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Commons Chamber

Volume 175: debated on Monday 2 July 1990

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House Of Commons

Monday 2 July 1990

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Social Security

Earnings Disregard

1.

To ask the Secretary of State for Social Security if he has any plans to increase the disregard on earnings before income support is reduced.

The Parliamentary Under-Secretary of State for Social Security
(Mrs. Gillian Shephard)

We keep the level of the earnings disregards under review. The Government are committed to monitoring them, but we have no plans for change at present.

I thank my hon. Friend for her reply. Would she consider regarding as disregard the cost that a lone parent bears for child care if she decides to go back into the work force? Does my hon. Friend appreciate that many women who are left to be supported by the state because their menfolk have deserted them would like to go back to work? However, if they lose £1 for every £1 that they earn after the first £15, the incentive for them to be self-supporting is reduced. I know that my hon. Friend would not want to punish such women and I am sure that she would like to give them more of a helping hand.

I thank my hon. Friend, and in preparation for her question this afternoon I read her ten-minute Bill that, in part, dealt with that matter. My hon. Friend is right to say that many lone parents want to work, and about one third of family credit participants are lone parents.

The Government have built into the social security system several disregards and incentives especially for lone parents. For example, £15 of their earnings is disregarded in income support, they get the same adult credit in family credit as a couple and, from October, lone parents will have a £25 disregard in housing benefit. The major thrust of Government policy is to ensure that lone parents, 95 per cent. of whom are women, get adequate and proper maintenance from absent fathers.

If we are moving into the season of pre-election largesse—whether as suggested in the Minister's answer to the hon. Member for Billericay (Mrs. Gorman) or in the report in today's The Guardian—will the hon. Lady take into account the plight of my constituent Mr. Stewart, about whom she wrote to me last month and who came to see me at the weekend? Mr. Stewart has had no increase in his income since April 1988, when the Government removed his special payments; he is having to pay increased electricity charges, and he is having to pay 20 per cent. of his poll tax. Is there no limit to the extent to which the Government are prepared to inflict real hardship and misery on some of our poorest pensioners?

Transitional protection was introduced to help those who might lose out under the 1988 social security reforms. A small number of people are still covered by transitional protection and the overwhelming majority of them received an increase this April.

The hon. Gentleman will know that I cannot comment on an individual case. I am glad that he pointed out that I have already replied to him.

Claimants (Residential Backgrounds)

2.

To ask the Secretary of State for Social Security if there are any limitations as to the residental background of recipients of attendance and other allowances; and if he will make a statement.

Attendance allowance is payable to people who live in independent residential care homes. It stops after four weeks for those living in other residential homes if the care costs are met from public funds. Limitations for other allowances vary.

Does my right hon. Friend accept that many elderly people who are of sound mind find it difficult and irksome to live with the confused elderly and those who are deeply ill?

The hon. Gentleman speaks for himself. He is somewhat confused and always has been.

Will my hon. Friend consider introducing changes to the allowance system so that people who are on attendance allowance can live not in nursing homes or in institutions but, for example, in private accommodation, where they could pay their way with the allowance?

Yes. I understand that my hon. Friend has a constituency case. He has quite properly written about it to the local office manager, who will be replying soon. Some quite complicated calculations have to be made to see whether people would be better off if they moved into private accommodation from residential homes of one sort or another. Individual judgments will have to be made. Within the private residential sector, there is a wide range of types of property and provision.

National Insurance

3.

To ask the Secretary of State for Social Security how many standard rate tax payers would be affected by the removal of upper earnings limit for national insurance contributions.

If the upper earnings limit for employees' national insurance contributions were removed it is estimated that about 3·3 million people would pay more contributions, of whom about 2·1 million would be standard rate taxpayers. If the corresponding upper profits limit for self-employed people were also removed, it is estimated that about another half a million people would pay more contributions, of whom about 200,000 would be standard rate taxpayers.

I thank my right hon. Friend for that illuminating reply and I hope that it will be well covered by the media, because these are the Labour party's policies. As we have taken a great deal of time and trouble to remove Labour's tax on jobs—the national insurance surcharge—will we also look at the employers' national insurance contribution, which is running at roughly double the amount that it was in the days of the Government led by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath)?

My hon. Friend is quite right to draw attention to the figures that I have given. I note what he suggested about the employers' contribution, but there is no upper earnings limit on it, and because of the way in which the national insurance system works and the direct relationship between the contribution paid by employees and the benefits subsequently received, I am not sure that the arguments are on all fours.

When an individual pays both national insurance contributions and tax, to ensure that when he becomes unemployed or sick, the state gives him assistance, how can there be any justification for reducing or taking away unemployment benefit? There is speculation about that in the press. Will it also be mentioned in the Tory manifesto, because the people want to know the truth? If unemployment benefit is to be taken away, how long will it be before pensions are undermined and perhaps taken away by the Government?

I am grateful that the hon. Gentleman used the word "speculation". As far as I can see, the press reports to which he referred rest on one pamphlet from one body, the Adam Smith Institute. That is not a Government plan and there is no basis for the hon. Gentleman's suggestion.

Is not it true that, since the Conservative party came to power, most people who pay national insurance have saved over £3 a week on it, but under the Opposition's glorious plan, the people whom the Opposition laud as those whom they want to encourage—those earning between £15,000 and £20,000 a year—will pay £9 a week more? They would not pay that in national insurance; the fraud is that they would pay it in increased taxes. How does that encourage people to work?

The answer is that that does not encourage people to work and that it runs exactly contrary to what we have sought to do in reducing national insurance contributions for many, with the aim of encouraging employers to provide jobs and encouraging people to do them.

If the Secretary of State is so concerned about the extra tax on higher rate taxpayers, how does he explain why the Government have increased, for instance, national insurance contributions, which are a tax, by no less than 14 per cent. for those on average or low incomes?

In view of his earlier answer, is the Secretary of State—or is it only the Prime Minister—in favour of the latest crackpot, right-wing daftness of privatising the dole, but still making people pay national insurance contributions so that they are forced to pay twice for the same benefit? If people have paid national insurance contributions, are not they contractually entitled to benefit? If something in the private sector that had been fully paid for were taken away, would not he, or even the Prime Minister, call that stealing?

It is perhaps understandable, in view of the events of recent weeks, that the hon. Gentleman should go to such lengths to divert attention from the main point. He referred to higher rate taxpayers. The point is that Labour's plans, as is clear, and is clearer still from my answer, involve higher contributions from many basic rate taxpayers. That is the point that the Opposition have been seeking to disguise because they do not want to let on how many people will have to pay much more to finance the hon. Gentleman's ambition.

Personal Pensions

4.

To ask the Secretary of State for Social Security what estimate he has as to the number of people who have now joined a personal pension scheme.

11.

To ask the Secretary of State for Social Security how many people are taking out personal pensions; and if he will make a statement.

Just over 4 million people have so far taken out a personal pension.

Does my hon. Friend agree that the most encouraging aspect of that figure is that it represents people in all age groups who have provided for their retirement? Does he further agree that it is absolutely disgraceful that the hon. Member for Oldham, West (Mr. Meacher) should seek to penalise those 4 million people—or probably 10 million people, when one takes their families into consideration? Is not this what the Labour party is all about—muddled thinking, total misrepresentation and, worst of all, patronising people? In other words, we know best.

To borrow a recently expressed phrase, that is an example of the Opposition's crackpot, left-wing culture—

What is important about the Government's pension provision is that people now have a choice between remaining in the state earnings-related pension scheme, taking out a private pension and belonging to an occupational pension scheme. The Opposition have made it clear, through the hon. Member for Oldham, West (Mr. Meacher), that they are totally against that choice and independence in pension provision—

Order. The questions that were asked were in order, and if they were not I should rule them out of order.

Does my hon. Friend agree that the hon. Member for Birmingham, Ladywood (Ms. Short) is muddled, as this is not Prime Minister's Question Time? We are asking specific questions on specific matters. Does she agree that, to use the words of the hon. Member for Oldham, West (Mr. Meacher), the Opposition intend to steal private pensions from people?

The hon. Member for Oldham, West has already made clear his party's intentions for personal pensions. Fortunately, the Government intend to continue the policy of choice within pension provision between SERPS, a personal pension and an occupational pension scheme. Clearly, the Opposition wish to threaten that choice.

On a point of order, Mr. Speaker. Is not it an abuse of the House that Question Time is used in regard to Opposition policies, which we shall certainly defend and promote when we have a chance? Is not the purpose of Question Time to hold Government policies to account?

This is not Prime Minister's Question Time and these are not open questions. It is the function of questions on the Floor of the Chamber to expound on policies, and that is what we are here to do.

To return to the question, does not the Minister feel a sense of guilt that she is aiding and abetting what is becoming the fraud of the century now that 4 million people have been bribed by dodgy advertising into taking out pensions? Does not she recognise that they are not pensions—they are risky savings schemes that are about as personal as a can of baked beans? When will the Government respond to the independent voices that are saying that more than 1 million people have been defrauded by such schemes and that most of their future benefits and pensions have already been eaten up by commission charges, administrative costs and the profits of the pension companies? Can it be possible that the Government are about to replicate that calamity by abolishing the dole? Will they give us a categorical denial, other than the arguments that have been presented today, and tell us that it is a product of midsummer madness by the loony right and that none of the Ministers will have any part in that crazy scheme to abolish the dole?

I was under the impression, although much noise was being made by Opposition Members, that my right hon. Friend the Secretary of State gave absolute assurances about the Adam Smith Institute pamphlet. The hon. Member for Newport, West (Mr. Flynn) repeated the comments made by the hon. Member for Oldham, West to try to scaremonger and to terrify perfectly normal, ordinary people who wish to take advantage of the excellent pension choices that have been made available by the Government. It is a disgrace.

Community Care Grants

5.

To ask the Secretary of State for Social Security what was the budget for community care grants in the latest financial year for which figures are available.

Community care grants are essential to integrate people back into the community. How will cuts in grant affect that integration? How will the grants enable people to obtain suitable housing in order to allow them to return to the community? What is the Minister's view about the role of housing providers? Will they be an essential partner in community care schemes and planning or merely an afterthought?

The budget for community care grant has not been cut but increased for the current year. I hope that as we develop our policies for care in the community, which we aim to introduce in 1991, there will be increased co-operation between social services departments, which will be involved increasingly in the provision of community care, and local housing departments so that proper arrangements can be made for those leaving institutions.

My right hon. Friend will know that community care grants are available only to those on income support. Many who would benefit from them receive invalidity benefit or other benefit and are therefore disqualified. Will he sympathetically consider extending the grants to other members of the community who would benefit from them?

I shall consider my hon. Friend's suggestion. There are administrative advantages in limiting community care grants to those who are on income support, and there are resource implications, but I have noted my hon. Friend's point.

If the social fund is so successful, why are so many disabled people now trapped in the jaws of loan sharks? Would not it much reduce dependence on community care grants if the Government quickly accepted the social security commissioners' decision, which was reported last week, in the important test case for severe disability premium of Simon Crompton, of Greater Manchester, which is estimated to benefit 30,000 other disabled people? What action is the Minister taking to identify them?

We are considering the implications of that judgment. The fact that loans under the social fund are interest free is likely to remove people from rather than hand them over to the loan sharks.

Pensioners (Income)

6.

To ask the Secretary of State for Social Security by how much pensioners' total incomes have risen (a) since 1979 and (b) between 1974 to 1979.

I am pleased to be able to tell my hon. Friend that while pensioners' total net incomes rose by only 3 per cent. in real terms between 1974 and 1979, they rose on average by more than that in each year between 1979 and 1987. In total, they rose by over 31 per cent. in real terms in this Government's first eight years of office.

