehensive reform of personnel policy; modernisation of financial management; and control of new systems. I support that programme and agree with the concerns that have been raised about the time scales, which need to be put in place—but progress is being made.
This morning, I had an opportunity to meet Mrs. Fontaine, the President of the European Parliament, and to discuss the Kinnock proposals with her. People sense an atmosphere of change, and that the proposals are beginning to bed down, but, when I discussed the reforms with Paul Van Buitenen, he expressed a concern that, although they may deal with the internal processes, there is a fundamental problem in terms of the culture in the EU, which is much harder to tackle.
The issue that Paul Van Buitenen put to me in cultural terms was that the EU lacks genuine transnational political parties. His argument was that everyone feels a stronger sense of affinity to his own nation, rather than to a pan-European group, and that that can make the imposition of standards difficult and disjointed. I hope that the EU tackles the cultural issue much more.
Of course, the debate about delivery and accountability in Europe is not about just what goes on in the EU. Eighty per cent. of EU spending is disbursed by member states. That is where most of the fraud takes place. An anti-fraud strategy must go beyond Brussels. It must be Europe-wide. That will be a major challenge for some of the EU member states that do not, if I can put it politely, have the same standard of probity in public affairs as we do.
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This touches slightly on the concern of the hon. Member for Gainsborough about the level playing field. If the EU is to embrace enlargement —I hope that it does so —to expand and include countries such as Albania, Poland and Hungary, we must be absolutely sure that the conditions of entry require those individual countries to raise their standards, too.
I am pro-European. I am pro-currency, pro-engagement and pro-Britain playing a full part in Europe, but I am disheartened by the fraud that is taking place. For those of us who believe that Europe is the way forward and is in our best interests, it is damaging our cause and our case. Bluntly, it is wrong that public money is mis-spent in that way. The Kinnock proposals represent a way forward, but, beyond that, there needs to be a cultural change in the EU. I hope that the British Government will take a lead on those issues when they argue for better probity at the conferences in the year ahead.
12.7 pm
Mr. Howard Flight: I, too, congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) on securing the debate. There is obviously a model of proper conduct and of ways of dealing with such problems in the UK. It is a pity that it does not and cannot operate more widely in the EU.
I remind hon. Members that as late as the mid-18th century, the Paymaster General's role was to milk public funds. Indeed, Fox's father made himself rich by so doing. We have not always had the standards that Gladstone established, and they do not seem to establish themselves satisfactorily across the channel.
I echo the support for Commissioner Kinnock. I am sure that he has not been infected by the environment that he is operating in. As has been pointed out, the report seeks to address the processes at least —but I, too, doubt whether it will be effective, because of the cultural problems.
On specifics, I agree that the Court of Auditors must have a rotating chairmanship drawn from the opposition. It must have independent auditors; it is complete nonsense for it to be staffed with insiders, as it were. It must report to the European Parliament, and, potentially, to European Governments individually, on its findings about what has gone on in member states.
I cannot help feeling that it would be useful for the European anti-fraud office to visit Hong Kong, which has the most effective anti-corruption fraud office in the world, although admittedly it is a small country. Again, if the European anti-fraud office is not independently staffed, I cannot see that it can do a proper job. Clearly, it must be accountable to the Court of Auditors.
As others have said, it is clearly essential to have adequate protection for whistleblowers —and, I would argue, rather better protection in this country, given the background —and proper exposure and punishment of offenders. It is unacceptable that individuals can return to power when they have a track record of corruption. I suggest that the European Parliament could do with a Nolan, as it were. Its standards are certainly not the standards of this Parliament, but such a committee is probably the only body that has the power to dismiss a corrupt Commission. Having that ability would give it a powerful raison d'être.

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The central problem of the common agricultural policy is that 80 per cent. of the money is dispensed by member states. The question is how they should be policed, because, to some extent, member states have a self-interest in obtaining as much as they can from the centre. It is a culture of "them", not "us". It will always be difficult for member states to police themselves, but it would be expensive to police them centrally. The common agricultural policy now costs £29 billion and the system clearly invites corruption. Ultimate reform can come only from the abolition of that system.
I wish to touch on a point that has not been raised. The CAP operates the exchange rate compensation scheme, which is drafted in a completely incomprehensible way. While sterling has strengthened by 50 per cent. against other currencies, and what is effectively one European currency, £1 billion or £2 billion a year in compensation has been paid out to Italy, Sweden, Germany and other member states. What is the logic of paying them compensation, because their currencies have weakened en bloc and they have enjoyed the advantages of that? On undertakings for collective investment in transferable securities, the German banks have blocked the development of money funds in Europe, and that is a different form of corruption.
The public in the United Kingdom have rumbled the situation. In a wonderful phrase, the right hon. Member for Birkenhead (Mr. Field) pointed out that they perceive the set-up as a thieves' kitchen. As people on both sides of the argument have said, until there is an improvement and proper standards of conduct, the credibility and standing of European Union organisations will decline further in the eyes of the British public.
When I was a meritocratic student at one of England's leading meritocratic universities, I studied mediaeval history. The wonderful Professor Walter Ullmann put his finger on the problem. Whereas the UK and other Anglo-Saxon nations have the deeply rooted concept of power ascending from the people and the tribe, and leaders being accountable to the people, the problem with continental Europe is that it still has the Roman empire and mediaeval tradition of power descending from God, or what have you. That creates a powerful obstacle in the way of properly exposing corruption, because the citizenry does not expect that to be done. They expect lower standards of conduct than we are used to in this country.
Commissioner Patten has been mentioned. I specifically recollect that £500 million of development support was allocated to South Africa, of which only £20 million of actual expenditure was ever discovered, and most of that was wasted. Some £480 million was completely unknown and unaccounted for. That is unbelievable.
I am nervous that, despite the good intentions of Commissioner Kinnock, there is still not the will to tackle the problem effectively. As was said, we do not know whether fraud is 7 per cent., 10 per cent., or the Court of Auditors' estimate of 5.5 per cent. The issue is not on the Nice agenda, and the view is that it has been buried for the time being.
The Treasury will no doubt refer to its report and to the five proposals of the European Court of Auditors concerning the elements of the structure that are
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missing. However, the problem goes a great deal deeper. Perhaps, only when member states look to devising methods of imposing their own sanctions against corruption will there be any real and dramatic change. In the meantime, I wish Commissioner Kinnock every success, and I commend him on his proper standards and his attempts to address a major problem.
