Westminster Hall Sitting of 23 July 2002

Preamble
[SYLVIA HEAL in the Chair]

Criminal Records Bureau
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Caplin.]
9.30 am
Mr. Desmond Swayne: The Police Act 1997, which established the Criminal Records Bureau, came into force some two months before the 1997 general election. The decision to create a centralised criminal records bureau was well received. The National Association of Clubs for Young People wrote to me at the end of last week to say that it fully supports the principle of the CRB.
Hon. Members have signed several early-day motions, including early-day motion 1335, which 75 hon. Members signed. Before the motion begins its complaint, it states:
"That this House welcomes the establishment of the Criminal Records Bureau."
Early-day motion 1273, which some 63 hon. Members signed, also states that.
The Protection of Children Act 1999, a private Member's Bill introduced by the hon. Member for Stourbridge (Ms Shipley) with Government support, provided a list of all individuals who are unsuitable to work with children. It also provided for the CRB to administer checks against that list with an obligation on organisations to carry out checks on new recruits and volunteers. The CRB thus became the central access point for all organisations for information on convicted or suspected child abusers.
The CRB issues three levels of criminal record certificates of disclosure. The first is the standard disclosure, which is primarily for posts that involve working with children or vulnerable adults, but includes one or two legal professions and the accountancy profession. It provides details of all convictions on the national police computer, including spent convictions, cautions, reprimands, and names held on lists kept by the Department of Health and the Department for Education and Skills.
The second level of disclosure—the enhanced disclosure—is for those who will have a greater degree of contact with children, such as teachers, scout masters and guide leaders. It, too, provides the information under the standard disclosure, but adds a check of local police records.
Finally, the basic disclosure is available for all types of employment, including voluntary positions. It lists unspent convictions under the terms of the Rehabilitation of Offenders Act 1974, and is applied for, and issued to, the individual concerned. It is up to the individual to choose whether to show it to their employer. It is a passport for employment in some professions, such as the care home industry. However, the procedure for seeking a standard or enhanced
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disclosure is different from that for the basic disclosure. An organisation is required to register for a standard or enhanced disclosure, which costs some £300 plus £12 to register any counter-signatories. Each further disclosure will cost £12, although that fee is waived for volunteers. Requests for standard and enhanced disclosures must be counter-signed by a registered counter-signatory. As expected, organisations have used the umbrella organisations of which they are members and to which they are affiliated to secure registrations on their behalf. A school seeking a disclosure will use the local education authority to seek that on its behalf as the registered body. That sounds fine in theory, but I have one or two observations about the costs and performance of the CRB.
On the cost, early-day motion 1326, which began life on 16 May, states that
"this House notes the Government's pledge made last year to meet the costs of police checks on those volunteers wishing to work with young and vulnerable people through the voluntary sector … but expresses grave concern at the fact that the cost of carrying out the criminal record checks will be passed on to the volunteers by the new Umbrella Registered Bodies, leaving organisations such as the Scouts … facing huge costs, or the individual volunteer facing costs".
Similarly, early-day motion 1273, which began life on 9 May, notes
"with regret the Government's failure to prevent the costs … being passed on to potential new volunteers by umbrella registered bodies; and urges the Government to reverse its decision and make resources available for umbrella registered bodies for this purpose, in order to encourage rather than deter legitimate volunteers".
Early-day motion 1335, which began life on 16 May, urges the Government
"to look again at this matter to ensure volunteering is encouraged, not penalised."
That extraordinary situation has arisen despite the assurances given by Ministers.
In February 2001, the then Secretary of State for Education and Employment said:
"We estimate that the voluntary sector will need to make at least 1.5m checks per year. That is why Jack Straw and I have worked together to ensure that organisations like the Scouts, playgroups and Sunday schools will not have to bear the cost of ensuring volunteers have undergone the essential criminal record background checks."
At that time, a Minister of State at the Home Office said:
"We have announced our intention that standard and enhanced disclosures … will be issued free of charge to volunteers."—[Official Report, 15 March 2001; Vol. 365, c. 695W.]
In one respect, they are issued free of charge to volunteers, but the volunteers nevertheless have to pay for them. The announcement by Ministers of an intention is not sufficient to deliver the reality on the ground, so what has gone wrong?
The Government pledged that no volunteers or voluntary organisations would be penalised financially. They pledged that volunteer checks would be free and, as I said, in one sense they are. However, volunteers cannot apply directly to the CRB; they must go through a registered body. Voluntary sector bodies will seek recompense only for their own costs as registered bodies, but commercial companies are free to charge what they like for the service. As a result, volunteers pay anything from £10 to £25 to have a check done. As I

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said, the CRB makes no charge with respect to volunteers, but with regard to registered bodies, the service is not free.
The National Association of Clubs for Young People, which estimates that it will process 8,000 applications a year, anticipates costs of £60,000 a year. It has sent me the costing, and I have looked through it. The headline figure of £60,000 to process 8,000 registrations might strike people as expensive, but having looked through the costing—I am happy to send it to the Minister—I can say that the costs seem perfectly reasonable. I am referring to the costs of the clerk to do the work, the rental of the office space, IT support and so on, which mount up.
A body such as that association cannot be expected to bear that cost; it must pass it on to the volunteers. We should bear in mind the fact that the association represents about 400,000 club members, 75 per cent. of whom are drawn from the three lowest socio-economic groups. We are not talking about the Hurlingham club—it is more a case of the Boys' Brigade. Many of those club members come from our most vulnerable communities. The Government will have to deliver their pledge of a free service because the reality is that organisations will have to bear enormous costs or volunteering will be penalised by the payment.
The CRB has been criticised for running about six months behind schedule. How will it handle the volume of anticipated inquiries? What is the backlog of teacher applications? Applicant checks are to be slimmed down, with a check against only the so-called list 99 before a teacher is employed and full vetting being completed after he or she has started teaching. Will the Minister confirm that that is the case and, if it is, the implications of that, and when a normal service will be resumed or initiated?
My attention was drawn to the problem of delivery by the chief executive of New Forest district council, Mr. Dave Yates, who wrote to me about taxi drivers in his area. He said:
"since the establishment of the CRB, all operators and drivers have encountered numerous problems, not least an unconscionable delay in response. This has led, in some cases, to the District Council being unable to issue drivers' licences and this means that certain individuals have had to suspend their livelihoods pending satisfactory resolution."
In other words, those individuals have not been able to work. I have had a helpful correspondence with the chief executive of the CRB; he has outlined to me in detail his action plan to deal with problem professions, including taxi drivers, about whom I am particularly concerned. He even helpfully gave me a telephone number that taxi drivers experiencing a problem could ring to expedite their applications. I thank him for that. However, what confidence can the Minister have that those are merely teething problems and how can we be assured that they are, without knowing in detail what they are? What is the cause of the problems?
Mr. Andrew Lansley: Like my hon. Friend, I have pursued the issue as a consequence of letters from a district council—in my case, Cambridgeshire county council. The council was naturally concerned about its failure to get timely checks
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on people who sought work with children and vulnerable adults. I felt particularly strongly about that when, as a member of the Standing Committee on the Protection of Children Bill, in 1999, I moved amendments that were expressly designed to provide that the CRB would have to obtain criminal record checks and enhanced disclosure within a calendar month. That is consistent with the target times that are being set, but it is clear from my correspondence with the CRB that within weeks of its establishment, and after three years of preparing to be established, it is not meeting even the targets set by Ministers at the outset and is having to take all sorts of remedial measures—
Madam Deputy Speaker: Order. That is too long for an intervention.
Mr. Swayne: I thank my hon. Friend for his intervention. He is right. It is a matter of debate who showed the greater prescience when he moved his amendments: he in spotting the problem, or Ministers in rejecting the amendments knowing that they would not be able to deliver on the demands made in them.
Mr. Lansley: I shall try not to strain your patience, Madam Deputy Speaker.
To be fair to Ministers, they said at the time that they would set targets. The point is that they are not meeting those targets because they did not put satisfactory measures in place when establishing the Criminal Records Bureau.
Mr. Swayne: My hon. Friend is right. In a parliamentary answer to me on 27 June, the Minister said:
"the Criminal Records Bureau will be in a position, as soon as possible, to meet the high standards of service that it has set itself."—[Official Report, 27 June 2002; Vol. 387, c. 1070W.]
Will the Minister give us some grounds for sharing the confidence that he shows in that parliamentary answer? Will he tell us that the problems will be resolved and how that will he done?
Mr. John Randall: I was reluctant to intervene because I have been listening with great interest. Does my hon. Friend have any idea of the reasons for the problems and the failure to meet the targets? Is it because of a lack of resources or people in the CRB?
Mr. Swayne: I understand that additional staff were taken on after the initial problems were experienced, which suggests that the organisation was under-resourced when it began. However, I shall look to the Minister to explain the reasons, because I can only speculate and rely on my correspondence with the CRB, which sought to hide nothing but concentrated on how it was addressing the particular problem with taxi drivers to which I drew attention. I was grateful for that, but the CRB did not go into great detail on the wider problems.
Mr. Lansley: I promise my hon. Friend that I shall not interrupt him again. He said that nothing was being hidden by the CRB. I am sure that that is true, but in

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correspondence with me, the chief executive made it clear that it had a service standard of meeting 90 per cent. of enhanced disclosure applications within three weeks and 90 per cent. of standard disclosures within one week. However, he did not provide me with information about the bureau's performance compared with those standards.
Mr. Swayne: I agree entirely. If I had been more efficient and diligent, I would have tabled written questions to elicit that information, but I am sure that the Minister will tell us today.
Mr. Christopher Chope: Does my hon. Friend accept that one problem is that the CRB does not seem to know when it has received applications? Dorset county council has sent in applications that the CRB has consistently denied receiving.
Mr. Swayne: I have experience of that too. I know of taxi drivers in my constituency whose applications were never received, which is frustrating for the individuals concerned. However, that problem is not exclusive to the CRB. Constituents have told me that they have been unable to establish whether their passports, which they sent by registered post, arrived at or were processed by the UK Passport Service. Many constituents complain that they have not received a reply to their letters to me although I was never aware of having received them, so it is sometimes difficult to apportion blame.
Finally, I shall give the Minister what might be described as a hospital pass. It is a question that I am sure that he will be unable to answer, but I would be happy if he passed it on to the appropriate Minister who can answer it. I have received many representations from an organisation called Hampshire Care. One of its complaints has been the number of staff waiting to have their own disclosures processed. The key question for that organisation is the proper lifespan of a criminal records disclosure, by which I mean the lifespan that the registered person should apply to the validity of the document.
There is a great deal of labour mobility in the care home industry—people move from one care home or employer to another—and using their basic disclosure they are able to show the certificate that they acquired from another employer. The key question for the care homes organisations concerns the point at which they should seek a new disclosure. Those organisations asked that question of officials at the Department of Health on 14 February, and again on 11 March, 30 April and 30 May, but have not yet had an answer. I do not expect an answer today, but I am sure that the Minister will be able to supply me with one at some point.
Mr. Chope: Will my hon. Friend ask the Minister how the accuracy of the information that comes from the CRB will be ensured? I have a constituent who is a distinguished former RAF officer, who has found that he has—allegedly—a criminal record going back to 1990. Obviously that is not the case, but he is being required by the CRB to disprove that conviction.
Mr. Swayne: I hope that the Minister will be able to reassure us that we have not turned the principle of
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English justice on its head by requiring people to prove their innocence, and that the CRB will take a more pragmatic approach in such cases.
9.51 am
Mr. Charles Hendry: I congratulate my hon. Friend the Member for New Forest, West (Mr. Swayne) on securing the debate. I have attempted to table an Adjournment debate on this subject for some weeks. My hon. Friend has spoken elegantly and effectively, and has drawn attention to the problems of which we have become aware over recent months.
I initially tabled early-day motion 1335 with support from two Labour Members, one Liberal Democrat and one nationalist, which now has more than 70 signatures of support. It was based on concerns expressed to me by the National Association of Clubs for Young People. I pay tribute to that association for highlighting those concerns, and for demonstrating so graphically their effect on people and similar organisations. None of us disagree in principle with the fact that there should be checks of this type, and we must be certain that those who are working with children and vulnerable people do not have backgrounds or records that would make them unsuitable for that work.
None of us seeks to suggest that those checks are inappropriate. We are concerned about the practical implications, and how the CRB is working. The Home Secretary, when he was Education Secretary, estimated that the voluntary sector would need to make at least 1.5 million checks per year, and said that the Government wanted to ensure that organisations such as scout groups, playgroups and Sunday schools would not have to bear the cost of ensuring that volunteers had undergone the essential criminal record background checks. That statement was endorsed by the current chairman of the Labour party, when he was Minister of State at the Home Office. He said:
"We have announced our intention that standard and enhanced disclosures, which include those working in sensitive positions with the vulnerable, will be issued free of charge to volunteers."—[Official Report, 15 March 2001; Vol. 364, c. 696W.]
Organisations such as the National Association of Clubs for Young People want the Government to honour that commitment. A discrepancy has arisen because of the costs of the checks that have to be carried out by registered bodies, which include the voluntary organisations, and profit-making organisations that can charge significantly higher sums of money. The National Association of Clubs for Young People has given us a detailed breakdown of its grounds for believing that the cost will be about £80,000 in a full year for that organisation alone to check the record of its volunteers. It reckons that it needs about 8,000 new volunteers annually. That is not an extravagant figure; it works out at only three new volunteers per club throughout the country. Those people are not in a position to afford the charges; not only do the overwhelming majority of people who are supported by the clubs come from the three lowest socio-economic groups, but so do the volunteers, therefore they will not be able to afford significant charges.
The voluntary organisations say that there are direct consequences of the proposal: a reduction in volunteers would mean that the programme would be reduced

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almost immediately and the smallest clubs, often serving deprived rural areas and, typically, maintained by the efforts of two or three volunteers, could be forced to close. We are talking not just about the costs but about a real possibility that the voluntary organisations that provide the services so effectively will have to close down, with the loss of those services.
Mr. Chope: Does my hon. Friend accept that there is a further problem? The Government are profiting from the process because value added tax is payable on the charges imposed by the club.
Mr. Hendry: I am glad that my hon. Friend made that point. I was going to come to it later in my speech, but I shall deal with it now. If the Home Secretary is right in his estimate that 1.5 million record checks a year will be required and that the average cost of each one could be about £10, the cost in total will be £15 million or more. That means that the Government stand to make £2 million, £2.5 million or £3 million a year from something that they said would be free. That is immoral. My hon. Friend tried to make changes to the Finance Bill to take that into account, but they were not acceptable because of the nature of that measure. It is completely wrong that when the principle is that the checks are free of charge the Government should profit from them through VAT. I entirely endorse my hon. Friend's comments on the matter.
I have contacted a range of other organisations that will be significantly affected. The Central Council of Physical Recreation, for example, which covers some 110,000 voluntary sport clubs, has a network of 1.5 million volunteers, and new volunteers coming on-stream will involve 30,000 checks a year, which is a phenomenal number. The CCPR reckons that the minimum cost will be £150,000 to £200,000 a year, money that could be spent on improving sports facilities, bringing in more volunteers or helping to run things more effectively, but instead it will be spent on paying charges simply to allow people to volunteer in the first place. The CCPR has decided that because of the costs involved it will not apply to become a registered body for processing applications. That means that those who want to volunteer to work with sports clubs and clubs for young people will often be driven to those who do such work on a profitable basis. One does not criticise that, but their costs will be higher than that of clubs run by a voluntary organisation.
The Scout Association says that it expects that 70,000 applications will have to be checked every year. It is already spending £25,000 on extra staffing to handle the applications and, as the year moves forward, it is possible that the cost will double to £50,000. The association believes, understandably, that that will put people off applying to become volunteers with the scouting movement.
The Church of England will be affected. Representations were made to me at the weekend by someone who was concerned by a notice from the diocese in Derby. There was concern about the cost even of a lay preacher, for example, who would have to undergo checks. The cost to the Church will be significant if it is to meet the legal requirements.
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None of the organisations are in a position to bear the costs. The Prince's Trust thinks that the cost to them could be as much as £100,000 a year. These are phenomenal figures for organisations that do so much good work, often with the most vulnerable and insecure people in society, so I hope that the Minister can reassure us on the matter.
The Girl Guides tells me that it faces extra costs in handling the applications, and in training. It speaks of
"huge cost implications involved in training our local managers
who are all volunteers which is key to the system working. They are from very diverse backgrounds and will not always have the skills required to ensure that forms are completed correctly. There are also training implications associated with developing a robust appeals system to allow for appeals when a volunteer application is refused due to an adverse disclosure."
Will the Minister explain how best we can help organisations such as the Girl Guides to cope with associated costs?
As my hon. Friend the Member for New Forest, West said, there are two ways forward: either the costs have to be borne by the voluntary organisations themselves, reducing the scope of their work, or the costs have to be passed on to volunteers, which will discourage them. According to the Girl Guides, that is already happening. It says:
"Guidance notes on completing forms are too detailed and are off putting to applicants."
The number of applications of people who want to work with Girl Guiding UK is diminishing because of the complicated procedure.
Some organisations say that the change will not be retrospective and claim that they will be all right because they deal only with a few volunteers. However, I understand—I hope that the Minister will confirm this—that it will be retrospective in its application to all those currently working with young or vulnerable people. The costs will be infinitely greater than many organisations currently recognise. I hope that today's debate will draw attention to such problems.
My hon. Friend also referred to delays, which are becoming extraordinarily serious. Girl Guiding UK states:
"Replies to individual applications submitted in April/May still have not been received from the CRB",
though
"applications submitted since June are being turned round in approximately 3 weeks."
The CRB claims that it can more closely meet the target that it set itself: does that apply only to current applications, or to historic applications as well? Will processing current applications more quickly create worse problems for applications submitted some months ago? Barnardos tells us:
"As at the end of June only 26 per cent. of disclosure applications had been returned by the CRB, which is impacting on our ability to start new workers and volunteers into posts working with children."
It continues:
"Summer play schemes are likely to have to be cancelled or disrupted because of the backlog."
Twenty-six per cent. is more than a quarter of the applications. It is clear that organisations such as Barnardos are feeling desperate at the prospect of such a substantial backlog.

