I beg to move, That the Bill be now read a Second time.

The Bill concerns disabled people and their needs—not only their need for help from the benefit system but, no less important, their wish for greater independence and for greater control over their own lives. The two new benefits that the Bill introduces are further building blocks in a strategy that began with the commissioning from the Office of Population Censuses and Surveys of a number of wide-ranging surveys of people with disabilities. In response to those surveys, we have already made many significant improvements in the help available to disabled people. This Bill will extend help to over 300,000 people, at a gross additional cost by 1993–94 of some £325 million.

In doing so, it breaks new ground in shifting the benefit system away from focusing exclusively on incapacity—on what disabled people cannot do—towards doing more to encourage people with disabilities to make the best of the capacity that they have—the things that they can and wish to do. In assessing entitlement, it seeks to give to disabled people a greater role, rather than relying almost exclusively on the assessments of professionals.

It is right to put the Bill's proposals in the context of other developments in social security policy for disabled people. When I introduced to the House in January of this year the Command Paper entitled "The Way Ahead: Benefits for Disabled People", I said that the Government saw three main strategic needs for benefits for disabled people. The first was to improve the balance of benefits available to people who are unable to work, and in particular to do more for those who are disabled from birth or early in life. The second was to improve, for those of working age and below, the coverage of help with the extra costs associated with disability. The third was to help those disabled people who can and wish to work by making it easier for them to take up and to keep jobs.

On the first objective, the intervening months have seen a wide range of important improvements. In April, we increased the disability premiums and income-related benefits by more than double the rate of inflation, giving an increase of £1·70 for a single person and £2·60 for a couple, to improve the help given to some 400,000 people. We also increased the disabled child's premium from £6·50 to £15–40 a week, thus giving substantial extra help to 20,000 families. At the same time, we scrapped the rule that prevented the payment of attendance allowance to children under the age of two. That directed a further £37·55 a week to 3,000 families with severely disabled babies. Also last April, we extended the mobility allowance, at £26·25 a week, as of right to people who are both deaf and blind.

Last month, we introduced a carers' premium of £10 into income support, housing benefit and community charge benefit, helping 30,000 people. Attendance allowance was made available to the terminally ill without the normal six-month waiting period. We expect 58,000 people to be helped by this measure.

Next month, we are introducing age-related addition to severe disablement allowance, which will give up to £10 a week extra at current rates to some 100,000 severely disabled people who do not qualify for the national insurance invalidity benefit and who are not receiving income-related benefits. Another 150,000 people will receive this amount as of right instead of a comparable amount of income-related benefit.

The House will recall that in my uprating statement last month I was able to announce five small but useful improvements in our provisions: an increase in the funding of the independent living fund to £62 million next year, making a twelvefold increase in less than four years; an additional grant of £1 million to Motability which has been widely and warmly welcomed; the extension of mobility allowance so that it can be paid to all double amputees from next April; a further increase in the invalid care allowance earnings limit from £20 to £30; and, not least in practical terms, to cope with some of the problems of stress arising from bereavement, that the carers' premium in income support will be paid for an extra eight weeks after caring ceases—for example, after the death of the person being cared for.

Against that background, the Bill introduces major measures to address the second and third of our objectives. The disability living allowance will restructure and significantly extend the help with the extra costs of disability.

The disability working allowance, which we renamed from "disability employment credit" following considerable consultation with people who work in the sector and disability organisations, will, for the first time, enable people with disabilities to work without suffering a drop in their income. I pay tribute to my right hon. Friend the Minister for Social Security and Disabled People and, without drawing attention to their location, to officials who have worked so hard on these proposals. I thank them for the work that they have done in taking us from the outline that we published in January to the Bill that is before the House today.

Clauses 1 to 5 introduce the disability living allowance. An important finding of the OPCS surveys was that the two existing extra costs benefits—attendance allowance and mobility allowance—were well targeted on the most commonly occurring of the disabilities that entail extra costs. That is why we have retained the existing qualifying conditions in the new DLA. Since evidence for the survey was collected, there has been a further huge growth of more than 50 per cent. in the number of people receiving those benefits.

Attendance allowance, which is currently worth £47·55 a week, is claimed at both rates by 795,000 people. Mobility allowance is claimed by more than 600,000 people. Allowing for the overlap in the case loads, about 1·3 million people are receiving extra costs benefits, and by 1992–93 we expect the figure to rise to 1·9 million. To put those figures in context—this is an important point, given some of the discussions that have taken place—the House should note that the OPCS found a total of fewer than 1·5 million people in its top four severity categories.

The OPCS identified the problem, which many hon. Members had identified in common-sense terms from their general experience of disability benefits, that the current benefit system is based on too sharp a distinction between people whose disabilities are severe enough to qualify them for attendance allowance and mobility allowance, and those who just fail to qualify and get nothing. To tackle this problem, we are introducing two new lower rates of disability living allowance to cover care and mobility needs. Instead of the present cliff edge, there will be something more like a series of steps, thus giving greater recognition to the fact that disability is a matter of degree.

Will the care component include visually impaired people, which is a matter of some concern?

I shall mention visually impaired people, particularly blind people, in relation to the mobility component. The hon. Gentleman will realise that, because of the way in which the criteria have been drawn, it is difficult to be specific. They have not been drawn in relation to specific types of disability. Much, therefore, will depend on the working of the detailed arrangements. My right hon. Friend the Minister for Social Security and Disabled People will have heard the hon. Gentleman's question and may comment further when he replies to the debate.

On the care component, people will be able to qualify for the new lower rate if they require attention for a significant portion of the day—in one or more aggregated periods—or if they are so mentally or physically disabled that they are unable to prepare a main meal for themselves. In the main meal test—I am aware that there has been some comment about this, so I shall say a word or two about it—we are seeking to adopt a new and more practical approach to bring into benefit an important group who do not have care needs related to their bodily functions but whose disabilities cause them difficulty in performing what to many of us are routine but important daily tasks.

The main daily meal criterion will provide a relatively simple test that is amenable to self-assessment and rapid adjudication. I should emphasise—I feel quite strongly about this, for a reason that I shall reveal in a moment—that we are talking about an assessment of whether a person could undertake such a task if he wished to do so, not about making him try to see whether he could do it. As the Minister for Social Security and Disabled People who abolished the old household duties test, which was associated with the benefit that was known as HNCIP to those of us who are familiar with the acronyms in this sector, I do not intend to reintroduce something like it in the context of these benefits.

For mobility, the new lower rate will be payable to people who are physically able to walk but who are so severely physically or mentally disabled that, when walking outdoors, they require the guidance or supervision of another person for most of the time. This will extend the mobility component—to some extent, this answers the question asked by the hon. Member for Caernarfon (Mr. Wigley)—to people who are mentally handicapped or blind and to those who have a very limited physical capacity to walk.

The Bill provides for the new common qualifying period of three months, and for a test of whether the disability is likely to continue, for both components. The special rules for the terminally ill, waiving the need to satisfy the qualifying period, are extended to the mobility component so that, if the claimant qualifies, both components can be paid immediately.

New section 37ZD—I apologise for this, but at an early stage we hope to consolidate these matters, otherwise it will be increasingly difficult for anyone to follow disability benefits legislation—provides for the age limits in the benefit. As the House is aware, the aim is to target resources on younger disabled people, and DLA is aimed at people who become disabled before 65. However, people receiving DLA at 65 will continue to receive it and the Bill abolishes the upper age limit for mobility allowance. We shall also extend, across the board, the current provision whereby mobility allowance claims can be accepted up to the 66th birthday for disabilities commencing before 65.

Clause 5 gives wide powers to deal with transitional matters. Those are needed so that the Department can undertake the sizeable task of amalgamating and extending the two existing benefits while making sweeping changes to the adjudication system and bringing almost a further 300,000 people into entitlement to new rates. We shall do that and allow all potential new claimants an opportunity to claim the new lower rates from day one. That is, if I may say gently in the presence of the right hon. Member for Manchester, Wythenshawe (Mr. Morris), a much more ambitious approach than that adopted when mobility allowance was introduced in 1976. The arrangements made by the then Labour Government meant that it was several years before all age bands were permitted to claim, with the result that fewer than 100,000 people were receiving mobility allowance when we took office.

Clause 6 introduces disability working allowance, which represents an important initiative to promote the independence of people with disabilities, giving sizeable numbers a new option of working without risking a drop in their income. Over the years, many of us have seen, as a matter of common sense, that too often people with disabilities who could do some work but could not earn enough on which to live were forced to remain entirely dependent on incapacity benefit. The aim of the disability working allowance is, for the first time, to offer the chance for disabled people to work to the full extent of their capacity and to have their earnings topped up by benefit. Even people who are so disabled that they can work only 16 hours a week will be able to qualify, which means that many part-time workers will be eligible.

The qualifying conditions for the benefit will be as easy as possible for potential claimants and staff to understand, so that claimants can work out whether they should claim and staff can put the benefit in payment quickly. The groups who will qualify for DWA will be identified by a simple qualifying benefit test whether they have been on a long-term incapacity benefit or are receiving an extra costs benefit. After satisfying that test, all the claimant will have to do on his first claim is certify that he has a disability or an illness that puts him at a disadvantage in obtaining employment. For subsequent claims, the claimant will be asked to fill in a simple self-assessment test, to show that he has one of a list of functional disabilities which are likely to make working difficult. Many people—those with the most severe disabilities—will not even have to do that, but will be automatically passported through it. Such an approach will provide a quick and straightforward method of identifying disabled people who are at a disadvantage in the labour market.

I am sure that this new allowance will be very much welcomed. Will my right hon. Friend confirm that people who have to risk giving up an existing benefit if they take a job are not likely to suffer if the job does not work out? Will he clarify the extent to which the cost of the new allowance will be offset by any reduction in benefits caused by people going back to work?

When I published "The Way Ahead: Benefits for Disabled People" and made a statement on it, I said that in broad terms we thought that the cost would be about neutral and that there would be savings on incapacity benefits offset by the payments of the new DWA—it is difficult to make a precise estimate, because we are talking about behavioural changes.

I hope that I carry my hon. Friend with me when I say that this is very much a benefit for which the case is not made in the simplistic terms in which we sometimes debate matters in the House—for example, that we are spending more money for a purpose. We are creating a more sensible benefit structure, giving disabled people an opportunity that is closed to them under the present system. It is on that basis that I should like primarily to argue the case for the benefit. It is not a great additional spending measure, but it will significantly improve the operation of the social security benefit system for disabled people. I shall comment later on the linking rule.

The income test for disability working allowance will be based on the family credit model, with the addition of an amount equivalent to the single person's disability premium in income support. Because of the addition of the premium, DWA will always be more advantageous than family credit for a disabled person with children. We were particularly anxious to ensure that there was not one of those tiresome "better buy" problems which mean that people have to weigh up which benefit they are better off claiming.

A key feature of DWA is the one raised by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham), with his usual acute perception of these problems—the linking rule. At present, a person receiving invalidity benefit or severe disablement allowance who decides to try his hand at work has, in effect, only eight weeks in which to decide whether he can cope. After that time, if he finds that he cannot cope and has to give up work because of incapacity, he has to spend 28 weeks requalifying for this old incapacity benefit. That rule can undoubtedly be a significant disincentive for disabled people who are contemplating a return to work.

We therefore propose a much more generous two-year linking rule. This will be a great help in building up the confidence of people who have never worked and in underpinning the confidence of those who are fearful of a return to the labour market after a long spell of incapacity. Such people will be able to try out the world of work, or re-try it, even for as little as 16 hours a week, reasonably secure in the knowledge that they will not have to suffer a drop in income through having to requalify for their old benefit if the attempt does not work out. I should like to make one simple but important point: no one who is on incapacity benefit will be forced to take up DWA—indeed, DWA will be available only to those who have found work and, by definition, wished to do so.

I should like to comment on a particularly important aspect of the procedures for assessment and adjudication where we are also proposing some significant improvements. The various differences—often extremely technical and obscure—between the assessment and adjudication arrangements for the existing mobility allowance and attendance allowance have long been a source of criticism by individuals, carers and disability organisations. That considerable number of current beneficiaries who get both existing benefits at the very least will have undergone two entirely separate medical examinations—often more. Despite the best efforts of the doctors who do that work, to whom I pay tribute, the process is sometimes seen as unnecessarily humiliating or intrusive.

Our emphasis in the Bill is very much on claimants' own perception of the problems that their disabilities cause them. I am convinced, as is my right hon. Friend the Minister for Social Security and Disabled People, that it should be possible to determine a sizeable proportion of claims without the need for a special medical examination, let alone two.

For the new benefit, we want to make the whole thing easier for claimants in three main ways: first, by enabling them to make a single claim covering their mobility and their care needs, instead of two separate claims; secondly, by giving them the opportunity to give us a fuller account of the effect that their condition has on their lives; and, thirdly—this particularly important point picks up recommendations that have been urged upon us over a period—giving the opportunity to marshall evidence about their condition from third parties who are involved in their care—their GP, health visitors, district nurses, relatives or other carers.

We believe that this will also give us a better picture of the circumstances than the snapshot of a Department of Social Security medical examination, which is frequently all we have now, so that adjudication officers have a better basis for their decisions. It will, of course, still be open to a claimant to seek a medical examination if he wishes, rather than filling in what will inevitably be, in the light of what I said, a rather longer claim form. I acknowledge that, in a proportion of cases, we shall still need some further evidence which may be obtainable only by a specially conducted medical examination.

I am encouraged, as is my right hon. Friend the Minister for Social Security and Disabled People, by the helpful and positive response that our first outline of these new assessment proposals and adjudication procedures received when we sent out a consultative document a few months ago. As we turn this legislation into practical working mechanisms, I want that consultation process to go further, so that people with disabilities and the groups who represent and lobby for them can help to fashion strictly practical elements such as the claims pack and the claiming process, which will be important to the success of the new benefit.

My right hon. Friend promises excellent progress. Will he go one stage further and tie that up with the personal assessment that will be required under care in the community by local social services? There could be one major assessment of the individual concerned, the family and the carers, so that one could get a passport of entitlement through social security benefit and local authority care alike.

