Westminster Hall Sitting of 21 January 2004

Preamble
[MR. FRANK COOK in the Chair]

Stamp Duty Land Tax
Motion made, and Question proposed, That the sitting be now adjourned.—[Paul Clark.]
9.30 am
Angela Watkinson(Con): I am grateful for the opportunity to raise the matter of stamp duty land tax. It is an important issue because, in the short time since implementation, it has had a significant impact on buyers of residential and commercial properties and on conveyancing solicitors.
In April 2002, the Government decided that the existing stamp duty regime for United Kingdom land and properties, which had been in place for some 300 years, should be modernised. If ever a word were open to interpretation, "modernisation" is it. If it were synonymous with improvement, it might inspire some confidence, but unfortunately it is not.
One of the main objectives of the change was to introduce electronic conveyancing, which would make the house-buying process simpler, quicker and more efficient, surely a desirable aim in view of the emotional and financial stress attached to the process of buying and selling property.
Stamp duty land tax replaced stamp duty on 1 December 2003, replacing the old stamp duty on documents with a tax on property transactions. It was also extended to include business leases, and the Government expect to raise an additional £170 million from lease duty in its first year, rising to £450 million every year thereafter. It is, quite simply, a stealth tax on business leases.
Longer business leases of 15 to 35 years will be hardest hit, because the new tax is based on the full lease term. Shops, pubs, bars, clubs, restaurants and hotels all take out such leases to recoup their fitting-out and setting-up costs. Many cannot switch to shorter leases and face tax hikes of four and 10 times the present level. Marks & Spencer faces an eightfold tax rise and B&Q a rise of £250,000 for each new store. A typical pub with a rent of £30,000 and a lease of 20 years will see the old stamp duty charge of £600 become a new tax liability of £6,000, a draconian tenfold increase.
The Government plan a 24 per cent. increase in stamp duty land tax revenues over this year, a £1.8 billion increase from £7.5 billion to £9.3 billion. Given that the predicted increase in the property market and securities is only 10 per cent., many wonder where the extra money will come from.
The new procedure is far from being simpler. The old one-page form has been replaced by a six-page land transaction return—SDLT1—plus eight further pages of forms and 43 pages of guidance notes. Is this an example of Government modernisation? Far from being suitable for electronic conveyancing, as promised, the new forms must be completed by hand in black ink,
446WH
handwriting must be neat and a capital letter must appear in each box. As on, solicitor put it, will we be expected to return to quill pens next? The change has caused unnecessary expense and inconvenience to many larger firms that had installed software in preparation, but had to revert to writing the forms by hand. The forms also require information beyond that needed to fulfil the transaction—for example, the national insurance number of the purchaser and the gazetteer number of the property. Why on earth should buyers suffer the additional inconvenience of providing this information?
As a result of these longer forms, the Law Society has advised its member firms to charge a minimum of £40 extra on residential transactions and £70 extra on commercial transactions. In practice, the costs are even greater. With about 1.1 nation transactions in the residential market every year, that represents £44 million in additional costs from Government bureaucracy to the home-buying public every year.
The Government were warned during the passage of the Finance Bill that the implementation of this new tax would need more time. For example, in the House of Lords Economic Affairs Committee report on 10 June, and also in a letter written in June by the then shadow Chancellor to the Chief Secretary to the Treasury. Conservatives even offered to support the Government if they listened to outside advice and delayed implementation so that the detailed rules and regulations could be agreed, documentation made ready, training for solicitors organised and computer systems tested.
Mr. Mark Simmonds(Con): I am grateful to my hon. Friend for giving way; she is making a powerful and articulate case about the problems of implementing stamp duty land tax. Is she aware that the Chief Secretary to the Treasury, in a response and in correspondence, admitted that it would take at least two years for the implementation of stamp duty land tax to work its way through the system?
Angela Watkinson: I will be referring to that point shortly.
The Government rejected all of our proposals because, according to a letter from the Chief Secretary to the then shadow Chancellor dated 30 June, they
"would lead to the loss of yield of about £250 million".
In other words, the reformed tax was no longer to do with simplifying the system, or enabling e-conveyancing, but was driven by a desperate need to reduce the £37 billion black hole in borrowing. Even the Chief Secretary, in that letter, admitted that the tax was unfinished and would need a couple of years for refining. How can it be right to introduce a major new tax when the details remain unclear? How are taxpayers meant to plan when the rules could be altered immediately after introduction?
This muddling-through approach was confirmed by the slipshod way the detailed rules were presented to the House in the statutory instruments on how commercial leases were to be taxed, affecting seven out of 10 business leases and producing £170 million extra tax in the first year alone. First of all, the debate was scheduled just two weeks before implementation, leaving businesses

447WH
little time to get organised. Secondly, the statutory instruments contained drafting errors and had to be reprinted and re-issued, leaving just five days for scrutiny. The Financial Secretary then failed to give answers to 12 key questions during the debate. With implementation looming, she promised to write with the answers straight away, but nothing was forthcoming, so on 28 November the shadow Paymaster General again wrote to the Financial Secretary asking for replies before the tax was due to come into force on 1 December. Nothing was heard, not a word. After further pressure from the shadow Paymaster General the Financial Secretary's office finally provided an answer to the 12 questions 10 days after the tax was enforced.
The introduction was shambolic and left businesses and their advisers in the dark. Key definitions were overlooked. The delegated legislation passed by the House on 12 November appears to have failed to provide the definition of the start to the lease term. "Start" could mean many things—for example the date of the grant or the commencement date. Would the Minister confirm that this definition is indeed absent, and say what this means for the statutory authority of those documents already processed?
The introduction of the new tax was badly organised. Insufficient forms were printed for 1 December and some firms reported three-week delays in obtaining these forms, delaying house purchases and business deals. What went wrong? Why was the demand not accurately estimated and a sufficient supply of forms made available? Some forms were wrong. For example. SDLT4 was completely wrong when dealing with more than one sub-lease. Some Inland Revenue officers have admitted that the document needs correcting and reprinting. The education and information provision for solicitors and conveyancers was late and inadequate. Many seminars took place just days before implementation, leaving insufficient time for professionals to prepare. Specimen documents shown were wrong—for example, the wrong codes were shown on SDLT1 forms—and many solicitors have complained that their questions were left unanswered. Why did this process start so late given that the main legislation was enacted in July 2003, giving a six-month lead-in time?
Delays with certificates of payment occurred. The promised five-day turnaround period is, in reality, nearly two weeks, and without a certificate the Land Registry can reject an application to register the buyer's title to the property. Are sufficient staff dealing with this now, how many and what training have they received? The helpline collapsed in I he first week, leaving many solicitors having to make repeated calls, only to be left without any information at all. What resources have gone into rectifying this, and how many calls to the helpline were expected during that first month? The electronic calculator for business leases, which the Chief Secretary told us would be ready in time, failed to be put online in time. May we be told why? The Law Society and its members are very unhappy about the implementation. The shadow Paymaster General has received dozens of letters citing complaints about these points. Has the Minister had an opportunity to meet with the society, to discuss such complaints?
448WH
I have one particular example in front of me, from a solicitor in Leicestershire, who says that at the beginning of November his firm wrote to the Stationery Office of the Inland Revenue to obtain the appropriate SDLT1 forms, together with associated documentation. No documents arrived at their office in time for when the stamp duty legislation came into force. Indeed, in the intervening period, which was approximately three weeks, his firm made 12 telephone calls and wrote again requesting the appropriate documentation. The Inland Revenue helpline was unable to contact St. Austell to find out why there was a delay and said that St. Austell had taken the phones off the hook and were not responding to the e-mails that the supervisor at the helpline sent them. The solicitor's office made two calls to the Inland Revenue helpline and, during the course of one conversation, the telephone was slammed down, while they were in the course of indicating the nature of the problems that they were encountering. I would like to have been a fly on that wall.
Problems were encountered and compounded by the news that early in December the Inland Revenue computer, which was designed to scan the handwritten forms and input the data, had broken down. Several professional firms were told that the forms are being bundled up, driven to a different office and inputted manually. Would the Minister tell us whether that is the case, what went wrong with the computer and what steps she is taking to rectify the problem?
This issue of stamp duty is also causing concern among mortgage lenders. The economics of house purchase are compelling. Mortgage payments tend, broadly, to be equivalent to rental payments. The possibility of making a capital gain when house prices rise means that owning your own home makes financial sense to most people. There are other distinct advantages to home ownership, such as the discretion to make improvements and to decorate according to personal taste, and location, which is not available to some people who are in rented accommodation. It is hardly surprising that most people aspire to home ownership by the time they settle down and start a family. Of course, this is also a time of life that incurs other great financial pressures, such as having children, paying off student debts and starting to make provision for pensions. Stamp duty comes as a significant extra hurdle for first-time buyers already faced with raising a sizeable deposit and rising house prices.
Four years ago, just 40 per cent. of first-time buyers paid stamp duty, and of those who did nearly all paid at the lowest 1 per cent. levy. Now only 25 per cent. of first-time buyers purchase property below the £60,000 threshold. Strikingly, in London and the south-east the figure is only 2 per cent. of first-time buyers, and in my own constituency a first-time buyer would be hard pressed to find any property under £150,000, and that would be a flat over a shop.
The typical amount of stamp duty paid by first-time buyers is £1,040, equating to 5.6 per cent. of annual take-home pay. It would take a year to save this amount at £85 per month. This typical duty of £1,040 also represents 8.6 per cent. of the typical deposit raised by a first-time buyer. It would not be surprising to see a downward trend in deposits in the future, given the difficulty in funding stamp duty, and this would be a worrying development as borrowers would be reducing

449WH
their equity butler in the unlikely event that house prices fall in their area. In extreme circumstances some borrowers may he enticed to put down no deposit at all. The proportion of first-time buyers paying no deposit has increased from 1.5 per cent. to 3 per cent. in the last four years. At a time when levels of personal debt in this country, excluding mortgages, are at record levels, this would be a very undesirable trend.
The number of first-time buyers is at its lowest point since the early 1980s, a clear indication that affordability is stretched to the limit. Wide-scale home ownership is one of the cornerstones of the British economy, and is one of the factors that make our economy different from the rest of Europe. For most people, buying a house is their major lifetime purchase, or at least an aspiration that offers independence and freedom from the feudal ties of a landlord. Stamp duty land tax has turned homeowners and mortgage borrowers into a milch cow for the Treasury, rivalling even the beleaguered motorist. I hope that the Government will see that it is not working and reconsider, and that they will consult all interested parties including businesses, mortgage lenders, conveyancing solicit ors and estate agents.
9.47 am
Mr. Mark Simmonds(Con): I draw Members attention to the declaration in the Register of Members' Interests of my chairmanship of two chartered surveying companies, which is relevant to this particular debate.
I congratulate my hon. Friend the Member for Upminster (Angela Watkinson) on securing this important debate and on the way in which she has assimilated an enormous amount of detail and made the relevant points so articulately.
I also congratulate my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) on his particular tenacity on this issue, throughout consideration of the Finance Bill on the Floor of the House and in Committee, because the measure is having such a detrimental impact, both on residential house conveyancing, as articulated by my hon. Friend the Member for Upminster, and on the commercial property market. He and others are absolutely right to continue to raise this particular issue.
It is no surprise to me that implementation of the stamp duty as set out in the Finance Act 2003 has turned out as it has. The Government and the various Treasury Ministers who took part in the debate were warned, not just by my hon. Friend the Member for Hertford and Stortford and myself and others who spoke from the Conservative Back Benches, but by hon. Members from all political parties. The hon. Member for Yeovil (Mr. Laws) put some very salient and pertinent points that were never answered in the Chamber or in Committee. I am not surprised that the Government, in trying to implement this new tax, are in this mess.
Mr. Mark Prisk(Con): Is my hon. Friend also aware that as well as discussions and concerns within this House, the Economic Affairs Committee of the other place also urged caution and suggested that the Ministers should delay implementation?
Mr. Simmonds: I was aware of that fact. Caution was urged not only in this House and in the other place, but,
450WH
almost unanimously, by outside bodies such as the CBI, the Royal Institution of Chartered Surveyors and the British Retail Consortium. Those bodies got together in an unprecedented way to write to the Treasury suggesting that the implementation of this new taxation should be delayed so that the detail could be worked through properly, and to suggest how the proposals could be changed to make implementation easier and perhaps fairer.
The word "modernisation" gives rise to the suspicion that the Government are trying to force through Parliament something that will be detrimental to one or another section of society, and this measure is no exception. It has nothing to do with modernisation; it is a new tax. As far as the Government are concerned, it must be put into place as quickly as possible to try to close the enormous funding, gap that has resulted from the disparity between public expenditure and the drop in revenue coming into the Chancellor of the Exchequer's pot.
There are many specifics that I do not have time to go into this morning with regard to why the measure is becoming problematic. My Iron. Friend the Member for Upminster said that the Chief Secretary has admitted in correspondence—certainly by implication if not by a specific statement—that this has not been properly thought through and that the matter will resolve itself in the next two years. As far as I am concerned, it is totally unacceptable that a Government should introduce new taxation without having considered the detail and thought through the implications that this new tax will have on the economy as a whole.
There are four or five specifics with regard to the problems of implementing the stamp duty that I would like the Minister to address. The previous simplistic forms have been replaced by much lengthier and more complex ones, with explanatory notes that are longer than the form. That is not necessarily a Government innovation, but it is certainly unwelcome. Previously automated, the conveyancing forms now have to be written out, as my hon. Friend said, in black ink and with a capital letter in each box, adding to the bureaucracy and taking much more time than before. Incorrect documents were sent out; there have been unanswered questions, both verbal and written, from solicitors trying to deal with these matters; and there is the seemingly inevitable computer break down.
On Report, I specifically asked about the electronic calculator for businesses and the Chief Secretary assured me that all was in train and that other methods were in train for those who could not access the electronic calculator—as in my own constituency, not all businesses have access to broadband, so they cannot get it. Subsequently, I have come to understand that everything was not in train, and many businesses have yet to receive information and detail about it. When will that be fully addressed, because many businesses are deeply concerned?
When a highly professional and respected organisation such as the Law Society—which is deeply concerned, collectively as well as individually—writes to Opposition spokesmen, expressing its displeasure at the implementation of this new taxation, it is time that the Government took stock and listened to what others are saying.

451WH
Confusion still surrounds the implementation of the lease duty. Many businesses do not have a detailed understanding of how that applies to turnover leases, where it is not just a straightforward matter of multiplying the market rent—or the estimated rental value, as it is called in professional circles. Clearly, many on turnover leases pay 70 or 80 per cent. of the rental value. Is that the number that is capitalised? What happens when turnover varies and therefore rents go up and down on an annual basis? They are not predictable over a five-year or 10-year lease term, or even longer in some cases.
The other main area of confusion, with regard to the lease duty—nobody has been able to give me an answer to this, even though I have raised it in previous debates on the Floor of the House—is how break clauses will be operated. It is common practice in the commercial property market for a 10-year lease to have inserted into it a three-year or five-year break clause. Does that mean that stamp duty is taken at the break, at three years? Does the break have to be mutual, or can it be only on the part of the tenant or landlord for it to be classified as a break for the purposes of stamp duty?
The other point, which again does not seem clear and which I hope the Government are considering carefully—the hon. Member for Yeovil has also raised this point in previous debates—is that it seems totally iniquitous that some areas are exempt from stamp duty in totality, to use a topical word, because of the socioeconomic deprivation of the residential areas, without any regard to the commercial activity that takes place there. Therefore, places such as Canary Wharf, Meadowhall shopping centre just outside Sheffield, all the centre of Birmingham, as far as I am aware, and all the commercial centre of Leeds and Manchester are exempt from stamp duty taxation. It simply means—I am looking at it particularly from the point of view of the commercial property market, but it must be true for the residential property market too—that the value of those properties is increased by the percentage that is not being paid in stamp duty. Therefore, the value of the Meadowhall shopping centre, for example, is increased by £50 million with the brush of a pen. That cannot be a sensible use of taxpayers' money.
Mr. Prisk: With regard to the commercial aspects, a number of experts have told me that the complexity of dealing with commercial leases causes problems. One solicitor told me that when he is acting for eight lessees in buying the freehold, he has to complete one return for the freehold and eight separate returns to cover the eight leases to which the freehold is subject. Does my hon. Friend agree that this is a bizarre form of bureaucracy gone mad?
Mr. Simmonds: I agree. My hon. Friend makes a good point. It goes back to the crux of the debate, which was so articulately put by my hon. Friend the Member for Upminster: the Government did not think through the implications of the tax before they implemented it on 1 December 2003. Had they with our constructive help, postponed its implementation until 1 December 2004, all these issues could have been debated. The 452WH
Government could have simplified their proposals and could ultimately have achieved what they wanted, without going through this unpleasant process.
I want to give the Paymaster General an opportunity to assure the Chamber that there will be no extension of stamp duty in the foreseeable future and certainly no imposition of stamp duty on local authorities to enable them to raise further funds for their services. Boston council faces terrible problems at the moment because, as we all know, the Government are moving funds away from rural areas. Because its budgets are being cut, it must cut services or increase council tax by unacceptable amounts. I hope that the Paymaster General will be able to assure me that there will be no increases in stamp duty this year over and above those set out in the Finance Act and no extension to it to enable local authorities to-raise specific stamp duty to spend in their areas.
It is clear from this morning's debate that the Government tried to push the proposals through. They were ill thought through and ill considered. The consultation process that was supposed to take place was guillotined and curtailed. I suspect that the responses that the Govt received from professional bodies and business, which were not prepared to roll over and agree with them, were not what they wanted to hear. I hope that they will continue to look at the matter closely and make the necessary changes to ensure that everybody has full information and that the system works properly and is simplified and clarified so that business knows what taxes it must pay and when it must pay them.
Mr. Frank Cook: It might be advisable to remind hon. Members that it is customary in a 90-minute Adjournment debate to commence the first of the three wind-up speeches 30 minutes before termination. However, there have been occasions in the past when spokesmen or spokeswomen from the main Opposition parties have exceeded their portion of time, which is usually split into equal thirds. On one occasion they not only went excessively over, but shortened the usual time allocated to a Minister. Some Ministers might welcome such a tactic because it prevents them from having time to answer all of the questions that have been posed, but it is not fair on the Chamber, on the issue or on other Members. I appeal to all Front-Bench spokespeople to examine the time that is available and to seek to apportion it equally, or to terminate early.
10 am
Mr. David Laws(LD): Thank you, Mr. Cook, for your guidance on that point. I intend to give full time to the Paymaster General to respond to the many points that have been raised. I agree that it is a serious problem when Ministers are not given full time to address all the issues.
I add my congratulations to those of other hon. Members to the hon. Member for Upminster (Angela Watkinson) on the clear way that she set out the issues that are relevant to this debate. I also congratulate her on raising a matter that is of great importance to many people—including many businesses—throughout the UK, and that will benefit from the airing that it is given today. She started her speech by setting out what the new tax represents and how it will be applied. She went