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Representations have also been made about the different forms that need to be completed. The Central Council of Physical Recreation says that it would prefer the system in Scotland, where a central registered body handles all the applications for voluntary organisations free of charge. The Scout Association has expressed frustration that it has to complete different forms in England, Scotland, Wales and Northern Ireland, adding further to the bureaucratic problems. A range of issues is not being dealt with adequately.
My final point concerns the costs of the CRB. Whether the CRB is under-resourced has already been discussed. A vast increase in anticipated costs has occurred. Three weeks ago, I tabled a question to the Minister, requesting a reply by a named date. I should have received a reply three or four days later, but I have not yet—[Interruption.]
Mr. Deputy Speaker (Mr. Frank Cook): Order. May I draw the attention of hon. Members to the fact that the only Member standing should be the one who holds the Floor.
Mr. Hendry: The question I asked the Minister concerned the initial anticipated costs of the CRB in comparison with current estimates. Capita, which has the contract to operate the CRB, issued a press release in July 2000 stating that the value of the contract was estimated to be around £400 million over 10 years. However, I understand that the Home Office said last month that current forecasts suggest that operating and overhead costs are estimated to be £940 million during the first 10 years of the project. That is a doubling of the estimate in two years and, by any calculation, it is a massive miscalculation. I hope that the Minister can give a clearer explanation than the information that we already have.
Those who work with young and vulnerable people are asking only that the Government should honour their clear pledge. The organisations involved took that pledge at face value and were grateful that they would not be charged by the CRB for carrying out checks. However, they did not realise how enormous the cost of preparing the forms for processing would be. The Minister will understand those concerns and I hope that he can address them this morning.
10.6 am
Mrs. Annette L. Brooke: I add my congratulations to the hon. Member for New Forest, West (Mr. Swayne). He expressed his concerns eloquently and touched on serious issues.
The hon. Member for Wealden (Mr. Hendry) spoke about the costs falling on volunteers, so I shall not spend time on that, but I endorse his comments because the strong concerns about the matter are important.
Of course, checks must be made and we must have an assurance that they are adequate, but there are many questions and issues about the current situation and we all hope that the Minister will address them today. I want to touch on three areas: the failure to attain targets for disclosures, the accuracy of information and the future marketing of services.
On the targets for disclosures, I want to touch on an issue that is close to my heart. I wanted to ask the Prime Minister about it on Wednesday because it is vital.
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Many checks have not been carried out on volunteers who want to participate in and help to run holiday play schemes and other activities. We are all concerned about antisocial behaviour and know that diversionary programmes are necessary, but many have been held up. Have the Government put in place a fast-track system of checks so that play schemes and so on can go ahead? They are vital and one of our greatest concerns in society at the moment.
On delays, I have received, as has the hon. Member for Christchurch (Mr. Chope), copies of representations from Dorset county council. The leader of the council, in a letter dated 26 June, states:
"Initial difficulties were experienced during March … Since then over two hundred applications … have been sent to the CRB. To date not one completed disclosure check has been received back. A similar situation exists with our Social Services Directorate. More than one hundred and seventy applications have been sent and so far only four completed checks have been received."
As the hon. Gentleman said, it is not clear that there was knowledge that those had been sent back by the bureau, which adds to the confusion.
The leader of Dorset county council is particularly concerned about performance standards and said that the National Care Standards Commission has instructed that potential employees must not he allowed to start work in children's homes prior to clearance being received—we all agree with that—and that the situation prompts the question whether, because of the poor service, the bureau will indemnify the county council for possible consequences of an unsuitable interviewee being put in post and harm arising therefrom. A number of bodies want reassurance because they are being asked to take risks or not to provide vital services. That is the choice before them. The service costs a lot, or perhaps I should say the lack of service.
Mr. Chope: The county council also says that the system that it used to operate when it obtained information from the local police was much more efficient than the new system. The new system is not only more expensive, but much less efficient.
Mrs. Brooke: Certainly, that point is being made strongly in representations to us. It shows what a long way the new service must travel before it can offer what the public deserve.
On accuracy, the data inputting has been outsourced to India and I have been informed of estimates that the data entered are only about 80 per cent. accurate. That means that some people are being wrongly identified as having a criminal record. If that is true, it is horrendous. I should like the Minister to clarify the matter, but the claim has been made to me that such people are having to prove their innocence. That seems bizarre in our system.
We have heard about the problems of escalating costs and we are aware that as the scheme is a partnership with Capita, profit must come into the equation at the end of the day. Although we all want organisations to be cost effective, I am concerned about how finance might be raised in the future. The CRB's business plans show that when it gets round to basic disclosures, which I think will be some time in the future, it has plans to

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market the usefulness of basic disclosure checks on a wider group of individuals. To cover its costs, the CRB needs to look into about 6 to 9 million basic disclosures and whether it will remain financially viable if it does not hit that target is questionable. However, if it is marketing those checks, is it possible that many organisations will be inappropriately probing people's backgrounds?
A balance is needed. Of course we want security and safety checks, but the plan smacks of Big Brother if its drivers are financial rather than caring. That is what concerns me about profitability. The scheme must be cost-efficient, but should not seek profit at the expense of people's lives. That is particularly the case because we know that we need to rehabilitate offenders and bring down re-offending rates. Disclosures are appropriate in some circumstances, but we must get the balance right if we are to get people back on the right track. I should be very grateful if the Minister would address some of my concerns.
10.12 am
Mr. Christopher Chope: I begin, Mr. Cook, by warmly congratulating—
Mr. Deputy Speaker: Order. I would be remiss were I not to remind hon. Members that when the House took the decision to have this parallel Chamber, it also decided that the four senior members of the Chairmen's Panel were to be referred to as Deputy Speakers when occupying this Chair.
Mr. Chope: I apologise profusely for having addressed you incorrectly, Mr. Deputy Speaker.
I congratulate my hon. Friend the Member for New Forest, West (Mr. Swayne) on having introduced the debate so ably. It is significant that we have had contributions from the Opposition parties but none from Labour Back Benchers. Perhaps they are embarrassed by the failure and performance of their own Government.
Mr. Swayne: They signed the early-day motions.
Mr. Chope: As my hon. Friend says, that is despite the fact that they signed the early-day motions.
I shall not repeat many of the points that have already been so ably made, but let is be said that, on this matter, the Government have broken their promises to an important part of our community—the volunteers who make the world go round for so many young and elderly people in our localities. An intolerable burden is now being placed on those volunteers, a burden not just of cost but of inefficiency.
I want to concentrate my remarks on the case to which I alluded briefly in an earlier intervention, that of a very distinguished retired Air Force officer who lives in my constituency and is the victim of inaccurate data. The Criminal Records Bureau now requires him to prove his innocence. I hope that the Minister will take that issue seriously because it has severe implications for the issue of identity cards that use microchips, and what can happen when someone is falsely accused of having a criminal record.
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My constituent writes:
"As a contribution to charity, I have taken up acting as a volunteer driver … As the work involves dealing with disabled and vulnerable people, I was required to provide full information as to my identity. These details were passed to the Criminal Records Bureau … for checking … To my surprise, on 19 June this year, I received from CRB an Enhanced Disclosure … showing that I was, in fact, someone else with a conviction dated 8 November, 1990."
He has not passed the name of the person on to me for reasons of confidentiality, but he continues:
"At the time of this man's conviction, I was resident in Switzerland. The only indication of a connection between the man and myself was that we were born in the same place."
He telephoned the CRB
"who seemed a little surprised that I was making a complaint, and I also wrote to them expressing my dissatisfaction, suggesting that they recheck their data. They responded by sending me a pro-forma letter registering my complaint and asking me to send them three passport size photographs of myself, and to complete a Fingerprint Consent Form giving me a deadline date of 10th July."
There were obviously a very large number of allegations of false identity, hence a pro-forma letter.
Why should my constituent be required to complete a fingerprint consent form? Why should he be put in the position of a suspect or a convict when he is the victim of mistaken identity, and perhaps bad data and record keeping? His letter continues:
"They would then arrange for my fingerprints to be taken by the local Police and they would be checked against the Police Central Fingerprint Database. Not unnaturally, I wrote to CRB and refused to do this, as I do not believe the onus is on me to prove that I am not someone they allege, but for them, if they wish, to prove I am not who I say I am."
He is not prepared to go to the time and expense of correcting CRB data.
My constituent says that he presumes—I am not so sure until we hear from the Minister that his presumption is correct—that the CRB has a responsibility to ensure that its data is correct, otherwise it is not worth having. He says that he has received another reply from the CRB. It seems that the CRB is quite good at dealing with correspondence, but it does not have the time to process the applications made. The CRB claimed to have rechecked its data, which showed that the convicted man had used my constituent's name, and date and place of birth as "an alias for conviction". My constituent says that he did not understand exactly what that means. He has a relatively unusual surname, so he finds it hard to believe that someone picked on that surname for part of a false identity. He will write to the CRB again to explain that he will not send photographs or have fingerprints taken, as it is for them to establish who is who for their records.
He draws to my attention and asks me to raise the issue that
"The CRB must take responsibility for the accuracy of their data. If they find inaccuracies or inconsistencies in their data, it is their responsibility to check and correct their data, not ask innocent citizens to do their work for them."
He asks:
"Whatever happened to the Data Protection Act when the criminal record of the man I am alleged to be has been passed to myself and others in the CRB Enhanced Disclosure? There seems to be no attempt to exercise confidentiality."

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He goes on to ask what will happen if we get identity cards—or entitlement cards in Labour newspeak—that could have in a microchip containing all the person's data including their criminal record. If that happened, he asks:
"How much confidence could one have in the quality of the data if simple cases of wrong identification like mine occur?"
I hope that the Minister will express his concern and tell us what the Government will do to ensure that similar injustices do not occur.
Perhaps because of my constituent's background in the armed services he does not say that he wants compensation. He is not suing for defamation—I am sure that he is entitled to do that, because he has been defamed by the CRB—but he seeks a system that is reliable and that can be used to ensure that information on people who have criminal records is available to those who need it but that those who do not have criminal records can remain free and at liberty.
10.20 am
Bob Russell: The Criminal Records Bureau is turning out to be this Government's Child Support Agency. It seemed like a good idea at the time, it had all-party support and everyone believed that it would be the answer to what was perceived to be a major problem, namely, preventing those with a relevant criminal record from working in paid employment or as a volunteer with children, young people or vulnerable adults.
However, the reality is not what was expected or what was promised. I accept that the CRB is still a new organisation, but the stark position is that it has failed to meet any of its targets since it was set up, according to an answer to a question that I put at last week's meeting of the Select Committee on Home Affairs. Teething problems are one thing, but the failings cannot all be explained away with such a lame excuse.
Of particular worry is the prospect that the applications of some new teachers will not be processed in time for them to take up work in schools this September. Last Friday The Times reported:
"Some new teachers may be unable to start work next term after a backlog at the Criminal Records Bureau, which does criminal checks on people working with children. The bureau has been unable to cope with the number of applications concerning teachers."
That report contradicts a written answer to a question that I put on the subject to the Secretary of State for Education and Skills. I was told that contingency arrangements had been made and that
"CRB staff are trawling the backlog of applications, and checking new applications, to identify those in respect of teachers and other key staff for schools."—[Official Report, 2 July 2002; Vol. 388, c. 237W.]
Will the Minister clarify the precise position? The CRB, an executive agency of the Home Office, is based in Liverpool. Will the Minister tell us how many people are employed by the CRB and by its private sector partner, Capita? Do Ministers accept any responsibility for what is happening? Should we blame the CRB or Capita, which, according to a media report, has been subjected to an investigation into its activities? Apparently, Capita has been accused of improper accounting, and there are rumours that the Home Office
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plans legal action against it for consistently failing to meet its performance targets under a £400 million contract with the CRB. Would the Minister care to confirm, clarify or deny those serious points?
The situation at the CRB is dire. Many applications are now being processed in India because Capita and the CRB cannot cope with the huge backlog. In the light of such revelations, how confident can we be about the CRB, which is a sister organisation of the UK Passport Service? An example from my constituency illustrates the shambolic state of affairs. An application by a lollipop lady has languished with the CRB for six weeks. Every day throughout that time, hundreds of pupils who attend the Friars Grove infant and junior schools in Colchester have had to cross a busy road without the assistance of a warden. The schools break up today for the summer holidays. I hope that the CRB will have got its act together by the time pupils return in September.
I submit that the safety of every youngster has been put more at risk by the CRB prolonging the absence of a lollipop lady than the realistically non-existent threat posed to a single one of them by the highly unlikely possibility that the lady in question might have a dodgy past and would molest a child. I am told that the schools were prepared to engage her but were advised that, legally, they would be in breach of the legislation if it were subsequently found that she had a criminal record. They were not prepared to put themselves at risk in the eyes of the law, however remote the possibility.
The upshot is that the CRB—an organisation whose whole existence is supposedly for the purpose of protecting young people—has put children's lives and safety at risk because it has not processed a lollipop lady's application in the six weeks since Essex county council submitted it for clearance. She has lost six weeks' wages. People are not queuing up to become school crossing wardens—there are many vacancies.
That is not an isolated incident. Last night, my hon. Friend the Member for Somerton and Frome (Mr. Heath) recounted to me a case in his constituency where someone had a job offer withdrawn because the CRB had taken too long to process the application. Youth organisations are finding it increasingly difficult to recruit volunteers, and lengthy delays by the CRB in processing applications for clearance are making the position even worse because potential volunteers can lose interest and find other things to do.
The CRB's annual report was published last Thursday and contains lots of ticks where performance tasks have been achieved. It boasts:
"As a new organisation we have an opportunity to deliver a first-class customer service. We are fully committed to Service First principles and shall apply for Charter Mark recognition once we are fully operational."
Experience thus far is not encouraging.
The CRB admits that it exceeded its budget last year by more than 10 per cent., but failed to deliver what had been expected and promised. How much of the overspending went to Capita? The annual report observes that the
"CRB was established as a public-private sector partnership (PPP). After a rigorous tender process we selected Capita as our private sector partner. Capita is responsible for developing the IT infrastructure; recruiting staff to operate the call centre; and making the initial identity check on applicants."

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Last year the Home Affairs Committee, which predicted troubled times ahead, said:
"Effort should be concentrated on ensuring that the Criminal Records Bureau will operate effectively when it starts, rather than opening earlier and performing inadequately."
The Committee's reservations seem to have been realised. The Home Office's annual report shows that the CRB missed its target to commence the issue of standard and enhanced disclosure certificates by November 2001, and instead began processing such applications only in March 2002. The CRB did not become fully operational until 11 March 2002. During questions to Lord Falconer on 1 July he confirmed that the precise number of enhanced disclosures currently being made within three weeks was not known, but that it was dramatically below the target.
I have asked many questions about the CRB from before it was set up to the present. In my research for today's debate the earliest question that I could find was from January 1999, and my most recent questions led to five written answers that I received last night. I may have asked more parliamentary questions about the CRB of the Home Office, the Department for Education and Skills and the Department for Culture, Media and Sport—in respect of sport—than any other Member, which may not come as a surprise to the Minister.
On 17 January 2001, I challenged the Prime Minister directly about the Government's intention to impose a tax on new volunteers by requiring them to pay a £10 fee to be checked out by the CRB. I followed that up with an Adjournment debate, and the Home Affairs Committee commenced an inquiry, which had only just started when there was a welcome U-turn by the Government, who agreed to scrap any fee, as the nation's voluntary youth organisations and I had requested. I suspect that the pending general election had something to do with that change of attitude.
The Government have said that clearance checks by the CRB will be free to volunteers, but the reality is that the establishment of the CRB collectively costs the nation's voluntary youth organisations several million pounds every year to service applications from new volunteers. My attempts, and those of others, to get the Government to reimburse organisations for their operating costs have proved unsuccessful. The loss of such money is to the detriment of our youth organisations, which consequently have fewer resources to invest in our young people.
In a written answer of 22 July 2002 the Minister said:
"We have received representations from voluntary organisations requesting additional funding to meet start-up costs and ongoing overhead costs of processing applications. We have considered the representations very carefully but we have not been persuaded that it would be appropriate for additional funding to be made available for these purposes."—[Official Report, 22 July 2002; Vol. 389, c. 96W.]
It is difficult to reconcile that refusal to help our voluntary youth organisations, sports clubs and other groups with the Government's claim that they want to encourage volunteering and promote the excellent work that the nation's youth organisations undertake.
In conclusion, I should like the Minister to consider how much it costs to lock up one youngster in a young offenders institution, and how many millions of pounds
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are spent each year dealing with the consequences of vandalism, antisocial behaviour and criminal activities. What about the cost to the national health service caused by the deteriorating collective health of the country's young people? That deterioration has been caused, in part, by the inadequate physical education that they receive in school and the lack of sports facilities outside school. If, rather than penalising volunteers, more was invested in organised youth activities, the public would receive better value for money. The Prime Minister says that he wants an extra 1 million volunteers to be recruited. The performance of the CRB is not helping to achieve that.
10.29 am
Mr. Dominic Grieve: I congratulate my hon. Friend the Member for New Forest, West (Mr. Swayne) on securing the debate. I listened with great care to what he said, and also to the contributions of my hon. Friends the Members for Wealden (Mr. Hendry) and for Christchurch (Mr. Chope). It is customary for the Opposition Front-Bench spokesman to come armed with statistics to back up the points made by the Member who proposed the debate. I have, however, rarely heard a more comprehensive and clear-cut litany of statistical evidence in a Westminster Hall debate. That evidence clearly shows that the CRB is not functioning. I will not repeat those facts to the Minister because I want him to have sufficient time to make the detailed reply that I am eager to hear.
The Minister should consider two issues of principle. There was universal approval across the House for the principle behind the introduction of the CRB and the vetting procedure. As the Minister knows, however, it was clear from the outset that there was considerable concern about the extent to which costs would be borne by voluntary organisations. The Government constantly reiterated that measures would be taken to ensure that that did not happen, but that has proved to be nonsense. The matter demonstrates, I fear, the law of unintended consequences. Departments consider a problem and identify what seems to them to be a solution—in this case, it was decided that volunteers would not have to pay to get the information—but, in fact, huge administrative burdens are created. I appreciate that the Government will say that those burdens will have to be shared to an extent, but there is a public policy issue.
I want to pick up on points made by the hon. Member for Colchester (Bob Russell) and my hon. Friends, which demonstrated the extent to which the vast bureaucratic system will have the unintended consequence of penalising and preventing volunteering. That will be to the detriment of society, even though the measures were intended to have an advantageous effect by preventing unsuitable people from gaining employment.
The other issue is performance. Performance is lamentable. The Minister will have to accept that. The CRB's own report shows that it has enormous problems. The evidence that shows that CRB's information is occasionally inaccurate—I have seen that in my constituency—is particularly worrying. I want the Minister to tell us more about the system by which the CRB operates. We have the impression that a structure has been set up. One asks a question of the structure and