That is a characteristically interesting idea from my hon. Friend, who takes such a close interest in these matters in his Select Committee role. I shall certainly consider what he has said, although I should point out that, whereas I hope that the new benefits will be introduced in April 1992, the new care in the community arrangements are not now due to be introduced in their full form until April 1993, so there is a slight disjunction. I can give my hon. Friend the general assurance that we are most anxious to reduce the hassle—perhaps a word I over-use in the Chamber—that the assessment and adjudication of help for disabled people so often entail. For that reason, I welcome my hon. Friend's suggestion, even though I cannot "go snap" on it this afternoon.

As a related and further improvement which has been widely welcomed, we will be introducing a right of appeal to an entirely new form of social security appeal tribunal—a disability appeal tribunal—which will be the third tier of adjudication for both benefits, the second being a new form of quick review of initial decisions where they are queried. Again we are determined that, besides the legally qualified chairperson, who it is right to have, and medically qualified member, who it is right to have, there should, wherever possible, be a third person who either has practical experience of the needs of disabled people or is himself disabled. The essence of our approach at all levels is that, in many cases, it is not highly technical or difficult medical judgments that need to be made—it is, above all, judgments about the effect that a condition ha .s on a person's life.

We are, of course, aware that there will sometimes be a need for specialist medical knowledge—in particular about entirely new conditions or syndromes—which goes beyond what we can expect of the Department's medical advisers. Clause 3 provides for a Disability Allowance Advisory Board to provide expert advice on specifically medical matters relating to DLA and residual attendance allowance only. The board will have no adjudicative function, unlike the current attendance allowance board. It will help to write a disability handbook for adjudication officers and provide ad hoc advice to the Department's medical advisers.

In the 11 years since the Government took office, we have already seen a huge improvement in the spread and coverage of social security help for disabled people. The number getting attendance allowance has risen threefold, from 265,000 to 795,000. The number receiving mobility allowance has risen sixfold, from 95,000 to 615,000. The number of carers getting invalid care allowance has risen more than twentyfold, from 5,000 to 130,000. This expansion, with other changes and improvements, has helped to more than double social security spending in this area, after allowing for inflation, from just over £4 billion to well over £8 billion.

This Bill, together with the many other improvements of the past year, builds on that——

I gather that my right hon. Friend is reaching his peroration. Before he does so, may I thank him and acknowledge the immense achievements that he has chronicled? I also ask him to take on board the further point that, in addition to providing disability living and disability working allowances, we should, as far as possible, help the voluntary sector, which also assists disabled people. That is particularly true in respect of disabled sports, and I hope that he will encourage those who are trying to assist disabled people, through voluntary efforts, in sport and recreation—whether in the special olympics or in other activities.

I can unhesitatingly give my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) that assurance. When I was Minister with responsibility for disabled people—it is now nearly six years ago—I actively sought to encourage and promote such activities. On one occasion, I went to the games for disabled people at Stoke Mandeville hospital. I know that the present Minister for Social Security and Disabled People puts a lot of his time into the matter. I have no doubt that there will always be requests for increased Government grants to such organisations and we shall not be able to satisfy all those demands, although we shall certainly continue to do everything that we possibly can.

As my hon. Friend rightly divined, I was approaching the end of my speech; indeed, I was in the middle of my last sentence, which I shall now repeat. This Bill, together with the many other improvements of the past year, builds on the achievements that we have already made in a way which I believe the whole House will welcome.

I am sorry to disappoint the Secretary of State, but I must tell him that when I had finished studying the Bill I recalled what was said of Napoleon III—that the most impressive thing about him was his name. The same could be said of the Bill. It seems that the less a measure contains, the more grandiloquent is its title.

The first part of the Bill is largely concerned with the amalgamation of two existing benefits. The second part is so significant as to involve no net extra expenditure, however much it may improve the ability of disabled people to get back into the labour market, which was the gloss that the Secretary of State put upon it. Having waited 10 years for the Bill—five years while the Government attended to the economy and another five while they procrastinated with half a dozen Office of Population Censuses and Surveys studies—disabled people expected a great deal more from it. They will be bitterly disappointed that it is so thin and misleading.

The only people who come out of the matter really well are those in the Government's public relations battalions. To think up the title of a new disablement living allowance to describe the existing attendance and mobility allowances is a stroke of evil marketing genius. The aim was presumably to put across to the general public the idea that a sort of disablement benefit or disablement costs allowance is being introduced, even though the Bill clearly does nothing of the kind. In fact, the extension of two existing benefits, paid to more people but at a lower rate, along with the common assessment and adjudication procedure—which the Secretary of State spent some time explaining and which we welcome—could have been achieved without the need to sell the provision as a new benefit. I submit that it is only the PR exercise that required the measures to be dressed up as a new benefit and sold as a package within a Bill.

Although it is a star turn for Government propaganda, the bundling together of two benefits will produce many difficulties. People will be puzzled about which part will be available for them to claim after the age of 65, whether parts will cease to be paid after 65 and why, if one can apply for one part after 65, one cannot apply for the other. Moreover unbundling will still be necessary. Motability, the independent living fund and local authorities will all need to know who is receiving what part of the mobility allowance and the attendance allowance. As the Secretary of State knows, Motability can only finance contracts based on the existing mobility allowance, the independent living fund will only help someone who is on the higher rate attendance allowance and local authorities treat mobility allowance and attendance allowance differently in their means test. That is why the point made by the hon. Member for Eastleigh (Sir D. Price) is worth considering. The bundled benefits will have to be unbundled so that everyone knows what the components are, and it does not appear that that information will be automatically supplied.

Another major flaw in the Bill is its failure to recognise the range of extra costs that disabled people have to meet. That is a fundamental point. The two modest extensions of mobility allowance and attendance allowance acknowledge the existence of care-related and mobility-related extra costs alone, but disabled people have a range of other costs which cause them higher expenditure, and people with other types of extra costs are left wanting by the Bill. There are several other causes of extra higher extra costs besides disabilities of locomotion and personal care. The OPCS referred to a long list of problems including digestion, disfigurement, behaviour, continence, reaching and stretching, and dexterity. As the Secretary of State follows the OPCS so slavishly with regard to costs because that suits his and the Treasury's interests in terms of lower public expenditure, why does he ignore the OPCS's more fundamental point about needs just because it would cost much more to recognise the truth about needs?

The levels of proposed benefit entirely contradict any illusion that the extent of extra costs facing disabled people is recognised by the Government. Many people would argue that existing levels of mobility and attendance allowance are already insufficient to meet the extra costs associated with just those two types of need.

Far from increasing the levels to cater for other forms of extra costs, there is a new lower level for each component at the derisory rate of just £10 per week. That new rate of £10 per week does not cover people who are marginally disabled and require just a small topping up of income. With regard to mobility allowance, it covers people who are able to walk but who, as the Secretary of State said this afternoon, are so severely physically or mentally handicapped that to take advantage of that faculty out of doors they require guidance or supervision from another person most of the time. They will get £10 per week. With regard to attendance allowance, the Government apparently believe that £10 is appropriate for people who require help from another person in connection with bodily functions for

"a significant portion of the day"

or who

"cannot prepare a cooked main meal for themselves if they have the ingredients."

How many Conservative Members who support this Bill believe that they could get by with that degree of disability on only £10 per week?

I recognise that the Government have based the figures on the extra cost data set out in the family expenditure survey and the OPCS report, both of which found that disability-related expenditure was low. The Government initially greeted that with glee, but when we think about it there is a good reason for the conclusion. The family expenditure survey in particular made the stunning discovery that

"spending on disability is constrained by income."

If we put that crudely, it means "If you haven't got it, you can't spend it." I imagine that even the housewife from Grantham would have agreed with that until she was seduced by the Lawsonian credit binge. That is an important point.

The hon. Gentleman says, "If you haven't got it, you can't spend it," but is that not exactly what the hon. Member for Derby, South (Mrs. Beckett) said when she described how Labour would fund its proposals? Did she not say that these were desirable aims and something that Labour would hope to do as resources allowed? Perhaps the hon. Gentleman will make clear how much money the Labour party would put on the table to fund its proposals.

We are discussing the Government's Bill. I will refer to the Labour party proposals later. I assume from the hon. Gentleman's intervention that he is embarrassed that the Government are being so niggardly in terms of the amount that they are putting on the table. It is the Government's responsibility to lay out their proposals for the disabled. Their proposals are extremely mean and I believe that the hon. Gentleman probably agrees with me.

The OPCS found that disabled adults spent on average only £6·10 extra per week. Other research, however—I will not say independent research as I shall refer to the source in a moment and the Secretary of State is aware of it—has considered the actual extra costs of disabled daily living. In particular, I refer to a pamphlet published by the Disablement Income Group in February entitled, "Short-changed by Disability," which found that the real extra cost was five to seven times that quoted by the OPCS. I am not so naive as to suggest that the Secretary of State will readily accept the DIG figures, but he would be ill advised to dismiss them out of hand. No one who knows anything about disability would accept that the OPCS figures are closer to the reality of the position.

There are several other disturbing aspects to the structuring of the misleadingly entitled disablement living allowance. For instance, the Bill provides that awards of both the mobility and attendance allowance components must be for the same period. I imagine that that will mean that some disabled people will find that the award of an attendance allowance for a shortish period will preclude their getting a Motability car. Another distressing point, which is meant no doubt to keep costs down rather than to meet need when it arises, is that people have to become disabled before the age of 65 in order to benefit. The needs of people who become disabled after that age—the majority—are simply ignored.

It is also dismaying to realise that the Bill offers nothing more for severely disabled people receiving both the mobility and attendance allowances, although it has been widely shown that many of those severely disabled people incur many other extra costs. If the Secretary of State needs proof of that—I do not suppose that he does—payments from the independent living fund show It to be true. Yet the Bill contains nothing more for those people.

The Government's objective for the DLA was, above all, simplicity. In section 4 of "The way Ahead," the Secretary of State wrote:

"We must be confident that when it is introduced, the Disability Allowance is easy to understand."

That has been echoed in ministerial replies to correspondence stating that the Government

"aimed to provide a more simple and coherent system of financial help."

I can only observe that three levels of attendance allowance and two levels of mobility allowance will involve 11 different benefit combinations.

indicated assent.

I note that the Secretary of State assents to that. The combinations range from being ineligible for both benefits to being eligible for both at the top range. Even that might be relatively easy to accommodate if there were only one criterion for assessment with 11 different levels or degrees, but there are nine different criteria, several with different degrees. If the Government wanted to scale new peaks of complexity, they have succeeded in this Bill.

I know that the Gentleman is seriously interested in the problems that we are discussing today, and I would not wish to pretend otherwise. However, I must make the point that this is an area in which we must draw a balance between an administrable benefit which can be made to work in practice and one which takes into account every conceivable factor. How does the hon. Gentleman square what he is saying now with what: he said 10 minutes ago about how this, that and the other had not been taken into account in the structure of the new benefit? If we were to follow the track that the hon. Gentleman urged on me 10 minutes ago, we would have ended up with a benefit so complicated that it could not be understood or administered.

The right hon. Gentleman misses the point. Ten minutes ago, I said that several other facilities could have been provided by the disablement living allowance but they have clearly not been provided because it would cost considerable extra sums of money. I am talking now about a quite different matter—the way in which the measure has been structured. Although I am sure that the Government wish it to be simple, the right hon. Gentleman must realise that it is far from simple and it is complex. Of course, that may also have someting to do with money. I appreciate that the right hon. Gentleman constantly has to struggle to improve the benefit structure and the social security system with virtually no new money from his colleagues in the Treasury and the Government. I see from the right hon. Gentleman's expression that he assents to that and I am sorry about his position.

I am not having that, and I am not assenting to it. In the next two or three years, the Bill will involve more than £300 million of new money. In the past decade there has been an increase in expenditure—I touched on this and gave the reasons for it—of about £4 billion per year at today's prices.

:I shall refer to money later. Perhaps I should move on. The right hon. Gentleman is talking about three years' time. That is the point at which extra expenditure reaches a peak. In fact, it is just under £300 million. Moreover, the right hon. Gentleman does not go on to say that, thereafter, the net extra amount for the disabled, taking account of cuts through reduced earnings allowance and, in particular, the additional component of the invalidity pension, will produce a remarkable falling off and a negative effect in the next century. It is fair to mention the £300 million extra in three years, but does the right hon. Gentleman accept that it will be down to nothing by the year 2000 and that we are talking about a minus figure of £1 billion per year 10 years into the next century? Those are the facts.

With regard to the disablement working allowance, in the section on the financial effects of the Bill—again, the right hon. Gentleman hinted at this although he did not use these words—the Government say that

"the gross cost of around £85m by 1993/4 will be offset by a reduction in payments of other benefits."

In other words, it is such an important new measure that it requires no new net expenditure. I repeat that to get significant numbers of disabled people back into work—not just a few thousand but a few hundred thousand—requires considerably more than no new net expenditure.

The principal defect of this part of the Bill—I may be wrong, but I will argue it both ways and we shall see which is right—is that it appears to use passporting benefits, that is, attendance allowance, mobility allowance and constant attendance allowance, to identify disabled people. If that is so, many blind or partially sighted people and many deaf people who do not receive any benefit on account of disability will not be entitled to disablement working allowance either, even though their disabilities unquestionably put them at a disadvantage in obtaining work. Other disabled people—and there are many others—will also be left out.

I recognise that that interpretation of the Bill, which I believe is correct, is slightly different from that which appears in the note on disability working allowance that the Government published this month.

rose—

:Perhaps I anticipate what the Secretary of State will say. That suggests that a self-declaration, which the right hon. Gentleman emphasised today, of disadvantage in obtaining work is all that is required for the first six months of an award if a claimant had been receiving invalidity benefit, severe disablement allowance or income support with a disability or severe disability premium. Perhap that is the correct version.

indicated assent.

In that case, I shall argue what I believe to be the Government's motive. If that is the case, as I thought that it probably was, it suggests that the Government's agenda is to get as many disabled people as possible off invalidity benefit because, as we know, following the National Audit Office report, the Government are alarmed at the cost and the number of those on invalidity benefit. That is somewhat different from what the Secretary of State said a moment ago about his pleasure at how many extra sums are being spent on the disabled. The Government are very concerned about the rising number of people getting invalidity benefit. Having made it very easy to sign away the right to long-term benefit, the Government then made it much more difficult to sign back on. That is probably a major motive behind the disablement working allowance, and disabled people need to take that point clearly on board.

