Westminster Hall Sitting of 10 January 2001

Preamble
[MR. MICHAEL LORD in the Chair]

Steel Industry
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Touhig.]
9.30 am
Mr. Llew Smith: As someone who, many years ago, worked for a short time in the steelworks and who now represents a constituency that includes the major steel plant at Ebbw Vale the debate, for me, is about jobs, about communities, about one of our great industries—steel. Linked to that, it is also about the United Kingdom's future as a manufacturing nation.
Sadly, that agenda was dismissed by Corus and its immediate predecessors. Their agenda—the only thing of interest to them—was summed up by the chairman of Corus, Brian Moffat, when he announced that he and his company were in business to make money, not steel. That philosophy was not reflected in the public statements made when Corus was first formed. On that day, I received a telephone call from one of the directors, Mr. Vickers, who wanted to assure me that the steel industry was safe in Corus's hands—which was similar to Mrs. Thatcher's statement that the health service was safe in her hands.
In retrospect—and, as always, wishing to be polite—I have to say that neither of them was telling the total truth, because since then, thousands of jobs have been lost in the UK steel industry and some plants are now threatened with closure. In that telephone conversation, Mr. Vickers also wanted to assure me that there was no threat to the Ebbw Vale steel plant and that its future was secure. I hope that I never have to accuse Mr. Vickers of lying on that matter.
Whatever criticisms I might have of the company, however, a lack of consistency would not be one. From the word go, money was its only interest. If anyone questions that, I suggest that they pause for a moment and examine the facts. When Corus, was formed, the first act of the board of directors was not to announce plans for future development but to pay out £694 million to its shareholders. That transfer had nothing to do with the shareholders' contribution to the success of the company but was another example of corporate greed—of lining the pockets of the fat cats of industry who have done so much to damage British industry. Such behaviour was reflected and encouraged in the Thatcher years. Sadly, that aspect of Thatcherism is still alive and kicking; and nowhere is it more obvious than in the boardroom of Corus—as it was previously. The directors are the true inheritors of that rotten tradition.
Corus also decided to use the law to rip off its pensioners, the former steelworkers who had built the industry and the company into one of the most
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successful in the world. As the Iron and Steel Trades Confederation stated in its evidence to the Select Committee on Trade and Industry in November 2000, the steel bosses had
appropriated unilaterally £863 million from a surplus in the British Steel Pension Fund
and were using it to reduce company contributions to the fund. The most disgraceful part of that episode was that most of the money invested in the pension fund, which had been built up over many years, was paid in by the publicly owned British Steel corporation. It should not be forgotten that in the 1970s and 1980s the British taxpayer supported the corporation. In effect, the money expropriated by Corus and its predecessors was British taxpayers' money. When Corus was set up it was also decided to give massive remuneration to the former Dutch senior management. Surprise, surprise, there was no proposal to bring the wages of the British steelworkers up into line with those of their Dutch counterparts.
Another point that arises in relation to money, and one that affects the United Kingdom steel industry, is that the former British Steel was—at least when compared with Corus—a comparatively prudent organisation. It would endeavour to maintain a cash reserve in profitable times to tide it over when the inevitable downturn came in the notoriously cyclical steel market. Yet by September, Corus had accumulated debts of more than £1.86 billion. Far more worrying is the fact that its most pressing current problem is financing the debt, which is costing Corus close to £1 million daily.
Corus was warned by the trade unions that its strategy was dangerously wrong, but their advice was, as always, ignored. Why should Corus listen to working people when what they wanted was to produce steel? I assume that that is why Corus, unlike companies on the continent, refuses to consult steelworkers on the future of their industry.
Mr. Richard Livsey: I agree entirely with the hon. Gentleman about the management of Corus. Would it be prudent to ask why the Department of Trade and Industry allowed the amalgamation of Corus and British Steel? Does the hon. Gentleman agree that the Minister needs to defend and explain the decision? The consequences, as the hon. Gentleman has said, are devastating, especially to the steel industry in Wales.
Mr. Smith: The question was directed to the Minister, who will, I am sure, if not defend, explain the decision to allow the amalgamation.
Recently, Mr. John Bryant and the other joint chief executive were sacked. They were obviously being held responsible for the problems of the company. There is something called corporate greed, and surely there is also something called corporate responsibility. The decisions taken by Bryant were not taken in isolation or in opposition to Sir Brian Moffat and the rest of the board of directors. If sackings were necessary, the whole board should have gone, because it was obviously collectively responsible for the decisions that were taken. If Bryant had to go, Moffat and other board members should have followed.

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If the press speculation is to be believed, at the time of the supposed resignation—in reality, the sacking—of Bryant and the other chief executive, they shared massive payouts of between £1 million and £2 million. Failure obviously does not come cheap in Corus. It will not come cheap for steelworkers in communities like mine. Their payments will not be as generous as the one that Mr. Bryant received. For Sir Brian Moffat and his board of executioners, the price will be worth paying if it safeguards their necks and their executive share options.
The ISTC would argue that
The new approach of the company seems to be based on an intention to concentrate on the home market and to reduce export efforts to attempts to retain or capture niche areas. This would mean abandoning most markets in other European Union countries to which nearly half of Corus's production in Britain is presently exported.
The ISTC also points out that Corus pays no heed to
the increased vulnerability to which the company would expose itself, stemming from reliance on the declining British manufacturing sector…the opportunities for building on the hard won markets in other European Union markets which are growing relatively fast…the prospect of a massive strengthening of the competitiveness of Corus products' as a result of the appreciation of the Euro against Sterling.
Indeed, the euro is strengthening, which is assisting Corus, and it is about time that Corus admitted that fact.
Also mentioned is the problem of the
demoralising impact on the outstandingly productive, skilled, and loyal workforce in Corus.
Although the contribution of the board of directors and the shareholders has been virtually nil to the development of the company, that cannot be said of the workers.
One of my predecessors, Aneurin Bevan, was fond of saying, "This is my truth; now tell me yours." Well, this is the truth, as far as the record of the work force is concerned, as opposed to the records of the likes of Moffat and the directors of the company. Productivity gains in the Welsh steel industry during the past 20 years rank with the best in the world. Productivity increased from 134 tonnes a man year in 1979 to 597 tonnes a man year in 1999. According to Eurostat, that compares favourably with Germany, at more than 540 tonnes a man year, and France, at 530 tonnes a man year.
Sadly, the work force have not benefited from the increased productivity, and the reason for that is obvious. The productivity, like that of other steelmaking countries in the European Union, has mainly come about because of a reduction in employment. The importance of the Welsh steel industry to the Welsh economy also needs to be stressed.
Mr. Barry Jones: I congratulate my hon. Friend on obtaining the debate, and on fighting hard and tenaciously for his community.
My steelworks, Shotton, once employed more than 14,000 steelworkers, but that figure is now dipping below 1,000. On Deeside, our community is terrified of losing its cold strip mill with the loss of 300 jobs. Our steelworkers have been very productive despite that, but
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they have never been rewarded for being productive in the face of giving up their jobs. I urge my hon. Friend to fight on.
Mr. Smith: The points made by my right hon. Friend about his constituency apply almost exactly to mine. Not many years ago, our steelworks employed 13,000 to 14,000 people, but that figure is now down to 800 to 900. The work force in Ebbw Vale, like the work force that he mentioned, have co-operated with the management on every occasion, increasing productivity, to the benefit of the company. They can be proud of that.
I should stress the importance of the Welsh steel industry to the Welsh economy. In 1999, it produced 6.8 million tonnes of crude steel out of the United Kingdom's total of 16.3 million tonnes. It accounts for about 5 per cent. of Welsh gross domestic product and 42 per cent. of all crude steel produced in the UK.
Those figures clearly show the increased importance of the Welsh sector's contribution to the UK steel economy. In 1999, Welsh steelworks delivered 6.1 million tonnes of finished steel products, of which 2.7 million were exported outside the UK. The prospects for Welsh steel ate therefore closely linked to the performance of UK manufacturing and construction. The industry employs 12,000 people, and it is estimated that a further 27,000 jobs directly or indirectly depend on it. If the steel industry were to be run down, the impact on the Welsh economy and other parts of the UK economy would be almost too frightening to contemplate. During the three years up to 1999 there were 3,000 job losses in the steel industry in Wales, reducing the work force from 14,000 to 11,000. Some 1,300 jobs were lost as a result of last July's announcement.
There has been much press speculation about Llanwern. If the fears about Llanwern are proven correct, with a consequent knock-on effect on other plants in Wales, particularly the plant at Ebbw Vale in my constituency, the number of steel jobs in Wales could fall below 5,000. The Government must be aware of the catastrophe that would hit our communities if large-scale redundancies were announced. What talks have the Government had with Corus and the trade unions regarding the proposed redundancies? What role can the Government play in averting those job losses? What would be the environmental cost of cleaning up and clearing the Llanwern site, if that site were closed? Who would be responsible for that cost? What are the Government doing to develop a strategy that promotes the development of manufacturing in the UK and ensures the survival of the steel industry, especially in its current configuration?
The managing director of Corus Strip Products, Nick Craggs, seemed to recognise, in principle, the need for such a strategy, when he said:
I do not believe that the UK economy can survive and prosper on traded services lone.
He went on to refer to the fact that manufacturing contributes an increasingly smaller share of UK GDP—it contributes roughly 20 per cent. at present. I would challenge Craggs. If he believes that manufacturing is so vital to our economy, he should prove it by fighting to maintain the UK steel plants' current configuration. Steel is the basis of innumerable manufactured products

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and demand for steel is a good indicator of business conditions. We need good manufacturing jobs, which will in turn encourage further inward investment and create high quality jobs.
Corus has shown a marked reluctance even to maintain existing UK facilities, and the lack of investment in the UK since the company's formation must result in declining competitiveness. As I said, if the recent speculation regarding the future of Llanwern is correct, it is now obvious why Corus, without any reservations, failed to commit itself to the re-lining of the plant's No. 3 blast furnace.
The failure to stand up for the steel and manufacturing industry is catastrophic for our communities. Those communities have still not recovered from job losses in years gone by in the coal and steel industries. When they get jobs, those jobs are too often low-paid, part-time, non-union and soul-destroying. They are some of the most deprived communities in the land, and they suffer all the social problems that go with poverty.
Steelworkers in my constituency are angry, as are steelworkers throughout the United Kingdom, because this is a United Kingdom problem. They are determined not to sit back; they are determined to fight these job losses. They are determined to fight for their jobs and their industry and for our communities. There is much at stake, and I am confident that any action that steelworkers may take to defend their jobs and their industry will receive the support of Labour Members and everyone else interested in those communities.
Mr. Deputy Speaker: Many hon. Members want to take part in the debate. However, it is relatively short and contributions should be brief so that we can fit in as many hon. Members as possible.
9.49 am
Mr. David Prior: I worked for British Steel during much of the 1980s, and have that in common with the hon. Member for Blaenau Gwent (Mr. Smith). I am aware of the deep emotions that run through the steel industry. Few industries in this country attract a similar degree of commitment and loyalty. Having worked in the industry for seven or eight years, I feel a commitment to it that I suspect I shall have until I leave this earth. Working in the industry has not been easy. It is like climbing a mountain: every time that one reaches a peak, there is yet another peak to climb before the summit is reached. I think that more than 10,000 people worked in Llanwern back in 1979; today there are only 3.000. It is a tragedy that that plant's future is once again in question.
This debate is not just about the steel industry; more important, it is about manufacturing as a whole, because the steel industry can survive only if this country has a competitive and thriving manufacturing industry. There was a brief time during the 1980s when it became fashionable to think that we could turn our economy into a service economy, that manufacturing did not matter, that we could rely on bankers, accountants and lawyers, and that people who got their hands dirty were less important. Sadly, in certain areas and in wine bars in Islington, that view has once again
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taken root. Reading a biography of Winston Churchill recently, I was struck by his description of people who hold that view. He said, I think in 1927, that they were
the glittering scum which floats upon the deep river of production.
We need a strong, dynamic and competitive manufacturing base for this country's security, for employment and, more important in the long run, for economic stability. To put all our eggs in the service-sector basket would be crazy. However, I stress the word "competitive". Our industries must be competitive. There must be no return to the dark days of the 1960s and 1970s when so much of our industry became uncompetitive compared with those of other western economies.
There is, rightly, a limit to the role of Government. Government interference in the steel industry has not been a happy experience. The chops and changes that we experienced during the 1960s, 1970s and 1980s as Government policies swung from one direction to the other did not help the steel industry. That is particularly true today because world markets have become much freer and globalisation has come out of the economic textbooks and into real life. In a global economy, the Government have two overriding responsibilities. First, they must allow British industry to operate from a level playing field. If they saddle our industries with costs that our competitors do not have to carry, we will lose jobs and market share. Secondly, they must manage the economy in such a way that interest rates are as low as possible and exchange rates are, consequently, as competitive as possible.
On the level playing field argument, the climate change levy, which the Government are about to implement, will place £12.5 million a year in extra costs on Corus. Big users of electricity in this country are at a competitive disadvantage compared with other users in the European Community, which costs Corus about £40 million. In the case of gas, the cost is about £30 million. Those are just three examples of costs that the Government have allowed Corus to absorb but that its overseas competitors do not absorb. If we add to those the costs of complying with regulations and directives—whether from Westminster or Brussels—British industry as a whole is increasingly competing on a playing field that is no longer level.
I was struck by the figures from British steel producers, which showed that steel consumption in this country over the past few years has fallen by 10 per cent., whereas it has increased in Germany over the same period by 10 per cent. and in the United States of America by 28 per cent.
Mr. Denis MacShane: Who was in government in that period?
Mr. Deputy Speaker: Order.
Mr. Prior: In running the economy, low interest rates are important in themselves but—more important—the lower interest rates are, the more competitive our exchange rate will be. The single most important factor in explaining the problems that Corus has had over the past three years is probably the high sterling-euro exchange rate.

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If Conservatives were in government now, Labour Members would be furious with them; they would have shouted from the rooftops about their failure to intervene. My contention is that, at best, the Government have stood by and done nothing and, at worst, have added costs to the British steel industry; that has made the closure of Llanwern and further redundancies and plant closures inevitable.
9.55 am
Mr. Paul Flynn: I shall be as brief as possible. My claim for speaking today is that I worked in the steel industry for 30 years—20 of them at Llanwern. I remember being there when the first coke was pushed and when the first iron and steel was made. People who were apprentices with me are now approaching retirement age. The story of Llanwern, as told by the previous speaker, has been a rollercoaster, but the ups and downs have become closer over the past couple of years.
Local people have experienced a damaging and debilitating time. If somebody had deliberately deployed psychological warfare against those working in the steel industry and their families, they could not have done a better job. The intention, of course, was not deliberate, but those people have been assaulted by rumours, sometimes good, sometimes bad. In August, an announcement was made about the re-lining of the No. 3 blast furnace, which was greatly welcomed, but people are constantly hearing bad news, which destroys the morale of the workers and saps their resistance and their ability to fight back.
I still find it inconceivable that Llanwern is being closed. I remain optimistic, as I have been for many years. I worked in the steel industry in the 1960s and 1970s, and have seen the absolute certainty of closure during that time, followed by the great slimming down of the industry during the 1980s. The recent story is one of remarkable success and the message today is that Llanwern steelworks is sound. It is superbly efficient and its productivity has improved vastly, to world-class standards. The work force has risen to every challenge put to it by the market and has changed its skills and working practices. The work force has been reduced from a maximum of 10,000 to fewer than 3,000—and it is now approaching 2,500. According to the hon. Member for North Norfolk (Mr. Prior), the industry has seen a 28 per cent. increase in consumption in the United States in the period 1989 to 1999. It is regrettable that the present situation is turned into a blame game against Governments of any party, because that is not the answer.
I agree with my hon. Friend the Member for Blaenau Gwent (Mr. Smith), to whom we are grateful for securing the debate, but I shall not repeat what he said. There is anger at Corus's lack of willingness to talk to the Government, to the Prif Wenidog of the Welsh Assembly and to everybody else, because they have a great desire to assist. We have heard from all parts of Government that many other industries approach them, tell them what is going on, open their books to them and tell them what they are thinking. Corus, however, has been secretive, and any ability to help and to act in the British interest is blunted by its refusal to open its books.
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We see increasing steel production in Europe, and I am grateful to my hon. Friend the Member for Rotherham (Mr. MacShane) for setting out the unfairness of the present position. As hon. Members and representatives of the Government, We must make a stand for Welsh steel—for British steel—to ensure that steel, which has been the bedrock of Welsh industry in recent years, contributing, even in its present depressed state, 6 per cent. to the Welsh GDP, has a share in the future. We cannot be dazzled by industries that appear and disappear rapidly, although we must welcome high-tech industries and acknowledge their position. We have been successful, particularly in Gwent, in doing so, but we must not turn our backs on manufacturing industry. Llanwern is high tech and it is a success story. It has had massive investment—£1,000 million—over the past 10 years. The problems are price, the market and currency.
When I talk about Llanwern I do not see a steelworks; I see the faces of all those with whom I worked, who are now my constituents, and their families, who are worried about whether they will be able to pay the bills and the mortgage. They have suffered a long period of anxiety. I appeal to all those in power to see closure as a great tragedy that might happen unless we act now. Permanent damage might be done to those families, Wales, Newport and the Welsh and British steel industries because of temporary difficulties that are already being solved. That would be a terrible crime.
10.1 am
Mr. Dafydd Wigley: I echo the words of the hon. Members for Blaenau Gwent (Mr. Smith) and for Newport, West (Mr. Flynn) and of the right hon. Member for Alyn and Deeside (Mr. Jones). I hope that Treasury Ministers respond to their heartfelt pleas, not with soft words but with action that will help safeguard the plants that are in danger.
When I entered the House of Commons in 1974 it was after six years in manufacturing industries that were steel-using: three bears with Ford in Dagenham and three years with Hoover in Merthyr Tydfil. It is sad to see the condition of those two plants, compared with the employment that they generated back in the 1970s. We now face the possible catastrophe of the closure of Llanwern and the knock-on effect that that would have on the Ebbw Vale, Trostre and Shotton plants, which process stripped steel. There is talk of mothballing. One may be able to mothball plants, but one cannot mothball workers—who are the greatest asset of any company. If the work force dissipates, it will not be possible to put it together again.
The irony is that there has been a massive improvement in productivity at Llanwern. In the early 1980s, Llanwern employed 4,700 people with an output of around 2 million tonnes. By 1997, the work force was down to 3,000 but the output was up to almost 3 million tonnes; in other words, productivity had increased from 452 tonnes per worker per year in the 1980s to 952 tonnes per worker per year now. That figure at Llanwern compares to 750 tonnes per worker per year in the Corus plants in Holland. That highlights the great irony that, despite the much greater efficiency in the UK, there is increased importing of steel. Monday's figures show that the import level of steel used in the UK last year was up to 47 per cent., compared with 44 per cent. in 1999 and only 12 per cent. back in the 1970s.