I thank my hon. Friend for that reply. As it is fashionable to quote the hon. Member for Oldham, West (Mr. Meacher) today, I am sure that she is aware of his comments in the Chamber on 30 January, when he said that the important consideration is the increase in pensioners' average income over the course of a Government. If my calculations are correct, we have done six times as well as the previous Labour Government. Does my hon. Friend therefore agree that a strong and proper pensions policy depends on two pillars—first, the strength of the economy, which enables us to pay proper state pensions and, secondly, a healthy economy giving a proper return on pensioners' savings? On both counts we outperform the poor performance of the previous Labour Government and the poor promises of a would-be Labour Government.

I agree with my hon. Friend. It is clear that the successful economic policies pursued by the Government have enabled us to spend £55 billion a year in real terms on social security and spending on pensioners and the elderly to increase by a quarter. To pursue anti-inflationary policies is particularly important for pensioners.

I accept the accuracy of the Government's figures although, of course, they have not yet been checked by the Select Committee. Will the hon. Lady confirm that for the poorest pensioners the most important thing to look for is a real increase in national insurance benefits? Will she confirm that, under the Labour Government, pensions for that group rose by 20 per cent. and under this Government they are yet to rise by 3 per cent?

The incomes of the poorest pensioners increased by 19 per cent. in that same period. As the hon. Gentleman will know, the numbers in the lowest quintile decreased from 38 to 24 per cent.

Is not it important to look carefully at the differences in income and support between the younger pensioners and other older pensioners, aged over 75? Have not younger pensioners in particular done extremely well with regard not only to income but to home ownership and personal and occupational pensions? Is not it necessary to look carefully at the incomes and the support given to older pensioners who have not done so well with regard to home ownership and occupational pensions?

My hon. Friend is right. Seventy per cent. of recently retired pensioners have occupational pensions, half own their own homes and 85 per cent. have income from savings. The Government have taken action to help the older, poorer pensioners through the package of measures announced last October, which helped 2.6 million individuals.

No one seeks to deny the important improvements in the standards of living that pensioners with occupational pensions and savings have enjoyed over the past few years. Does the hon. Lady accept, however, that it is a great mistake for Government policy to be predicated on the basis of gross public expenditure increases or average pensioners' incomes? Does she further accept that, over the past year, the erosion in pensioners' standards of living because of the difference between the retail prices index and earnings levels has been a constant source of concern for poor pensioners? If the package of measures last October was so successful, why will not the hon. Lady repeat it this October?

I am glad that the hon. Gentleman implicitly accepts that the October package was a success. Its aim was to target help towards older and poorer pensioners. I am sure that those who are responsible for dealing with those matters will listen to the hon. Gentleman's points when he asks for them to be considered next October.

Is my hon. Friend really telling the House and the country that pensioners' living standards have risen faster in each of the past 11 years of the Conservative Government than in the six years of the previous Labour Government?

Perhaps the hon. Member for Eastbourne (Mr. Gow) would like to think about the fact that, by comparing five years and 11 years, one gets rather different outcomes. This is another attempt by the Government to manipulate and misuse the agenda of the House. I hope that you will reconsider your earlier ruling, Mr. Speaker, or any democratic procedure for holding the Government accountable will break down. I put it to the Minister—I am sure that she knows this to be true—that, according to the Library, 20 per cent. of pensioners rely entirely on state benefits. The Government have cut state pensions by £13.20 for a single pensioner and £20.70 for a couple. Labour takes great pride in the improvement in many pensioners' incomes due to the introduction of SERPS, which the Government have now cut, resulting in a reduction in the incomes of future pensioners. Labour is proud of the improvements for some but is worried about those who are finding life increasingly hard, many of whom are women. The poorest pensioners are women, and the Government are doing nothing for them.

The average income of pensioners who receive all their income from state benefits has increased by over 27 per cent. during the life of this Government. If the hon. Lady and her hon. Friends go on threatening and scaremongering about the choice, independence and diversity that the Government have introduced into pensions, they will live to rue the day.

Income Support

7.

To ask the Secretary of State for Social Security what is the amount within an income support payment which is imputed to cover the 20 per cent. liability for poll tax; and if he will make a statement.

On average, income support beneficiaries receive the equivalent of 20 per cent. of a community charge of £340.

As the average poll tax is £100 higher than was envisaged when the Government introduced the £1.30 payment per person on income support to cover that notional 20 per cent., why have not the Government increased the figure to 20 per cent. of the actual average poll tax? In Tory-controlled Windsor and Maidenhead, for example, the poll tax is £449 and 20 per cent. of that is £1.72; the odd 40p may not mean much to a Minister on nearly £1,000 a week, but to someone on income support it means a loaf of bread.

The level of community charge varies from place to place. The amount that people have to pay reflects the decisions of their local council, and there is an element of that in respect of income support. I hope that the hon. Gentleman will accept the figure that I gave in my original answer. The weighted average amount included in income support payments across Great Britain is equivalent to 20 per cent. of what has turned out to be the average community charge across Great Britain after allowing for transitional relief.

Is it not a fact that all people on income support receive the full maximum 80 per cent. rebate on their community charge? Do not those on income support also benefit from transitional relief, which cost the Government £350 million in England alone and which benefits 7.5 million people? Does not that show that we are the Government who care for the disadvantaged?

I can confirm that those on income support pay only 20 per cent. of their community charge—the other 80 per cent. is met directly—and that many income support beneficiaries will have benefited from the transitional relief scheme.

Is the Secretary of State aware that in my constituency of Workington, and throughout the north-west, there is a disturbing incidence of young people leaving home because of changes in social security legislation and also because their parents will not help out with payment of the poll tax? Was it really the Government's intention to drive young people out of their family homes? If it was not, will they reconsider the legislative provisions which are having that effect?

The hon. Gentleman will know that we have made a number of changes in the way in which the benefit rules operate, in an endeavour—I pay tribute to my hon. Friend the Parliamentary Under-Secretary of State for Social Security for the work that she has done in this regard—to ensure that the rules, which are sensible, work as well as we should like them to. I ask the hon. Gentleman to recall the history of social security and young people, especially under the old board and lodging regime. The attempt to solve the problems by social security means has aggravated rather than diminished them.

To revert to my right hon. Friend's original answer, does he agree that his reference to the Government's taking into account an average community charge of £340 underlines the sheer cruelty and lack of concern for the poorest people implicit in the attempt—shortly to be frustrated, I hope—by Bristol city council and Avon county council to levy a community charge of £493?

I agree with my hon. Friend that the core of such problems as are faced not only by those on benefit but by many others whose incomes may be quite modest reflects the irresponsible decisions of many councils throughout the country.

Homelessness

8.

To ask the Secretary of State for Social Security what further measures his Department is planning to take to reduce the problems of the homeless.

My hon. Friend the Minister for Housing and Planning announced a substantial package of measures on Friday 22 June to deal with this problem. We believe that this is the best way to tackle the issue, rather than through benefit changes.

Is the Minister prepared to concede that the Government's legislation, especially in relation to the withdrawal or reduction of social security benefits for young people and the imposition of the poll tax, compounded by their refusal to allow local authorities to build houses for rent, have created the appalling homelessness which exists in Great Britain today? Does she agree that renting a few church halls will not solve the problem?

The hon. Gentleman will be aware that the problem of homelessness spans a number of Government Departments and a number of countries throughout the world. He referred specifically to young people, however, and I remind him that there is no need for any 16 or 17-year-olds to be without an income. They can have a job, remain in education or take a YTS place. We have made a number of administrative changes and we raised the benefit level last July to help that particular group. I fully accept that there were some problems with the interaction between the Department of Social Security and the operation of youth training schemes, but we have done everything possible to put that right. It is surely better for young people to start their adult lives in school, in a job or in training rather than trying to live on benefit.

Has my hon. Friend noticed that young people who sleep rough almost always seem to come from the indigenous population and rarely from the immigrant population, who always seem to find somewhere to live? How can that be so? Would not it be unreasonable to provide expensive council house accommodation and flats for young people who merely leave home when others have to save, often for years, to find the accommodation that suits them?

I have already stated in reply to an earlier question that the Government believe that the best possible start for young people is to take training places, of which there are plenty—even a surplus—available and if possible to live at home. There are special benefit arrangements for those who have to live away from home.

Does the Minister not understand the difference between the roofless and the homeless? While the announcement of a recent package of measures involving opening up a few chuch halls put a roof over some young people's heads, those measures do nothing to solve the underlying problem that thousands of teenagers are being driven out of their homes by the conditions created by the Government, not least through the stealing of YTS allowances and the general cut in benefits?

I totally rebut the hon. Member's accusations. If larger numbers of young people are leaving home than in previous years, that is also a matter of concern for their parents.

Maintenance

9.

To ask the Secretary of State for Social Security when he expects to announce proposals resulting from his review of the maintenance system; and if he will make a statement.

We are pressing ahead with the review of maintenance, which is wide ranging, and are examining all areas of the current system to see where reform is required. We hope to make proposals later this year. Meanwhile, there are measures in the present Social Security Bill which address some of the problems that lone parents have experienced with the current system. My right hon. Friend the Minister of State, Home Office, has recently announced proposals to reinforce payment arrangements.

I thank my right hon. Friend for that reply and I wish him well with the proposals that he is bringing forward. They are long overdue.

I shall ask a real question. Is the right hon. Gentleman aware that the Government's first effort in that direction—the enforcement of payment through attachment of earnings—is merely a pathetic re-statement of existing law? Why is there nothing about the real issues such as the level of awards, which in general is far too low? What incentive is there for mothers to claim maintenance if the Department of Social Security simply claws it back in reduced income support? Do not the proposals have all the makings of yet another Tory ramp of reducing public expenditure instead of giving extra help to those in real need?

I really think that the hon. Gentleman might tone down some of the overheated language that he so persistently uses. First, the proposals of my right hon. Friend the Minister of State, Home Office, involve legislation and thus can scarcely be simply a re-statement of existing law—[Interruption.] Having asked three questions, perhaps the hon. Gentleman will allow me to answer them.

Secondly, as we announced to the House earlier this year, we have already taken action to strengthen the way in which maintenance is assessed and the amount that is expected under the current DSS rules.

Thirdly, the advantage to lone parents is that their position is much better if they are getting maintenance, especially when they enter work, than if they are wholly dependent on DSS benefits.

Will my right hon. Friend consider the position of single mothers bringing up children on their own without any assistance from the fathers, particularly when the fathers are known? Does he agree that it would be appropriate to ask those mothers to make applications to the courts for maintenance so that the fathers face up to their duty to support their children rather than leaving the whole burden to the taxpayer?

Yes, and indeed we do. Lone mothers in those circumstances can face a number of practical problems. We are seeking to address those problems in the Social Security Bill—for example, by legislating to make it possible for the Department's own maintenance orders to be transferred to claimants when they leave income support, and by taking powers to enforce a claimant's own maintenance order if it falls into arrears.

Retirement Age

10.

To ask the Secretary of State for Social Security what are his current plans for introducing a common retirement age for men and women in relation to the state pension.

The Government's position remains as described in the response, published in April, to the report of the Select Committee in another place.

Now that we are beginning to see signs of the Government's programme for the coming year and what the Prime Minister would like in their manifesto for the next election, and as the Prime Minister will be 65 this autumn, may we at last have a clear commitment from the Government to a common retirement age for women and men?

I have referred to our response to the Select Committee in another place, and I have no doubt that the hon. Gentleman will have read it. The hon. Gentleman will be aware that the Government are committed to the principle of equal treatment, but there are a range of difficult, complex practical issues and I really cannot give the hon. Gentleman the off-the-cuff undertaking that he seeks.

The Arts

Museums And Galleries (Charges)

51.

To ask the Minister for the Arts what recent representations he has received calling for access to all public museums and galleries to young people under 18 years to be without charge.

In recent months, I have received a number of letters concerning admission charges in the national nuseums and galleries which I sponsor. Those institutions which levy an admission charge allow free or concessionary entry to all pre-booked school parties and students. The decision whether to introduce admission charges is, of course, a matter for the trustees and directors of individual institutions.