12.15 pm
The Economic Secretary to the Treasury (Miss Melanie Johnson): In the 15 minutes allotted to me, I will struggle to respond to all the points that have been raised. However, I shall do my best. I apologise if my reply is a little bitty, but it is either that or answering fewer questions.
Like everyone else, I congratulate the right hon. Member for Haltemprice and Howden (Mr. Davis) on securing this debate. I know that the subject is dear to his heart and that he refers to it on many parliamentary occasions. I welcome the fact that he has raised the subject and I welcome the contributions that have been made. The Public Accounts Committee was so concerned about the issue that when its members visited Brussels last year, they interviewed key players and produced the important report on "Financial Management and Control in the European Union". It raised many pertinent questions about the state of European institutions and the Commission itself.
The right hon. Gentleman asked about the independence of OLAF and its relationship with the Commission. The arrangements that have been put in place are entirely right, because the Commission has the responsibility, under the treaty, for budget execution. That responsibility must include instituting effective fraud prevention procedures. The anti-fraud office needs to understand the organisation that it is investigating so, in that sense, it needs to be an insider with access to information about what is happening within the organisation. Past experience bears that out. The Commission's previous anti-fraud unit, UCLAF, investigated all the fraud allegations that featured in the wise men's report, but, under the previous arrangements, it had no responsibility for follow-up and there was no mechanism to ensure that the right course of action was taken.
The new arrangements under OLAF will make recommendations on follow-up, and the institutions will have to report on whether that has been carried out. In addition, the unit's director will report to the European Council and to the European Parliament. I take the point made by the hon. Member for Winchester (Mr. Oaten) that the important element of accountability in the reporting arrangements must be considered. It is important that we do not lose sight of that.
The question of whether we should replicate the arrangements used by the Public Accounts Committee was raised. The PAC works because officials have clear roles and responsibilities. The accounting officer in the National Audit Office knows that he is responsible for ensuring that Departments apply the rules and will have to answer if they do not. That is why we pressed the Commission, as a priority, to set out clear roles and responsibilities for all staff. Indeed, the White Paper on reform, which I shall refer to in more detail shortly,

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includes important measures in that regard. We know that the Commission intends all staff to have clear job descriptions and objectives by the autumn. We will keep up the pressure to ensure that there is real and meaningful reform. I agree with all the contributors to the debate who stressed the need continually to press for progress on that front.
Questions were raised by the right hon. Gentleman about Italy. Fraud cases tend to be enormously complex and can take an extremely long time—often years—to investigate. That is not unusual, if we compare it with fraud investigations in the UK on matters unrelated to the subject of the debate. That is frustrating for all of us, but it is not outside the bounds of our usual experience of the difficulties of detecting and investigating fraud. For that reason, it is difficult to comment on individual cases.
On the security contract fraud, the security firm was replaced and investigations by the Belgian police are still going on into the allegedly fraudulent contract arrangements mentioned by the right hon. Gentleman.
It may be helpful if I deal next with whistleblowing. It would have been wrong to intervene without knowing the full details of the case, as ill-considered intervention might have endangered ongoing investigations. However, I accept that there must be rules governing whistleblowing. Since the Government came to power, we have taken significant steps in the UK to establish such rules.
Van Buitenen was the subject of a disciplinary hearing, which reprimanded him for actions that were considered to compromise certain criminal investigations that were in progress; but the judgment was mitigated by the circumstances of his case, particularly the lack of proper procedures for reporting concerns about improper practice.
Mr. David Davis: I thank the Minister for giving way. I do not wish to delay her progress, but is it plausible for a whistleblower who has brought a matter to public attention for the first time to be reprimanded on the grounds that he is jeopardising a criminal prosecution, when no criminal prosecution has ever been brought to fruition in the European Commission?
Miss Johnson: The right hon. Gentleman makes a useful point, but it is fair to say that with regard to the way that van Buitenen behaved, there were issues on both sides. It was not an open and shut case. We accept that whistleblowing by employees is extremely important. If they suspect fraud, they should be encouraged to report it, and whistleblowers should be protected. That is an important principle. I agree with both the right hon. Member for Haltemprice and Howden and my right hon. Friend the Member for Birkenhead (Mr. Field), who made those points particularly strongly.
The Commission's decision in June 1999 on whistleblowers sets out clear procedures for reporting suspected fraud, corruption and other illegal activities. Those procedures will be formalised in the revision of the staff regulations which is in progress, as part of the Commission's reform programme. The aim is to ensure
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protection for a whistleblower acting in good faith and in the public interest. We respect and value that in this country, and have taken steps to put it in place in full-blown form in the UK. Until just a few years ago, we could not claim that everything in our country was right, and indeed, we still cannot be confident that it is all right.
On the subject of structural flaws in the Parliament which lead to protection for individuals by political parties, it is essentially up to the European Parliament to decide how it organises its sessions. The right hon. Member for Haltemprice and Howden proposed an interesting idea in that respect which is worth exploring further.
The right hon. Gentleman also referred to tourism fraud. I agree that the Commission's handling of the matter was not competent. That is why it was so necessary to implement the reforms. There must be greater co-operation between member states. There is scope for taking forward and implementing effectively the Eurojust proposal for an agency to assist co-operation and to allow the exchange of information—for example, about the evidence that needs to be gathered in one member state to be used in legal proceedings in another member state with a different judicial system.
I am sure that Commissioner Kinnock will be somewhat embarrassed by the support that he has received from all right hon. and hon. Members present, but no doubt he will also be delighted. Of course, the Government support reform and the work that he is heading in the Commission.
I agree that staff regulations are too inflexible. Lengthy consultations with staff are required. The last reform took place 10 years ago, so the situation has been left untouched for too long. There is a need to get it right this time. That will take time and negotiation, but we are not complacent. We are keen to make progress, as is Neil Kinnock, I am sure.
There is already a code of conduct for Commissioners, and there are proposals to protect whistleblowers. The White Paper on Commission reform incorporates proposals to modernise staff management, including an overhaul of recruitment procedures, improved training and career management, a proper system of staff appraisal based on job objectives that are directly linked to Commission objectives—a highly desirable feature—a merit-based system of promotion, which is important, and a more effective disciplinary system, which is also important. All the right sort of measures are being progressed.