The other major point that I stress is that the applicable amounts are far too low. You would expect me to say that, Mr. Deputy Speaker, but I repeat it because I believe it and I know the disabled people whom the measure affects will say it with great feeling. For example, there is just over £37 for single claimants. That is extremely low by any standards. Equally, the proposed threshold levels are extremely low—just over £34 for single claimants and higher, of course, for married couples. Also, the capital disregard with its £8,000 cut-off point takes no account of the extra need for capital that many disabled people have compared with non-disabled people.

It has been carefully worked out to my satisfaction that the illustrative figures for the disablement working allowance show that, for a single person, earnings as low as £87 per week would still result in no disablement working allowance. In effect, the disablement working allowance will give some people who are partially capable the option of exchanging poverty-level benefit for poverty-level wages. That is the net effect of the way in which the measure is construed.

The Bill is not impressive and it must be seen against the background of the major overall cuts in benefit, to which I have already alluded, that the Government are planning in the next decade. I have made the point that, although there will be an immediate increase in the next three years, the total will steadily decline to a net loss of more than £500 million per year by the year 2000, declining further into the next century until, by the year 2025—that is a long way off, but the Government plan that far ahead, just as they did when they tried to abolish the state earnings-related pension scheme—according to the Government's own figures, the net cut in all benefits to the disabled will be £1·5 billion per year. That is the background against which we must judge the Bill—a £1·5 billion per year cut by the time we reach the second and third decades of the next century.

Not only is that a scandal but the scale of the cuts calls into question the Government's motive in announcing the proposals in "The Way Ahead" and introducing the Bill today. The proposals can now be seen as little more than a smokescreen to conceal the most savage cuts in disability benefits on record. The Bill not only fails to provide the comprehensive disability income to which we are pledged, but it does not even begin to match up to its title. It does not offer a disablement living allowance and it does not offer a disablement working allowance—it is merely a limited gesture from a dying Government.

In supporting the Bill, I draw the attention of the House to the last report which we on the old Select Committee on Social Services presented to the House in our series on community care. Those who follow our work will know that it was our seventh report on community care and that it was entitled "Social Security for the Disabled". It bears directly on the substance of today's Bill. I should like, therefore, to remind the House of some of the things we said.

We welcomed the statement of principles for social security help for disabled people contained in the Government's policy statement entitled "The Way Ahead". We supported the Government in their stated aims. I shall remind the House of the three most important. They were, first, to improve the coverage of help with the extra costs of disability; secondly, to create incentives for disabled people to take paid employment; and, thirdly, to provide income for disabled people who cannot work. It is against those three agreed aims that the House must judge the Bill's relevance and efficacy.

The Select Committee's biggest concern was the extra costs incurred as a direct result of disability and how they are assessed—a matter which was touched on by the hon. Member for Oldham, West (Mr. Meacher). The Office of Population Censuses and Surveys produced figures on the extra costs of disability which all the disabled organisations found, in the words of the Disablement Income Group, to be "surprisingly low". They were all critical of the methodology adopted by the OPCS in attempting to assess those extra costs.

Ian Bruce, the director general of the Royal National Institute for the Blind, summed up the matter well when he said:

"So many disabled people have low incomes, if you say to them, 'How much more money do you spend on things because you are disabled?', they may never have had the opportunity to spend the money to start with … a lot of blind people do not go out very much because they cannot afford taxis. Now if you ask them how much extra they spend on travel or transport, they might say not very much, but that is because they have never had the money to do it."

The same view has been expressed recently by the DIG, which said:

"It is certainly inappropriate to base proposals on an interpretation of research into the extra costs of disability that judges the need for extra cash by reference to the extent to which the extra cash is spent. Obviously, if you don't have the cash, you can't incur the cost."

The same point was made by the Royal Association for Disability and Rehabilitation, which criticised the Bill because it

"fails to address the costs of disability other than care and mobility cost."

It said:

"Disabled people incur many other costs"—

the hon. Member for Oldham, West made the same point—

"besides care and mobility e.g. diet costs, high laundry costs, higher than normal heating costs, the cost of help with communication, the cost of domestic help and clothing costs."

Despite all that, paragraph 4.3 of "The Way Ahead" says that the Government are satisfied with the present levels of attendance allowance and mobility allowance. They say that they are "more than sufficient" to cover the extra costs associated with disability, as identified in the OPCS reports.

In paragraph 4.6—it is not my view—it says:

"The Government considers, and the OPCS findings confirm, that for the great majority of disabled people the rates of Attendance Allowance and Mobility Allowance make generous allowance for variations around the averages"—

of extra spending associated with disability—

"identified by the OPCS."

The Select Committee was clear that the rates of those benefits could be considered a "generous allowance" only if the low estimates of extra costs made by the OPCS are accepted without question. I do not accept them without question. All my experience tells me that they are gross under-estimations, arising largely because of the methodology adopted by the OPCS—that is, trying to identify extra expenditure for people who have not got the cash to spend in the first place. It is a measure of what happens—I accept that—not a measure of need. That is the fundamental difference. I am therefore disappointed that the Government propose to set the rates for the new disability allowance, as for the old allowances, on the basis of the OPCS research.

The Select Committee was convinced that there were sufficient reservations, not least from the OPCS itself, to warrant further research specifically into the extra costs of disability. That is why we made the specific recommendation that the Government should conduct and publish ongoing research on the actual and potential costs of disability, in conjunction with various organisations representing disabled people, to inform future policy decisions about assistance for disabled people. I hope that the House and, above all, the Government will accept our recommendation. We all know how difficult it is to be precise in this matter, so it is not being unduly controversial or aggressive to ask the Government to accept our recommendation.

We could not accept the logic used by the Government in making changes to the severe disablement allowance. As the House knows, SDA is paid at only 60 per cent. of the rate of invalidity benefit. We welcomed the decision to pay age-related additions to people disabled in earlier life, but we fail to see the logic in denying that small bonus to people receiving SDA for other reasons whose needs, through disability, are presumably just as great. We therefore recommended that SDA should be increased to the same level as invalidity benefit.

That would concentrate resources on the most severely disabled people and would create more equal treatment in the social security system for people prevented from working by the same degree of disability whether or not they qualify for invalidity benefit. Our recommendation is in accordance with the Government's strategy, as identified at the beginning of my remarks, to redress the balance of help for disabled people which is at present heavily weighted on the side of those who have worked for a reasonable time.

Therefore, I hope that during the Bill's passage the Government will accept the logic of our recommendations. Such measures would not need primary legislation. They could be simply implemented during the annual uprating of benefits.

Our fifth report was devoted entirely to the role of carers and their problems. We concluded that the proposals in the community care White Paper and their greater emphasis on informal care at home would, among many other things, require the continuing extension of benefits for carers. The evidence that we received and the experience of the independent living fund suggested that there was a large amount of unmet need. Those of us who have been involved in caring will know that from our own experiences. We recommended that as part of their longer-term consideration of benefits for disabled people the Government should consider a number of important proposals for improving the lot of carers as resources permit. Those are outlined in the report

. First, we suggested that invalidity care allowance should be paid at the same rate as invalidity benefit and the retirement pension. It would have to be decided whether that would be available only to carers with contribution records, such as IVB, or to all carers on a noncontributory basis. I recommend the latter. If the latter, logic and fairness would demand that the noncontributory severe disability allowance should also be uprated. I have already outlined the reasons for that.

Secondly, eligibility to invalid care allowance should be extended to all those caring for disabled people for 35 hours a week or more. That is to define the criterion in terms of the characteristics of the carer rather than the pure medical condition of the cared-for. Attendance allowance and the new lower rate of disability allowance should provide automatic evidence that that criterion is fulfilled—again trying to reduce the bureaucracy—but a direct test of caring could also be accepted. That is the direction in which we should move.

Thirdly, we should pay invalid care allowance at the rate of sickness benefit to carers during the six-month qualifying period for attendance allowance—three months under the new disability allowance.

Fourthly, we should extend the time period for invalid care allowance to include the six-month period after caring ceases. We hear some sad stories about people who have devoted many years caring for a relative whose allowance is terminated immediately their relative dies.

There are many other proposals with which I shall not detain the House now. I merely recommend our report to the House. If I may humbly suggest it, it is worth debating in its own right.

I could say a great deal more, but I promised to be brief. In conclusion, I welcome the Bill as far as it goes. I have identified at least three major matters on which the Government should go much further. I shall continue to press the Government, as I have always done since I came to the House, to maintain the momentum of progress. Nevertheless, it would be churlish of me not to recognise the progress that has been made in developing public policy for the disabled in the thirty-five and a half years during which I have had the honour to be a Member of the House. I am reminded of the words of Arthur Clough:

"For while the tired waves, vainly breaking, Seem here no painful inch to gain, Far back through creek and inlets making Comes silent, flooding in, the main."

The incoming tide is in favour of the disabled. The Bill is one wave in that tide, but we need many more.

The debate has a thread in common with other debates in the House. Ministers come to the Dispatch Box and make statements about their concern for the disadvantaged groups in our society—the sick, the elderly or people with disabilities. The Government may have commissioned reports. They may await the results of surveys and reviews. Needs and problems are identified. Solutions and suggestions may well have been offered. Professionals and voluntary groups may or may not have been consulted, sometimes to find that the advice they offer is ignored.

Successive Ministers have spoken of the aim

"to introduce a coherent system of cash benefits to meet the cost of disability."

Yet their actions fall far short of that. The OPCS survey, which has already been referred to, and voluntary groups such as the Spastics Society, Disability Alliance, the Royal Association for Disability and Rehabilitation, the Royal National Institute for the Deaf and the Royal National Institute for the Blind have highlighted the need for a comprehensive disability benefit. Yet the proposals in "The Way Ahead" do not represent a full review of the benefits system for people with disabilities.

I appreciate that the disabled living allowance and the disabled working allowance will help some individuals, but they are not comprehensive enough and, as has already been said, do not meet all the extra costs incurred by people with disabilities. I regret that pensioners over the age of 65 who develop difficulty with walking—as the result of either an accident or the onset of some disease or illness will still not receive any extra financial help. Such people may have to remain housebound. The Bill contains no changes that will help them. They may have a friend or neighbour who is 64 years of age or younger and qualifies for additional help. Is there any fairness in legislation if it treats people in that way?

What of elderly deaf people whose sight becomes impaired after their 65th birthday? That is not unusual. It may happen as a result of the onset of diabetes and glaucoma. They will not be eligible for the additional benefit. They will receive no extra help from this Government. Will people who are deaf and blind still be eligible for the higher rate of attendance and mobility allowance?

The disability working allowance is means-tested—we are becoming used to that under this Government. Do the Government deliberately set out to add to the difficulties and humiliation of people with disabilities? I ask that question because, until the end of last month, people could apply for reduced earnings allowance if they were injured at work or following the onset of a prescribed industrial disease. They could obtain that benefit as of right, whether or not they were working. It was not means-tested.

The proposed benefit—the disability working allowance—is intended to encourage people to return to work. Despite some of the thin assurances that we have had this afternoon, I and many others fear that it could also be used to take people off incapacity benefits such as invalidity benefit or severe disablement allowance and put them into low-paid jobs.

The emphasis will be less on dealing with poverty among disabled wage earners and more on providing an incentive payment for people with disabilities who are not working but who are thought to be partially able to do so. It will reduce some disincentives and financial penalties for some people entering the work force but the numbers will be small. It remains to be seen whether it will help those who wish to work and can find suitable work, or whether it will be a means of putting pressure on people to work regardless of whether it is truly helpful to them.

The way in which the disability working allowance will work may lead to inequitable treatment of poor disabled earners who have not come within the benefits system and those who have received benefit. As it is a means-tested top-up, the allowance contains certain inherent difficulties. The withdrawal rates, especially when combined with other means-tested benefits, will impose a poverty trap if they are too rapidly imposed, so people will gain little from an increase in earnings. Help from the Department of Employment with the extra costs of employment falls far short of the needs of some individuals with disabilities. Such people may include those with cerebral palsy and communication difficulties. Again, that is not an unusual combination. The availability of a communicator alone may not be sufficient. Often, another person is needed to act as a facilitator. In no way are those costs met by the Department of Employment.

The current legislation applies only to people who can work for 16 hours or more. What about those who are capable of working for less than 16 hours per week? Some people with disabilities are capable of working perhaps no more than two hours a day at the beginning, if one allows for the time and discomfort that travelling to and from the place of work may involve. To bar such people from the allowance will provide a total disincentive to work, because people would hardly be able to earn more in, say, 12 or 15 hours a week than they would receive from benefits alone.

What about some of the difficulties and delays in processing claims for the disability allowance? It has been compared to family credit. I am only too well aware that many people are having great difficulty in obtaining family credit. Will people have to provide wage slips, as they do for family credit, for at least five weeks before they can claim?

Many people with disabilities may be reluctant to experiment with working in case they lose future entitlement to the long-term disability benefits. I am thinking in particular of the severe disablement allowance. People are entitled to that allowance if they could not work before the age of 20. Are they also to be barred?

The Bill specifies that previous benefit can be protected for a maximum of two years, and the Minister has reassured us about that. That in itself is no more generous than the eight-week linking period which may still prove to be a disincentive to experiment with work. Perhaps the real problem to be tackled—and it is certainly not tackled by the Bill—is much more fundamental than the problem that we are discussing: it is about improving access to employment opportunities and about obtaining from the Government a guarantee that the existing rehabilitation and training services will be maintained and improved. We need a guarantee about the introduction of anti-discrimination legislation, and the quota system needs to be enforced. We also need a national minimum wage.

The hon. Member for Mid-Staffordshire (Mrs. Heal) speaks from great experience, and to that extent her contribution is welcome. However, she was a little churlish in not recognising many of the changes that the Government have made to help disabled people on low incomes and to remove the barriers to work. She said that the Bill did nothing for pensioners but, of course, there have been measures to provide disability premiums and higher pension premiums for people on low incomes. She could have spoken about that. It is helpful to remove barriers to work, and if it can be done in a way that does not incur a net cost, extra money is available to be spent elsewhere.

I listened carefully to the speech of the hon. Member for Oldham, West (Mr. Meacher). I am grateful to the hon. Gentleman for allowing me to intervene. He did not give his promised answer about how much money the Labour party would put on the table. He adopted a spurious method of jobbing forward and calculating that there was a reduction of £1·5 billion, even though the Government's track record is of increasing expenditure. He said that such a reduction was scandalous. When we job backwards, we see that in real terms the Government are spending £4 billion more than Labour did when it was in office.