453WH
on to describe many of the fundamental concerns that have been expressed about it, not least during proceedings on the Finance Bill, in the debate in the House on 12 November and by many business groups that have made representations to the Government.
The hon. Lady also did a good job in updating us on many of the practical concerns that have arisen since the new tax was introduced—some of which I was aware of and some of which I was not. I welcome the Paymaster General, and it is of great benefit that she is present to respond to some of those specific points. The previous debate on this issue on the Floor of the House was with the Financial Secretary. Recently, I have spent quite a lot of time with the Financial Secretary in the Standing Committee on the Child Trust Funds Bill, and I am pleased to see a fresh Treasury face this morning.
The hon. Member for Upminster will probably agree that the Paymaster General has had a lot of practical experience over recent months of the difficulties in implementing new Government policies, particularly on tax credits. The Paymaster General is familiar with the gap that can exist between Government intention and delivery. I hope that she will respond not only to some of the long-standing concerns about the new tax, but to some of the practical issues that were set out by the hon. Member for Upminster. They are separate concerns that are worthy of a detailed response.
I am pleased that the hon. Member for Upminster also set out her concerns about the development of the stamp duty regime in relation to residential property transactions. There is increasing concern about the lack of fairness and rationale in the stamp duty system as it applies to residential properties. Over the years, that regime has increasingly caught large numbers of first-time buyers because of the Government's failure to index the starting threshold for payments of the duty. In addition, there is the illogical structure of rates, which means that people have a particularly high tax burden when they exceed the specific thresholds. There is growing momentum behind the case for fundamental reform of the stamp duty regime as it applies to residential properties. I hope that, at some stage, the Government will consider consulting on that issue and introducing proposals to reform it and to ensure that the thresholds are indexed.
The hon. Lady began her speech by teasing the Minister a bit about the stated purpose of the stamp duty land tax, and the hon. Member for Boston and Skegness (Mr. Simmonds) made similar comments in the introduction to his speech. The hon. Lady referred to modernisation as one of the stated intentions of the new tax. I think that the three stated intentions were modernisation, promoting e-business and promoting fairness. We are entitled to ask whether the new tax meets any of those criteria.
I share the hon. Lady's suspicion of the word modernisation. In fact, I can remember that my predecessor, Lord Ashdown of Norton-sub-Hamdon, got into difficulty in my party's federal policy committee prior to the 1997 election: he wanted to put the word "modernisation" into our manifesto and he was firmly told that he could not because it was meaningless new Labour jargon that signalled nothing clear about the intent of a policy. The debate about the stamp duty land tax probably shows that the members of that committee were correct to pull my predecessor up on that point.
454WH
The hon. Lady questioned whether the new tax is fair in the way in which it applies to different sectors. That point has frequently been made. The hon. Member for Boston and Skegness referred to the stamp duty land tax interacting with the deprived area relief in a way that has bizarre effects.
The hon. Lady also mentioned e-business and the extent to which there might be a gap with regard to the Government's stated intention of creating a streamlined tax system in which many transactions take place on the internet. She gave examples of the backward mechanisms that are in place in some cases for people to submit paper-based returns and the practical difficulties that have arisen out of that.
The Government have failed to persuade people about the benefits of the new tax reform. They have not convinced people that the stated Government intention of addressing long-standing distortions and loopholes is what the new tax is about. If that is what it is about, people fail to comprehend why its introduction has corresponded with a £200 million increase in the tax yield from this measure. The hon. Lady referred to that.
Mr. Prisk: In the original consultation document, the Government foresaw that the costs to the public and professionals would not only) be held level, but that they might fall. Given what has happened, does the hon. Gentleman share my concern about that?
Mr. Laws:: The hon. Gentleman is right. The impression was created that this would be a tax-neutral reform designed merely to introduce a more rational system and to clamp down on tax avoidance, and that it might reduce some transaction and processing costs. If the points made by the hon. Lady are correct—I have no doubt that they are—one must question that part of the equation as well.
The hon. Lady referred to the increase in property taxation in the United Kingdom in the past few years and to the high transport taxes that many UK businesses pay. The CBI made that point in its representations to the Government about the implementation of this tax. It said that although UK corporate tax rates, and to same extent social costs, are lower than in many of our computer countries, it is not often understood that that is offset by high property and transport taxes. The reform of this tax is resulting in increased taxation on business and increased yields to the Exchequer.
It must be of concern to the Paymaster General and the Government that, in all the consultation that there has been about the introduction of the new tax—in all the representations that there have been since the details of the new tax were confirmed—there has been a universal thumbs-down from business lobbies, particularly in relation to the leasehold aspects of the tax. When we last debated the issue with the Financial Secretary to the Treasury in the House on 12 November, she was asked whether she could name a single professional or business body that supported the new tax or thought that it made any sense. She could not come up with the name of any organisation. I would be interested to hear today from the Paymaster General whether she has the names of any bodies that support its introduction.

455WH
The implementation issues that I want to focus on are not only the practical issues. The hon. Member for Upminster explained those issues clearly, and we must ensure that the Paymaster General has sufficient time to respond to them. Fairness issues were referred to in earlier debates, particularly in relation to how particular sectors will be hit by the implementation of the tax, as was the point made by the hon. Member for Boston and Skegness about the interaction of the leasehold aspect of stamp duty land tax with the deprived area relief. A number of business bodies have made representations on those points.
In the debate of 12 November 2003, I reminded the Financial Secretary of companies' strong criticisms of the new legislation, and that the CBI had said that the Government's decision on the stamp duty land tax would drive up prices, cost jobs and damage regeneration. The CBI also said that the Government were underestimating the measure's potential cost to business. It stated explicitly that the Government were understating how many leases would be affected and overestimating the value of the leases, a point that the hon. Member for Hertford and Stortford (Mr. Prisk) has made on many occasions. It will be interesting to hear from the Paymaster General whether the early implementation of the tax confirms the accuracy of the Treasury's assumptions on those points, or whether there is any early indication that the points made by business and reinforced by the hon. Gentleman have proved correct.
Business organisations expressed another strong concern that came out in the 12 November debate—that the tax would unfairly hit particular sectors of business. The British Retail Consortium made the assessment that the cost to retail members alone would be £200 million. The consortium pointed out that in a number of sectors, long leases are fundamental—for example, in the sports and leisure industry. Such sectors would be adversely penalised by the new tax. The Business in Sport and Leisure group, an umbrella organisation representing more than 100 private-sector companies in the sport, leisure and hospitality industry, had made that point in its representations to the Government and had pointed out that many parts of the leisure industry might well face an eightfold increase in stamp duty under the proposals.
It seems bizarre that a measure that, according to the Government, will promote fairness should hit particular sectors in that way, merely because of the typical structure of long leases that prevail in them. It seems odd that the Government should wish to frame measures that, in attempting to tackle tax avoidance, should penalise sectors involved in long leases of up to 20 or 25 years, often because of the capital investment involved in maintaining properties. In our earlier debate, the Financial Secretary said that some 60 per cent. of businesses would be exempt from the increase, because of the Government threshold. However, other business organisations have made representations that, in some areas, as few as 30 per cent. of companies would be exempt because of their sector's leasehold structures.
The other unfairness of the tax's implementation was raised by the hon. Member for Boston and Skegness. We have been critical of the new tax reliefs and
456WH
loopholes consistently introduced by the Chancellor in each pre-Budget report and Budget statement. All, no doubt, are well intentioned, but they have bizarre effects when the Government seek to implement them. The famous example was the film industry tax relief, designed to incentivise the British film industry. Initially, it was estimated that it would cost £30 million or £40 million per year, but it ended up costing £400 million or £450 million per year, because of the tax avoidance opportunities that it opened up.
The House of Lords Committee that considered the issue, and other groups that have made representations, have pointed out that the stamp duty land tax with the deprived area relief will have the bizarre effect of giving exemption and relief to a pub in an area such as Canary Wharf that serves the interests of rich investment bankers working nearby, or to the Harvey Nichols department store in Leeds, which the hon. Gentleman said would be affected. Such areas will get exemption and relief from the stamp duty land tax, whereas many other businesses will be operating in genuinely deprived parts of the country, including wards in my constituency that are among the 25 per cent. most deprived in the country. Those businesses will receive no exemption, which is odd and raises the question of whether the Government should revisit the subject of deprived area relief, as well as the fundamental basis for the stamp duty land tax.
There are many issues for the Paymaster General to respond to. Some have been raised before in the consultation process, during the passage of the Finance Bill and in the debate that preceded the introduction of this measure. No doubt, she will be unwilling to reverse the course in the short term on some of those matters. However, I hope that she will respond to particular issues that have been raised today and will plot a course to deal with these concerns in future.
I hope that the Paymaster General will respond first to the practical matter raised by the hon. Member for Upminster of the many real problems arising as a result of the introduction of this tax since 1 December. There is a gap between what we were promised in relation to the calculations and the processing of these transactions and the reality on the ground. It must be worrying that the introduction of the new tax has led to so many problems. The preparation that we were told would be in place does not seem to have been put there.
This is a new issue for us—it has not been debated in detail since the new tax came in. I hope that the Paymaster General will tell us how the Government intend to deal with those problems. Although they do not affect the fundamental introduction of the tax, she must be concerned about them. I also hope that she will undertake to reconsider some of the issues about which businesses are concerned. Perhaps she can tell us whether, by the next Budget statement, or at worse the next pre-Budget report, there will be a review of how many businesses have been affected by the leasehold reform in particular and whether the Government's initial estimate is being realised in practice. I hope that they will do some work to assess whether the introduction of the stamp duty land tax for leaseholds has had an unfavourable effect on some sectors, and whether that can be justified.

457WH
I think that the business community accepts that the tax has arrived and that it has lost its opportunity to halt the principle of this new tax. However, it wants the Government to respond in future to problems that emerge when the evidence demonstrates that their initial assessment was incorrect. It also wants the Government to show their willingness to respond to problems when they arise. I hope that as part of any review of this tax in the Budget, or in the pre-Budget report, there will not only be consideration about the fundamental nature of the tax and the interaction with the deprived area relief, but a review of whether the existing thresholds are set at the right level. Business organisations are asking for the threshold to be reviewed if the evidence shows that the Treasury got the initial assumptions wrong.
This debate has been a great benefit. Once again, I congratulate the hon. Member for Upminster on securing it. I now intend to give the hon. Member for Hertford and Stortford full time to develop his case, and the Paymaster General time to respond in great detail.
10.19 am
Mr. Mark Prisk: I, too, congratulate my hon. Friend the Member for Upminster (Angela Watkinson) on securing this debate and on a thorough and excellent speech. She has shown on a number of occasions that she is able to get to the heart of the issue in a way that everyone can relate to, and I genuinely wish to commend her opening remarks.
I also congratulate my hon. Friend the Member for Boston and Skegness (Mr. Simmonds). As always on this issue, he brings a professional insight that adds to our debate, as all hon. Members could hear.
The original objectives for reforming stamp duty were set out in the consultation document of April 2002 "Modernising Stamp Duty". In that, the Minister and the Financial Secretary—then the Economic Secretary—stated that the Government's reforms would be based on the principles of fairness and modernisation, and would enable electronic conveyancing. In short, the new taxation regime would
"make the house-buying process simpler, quicker and more efficient".
I wish that were true, but sadly those worthy statements have been overcome by not only the Government's desperate need to fill the Chancellor's financial black hole, but the actions of Inland Revenue officials. After all, if electronic conveyancing does not begin until 2006, why the rush to implement the tax by 1 December 2003?
From the botched consultation on lease duty, through the heavily guillotined considerations on the Finance Bill, to the shambles in implementation described by my hon. Friends, the tax is the story of an ill-conceived, ill-prepared measure that is hugely bureaucratic, technologically regressive, and has increased costs to home buyers and property professionals. My hon. Friends highlighted a number of problems that people face. The old one-page form is replaced by a six-page land transaction return, plus another eight pages of forms, just in case the first six were insufficient, and should one's attention wander, there are an additional 43 pages of guidance notes.
One reason why the forms are so long is that a requirement has been inserted into the new process for a raft of information that has nothing to do with the tax
458WH
being paid. Thus, for example, people are asked to put down their client's national insurance number. Why? Also, as hon. Members have described, there is the nonsense that the new forms, designed to enable electronic conveyancing, have to be completed by hand in black ink, there must be a capital letter in each of the key boxes and, of course, one's handwriting needs to be neat. Quill pen or no, clearly modernisation means something entirely different to the Government on the one hand and the rest of us on the other.
The result is that it is takes far longer to complete the new forms than the old. Most professionals tell me that instead of taking five minutes, it now takes 30 to 40 minutes. As all good lawyers will say, the Law Society has costed the tax. It has advised its firms to charge a minimum £40 extra for each residential conveyance, and £70 for commercial deals, in order to cover the increased costs. In most years there are about 1.5 million transactions in the residential market; that means £60 million of extra cost for home buyers and property professionals from Labour's new tax.
What went wrong, given that we have heard that the original consultation said that costs would be kept to a minimum—indeed, might even be reduced? Before the Bill came before the House, we were told by a raft of experts that the Government should treat the matter carefully, and that implementation should be delayed. Indeed, even the cross-party House of Lords Economic Affairs Committee, which considered the issue with care, urged delay. Having listened to that advice, on several occasions the Conservative party offered to support the Government if they delayed implementation in order to get the details right. All that was rejected because, in the opinion of the Chief Secretary, it would lead to a loss of tax revenue. We could see that, even by last summer, those halcyon ideals of a simpler, cheaper efficient tax were long gone; the agenda had changed.
The perils of ignoring the warnings became clear when, on 12 November, we debated the detailed rules for the implementation of lease duty. First, the debate was scheduled just two weeks before implementation, leaving businesses very little time to get ready for the new tax. Next, one of the orders printed was wrong and had to be reprinted, so the House had just five days for scrutiny before the debate. Then the Financial Secretary failed to answer 12 of the questions raised during the debate. With implementation looming—of course, that affects how people should respond to the new tax—she promised to write to me with the answers straight away, but as my hon. Friend the Member for Upminster said, we waited a week and nothing arrived, so I wrote to the Financial Secretary and asked for answers before the tax came into force. All I received was silence.
I am rather persistent so I continued to press the point. I even hinted that I might make a fuss on the big day of the Chancellor's pre-Budget report, which would have been warmly received by the occupant of that particular job. Suddenly and miraculously however, at 8 am on the morning of the pre-Budget report on 10 December, my fax machine whirred into action and direct from the Financial Secretary's office we finally got the answers that we sought. Faxing through Inland Revenue rules 10 days after legislation has come into force is no way to run a tax. Since then, many professionals have asked me about what was contained

459WH
in the information because they cannot find it, even 50 days after implementation. Will the Minister tell us whether those answers have been published? If they have, where can people find them?
Believe it or not—I do not want to stretch your credulity too far, Mr. Cook—there was another error in the statutory instruments. Several solicitors have since advised me that the orders passed by this House on 12 November failed to include a key definition: the definition of a start of lease term, which could be the date of grant, or the commencement date. I have looked through the orders and have them with me, but I cannot see the definition. Can the Minister direct me to where it is? If it is missing, what does that mean for the legality of those documents already processed? Are they open to challenge?
Since the tax came into force on 1 December, I have been inundated by a raft of letters from solicitors and those dealing with conveyancing, who are intensely frustrated by the whole process. They have condemned the implementation as bureaucratic, and the revenue's organisation as chaotic. I have many letters that I could quote, and I will quote one later, but first I shall raise specific issues so that we cart get a proper and full answer from the Paymaster General. I know that she will want to give answers.
Despite the Financial Secretary's promises, insufficient forms were printed in time for 1 December. Some firms reported delays of more than three weeks in receiving forms, which meant that they could not complete house purchases and business deals could not happen. What went wrong and why were insufficient forms printed? Some forms that were printed had the wrong information on them or were badly designed. I am told that one of the many tax form pages —SDLT4—has so many faults that the Revenue officers have told solicitors that they are going to have to withdraw the documents three weeks after implementation and have them reprinted. Is that true?
The education and information provision for solicitors in conveyancing was also late and inadequate. Many of the revenue seminars for professionals to explain how it would all work took place just days before implementation, leaving little time for professionals to prepare. Why did the process start so late, given that the main legislation was enacted last summer? If the answer is that the Government did not have the final details, why do they refuse our offer of more time to obtain those details?
We have heard about the problems with the helpline—where is the Inland Revenue these days without problems with its helpline? It collapsed in the first week, leaving many solicitors having to make repeated calls, and we have heard about one especially pertinent story during today's debate. Often, solicitors were left with no information whatever, and were faced with the embarrassment of having to explain to their clients that they could not fulfil the tax requirements on which people's move to their new home depended.
Lastly, there have been serious delays with the certificates of payments. As has been described, those are essential, because the Land Registry can reject an application to register a buyer's title to property without
460WH
such a certificate. We were promised a five-day turnaround, yet for many people it takes two weeks. Are there sufficient people dealing with that, and what is the reason for the delays, given that this is probably the quietist period of the year for home buying?
Solicitors have genuine frustrations. Andrew Almond of Messrs Halsall and Co. of the Wirral says:
"It is clear that the implementation of this tax has been brought about too quickly, with too little thought being given to the practicalities for administering the tax, and with the forms that we are required to complete having been prepared by people who can have no conception whatsoever of the difficulties they are creating and the time they are wasting for professional people, who are trying to serve their clients' best interests in a competitive commercial world, and where the method of imposition of such a bureaucratic tax has reached the point of sheer lunacy."
Those are the words of a professional trying to deal with the issue. Given the bitter experience of such professionals in the first month, when the housing market has been at its quietest, many people now fear that things will take a turn for the worse.
It is welcome to see the Paymaster General. She will be able to clarify whether she is dealing with the issue, or whether it is the Financial Secretary again. Will she confirm that the Minister responsible will meet me and the concerned professionals and their representatives to hear their concerns about what can be described only as gross incompetence?
What a wasted opportunity the tax has proved to be. Its implementation has been shoddy and haphazard, with error heaped upon error. Where we were promised simplicity, we have bureaucracy; where we were offered speed, we have delay; arid where we were promised fairness, we find hidden costs. In 2002, the Government's stated aims for the tax were to be commended. Yet today, as so often with this Government, the results deserve only to be condemned.
10.32 am
The Paymaster General (Dawn Primarolo): I congratulate the speakers in the debate, and the hon. Member for Upminster (Angela Watkinson) on securing it. I want to return to the questions that she posed and dispel some of the myths that are circulating about what happened on the introduction of stamp duty land tax.
As has been mentioned, in the Government's view, stamp duty land tax creates a fairer, more modern and more robust tax regime for transactions involving United Kingdom land and buildings. It successfully addresses the long-standing distortions and loopholes in the previous charge, which were being increasingly exploited by big commercial players at the expense of the majority of taxpayers.
Yesterday I was in Scotland meeting various groups and considering questions surrounding the introduction of new technology and the importance of using new communication forms. We considered how difficult it is to introduce such new methods, and how vital they are to smooth communication in society, and today's debate caused me to reflect on the fact that we are talking about a system that was in place for something

461WH
like 300 years, which hon. Members would apparently prefer to have kept. The serious problem that needs to be addressed is how to move to the new systems.
Mr. Prisk: Will the Paymaster General give way?
Dawn Primarolo: Out of respect for the hon. Member for Upminster, and given that everyone has implored me to answer her questions, perhaps I should try to make some progress. The hon. Gentleman has many opportunities to debate the matter. As he said, he does so assiduously.
In achieving the objectives, my right hon. Friend the Chancellor was determined to introduce a new regime that would cause as little disruption as possible—a point to which I shall return, along with the points that the hon. Lady raised—to all those involved in land transactions, be they purchasers, sellers or those who assist them. The Inland Revenue officials worked with interested parties, including the Land Registry, the valuation office and practitioners to achieve that. Both during proceedings last year on the Finance Bill and elsewhere, there were calls for implementation to be put back, perhaps by a whole year, to which the hon. Gentleman referred. The Government believed that it was right to act in 2003 to prevent further avoidance of duty under the old regime and an increase in the distortions, and we stand by that.
Mr. Simmonds: Will the right hon. Lady give way?
Dawn Primarolo: I will not give way at the moment. Perhaps the hon. Gentleman will be patient; this is not his Adjournment debate.
We continue to consult on how we can have a fairer system that reflects commercial practice, not tax distortions, and takes account of moves towards e-conveyancing. Consultation on the processes commenced in the summer of 2002, and on some of the more complex areas, such as large developments and leases, it continued until the summer of 2003. That consultation was worth while. It produced worthwhile changes on the lease duty. For example, it resulted in the whole amount of the net present value below the thresholds for residential and commercial properties being exempt from the charge for commercial land. That means that every time a lease is chargeable. the duty will be £1,500 less than under the original proposals.
We recognise that the changes did not give everyone the outcome that they wanted. How could it for those who were taking advantage of the distortion? We have tried to help small and medium-sized businesses and business start-ups particularly. The consultation took place not only on how the legislation should be operated, but on the administration and implementation of SDLT. In that context, I recognise and pay tribute to the important roles played by all the representative bodies that we consulted, including the Law Society of England and Wales, the Law Society of Scotland and the Law Society of Northern Ireland. They robustly represented the Interests of their members and it is the duty of the Government to listen to those interests, but to make decisions on behalf of all of us. They also worked with Inland Revenue officials to
462WH
prepare for implementation. Working together, more than 55 events were organised, which more than 5,000 solicitors and conveyancers attended. It is unquestionable that the move to the new regime was much smoother as a result of that work and benefited from it.
One of the messages that came across loud and clear was that practitioners wanted some flexibility in how SDLT was introduced. The interested parties are urging the Government to adopt a light-touch approach and provide such flexibility as to allow various ways to support their documents, as well as the move to e-conveyancing. The hon. Gentleman sought this morning to use the Government's willingness to adopt such a light touch approach and to implement such flexibility to criticise the system as a whole. This is a matter for the Government—Ministers' shoulders are broad—and this is what we must do. It will allow the Inland Revenue to adopt a light touch approach for a limited period to accept returns that do not include all the information that is required in the longer term. That light touch, which has been well publicised, also extended the time before which the Inland Revenue will seek to charge interest and penalties because of late delivery of forms.
All those initiatives require a high degree of manual intervention and a manually run office was established at Kenton Bar in Newcastle. That office has issued more than 58,000 certificates and has collected more than £99 million in revenue. It is currently receiving between 7.000 and 8,000 completed returns a day and processing those returns within three to four working days. The Inland Revenue's stamp offices expect to be able to maintain that service commitment of turning returns around with five days of receipt.
The hon. Member for Upminster asked a number of questions about implementation, and before making further more general points about the system I shall return to some of her questions. She said that the six-page form, plus the supplementaries, is a backward step. Moving away from stamping documents is a necessary first step to e-conveyancing. It is impossible to send documents down the internet. Little additional information has been requested. The national insurance number, which has been mentioned by several hon. Members, is one example of additional information, but it is the common currency that the Inland Revenue uses to deal with all its taxpayers and contacts. However, if the national insurance number cannot be provided, that by itself will not prevent a certificate from being introduced. Again, the question is when we will introduce the steps that allow us to move towards an e-conveyancing system while at the same time allowing flexibility. I believe that the right balance has been struck.
The hon. Lady and other hon. Members made the sweeping statement—it is open season on computers, particularly the Inland Revenue's system—that the computer went wrong. The computer did not go wrong. Best practice requires that IT is phased in when implementing a new system, and I hope that everyone finally understands that. It was always the plan to start