The hon. Member for Gainsborough (Mr. Leigh) spoke about the way in which EU funds are being wasted. The level of error is clearly unacceptable, and we have been pressing the Commission and other member states to take action. However, we must not lose sight of the fact, pointed out by several speakers in the debate, that 80 per cent. of the expenditure goes through individual member states, and is therefore up to them. We need to address the matter through the EU and by putting pressure on member states through member-state to member-state channels.
Contrary to what the hon. Member for Ludlow (Mr. Gill) said, it is not simply a matter of tackling the Commission. Member states must be tackled. We are

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working with them to improve financial control, which includes work to simplify regulations and provide clarification of eligible expenditure. I agree wholeheartedly with my right hon. Friend the Member for Birkenhead that the mismanagement of public funds undermines the confidence of European taxpayers in the EU. We must work together to remedy an unacceptable situation.
With regard to humanitarian aid, one of the problems is a lack of resources to manage the aid programme. Most of the resources did not go astray, but were used to administer the aid programme. That relates to the point about how much is fraud and how much is money mismanaged in various ways, which is also a big issue. Much of what is described as fraud is not technically fraud, but mismanaged funds.
Mr. David Davis: One example is the 2.4 million ecu contract, which was fictitious. Some of the money, as the hon. Lady says, was used for other employees, but two thirds of a million ecu are still missing. The money cannot all have been used properly.
Miss Johnson: At no time did I suggest that all the money was used properly. I believe that the sum of £400,000 is unaccounted for, but I agree with the right hon. Gentleman that money unaccounted for is unacceptable. We must do more to tackle the problem. Activity-based budgeting will help us to identify the administrative resources needed for efficient management. That is an important part of ensuring that resources reach their destination and that no fraud takes place. The distribution of aid has been the subject not only of proposals by Commissioner Patten, as the right hon. Gentleman said, but of considerable ongoing discussions in various EU forums, including the Budget Council, with which I am involved.
The hon. Member for Gainsborough spoke about the CAP. It is worth while pointing out in relation to his East Anglian example—I know the hon. Gentleman's constituency a little, and I am not sure whether Gainsborough considers itself part of East Anglia, but it is not far short—the claimant literature is constantly being reviewed. We are trying to simplify the pilot scheme for arable area payments in East Anglia. Those may not apply to his area, but efforts are being made to lessen the bureaucratic burden on farmers. We all—
Mr. Deputy Speaker: Order.

Police Services (Sutton)
12.30 pm
Mr. Tom Brake: I am delighted to have been given the opportunity to raise a number of issues about policing in Sutton. I know that my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) would like to speak too, so I shall try to limit my contribution.
It may be unusual, as an Opposition Member, to say that, generally speaking, things in Sutton are working well. The overall policing picture is a good one by comparison with other parts of London and the country. Sutton has the second lowest crime rate in London, and I pay tribute to the local force and the local council for achieving that. I am happy to back the bid by Sutton police to make Sutton the safest borough in London.
Not everything is perfect, of course. The Sutton racial equality council is concerned about the under-representation of ethnic minority officers, the turnover of staff in the community safety unit and the degree of consultation with ethnic minority communities. Perhaps the Minister could comment on the progress that is being made in meeting the target of 5 per cent. ethnic minority officers by the end of the year. There are also concerns in the constituency about 999 calls that are unanswered. I know that that issue was touched on in the debate last Friday.
Sutton police force is having to adjust its numbers following the boundary change with Surrey police on 1 April. That change means that the police boundaries are, for the first time, exactly coterminous with those of the London borough of Sutton. That change has resulted in the creation of the smallest police division in London, but one which I believe is perfectly formed.
Inevitably, reorganising the force and deciding which officers go to Sutton and which to Epsom has not been the easiest of tasks. Furthermore, the boundary change has left Sutton over strength by a net number of 21 officers. The serious shortfall in police numbers across London—hon. Members should be aware that those numbers have fallen by about 1,700 since the Government came to office—has meant that the 21 officers have had to be redeployed elsewhere.
Not surprisingly, many of those officers who were forced to move wanted to stay in Sutton and have been upset by their enforced relocation. Does the Minister agree that enforced relocation, whether caused by a change in police boundaries or by the tenure policy that requires officers to be moved perhaps two or three times within their careers, is unpopular within the Metropolitan police and ensures that valuable local experience and specialised expertise are lost?
Will the Government provide input to the consultation with the Commissioner of Police of the Metropolis on this important issue and support changes that make these moves voluntary rather than mandatory? When do the Government expect the Commissioner to report back on his consultation?
Enforced relocation is not the only local issue; pay is another. I recently secured an Adjournment debate in Westminster Hall on public sector workers' recruitment and retention in London. During that debate, I raised

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the issue of the cost of living for those workers. The Home Secretary clearly read his Hansard and listened, at least in part, to some of the points that I and other hon. Members raised during the debate. Last week, he announced that effectively he was restoring to London police officers recruited after 1994 the housing allowance that the Conservatives abolished in 1994. That is a Liberal Democrat campaign success which, the Minister will be pleased to hear, we shall widely advertise in Focus. [Laughter.]
The Home Secretary made the correct decision, though it will not solve current problems. What assessment have the Government made of the extra number of police officers who will be recruited and retained as a result of the change? I know that the Home Secretary was not able to answer that question last Friday, but perhaps the Minister will have had time over the weekend to analyse its impact. It remains the view of senior officers in my patch that retention will still be a problem even after the Home Secretary's welcome announcement.
Even in London's second safest borough, we cannot afford to lose officers. Last year's crime figures in Sutton were a disappointment, and ultimately that is the test of a policing and crime strategy. There was an increase in crime overall and in each of the major categories. Although burglary and vehicle crime rose relatively little, violent crime increased by 22 per cent. and street crime by 36 per cent. Those are the most worrying features.
I am happy to praise my local police force, but those figures are depressing and we cannot afford to be complacent. I know that Sutton police are not complacent and that they are redoubling their efforts to get Sutton back on track. However, unless they are given the resources that are needed, they will be facing an uphill struggle because of the increasing demands on police resources.
Is the Minister, for example, able to confirm the cost of policing the £1.5 million party that Sir Bob Geldof will be organising for London's mayor, the hon. Member for Brent, East (Mr. Livingstone)? Who will be paying for the policing of that event? What mechanisms exist to stop resources being siphoned away from a relatively safe borough such as Sutton to inner-city boroughs by a Metropolitan police authority, which perhaps inevitably will have an inner-city focus? Will the Minister say how much of the budget of Sutton police will have to be paid out for the welcome increase in post-Sheehy officers' salaries, which will be effective from next week? I shall be happy for the Minister to respond later in writing because I have not notified him of all these questions.