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Why therefore is Corus threatening to close plants in the UK, with massive redundancies? First, there is the strength of the pound. The Treasury needs a different strategy on that because it hits not only steel but manufacturing generally, tourism, agriculture and the whole economy. Taxation needs to be used as the lever to free up Eddie George to bring down interest rates and ensure a lower parity for the pound. That is a central responsibility of the Government. The ground rules laid down for the Bank of England must be changed to make employment as important a consideration as fiscal policy.
Secondly, there are different rules relating to redundancy in Holland, where prior permission from the director of the district labour exchange is needed before dismissals or similar action can take place. Dismissals can be examined retrospectively by the courts there, which can direct compensation. As noted in European Union investigations, that undoubtedly has an effect.
Steel has to compete within the one market in the European Union. Our working people need a level playing field for the protection of redundancy law. The Government should examine that in the longer term. In the short term, action could be taken to help with uniform business rates. In crises, that can be done and I hope that the Lib-Lab Government in Cardiff will move quickly on that front.
The impact of energy bills on industry is also important. As we move towards more renewable energy policies, we must ensure that we do not undermine industries—such as the steel industry—that have heavy energy usage. We need a strategy to minimise the effect of closures and redundancies on communities and affected individuals. What is the Department of Trade and Industry's strategy? Does DTI strategy include a rescue package for the steel plants? Have approaches been made to the European Union regarding derogation from the rules because of the crisis in the industry?
I was accused of scaremongering by DTI Ministers when I raised the dangers to Llanwern 18 months ago. My accusations reflected the culpable complacency of the DTI. I hope that today's response will provide something different because today the chickens are coming home to roost.
10.6 am
Mr. Denis MacShane: As always when debating the steel industry, I refer to my entry in the Register of Members' Interests and my possession of 25 Corus shares. I congratulate my hon. Friend the Member for Blaenau Gwent (Mr. Smith) on an excellent speech, which will find echoes all over Yorkshire.
The steel industry is in crisis, partly of its own making and partly due to events beyond its control. The Government are aware of the problem and have put money into my area to help with the transition. Before Christmas, the Prime Minister met a dozen steel constituency Members of Parliament to discuss problems. The Chancellor and other Ministers have also welcomed delegations of such Members. Like Corus, however, the Government are prisoners of an inheritance left by the previous Administration. The two main reasons given by the UK steel industry and Corus for the present crisis, which threatens misery for
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thousands of families, are the high value of the pound against the euro and the plight of manufacturing industry generally.
Since 1996, British steel firms have posted an average loss of £60 million a month on exports to Europe because of the high value of the pound sterling. The year 1996 is important because the pound rose by nearly 30 per cent. against the deutschmark in the final year of the Tory Government. That was the last gasp of the boom-and-bust economy of the Conservatives, who refused in this era to promote any measures to ensure currency stability. That has cost steel and manufacturing dearly.
Since I entered the House in 1994, I have pleaded with British Steel, now Corus, to call publicly and clearly for Britain to get into alignment with the euro-zone currencies. But my pleas fell on deaf ears, as the company did not want to embarrass its friends in the Conservative Government and was enjoying short-term windfall profits after the 1992 devaluation. Let me make it clear again today that the UK steel industry will have no sustainable long-term future as long as our currency remains out of kilter with the rest of Europe.
Continuing ideological hostility to Europe is one legacy from the Tories that has grievously undermined steel. Even more damaging was the 20-year onslaught—not just a flicker in the middle of the 1980s—delivered on the manufacturing economy by the previous Administration. It was a deliberate policy, not chance.
It is untrue to argue, as Ministers did then, that the decline in steel reflects a worldwide change in consumption or spending patterns. On the contrary, steel consumption is increasing everywhere in the world, save Britain. During the 1990s, the United States—for many economists, the nation paving the way for the so-called post-industrial weightless economy—increased its use of steel by 28 per cent. Under the previous Administration over the same period, steel consumption in the United Kingdom decreased by 10 per cent. In Europe, sensible tax and energy-pricing policies in the 1980s encouraged the use of electric arc furnace production, which is by far the most environmentally friendly form of steel production. Since 1980 in the UK, there has been a significant decline in electric arc furnace production, which is highly relevant in South Yorkshire.
Our shopping malls, homes, and two and three-car families show that our economy is getting heavier and weightier; we buy more manufactured goods, but fewer of them are made in the United Kingdom, so less steel is needed.
Steel remains a great export earner for Britain, but until we reverse the anti-manufacturing policy deeply embedded in our policy-making culture in the past 20 years and learn from countries such as the United States of America or even Switzerland, for heaven's sake, which consumes more steel per capita than Great Britain, our industry will face great difficulties.
I support the knowledge economy. In steel plants, more workers sit behind computers than in front of furnaces. Information technology accounts for 30 per cent. of steel's investment each year. Thanks to the cooperation and the wise leadership of the Iron and Steel Trades Confederation, there has been a 10 per cent. growth in productivity year on year since 1990. That is a rate of productivity growth that the Chancellor would

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die for in other sectors of the economy, yet there has been a steady attrition of jobs. Shareholders have been protected; 12 months ago £800 million was paid to shareholders as a sweetener for the merger with Hoogovens to form Corus. Last year, savage job cuts were announced leading to the threat of strike action in Yorkshire, on the Humber. That is remarkable in an industry that does not contemplate strike action easily; it shows how angry the men are. As my hon. Friends said, the spectre of mass closure, which is not justified or necessary, looms.
Angry and emotional words have been exchanged, but with good will and the willingness of Corus, the Government and others with a stake in steel to compromise rather than stick to rigid positions, a future for steel can be sustained. First, Corus must move from the them-and-us attitude of the 1980s and develop a new partnership approach based on full and frank information and consultation with its work force, the unions and representatives of the steel community. That will not stop redundancies; the rate of decline in manufacturing jobs in the Netherlands has been faster than in the United Kingdom and it is wrong to pretend that there is a magical European solution that can save jobs. Corus must come into the 21st century. Sharing full and accurate information and consulting adequately and in time will not avoid painful decisions, but the culture of playing cards close to the chest and management by press release, not partnership, must stop.
Secondly, Corus must develop a clear, international, analytical capability. The huge mistakes over potential investment in Indonesia and Poland suggest that Corus lacks a global or European strategy based on a sophisticated knowledge of the international economy and political developments.
Thirdly, Corus must come out of the closet on Europe. It must understand that the days of not wanting to embarrass the wretched Tory party—the "glittering scum" of today's politics—are over. Corus must campaign openly and clearly for the interests of the steel industry in terms of European currency stability. Already, currency movements favour steel. According to Corus and the United Kingdom Steel Association, every time the pound moves by 10 pfennigs against the deutschmark—I use that example because the euro is not yet fully operational—£80 million is wiped off the bottom line of UK steel exporters. While the converse is true—
Mr. Prior: Will the hon. Gentleman give way?
Mr. MacShane: The hon. Gentleman will forgive me if I carry on, as there is a time limit.
The pound has dropped from DM3.40 in the middle of the summer to less than DM3.10 today. It is irrelevant that the deutschmark or the euro has strengthened or the pound has weakened. What it means is that £240 million in bottom-line profitability has been restored to Corus because of the highly welcome currency movement. Corus could be making another geopolitical and economic error by announcing a major loss in capacity just when currency movements are no longer penalising exporters.
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The Government must do more; why are electricity prices for United Kingdom steelmakers 40 per cent. higher than for our European competitors? It is a pricing policy aimed against industry, inherited from the Conservative Government. Why are we fiscally penalising environmentally friendly electric arc furnace production? The total gain to the Treasury is £1.9 million. The Prime Minister heard about that yesterday. He has heard it from MPs. It is not much money for the Treasury but it is a big signal for steel.
What can be done to ensure that the Chancellor's boost in public investment following the disgraceful lack of investment in our infrastructure by those wretched Conservatives is channelled into infrastructure renewal that uses British-made steel? The American Department of Defense consumes plenty of American-made steel. Can our Ministry of Defence fly the flag a bit higher for British manufacturing? What can the unions, with all their different positions in manufacturing and on Europe, do to find a common voice on Europe and on the need for a tax and regional policy that promotes manufacturing investment?
If we can accept the need for co-operation and partnership, it may be possible to save steel jobs and keep this crucial export-earning industry as a significant part of the UK economy. But if senior management, Ministers and other representatives of the steel industry all insist that it is someone else's fault and that their policy cannot be challenged or changed, that bunker mentality will see the furnaces of high-volume steel output in Britain shut down. That must not be allowed to happen.
10.16 am
Mr. Derek Wyatt: I congratulate my hon. Friend the Member for Rotherham (Mr. MacShane) on his speech. Much has changed since we last discussed steel. My steel company, Co-Steel, was then owned by Canadians. Now, I am glad to say, it is owned by some very fine Welshmen. It is a British company. Yesterday, the share price for ASW/Co-Steel was 7p. That reflects the City's nervousness about ASW's current overdraft facility; I shall return to that later.
ASW/Co-Steel in Sheerness is now a much better managed and friendlier place than when the Canadians ran Co-Steel. Graham Mackenzie, the current chief executive, overall is very approachable and hardworking and is trying to get the unions a much better deal, especially the Iron and Steel Trades Confederation, which was banned for so many years there. That is a significant and welcome change by the employers.
I have four questions. First, what talks has the DTI initiated with ASW/Co-Steel about supporting its current financial position? So often the DTI seems to come second, third or fourth to big issues. One thinks of Vauxhall, Ford, BMW and Rover. It would be nice just for a change if it could be proactive and sit alongside this industry to, see what it could do, particularly with the overdraft facility of ASW.
Secondly, other hon. Members have mentioned the climate change levy, which I support, but there is not much sense if it is I tot to be introduced at the same time by our rivals in Europe. That seems complete madness.

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If it is supposed to be for the benefit of all Europeans, we should introduce it on the same day. I urge the DTI to twist the Treasury's arm on this. That little help would be just over £1 million of additional bottom-line cost for ASW/Co-Steel.
Thirdly, when was the last time that the DTI and the Treasury sat down together to look at pension funds? One of the attractions of Co-Steel when it was with the Canadians was its sizeable £19 million pension fund. However, when ASW and Co-Steel were merged, ASW, by the way that it changed the trustees of the pension funds, got access to the £19 million. Its pension fund is nowhere near as advantageous as Co-Steel's. Naturally, my constituents are nervous. I do not suggest there is anything underhand there, but I feel that one aspect of takeovers is that pension funds should be reserved and should be kept for those who have paid into them.
Fourthly, I have a suggestion, which I hope that the Minister will consider seriously. Over 50 years there have been huge redundancies in our basic steel, coal and iron industries, yet we search to find the entrepreneurs in our communities. Where are they? Instead of giving people redundancy packages, perhaps we could challenge the university for industry to come up with a steel package that would match in financial and training terms the redundancy package. We could try to encourage the entrepreneurial spirit stow. When there is mass redundancy, it is much harder.
Across Government we talk about this subject, but we do not often do much about it. We say that we have joined-up government, but it would be good if the Department for Education and Employment could be challenged to create a steel package to help with the retraining of our communities.
10.19 am
Mr. Brian Cotter: In introducing the debate, the hon. Member for Blaenau Gwent (Mr. Smith) gave a clear outline of the situation, expressing strong views and a broad knowledge of the industry. I do not come from a steelmaking constituency. However, I declare an interest in that I am managing director of a manufacturing company, albeit one that has only 20 employees and is therefore somewhat smaller than the organisations that we are discussing.
The hon. Member for Blaenau Gwent made some telling points, which struck home with me. Primarily, he is concerned about the way in which Corus has dealt with the work force. That issue is key to the way in which manufacturing industry should do business. I agree with the hon. Member for Rotherham (Mr. MacShane) that it is deplorable that a "them and us" approach remains in this country. As the hon. Member for Blaenau Gwent said, had the work force been listened to more, they could have provided some solutions. If one does not give proper consideration to the views of the work force, one does not get the best out of their efforts.
The hon. Member for Rotherham mentioned Europe and the single currency. I share his worries about the Conservative party's head-in-the-sand attitude to Europe in general and the single currency in particular. We do not know whether the Conservatives are coming or going in terms of whether they will at some stage consider entering the single currency. That has
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contributed to the high value of the pound, which is discriminating against manufacturing industry. If the Government had declared firmly in autumn 1997 that they were committed to entering the single currency—provided, of course, that the conditions were right—that would have signalled a message of serious intent to the financial markets, thus helping to keep the value of the pound down to a more realistic level.
Mr. Livsey: My hon. Friend is right. Does he agree that, over the past three or four years, our manufacturing industry has rapidly become more uncompetitive in relation to the European markets; that the consequences of not embracing a coherent policy on alignment with the euro are now coming home to roost; and that, if we are not careful, the steel industry will largely disappear?
Mr. Cotter: I welcome and agree with my hon. Friend's comments. Any effective assessment of the exchange rate of this country against that of the European Community, taking into account all the relevant factors, shows that the pound is at a 30 per cent. disadvantage. Steel is a basic commodity, and the overvaluation of the pound is highly significant in terms of commodity prices.
I shall not speak for any longer, because hon. Members who are more intimately concerned with the industry wish to contribute. I hope that the Minister will give a helpful response to the debate. It is not only about steel; it also concerns Britain's position in the world and the future of manufacturing. I look forward to hearing what he has to say about those points.
10.24 am
Mr. Richard Page: May I congratulate the hon. Member for Blaenau Gwent (Mr. Smith) on introducing the subject? It is obvious, in view of the numbers in the Chamber, that we have insufficient time for debate.
The hon. Gentleman outlined his concerns for the industry. He gave—dare I say it—a partial tour d'horizon of the steel industry. I delicately point out to him that he failed to cast out the mote in his eye that blocked his view of Government responsibility and action. I speak today as someone who had the privilege of being Member of Parliament for Workington, which is a steel and coal area with a blast furnace, cast iron production and rail rolling. In that time, I learned a great deal about the steel industry, so I, too, appreciate the spirit and comradeship that runs through it, and it hurts to see it under such pressure.
Helen Jackson: Will the hon. Gentleman give way?
Mr. Page: With due respect, we are all trying to get in. If we had a five-hour debate I would give way to the hon. Lady, but we do not have that privilege.
This debate is indicative of what is happening to our manufacturing industry. Current events in the steel industry starkly illustrate that the Government have abandoned manufacturing. The steel industry has been abandoned in the sense that the Government are indifferent to its fate. That indifference contrasts sharply

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with their honeyed words about, "When we are in government." I find it amazing that they are treating manufacturing in this way. I do not accuse them of deliberately trying to hurt the steel industry, but I do accuse them of the indifference that typifies their work.
I am delighted that the Minister will respond to the debate, because I can give him the parallel example of the Post Office, for which he is responsible. The Government announced with great glee that they could save £430 million on social security payments through automatic credit transfers on pensions and benefits. They forgot that that £430 million supported our sub-post offices, which are now closing at a rate of nearly two a day. My concerns are shared by every hon. Member—
Mr. Barry Jones: On a point of order, Mr. Stevenson. Sir. Winston Churchill described the hon. Gentleman as a species of gilded scum.
Mr. George Stevenson (in the Chair): He may have done, but I am not sure.
Mr. Page: Thank you, Mr. Stevenson. That was the intellectual approach.
John Edmonds of the General, Municipal, Boilermakers and Allied Trades Union, who said that 96,000 manufacturing jobs were lost last year, shares my concerns. In 2001, 10,000 manufacturing jobs will be lost every month. That is not my view but that of John Monks, general secretary of the Trades Union Congress. I make those points because steel is one of those industries that require a critical mass to survive. Its immediate future is bleak, unless the Government adopt a more understanding attitude. The loss of British steel users such as Vauxhall and Ford are hammer blows at the core of that critical mass. The industry is alive with rumour and speculation, but Corus will inevitably be a major player in whatever happens.
Before I state my specific concerns, I wish to emphasise the importance of manufacturing. By doing so, I am expressing a view that I believe to be shared by every hon. Member in the Chamber. I know that that is not a fashionable view among all Conservative Members, but equally, I find the Government's approach to manufacturing amazing, given what was said before the 1997 general election.
Each of us in this Room must keep repeating that manufacturing is vital to the British economy. We must bear in mind that it still provides some 17 per cent. of employment and a high share—26 per cent.—of income tax revenue. It employs 4 million people and accounts for 20 per cent. of the gross domestic product. I endorse the sensible and reasoned comments of my hon. Friend the Member for North Norfolk (Mr. Prior) about the importance of the steel industry. Unfortunately, because the strength of the pound is being overlooked, investment is declining. As the Confederation of British Industry has pointed out, regulation of industries and businesses is costing some £5 billion a year.
The example of steel is symptomatic of the industry as a whole. Productivity has improved beyond all recognition, particularly when compared with the general level of manufacturing—
Helen Jackson: On a point of order, Mr. Stevenson. The hon. Gentleman is reluctant to give way, but my
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understanding is that a Westminster Hall debate such as this is supposed to give Back Benchers the opportunity to make points relating to plants in their constituencies. Given several of the points that he has made, it is entirely relevant for me to raise the issue of the Stocksbridge plant, which is in my constituency, but he is not prepared to give way.
Mr. George Stevenson (in the Chair): During my time in the Chair, I have called every Back-Bench Member who has shown a desire to speak, so I hope they feel that there has been sufficient opportunity to do so. If the winding-up speeches finish before 11 o'clock, I shall of course be obliged to call anyone else who wants to contribute. However, the decision whether to give way is entirely a matter for the Front-Bench Member concerned.
Mr. Page: I thank you, Mr. Stevenson, for what you have said. As the Front-Bench spokesman for the Opposition, I was under the impression that speaking for only 10 minutes would allow other Members to speak. However, as the 10-minute rule seems to have gone out of the window, I shall give way to the hon. Lady.
Helen Jackson: I am grateful to the hon. Gentleman for giving way—after a little pressure. Given his time in Workington and his understanding of the steel industry and manufacturing, does he recognise—as his Government did not—that this is a core industry for the whole of the UK? I point to the example of the plant in my constituency, which has 80 per cent. of the market share of all high-temperature steel for power generation. This issue affects not just the steel industry but manufacturing as whole and the entire UK economy. The industry is suffering as a result of the previous Government's failure to recognise that crucial link.
Mr. Page: I say straight away that steel is a vital industry for the United Kingdom, and to lose that capacity would be a disaster. I agree that we could have done more for the industry at certain times, but I should say in our defence that we inherited a steel industry that was being subsidised at the rate of £500 million a year, and which was getting about the same again in investment from the taxpayer's pocket. By allowing privatisation, and thanks to the people in the steel industry, we produced one of the best and most efficient steel industries in the world.
When I was in Workington, the blast furnace produced steel at the rate of approximately 14 man hours per tonne. At that time, the Japanese were achieving 5.6 man hours per tonne. The privatised British Steel drove efficiency up and up, and that is one reason why, during the past 20 years, productivity has risen by almost 5 per cent., which is 3 per cent. better than our manufacturing industry as a whole. I did not want to be rude to the hon. Member for Sheffield, Hillsborough (Helen Jackson) in not giving way, but there is a time limit, although it has been put to one side for the moment.
As I was about to say, the steel industry has invested £3.5 billion since 1990, much of it on information technology and training, and has done much to improve efficiency. Our big problem has been the change in the