463WH
up with the manual processes, which is something that some hon. Members have implored the Government to do in this debate.
Mr. Prisk: Will the Paymaster General give way on that point?
Dawn Primarolo: No. The hon. Lady asked many questions and, Mr. Cook, you made it clear that you expect me, quite rightly, to address her questions. If time permits, I shall happily give way to the hon. Gentleman later.
Running the manual process at the start also helps with the light-touch approach that I described previously. Again, the Government were implored to adopt that process in moving from one system to another, to assist practitioners.
The hon. Lady also discussed lease duties on pubs and restaurants and the charge for shorter leases. The change applies only to new leases; existing leases are not affected. As for Marks & Spencer, it has publicly stated that SDLT will not affect its expansion plans. The tax is in line with the Government's policy to encourage shorter leases.
The hon. Lady made a great deal in her speech about first-time buyers who cannot purchase because of rising stamp duty. I would like very gently to remind her that the Government have not increased stamp duty for the past three years, that transaction costs in the United Kingdom are lower than in most European countries and that the introduction of SDLT did not affect residential rates. She then went on to make the general proposition that is always made, that SDLT—and, it seems, anything else that the Government introduce—is a stealth tax. The changes to lease duty charge will remove the distortions between freehold and leasehold transactions. Hon. Members have mentioned the independent property research organisation that estimated that 60 per cent. of new commercial leases will be exempt from SDLT.
Mr. Prisk: Will the Paymaster General give way?
Dawn Primarolo: No, it is important, in terms of protocol, that I answer the hon. Lady's questions. The hon. Gentleman is using up time by repeatedly asking me to give way. I still have a large number of questions to answer, and I shall do her the courtesy of answering them. That is what I am expected to do as a Minister.
The hon. Lady asked why the forms were so long. She said that they take longer to complete than under the old system and that they will increase the cost of buying a house. The forms seem longer because they had to be made IT compatible. In fact, they ask for virtually the same information that the stamp duty office asked for under the old stamp duty regime. We have taken steps to assist practitioners in implementation, such as the light touch approach, manual working and educational discussions on duty, and although we accept that it will take time for practitioners to become familiar with the form, we do not see any reason why in the long run the time taken to complete it should be significantly more than under the old regime.
464WH
I would also say that more than 98 per cent. of transactions will need only the basic form. The supplementary forms will be required only in a small proportion of transactions, primarily commercial ones, which is exactly the area where the distortion and the problems were occurring.
It was said by the hon. Lady, and in several of this morning's contributions, that the Inland Revenue ran out of forms in December. The Inland Revenue did not run out of forms. Everyone who asked for a return form will have received one. The Inland Revenue estimated the number of forms necessary, and it never ran out of returns. By early December, the Inland Revenue had received requests for more than 1 million returns for a maximum of 8,000 transactions a day. Returns could also he obtained from the website and from case management software, and the Inland Revenue sent out starter packs to more than 10,000 practitioners before 1 December.
Mr. Prisk: Will the Paymaster General give way?
Dawn Primarolo: No.
The hon. Lady went on to raise three questions. One concerned the duty calculator, the second related to the two weeks that the certificates took to arrive, and the third to the inquiry line not working. Those are important points, and I can tell her that there were problems in the first week of December, but the calculator was working correctly by the end of that week. In the interim period, the Inland Revenue staff were helping practitioners with calculations.
The hon. Lady gave a particular example of a telephone being put down in mid-conversation and she said that she would have liked to have been a fly on the wall at that point. I, too, would have liked to have been a fly on the wall to see what really happened. I cannot comment on the particulars of the case, but as a general point, and as the high standards by which the Revenue operates demand, I, like everybody else, would not expect anyone to have the phone put down on them when they are making inquiries. I do not know the details of the incident, but I will certainly make sure that my view about the courtesy of our staff on the telephone, and my understanding of how they behave, is the one that prevails.
The hon. Lady made points about the regulations, and that was a theme of each of the contributions made. We were, as I have tried to explain, rightly committed to allowing a proper time for consultation, but there was a minor error in the formula. That will not take effect for five years, but none the less it is important to have correct regulations. There was also the question about the answers that my hon. Friend the Financial Secretary to the Treasury gave and whether they were in plenty of time. They were in plenty of time for a return of any SDLT transaction to be completed in time. The earliest SDLT transaction on 1 December does not require a return until 10 January. The start date of the lease is defined in general law—the express date of commencement of term or date of grant of the lease.
I hope that the hon. Lady realises that I completely understand her frustration at the anger that some people have expressed to her. I also hope that she accepts that the Inland Revenue did consult and undertook to ensure

465WH
a process that could be as smooth as humanly possible, given that we were transferring from one system to a new flexible one, as was requested of us in the consultation, with the manual working and the light touch approach. It continues to provide enough time for practitioners to become familiar with the new processes. The information required is the same as was required for 98 per cent. of those in the system predating 1 December.
Inland Revenue officials are going further because, if our objective is to move to e-conveyancing, it is important to ensure that there are products on the market that enable it to take place. That includes work to introduce an online version available on the Inland Revenue website and for Inland Revenue-approved versions of various returns to be provided by software companies as part of their case-management packages. Returning to the point about the process being all being pen and ink, both alternatives have been widely and warmly welcomed and will be introduced to the system.
Inland Revenue officials continue to work on other ways in which to complete SDLT returns. A stand-alone CD-ROM that will help some practitioners is currently being tested, and the Inland Revenue expects to have e-filing available in the autumn. As part of the development of those tailor-made response options, the Inland Revenue has consulted practitioners to ensure that the individual product will be of most value to their business. An online filing service will be available later in 2004.
One objective of the implementation of SDLT was to ensure that the new processes should not inconvenience property purchases, and particularly home purchases, to which the hon. Lady referred. Another objective was to ensure that there was less avoidance, which I am sure all Members welcome.
After only seven weeks, I am sure that hon. Members will appreciate that it is difficult to judge whether the measure has been successful. The hon. Member for Yeovil (Mr. Laws) referred to that in his contribution about monitoring and testing the objectives. However, the number of transactions notified to the Inland Revenue is up by about 25 per cent. and the amount of duty paid in November and December 2003 was more than £933 million compared with £864 million for the equivalent period in 2002.
Mr. Laws: Will the right hon. Lady give way?
Dawn Primarolo: I should like to continue.
From a compliance perspective, it is interesting to note that higher than expected volumes of stamp duty transactions continue to be returned late to the Inland Revenue, and it must consider the reasons for that. There are a number of other issues in the market, so—before the hon. Gentleman jumps to his feet—I am not suggesting that there is a causal relationship between those volumes and the change in revenue, although we need to understand the trends in such matters. The Inland Revenue will therefore analyse the reasons behind that, and it will have the power to take action just in case anyone is backdating transactions.
We recognise that the successful introduction of SDLT on 1 December is not the end of the process, and in today's debate, hon. Members have again implored
466WH
me, as the Minister, to bear that in mind. As I have said, much has been done to prepare practitioners and that will continue. In answering the hon. Lady's points, I said that the programme that was introduced was designed in partnership with the various Law Societies. To test how successful it was, consider those who were involved in designing the process. More than 5,000 practitioners attended and the timetable was agreed with the Law Societies. Having been encouraged to carry out all this consultation, having listened to what was said to us and having taken on board the points and implemented them, we should not face criticism for having done that in the first place. Unless Opposition Members are suggesting that we should not have dealt with a distortion that is unfair to all taxpayers, I am a little perplexed.
Mr. Simmonds: Will the Paymaster General give way?
Dawn Primarolo: I was just coming to the hon. Gentleman's points, having completed my detailed reply to the hon. Lady, so I am happy to give way to him.
Mr. Simmonds: I am delighted that the Paymaster General has given way. Would she not accept that the Government could have closed the loopholes that were being used without introducing the additional taxation, and could have concluded the consultation period properly to make sure that such problems did not arise?
Dawn Primarolo: I cannot believe that the hon. Gentleman said that. A loophole allows people not to pay tax when they should t e doing so, and the purpose of the legislation is to stop their avoiding tax that they should have paid. The Government did not conceal the point that we were proceeding on the basis that we had avoidance and that the nature of that avoidance was distorting the stamp duty system.
Mr. Laws: Will the Paymaster General give way?
Dawn Primarolo: If I could just finish my point, I will give way to the hon. Gentleman.
The stamp duty system needed to be fundamentally addressed. That is not new; the Conservative Government did it on loan relationships, and I am extremely happy to discuss the detail of how that was implemented, what went wrong and how the Government are still trying to put it right.
Mr. Laws: I am grateful to the Paymaster General for giving way. She has obviously never heard of a tax-neutral reform before. Perhaps I can help her as she has clearly run out of her speech. In her earlier comments, was she saying that the yield from the new tax has, so far, turned out to be higher than expected? Is she saying, therefore, that when it comes to the Budget in a couple of months' time, she may have to revise up the yield that the Exchequer will get from the new tax?
Dawn Primarolo: I was not saying any such thing. That goes to show that when one tries to answer a question honestly by giving early indications to hon. Members, it can be swung round to mean something different thing. What is important is that we ensure that the tax is collected, that every body pays the fair amount

467WH
of tax that the legislation requires, that we introduce the new system, moving to e-commerce as smoothly as we can by taking on board points about the transition that are made to us in consultation, and that we have a system that is fair to all taxpayers. As a Government, we must ensure that we continue to monitor the system's introduction, continue the discussion on its implementation and therefore ensure that we have a system that is fair to all taxpayers and fair to taxpayers in the area. That is precisely what the Government have done.

FCO Contribution to Environmental Objectives
11 am
Norman Baker: I am delighted to have the opportunity to introduce the debate. I was encouraged to do so by a written ministerial statement issued on 2 December by the Foreign and Commonwealth Office. It sets out an analysis of its raison d'être and the United Kingdom's international priorities.
When I read the eight strategic policy priorities identified with the UK, I was dismayed to find that the word "environment" did not appear anywhere. In fact, notwithstanding the preceding blurb suggesting that issues were changing, the priorities tended to confirm the traditional view of the Foreign and Commonwealth Office as a body that seeks to maintain stability through diplomacy—the big chess game—to maximise the UK's interest. I agree with the objectives. None is wrong in any way, but failure to take full account of the environmental crisis that the world is facing would undermine the objectives of the Foreign and Commonwealth Office. That is why I am raising the subject today.
To be fair, it is true that one of the objectives is sustainable development, but that is slightly different from tackling the backlog of environmental problems that have arisen in the world and which require something other than that strategy to ensure that what develops from now on is satisfactory. The strategy of "it is good as far as it goes" is not sufficient to deal with the crisis that we are facing.
Another objective is the security of UK and global energy supplies. Again, no one can dispute that we must ensure that the lights are kept on, but the way in which the objective is phrased suggests that we want to ensure that we have control over fossil fuel exploitation, whereas energy policy in the 21st century should be about diversity of energy sources and ensuring, as far as possible, that all the world moves towards renewable sources and that energy demand is not simply met, but reduced through the implementation of energy efficiency and conservation measures. I do not see such thoughts set out in the Foreign Office statement of 2 December.
If full account is not taken of the environment, the traditional Foreign Office objectives that have served us well over centuries will be undermined. I refer the Minister in particular to the comments of the Government's chief scientific adviser, Sir David King. On 9 January, he said:
"In my view, climate change is the most severe problem that we are facing today—more serious even than the threat of terrorism."
For understandable reasons, for the past two years we have heard a great deal from the Government about the threat of terrorism. The Prime Minister and others have rightly given attention to that matter and have taken steps both domestically and internationally to reduce the threat of terrorism to this country. No one can dispute that such a policy is anything other than sensible. However, we have heard little from the Prime Minister or the Foreign Secretary about what is, according to David King, the more serious threat to the

469WH
world—that of climate change, which seems to be an add-on—a footnote—to policy, rather than a central tenet of it, which is what it should be.
It is a fact that, through climate change, our environment is facing unprecedented threats. There is an old saying that forests precede man and deserts follow him. That was never more true than today. Mass deforestation is taking place, so that even countries such as Brazil, which has gigantic forests, are losing areas the size of Scotland each year. 'We shall end up, not within my lifetime, but in the lifetime of others now on this earth, with the forests all gone.
The situation is that serious: forests that have existed for millions of years could disappear, and we are seeing the polar ice caps melting and the oceans rising. Millions of people could be flooded out of their homes, and perhaps killed. We are seeing extreme weather patterns across the world. In addition, we saw a projection only last week that a quarter of all species on this planet could be extinct by 2050. Of course, there is also the issue of resources, especially water, and the fact that access to water is in question for a large part of the planet.
There is an ethical dimension to that—I hope we still have an ethical foreign policy, as we did when the Labour Government came to power—but there is also a practical dimension in terms of traditional Foreign Office policy. If the current environmental degradation continues and if no steps are taken to deal with it, the objective of the Foreign Office to maintain stability and guaranteed supplies of energy will be fatally undermined, because the world will start fighting for resources.
We—I refer here to the north, or to NATO, one could say—would be dragged into a position where we would have to defend access to resources. We have not quite got there yet, but with the battle for oil meaning that guaranteed supplies of fossil fuels is a key issue around the world we are getting there. We must avoid that, because it leads to instability. The way we avoid it is by making a real attempt worldwide to have a sensible environmental policy. That is something on which the Foreign Office should be leading, not least because there is a commitment to it in this country. I pay tribute to the Government for signing up to the Kyoto protocol and to the European Union for leading the way on that issue. We need to go further by taking that battle to the United Nations and to some of our allies, who are perhaps less enlightened than we are on those matters.
That leads me on to the United States, which is our ally. We have many close links—indeed, my wife is half American—but I am sorry to say that the United States is the world's environmental pariah. We need to say so, and we need to take firmer action than we have so far taken to bring the Bush Administration in particular into the world we all live in and make them realise their responsibilities. We have the opportunity to do that, more so than perhaps any other country.
We have this so-called special relationship: it is clear that, over many years, the UK, under successive Governments, has worked hard to ensure that we are in a good position with the United States. That may be a sensible Foreign and Commonwealth Office objective, but if we are in that position we should use our influence, where we can, to encourage the Americans to move
470WH
forward on those issues and to make them realise that they are not isolated, that t hey live with and have a duty to the rest of the world, and that what they do affects us.
The Americans must appreciate that. Drawing in their horns and pretending that only America counts—which, I am afraid, is what the United States appears to do environmentally as well as in terms of the International Criminal Court and other issues—suggests that their policy is not sensible or sustainable.
The United States has not signed up to the Kyoto protocol. It has abrogated commitments made by President Clinton and its carbon dioxide emissions are 16 per cent. above 1990 levels, while the rest of us are cutting our CO2 emissions. The Government and the EU are on target to make their reductions specified in the Kyoto protocol, but the United States is not—and it is already the world's biggest polluter. Currently, 36 per cent. of carbon emissions came from the United States. Indeed, a third of the world's emissions come from there, yet Americans are getting worse in their approach to the issue.
The United States is the world's biggest economy and it has the greatest opportunity to deal with this matter. If it does not do so, how can we expect smaller countries to make the short-term sacrifices necessary to meet their Kyoto targets? Why should they bother when the United States does not?
The problem involves not only the United States' attitude to climate change directly, in terms of the Kyoto protocol. The front page of The Independent this week listed some attributes of the United States, including the opening by President Bush of 58 million acres of public land to road building, logging and drilling, and the attempt to downgrade or weaken 200 public health and environmental laws during his presidency, including permitting drilling for oil in pristine national park areas in Alaska and elsewhere.
I hope the Government recognise that President Bush's Administration are up to their neck in oil, in terms of the members' backgrounds, and that this is driving the Administration's policy. It is not in the UK's interest to go along with that. However, it is in the UK's interest to try to influence the United States to adopt a more realistic and responsible international approach to environmental matters, but I am not always convinced that we do that.
I was pleased to see—credit where it is due—what I hope is a true story in The Independent on Sunday on 11 January, which said that the Prime Minister is, finally, attempting to get George Bush to move on climate change. I very much hope that that is true. I do not know whether the Minister will be able to confirm it, but that is exactly what the Prime Minister should be doing—using his influence with President Bush to try and move him along in that direction.
On occasion, part of the price of the Government's objective to remain close to the Americans appears to be signing up and agreeing to whatever the US wants, even if we do not necessarily want to go along such a road ourselves. The Minister recently gave me an instructive parliamentary answer when I asked him on how many occasions since 1975 the UK vote in the UN Security Council was diametrically opposed to the US vote. In only 2.3 per cent. of the votes had the UK voted against the US.

471WH
Most of those occasions as helpfully listed by the Minister, were between 1975 and 1985, and there have been only two occasions since the Labour Government came to power in 1997 on which our vote was diametrically opposed to that of the US. I am not saying that we should seek occasions on which to vote like that—if we can get agreement and have a common policy, all to the good—but what has happened sometimes suggests that we are not as independent in respect of the US as we might be.
I would like to know what the Minister is doing through the Foreign Office, and what the Prime Minister is doing, to deal with Kyoto and the US. I would also like to know how much progress we have made with the Russians. I hope that the Minister and his colleagues are putting pressure on the Russian Government to sign up to Kyoto, because if the Russians sign up the protocol will come into force. We need either the US or the Russians to do so.
I would also like to ask the Minister what we are doing about promoting renewables, conservation and energy efficiency worldwide. Britain is at the end of a very long pipeline in terms of gas and oil supplies from pretty unstable areas of the world, so it is in our interest to take such measures—we will be dependent on those fossil fuels for the foreseeable future. We also need to ensure that we have our own indigenous supplies, which means, essentially, renewable resources.
I would also like to know how the Foreign Office calculates the balance between the geopolitical aspects of its policy and the perhaps long-term environmental consequences, as, for instance, with some dam projects that the Foreign Office has been keen to support. Friends of the Earth has produced a report on a BP pipeline that is intended to run through Turkey, Georgia and Azerbaijan, which says that 173 violations of World Bank standards have been committed.
The pipeline will carry 1 million barrels of oil daily, which, when burnt, will produce 160 million tonnes of carbon dioxide—a third of the UK's annual emissions. The Foreign Office is supporting that policy, presumably for geopolitical reasons, but there is a big environmental downside. How is the balance achieved and what is the process for assessing whether the environmental downside outweighs the traditional geopolitical benefits of any particular project?
For example, the Foreign Office traditionally claims to lobby the Chinese Government on human rights abuses in Tibet, an issue close to my heart. I think the Minister and his colleagues do that, and all the evidence is that the Foreign Office listens on the issue, although I am sorry that the Prime Minister is not meeting the Dalai Lama. However, do the Minister and his colleagues lobby the Chinese on the environmental destruction that is taking place in Tibet?
The Minister will know, for example, that Tibet is being used as a nuclear waste dump. He will also know about the obscene deforestation, which is causing flooding for millions of people, not least the Tibetans themselves, because the Yangtze is affected. Unsustainable agricultural practices have been taking place in Tibet, which over the years have led to starvation among the Tibetan people. The Chinese are
472WH
constructing a railway to Lhasa, which will enable that environmental destruction to accelerate. What are the Government doing about the environmental destruction of Tibet? I give that as a specific example, although there are other countries where it may apply. However, human rights are also abused if the environment in which people live is degraded. That is the important point, which I want the Minister to get across.
I draw the Minister's attention to the story in The Observer by Anthony Barnett about the Foreign Office apparently giving permission for 240 rockhopper penguins to be removed from Tristan de Cunha, a British dependency. That in itself is a relatively small matter, but it suggests that sometimes economic considerations come before environmental, so I hope that a system is in place to ensure that those things are properly assessed.
11.15 am
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I congratulate the hon. Member for Lewes (Norman Baker) on securing this important debate, and although there will be a number of areas where I disagree with what he has said, or at least his emphasis, nevertheless he is a Member of the House whom I admire for the genuine commitment and energy with which he pursues his causes. Fundamentally, though, his critique is misplaced.
The hon. Gentleman is saying that we do not weave environmental considerations right the way throughout the fabric of our foreign policies and operations, but that is not the case. From personal experience, I know the number of countries—I have visited them on Foreign Office business—with which we have raised environmental concerns and considerations.
The hon. Gentleman has made great play of the FCO strategy, which was launched and published before Christmas. It presents eight strategic international priorities with the collective aim of creating a safe, just and prosperous world, underscored by sustainable development. As the Foreign Secretary said in respect of the hon. Gentleman's written question, which appeared in Hansard on 5 January, priority 6 of the strategy specifically refers to sustainable development underpinned by democracy, good governance and human rights. That underlines the fact that those issues are central to the work we undertake.
I have also commissioned within the Foreign Office the production of an FCO sustainable development strategy. This will provide the action plan to guide FCO staff in the implementation of this priority and of our public service agreement, which explicitly refers to making globalisation work for sustainable development in the UK and internationally. We are working towards that end in co-operation with colleagues in the Department for Environment, Food and Rural Affairs, the Department for International Development and the Department of Trade and Industry. I went out of my way to involve Jonathon Porritt, chair of the Commission for Sustainable Development, in that process to give us ongoing constructive feedback about the way that the strategy is developed. That was exactly the right thing to do, and it underlines our commitment to this issue.