Is the Minister aware that about 15 per cent. of all museums and galleries in London charge more than £2 for young people's admission and that fewer than 5 per cent. have free admission? Will he state that it is the Government's view that, wherever possible, it should be a museum's or gallery's policy that young people should be admitted free of charge as part of their general education?

The decision whether admission charges should be imposed is for the trustees, but if national museums and galleries were to impose charges—about five in the London area have decided to do so—in most, if not all, cases there would be concessionary rates for children. That means that most children would be admitted at half price. There are any number of examples of free admission for school parties. That is an important principle to pursue.

Will my right hon. Friend arrange for all museums and public galleries in this country to hold exhibitions for people under the age of 18 on the history of Labour Governments since 1900, all of which have ended in disaster, especially for those least able to defend themselves?

My hon. Friend has introduced an interesting idea, although I am not sure how many members of the public would bother to go to such an exhibition—we should have to wait and see. It must be stressed that, when admission charges are imposed, it is important for the public to see a clear benefit to the customer. For example, the science museum has free admission on certain days and is open on more bank holidays than before.

Does the Minister accept that the first step to widening access and encouraging children to go to our great national galleries is for those galleries to be in good condition? Does he support the plan of the Arts Council chairman, Mr. Peter Palumbo, to restore the fabric of our theatres, museums and galleries by the end of the century? Does he accept Mr. Palumbo's point that the problem—indeed, the crisis—has been caused by the Government's neglect over the past 10 years? Will he at long last accept what I have been urging him to do for the past three and a half years and have a national audit of all museums, galleries and other cultural buildings so that we know how big is the legacy of debt that the Government are leaving to the country?

I look forward to dealing more fully with some of those issues in the debate on Wednesday, when shall answer some of the hon. Gentleman's nonsensical points. Since 1979, the overall real resources of the national museums and galleries have increased by no less than 40 per cent. and for building and maintenance by 50 per cent. In September I announced that £180 million would be made available for the fabric of our national institutions. That is very much in line with the view expressed by Mr. Palumbo that we should get our institutions and their fabric in good shape.

Will my right hon. Friend take a leaf out of the French book in relation to the treatment of museums and galleries and ensure free admission for large families and men or women mutilated in wars?

I am sure that the leaders of the institutions in Britain will acknowledge the point made by my hon. Friend, but it is for them to decide what should be done. Some British institutions, unlike the majority of French institutions, do not charge at all.

Photography

52.

To ask the Minister for the Arts whether it is his intention to vary the Arts Council's responsibility for photography.

No, but I expect the council to review its support for photography as part of its development of a national strategy for the arts.

I welcome the Government's plans for devolution, especially that aspect which permits regional art association photography offices to work closely with the national officer. That will enable all the officers to formulate a coherent national policy for the further development of photography, especially in the context of funding for regional galleries, but does the Minister accept that carrying out those plans will require adequate funding and support from the Minister?

I am grateful to the hon. Gentleman. There has been a 10 per cent. increase this year over last year in overall resources for the Arts Council to give to photography. I am sure that that will play a part in helping to strengthen photography in Britain.

I cannot let this occasion pass without congratulating the hon. Gentleman on his achievement in producing the book, "People in Parliament", and I congratulate him the more strongly inasmuch as I am one of the people who feature in the book. I also congratulate him on his leading part in organising the remarkably good exhibition of photographs by hon. Members—an exhibition which shows that there are many hidden talents in the House.

Paintings

53.

To ask the Minister for the Arts whether he will make a statement on the public display of paintings.

I have been much impressed by the recent expansion of the range of paintings on display in London, including the new Courtauld Institute galleries and the generous loan of the Berggruen collection to the national gallery. There are, of course, many other developments outside London.

My right hon. Friend's answer reveals that the position not just in London but in the provinces is very good. Will he redouble his efforts to ensure by the use of loan paintings and the reserve collection that people who do not live in London can see the excellent pictures available in the metropolis?

My hon. Friend is, of course, right. A special exhibition and travelling unit advises on such matters at the Museum and Galleries Commission. There are now more loans available throughout the country and more objets d'art are outside the cellars and on display, but there is still a long way to go. As for London, I noted the other day that the chairman of the national gallery, Lord Rothschild, said that he believed that London is now the paintings capital of the world. In view of the remarkable developments of the last few years, I am sure that he is right.

May I draw the attention of the Minister and of the Opposition spokesman, my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher), to the resumption of the exhibition of paintings and art by Members of both Houses? The exhibition opens officially tomorrow morning, but the works are already displayed in all their glory. There are some fine exhibits on show and admission is free. After a two-year gap, there are some splendid contributions this year. Modesty prevents my saying any more.

I am grateful to the hon. Gentleman for drawing to the attention of the House and the outside world once again the hidden talents available in the Chamber.

Building Refurbishments

54.

To ask the Minister for the Arts what programme of refurbishment of buildings within the responsibility of the Office of Arts and Libraries has been established.

I am allocating £180 million over the next three years towards the building programmes of the national museums and galleries which I sponsor. The current year's allocation of £57 million represents a 75 per cent. real terms increase over 1979–80.

Will my right hon. Friend also confirm that the private sector has played a major role in refurbishing and repairing our museum buildings? Will he congratulate those responsible for the major refurbishment work on the facade of the Victoria and Albert museum which is turning out splendidly and rising phoenix-like from its scaffolding? Will he also—

I agree with my hon. Friend about the remarkable contribution of the private sector to the refurbishment of national galleries, including the V and A. By contrast, £5 million of extra private sector money has been made available for the British museum by the Japanese to help open the Japanese galleries. There are several other examples. Most notably, Lord Wolfson has joined the Government in a joint funding exercise to help with the improvement of the national galleries in our country.

While I am pleased with the reaction of so many of the people with responsibility for some of our public buildings and the arts aspects of them, does the Minister agree that we need long-term funding for many buildings which have fallen into disrepair? That funding is urgently required, not just for the next year or two, but for the next decade or two.

I take the right hon. Gentleman's point seriously. That is why I made a speech in York last September about longer-term funding for the fabric of our national institutions, particularly the national museums and galleries. It is for that reason that, with the co-operation of my colleagues in the Government, I decided to allocate £180 million for that purpose for the next three years. I have given an undertaking that it is the Government's task, job and duty to ensure that the fabric of those institutions in particular will be in good shape for the next decade.

Civil Service

Retired Civil Servants (Appointments)

75.

To ask the Minister for the Civil Service whether he has any plans to revise the rules governing the appointment of retired civil servants to senior positions in companies with whose subject area they have dealt during their public service careers.

The rules are kept under review and were last revised in 1989. I have no present plans to revise them again.

Does the Minister agree that those rules, which preclude civil servants from taking senior board appointments in companies within two years of their retirement, are an important safeguard against civil servants being suspected, perhaps wrongly, of being influenced while in office by the hope of such appointments? Is not it strange that civil servants are in that position when the Ministers whom they advise, and who frequently neglect their advice, are not subject to similar restrictions and former Secretaries of State for Trade and Industry or for Energy can take appointments in the industries that they have privatised?

The position for civil servants is as the hon. Gentleman describes. Of course, it is possible for their appointments to outside jobs to be delayed for up to a maximum of two years. It is not a rule that such appointments are delayed for two years. They can be delayed for up to a maximum of two years. Those rules have been in force for a long time. I am not directly answerable for the actions of Ministers, except for my own actions. However, the position is clear. I agree with the view expressed by my right hon. Friend the Prime Minister and that expressed by Lord Wilson in 1968, that it should be up to the good sense and discretion of Ministers when they retire. Clearly, they will care deeply about their public reputation. Their talents and abilities, along with those of civil servants, should be available to the nation and the private sector should be allowed to benefit from them.

Is my right hon. Friend aware that anxiety about this matter is not confined to the other side of the House and that, in particular, civil servants who have received considerable salaries and pensions must be careful about their relationship with the private sector after they retire from the public sector where they received confidential and important information?

I fully acknowledge what my hon. Friend says. I am responsible for propriety, and I am most anxious to ensure that we continue with the highest possible standards. Under the rules, applications are sent to the advisory committee on business appointments and to the head of the home civil service when lower grades are involved. My hon. Friend might like to know that conditions were imposed upon more civil servants who were going to outside jobs in 1989–51 per cent.—than in 1988, when the comparable figure was 34 per cent., and in 1987, when it was 26 per cent. That is a sign that the issue is being treated seriously.

Trade Unions

76.

To ask the Minister for the Civil Service when he last met representatives of the civil service trade unions; and whether he discussed conditions of service.

I meet the civil service unions from time to time to discuss a range of matters.

When the Minister next meets the civil service unions, will he take the opportunity to dissociate himself and the Government from the report in The Guardian today of the thoughts of the right-wing Tory No Turning Back group for a pay-as-you-like or pay-whatyou-like tax system? Is not this a typical, desperate last attempt by the Conservative party to flag up its growing unpopularity in the opinion polls?

Order. The hon. Gentleman's supplementary question should relate to the conditions of service of civil service trade unions.

Does the right hon. Gentleman not understand that the bash-the-taxman idea behind the scheme is deeply offensive to civil servants and will do nothing but lower morale among Treasury civil servants who are collecting taxes on our behalf?

I cannot see the direct connection between the hon. Gentleman's supplementary question and the civil service. The production of new thinking and new ideas from all parts of the Conservative party is a sign of how alive the party is and how much it is looking forward to serving the country in the 1990s.

Has my right hon. Friend had time to discuss with the civil service trade unions the concern that they feel about Treasury report No. 2435, which recommends the downgrading of the pay and structure of a number of security officers and investigating officers in the sensitive area of physical security of Ministry of Defence buildings and of positive vetting? Does my right hon. Friend agree that a report which appears to seek to reduce by as much as £2,400 a year the pay of the 350 or so officers who work in this sensitive area is sending the wrong signal to the IRA and others and that there should be careful reconsideration of those misguided proposals?

That is a matter which should be drawn to the attention of my right hon. Friends, and I shall do that. I note what my hon. Friend has to say.

The Minister can no longer hope for preferment from a discredited Prime Minister and it would do all civil servants a power of good if he stated that the possibility reported in the newspapers of a bash-the-taxman policy in the next Conservative manifesto would be resisted by him. Civil servants at the Inland Revenue are professionals who take a pride in their work and the last thing that they want is a bash-the-taxman policy in the next Tory manifesto. Will the right hon. Gentleman do his best to ensure that it does not appear?

When the historians come to judge the 1980s and early 1990s, I believe that they will praise my right hon. Friend the Prime Minister for her remarkable leadership. They will realise how alive the Conservative party was in the 1990s and how much its members were looking forward to serving the country in the future, compared with the sterile members and policies of the Labour party.

Agencies

77.

To ask the Minister for the Civil Service what assessment he has made of the effect on the quality of public sector services of the establishment of agencies.

Improved service is one of the most important benchmarks by which the success of the next steps initiative will be judged. Results from the early agencies are promising.

Does my right hon. Friend agree that the quality of service promoted in the next steps programme is wholly consistent with the Government's drive to improve the quality of life in the areas affected by these services for those who work in them and, equally important, for the customers?

My hon. Friend hits the nail on the head. One of the main objectives of the next steps programme and the reforms is to ensure that the service provided to the public by the civil service is strengthened still further and that the quality of the service is even better. As we look to the 1990s, that is our clear priority. Evidence is coming in already that the agencies, ranging from Companies House to the laboratory of the Government chemist, and including HMSO and many other organisations, are providing an improving service and that high priority is given to the customer.

Does the Minister accept that computerisation of the benefit system has caused great problems for the staff and that, far from staff reductions, the 23 managers of the system agree that staffing levels should be increased? Current problems include giros not being paid on time, specialist benefits not being dealt with and money from the social fund, designed to make crisis payments for cookers and the like, not being paid out on time.