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balance of trade resulting from the strength of sterling. The volume of steel used in imported goods now balances that produced in and for the United Kingdom. As a result of sterling's appreciation against the euro, the average price of a tonne of steel exported to the EU has fallen by a quarter since 1996. The hon. Member for Rotherham (Mr. MacShane) should come out of his time warp because his party has had its hands on the Government tiller since 1997—almost four years. He is trying to look over his shoulder and bring forward a four-year position as a consequence of where we are today, which is a little extravagant, although I realise that an election is coming and that we must grab every straw.
The hon. Member for Blaenau Gwent said that reserves must be kept for a rainy day. I must say that having a reserve of £1.86 billion for a rainy day is an extreme cash position for a company.
Another matter, which no one has mentioned, is the sword of Damocles hanging over every industry, and particularly the steel industry—the climate change levy. It is a typical example of the DTI failing to support industry. If the levy is introduced, our steel industry will be hit to the tune of £10 million a year—assuming that it is agreed by the EU. If it is not agreed, the charge could be considerably more.
I shall not comment on the position in Corus because other hon. Members have done so, but I look to the Minister to give us some hope. I endorse what the right hon. Member for Caernarfon (Mr. Wigley) said when he questioned the Minister at the end of his speech. I want the same questions answered and I hope that the Minister will answer them.
Despite job closures and company difficulties, I am amazed how well British industry has done during the past three years in its battle against the huge differential between the pound and the euro arising from Government policies. Unless there is a change, goods that were primarily made in this country will be made abroad. The outcome will be that emissions abroad will rise, contrary to what we are trying to achieve with the climate change levy. Pollution abroad will rise more than if that manufacturing had remained in the United Kingdom and, more important, employment abroad will rise more than in the United Kingdom.
I am sorry to tell the Minister that, unless there is action, the situation will worsen, and that will be exacerbated by the world situation. We have a Chancellor who says that he will dc away with boom and bust. He is halfway there in the steel industry. He is doing away with the boom, but he is keeping the bust.
10.39 am
The Minister for Competitiveness (Mr. Alan Johnson): I congratulate my hon. Friend the Member for Blaenau Gwent (Mr. Smith) on securing this crucial debate. It is important to those who represent Welsh constituencies—hence the presence of so many hon. Members in the Chamber, such as my hon. Friend the Member for Delyn (Mr. Hanson), the Under-Secretary of State for Wales. Even the Whip is Welsh. Furthermore, the number of other Members of Parliament present this morning shows the importance to their constituents of the steel industry. Its future is crucial to the strategic, economic and social well-being of this country.
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The Government fully accept the worth of a successful steel industry and the significant contribution that it makes to the economy and employment. Although the debate is about its future, my hon. Friend the Member for Blaenau Gwent focused most of his remarks on Corus, which is understandable as it accounts for 90 per cent. of the United Kingdom's steel production. It is an employer of major importance in the constituencies of many in the Chamber today.
I am acutely aware that the industry faces difficult international trading conditions. There are no simple solutions to that problem, but the contributions to the debate, particularly of my hon. Friend the Member for Blaenau Gwent and other Labour Members, have shown its complexity. One of the issues faced by Corus is globalisation, which means more in the steel industry than in most other industries. In recent years, the industry has been faced with worldwide overcapacity and weak prices.
The European steel industry has been going through a period of consolidation. It has been under continued pressure to reduce costs to remain competitive and secure high-value business, and that has led to the level of restructuring that we are now seeing in the United Kingdom. While restructuring is a commercial decision for individual companies, the Government's primary role is to provide economic stability. The underlying strengths of the economy are clear: annual economic growth has averaged 2.7 per cent. since the general election, inflation is under control and employment has risen by more than 1 million. Incidentally, the industry has the only trade union movement in Europe that is gaining members, and the United Kingdom has overtaken France to become the world's fourth largest economy.
It is important to put our economic record in perspective, especially given some of the remarks of Opposition Members. I re-emphasise that we do not regard the steel industry as part of some old economy. I was grateful to the hon. Member for North Norfolk (Mr. Prior) for his devastating criticism of the previous Government. Let me assure him that, whatever they are saying in the wine bars of Islington, at No. 1 Victoria street over our still mineral water and all the way up Whitehall we are clear that there are not two types of economy in this country.
As my hon. Friend the Member for Rotherham (Mr. MacShane) said, the knowledge-driven economy is about manufacturing, principally embracing technological developments and using them to great advantage. Indeed, anyone who has visited a steel plant recently will know that steel production is a high-tech business, using leading-edge technology. It has an excellent record in research and development. The United Kingdom steel industry is among the most productive in the world. Each steelworker is four times more productive than he or she was 20 years ago. Furthermore, 70 per cent. of steel qualities that are available now have been developed over the past 10 years, which is also indicative of the industry's being integral to the knowledge-driven economy of the 21st century.
The Government were deeply concerned about the redundancies announced by Corus last year. Job losses are distressing for those personally involved, for their family and the communities in which they live. We are

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also worried about Corus's announcement of 5 December. It informed us that the company's two chief executives had resigned and that the company would announce further restructuring this year. It was an extremely worrying development, particularly given the background of the company's trading results over the past two years, which have not been good.
We are fully aware of the problems facing Corus and others in the steel industry. Department of Trade and Industry Ministers and representatives from the National Assembly for Wales have held discussions with Corus at the highest level, and will continue to do so. There is a further meeting tomorrow. It is important, however, to concentrate our efforts on those areas where we can give practical help.
I will take this opportunity to make a point about manufacturing. The future of the steel industry is obviously bound up with manufacturing industry, which has reduced as a proportion of gross domestic product in every G7 country over the past 10 or 20 years. However, manufacturing is a key part of our economy. It makes up one fifth of our national income, it directly employs 4 million people and it is crucial to our economic success. Although there are serious difficulties—those faced by the steel industry are the same as those faced in other sectors of manufacturing—some sectors in manufacturing are doing extremely well.
To put into context the comments made by the hon. Member for South-West Hertfordshire (Mr. Page), who used to be the hon. Member for Workington—perhaps it is his own Government's record on manufacturing that has led to his now being the Member for South-West Hertfordshire—manufacturing output is up by almost 1 per cent. over the past year. Last year, we produced more cars in this country than at any time since 1974, and we exported more cars than at any time in our history. Manufacturing output fell by almost 20 per cent. in the 1980s recession, and then fell by a further 7 per cent. in the early 1990s.
In addition to manufacturing productivity rising by around 4 per cent., exports of manufactured goods are up by more than 8.5 per cent. on last year. It is, therefore, a difficult but not impossible climate. Whether we call it a weak euro or over-valued sterling—I think it is the former rather than the latter—we should remember that the German manufacturing industry survived well for many years on an over-valued deutschmark. We must look at such issues on the basis of many factors, and not use only one as a catch-all to explain problems in the manufacturing industry.
Let me set out the practical ways in which we are assisting the steel industry. Incidentally, the Opposition have said that in their plans to save money, they would raid the tills in the DTI and remove every single initiative that we are taking on behalf of manufacturing industry. We have introduced the metals industry competitiveness enterprise—the gloriously named MICE—which is a project suggested to us by the industry. It is based on the industry forum model, which has been so successful in improving productivity in the automotive sector, and aims to improve shop-floor process techniques in up to 130 companies over the next five years.
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We have also invested a great deal of effort in looking at how the steel industry can take advantage of e-commerce and other such developments. At the request of the steel industry, we have supported initiatives such as the establishment of a metals centre of excellence. On 23 November, I held a tripartite meeting where the industry, its work force and the Government sat down to look at other ways in which we could give practical help. At that meeting, and at the one mentioned by my hon. Friend the Member for Rotherham, between Back Benchers and the Prime Minister on 22 December, three key issues were mentioned. I do not want to duck those issues. They are crucial not only to the steel industry but to manufacturing in general. The three key issues are the exchange rate with the euro, or single currency argument, the climate change levy and energy prices. I am not trying to suggest that the other initiatives that we are pursuing devalue the importance of those points.
The strength of the pound and the weak euro have caused problems for manufacturing industry, and especially for steel. The steel industry exports 50 per cent. of its products, and 70 per cent. of its exports go to euroland. In an Anglo-Dutch company, that has, obviously, presented problems, although there have been job losses at Corus in the Netherlands as well as in the UK.
My hon. Friend the Member for Rotherham makes an important point. The recent strengthening of the euro will have provided some relief. Wherever one stands on the issue—it is fascinating to observe our two Opposition parties suggesting different ways around the problem—we certainly cannot offer a short-term solution in this respect. Hon. Members will remember that last summer we did intervene to try to bolster up the value of the euro. The only way to boost the value of the euro—I do not believe that anyone is suggesting that we should enter the realms of devaluing the currency, not even some of the more weird and wonderful Opposition Members—is in co-operation and co-ordination with all G7 countries. That is what we tried to do last summer with, admittedly, very little success, but it was an indication that the problem is being taken seriously.
We are determined to adopt a long-term strategy in ensuring steady growth and investment and job creation. In that respect, we do not intend to intervene in the problem of the strong currency. The Confederation of British Industry report on manufacturing, which came out a couple of weeks ago, recognised that there is no short-term solution to the problem.
The climate change levy is a crucial part of the Government's response to the threats posed by climate change. I am all too aware of the industry's anxieties, but the levy is a key element in our national climate change programme. It has an important role to play in helping the UK to meet its Kyoto target for reducing emissions of six greenhouse gases and in moving towards our domestic goal of reducing emissions of carbon dioxide, the most dangerous greenhouse gas. In designing the levy, we tried to protect the competitiveness of the steel industry. The original proposal for a climate change levy has been dramatically changed.

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One hon. Member asked what is happening in the rest of Europe. Countries in the rest of Europe signed up to the climate change levy but chose different ways to implement it. We are dealing with producers; other European countries place the emphasis on consumers, which opens up another set of problems.
We have worked closely with the steel industry, in which the return on national insurance contributions, which offsets the cost of the climate change levy, is obviously not as relevant as in some other industries. We tried to protect the competitiveness of the steel industry, alongside other energy-intensive sectors. They will receive an 80 per cent. levy discount in return for commitments to energy-saving targets that meet Government criteria, and we expect that discount to last up to and including the Kyoto target period of 2008 to 2012. The Department of the Environment, Transport and the Regions is developing negotiated agreements with those sectors.
I hope that we shall reflect further on the important points made in the debate, to the Prime Minister in a discussion on 22 November and to me in our tripartite forum—the first time, incidentally, that the steel industry, the unions and the Government have ever sat down together. We are absolutely clear that our overall objective is achieving an agreement that has challenging energy targets while safeguarding competitiveness and allowing the principal steel producers to respond to increased demand for steel without a levy penalty.
Energy prices are a difficult aspect that has a profound impact on the steel industry. We are aware of the effect of high gas prices on the industry. The wholesale price of gas has been reduced, but the industry is still paying twice what it was paying this time last year. It might be helpful if I were to outline the reasons behind the increase and describe the actions taken by Government and the regulator to try to address the problem.
Mr. MacShane: The biggest energy source for electric arc-furnace production is electricity. I have led delegations on the matter, and, for three years, we have been promised a reduction. I have arranged a meeting with my right hon. Friend the Minister for Energy and Competitiveness in Europe. When the Minister returns to his office on Victoria street, will he say to his right hon. Friend that no hope can be offered on the climate change levy? The currency remains where it is. There is one area, however, where a positive signal can be sent to steel—a reduction in industrial electricity prices should not be just pushed into the future; it should happen now.
Mr. Johnson: If I had had time to address all hon. Members' contributions, I was going to say that my hon. Friend, with the full authority of his 25 shares in Corus, made an important point on electric arc-furnace production. I shall respond to that point as he suggested.
The immediate cause of the problem is oil-related gas contracts in Europe—the price of gas is tied to the oil price, which has brought about a sharp rise in northwest European gas prices. In turn, that has set the benchmark for UK prices through trade across the interconnector. That has been made worse by the absence of genuine competition and liberalisation in the European market and the consequent lack of real gas-
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to-gas competition. How can we best address that problem? The Government consider that the key lies in ensuring that there is increased liberalisation and competition in Europe. We can expect support in that aim from the Commission and the Swedes, who currently hold the European Union presidency. The conclusions of the Madrid regulators' meeting in October also recognised the need for gas-to-gas competition. At the same time, we are working with the Commission on the new gas directive, which will lay the groundwork for a single energy market. Many initiatives are being taken, which I do not have enough time to address fully.
Although UK electricity prices are generally low by EU standards—prices to industrial consumers have been falling in real terms in recent years—there are indications that the largest UK users are paying higher prices than in some other EU member states. For example, in November 2000, prices in France and Germany for the largest users were more than 11 per cent. lower than in the UK, although, incidentally, the price in Italy was 42 per cent. higher. We also recognise that some large consumers have poor price-related contracts and will have been hit by fluctuations in those prices such as the spike in September and October.
Mr. Llew Smith: Can the Minister provide me with information on who would be responsible for the environmental clean-up and removal of the plant, should Llanwern close? Does he have an idea of how much it would cost? If he cannot give me that information today, will he write to me?
Mr. Johnson: I shall certainly address that point at the end of my remarks.
I want to acknowledge that the industry is not crying wolf about the problems with energy prices—those problems need to be addressed. The implementation of the new electricity trading arrangements in relation to Europe has been delayed, but that should not detract from the significant progress being made during the past year, not least the development of the legal framework for NETA in the form of the balancing and settlement code that has been introduced.
We are taking action on the three key issues of the European exchange rate, the climate change levy and energy prices. There is no simple solution, but we are trying to address the needs of the industry while avoiding a return to the problems of the late 1980s and early 1990s. Not only was there a 20 per cent. reduction in output in the 1980s and a 7 per cent. reduction in the early 1990s. but millions and millions of manufacturing jobs were lost in the industry. I therefore do not think that the two Conservative Members, especially the hon. Member for South-West Hertfordshire, have any lessons to give us in that respect. Every initiative supported by the industry, whether in relation to shipbuilding, the automotive industry, chemicals or steel would be abandoned by a Conservative Government, according to the proposals that the party has recently published explaining how they would finance their tax cuts.
In conclusion, and in answer to the points made by my hon. Friend the Member for Blaenau Gwent, I can tell hon. Members that we have no further information

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on Corus's intentions, but Ministers and officials will stay in close contact with the company. We hope that they will reflect long and hard before reaching any further decisions on rationalisation. As for the obligation on the company to clear up sites, we hope that there are no sites to clear up.
Mr. George Stevenson (in the Chair): Order. We move on to the next debate.

Non-governmental Organisations
11 am
Mr. Andrew Rowe: I come to this subject from a lifetime of interest in and support for the principle of voluntary activity and non-governmental organisations. I was for a time a consultant to the Voluntary Services Unit, which was originally a civil service department. The unit was subsequently moved into the Home Office, and I believe that it never recovered from that. Among my numerous voluntary activities, I am a trustee of the National Society for the Prevention of Cruelty to Children and the Community Service Volunteers.
We live in a fast-changing world in which the issue of world governance is becoming more important every day, making the position of NGOs, nationally and internationally, more important than ever before. There are several reasons for that. First, the number of NGOs has increased enormously: a 1996 study shows that, in India, more than 1 million NGOs were registered in one form or another. In this country, at the latest count, there were 187,000 charities, and charities form only a small part of the NGO scene. Secondly, the wealth and sophistication of NGOs has increased sharply. Thirdly, NGOs are used increasingly as the agents of or consultants to Governments, or as analysts and commentators on the media.
What are NGOs? The Department for International Development's definition of NGOs is so wide as to be misleading. It includes:
All civic organisations, associations and networks which occupy the "social spare" between the family and the state except firms and political parties: and who come together to advance their common interests through collective action. Includes volunteer and charity groups, parents and teachers associations, senior citizens groups, sports clubs, arts and culture groups, faith-based groups, workers clubs and trades unions, non-profit think-tanks and "issue-based" activist groups. By definition, all such civic groups are non-government organisations (NGOs). The NGOs which have come together under the banner of global civil society to campaign on globalisation-related issues constitute a sub-set of broader civil society.
So you name it, we are talking about it.
Many high-profile NGOs derive much of their income from government. As a trustee of CSV, I am delighted that, over 35 years, it has so often been supported by public money to pursue not only the Government's but often, I am glad to say, its own agenda. CSV has earned that trust through many years of high-quality work, but we need to look closely at how NGOs are chosen by the Government and media and why.
Whom do NGOs represent? Are they the result of the enthusiasm of an individual or of a group acting altruistically? If I had wanted to pursue a higher-profile career than my obscure Back-Bench career, I would have started my own NGO. There is no quicker way of attracting media support than to start an NGO, possibly using a laptop computer. If one does that, makes a few contacts and utters some outrageous remarks, one can often attract the type of support that makes it easier to raise money. Some of the individuals from NGOs who are often seen on television or heard on the radio do not have much of a hinterland of credibility, and that is one of the reasons for today's debate.