473WH
Furthermore, I believe that the strategy will show how the Foreign Office will work with other countries towards meeting international commitments on development that are agreed by the United Kingdom. Those commitments are the millennium declaration on poverty reduction, the Doha trade round on development of the international trading system, the Monterey agreement on financing for development and the commitments made at the 2002 World summit on sustainable development.
I will deal with some specific points the hon. Gentleman made. He started by referring to our strategy document and the focus on energy security, implying that it contained no environmental considerations. However, priority 7 specifically refers to practical initiatives to promote sustainable energy consumption. We are seeking to secure our energy supplies and, in doing so, to benefit the environment significantly through the promotion of renewable and sustainable energy. Promoting the diversity of supply is integral to tackling climate change.
The hon. Gentleman also referred to Sir David King's comments, which were quoted in a newspaper, suggesting that climate change is more serious than the threat from weapons of mass destruction. Both climate change and proliferation of weapons of mass destruction are serious issues that we take account of in the development of foreign policy, and in our recently published strategy we committed ourselves to tackling both.
The hon. Gentleman made great play of the position and situation with regard to environmental concerns about the United States of America. I make no apology for saying that we are strong allies with the USA—we share a number of interests, values and concerns. Nevertheless, there are a number of areas where we disagree, and we do not have a problem with saying so.
The Kyoto protocol is one such area where we took a different position from the United States, and that is a position that we continue to uphold. The International Criminal Court, which the hon. Gentleman referred to, is another matter on which we have made clear our position, which differs from that of the United States. However, resolving those matters and seeking to influence the United States are not so easy as he suggests.
I also dispute the hon. Gentleman's party political characterisation in suggesting that the problem is just with the Bush Administration and that, if there were a different Administration, the situation would be different. I was interested to read the comments made recently by Howard Dean, one of the front runners for the Democratic party nomination. He said that if he wins the nomination, he will not sign up to the Kyoto protocol. With respect, the issue is a bit more complicated than the hon. Gentleman suggests.
Nevertheless, notwithstanding that disagreement on climate change and the Kyoto protocol, we are seeking to work with the US on a range of areas to promote environmental concerns and to achieve progress outside the Kyoto protocol. We continue to co-operate on climate change and believe that there are a number of areas for fruitful exchange, such as sharing our experience of the early action that business can take, working together on low carbon energy sources, and
474WH
exchanging views on technological developments and climate change science. Science and technology in particular are areas in which we can make progress.
The hon. Gentleman referred to the article that attempted to suggest what the Prime Minister's views are. We have consistently made it clear to the US at all levels that we wish to engage with it on climate change and we regularly raise the matter at political and official level. We shall continue to do that. In addition, the US is a key partner in out efforts to prevent forest destruction and illegal logging. We work effectively in G8 and the United Nations, and the US has recently launched a presidential initiative on illegal logging. We support all those initiatives.
The hon. Gentleman referred to export credits and various pipeline proposals. Through the Export Credits Guarantee Department, environmental considerations are at the forefront of our approach and the FCO cooperates closely with the ECGD on the social and environmental impact of its work. That will continue.
The hon. Gentleman also referred to concerns about the situation in China. One of the biggest challenges in tackling future environmental concerns is those countries that are going through dramatic growth—for example, Russia, China, India and so on. Unless environmental considerations are built into the development of their industries and businesses at this stage, we will have serious problems. We are doing something about that on an ongoing basis and are constantly engaging with those countries on these issues.
The hon. Gentleman may be aware that we recently established a China taskforce under the leadership of the Deputy Prime Minister, which is treating the environment as a cross-cutting issue and covering every area.
The hon. Gentleman raised the issue of rockhopper penguins. I want to make it clear that under the terms of the overseas territories White Paper such matters are for the overseas territories to decide. We have reached a new and sustainable position with the overseas territories. We reassured ourselves about the safety and security of the rockhopper penguins, but to intervene because we dislike a decision would be the wrong approach when, under the terms of the agreement, the matter is no longer one for the UK.
My final response to the explicit points made by the hon. Gentleman is to agree with the thrust of what he said, but to disagree with his conclusion. By that I mean that if we did not tackle environmental concerns throughout our foreign policy, I agree that we would eventually affect and constrain our security. However, I rebut the suggestion that we are doing that. We weave environmental
considerations throughout the range of our foreign policy deliberations.
I turn to some other key issues that the hon. Gentleman will, I am sure, be interested in. Climate change and the loss of natural resources and biodiversity are clearly shared global challenges, which we continue to face up to. We are aiming to reinvigorate the international response to climate change.
It is worth noting that, as the hon. Gentleman acknowledged, we have taken a lead, and we can be proud of our track record. We have shown leadership by setting the UK on the path to a 60 per cent. reduction in carbon dioxide emissions by 2050. Indeed, the UK is one

475WH
of the few developed countries to have met, and gone beyond, the target agreed at Rio in 1992 to return greenhouse gas emissions to 1990 levels by 2000—a remarkable achievement. Between 1990 and 2001, emissions fell by more than 12.3 per cent., while the UK economy grew by over 32 per cent. That is substantial progress and it shows that we are committing to the issues, although I do not believe that the hon. Gentleman gave us credit for that.
We are also putting our money where our mouth is. In addition to our diplomatic efforts, we want to deliver concrete actions on the ground. To that end, the FCO has created the Global Opportunities Fund, which is spending some £4.7 million this year on financing sustainable energy and climate change projects in several of the world's major developing economies, including China and Russia. Environmental degradation and biodiversity loss also threaten the ability of the world's ecosystems to provide goods and services in a sustainable way, so they pose a direct risk to us all. We are also tackling that issue.
Another key policy instrument at our disposal is the convention on international trade on endangered species, which regulates trade in endangered plants and animals and is widely regarded as one of the most successful multilateral environmental agreements. As part of the UK delegation, the FCO ensured that the last conference of the parties in 2002 was a great success for the UK. Our proposal to protect the basking shark was adopted, and we were instrumental in stopping attempts to remove protection for some whale species. In that regard, the work of the International Whaling Commission, in which we are very active, is similarly productive and successful. Maintaining the moratorium on commercial whaling remains our core objective, and our overseas posts undertake concerted lobbying in that regard.
Norman Baker: I agree with what the Minister says on whaling, but will he say something about how
476WH
discussions on Kyoto are going with the Russian Government and whether he thinks they are likely to ratify?
Mr. Rammell: We are taking every opportunity at all levels, including the highest, which is Prime Minister to President, to express our view that it is critical for Russia to sign up to the Kyoto protocol. As the hon. Gentleman will be aware, given the configuration of countries that have signed, Kyoto will not go forward without Russian endorsement. That is an issue of concern to us. We take it up regularly and we shall continue to do so.
We also work through a range of multinational agencies—the G8, the United Nations, the European Union and the Commonwealth—to ensure that we speak and act not only on our behalf, as we seek partners to work with us and take the process forward. The European Union, in which 40 per cent. of legislation is environmental, is clearly a major motor for change.
The hon. Gentleman also asked about our commitment on renewable energy. I was particularly pleased to be able to launch this year, in association with colleagues, the renewable energy and energy efficiency partnership—a partnership forged at the World summit on sustainable development. That mechanism builds on our commitment to accelerate the development of renewable energy. Renewable energy sources are essential in tackling climate change, and they will also ensure the long-term energy security of the UK and promote sustainable development at home and abroad.
Access to information is also critical. That is why we are promoting good environmental governance through the partnership for principle 10. Tourism is another key sector. The Prime Minister launched the sustainable tourism initiative, and I was pleased to launch the Travel Foundation, which the FCO is funding, at a meeting of the Association of British Travel Agents in October 2003.
I genuinely respect the hon. Gentleman's concern over these issues, but we are addressing them. We are endeavouring to include environmental considerations throughout our foreign policy and practice, and we shall continue to do so.
11.30 am
Sitting suspended until Two o'clock.

Human Rights (Saudi Arabia)
2 pm
Mr. John Lyons: I am delighted that the subject of human rights in Saudi Arabia has been chosen for an Adjournment debate. It is obviously a vast subject, and I hope that hon. Members will feel free to contribute to the debate and make known their views. I want to draw attention to Sandy Mitchell—my constituent—Ron Jones and Bill Sampson, all of whom have faced abuse and torture in Saudi Arabia.
On Friday 6 August last year I received a telephone call from Sandy Mitchell to say that he had been released from jail in Saudi Arabia. He had telephoned for two reasons: to thank me for the contribution—very small, I admit—that I had made towards his release, and to say that he was innocent. The second reason for the phone call was unnecessary. I knew from the papers that he and the others were innocent of the allegation of bombing in Riyadh. The tragic case of Sandy Mitchell and the others centred on the charge that they set off a bomb that killed Christopher Rodway. I wish to put on the record not only my sympathy, but that of all hon. Members, for the family and friends of Christopher Rodway.
A dark tale of torture has been unfolding since the release of Sandy Mitchell and the others last August. It seemed that a new allegation would surface almost every month. New information and evidence would be produced by those who had been jailed. Sandy Mitchell was a senior anaesthetic technician at the security forces hospital in Riyadh. He was arrested on 17 December 2000 and was charged with the bombing and killing of Christopher Rodway. As I said, he was finally released on 6 August last year in response to a plea for clemency that was made to King Fahd. I thank the Foreign Secretary, the Prime Minister and other hon. Members who made representations to the Saudi Government for the release of the men. During his term of imprisonment, Sandy Mitchell had to face solitary confinement, and physical and psychological torture. That was a continuing story for him when he was in prison in Riyadh.
I wish to make it clear at the outset that I do not want to use the debate as an opportunity for an anti-Saudi discussion, nor do the prisoners. Sandy Mitchell and other prisoners speak fondly of the Saudi people. They speak in support of the people they met in prison, but we are against torture and the torturers, which is the focus of my contribution to the debate.
The debate will not go away. I and colleagues will not walk away from the abuses in Saudi Arabia. We are not willing to turn our backs on the people who have faced torture and abuse. It is as straightforward and simple as that. The Government, the House and the British people need to make it clear that they are horrified that, in this day and age, someone can be tortured in a country with which we are supposedly friendly. We should take the chance of today's debate to say that we stand four-square with the victims of torture—not just today, but tomorrow and in the future. That should always be the case.
The case of Sandy Mitchell and his arrest is horrific. He turned up for hospital on 17 December at 7 o'clock in the morning, only to be arrested by the Saudi secret
478WH
police. He said that he was handcuffed, hooded and taken to a detention centre where he was accused of carrying out several bombings in Riyadh. He pleaded with them and told of his innocence, but without any response. He said that he was in no way party to any bombing campaign and that he was sure that the others who had been mentioned in the arrest were not party to it, either.
Mr. Mitchell was immediately faced with a beating from the people who had Arrested him. He could not defend himself because his wrists and ankles were cuffed. The beating continued for several hours. He was then taken down to the cells and was chained to a door, so that he could neither sit nor lie down. He was denied sleep and rest for a total of nine days. He said that at about 10 o'clock that evening he was taken back to his house in chains by the security officers who had beaten him. They ransacked his house, and all his personal items, including clothes, cameras and diplomas were confiscated. Most of the items taken have never been returned. His wife and son were, of course, terrified by his arrest and by the state he was in when he was taken back to his house. On his return to the detention centre he was punched, kicked and spat on, and was again chained to the door of his cell so that he could neither sit nor lie down. As I said, he was kept awake for nine days and nine nights.
During Sandy Mitchell's imprisonment his beating consisted of the torturers striking the soles of his bare feet with axe-handles, with a Saudi sitting on his chest at the same time, making it difficult and frightening for him to breathe as his feet were being beaten. He was told that he would never be released if he did not confess to the bombings. He begged his captors to check his alibi for the evening on which they accused him of being involved in the bombing. He felt certain that friends and colleagues could easily convince the police that his alibi was strong and would clear him of any guilt. He demanded a polygraph test because, as a desperate man, he thought taking such a test would prove his innocence and he would be released. This was denied to him, and the torture continued. He said that, during the beating and torture, he was bleeding continually from inside his left ear, his nose and his mouth, and that he lost some teeth.
I do not intend to go on all afternoon. I think what I have said about the torture is enough. That story can be repeated by Ron Jones, by Bill Sampson, and by any of the other prisoners held in Saudi Arabia. Having listened to one case, one can multiply it by seven to obtain an accurate picture of what went on for a very long time—as I say, these men were held for two and a half years.
In addition to the beatings and the psychological torture, we need to consider the solitary confinement in which these prisoners were held during this period—again, an attempt to break them and extract confessions to something in which they were not involved. We know all of them, and there is no question of it.
Jim Sheridan: I thank my hon. Friend for giving way and for securing this valuable debate. I think he underestimates the role that he, other hon. Members and the Government played in securing the release of these men. Does he agree that

479WH
for the long-term prosperity of the UK and of Saudi Arabia, it is important that a message comes from Saudi Arabia, to the effect that those who wish to go there and use their skills to add to the country's prosperity will be subject to clear, democratic justice, and not to some of the horrendous examples he has outlined?
Mr. Lyons: My hon. Friend makes a valid point. As I said at the beginning, this is an argument against the torturers, not against the decent people of Saudi Arabia, who want to give support to those who go to work or holiday there—not only British people, but those of other nationalities—and seem to be a kind race in many ways. We need to insist that people can go to Saudi Arabia in absolute confidence of the legal and judicial system; I will return to that later, because I believe that there is a bigger role for the Foreign Office and for others in making sure it happens.
Dr. John Pugh: I hope I am not stealing the hon. Gentleman's thunder, but he will be aware that Ron Jones's case, in particular, goes to the Court of Appeal later this year—in May, I think. Is he expecting the Foreign Office or the Department for Constitutional Affairs to intervene in the case being conducted against the Saudi Arabian regime? Is he expecting their intervention to be unhelpful and to argue that the State Immunity Act 1978 overrides human rights legislation? Is it not important to clarify the Foreign Office's take on that appeal and on the basis for intervention? What does it intend to achieve? It is also important that the British Government are not in any way implicated in condoning torture.
Mr. Lyons: I thank the hon. Gentleman for making that point. I will come to It in due course as I want to deal with the detail of that case and with what we would all expect from the Foreign Office and from the Government in these circumstances.
Mr. Mitchell said in his evidence that after about the fifth night he could not endure the beatings and the torture any more. He said he was prepared to sign a confession, no matter what it said. He was given a very sweet cup of tea and asked to sit down and sign a prepared statement of his confession. This was directed by Lieutenant Khalid al Sallah, the translator for Captain Ibrahim al Dali. These two seem to have been the two main torturers of Sandy Mitchell. I will refer to both of them again, as it is important that we identify the torturers and take the appropriate action when we can.
The interrogators also wanted to know, even after Mr. Mitchell had signed his confession, who had been involved with him—not only the other prisoners, but which people from the British embassy had assisted him. He could not believe that this line of questioning was being put to him, that it was suggested that the embassy was somehow involved in a bombing in Riyadh. He continued to be beaten and tortured into the eighth night, even after the confession, because they wanted further information. They said that if he would not help them further, they would bring his wife into the interrogation, because she was Thai and they could
480WH
do anything they wanted to her. He said that just hearing the screams of other detainees in the prison again put him under tremendous pressure to agree to anything they were saying in terms of the British embassy involvement and the devices for the bombings.
On 25 December 2000 Mr. Mitchell was hooded and taken to what he later discovered was al-Hiar prison. The officer in charge of the prison, when he saw the state of him, had him cleaned up and examined by two doctors. He then had to sign a statement that his injuries when he arrived at the prison had been based on some previous interrogation at another location. The prison was not prepared to accept responsibility for the state of him. He did sign such a statement, which, quite properly, the prison wanted him to do. He was then given some medical help and something for the pain, and he was allowed to sleep for three days. Being denied sleep for so long must have been torture in itself, as well as the interrogation and the beatings.
Mr. Mitchell said that his interrogation and the torturing had sometimes lasted for an unbelievable 14 hours. That was normal for him. Even after he had been taken to the prison, the beatings continued. He was hospitalised on three occasions, first for two days, then for 14 days and then for 15 days. Imagine the extent of the injuries that meant he was hospitalised for that length of time. He was allowed a visit from the British embassy after 46 days. Prior to that visit he was again warned not to complain to the embassy about his treatment or he would face even further beatings and torture. At least then he felt that the embassy had been involved, and would hopefully speak up for him and for the other prisoners and get things moving regarding his case.
Mr. Mitchell was then prepared—he says "drilled"—to make a video confession for television as part of his confession, which was rehearsed many times. At first he was told that it was nothing more than a video for the private files. All of us who saw the alleged confession on television were horrified because Sandy Mitchell was reading off an autocue in a very unconvincing manner—and no wonder, because it was the result of beatings and torture from previous days.
So a British citizen was shown all over the world confessing to the bombings in Riyadh, and that suited a lot of internal sources in Saudi at that time. They could claim that the bombings were not the work of domestic terrorists but were quite simply the work of British or other foreign nationals working in Saudi Arabia.
Mr. David Drew: My hon. Friend is making a compelling case. One of the issues here is the face that Saudi Arabia shows to the rest of the world, and although I cannot speak in any detail about the case he is referring to, Saudi Arabia certainly does not have a good reputation with regard to any form of religious freedom. Shi'a Muslims are regularly dealt with in a savage manner, and Christians who happen to be working in Saudi Arabia face all sorts of problems. Surely any country that wants foreign nationals to come and work within its boundaries, and