That is a matter for my right hon. Friend the Secretary of State for Social Services and the hon. Lady will be aware that my right hon. Friend is paying great attention to the way in which we can improve the services through that system. An agency is to be established next year which will strengthen still further the prospects for a better service.

Does my right hon. Friend agree that not only the conditions for those who consume the agencies' services but the terms and conditions of the employees have been improved? Will my right hon. Friend give every consideration to the Paymaster General's office in my constituency where the management would greatly welcome an early move in to the private sector?

I am grateful to my hon. Friend. We must, of course, draw a distinction between agencies remaining under the control of Secretaries of State and privatisation. There is increasing enthusiasm on the part of the staff in those agencies—hence their success stories. The potential for staff terms to be improved is considerable as a result of more flexible pay, individual performance bonuses and, in some cases, group performance bonuses.

Civil Service (Conditions Of Employment)

78.

To ask the Minister for the Civil Service when he next expects to meet the civil service trade unions to discuss changes to the civil service conditions of employment.

I refer the hon. Member to the reply that I gave earlier to the hon. Member for Stoke-on-Trent, Central (Mr. Fisher).

The next time the right hon. Gentleman sees the civil service trade union leaders, will he tell them that to get rid of the double standards regarding civil servants and Ministers taking jobs in outside industries top civil servants will be stopped from taking such jobs? That is the best around the problem and would be appreciated by the millions outside this place. A ban on such appointments should not apply for two years only, and Cabinet Ministers should be treated in the same way. It would also not be a bad idea if every Member of Parliament had one job, and one job only. The moonlighting should be stopped.

We are talking about people who have retired from the civil service or retired Ministers. The hon. Gentleman does not do justice to the fact that many of them have talents to offer the country. Just as many Labour ex-Ministers—[Interruption.] I do not know whether the hon. Gentleman agrees, but Lord Glenamara, Lord Robens, Lord Marsh and many others, whose talents were available, have served in the private and public sector. So long as propriety is maintained—that is the rule with the civil service—those talents should be available to the private sector.

Ozone Layer (London Conference)

3.32 pm

With permission, Mr. Speaker, I should like to make a statement about the outcome of the second meeting of the parties to the Montreal protocol on substances that damage the ozone layer, which the United Kingdom hosted and chaired in London last week under the auspices of the United Nations Environmental Programme and which was opened by the Prime Minister.

I am delighted to say that the agreement reached at the meeting marks a major step forward in the global effort to deal with the ozone problem. The parties agreed that chlorofluorocarbons should be phased out by 2000, with intermediate cuts of 50 per cent. compared with 1986 levels by 1995, and 85 per cent. by 1997. We also agreed that halons should he phased out by 2000, except for agreed essential uses, with an intermediate cut of 50 per cent. by 1995.

Those two agreements represent a substantial tightening of the controls in the protocol. Before the London meeting the only requirements were a return to 1986 production and consumption levels by 1989–90 for CFCs and 1992 for halons, and a 50 per cent. cut for CFCs by 1998–99. Controls on two other ozone-depleting chemicals—carbon tetrachloride and methyl chloroform—were also agreed. Use of carbon tetrachloride will be phased out completely by 2000, with an intermediate cut of 85 per cent. by 1995. Use of methyl chloroform will be reduced to 30 per cent. of current levels by 1995 and 70 per cent. by 2000, and it will be phased out completely by 2005. Neither of those chemicals was controlled under the protocol previously.

Despite that tightening, several countries, including ourselves, would like to have gone further and faster. In particular, a number of countries argued that we should ban CFCs by 1997. We think that this would be a wholly acceptable target provided that there was an exemption for essential medical uses—for example, medical aerosols. We shall be pressing the European Commission to bring forward an amending regulation to provide for this within the Community as soon as possible. We shall be returning to this issue on a global basis in 1992—the parties agreed that there should be a review of the CFC controls then, with the aim of accelerating the phase-out schedule.

We also reached agreement on a financial mechanism under which developed countries will meet the incremental costs that developing countries incur in complying with the protocol, and on the technology transfer that will be necessary to enable developing countries to do so. Governments cannot simply guarantee that technology will be transferred, because they do not own the technology. But provision was included in the protocol so that if a developing country feels that insufficient financial support or transfer of technology threatens its ability to comply with the protocol's provisions it will be able to discuss this issue with the other parties to find a solution.

The outcome of the London meeting is a unique achievement in environmental diplomacy. Never before has the international community reached agreement on this sort of package. It brings together tight controls on chemicals which have previously played a vital role in our economic development, financial support for developing countries, and a commitment to helping those countries adopt and adapt to the new technology that has to be employed in making and using substitute chemicals.

The fact that nearly 60 countries from the developed and developing world succeeded in reaching agreement on this issue, and that the Indian and Chinese delegations both said that they would recommend to their Governments that they join the protocol, marks a new phase in international co-operation on major environmental issues. I believe that, having reached agreement on the ozone problem, we can now move on and try to reach agreement on the other more difficult environmental problems that we face, such as global warming.

The agreement reached last week was an important and welcome step towards the long-term protection of the ozone layer. To the extent that the Secretary of State, as chair of the conference, made his contribution to that outcome, he deserves our congratulations, and the Opposition are glad to offer them. It is particularly welcome that China and India have been brought within the Montreal protocol. I am also pleased that the principle of a fund and financial help to the third world has been established.

Does the Secretary of State agree that the agreement, welcome though it is, does not of itself save the ozone layer? Does he accept Dr. Joe Farman's view that the ozone layer will still suffer a further 20 per cent. destruction by the year 2000? Does he agree with the United Nations working group that every 1 per cent. loss of ozone leads to a 3 per cent. increase in skin cancers and a further 100,000 people going blind?

What is the Secretary of State's estimate of the volume of ozone-depleting gases that will be released between now and the year 2000? Does he agree with the Greenpeace estimate that it will represent half as much again as the total amount already released in the whole of recorded history up to the present?

Is the Secretary of State satisfied that enough help has been offered to the third world, particularly in relation to technology transfer? Will he say more about how the fact that that technology is largely privately owned is to be circumvented? While the British Government's offer of £9 million to the fund is welcome, that must surely be seen in perspective. Is not it the case that it represents just one fifth of the amount that the Department of Energy is currently spending on consultants' fees in the run-up to electricity privatisation?

While the Secretary of State clearly did well in his role as chair of the conference—[Horn. MEMBERS: "Chairman."] I am replying, and I shall choose my language. While the Secretary of State did well in his role as chair, will he acknowledge that the position of the British Government left something to be desired? I refer especially to the mystery of why we are unable to add our signature to the declaration which commits 14 other countries, including all the other members of the European Community, to phasing out these gases by 1997. Is it really true, as his hon. Friend the Minister of State maintains, that we were simply not asked to sign? If it is true that we were excluded in such a way, is not it a rather wounding insight into our image as a country which is always expected to drag its heels and to act on the side of delay?

What are the special medical uses that prevent us from agreeing to a 1997 phase-out, and how are other countries, which have agreed 1997, managing in that respect? How will we ensure that we meet the deadline? Will building foam containing CFCs, for example, be banned? If so, when? Will the chosen instruments be prohibition, or a price mechanism, as recommended by the Pearce report? What support will be given to the recycling of CFCs and what safe methods of disposal will be adopted?

Does the Secretary of State acknowledge that green consumerism has been an extremely valuable ally in reducing the use of CFCs, but that Government intervention is now required? I assure him that he will have the Labour party's support for any measures that are put in place now.

I thank the hon. Gentleman, parenthetically, for his kind parenthetical observations.

It will probably take the next half century to save the ozone layer. Under the previous protocol, it was estimated that chlorine loading in the atmosphere would rise from today's level of 3.5 parts per billion to about 5.9 parts per billion by the year 2040. Under the terms of the new, tighter protocol we are talking about an increase which will peak at just over present levels in 1997, and will then fall towards the year 2040. Levels should fall to about three parts per billion by the year 2040 and continue to fall thereafter. We may be able to achieve a better result, but that will obviously depend on whether we can encourage others to tighten up regulations and targets in the way we would like. Those estimates are on the pessimistic side.

Nevertheless, we expect substantial improvement in chlorine loading, which will fall back to the levels that existed before the hole in the ozone layer above the Antarctic was discovered. We expect a substantial improvement, but it will take quite a long time.

The hon. Gentleman asked whether we were providing enough help. Our contribution to the interim fund for the next three years is based on the United Nations formula. No one at the conference did not welcome the contribution that we were proposing. I have no doubt that after the interim fund ends we shall be considering a further longer-term fund, which will provide financial assistance. We also want to ensure technology transfer as far as we can, but that tends to be a curious portmanteau expression used to describe things which are tradeable. Under the existing aid programmes, technology transfer is encouraged: licensing agreements, technical co-operation and training programmes, and the purchase of patents are all funded by aid.

The hon. Gentleman was wrong in his remark about the United Kingdom Government's position compared with that of the rest of the European Community. Four member states of the Community signed the statement to which the hon. Gentleman referred, not 11. Among those countries that did not sign and do not have their names on the statement to which the hon. Gentleman referred are France, Italy and the Republic of Ireland, which at the moment holds the presidency of the Community. We have no differences with the rest of the Community about wishing to phase out CFCs by 1997.

I suspect that one reason why we were not approached to sign the statement was that I was chairing the conference and trying to provide as broad an agreement as possible. Other member states may have concluded that it would be wrong to press Britain to take a partisan position during the conference. Let there be no doubt that we are committed to phasing out CFCs by 1997, except for special medical uses.

The hon. Gentleman asked to what sort of medical uses I referred. I mentioned medical aerosols in my statement. If the hon. Gentleman knows anybody who suffers from asthma, he will rapidly find examples of medical aerosols.

I could refer to other issues involving toxicity testing and, alas, the fact that no alternative has yet been found for halons for use in aircraft, in manned computer centres or for putting out fires. There is also difficulty in producing enough of an adequate substance for use in refrigerators. However, I will not go into those matters in detail.

The hon. Gentleman is right to say that the Government need to encourage greater recycling. I was delighted when my hon. Friend the Minister for the Environment and Countryside opened the plant that Imperial Chemical Industries has started for that purpose. The hon. Gentleman is also right to say that green consumerism has helped a great deal. I hope that the green labelling scheme, which we are pressing in the European Community, will help in that and other areas. We look to European Community regulations to help the Government to achieve tougher and tighter targets. I shall be asking the next presidency of the European Community Environment Council to take urgent and early steps on that issue.

Will my right hon. Friend accept the congratulations of the House on his chairmanship of the conference? I thank him for his reference to asthmatics, because, being one myself, I am aware that the issue is of great importance to them.

Is not it true that one of the greatest problems of chlorine in the atmosphere arises in European nations that we used to describe as being behind the iron curtain? Will my right hon. Friend ensure that the EEC considers giving assistance with the financial problems faced by those nations in dealing with the industrial problem, which is both great and severe?

I was extremely pleased that a number of central and eastern European countries were represented at the meeting in London last week for example, Hungary, Poland and Czechoslovakia. The European Community needs to give as much assistance as possible to countries in central and eastern Europe to enable them to cope with their environmental problems, and that includes the depletion of the ozone layer.

I, too, congratulate the Secretary of State on making such welcome progress in phasing out CFCs and, in particular, on bringing China and India into the agreement. He would be the first to recognise that the crucial element in their agreement is that there should be an adequate transfer of technology. It is on that point that I feel that the position is not yet as clear or as definite as the House would wish. What discussions has the right hon. Gentleman had with companies such as ICI—there are few CFC producers in the United Kingdom—to obtain their agreement to the necessary transfer of technology, either through establishing subsidiaries in the case of India, or through licensing agreements in other cases?