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Some NGOs may represent the interests of a member group. One of the most successful and welcome interest groups started in recent years, for example, was the group set up by children leaving care to represent themselves. That is a remarkable example of how, by getting themselves organised, an oppressed and marginalised group can change the nature of the debate about themselves and improve their status. Of course, if trade unions were included as NGOs, they would have an absolutely explicit self-interest in their operation.
Do NGOs represent their subscribers? Quite a few NGOs seem to rate their success on the size of their subscription lists. The Royal Society for the Protection of Birds, I believe, has the largest subscription list of any NGO in the United Kingdom, but does it represent the interests of its subscribers or the interests of those who manage it?
Do NGOs represent their funders? Quite a few NGOs seem to make little effort to attract support from the general public. Indeed, in recent years, many NGOs have cut back quite far on their education role, the RSPB being a notable exception. However, many NGOs are quite happy to find a source of funds—a public agency, the Government or a trust—and one wonders whether they represent themselves or the interests of the funders.
Does it matter whom NGOs represent? Do they represent the poor and disadvantaged? A host of NGOs, at home and abroad, claim to represent the poor and disadvantaged. I have no doubt that they are run by people whose aim it is to do exactly that. However, many of them have no personal experience of poverty or disadvantage and are often strangely resistant to including on the board or in the trustee membership representatives of those for whom they claim to speak. I shall return in a moment to one notable international example of that bad practice.
Perhaps, whether they realise it or not, some NGOs represent the rich and influential. Clearly, some NGOs deliberately set out to represent the rich and influential. I cannot believe that members of the Country Landowners Association, for example, would think that their organisation was successful if it represented only the poor. However, as there are often no poor people in those groups, those groups may well perpetuate an out-of-date view of society.
Perhaps I may enumerate some of the categories. An interesting example—one of the most formative of my time—was the Child Poverty Action Group. The enthusiasm of an individual, with a very able ally, changed the way in which NGOs could work in this country. The right hon. Member for Birkenhead (Mr. Field) hit on a remarkable key: if two or three Members of Parliament could be persuaded to take an interest, the entire fabric of the Government information service could be opened to an organisation, at no particular cost. He was extraordinarily successful in that. Funnily enough, on my way to the debate, I met the right hon. Gentleman, and I mentioned that I intended to use him as an example. He told me something that is very germane to the debate.
Early in its life, the Child Poverty Action Group was given quite a large cheque by Lord Windlesham, who was the Cabinet Minister responsible for the Voluntary Services Unit when I first joined it. There was some
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difficulty in delivering the cheque because the Child Poverty Action Group had so few staff that there was no one to open the door. The right hon. Member for Birkenhead took the cheque and said, "I hope that you do not expect me necessarily to support all that you say." Lord Windlesham replied, "I very much hope that you will bite the hand that feeds you regularly and ambitiously." As the right hon. Gentleman said, one wonders sometimes whether the same degree of altruistic masochism is available in government today.
Those who represent the interests of a member group were well exemplified by the United States trade unionists demonstrating at Seattle. Although they pretended that they were interested in the world's poor, they were in fact demonstrating against the World Trade Organisation because of exaggerated anxiety that American jobs would be lost if that organisation succeeded in liberalising world trade.
I suppose that a good example of one of the subscribing organisations is the Royal Society for the Prevention of Cruelty to Animals. The well-known and interesting controversies that have split the RSPCA over a number of years demonstrate that NGOs are often in difficulties if the management moves too far from the interests of the subscribers.
On the funding issue, I sometimes worry that the aims of an NGO become distorted to fit in with the funding criteria of donors. As someone who has spent too much of the past two and a half years raising money for various organisations, I am conscious that writing an application for money is a skill learned with difficulty. It is important not to allow the desire for the money to distort the purpose of the NGO.
The business of middle or upper-class people representing the poor has taken a step forward lately. Organisations such as the Save the Children Fund and the National Society for the Prevention of Cruelty to Children, to name but two, are making much more effort to collect and act on the views of the client group. Both at home and abroad the Save the Children Fund has produced some excellent publications, which are little more than collations of children's voices. That is an important advance. Any of the categories that I have mentioned seem legitimate, but it is essential that, outside and inside the NGO, the group that one represents at any time should be made clear and recognised. That is often confused and hidden, and is sometimes examined reluctantly.
At home and abroad, NGO policy is shaped by trustees, yet how are trustees chosen? It is more than 30 years since I read Ben Whitaker's book about the big charitable foundations. In it, he pointed out that the trustees were really a self-selecting group of friends and that, whatever one felt about the appropriateness, altruism or competence of the people chosen, the trustees came almost inevitably from a group that would perpetuate what was already there. That was scarcely a recipe for radical advance. The same is true of most NGOs, which have difficulty recruiting trustees of the quality that they want, and so often ask the existing trustees for suggestions. A self-perpetuating oligarchy arises. That may work extremely effectively, but one should carefully consider how trustees are chosen when considering the accountability of NGOs. I understand that the Consumers Association, for example, is trying

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hard to improve the way in which it chooses its trustees, but I do not know many examples of good practice in the field.
We also need to ask about the degree of control exercised by Governments or Government agencies. The departmental rules, or those of an agency, have an enormous effect on the nature of the work of NGOs. For the many NGOs that have become increasingly dependent on public money, the rules become a form of control. One striking example is that, so far as I can see, the lottery will not entertain applications from explicitly Christian groups. I do not know why, but it was certainly the case with JC2000, and colleagues have told me that it was the case with several other applications.
Mr. Phil Hope: The hon. Gentleman has much experience on this matter, and we have worked closely together in the all-party parliamentary group on charities. I want to draw his attention to something that he has not yet mentioned, which is the Government compact on the relationships between Departments and the organisations that they fund. The first undertaking in the Government's compact is
To recognise and support the independence of the sector, including its right within the law to campaign, to comment on Government policy, and to challenge that policy, irrespective of any funding relationship that might exist, and to determine and manage its own affairs.
Does the hon. Gentleman agree that the compact, introduced recently by the Government, has helped to establish the independence of the sector? The concerns that he raised have been dealt with fully in the new compact, as it contains commitments made by the Government.
Mr. Rowe: I profoundly agree that the aspiration is clear. I welcome it and hope that that is the case. It is fair to say that what has been made explicit is what was always intended to be the case. I shall watch with interest and hope to see what works out in practice.
I acted as consultant to the community development projects at the Home Office a long time ago, and I remember visiting a project. When we arrived, the young people running the project complained that they received little support from the local authority. As I had walked up the rather grotty stairs—I think that the project was in Liverpool 8 or somewhere like that—I passed a series of newspaper pictures of local councillors under the heading, "Know your enemy". It seems that projects should exercise some tact and restraint if they want support.
An important issue is the extent to which NGOs compete for attention, members and funds, which can be extraordinarily destructive. Competition often leads to inappropriate behaviour such as exaggerations that are unsustainable when examined. Some of the hype about global issues that we hear from organisations such as the World Development Movement does not stand examination in the full light of day. It is rare for big NGOs to be as gracious as Greenpeace, which admitted that it had grossly exaggerated the risks from Brent Spar. There is unquestionably a suspicion that an organisation must have a high profile to keep up the flow of donor money, particularly subscriber money. In these
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media-driven days, that often means making exaggerated statements. That is important, because it can lead to bad behaviour.
I shall give one example from overseas, which I realise is not fair on the Minister, because he is not responsible for international affairs. I happen to know an African nun, who spends her days looking after refugees in Goma for an indigenous NGO. When the refugee crisis blew up, international aid agencies poured in to offer humanitarian support, but they paid far more than the local going rate, so all the drivers from the local NGO were taken away. Other terrible resource famines for the local NGOs followed as a result of that competition from rich, well-funded organisations from abroad. As the nun and her organisation had only wind-up telephones, they asked to use the e-mail facilities of the big international organisations, but the foreign NGOs refused. Such behaviour is disgraceful and inexcusable, particularly when a large number of those organisations have now left Goma, and the indigenous NGO is trying to pick up the pieces.
Michael Edwards, who wrote an interesting pamphlet for the National Council for Voluntary Organisations, says that another danger is that NGOs are famous for their advocacy of pre-determined positions, often couched in terms of strong opposition to the status quo. Hostility to the status quo often rather outruns the research or factual base on which it is placed.
Much is being done. At home, we have for some years had fund-raising codes and a professional association of charitable fund-raisers. Codes for governance are increasingly being introduced, talked about and shared. Abroad, the Sphere humanitarian charter, for example, and minimum standards in disaster response will, one hopes, over time diminish the disgraceful behaviour that I have described.
Given that NGOs in their different forms are an essential, widespread and growing feature of our democracy, we must ensure that they work as well as they can, that they are seen to be wholly transparent, that they know whose interests they represent and that they make that clear to other people. We must ensure that NGOs are not an unnecessary intermediary between citizen and Government.
I am glad to be retiring before the full impact of the IT revolution strikes this place. The arrival of e-mails by the bucketful and instant access to every Member of Parliament foolish enough to have posted a web page will create enormous pressures by increasing the work load and people's expectations of Members of Parliament. I sometimes wonder whether the prophets of doom who say that we have lost all our influence and purpose may be proved right. I hope not, but Rowe's law of institutions is that an institution obtains optimum facilities only when it no longer has serious work to perform. Every time I pass Portcullis house, I think that that may be the case. When institutions are at their most powerful, they often work in difficult conditions—usually up a back stair somewhere.
Ms Julia Drown: The hon. Gentleman is making important points about how voluntary organisations need to involve the people whom they represent, and minor points about how organisations should be more subtle in the way in which

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they work. Is he arguing that the Government should become more involved in the functioning of NGOs? Surely the fact that they are non-governmental organisations creates some tension on that point, and there should be distance between them and Government. Could he clarify his position on that? He also said that some organisations were well funded. However, most of the organisations that he is talking about are very stretched. Although some of the organisations are large, they have to make difficult decisions about how they spend their money. I would not like us to leave members of the public thinking that they can relax and keep their money in their pockets when there are worthy causes that need increased and continual support.
Mr. Rowe: I am grateful for both parts of that intervention. Government should not get involved in the inner workings or objectives of NGOs; that would be quite wrong. As I said, the Government should stay well away from NGOs, and cheerfully fund organisations that might attack or criticise the Government—as long as it is done responsibly. That is very important. On funding, there is no well-run, effective NGO or charity that cannot find more causes to support, more people to help and more services to run, and there will always be a need for more money. However, there are worrying trends that show that the public's willingness to give on a continuing basis rather than in response to a particular crisis is diminishing. In a society that is getting richer, that is a tragedy. I welcome the measures that the Chancellor has taken to make it easier for people to give in a tax-efficient way.
I have spoken for long enough. I wanted to highlight the fact that, as we enter the new century, it is of paramount importance that as a society we work out NGOs' appropriate place and method of operation as they become ever more influential it the body politic.
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Mr. Mark Oaten: I thank the hon. Member for Faversham and Mid-Kent (Mr. Rowe) for raising an important and topical issue. He argues that we need proper accountability of NGOs for two main reasons. The first is that the growing power of NGOs may undermine democratically elected Governments. The second is that, as the work of NGOs can be undermined if Governments are undermined, controls are in the interests of NGOs themselves.
The hon. Gentleman's arguments were measured. Indeed, they were slightly more measured than his press release on the debate—I received it not via e-mail, but by good old fax—which was entitled "World conscious or world con: who do the NGOs think they are?" Such statements are slightly over the top and do not help the debate. However, as I said, his comments today were measured. Additionally, when my staff complain about their working conditions, I shall quote them Rowe's law.
Mr. Rowe: The title may have been over the top, but it did not half attract media attention. A sad aspect of this world is that the largest millennium project in
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Britain can receive no media coverage at all, yet an irresponsibly phrased press release can receive considerable media attention.
Mr. Oaten: Indeed; perhaps it is an example of, as the Leader of the Opposition might say, "all spin and no substance".
The events at Seattle have made the NGO issue particularly topical and, especially in the past six months, brought the work of NGOs into the public domain. It is right to recognise the enormous growth of NGOs. According to United Nations figures there are approximately 25,000 international NGOs, which is an enormous increase on the number 10 years ago.
Globalisation has had a big impact on NGOs. Whereas the boundaries and responsibilities of Governments are limited, those of NGOs can be incredibly wide. NGOs have been able to respond to changes in how the world operates—much faster than Governments with their democratic confines and restricted boundaries ever can. NGOs are running much further ahead. Concern was raised in this country about quangos, which assumed responsibility for work previously undertaken by the Government, and the loss of democratic accountability that they entailed. Parallel concerns can be discerned in relation to the work of NGOs.
Before I highlight my concerns about the operation of NGOs, it might be worth highlighting some of the useful work that they perform. They have become powerful and are, to some extent, victims of their own success. The most prominent recent example is the Jubilee 2000 campaign against land mines, which succeeded in changing Government attitudes. I congratulate the Government on their prompt response to that agenda. That example shows that NGOs can be powerful forces for bringing individuals together and making a real difference in legislation.
NGOs are also enormously helpful to Members of Parliament in performing our role. I could not have made some of my speeches of the past three or four years without the briefing work done by various groups. When I was appointed disability spokesman for the Liberal Democratic party—I am being completely honest about this—I did not have a clue about the disability sector. However, I was helped by the brilliant work of the Royal National Institute for the Blind, the Royal National Institute for Deaf People. Scope, Mencap and other such organisations, all of which provided briefing material that was supplied, of course, to hon. Members of all political persuasions. The Government worked closely with the disability sector and learned much from its knowledge. No one should underestimate the powerful impact of such organisations in supplying us with material and briefing notes, which we use endlessly in our debates.
NGOs are trusted in a way that politicians will never be. The public has a high regard for NGOs. The Edelman group recently did some survey work and discovered that NGOs were six and a half times more trusted than business and companies, and many more times trusted than politicians. If we take the example of the recent scare story in the press about genetically modified food, we find that people believe the NGOs more than politicians and even the scientists. We must

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recognise the enormous power of NGOs in that respect. That is one reason why the hon. Member for Faversham and Mid-Kent is right about the need for some control.
Mr. Hope: I wonder whether the hon. Gentleman will refer later to the research of Dr. Alan Hudson, who said:
The values which NGOs hold and promote, and the advocacy position they take, derive from experience in, and links with the South.
He was explaining the NGOs' role in international development, and went on to say:
It was their experience of working at a grassroots level, implementing projects and programmes in a wide range of contexts that gave them the legitimacy to advocate about development issues.
Do not organisations such as Oxfam—I have had personal experience of working with it—gain legitimacy and accountability through their work, which makes them such powerful advocates for the poor in developing countries?
Mr. Oaten: The hon. Gentleman is right. NGOs can get to the places that others cannot. They are often there on the ground—whether holding meetings with blind people in the case of the RNIB, placing individuals in famine areas, or having the ability to enter and play a critical part in war zones. The public trust them simply because they are not governments and politicians; they can go into places that are inaccessible to those officials.
In Seattle, there was much talk about the difficulties faced by NGOs. I understand—the Minister will correct me if I am wrong—that a member of Action Aid was part of the British Government delegation. The Government thus showed how much they want NGOs to be part of the briefing process.
The NGOs are victims of their own success. They have more power and money than before, but with that power and money have come the critical requirements to take more responsibility and be more accountable. Money, as ever, is at the heart of the debate.
About 40 per cent. of the money to NGOs comes from grants, and people must be confident that public money is being used in the right way. However, regardless of whether the money comes from Government or from someone shaking a tin or writing a standing order, a proper process must be in place to account for it. The accountability trail in many NGOs—unlike those involving big business, political parties and Members of Parliament—is difficult to follow. However, although Oxfam does not regard itself as having shareholders in the same way as a company does and the link is much harder to see, anyone who drops money into a tin or goes into an Oxfam shop is by definition a shareholder.
There is anxiety that the big increase in NGOs will lead to overkill. Those working in Kosovo were worried when it was described as an NGO playing field; far too many organisations were trying to get a piece of the action. That is a big danger, and we should consider it when discussing reform of NGOs. The United Nations High Commissioner for Refugees expressed alarm at the operation of some of those organisations, and we must tackle the issue.
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As the hon. Member for Faversham and Mid-Kent said, NGOs are driven by the need for a high profile on the international scene, to keep the money coming in. The anxiety is that competition for money may drive some NGOs into in appropriate places, or to compete with other NGOs so that their logo appears on the 9 o'clock or 10 o'clock news—or whenever it is—which may be part of their campaign to raise money. Such competition will not help individuals in Sudan, Kosovo or anywhere else.
It is worrying that some agencies take a short-term view, but they know that to obtain funds they have to make an impact quickly when flood or famine strikes. That is not good for an organisation's long-term fund raising, but it is necessary because the public are motivated when they see images of disasters. That issue must be considered when we examine the development of NGOs.
The organisations have recognised some of the difficulties and are seeking solutions. Some groups involved in peacetime campaigning activities worked together as part of Jubilee 2000, which was a model of how organisations can pull together and use their joint experience to get a single message across. We must apply the lessons learned in Jubilee 2000 to emergency and wartime activities. Establishing a co-ordination committee in Kosovo, for example, would help ensure that, rather than NGOs doubling-up activities, each one would take on a particular task, with one focusing on children, one on food, one on disease, and so on. NGOs should work closely through a co-ordinating committee, with clear lines of accountability.
We also need to re-examine the current UN guidelines. The UN has to recognise that the world is moving on and that its guidelines and vetting processes need revising and updating. There are also arguments for some form of independent monitoring and the strengthening of existing structures. There may be a role for ombudsmen to examine the work. However, if the Minister were to suggest heavy Government regulation in this sphere, I would be reluctant to endorse it. I am a fan of self-regulation when possible, and some NGOs are implementing it very effectively. The best way forward is to get individuals to do it themselves.
This is an important debate. However, let us not lose sight of the incredible work that is being done. Let us not use language that would in any way undermine the fundraising ability of those organisations. For their sake, let us recognise that the world has moved on. NGOs are working in a growing sphere, and they are extraordinarily well-respected—more so than Members of Parliament will ever be. We need to support them to ensure that they maintain their good reputation.
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Mr. Gary Streeter: It is good to be part of this debate, and I congratulate my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) on securing it, and on the remarks that he has made. He is a distinguished parliamentarian, and I am sad to learn that he is retiring at the next election. He has always spoken up for the underdog, but has also been prepared to challenge orthodoxy and the establishment, and he has sought to do that this morning.

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I know, from some of the phone calls that we have received, that my hon. Friend's press release caused a stir in certain quarters, as I am sure it was intended to do. That is no bad thing, because although I am about to make a speech that is broadly supportive of NGOs and their work as I have encountered it during my time as Conservative party spokesman for international development, a wake-up call is sometimes good. The organisations are often one step removed from direct accountability to a third party, and it is good for any organisation to examine itself and ask whether it represents the people that it was set up to represent—whether it is still focusing on its core group, its core business. I congratulate my hon. Friend on raising the issue, on his remarks and on his important career to date. I do not agree that he would have made a bigger splash if he had set up his own NGO—he has made a massive contribution in what he chose to do.
I also want to affirm my belief in the big wide world of NGOs. It was interesting to hear again the definition of an NGO. NGOs are those charities and voluntary groups that we know as civil society. They are important—a famous Conservative once described them as "small platoons". They provide a link between the private individual, the family and the state. If we consider for a moment what our society would be like if we had just the state and private individuals, we should be thankful for the existence of the NGO sector and its work.
In the past two and a half years, I have seen some wonderful examples of high-quality work by British NGOs. It is invidious of me to mention but a few, just as it would be if I was thanking people on the occasion of receiving an Oscar and left out my mother, but I will briefly mention four projects that have particularly impressed me.
I shall start with the work of Oxfam in the slums of Nairobi. I have been to some wonderful places in the past years, made horrible by the things that human beings have done to them and to each other, and those slums were the worst that I have seen, smelt or encountered. They are characterised by a sense of hopelessness and despair. However, Oxfam has, by speaking up on behalf of the many thousands of people living there, brought some hope. It is continuing to work there when it seems that everyone else has forgotten about those people. I remember that, having visited those slums in the morning, I sat down with some politicians in the afternoon and said, "What are you doing about those slums? What are you going to do about the people living like this?" I was met by blank expressions, as if to say, "Well, what's it got to do with us?" Thank goodness for Oxfam's work in Nairobi.
I saw a project in Kenya in which the Tear Fund got people together to install a pump that is serving three villages. That means that instead of walking four hours every morning to bring back dirty water for their families to wash in, to cook with, and to wash their clothes, several hundred women—it is always the women in so many developing countries—have access to clean water. It is literally on tap; they have to walk only five minutes to it. The elders of those villages had come together; they knew how to maintain and safeguard the pump. It was a sustainable project. The elders spoke with such pride of the difference that the Tear Fund had made to their lives and I thought, "Thank heavens for that project."
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I saw the work of World Vision in Rwanda with orphans. I am sure that we are all aware that in genocides such as in Rwanda, thousands of children's parents are killed overnight. I met one girl called Alphonsine. Both her parents had been killed on the same day and at the age of nine she had no choice but to try and bring up her three younger brothers on her own. She is now 15 and has been acting as mother and older sister for all these years on her own except for the support of World Vision. Many other NGOs are doing fine work over there. For that young lady, coping in that terribly difficult situation, thank goodness that World Vision was making a difference.
I could go on, as I have seen so many wonderful things, but I will just mention Christian Aid, which supports internally displaced people in Colombia. These are people whom the drug barons have displaced and the world has largely forgotten. Christian Aid has not forgotten them. Thank heavens for the people who put money in the tins and envelopes each year. My experience of NGOs' and charities' work abroad has been positive. Of course, some projects are more impressive than others, but that is the nature of things.
In the past two years, I have been overseeing something that we call in the Conservative party listening to Britain's Churches. It is actually listening to Britain's Christian and other faith communities. We have met more than 300 faith-based groups in the country, learning about the work that they are doing. I accept that one does not have to be a religious person to help one's fellow man or woman, but the reality today is that many of our charities are faith-based. We would really notice the wonderful work being done by those unsung heroes if they stopped doing it. It is an impressive display of human endeavour. I want to affirm the work that is being done in our country.
I come to the debate, which I welcome, with some knowledge of what NGOs are doing both abroad and at home. I have not seen everything, but I have seen a fair amount in the past two or three years. It is important to consider for a moment the nature of most NGOs. I will talk in a few seconds about some of the large multinational organisations. I am not sure whether they are also NGOs. Most NGOs are started by a small group of people, who are motivated by one reason or another to do something worthwhile in their community or overseas. Many of these NGOs stay small, focused and local—and that is great—but many of them grow into large organisations. I understand that it was a handful of people meeting around a kitchen table in the 1950s because they were concerned about world poverty who set up Oxfam. That is the nature of many of our excellent NGOs-Save the Children, Barnados, the Shaftesbury Society. They started small, with one person or a handful of concerned people, and have grown as organisations. My hon. Friend the Member for Faversham and Mid-Kent is right to make the case for ensuring that, as they grow and change, they continue to carry out their original purpose, do not lose sight of their core mission, and are accountable to their subscribers and stakeholders—a modern expression which I am sure that my hon. Friend will embrace, even though he does not embrace e-mails as much as some of us do. The issue is one of accountability to stakeholders, whether they are the people whom the NGO is trying to help or the people from whom it receives money.