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it comes up with an answer. It may not deliver it as quickly as it should, but it comes up with the correct answer. My hunch—perhaps it is more than a hunch, I think that one can detect this—is that the system is far more ramshackle than the existence of the CRB as an institutional agency suggests.
The recent publication relating to the Rehabilitation of Offenders Act 1974, "Breaking the Circle", introduces a new topic that I will not touch on—although I remind the Minister that this valuable document contains interesting material. Paragraph 1.19, entitled "Approaches to disclosure", is about the background to the changes to the 1974 Act, which are intended to increase public protection while minimising the burden on those who should have their convictions treated as spent, thus changing the categories under which the CRB operates. It states:
"An additional factor to consider has been the recent introduction of central arrangements for the disclosure of previous convictions through the Criminal Records Bureau (CRB). The demand for checks for vetting job applicants has placed a heavy demand on local police forces. The CRB is shifting that burden to a one-stop shop service for access to criminal and other information, principally for recruitment and certain licensing purposes".
It then describes the three different levels of disclosure.
I was struck by that passage. Hon. Members may care to note its tone. First, it is clear from what is said that the CRB has not completed the shifting of that burden to a one-stop-shop service. Secondly, it highlights that in the initial stages of disclosure, the local police forces on which demand fell in practice were overwhelmed. I shall be interested to hear from the Minister what stage we are actually at. Does the CRB yet have all its data, or is it, in fact, having to shop around in a multiplicity of records? Since my time as a barrister, I have always taken the view that the criminal records system has been rather less centralised than some people may imagine. What are the procedural and logistical difficulties that the CRB must overcome to assure itself that it has all the information it needs?
My questions are genuine; they are not loaded and I do not know the answers to them. However, I have a feeling that matters are far less simple than the existence of the CRB may have led people to expect, a fact that struck me as I listened to my hon. Friend the Member for Christchurch describe the case of his constituent. Sources of information seem by no means clear cut and could be open first to mistakes and secondly to a lack of confidence that the CRB is able to gain access to the information that it needs to supply the right reply. If I were working for the CRB, I would be rather anxious about giving somebody a cleared vetting when I know from the multiplicity of sources that the bureau taps into that it does not have the confidence to do that. I wonder if that goes some way to explaining the problems. What are the Government and the CRB doing about that?
As I said, I want to give the Minister every opportunity to reply. The Government have our absolute support in wanting to make the CRB work. However, the comment that it has the same feel about it as the Child Support Agency is correct in my view. We must get the system up and running and ensure that it is cost-effective, that the burden does not fall disproportionately on voluntary organisations and that answers come through accurately and quickly.
10.38 am
The Parliamentary Under-Secretary of State for the Home Department: I am genuinely grateful to the hon. Member for New Forest, West (Mr. Swayne) for raising this important issue. I am only too aware of the difficulties and problems about which he and other hon. Members have spoken in today's debate.
I shall begin by saying something simply and clearly: the Criminal Records Bureau is not currently providing a satisfactory service. I want to apologise to hon. Members for that fact. The CRB and its staff are aware that a satisfactory service is not being provided and they are working hard to put things right as we begin to deliver this important new service, which is, after all, aimed at improving the protection of children and vulnerable adults.
Before I try to respond to as many as possible of the questions that have been asked by hon. Members, it may be helpful if I set out the background. I acknowledge the point made by the hon. Member for Beaconsfield (Mr. Grieve) and other speakers that there was and is widespread support for the creation of the CRB under part V of the Police Act 1997. As we heard, the CRB issues three levels of criminal record certificates, or disclosures. Anyone will be able to apply for the lowest level of certificate—the basic disclosure—when it becomes available early next year. However, access to the higher levels—the standard and the enhanced disclosure—is restricted to those applying for positions that are exceptions to the Rehabilitation of Offenders Act 1974. That is intended to ensure that spent criminal record information is revealed only where necessary because of the sensitivity of the post for which an individual is applying.
The Police Act further restricts access to the highest level—the enhanced disclosure. Part V of the Act was amended primarily by the Protection of Children Act 1999 and the Care Standards Act 2000, which set up a single arrangement through which standard and enhanced disclosures reveal whether the applicant is included on lists of those who are unsuitable to work with children, which are held by the Department of Health and the Department for Education and Skills.
It was always recognised that the programme for establishing the CRB was highly complex and challenging. As we heard, the CRB replaced the previous arrangements involving separate checks with each local police force and against departmental lists. It should be remembered that the time the police took to carry out those checks under the previous arrangements varied enormously. Some checks were carried out quickly within two weeks; others took as long as three months, depending on the police force and the time of year. The creation of the CRB has thrown into sharp relief a single standard of performance compared with the previous performance of all the different police forces.
Switching from the previous arrangements involved 43 police forces, and the integration of a major central computer system and other Departments' databases. It was a massive undertaking but allows the CRB to offer a single route of access to local police force intelligence, information held by the police national computer, and lists held by the Department of Health and the

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Department for Education and Skills. Drawing those sensitive databases together means that, for the first time, standards can be used for assessing the suitability of personnel who might be recruited into positions of trust.
The legislation under which the CRB operates requires registered bodies to countersign applications for higher-level disclosures, thereby confirming that the applicant's identity has been checked and that the higher level of disclosure is appropriate to the post or work involved. I will return to the point made by the hon. Member for Christchurch (Mr. Chope) in a moment. These bodies may be employers or, in the case of volunteers, one of the large number of registered "umbrella" bodies. Following a major exercise, a total of 6,096 bodies have registered to date, of which 917 are umbrella bodies—an important point that relates to the issues raised by the hon. Member for Wealclen (Mr. Hendry) and others about the impact on the voluntary sector. Of those 917 umbrella bodies, 442 are—in the jargon—open umbrella bodies that are prepared to take applications from outside their sector.
The CRB became operational on 11 March this year. Since then, more than 276,000 disclosure applications have been received and more than 119,000 disclosures have been issued. The number of disclosures currently being issued is already greater than that achieved by the old police checking system. The police carried out about 1 million checks a year; the CRB's current workload suggests that the annual rate for the first year will be about 1.5 million checks. However, as hon. Members forcefully pointed out, performance to date has not matched the service standards to which the bureau aims to work. There have been delays in processing disclosure applications, which I regret. The CRB is typically taking six weeks to process correctly completed disclosure applications. I emphasise the words "correctly completed", because one of the principal reasons for the delay is the introduction, following consultation with customers, of a paper-based application route—filling in a form—alongside the telephone route, which was originally envisaged as the principal application route. That is an experience with which hon. Members will be familiar in many other areas: if one wants to renew insurance, for example, one rings a number, gives the details and is then sent a piece of paper to sign.
A question was asked about the cause of the current difficulties. The bureau had anticipated a much higher level of telephone applications; about half the disclosures are issued within three weeks by that method, compared with the paper application route, which achieves that target for about 10 per cent. of disclosures. The contrast between the two routes is obvious. Paper applications contain very high rates of error and omission. Many forms—as many as almost half of those sent to the CRB—have had to be sent back because information was missing from them. Changes were made to accommodate paper applications; processing times are affected by incomplete applications. In addition, measures taken to overcome the early operating difficulties have led to delays in processing applications.
I am sure that hon. Members appreciate the great importance of ensuring that the CRB has the right information to make a check, because if a check is not
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done correctly—this relates to the point made by the hon. Member for Christchurch, to which I shall come in a moment, about the identity of his constituent—we would have a different debate, in which I would be criticised because the system had failed. The purpose of the process is to ensure the protection of children. We therefore need to ensure the proper collection of information and completion of applications. If that is done over the phone, an operator gets all the necessary information so that a form can be sent for the applicant to check and pass to his or her employer or registered umbrella body for counter-checking. That is the best way of ensuring that errors and omissions do not occur.
Mr. Hendry: Does the Minister agree that there is a third option, which is for applications to be processed electronically? Many voluntary organisations would welcome that because it gets round the problems of postal applications—although they recognise that there are difficulties with electronic signatures. Could more applications be done electronically, to speed up the process?
Hilary Benn: I do not know the answer to that but I shall inquire and write to the hon. Gentleman. We set up the CRB with the expectation that the vast majority of applications would be dealt with by telephone, which is a way of providing a service with which citizens are increasingly familiar and which, as I have tried to explain, has distinct advantages over the paper-based route in terms of making the system work more efficiently.
Many points have been made and I shall try to respond to them as extensively as possible in the time available. The hon. Member for New Forest, West asked about the life span of a criminal disclosure. That is a pertinent question but it is not an issue for the CRB. It has been suggested that checks should be made every three years, but ultimately it is the responsibility of the employer or the voluntary body to decide what is appropriate. If someone moves from one employment to another and says to the new employers, "Here's the check I received 12 or 15 months ago", the onus is on those employers—who are, after all, taking on the person—to decide whether the check is sufficiently up to date to satisfy them that the individual is safe to work with those for whom he or she will have responsibility or whether to request a further check.
Bob Russell: I am grateful to the Minister for that explanation. What advice would he give a voluntary organisation such as the Scout movement, which has tens of thousands of uniformed and non-uniformed volunteers?
Hilary Benn: The same advice would apply, because in the end the voluntary organisation faces the same responsibility. What other reassurance can one give? It is the employer or voluntary organisation that is responsible for taking on the person, whether in a paid or voluntary capacity, and it must decide the appropriate action to take. We all recognise that the CRB must be quicker in responding and issuing the disclosures, but the responsibility cannot be taken away from the organisation that takes on the person.
Mr. Grieve: I am sure that the Minister will see the difficulty that that poses in practice. It is one thing to vet

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a stranger who comes along and says that they want to work in an organisation, but a slightly unusual thing to tell someone who is a permanent part of the organisation that they will have to reassure the organisation every three years that they have not secured a criminal conviction somewhere else. This is when I start seeing elements of unreality creeping into the system.
Hilary Benn: I understand the hon. Gentleman's point, but in working for the protection of children and vulnerable adults, we are balancing risks. We must balance how organisations run against what would fall down on our heads from a great height if someone got a criminal conviction somewhere else and did not tell their employer or the voluntary body with which they were working. That is what we are dealing with, and we are imposing the requirement because as a society we want systems in place to minimise the chance that people are put at risk. There is a cost to that and a balance to be found.
The hon. Member for Wealden spoke about the complicated procedure. While informing myself, I looked at the application form. It requires a certain amount of information, but that is necessary to enable cross-checks to be made. If the CRB does not have those full data, it will find it much more difficult to issue a disclosure confidently. I was asked whether the system is retrospective. There is no obligation, and it is up to voluntary organisations to assess the potential. On the cost, the contract with Capita was valued at £400 million over 10 years. That is an element of the overall cost of the CRB, which, including the agency, non-Capita costs and the police, is estimated at £930 million over 10 years.
The hon. Member for Mid-Dorset and North Poole(Mrs. Brooke) asked about summer play schemes. Fast-track arrangements are in place, but if she is concerned about particular schemes, I would be grateful if she could draw them to my attention. The summer splash schemes organised by the Youth Justice Board have been fast-tracked, and I am aware of the point, made by the hon. Member for Colchester (Bob Russell), about the importance of other activities in ensuring that young people do not engage in criminal activity.
The hon. Member for Christchurch cited an important case, and I understand his concern. I am advised that fewer than 10 of the 119,000 disclosures have been disputed. If he gave me further details about the case, I would be happy to investigate and write to him. Indeed, I was interested in his description of the unfortunate circumstances in which his constituent finds himself—and it appeared that someone else had used his constituent's identity. We should pause for a moment to reflect on that. In those circumstances, the onus is on the CRB to satisfy itself about who it is dealing with.
I understand why someone who has not got a criminal record would ask why they should have to prove that they have not done something, and hon. Members asked about the process. Someone has a name and a date of birth, but people with a common name may share the same name and date of birth. If the CRB checks its various sources of data and finds that someone with that name and date of birth has a criminal record, it must ask itself whether it is dealing with John Smith of this date who has or John Smith of this date who has not. Those
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are the difficulties that arise, because people use aliases, with all the things that can be found on the police national computer and local police intelligence records.
The CRB has the duty to check. I appreciate the difficulty raised by the hon. Member for Christchurch, and I understand his constituent's concern. However, one could see the problem in a different light if, in another case, a person had committed an offence but had used an alias and applied under that name. That is why the CRB must be satisfied about who it is dealing with. However, if the hon. Gentleman gives me the details, I shall be happy to look into the case.
The hon. Member for Colchester asked about the number of staff: 700 staff are employed by Capita and there are 400 core staff. On the matter of voluntary organisations, the Government responded to the anxiety originally expressed about imposing a cost on the individual volunteer. I understand that it is possible for volunteers to apply by telephone and—I am thinking through the process—if they do so and give all the information required, the CRB will send them a form which they will have to sign and present to the umbrella body, saying, "Here is the evidence that shows I am who I am. Can you sign it?" The umbrella body will check their identity and countersign it. That might be a way to address the cost of the process.
In the time available, I want briefly to move on to the steps that the bureau is taking to deal with the problems that have been identified. First, incomplete forms are now removed from the mainstream processes to try to increase the efficiency of processing correctly completed applications and the exceptions. Incomplete or incorrectly completed application forms are now being returned to the registered body for correction.
Secondly, there is a programme of training and communication for registered bodies to try to reduce the main sources of errors and incomplete forms. If they can get the applications right first time, the CRB will have a better chance to deal with them than if they have to send them back. Additional staff have been taken on, including in the call centre, where last week 88 per cent. of calls were answered within the 20-second response time set down in the service standard, compared with under 30 per cent. at the end of May. That is progress, and we should acknowledge it.
Additional data entry capacity has been taken on by Capita using Hayes plc India, and new data entry systems involving fast keying and scanning optical character recognition systems are being utilised. The disclosure application forms have been reviewed and redesigned to try to deal with people's experiences as they fill them in. All of these steps form the CRB's improvement plan and if the agreed time scales are kept to, it will progressively achieve a reduction in the backlog of unprocessed work in the coming weeks, and achieve service standards by the end of the summer.
Mr. Grieve: Will the Minister answer my query about the CRB's ability to access information?
Hilary Benn: I apologise to the hon. Gentleman for not responding to his question. If he is content, I shall write to him about it as he raised a very important point about the systems and the processes. We need to look at that if they are creating difficulties.

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The hon. Member for New Forest, West mentioned taxi drivers at the beginning of the debate. Special arrangements have been made for them, as I think the hon. Gentleman acknowledged in his response. I hope that they are working, in particular to deal with issues involving loss or distress. The hon. Member for Colchester mentioned teachers. The bureau has introduced contingency arrangements to enable teachers to be offered placements on the basis of a check of the Department for Education and Skills list 99, in advance of the full disclosure. That meets the legal requirement, so it will not result in the difficulty that the hon. Gentleman feared. For care home staff, the CRB is talking to the Department of Health about fast-track procedures.
It was perhaps inevitable that a project of such a size would encounter problems. Hindsight is perfect; the CRB is not yet. The problems, however, have made the staff at the bureau even more determined to offer a higher standard of service in future. They want to get things right.
I conclude where I began: there cannot be short cuts in trying to get things right. This is not just a mindless administrative process —
Mr. Deputy Speaker: Order.

Export Credit Guarantees
11 am
Mr. Harold Best: Thank you, Mr. Deputy Speaker. I wish to address how the Government manage import and export credit guarantees, with particular reference to the arms industry and its trade with the rest of the world.
For the past 12 years, there has been a consistent loss in relation to the underwriting of the arms industry's export trade by the Export Credits Guarantee Department. My observation is based on my reading of an answer from the Secretary of State for Trade and Industry to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) in June this year. The answer contains a table of results, for want of a better term, from 1990 to 2001 that makes the losses clear.
As I understand the matter, the ECGD is required to operate with a reasonable expectation of breaking even. Premium levels are set to cover costs and risks, and the reserve margin is added to the premium rate to provide the necessary confidence for a break-even in trade that it carries out. The Minister for Tourism, Film and Broadcasting, in his previous job, emphasised that point, saying
"we expect ECGD to do a good deal more than break even."
He continued:
"Export credits are not aid but…loans that we expect to be paid in full and on time."—[Official Report, Westminster Hall, 2 February 2000; Vol. 343, c. 202-3WH.]
The ECGD operates under the Export and Investment Guarantees Act 1991. The Organisation for Economic Co-operation and Development's financial objectives for the export credit agencies lay down a set of rules, and Ministers are expected to ensure that they are upheld—that is, there should be no operation on a loss-making basis. That is manifestly not happening in relation to the guarantees for the arms-related business.
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): I do not want to take up my hon. Friend's time, but I must intervene. I think that he will find that his information is out of date, and I hope to show that things have dramatically changed in the past five years.
Mr. Best: If that is the case, I will be delighted to hear it, as will most hon. Members. From the information I have, though, things might be getting worse, even when recoveries are taken into account. Maybe that is the Minister's point.
On a macro-economic level, joint research carried out by the Centre for Defence Economics at York university and by the Ministry of Defence concludes that the significance of its results for the wider debate on defence exports is twofold: first, the economic costs of reducing defence exports are relatively small and losses are largely one-off, and, secondly, the balance of argument on defence exports should depend mainly on non-economic considerations. Those two points are of great significance in this debate.
In addition to what seems like an ECGD subsidy, the arms trade benefits from a £10 billion investment by the Ministry of Defence every year, including research and development, and £20 million provided through the Defence Export Services Organisation.

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I and others think that the ECGD's support for defence exports should be included in annual reports on strategic export controls. That was also the view of the Quadripartite Committee in 1998. The economic benefits of the arms trade are at best dubious and, on what is essentially a moral issue, the Exchequer should no longer provide a subsidy to it.
This short debate is timely, in that the Export Control Bill is going through the House of Lords, and it provides an opportunity that we should take. We could tighten the Bill to strengthen the Department of Trade and Industry's role in the licensing process, making suitable development one consequence that it must consider in deciding whether to grant a licence. The Chancellor should build on the Mauritius mandate, and export credit should no longer be supplied for arms to go to any developing country. The need for transparency and accountability has never been greater than it is in that area.
I have some questions for my hon. Friend the Minister. First, why has the National Audit Office not investigated the excessive and unwise expenditure by the ECGD? Secondly, what explanation can be offered for the losses in relation to defence-related business? Thirdly, why have such losses been allowed to continue for the past 12 years? I shall be particularly interested in his response to that in the light of his assertion that it is not true. Fourthly, will the Government accept the need for clear and transparent accounts, and disaggregate the figures for sector and country so as to make it clear which areas and sectors are making a profit and which a loss? Finally, will they extend the Mauritius mandate, insisting that ECGD cover should be available only to those 63 developing poor countries that support economic and social recovery and development?
Like most people, I feel passionately about whether the Government of the United Kingdom take a moral approach to the arms trade and how it is financed by Departments. I am sure that all the people of Britain, not just taxpayers, would like to feel comfortable in that their Government are not involved in any financial arrangements that might subsidise the activities of arms manufacturers and the use of arms in other parts of the world.
11.7 am
Mr. Paul Stinchcombe: Thank you, Mr. Deputy Speaker, for allowing me to speak early in the debate. As you are aware, I have an engagement elsewhere in the House at noon and I apologise to all hon. Members for having to leave early. I shall read with great interest and care all the contributions that I miss.
I congratulate my hon. Friend the Member for Leeds, North-West (Mr. Best) on having secured the debate. He has brought before the House a subject that raises issues of considerable political, moral and economic importance, especially in the troubled times in which we live. It is right that Parliament should have an opportunity to discuss them.
It might help if I make clear the political and moral standpoint from which I view those issues. I am a Christian socialist who, although not a pacifist, has pacifist leanings. I am not a member of the Society of Friends, but I periodically attend Quaker meetings and I have been encouraged to consider the issues
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surrounding the ECGD and the arms trade by the parliamentary officer to the Society of Friends, Mr. Michael Bartlett, whom I thank for the research that he has undertaken. I am pleased that I and others in this Hall might have assisted in that research through the parliamentary questions that we have asked.
One parliamentary question that I asked sought to discover the total premiums received by the ECGD in respect of the arms trade for each year in the decade 1990 to 2000, and how much was paid out in claims for the same period. The answer was given on 12 June 2000. In respect of the arms trade, it showed that, for every single year of that decade, considerably more was paid out by the ECGD than it received through arms deals.
In none of those 10 years did premiums exceed payments made. During that period, premiums in the sector amounted to £213 million while the sum paid out in claims was a staggering £667 million, which is more than three times the premium. We must think about those figures, because they mean that the ECGD lost £454 million—nearly half a billion pounds—on arms deals in the last decade of the last millennium. More recent answers to similar questions on different years appear to reveal the same pattern of losses.
Ministers have often said that the ECGD does not operate to subsidise international trade, but to support and insure it. If the ECGD is an insurance policy, it is one that makes a staggering loss every year. When that happens on such a sustained and consistent basis and on such a scale, we must question the ministerial assertions. The figures are compelling, and they leave little room for any conclusion other than that the ECGD operates to subsidise the arms trade significantly. That raises issues of substantial political, moral and economic importance.
Politically, we must confront what appears to be the simple fact that a covert subsidy for the arms trade exists, which would be an overt breach of Government policy. As my hon. Friend the Member for Leeds, North-West suggested, the ECGD is specifically required by the Government to operate with reasonable confidence that it will break even. It is not remotely breaking even on arms deals and it makes losses year on year. If the ECGD is confident that it is breaking even in the sector, its confidence seems badly misplaced.
If that is the case, we must ask significant questions. How can we require the ECGD to break even when we allow it to sustain losses on such a scale? How can we decry any subsidising role for the ECGD while simultaneously allowing it to fulfil exactly that role? Those are questions of profound political importance, and I trust that the Minister will address them.
The figures also raise a moral issue for us all. The arms sector, in which the ECGD operates, is no ordinary industrial or manufacturing sector, but one of the most sensitive sectors of all. That requires us to answer a simple question: do we believe that it is right for the weapons trade to be subsidised by our Government? I am not a Quaker or a pacifist. I believe, albeit reluctantly, that in our dangerous world it is necessary for nations to be armed and able to defend themselves. That means that I believe it legitimate to make and sell arms, but I question whether it is right for the Government to underwrite that trade to the extent that they manifestly do.