481WH
which wants to show the rest of the world that it is a developed country, should take religious freedom on board. Does my hon. Friend agree?
Mr. Lyons: There is an important question of religious freedom in Saudi Arabia, which parallels the question of freedom for women to be accepted into Saudi society, and to be able to operate in a normal way. The issue is not just one of religion—there is the question of human rights for the whole population. The Foreign Office needs to address these issues sharply. We as a Parliament need to find a stronger voice when dealing with the Saudis, and the Foreign Office needs to lead that process.
Sandy Mitchell was finally taken to court in July, and before he entered the courtroom he was warned again that if he tried to retract his statement, he would be taken back to the detention centre, and the torture and the beatings would continue. That is what he was faced with at the so-called Department of Justice as he was being taken into court. It took about five months for a lawyer to come and speak to Sandy Mitchell and the other prisoners about the Saudis' abuse of their human rights during their time in prison. It was then that he found out that he had apparently been sentenced to partial beheading and crucifixion. His sentence had already been decided before he even saw a lawyer. That is how expansive Saudi justice is.
I do not intend to go through a lot of the horrific detail involved in this and other cases, but one issue that I must raise is the fact that as Sandy Mitchell and others were being tortured in Saudi Arabia, they noticed that the footcuffs and handcuffs that held them had been made in England. That should make us all feel tremendous shame, and I know that there is all-party support for saying that we cannot allow it to continue. We need to take action to ensure that this stuff is not exported and then used as part of a torture mechanism against any citizen, Saudi or otherwise.
Because we are talking about religious rights, the rights of women, the rights of foreign nationals and the rights of the Saudi population, it is important to record that we salute the work of Amnesty International and Human Rights Watch. Although we are debating this issue today, and may spend some weeks and months on it, they are the custodians ensuring that Saudi behaviour is watched and properly examined every day of the week throughout the year. That is important. We should salute the work in which they have been involved. Amnesty International found a persistent pattern of systematic human rights abuses in Saudi Arabia. Again, that comes not just from the prisoners, but from the international organisation that knows best.
Anne Picking: I, too, congratulate my hon. Friend on securing the debate. I know that he has pursued the matter with great passion. His contribution so far has been excellent.
Before he moves off the issue of torture, I should like to say that I had the pleasure of meeting Sandy Mitchell after he was released. In my professional capacity I was able to judge that he is still suffering from torture. His mental health is in serious need of support. I was
482WH
concerned for him. Does my hon. Friend agree that although the beatings have stopped, the torture is ongoing for him and his family?
Mr. Lyons: My hon. Friend makes a valid, important point. The experience has not ended for the prisoners. Their release was great—it was a wonderful for all of them—but I am sure that the pain of trying to bring their lives together after two and a half years of imprisonment, torture and beatings will leave a tremendous physical and psychological scar on all of them. Again, we need to think about how best to help people in such circumstance s to move back into life and get back to normality. I am pleased that she raised that point. We must deal with such matters properly and more consistently.
In December I asked the Foreign Office whether it would investigate the claims of torture that were made against Saudi Arabia by the recently released British prisoners. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Sunderland, South (Mr. Mullin), replied for the Government, saying:
"Throughout the detention of the British men in Saudi Arabia, we raised with the Saudi authorities, at the highest levels, our concerns about the case, including the men's treatment and conditions in detention. We are in touch with the men and their lawyers and are doing what we properly can to assist them." — [Official Report, 16 December 2003; Vol. 415, c. 779W.]
With respect, that is all very well, but I want to know what the Government are doing to take on the Saudis on the question of the torture and beatings of British citizens in their care in prison. We must be sharper. Members of Parliament, the Foreign Office and the Foreign Affairs Committee must sharpen their language and be tougher on such questions. Those tortures and beatings cannot simply be put on the record by the Foreign Office or the Select Committee and dealt with as numbers. We must take up that challenge at all levels, whether it is the Prime Minister, the Minister, or MPs who do so. We must ensure that people are treated properly.
It is important to note that the UN is unhappy with the situation in Saudi—it is not just me, other MPs, the British Government, Human Rights Watch or Amnesty International who are worried. In reports, the UN continually refers to the abuses that take place in that country, including the abuse of human rights, torture, beatings and jailings. We must raise those matters at every opportunity.
Since his release, Sandy Mitchell and the others have been referred for medical examination. Despite the fact that we have moved on and it is so long since the torture and beatings, they still want to prove medically that they were tortured and beaten in Saudi Arabia. I do not intend to go through the medical evidence produced by the Parker Institute in Denmark, which is the world centre of excellence to which people are referred when they think they are victims of torture and want to prove it. It is important that these reports should remain private, but I shall speak to the conclusion of that report, which states:
"There is an overall accordance between the presented torture history, the described symptoms and the results of today's examination. The findings are consistent with alleged torture with a high degree of support."

483WH
That is not an allegation by any of the men. It comes from medical evidence to support their claims. There should be no question in anyone's mind that everything points to the statements made by Sandy Mitchell, Ron Jones and others, being 200 per cent. true. The report, from such a renowned institute, confirms that in everyone's mind.
As I said to the hon. Member for Southport (Dr. Pugh), I want to come back to the issue of Ron Jones. The hon. Gentleman correctly said that the case would go to the Court of Appeal on 11 and 12 May. Again, we have been told that the Treasury Solicitor has been instructed to act on behalf of the Department for Constitutional Affairs and the Foreign and Commonwealth Office at the appeal. I am unhappy that we should interfere in a claim against the Saudi Government by a person who was beaten and tortured. We should be doing the opposite: we should do everything we can to assist such a claim. We should not stand in the way of it or raise a constitutional hurdle, but should make sure that these who are responsible for torture and beatings are brought to court and that the victim has his day in court to accuse them.
The Foreign Office website says that torture is abhorrent and illegal. If that is so, it should do nothing on 11 and 12 May to stand in the way of the proper presentation and prosecution of Ron Jones's case. The Foreign Office claims that the State Immunity Act 1978 gives legal protection, but t hat should never be a reason for the Government not to do something. I hope the Minister will reflect on that point and give it due consideration.
Jim Sheridan: This may seem a naïve question. It is right and proper for us to seek assurances from the Government that they will do everything they can to ensure that those who have been subjected to torture and their families receive every support and that the same does not happen again, but did the employers of any of those detained play any role in assisting them or in offering their families support?
Mr. Lyons: I thank my hon. Friend for making that point. My information is that the employers of those who were arrested are under tremendous pressure. As employers in Saudi they did everything they could to keep channels open while their employees were in prison and to support the families, but that is difficult to do in Saudi; it is not an easy role for an employer. I am sure that those involved did everything possible in the circumstances.
I said that I would raise the case of Bill Sampson. I do so because the right hon. Member for Penrith and The Border (David Maclean) cannot be with us today, as he is detained elsewhere. I know that he would make these points on behalf of Dr. Sampson and I am happy to do so briefly.
Dr. Sampson was one of the few people who have dual nationality—British and Canadian. He says:
"Of those detained, I am the only dual-national (British and Canadian), and my case was initially handled by representatives of the Canadian Government. This was against my stated request to the Saudi Arabian authorities."
484WH
Dr. Sampson had asked that the British embassy deal with his problems. He continues:
"I have been given to understand that notwithstanding the Saudi Arabian refusal to recognise my dual-nationality, I was entitled under international treaty obligations to be visited by representatives of Her Majesty's government. As such, this has to be added to the long list of my basic human rights that the Saudi Arabian government violated.
The others"—
that is, Sandy Mitchell and others—
"and I were denied access to legal counsel until after we had already been tried and convicted. We were denied consular access during the initial phase of our detention (in my case, the first six weeks). We were denied private, unmonitored visits with our consular representatives. We were not allowed to discuss our situation or the case with the consular representatives. Alongside these basic violations, we were held in solitary confinement, denied access to the news and any information pertaining to our case, kept under conditions of continuous light, physically tortured by systematic beatings and sleep deprivation. Because of this brutality, I suffered a heart attack and almost died due to the special attention of my gaolers."
The case that we and other hon. Members have made is a strong one.
At the outset, I said that 6 August, which was when the men were released, was a wonderful day; but there has been tremendous pain and suffering since, because they have had to recall their dreadful, horrific story of torture and beating unnecessarily, as they know that we need to bring the Saudi Arabian Government to account and get justice, not only now but in future. We have to protect human rights in that country for foreign nationals and people living there.
What I say is not against anyone other than the torturers. I have named the two people whom Sandy Mitchell recalls torturing him. They were guilty, and if the Government do nothing about the matter, they will be guilty of human rights abuses and torture. That is the only conclusion that people can come to after listening to the case of Sandy Mitchell and the others. I am sure that all of us in the Chamber demand justice for people who have been tortured. As I said at the outset, we should stand four-square with the victims of torture.
2.31 pm
Mrs. Ann Cryer: I support everything that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) said about the treatment of his constituent Sandy Mitchell and the others who were kept in such appalling conditions and suffered such dreadful treatment, including torture. I want to mention a few things that have come my way because of a visit to Saudi Arabia, and some other matters that I hope are worth mentioning and may lead to a better understanding of what is going on there.
Last summer, I was invited to Riyadh in Saudi Arabia to meet Government Ministers by the Council for the Advancement of Arab-British Understanding. At first, I refused, as I always have done—I have been invited before—because of the appalling treatment of women, as well as other human rights considerations. I felt very strongly about the issue of women in particular. However, I thought about the invitation, and uppermost in my mind at the time was what happened on 9/11—the demolition of the twin towers in New York. I started to think that perhaps the time had come

485WH
for some of us to start talking to Ministers in places such as Saudi Arabia, instead of being virtuous and not going to those places, especially considering that all those involved in the demolition of the twin towers were Saudi Arabian citizens.
I contacted CAABU and decided to go. A few days later, my hon. Friend the Member for Strathkelvin and Bearsden approached me and told me about the plight of Sandy Mitchell and the others. That convinced me even further to go, because he asked me to make representations on his and his constituent's behalf. Shortly after that, there was a very bad situation in Riyadh, in which a compound that housed mainly foreigners was completely demolished by suicide bombers; a number of bombers were involved. That was two days before we were to fly out.
We were invited to the Foreign Office, and the adviser there told us that we really ought not to go and that our lives would be in danger if we did. However, one member of the delegation was a Member of the other place, Lord Redesdale, and in true Brit fashion, he said to us, "Well, you can decide not to go, but I'll go. If we don't, the suicide bombers have won. If they stop us going to and having influence in countries such as Saudi Arabia, they have won their case." That was a good point. Having considered his and my hon. Friend's arguments, but in the teeth of opposition from my son and daughter, I decided that I should go.
We went and, as has been mentioned, we were treated with courtesy and hospitality. We were only there for a weekend. Of about six people, my hon. Friend the Member for City of Chester (Ms Russell) and I were the two women on the delegation. We were accepted: we were not asked to dress in a certain way and we were not asked to wear veils or cover our heads. We were treated with the utmost courtesy. I ate so much that weekend, I am sure I put on weight. That is not to trivialise what we are talking about.
During our visit we spoke to seven or eight Government Ministers. To each Minister we made representations on behalf of the British prisoners. We complained about their treatment and the charges that had been brought against them, and we begged for their release. Within weeks of our return they were released. Whether our representations had any impact, I am not sure. Later, I went to the Saudi Arabian embassy in London as part of a delegation that included my hon. Friend the Member for Strathkelvin and Bearsden and other Members involved in these arguments. That probably also helped.
Last summer, after the release of the captives, I was invited to a Saudi Arabian women's day—can you believe it—in London. It was a lovely occasion. We heard from all kinds of professionals from Saudi Arabia—I know this is trivial, but they were beautiful women and beautifully dressed—who were very clever and talented. It made me think that Saudi Arabia is moving in the right direction. At the same time, however, I had to consider the fact that women in Saudi Arabia are not allowed to travel alone unless they carry a document demonstrating that they have their husband's permission to do so. They are not allowed to drive or vote, and they do not have any seats on the governing council. However, a handful of women now
486WH
have advisory positions to that governing council. Many of these women were in London last summer.
I made representations in Saudi Arabia on behalf of the Christian community about its right to freedom of worship. I was told by Saudi Arabian Ministers that there was no restriction on freedom of worship. They do not, however, allow buildings dedicated to religions other than the Muslim faith. I would like to discuss that issue with them once more.
I was very encouraged by the conference and lunch that I attended in London, and by seeing those terrific, talented women, who were able to speak up on behalf of the women of Saudi Arabia. This morning, however, I was very saddened to hear on the "Today" programme that the Grand Mufti of Saudi Arabia, who is, I suppose, the Muslim world's equivalent to the Archbishop of Canterbury, had condemned a group of women—I am sure that they were the same women whom I met in both Riyadh and London—for having the audacity to go to a business conference where they spoke, did not cover their heads and did not wear a veil. Apparently the Grand Mufti was very critical of those women. It was suggested that he was threatening about them. Having had contact with the Saudi Arabian ambassador to London with my hon. Friend, I will write to him in the next few days asking for his Government's assurance that those women will not be threatened; in fact, I would like to see such women promoted and accepted as a norm in Saudi Arabian society.
I looked through this morning's newspapers to see whether I could find a report of the Grand Mufti's comment, but I could not do so. I discovered one or two encouraging things, however. Morocco, another Muslim and Arab state, has passed a new law that will give women equal rights; there will also be family rights; and they hope that polygamy will become a thing of the past. In addition, women are now to be allowed to join the committees of the governing councils of the game of golf. So even we and our golling enthusiasts are coming into the 21st century.
2.39 pm
Mr. Michael Moore: I add my congratulations to the hon. Member for Strathkelvin and Bearsden (Mr. Lyons) on securing the debate and on showing a great deal of patience and care in setting out the case of his constituent, Sandy Mitchell, and the experience of other hon. Members who have had to deal with the shocking instances involving British detainees in the past year. I also pay tribute to the hon. Member for Keighley (Mrs. Cryer) for raising another issue relating to human rights problems in Saudi Arabia. I hope that the Minister will be able to touch on that in his reply.
The broader topic is important but, at the outset, I join others in supporting the efforts of the hon. Member for Strathkelvin and Bearsden to pursue the issue of compensation and related issues with the Saudi authorities. I hope that the Government will facilitate that, and that the Minister will shed some light on the situation in the Court of Appeal in his winding-up comments.
In response to a parliamentary question from my noble friend Lord Avebury on 17 November, Baroness Symons said that if the men choose to pursue a claim for

487WH
compensation, it is a matter for them and their lawyers. Everyone here would expect a little more activity on their behalf by the Government so that they will not simply be left in isolation to pursue their cases. The release of the prisoners was obviously welcome, and I join other hon. Members in acknowledging the efforts of many in the Chamber, and behind the scenes in the Government, who made key efforts on their behalf. The specific instance of the British detainees has cast a rather harsh light on the relationship that the United Kingdom enjoys with Saudi Arabia, not least in respect of human rights.
Before I am critical, perhaps it is only fair to recognise the complexities that exist in Saudi Arabia. The religious situation is extremely sensitive, and we all recognise that. There are difficult internal security realities, not least, as has been mentioned, after 11 September. There are also important regional strategic security issues, to which all of our concerns relate.
It would be churlish if we did not acknowledge the serious efforts that have been made by Crown Prince Abdullah to move the reform programme forward. His proposals last year for self-reform and the promotion of political participation were an important step forward. The national reform document, and the petition that he accepted from the Shi'a Muslims, also showed signs of progress. None the less, we have yet to see any fruits from that dialogue. I hope that the Government will continue to press for concrete outcomes from them.
The hon. Member for Strathkelvin and Bearsden rightly paid tribute to Amnesty International. In its most recent report, it highlights many different issues, but describes how torture and ill-treatment remain rife. It also highlights the fact that international non-governmental human rights organisations have been denied access to the country to do anything meaningful.
The Government have not been slow to highlight the weakness of the Saudi position on human rights. On their website, they have focused for some time—in language consistent with that used in parliamentary answers—on aspects of the judicial system, corporal and capital punishment, torture, discrimination against women and non-Muslims, and restrictions on freedom of movement, expression, assembly and worship. This is not a relationship in which the Government are blinded or turn the other way.
Although I welcome the Government's frank statement on the human rights situation in Saudi Arabia, I recognise the complexity of our relationship with that country, in terms of trade, security and our joint efforts to combat international terrorism. The overlap between all those different issues sometimes means that none of them is particularly clear. Sometimes they all come together, most obviously in the al-Yamamah project—the scale of which is vast, but detail about which is limited. My hon. Friend the Member for North Norfolk (Norman Lamb) has repeatedly asked the Ministry of Defence for information and has been repulsed on the grounds of confidentiality or disproportionate cost.
We are keen to get to the bottom of the extent to which there is any conditionality in the relationship, in a trading sense, with Saudi Arabia, particularly in
488WH
relation to that project, but in relation to our other dealings. On 18 November, my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) asked if human rights were included as a condition in the contracts governing the al-Yamamah programme. The Minister of State at the MOD replied in a parliamentary answer that no conditions were attached. That will surprise many people.
The hon. Member for Strathkelvin and Bearsden highlighted the fact that export licences from this country are still being allowed for types of equipment that would appear, at face value, to breach the consolidated EU and national arms export licensing criteria, by which such things are judged. Criterion two states that the Government will not issue an export licence
"if there is a clear risk that the proposed export might be used for internal repression".
The export to Saudi Arabia of footcuffs and handcuffs that were manufactured in this country shows that there is at least one example of the failure of that process. Surely it is time for Britain to get its house in order, because, without that, we make a mockery not just of the licensing system, but of the Government's publicly stated position on human rights in Saudi Arabia.
It is important that we do not lose sight of the issues raised by the hon. Member for Strathkelvin and Bearsden and his hon. Friends regarding Sandy Mitchell, Ron Jones and others. The Government must make every effort to assist them in their case against the Saudi Government. In our dealings with the Saudis, we must continue to urge them to respond positively to those appeals. We must also take account of the point made by the hon. Member for West Renfrewshire (Jim Sheridan), who said that the Saudi authorities must send clear signals to citizens from other countries that they will enjoy the highest standards of international law in all their dealings with them.
On the wider issues, we must also encourage the Saudis to continue with the reform programme, and, in particular, to allow non-governmental organisations and others in to monitor how that is progressing.
We have a strong relationship with the Saudis. That relationship has to be frank, and we have to balance all our different interests carefully. However, without increased transparency and a proper understanding of the commercial and strategic relationship with Saudi Arabia, the concerns about human rights abuses will continue, and our Government's position will continue to appear weak.
2.49 pm
Mr. Gary Streeter: I am pleased to take part in this important debate. I add my congratulations to the hon. Member for Strathkelvin and Bearsden (Mr. Lyons), not just on securing the debate in the first instance, but on the way in which he set out his case. We lawyers, or former lawyers, have an expression, res ipsa loquitur, which means that the facts speak for themselves. The power of his case was that he allowed the facts to speak for themselves. The facts are chilling and that is what makes his case so powerful. I congratulate him on raising the cases of Sandy Mitchell and the Jones family over a long time. I hope that the Minister can give some of the reassurances about more effective action that the hon. Gentleman has called for.