The hon. Gentleman said that the Government are being "extremely mean", but we are spending twice as much as Labour did when it was in power, so how would he describe expenditure at half the current level? Instead of spuriously jobbing forward and trying to invent a reduction in spending when the Government's track record is of increasing spending, the hon. Gentleman should look at his own record, try to figure out exactly what he would spend and tell us the amount that a Labour Government would put on the table.

All we have to go on at the moment are the words of his hon. Friend the Member for Derby, South (Mrs. Beckett). She said that Labour hoped to implement its policies as resources allowed. She has not specified any sum. The hon. Member for Oldham, West said that he would come to that in his speech, but he never did. I do not know whether he was afraid to come out with it, or whether he has not been able to do the sums. Perhaps his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) has told him not to give any figures because the right hon. and learned Member would be embarrassed when he came to fund the policies. It is spurious nonsense to talk about the Government reducing future expenditure on the disabled when the whole pattern has been of increasing spending.

The Bill is an important step forward. Of course we all want to see more money spent on the disabled. It is probably the greatest unmet need in my constituency, where we have severely mentally handicapped adults with challenging behaviour living at home. We should welcome the Bill as another step on the road to more spending. As my hon. Friend the Member for Eastleigh (Sir D. Price) said, it is another wave on the ocean.

Given that we have a record of a continuous increase in spending, I do not understand how the hon. Member for Oldham, West can give such spurious projections and say that there will be a reduction of £1·5 billion. All hon. Members accepted that SERPS was the wrong way to allocate scarce resources. If we are to spend more, surely it is right to ask how we should spend the extra money.

rose—

Does the hon. Gentleman propose to tell us how much he would spend?

The hon. Gentleman keeps repeating the same point. The £1·5 billion per year cut is based on Government figures which are to be provided inHansard and which the hon. Gentleman can consult. When he looks back, as he is perfectly entitled to do, at the increased expenditure on the disabled, he will see that these are not new benefits introduced by the Government but further take-up of benefits that were introduced by the last Labour Government. We are committed to comprehensive disability income. I agree that the cost will be considerable, but we have clearly said that we will introduce it as soon as resources allow. We are responsible about that and intend to do it. The Government do not.

It is obvious that, under socialism, the money was not there. As Sir John Wilson said recently,

"Communism has failed because it is incompetent and it is surely important that the enterprise culture should not fail because it is inhumane. The provision society makes for people with disability is surely one of the most sensitive points in that issue. There must be some way of rewarding winners without victimising disabled losers."

The hon. Member for Oldham, West was not generous enough to recognise that the Government have introduced many new measures. It is not just a question of all the old measures that a Labour Government tabled but could not afford to implement. There is a thicket of new measures and the Bill lists some strange alphabetical clauses such as 37ZA, 37ZB and 37ZC. If we had not had a change in this week's business, I would have gone further into the Bill before the debate, which was originally scheduled for tomorrow. Perhaps I can leave it to later stages of the Bill to find out more about it.

I turn now to employment issues. The recent survey showed that there are close on 1 million disabled people in work, and that 250,000 are unemployed. I am sure that the new allowance will help to create conditions in which the unemployed can he brought back into work.

I was pleased by the Government's newly introduced logo for employers who adopt good practices. It has a double tick, and that is a double tick for the Government's policy on the disabled: that double tick means double spending. I am pleased that employers will be able to adopt that code, thereby showing that they are willing to employ disabled people to the maximum extent of a company's resources, even though the quota may not be applicable to an employer's particular industry.

I recently discussed several matters with members of the Bolton and Wigan committee for the employment of people with disabilities. I hope that the prospects of people employed by agencies of the Department of Employment, such as disablement resettlement officers and others, will benefit from their work in this important area. They should in no way feel that their career will not develop in that Department as well as it would in any other Department of the Civil Service.

People who get sheltered placement scheme opportunities in the Civil Service should also be able to develop their careers. There should be a progression of people from day centres through sheltered workshops to sheltered placement schemes and then into industry. That is better than staying in, for example, Remploy for years on end. People should be seconded to industry so that they can move into employment as soon as possible. I am sure that the new allowance will help to make that much easier.

It is interesting to consider the position of overseas companies with factories in Britain and the extent to which their employment practices here may develop upon legislation in their home states. It would be worth seeing a study showing the extent to which employers, whose head office is subject to legislation in a foreign country, adopt a different practice here. However, I understand that there is no evidence to suggest that German companies, in whose head offices there is supposed to be a 6 per cent. quota, endeavour to employ 6 per cent. here.

That suggests an area in which we could develop more freely, and the Government's present policy based upon voluntary methods is the best way forward. Other methods used abroad have met with mixed success, but one might expect foreign subsidiary companies in this country to follow the same line. There is no evidence that they do, so I believe that the Government are pursuing the right policy.

I received a brief note from RADAR—the Royal Association for Disability and Rehabilitation—and I should like to comment on the issues it raised. My right hon. Friend was right to introduce the independent living fund, which has grown to a current value of £60 million. It has proved extremely useful and has helped some of my constituents with great unmet needs. There is some doubt about the future of that fund, however, and I should be grateful if my right hon. Friend could tell us what is intended.

RADAR also raised the problem of Motability when mobility awards are given for a short period. I have written to my right hon. Friend about a constituent who is facing that problem. The length of time for which the mobility allowance is awarded is insufficient to fund a car under the Motability scheme. The mobility allowance contains the equivalent of cliff edges, with which people are unable to cope. I hope that my right hon. Friend can say something about that problem.

We must also consider carefully the incentives for people with disabilities to register as disabled when seeking employment. For one reason or another, many people do not do so, as they feel that there is no incentive to register as such. The disability working allowance should address that problem. In addition, those people registered as disabled should benefit from transitional relief on the community charge.

Disregards are also important when attempting to encourage people back to work. The hon. Member for Mid-Staffordshire should have paid some attention to disregards and the fact that they have been increased. If people are able to work for a short time only—the hon. Lady mentioned people who can work alone for less than 16 hours a week—disregards represent one of the easiest ways back into work.

RADAR has also questioned the capital rules for people who will benefit from a disabled working allowance. It believes that there should be no capital limit and that the proposed limit of £8,000 is too restrictive on those people who need additional funds to help them to meet the costs of their disability. If they have such capital, it is unreasonable that they should be ruled out from benefiting from the new allowance. People need that capital to meet the cost of their additional needs.

I am grateful for the opportunity to raise such important issues, and I look forward to the successful passage of the Bill.

It is always a pleasure to follow the hon. Member for Bolton, North-East (Mr. Thurnham), who has a good track record on this subject. The experience that he brings to the House means that our debates on it are all the better.

I shall try to be a little more generous than the hon. Member for Oldham, West (Mr. Meacher) when deciding whether the Bill is good or bad. Some may say that that would not be too difficult, but I should qualify my generosity by saying that what I welcome most about the Bill is the approach behind it. The Secretary of State underlined that the purpose of the Bill is to try to open up opportunities for people with disabilities so that they can seek greater independence. That is extremely welcome.

In principle there should be no such thing as a disabled person. Governments and political parties spend too much time discussing the difficulties encountered in providing for people with disabilities. We often get caught in the bind of assuming that there are problems associated with all people with disabilities, but many of those people have a great deal to contribute. Society's attitude to disability and the way in which we provide for people with disabilities must be turned round. I hope that the Bill will have a positive impact on that important matter.

The way in which we take decisions on how to provide for people with disabilities should be examined carefully. Such decisions should be taken within the political decision-making process. I am heartened by the contribution of access panels to the public discussion of the local provision that must be made for people with disabilities. Long may that contribution continue.

Although I welcome the general approach of the Bill, the costs involved have not been properly addressed. It is a waste of time, however, to trade insults across the Floor about how much each party would spend in the future. I have no doubt that the Minister's intentions are right and honest and that he does a great deal to promote the interests of people with disabilities within the machinery of government. However, whether the right hon. Gentleman succeeds with his Treasury colleagues is not nearly so certain. I do not believe that the Minister has got as good a deal as the Secretary of State tried to make out. I do not believe that £325 million, to be spent over three years, adds up to an awfully big row of beans. I exonerate the Minister from blame, however, as I know that, in his heart of hearts, he knows that that sum is not enough. I know that there are nods and winks in this game and if the right hon. Gentleman said that he was prepared to go back to the Treasury and to pray in aid hon. Members' belief that the resources are insufficient, I would support his campaign. I hope that the right hon. Gentleman will tell us that this Bill is the first block in a building project that has a long way to go before it is complete.

The survey undertaken by the Office of Population Censuses and Surveys was an excellent opportunity to review the extent of the problem throughout the country. I do not believe, however, that the Government have satisfied the expectations of the pressure groups that are responsible for promoting the interests of people with disabilities. The work undertaken and the evidence produced have not been properly assessed or taken into account in the Bill.

The hon. Member for Bolton, North-East argued about how much money is necessary and how much will be devoted by the various political parties. I believe that all of us, including the Government, should commit ourselves to the principle of moving towards a comprehensive disability income. I do not care how long it takes—the pressure groups are realistic about it as they do not believe that a Government of any political complexion can deliver what they need immediately. It would be of great assistance to those groups, however, if we could say that, in principle, the long-term goal is a comprehensive disability income, no matter how long it takes or at what cost. That commitment would be a positive contribution to our discussions. I hope that the Minister will say something about that when he replies.

Additional costs for heating, laundry, clothing and domestic care have largely been put to one side in the Bill. The additional costs that will result from the recent privatisation of the water industry in England and 'Wales and the privatisation of the electricity industry will exacerbate the problem. The decision to set the lower rate of attendance mobility components at £10 only from next April will not begin to meet the problem.

The mobility allowance is too restrictive. I know that it would not be cheap, but, as I have argued before, it is wrong to use cost as a reason not to take on board the possibility of extending the allowance to those over the age of 65. That, more than anything else, causes heartache to those who attend my surgeries.

I see the Minister raising his eyes to the ceiling. I am well aware that we are talking about a large amount of money, but there is no justification in principle for the existing position. If we continue to allow such a position, we are in effect saying that disability is synonymous with being old, and that is neither true nor fair. The Government should address the problem, but they do not seem to have done so; even worse, they do not seem to be prepared to do so in future. Never mind the amount of money involved: if the Government could say something constructive about a new approach, I should be happier.

The Bill is unclear about those with severe learning disabilities or challenging behaviour. That is another problem that I find in my constituency: apparently such people might qualify for the lower but not the higher rate of mobility allowance. Perhaps that is a Committee point, but I hope that the Minister can clarify it at some stage.

The Secretary of State earlier referred to the extension of mobility allowance to deaf-blind people. That was warmly welcomed, but there remains the problem of take-up. Far too many people are turned down at the assessment stage. I make no complaint, as it is a difficult judgment to make, but I do not think that adjudication officers are being given the training that they need to cope with the needs of sensory disability. If the problem were addressed, deaf-blind people could probably obtain the benefit and allowance that they are not obtaining at present.

I was disappointed by the Government's decision to extend the qualifying period to three months. Perhaps the Minister could say a word about that. In my experience, medical people are usually definite about the extent of any given disability, and about whether it is chronic or temporary. The Minister may say that that administratively is easier said than done, but in my experience doctors are quite clear about whether a condition will continue.

I am on all fours with the philosophy of the disability working allowance. I believe that the threshold levels and the maximum benefit rates are too low, but I am prepared to give the Government the benefit of the doubt and wait and see what emerges in future public expenditure survey rounds and in Conservative conferences at various seaside resorts—where, no doubt, Ministers meet in the room of the Chief Secretary to the Treasury; more power to their elbow, say I.

The question of most importance to carers is whether eligibility for invalidity care allowance can be linked to both levels of the new disability living allowance, rather than just the higher level. That is causing real concern, and it would be welcome if the Government could say something about it.

The Bill as a whole deserves the support of the House. I intend to study the figures given by the hon. Member for Oldham, West (Mr. Meacher) about the cuts, some of which seem to be fairly sizeable.I shall read what he said in the Official Report very carefully. Certainly, in terms of costs the Government have little to crow about. Some aspects of the Bill can be improved upon in Committee, and the debate will unquestionably continue—although I suspect that the public debate will concern what is not in the Bill rather than what is.

In so far as the Bill will help disabled people in the future, I support it, and I hope that the House will do the same.

The Bill is a step forward, although it is a much smaller one than many of us hoped. Much of the agenda was well brought out by the hon. Member for Eastleigh (Sir D. Price) and in the excellent Select Committee report, to which I pay tribute. It is sad that the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) is not with us for this debate, as he has played a leading role in the work done for disabled people; he is indisposed at present, but I hope that he will be back shortly—in time for the Committee stage.

I think back to the Conservative manifesto of 1979, which said that

"a coherent system of cash benefits"

would be introduced for disabled people

"as swiftly as the strength of the economy allows."

We have been told repeatedly by Ministers—not least by the Prime Minister—that the economy has gone from strength to strength; presumably, therefore, we should now be looking for the fulfilment of that pledge. Using that measuring rod 11 years on, however, I am not sure whether the Bill is as substantial as many of us hoped. To some extent, it merely tinkers with some problems, and does not deal with others at all.

We must see the Bill in the context of the delay in the community care legislation—which has been put off for another two years—and the non-implementation of several parts of the Disabled Persons (Services, Consultation and Representation) Act 1986. Parts I, II and III of that Act are relevant to some of the matters that we are discussing here, and I have no doubt that we will deal with that in Committee.

Before I get too critical, I should like to pay tribute to the fact the Bill contains one provision for which many hon. Members from both sides of the House have pressed for a long time—the extension of mobility allowance components to those, especially mentally handicapped people, who can physically walk, but are unable to do so independently. There was a time when mentally handicapped people were receiving benefit, until several court cases raised doubts about that. It is good to see that that has now been cleared up—although the Bill seems to suggest that it may be provided at the lower rate of £10. If that is the case, I suspect that it will be inadequate in many instances, and that we may need to return to the matter. I also regret the three-month waiting period. I thought that, in the context of attendance allowance, we were getting away from that. The whole thrust last year was to try to do away with waiting periods. Now we are introducing them, and that is unfortunate.