There are ways of maximising the best use of police resources. I recommend the positive partnership approach that Sutton police have with the London borough of Sutton in tackling issues such as graffiti. Sutton council has also been working locally with the probation service on its anti-graffiti strategy. Following successful graffiti projects at Wallington station in my constituency and Stonecot hill, the council's community safety unit is co-ordinating a new project, again in my constituency, at Wrythe lane, Rosehill, which started on Monday.
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Following consultation with shop owners, local residents, the police and the probation service as well as the Sutton youth awareness programme, murals are being created on 19 shutters at a row of shops in a busy shopping location. Not all the shop owners wanted a mural, and that is fine. None will be forced to take one. Offenders on community service orders will paint the shutters, ready for the murals to be painted on by local young people, supervised by Darren Cullen, who is a former graffiti artist.
I am sure that hon. Members will agree that that sort of partnership approach should be commended. However, I am concerned that the good work of all the organisations could be undermined in Sutton by the circulation of a magazine called Graphotism. I do not have a copy of the magazine to show hon. Members, but I have seen photocopies of some of the pages. The magazine is clearly dedicated to the promotion of graffiti. It features photographs of graffiti on commuter trains and it markets products for use by graffiti artists. Many people, including me, take the view that it encourages people to break the law. There is a very small disclaimer that can hardly be read on the pages of the magazine, and apparently that may be enough to let the producer off the hook.
What action can be taken against the publishers of such a magazine? I understand that the police solicitors and the Crown Prosecution Service believe that it would not be possible to prove mens rea, or intention. What further steps are the Government considering to deal with such a blatant incitement to commit a criminal offence?
One way of dealing with the problem of graffiti, if not Graphotism, might be through the creation of community constables, an idea that Susan Kramer promoted tirelessly in her excellent mayoral campaign. The idea is a simple one, and I am sure that the Minister will be familiar with it. I can point to a good example in my constituency. The Sutton parks constabulary is now in its second year and is proving very effective. Council officers are used to doing some of the work that would otherwise be done by the police and they are doing an excellent job. In the past year, for instance, the parks constabulary received 587 calls and dealt with a wide range of issues, mainly relating to youth disturbance, burglar alarms, unauthorised vehicles in parks, joyriding and abandoned vehicles. What plans do the Government have to extend the range of responsibilities that parks constabularies and others could take on?
Sutton is a relatively crime-free area. Local residents, the council, the police, my hon. Friend the Member for Sutton and Cheam and I all want to keep it that way. In fact, we want to make Sutton the safest borough in London, but we cannot do that without addressing the issue of officer retention and without a guarantee that Sutton will not be penalised for its success in keeping crime down. I hope that the Minister will be able to reassure Sutton residents on those points.
12.40 pm
Mr. Paul Burstow: I want to underline one or two of the points that my hon. Friend the Member for Carshalton and Wallington (Mr. Brake) has made.
Some years ago, my parliamentary predecessor, Lady Olga Maitland, secured a debate in the House on law and order in Sutton. In that debate, she branded Sutton

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as crime-ridden and a dangerous place to live. She was wrong, but she secured banner headlines in the tabloid press—popular papers that many people read—portraying Sutton as a dangerous place. That did great harm to the borough and to the livelihoods of many of the traders in Sutton town centre. Those who think that Sutton is a dangerous place today are as wrong as she was then.
My hon. Friend is absolutely right to highlight the fact that Sutton is the second safest borough in London. That is something to be pleased but not complacent about. Sutton is also the smallest borough in London and, with the advent of the borough-based policing system from 1 April, which I certainly welcome, we now have the opportunity to have a much clearer focus of police activity on the problems of the local communities.
We can now have one set of partners. My hon. Friend has already said something about partnership working, which has been established in Sutton for 10 years, with the council, the police and many other community interests working together to develop and invest in crime reduction and prevention, tackling both crime and the fear of crime with initiatives such as closed circuit television, home security, gating projects and youth diversion initiatives.
My hon. Friend referred to the incitement, through a magazine that is circulating in the area, to damage property with graffiti. I hope that the Minister will say something about that and about what the Government intend to do about those who supply the paint products that are used for graffiti. Back in March, there was an initiative in Sutton that tackled the perpetrators. There were 30 arrests and a substantial reduction in graffiti following the concerted effort by the police, the council and others.
That exercise showed clearly that some of the people who supply and sell the paints do it in a way that is totally irresponsible, displaying them in such a way as to entice and paying no regard to the use to which they can be put. I hope that something can be done to control more effectively the way in which the products are sold.
Having the smallest division in the Met has many advantages, some of which I have outlined, but it also has some potential downsides. As my hon. Friend said, the Sutton division is having to slim down to get down to the 254 officers that it will have as a borough division, losing 21 officers from the bigger division that it once was.
There is also undoubtedly concern arising from the current tenure policy, and it is hitting morale. I have had letters expressing concern from local officers. A review of the policy is under way, and it certainly needs to be changed. We must ensure that we make best use of the experience that officers gain through their careers, and of the investment that the police service puts into the development of specialist skills. That can be lost through an ill-thought-out transfer to an area of activity that does not exploit those skills.
Last week, Sir John Stevens told the Commons Press Gallery:
I need to maintain at least 25,600 officers if I am to police London with confidence. The people of London deserve nothing less than the best we can offer and if numbers continue to dwindle we are in trouble—make no mistake.
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He went on to say:
We do not have enough officers to police London with confidence. We have 25,480 officers—five years ago we had 28,000.
If the most senior police officer in London says that he does not have confidence that he can police London adequately, there must be cause for concern in my and my hon. Friend's constituencies about the fact that having only 254 officers does not give sufficient leeway to cover vacancies. We have already discussed the problems of recruitment and retention. With such a small number of officers, losing even one or two to vacancies has a disproportionate impact on the operational effectiveness of the division. That is why I hope that the Minister will say something about the tenure policy and the need to ensure that success in reducing crime is not rewarded by a further reduction in police numbers.
My hon. Friend rightly said that it is important, with a successful community safety strategy, never to be complacent. The crime figures in Sutton in the past year—for violent crime and street crime in particular—have been a cause for some disappointment and concern for my constituents, and for the council and the police, who need to redouble their efforts. They are doing that, but they also need to know that both the Greater London Authority, which is now the responsible body, and the Minister, who provides much of the funds, are mindful of the fact that a small police division needs to have a guarantee that its numbers will not be reduced any further.