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Consider the countries and people to whom we have sold arms, and the extent to which they have benefited from such subsidies. Saddam Hussein has been the lucky beneficiary of £630 million of arms subsidies, not a penny of which has been recovered. In today's time of great peril, it seems that we could sell arms to Pakistan and India, backed by ECGD support. I hope that I am wrong, but I fear that I may not be. Subsidising arms deals to that theatre at this moment may not make the world safer.
The extent of the apparent subsidy seems to raise large economic issues. Apart from the domestic consequence of diverting such sums to the arms trade, the subsidy surely distorts the economies of the countries to which we sell the weapons. especially developing countries. That means that their scant resources are being diverted to arms deals. Many people—not only in the House, but in the country as a whole—already despair at the amount that developing countries spend on weapons. That money could be spent on schools, medicines or economic infrastructure, but our Government are apparently offering some of those nations subsidies to encourage them to continue buying arms that they may not need.
My right hon. Friend the Chancellor appears already to understand that. Under the 1998 Mauritius mandate, to which my hon. Friend the Member for Leeds, North-West referred, my right hon. Friend announced the end of support for arms export sales to the world's most highly indebted poor countries. That is warmly to be welcomed, but we must follow that lead and extend the policy globally. We shall then have an ethical policy of which we can all rightly be proud.
11.16 am
Sue Doughty: I, too, begin by declaring my credentials: I am a Quaker—a member of the Religious Society of Friends. That does not necessarily bring with it total acceptance of the idea that we cannot have arms anywhere, and each of us constantly searches our conscience to work out where peacekeeping and justice are necessary. We do not simply say "No!" in every situation; we must think about what we do. Like other hon. Members in the Room, however, I have come to the conclusion that the ECGD should not be involved in the arms trade. Its involvement in such things does morals, ethics and the ethical dimension of our foreign policy no good. It also seems to cost us money. which we could invest in other countries positively rather than negatively.
ECGD export credit guarantees for defence-related sales have grown in recent years, which makes it a priority that we examine the department's activities. An answer that I received to a parliamentary question shows that £0.37 billion of guarantees were issued for exports of defence equipment in 1996–97. Under this Government, that figure has risen every year, and it reached £2.73 billion in 2000–01, which is the most recent year recorded.
I do not want to take a cheap swipe at the Government's ethical foreign policy. The intentions are there, but we need much stronger commitments, and if that means anything, it means examining the ECGD
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and arms exports. We know that the arms trade is subsidised using taxpayers' money. The ECGD succeeds in breaking even across all the exports that it supports, but that is not true of the defence sector. The net cash loss per annum for defence-related guarantees was £57 million per annum, but it has reached £80 million per annum during this Government's years in power. On top of that, it can be argued that the risks involved in export guarantees mean that the true cost of the ECGD's subsidy to the arms trade is as high as £227 million.
We must ask ourselves why arms exporters cannot go to the private market to cover risks, because if they can find cover there, they should. If private investors find the risks too high, they are surely also too high for the British taxpayer. The net cost to the ECGD confirms that.
Supporters of the subsidy to the arms trade advance various arguments in its favour, such as the fact that it provides employment, supports research and development and contributes to British technological excellence and the security of domestic sources of defence procurement. However, one could almost put those arguments in favour of the drugs trade. Last week, we heard of a big gang bust in south London and of the way of life of some of the people involved. One could say that getting rid of drugs gangs would cost jobs or car sales—that logic does not seem too different from that used by supporters of the subsidy.
Let us consider that logic. Ministry of Defence economists concluded in their analysis last December that the economic costs of reducing defence exports are relatively small and largely one-off, and they suggested that the transfer of resources from a capital-intensive industry such as arms production to a more labour-intensive industry might mean a net increase in employment.
Reference has already been made to the report "The Subsidy Trap", published by Oxford Research Group and Saferworld, which further undermines the claims about jobs in the arms sector. It estimates that each job in defence exports receives a subsidy of £4,200, although those figures can cut both ways and people can claim that they mean or do not mean certain things. However, whatever one says, Government subsidy is everywhere in arms exports. It could go somewhere else—to railways, renewable energies or forces for the sustainable environment. The engineers could be redeployed, and their skills would have a role elsewhere.
When considering technological excellence and security of supply, we still have to take a realistic approach based on the dangers and challenges that we face. Our involvement in recent conflicts has been as a member of international coalitions based on our membership of the North Atlantic Treaty Organisation and the European Union. Defence procurement takes place with our allies, as in the case of the Eurofighter. For those who believe that that is the way we should go, the development of such co-operation is much better for our security and it will do more to strengthen than to undermine it.
We must remember, on behalf of the Government, what our over-zealous and unethical pursuit of the arms trade has led to in the past, and this debate is part of that. Sales have been made to countries such as

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Indonesia, which have used the arms for internal repression and external aggression. Efforts have been made, including this Session's Export Control Bill, to ensure that that does not happen in future—I know that the Minister will come to that— but there are loopholes in that Bill, which I know my hon. Friend the Member for Twickenham (Dr. Cable) will refer to.
Mark Thomas, of Channel 4, found that, within a week or two, he could become a middleman arms broker, facilitating the sale to Zimbabwe of gun parts originating in Britain. At the time, we were friendly with some countries or hostile regimes to which we sold arms. How do we know what arms Iraq has? Because we sold Iraq the arms and we have the receipt, so we know that Saddam Hussein has dangerous weapons.
Sometimes we do not even think before we sell, or we think the wrong thoughts. There are ethical considerations that cannot be ignored—this is a matter not just of subsidy, but of ethics. The Government have taken positive steps by stopping the use of guarantees for exports to some of the world's poorest and most indebted countries, and we all welcome that, but there is still concern about exports to India and to Indonesia, the instability of conflict areas such as Kashmir and the message that the continued sales sends to the countries involved. Jack Straw says that the deal was not intended to support the conflict, but we are sending mixed messages.
Mr. Deputy Speaker (Mr. Frank Cook): Order. In the Chamber, we refer to Members by either their Government post or their constituency, not by their Christian name and surname.
Sue Doughty: Thank you, Mr. Deputy Speaker. I should have said Foreign Secretary, and I take your point entirely.
People are not happy about the taxpayer's role in such conflicts. Our priority, and I hope that the Government will continue with this, is to assist in achieving peaceful resolutions rather than to support conflict. Although nations have the right to defend themselves, I am no cheerleader for the arms trade. It is part of international trade, but we should not help it through Government subsidy. We must negotiate and, if necessary, act unilaterally to make our arms trade an ethical exporter or to bring it as near as possible to a strict definition of an ethical exporter. Conducted ethically, the trade may even work towards greater global stability.
I must make a further point on the ECGD and corruption. Susan Hawley, for Cornerhouse, presented a paper on that subject at the "Beyond Best Practice" seminar in Parliament on 23 May. The paper identified the amount of bribery undertaken by British business and identified the ECGD as an organisation with a long history of backing projects involving corruption. Bribery by British businesses remains a significant problem, despite the OECD convention, and Gary Campk in of the CBI said recently:
"The CBI and British business is totally against bribery, corruption and extortion. But these sort of issues are often about the way you do business."
A document entitled "Transparency International Bribe Payers Index" shows that, this year, Britain comes well behind other European countries in that respect.
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None the less, the top three corrupt industries are construction and public works, arms and defence, and oil and gas. There is a lot of corruption in those industries, and we need the ECGD to take a lead in eliminating it. The ECGD needs to review its policies, because export credit is still being given to corruption-prone businesses. It must play a greater role in sharpening the Government's anti-corruption measures and commit itself to greater transparency.
In concluding, one might ask what the ECGD is for. It results in a peculiar subsidy that is taken from the better side of our export trade and given to the arms business. That is totally unacceptable. However, at the 23 May seminar, we heard nothing about the ECGD promoting renewable energy, which is a force for peace and economic development in the world's poorest countries. If we are to retain the ECGD, we should ask that it support sustainable businesses that benefit British exports and do good rather than harm in the world overall.
11.27 am
Harry Cohen: First, I congratulate my hon. Friend the Member for Leeds, North-West (Mr. Best) on securing the debate and presenting it so well. I agree with him and the other hon. Members who have spoken in their criticisms of the ECGD.
I quote New Statesman, which produced a supplement for the arms industry entitled "The Defence Business". Louise Bowman wrote an article referring to the issues that we are discussing:
"Export guarantees are a way of offering finance to the buyer on the cheap—at the expense of the vendor country's taxpayers"—
in other words, us. She continued:
"At its simplest, the arms buyer borrows money from a bank to pay for the goods. The export credit agency (ECA) in the vendor country, whose industry is selling the arms, stands surety for the loan. Because the ECA is a government agency, the loan is backed by the Government and—this is the key—so qualifies for the lowest rates of interest."
Under such arrangements, and with guarantees from our Government and our taxpayers, we are subsidising foreign companies that want to buy arms. We often subsidise foreign Governments who want to buy arms. My hon. Friend the Member for Wellingborough (Mr. Stinchcombe) is right to say that we subsidised Saddam Hussein with about £630 million for armaments for which we have received not a penny back.
Nigel Griffiths: We did not do that.
Harry Cohen: No, the Labour Government did not do that, but the last Conservative Government did. However, that is the system under which the ECGD operates, which led to that situation. Some £4,100 million of military-related guarantees are still at risk.
Oxford Research Group, which has done a lot of excellent work, estimates that the net subsidy via the ECGD is £227 million per annum. The ECGD persistently makes losses, although Ministers have said that it is supposed to break even and have given clear instructions to that effect. It has made losses every year

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for the past 12, and the figures are illuminating. as in no year has the premium earned come anywhere near the claims paid. For example, in 1991–92, £11 million of premium was earned and £79 million in claims paid—a sevenfold difference. The claims recovered made only a small dent in the deficit. That pattern is repeated year after year, with a fivefold or sixfold difference.
Dr. Jenny Tonge: Does the hon. Gentleman recall that, in a previous debate in this Chamber on the ECGD, a Minister denied that there was any cost to the taxpayer?
Harry Cohen: I hear that point and I know that that was the Government's position, but it is contradicted by figures in parliamentary answers. If the subsidy is not direct, it is a back-door subsidy of the size that I mentioned. Despite ministerial requirements that the ECGD should break even, there have been consistent losses, year after year. That is why my hon. Friend the Member for Leeds, North-West and I have sent a joint letter to the Comptroller and Auditor General, asking him to meet us to discuss the issue. The ECGD is clearly not operating in the way that it is required to operate.
The ECG is only part of the overall subsidy to the arms industry. The Campaign Against Arms Trade has just issued its document "Shelling Out", which details the amounts involved and shows that the overall subsidy is £763 million a year—that is, £30 for every person in this country ever year, despite the fact that defence constitutes only 2 per cent. of our overall exports. We could build 10 hospitals or 100 schools with that subsidy.
I want to list several criticisms. The arms that we sell end up in the hands of people for whom they are not intended and there is no end-user requirement on arms exports. That creates all sorts of misery, war and conflict in other parts of the world.
One consequence is that refugees seek to escape those conflicts, which have been fuelled by our armaments and armaments subsidies. Those refugees then come to Britain and we are told every day by the press, such as the Daily Express, that asylum carries a cost, which it does. It is right to offer asylum, because we must treat people decently and not allow them to be tortured or killed, but of course that costs money. That is a hidden subsidy of the arms trade, which should be added to the bills already identified by the Campaign Against Arms Trade, Oxford Research Group and Saferworld.
The arms trade also does harm through wars worldwide. My hon. Friend the Member for Wellingborough has tabled an early-day motion emphasising that no impact assessment has been carried out on the arms trade or the work of the ECGD. There is a licensing system, but that is not the same as an impact assessment covering human rights, the effect on the environment and the effect of wars and refugees. Such an assessment should be carried out before subsidies are given.
The Government and those who favour subsidies for the arms trade often make the excuse that many jobs are involved. "The Subsidy Trap", published in July 2001 by Oxford Research Group, estimates that annual
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Government subsidies for arms exports are about £420 million. That is less than the figure in "Shelling Out", but still £4,600 for every job in arms exports. In December 2001, a Ministry of Defence economist and independent academics teamed up to publish a report on the economic impact of halving defence exports, which concluded:
"The economic costs of reducing defence exports are relatively small and largely one-off."
It went on to suggest that employment levels are likely to benefit from investments being transferred to more labour-intensive, but lower wage, economic activities. I believe that we could create more jobs and more income for the nation by putting such subsidies directly into productive jobs.
We must consider the issue of free trade and protectionism. We are told by the Americans and members of our Government who are in favour of globalisation that we need to end protectionism and subsidies, but subsidies go directly to the arms trade, which contradicts what they say. Those subsidies amount to a trade barrier. There is consensus in the OECD on the effect of such subsidies in other areas, which are restricted, but that does not apply in agriculture and defence, so all sorts of hidden subsidies occur as a result. They distort overall Government borrowing because we have to pick up the bills, especially in the case of default, and they penalise other productive sectors.
In the example of the ECGD, which breaks even overall, civil industry—productive industry—is paying the bill for subsidies to non-productive areas, such as defence, when the money should go to productive sectors of the economy. Why not let the market do the job anyway? There are plenty of other credit agencies. Why not let the arms industry live or die by the market, as other areas of the economy are being told to do?
I believe that the Government have proposed a 6 per cent. rate of return on capital, as the New Statesman article said. That is welcome to a degree, although the arms industry is already campaigning against it. Even if it is implemented, will it be required? If the ECGD is supposed to break even, it will not, so is it just another target that will not be met? For those reasons, all Government subsidies and credits to the arms industry should be ended completely. That is long overdue.
11.39 am
Mrs. Alice Mahon: I shall be brief. I, too, thank my hon. Friend the Member for Leeds, North-West (Mr. Best) for obtaining the debate. Hon. Members have expressed their opinion on war, so I shall express mine. I am not a pacifist, although I wish I had the strength of mind to be one. I am probably one of the world's natural warriors, but I am interested in conflict resolution and I seem to spend most of my working life concentrating on that. If this country were attacked, however, I would hope that we had the correct arms to defend ourselves.
For that reason, I realise that we cannot do without some sort of arms trade, but I do not believe that our taxes should be used to subsidise other regimes through it. I agree with my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) that we can do nothing about the end use of arms, and there have been tragic

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consequences from end-use in our lifetime—Saddam Hussein has been mentioned, and I went to East Timor during the referendum and saw the suffering there. Perhaps we should concentrate on that. We carried on selling to Indonesia when we knew that wholesale slaughter was going on in East Timor.
What the Government do in my name is hugely important to me. The ECGD is clearly subsidising the arms industry, and we are still helping India and Pakistan to increase their arms, which fills me with horror. They were teetering on the brink of nuclear war just weeks ago, and that threat has not gone away.
A number of other Members have tabled early-day motions, such as that condemning the sale of F 16 fighter aircraft to Israel. We cannot control end use. I shall give an example. Earlier today, the sovereign so-called democracy of Israel used an F 16 to fire a missile into a residential area, supposedly to assassinate a Hamas leader. So far, 16 civilians have died, eight of them children. The incident is being called the slaughter of the innocents, which it certainly is.
That slaughter was carried out not by an organisation operating outside the state or an organisation from an aspiring state, but by the state, taking part in murder. The fact that eight civilians who died were children is coincidental. The attack was ordered by Ariel Sharon, who is already dripping in blood from Sabra and Shatila. I want an answer from the Government on why the rules for obtaining export licences were changed, allowing British components for the F16 fighter to be sold to Israel via America. Will the Minister explain the ethical dimension of allowing the Department to subsidise the arms trade and grant licences to countries such as Israel and, in the past, Iraq and Indonesia?
As other hon. Members have said, if we are to subsidise, we should do so for humanitarian reasons. A company in my constituency made a terrific product—drills for obtaining water in developing countries. I bet that it would love a subsidy. It did a useful job, as most of the developing world is without clean water supplies, and I would like my taxes and those of my constituents to go on something like that. I agree with the hon. Member for Guildford (Sue Doughty), who talked about sustainable energy and worthwhile projects, which we would all like to see.
I want to speak only briefly, so I end by pleading with the Government and the Minister to take note of the extremely sensible advice of the Quadripartite Committee, which is that they should stop subsidising the arms trade. If there is talk of ethical dimensions to policy, let us put our money where our mouth is and carry it out for once.
11.44 am
Dr. Vincent Cable: I congratulate the hon. Member for Leeds, North-West (Mr. Best) on choosing this important subject, and on the brevity and clarity with which he introduced it. He thereby gave other hon. Members the opportunity to develop arguments in a manner that is rather unusual in this Chamber, where the introductory speeches are often rather self-indulgent.
Most hon. Members who have spoken have declared where they come from, spiritually and ideologically. The hon. Member for Wellingborough (Mr. Stinchcombe)
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called himself a Christian socialist, and my hon. Friend the Member for Guildford (Sue Doughty) described herself as approaching the subject as a Quaker. Like her, I had my spiritual upbringing in the Quaker meeting house in York, although I fear that I have regressed.
I approach the issue from the standpoint of an economic liberal. I do not quarrel with the basic proposition that there has to be an arms trade—countries have to defend themselves, so they have to acquire arms, which have to come from somewhere, and have to be bought and sold across frontiers. There is, therefore, a legitimate role for trade and for the UK, both as an importer and an exporter of arms.
However, the arms trade is different from trade in other products. It therefore has to be hedged with regulation to take account of the dangers of internal repression and of the sort of instance described by the hon. Member for Halifax (Mrs. Mahon), in which the arms export trade can fuel conflict. I take come comfort from the strong position taken by the IMF, which has been extremely critical of the role played by export credit guarantee agencies, not only the British one, in relation to the arms trade. It argues that normally, when an export credit guarantee operates for the supply of, say, machine tools or a power station, it is supplying a productive asset that generates income and wealth. It therefore contributes to development and that development helps the country to repay the debt that it has acquired. However, that does not apply in the case of the arms trade, because what is being sold is an unproductive asset. Weapons generate no income or wealth. One has, therefore, to be extraordinarily careful to ensure that the supply of weapons under export credit agreements does not undermine the development of the countries concerned. The IMF has taken a critical view of the role of export guarantee agencies. This is not just a moral issue, it is also an economic one.
I was fortunate enough to introduce a debate on the subject in February 2000, and I made many of the points that the hon. Member for Leeds, North-West has made today. I want not to go over that ground again, but to identify the areas in which Government policy has moved on, so that we can update the debate. I would point to two factors. First, the role of the ECGD has been reviewed—indeed, I think that it is now in the middle of a second review. There is clearly some discomfort in Government about it, and I believe that that arises from wondering why the ECGD is not turned over to the private sector. The Government have been happy to do that with National Air Traffic Services and other organisations, so if the ECGD is purely commercial and will be subject to commercial discipline, why is it not privatised? That would be a logical step for a body that was subject to full commercial discipline, but it has not happened; the ECGD has been retained as a public agency. Therefore, Members of this House have, very reasonably, asked why, if it is a public agency subject to public policy concerns, we should not have a look at what it is doing.
That has raised several secondary issues. The environmental agencies are rightly asking why a public body is providing credits that are, arguably, subsidised, to promote coal burning in power stations, which undermines the Government's Kyoto objectives. Questions are also asked, as they have been today, about why the organisation is apparently promoting