489WH
A number of cases raise general concern about Saudi Arabia, and that is what I want to address. Nobody can have any doubts about human rights abuses after reading the evidence in the US State Department report. There are also several reports by non-governmental organisations that raise such issues—we have heard about Human Rights Watch and Amnesty International, and we owe them a debt of gratitude for being vigilant on our behalf. The Government have their own assessment of human rights in Saudi Arabia.
Important information about human rights abuses comes from all quarters. In my part of the United Kingdom, the west country, there is a strong defence contingent and many former servicemen and women work or have worked in Saudi Arabia and other Gulf regions. From them, I have received, on a number of occasions and over many years, first-hand testimony of human rights abuses and other difficulties in Saudi Arabia. There is undoubtedly a very worrying situation. We should all be concerned about the brutal and one-sided criminal justice system, unacceptable restrictions on religious freedoms, restrictions on free speech and movement, appalling discrimination against women and non-Muslims—or even the wrong type of Muslims—and a lack of representative Government and anything remotely approaching democracy.
The hon. Member for Keighley (Mrs. Cryer) mentioned the comments of the Grand Mufti. I have a piece of paper that was printed from the BBC website that quotes his remarks. There was a conference at the Red sea port of Jeddah at which the chief businesswoman in the country, Lubna Al-Olayan, used her speech to call for female empowerment in the kingdom. She said:
"It is essential for Saudi Arabia's economic well-being for the potential of the country's female workforce to be unlocked. Without real change there can be no real progress. If we in Saudi Arabia want to progress we have no choice but to embrace change.
Her statements were reasonable and sensible. Unfortunately, the Grand Mufti's response was:
"I severely condemn this matter and warn of grave consequences."
I hope that the Government will support this brave businesswoman's call and condemn the comments of the Grand Mufti.
In a difficult and unstable region where the virtuous triangle of democracy, the rule of law and respect for human rights are thin on the ground, all hon. Members must ask how we and the UK Government can best act to help the situation to improve. I agree that we need a stronger and sharper voice on the unacceptable practices in Saudi Arabia, but the key question is how we can best advocate change.
Our quest for the right approach must be informed by three key principles. First, it is unrealistic to expect quick fixes. It took the people of our country hundreds of years to get the democracy that we have today. We all want rapid change, but we must recognise that such change can take time. Secondly, it is unhelpful— arrogant, even—for us to seek to impose western solutions on what is a very different region and culture. One size does not fit all in this case. Thirdly, we must accept a measure of realpolitik. In the struggles that we
490WH
have had in the Gulf region in the past 15 years or so, Saudi Arabia has been a friend and ally in some of our interventions. Those things need to be understood.
The human rights situation in Saudi Arabia, however, is intolerable and unacceptable. I say that even though this country considers itself to be a friend of Saudi Arabia and has strong trade links with it. There must be gradual change and reform. The question is how can we help to achieve that.
The Government have decided how they will tackle this matter. I will now refer to the "Human Rights Annual Report 2002" of the Foreign Affairs Committee, and specifically to the evidence given by the Minister on 28 January 2003—I am not sure how those dates tally, but apparently they do. He was asked about Saudi Arabia and, on page 35, he is reported as saying that
"there is an extensive list of concerns that we put forward, and they are in the public domain, about corporal and capital punishment, torture, discrimination against women and non-Muslims and restrictions on freedom of expression. However, we maintain a confidential dialogue with the Saudi Government on human rights issues because we do find in some circumstances that is more effective than public confrontation."
I am not saying that a confidential dialogue is not the right course of action—we all have to live in the real world—but if we are not careful, the words "confidential dialogue" can become a smokescreen or camouflage to hide behind. It could be another way of saying, "Actually, we are not doing much."
I am not accusing the Minister of that, but I would like him to say a little about what that confidential dialogue includes. How frequent are these confidential conversations? When was the last time that the Minister spoke to a Saudi Minister about human rights? The Minister says that the Government do, from time to time, criticise publicly the Saudi regime, but I would like to know when that last happened. I was unable to find any press cuttings of public criticism.
Saudi Arabia is an important trading partner, in particular in the realm of defence procurement. I note that the Saudi Foreign Minister has been to the UK four times in the past three years, and there have been many ministerial visits to Saudi Arabia in that time. Baroness Symons of Vernham Dean, in her capacity as Minister with responsibility for trade and industry, has been three times in the past two years. The Defence Secretary, the Prime Minister and the Foreign Secretary have all been to the country in the past two or three years. I would like the Minister to confirm whether on each visit the issue of human rights was raised. It is not so important whether they discussed the cases of individual families or the general situation, but that, on every occasion, the UK Government put down the marker that we find the country's human rights record unacceptable.
In his evidence to the Select Committee, the Minister understandably pointed towards some progress. On page 37, he says that
"we have seen in the last year the first time the Saudi's reported to the UN Committee Against Torture. There are still concerns but I think that is a positive development. There was the new criminal code, which came into force in Saudi Arabia in May 2002 which gives increased rights to those people accused of crimes. The fact that the UN Special Rapporteur on the Independence of Judges and Lawyers visited Saudi in October 2002 I think was a positive development."
I do not disagree with any of that, but what has happened since January 2003 when he made those comments? In particular, what has happened to the new

491WH
criminal code, which introduced the radical notions of an accused person being allowed to be defended by a lawyer, and a court passing a sentence after the trial, rather than before the trial has taken place, as was the case? Is that code in place and working, and are we satisfied with it?
I recognise that Saudi Arabia is at the crossroads. The winds of change are beginning to blow fiercely through the country. It is facing a struggle with internal dissent and terrorism. It is grappling with population growth that is outstripping economic growth. Sectarian resentments are beginning to grow, and there is an upsurge in radical Islamic activism. Those are difficult issues for any Government to deal with. We must recognise the fragile state of the entire region, the stability of which is by no means assured.
Although, we appreciate the sensitivities of the country and the region, we none the less want the Minister to take effective action. It is vital that the Saudi Government act firmly and decisively against the threat of terror and global terrorists, and nothing should be used as a smokescreen or excuse to block further progress in giving Saudi citizens more freedoms, rights and justice. That might be achieved through confidential dialogue or through something else, but will the Minister tell us whether he will continue to press the Saudis, using all means possible, to accept the need for change and to flow with the inevitable river of reform?
3 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): We have had an exceedingly good debate on what is, undoubtedly, a very serious issue. In particular, I congratulate my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) on securing this debate on human rights in Saudi Arabia. I have listened carefully to all the points.
Jim Sheridan: Thus far, I have resisted the temptation to intervene on the persistent references to the constituency of my hon Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) as "Beersden". It is actually "Bearsden". I do not want my hon. Friend's constituents to be thought of as people hiding in a den, drinking beer.
Mr. Rammell: I am appropriately reprimanded and apologise sincerely for my mispronunciation. Perhaps it is because I have been drinking beer—no, I have not.
My hon. Friend the Member for Strathkelvin and Bearsden raised important concerns about the human rights situation in Saudi Arabia, particularly his constituency concern. He focused on the cases of the British men who were detained in Saudi Arabia until August last year. I genuinely understand his concerns, and I pay tribute to the way in which he consistently supported their cause. He somewhat diminished his role in the process, as he played a key part in advocating their interests.
I shall comment in general terms on points raised by my hon. Friend and other hon. Members. To this day, the Foreign Office remains in close contact with the men
492WH
and their families. Indeed, throughout the two and a half years of their
detention, British Government Ministers and officials worked exceedingly hard to resolve their case and to secure their release. We consistently raised the matter with the Saudi Government at the highest levels and at every conceivable appropriate opportunity—I shall come back to that later—and we were in close contact with the men and their families throughout the case. Obviously, it was an extraordinarily difficult time for them. Mr. Ron Jones is present today in the Public Gallery, and I welcome him.
My hon. Friend the Member for Strathkelvin and Bearsden discussed the men's treatment while in detention. I wish to make it absolutely clear that throughout the case the paramount concern of Ministers and officials has been the men's welfare. We made clear our concerns about their treatment and conditions of detention with the Saudi authorities repeatedly and consistently at all levels. We did so in private—that goes to the nub of several points that have been made this afternoon—as our judgment and assessment were that that was the most effective, practical means of securing the men's release. Of course, we can be challenged over that assessment.
The majority of the families and of the lawyers believed that it was not in the men's best interests to raise the profile of their case publicly. We can be criticised, and different Members will have different judgments, but that is the conclusion that we reached. The fact that finally, albeit after too long a time, we secured the men's release suggests that our approach was sensible.
Let me comment specifically on some of the points that have been made. My hon. Friend spoke about the identities of two individual torturers. We raised with the Saudi authorities the role of named Saudi individuals involved in the men's detention. In respect of my hon. Friend's concern about what would happen if they came to this country, the position is that unless those individuals were found guilty by a court of an offence recognised under UK law, we would have no grounds for arresting them. That is the legal situation. We are aware of the ongoing legal case on the men's detention. We have expressed our concerns about it and the conditions of their detention, and we shall continue to do so.
My hon. Friend also said that he wanted a stronger voice from the Foreign Office against human rights abuses in Saudi Arabia generally. That is a key point. He asked explicitly what we are doing in that regard and I shall give three responses. First, there is undoubtedly a balance to be struck in respect of what might be described as strident, public criticism that could harm the interests of UK citizens. I am not referring to my hon. Friend, but unless we recognised that there is a balance to be struck, we would not be carrying out our responsibilities on behalf of UK citizens appropriately and responsibly. Secondly, in response to the question about what the Foreign Office is doing, people must look at what we have done: we have consistently pursued such matters and made our position clear.
Thirdly, on the generality of the human rights situation in Saudi Arabia, the issue was consistently brought forward by hon. Members of all parties when the Foreign Office published its annual human rights

493WH
report. We have listened and responded and the general criticisms of human rights in Saudi Arabia are far more explicit in that annual human rights report now than in the past. My hon. Friend referred to the excellent work of Amnesty International and Human Rights Watch in relation to that process and other human rights cases, and I endorse that view. Although the Government have one role and human rights organisations have another, we respect such organisations and work with them to promote human rights and to take up particular issues of concern.
My hon. Friend also referred to Bill Sampson and questioned why he was dealt with as a Canadian national. He entered Saudi Arabia on his Canadian passport, and Saudi Arabia, under its statutes, does not recognise dual nationality. That is why it was appropriate and most effective for the Canadian authorities to take up the case. Nevertheless, we were in close contact throughout with the Canadian authorities and, since his release, we have offered to provide Mr. Sampson with appropriate assistance.
My hon. Friend the Member for Keighley (Mrs. Cryer) mentioned the approaches that she and others have made, both in Saudi Arabia and to the Saudi ambassador in London. I genuinely believe that all such representations, including our own in the Foreign Office and throughout Government, contributed to the work that went on throughout the men's detention to secure their release.
My hon. Friend also referred to the involvement of Saudi nationals in the attacks on the United States on 11 September 2001. Despite differences of view with the Saudi authorities about human rights, it is worth stating on the record that the Saudi Government have at all times condemned those attacks, as they have repeatedly condemned terrorist attacks wherever they occurred and whomever the victims were.
My hon. Friends the Members for East Lothian (Anne Picking) and for Strathkelvin and Bearsden raised the important point that a number of the men concerned are still suffering from torture. My hon. Friend the Member for East Lothian said that we should be helping to integrate those men back into society. The point was well made. On their release, we arranged for fast-track access to national health service appointments and liaised with the offices of the men's MPs to help them get access to local services. It was right and proper that we responded in that way.
The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) raised in general terms the issue of selling arms to Saudi Arabia. It is worth saying that all export licences for equipment for Saudi Arabia are assessed case by case against both our own national arms export licensing criteria and the consolidated EU criteria. Most of our strategic exports to Saudi Arabia fall within the ambit that he mentioned—the al-Yamamah project—under the terms of the Government's memorandum of understanding that was signed in 1985. The equipment that is supplied is judged according to those licensing criteria. Key within that is the point that equipment is not sold if we judge that it could be used for internal repression or external aggression.
494WH
My hon. Friend the Member for Crawley (Laura Moffatt) has not spoken today, but she is in the Chamber. She has consistently raised concerns with the Foreign Office on behalf of her constituent, Mr. Ron Jones.
Mr. Moore: I am grateful to the Minister for giving way. I am sorry that I did not catch him before he moved off the point to which I want to refer. Will he pick up on the specific issue that was raised not only by me, but by the hon. Member for Strathkelvin and Bearsden (Mr. Lyons), about the supply of equipment that can be used for repression?
Mr. Rammell: When I return to the body of my speech, I shall refer specifically to that worry. It is a key issue.
The hon. Member for South-West Devon (Mr. Streeter) referred to my comments at the Foreign Affairs Committee earlier this year when I spoke about the Government's annual human rights report. I said that we undertake a confidential dialogue with regard to the Saudi authorities and I am grateful for the fact that the hon. Gentleman acknowledged that that is not necessarily the wrong approach. He asked how often the dialogue takes place. It takes place exceedingly frequently and at every opportunity we raise such issues at official and ambassadorial levels.
My noble Friend Baroness Symons has explicit responsibility for Saudi Arabia, which is why the hon. Gentleman has not heard me usually referring to such matters. She has raised the matter directly with the Saudi authorities, as have the Foreign Secretary and the Prime Minister. We take such an approach consistently and we shall continue to do so. The hon. Member for South-West Devon also acknowledged from my comments that some progress has been made in Saudi Arabia, an issue to which I shall return.
One of the matters that we need to reflect on is that when dealing with human rights at any time, there are intermingling forces of progress and forces of reaction. We are therefore constantly engaged in making exceedingly difficult judgments about how to promote the forces of progress while, at the same time, making clear our opposition to the forces of reaction. The hon. Gentleman sought a more detailed response in respect of Saudi Arabia. On 24 February, I will give evidence to the Foreign Affairs Committee on this year's annual human rights report, when I am sure we shall go into such issues in considerable detail.
Laura Moffatt: My hon. Friend rightly mentioned steering a careful path between encouragement and criticism. We have all been sensitive to that. Does he agree that it is most important for the victims of torture to know that the Government, especially the Foreign Office, are not obstructive to any action that they may feel is necessary? It is not just a matter of sitting back and allowing things to happen, but of supporting people from the United Kingdom who may have been in difficulty, particularly in Saudi Arabia.
Mr. Rammell: I thank my hon. Friend for her intervention. We support United Kingdom nationals

495WH
who have been in such difficult circumstances and we shall continue to do so. I think that she was alluding specifically to a legal case, to which I shall refer later.
The hon. Member for Tweeddale, Ettrick and Lauderdale raised the issue of men being shackled by leg irons that were made in England, as did my hon. Friend the Member for Strathkelvin and Bearsden. I am sure that all of us shared the horror and revulsion when that fact was revealed. It is a worrying and serious allegation and it is important that I make some specific comments about it.
In March 1994, an open individual export licence was granted for the export of shackles to destinations that included Saudi Arabia. In an announcement to Parliament on 28 July 1997—under a Labour Government—known as "the torture statement", the then Foreign Secretary, my right hon. Friend the Member for Livingston (Mr. Cook), committed the Government to taking the necessary measures to prevent the export or transhipment from the United Kingdom of leg irons, gang chains and shackles—excluding normal handcuffs—and electric shock belts designed for the restraint of human beings.
That announcement also committed the Government to encourage European Union member states to impose similar restrictions as a third step towards a global ban. As a forerunner to that announcement, Saudia Arabia was specifically removed as a destination on the export licence on 25 July 1997. I am trying to make it clear that the equipment to which my hon. Friend referred is in Saudi Arabia because of the export licensing regime that existed prior to 1997. All other things being equal, similar equipment could not be exported today.
We greatly welcomed the men's release on 8 August 2003. We were relieved at their return to the UK and to their families. Indeed, Ministers and officials had worked vigorously to secure that outcome. It is worth relating the efforts that we went to when they were released. British embassy officials met them and stayed with them until they boarded the flight to London. We arranged for the men to be accompanied on the flight by a team of British medics and a British embassy official. Police collected members of the men's families from their homes across the UK and drove them to Heathrow airport so that they could meet the men on their arrival. The police then took the majority of the men and their families to their homes or other locations of their choice.
Although the Foreign Office's consular remit and responsibility normally ceases when a British national returns home, on this occasion, given the exceptional circumstances, we offered the men further assistance. As I said, we offered them fast-track access to the national health service. We liaised with their Members of Parliament and—rightly and appropriately, given the circumstances—the Foreign Secretary spoke to each of the men on their return.
The issue of compensation has been raised, and my hon. Friend the Member for Strathkelvin and Bearsden mentioned that, too. I am aware of the men's desire for compensation. It is of course for them to decide how they proceed in that regard, and whether they pursue legal action. Nevertheless, we remain in close touch with the men, their lawyers and the Saudi authorities, and it
496WH
would not be appropriate for me to go further on those issues now. Indeed, to do so could compromise any progress that would otherwise be made.
Mr. Lyons: It may be true that there are outstanding legal cases, but behind all that, at the end of the day, there is a drive to receive justice rather than compensation. I ask the Minister to reconsider the legal opinion that he has been given in respect of Ron Jones and the two people I mentioned, Khalid al Sallah and Ibrahim al Dali. Surely the Foreign Secretary should consider how we could arrest those people the minute that they step foot in the UK or the EU. That would be a way forward.
Mr. Rammell: I give my hon. Friend a commitment that I will look at that legal advice again. It is clear legal advice, and I will happily discuss it with him in detail, but it would be totally inappropriate for Ministers to give cavalier commitments on something of such importance when we know that, legally, we could not act differently.
The Foreign Office's annual human rights report describes in detail how the Government have responded to human rights challenges around the world, including in Saudi Arabia. Our view is that the promotion and protection of human rights is morally right and firmly in our national interest. By that, I mean that countries that have strong and good human rights records tend to be those with which we have good relations and can do business. We are convincing people that we are taking the right approach on human rights both from a moral and altruistic and from a self-interested point of view.
The annual report on human rights makes it clear that we have human rights concerns in a wide range of countries. We undoubtedly use different approaches to human rights issues in different countries. I know that that sometimes subjects us to criticism, but it is a reality that one size does not fit all. The same approach is not the most effective in every situation. Our experience has been that engaging the Saudi authorities in discussion on human rights issues in private is often more productive and effective than public confrontation. However, let me be clear that private discussions are in no way synonymous with a soft approach. That refers to the issues raised by the hon. Member for South-West Devon.
We have deep concerns about Saudi Arabia's failure to implement basic human rights norms on a wide range of issues, including aspects of the judicial system, corporate and capital punishment, torture, discrimination against women and non-Muslims and restrictions on freedom of expression, assembly and worship. Hon. Members have referred to a number of those issues, and it may be helpful if I expand on them.
We are worried that the Saudi legal system's procedures do not meet accepted international standards. Indeed, in a fact-finding mission to Saudi Arabia in October 2002, the United Nations special rapporteur for the independence of judges and lawyers, Mr. Cumaraswamy, met representatives from the Government, the Shura council, the board of senior religious scholars, the bureau of investigation and prosecution, the judiciary, the prison service and the legal professions. His report identified many areas of

497WH
concern. He considered that the Saudi judicial system continued to rely heavily on confessions, that the Ministry of Justice's control over judges contributed to a lack of transparency and impartiality, and that torture and prolonged, incommunicado pre-trial detentions continued. We voiced our concerns about Saudi Arabia to our European Union partners at the United Nations Commission on Human Rights in March 2003.
We also have concerns about capital and corporal punishment. As hon. Members will be aware, the Saudi judicial system imposes corporal and capital punishment under Saudi sharia law. A number of crimes can be punished by death, including adultery. The judicial and administrative authorities' use of amputation—for example, for theft—and flogging remain prevalent. Individuals can be sentenced to flogging for consumption of drugs and alcohol. We believe that the Saudi authorities executed 53 people last year, one of the highest levels of public execution in the world. The Saudi authorities are well aware of our views on the use of the death penalty: we oppose it in Saudi Arabia and everywhere in the world. We also oppose judicial corporal punishment in all its forms.
My hon. Friend the Member for Keighley referred to the plight of women in Saudi Arabia. While women represent more than half the school and university population, they are constrained in the types of job that they can take and in the positions that they can hold in society, and there are severe restrictions on their freedom of movement, to which my hon. Friend referred. There has been some progress. In September 2001 Saudi Arabia ratified the UN convention for elimination of discrimination against women, but we and others have voiced disquiet about the broad reservations that it placed on that ratification. Again, therefore, it is a mixed picture.
Against those wide-ranging concerns must be set some encouraging developments in Saudi Arabia in human rights issues. In May 2002 the Saudis adopted new criminal justice procedures aimed at modernising the criminal justice system. The Saudi Government have shown a greater willingness to engage with the international community and openly discuss human rights issues, and we support and encourage them in that process.
Mr. Streeter: The Minister mentioned the new criminal justice system. In his evidence to the Select Committee in January it was clear that it had not yet been implemented, although it had been introduced in a different way the previous year. Does he know whether it has now been implemented and is working, and are we satisfied?
Mr. Rammell: I apologise to the hon. Gentleman. I meant to pick up that point earlier.
We have seen some practical implementation of the new system. We continue to monitor the situation closely and we are encouraging the Saudi Government
498WH
to move further. In terms of progress, we have also seen a greater willingness by the Saudi authorities to engage with the international community in dialogues on a wide range of issues. Indeed, in January 2003 the Saudi Crown Prince, who is responsible for much of the day-to-day running of the country, set out proposals for self-reform and the promotion of political participation in the Arab world. Two dialogues have been held since then, and a third is planned. It will address what in many senses is the most controversial subject—the situation of women in Saudi Arabia. We see that as a positive step forward and will encourage that process.
A number of hon. Members referred to the legal case that Mr. Jones is pursuing. Mr. Jones has asked the Court of Appeal to decide that the United Kingdom's existing legislation regarding the immunity of foreign states from the jurisdiction of UK courts, under the State Immunity Act 1978, is not compatible with the UK's obligations under the European convention on human rights. That request is a legal challenge to the 1978 Act under the Human Rights Act 1998. In accordance with the requirements of the 1998 Act, the Government have a right to be party to the proceedings. The legislation is theirs, so they have a right to be represented. The 1978 Act is the responsibility of the Department for Constitutional Affairs, which has asked to be joined as a party. The Government are intervening not to go against Mr. Jones. but to defend existing UK legislation. I shall be happy to talk to hon. Members about that on another occasion.
In conclusion, this has been an important debate on a difficult issue. There have been some positive human rights developments in Saudi Arabia, but there is undoubtedly still a long way to go. We continue to have wide-ranging concerns, but we remain committed to encouraging Saudi Arabia to improve its human rights record. We are encouraged by the ratification of some of the United Nations' human rights treaties, but we should like to see the Saudi authorities go further in implementing those treaties and lifting their exceedingly broad reservations, particularly with regard to women. We continue to press the Saudi Government to ratify the international covenant on economic, social and cultural rights and the international covenant on civil and political rights, which are two of the six core UN human rights instruments.
We continue to voice our concerns at every opportunity, both privately and publicly. However, as I have stressed on a number of occasions, there must be a balance between explicit public condemnation and private dialogue. The reaction of hon. Members suggests general recognition of that point. If we do not take that balance into account, we shall not serve the interests of UK nationals. In that context, we shall continue to pursue our course of action. I thank every hon. Member who has contributed to the debate, especially my hon. Friend the Member for Strathkelvin and Bearsden, who initiated it. This has been a good opportunity to raise issues on an important subject.