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Some organisations have grown into national and international organisations. Many of them still do a fantastic job. However, there is a risk that increased size and bureaucracy will force one or two of our larger domestic charities to lose sight of their core focus. It is useful for all such organisations to take stock occasionally.
My experience is that whether they were started 100 years ago, or 10 years ago, many of our charities and NGOs do a first-class job. My hon. Friend the Member for Faversham and Mid-Kent and the hon. Member for South Swindon (Ms Drown) are right to raise the issue of independence. The essence of many successful NGOs is their independence. The House was asked whether we wanted the Government to be more involved. The Conservative party jolly well does not want to be more involved in the life of NGOs when we come back to government. We want them to get on with it. I shall come on to describe how we want the Government to get out of the way and remove some of the obstacles to their work.
We believe in the vitality and independence of charities and organisations. It is probably a mistake for them to become dependent on Government funding. It is probably a road along which there is no way back. While it is necessary for most charities and NGOs to take some Government money and local authority grants and a good idea to get involved in a contractual relationship with the Government or a local authority to deliver a project, it is a bad idea for them to become dependent on Government money. Above all, the presence of NGOs in our country is a reminder to all of us that the state cannot do it all, although it does some things very well at local and national level. No matter how motivated civil servants and bureaucrats might be, it is impossible for them to get to the nitty-gritty out there.
John Bird, who launched that great project The Big Issue—we have all seen and bought it, although I suspect that few of us read it—told me that the last thing that a homeless person needs is a home. That seemed a strange thing to say, but he meant that they need a friend. They need someone who can get alongside them and help them to tackle the problem that has put them on the streets in the first place, whether it is drug dependency, alcoholism or some other crisis in their life. Homeless people need counselling and to learn job and life skills to increase their confidence and self-esteem. There is no doubt that many NGOs and charities are far better placed to provide that support than the Government could ever be.
Is it not one of the silent scandals in our country that so many young children under Governments of whatever colour move from local authority care into oblivion? It is no good our thinking that they all have a social worker ringing them up every other day to find out how they are getting on, as that just does not happen in reality. Charities are far better placed to get alongside to provide the support that vulnerable people need. No wonder a third of the people on the streets of London come from local authority care. That is not to criticise local authorities, but there is a shortfall in our provision, and it cannot be met by the state. It is a role that we want to see more and more charities moving into.
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We should celebrate the existence of charities. They are the little platoons that make our society work, but as my hon. Friend the Member for Faversham and Mid-Kent says, there are issues of accountability. It is important to raise those issues. Ultimately, all charities—although not all NGOs are charities—are responsible to the Charity Commission and through it ultimately to the Home Office. If we are honest, most of our charities today will be troubled by the Charity Commission only if a major scandal is drawn to their attention. The Charity Commission is not there to give charities a nudge and a wink, to guide them or to hold them to account on a day-to-day basis. The Home Office has got far too many other things to do to be able to watch over all the NGOs, and we would not want it to do so. It is important for NGOs to be accountable to their stakeholders, because we cannot expect the Charity Commission or the Government to hold them to account.
When Governments enter into contractual arrangements with NGOs and charities, it is legitimate for them to carry out careful checks on the work that each charity has been doing and to set specific targets. Most important, they should monitor the outcomes of the work that NGOs carry out on their behalf. The key question that Governments should ask themselves before entering into such relationships is, "What works?" They should set specific targets and monitor them against outcomes.
I support the move made by the Department for International Development towards longer-term relationships with its service providers in preference to the awful competitive tendering process, which, as my hon. Friend the Member for Faversham and Mid-Kent said, can be destructive, time-wasting and expensive in the NGO sector. It is important for Departments to enter into long-term contractual relationships based on partnership.
I turn to a matter for which the Minister does not have direct responsibility, although I hope that he can pass my concerns on to his colleagues at DFID. Some of our larger charities face an increasing number of requests for bank guarantees to back up the work that they do for DFID. That is unfortunate, because unless NGOs put most or all of the value of the guarantee into a bank account, the bank will not give a guarantee. Consequently, precious resources are being locked away in bank accounts instead of being made available for important work.
Mr. Rowe: I understand that DFID has changed the rules so that it will now pay a month in arrears, which will discourage many small NGOs from applying. That may be the purpose—although I would be sorry to hear that—but DFID should examine the matter carefully.
Mr. Streeter: My hon. Friend is right. It is important not to discourage applications from smaller charities. The application processes should not be so bureaucratic and difficult that only large charities have sufficient resources to apply. Smaller organisations are often discouraged from applying by the prospect of payment in arrears when they have had to fund the work up front. We shall want to put that right when we return to government.

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It is true that DFID is a far better payer than the European Union of grants to aid agencies for humanitarian work. The quality of the EU aid programme has been a scandal for many years, and I hope that that will be put right in the next 12 months. Many of the charities and aid agencies that I speak to have been waiting for payment for six months or more, which places them in real difficulties when they have already done the work.
Will the Minister comment on bank guarantees or write to me in due course? If it is more appropriate, I would be happy for him to pass the matter on to his colleagues in DFID. It is right to monitor, but bank guarantees and bonds are over the top. After all, Governments should not enter into contractual relationships with organisations if they are concerned about the quality of their work. That is the biggest safeguard of all.
I am a great fan of much of the work of NGOs and charities that I have seen over the past two-and-a-half years. However, in respect of some leading charities—my experience has centred on those that work in international development, but I suspect that it also applies on the domestic front—there is an unattractive level of duplication, especially in the realm of advocacy. I am all for such organisations acting as advocates: it is important to put pressure on people such as the Minister to influence him to make even better decisions. I accept that that is a legitimate role for NGOs. However, in the past two years my desk has been flooded with glossy publications from NGOs, in which they advocate certain policy approaches. Given that these publications often say the same thing, why on earth do NGOs not get together to produce a single document?
I agree with the comments made by the hon. Member for Winchester (Mr. Oaten) about Jubilee 2000. It is an example of an effective campaign that is well on the way to persuading this Government and Governments overseas to do more in terms of debt relief. There are two key points to make in this regard. First, Churches and charities worked together to produce joint publications, and there was joint advocacy. Secondly, they had a clear focus. NGOs should recognise that there is too much wasteful duplication, particularly in the realm of advocacy, which does not constitute value for money. If they were to come together and co-ordinate to produce a single document, they would get a better response from people such as me.
Mr. Rowe: I apologise for interrupting my hon. Friend yet again, but he may wish to know that, for example, the NSPCC, Barnados and the Shaftesbury Society have come together to produce a joint charter cum manifesto for young people. That is a promising development.
Mr. Streeter: I am delighted that my hon. Friend agrees with me, and I am pleased to hear that those organisations have come together. That is certainly the way forward. In every other sector of society of which I have experience—my real job was as a lawyer advising business people—mergers, acquisitions, collaborations and partnership deals take place. There needs to be more of that in the NGO sector.
Some of the multilateral organisations that have been active in the past two and a half years—the Minister may want to correct me, but I think that they are in the
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NGO sector—are less than impressive. I wonder to whom some of those organisations are accountable. If I mention the International Monetary Fund and the World Bank, the Minister will rightly say that they are accountable through the Chancellor to Parliament—although I have no idea what he would say about the World Trade Organisation. Many United Nations organisations are theoretically accountable through various committees to the Secretary-General and the General Assembly. However, the reality is that many are not accountable on a daily basis. In real terms, many large UN organisations are accountable only to themselves. That is a genuine problem.
I agree with the comments of my hon. Friend the Member for Faversham and Mid-Kent and the hon. Member for Winchester about developments in the Balkans. Some fantastic work has been undertaken in the Balkans in the past five years, but on visiting the region—I have done so four times in the past two years, so I speak with some experience—one gets the impression of a complete NGO takeover. The restaurants are full of English-speaking people—although English is perhaps not their native language. NGO staff wages completely dominate and upset the local economy and wage rates, and the streets are full of white 4x4 vehicles that are smothered with NGO logos. One wonders whether profile is more important than delivery for some of these organisations. Lack of accountability, too much competition, terrible overlap and NGO overkill are real issues. Although the problem is difficult, Governments can tackle it by recognising that, in selecting partners in contractual relationships, it is important to consider the work that an NGO does, rather than its ability to market itself. If Governments and local government can do that, we will be well on the road to working with the right people.
I shall finish by touching on the important issue of faith-based charities, which my hon. Friend the Member for Faversham and Mid-Kent raised en passant. It is clearly nonsense to argue that one must have a personal faith in order to be motivated to help one's fellow men. Nor is it true to say that all NGOs and charities that are active in this country or abroad are driven by faith-based people. However, it is true that in this sector, a lot of work is done by those of a religious persuasion. People are increasingly experiencing difficulties in obtaining grants from the Government, the National Lottery Charities Board and local government. We do not want any organisation to become dependent on Government grants, but a small grant can sometimes unlock a problem and put the organisation on its way. Grant-making bodies in this country are increasingly saying to organisations, "You have been successful and we want to support you, but we shall not do so if you continue to operate as a Christian organisation or Muslim organisation." I have had many conversations during the past two years with Christian and Muslim groups and groups of other faiths, and the problem is increasing.
The Minister may be unable to reply today, but it is important that the Government bring an end to discrimination against religious groups in the grant-making process. Such discrimination is taking place all over the country, although I do not believe that that is the Government's intention. The problem is that it is the religious persuasion of the people concerned that

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produces the results because their faith is the essence of their organisation. The Government and local government are saying, "We want the results, but we do not like your label or your methods." However, the reality is that if those organisations changed their methods, they would not obtain the same results.
Mr. Hope: My experience as a former county councillor on a grants panel which issued grants to voluntary organisations is that church or faith-based groups received grants if they could demonstrate that their doors were open to all people in their community. It was not that they could not obtain grants, but that they had to be inclusive in delivering their services. Most faith-based groups support that approach because it avoids discrimination. Grants should be given to groups that provide services to the whole community, not to their faith-based community only. That builds inclusion into local communities.
Mr. Streeter: The hon. Gentleman makes an important point about inclusiveness and serving the whole community, which I accept, but grants may be denied because organisations employ the people whom they want to help or perhaps because they pray with them. Grant-makers may believe that this is wacky in the 21st century, but it may be a way of providing care and help to people. This matter is important and I call on the Minister to examine it more closely. I welcome the fact that during the run-up to the next general election, in whichever year it comes, the Churches are getting their act together and lobbying prospective parliamentary candidates.
In conclusion, my hon. Friend the Member for Faversham and Mid-Kent has done the House and nongovernmental organisations a service in introducing the debate. It would be sensible if those organisations reexamined their accountability. I want to leave no doubt that my experience and that of my hon. Friend and all hon. Members in the Chamber today is that the work of non-governmental organisations in this country and beyond is, by and large, excellent, of high quality and changes people lives. We strongly support their work because all of us, but especially the most vulnerable among us, would be poorer without it.
12.8 pm
The Minister of State, Home Office (Mr. Charles Clarke): I congratulate the hon. Member for Faversham and Mid-Kent (Mr. Rowe) on securing this worthwhile and important debate, to which a number of positive and helpful contributions have been made. His record is outstanding and well known, and when I was an Education Minister we had a dialogue on some of the issues.
I was not aware that the hon. Gentleman is leaving the House until he said so earlier today. I want to put on record my respect, and that of my party, for his consistent work on the issue. One regrets that the liberal, caring conservatism that he represents is steadily leaving the Opposition; that is a shame for society as a whole. However, I am sure that Opposition Front Benchers will do what they can to rectify that in future. I pay real tribute to the hon. Gentleman for his work—which has been outstanding, well known and appropriate.
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I apologise for my presence here in the absence of the Minister of State, Home Office, my right hon. Friend the Member for Brent, South (Mr. Boateng), whose responsibilities include this work. He is unable to be here today, and I regret that I am here in his place. However, I was fascinated to hear the debate. I have worked with voluntary and community organisations in various capacities, and some of the comments made today were resonant.
The hon. Member for Faversham and Mid-Kent mentioned the large foundations—I worked at the Gulbenkian Foundation, where my right hon. Friend the Member for Birkenhead (Mr. Field) started—and he was right in what he said. I have also worked with voluntary and community organisations in inner-city London. Although I am not a churchman, I also echo the comments of the hon. Member for South-West Devon (Mr. Streeter) about the important role of faith groups of all descriptions as the glue for the way in which many organisations work. I heard a Labour politician say that he would not give money to voluntary and community of organisations. His philosophy was simple: if a project was worth funding, the council would do so; but it if was not worth funding, the council would not do so. That was a conventional view.
I want to place on record my agreement with what has been said by all hon Members in this debate. The view that I have characterised is out of time and wrong. An important contribution can and must be made by non-governmental organisations of many types, whether in small urban communities or in great war zones of the world. Independent organisations are vital because they may be able to help when the state cannot and individuals are not empowered to do so without support. That view is generally shared across the country.
Before being elected to the House, I worked with a number of organisations. Reference has been made to UNICEF and the RSPCA, and I recognise many of the points that have been made. The Government have a strong commitment to value the part played by voluntary and community organisations in improving the fabric of society and enhancing the quality of life of many people. I assure the hon. Member for Winchester (Mr. Oaten) that the Government do not want a regulatory heavy hand in the matter. Partnership based on independence and mutual respect is the way forward. A heavy hand that over-regulates and over-bureaucratises is not the way forward.
The Government provide £4 billion of the sector's annual income, which is divided almost equally between grants and purchases, including contracts. That is a substantial resource, so there must be accountability. The comments of the hon. Member for Faversham and Mid-Kent on the way in which some organisations are established as campaigning organisations were interesting.
The hon. Member for Winchester referred to the opinion-forming role of campaigning organisations, but the role of local, national and world media has been omitted. As he rightly said, globalisation makes it possible for the hon. Member for South-West Devon, for example, to take a photograph of a slum in Nairobi and for that picture, with the views of the organisation concerned, to be sent around the world instantaneously. Technology has transformed the position from that

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which existed 20 or 30 years ago. The hon. Member for Winchester referred to the classic example of Princess Diana in the minefield in Angola. That image whizzed around the world instantaneously. Such activities change the context of political debate for legislators, Governments and everyone else, and the questions of authority and of what is the truth become important.
The hon. Member for South-West Devon referred to genetically modified food. A substantial research establishment in my constituency—the John Innes centre—is the world leader in research into GM foods, which is very exciting, although the Government must deal with wide public concern about the matter. Organisations state what they believe to be the truth. Greenpeace consciously uses the media and the instantaneous image to influence world debate on its international campaigning activities, whether those involve whaling, Brent Spar or something else.
The hon. Member for Faversham and Mid-Kent referred to the Child Poverty Action Group and to other organisations which make their cases in different ways. On whose behalf and with what authority they speak is not simply a matter for those organisations or the Government; it is for the media to decide what weight they give to allegedly factual remarks made in such discussions. I am not saying that the media should censor people, but there should be a conscious effort to think with what authority people speak.
When I was a Minister at the Department for Education and Employment, I took part in a television programme on safe routes to school—a campaign that I strongly favour and which is part of the Government's policy. A motorist representative was put on the programme against me. He came from an entirely self-invented organisation. He had literally done what the hon. Member for Faversham and Mid-Kent said and produced a letterhead. The motorist representative was allegedly speaking on behalf of motorists. I cannot remember his name, but he had invented the name of an organisation so that he could be summoned by the media as an authoritative commentator on such matters. Nobody objects to the AA, the RAC or other reputable organisations becoming involved in such issues.
The hon. Members for Faversham and Mid-Kent and for Winchester were right to deal with those points. Nevertheless, we should not let the media off scot free. They should operate a discriminatory approach in deciding who should and who should not be listened to.
I strongly support the point made by the hon. Member for South-West Devon on collaborative approaches. Had the hon. Member for Faversham and Mid-Kent not made the point, I would have cited the example of children's charities that have worked closely to influence the debate on the Regulation of Investigatory Powers Act 2000, in relation to paedophile links and how we deal with paedophile crime. Those charities are working closely with us on the development of the Criminal Records Bureau and associated issues. As the hon. Member for South-West Devon said, those organisations are also collaborating closely together.
The Member for South-West Devon also described international collaborations, which must be the way forward. Indeed, such an approach is at the core of the Government's actions.
Ms Drown: My hon. Friend will know that I have raised before my concern about the potential charges to NGOs for using the Criminal Records Bureau. Can he give me an update on the consultation process? I should like to know about the bureaucracy that will be associated with such a proposal, and hope that the possible disincentives for organisations to come forward are removed.
Mr. Clarke: The short answer is no. I welcome my hon. Friend asking such a question. We are good friends. She secured the first Adjournment debate after the 1997 election on an issue about which we are both concerned. I say to my hon. Friend the Member for Basildon (Angela Smith) that it is a touching tale, but I shall go into it.
Mr. Hope: My hon. Friend the Minister may be glad to know that the hon. Member for Faversham and Mid-Kent and I are to meet him on 22 January to discuss the Criminal Records Bureau.
Mr. Clarke: Funnily enough, I did know that. I have received a large amount of correspondence about the matter from Members on both sides of the House, members of the all-party group and others. We are considering carefully the various representations that have been made. The reason why I rather rudely said no to my hon. Friend the Member for South Swindon is that I do not want to get into such a debate here.
Accountability and partnership must be at the core of our actions. The fact is that charities and voluntary and community organisations must account for their use of substantial sums of Government money. Central Government are obviously accountable to departmental accounting officers, the National Audit Office, the Public Accounts Committee, and to Parliament and the electorate. Voluntary organisations are accountable to their users and funders, including the Government. Registered charities are accountable to the trustees, the terms of their trust deeds and the Charity Commission, which is responsible for promoting the effective use of charitable organisations. Such a relationship is difficult, which is why the compact to which my hon. Friend the Member for Corby (Mr. Hope) referred is so important.
I was slightly worried by the tone of some of the speech of the hon. Member for Faversham and Mid-Kent, because it would be dangerous if the Government or the state were to follow policies that seriously encroached on the independence of voluntary community organisations. That independence must be exercised with discretion, but the principle remains that it should be protected and substantiated through existing relationships. The hon. Member for South-West Devon gave good reasons for protecting that independence. One might have concerns about the way in which some organisations operate, but in seeking to rectify that, we must not override the key issue of their independence. That principle lies at the heart of the compact on relations with the voluntary and community sector, which is a memorandum of understanding by which voluntary organisations and the Government voluntarily agree to abide. It sets out key principles and undertakings that underpin the relationship and emphasises the co-dependency of Government and the sector.