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armaments exports. That is important, because of the proportion of the ECGD's portfolio represented by the armaments business. If that were only 5 or 10 per cent., as it was in the 1960s and 1970s, it would not be an issue; we would not be debating it. However, the arms trade is now central to the role of the ECGD. Some 40 to 50 per cent. of outstanding debt to the ECGD relates to armaments business. Last year, 50 per cent. of its new business was arms. That might have been a blip. However, in recent years, the armaments industry has been the dominant industry to be supported by ECGD arrangements. To summarise, there is a big debate about the ECGD and its role. If it is commercial, why is it not private? If it is public, why does it not support public policy objectives?
The second big change since I introduced the debate a couple of years ago is the evolution of Government policy towards arms exports. The Minister will know about the Export Control Bill, as he piloted it through the House. I trust that we will not hear any more about it tomorrow on the Floor of the House, but we are not quite sure about that. It has almost completed its passage through Parliament. In general, my colleagues and I welcome it, and we also welcome the fact that the Government took the initiative to introduce this legislation, which provides a framework of discipline for arms exports and licensing.
However, there has been much ambiguity in the Government's attitude towards arms exports, notably in respect of sustainability. The Government have ignored an all-party consensus on that issue, hence the Tanzanian deal—on which, as the Minister knows, I have strong views, and about which I have spoken in the main Chamber. There is also a lack of effective controls over deals involving third countries, which has led to the current arrangements in relation to Israel.
There has been a lack of transparency, because the Government have chosen to ignore the recommendations of the Quadripartite Committee. That is very important in the context of the narrow discussion on subsidies, because we do not know how much of the arms section of the ECGD portfolio is subsidised. The issue is wrapped in secrecy, and the Department's annual report hardly refers to the arms part of its business, even though it accounts for almost 50 per cent. of its activity. There is very little transparency and clarity and we have little idea of what is actually going on.
Dr. Tonge: Does my hon. Friend agree that one of the amendments that we tried to push through to strengthen the prior scrutiny provisions in the Export Control Bill would have ensured much greater transparency and enabled the whole of government to see where the deals were being done? That might have brought the ECGD under the control of Parliament rather than one or two Ministers.
Dr. Cable: I agree, and that is the single most disappointing retreat that the Government have made in this policy area. It is relevant not only to licensing but to the way in which the deals are financed.
I shall make a final comment on Government policy, before turning to the narrow issue of subsidy. I am worried because the Government have been at least
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partially captured by the industry. About 10 days ago, BAE Systems made an outrageous statement demanding a monopoly in Government arms contracts. It was an outrageous demand and I am pleased that Defence Ministers robustly repudiated it. None the less, something has given BAE Systems the expectation that Government Ministers are there to do its bidding. That is a worrying and alarming indication of the way in which the Ministry of Defence and the Department of Trade and Industry have handled their relationships with the industry. The subsidy issue is an integral part of that.
When I raised the issue of subsidy in a debate more than two years ago, I was told, as the Minister has obviously said to Labour Members now, that our figures were out of date and that the Government would demonstrate to us in the course of time that they had tightened up on implicit subsidies through defaults on ECGD contracts, so there was no subsidy at all.
However, the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) asked a penetrating question that demonstrated that the net loss from ECGD business is accelerating, not declining. While this Government have been in power there has been a net cash loss of £80 million a year, as opposed to £57 million a year before 1997. That is expressed in simple cash terms, but the cash losses understate the extent of the subsidy.
As hon. Members have already said, two major reputable academic studies have cast light on the problem. The first one to be published, to which we first had access a few years ago, was the York study conducted by Professor Hartley and his colleagues, which focused on the fact that the ECGD was required merely to break even, rather than to generate the 6 per cent. return required of organisations such as the Post Office and London Underground. The subsidy was calculated on that basis. The ECGD has subsequently said that it does not merely break even, but makes a 5 per cent. return on its capital. The problem is that we do not know the return on its arms business, because it does not say; it has not broken the figures down and it probably does not analyse them. That is the department's defence, but it is rather shaky.
A more sophisticated study, which was recently carried out at Oxford, nails down the fully subsidised nature of the department's arms activities. It examined the cost of export credit guarantees, which are, effectively, a form of political risk insurance provided by the ECGD to arms exporters. Those involved in the study went round the market asking what deals would have cost had they been financed in the international capital markets, particularly using the new derivatives available in those markets. They then applied the same weighting for risk that would apply in a purely commercial transaction. The result was a sophisticated, methodologically faultless study, which came up with a figure of £225 million a year for the subsidy to the arms exporters. Without it, they would have had to pay higher premiums in the market.
To conclude, I do not understand why the Government are so reluctant to apply market discipline to arms exporters. After all, it is now accepted that many aspects of PFI projects must be financed in the market and carry the full market cost. Why should our arms exporters be exempt from that discipline? Ministers

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have never satisfactorily answered that question, and the hon. Member for Leeds, North-West has performed a valuable service in continuing to focus their attention on it.
11.57 am
Mr. Robert Key: I, too, start by congratulating the hon. Member for Leeds, North-West (Mr. Best), who initiated the debate. It is important that we have the opportunity to air our feelings about these extremely important issues on behalf of our constituents, and I shall seek to do just that.
Hon. Members seem to have been declaring interests, so I had better declare mine. Earlier this year in the main Chamber, I said that it might be a good idea if we declared where we were coming from on issues with moral and ethical dimensions. I therefore have no difficulty in saying that I am a fully paid-up member of the Church of England and that I take my religion seriously.
All those who have spoken have considered only one side of the equation as regards exports, and particularly defence exports, and I shall seek to redress the balance somewhat. I look forward to the Minister's comments; indeed, I think that he might even have some news for us, because we are expecting an announcement quite soon.
I want to move the debate from utopia to the real world. It has always been my understanding that the ECGD's purpose was to share risk in the national interest, not to subsidise exports. That is a fundamental difference in view between the hon. Member for Leeds, North-West and myself.
The Conservative party has supported arms sales to foreign Governments where those sales conformed to the accepted consolidated criteria that have been put in place. Arms should be sold only where we are satisfied that they will be used for the legitimate purposes of security and defence. During the recent stand-off between India and Pakistan, my right hon. Friend the Member for Devizes (Mr. Ancram) said that we should temporarily suspend arms sales to the region. That is now inappropriate in the light of the de-escalation of tension between the two countries. There is therefore no doubt that we take a pragmatic approach, but it is based on a strong ethical foundation.
Harry Cohen: Will the hon. Gentleman give way?
Mr. Key: I really do not have the time.
Harry Cohen rose—
Mr. Key: All right, but only because it is the hon. Member for Leyton and Wanstead (Harry Cohen).
Harry Cohen: Will the hon. Gentleman say whether the previous Conservative Government were satisfied that it was in the interests of security and defence to give Saddam Hussein an ECGD subsidy?
Mr. Key: I was not a Minister at the time, and cannot answer for the then Conservative Government, much as that will disappoint the hon. Gentleman.
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Hon. Members who are not Ministers have no access to intelligence or defence reports or to the diplomatic analysis available to the Government. Only the Government have that information—and quite right, too. They have the legitimate right to make executive decisions on exports, and we scrutinise those decisions under our constitution through the Select Committee system. The Defence Committee, as the hon. Gentleman knows because he served on it with me, has access to secret information on a limited basis, which can help to inform us. For those reasons, however, my party and I reject the suggestion that there should be prior parliamentary scrutiny. In the end, the Executive have the right to govern, and only they have the information.
Mrs. Mahon: Will the hon. Gentleman give way?
Mr. Key: No, I am going to make progress.
Under the United Nations charter, countries have the right to self-defence. I believe that it is morally bankrupt to say, "Let's trust the United Nations to sort out the world's problems and accept that nations will buy arms—but not from my country, because I am morally superior." That is not a sustainable argument.
The overriding reason for the existence of the United Kingdom defence industry is, always has been, and always will be the supply of equipment and services needed by the British armed forces to ensure that our country's national security interests are protected. Exports are increasingly vital for the continued maintenance of a viable defence industrial base in the United Kingdom, and the industry cannot be sustained by reliance on procurement by the Ministry of Defence alone. Due to the high technology input and the cost of a large proportion of the defence industry's output, it is essential to lengthen production runs and reduce unit costs. Therefore, it is vital to export.
The benefits of the United Kingdom defence exports to the Government in reducing defence equipment costs outweigh their cost by a significant margin. Rather than being subsidised, as we have heard consistently from hon. Members today, defence exports represent a significant net benefit to the United Kingdom economy. Sales averaged about £6 billion in 1998–99 and supported almost 100,000 of a total of 400,000 defence jobs. Many of those were high quality jobs in cutting-edge, high-technology industry.
It has been estimated that the ending of defence exports from the United Kingdom would involve a one-off adjustment cost of between £4 billion and £5 billion, which is equivalent to about 0.5 per cent. of one year's gross domestic product. In addition, there would be a continuous net cost to the taxpayer of between £90 million and £200 million a year.
The Government's policy of supporting the legitimate efforts of the United Kingdom industry to win export orders are primarily based on their contribution to our defence and international security interests. Defence exports help to support a strong United Kingdom defence industry and contribute to the security of our friends and allies.
Dr. Tonge: Will the hon. Gentleman give way?
Mr. Key: I am sorry, but I am going to make progress; the debate so far has been very one-sided.

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The benefit of the defence exports is felt by not only British companies but by United Kingdom industry as a whole, because defence exports are a catalyst for national economic and technological development. Exports also help to defray the costs of the United Kingdom's research and development. The Ministry of Defence has estimated that defence exports through extended production runs reduced unit costs by £350 million to £400 million per year from the United Kingdom defence budget.
It is unsurprising that the United Kingdom's share of the world defence export market is rising, because the global defence market has been in steady decline since the mid-1980s. That market is still lucrative and valuable financially while also having important intrinsic strategic and political implications. The benefits for the companies involved and for the wider British economy are substantial. The market protects the United Kingdom's national interests through the maintenance of our indigenous manufacturing capability, and British political influence around the world. Companies often fund a considerable portion of the research and development activities that develop the equipment needed by the British armed forces from export-generated income. Exports help to keep the United Kingdom at the cutting edge of high technology development, giving our armed forces a technological advantage. The Export Credits Guarantee Department is probably the most reviewed agency of Government at the moment. I hope that the Government will, within the next 24 hours, stop dithering and tell us what they plan for the ECGD.
Defence should be judged by the same criteria as any other sector when ECGD cover is considered. Once it has fulfilled the conditions of the consolidated criteria, it is no different from any other industry. I hope that the ECGD, and defence exports, will be treated accordingly. I also hope that the ECGD process will not be used to second-guess issues such as sustainable development—subjects on which we have had substantial debate both in the House of Commons and in the other place.
If an export licence is issued by the Government, firm and open reasons should be given for any subsequent refusal of ECGD support. Examples are regularly quoted of cases in which Treasury intervention—or some other mysterious intervention—stops a particular export, even if it is a reorder by a NATO ally, but the company involved is never told. Sometimes hints are dropped, but that is as far as it goes. If we seek transparency, that is an area in which there should be more; companies should know why their applications are being rejected.
Some aspects of defence procurement might not be shared by the majority of other bidders for ECGD support. Project fulfilment often spans many years, the customers are usually Governments, not companies or consumers, and the risks are sometimes political as well as commercial. Banks will often refuse to provide cover in such circumstances, even when an export licence has been granted. The hon. Member for Leyton and Wanstead says that we should let companies live and die by the market, but that would not necessarily be in the national interest. If the banks will not—for a very good
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reason—take on a risk that the Government assess from their information to be in the national interest, the hon. Gentleman's argument falls down. Our main competitors enjoy strong and cheap support from their equivalent Government agencies for defence business. So long as that situation remains, we need comparable support from the UK Government to ensure that there is a sustainable approach to risk. This is all about risk management, not about subsidy.
What does the ECGD support? Is this just about arms? Of course it is not. The exports that it has supported have included textile machinery for Uzbekistan and power stations for China. Yes, there has been defence-related equipment, but civil aircraft take 21 per cent. of the budget, and among £800 million of overseas investments there is an office building in Morocco. The projects featured in the annual report include double-decker buses for Hong Kong, low-cost housing for Romania, road improvement schemes for the Pacific island of Vanuatu, a pharmaceutical plant in Croatia, social services vehicles for Barbados, navigational equipment for Trinidad and Tobago and investment in an aluminium smelter in Mozambique, generating 800 jobs.
I mention those because they are all part of the same equation; we cannot separate defence from everything else. It is straightforward. If, as a nation, we are to come back to the moral and ethical position, apart from ensuring that we have a healthy industrial base for the prosperity of our people, we need to reduce the need for arms around the world. That has been a prime mover in the whole of western strategic defence analysis.
We have learnt the lessons of the cold war, and we are now learning the lessons of terrorism and the consequences of asymmetric warfare. We see the horrors of mines around the world and the damage that they do to the economy. We are talking about areas of instability, such as the great arc of instability from the Caucasus through the middle east and along the Maghreb to the western or Atlantic end of north Africa. Instability generates a need for arms and leads to economic migration and further political and military instability.
In 1996, I served on the Select Committee on Defence. I cannot remember whether the hon. Member for Leyton and Wanstead was on the Committee then—I think that he was. We visited nearly all the countries on the northern shores of the Mediterranean and talked to them about reducing risk, economic inequalities and the need to migrate.
The root cause of all the instability is poverty. All the nations of the developed world need to start thinking differently. The hon. Gentleman has been thinking along those lines since 1996 at least, when the Committee produced the report outlining that need. If we talk about reducing the need for arms, we should also talk about reducing poverty and the lack of food, water and education, and health problems—especially women's health. They are the root causes.
Dr. Tonge: Will the hon. Gentleman give way?
Mr. Key: In a moment. We are talking about the need to support some of the most vulnerable people in the

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world. We must all promote that new thinking. As a Conservative, I think that that is consistent with my political beliefs.
Dr. Tonge: I thank the hon. Gentleman. If he believes that poverty is the cause of all the instability he referred to, does he not feel a little ashamed that the Conservative Government reduced the proportion of GNP spent on overseas aid to 0.25 per cent, and that, as the Conservative spokesman on international development has explained, it is not his party's policy to raise the proportion to the 0.7 per cent. that the United Nations recommends?
Mr. Key: That is not an accurate representation of my party's policy. I certainly do not feel any shame. I feel disappointment, and did so many years ago, when I was Parliamentary Private Secretary to the then Minister for Overseas Development, Chris Patten. We were constantly battling with the Treasury, just as people in Departments do now, to try to increase the proportion of the budget that went to our Department.
The hon. Member for Guildford (Sue Doughty) said that the ECGD must take a lead in eliminating corruption. That is an extraordinary request to make of the ECGD. I do not think that such a role is in its constitution. Let us get back to reality.
It is important to recognise that the largest slice of ECGD support—53 per cent. was the latest figure that I could get hold of—goes to civil programmes. Those will be crucial if we are to start eliminating the poverty that leads to all the instability that leads to the arms trade.
I hope that we can get more of a note of realism in the debate. If all we can do is try to stop the arms trade, we will not get very far forward. I read with interest the letter from bishops and others in The Times yesterday about that issue. I thought that their hearts were wholly in the right place, but that they should get their feet on the ground and think of the broader equation that I have tried to outline.
I hope that we shall get some news about the ECGD, because there have been four ongoing reviews in the last year or so. I hope that the Minister will have some important messages for us.
12.14 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): I congratulate my hon. Friend the Member for Leeds, North-West (Mr. Best) on securing this important debate. I also congratulate all hon. Friends and hon. Members on their excellent contributions, and on giving their sincerely held views.
Before answering the five questions that my hon. Friend the Member for Leeds, North-West put, I shall set out the value of the ECGD's work. In its recent annual report, the ECGD showed that the guarantees were aimed at ensuring that countries could benefit from the expertise of UK businesses, and that UK businesses are not disadvantaged when bidding for contracts abroad, whether civil or defence related.
My right hon. Friend the Minister for Trade and Investment, Baroness Symons, presented the new and comprehensive ECGD annual report on 10 January. She stressed that it showed that exporters—with
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Government insurance and Government support—had been successful in winning orders worth billions of pounds.
More than 50 per cent. of the ECGD's support goes directly to civil contracts. I expect that civil contracts in 2001–02 will take up 70 per cent. of such support, and that the proportion taken up by defence contracts will fall to 30 per cent. Civil projects include, for example, the export of Airbus aircraft to Austria, Canada, Chile, Croatia, El Salvador, Finland, Hong Kong, Iceland, Korea, the Netherlands, Singapore, Sri Lanka, Switzerland and the United States.
All hon. Members can see that the ECGD plays an important role in supporting the aerospace industry's export drive. It also helps business to export buses to Hong Kong; it aids the construction of a port in India; it provides a desalination plant in Oman to supply fresh water for thousands of homes; it builds bridges and a 500 MW gas-fired combined-cycle power station in the Philippines; and it supports a food-packaging plant in Turkey. All those examples are testimony to the value of export credit guarantees. The ECGD also welcomes applications for sustainable energy projects—as hon. Members know, that is a subject close to my heart.
More than 30 countries received goods backed by export credit guarantees last year, and details are given in the annual report. Those countries include South Africa, the United States, Australia, Lithuania, India, Italy, Sweden and Greece. In Romania, export credit guarantees helped a UK defence manufacturer to supply border surveillance vehicles. That is a part of the world that I know well, and the whole House knows that nearby territories were subject to the worst type of ethnic cleansing. The command and control systems for South Korea's navy were supplied by UK manufacturers helped by export credit guarantees. Of course, some items that were formerly supplied using export credit guarantees were the subject of great controversy. Those include the Hawks that the Conservatives sold to Indonesia in 1990.
In answer to one of the specific questions that hon. Members raised, I should make it clear that we reject any automatic linkage between export licences and ECGD support.
My hon. Friend the Member for Wellingborough (Mr. Stinchcombe) mentioned the Mauritius mandate and demanded that ECGD cover should not be granted to the poorest developing countries. I agree. My right hon. Friend the Secretary of State told the House on 4 December:
"Export credit support for defence sales to 63 of the poorest developing countries is not generally available."—[Official Report, 4 December 2001; Vol. 376, c. 145W.]
In fact, those countries have received precisely no ECGD cover for defence items in any of the past five years. We go further than the OECD statement of principles on official export credit support to heavily indebted poor countries, which lists only 41 countries, as my hon. Friends know.
Dr. Tonge: Will the Minister give way?
Nigel Griffiths: I will not give way to the hon. Member, because she came in late and did not hear the contribution of my hon. Friend the Member for Leeds, North-West. I want to answer the points raised by hon. Members who have been here throughout.
In the past five years, export credit guarantees have not been granted for defence contracts to any African country, expect Egypt and South Africa. Total Government aid to African countries—excluding, of course, the export credit guarantees to the two countries that I mentioned—totalled £450 million in 1997–98, £575 million in 1998–99, £634 million in 1999–2000 and £778 million last year.
The UK has one of the most responsible and transparent export licensing regimes in the world. In response to questions that have been raised, I should say that neither Pakistan nor Israel has benefited from UK defence companies using ECGs in the past five years—nor, since 1998, have Indonesia and India. When Thabo Mbeki's democratic Government sought to ensure that his country and all the citizens of South Africa had the necessary protection, they awarded a contract to BAE Systems and its partners to supply 52 aircraft. An application for ECG was accepted.
I shall now turn to the four questions asked by my hon. Friend the Member for Leeds, North-West.
Dr. Cable: Before the Minister does that, I want to ask him about the transparency that he just described. Will he explain why he has just approved export licences for the sale of military equipment to the Channel Islands, including helicopter parts, machine guns and much else, given that the Channel Islands does not even have an army?
Nigel Griffiths: The issue is transparency. The hon. Gentleman knows about those export licences because the information is in the public domain, but I am happy to write to him about any specific questions that he wants to ask.
My hon. Friend the Member for Leeds, North-West asked why the National Audit Office is not examining the ECGD. As hon. Members will know, I served on the Public Accounts Committee, and I have the greatest admiration for the work of Sir John Bourn and his colleagues. They decide what they will investigate and they have clearly chosen to focus on expenditure that causes far more concern than that of the ECGD.
My hon. Friend's second point related to losses. The ECGD charges a premium to cover its costs and any expected losses, and as my right hon. Friend the Secretary of State told the House on 22 January 2002, it is her policy to eliminate subsidies from export credits. For several years, ECGD has made a net contribution to the Exchequer: £128 million in 1999 to 2000; £205 million in 2000–01; and I understand that a similar contribution is expected for 2000–02.
My hon. Friend's third question referred to the amount of ECGD support for defence manufacturers during the past 10 years, which he claimed amounted to a subsidy. Let me give the Chamber a fuller account of our stewardship since May 1997. For defence businesses supported from 17 May 1997, claims outstanding are zero. In fact, ECGD earned about £100 million in premium for defence business in the same period. The
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ECGD has actually made a net contribution. In summary, since May 1997, when the Labour Government were elected, no new business supported by ECGD for the defence sector has had claims sanctioned.
My hon. Friend's fourth question related to the need to provide figures country by country. The Secretary of State has done precisely that in her full answers to parliamentary questions. Let us be clear about how we ensure the defence of the UK. Our spending on equipment is almost £10 billion. We can—and do— buy some of that equipment abroad. We purchase other equipment from UK firms, which employ about 245,000 people in this country. Those companies also seek to export some of that equipment, or modifications of it, to other countries that want to defend their territory. That generates an income of about £5 billion a year.
Some would argue that such exports should be abolished, shrinking the defence industry to two thirds of its present size. That would not remove the need for the UK's armed forces to have equipment, but it would require the MOD to source more of it from abroad. Export credit support for defence exports is available from all the major exporting countries. Competition in the defence sector is fierce, and if UK manufacturing exporters are to remain competitive, they should have access to the same sort of support that is available to their overseas rivals.
Mrs. Mahon: Even if what is exported is used as it was in Israel this morning, against civilians? Eight children died.
Nigel Griffiths: I did refer to Israel earlier, when I assured hon. Members that my information was that Israel had not benefited from defence-related export credit guarantees for the past five years under this Government's stewardship.
I have been closely involved with the Export Control Bill, and it is important to realise and accept what the Quadripartite Committee said: we have one of the most transparent and effective export control regimes in the world. We are, however, seeking to strengthen it, because there is no complacency in our approach, and I shall describe some of the improvements that we have made.
First, we set out our ECGD business principles in 2000 to ensure that the ECGD promotes a responsible approach to business and takes account of the Government's policies on sustainable development, the environment, human rights, good governance and trade. Any support for the defence sector must now be consistent with those principles.
Secondly, we have increased transparency by ensuring that the ECGD publishes a list of guarantees in the annual report for the first time. Defence manufacturers are not exempt from the terms of confidentiality that apply to all other business sectors. Thirdly, the ECGD has strengthened its anti-corruption and due diligence procedures.