The right hon. Gentleman is right, and I thank him for what he said about the difficulties of ensuring adequate top technology transfer. One important element in the agreement is that it brings together the issues of compliance and of technology transfer in a way that is acceptable not only to developed countries but—and it is slightly more to the point in this context—to developing countries. The Government have had a number of discussions with ICI, just as Governments of other countries have had discussions with their chemical producers. With reasonable good will on the part both of the firms concerned and of developing countries, it should be possible to get round some of the difficulties that the right hon. Gentleman identified.

For example, as part of our aid programme—it was part of an aid agreement that I signed with India last year—we have already done an extremely good study on the costs to India of CFC substitution and ways in which we should set about helping it to meet those costs and deal with the necessary technology. It involves a number of elements, not least how early the Indians can take action, and how much they can do to promote recycling. I have no doubt that companies such as ICI are keen to discuss with Governments such as the Government of India how they can transfer technology in a way that does not discourage them from investment in substitution.

I join in welcoming my right hon. Friend's statement and the personal commitment that preceded his chairmanship of this important conference in London. I also welcome the fact that both India and China have been brought in, and the opening that he announced for even more rapid progress over the next decade or so.

My right hon. Friend has already acknowledged that the consumer movement played a large part in paving the way to the conference. What advice, apart from the labelling scheme, would he give to consumers, recognising that the responsibility for reducing the use of ozone-depleting chemicals rests not just with Government but with household consumers and buyers?

I am grateful for what my hon. Friend has said. It is important to pay tribute as well to the work of the United Nations Environmental Programme in general and to Dr. Tolba, the executive director, in particular. He did an admirable job in moving along the discussion in the past few months and in getting us to the situation in which we could reach agreement last week.

Consumers have helped, through the pressure that they have brought to bear, to ensure the more rapid phasing out of aerosol sprays. I hope that consumers will turn their attention to recycling, for example, of CFCs in refrigerators. They can ensure that, when they replace their refrigerator, if possible, their retailer takes back their old regrigerator and has the CFCs contained in it adequately recycled through one of the schemes.

The international agreement and the level of it are welcome. It is appropriate that there has been a unique agreement, given the uniquely severe and urgent problem. However, the Secretary of State has failed to achieve his targets, as set out in his press release of 14 June, in which he said that the objective was to achieve the most rapid possible cuts in and consumption and the most demanding timetable for reduction of CFCs. We should have set an example. We should have said that we were committed to a 1997 phase out at worst, or even one in 1995, and even allowing for the exemption on medical aerosols.

Given that many of us feel, like Joe Farman, who discovered the ozone hole above the Antarctic, that the results of the conference were very disappointing, will the Secretary of State look again at the Government's policy of blocking in the Commons the Bill promoted by my noble Friend Lady Robson that got through the other House? Will they introduce in this House in the next Session of Parliament a Bill that commits us to the most urgent possible target for the elimination of CFCs?

I hope that we shall be committed, with agreement on the European Community regulation, to phasing out by 1997, with the qualification that I mentioned earlier. I do not think that the hon. Gentleman, while properly stressing the urgency of this issue, should overlook some of the real problems in providing substitution, one of which is adequate toxicity testing. It is simply not good enough, for example, to tell people in electronic engineering who are using solvents that they should use alternatives that have not yet been properly tested. That would not be reasonable. There are other problems, to which I have already referred, relating to halons, and the medical arguments. These are not being paraded as excuses for inaction, but are being pointed to as reasons why we cannot go even faster. Anybody in his right mind would want to get rid of CFCs tomorrow.

Is my right hon. Friend aware that it is gratifying that he is receiving accolades from Members on both sides of the House for what has been achieved? Will he say a word or two about the methods of monitoring and enforcement of what has been agreed?

Of course. Monitoring and regulation are extremely important parts of the protocol. A special committee will be set up under the terms of the protocol, comprising some of the countries that agreed to it, which will be responsible for monitoring compliance with the protocol. In addition, we shall have our own reporting procedures within the European Community to make sure that we achieve the targets. My hon. and learned Friend is entirely right in noting that one of the major considerations in all environmental diplomacy will be making absolutely certain that, having signed agreements, people keep them. I suspect that that will become an even greater problem when we start discussing other greenhouse gases.

I join in congratulating the Minister on the further progress that has been made in the new agreement. Will he answer the question asked by my hon. Friend the Member for Dagenham (Mr. Gould) about the comments of Dr. Joe Farman that, even under the new arrangements, ozone depletion will continue and the ozone layer around the northern hemisphere over Britain and the United States will decrease by 20 per cent. by the year 2000? When we talk about phasing out CFCs by the year 2000, are we not in a similar position to a smoker who smokes 100 cigarettes a day and is told to give up because he risks getting cancer? Should not there be much greater urgency internationally towards phasing out by 1995 or 1997? Frankly, if we had any sense, we would stop using those products virtually straight away.

Although metaphors are valuable in political debate, the hon. Gentleman's chosen metaphor is not wholly accurate. Speaking as a former smoker, I found it possible to go from smoking 30 cigarettes a day to zero overnight, encouraged by the existence of two ulcers. CFCs are rather a different issue.

Although it would be nice to stop any use tomorrow, that is not possible, but we have introduced new and much tougher targets. I hope that when we review those targets in 1992 we shall be able to toughen the ones that we agreed last week still further. I pointed out earlier that the new agreement would mean that chlorine loading in the atmosphere would peak by 1997 and start to fall thereafter. Under the previous protocol we were talking about chlorine loading increasing from 3.5 to 5.9 parts per billion by the year 2040. However, even if we were to stop using CFCs now, we should be talking about the problem for some time in future because of the concentration of chlorine in the atmosphere. It will take quite some time to deal with that extremely important and difficult problem.

I congratulate my right hon. Friend on the excellent agreement, and, in particular, on the attachment of China and India to it. At a more mundane level, will he bear in mind the importance of continuing to encourage local authorities such as Gedling to look for ways of setting up a system of reclaiming domestic fridges and large industrial freezer units which contain damaging gases which would otherwise be released into the atmosphere?

I very much agree with my hon. Friend. Local authorities which have taken the action to which my hon. Friend has referred are to be warmly congratulated. I hope that many more will follow their example, and, as I said earlier, that retailers will do all that they can to promote recycling.

Will the Minister tell us exactly when we will get the Government system of green labelling? If the EEC is still dragging its feet, could not we ensure that all ozone-damaging products are clearly labelled as such when they are sold in Britain and when they are exported so that consumers can move rather faster than the Government and other international groups?

I think, not least because of the creation of the single market, that there is a strong argument for a Europewide scheme of green labelling. We have been pressing for that, and I should like to see one agreed and, if possible, established by the end of next year. If we do not make such progress on a Community level, we shall have to introduce our own scheme for this country. It would be better if we had a scheme that applied across the Community.

Does my right hon. Friend accept that one of his achievements has been in harnessing the international community to produce an agreement that is more far reaching than many people thought could be achieved? He has confounded and wrong-footed the professional moaners who carp about things being too little, too late. Notwithstanding the monitoring and reporting systems in the agreement, are there any more precise safeguards to ensure that countries cannot backslide on keeping to the agreed deadlines?

The protocol provides adequate safeguards on backsliding. As I said to the right hon. Member for Bethnal Green and Stepney (Mr. Shore), it will be possible for countries that believe that they are not receiving adequate help with technology transfer through the financial mechanism to take the issue back to the other parties under the protocol, which is reasonable.

In the next few years, environmental diplomacy will raise issues of the greatest sensitivity to individual countries. It will draw attention to the different judgments that countries make about these matters and the problems that they face. We shall achieve the agreements that we need only if we start diplomacy without grandstanding or slagging one another off. These issues must be handled with humility on all sides.

May I take the Minister back to the reply that he gave my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) on the important question of technology transfers? To many, it appears that there is a dangerous loophole in the agreement, because the technology is held by a few multinational companies. Developing countries which understandably wish to promote the development of refrigerator-making industries and so on will have to pay much for that technology, unless they apply to an as yet unquantified fund held by the Commission or the convention.

Will the Minister assure us that there wil be no delay in ensuring a rapid transfer of technology, for example, to allow the Indian Government to promote the building of a new refrigerator plant, which is now planned, using non-CFC material rather than the obviously dangerous CFCs? If this loophole continues, many of the achievements in getting people together will be weakened, if not destroyed altogether.

The fund is not unquantifiable. We have agreed on a figure for the interim three-year-old period of S240 million, including resources for India and China. Subsequent commitments to the fund may need to be much more substantial, depending on the progress that we make and on the precise costs of CFC substitution.

As I said earlier, the expression "technology transfer" tends to be used rather loosely, ignoring the fact that when talking about technology transfer one is talking about items which are tradeable, which are sold between one company and others or between one country and others. I suppose that that is a rather confusing concept for some Opposition Members—I do not mean to be offensive—who would argue that the multinationals should be nationalised; socialism is still on one country's agenda. It should be possible, with a modicum of good will, to overcome the problems identified by the hon. Gentleman through licensing agreements and joint ventures. There are plenty of examples of those agreements being funded within our existing aid programmes; I concluded one or two in a more benign past.

Order. I have an obligation to protect the business. There is to be a debate on a Select Committee report on aid to eastern Europe. Some of those hon. Members who are rising seek to take part in it, so I shall allow two more questions from each side of the House. We must then move on. Undoubtedly we shall return to this subject.

My right hon. Friend referred to the fund and will be aware of the comments by the Indian Government about the shortage of funds. He has presided over a major achievement. Will he comment on the size of the fund that will result from his achievements at the conference and on the adequacy of the fund for countries such as India if they are to be able to meet their requirements under the protocol?

As I said, the size of the interim fund is about $240 million over three years, but we expect further contributions to a fund after that. Under an aid agreement with India which I signed last year, we have promoted a study of the costs of CFC substitution in India. The distinguished Indian Minister, Mrs. Gandhi, who made a substantial and distinctive contribution to our discussions last week, referred in some press interviews to a cost of $340 million for CFC substitution programmes in India. That is the highest figure suggested by Touche Ross, which suggested in its report that, with earlier action and more recycling it might be possible for the Indians to cope with the CFC substitution problems for $120 million. I guess that somewhere between those figures there is a realistic amount which the Indians will need to comply with the protocol. What delighted me almost more than anything else was the fact that India and China reckoned, at the end of a fortnight's argument and discussion, that they could bring themselves to agree to the terms of the protocol.

I acknowledge the contributions by the Prime Minister and the Secretary of State to this historic international agreement on a major environmental issue. I put it to the right hon. Gentleman that the effect of the implementation of the protocol by India and China will be crucial. To many Opposition Members, the right hon. Gentleman's remarks about the transfer of the technology of the production process to these developing countries could have been more robust. Surely we will not allow the multinational companies to drag their feet. The sums of money that will be given to India and China in the short term are relatively small. I hope that the right hon. Gentleman agrees that it would not be acceptable to us if they used that money to buy CFC substitute products from advanced economies.

It is worth noting that the substitutes for CFCs were not discovered by politicians and will not be marketed by Ministers who sign agreements. They were discovered and will be marketed by the same multinational companies that are still some of the villains in the Opposition's arguments. I do not see the companies concerned in that light. ICI has behaved with commendable public spiritedness. Like the rest of us, these companies want CFC substitutes to be used to ensure that we can enjoy the benefits of economic and social progress without depleting the stratospheric ozone.

What measures are in the protocol to deal with the destruction of exhausted air-conditioning and refrigeration equipment in China, India and the countries throughout the far east which have very hot climates? What will happen to the equipment that must be destroyed? Will those measures be funded?

As I said, the study on India, which we helped to fund, referred to the considerable progress that could be made by the encouragement of precisely the sort of recycling to which the hon. Gentleman referred. One of the first steps that we must take with all developing countries is to agree on a realistic programme for both CFC substitution and recycling. The potential impact that those countries' economic development could have on the problem if we do not assist them makes one realise how important it is to give them all the help that we possibly can.