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Independence is critical. Especially important is the right to campaign and to comment on Government policy and challenge it, irrespective of any funding relationship that might exist. Although resources are substantial, it would be dangerous if we were to rule that an organisation could have access to those resources only if it signed some self-denying ordinance not to attack Government. There may be frustrations and raggedy bits at the edge of such an agreement, but the principle is important and the Government adhere to it strongly.
The compact is supplemented by codes of general practice, including ones on funding. I return to the point made by the hon. Member for South-West Devon. When the Government fund an organisation, they always advise it to plan a funding strategy for when that funding ceases, for the reasons mentioned by the hon. Gentleman. The code seeks to develop such points.
The code also applies to central Government Departments, to next steps executive agencies and to a range of organisations in the voluntary and community sector. It is designed to reflect best practice in Government. The better regulation task force report on voluntary sector funding emphasised the need for a Government funding framework. The code provides a framework that meets the five principles of good regulation, transparency, accountability, targeting, consistency and proportionality in seeking to ensure value for money, protect public money, promote fair access to strategic projects and contract funding and provide clarity in the objectives of grant programmes and eligibility criteria.
I will ask my ministerial colleague to examine the point made by the hon. Member for South-West Devon about religious discrimination and fair access to funding. The points made by my hon. Friend the Member for Corby were well made, however. The code provides transparency and objectivity, ensures clarity and greater consistency, and establishes a joint approach to monitoring, which is at the core of a great deal of what we do.
For its part, the voluntary and community sector acknowledges that being in receipt of public funds brings with it responsibilities to the funding body and to service recipients. The sector undertakes to pursue good practice in the use and administration of public funds, including the establishment of effective and proportionate systems for management; compliance with the appropriate framework of law; systems for planning and implementing work programmes; systems for monitoring and evaluating activities against agreed objectives; systems for quality assurance and accountability, and public acknowledgement of Government support.
We have an appropriate legislative framework for charities that is specifically intended not to overburden them. That framework includes a series of requirements, which I will not address in detail except to respond to the point made by the hon. Member for Faversham and Mid-Kent. He referred to the issue of including people drawn from the group that the charity serves—an important point for any "do-gooder" organisation. The
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Charity Commission has provided guidance on new ways of finding trustees that includes guidance on that point.
There are questions as to how far individual organisations respect the guidance set out by the commission. A series of approaches have been made in developing that point. In recent years, the commission has achieved increasing compliance from charities on basic matters such as submission of accounts and reports; 92 per cent of charities with an income of more than £100,000 in the year 1999–2000 have submitted their accounts to the commission. The commission actively pursues larger charities that do not comply. At present only a handful have failed to submit any accounts in the past three years, and the commission intends to name and shame any that remain in default in an announcement this month. We believe that the public have a right to that information, for the reasons that the hon. Member for Faversham and Mid-Kent described.
All those issues are serious and need to be properly developed. Charities must be accountable for the resources that they hold. Established development charities have shown that it can be done, and various cases have shown that effective action will be taken to protect charitable funds when it is not.
I turn now to the international development aspects that were mentioned, which are an important aspect of the debate. The hon. Member for South-West Devon rightly mentioned the partnership programme agreements of the Department for International Development. Those agreements take the approach that I described in the domestic environment into the international arena, which is obviously more complicated for a variety of reasons. Through those partnership programme agreements, DFID hopes to strengthen and deepen its strategic relationship with key development actors in British civil society, with the aim of collectively making more impact on the international development targets.
By March 2001, DF1D aims to have concluded PPAs with 11 long-term partners, including Save the Children, Action Aid, Oxfam and Voluntary Service Overseas. Those PPAs will be worth £150 million over the next five years, and the plan is to extend those agreements to other major civil society players in the United Kingdom in the coming year. That is intended as a response to the points that have been made about the need for a longterm rather than emergency-based approach to development work and building the necessary partnerships.
I shall not talk more generally about DFID's commitment to building a civil society and its encouragement of voluntary and community organisations, although they are important, for exactly the reason that the hon. Member for South-West Devon gave when he discussed his experience in Nairobi. However, I shall respond to the points that he made.
I am advised that funded organisations must produce work programmes and structured budgets and that funding is released against delivery of the programme to budget. I understand that, as the hon. Member for Faversham and Mid-Kent suggested, money for development programmes is paid in arrears. I shall ask my ministerial colleagues at DFID to consider the points that have been made in the debate as we move forward.

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Bank guarantees are slightly more complicated. They are not required for emergency funding, which involves only bank details. For development programming, DFID does not insist on guarantees, but in cases in which we have agreed that the NGO involved will provide matching funds, we want assurances that matching funds are available for the first-year programme and will be forthcoming for subsequent years. That assurance forms part of the agreement between DFID and the organisation involved for development projects. However, as the hon. Member for South-West Devon was nice enough to concede, such projects are not my area of responsibility and expertise, so I shall ask my colleagues at DFID to write to him and copy the correspondence to other Members who participated in the debate.
The final point that the hon. Member for South-West Devon made related to big, multinational, multilateral organisations such as the IMF, the World Bank, the WTO and the UN. As hon. Members know, the British Government have under both parties operated a major programme to reform the UN's institutions and operation. We have tried, for reasons that seem to us to constitute good government, to persuade our international colleagues in the UN that we need a much more effective framework in which to operate. As the hon. Member for South-West Devon knows, the circumstances have been difficult, but both this and the previous Government were active in trying to take those circumstances forward constructively.
When I was a member of the Select Committee on the Treasury, I was keen for Select Committees to hear evidence on such matters from the IMF and World Bank, which are Treasury institutions, in order to ascertain whether we could tease out some of the issues that have been raised today. I emphasise that this is not an official Government position, but I feel that the Select Committees of the House, including the Select Committee on International Development, of which the hon. Member for Faversham and Mid-Kent is a distinguished member, could consider some of those issues in an interesting way that might take the debate forward in a general spirit of trying properly to inform the debates of the House.
I conclude this positive debate—I wanted to speak about the Sphere project, but I do not have time to do so now—by emphasising the Government's commitment, which this debate has demonstrated is shared throughout the House, to the overall approach to strengthening the voluntary and community sector at all levels of our society.

Violent Parents
12.30 pm
Ms Sally Keeble: I am grateful for the opportunity to debate this important subject. I am also grateful to the Women's Aid Federation and other agencies who have given me advice and information on this subject. Since the announcement of the debate—Ceefax carried a short piece registering the fact during the Christmas holiday—several journalists have telephoned me and, to my astonishment, two women who are not my constituents managed to track me down. They said that they had seen the item, and told me their stories. I hope that raising the issue in a public arena will help them and other women in a similar position.
I want to start by putting a human face on the problem of contact orders between children and violent parents. We are considering the assault and murder of children by an estranged parent, sometimes during contact that has been ordered by the courts. Recent press cuttings make quite horrific reading. Under the heading "Father and Son found dead" the Lincolnshire Echo recounted in March 1999 the story of a 26-year-old man and his two-and-a-half-year-old son who were found gassed in the father's car. The killing happened when the child was on a contact visit with his father. A neighbour said that the father was a lovely bloke who would do anything for anyone.
In August of the same year, The Western Mail reported the killing of seven-year-old Daniel and three-year-old Jordan Philpott by their father during a court order contact visit. The contact was ordered despite a background of violence. In March last year, the horrific killing of Shazia and her children, Saba, aged seven, and Zeshan, aged six, when she was handing them over to her ex-husband for a contact visit received national attention. A month later, Christopher and Oliver Fairless, aged nine and six, were killed by their father. He suffocated his sons and then killed himself during his first contact visit with the children. He was facing assault charges involving his ex-wife and her father. In October last year, the Lincolnshire Echo reported the discovery of the body of a two-year-old girl at a local beauty spot. The child had not been seen for three days since going out with her father as part of a custody arrangement. The paper simply reported that a man had been arrested and was helping the police with their inquiries.
That is a horrific catalogue of killings, but it is taken from just a few clippings. It is by no means a comprehensive survey of what has happened to children during the past two years. Two things especially surprise me. First, the events were reported in only local papers—no national record seems to have been kept of the killings. Secondly, I was surprised that such an appalling list of multiple murders has not attracted more national attention. The children were not killed by a maniac or mass murderer but by one of their own parents during a contact visit, and mostly during arrangements that had at least been sanctioned, if not ordered, by the courts.
Many cases do not end in such complete tragedy, but the consequences are traumatic enough. One such case is that of a constituent who came to me in desperation

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because her ex-husband was trying to get access to his daughter. The man had barely seen the girl before because he had tried to strangle the mother when she was five months pregnant, then walked out of the family home, cutting the phone lines on his way out. Two years later, a letter arrived from his solicitor asking the mother for contact with the child. After nine court appearances, she found herself facing prison for contempt of court for refusing to provide court-ordered access. Like many other women, she was put under heavy legal pressure, being told that she was destined to go to prison if she continued to refuse contact, but knowing that if she agreed to the contact, she would be exposing her young daughter, her two older children and herself to further attack. She had a last-minute reprieve, but she fears that her ex-husband is still pursuing her—he sent her a wreath shortly after the final court hearing.
I had thought that that was a one-off case, but when I looked into the issue I discovered that it was not, and I applied for an Adjournment debate to put the issue on the public agenda. Fortunately, the scale of domestic violence is being recognised. A third of all divorces are due in part to domestic violence, but the problem seems to be barely taken into account when determining contact. In 1997–98, of 36,144 applications for contact heard through the family courts, orders were granted in 32,868 cases, and refused outright in only 656.
Research by Women's Aid shows that two out of three parents who fled their homes after domestic violence were further abused as a result of contact, and that 76 per cent. of children physically abused by a violent parent were abused again during a contact visit. Risk assessment for contact was poor. In a fifth of cases, the former partner had a criminal conviction for violence against the parent with care of the children, but despite that, three quarters of them managed to get contact with those children. In fact, the parent was more likely to get contact when there was a record of child abuse. Three quarters of abused parents said that their partner's violence toward them was not considered by the court to be convincing enough to refuse contact. Perhaps worse, it was felt that 83 per cent. of children, especially those under five, did not have their views taken into account in decisions on contact.
Things have moved on since the Women's Aid research in terms of working out ways to deal with this awful problem, although the solutions have not yet been put into effect. Following a series of especially compelling cases, the Children Act sub-committee of the Advisory Board on Family Law has put forward a report and some guidelines to be taken into account in deciding on contact, and those are welcome.
In cases that have involved domestic violence the court should consider the conduct of both parents towards each other and towards the children, especially the effect of the domestic violence that has been established on the child and on the parent with whom the child is living; whether the motivation of the parent seeking contact is a desire to promote the best interests of the child or is a means of continuing a process of violence against or intimidation or harassment of the other parent; the likely behaviour of the parent seeking contact during that contact and its effect on the child or children concerned; the capacity of the parent seeking
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contact to appreciate the effect of past and future violence on the other parent and on the children concerned; and the attitude of the parent seeking contact to their own past conduct, especially whether they have the capacity to change and behave appropriately.
At present, those recommendations are only guidelines. They have not been promulgated or circulated, and it does not appear that they are being used evenly or are recognised by some courts or lawyers dealing with contact cases. I gave the list of recommendations to my constituent for her final court case and urged her to give them to her lawyers to raise them in court, which she did. In fact, while her lawyer knew about the guidelines, they had not been raised in any of the previous nine hearings. It seems that the judge might not have known about them, because after they had been raised, the court was adjourned for the judge to consider them. After his consideration, the judge said that although my constituent was in contempt, her fears were reasonable, and, as she was reasonably in contempt, she was not jailed. A public report on the case is not available, because it was heard in the family court. That is another problem, because the secrecy that surrounds the hearings plays into the hands of the abuser. Dina Rabinovitch dealt with the issue in an excellent way in The Guardian yesterday. Many of the concerns raised in that article are familiar, from both my constituent's stories and the accounts that I have heard from Women's Aid and other agencies.
My constituent's ex-husband could bully her through the courts over a two-year period, and one of her many concerns in the whole matter was that if she went to prison—which she was quite prepared to do, because she felt so strongly—apart from leaving her children in a dire state, it would be done in a cloud of secrecy. It is shocking, in this day and age, that a woman can be sent to prison and her family split up, and that she could face the loss of custody of one of her children, with no recourse to a public hearing.
Ms Julia Drown: I am glad that my hon. Friend has raised this disturbing issue. However, she has not mentioned contact centres. I wonder whether she is arguing for the courts to adopt the most prudent approach if there is a history of violence. Nor has my hon. Friend mentioned mental health, yet some of the cases that she has outlined could pose potential mental health difficulties. Should not those risk assessments take account of mental health?
Ms Keeble: I shall speak later about how those problems might be dealt with, but I have mentioned only a few of the many guidelines issued by the Advisory Board on Family Law, particularly those that should be considered when deciding whether a parent should have contact. If contact is agreed, a whole host of arrangements have to be made about where it should take place. The real difficulties are that there are not enough contact centres and that the staff are not given proper training.
Two contact centres were suggested to my constituent. One was run by the Women's Royal Voluntary Service, but the people who work there were extremely badly equipped to deal with a violent and fit young man. The other was a court welfare centre, which

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said that it was not prepared to have her ex-husband there because he was too violent and the staff could not deal with him. Heaps of issues are involved. I want to focus on the initial consideration of whether the parent should have contact; and the parent could be of either gender.
The experience that my constituent has had to endure—many others continue to suffer it—makes it essential that those guidelines are implemented by all courts; it should not be done only at the discretion of certain judges or barristers. We must also properly monitor what happens as a result of contact orders, and use that information to improve risk assessment and to plan and provide proper support for victims—and for abusers who want to deal with their difficulties. That includes considering such matters as where contact can take place and whether proper contact centres should be provided throughout the country.
Having the guidelines sent out as an official direction to the courts would certainly bet step in the right direction. However, it would be better if those guidelines were enshrined in legislation by amending the Children Act 1989. I have two reasons for suggesting that. First, it would help to ensure parity in implementation, so that all abused parents knew that the sane assessment would be made of their abusers' behaviour in court before that person was given access to the children. Given that abused parents and children are forced to flee from pillar to post, it is especially important that, wherever they go, they know that they will have equal access to the same justice.
Secondly, an important principle is at stake here, and it should be properly discussed. Many of us assume that it is better for children to have contact with both their parents. It is said that it keeps them in touch with their roots, gives them a sense of identity, ensures that they have two parental role models and so on. I have always assumed that to be the case, but the evidence shows that it is not strictly true. There are times when it may not be better for children to be in contact with both their parents: in some circumstances, it could lead to their death. It is a fact that society would rather not face, but we must deal with it if we are to prevent the continuation of that catalogue of horrific crimes continuing.
Those issues must be aired publicly so that measures can be put in place to ensure that the risks to children and abused parents are better assessed, that facilities are available if there is to be supervised contact and that staff are properly trained. Abusing parents and their partners must understand that if they want contact with children, they will need to change their behaviour, but that such change is possible, and that there are services to help them achieve that.
For that reason, I ask my hon. Friend the Minister to ensure that the best practice guidelines are adopted, implemented and sent out in a direction to the courts, and that the Children Act is amended to enshrine the guidelines and ensure that the appalling slaughter of the innocents comes to an end.
12.45 pm
The Parliamentary Secretary of State, Lord Chancellor's Department (Jane Kennedy): At the outset of a ministerial response to an Adjournment debate, it is a customary courtesy to thank the hon. Member who
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has raised the issue. On this occasion I do so absolutely sincerely. I am grateful to my hon. Friend the Member for Northampton, North (Ms Keeble) for initiating the debate, which allows me an opportunity to state how progress is being made, and to confirm that I share many of the anxieties that she and other hon. Members have highlighted today. We remain concerned about the issue and continue to work hard on it. I congratulate her on the way in which she presented her case.
The importance of the subject is demonstrated by the fact that this debate follows an excellent debate that took place in November last year. I was sorry not to be present on that occasion, but I have read the Hansard report, including the speech made by my hon. Friend. I took part in a debate on the subject in June last year, when my hon. Friend the Member for Luton, South (Ms Moran), chairman of the all-party group on domestic violence, initiated a debate.
As my hon. Friend the Member for Northampton, North has highlighted, domestic violence is not only an important subject, but a horrifyingly common problem. I do not believe that it has been treated sufficiently seriously by society and the courts, and incidents have been dismissed as "domestics"—events of no importance to anyone outside the family. Lingering traces of that view may still be with us today. However, as this and earlier debates have shown, it is not a view held by the Government or by any party in the House.
My hon. Friend and I have corresponded on the subject and had an exchange of views through oral questions in December last year. I am aware of the constituency case that she mentioned, and I am pleased that it has had a satisfactory outcome to date, largely thanks to her efforts. As a Minister, I am at somewhat of a disadvantage in this debate. My hon. Friend has ably demonstrated that the most persuasive way of tackling the subject is to put names if not faces to the bare statistics. As a Minister, I cannot do that, or comment on specific cases and the decisions that the courts take on them.
I concede that there are cases in which children are killed by one or the other parent during a contact visit. There is no disputing that. Each case is an appalling tragedy. When it occurs against a background in which a court has ordered contact with a previously violent parent, it is clear, in retrospect at least, that the court has made a bad decision. It may not always have been easy to know that at the time, however. Courts do not deliberately order contact when they think that there is a risk that death will result.
It is also worth bearing in mind that the number of children killed by their parents, though appalling—each case is appalling—is relatively low. My hon. Friend said that there was no national record, but we keep statistics. In 1999, 56 children were killed by one or other of their parents. Statistics do not record which parent committed the murder, although it might be worth mentioning in passing that there are certainly cases in which mothers kill their children. Also, the statistics do not record whether those children were killed during contact visits.
It seems probable that most of the children killed during contact visits are killed by a father, but this would follow from the fact that it is usually men who have contact with their children while women typically secure residence.