12.46 pm
The Minister of State, Home Office (Mr. Charles Clarke): I congratulate the hon. Member for Carshalton and Wallington (Mr. Brake) on securing this debate. We have debated policing in London a great deal recently, both in Adjournment debates and in the annual debate last Friday, so if he will forgive me, I will focus on the issues that he has raised relating specifically to Sutton rather than on some of the more general issues.
Both the hon. Gentleman and the hon. Member for Sutton and Cheam (Mr. Burstow) began by talking about current policing working well and rebutting the approach that was only too characteristic of Lady Olga Maitland when she represented Sutton and Cheam. It is worth placing on the record the comparative crime position in Sutton because, as has been said, it is very good.
Incidents of violence against the person in Sutton were 6.5 per 1,000 of the population in the 12 months to September 1999, compared with the Metropolitan police average of 11.2; sexual offences were 0.4 per 1,000, compared with 0.7; robberies were 0.5, compared with 2.3; burglaries from a dwelling were 2.1, compared with 5.1; thefts of a vehicle were 2.9, compared with 4.2; and thefts from a vehicle were 5.2, compared with 7.8.
None of that is reason to be complacent in any way, but both hon. Gentlemen are absolutely right to highlight the fact that Sutton is the second safest borough in London and to join the police in the borough in campaigning to make it the safest.
Greater London has witnessed significant change this year in its government, with the creation of the GLA and of the independent Metropolitan Police Authority and, most importantly in my opinion, with the

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consequential boundary changes that have affected Sutton and other London boroughs significantly. The hon. Member for Carshalton and Wallington put the case well when he referred to the encouragement that the coterminosity of boundaries affords to a whole range of partnership working.
Many police officers have described our Crime and Disorder Act 1998 as one of the most significant pieces of legislation ever to affect policing. That is predicated on good partnerships, which are massively assisted by being able to have common boundaries and therefore common professional, political and strategic links. That is extremely important.
Obviously, there may be teething difficulties, as there have been big changes in the policing of the Sutton area, with the transfer of the officers who police the Epsom area to the Surrey police. No doubt there may be some confusion in the immediate period, but I know that the hon. Gentlemen and all the authorities concerned will do their best to ensure that the transition is as smooth as possible. The ultimate result of the transition will, I believe, be positive for the residents of Sutton, as it will be more generally across the Metropolitan police force. The change is important and significant.
The issues raised by the hon. Members for Carshalton and Wallington and for Sutton and Cheam are important. Boundary changes under the leadership of the borough's police commander, John Bainbridge, to whom I also pay tribute, have become a conduit for the review of policing styles in Sutton. He has decided to adopt a combination of intelligence-led and problem-orientated policing that is locally delivered in partnership with the borough council. That is an important development. The Metropolitan police have invested more resources and effort into problem-orientated partnership activity, as in their view it will achieve lasting reductions in crime and disorder. Such improvements would have been more difficult to deliver before the boundary changes.
I understand the concerns expressed on the reduction in police numbers. I understand from the commissioner that the boundary changes left Sutton relatively over-staffed, when other London boroughs were short of staff. The result was the transfer of about 20 officers in June and July to other London boroughs, as the hon. Member for Carshalton and Wallington said. The process has been handled by the force as sensitively as possible, and I hope that it will take place smoothly.
I understand that the boundary changes have resulted in a target in the Sutton borough area of 254 police officers by 31 March 2001. They will be supported by 75 civilian staff. We do not believe that that change will compromise the Met's policing style. Nor will it affect their operational activities. The policing of Epsom and the other areas that have been transferred to Surrey police is a matter for the chief constable of Surrey, who I am sure will ensure that Epsom is as well policed as previously. Indeed, Surrey's budget has been increased as a result of the boundary changes to ensure that the resources are available.
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Both the hon. Members for Carshalton and Wallington and for Sutton and Cheam referred reasonably to the issues of tenure, which are important to consider. The facts on tenure are straightforward. For reasons of not only specialism, to which the hon. Gentlemen referred, but community continuity, which is essential to partnership work, we have considered that it is important to address again the question of tenure. The commissioner is indeed doing so. The Metropolitan police service career management policy is about to be launched, which will replace the tenure arrangements—officer postings—with a Much more effective means of capitalising on the needs of the organisation and officers' particular professional skills.
I believe that the change on tenure will be widely welcomed—I certainly welcome it—and that it will address much more effectively the need for stability and the removal of uncertainty to which both hon. Gentleman referred. I hope that the change will be welcomed by all people throughout Sutton and by the hon. Gentlemen. I certainly commend it to them. It is part of a significant and substantial programme on which I am happy to give further details to them in writing if it would be helpful. It is an important part of the remotivation and rededication of the police service in London generally, and Sutton particularly, to the issues that have to be addressed.
Mr. Brake: I would be grateful if, as far as possible, the Minister confirmed in his letter the timetable—when consultation will finish and when any recommendations will be implemented.
Mr. Clarke: I am of course perfectly happy to do that.
I apologise to you, Mr. Deputy Speaker, for my unparliamentary behaviour in laughing out loud when the hon. Member for Carshalton and Wallington claimed the increase in Metropolitan police pay as a Liberal Democrat campaign success. I have heard many things so claimed in my time, both in my constituency in Norwich and nationally, but without taking away any credit for the vigorous way in which the hon. Gentleman puts the case, I assure him that the announcement by my right hon. Friend the Home Secretary on Friday was due to scientific assessment of a range of facts and the result of wide representation. I believe that it is out of order to laugh during a parliamentary debate, but I could not control myself. I try to be an extremely controlled individual, but I could not manage to be so on that occasion.
The hon. Member for Carshalton and Wallington referred to the Sutton parks constabulary, which is an important point. The constabulary is an important complement to the work of the Metropolitan police service in Sutton. The London borough of Sutton parks police work closely with Metropolitan police staff under a joint protocol for responses to incidents and the flow of intelligence. The parks police have been directly involved in the graffiti and under-age drinking initiatives. The constabulary has eight constables, and its work complements our continuing drive to develop partnership between police and local authorities.
In my city of Norwich, a similar parks police initiative under the neighbourhood warden and community constable scheme has had a major impact on improving

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the amenity of parks and on eliminating not only petty but sometimes more serious crime. I am therefore happy to commend the police, the council and Sutton parks constabulary for their work and look forward with interest to evidence of continued work in that area.