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All nations have the right to self-defence; it is enshrined in article 51 of the United Nations charter. However, many countries do not have an indigenous defence industry and rely on purchasing equipment from elsewhere to safeguard their national security.
Harry Cohen: Does Iraq have the right to self-defence?
Nigel Griffiths: Every country has the right to self-defence, but I take it that my hon. Friend is not defending some of the terrible practices in Iraq. A few moments ago he openly condemned the purchases of past decades. Indeed, even those who contributed to licensing them have recognised that they were a mistake. I hope that that answers my hon. Friend's question. [Interruption.]
Mr. Deputy Speaker (Mr. Edward O'Hara): Order. All interventions should be made from a standing position and through the Chair.
Nigel Griffiths: This has been an important debate. It has covered an issue that cuts across party differences, and many sincere contributions have been made. It is our job in government to ensure that there is no repetition of the arms-to-Iraq scandal and others. I welcome the interventions that have been made, and the keen interest shown by many Members of Parliament, particularly those who are present. For many years, they have highlighted any reprehensible practices, and they seek at all times to hold the Government accountable for export policy and the way in which export credit guarantees are given.
The debate has given those of us in government the chance to explain how our policy is working, and I urge every hon. Member to read this year's annual report. I thank my hon. Friend the Member for Leeds, North-West for securing the debate and enlightening us all.

Belarus
12.29 pm
Mr. Michael Trend: I am grateful for this opportunity to bring the situation in Belarus back to the attention of the House. This is the third time that I have raised the subject in such a debate, but I make no apology for that. The oppressed people of Belarus rely on us to give them the voice that they are denied in their own country. In July last year and July 2000, I outlined the condition of what was, and sadly remains, the most authoritarian of European countries. Since then, the position has got worse.
I should like first to welcome the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North Warwickshire (Mr. O'Brien). It is my first opportunity to welcome him to his new position. In the three debates that I have been fortunate enough to secure, he is the third Minister to reply. I regard these opportunities as important moments for Ministers to familiarise themselves with, and educate themselves on, this question. I also welcome him back to the Government, as he was a loss to them. I am sure that he will do well.
It is important for us in the free Parliaments of the world to continue to remind the authorities in Minsk that we are watching them closely and that they shall one day be called to account. Last year, the Minister for Europe spoke well of the need for the torch of liberty to be lit for Belarus. Over the years, that torch has illuminated the hidden secrets of totalitarian dictators throughout the world, been used to search out and expose the wicked deeds of tyrants and helped bring half our continent closer to the clear light of responsible government. Mr. Lukashenko and his cronies in Minsk should be in no doubt that we will continue to hold the torch of freedom for Belarus.
In the past two years, we have seen first parliamentary and then presidential elections in Belarus. Both were severely flawed. The Minister will know that the British Government said that the parliamentary elections
"failed to meet international standards for democratic elections"—[Official Report, 11 January 2001: Vol. 360, c. 603W.]
I am sure that the Government are equally critical of last year's presidential elections, in which the united opposition forces struggled against injustice and corruption. The elections were conducted in a country where there is no proper rule of law or division of powers, no legitimate Parliament and no free access to the media for the opposition forces. Electoral law in Belarus is far from fair and, inasmuch as it exists, is evaded rather than respected by the state authorities. Above all, the atmosphere of fear created by Mr. Lukashenko persists and, in recent months, has perhaps heightened. As in all totalitarian societies, fear is essential for keeping the system going. Belarus is a police state going to the bad. It remains the worst such country in Europe, and Mr. Lukashenko continues to hold the unenviable title of our continent's most tyrannical leader.
Before examining developments since the recent elections, it is important to remind the House of concerns that have existed for some time. We should not lose sight of the depth of the problems in Belarus. In recent years both the United Nations committee against

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torture and Amnesty International have commented fiercely on Lukashenko's curtailment of basic liberty and freedoms, and I will cite a few past cases that are still alive. The Belarussian authorities have still failed to initiate impartial and thorough investigations into the "disappearances" of the former Interior Minister Yury
Zakharenko in May 1999, the former first secretary chairman of the dissolved Belarussian Parliament Viktor Gonchar and his companion Anatoly Krasovsky in September 1999, and the Russian television cameraman Dmitry Zavadsky in July 2000. Amnesty International's three prisoners of conscience in Belarus—Professor Yury Bandazhevsky, Andrey Klimov and Vladmir Koudinov—remain in prison. In each case, the real reason for their imprisonment was their opposition to Mr. Lukashenko. I could mention countless other examples, but suffice it to say that our memories will go on as long as it takes.
More recently, what has happened in Belarus since the recent elections? The simple answer is that there has been an increase in state control of Belarussian society and further concentration of power in the hands of Lukashenko. His Government have failed to produce any viable plan to reform the ailing Belarussian economy, which is heading full speed towards crisis, and the European Bank for Reconstruction and Development has said that it will curtail its activities in Belarus because the country has failed to enact economic and political reforms. The EBRD announced last year that it would review its activities following the presidential elections. It now sees no evidence of a commitment to the principles of multi-party democracy, pluralism and market economics. It probably did not help that after the presidential elections Lukashenko also unseated several senior businessmen from their positions when it suited him to do so.
Lukashenko has also fallen out with his one former international ally. the Russian leader President Putin. Assaults on human rights and freedoms in Belarus are becoming even more blatant and the situation continues to deteriorate. I shall give examples of that. For some years, the Organisation for Security and Co-operation in Europe has played an important role in voicing the concerns of the free world in Minsk. After many months of worsening relations between the Belarus Government and the OSCE, the authorities have refused to extend the visa of the acting head of the OSCE's advisory and monitoring group in Belarus, Andrew Carpenter. No reason has been given for de facto expulsion of Mr. Carpenter, which means in effect that the sterling work that the OSCE has done in Belarus has come to an end. The expulsion was condemned at a recent OSCE parliamentary assembly meeting in Berlin and the Council of Europe has also registered its support for the OSCE position. It was right that the delegation from the Belarus Parliament—which was elected two years ago but which we do not recognise as legitimate—was not allowed to sit in the OSCE parliamentary assembly.
The case of two journalists of the independent regional newspaper, Pahonya, in Grodno who were convicted of libelling Mr Lukashenko during last year's presidential campaign has also caused much concern. The two men, Mikola Markevich and Pavel Mazheiko,
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were sentenced to serve up to two and a half and two years respectively in a detention camp. Amnesty International has said about the case:
"The sentencing of these journalists yet again revealed Belarus' inability to brook dissent and allow its small independent journalist community to give voice to widely shared concerns about the fate of a series of high-profile 'disappearances' in the country".
What remains of press freedom in Belarus is in a precarious position. Pahonya has now been shut down. Other journalists have been arrested and other publications are under threat. Lukashenko's reign of terror extends across all the provinces of Belarus.
Another case should give us great cause for concern. Mr Anatoly Lebedko, leader of the United Civil party, is an old friend of the Westminster Foundation for Democracy, of which I have the honour to be a governor. He has travelled widely in his campaign to put the case for the democrats of Belarus; indeed, hon. Members of all parties met him in the House only a few years ago. He too is in a position of potential personal danger. On 12 July he was summoned to the prosecutor's office and informed that a criminal case had been opened against him. The Belarus Ministry of Justice has begun a broad examination of activities of the United Civil party; the authorities demanded that they be given 5,000 documents within two days. Their intentions are clear: to get rid of the UCP and others who effectively block the Belarussian Government's attempts to achieve international legitimacy. Other political parties, independent trade unions and non-governmental organisations have also been targeted and subjected to harassment. Ordinary people as well as political leaders and journalists have been subject to criminal and administrative persecution for taking part in demonstrations: for instance, there were severe beatings of peaceful demonstrators who demanded social protection for workers and pensioners in April.
There is also a threat to freedom of religion in Belarus. The Belarus Assembly recently approved a draft bill to introduce compulsory registration of religious communities as well as other restrictions on religious freedoms in the country—which has great resonance for those of us who followed the assaults on religious freedom under the Soviet Union. In the past few weeks, we have once again heard the voice of the Keston Institute, which I am ashamed to say I have not thought about much in the past 10 years. It still exists, and has pointed out the threat that this law poses to Protestant churches and non-traditional religious movements in Belarus.
Lukashenko' s behaviour on the international scene continues to give as much concern as his tyranny at home. There have been many reports recently about the part that Belarus plays in international arms trading. Only last week, United States Congressman Christopher Smith, who was in Berlin for the OSCE parliamentary assembly, commented on his fears about the extent and nature of Lukashenko's arms dealing. In an interview with Radio Svoboda, Mr. Smith said:
"The facts I saw, both confidential and not confidential ones, evidence that Minsk is a main source of arms delivery to dictatorships and terrorists, including Iraq, for which the potential targets are the USA and British military aircrafts, patrolling the air zone. It is a special question. There is an agreement at a high level that Lukashenko supports terrorists."

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We should understand that that view is widely held in Washington. This country has a clear interest in not allowing Belarus to operate as a European arsenal of terrorism.
It is also clear that we should keep a close eye on the deteriorating relationship between Lukashenko and President Putin of Russia. Since 11 September last year, much has changed in the relationship between Russia and the west. A consequence of the improving relationship has been a falling out between the authorities in Moscow and Minsk. A few weeks ago, several parties of the Russian state Duma, including the Union of Right Forces and Yabloko, urged President Putin to press Belarus to investigate all its cases of disappearance. The leader of the Union of Right Forces, Boris Nemtsov, said that Putin is concerned about the number of people who have gone missing in Belarus. That is a great change. Last year, Putin was not prepared to use his influence for good in the Belarussian presidential elections. Now, he pours scorn on Lukashenko's wild plans for a union of equals between Belarus and Russia.
Surely those developments present the west with an opportunity. Belarus has hitherto relied heavily on moral and financial support from Russia. There is some evidence that the continual notice that we in the west give to individual cases in Belarus pays off, in that the authorities tread with greater care. How much more of an effect could President Putin have if he really decided to help sort out the disgrace that is the Government of his neighbour, Belarus?
We must also keep sight of the fact that Belarus will quite soon be the European Union's neighbour, given the EU's ever widening border. Drug traffickers and other serious criminals are allowed to operate in Belarus. The EU has a clear interest here, too.
Finally, I want to pay a personal tribute to the brave people who keep the torch of freedom alight in Belarus. The debate always returns to human rights. Those who work for human rights internationally, especially in oppressed countries, most deserve our support. International parliamentary bodies and groups such as Amnesty International continue to play an important and robust part in the fight against injustice. Our embassy staff in Belarus should also be commended, as should the OSCE mission. Charter'97 does much to bring news from Belarus to the attention of the outside world, as does Radio Free Europe and Radio Liberty. However, our greatest concern must always be for individuals. At this time, I am thinking chiefly of Mr. Lebedko.
If I have one delicate word of criticism for our own Government, it is that I still regret the closure of the British Council in Minsk. At the time of the closure, Members from both sides of the House were very critical of the Government for sending the wrong signal to the Government and democrats in Belarus. If the Minister can say anything today that might bring some hope that the Government will reconsider their decision, it would be very welcome.
The United States and European Governments, and many international bodies and observers, have rightly condemned Lukashenko's behaviour. I look to our Government today to raise their voice again in defence of the human rights of the people of Belarus. Liberty,
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the rule of law and the right to own property are at the heart of individual and collective freedom. These are denied to the people of Belarus at the moment. I urge the Government to take the opportunity to add their voice—the voice of a free and strong people—to the general condemnation of Lukashenko and to do all that they can in particular cases to advance the cause of liberty in Belarus.
12.44 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mike O'Brien): I thank the hon. Member for Windsor (Mr. Trend) for his warm words on my appointment: I am looking forward to carrying out my new responsibilities. I congratulate him on keeping issues about Belarus in the public eye. It is indeed a police state going to the bad, as the hon. Gentleman described it, and it needs to know that Members of Parliament in the UK will keep the torch of liberty burning for the people of Belarus.
It is almost exactly two years ago since the hon. Gentleman raised the issue of Belarus for a summer Adjournment debate. He raised it again last July, and now brings this important issue before the House once again. When we debated Belarus two years ago, the country was due to hold parliamentary elections. The then Minister of State noted that the flawed referendum of November 1996 had set the country on an anti-democratic path, from which it has not deviated. My hon. Friend the Member for Leicester, East (Keith Vaz) hoped that the parliamentary elections of 2000 would be used to take a step towards democracy. In last year's debate, he noted that those hopes were not fulfilled, but looked forward again to the presidential elections due last September. I regret that I am unable to bring news of any improvement in Belarus. Rather, the democracy and human rights position there has deteriorated.
Most opposition parties boycotted the parliamentary elections of October 2000. The conduct of those elections did not comply with international standards. The Organisation for Security and Co-operation in Europe, the Council of Europe and the European Union all declined to send official observers to the elections, and have not recognised the election as legitimate.
Presidential elections were held on 9 September last year, and the Belarussian electoral commission declared President Lukashenko the winner with 75 per cent. of the vote, but the OSCE's Office for Democratic Institutions and Human Rights reported that the election process had failed to meet OSCE standards. After two years and two flawed elections, President Lukashenko' s re-election regrettably appears only to have confirmed him in his anti-democratic path.
Most seriously, no progress has been made in investigating the disappearances of political opponents or the oppression of political opponents. I shall mention, as did the hon. Member for Windsor: the former Interior Minister, Yury Zakharenko, the Belarus Supreme Soviet Deputy, Viktor Gonchar, Anatoly Krasovsky and the journalist Dmitry Zavadsky. We are also worried about the prisoners of conscience to whom the hon. Member for Windsor referred: Professor Bandazhevsky, Andrey Klimov and Vladmir Koudinov. We in this country are concerned about them all. Some remain missing and no progress on these cases has been made, despite frequent expressions of concern from the international community.