Language Development (0—3 year olds)
3.28 pm
Chris Ruane: Thank you for your kind introduction, Mr. Cook. The issue is indeed intriguing. I should like to bring to the Chamber's attention what I believe is the key issue facing the country today. At first glance, one might not think that it could possibly be this, but the development of language governs not only an individual's ability to talk, but the ability to think, reason, argue, discuss, debate and use a range of higher-order skills that are necessary for an individual and a national economy to function properly in the 21st century.
I draw hon. Members' attention to this book "Meaningful Differences in the Everyday Experiences of Young American Children", by Betty Hart and Todd R. Risley, who are professors of human development and psychology. They have produced what is widely recognised as the most comprehensive study of early language development ever conducted. I should like to give a brief summary of that research, which was first brought to my attention by the journalist Polly Toynbee, in a recent article in The Guardian. I am indebted to Polly: the House could not get a copy of the book for me in time, but she sent one last Friday. I read it over the weekend and was very impressed. The authors originally took part in intervention programmes with four-year-olds. They tried, with extra funding and resources, to raise the children's educational attainment. They could not achieve this, and wondered why that might be, so they examined development from nought to three and found it to be the key.
Hart and Risley studied 42 families: professional and working-class families and those on welfare. Once a month they went into the family home and recorded every single word that was uttered to the child concerned. They did this for two and a half years. They spent six years categorizing, coding and analysing this information. They found that, over the two and a half year period, there were widening gaps between the vocabulary growth of the child from a professional family, the child from a working-class family and the child from a family receiving welfare. By the age of four, the child from a professional family had had 50 million words spoken to him, the child from a working-class family 30 million, and the one from the family on benefits just 12 million.
The researchers also examined the types of words that were spoken and the context in which they were used. They looked at positive reinforcement and negative discouragement, and what they found in this regard was equally shattering. The child from the professional family had had 700,000 words of encouragement, with just 80,000 negatives. However, the child from the family receiving benefits had 60,000 words of encouragement and twice as many words of discouragement. One can imagine the effect of this, day in, day out, on a child's motivation, confidence, self-awareness, self-esteem and aspiration—it cannot be exaggerated.
Hart and Risley also found that the vocabulary of a child of three from the professional class was greater than that of the adult from the family receiving benefits.
500WH
That is a devastating statistic. I would say it needs further analysis, but if it is true, a great deal of intervention needs to take place. I think this might help us to understand why social class is the most significant defining factor in a child's educational success in Britain. According to the March 2003 Education and Child Poverty report, the gap established was larger than in any other country in the developed world. I know that the Pre-School Learning Alliance, a national educational charity that has campaigned on this matter, is also concerned. Recent research by the Government's Basic Skills Agency has also found a notable decrease in language skills in all primary school children, regardless of family demographics, within the last five years. A clear initiative to foster early language development among disadvantaged British children is essential.
I want to turn my focus to what can be done in the UK to give children from working-class families and those on welfare equality of opportunity from the day they are born. Before I do this, I would like to give credit for what the Government have done for families in deprived neighbourhoods—the list is impressive. We have increased child benefit to more than £16 a week for the first child, and continue to uprate it each year. We have introduced a range of early-years programmes, including Sure Start, which now attracts £500 million in funding. We have reduced class sizes in infant schools to below 30. We have introduced literacy and numeracy hours and have dramatically improved the results obtained in standard assessment tests. We have introduced flexible working hours and paternity leave, extended maternity leave and pay, and introduced the working time directive to enable families to spend more time together. We have introduced the minimum wage and the working families tax credit, which specifically target women and poorer communities. In the pre-Budget report, the Chancellor announced new tax and national insurance breaks for employers who supported child care. We have helped to set up workplace nurseries, after-school clubs, pre-school clubs, breakfast clubs, and family and neighbourhood learning centres in deprived communities. Indeed, I have a dedicated family learning centre opening in my constituency in March, in the West ward of Rhyl, the poorest ward of the 865 in Wales. This Friday I will be opening an out-of-school club at Ysgol Brynhedydd in my constituency. The parents are over the moon at these developments.
I am sure the Minister will add to this impressive list when she sums up at the end. In the Green Paper for children published last September, proposals were put forward to offer a comprehensive approach to the improvement of the lives of British children and youths. I look forward to further development of the initiatives in the coming months, in particular the thorough assessment of how language development can help achieve the goal of lifting children out of poverty. That is a noble goal, set by the Prime Minister—sorry, that was a Freudian slip; the Chancellor has set the goal of lifting all children out of poverty by 2020. However, is bringing them out of poverty so that they are hovering just above the poverty level enough? I do not believe so. We should give such children material support, but our true goal should be to let each and every one of them flourish, and that is contingent on—I refer the Chamber back to the title of the debate—improving children's language development between the ages of nought and three.

501WH
The importance of language education for children between nought and three should be recognised in our financing and budgeting. That would show our priorities. Putting the finance in place would show that we are serious about tackling the issue. UK education funding between the ages of nought and 21 is biased towards the secondary and tertiary sectors. In 2001—02, net expenditure in England per pupil was £5,170 for higher education, £3,790 for further education, £3,500 for secondary education and £2,940 for pre-school and primary education, which are now lumped together. I have not been able to obtain the figure for the nought to three-year-olds, but I imagine that funding for them would be dramatically lower. That bias is maintained, despite the fact that for at least 50 years we have known that 50 per cent. of learning is done before the age of five. Ignatius Loyola said 400 years ago, "Give me the child until the age of seven, and I will give you the man." Yet our funding priorities are the inverse of that.
I have concentrated on an overview of our achievements to date and on the importance of the early years, but I wish to return to the specific point of language development, and to what measures the Government could take to narrow the gap among nought to three-year-olds of different social classes. I urge the Minister to conduct a comprehensive assessment of previous research on that issue, of which there are numerous examples from around the world. We need to reassess the excellent work done in America, of which I am sure civil servants are aware. We should consider the High Scope Perry pre-school project, which focused on the early education of disadvantaged children in the Michigan community. Those children learned language through activities that they created and implemented themselves, with the guidance of adult educators. For every $1 invested in that programme—and we have a canny Chancellor interested in savings—$7 was saved during the next 20 years, because less money was subsequently spent on special educational needs, welfare benefits and juvenile crime. The university of North Carolina set up the Abecedarian project, in which infants from low-income homes were put in an intensive child care setting, which resulted in a return of $4 for every $1 spent.
I ask the Minister to look not only to the US but to areas of the UK. In Wales, we are surging ahead with breakfast clubs—putting the nutrients into children from the poorest communities so that they can function and learn properly at school. The parents-as-teachers partnership involves a different approach: it is based on the philosophy, which I share, that parents are the first and most influential
teachers. Involving parents in the learning process has the added benefit of improving language skills throughout the family. All those approaches share the goal of establishing strong language skills in each child well before he or she is ready to begin primary school, thus preparing the child for success throughout his or her education and continuing into adulthood. I urge that there be a thorough review to see how these kinds of successful early childhood education programmes may be implemented, developed and expanded in the UK.
Some of the strategies outlined by Risley and Hart seem eminently sensible to me. They have worked in communities in America. Can they work in ours? They
502WH
recommend quality, income-graded child care that is affordable for all parents. I have already mentioned that the Chancellor has proposals on that.
Last week I was conducting a listening exercise at a local factory in my constituency. There were 10 people around the table, eight of whom were women. One woman calculated that she had spent £36,000 on child care on her child from nought to six. I do not want to diminish the argument for higher education, but hon. Members can draw their own conclusions from that example. Another person calculated that after paying child care costs during the school holidays she was working for £2.27 a day. Those people wanted the Government to support workplace child care.
Is there a case for parenting classes for every child of 15 and 16 years old, or even earlier, so that they are aware of language between nought and three? If they then have children—and especially if they have them early—they will be fully aware of the importance of language. Should the families have enhanced benefits for enrolling on parenting courses? That may help to reduce economic inactivity and help parents to help their children. If parents are willing to co-operate, they should be rewarded.
Hart and Risley estimate that it would take 41 hours a week of one-on-one tuition to bring the child from a family on benefits up to the language exposure level of a child from a professional family. We as a state will not be able to afford that. We must bring the parents on board and help them spend 41 hours a week in constructive dialogue with their children. Engaging the parents will be the key to improving linguistic development. We can learn from the parents-as-teachers project in America, as well as the success of projects around the UK.
Although the Pre-School Learning Alliance cites early language development as central to its ongoing project of striving to provide a series of learning opportunities associated with pre-school education that will support more long-term learning, it has lost funding for its central initiatives. That has greatly reduced the access of parents in the country's most deprived wards to these essential programmes for the promotion of early language development. The alliance contacted me about that yesterday.
If we are cutting back on the support and funding for such excellent projects and organisations, we have no chance of releasing and unlocking the potential of children in deprived neighbourhoods. I have seen the expenditure plans for the Minister's Department and I welcome the rapid expansion of the Sure Start programme from £179 million in 1998 to £531 million now, increasing to £1,506 million by 2006. That is truly rapid progress, and I am pleased about it, but higher education expenditure is currently £7.7 billion and there is a proposed budget of £8.3 billion by 2006.
Last week I was also listening to the views of some families on a local council estate in an area of deprivation. It was mainly mothers who turned up. In fact, it was the council estate that I grew up on. The parents commented on the recent wall-to-wall publicity for top-up fees on the TV and in the other media. They said, "That's an upper-class thing. The rich mummies and daddies are worried. How much will you be spending on the 50 per cent. who will never have the

503WH
chance to go to college? How much will you be spending on our children? You'll just let them fester and get into crime, drugs and failure." That is a valid point. I do not want to rubbish the higher education argument. However, although we need that investment, which I welcome, we must question where we get it from. This is an issue of social justice: putting the resources where they are most needed and where we will get the most feedback.
Is it right that there is a disparity in the funding of programmes like Sure Start? We are spending 14 times as much on higher education as we are on that dedicated Sure Start programme for children of nought to three years. Is it right for us to spend that much? There needs to be a seismic shift in funding for pre-school education to at least equal, if not overtake, the funding going into higher education. Perhaps I need the Chancellor to be present, because I am sure that the Minister would welcome a fourteenfold increase in her budget to help her achieve her Department's aims. With due respect to the Chancellor, I must say that he has already done more than any other Chancellor in British history to improve the lot of working-class families, and I have given a comprehensive list of his achievements.
There must be a massive expansion of ring-fenced funding targeted at the specific aim of language development in nought to three-year-olds. The Chancellor is a canny Scot who knows where he can get value for money. The earlier we intervene, the greater the savings we will make. The price of failure—the alternative—is juvenile crime, welfare payments and crippled communities. The costs to the individuals are lost opportunities, unfulfilled lives and untapped potential.
Funding is a key issue, but it is not the only one. Another key issue is how we engage the nation with the issue of language development, and, more important, how we engage families who would most benefit from it. Again, I draw comparisons with the debate on higher education funding: nought to three-year-olds in working-class communities do not have a National Union of Students to stick up for them and say, "These are our priorities; we believe in our priorities above everybody else's in the whole of the UK." They have no such lobby. They do not have the equivalent of university vice-chancellors, who can pop in for a cup of tea and a chat with a Cabinet Minister or the Leader of the Opposition and set out their stall. They do not have a powerful parliamentary lobby of MPs who will get to grips with the facts and figures and rebel against the Government if they feel it necessary because they are passionate about the issue. There is very little passion on the issue in the House of Commons.
There are many organisations and individuals that do a sterling job in this country in highlighting the issue of language development in young children. The Pre-School Learning Alliance has helped to co-ordinate much of that activity, but in the busy world of the lobbying of Government it does not have funding, the resources or the contacts of the multinationals—or even of the major national charities and voluntary groups.
In the light of that, I ask the Minister to do all that she can to unite and co-ordinate the voice for the pre-school child. I specifically ask her to establish some high-profile
504WH
British longitudinal research on the influence of enhanced language development on the educational attainment of children in deprived areas. I also urge her to engage the media and the public in that project. She will probably recall the "7 Up" programme, which has now been going on for 40 years and charts the success or the failure of upper-class, middle-class and working-class children every seven years. Whenever that is on TV the whole nation is engaged. We are all aware of reality TV programmes such as "Big Brother"; if we had a TV programme that properly focused on the improvement of the lives of nought to three-year-olds in working-class communities, one can imagine how fascinating, accessible and highly informative it would be. That would help us to get across our key message to the people who would most benefit from it.
To summarise, I welcome the many and varied measures that this Government have taken to help families with young children in deprived areas. I recognise the importance of language development between the ages of nought and three for the individual, for the community and for society. I call upon the Government to continue to expand rapidly the budgets for the education and social care of nought to three-year-olds. I urge them to take particular note of the research of Hart and Risley and focus specifically on increasing the number of words and positive reinforcements spoken to young children in deprived neighbourhoods. I call for the establishment of a longitudinal study on this important issue, and for the relevant media outlets to be used to popularise that research. I would also like the Minister to do all she can to work with the early-years development lobby to ensure that this key issue remains at the top of our political agenda.
3.49 pm
The Minister for Children (Margaret Hodge): I warmly congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this debate. It is sad that there is not greater interest in it, particularly given that the ambition on the Government side of the House is to secure much better equality of outcome for every child. My hon. Friend has identified a critical matter and there was nothing in his contribution with which I disagreed.
I have not read the book that was referred to—I would be delighted to have a copy—but I did read Polly Toynbee's article. She always writes incredibly powerfully and her articles make a contribution to social policy. Her articulation on what is a vital piece of our understanding of what makes for equality of opportunity was very important. Many of my colleagues in this sphere were also influenced by it. It was a really good bit of journalism, which I hope will be widely read.
That article highlights two stark facts that I will mention. One is that, by the age of four, a child from a professional background hears 50 million words, whereas a child from a welfare background hears only 12 million. That is a fantastic difference. The other, rather frightening, conclusion drawn from that research was that it would take 41 hours a week of talking at the level offered by the professional parent for the child from the working-class background to experience the

505WH
same vocabulary. That shows the mountain that we have to climb if we are to achieve genuine equality of opportunity.
I draw your attention, Mr. Cook, and that of my hon. Friend to other bits of research that influenced our thinking. One is some research done by Feinstein, who demonstrates that one can measure children's cognitive development at 20 months and that there is a distribution regardless of social background and class. Some working-class kids have high cognitive skills and some middle-class and upper middle-class kids have low cognitive skills. However, over time, by the age of five or 10, class is really locked in so that the children with low cognitive skills from a high-income background overtake those with higher cognitive skills and a low-income background. That also demonstrates the importance of our intervention.
The other bit of research was given to me in my early days in this job. It was an analysis done by Charles des Forge of all the research literature about the importance of parenting and the influence of it on outcomes for children. He demonstrated what is common sense to us all: good parenting in the home has a greater impact on the educational outcome of children than do socio-economic background and the most excellent teacher in the most wonderful school. That is largely about parents talking to their children. If we can improve that aspect of parenting, we can improve outcomes for children.
We are thinking about—I would welcome any contribution from my hon. Friend—how we can strengthen parents in the home and support them in talking to their children; how we strengthen the role of fathers as well as mothers; how we provide support at key transition points; how we better develop the peer group support that comes from projects such as home start or the peers early education partnership, which is a good early intervention project whereby, in group situations, mothers are encouraged to develop their children's linguistic skills; and how we can spread those projects.
My hon. Friend described accurately and in detail many of the initiatives that we have taken to tackle child poverty and I echo something that he said. There are two ways that we tackle child poverty. One is through the tax and benefits system, and as a Government we have been incredibly successful in doing that, with a third of children lifted out of poverty through the changes that we have made to tax and benefit. However, the cycle of deprivation will never be stopped simply by intervening in the tax and benefits system. We also have to intervene to provide that equality of opportunity for children through the education system, health, housing and parenting skills. That is where the linguistic agenda comes into its own.
On the balance of funding, I could not agree more with my hon. Friend's analysis that we have got it wrong in Britain. We spend more per capita than any Organisation for Economic Co-operation and Development comparator country on the elite group who go through to higher education, and we spend less than any comparator country on children in their early years. The Danes spend 2.4 per cent. of their gross domestic product on children in those years; despite the investment that we have made since we entered government, we still spend only 0.4 per cent. of our GDP on children in their early years. I know from
506WH
conversations with the Chancellor and the Prime Minister that the issue of children and their early years is central to the political agenda and to the programmes in which the Government are engaged.
The assessment of research is obviously important. Much of the Sure Start programme—we have embarked on 524 Sure Start programmes around the country—is built on the High Scope Perry evidence. We are beginning to find evidence in England of the impact of early multi-disciplinary intervention on children and their families. In one Sure Start programme in Corby, the number of children who have to have a special educational needs assessment has been reduced by 10 per cent. In another programme in a London borough, children who were ref erred to the early-years programme by social services—very needy children—are now performing as well At key stage 1 as middle-class children from more advantaged homes. Leicester saw a 40 per cent. reduction in referrals to social services because of Sure Start and early intervention. We are getting there, and we will continue to review successful interventions.
We are engaged in longitudinal research. I am sure that that research is in the Library, but I will ensure that my hon. Friend receives a copy. Over a 10-year period, we are evaluating the impact of our interventions through what is known as EPPE—effective provision of pre-school education—research. We will use that knowledge to influence where we go from here.
I want to mention some initiatives that my hon. Friend did not. We haw developed a pedagogical framework for all professionals working with children from birth to three. That is a step forward, and my hon. Friend might like to have a copy of the framework. It will be used by professionals and, we hope, by others to consider how they can best work with children in those early years to develop their potential. It contains a lot of information about speech development. We are now in the process of training professionals to feel comfortable using the "Birth to Three Matters" framework throughout early-years work.
We will also shortly publish a book about children's development from birth to three. We have called it "The Learning Journey: Birth to Three Matters". The book will help us explain to parents how children learn and develop from birth and will offer advice on supporting children's development. We are listening closely to children; one can listen to children from an early age. A project has been undertaken by the Coram family, which I found fascinating when I first went to see the research evidence. The evidence showed how listening to children will improve how one relates to them and will enable them to learn and develop their linguistic skills.
We have commissioned Manchester Metropolitan university to create an early language training programme for us, which will develop training materials to support early-years practitioners. Although in the first phase the focus will be the foundation stage, which involves three to six-year-olds, the project is linked to the "Birth to Three Matters" framework. We will extend it to the nought to three age group at a later stage.
The Sure Start unit is funding the development year of a campaign that we have called "Talk to Your Baby", which has come from the work of the National Literacy Trust. Again, the aim is to raise awareness.

507WH
I am delighted that we have had this short debate. This is a key issue. The best possible start for our young children is at the heart of Government policy. We will continue to drive our policies forward, which we believe will improve life chances. Early intervention with a mixture of universal initiatives, targeted support and mainstreaming will pay huge dividends for all our children.
Mr. Frank Cook: Order. We come to the final subject for our consideration today: the use of blast cleaning by the armed forces.
I am conscious of the fact that this is an Opposition Supply day and that a Division is due at 4 o'clock. If no one has any news on that, we will commence with Mr. Richard Bacon.