The graffiti campaign is important. I refer to the Adjournment debate on the matter on 27 March secured by the hon. Member for Twickenham (Dr. Cable). Indeed, in the policing debate on Friday, the hon. Member for Kingston and Surbiton (Mr. Davey) raised such points. I take the points seriously; they are important and we are seeking to address them.
Sutton's multi-agency approach between the police, local businesses and communities, schools and the Crown Prosecution Service seems to be effective. I understand that a database of tags has been developed and important links between graffiti artists and priority crimes have been established. A total of 50 reported allegations have been dealt with by various means.
I commend to the hon. Member for Carshalton and Wallington the development of new guidelines on closed circuit television in the context of his remarks on transport. I published them in February, and we gave, particular priority to CCTV in areas where there is concern about transport. That will help our integrated transport policy and with the issues that he raised. I cannot tell him anything on the question of the publishers of the magazine, although I will look into that. We have looked carefully into the serious issues concerning paints and the way in which we can deal with them.
Mr. Brake: The Minister has not responded to the issue about magazines and it was certainly not addressed in Friday's debate. I would be grateful, therefore, if he responded in writing.
Mr. Clarke: I will respond; I was not aware of the problem more generally.
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The hon. Gentleman raised the question of the 999 service, which is a serious concern. I dealt with that in my response to Friday's debate, so I will not go through the matter in detail except to say that many more staff have been recruited to address the issue. The issue of a major £1 billion investment in a completely new command and control system will be one of the earliest and toughest decisions for the new Metropolitan police authority. We in government have encouraged that. The Metropolitan police are working very hard on it and we acknowledge that serious issues need to be addressed.
As the hon. Gentleman knows, the target—I emphasise that such targets are not quotas—for ethnic minority recruitment is 25 per cent. by 2009, which is challenging. The majority of forces should meet their target in 10 years, but we have accepted that some may take longer. I have no other information to give him on that subject. We give great priority to it for the simple reason that, in cities across the United States of America, for example, when a community identifies with the police force that serves it, policing is strengthened in a variety of important and different ways.
On Bob Geldof and the mayor of London's campaign party, I must confess that I do not study the affairs, particularly the social life and plans, of my hon. Friend the Member for Brent, East (Mr. Livingstone) as closely as I perhaps should. However, I assure the hon. Member for Carshalton and Wallington that, under section 25 of the Police Act 1996, the commissioner has the power to charge for policing special events such as pop concerts. The matter is one for the commissioner, although any event that my hon. Friend might organise for his own pleasure and interest should not affect normal policing. Off-duty officers would often be used.
I have attempted to address the issues and conclude by commending Sutton for its extremely effective and strong safety record.

Paper Industry
1 pm
Mr. Jonathan Shaw: I am grateful for the opportunity to debate one of the United Kingdom's great manufacturing industries. As chairman of the all-party group on the paper industry, I can tell the Minister for Small Business and E-Commerce that those hon. Members with paper interests in their constituencies are concerned about the pressures that the industry faces and believe that the Government should be seen to take those concerns seriously. Therefore, my purpose today is to highlight the industry's valuable contribution to UK manufacturing and present its concerns to the House.
The UK has 98 pulp, paper and board mills, employing about 21,000 people. Those mills produce hundreds of grades of paper and board, which convert into a wide range of products for industry, commerce, education, communications, distribution and personal use in the home, together with a host of other specialty papers for industry. It is estimated that 12.7 million tonnes of paper were used in the UK last year. Sadly, more than half of that paper came from imports.
Mills in the UK are concentrated in Lancashire, the west country, central Scotland and my own county of Kent. In the Chatham and Aylesford constituency, the industry has an annual production of approximately 1.4 million tonnes of paper and board, making it the largest single concentration of production anywhere in the UK, employing more than 1,000 workers.
The industry is highly capital intensive. A new paper or board mill can cost well over £200 million and may take up to three years from the design stage to commission. To obtain an adequate return on such an investment, a mill needs to operate 24 hours a day. Such huge investments make the industry volatile to fluctuations in demand. If the economy slows down, so does the demand for paper.
The measures taken by my right hon. Friend the Chancellor have created the type of stability that the paper industry needs. Yet, as I said, the market is a European one, with 80 per cent. of imported paper coming from Europe. During the past three years, the value of the pound has led to job losses, mill closures and lost markets. Within such a competitive market, it can be difficult to claw back those markets.
The paper industry takes seriously its responsibility to the environment. During the past 20 years, the industry has reduced its water consumption by 70 per cent., its energy consumption per tonne of paper is falling year on year, and many of the UK operations have transferred their energy needs to combined heat and power plants. Earlier this year, following negotiations with the Government on the climate change levy, the industry agreed tough targets. Before her transfer to the Department for Trade and Industry, my hon. Friend the Minister was very much involved in those negotiations, particularly at the preliminary stage.
I welcome the outcome of the negotiations. The industry felt that the Government had a genuine desire to listen and it responded. But there remains some anxiety in the industry, in particular about what is good quality combined heat and power, because it is that
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which will be exempt. It would be of great help if my hon. Friend were able to say when that matter will be clarified.
The industry knows that, if it is to compete, it must invest. Last year saw £300 million of capital expenditure, and, coupled with that investment, the industry has increased efficiency. Since 1989, output has improved by 43 per cent., and productivity per operative has increased by 140 per cent.
The paper industry is different from other traditional manufacturing industries in that capacity is increasing, not contracting. It is important to recognise that the industry has massive potential, and, with the right economic conditions, most of which are in place, it has the ability to beat all comers. As I say, despite technological advances, paper consumption has not declined but increased. The Government make their own contribution to that with their endless White Papers, Green Papers and consultation documents, all of which, I am sure that my hon. Friend will agree, make excellent and stimulating reading. Some may be better than others, but I shall leave it to my hon. Friend to say which. That also creates jobs.
In 1990, the UK consumed 1.8 million tonnes of newsprint, and in 1999, that had increased to 2.5 million tonnes. In the UK, we buy more papers and magazines than any other country in Europe, having recently overtaken Germany. I am bound to say that, indisputably, the best newsprint comes from Aylesford.
Given that the market is growing, with a forecast growth of 2 per cent. in the UK and between 1 and 3 per cent. throughout the rest of Europe, the question for us in the UK is whether our paper industry will be able to capture those markets and take advantage of the extra business and prosperity that that will bring. At present, we are at a distinct disadvantage.