Perhaps the Minister can clarify the position regarding the extension of mobility allowance to people with agoraphobia—people who, because they have problems in going out, need assistance. MIND has lobbied hon. Members about that.

A number of hon. Members referred to the position with regard to mobility allowance beyond the age of 65. I have a number of difficult cases in that category in my constituency. If community care means anything, there must be adequate support for those beyond the age of 65. That is when so much disability occurs and so much help is needed. We should not be pulling out and failing to provide assistance where it is most needed. RADAR made a strong point about that in its representations to us. It said:

"RADAR totally rejects the restriction of the new levels of allowance to people who become disabled before age 65. The current rules for Mobility allowance are possibly the single issue on which RADAR receives the most complaints. We do not advocate the extension of Mobility allowance to pensioners as a priority, but a properly constructed disablement costs allowance payable to meet costs of disability rather than payable on the basis of age and cause of disability."

That is the level at which the argument should be put—there should not be an automatic cut-off at 65, but people should be judged in the context of their disabilities and needs.

In the past, I have had an opportunity to mention in the House my own family circumstances and our awareness of the costs of disability. I know the great benefit that comes from attendance and mobility allowance. We received two attendance allowances and two mobility allowances simultaneously. That was enough to provide one full-time person to cope with our disabled children when they were alive. Our circumstances were better than those of many people facing similar difficulties. I urge the Minister to look in some depth at the level of resources needed to help disabled people. Some 4·5 million disabled adults—two out of every three—live in households in which there are no earners. Those people are dependent solely on benefits. The proposed extension of mobility and attendance allowance to a wider group, albeit at reduced rates, addresses only two of the extra costs of disability—the attendance and mobility costs.

The Office of Population Censuses and Surveys study found that the most common item of additional expenditure on normal items was fuel for extra heating or hot water. More than half—51 per cent.—of those surveyed thought that they spent more on fuel than they would have done had there not been a disability in the household.

Mencap undertook a survey on the needs of children and adults with profound retardation and multiple handicap. It confirmed the need for additional financial support to cover heating costs. Some 79 per cent. of parents of children with such handicaps and 74 per cent. of the parents of adults with such handicaps needed more money for heating costs. Disabled families face additional costs for heating, diet, laundry, communication, clothing and domestic help, which all add to their bills. However, the legislation does not improve the living conditions of such people. Deaf people often face additional costs of aids and adaptations, and we should make more progress to help them.

As well as the revenue costs, many disabled people have to pay out for capital cost items, which can be expensive. There should be flexibility in the system to deal with their requirements. The Social Security Advisory Committee sent a report to the Secretary of State urging him to increase the rates of income support to take account of some of those costs. People now face additional costs such as the poll tax and water rates, which will certainly increase in future years.

It does not say much for the affluent Britain of the 1990s that disabled people are unable to afford the fuel to heat their houses or have hot water. They are not luxuries but basic necessities. The proposed disabled living allowance must make provision for those extra, basic living costs. Hon. Members have received representations from the Spinal Injuries Association underlining that need, and from Deaf Accord. Those organisations say that, for deaf and hard-of-hearing people, the introduction of an element in the allowance to look after such additional costs is essential. All the representations that we received underlined the need for us to make progress.

I fear that the disability working allowance may not be providing enough incentive for those wishing to return to work or go to work. It should be enough to ensure that there is extra income as a result of the allowance to cover the cost of traveling—which in a region such as mine can sometimes be large—eating away from home and working clothes. The allowance should contain elements of pension rights and certainly a margin of motivation to make the exercise worth while.

The hon. Member for Mid-Staffordshire (Mrs. Heal) mentioned the 16-hour minimum limit. Many disabled people may wish to start at a much lower level and build up the number of hours. Having a cut-off of 16 hours does not help us to get the maximum out of the allowance.

We in this country have waited 11 years for progress to be made on disability allowances. There is a contrast between our priorities and those shown by some small European countries. In the Netherlands there is a non means-tested benefit that is adequate to live on, payable to all those who have never been able to work or who become unable to do so during full-time education up to the age of 30. In Denmark, the contributory system has been entirely abolished and there is no discrimination between any group of disabled people. For any single person totally incapable of work, the benefit rate in Denmark on 1 January last year was the equivalent of £106 a week purchasing power. If we compare that to the rate of invalidity benefit, let alone the SDA, we see that the United Kingdom is way behind. There is tremendous room for us to improve. If small countries such as Denmark, Holland and Sweden can do so much more for disabled people and meet their real needs, we should do so here. It is a matter of priority and values.

I do not challenge the wishes of the Ministers present today to make progress, but I only wish that the message would get home to Treasury Ministers so that we have the right priorities on expenditure in these islands.

I apologise to my right hon. Friend the Secretary of State for my absence at the beginning of the debate. I was attending and speaking at a meeting upstairs on compensation for haemophiliacs, which I am sure the House will agree is an equal priority.

Like the hon. Members for Caernarfon (Mr. Wigley) and for Roxburgh and Berwickshire (Mr. Kirkwood), and as secretary of the all-party disablement group, I welcome the opportunity afforded by the Bill to improve the benefits system for disabled people. I particularly welcome the fact that the Government have used the opportunity to change the assessment procedures for the attendance and mobility allowance, away from the much-criticised medical system towards self-assessment. I welcome the attempt to devise a system to give assistance to people partially capable of work. However, the disability allowance needs much more work, consultation and change, which should be coupled with legislative protection for disabled people in employment, if it is to provide the incentive to work that we all wish.

Last October, a 10-point plan of improvements was announced, which was welcomed. I particularly welcomed the extension of mobility allowance to deaf and blind people, about which the all-party disablement group, hon. Members present and I have been concerned for many years. It took about eight years to get the message through.

The Government have published a consultation document containing their illustrative levels of benefit for the disability working allowance. I regret that that was not published in advance of the Bill to enable disabled groups to assess how the benefit would work. I hope that the Secretary of State will give a guarantee that work on that benefit will proceed in full consultation with the relevant disability groups, so that we can come up with a workable system for disabled people at the end of the Bill's passage. If the working allowance is to be of real benefit to disabled people, we must take their circumstances into account.

The two benefits—family credit and disablement working allowance—have fundamentally different aims. Family credit assists families on low incomes, and the disability working allowance should be of benefit to enable disabled people who are unable to work full time because of their disability to work part time. It is vital to ensure that we do not lose this opportunity to make a workable benefit system for partially capacitated people. My right hon. Friend will know of my long campaign for that objective.

I can identify a number of issues on which we should work during the Bill's process. First, as other speakers have mentioned, the current limit on the capital disregard of £8,000 simply replicates family credit, and should be much higher. Disabled people need substantially more capital than able-bodied people because many items of essential equipment—such as powered wheelchairs and communication equipment—are not available on the NHS.

As advancing technology produces improvements, there is also a dramatic increase in the price of equipment. The cost of such equipment uses up capital that many able-bodied people have to spare for other luxuries of life. Disability often precludes many do-it-yourself jobs that able-bodied people can carry out, which means that disabled people have to pay someone else to do them. Capital often has to be consumed to pay for assistance while a spouse is on holiday.

I urge the Secretary of State to use the example of the independent living fund, where any capital earmarked for expenditure occasioned by disability can be disregarded. Disabled people often receive lump sum payments because of their disability—for example, industrial injury, or compensation for personal injury or redundancy. For many of those people, the opportunity to rehabilitate through part-time work should not be denied them because of restrictive capital limits.

My next query concerns recipients. The allowance should not be limited to people in receipt of certain passporting benefits. It should, for example, be available to deaf people and partially sighted people who are not in receipt of any disability benefit. A functional test of capacity will exist for some claimants when they renew their claim after six months. That could easily apply to new claimants who are not in receipt of any passporting benefits.

On threshold levels, the illustrative figures given by the Department for the working allowance will not provide an adequate incentive for disabled people to work. I quote a true example which came through on the very day on which benefit levels for the working allowance were announced.

Sarah is 32 and lives at home with her parents. She has not worked since 1983 because she has multiple sclerosis. She has a science degree and has worked in industry, and her current benefit income is £58·70 in invalidity benefit and community charge benefit. If she goes to work and earns £34·60 a week, she will get £37·20 in disability working allowance—a net gain of £13·10. However, out of that she will have to meet work-related expenses—fares, working clothes and eating away from home. She lives at home now, but if she were to live in rented accommodation she would pay at least £20 a week in rent and would finish up gaining only 7p in housing benefit—so she would actually lose benefit.

We must examine the thresholds carefully and consider higher ones. We need not grumble about them too much at this stage; I always regard the establishment of new benefits as the beginning of a process. We should be able to consider the thresholds in Committee, and I hope that we can raise them to proper levels over the years ahead. On the hours rule, I welcome the fact that the requirement to work a minimum of 24 hours has been abolished in favour of 16 hours. We have long argued that 24 hours excludes and would exclude many people who are partially capable of work, but I still believe that we need to revise the rule further. What will be the position of someone who has had an accident and who needs to build up his hours gradually until he can work 16 hours or even more? Such an example needs to be accommodated in the system. Nicole Davoud, who has campaigned so much on behalf of multiple sclerosis sufferers, has written to me today—other hon. Members may have had the same letter—confirming that the rule needs revision.

As for the disability living allowance, as one who has campaigned for a number of years on behalf of the deaf-blind, I welcome the new system. Proposals to drop the humiliating and much criticised assessment procedure for the combined mobility and attendance allowance have been welcomed by all the organisations working in this area.

However, it is misleading and confusing for the claimants to call this a disability living allowance, because it is not a new allowance; it is a combination of two existing benefits, plus a new lower rate of attendance and of mobility allowance. There is no doubt that the extra money each week will be welcomed by disabled people who now receive nothing, but it is misleading to imply that a completely new benefit is being introduced. I regret that we have not yet been able to take the step towards a comprehensive disability income scheme that has been advocated for so many years. As my hon. Friend the Member for Eastleigh (Sir D. Price) pointed out, the Select Committee produced an excellent report which made a number of useful recommendations in this direction.

My long-term objectives include the hope that this is the first stage of a process and that the Government aim in the long term to introduce a disablement costs allowance. As pressure mounts on my right hon. Friend every time we have these debates, and as the budget grows ever larger, we are approaching the point at which we can effect the changeover. I should like to press this matter and ask again about the long-term plans of the Government to upgrade the severe disablement allowance to the level of invalidity benefit. Initial steps were made in that direction in the previous Social Security Bill, which introduced age-related additions to the severe disablement allowance. What are the long-term plans to meet the high costs of severely disabled people and of elderly disabled people? These are pertinent questions about our continuing policies, and we should discuss them in the context of this good Bill.

I hope that my comments on this progressive Bill have been constructive. I hope too that it can be improved in Committee and thereafter. I congratulate the Government on the advances that they have introduced for disabled people, and I look forward to many more years of improvements, under successive Conservative Governments.

too, apologise for missing the Secretary of State's speech—I was engaged on business similar to that described by the hon. Member for Exeter (Mr. Hannam). Other hon. Members have covered many of the issues, so I shall concentrate on the cut-off at 65.

My hon. Friend the Member for Mid-Staffordshire (Mrs. Heal) and other hon. Members have pointed out that there are many categories of disability among people aged over 65. The House will be well aware that I have campaigned for many years on the problems of the severe chest diseases suffered by mineworkers. Five times, I have presented Bills to highlight the problem, and arising out of those Bills, the Industrial Injuries Advisory Council held an investigation which reported about two years ago—1but it still did not find it possible to recommend to the Secretary of State that emphysema be described as an industrial disease. That was alarming and regrettable, given the large amount of in-depth medical research and evidence which shows that mineworkers are 10 times more likely to contract the disease than members of the general public.

I recognise that the council's failure to prescribe emphysema as an industrial disease has nothing to do with this Bill. The problem is that the disease tends to progress more rapidly in men over 65. It is a severe disability. Miners reach the stage when they cannot walk more than a yard and find it difficult to lift a cup of tea to their lips. They cannot look after themselves. Most of them live in bungalows or in local authority dwellings that burn solid fuel because they have always enjoyed concessionary fuel.

With each passing year, the miners' wives, who are as much victims of the disease as the miners, become a year older and thus less able to cope. They can no longer carry their husbands to the toilet. They can no longer dress them. However, if these people apply to live in dwellings in which they do not need to carry buckets of coal to mend their fires and warm themselves, British Coal immediately stops their concessionary fuel allowance, because they have converted to gas or some other form of heating. So these unfortunate miners miss out in every way and do not get their rightful compensation. If the disease does not become severe until after they are 65, as often happens, they are cut off and left with this chronic disease. Their plight is distressing indeed. They cannot live without oxygen masks, applied continuously. If that does not happen, they are not classified as disabled.

I appreciate how much more it would cost if those over 65 were included—there is no bottomless pit. However, the medical profession knows that eventually these men will die. That is known before they reach the age of 65. However, they do not qualify for benefit, because their disablement is not so severe when they are below that age.

I ask the Minister to take account of these men. The medical profession ought to be able to take action before they reach the age of 65. The care allowance ought also to take into account the fact that the wives of these men hardly ever think about applying for assistance. They deem it to be their duty to look after their husbands. To have this cut-off at 65 means that many categories of disabled people, not least those to whom I have referred, are treated unfairly.

I give a general welcome to the Bill. It should be an improvement on the present position of certain disabled applicants. Any improvement, however small, must be supported so that we can continue to encourage Her Majesty's Government to target benefits properly on those who are most in need.

Surely the starting point for dealing with the problems experienced by the disabled should be to make sure that they are on a par with their able-bodied neighbours in the community. To do that, we must look at the extra cost incurred when a person is disabled. In other words, if an equal amount of benefit were given to two claimants—one disabled and the other able-bodied—by the very nature of things the disabled person is at a distinct disadvantage because of the extra costs incurred as a result of disability.

Every representative body speaking on behalf of the disabled has given a list of the extra costs that the Bill does not seem to take into account. Many disabled children and adults require additional help with higher heating, diet, laundry and clothing costs. They also incur costs involving communications and domestic help. At least in Northern Ireland we do not as yet have the problem of the poll tax and the higher water charges predicted for Great Britain, but all the other additional costs that I have mentioned apply equally throughout the kingdom.