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Belarus's legislature, the National Assembly, is the product of the flawed and internationally unrecognised elections of 2000. It is now considering an illiberal law, requiring the registration of religious communities. The proposed Bill would outlaw religious groups active in Belarus for fewer than 20 years or with fewer than 20 Belarus citizens. One might have anticipated that Lukashenko was the sort of person who would have sought to ban the 12 apostles. The Bill clearly sets out Lukashenko's vision for Belarus—to turn back the clock to at least 1982.
On the economy, Lukashenko has reiterated his opposition to structural reform and earlier this year assumed powers to interfere in business activities. Attempts to reach agreement with the International Monetary Fund have consistently failed. The directors of the European Bank for Reconstruction and Development reported in March that economic conditions in Belarus were such as to preclude fulfilment of the technical conditions for new lending.
The people of Belarus are being impoverished by their President. Further evidence of the path followed by Lukashenko is found in his relationship with the OSCE, which has deteriorated in the past two years. In 1997, the OSCE permanent council established an advisory and monitoring group, which was set up in Minsk in 1998. However, following the departure of the group's head official, the Belarussian authorities have refused to grant a visa for a replacement and have refused to extend the visas of other senior AMG personnel.
The hon. Member for Windsor noted the latest turn of events. The senior OSCE expatriate—Andrew Carpenter, a Briton—was told on 3 June that his visa was not to be extended and that he had until midnight to leave the country. Such behaviour by the Belarussian authorities is unacceptable and gratuitously damages relationships with other countries, such as ours.
What can we do about it? Our actions to deal with Belarus must necessarily be taken in concert with our EU and other partners. We are all exerting pressure for change but in the end the solution lies in Lukashenko's own hands; we cannot run Belarus for him. He has been in power since 1994, and he has four years of his current term left to run. The UK and other EU member states have made our position very clear. The measures taken by the EU in 1997 remain in place. They restrict ministerial contacts with Belarus, suspend aid except for humanitarian reasons or to support civil society, and suspend ratification of the EU-Belarus partnership and co-operation agreement.
EU member states will not support Belarus's membership of the Council of Europe. NATO's partnership for peace agreement, signed in 1995, remains undeveloped. Aid to Belarus by international financial institutions is restricted, going only to support small and medium-sized enterprises and the private sector, with a view to strengthening civil society. I should here point out that we have no quarrel with the people of Belarus, as the hon. Member for Windsor said. We wish to alleviate the problems they face because of the misguided policies of their leader. Giving money to Lukashenko is a waste and unless we can get help directly to the people of Belarus it is frankly better to keep the cheque book shut.
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Belarus may not be changing, but the region around it is. Belarus's western neighbour, Poland, is now a member of NATO and should soon join the EU. Belarus's north-western neighbours, Latvia and Lithuania, are candidates to join both NATO and the EU. To the south, Ukraine has just declared its intention to join NATO, and is seeking to intensify its relations with the EU, which it has stated its desire to join one day.
My right hon. Friend the Secretary of State recently launched a wider Europe initiative which aims to encourage the EU to set out a policy for its relationship with Ukraine, Moldova and Belarus after EU enlargement. Such a policy could be the basis for the fruitful development of relations between the EU and its three new eastern neighbours. We envisage enhanced agreement in a range of areas, conditional upon further reforms in the countries concerned. The Danish presidency is taking forward detailed work on these elements. On present form, Belarus looks likely to miss out on the opportunities that that would offer, but the clear option of a more beneficial relationship with the EU will soon be on the table. Belarus will need to decide how to respond.
To the east, Russia has established a new relationship with NATO. It also has a key role in the future of Belarus, not least because of Lukashenko's interest in a Russia-Belarus union. As the hon. Gentleman said, the plan seems to have been thrown into doubt following last month's meeting in St. Petersburg between Presidents Putin and Lukashenko. At the meeting, President Putin seemed lukewarm, to say the least, about the concept, and the prospect of uniting Belarus's unreformed economy with that of Russia, which is much further advanced, cannot be attractive.
We understand President Putin's wish to develop a close relationship with neighbouring states with which Russia has traditionally close ties. An undemocratic and economically dependent Belarus is a less interesting proposition, even if it is on Russia's doorstep and any union would be on its terms. The hon. Gentleman is right that we hope that the pressure for reform in Belarus will come from the east as much as the west, and we would welcome any decision by Russia to use its influence to encourage positive changes in Belarus.
The hon. Gentleman referred to reports about arms supplies and links to Iraq. We are concerned about the reports and are watching the situation carefully. President Lukashenko needs a clear warning that close relationships with Iraq would not just lead to him being frowned upon by the international community, but to it expressing its views even more strongly than that.
I repeat my congratulation to the hon. Member for Windsor on securing this debate. I also repeat the concern that the UK shares with the people of Belarus about the way in which their President is running the country into the ground. Lukashenko is leading his country backwards economically and politically, and that is unsustainable. We shall ensure that the pressure for reform, or the torch of liberty as the hon. Gentleman described it, continues at least to flicker in Belarus and is supported by parliamentarians in this country. The day will come when Belarus returns to the democratic path and the European mainstream.

Charter Holiday Industry
12.57 pm
Mr. Frank Roy: I am delighted to have secured this important debate on a subject that directly affects the lives of many people in the United Kingdom.
According to the Home Office's website, more than 38 million holiday trips were undertaken from this country last year, and of those more than 20 million were what is known as package or inclusive holidays. This week, airports throughout the UK will move vast numbers of holiday-making families to their dream destinations. The people taking those trips—to the heat of the Spanish costas, the fun of Majorca, the nightlife of Ibiza, the magic of Florida or wherever their chosen holiday resort lies—deserve the best value their money can buy.
Those people have worked hard all year. Many pay the cost of their trip with loans and will repay them in the next 12 months in time for next year's holiday. However, millions of them do not realise that they have been ripped off by greedy holiday companies. The phrases ripped off, fleeced, done, overcharged or taken for a ride all mean the same thing: people have not received value for money. Unfortunately, no one seems able or willing to give them the protection they deserve.
I do not intend to discuss the holidays from hell that we see commonly on television: the four-star hotels with no sanitation; the family rooms above a 24-hour discotheque; the half-built self-catering unit; the room with a view of the local rubbish dump; the pool with no water; the cruise ship with no hot water; and the villas flooded with too much water. I intend to highlight the need for regulation of the holiday industry to ensure a better deal for those who put their trust and hard-earned cash in the hands of holiday operators.
For some time, I have been appalled by the practices of the holiday industry, as they extract as much money from their customers as possible. However, I became even more appalled, and angry, when I discovered that those same companies paid no heed to the guidelines laid down by the Civil Aviation Authority on the serious matter of safety during flights. I quote from the CAA's "Flight Operations Bulletin on Cabin Safety":
"Emergency situations have shown that the separation of family groups, especially children, may lead to problems in emergency situations. Of particular concern is that during emergency evacuations group members separated from other members of the family, or party, might seek each other out during an evacuation process."
That is very understandable. What family or parent would not immediately ensure their child's safety in the event of an emergency evacuation from an aircraft? The guidelines continue:
"Such actions could have an adverse effect on passenger flow rates towards emergency exits and might seriously affect the outcome of an evacuation."
That is exactly what would happen if families were not seated together on their holiday flights. Undoubtedly, parents would not escape quickly from an aircraft if they knew that the rest of their family were sitting some rows behind them. They quite naturally would make their way back along the aircraft, against the flow of the other passengers, to ensure their family's safety. That delay,
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caused by seat separation at the check-in desk, could mean the difference between life and death for many people on a stricken plane.
In the same bulletin, the CAA states clearly: "Operators are recommended to develop procedures for seat allocation that takes into account the following factors

(a)Children accompanied by adults, should ideally be seated in the same row as the adult. In wide-bodied aircraft children and accompanying adults should not be separated by more than one aisle.

(b) Where such criteria is not possible, children should be separated by no more than one seat row from accompanying adults.

c) Seat allocation procedures for family groups, including adults, should reflect the above criteria."

Those are straightforward, unambiguous guidelines with no possible misinterpretation: for everyone's safety, families must sit together on aircraft. What do United Kingdom holiday companies do? That nice Mr. Thomson, not to mention Airtours, JMC and Global—in fact, nearly every charter company—charge us extra for the privilege of staying alive with our kids in an aircraft emergency.
During the past few weeks, my American intern, Jess Lorber, and I have contacted a number of well-known travel firms to find out whether they charge families for the privilege of sitting together on an aircraft. Almost 90 per cent. told us that, to guarantee a seat together, there would be an average charge of £10 per family member. However, they did not all charge £10: some gave discounted children's rates of £7 and £5. Kindness indeed. All the operators told us that that was an extra service, and the best way of ensuring that a family was seated together. One operator even told us, "Between you and me, we do it to remain competitive with other companies, as they all charge fees." Forget about safety, is not it comforting to know that some companies charge merely to remain competitive? That statement sums up the need for this debate and, more importantly, the need for stronger regulation of the holiday sector. Companies argue that they rip families off because their competitors do. That is an indictment of the holiday sector.
I have no hesitation in calling on holidaymakers to boycott companies that charge families for the privilege of sitting together on a flight to or from their holiday destination. There is no need for such charges, whether at the pre-booking or late-deal stages. Every company knows beforehand how many families will be travelling together and can pre-allocate adjoining seats, just as many scheduled flight operators do every single day of the week. I hope that the Minister will address that serious issue.
After the dreadful events of 11 September last year, every flight operator and airport rightly had to review their security procedures. The world had moved into a new era of asymmetrical threat from terrorist attack, and every innocent family became a potential target. I believe that every holiday company in the UK now charges a security surcharge of £7 per person. I presume that it is for the increased costs at airports and on flights, although one company representative stated:
"These charges were government imposed after September 11."
Perhaps the Minister can tell us when the Government imposed such a charge. I suspect that he will be as puzzled as I am.

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Perhaps the £7 charge pays for more controlled airport parking, perimeter fencing, CCTV, luggage and body scanners and more employees at airports. However, is not it strange that a company such as easyJet charges only £1.60 for the same services? The explanation on the company's website for imposing the charge is that, because of the incidents of 11 September, the cost of running a secure airline had risen and, although easyJet had tried to avoid incurring extra charges for its customers, a charge of £1.60 had been imposed to appease insurance syndicates. It assures customers that it
"will not be making any additional profit from this charge."
What happens to the difference of £5.40 between easyJet's £1.60 charge and the £7 charged by travel companies? Why is it charged? I certainly do not know why; perhaps a tougher regulator would be able to tell us.
Can we argue that a family of four should have to pay almost £30 for extra security at the airport and on flights? I doubt that we can, but BAA plc may be able to. However, its senior management told other Members and me last week that
"they have passed on no extra security charges to flight operators since September 11."
By my calculations—according to the school that I went to—more than 20 million trips taken by holidaymakers at £7 per person bring in £140 million. For what? We know that the money is not going to BAA plc. It does not buy more controlled parking spaces, perimeter fencing, CCTV cameras, luggage and body scanners or more people. So where does it go? Are holiday companies ripping customers off as a result of 11 September? I sincerely hope not. Perhaps the Minister will give us his opinion about that.
Can the Minister explain the meaning of a holiday advertisement on Teletext a few days ago, which said:
"Family of 4, 14 days, HB, Majorca, 1,500, BF £10pp, TOD £10pp, DC/CCC 2.5 per cent."
In the interests of fairness, I shall repeat that more slowly:
"Family of 4, 14 days, HB, Majorca, 1,500, BF £10pp, TOD £10 pp, DC/CCC 2.5 per cent."
I am sure that you know what that means, Mr. Deputy Speaker, but, with all due respect, I hazard a guess that the Minister would have been puzzled on reading it, as I was. It means that 14 days half board in Majorca for a family of four costs £1,500. Booking fees are £10 per person, which for a family of four is £40. Tickets on departure are £10 per person, which is £40 for a family of four. I shall refer later to DC/CCC. The new price is now £1,580.
There are more hidden rip-offs. The £7 per person security charge would cost a family of four £28. In late deals, transfer between the airport and the hotel costs £15 per person, which is another £60. Optional flight meals cost £10 per person, which is an extra £40. Even the 20 kg luggage allowance that used to be included now costs £15 per person, so that is an extra £60. All those hidden charges blow away the theory that we are still considering a package holiday. It is no longer a package holiday, but a fragmented rip-off. Our family of four, who were paying £1,500, now need to pay £1,768.
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What is the final rip-off? Every travel agent sets its employees targets to sell holiday insurance to unsuspecting customers. Even when free insurance incentives are offered, which are known in the trade as silver level, employees are ordered to sell gold-level insurance, which costs £10 per adult and £7.50 per child. That insurance is paid out against a holiday costing £1,500 per person. How many ordinary families in this country book a fortnight's holiday in Majorca at a cost of £1,500 each? Families are paying far in excess of what they need to pay. If a family of four are not offered free insurance, they pay the going travel agency rate of a staggering £31.99 per adult and £27.74 per child to cover the two-week holiday. Those inflated insurance charges add an extra £119.46 to the family's bill.
From the original price of £1,500, our family must now pay a new amount of £1,887.46. To borrow words from "Who wants to be a millionaire", "But we don't want to give you that. We want to give you DC/CCC at 2.5 per cent." That debit or credit card charge of 2.5 per cent. on £1,887.46 is £47.18. That brings the new grand rip-off charge for the £1,500 holiday seen on Teletext to £1,934.64. That is an astonishing hidden charge of nearly 30 per cent.—a rip-off in anyone's language.
I can highlight other rip-offs, such as cancellation fees. If a family buys out within 56 days, they pay £105 per person, so our family of four would lose £420. However, if the company cancels, it pays out only £20 per person, which would be a total of £80. There is an increase if the customer cancels 14 days before departure. They would lose 90 per cent. of their money, yet the company would pay only £40 per person if it did likewise. That means that if our family of four cancel, they lose £1,698.72, but in similar circumstances, the company is obliged to pay out only £160. I genuinely believe that consumers receive a raw deal from holiday companies. Their flagrant disregard for the Civil Aviation Authority's guidelines is scandalous. Their security fees must be justified, their hidden charging must be investigated and the rip-offs must stop.
While researching this matter, Jess Lorber asked me why British consumers do not complain more and insist on a higher level of service. He was right to ask that, and it is why I am complaining in this debate. I am looking for a far higher level of service and demanding tougher regulation of the holiday industry.
The examples that I have given reveal only the tip of an iceberg. We all know that there are many horror stories to be told about the charter holiday industry, so I call on the Government to launch an inquiry into the need for stricter regulation of that industry. I and 20 million others await with interest the Government's response.
1.15 pm
The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I congratulate my hon. Friend on securing this debate, which is topical as we are now in the holiday season. He raised important issues and made typically shrewd observations on the travel industry and the need to protect holidaymakers.

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I shall speak first about the holiday market in the United Kingdom, which is one of the largest and most diverse in Europe with about 20 million packages sold every year and a turnover of around £8 billion. The traditional holiday market is changing and, increasingly, the familiar package is just one of a number of holiday products from which consumers can choose. Before focusing on my hon. Friend's concerns, I want to outline the protection available to the travelling public in the United Kingdom.
There is already a considerable body of regulations governing holidays, especially package holidays. Package travel law recognises the great diversity of the market from the largest operators, which are household names, to the smaller, independent businesses and one-person operations. The key legislation is the package travel regulations, which implement the 1990 package travel directive. One of the main reasons for the introduction of those regulations was to enable dissatisfied holidaymakers to pursue their case with a single supplier. Previously, aggrieved holidaymakers had to pursue their case with hoteliers and transport providers in a foreign country. The important protection is that the regulations place on tour operators a wide range of obligations to their clients, and ensure that when things go wrong consumers have adequate means of obtaining redress. The regulations also require tour operators that become insolvent to be able to repatriate and refund holidaymakers.
Another important protection for consumers is provided by the Civil Aviation Authority's licensing regulations. The majority of package holidays sold in the United Kingdom involve air travel, and the package travel regulations require organisers to hold a licence issued under the Civil Aviation (Air Travel Organisers' Licensing) Regulations 1995. Those licences are administered by the CAA and provide financial protection arrangements for air packages.
Other consumer legislation also applies to the sector, including the Trade Descriptions Act 1968, misleading prices law, the Unfair Terms in Consumer Contracts Regulations 1999 and the Control of Misleading Advertisement Regulations 1988. They provide protection against misleading statements by tour operators about the holidays they provide, and apply to all holidays, not just packages.
The package holiday market is also self-regulated, primarily by the codes of practice operated by the Association of British Travel Agents. Those codes of practice have been tried and tested over a long period. ABTA operates an independent arbitration scheme to resolve disputes between holidaymakers and ABTA members, who sell more than 90 per cent. of packages in the United Kingdom.
The fact that there is a strong body of legislation does not mean that things do not go wrong. As my hon. Friend said, things can go awry even before a holiday has started, and he highlighted problems arising from lack of transparency when consumers are given misleading or confusing information.
The travel industry is dynamic and constantly changing in response to consumer demand and other less predictable events. Since 11 September, the tourism industry has been through a difficult time. Recovery has been slow since consumer confidence took a blow.
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Bookings for the next year are down on previous years, and the industry has been going through some restructuring; it has cut capacity in an effort to face new challenges. Some costs, such as aviation insurance and airport security, have become more unpredictable.
As I said earlier, other market developments include an increasing trend away from package holidays. Instead, consumers put together elements of holidays from sources other than traditional travel agents by, for example, looking for the best deals on the internet. The phenomenal rise of the no-frills airlines has been part of that trend, and it is set to rise further. However, the great majority of British family holidaymakers continue to look for conventional packages, and the variety of deals and prices on offer can be bewildering.
As my hon. Friend emphasised, changing trends can bring problems as well as increased choice for consumers. The regulatory bodies report significant numbers of consumer complaints about this sector, and we take that very seriously. The levels of protection for consumers vary according to the methods by which consumers book their holidays; the rules are extremely complex. There are concerns that consumers may not know their rights despite the efforts of the regulator, industry bodies and consumer groups, which is why my Department is taking steps to improve the information available to consumers.
Holidays that go wrong can be particularly distressing for consumers. My hon. Friend described several specific problems encountered by consumers when they try to book holidays. I shall briefly address each of those.
As regards security charges, I appreciate the concerns about the levying of yet more charges on holidaymakers. However, the industry is best placed to make a commercial judgment as to what extent extra security charges need to be passed on to the consumer. The Government have the same concerns as my hon. Friend. If additional security charges are levied, they should be fully justified and presented in a clear and transparent manner so that holidaymakers know what they are paying for at the outset and can make a choice of whether to use a particular operator or to go elsewhere.
We are liaising with trading standards officers on concerns about pricing practices in the holiday industry. The law is clear: prices that include security charges must be made transparent. We are ensuring that this sector operates in that manner.
Concerns have been raised that consumers are inadequately protected because they are increasingly buying holidays that are not packages and so fall outside the scope of the regulations. That issue was covered in a recent European Parliament report, which proposed a fairly wide-ranging review of the package travel directive. The origins of the report lie in earlier work carried out by the Commission on the implementation of the directive by all member states.
There is a trend among tour operators to add a number of supplementary charges to the price of a package, and my hon. Friend has given some examples of that. Others include charges for collecting tickets at

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point of departure, and even for using the resort swimming pool. We believe that holiday operators should ensure that all charges are made clear to the consumer at the point of sale, so that people know what they are buying. My hon. Friend was worried about the practice of some operators of charging for pre-bookable seats. That is a matter of concern, particularly as the CAA recommends that in the interests of safety families should be seated together. I shall return to that point.
The recurring problem of misleading prices in brochures or shop windows is often highlighted in the media. Trading standards officers keep those practices under close scrutiny, and have initiated discussions with the industry about pricing. A particular problem is the way in which holiday prices are generally presented, with the use of discounts, fluid pricing and, last but not least, the increasing use of supplementary charges or optional extras, to which my hon. Friend has referred.
What are the Government doing about those criticisms? There are mechanisms in place for dealing with misleading statements. In addition to powers under the Trade Descriptions Act 1968, trading standards officers are empowered to take action when they consider that a misleading price indication has been given. Any suspected breaches of pricing law fall within the scope of part III of the Consumer Protection Act 1987, and should be reported to the trading standards service so that it can investigate as appropriate. My Department is in close touch with the trading standards service on matters relating to that legislation, and trading standards takes a keen interest in such issues.
Seating arrangements on aircraft are such an important matter that the Under-Secretary of State, Department of Trade and Industry, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), who has responsibility for competition, consumers and markets, will be discussing it in more detail with the scheduled tour operators. That is in response to criticisms voiced by my hon. Friend the Member for Motherwell and Wishaw, not least at DTI questions recently.
My hon. Friend referred to the powers of the Director General of Fair Trading under the Control of Misleading Advertisement Regulations 1988. He does have such powers, but they are used only as a last resort. Advertising and sales promotion in the printed media in the United Kingdom are largely controlled by self-regulation. We would prefer businesses to use that means to ensure that their advertising material does not offend or mislead. The Advertising Standards Authority
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is responsible for ensuring compliance with the British code of advertising and sales promotion. It is to that organisation that concerns about misleading advertisements in the printed media should be directed.
That system of independent scrutiny, set up with the support of commercial businesses, shows why it is important to examine ways of tackling problems through self-regulation, such as improvements to codes of practice or information and advice, so as to arm consumers better when making decisions about holiday bookings. More regulation is sometimes the answer, but I hope that I have reassured my hon. Friend that the market is already well regulated and monitored. Given the circumstances that my hon. Friend described, I suggest that the travel industry should take primary responsibility for fulfilling its obligations to its customers, and should do so well and within the prescribed legal limits. If the industry fails to do that, it runs the risk of facing legal action.
Having said that, I recognise that the operation of legislation benefits from fresh consideration and review of its effectiveness. We are aware of the European Commission's interest in reviewing package travel and timeshare law. The Commission has said that further work is needed, for example, to clarify the definition of a package holiday. A recent European Parliament report recommended that the term "package" be redefined. We shall have to consider whether widening the scope of the directive would be appropriate and would address some of the concerns that my hon. Friend has raised.
We are ready to play a full part in ensuring that the travel market works properly, and we want to develop a dialogue with key players in the industry, with regulatory authorities and with key consumer bodies. The latest Commission initiative may provide the opportunity to resolve once and for all some of the issues surrounding the protection of consumers buying package holidays. By their very definition, the matters that we are discussing are wider international concerns, not just domestic issues. That initiative builds on work already done by the Commission and others. The market is changing, and traditional consumer attitudes to holidays, including the way in which they book them, are changing. The Government must ensure that consumers are protected in that constantly changing market, but consumers have a responsibility to be careful when buying one of the many types of holiday now on offer.
I congratulate my hon. Friend once again on raising an important matter. I hope that I have reassured him that there is work in progress to address the real concerns that he has raised this afternoon.