Last year was a record year for production, with a turnover of £3.5 billion, yet the industry realised a pre-tax profit of just £150 million. The main problem facing the industry is the strength of the pound and the weakness of the euro.
The Graphical, Paper and Media Union, the main union representing workers in the industry, advises me that mills throughout Britain have closed, principally due to the strength of the pound. We have seen examples in Kent where profitable mills, such as Kimberley Clark Ltd. in Larkfield in my constituency and the Buckland mill, which produces the world famous Conqueror paper, owned by Argo Wiggins are in the process of closing operations, with about 400 job losses in Kent.
The industry knows that, to a certain extent, it must live with a strong pound. But to be told that it must be more efficient does not inspire confidence, particularly given the background of the figures to which I have referred. Cost-cutting and efficiency improvements have been made at the cost of many jobs—2,500 in the past two years, representing 10 per cent. of the work force. Importantly, they are well-paid jobs.
The Paper Federation of Great Britain recently held a referendum among its members regarding entry into the euro, and 60 per cent. favoured entry, believing that it was the right move for the industry, although obviously at the right rate. That view is shared by the GPMU.

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It is vital that industry takes part in the debate. When we have a referendum, industrial leaders will have more influence on what is a major democratic decision than ever before. People who work in mills, textiles, and in the car and steel industries will ask their employers and union leaders what it will mean for their industry, job security, ability to pay the mortgage and have a holiday. Those are the issues that matter and those are the arguments on which we should concentrate. I should like the Government to take a more robust line as the matter is taken forward.
I have spoken about the great efforts that the industry is making in investment, productivity, the environment, and about the pressures that it faces. However, it is also important to highlight some of its shortcomings. The industry has an appalling health and safety record, which puts mill owners in the United Kingdom to shame. Twelve deaths have occurred in the past six years and scores of serious accidents.
Two years ago, the industry set itself a target of reducing serious accidents by 50 per cent. It is widely acknowledged that progress has not been satisfactory. Earlier this year, George Beattie, the GPMU national officer, told a meeting of the chief executive officers of the paper industry that they were not improving enough or even at all. That is a damning indictment.
The industry kills. There are examples of people being allowed to work 34 12-hour shifts without a break. The industry asks people to work for 40 days without a day off. Paper mills are dangerous places, and the industry has not taken health and safety seriously enough. The culture is far too macho, and there is a lack of interest in health and safety. The consequences are fatalities. People are dying in the industry.
There must be change, and I hope that the industry will take its commitments to targets seriously. There must be a wake-up call, and a sea change in the industry's attitude. The targets that the industry has set are not unrealistic because there are examples of good practice throughout the country in various mills, which have reduced their accident rates by 50 per cent. If some can do it, others can learn and follow their example.
Against the background of appalling safety, the GPMU will not sit back. I endorse its campaign themes. Its message is:
We are here to work, not to die. Say no to unsafe jobs.
That is a powerful message, and I hope that mill operators will take it seriously. There is a firm basis on which employers and unions can improve their health and safety record: a positive and productive relationship between the two sides. The relationship between the unions and management could be held up as a model of excellent industrial relations. It is therefore possible to use that relationship to ensure that the health and safety record matches the technological, productivity and environmental advances.
The industry is good for Britain. With the right economic conditions, it can be a world beater because it has a skilled and dedicated work force. The Government need to listen and understand the anxieties and do everything in their power to create the right economic conditions for it to thrive. If we do that, it will thrive.
1.13 pm
The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): I warmly congratulate my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on securing the debate and on his election as the new chairman of the all-party group on the paper industry. I also congratulate him on his excellent speech, which was made not only on behalf of his constituents who work in the industry, but on behalf of the whole industry.
I checked the parliamentary online information system—POLIS—and found that the paper industry was last debated in the House 14 years ago. I appreciate that my hon. Friend spoke on the importance of recycling in the industry in the Budget debate earlier this year. However, it is extraordinary that such an important industry has not been the subject of a debate before today. I therefore especially congratulate my hon. Friend on securing the debate.
I strongly agree with my hon. Friend's remarks on the industry's importance. This country has an extraordinary tradition of excellence and self-sufficiency in paper and board making. Fifty years ago, we were not only wholly self-sufficient in producing paper and board, but a major exporter. For a variety of reasons, that position has been steadily eroded until a nadir was reached in the mid-1980s. Employment in the industry has fallen from 52,000 in 1980 to less than half that number today.
The shrinking in employment does not provide an accurate view of what has happened in the industry. I am glad that my hon. Friend emphasised its productivity improvements and output growth. Both have been striking. In the past two decades, total annual production has nearly doubled from 3.8 million tonnes to 6.6 million tonnes.
There is still significant employment in the industry. As my hon. Friend said, some 21,000 employees work in fewer than 100 mills in several different parts of the United Kingdom, including, of course, my hon. Friend's constituency. If one takes the wider definition of the industry by the Office for National Statistics—it includes pulp, paper and paper products—the sector contributes more than £4 billion of value added to our gross domestic product. That is comparable to the manufacture of textiles and aircraft, and greater than the manufacture of steel and computer hardware. We are therefore considering a sizeable, high-productivity, high-technology manufacturing sector.
The industry's other distinctive feature, to which my hon. Friend referred, is its position not only in a European but a global marketplace. That is clearly reflected by the industry's ownership structure, with some 60 per cent. of capacity owned by overseas interests, including Nordic and North American interests. My hon. Friend rightly mentioned that we import more than half our total paper requirements. We are in a major market; our consumption is the fifth largest in the world and, as my hon. Friend said, it is growing. Imports are also growing fast. Exports have remained steady, but imports are growing rapidly. Our ability to recover paper from the urban forest—the newsprint and other forms of paper that have already been used—is crucial to our future competitiveness.

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The strong level of investment that continues in the industry is welcome. It has often been encouraged by Government grants. In the last three financial years, 93 offers of regional selective assistance grant have been made and accepted. They total some £19 million of Government support for investment in paper, paper products and packaging. Of course, the total value of the investments is far greater. That is encouraging for future productivity and the management's confidence in the capacity of the UK industry. The large amount of inward investment in the tissue products sector is especially welcome, as is investment in environmental improvements.
Although the industry faces competitive challenges in a global marketplace, and employment in the sector is contracting, it is fundamentally in good shape. Output has continued to increase, and productivity has been increasing substantially.