Will my right hon. Friend confirm that CFCs are used so widely because of their non-toxic and non-flammable properties? Will he confirm that, while protecting the ozone layer, the Government will make absolutely sure that they protect factory workers and other citizens against possible less safe substitutes?

My hon. Friend is quite right. The importance of taking precautions is relevant to CFC substitution, as it is to other matters. The damage that was done inadvertently by the invention, manufacture and use of CFCs, which were initially regarded as a great scientific breakthrough, should make us particularly cautious in respect of the testing that is required for CFC substitutes. That is why I stressed toxicity testing.

European Community Documents

Ordered,

That European Community Document No. 10139/89 relating to municipal waste water treatment be referred to a Standing Committee on European Community Documents.—[Mr. Patnick.]

Statutory Instruments, &C

With the leave of the House, I will put together the Questions on the two motions relating to statutory instruments.

Ordered,

That the Rent Book (Forms of Notice) (Amendment) Regulations 1990 (S.I., 1990, No. 1067) be referred to a Standing Committee on Statutory Instruments, &c.
That the Rent Officers (Additional Functions) (No. 2) Order 1990 (S.I., 1990, No. 1068) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Patnick.]

On a point of order, Mr. Speaker. We all realise the pressure of business, but we have just had an important statement on an issue that affects the future of the planet. Only two more hon. Members wished to ask questions—

Order. I know. It would be very tempting to call all those hon. Members who rise on questions and statements.

Many other hon. Members wish to take part in today's debate. Even if I could impose a 10-minute limit on speeches, I should not be able to call all those who wish to participate. The House must accept that it is only fair to give hon. Members who wish to take part in the main debate the opportunity to do so.

Two Opposition Front-Bench spokesmen will be making speeches, and if they set a good example to the rest of the House I may be able to call a good many—though perhaps not all—of those hon. Members who wish to participate. Again, I ask for brief speeches.

Estimates Day

[1ST ALLOTTED DAY, 2ND PART]

Estimates 1990–91

Foreign And Commonwealth Office

Eastern Europe

[Relevant documents: Third Report from the Foreign Affairs Committee of Session 1989–90 on FCO/ODA Expenditure 1990–91 (House of Commons Paper No. 233).

European Community Documents Nos. 9090/89 on Aid to Poland and Hungary and 10788/89 and 4542/90 on medium term financial assistance for Hungary.]

Class Ii, Vote 2

Motion made, and Question proposed,

That a further sum, not exceeding £74,290,000 be granted to Her Majesty out of the Consolidated Fund to defray charges that will come in the course of payment during the year ending on 31st March 1991 for expenditure by the Foreign and Commonwealth Office on grants and subscriptions etc to certain international organisations, certain grants in aid, special payments and assistance, scholarships, Military aid and sundry other grants and services.— [Mr. Waldegrave.]

4.13 pm

The Select Committee on Foreign Affairs is grateful to the House for giving us this opportunity to discuss the Committee's third report on Foreign and Commonwealth Office and Overseas Development Administration expenditure, and to focus particularly on matters relating to assistance to eastern Europe. The sections of the report dealing with the know-how fund and support for eastern European economic development will be the main focus of attention. It is worth pointing out, however, that the other issues raised in the report relate directly to what is happening in eastern Europe and to the whole range of other issues of concern to the House, including environmental pollution, which we have just discussed.

Paragraph 7 of our report examines the problems of Foreign and Commonwealth Office staffing, which have arisen because of the need to establish stronger posts and a greater effort in the new democracies of eastern Europe. Some changes in the dispositions and staffing policies of the Foreign Office have already been announced and it is clear that further changes will be needed if we are to meet those pressures.

In paragraph 9 of the report, we return to the subject of visa policy—a perennial problem and a frequent cause of complaint to those who visit eastern Europe, where the granting of visas to the United Kingdom is still too slow and there are too many unacceptable delays. We look forward to a time when the visa arrangements for eastern European countries are abolished. That would have to be achieved on a Europewide basis and I know that Ministers have been examining that possibility.

We considered the role of the BBC's World Service both generally and in relation to its role in the liberalisation processes in eastern Europe. The general view of the House would be that the World Service has performed wonders and that it has played an excellent role in assisting the process of democracy to emerge in eastern Europe and in establishing the work, role and reputation of this country. I hope that all hon. Members will support me when I say that we hope that the financial problems facing the World Service in trying to catch up with inflation—admittedly, that is a problem we all face—can be satisfactorily resolved so that the highly worthwhile efforts and the very valuable return per pound spent through adequate support for the World Service are fully recognised in future.

The Select Committee considered the Wooding review into how we can encourage east European and Soviet studies in British universities. We expressed some disappointment and unease about the fact that, despite certain undertakings by Ministers, the full commitment to implement the review has not happened and there seems to be a certain amount of buck-passing who should find the funds to push the matter forward to ensure that we have adequate Soviet and eastern European studies in our universities. Above all, the Select Committee considered the work of the British Council and, in particular, its work in setting up offices in eastern Europe and encouraging English language teaching to ensure that English becomes the second language of eastern Europe.

The know-how funds are part of a much bigger jigsaw. The G24 advanced industrialised countries have already pledged about $13 billion in loans and credits to eastern Europe. That includes $2 billion for Poland and Hungary from Japan, $300 million from the United States and an enormous programme of activities, and support from the European Community to which we contribute directly. All that is embraced in the so-called PHARE—the Poland-Hungary assistance for the reconstruction of economies—system of support for eastern Europe. That is a wide-ranging and fast-developing set of programmes ranging from food aid in the short term to meet immediate emergencies in eastern Europe to vocational training, massive projects for cleaning up the environment—which are certainly needed in eastern Europe—raising loans for infrastructure, opening markets in western Europe for eastern European goods and a host of other developments. In addition, there is the European Bank for Reconstruction and Development which is to be located in London.

The right hon. Gentleman has been talking for a few minutes and I had thought that with the passage of time some of his friends from the Select Committee might turn up to listen to him, especially as Mr. Speaker said earlier that quite a number of hon. Members wished to take part in this debate. I do not think that I am mistaken in saying that only one other member of the Select Committee is present to listen to the right hon. Member for Guildford (Mr. Howell). I wish to address my remarks through the right hon. Gentleman to the Chair. It is a bit odd that in this great debate for the general good and so forth, when we want to talk about the ozone layer there is only one other member of the Select Committee present to listen to the right hon. Member for Guildford. That says a lot about this whole panjangle.

Order. The question was addressed to me. The object of these debates is to give hon. Members who are not members of Select Committees and other hon. Members who are not fortunate enough to visit these places an opportunity to express their views. Of course, the Treasury and Civil Service Select Committee has also recently returned from eastern Europe.

In the first two minutes of my speech I deliberately mentioned environmental pollution, two or three times, in the hope that the hon. Member for Bolsover (Mr. Skinner), whose views are greatly valued by the House—he is an expert on environmental matters and sought to intervene earlier—would be able to catch your eye, Mr. Speaker, and to develop his views at length. Hon. Members hope to hear from him on these issues because his views are relevant to eastern Europe and assistance to it.

All the programmes of assistance pale into insignificance when compared with the gigantic capital needs of eastern European countries. We are talking not about millions or billions of pounds, but about hundreds of billions of pounds, which will be needed to develop and improve the structures of eastern Europe. Those programmes will have to be financed, at least in part, from the resources of eastern European countries. Incidentally, it is encouraging to note that the East Germans already show signs of saving rather than spending their new-found deutschmarks. Other eastern European countries will need to do the same, but they will require large capital resources, which will put a huge strain on the capital systems of the west. If one is a little gloomy, therefore, one can expect rather high interest rates some way into the 1990s as capital is diverted to eastern Europe as the sums involved are absolutely huge.

In thinking about our assistance, we have been focusing on Poland, Hungary and Czechoslovakia, but a far greater problem stands behind them—that of the Soviet Union and what, if anything, can be done to meet the large and rapidly growing needs of that struggling, sinking and disintegrating society and economy. The needs are bottomless. There is an understandable view that the Soviet Union will have to stew for the time being, until it works out its new political order and gets some means of receiving and making use of assistance from the west which many people fear that it does not have at the moment.

I agree with those who say that simply throwing enormous sums of money at the Soviet Union in new loans and grants at this stage would probably be a complete waste and cause only temporary easement before the whole economy continued its downward path to penury.

Does my right hon. Friend agree that, once the Soviet Union has shown the democratic direction in which it wishes to go, one of the beginnings of help could be the extension of the know-how fund to the Soviet Union, whereby we would use our initiative and managment know-how to encourage the development of private industry and private initiative, which would help to fight the shortage of consumer goods which patently exists within the Soviet Union at present.

My hon. Friend is absolutely right—once the Soviet Union shows the beginnings. The first beginning must be some currency and financial reform. In a sense, the Soviet Union needs a major currency union with the rest of the world—that would put it in a position to receive effective assistance from the west—through the creation of a hard rouble, just as East Germany has had a currency union with West Germany and received a hard currency so that it can attract investment and begin to develop. The only hope for the Soviet Union is the development of a hard currency, which would require vast international effort and support. That subject is now being considered and ruminated on and possibly mobilised in the International Monetary Fund, the world bank and other circles.

Is my right hon. Friend really saying that it would be possible to lock all the great currencies in the world into some fixed mechanism?

I was not dealing with that fascinating aspect of the subject. I was merely indicating the virtue and necessity of a hard currency. I think that my hon. Friend would be the first to recognise that that is the only basis upon which one can begin to get economic growth. and reform. Without a hard currency, there is little hope of the Soviet Union being able to check its downward slide. Much as I should like to discuss aspects of exchange rate policy with my hon. Friend, who is an expert in such matters, my present proposition is no more adventurous than that which I have advanced.

Any western aid to the Soviet Union should be geared to changes of the kind that I have described. The goal is a hard currency. Meanwhile, suggestions by European Ministers of billions of dollars for the Soviet Union may be good rhetoric but will not have much effect.

Does my right hon. Friend agree that, although the Soviet Union has not embarked on the reforms that we agree are desirable to trigger resources, there might be a case for giving it an incentive in the form of limited aid from the know-how funds, perhaps to spread the English language to which he has already referred? Such a move would help the leader of the Soviet Union.

I shall deal later with the promotion of English as a second language. Anything that we can do in that respect would be valued in the Soviet Union and everywhere else, not just in a high-minded sense but because it would further the prosperity and interests of Britain. The other country that was in our minds at the weekend was East Germany—the German Democratic Republic.

Will my right hon. Friend give way?

Yes. Does my right hon. Friend accept that a great deal of sentimental twaddle is talked about Mr. Gorbachev and what he wants to do for Russia and for the world? Chancellor Kohl wants to invest £20 billion of the money of all of us in Russia to save Mr. Gorbachev. Until Mr. Gorbachev stops trying to improve communism and attempts to change the communist system, stops giving Cuba $5 billion of aid which he does not have and stops spending four times the amount that we spend on defence, why the devil should we give Russia money that it will use to beat us?

We do not necessarily want to save any individual politican, whether it be Mr. Gorbachev or anybody else—it is up to the Russians to decide whom they want to run their country. However, it is palpably sensible to encourage reasonably bloodless democratic development in all the Soviet republics. If we fail to do that and leave the Soviet stew to bubble over, creating a chaos of tribal and national wars which will spread to central and eastern Europe, we shall create great trouble for ourselves. I agree, however, that we should not back individuals but should encourage the democratic process as best we can wherever it shows signs of growing.

I agree with much of what the right hon. Gentleman says. Does he agree that many Soviet economists have argued against large quantities of western aid at this stage, if only because it would underpin Soviet institutions which they believe can be removed only by financial disciplines? We should recognise that and, if necessary, delay aid in the hope that in finally allocating it we can determine the nature of those institutions.

I agree with the hon. Gentleman, although I would put it a little more positively. Rather than saying, "Let us do nothing until," I would say, "Let us try to work with the many Soviet economists who think that financial reform is needed to see ways in which that reform can be underpinned by western aid." Until something like that happens, there is no point in underpinning or underwriting the present chaos and inefficiency. Money would simply be lost.