Hospital Services (Somerset)
1.29 pm
Mr. Ian Liddell-Grainger: I am delighted to have secured this debate with only 24 hours to go until the recess. I want to be a little parochial; rather than discuss hospitals in Somerset, I should like to talk about the Minehead, Williton and Bridgwater hospitals in my constituency. I shall focus on the Minehead and Bridgwater hospitals, as the Williton hospital is quite new, and has had an exemplary record for many years. I want to consider the problems of a constituency that is more than 52 miles long, and covers some of the most sparsely populated areas of England. The problems of west Somerset are probably quite well known to many people. The area contains the biggest Butlins in Britain, where 9,000 people a week can enjoy the delights of the riviera of north Somerset. Last week, 280 people went down with a virus, and hon. Members can imagine the strain that was put on the local health service to deal with that problem. I could say that that happens only once in a while, but it tends to happen each year, when that number of people are in such close proximity to each other.
My constituency is a tourist area, including Exmoor, the Quantocks and the Levels. The last battle in Britain was fought in my constituency—some say that it still goes on. People come through it at an enormous cyclical rate to enjoy the delights of a very large area. The town of Bridgwater is the opposite extreme. It is an industrial town that makes cellophane, Sunny Delight, ammunition, plastics, extruded plastics and many other things. The hospitals cover a very sparse and dense area, but they have one thing in common: they cover a vast area.
I should like to pass on the apologies of my hon. Friend the Member for Taunton (Mr. Flook) and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), from whose areas the hospitals draw people and who cannot be here owing to other duties. They have exactly the same problems with those two hospitals, and would say what I am saying. To put it crudely, we need two new hospitals: one in Minehead and one in Bridgwater. That is because the present hospitals were built by subscription, as most in this country were within living memory. The hospitals have a finite capacity. Minehead hospital is on three floors, with the operating theatre on the third floor. As hon. Members can well imagine, with today's health and safety concerns, doctors cannot operate on the third floor due to the constraints of fire regulations and other modern problems that were not taken account of quite so readily some years ago.
I want to cite some statistics to show why we need a new hospital: it is a case of the devil and the damned. West Somerset covers 218 square miles—London would fit into it easily. Bridgwater is a slightly smaller area, but it covers Mendip, Taunton Deane and a surrounding area that has the sea on only one side. The rest is almost the same size. There are on average 50 beds in Bridgwater hospital, slightly fewer in Minehead and about 30 in Williton. An enormous number of people need health care and they cannot always get it.
The local major hospital, Musgrove Park, is just outside the constituency of the hon. Member for Somerton and Frome (Mr. Heath). That hospital has its
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own problems because its general surgery unit needs about £40 million to bring it up to a standard that is acceptable today. It was built so that US Army jeeps could drive down the corridors during the last war. That is how wide the corridors are, although I am not sure jeeps would get down them nowadays. Musgrove Park is going down the private finance initiative route already, but I do not want to concern the Minister with that. However, we have infrastructure problems that we need to address. The hospital in Minehead is in the middle of the town, and it is physically impossible to expand it any further. The one in Bridgwater has exactly the same problem. It cannot be expanded because it is faced by a river, and a main road lies behind it.
We also have other problems. We have an enormous problem in housing nurses. There are not enough houses. The Minister may respond that that is the responsibility of another Department. It is incredibly expensive to live in Exmoor or the Levels. One would think that it would be comparatively cheap because it is a rural area, but in fact houses in Exmoor are more expensive by far than anywhere locally, because of the area and its outstanding beauty.
We also cannot recruit GPs. The whole of Somerset is short of GPs, but especially in my constituency. We cannot get them to come down and settle there. One would think that GPs would love to come to such a beautiful area and be part of a thriving rural community. It is a lovely place in which to bring up their families. However, they do not come and we are short of them. We are also short of dentists throughout the county, and we are trying to encourage them to come to the area. We have a problem getting them to settle in the area, although we had no problem in doing so until recently.
We have a problem with all levels of care. Until recently we were fighting tenaciously for equipment to keep our X-ray system in Minehead going. We managed to do so, but it cost £150,000, nearly half of which was raised by the League of Friends and others. We could not rely on our primary care trust to raise the money, although it is doing its best to provide money across the spectrum. The trust got the money and now has a digital X-ray machine, but thanks only to enormous support from the local community in the Minehead area.
Domiciliary care is another problem. We cannot get people to come down and settle because we have a problem with training our nurses. If a nurse settles in my area and needs to train to get up to the next level or grade, they have to go to Plymouth, Bristol or in some cases Truro. Truro is in Cornwall and is about 120 miles away. Plymouth is 80 miles away and Bristol is between 50 and 60 miles away. Those places are not easy to get to, so if a nurse intends to take time out and wants to get up to the next grade at a cost of £350, she has to do it in her own time. Getting cover in an area such as my constituency is almost impossible, so many nurses who want to get on and better themselves are not in a position to do so. We do not have enough people to take up all the slack in the system. I am sure that that is true throughout the United Kingdom, but I am describing the particular problems of a rural area.
Nurses' pay is another problem. I am delighted that the Government intend to build more houses in London for nurses, and are doing whatever else they can to encourage nurses, doctors and police, but that does not

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help us in our area. Will the Minister consider some form of inducement for nurses to settle in rural areas, to encourage them and enable them to retrain? In Minehead especially we depend almost entirely on people who retire to the area or who are considering settling in the area because their husbands or wives have moved there.
I wonder whether, in the longer term, we should consider establishing a mechanism to encourage nurses and other specialists to settle in areas such as my constituency. They should not be offered a bribe—that would be cheap—but some form of incentive so that they could set up their family and themselves in an area where they know they can stay for a long time.
The health service is considering how to improve training in our area, and the university of Plymouth, with Somerset College of Arts and Technology in Taunton and Bridgwater college, is actively considering whether something can be done. However, as the Minister knows, the cost of doing anything like that is enormous, and it will be difficult for the university of Plymouth to improve matters without help from the Learning and Skills Council, the medical sector or the Department of Health. If that were forthcoming, a lot of people would be willing to come and settle in the area in the certainty that they would receive training and be able to stay on. That goes for GPs and for everybody else.
About a third of the beds in our three hospitals are blocked. We have a major problem in Somerset with care homes. We have lost many beds during the past few years, in an area with a large number of retired people, and the hospitals have had to take much of the strain. I had a meeting with all the health care providers in my constituency at Bridgwater hospital last Friday. They said that the situation was getting worse. I am not saying that there is an easy fix to the problem—there is not—but I hope that the Minister will try to deal with the problems caused by the fact that up to a third of the beds in those hospitals, which are almost always full, are taken up by people who need to be properly looked after either in the community or in care homes.
Somerset county council pays one of the lowest rates of income to nursing home operators in the United Kingdom. I see Somerset as the forgotten county. People go through it to get to Devon and Cornwall or elsewhere, and we seem to be forgotten. We have more old people than the areas that surround us. As a result of that, and the loss of homes, we cannot afford to keep those people, so homes are shutting down at an alarming rate. In Minehead, we have lost four homes in the past year. We cannot continue that level in any sustainable future. People have to go to Musgrove on the one ambulance that we have or stay in the hospital in Minehead, but the capacity there is such that acute patients have to go to Musgrove to be looked after.
People in hospitals tell us that they want to be in a care home but cannot get into one, which is a shame. That is not because they do not have the money. Some have the money, but beds are not available for them. A lady from one of the homes in my constituency told me a couple of weeks ago that she had a waiting list of five people for every bed. As the Minister knows, people usually get
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into nursing homes usually as a result of the death of a client, to put it crudely. We have a structural problem now that things have reached that level.
Another problem in Bridgwater—it applies to the whole of Somerset—is that the mental health department in the county wants to lay off between 45 and 50 people this year because of a funding crisis. I received an e-mail from a constituent, who stated:
"The chief executive admitted at the meeting that services to our patients would suffer as a result of these cuts. This in turn will put extra pressure on the GP's and other primary care staff."
That sums up the problem. The area can ill afford to lose so many mental health professionals. I hope that the Minister will take that on board. It is not a criticism, but it may make him consider the future of a county that has encompassed mental health provision. We bring many people into Bridgwater from elsewhere and ably look after them. Is there any way in which we can bring that to the forefront of people's minds? Unfortunately, it tends to be disastrous when people's mental health is not as good as it should be. All the health care professionals involved suffer, as well as the person who is ill. I do not want blame to be apportioned; I merely want the problem to be sorted out. The Minister could address that.
I want to praise the Somerset Coast primary care trust, which has done a phenomenal job. Its work extends into the constituencies represented by my hon. Friend the Member for Taunton and my right hon. Friend the Member for Wells, and it has tried to bring health care to the forefront of people's minds in the area. Donald Hinds and Alan Carpenter, the two people at the top. have worked incredibly hard with the general practitioners and all the health care professionals in my constituency and in the other two constituencies to ensure that the trust works. So far, so good, I can safely say. It is marvellous that the trust is creating a system in which GPs and nurses feel that they are part of the team and that people are talking to each other. Last Friday, I was delighted to see the executives of the trust and the health care professionals talking openly about the future.
In the past month, we have had two yellow alerts in Musgrove. There have been 12 medical outlays in July as well. We are a tourist area, and we cannot always cope with problems when we have an influx of tourists. The information about the yellow alerts came from a doctor, as I had wondered about them. Two in one month is not good. We cannot cope, and it does not help when people are in corridors on beds or when they cannot be admitted to hospital because there are no beds. The situation in Musgrove is extremely difficult.
We should consider new hospitals in such areas. They could be built with small accident and emergency departments, out-patient departments and so on. At the moment, in neither of my hospitals are such departments manned all the time. They do not have the capacity or the people, and that point must be considered. Resolving that problem would help the situation dramatically.
The only downside or fear that we have about the strategic health authority is that we have been thrown in with Dorset, and if people in my area need acute care they must go to Dorchester, Poole or Bournemouth. It is a long way to travel from my area to Dorset, through

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the constituency of the hon. Member for Somerton and Frome. I wonder whether the decision is right; if it works, it will be marvellous, but if it does not it will be difficult for people in Somerset—certainly for those in my constituency. That is why we need those hospitals, because it takes the whole day to go down to Dorset.
1.45 pm
The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): I congratulate the hon. Member for Bridgwater (Mr. Liddell-Grainger) on securing this important debate. His passion for his constituency and for health issues in the area is evident. I know Somerset a little, having had occasion to visit Glastonbury in the past. One of the first media events in which I participated on becoming Member of Parliament was to visit Frome's Women's Institute for "Any Questions", so I know how friendly people are in that part of the country. The national health service is vital for people in his constituency and for everyone in the country. I am pleased to take on board much that has been said and to speak on the issue.
The hon. Gentleman referred to two community hospitals in his constituency, at Bridgwater and Minehead, which provide a valuable role and, at least to some extent, enjoy good local support. I join him in expressing my appreciation and thanks to those who work in them for the care and support that they provide to their patients. The hon. Gentleman raised the need for investment and to improve the environment of the two hospitals, which are managed by the Somerset Coast PCT.
I am pleased to be able to inform the hon. Gentleman that as part of the clean hospitals programme, the Government last year provided that PCT with £75,000 to improve cleanliness and decor at hospitals. Extensive refurbishment of community hospitals in Minehead, Williton, Bridgwater and Burnham has now been completed. It included the painting of hospital corridors and foyers, the provision of new signs to give patients clear directions around the hospitals, refurbished toilets and new tables and chairs.
The refurbishment is part of the Government's £60 million investment to improve the environment for patients across the country and comes with the requirement for NHS trusts to carry out monthly cleanliness inspections and quarterly building maintenance audits, to be monitored by strategic health authorities and NHS Estates.
The hon. Gentleman raised concerns about the changes to the two hospitals. One would expect a constituency MP to raise such concerns, and I take them on board. It is important to emphasise that the NHS has a new framework; we have been serious about shifting the balance of power from Richmond house to local PCTs in liaison with their strategic health authorities. The debate will be on record, but I encourage the hon. Member to take his views and those of his constituents to the local PCTs, which liaise with the strategic health authority to make those important local decisions.
The hon. Gentleman expressed concerns about mental health care. Those decisions may need to come back to Richmond house. Essentially, investment is shifting the balance of power. We are serious about that and committed to it in the NHS plan. That means that it is for local areas to make any decision.
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I also hear what the hon. Gentleman says about the configuration of the strategic health authority. Again, that involves local decisions, and there are discussions about reconfiguration and other issues elsewhere in the country. That is an issue for the hon. Gentleman and his colleagues in the health community in the Somerset and Dorset area.
The hon. Gentleman highlighted the problems faced by the local health community in recruiting suitably qualified staff. He will know that the main problem facing the health service is not necessarily the provision of extra money; indeed, people throughout the country will say that they see the resources coming through. The NHS is growing faster than any other health service in Europe and it has undergone the longest sustained period of growth that we have ever known. However, the hon. Gentleman rightly mentioned staffing constraints, including the number of trained and qualified staff across a range of specialties. Increasing the work force is therefore a top priority for him and, indeed, the Government. We have said that, by 2004, there will be 7,500 more consultants, 2,000 more GPs, 20,000 extra nurses, 6,500 extra therapists and 1,000 more medical school places, on top of the extra 1,100 already announced. That huge programme of growth is intended to deal with capacity issues that affect some of our larger counties, and particularly those whose population profiles include a large elderly community.
In 1996, there were 2,629 consultant anaesthetists. Five years later, there were 3,549—an extra 900. However, that is simply not enough, and we estimate that we will need another 2,500 consultant anaesthetists over the next nine or 10 years. We expect 1,850, so it looks as if there will be a shortfall. We therefore need a massive recruitment campaign to step up the numbers right across the board.
Trusts in Somerset have been active not only in recruiting the necessary additional staff but in retaining those who currently work in the area. The PCT has attended several career fairs around the country to showcase the facilities that are now available, and that is starting to have positive results. In addition, it offers a range of flexible working conditions, including flexible working patterns, team-based self-rostering, annual hours and flexitime. I understand that it is also looking to develop a child care strategy centre to provide staff with good, accessible and affordable child care. There will also he particular local needs and local ways of recruiting, which the PCT will be well placed to take on board, and I listened with interest to some of the hon. Gentleman's suggestions in that regard.
Several new developments are under way in Somerset. They are the result of the hard work and commitment of staff and of new moneys invested by the Government. They are helping the trust to attract new members of staff from across the country, and I want to mention some of the exciting new services in the Somerset area. A £17 million oncology centre is due to open in 2005. It will significantly improve services for the people of Taunton and Somerset, while reducing the need for patients to travel to Bristol for treatment. The Dene Barton House medical step-down unit has been developed at a cost of £700,000. That vital unit provides on-going care for patients once they have left the acute wards of Taunton and Somerset hospital, but before they are ready to go home, and it enables the trust to

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reduce the length of time that people stay in hospital unnecessarily following treatment. It also helps to free beds in the district general hospital that are taken by patients who are waiting for nursing home places and who would be better placed outside the hospital environment.
A new cardiac catheter lab and angioplasty service have been developed at a cost of £420,000. The new service will increase the range of services available to the people of Taunton and Somerset, while reducing the need for patients to travel to Bristol. Those significant new investments will lead to an improved service for patients and show the commitment of the local NHS to providing specialist services closer to home, so that patients need not travel long distances for treatment.
I take on board many of the suggestions that have been made. I hope that the investment, alongside the ideas and good practice that have arisen as a result of the PCT's work with the hon. Gentleman and others, is the beginning of a health journey for people in the Somerset area. We are starting to see the benefits of investment and reform, both nationally and locally. Waiting time figures have improved significantly. The trust met its 2001 NHS plan targets of no patients waiting in excess of 15 months for in-patient treatment, or 26 weeks for out-patient treatment, by March 2002. It also achieved a maximum in-patient wait of 14 months and reduced the number waiting in excess of 13 weeks for an out-patient appointment to 971.
The trust will achieve the NHS plan target of a maximum 21-week out-patient wait by March 2003 and will move towards a 13-week maximum during 2003–04. Waiting list figures should continue to improve following the redevelopment of existing theatres and ward areas, the establishment of additional beds and the development of a diagnostic and treatment centre.
The hon. Gentleman raised concerns about delayed discharges, and linked the problem to the geography and population profile of his constituency, which
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includes a large elderly population because people retire there. A few weeks ago, I was in Devon, where there are similar issues because of the nature of the county. He is right that there are too many delayed discharges, not only in Somerset but across the country. However, we are investing record amounts of money in social services. The Chancellor's Budget commitment to double annual increases in social services funding for the next three years will give social services departments the money that they need to build care capacity in the future.
We have already taken action to maintain capacity in the care home sector, to ensure that older people get the choice of a care home place when they need it. An extra £300 million has been allocated to local authorities to build capacity locally. From this, Somerset county council received £2.25 million. Our monitoring shows that at least half of that money has gone to support care homes with fee increases of between 3 and 10 per cent. since last September. The rest is enabling older people to stay in their own homes or to avoid having to go into hospital in the first place.
The number of delayed discharges is also falling as a result of the investment, which has ensured that people get the care that they need in the right place. In March 2001 there were 5,938 beds blocked but there were only 4,691 in March 2002.
We have already taken action to ensure that the care standards do not lead to the closure of good quality care homes. We will continue to monitor the situation and will take further action if necessary. The hon. Gentleman will be aware of the on going discussions between the local council and independent care home providers to address local concerns.
In conclusion, I would like to praise the staff working in the Somerset Coast PCT. I am pleased to support the hon. Gentleman's view that their dedication and commitment is highly commendable.
Question put and agreed to.
Adjourned accordingly at Two o'clock.