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My hon. Friend cited research conducted for Women's Aid, which seemed to show that the courts make bad decisions in an astonishingly high proportion of cases. I think that the title of the research paper is "Unreasonable Fears?" and that the work was conducted by Lorraine Radford and Sarah Sayer. I greatly admire the work that Women's Aid does on behalf of abused women and their children, but the research needs to be examined carefully and in the correct context. The study was not a survey of the decisions that the courts make in all contact cases, so research findings such as the one that
in a fifth of cases the former partner had a criminal conviction for violence against the parent, but despite this most of them managed to get contact with their children,
may mislead, unless set out fully.
The research dealt with 130 survivors of domestic violence, 129 of whom were women. It recorded their perceptions of what had happened during and after their cases. Those findings are important but they do not tell us what happens in all cases. The findings that my hon. Friend read out could be put in another way. The survey found that in only a fifth of the cases covered had the former partner been subject to a criminal prosecution for domestic violence, but that in a quarter of them the former partner was refused direct contact with the children. That suggests to me that the courts try conscientiously to do what is best for the children, and attempt to assess risk to them in making decisions about contact.
In cases where there had been convictions for domestic violence we would, rightly, expect the courts to be extremely cautious, but clearly not all violent spouses are also violent parents. Still less do they inevitably go on to attack or murder their children during contact visits.
Ms Keeble: I do not have the figures to hand, but does my hon. Friend agree that substantial work has been done by the National Society for the Prevention of Cruelty to Children, and others, showing that while not all those who are violent to their partners also attack their children, the children are witnesses in the vast majority of cases of domestic violence—something like 70 to 90 per cent? Therefore they understand the violence and in a substantial number of cases are also at risk.
Jane Kennedy: That is a valid and valuable point.
My hon. Friend also talked about the secrecy surrounding the court hearings. Family court cases are not secret, but they are usually heard in private. The parties can apply for an open hearing if they wish, but may not always necessarily be made aware of that. The hearing of family cases in private is intended as a protection and is expressly compatible with article 6 of the European convention on human rights, which is intended to protect people and families from public intrusion into their private life. We should bear in mind the context in which courts work.
My hon. Friend also made a point about how, generally, we all accept that it is important for a child whose parents have separated to maintain contact with
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both parents, whenever that is possible and advisable. The courts can and do impose conditions on contact orders, limiting the times and places when contact can take place and, if necessary, requiring it to be supervised. My hon. Friends the Members for Northampton, North and for South Swindon (Ms Drown) will know of the good work that is done by contact centres, which allow contact to take place when for some reason it cannot happen at home, and by some more specialist contact centres which provide the supervised contact that did not happen in the two cases mentioned by my hon. Friend the Member for Northampton, North.
Ann Keen: Is my hon. Friend prepared to consider what happens in other countries? For example, in Cyprus if the children are in the house—not necessarily in the very room, but perhaps asleep or hiding—when the perpetrator is attacking their mother, he is charged with abuse of the child as well. That is a completely different outlook on children in situations of domestic violence.
Jane Kennedy: I am interested in that example, but the question of our policy on new criminal charges is a matter for colleagues in the Home Office. I will ensure that they are aware of the points raised by my hon. Friend.
Ms Keeble: Following on from the point made by my hon. Friend the Member for Brentford and Isleworth (Ann Keen), my understanding is that an assault is committed when someone makes another person apprehend violence. The person does not actually have to be hit, because that would be battery. Will my hon. Friend ask the Home Office whether it is possible, even under existing legislation, to take action against a parent who attacks the other parent when the children are also in fear of being hit?
Jane Kennedy: Both points made by my hon. Friends are important, and I will ask my colleagues in the Home Office to respond. They will see the record of this debate, and I will ensure that a response is forthcoming, because those points are valid.
The Government value the work of contact centres, which play an important role in assisting the courts in contact cases involving allegations of domestic violence. The court may consider ordering supervised contact for the purposes of assessment, and the parties, often using the court welfare service, may arrange for contact to take place at a contact centre with facilities for supervised contact. We are aware of the need to develop contact centres and to extend their work, so we are further supporting the work of those valuable organisations. In a written answer today to a question asked by my hon. Friend the Member for Warrington, North (Helen Jones), I detail the breakdown of more than £500,000 in grants made by the Lord Chancellor's Department to contact centres. I do not have time to go into the detail now.
The Women's Aid research illustrates another important point: in most cases involving allegations of domestic violence, there will probably be no criminal conviction on which the courts can rely. Inevitably, they must weigh up contradictory claims, some of which are

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certainly untrue. I am sure that my hon. Friends accept that we could never agree to a situation in which one parent had only to make an allegation of violence against the other to deny that parent contact with their children.
Having said that, I have accepted that the courts, like the rest of us, are not perfect and make mistakes. In the leading case on this subject, the Court of Appeal said that, in the past, courts have not placed sufficient weight on domestic violence in child contact cases. That is why, like my hon. Friend the Member for Northampton, North, I welcome the guidelines proposed by the Children Act sub-committee of the Advisory Board on Family Law under Mr. Justice Wall. They may not have been available in the nine hearings of the case referred to by my hon. Friend.
At the conclusion of the judgment in the four appeal cases, Lord Justice Waller emphasised the key points, two of which I draw to the House's attention. He says that it follows that alleged domestic violence is a matter that ought to be investigated and on which findings of fact should be made, because, if it is established, its effect
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on children exposed to it and the risk to the residential carer are highly relevant factors in considering orders for contact and the form that those orders should take.
Lord Justice Waller also said, however, that there should be no presumption against contact simply because domestic violence is alleged or proved. He said that domestic violence should not be elevated to a special category: it is one highly material factor among many that may offset the assumption in favour of contact when the difficult balancing exercise is carried out by the judge applying the welfare principle and the welfare check list set out in the Children Act.
I know that my hon. Friend is keen to see the matter enshrined in legislation. As I said earlier, we considered making a practice direction and we are still actively considering the best way to make progress. An alternative method might be to amend the family proceedings rules and introduce guidelines in that way. However, going down the route suggested by my hon. Friend would be much slower and less productive—
Mr. Mike Hancock (in the Chair): Order. Time is up.

Mid-Bedfordshire Schools (PFI)
1 pm
Mr. Jonathan Sayeed: The Minister will recall that I wrote to her Department on 7 December to seek her assistance with the provision of upper school places in part of my constituency. My request is endorsed by my hon. Friend the Member for South-West Bedfordshire (Sir D. Madel), who is present today, and by my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell).
The area in question is largely rural and has a population of about 65,000. It lies between Bedford in the north, and Dunstable, Luton, Hitchin and Letchworth in the south. The largest towns in the area are Flitwick and Ampthill, with a population of 20,000 between them. Other towns whose children attend the relevant schools, not all of which are in my constituency, include Arlesey, Barton, Henlow, Shefford and Stotfold. Much of the countryside is agricultural land with some attractive natural features, particularly Greensand ridge, which runs through the northern part.
The area is served by three upper schools: Harlington upper school, Redborne upper school in Ampthill, and the Samuel Whitbread community college in Clifton, which is close to Shefford. All three are excellent schools, providing a high standard of education, and are popular with parents. May I take this opportunity—I trust that the Minister will endorse this—to congratulate the heads, teachers and other staff of those three schools, as well as the pupils and their parents who make such an important contribution.
All three schools are over-subscribed—Harlington school houses 1,200 pupils in buildings designed for 847—and are likely to become even more overcrowded as the demand for school places increases on account of housing development. This year saw 1,030 applications to the three schools, but only 970 were admitted, so 60 were refused a place. More are likely to be turned away next year and even more in future years, which undermines the Government's commitment to allowing parents to send their children to a school of their choice.
The problem existed three years ago, but it was not so bad then. The three schools had 3,300 students then; they have nearly 3,800 students now, and by 2013, 4,800 places will be required. The increase stems from several factors, but mainly from the construction—fuelled by the Government's projections for housing in rural areas and also, I suspect, by the popularity of the three schools—of between 2,000 and 3,000 homes in the area.
The trouble is that the existing school buildings provide fewer than 3,000 permanent places. Bedfordshire local education authority intends to increase the numbers to 3,600 over the next two years through building projects at Harlington upper school and the Samuel Whitbread community college, which will make an immediate difference. There have, therefore, been benefits to the children of the Harlington and Shefford areas, but there will still be a need for another 1,200 places. The LEA has put in a bid under the private finance initiative and has been allocated PFI credits by the Department of £15.8 million. As required for any PFI proposal, a thorough analysis has been carried out of the various possible ways of delivering the
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additional 1,200 places, including a different approach to enlarging the existing schools and building a fourth upper school of 1,200 places.
The options analysis, which was rigorously carried out, considered the educational issues involved, the needs of the local community and value for money, and identified a preferred approach to the delivery of those additional places. It would involve the expansion of the three existing schools so that they can, for example, maintain the excellent links that they have with their 33 lower and eight middle feeder schools. Those links undoubtedly benefit the children in my area and have led to a significant improvement in pupil achievement during the past three years.
The LEA's proposals are in line with the wishes of local parents who want to maintain links with the successful schools; theirs is an almost simple—not simplistic—view. They say that when one has a winning team, one does not change it. As well as providing much-needed new buildings, the preferred solution would bring equally vital improvements to the standard of existing accommodation in each school. There would be a basic requirement for private sector participation in such an arrangement because, not unreasonably, the buildings would need to be at a uniform standard before there is investment in extensions.
While there are issues to be addressed in all three schools, I shall highlight the condition of the south school at Redborne upper school because it is deteriorating rapidly and is costing more and more to maintain. Under the preferred option, that inadequate building, which is no longer suitable for the purpose, will be replaced with a new building that will provide a better educational environment and have much lower running, energy and maintenance costs. The trouble is that that approach would require more funding than originally envisaged, with a total cost of around £32 million. However, rather than meeting the needs of just 1,200 pupils it would benefit 4,800 pupils at any one time—that is, 30,000 over the 25-year period of the private finance initiative. That represents only about £1,000 per pupil, or, in simple money, £200 for each year that a pupil is at the school. There would also be considerable saving in maintenance and energy costs that would allow more money to be put back into the curriculum and further drive up standards, which is what we are all about. The proposal would therefore provide much better value for money than building a fourth school which, while it may be cheaper ab initio, will cost around 50 per cent. more for every student over that 25-year period. In other words, a new school would cost £300 per pupil per year rather than the £200 that I cited earlier.
To adapt a term that is often used in defence procurement, the through-life costs of my proposals are 50 per cent. cheaper. However, I am a realist and I recognise that the Department has difficulty in accommodating a much larger project within the PFI programme. The LEA made a proposal in order to be helpful. It suggested a way of delivering the same outcome but with two of the three schools involved in the PFI and the third school, Redborne upper school, funded from other capital resources. In that proposal, a PFI provider would upgrade and extend the accommodation of Harlington upper school and Samuel Whitbread community college, while the work

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at Redborne upper school, including the replacement of the south school, which is essential and urgent, would be contracted out in the traditional way. However, as yet it has not been possible to put forward a package that would be sufficient to finance the work at Redborne outside the PFI, despite the best efforts of the LEA, in conjunction with Department for Education and Employment officials, who have tried to be helpful.
The LEA is putting a bid to the DFEE for targeted capital to bridge the funding gap, but it will be later this year before a decision on that bid can be taken. The problem with such a late decision is that there will be many other bids during the period, which means that the budget may not stretch far enough. The school governing bodies and the wider community are worried that any delay will result in greater pressure being put on existing school buildings, which are already overstretched, and in money that could be better used being wasted on temporary accommodation.
A further delay would have a serious impact on staff and pupil morale and consequently on children's education, which is indefensible. It would not be helpful to the Government, because it would not assist them to meet their targets for improvement in school standards.
However the project is funded, it is vital that places are provided as soon as possible so that my constituents can be assured that their schools will continue to provide the high standard of education to which they have rightly become accustomed and for which they pay. I ask the Minister to say when a decision is likely to be taken on the funding and what she is minded to decide.
1.12 pm
The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): I congratulate the hon. Member for Mid-Bedfordshire (Mr. Sayeed) on securing the debate on an issue of great importance to his constituents. I also congratulate the schools in his constituency on the good job that they do in achieving high standards.
As the hon. Gentleman said, capital investment in schools is an important priority for the Government. Increased capital funding and the improvement of school buildings is part of our commitment to raising educational standards. That is why Government capital expenditure on schools has tripled since we took office and why we will embark on a £7.8 billion investment programme to further improve school premises and facilities in the next three years. The hon. Gentleman will welcome the extra money that has already been made available to tackle the backlog of work in Bedfordshire schools, which reflects the national funding increases from £3.162 million, £33 per pupil, in 1996–97, to £16.846 million, £249 per pupil, in 2000–01.
I understand the hon. Gentleman's point about the private finance initiative's ability to deliver the project, and I should emphasise that the development of public-private partnerships is the key to our strategy to maximise the impact of resources available for education and to secure a modern educational infrastructure. We believe that PFI is a means of delivering better and more cost-effective public services by bringing the private sector more directly into the provision of the assets that the public sector needs. PPP can harness private sector expertise and innovation and allocate risks to the partner best placed to manage them.
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Long-term private sector involvement means that there is a continuing commercial incentive for efficiency through the various stages of work from the initial design, through to the operation of buildings and the management of services. That is why we have already allocated over £1.2 billion of PFI credits to support PPPs in the schools sector. A further £1.65 billion of credits are available in 2000–02 to 2003–04, and we will shortly be allocating up to £400 million to support new projects for which contracts are expected to be signed in 2002–03.
In 1997, there were no signed PPP or PFI contracts in the schools sector; now there are 28 contracts to build or manage new school facilities, covering around 400 schools, with a capital value of over £500 million. The PFI projects of a further 33 schools have been endorsed by the interdepartmental project review group, and they have been allocated PFI credits. Those projects are in procurement, and are being supported by the Department as they work towards contract signature.
I turn now to the problems faced by the Bedfordshire schools PFI. It is worth looking at some of the history. Bedfordshire's outline proposal was ranked 11th of the 66 proposals received by the Department in the 1999 PFI credit allocation round. That was for projects for which it was aimed to sign contracts in 2001–02. The 66 proposals received in 1999 required a total of £1.3 billion of PFI credits. That was a significant overbid against generous available funding, and we were able to support only the 17 highest scoring proposals by provisionally allocating £284 million of PFI credits, which, as the hon. Gentleman said, also included £15.8 million of PFI credits allocated to the project in his constituency.
The projects were evaluated against our published criteria: priority need, sufficiency, condition and suitability, including an assessment of the extent to which proposals made a case for raising standards; the extent to which proposals address wider DFEE priorities and the extent to which proposals address wider Government priorities. The Bedfordshire project was supported primarily on the basis of the need for new school places forecast as a result of housing development—the need that the hon. Gentleman outlined as the most significant. The primary reason for supporting the Bedfordshire proposal with the allocation of £15.8 million of PFI credits was the basic need case. In order to fund the condition and suitability elements of the re-scoped project, we will have to consider how the project compares with high condition and suitability needs elsewhere.
We continue to recognise the case for providing new school places in mid-Bedfordshire in a planned and coherent way to match the need generated by housing development, but this must be done in a way that is cost effective and does not call into question the basis of the original prioritisation on which the £15.8 million of PFI credits were granted. The allocation of PFI credits can be confirmed only once the interdepartmental project review group has approved the project. PRG approval is subject to the authority having developed an outline business case that clearly demonstrates that a commercially viable, value-for-money PFI contract can be delivered.

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As the hon. Gentleman suggested, a complicating factor in this case has been the various alternatives proposed by the authority. The original £15.8 million of credits were allocated on the basis of a basic need case, and for the provision of a new upper school. We understand that, after the outline proposal for a fourth upper school had been provisionally approved, the LEA consulted the three existing mid-county upper schools and concluded that that option would be difficult to deliver.
We appreciate that if Bedfordshire were to develop four upper schools, starting from scratch, they would not place the three existing schools on their current sites. In developing its admissions policy, the authority paid close attention to the needs of the existing schools, their relationships with feeder schools and the loyalty of parents who wish their younger children to attend the same schools as their older siblings. To develop an affordable PFI solution, the LEA may need to consider whether to change that admissions policy.
The LEA's desire that the three existing upper schools should benefit from the PFI project—understandably shared by their head teachers and governing bodies—must be weighed against the Department's need to target investment where it is most required, while ensuring value for money.
We are concerned that the cost of the three-school project has increased. It was originally estimated—at the same time as the alternative proposal for a new upper school proposal was put forward—as requiring £12.8 million of PFI credits. It first increased to £24.1 million, and now requires an estimated £32.6 million of PFI credits. Similarly, the cost of a two-school PFI project, with the cost of work planned for Redborne school to be funded from other sources, has increased from £20 million to £21 million. By seeking, however understandably, to widen the scope of the project in order to deal with condition and suitability issues at the three existing upper schools, the LEA risks undermining the value-for-money case for the project. The current estimated cost of extending, improving and remodelling the three existing schools is more than twice the cost of developing a new school to provide the same number of additional school places, which, as the hon. Gentleman said, was the first and pre-eminent reason for extra investment in the area.
A change in focus—from a starting point of basic need—to include condition and suitability issues will mean us having to consider Bedfordshire LEA's request for additional PFI credit funding against high-priority condition and suitability needs elsewhere. The hon. Gentleman argues eloquently that the cost per pupil will decrease as the project size increases. I have no doubt that economies of scale would apply in this case, as they would in many others. However, I have to consider not only the efficiency of alternative Bedfordshire schemes, but the availability of credits and the opportunity cost of devoting significantly more resources to Bedfordshire as against other schemes pursuing the same resources.
We have never increased PFI credit funding to this extent for a project where there has been such a change of scope; we have increased PFI funding for projects, but we have applied specific criteria to all such requests
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for increased funding One criterion is that the increased credits should relate to increased costs arising as a direct result of the implementation of the new schools framework, from limited project enhancements that provide value for money and address key DFEE priorities, such as improved special educational needs provision or school-community links, from changes in interest rates or other technical factors affecting financing, from the underestimation of life cycle costs or from construction cost inflation. Furthermore, in order to fix project costs at an early stage of development and give LEAs more certainty about the funds likely to be available to them, we have been working with PricewaterhouseCoopers to develop a PFI credit tool kit, which is being used to evaluate the PFI credit requirement of projects in the current PFI application round. It is likely that in future we will rule out increases resulting from significant changes to project scope by LEAs. That, of course, will enable more projects that meet planned departmental priorities to be supported.
Given my argument about competing priorities, it is important to set the context for a decision about extra credits to Bedfordshire. We are currently considering 51 proposals for new PFI projects, aiming to sign contracts in 2002–03 with a capital value of more than £1.5 billion. We are also considering requests for increased funding from other projects that are currently under development. Given the current high level of demand for PFI credit funding, it may be difficult to find the increased PFI credit funding requested by Bedfordshire. In order to fund the increase requested, it is likely that we would have to drop completely one or more of the proposals that we are considering in the current PFI credit allocation round.
The hon. Gentleman outlined the two-school option, and I can tell him that officials have previously encouraged the authority to develop the two-school PFI option covering Harlington upper school and Samuel Whitbread community college, combined with a conventionally funded project to extend and improve premises at Redborne upper school, which appeared to offer the most viable alternative to building a new fourth upper school. I appreciate that it will be difficult to progress the option until we announce the outcome of basic need and targeted capital applications.
Although I am pleased to say that Redborne upper school has been allocated funding to meet 116 new places and 100 post-16 places, which were announced on 19 December a 2000, the deadline for targeted capital funding applications is 15 January, which will not allow us to announce the outcome of Bedfordshire's application until the spring. Also, although I understand that the LEA was not able to secure funding for all the work at Redborne upper school—as, in the recent application round, authorities were asked to apply for funding based on the estimated deficit of school places up to September 2004, which they intend to meet by new building in 2001–02—the current allocation does not preclude further applications in future years. I urge the authority to consider the possibility of developing a project for the phased delivery of new places at Redborne on that basis, and to consider allocation from its condition-related formula capital, which will be announced shortly.
I welcome the hon. Gentleman's comments about officials in the Department. I suggest that the LEA should continue its discussions on funding for Redborne

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upper school with my officials, while also continuing to discuss options for a PFI project. Although I hope that the hon. Gentleman will understand the competing priorities that must be considered, I assure him that we remain committed, as he does, to providing extra places for his constituents and ensuring that we do that in a cost-effective way, which will enable schools in his constituency to continue their excellent work in raising standards.
Mr. Mike Hancock (in the Chair): Order. Since all hon. Members are present for the next debate, we shall move on.