I have given way too often. That may count against me on your score board Mr. Speaker, although I hope not too severely. I shall now talk about eastern Germany, which is in the news and which is about to become one vast construction site as the bulldozer and the deutschmark move in. One must marvel at how in three and a half months the German bureaucratic machine has achieved miracles and installed in East Germany an entirely new currency system, entirely new networks of financial control and an entirely new VAT system. In effect, a new official structure is already up and running as of yesterday morning.

It is a fantastic development. Whether it will also produce inflation remains to be seen.

Britain should certainly keep a close eye on East Germany and consider giving it assistance and investing in it. A huge programme is now under way to privatise thousands of small firms and all the large firms, in an effort to break the key log jam—that of private ownership and the problem of who owns the property and title to firms, businesses and real estate in East Germany. A programme has been set up through which a public trustee, the Treuhandanstalt, with an international supervisory board which will include someone from the United Kingdom, will attempt to dispense land on a legal title basis and establish that any land purchased by new enterprises belongs to them and ownership will not be thrown into question. In that matter, the British have been invited to be involved in the most intimate part of the transformation of East Germany and I hope that we can play our part vigorously.

Hope for East Germany turns on achieving the right balance between keeping wages low enough to attract investment without causing strikes, pressures and anger or making immigration to the west resume as people see higher wages over the way, and setting wages too high, creating massive unemployment as whole industries are wiped out because they are uncompetitive. The Germans must get that balance right. If they do, and as they do, we should be able to help them.

The picture in eastern Europe is of a whole range of new countries striving for a free market, privatisation, liberalised trade and free enterprise. Of course, expectations are miles too high. It is believed that, as in East Germany this weekend, the magic of currency reform and pouring concrete can somehow change living standards, but it will not happen overnight. The House will agree that for our own commercial interests we must be closely involved in that process. Eastern European countries are not faraway countries of which we know nothing but our next-door neighbours in the European land mass.

What are the United Kingdom's interests? What is our role, and how can we strengthen it? The estimates report from the Select Committee attempted to address those questions and gave three categories of answers. The first related to personnel and language teaching. We should recognise that British professional personnel such as accountants, managers, administrators and even, I fear, lawyers are in huge demand in eastern Europe. Perhaps we could export a few lawyers from here. There is a tremendous feeling in eastern Europe that the British professional services can provide the habits of administration and ways for countries at last to get going again as free economies. As we point out in paragraph 42 of the report, there is great demand for British expert consultants to advise on the reorganisation of industries, businesses, utilities, and so on. Here I must declare an interest as energy adviser to a leading firm of British consultants involved in eastern Europe. I declare both an interest and some knowledge that the demand for their services is great.

On the language side, there is a world to conquer. As my right hon. Friend the Foreign Secretary said, we have the opportunity to make English the second language of eastern Europe. The Russian textbooks and grammars are being carted out of the classrooms and there is a call to bring in English teachers, books and teaching methods. The British Council told the members of the Select Committee that it foresees the need for 100,000 English teachers over the present decade, with 20,000 in Poland alone. It would be crazy not to respond to that demand as vigorously as we possibly can, even if it means switching resources from other areas. As I have said, the first category is people and languages.

The second category is private investment flows, which will follow language familiarity, expertise and administrative and legal reform. There, too, we must play our part. At present, West Germany is leading the pack in almost every country, and especially in East Germany.

The third category is our part in the multilateral support efforts that I have already mentioned. These will be made through the European Community, the European regional development fund, the International Monetary Fund and sensible programmes of debt reduction. We cannot continue with the line that the countries of central and eastern Europe should be asked to swim into the deep water of democracy and free markets while wearing concrete collars of impossible debts. I refer to the debts which were run up in the past by the communist regimes. There is a case for recognising the difference between debts incurred by incompetent communists in the past and the need for those countries to strike out without seeing all their foreign currency disappear in debt servicing at every stage. We must adopt a balanced approach.

I hope—the Select Committee had this hope after considering the issues—that the opportunities in eastern Europe will be fully recognised. In due course we might look to the Government for a comprehensive statement on the United Kingdom's strategy in terms of the fantastic and unfolding drama of eastern Europe. Eastern arid central Europe are part of our culture and we can learn much from them. We should not assume too patronising a stance. In other words, we must not assume that the learning is all one way. We have a great deal to learn from the skills, energies and genius that are to be found within the central and eastern European countries. In eastern Europe we are looking at a vast and developing market of about 120 million people, most of whom are highly skilled. As a trading nation, we must be firmly established in that market. I hope that the comments in the report and my comments this afternoon will be of some small help in that direction.

4.37 pm

I welcome some of the remarks of the right hon. Member for Guildford (Mr. Howell), but he would not expect me to be in agreement with everything that he has said. I associate myself and my right hon. and hon. Friends with his remarks about the BBC World Service. We are all conscious of the excellent job that it does with only limited resources. It is essential that its resources are strengthened to take into account the important extra work that it will be called upon to undertake.

Any discussion of assistance to eastern Europe must be seen against a backcloth of some of the most startling political and economic changes that have been seen this century, with countries moving from central planning to social democratic market-oriented economies. In eastern Europe there is excitement, uncertainty and some chaos, but everywhere there is hope. Britain, along with other countries that are giving aid, must take account of several developments that are, or will be, common to each country in eastern Europe. They include the creation of pricing systems and mixed economies that are based in part on private ownership and enterprise, the creation of capital markets, movement towards currency convertibility and the opening of internal markets to foreign competition.

We must be sure also, as the right hon. Member for Guildford said, to take account of the differences between the various countries—differences in history and tradition and in how the revolution was brought about in each country. That means that the pace and type of reform and the role of the western donors will vary from country to country.

We have all been shocked by the sight of Romanian orphans dying from AIDS, Soviet citizens queuing for hours just for a loaf of bread and Polish factories poisoning the air and water for miles around. I was glad that, earlier, the Secretary of State for the Environment made particular mention of the assistance that will be given to improve the environment in eastern European countries. The damage to the environment caused by old, inefficient industrial processes has been immense. In Hungary, even if further pollution by chemicals stopped tomorrow, chemicals would still flow through the water table for the next 80 years. In East Germany and Czechoslovakia, unsafe nuclear power stations and energy production from lignite—a polluting brown coal—threaten the environment. It is therefore essential that aid responds to the needs of those countries for a better, cleaner and safer environment.

The Labour party is pleased to note that the forthcoming know-how programme for East Germany will include advice from Britain on decommissioning clapped-out nuclear power stations. I sincerely hope—I was pleased to note that the Secretary of State for the Environment also touched on this—that eastern Europe, unlike some other developing countries, will receive only the cleanest and up-to-date technology from Britain. In India, for example, British aid paid for British companies to build power stations without sulphur-cleaning flues. As a result, those power stations are now causing acid rain.

The scale of aid is bound to be considerable, but the resources must be found. The annual report of the United Nations Economic Commission for Europe looked at a possible Marshall plan for eastern Europe that would cost some £17 billion for four years. In January, the European Community outlined a programme that would cost about £14 billion a year. It is a tragedy that sums of that order seem to be too big and too challenging for the Government and the Prime Minister to take on board. The pace of change is simply too much for them. The Prime Minister, in particular, is out of sync and out of sympathy with the needs and challenges of the age in which we live.

Is it the Labour party's policy to press for such expenditure? No doubt it would be welcomed in many quarters in Europe and it might be politically attractive in this country. If that is the Labour party's policy, by how much is our contribution to the EEC likely to go up as a result?

As the debate develops I shall answer all the hon. Gentleman's questions. If he cares to spend a little money on purchasing the Labour party's new policy document, he will find that the Labour party supports the idea of a Marshall plan. As my speech develops he will also learn about the other things we support, but he will be aware that we are in favour of contributing 0·7 per cent. of gross national product to overseas aid. We intend to achieve that target in the first five years of a Labour Government.

It is a tragedy that the sums of aid needed appear to upset the hon. Member for Wolverhampton, South-West (Mr. Budgen), especially as I shall seek to prove that they need not hit the British taxpayer's pocket.

If the hon. Gentleman can contain himself, he will find out.

There are limits on resources and none of us would pretend otherwise. It is imperative, however, that aid, whether in the form of grants, know-how, equity financing, joint ventures or balance of payments support, should be carefully targeted. It should be used to build the structures to ensure that funds are productively used so that loans generate long-term revenue.

It is precisely because resources are scarce that third-world countries are anxious that the ideological political pressure for reform in eastern Europe should not encourage western countries to give those countries aid at the expense of the third world. In short, the aid given to eastern Europe must be in addition to that given to the third world. I hope that the Minister can clarify the position by assuring us that aid to eastern Europe will not be at the third world's expense, not just this year—we have already had some assurances about that—but in the years to come.

It is not surprising that third-world countries fear that more aid from Britain to eastern Europe means less for them because they have seen the Government renege on their aid commitments every year since 1979. Far from meeting the United Nations overseas aid target of 0.7 per cent. of GNP, Britain's contribution has fallen to less than half of that target. If the aid had remained at the level achieved when the Labour Government left office in 1979, the third world would be £8 billion better off than it is today. I am glad to note that the Select Committee on Foreign Affairs strongly recommends that the Government should set a timetable for achieving the UN target. Only by doing so can the Government genuinely demonstrate that aid to eastern Europe is not preventing Britain from meeting its commitments to the poorest countries.

Regrettably, the record of aid to eastern Europe so far shows that the performance of the British Government and British industry is far from impressive. One of the stumbling blocks is the Prime Minister, who, despite her love-ins with President Gorbachev, has been slow to realise the significance of what is happening in eastern Europe. Ideologically blinkered, the right hon. Lady has even had the nerve to criticise West Germany and France for providing credits to the Soviet Union. She seemed to fall in line only after President Bush had had to intervene.

Ministers, led by the Prime Minister, too often view the problems of eastern Europe as opportunities for photo-calls rather than for action. Goodness knows how the embassy in Hungary copes, because, by the end of this year, no fewer than 22 British Ministers, including the Prime Minister, will have visited that country. Not to be outshone, the right hon. Member for Henley (Mr. Heseltine) has been there, too.

Would the hon. Lady care to remind us about the number of Opposition Members, as well as Opposition Front-Bench spokesmen, who have also been to the embassy?

Obviously I cannot speak for my hon. Friends, but I am sure that those who contribute to the debate, including members of the Select Committee on the Treasury and Civil Service, will be ready to tell the right hon. Gentleman about their experiences. I cannot understand why 22 British Ministers felt it necessary to visit the embassy in Hungary.

Unfortunately, the Opposition do not have the Government's budget to make such visits possible. We believe in protecting the British taxpayer as far as we can—[Interruption.] I have a suspicion that 20th century grand tours by Ministers are not what eastern Europe needs just now.

It is important to consider the background of the countries to who aid will be given, starting with East Germany. Yesterday there was German economic and monetary union which was historic not only for Germany but for Europe and the world. It will ensure that aid is fast on its way to East Germany. East Germany reckons that it needs 130 billion deutschmarks for investment between now and 1993. It believes that British firms, with the help and encouragement of the Government, could invest in environmental development work, including water and sewage management, in financial services, hotels and transport, for example, in the railways. East and West Germany are anxious that aid and investment in East Germany should come from countries other than the Federal Republic, but it is inevitable that West Germany should carry the main burden.

There is also a firm belief in West and East Germany that the British Government have been slow to help and British companies slow to appreciate existing opportunities. One can but hope that the Prime Minister—

I am sorry, but I shall not give way again.

One can but hope that the Prime Minister, who met the East German Prime Minister last week, will do more to convince British firms that a developing country, which has a hard currency like the deutschmark, presents a unique opportunity for profitable investment. The British Government's know-how scheme for East Germany is, to say the least, bizarre. Although it is not yet under way, it is due to finish when reunification takes place later this year, so it will have a life span of a pathetic few short months.