It is doubtful whether the £10 per week lower attendance component will meet the needs of claimants needing help getting out of bed in the morning or retiring for the night, or preparing even one cooked meal each day. While I welcome the extension of the mobility allowance to those who can walk but are not independently mobile, it is unlikely that for £10 they could obtain the services of a car and driver, let alone someone to be with them when they go out. I have not forgotten the independent living survey, which meets some of the higher costs arising from disability, but the future of the fund seems uncertain and the Bill provides no long-term assistance for such people.

I give a warm welcome to the provision which allows a disabled person to try out a job for up to two years before losing the right to return to the full benefit level that he or she received before commencing work. I hope that there will be no attempt by employers to pay low wages to disabled people because such people will be eligible for the disabled working allowance. It is not unknown for some employers to make disabled persons feel that it is a great favour for them to be allowed to work in their firms and that, by implication, they should expect lower wages. What a great insult that is to the many disabled people who are an example to other workers in dedication, hard work, common sense and excellent time keeping.

I am concerned about the means-tested nature of the disability working allowance for disabled people who are anxious to work. The DWA must create the right circumstances 1:o provide sufficient extra finance to cover travelling to work, working clothes, meals at work, savings, building up a pension and, I hope, an increased income when all those things have been looked after. When work-related expenses are taken into account, the disabled person must believe that it is an advantage, not a disadvantage, to take up employment.

I ask the Minister to reconsider the £8,000 capital limit. If we wish to encourage the disabled to save, it is a mistake to impose a capital limit of £8,000. It would surely be fairer to increase that figure, or even to disregard all capital. Situations can arise, through accidents or terrorist action, which make citizens, through no fault of their own, disabled for life. Sadly, we have many such cases in Northern Ireland. Let us not add insult to injury for those unfortunate people. Let us show our compassion by disregarding sums of money awarded to them which. if the truth were known, they would gladly give away if they could only return to their former way of life.

It is disappointing that the Bill will not apply equally to all citizens, regardless of age. Surely those over 65 ought to be treated in the same way as all other citizens. I ask the Minister to ensure that local offices are fully aware during the implementation of the measure that the disablement working allowance cannot be applied for until a person has a job. At that point, disablement benefit ceases. While the claim is being processed, therefore, no benefit is payable. I urge the Minister to ensure that all local offices process such claims as speedily as possible.

I have mentioned the various improvements that we should like to be made to the Bill. I hope that in Committee the Minister will be persuaded to consider constructive suggestions which I know would improve the lot of many disabled people.

My speech will be brief because I hope that the contents of the Bill will be fully explored in Committee. The fact that we do not intend to divide the House suggests that we believe that the Bill contains some good things. However, it does not go far enough. The Minister could reply that that is always our argument, but if we did not put forward that argument continually no improvement would be made to social security and welfare benefits.

The point has already been made that the £10 allowance is inadequate. If hon. Members think about the things oi. which they spend £10, they will realise how insignificant a sum it is in terms of additional social security benefits. I do not believe that the allowance will be successful in encouraging people to return to work. Nevertheless, it is a step in the right direction. One only has to think of mobility costs. It costs £2 per day in bus fares to travel into town from where I live. If disabled people are able to travel to work, most will do so by bus. They will need help to get to town, but many will try to do so if they believe that they can succeed.

The Bill places more pressure on DSS staff. I have received nothing but help and co-operation from the office with which I have dealt since becoming a Member of Parliament and I am conscious of the pressures under which it works. During the recess, I took the opportunity of visiting the office. I informed the manager of my visit, not as a Member of Parliament but as a member of the public, with some of my constituents, to see what happens. I was appalled at the indignity that claimants suffer and the long waiting time. I was even more appalled at the pressures on the people behind the counter. If our constituents who, through no fault of their own, depend on benefits are to be dealt with in a proper and dignified manner, the system should enable the people behind the counter to provide such a service.

We shall explore the Bill further in Committee. It is a step in the right direction, but certain parts of it need amending and some benefits need increasing. I hope that when it emerges from Committee it will be a better Bill.

The hon. Member for Eastleigh (Sir D. Price) ended his speech on a poetic note, referring to a wave coming in on the top of a tide. That metaphor is perhaps more helpful to Labour Members, as the present tide has defied the laws of nature and taken eleven and a half years to come in, whereas normally tides come in twice a day. Tides often have another unfortunate effect—they not only come in but go out, leaving a mudscape that is unsightly and ugly.

We must consider what is behind the Bill. One hates to be accused of being churlish, but much of it is cosmetic and its main effect is to recycle money. The hon. Member for Bolton, North-East (Mr. Thurnham), like many other hon. Members who have participated in the debate, has made a distinguished contribution and has a deep commitment to the needs of disabled people. Unfortunately, as he confessed, he was in some difficulty because he was expecting to speak tomorrow and had to rely on a handout from the Royal Association for Disability and Rehabilitation for most of his speech. He unfairly attacked my hon. Friend the Member for Oldham, West (Mr. Meacher) for referring to the finances of the Bill, which are absolutely crucial. Our 6·5 million disabled people have been waiting a long time for a Bill that is radical, progressive and fundamental. Those people, who have been short-changed by life or cheated by nature, have a right to expect something far better than the Bill. Without question, there are improvements in the Bill. Hon. Members have complained about how disabled benefits have worked, but some of the Bill's provisions will be effective.

There are two parts to any Bill—first, the philosophy of whether it will work and whether it is the right thing to do and, secondly, how it underpins measures and the generosity behind it. We hear daily from Conservative Members about the improving prosperity of our society, but what share of that is going to disabled people? The Bill paints a different picture. It is a means of recycling money. All disabled people have a complex income structure from multiple sources, but the Bill attempts to rob Peter to pay Peter.

"The Way Ahead" was part of the Government's much trumpeted process of targeting. The Government are brilliant at targeting income tax handouts on the best off, but the improvements in benefits for disabled people will be financed from existing benefits. That must be understood. Projecting forward is the only sensible way of gauging their benefits. These are wedge-shaped cuts. The point of the wedge is felt immediately and, although it may be thin and slight, it expands over the years and an enormous amount of money is involved.

If we are to make a sensible judgment, we must consider the other changes that the Government have made, often to little known benefits of which people are unaware. A Bill of this kind is heralded with much publicity and adjectival assault from the Government, but what effect have their other little cuts had? The disability working allowance is expected to be self-financing. The total cost of the allowance will be covered by the loss of other benefits paid to disabled people. From the Government's point of view, it is even better than that because the Government will profit from the additional £10 million income tax that recipients are expected to pay.

The disability living allowance will involve an estimated additional cost of £120 million in 1992–93—not a huge sum of public expenditure—rising to £240 million by 1993–94. After the first few years, that additional cost will be more than outweighed by the savings resulting from the other proposals in "The Way Ahead".

The biggest cut, which was made in the Social Security Act 1990, is the abolition of the earnings-related element of invalidity benefit. That is a bit of a mouthful and is little understood, but it is a vital lifeline to many disabled people. The earnings-related element was introduced by the Labour Government's Social Security Pensions Act 1975, which had all-party support but was savagely cut by the Social Security Act 1986, the effects of which were expected to save about £400 million per year by 2013 and £1 billion by 2003—far more than the amount needed to cover the entire cost of this Bill. According to Government figures in parliamentary answers, the abolition of what remained of the earnings-related invalidity benefit is expected to save a further £1·3 billion net by 2025–26.

The second major cut made by the Social Security Act 1990 as part of "The Way Ahead" package was the abolition of reduced earnings allowance for the victims of industrial injuries and diseases. Again, this was the culmination of a series of salami cuts in that benefit over the years. The abolition of what remained is expected to cut a further £130 million by 2001–02.

Much play was made of the changes in the disregard to help disabled people back to work. The Bill may have that effect, but another Bill which is to be brought before us next week cuts statutory sick pay and shifts the burden to employers. That must be a disincentive for employers to employ disabled people and will have a further balancing effect on any benefit from the changes in disregard.

The Government are entitled to argue, as I am sure that they will, that the money has to come from somewhere, but there are far better ways of obtaining it. The lady who was Prime Minister at 3.30 pm—so far as I know, she is still Prime Minister; I would not want my remark to cause alarm among Conservative Members—explained how the Government would make changes in terms of the waste of money on armaments in past 40 years. Despite the Gulf crisis and other dangers in the world, the peace dividend will result in major savings. Surely, therefore, the worst possible way to raise money to improve conditions for people with disabilities is the way that has been used by the Government, whereby benefits to which those people were already entitled have been taken away. That is like providing a starving child with a meal by taking away his shirt, or mending the walls of a house by taking stones from its foundations. The disability groups and the bodies which represent them will judge the Bill and the Government's record as unhelpful and ungenerous.

The Government's case in promoting the Bill, even before it appeared, has been an inverted pyramid of ministerial claims that rest on but a pinhead of fact. The pyramid was tottering to destruction long before today, as Ministers' claims for their proposals were scrutinised and rejected by all the major organisations of and for disabled people. In the words of the briefing for this debate from the House of Commons Library, their reaction is one of "extreme anger and disappointment".

The Secretary of State in his speech talked about the "cliff edge". In doing so, he reminded me that Peter Large of the Disablement Income Group—than whom no one in the voluntary sector is more widely respected in this House—described "The Way Ahead", the policy paper on which the Bill is founded, as

"nothing but a narrowing stony ledge".

As for the Government's claims about bringing some coherence into cash provision for disabled people, he comments,

"the future promises to be a worrying mess";

and he concludes that ministerial

" … talk about a more coherent system is a sign of delirium."

My hon. Friend the Member for Oldham, West (Mr. Meacher), in opening the debate from this side of the House, comprehensively demolished the Secretary of State's case for regarding the Bill, in any meaningful sense, as a bright new way ahead for Britain's 6·5 million people with disabilities. What they and their organisations seek, and the Bill fails to provide, is urgent relief from the hugely increased gap in living standards that divides people with disabilities from those of most other people in Britain today. Average male earnings have increased by 20 per cent. while the present Government have been in power, yet the basic level of benefits for disabled people has risen by less than 1 per cent. Ministers can juggle the figures as much as they like, but that is the unvarnished truth about the priorities of this Government as they affect people with disabilities and others more fortunate.

Let us consider the pinhead of fact in the Government's inverted pyramid. It is incontrovertibly true that, taken together, the Government's proposals as set out in the policy paper which they published in January will, as they claim, increase expenditure in the short term, but even this claim is subject to major qualification. The qualification is not mine or that of the organisations of and for disabled people, but one made by Ministers themselves in reply to parliamentary questions since "The Way Ahead"—heralded as a policy to take us into the next century—was published in January. What their replies to my questions and those of other right hon. and hon. Members show is that, in 10 years, the net increase in spending will be only £6 million. I leave it to any senior wranglers in the House to decide what percentage contribution that will make to narrowing the huge gap in living standards between disabled people and those in our society whose needs are much less compelling.

Yet the claims made for the Government's proposals are still uncritically accepted even by news editors of high standing. After all the dust thrown in their eyes by Whitehall's news managers, how many news editors are aware of the Government's own admission that virtually all "extra" spending on social security benefits for disabled people has been the result of more people becoming entitled to benefits, not least the attendance and mobility allowances, that were introduced before they came to power? Again, how many recipients of the "facts" churned out by the Government's news managers are aware that there were 1 million disabled losers from the so-called "reform" of social security that took effect in April 1988?

Many thousands, even of the most severely disabled people, have had no increase in their incomes since that date, notwithstanding the effect of inflation over the past two and a half years. They are people who were receiving help for their additional requirements under the supplementary benefit scheme which terminated with the change to income support. The help that they have lost was for extra heating, the high laundry costs that increasing incontinence can cause, special diets and paid assistance to enable them to go on living in their own homes. I have drawn repeated attention in the past two years to the idiotic myopia in Richmond house where the Department of Health provides expensive drugs for people with AIDS, while the Department of Social Security cruelly undermines them by failing to give them enough money to afford recommended diets.

The living standards of people with disabilities have also been further reduced by the poll tax. A recent survey carried out by the Royal Association for Disability and Rehabilitation showed that nearly a quarter of the disabled respondents were over £400 a year worse off, while over half were over £300 a year worse off. Many of them are using the attendance and mobility allowances to meet the poll tax.

We have had some very well-informed speeches about the Government's record and proposals in this debate, notably from my hon. Friends the Members for Mid-Staffordshire (Mrs. Heal), for Pontefract and Castleford (Mr. Lofthouse), for Barnsley, West and Penistone (Mr. McKay) and for Newport, West (Mr. Flynn). We had important speeches as well from the hon. Members for Eastleigh (Sir D. Price), for Caernarfon (Mr. Wigley) and for Exeter (Mr. Hannam). Sadly, my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) has not been able to intervene in this debate, but he will soon be back—I hope tomorrow—ready as always to argue the claims of disabled people.

What emerges from the debate is that to bundle together the attendance and mobility allowances, in spite of the alterations that the Government propose, and to call the combination a new benefit is to mix truth with propaganda. The Government want to give the impression that they have now tackled the extra costs of disability. Their so-called disability living allowance does no such thing. It is an extension of existing allowances and the new components, set at £10 in each case, have been dismissed as "derisory" by the organisations that speak for disabled people. Even whatever meagre help with their attendance and mobility needs can be bought with £10 will be denied to the vast majority of disabled people by the age bar.

The Government argue that more pensioners are benefiting through occupational pension schemes and have higher incomes with which to meet their needs. The Social Services Committee, of which the hon. Member for Eastleigh is a distinguished member, looked at the evidence and in paragraph 29 of House of Commons Paper 646 concluded:

"The Government should not assume that disabled people over pension age have necessarily enjoyed the same income rises as other pensioners."

Indeed, common sense tells us that it is younger pensioners who have the higher incomes and older pensioners who are most disabled. Just because some people have better incomes does not remove the Government's responsibility to direct help at those most in need.

If the disability living allowance lived up to its name, all would be well. It would recognise the other costs of disability, including special diets, extra heating, the need to employ domestic assistance and help with communication, of which disability organisations are constantly providing evidence but which the Government continually fail to recognise. The OPCS reports themselves reveal that, although only 18 per cent. of adults reported extra expenditure on food—OPCS 2, table 4.7—this was, at £6·20 per week, by far the single most expensive item; and expenditure was almost identical in all severity categories—OPCS 2, table 4.9. Equally, the small number of children with digestive disorders cost their parents four times as much as others—OPCS 5, table 4.16. What does the Bill do for them?