USA
1.29 pm
Mr. George Galloway (Glasgow, Kelvin): During the war against Yugoslavia the Secretary of State for International Development said that those of us who were opponents of the war were blinded by our visceral anti-Americanism. Even by her standards, that was baloney. The leader of the anti-war camp was my right hon. Friend the Member for Chesterfield (Mr. Benn). So viscerally anti-American is he that he was blissfully married to one for more than 50 years. At the age of seven, I could recite large chunks of the inaugural address of the 35th President of the United States, John Fitzgerald Kennedy. Like many Scottish people who share my background, I grew up with a portrait of the late President. Indeed, it still hangs on the wall in my home.
Only a fool would deny the unprecedented success of the United States of America. It has built the greatest economy in the world, landed men on the moon, and is reaching for the furthest stars. Despite many difficulties, it has constructed the most successful multi-ethnic state in history, and its sporting, scientific, and cultural achievements bestride the world.
It would be equally absurd to deny the special relationship between our two countries—a former colonial relationship, it is true, but one in which the colony has become fantastically more powerful than its coloniser. None the less, we remain united by a common language, a shared history, and, not least, the monumental achievement—together with our allies—of defeating fascism in the cataclysm of the second world war.
My concern, which is widely shared throughout the country, has nothing to do with anti-Americanism and everything to do with our own self-respect, independence and place in the world. It is not anti-American to be conscious that the USA has many sides and is guilty of many dark deeds. Nor is it anti-American to assert that a country such as Great Britain—with its own history, achievements, culture and reputation—is degraded and diminished by voluntarily reducing itself to a little echo that is prepared to encourage the USA's worst instincts, even when we know that they are wrong, while failing in the primary duty of a true friend: to advise where its best interests lie.
I could dwell on some of the dark deeds to which I have alluded. I could detain this Chamber for longer than is available with an account of the post-war history of American foreign policy. I could talk about Guatemala, Iran, Lebanon, Cuba, Congo, Vietnam, Cambodia, Laos, Chile, East Timor, El Salvador, Nicaragua and many other dark chapters, but I have neither the time nor the wish to do so at this stage. I intend to concentrate on the immediate past and, more importantly, the immediate future.
I know that President Clinton was a seductive kind of guy. All manner of people in all manner of places fell for his undoubted charms, but I could never warm to him after he killed a good friend of mine in the early days of his presidency, just to prove how macho he was. While reeling from setbacks delivered by opponents of his policy of gays in the military, he unleashed—for the first time, but sadly not for the last—a cruise missile to divert

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attention from a mess of his own making. The pretext was the bogus conspiracy, uncovered with a fanfare, to assassinate former President Bush on a visit to Kuwait.
Most hon. Members will have forgotten the incident, largely because evidence of a conspiracy was so threadbare that even the Kuwaitis quietly buried it, but not before her family buried my friend, Leila Al-Attar, the finest woman painter in the Arab world, on whose house one of President Clinton's missiles landed, killing her and other members of the household, blinding her husband and severing the legs of her son. The then British Government backed that illegal attack on Iraq, but they were virtually the only Government to do so.
Sadly, that pattern was to be repeated time and again. On the day before Miss Monica Lewinsky was to appear before a grand jury to testify about her affair with the President, Clinton launched a blizzard of cruise missiles against targets in Afghanistan and Sudan. In Afghanistan, the target was the obscurantist terrorist, Osama bin Laden, who was once lauded as a holy warrior to be assisted, armed, trained and financed by the British and American Governments, and those of some of our closest allies. No international legal authority existed for that attack, nor was it sought by the USA. It goes without saying that the assault solved nothing and made every matter worse. It further alienated Muslim opinion, inflated the burgeoning reputation of bin Laden and added a new twist to the hatred of the USA that exists in large parts of the third world. Britain, with its long experience of that part of the world, must have known that that was bound to be the result, but it loyally stood by its man. That deepened the already dangerous sense in which our country was seen as the tail wagged by the American dog—a dog which, not to put too fine a point on it, was increasingly out of control.
The attack upon Sudan was far worse. President Clinton did not confer with his Chiefs of Staff before selecting the Al-Shifa pharmaceuticals factory in Khartoum as his target. He did not confer with his Cabinet, and we must assume that he did not confer with his special friends in the Government. Had he done so, any of them would have told him that he must have better evidence than that which he ultimately produced to justify a massive missile attack on a factory producing vital medicines in one of the world's poorest countries. As the smoke cleared and the dead were carried out of the pharmaceuticals plant, only one Government on earth paraded its support for the American action—the UK Government.
To my certain knowledge, the Foreign and Commonwealth Office does not, indeed never did, believe that the Al-Shifa factory was owned by Osama bin Laden, or was ever used for the production of chemical weapons. To my certain knowledge, the Foreign and Commonwealth Office knew from the beginning that this murderous act, carried out by President Clinton on the eve of his mistress's court appearance, was based upon a bright shining lie.
Like the conspiracy that never was, involving former President Bush in Kuwait, not much is heard about that lie. Indeed, reports suggest that in the near future the United States Government will reach a massive out-of-court settlement, paying millions of pounds in
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compensation to the aggrieved owners of Al-Shifa. Of course, this crime has not been forgotten in Sudan, or elsewhere in the Arab world, or by the 1 billion-strong Muslim population. Nor have they forgotten Britain's support for that crime.
Hon. Members will recall the rampage of British and American aeroplanes—only British and American aeroplanes—when we launched the verminous Operation Desert Fox during Ramadan in 1998. It killed and maimed countless civilians; it destroyed power, water and sew age facilities; it hit hospitals, bridges, schools and other essential civilian infrastructure. It was another mindlessly violent spasm, timed to divert a mounting threat to President Clinton's position, and again only one Government supported it—our own. Not even Operation Desert Fox's best friends can pretend that it was anything other than a monstrous, utterly self-defeating debacle, which strengthened the regime that it sought to weaken while degrading and diminishing the only two countries that participated.
Similarly, the so-called no-fly zones, which, without a shred of lawful authority, British and American planes—only British and American planes—patrol daily, violate the sovereign rights of Iraq. Meanwhile, millions of pounds of taxpayers' money are expended to kill and maim the very Iraqi civilians that the policy claims to protect.
According to two unimpeachable former international civil servants who are closely associated with the United Nations' policy towards Iraq, the sanctions policy is killing an Iraqi child approximately every seven minutes of every day and every night—a mass grave of innocents; children dying before they even know that they are Iraqi, but dying for no reason other than that they are Iraqi. Of the five permanent members of the United Nations Security Council, the Governments of only two countries wish to continue this policy—a policy described by the Democratic party's chief whip in Congress, David Bonior, with whom I shall speak in Michigan later this month, as "infanticide masquerading as policy." Those two Governments are our own and that of the United States.
Even today, at the NATO meeting in Brussels, only two countries are resisting the rapidly emerging European consensus that the deployment of depleted uranium weapons should be halted until their impact on health and the environment has been assessed. There are no prizes for guessing which two countries they are.
In Britain just before D day it was said that all that was wrong with the American armed forces was that they were overpaid, oversexed and over here. I would not have gone along with that, and I have no problem with President Clinton's remuneration or libido, but I and a very large number of people in this country strongly resent the overwhelming extent to which he has been, politically speaking, "over here"—over here, over there, over everywhere—seeming to project American power like a giant with the mind of a child.
I know that the current leaders of both countries regard themselves as ideological fellow travellers, soulmates and friends. However, America has just turned off the third way—the Clinton-Gore Administration has been dumped by the side of the road and the country has a new Government of the

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Republican right. The party of Richard Nixon and Ronald Reagan, and of George Bush Senior, who served under both Nixon and Reagan, is massing on the banks of the Potomac.
I say to the Minister, although I know that he will not be able to acknowledge it, that the Labour party in Parliament and in the country will refuse to be led into the same kind of relationship with the new American Government that it had with the old one. There will be trouble ahead if the Government seek to contend that it can be business as usual with President Bush and the Republican right.
It is frequently said that the Bush Administration will be more isolationist than its predecessor, and I very much hope that that will be so. However, early indications are that the new United States Government will be not so much isolationist as unilateralist, paying not the slightest attention to international opinion, international law and international alliances, and projecting a unilaterally American power wherever the Bush Administration determines that American interests lie.
Nowhere will that be more evident than in the new Administration's attitude to the so-called star wars fantasy of the national missile defence concept of a shield guarding the American mainland from ballistic attack. President Bush has appointed his own Dr. Strangelove to the defence portfolio in the form of Donald Rumsfeld, who also served Presidents Nixon and Reagan and is regarded as one of NMD's most fanatical supporters. The next Secretary of State, General Colin Powell, has signalled full steam ahead for NMD.
That policy, which will cost as much as $60,000 million, would be a fantastically destabilising development and an absolute breach of the strategic arms limitation treaties to which the USA has solemnly committed itself. The cover story spun by Dr. Strangelove is that this Ozymandian scheme is required because of the threat that is posed by so-called rogue states. Of course, that is a fast-moving definition. The two Koreas are rapidly conflating, Iran is busy reforming, Libya is turning into a Klondike and—according to the latest reports—even Iraqi policy is under review. It is likely that any conceivable nuclear threat to the USA from such a source would be delivered not by intercontinental ballistic missiles, but in a suitcase—in which case it would be better to beef up American customs than to saddle the world with the NMD monstrosity.
The real truth is that the NMD threat—it is a threat and a weapon—would, if it worked, allow the USA first-strike capacity with impunity and a massive thermonuclear goal of a start in any conflict. It is aimed not at Pyongyang, but at Peking and to a lesser extent, Moscow.
One of the many storm clouds gathering over Washington is the contempt for Russia and the fear and loathing of China in the writing and thinking of people such as Richard Perle, who was known during the Reagan years as the prince of darkness and is now, again, close to the heart of presidential policy making. The $64,000 question is whether the Government will agree to submit and allow our country to become an offshore radar station and an early
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warning system with a 14-storey skyscraper on the Yorkshire moors, because that is an indispensable component of the system. As with the cruise missile deployment at Greenham Common, we, who will have no protection from the missile shield, will have placed ourselves in the front line as an important target in any nuclear conflagration. I predict a massive wave of protest and political turmoil in this country if that ultimate act of obeisance is made.
British agreement would be a fatal rupture with our European partners, all of whom oppose and fear this development. It would mark us forever as veritable slaves of American policy. Hugo Young stated the position perfectly in The Guardian when he wrote:
A moment of truth beckons. Will NMD become a pretext that requires one more affirmation of the old special relationship? Or the project that at last obliges Britain to recognise she cannot continue as the compliant poodle?
1.46 pm
The Minister of State, Foreign and Commonwealth Office (Mr. John Battle): The subject of this debate is the Government's policy towards the USA and my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) raised a series of wide-ranging questions to which I shall try to respond in the brief time remaining.
It is customary to congratulate the hon. Member who initiates a debate, but I want to go a step further than the usual courtesy and congratulate my hon. Friend on his outspoken, passionate and fearless commitment. He often speaks for the voiceless when others do not, without fear or favour. That earns him great respect. International affairs is not a route to popularity internationally or in one's constituency, which, as a Minister, I now know. My hon. Friend has tenaciously maintained his position and I remember him campaigning on international development some years before he came to the House. It is not easy for hon. Members to maintain their position against the odds and I compliment him on that.
My hon. Friend referred to the United States as the "most successful multi-ethnic state in history" whose "sporting, scientific and cultural achievements bestride the world." He said that we remain united by a common language and a shared history, and not least by the "monumental achievement", with our other allies, "of defeating fascism in the cataclysm of the second world war." I draw attention to those two points because I do not want to accuse my hon. Friend of being anti-American. However, I do not accept that we are a little echo or the tail being wagged by the dog.
I want to explain our policy in two areas. First, the United States is and will remain a close political ally of the United Kingdom, although the position has changed since the recent election. Secondly, I want to emphasise, as the Minister responsible for trade at the Foreign Office, that the USA remains our number one trading partner, and I hope that my comments on that and on the international affairs of the alliance will be taken in that context.
This morning, I had a meeting with the heads of mission of all our Latin American embassies to discuss the situation in every Latin American, central American and Caribbean country. The changed Administration in

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the United States is of great interest because, as yet, it is unclear whether they will be more unilateral or more multilateral in their approach. We have to watch what happens carefully and develop relationships with new people to move politics on, particularly for Latin America and elsewhere.
Let us consider trade—almost to get it out of the way. I am not suggesting that it is the most important issue, but I want to put it into perspective. We are key trading partners with the United States of America; it is at the top of the table for imports, exports and investment. Our interests in the 50 states individually outweigh our interests in many other countries in the world. The Government organisation, Invest UK, reports that of the 757 inward investment projects secured for the United Kingdom, 48 per cent. or 363 of them were from America. Of the 200 largest internet companies on the Nasdaq exchange, 134 have a European presence and, of those, 96 have a United Kingdom presence. The United States economy is slowing down, but it is not showing any reverse in those trends. The best United States firms will continue to invest heavily in new technologies and the United Kingdom is the key area of its investment.
As we enter 2001, the trade links are strong, and they are strengthening. We can fully expect the traditional bilateral deficit in trade in goods with the United States to disappear this year. Growth in some of the sectors has been absolutely incredible. I mention that only to suggest that our two-way trade in goods and services of about £80 billion a year reflects our mutually strong and important trade links, and a trading relationship that goes back more than 100 years. In that context, it is important that we work together and have a relationship that is not antagonistic. This is not just about trade, but £15 billion worth of investments is an important factor in our mutual trade relationship.
I shall now focus on international security. The United States is a world superpower and our closest ally. We work as partners in the North Atlantic Treaty Organisation. We face common threats, common challenges and our common security is mutually entwined. A good, close working relationship with the United States of America best advances our mutual interests and those of interdependency internationally. A strained antagonistic relationship would benefit no one.
I wish to respond to my hon. Friend's points about particular relationships in certain situations. I am more than happy to take interventions from him, but I just want to put matters on the record. Yes, we are allies over Iraq. I emphasise once again for the record that Security Council resolution 1284 offers a way out of the sanctions. We want them to be suspended and then lifted. The United Nations fast-track procedures, which were introduced a year ago, mean that the majority of goods do not need to be submitted to the sanctions committee for approval.
The United Nations is delivering more goods, more quickly to the Iraqi people. The sanction committee approves the majority of contracts for Iraq. There has been comment about this in the media in recent days. In fact, the United Kingdom put on hold less than 2 per cent. of the contracts that were submitted for approval,
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and those were referring to concerns about weapons of mass destruction. Occasionally, it needs to be put clearly on the record that claims that items such as food, children's toys and so on have been held up by Britain are not true. In light of my hon. Friend's knowledge of Kuwait and particular people there, I wish to put it on record that 600 Kuwaiti prisoners are still missing in Iraq. The position is not quite as one-sided as it is sometimes presented.
There has been much speculation about President-elect Bush's plans for a national missile defence system. I stress the word "speculation" because what we have been hearing is commentary rather than fact and analysis, and my business is not speculation. The Government will wait until the Bush Administration take office before considering any proposals that they make. Having checked, I do not think that Colin Powell has made statements on the record about pressing ahead on the national missile defence system. That is the situation as far as I am aware.
The European Union is not taking sides between the United States and Russia on that complex and sensitive issue; we want them to find an agreed way forward. Along with our European Union partners, we have made it clear that we want to preserve the anti-ballistic missile treaty and our strategic stability. I represent an area that is not far from Fylingdales and, as far as I am aware, the United States has not put in any request to us as about the deployment of such a system, and we do not expect them to do so until, or unless, they decide to proceed with such a deployment. As far as I am aware, nothing will arrive at Fylingdales next week.
Mr. Galloway: I am grateful to my hon. Friend for giving way so graciously, and for his kind comments. Of course no planning application has been received. The Bush Administration are not yet in place. However, that event is only days away, and I assure my hon. Friend that Colin Powell h is said that the NMD project will go ahead. Most significantly, the appointment of Donald Rumsfeld—who is the ideologue, the mainspring and the most fanatical and fervent supporter of NMD—as Defence Secretary, suggests that they will adopt a full-steam ahead attitude towards that policy.
Mr. Battle: I did say that as far as I was aware, there were no such plans. I did not know of Colin Powell's comments, and we will have to check that. I would like to assume the best rather than the worst—pessimism of the intellect and optimism of the will, I am tempted to say. Thomas Hardly, that great poet from Wessex, emphasised that we should have the courage to look the worst in the face in order to be able to change reality. He was only a poet, but I tend to share his view of reality.
We need to keep a close eye on the situation. I simply say to my hon. Friend—if I may indulge in a comment on the national missile defence business—that the records state that out of 18 attempts, only two have been successful. There are large question marks over the entire project. We cannot reasonably be expected to say how we would respond if we received such a request: we cannot know what the circumstances and proposals might be in reality. However, my hon. Friend has put down a marker. It has been heard and will echo outside this Chamber.

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The anti-ballistic missile treaty remains, in general terms, the foundation and basis of arms control. We should keep an eye on that and work with it to ensure that our planet, in the 21st century, is a safer and securer place, without violence.
On the issue of depleted uranium, a report of yesterday's meeting in Brussels suggests that it is untrue that a European Union consensus for a moratorium is emerging. However, as my hon. Friend the Minister for the Armed Forces spelt out in the House yesterday, we take the matter seriously. We are insisting that all information on the health effects should be pooled and shared. Next week, the chief medical officers of NATO member countries will meet to discuss the health impact. The matter has not been swept under the carpet.
I refer to the question of whether the election of President-elect Bush will mean the end of any "special relationship". Of course, the President-elect has a different world view from President Clinton. However, a report in the 9 January edition of the International Herald Tribune states:
Scott McClellan, a spokesman for the Bush presidential transition committee, said on Sunday, "The president-elect believes it is important for the United Stares to speak with one voice in foreign policy and until Jan.20, that voice is the Clinton administration."
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That suggests that there may be some continuity in foreign policy, but we shall have to develop relationships with the new Administration and wait and see what directions their policy will take.
On "Breakfast with Frost", the Prime Minister said:
I'm the British Prime Minister and George Bush is the American President and it is my job and my duty to have the best possible relationship with them, I've no doubt at all that we will do, I have no doubt at all either that he will take the greatest care and has the greatest support and respect for the relationship Britain and America have together.
My hon. Friend has set out a whole agenda, on which there are many more items. I warmed to the list of countries and areas of the world that he would have wanted to discuss, if we had but world enough and time—many of them in central and Latin America and south-east Asia. He referred to Plan Colombia, for example. We need to get our heads together about those serious, pertinent matters. There is space and time for a dynamic conversation. We are not a tail being wagged by the dog. We need a dialogue in which we move events on.
Mike Hancock (in the Chair): Excellent timing.
Question put and agreed to.
Adjourned accordingly at Two o'clock.