Some British commentators fear that German economic and monetary union could go sadly wrong, with inflation taking off in Germany. We believe that such fears will prove groundless largely because the markets have already discounted the possibility by raising real interest rates to 6.5 per cent. German economic and monetary union may be going too fast, and its consequences may not be properly understood by the people of East Germany. Undoubtedly, there will be some dreadful results, with up to 25 or 30 per cent. of the population becoming unemployed. But the speed at which aid and foreign investment takes place could be critical in mitigating the damage.

This provokes another problem for East Germans, who must ensure that western capitalists do not rape their country and buy it out for the sale of the century. A warning given by the Organisaton for Economic Co-operation and Development in its publication "Economic Outlook" that eastern Europe risks being asset-stripped by western investors is one that we should all take seriously. East Germany needs productive investment that creates real jobs.

If East Germany is a special case, so too is the Soviet Union, which has special political difficulties and is moving much more slowly towards a social market economy. While the Soviet economy may, at present, be in no state to use the vast sum in aid that it will ultimately need, the immediate provision of credit can obviously help President Gorbachev buy more time for perestroika.

When the Prime Minister returned from a visit to the Soviet Union recently, instead of suggesting a package of aid and assistance, she came to the House and insulted it with an hour-long, condescending and patronising lecture on what a backward country the Soviet Union is—a view shared by some Conservative Members. If reports are true that President Bush is working on guidelines for the United States and other NATO countries, at this week's summit in London, in support of direct economic aid to the Soviet Union, possibly the attitude of the Prime Minister and other Conservative Members will change.

Unlike some other countries in eastern Europe, the Soviet Union can see little prospect of a significant increase in bank lending from the west or raising funds by the use of securities. In addition, it cannot get bilateral aid from the World bank or the International Monetary Fund because it is not a member of either organisation and does not qualify for their assistance. The sooner that Britain and other countries seek to bring the Soviet Union into the orbit of the world's financial communities, the better.

Up to now, the Prime Minister has talked of aid only once structural reform has taken place, which is like ordering someone to build a house and offering to pay for the bricks only when the last roof tile is in place.

No, I shall not give way because the hon. Gentleman has been muttering throughout my speech and I think that we are all aware of his views.

In this instance, the Prime Minister has failed to grasp the fact that the house can be built, indeed may only be built, if the bricks are provided in the first place. By comparison, the Dublin communiqué talks of short-term aid and aid for structural reform for the Soviet Union.

President Mitterrand went public on the Prime Minister's isolation after the Soviet aid package had been opposed by Britain in the discussions. He said:
"Nobody voted for the British proposal."
He was particularly scathing about the Prime Minister's position. He described her objections as
"Britain's penultimate twitch of life."
He added:
"we can always count on her to ensure debates are long arid that the decisions taken are always retaken."
He said that she would be defeated when the aid package was considered at a Rome summit in October. Whatever the view of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), he will be carried along by the tide of events and his views, and those of some of his hon. Friends, will constitute a lone voice crying in the wilderness.

It is my understanding that the Soviet Union will get little help from the new European Bank for Reconstruction and Development, which is being set up in London because there will be special limits on lending to the Soviet Union. Will the Minister confirm or deny that? If it is true, it is a miserable state of affairs. It is no wonder that some bankers and Governments in Europe fear that the rouble will soon cease to be convertible, even in the rouble area. The world will let that happen and see President Gorbachev fail at its peril.

Of the other European countries, Poland, Hungary and Czechoslovakia are in the process of creating democracies, based on mixed economies and market principles. For both Poland and Hungary, the burden of servicing debt payments presents awesome problems. Poland's debt today, standing at $40 billion, is the largest in eastern Europe. My view, shared by some leading bankers in Europe, is that it will be all but impossible for Poland to succeed in its endeavours unless both Governments and commercial banks are prepared to write off some of Poland's debt. Will the Government set out and justify their own views on that today?

Hungary's debt of $20 billion represents the highest per capita debt in Europe. Hungary's position was not helped earlier this year when a clumsy Bank of England report on the debt matrix created a loss of confidence in Hungary's creditworthiness. Partly because of that, Hungary has since had to get help from the Bank for International Settlements to add to its stand-by agreements from the IMF. Will the Minister ask the Governor of the Bank of England, one of the Prime Minister's family friends, to be more careful in future about damaging the prospects for development in other countries?

The present Hungarian Government say they can repay their debts and are not interested in debt rescheduling or debt forgiveness. I hope that their assessment is correct. Hungary has been engaged in economic experiments for 20 years, and this one certainly deserves to succeed.

The hon. Lady is a spokesperson on aid in general and is asking us to forgive the debts of Poland and Hungary—middle income countries. Therefore, she is also presumably asking us to forgive the debt of all the far lower income countries which she often mentions. Am I right? I want to ascertain the extent of the huge expenditure of which she is talking.

The Minister will have heard the Opposition advance that argument many times, particularly as there seems to be no will on the Government's part to make debt forgiveness a possibility for many developing countries.

Have not the American Government recently announced that they are considering favourably the idea of debt forgiveness for Poland? The United States is Poland's biggest single creditor.

My hon. Friend is perfectly right, and his point is consistently made by Opposition Members.

Naturally, the Opposition are also pleased about Britain's participation in the Poland and Hungary assistance for economic restructuring programme, which the European Commission is co-ordinating to help Poland and Hungary. We also welcome the food aid given to Poland, and lending through the European investment bank. We also approve of the setting up of the £50 million know-how fund for Poland and the £25 million know-how fund for Hungary, although we have reservations about its operation so far. The evidence, from both the recipient countries and the Foreign Office, seems to be that the know-how fund, particularly for Poland, lacks direction, has been unclear, and has confused the recipient countries.

An article in The Economist this month evaluates the fund by stating:
"The most stinging complaint is simple: for expertise read fripperies. The Poles need drains: the know-how Fund has given them seminars … Such criticisms find an echo in Poland, where some claim that money is being wasted, extolling the virtues of the House of Lords, or the subtleties of a free press; they point out that they have a long (albeit submerged) parliamentary tradition, and, thanks to Solidarity, no dearth of first rate journalists."
We must not forget that eastern European countries have political traditions and the roots of democracy. Some of the criticisms and comments of the right hon. Member for Guildford smacked of a patronising attitude towards the established background of those countries. Eastern European countries need assistance to get those roots to flourish throughout society, and to get everyone, not merely business men, on their feet.

If eastern European societies are to become truly participatory they will eventually need their own versions of Greenpeace, Oxfam, the British Medical Association, citizens advice bureaux, farmers' associations and even the CBI, along with the many other varied organisations that represent citizens' views and interests.

The Government should not focus merely on business men and politicians—teaching them English and setting up exchanges—but should help to lay the foundations for a broader link between east and west.

The varied contributions made by the British Council, Voluntary Service Overseas and the World Service of the BBC all greatly enhance Britain's contribution to eastern European developments, but the Government are not providing those organisations with adequate funds to take advantage of new opportunities, except by cutting their work elsewhere. The key to providing the most effective aid is listening to voices on the ground in eastern Europe. At present, there is concern that there has been too much political control from London and that the advisory committee has been ineffective. We hope to see improvements in the programme for Hungary, which has scarcely started, but which should soon be up to speed.

The Foreign Office has had some teething problems in getting to grips with its increased work load in eastern Europe. That has led to cutting diplomatic posts in the third world, especially in Latin America and in Africa—a point made in the report by the Select Committee. The Foreign Office has diverted some staff from the Overseas Development Administration to work full time and part time on eastern Europe. Clearly, additional staff are needed at the Foreign Office and the ODA, but not at the expense of the third world.

I do not want to end my speech on a sour note, but I wonder how the Minister of State responds to the scathing criticisms of the know-how fund in The Times on 1 May:

"Unfortunately, the Know-How fund does not seem to be connected with a coherent vision of a future Europe … So far, £2 million has been spent and there is nothing much to show for it … Britain is dwarfed by West Germany, overshadowed by France, Austria, and even Italy, in trade with Eastern Europe."
Changes in eastern Europe perfectly illustrate the need for countries to work together without one dominating another, and for the European Community—I was privileged to be one of the first elected Members of the European Parliament—to develop and extend its borders, as well as the need to recognise that no nation state can go it alone in today's world.

On our television screens we have seen the tearing down of the wall which divided Europe, the opening of Hungary's borders, and the emergence of Vaclav Havel from the long winter which followed the Prague spring. Britain should now be ready to play a role in such new and immensely challenging developments. When we win the next general election, our imaginative and constructive approach will show how limited and blurred the horizons of the present Government are. The Opposition will see aid to eastern Europe as part of the peace dividend which follows the disappearance of the cold war, the iron curtain and the Berlin wall, and as part of all our hopes for the future of the world.

5.3 pm

I am glad to follow the hon. Member for Cynon Valley (Mrs. Clwyd) if only to say that I agree with her about some of the problems of the environment. Hon. Members who have had the chance to see pollution in the Elbe and Danube must recognise the huge task there, which could be a major opportunity for many of our industrial concerns which have special expertise and which could help to resolve such problems.

I regret that the hon. Lady felt that it was necessary to pitch into party political arguments. There is a genuine job of work for hon. Members on both sides of the House to do.

Will my hon. Friend reconsider his remarks? It is obvious from the hon. Lady's speech that there is a vast division between the two sides of the House on this issue. If she wishes to emphasise that difference, she does a service to political debate. It is obvious that the Labour party plans substantial expenditure in eastern Europe. Since that inevitably means that it intends to print money or to increase taxation, it is right that the hon. Lady should have raised the temperature and told us where she disagrees with the Conservative party.

I accept what my hon. Friend says about expenditure because, although the hon. Lady said that she would tell us more about it, she did not say precisely what she had in mind.

I wish to try to find a common cause, at least in the scope of the problem and the opportunities that arise for parliamentarians seeking to address this issue. I am sorry that the hon. Lady attacked the Government about the number of Ministers going to Hungary. She should be aware that, through the Inter-Parliamentary Union, 30 hon. Members have visited four eastern European countries in the past six months, and I greatly welcome that. I want to discuss ways in which we can build on this process. If the hon. Lady reflects on that and on the other initiatives taking place, she will realise that, if anything, the Government lag behind in the number of parliamentary links we have with eastern European countries.

I make no apology for referring to the IPU, but it does not have a monopoly. There are party-to-party links with eastern Europe and a range of other activities, including the party funding organisation that is being co-ordinated by my right hon. Friend the Minister with other parties in the House—I hope that he will say more about that in a moment.

In the past six months the IPU has had seminars and fact-finding missions, which would not have been possible in the short time scale leading up to the elections—and which have now effectively concluded with the Bulgarian elections—without the co-operation of organisations such as the Great Britain-Eastern Europe Centre. I am glad to see my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) present, because he chairs the centre, with assistance from Opposition Members.

I also recognise the work of the Foreign Office, the Central Office of Information, the Clerks to the Overseas Offices of both Houses and organisations such as the Hansard Society, which have all been working in a common endeavour to understand the needs of emerging democracies and to understand how funding—which we must consider when debating the estimates—is related to such work. Also I am glad to be able to pay tribute to Mr. Speaker—in his absence. As you will know better than most, Madam Deputy Speaker, he is especially concerned with Speaker-to-Speaker initiatives in eastern Europe, and, as an honorary president of the IPU, in support for all our parliamentary links.

The factual background is the reason why I picked up the hon. Lady's remarks about the amount of personal contact with eastern Europe. In the past six months, through seminars and exchange visits, 196 Members of both Houses—the vast majority from this House—have been involved in face-to-face and one-to-one discussions with parliamentary candidates or parliamentarians from eastern Europe—a pretty high striking rate. A third of our membership is involved in that process.

I