Blast Cleaning (Armed Forces)
4 pm
Mr. Richard Bacon: I am pleased to have secured this debate. The Minister will have some familiarity with the subject because he was kind enough to host a meeting with my constituent Mr. Nigel Farrow and I at the Ministry of Defence on 2 July last year. He will not be surprised to hear that it is in relation to Mr. Farrow that I secured the debate.
Mr. Farrow is an inventor who runs a business called Farrow System in Loddon in my constituency. He has built a successful business from scratch, which now employs 25 people. One of its main products is an innovative blast cleaning method. Blast cleaning involves forcing a mixture of water, air and abrasive grit—for example, sand, glass beads or copper slag—through a pressure hose on to the surface being cleaned. Many people will have seen old stone churches and other buildings cleaned in that way. Blast cleaning has many industrial and commercial applications, but there have always been problems with traditional methods, the most notable being that they can cause serious damage to the surface being cleaned and that a big mess is often left behind.
Mr. Farrow invented a new blast cleaning technology that would solve those problems. It is quicker, more accurate and less messy, so operators can see what they are doing. Crucially, it can be applied with much greater delicacy than any previously known method, to the extent that it is possible to remove layers of varnish from valuable antique furniture without damaging it or to remove layers of paint from a surface one at a time. Of course, it can also be used for a wide range of more industrial applications.
Mr. Farrow was invited to demonstrate his new process on the BBC television programme "Tomorrow's World", which he duly did on 2 February 2000. After that, Mr. Farrow's telephone did not stop ringing. One call was from Mr. Alan Jones of the Royal Navy, who called to say that the Navy was interested in meeting Mr. Farrow because—
4.2 pm
Sitting suspended for a Division in the House.
4.17 pm
On resuming—
Mr. Bacon: I was saying that one of the many telephone calls received by Mr. Farrow following the appearance of his method on "Tomorrow's World", the BBC television programme, was from Alan Jones of the Royal Navy. Mr. Jones thought that Mr. Farrow might be able to help the Navy with a long-standing problem.
Mr. Farrow was asked if Mr. Jones' colleague from Defence Evaluation and Research Agency Marine Structures at Rosyth naval dockyard could contact him to arrange a demonstration at Rosyth, Scotland. To this Mr Farrow agreed. It is important to note that Marine Structures' department at Rosyth was doing its own research on removing surface coatings. That is a germane point to which I will return.

509WH
Mr. Farrow duly went to Rosyth on 15 June 2000 for the demonstration, which was arranged by Mr. Malcolm McGugan of the Ministry of Defence agency, DERA Marine Structures at Rosyth. Mr. McGugan made it clear that during the maintenance and repair of Royal Navy glass fibre hulled vessels, there was an ongoing problem in that paint contractors, when they removed the paint, caused damage to the structure of such vessels by over-blasting and that this was an ongoing problem that the Navy had been unable to solve.
Mr. McGugan said he was fed up with the paint department of the Navy—the contractors, in some cases—which was responsible not only for applying new paint, but for removing the surface of the old; he was fed with the damage they caused to the structures of glass-reinforced polymer—GRP—or fibreglass vessels through over-blasting. Indeed, engineers from Marine Structures had put in place a protocol that there had to be a warning bottom layer of green paint, which would prevent contractors from over-blasting on the basis that once they saw the green paint they would know that they had blasted enough, although over-blasting continued.
Mr. McGugan said that the paint department blamed Marine Structures, saying that the marine vessels were not strong enough. It subsequently became clear that the Navy had been conducting intensive research for some years, but without success, on how to solve the problem of over-blasting. I will ask the Minister about the question of research later.
The Rosyth tests on 15 June included using Farrow System to remove bio-fouling such as barnacles
"from the hull of a ⅔ scale MCMV model at Rosyth",
also to provide a surface abrade to a thick GRP panel. In attendance were a considerable number of senior MOD officials and scientists, as well as contractors. Following the Rosyth demonstration, on 16 June 2000 Mr. McGugan, who had arranged the trial, issued a report on the results to Minewarfare IPT, which was copied to others.
Mr. McGugan's report noted the low volumes of grit and water produced by the method—in other words, it produced very little mess—and also that
"unlike current methods, the system can be used on internal compartments of the ship".
The report also stated that Mr. Farrow's method was quick, precise and capable of removing one layer at a time.
Mr. McGugan also observed that in any paint removal system the skill and experience of the operator are important factors. He stated that when a powerful combination of grit and pressure is used, speed is maximised, but he also highlighted the fact that
"the process relies entirely on the operative keeping the pressure nozzle moving over the surface and preventing an area being structurally damaged."
By contrast, Mr. McGugan noted, Farrow System used a relatively fine-grained soft grit and achieved a considerable variation in blast strength by altering the pressure and the water-grit mixture. He continued:
"Thus, the 'skill' aspect of the process is moved towards the calibration/set-up of the system with a subsequent reduction in the possibility of damage to the GRP through inappropriate use of the method by the operator."
510WH
In short, Mr. McGugan acknowledged that that was a helpful new development.
There followed a rather sniffy e-mail from Mr. Gary King of Sea Technology Group Materials Technology, otherwise known as STGMT, who seemed to take exception to Mr. McGugan's report. Mr. King wrote:
"I have to admit surprise at the necessity for a demonstration of 'Wet Blasting' as a means of paint removal. This method has been the prescribed, major method of surface preparation of GRP structures"—
that is, fibreglass—
"by STGMT, for several years.
Whilst I have no wish to detract from the capabilities of the Farrow System, I believe it is incorrect to consider it as innovative. Both FSL at Portsmouth and DML at Devonport have employed similar systems for paint removal by other contract companies.
I am afraid I also have to disagree with the statement in the report 'Unlike current methods, the Farrow System can be used on internal compartments of the ship'. The greatest associated problem with internal paint removal is and has always been the clean-up operation."
It is worth reminding the House that one of the key aspects of Mr. Farrow's system is that it involves very little mess compared with traditional methods.
Mr. McGugan was furious at the e-mail and replied to Mr. King that while blasting in general might not be new as a technique, contract companies were over-blasting and damaging the underlying GRP structure. He went on to point out that Mr. Farrow's method had just been used on HMS Victory—the Minister will know that that is the flagship of the Second Sea Lord, and probably the most famous warship in the world—to restore delicate antique timbers, with excellent results. Indeed, the commanding officer, Lieutenant-Commander Frank Nowosielski, said of the restoration:
"The condition of the wood is excellent. Better still, the process did not do any damage to the deck at all."
In September 2000, Mr. Farrow went to Fleet Support Ltd.—FSL—in Portsmouth to do a small demonstration on the quayside. He was repeatedly asked whether his method was environmentally friendly, which it is. That demonstration was followed by an invitation to remove the surface coatings from the fresh-water tanks and bathroom area of a minesweeper, as soon as he had gone through the required supplier accreditation process. Mr. Farrow duly went through the accreditation process, and his first opportunity to work on a ship in port for its base maintenance period was with HMS Quorn.
Around that time, Mr. Roy Hussey, a senior project leader at Fleet Support, warned Mr. Farrow as follows:
"Do you realise that if you mess this up we will lose the fleet abroad?"
In other words, the work would be done elsewhere. It seems that there had been a long-standing row between Marine Structures and the paint department at Fleet Support. For several years, Marine Structures had been saying to the paint department, "You are damaging our ships." The paint department at Portsmouth was so worried that it thought it might lose the fleet—it understood that there was only one more chance.
While Mr. Farrow was going through the accreditation process, a trial took place in October 2000 on HMS Berkeley with a Quill Falcon 50 machine from Quill International, but using the conditions and

511WH
parameters—the grit and pressure parameters—that Mr. Farrow had shown Fleet Support earlier in the year. Quill's system was given very rapid approval by the ship support agency, while Mr. Farrow had to spend several months fighting to be listed in the "Warpaint" document. Quill machines started to be used, but since January 2001 Mr. Farrow has not even had any inquiries, let alone the opportunity to tender for work.
In early 2001, Mr. Farrow was told that someone cannot be an approved contractor unless they are in "Warpaint", the document for specifying standards for surface treatments, so he set about getting listed. The Minister told me in his letter of 11 July 2003 that he had been unable to discover any reason why Mr. Farrow might have been told that being listed in "Warpaint" was a requirement for tendering for work. He assured me that that was not the case. Anyway, Mr. Farrow was told otherwise.
In February 2001, while Mr. Farrow was still working on HMS Victory, Mr. Roy Hussey of Fleet Support told him that he wanted him to work on three minesweepers. As the HMS Victory work neared completion, Mr. Farrow sought out Mr. Hussey to ask him when work on the minesweepers would commence, as he had staff commitments and wanted to be able to plan staff time. Because Mr. Farrow was wearing a different-coloured overall from the rest of his staff, Mr. Hussey mistook him for someone from a rival firm and said, "I've told you before: I'm happy with the Farrow System. I don't need the alternative." What is more, he was fairly obviously coming under pressure to use a different system from Farrow, even though he was pleased with the results.
In July 2002, Farrow System was granted UK patent 2344348, which relates to the heat parameter used in the method. In October 2002, Farrow System was granted UK patent 2372039 in respect of the pressure parameter. Farrow System has also been granted a number of patents elsewhere in the world, including the United States, Australia, New Zealand, Gibraltar and the Falkland Islands. While we are on the subject of the heat parameter in Mr. Farrow's method, it is worth noting the statement by the Ministry of Defence that it was of no consequence. Indeed, the Minister's letter of 19 June 2003 specifically stated that there was no heating of the fluid in any application of the wet-blast method to Royal Navy ships. That point was repeated to me in his letter of 11 July 2003.
The MOD is now seeking to revoke Mr. Farrow's patents. I shall return to that in a moment, but I want first to address the important issue of water contamination. A serving officer on HMS Quorn told Mr. Farrow before he started working on the Quorn, "You know the real reason why you're cleaning these tanks is that the water is contaminated and the water from the tanks is what we drink." Paint on the inside was flaking off, and the water was in direct contact with the fibreglass, which had no gel coating, although perhaps it should have had. The Fleet Support people had been trying to remove the surface coating of the tanks but, in common with what was happening on other vessels, they were over-blasting and causing serious structural damage. Mr. Farrow went inside a tank and removed the coating in a controlled and benign way.
512WH
I also want to mention shells, because one of the calls that Mr. Farrow received following the appearance on "Tomorrow's World" was from the bomb disposal experts at Porton Down. Shells are washed up on the north Wales coast every spring during the high spring tide, including chemical shells left over from the second world war.
Mr. Farrow went to Porton Down on three occasions between March and June 2000 and advised staff on the use of the Farrow method for cleaning shells. Those staff, wearing chemical protection suits, used the Farrow method to remove marine debris from the shells and thereby identify which were conventional and which chemical. Of course, one cannot cause a controlled explosion with a chemical shell, because it would spread dangerous chemicals everywhere, so although the
conventional shells were disposed of once identified, the chemical shells are still being stockpiled.
Mr. Robert Cox of the MOD told Mr. Farrow that the experiments in cleaning the chemical and conventional shells that Mr. Farrow and his staff had witnessed had been successful, and that the MOD wished to purchase several units from Farrow. Negotiations would be conducted by Mr. Richard Hollands of the MOD but, three years later, nothing has happened, so I would like to ask the Minister how the MOD is now coping with the problem of cleaning conventional and chemical shells from the second world war that have been washed up.
That brings me to a series of other questions, the first of which is about public procurement. Who controls Fleet Support's procurement policies? Is it fair that it does not put work out to tender? We are dealing with taxpayers' money, and the Minister may say that it is down to the prime contractor to choose how it procures services.
In a letter to Mr. Farrow's patent adviser, Mr. Harrison, on 14 August 2003, Mr. Robert Beckham, director of intellectual property at the Ministry of Defence, made that point when he reiterated the fact that the Ministry requires the dockyard to work to a standard of surface finish and that how that finish is obtained is for the dockyard contractor to determine.
None the less, it seems rather strange that there are seven or eight approved painting contractors that get work, most of which are not listed in "Warpaint", but only two paint removal methods. However, all work appears to go only to one company, Quill International. I would appreciate it if the Minister supplied me with all the copies of "Warpaint" so that we can establish when Quill was first listed and when Farrow System was listed, and what the previous system was for removing the surface coatings. What standards were applied before Mr. Farrow showed the MOD and the Navy how to do it more effectively?
Now that the MOD is seeking to revoke Mr. Farrow's patents, will the Minister explain why the Ministry is attacking the heat patent 2344348, given his statement in a letter to me that heat is of no consequence?
Has anybody on a royal naval ship been affected because of the contamination of tanks that contain fresh water? If so, how many and what has been done about it? When Mr. Farrow raised the issue with Mr. Gary King, who is, incidentally, the editor of "Warpaint", Mr. King made no attempt to deny that there was an

513WH
issue with the contamination of tanks that contain fresh water. He simply said to Mr. Farrow, "Prove it." That is a slightly worrying attitude when the health of naval personnel is at stake. If, as stated by the MOD on several occasions, there has been no change to the method of operation, what was the purpose of all the trials in 2000?
In December 2003, the Minister for Science and Innovation, Lord Sainsbury, announced a new, radical plan that the Government were considering, which would allow British inventors to draw on a central fund to fight companies that steal their ideas. He said that a lot of the big companies have deep pockets, which means that they can fight for a long time against smaller firms or individuals. I hope that that applies to big companies and not to the Government, and that the Government would do all they can to encourage new inventions and inventors, rather than do all they can to squash them. I look forward to the Minister's reply.
4.32 pm
The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): I congratulate the hon. Member for South Norfolk (Mr. Bacon) on securing the debate and I am grateful to him for providing us with the opportunity to discuss the matter in the Chamber this afternoon. As the hon. Gentleman said, we had a very amicable meeting on the matter last July, shortly after I became a Minister at the Ministry of Defence.
Over the past year, there have been several articles in the press on blast cleaning of warships constructed of glass-reinforced plastic, often known as GRP. The articles have also alleged that the MOD has been improperly dealing with patented technology in the field and they have questioned the tendering practices of the Department. The hon. Gentleman has repeated many of those points today, and I hope to set the record straight.
Blast cleaning is an old technology that has been and is still used widely by contractors to the MOD supplying support to all three of our armed services. It is used for the cleaning and removal of coatings from surfaces. The fundamental technical principle behind blast cleaning has been known for many years and many companies operate in the United Kingdom within the field.
Blast cleaning takes place with the use of a pressurised fluid on its own—for example, air or water—or with the use of fluid entrained with abrasive particles such as grit entrained in air or water. The pressurised fluid, or fluid abrasive combination, is impacted against the surface from which the coating is to be removed. The use of blasting has been found to be useful to the armed forces for the removal of paint and dirt from equipment surfaces in general. One of its advantages over other forms of paint removal is that when used on delicate surfaces at low pressure it does not damage the underlying surface, unlike chemical solvents, which can do so in some instances. Materials such as GRP are less robust than metals such as steel. Much work has been done in devising or selecting blasting media, equipment and processes that enable the use of blast cleaning parameters that do not damage delicate surfaces.
Mr. Bacon: In Mr. McGugan's report on 16 June 2000, he referred to the then ongoing research. Will the Minister supply me with copies of that research?
Mr. Caplin: I will consider that and reply to that point later in my response.
514WH
The solution that I was referring to has been known for many years, and is typically to adjust parameters such as impact pressure, grit size and grit hardness. Today's debate is about blast cleaning across the armed forces, although many questions are specifically directed at Royal Navy activities. However, I shall address the use of blast cleaning across the whole of the armed forces.
The Royal Air Force deals with contractors that use materials such as plastic acrylic media, under wet and dry conditions, for paint removal from aircraft and other vehicles. Aluminium oxide may also be used for corrosion removal on selected components. The RAF also uses low-pressure aqueous washing rigs to clean aircraft.
The Army deals with blast cleaners under the auspices of the defence trading agency, ABRO, and uses dry abrasives for paint removal prior to repair work. For the removal of temporary camouflage paint, a simple water and detergent spray is used.
The Royal Navy has a contract with Fleet Support Ltd., which is responsible for the management of the Portsmouth Dockyard, Devonport Management Ltd. and Babcock Rosyth Dockyard Ltd. Those contractors may also choose to contract the task of blasting to a number of sub-contractor.
All of the issues that have arisen today have been raised previously, and have emanated from questions raised by Mr. Farrow, who is the managing director of Farrow System Ltd. The hon. Gentleman and I met him in July. The questions have been raised with specific reference to the removal of paint from GRP hulls and superstructures of Royal Navy surface warships. Mr. Farrow gave a demonstration of his blast cleaning equipment on "Tomorrow's World" in 2000, and an employee of the Ministry of Defence watched the programme. As the Department is always interested in potentially useful techniques, our member of staff felt that the claims made by Mr. Farrow were worthy of further investigation. The then Defence Evaluation and Research Agency Marine Structures at Rosyth, which held a watching brief for the Ministry on such matters, arranged for a demonstration of the Farrow system to be given at the dockyard.
Mr. Farrow gave a demonstration at Rosyth for DERA Rosyth and Babcock Rosyth Dockyard Ltd. in June 2000. A report was written by DERA Rosyth and sent to the Ministry's Warship Support Agency and the Defence Procurement Agency, which is responsible for paint techniques for surface ships. The Defence Procurement Agency made it clear to DERA Rosyth that, however effective the trial was, it did not represent a new technology but was known and had been prescribed for GRP vessels for several years. It was particularly noted that operator skill was an important factor in avoiding damage to exposed areas of the surface.
Mr. Farrow has since alleged that the Ministry of Defence has changed its working practice as a result of his demonstration of the Farrow system at Rosyth. The Ministry simply refutes that. Any problems with the removal of paint from GRP had been solved a considerable time before the Farrow system became available. In particular, successful trials of various abrasives for removing paint from GRP surfaces were

515WH
made in 1996, as a result of which, low-pressure water slurry blasting, using garnet as the abrasive, was recommended. Moreover, there had been earlier successful use of the known techniques at Portsmouth, using olivine grit rather than garnet.
In the time left, I shall address the specific legal issues raised by the hon. Gentleman and Mr. Farrow. The first is that the Ministry has been using two United Kingdom patents that have been granted to Mr. Farrow. The MOD's policy is to recognise and respect the intellectual property rights of third parties. In particular, when use is made of valid patent rights under the Crown use provisions of the Patents Act 1977, the Ministry honours its legal duty to compensate the patents' owners in accordance with that Act.
On first becoming aware of the allegations made by Mr. Farrow, the MOD undertook an investigation into the facts. The Ministry found that most of the claimed parameters of Mr. Farrow's patents were known as a result of earlier trials held in 1996, and I can confirm that the Ministry found that the procedures in use at Portsmouth did not fall within the claims of Mr. Farrow's patents. However, it was found that the techniques used at Devonport might fall within the scope of one of Mr Farrow's patents.
However, from a study of the literature that predated Mr. Farrow's patents, the Ministry considered that the UK patents, despite having been granted, were invalid in the light of relevant published material that had not been found by the UK Patent Office. The Ministry informed Mr. Farrow that in the light of the investigation, it did not consider that he had a sustainable claim for compensation under the Crown use provisions of the 1977 Act. Mr. Farrow does not agree with the Ministry's findings on the validity of his patents, and to try to resolve the impasse, the Ministry, with Mr. Farrow's knowledge, has instituted actions to seek revocation of those patents before the UK Patent Office. The action was filed on 7 January 2004 and will take about nine months to complete.
The second legal issue raised by Mr. Farrow is that the Ministry has released confidential information belonging to him to other contractors and that, as a consequence, the practices adopted by the Ministry's contractors have changed. From our investigations, I
516WH
can say that those allegations are entirely unfounded. According to the DERA Rosyth report, the only contractor present at the demonstration of the Farrow System at Rosyth in 2000 was the dockyard operator Babcock Rosyth Dockyard Ltd. Additionally, any information that may have been divulged there by Mr. Farrow was already in the public domain.
In any case, knowledge of the technique demonstrated by Mr. Farrow can be traced within the Ministry to at least as far back as 1996 to a report by Coating Consultants Ltd.
Mr. Bacon: Will the Minister give way?
Mr. Caplin: I am sorry, but I do not have time.
Prior to Mr. Farrow's trial at Rosyth, the Ministry had already solved the problem of removing paint from GRP. Use of wet grit blasting at reduced pressure was already practised at Devonport and Portsmouth, and there has been no change at either dockyard resulting from the demonstration of the Farrow System at Rosyth.
The third legal issue that Mr. Farrow raised has been the probity of the tendering practices adopted for the Ministry at the various dockyards. The Ministry of Defence's policy is to treat contractor's information released to it in the strictest confidence when it is confidential. However, since privatisation of the royal dockyards, responsibility for management work at the dockyards is in the hands of private contractors. The Royal Navy is a customer of the respective main contractors and is not involved with directing how work should be performed.
The Ministry requires that the dockyard works to a given standard of surface finish within a given delivery period. How that finish and delivery time is met is for the dockyard contractor to determine, as is the decision on whether a subcontractor is brought in to do the work. The Ministry endorses certain contractors and processes that it considers capable of reaching that standard, and the Farrow System is one of a number that are recognised as meeting the standards required.
I am out of time, and I may well have to write to the hon. Gentleman on some of his other questions.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to Five o'clock.