Nor does the so-called disability living allowance help disabled people with exceptionally high costs. The experience of the independent living fund has shown that there are several thousand people who need a lot of money to live independently in the community. Average payments made by the fund are £64 a week, but some payments exceed £400. The type of help now provided on a discretionary basis by the ILF should be a statutory right of disabled people.

One aspect of the allowance causes me particular concern. The House will know that I was instrumental in setting up the Motability scheme. The Bill states that, where a claimant is awarded both a mobility and an attendance component, they should be awarded for the same period. If this means that someone who would normally be awarded mobility allowance for three years or more would have the length of allowance reduced, they would no longer be able to use the Motability scheme. Will the Minister be commenting on the concern that this is causing among disabled people?

Even the most charitable person must describe the DLA as seriously flawed. It is difficult to find anything as complimentary to say about its siamese twin, the disability working allowance. This DWA bears no relation to the partial incapacity benefit for which disability organisations have campaigned for over 20 years. It bears no relation either to any of the schemes that have been operated successfully by several of our European partners—if the Prime Minister will allow the phrase—for many years now. The DWA is little more than family credit without the families and incorporates all the poverty and unemployment traps of that misbegotten benefit.

As the Government readily concede, the DWA is, in their colourful language, "cost-neutral". That means, of course, that it will involve no extra spending by the Government. In practice, there will be no help, and thus no incentive to leave invalidity benefits for people with capital of over £8,000—even if it comes from a compensation award—or for those whose partners are working. DWA would begin to qualify for the name of a partial incapacity benefit only if the sole income taken into account were that from the claimant's own earnings. The list of access benefits is also likely to exclude entirely many deaf or partially sighted people. Again, the need to work 16 hours will exclude many people who, as my hon. Friend the Member for Mid-Staffordshire said, wish to build up their hours slowly, for example, after a serious accident.

Even people who do qualify will receive precious little incentive. RADAR has provided examples of how people currently claiming invalidity benefit would gain from the allowance. A single person who takes a job with net earnings of £50 a week will gain a little under £16, after taking loss in community charge benefit and housing benefit into account. A married person with earnings of £100 will gain under £20 a week. Once the costs of getting to work and other expenses are taken into account, there will be little left to provide disabled people with any improvements in their lifestyles. Moreover, both RADAR and Nicole Davoud, who, as the Minister knows, has worked long and hard over many years for a partial incapacity benefit, have pointed out that the absurdly steep taper will cause marginal tax rates of over 94 per cent. after loss of housing and community charge benefit. How can the Minister possibly defend that kind of mockery in the treatment of disabled people?

It is not in the Bill, but I understand that the additional partial incapacity test proposed by the Treasury for renewal claims refers not to earnings loss due to disability but to difficulty in finding a job. This is an incredible commentary on the abject failure of the Government's employment policies. Research and the experience of countless thousands of people with disabilities have shown that difficulty in finding work is predominantly caused by discrimination. If we cannot have a partial incapacity benefit, would it not, as the Disability Alliance has suggested, be more effective to introduce antidiscrimination legislation plus an extended linking rule for everyone?

The Prime Minister no doubt considers this to be an even more dangerous socialist policy than those espoused by the right hon. Member for Henley (Mr. Heseltine). Yet she has been hob-nobbing for the past few days with George Bush, that other notorious leftist, who signed into law this summer the Americans with Disabilities Act. That very important Act extends the hugely successful anti-discrimination legislation that the hotbed of socialism that is the United States has operated successfully over 15 years.

I recall the time, 15 years ago, when the Labour Government introduced their legislation for mobility allowance, invalid care allowance and non-contributory invalidity pension. Of course, we were criticised for not going far enough, but we were setting the framework on which we would build. One of my most earnest hopes was to smash the contributory principle and end the wholly unjust exclusion from benefits, as of right, of those unable to pay insurance contributions. It was an important breakthrough even to start down that road, just as we led the world on access to the built environment for disabled people.

Today, we lag behind other countries. Where might we have been now if, in the past 11 years, there had been a Government who, instead of reallocating resources from the poor to the very rich, had fulfilled their responsibilities to those most in need? Fortunately, the chances of this Government now enduring to write the regulations under the Bill are not good. In truth, as they know, their extensive research and consultation since January have resulted only in a change of names for longstanding benefits, to the bitter disappointment of everyone in the voluntary sector who knows the facts.

We have all, on both sides of the House, as the Minister must know, been flooded with angry representations about the Bill. So I give notice this evening that we shall do everything we can, from this side of the House, to improve the Bill in Committee. By common consent outside the Government, there is much to improve.

In his resignation speech last week, the former deputy Prime Minister, the right hon. and learned Member for Surrey, East (Sir G. Howe), said that, in the mouth of the present Prime Minister, words have lost their meaning. This Bill does not provide for a disability living allowance properly so-called. In the words of the Disability Alliance,

"the Disability Living Allowance is clearly nothing of the kind. Why its name was changed from the original Disability Allowance is quite inexplicable. Both names are completely misleading. The new name of Disability Living Allowance if anything compounds the confusion."

Nor does the Bill provide, in any real sense, for a disability working allowance worthy of the name. We shall do our level best in Committee to improve the Bill in the direction which Britain's 6·5 million disabled people overwhelmingly now want this House urgently to proceed.

My hon. Friend the Member for Eastleigh (Sir D. Price) ended his speech with Clough's well-known words and drew attention to the improvements that have been possible in the quality of life of disabled people over recent years. Having borne my present responsibilities for three and a half years, I believe passionately that the 1990s are likely to see more substantial advances in the quality of life and opportunities for disabled people in several different areas.

Demographic pressures will compel employers to look beyond the disabilities that confront them to the abilities of so many disabled people. Improved access to homes, offices, workshops and leisure facilities will also improve dramatically. We shall also have improved and more coherent delivery of services for the disabled and technology will enable many more of them to live independently and earn their own livings.

The Government are determined to press on with all that and to encourage it to the greatest possible extent so that we can achieve that improvement in the next 10 years. There is also a role to be played in an improved, more generous and more coherent structure of benefits for disabled people. Contrary to the moaning minnies on the Opposition Benches, I believe that the Bill is an important step in that direction.

I recognise that the hon. Member for Oldham, West (Mr. Meacher) has a duty to oppose our legislation because that is the role of the Opposition under our constitution, but he was far less generous than I expected when he considered the Bill's provisions. His criticism of us for marketing the two new measures was blatantly absurd. He takes great pleasure in saying that most of the increase in expenditure on disabled people under this Government has come about as a result of increased take-up. We market the benefits and make people aware of them because we want people to take them up. We have also made many of those benefits more generous and flexible while we have been in office. I fully recognise that we need to market the new benefits effectively so that people take them up and benefit from them.

The hon. Member for Oldham, West also said that the disabled living allowance was not simple or easy to understand. However, he apparently plans to return to a system with the complexities of additional requirements or to a points-based comprehensive disability allowance which would be immensely complex to operate and enormously dependent on medical assessments, which we are seeking to move away from. That would not begin to meet the needs of disabled people. I shall refer later to the improvements in assessment and adjudication that we have in mind, but the hon. Member for Oldham, West has it the wrong way round.

What is the philosophical approach of the hon. Member for Oldham, West to the disability working allowance? Does he want to encourage disabled people who can and wish to work to do so? We aim to do that, but the hon. Gentleman seemed to imply that we were trying to force people off invalidity benefit on to DWA. That is not true. We want disabled people to have the opportunity to achieve the dignity, independence and self-respect which comes from being able to earn one's own living.

The change in the linking rule is as important as the introduction of the allowance. I can take the hon. Member for Mid-Staffordshire (Mrs. Heal) with me when I say that if someone gets a job and then finds that he cannot hold it down or the employer feels that that person is not up to it, the person can retain the underlying entitlement to invalidity benefit or to severe disablement allowance. That will be an important encouragement.

The hon. Member for Oldham, West also criticised our general approach to disability and, I suppose, our generosity. I have referred to the figures before and I do not apologise for repeating them now. The last Labour Government managed, commendably, to increase expenditure for the long-term sick and disabled by £220 million per year during their period in office. We have improved that expenditure by £370 million per year during our period in office. That demonstrates our commitment to meeting the needs of the disabled.

The hon. Member for Oldham, West also used a slightly complicated phrase about unbundling which I think that I eventually grasped. The hon. Gentleman was correct to say that beneficiaries will need to know what they are receiving. The new arrangements, which bring together procedures for the care and mobility components in the new benefit, will bring to the beneficiary a single award notice which will make it clear exactly what the person is obtaining when the award is made. There is no great problem about that.

The hon. Gentleman was concerned that blind and partially sighted people would not get the new allowance. Many blind and partially sighted people will be getting invalidity benefit or severe disablement allowance before they start work, and registered blind people can receive the disability premium in income support, housing benefit or community charge benefit. Both those groups would satisfy the qualifying benefit test for the disability working allowance.

My hon. Friend the Member for Eastleigh referred to the momentum of progress, reinforcing Clough's words. I compliment the Select Committee on Social Services and my hon. Friend the Member for Eastleigh on the work that they have done in relation to disability. We consider their advice most carefully. My hon. Friend the Member for Eastleigh mentioned his aim and that of the Select Committee to bring the severe disablement allowance up to the level of invalidity benefit. Legislation would not be necessary to achieve that. I have no objection in principle to that, but it is a matter of resources and priorities and I cannot see an early prospect of achieving it. Nevertheless, I have noted carefully what my hon. Friend said.

My hon. Friend the Member for Eastleigh also asked us to extend the scope of invalid care allowance. I am sure that the whole question of carers will have to be addressed more carefully in future than in the past. The growing awareness of disability and care for the elderly and the role that carers play in our society is recognised in our introduction of the carer's premium in income support, through our improving disregards for carers and extending the premium for eight weeks after bereavement. Those may be small steps, but they are steps in the right direction to a wider recognition of the role that carers play.

In his response to the fifth report of the Select Committee on Social Services, will my right hon. Friend bundle his views about the Government's intentions in a Green Paper? As members of the Select Committee on Social Services technically no longer exist, I am sure that our ghosts would lie happy if we felt that a full response was to come in the form of a Green Paper outlining the Government's future intentions

I will ponder that suggestion and discuss it with my right hon. Friend the Secretary of State.

My hon. Friend the Member for Eastleigh also tried to persuade us to link the assessment for disability benefits to the assessment for community care. The new system will make use of any existing evidence about a disabled person's condition. We want to make the process more coherent and interrelated.

The hon. Members for Mid-Staffordshire, for Oldham, West and for Roxburgh and Berwickshire (Mr. Kirkwood) and my hon. Friend the Member for Exeter (Mr. Hannam) referred to a comprehensive disability benefit of one kind or another. Obviously cost is involved. One of the schemes put forward before we published "The Way Ahead" could not have been introduced for less than £3 billion per year. I must reinforce the point that I made to the hon. Member for Oldham, West. Such a benefit would inevitably be complex and it would inevitably depend heavily on medical manpower. In moving to a new system, there would be many losers. There would have to be a considerable period of transitional protection. The hon. Member for Oldham, West is aware of the complexities

Why should there be substantially more losers?

As we discovered when we introduced the new social security benefits, if the pattern is changed there will inevitably be many gainers, but if the cost is to be controlled at the point of change there will inevitably be losers. Our study showed that there would be a substantial number of losers and we would want to avoid that. I warn Opposition Members that if they are thinking of going down that route, if ever they have the opportunity, they should bear that point carefully in mind.

I was asked why we settled on 16 hours. We did so not least because we were persuaded in that direction by the many disability organisations which commented on our proposals in "The Way Ahead". I promise the hon. Member for Mid-Staffordshire that I understand her point about those unable to work to that extent. If they are on invalidity benefit or severe disablement allowance, they can earn up to £35 per week under the therapeutic earnings rule. Then, perhaps, by gaining experience with that opportunity, they may get beyond the 16-hour limit and be able to work to a greater extent. It is a stepped approach to encouraging people to get back into work and the therapeutic earnings provision is important.

My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) congratulated us and recognised our efforts to improve the pattern of benefits. I think that my hon. Friend was the author of the original phrase targeted at the Opposition—that it is all very well for them to promise the earth and to deliver the International Monetary Fund. He recognises that steady improvement in meeting the needs of disabled people is being achieved in a structure within which we are playing our part in the Government's overall economic strategy.

My hon. Friend mentioned the independent living fund and recognised that we have doubled provision for next year to £62 million. The arrangements for community care are planned to come into operation in April 1993. That will obviously have an impact on the caseload in terms of those helped by the independent living fund. We shall obviously have to consider what transitional arrangements to make for existing beneficiaries and perhaps a small number of new cases. In general, beyond 1993 the ILF caseload should be looking towards local authorities under the community care provisions rather than to central Government.

My hon. Friend and others mentioned the problem with Motability when mobility allowance is granted for less than three years. Well over 70 per cent. of mobility allowance awards are made for life. Clearly, there is no problem in any of their cases. If problems arise as a result of the new arrangements, I will certainly discuss them with Motability to see whether there is some practical way of overcoming them.

I was grateful for one speech from the Opposition side of the House which gave a general welcome to the proposals, but went on to raise several points which were properly recognised as being more appropriate for discussion in Committee. Several hon. Members seemed to volunteer to serve on the Committee, and I look forward to welcoming them aboard in due course.

I know of the problems that were raised by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and of his devotion to the cause of miners who suffer from the three terrible respiratory diseases associated with that industry. People under retirement age could qualify for the various benefits that are available. Over retirement age, they could qualify for the care components of the new benefits. I hope that that will be of some support for them. As I have said, I know of the hon. Gentleman's long campaign and how much it is appreciated by those who suffer from those debilitating conditions.

The hon. Member for Caernarfon (Mr. Wigley) mentioned agoraphobia. I cannot say that every person who suffers from agoraphobia would qualify for the mobility component, but that is certainly one of the groups we had in mind when we designed the extension of mobility allowance within the new benefit. I slightly disagreed with the hon. Gentleman at one point when he seemed to be suggesting that we were trying to bribe people back to work. In three and a half years of meeting and discussing with disabled people, I have found that the vast majority of them want to work. They have a driving wish to be able to earn their own living and acquire the dignity and self-respect of which I spoke earlier. The disability working allowance will be a tremendous encouragement for them to do that.