I should like to say more about the growing importance of recycling in the paper industry. As my hon. Friend knows, the so-called waste paper utilisation rate—the proportion of our paper production that is derived from waste paper and board—is among the highest in the world, at around 65 per cent. Aylesford uses only recycled stock for its newsprint production.
The other side of the coin, the recycling rate—the proportion of our total waste paper that is collected and recycled—is disappointing. It is less than half the utilisation rate. One of the reasons is that we consume far more paper and board than we manufacture. Consequently, several million tonnes of paper are landfilled each year. That is clearly a wasted opportunity for environmental sustainability and industrial competitiveness.
Waste Strategy 2000, the waste strategy for England and Wales, which we published in May, sets out the various steps that we are taking to increase the recycling rate. It has been good to see the response from the paper sector to the White Paper and the recent call for proposals under the recycling programme of the Department of Trade and Industry to support research and development, and to underpin projects that are designed to increase demand for recycled materials. We are now in the final stages of assessing those projects.
Mr. Shaw: This subject is close to my heart, and I spend much time lobbying every Minister about the need to provide more facilities so that local authorities can collect their waste in a way that means that it can be recycled. Does my hon. Friend agree that the three mills that can take newsprint and magazines are full to capacity and that no new mill has been built for nearly five years? The mills that have come on stream have been in Europe. It is a European market, so there is only so much capacity. We need to increase capacity and it is essential that the Government provide assistance for that. Without that, the strategy will not work.
Ms Hewitt: My hon. Friend makes an important point and I am well aware of his long-standing interest in the issue and the proposals that he has made to
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colleagues and myself. In the Waste Strategy 2000, we announced that we would set up the waste and resources action programme—WRAP—to overcome some of the barriers to reuse and recycling. The objective of that new body, which will be established later this year, will be to promote more sustainable waste management generally, but, in the first instance, to focus on developing markets and end uses for secondary materials. I hope that it will be able to tackle some of the market failures that exist in recycled materials, especially newsprint. Both the Department of Trade and Industry and the Department of the Environment, Transport and the Regions have committed resources to that new organisation to give some muscle to the strategy.
My right hon. Friend the Minister for the Environment recently reached an agreement with the newspaper publishing industry on increasing its recycled content targets. I am sure that my hon. Friend agrees that that was an important development.
My hon. Friend referred to the climate change levy that will be introduced next April. That levy is a key element in our strategy to tackle the issue of global climate change and to deliver on our international and domestic targets to cut emissions of greenhouse gases. We have worked hard with industry—the paper industry and more broadly across manufacturing—to ensure that we get the design of the CCL right to achieve our environmental objectives in ways that do not damage, and indeed could enhance, the competitiveness of British industry.
As my hon. Friend will be aware, the Chancellor announced important revisions to our original proposals in both his pre-Budget report last November and in his Budget statement in March. When we announced the levy—I was involved as Economic Secretary to the Treasury—we made it clear that we would take especial notice of the position of the energy-intensive sectors that are subject to intense international competition, including, of course, the UK paper industry. I am therefore pleased that the Paper Federation of Great Britain, on behalf of its members, has negotiated with the Government an energy efficiency agreement which will qualify the industry for an 80 per cent. discount on the levy. That is an important step forward for the industry's competitiveness and the wider objective of improving environmental sustainability.
My hon. Friend rightly referred to the exemption from the levy for good quality combined heat and power. My right hon. Friend the Minister for the Environment announced on 17 May how good quality would be assessed, using a simple and definitive methodology called CHP quality assurance. That followed valuable consultations with the paper industry and other CHP users. My right hon. Friend will issue the full details in the next few days, and they will be circulated to all companies using CHP.
It is worth stressing that the CHP plants that have been approved during and since the review of energy sources for power generation include four paper mill developments, totalling nearly 350 MW. I warmly congratulate the industry on those multi-million pound investments in new paper production technology.

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My hon. Friend mentioned the issue of the exchange rate and the weakness of the euro. We know that that is causing difficulties for British industry, particularly paper and board manufacturing, 75 per cent. of whose exports go to the European Union. As my right hon. Friend the Chancellor has said on many occasions, the problem is the weakness of the euro, rather than the overall strength of sterling. Indeed, sterling had been stable for four years against the dollar, although more recently it has fallen to a six-year low against the dollar. The Government must take a long-term view of how to achieve the economic stability that, as my hon. Friend began by saying, is crucial to investment and confidence in the paper and other industries. We will not allow short-term pressures to risk returning us to the days of boom and bust and a constant change in policy that made investment in the UK's productive capacity so inadequate.
It is worth remembering that in the paper industry, and more broadly across manufacturing, we are seeing improvements in output, productivity and exports. Although manufacturing employment has fallen by some 160,000 jobs in the past three years, we should remember the period between 1979 and 1997, when manufacturing employment fell, on average, by 140,000 every year. The scale is very different today.
As my hon. Friend will be aware, the Government's policy on the single currency remains as it was when my right hon. Friend the Chancellor of the Exchequer set it out in October 1997. The determining factor that must guide any Government decision is whether the economic case for the UK joining is clear and unambiguous. We have set out five economic tests that have to be met before any decision to join can be taken, and we have made it clear that once the Government have made a
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decision, it will be put before Parliament, but that the final decision must be made by the people in a referendum.
I shall end, as did my hon. Friend, on the issue of the health and safety performance of the industry. I am glad that he tackled so trenchantly the appalling health and safety record that mars the otherwise highly impressive record of productivity and investment. I know from discussions with the Graphical, Paper and Media Union how hard it has worked with management, in a model of partnership with industry, to tackle that problem. The accident rate in the paper industry has persistently remained some 50 per cent. higher than the average achieved by all manufacturing industry. That record is simply not good enough.
For the past two years, the industry, the unions and the Health and Safety Executive have co-operated in a major initiative, strongly backed by Ministers in the Department of the Environment, Transport and the Regions. The initiative was designed to reduce accidents by 50 per cent. over three years, but the accident figures remain stubbornly high. That is unacceptable. We expect from the owners and management of the mills a commitment to safe working practices, and a culture of safety and continuous improvement in which people's health and lives are not regarded as expendable commodities in the quest for higher output. That safety record is the one blot on the record of an industry that is enormously important to this country, which has made real improvements in investment and productivity and which certainly has the backing and the practical support of the Government.
Question put and agreed to.
Adjourned accordingly at half-past One o'clock.