The hon. Member for Antrim, South (Mr. Forsythe) referred to awards of compensation, and in the particular circumstances of Northern Ireland, with which I am familiar, to compensation perhaps for terrorist activities. If money is given to someone in compensation for a personal injury or accident, there is a simple answer—to put the money in trust as it is then not regarded as capital for the purposes of income-related benefits

indicated assent

The hon. Member for Caernarfon nods in agreement.

I said that I wanted to make a particular point about the improvements that we plan to make in adjudication and assessment procedures. Since I have been in the Department, there has been considerable dissatisfaction with some aspects of those procedures. The new system that we intend to introduce will be more speedy and more streamlined and will provide a simple and effective service to the public. We are anxious to achieve that. There will be one claim form, one adjudication system for both components, and a significant reduction in medical examinations, thereby improving the scope for dealing with claims more speedily. A second-tier review means that dissatisfied claimants will be able to have their decisions looked at again quickly by another adjudication officer, without going straight to a tribunal with all the delays implicit in that procedure.

I believe that we shall be able to reduce the medical input by making the decisions by administrative adjudication officers—reflecting the policy intention that the important factor is not the medical condition but the effect that it has on people's care and mobility needs. We intend to place the emphasis firmly on self-assessment and on supplementary evidence from those in contact with the claimant, giving proper weight to the judgment of those in the best position to know the effect that a claimant's condition has on his or her life

Will more notice be taken of the general practitioner? Time and again, there is a difference of opinion between the general practitioner and the departmental officer, with a lot of controversy and in some cases loss of benefit, although some claims are later deemed to be correct

My right hon. Friend the Secretary of State made that point in his opening speech. In essence, the best that an examining medical practitioner can do is to take a snapshot of the person's condition on the day on which he sees that disabled person. Many conditions relapse or progress at different times. It is much better to rely on the evidence of someone continuously in touch with the disabled person who can give a much better and longer-term assessment of their condition and the effect on their way of life. That will be an improvement. It will also make the best use of scarce medical resources. When we need an examination or judgment of one sort or another, we shall be able to have higher standards. The system will be cost-effective. For the first time, too, we shall be introducing a system in which people with attendance needs will have independent rights of appeal. The balance of membership of the disability appeal tribunals again shifts the emphasis from medical conditions to considerations of care and mobility needs. All those matters will result in substantial improvements, and they have been warmly welcomed by many disability organisations.

The full package of measures in "The Way Ahead" and in the Bill will mean extra help for 850,000 disabled people, and £300 million added on in 1993–94 to the £8·3 billion already being spent on the long-term sick and disabled. We shall remove the rigid distinction in the present benefit structure between ability and inability to work and have a more comprehensive, generous and coherent system of disability benefits than ever before. I believe that we are laying down firm foundations for the future structure of our benefits system which will considerably benefit disabled people. The two allowances in the Bill are wholly beneficial and should be welcomed by the whole House. I commend the Bill to the House.

I beg to move, That the Bill be now read a Second time.

The main purpose of the Bill is, like its predecessors, to continue in force for a further five years the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957 which together form the statutory framework for discipline in the services. Unless renewed by Act of Parliament by the end of December next year, those Acts will expire.

Clause 1, therefore, is straightforward. It provides, as I have mentioned, for the service discipline Acts to continue in force for a further year and for their renewal thereafter on an annual basis by Order in Council for a maximum of four further years.

Much of the rest of the Bill, however, contains provisions designed to bring service law closer into line with changes in civil law over the past five years in so far as it is sensible and practical to do so. Consequently the Bill covers a range of subjects and in the time available tonight I shall concentrate on its main provisions.

Clauses 2 to 5 make amendments to existing provisions relating to the passing of custodial sentences on young offenders under 21 to bring service law into line with the current provisions of civil law in this area.

Under the discipline Acts a court martial and standing civilian court—which is equivalent to a magistrates court trying civilians overseas—already have sentencing powers in respect of young offenders which mirror the powers of civil criminal courts in this country. However, the grounds on which such courts may pass a sentence on a young offender of custody for life or make a custodial order which provides for the detention of the offender in an appropriate civil institution in the United Kingdom do not reflect changes to civil law made by the Criminal Justice Act 1988.

Consequently, clause 2 introduces new grounds which must be satisfied before a service court can impose a custodial sentence. Those are that the circumstances, including the gravity of the offence, are such that had the offender been over 21 he would have been sentenced to imprisonment and that the offender qualifies for a custodial sentence.

Further provisions made in the Criminal Justice Act 1988 require the court to record the grounds on which it believes that the offender qualifies for a custodial sentence, to announce them in open court and to explain to the offender in ordinary language why it is imposing a custodial sentence. We have similarly adopted those provisions for service courts.

Clauses 7, 8 and 9 are all concerned with extending the power of service courts and of commanding officers in the Navy in respect of personal injury cases. They introduce a new sentencing power which for some years has been available to civilian criminal courts in England and Wales and which reinforces the belief that it is right and proper that an offender should compensate his victim personally to the extent that he is able to do so.

Clauses 7 and 8 deal with the sentencing of service personnel and extend the power of courts martial and of commanding officers in the Navy to award stoppages from pay as compensation to cover personal injury as well as for expense, loss or damage.

The inclusion of commanding officers in the Navy in the proposals but not those in the other two services is due to their greater summary powers. Select Committees dealing with successive armed forces Bills have recognised the operational requirement for commanding officers in the Navy to have quite extensive powers of summary jurisdiction.

Clause 9 makes similar provision for civilians sentenced by court martial or standing civilian court. There is no power to award stoppages, but there is already a power to make compensation orders and again this is being extended to cover personal injury.

For that new power, the Bill makes provision for the amount of compensation that may be awarded to be limited, initially at £2,000. The powers of the standing civilian courts will always be limited to that which magistrates courts in this country could award.

A further provision which derives from the Criminal Justices Act 1988 is made in clause 10. That provides for the first time for a statutory right to compensation for miscarriages of justice before courts martial. The grounds and conditions on which such compensation will be paid are the same as the civil law provisions.

It is clearly proper that such a statutory right should exist in service as well as civil law and that we provide for the appointment of assessors of such compensation in the same way. I add that, like the Home Office, we will be retaining our existing ex gratia arrangements for the payment of compensation for miscarriages of justice which fall outside the scope of the statutory scheme. Overall we do not anticipate any increase in public expenditure, but because the clause introduces a separately defined charge on public funds, I will be asking the House separately to approve an appropriate money resolution.

I return to the subject of civilians. In particular, I shall concentrate on the significant changes that we are making in service law affecting children and young people under the age of 17. It often comes as a surprise to people to learn that civilians can be subject to service law. That is not new—arrangements have existed since 1748. Under current law, many of the provisions in the current service discipline Acts are applied to certain civilians.

The number of civilians accompanying the forces abroad, either as dependants or in a professional capacity, is considerable. There are more than 30,000 in Germany alone, although, of course, that number will be reducing. Given that number, it is inevitable that some breaches of the law occur. Nevertheless, it has long been the view that civilians should, as far as possible, be subject to the laws and punishments provided for at home and that they should not be disadvantaged by virtue of their connection with the armed forces. This is the basis for clause 6, which abolishes the power of courts martial and standing civilian courts to make a reception order. Those orders are the service law equivalent overseas of a care order as a criminal disposal and place the offender in local authority care in the United Kingdom. As hon. Members will know, such orders are being abolished by the Children Act 1989 and we therefore see no justification in allowing service courts to continue making them.

It is, however, part III of the Bill which introduces the most significant changes in the current provisions in service law in respect of children. Clauses 17 to 23 deal with the children of service families at risk overseas. Those provisions are a response to the changes in the civil law enacted in the Children Act.

The detail of the provisions is perhaps best discussed in the Select Committee to which I shall propose that the Bill is committed, although I can assure the House that we have at all times been concerned to ensure that the welfare of the child is paramount.

I shall now take a little time to explain some of the thinking behind the proposals to introduce orders providing for the assessment and protection of children at risk. Those are closely based on child assessment orders and emergency protection orders under the 1989 Act. I would like in particular to acknowledge the considerable assistance we have had from the Soldiers, Sailors and Airmen's Families Association in the framing of the proposals. It will, of course, continue to play a key role in dealing with these matters.

In this sensitive area, and even though the number of cases involved is, thankfully, small, it is right that such matters are dealt with under the law rather than administratively in order to protect the rights of both the children and the parents involved. Since 1981, service law has provided for the removal of children from their families overseas where they were believed to be at risk. The provisions largely mirror those of existing civil law.

We are building on these provisions by giving certain officers new powers to make orders for the assessment and protection of children. The assessment order is completely new, as it is in civil law, and provides in certain circumstances for an assessment of the child to determine whether he or she is suffering or is likely to suffer significant harm. We envisage such orders always being made with some parental involvement and provision is made for certain people to be notified in advance that an application for such an order is being heard. The protection order is designed to deal with a case which is so serious that the child must be removed from his family as an emergency measure. The grounds for making such an order are the same as will apply to a court in this country making an emergency protection order. In these and a number of other respects, the provisions that we are making mirror those in the Children Act.

We are, however, retaining certain features of existing orders relating to places of safety. The most obvious difference between our provisions and those in the Children Act 1989 is the possible maximum length of the order set out in clause 21. This will remain at 28 days as opposed to the 15 days that will be allowed for under the Children Act. The decision to retain the 28-day limit has been taken after careful consideration and consultation with interested parties.

As the House may know, under current procedures children overseas who are removed to a place of safety under service law may be returned to the United Kingdom, where the order automatically expires after 24 hours. Thereafter, the provisions of the relevant domestic law apply. We are clearly concerned that service parents should be properly involved in those processes in the United Kingdom which determine the longer-term care arrangements for the child. In exceptional cases it can take a few weeks to make all the necessary arrangements with a receiving local authority and for returning the family from overseas. I am satisfied that it is right to provide for such cases.

We expect that few orders will be made for the maximum period and do not envisage that any will be made for that length from the outset. Clause 22 makes special provision for the periodic review of protection orders and for their discharge. No period of over six days will elapse without a requirement for the order to be tested by a review, a request for an extension of the order or an application for the discharge of the order. The fundamental aim is that a protection order will remain in force for only so long as the conditions exist which must be satisfied for such an order to be made in the first place, and never beyond 28 days. I hope that the House will welcome these changes as a sensible and practical response to developments in civil law.

Finally, I should like to mention briefly two of the other clauses in the Bill. Clauses 14 and 15 are designed to bring up to date the existing provisions in the discipline Acts for making deductions from pay in respect of maintenance. Although there are longstanding provisions protecting the pay of service personnel, we have no wish that they should escape their obligations to pay maintenance for wives and children, particularly when ordered by a court. Recent changes in the civil law have changed the power of courts in the United Kingdom to make orders, and the changes that we are making simply ensure that where courts have the power to make orders there is corresponding power to make deductions from the service man's pay.

I do not propose to comment specifically on the other provisions in the Bill. Some make small changes to rationalise or update provisions in Acts relating to the armed forces, while those of a minor editorial or technical nature are set out in schedule 2. All are covered in the memorandum printed with the Bill.

I hope that the House will agree that we have used the opportunity of renewing the service discipline Acts to make some significant and useful steps to improve them. We in the House rightly pay tribute to the work of the armed services in the responsible and sometimes dangerous work that they do. We have many reasons to be indebted to them. It is our responsibility to ensure that the special codes of law to which service men and service women are subject and which are central to the maintenance of discipline and morale provide a proper framework to enable the services to continue to operate fairly, effectively and efficiently. The Bill is primarily designed to ensure that the system enshrined in the service discipline Acts best serves those purposes.

I thank the Minister for his clear exposition and explanation of the Bill. I must admit that, since the debate was scheduled, I have agonised over what many of the clauses in the Bill mean. The Minister has helped me enormously this evening, and I am sure that he will help us enormously as we progress through the deliberations of the Select Committee.

I begin by echoing the Minister's tribute to our armed forces, who work in such difficult conditions, often in danger of their lives, in this country and abroad. The Opposition join the Minister in paying tribute to service men and service women. The peculiar nature of the Bill is that it comes round every five years, so it gives an opportunity for hon. Members to address the problems of service life and discipline in general. The various clauses of the Bill contain amendments to existing Acts. Perusal of the Bill is undertaken not by a Standing Committee but by an ad hoc Select Committee. The Select Committee can consider all aspects of service life and discipline, not only the specific matters dealt with in the Bill. Those specific matters will be dealt with in greater or less detail by my hon. Friend the Member for Motherwell, North (Dr. Reid) later in the debate if he catches your eye, Madam Deputy Speaker, and in the Select Committee.

Whatever we might do or say specifically or generally, we must always remember that our service people are first of all citizens and that our armed forces do not exist in a vacuum. They must be seen in the context of society at large. We should accept the need to parallel, wherever practicable and possible, military and civilian law. When a person joins the armed forces, his civilian status is modified by the superimposition of military status, with certain rights and freedoms restricted to preserve military discipline and readiness.

When the previous Bill was considered five years ago, it was clear from the proceedings of the Committee and discussions during the remaining stages of the Bill that there were several difficulties and disagreements about the work of the Committee. Some hon. Members were deeply unhappy about the procedure followed. May I give the Minister an assurance that the Opposition do not want a repetition of that? We hope to be able to work closely with the Government in examining the Bill.

However, we have some points to make on issues which were raised five years ago and are still matters for concern. My earlier remarks that the services do not operate in a vacuum and about the need, wherever possible and practicable, to bring military law into line with civilian law are pertinent. The matters that we may well want to consider in the Select Committee are the operation of emergency powers, the establishment of service personnel organisations, the composition of courts martial, drug and alcohol abuse in the services, homosexuality, the death penalty, racial discrimination, the rights of ethnic minorities and the problems of bullying in the armed forces.

I shall not rehearse the arguments about the composition of courts martial; I hope that we can finish fairly quickly. However, I wish to give the reasons why we want to discuss the composition of courts martial in the Select Committee. At the last review of the armed forces, there were strong calls for senior non-commissioned officers to be included in courts martial. That was rejected by the Government on various grounds. They used as their argument the Lewis committee report published in 1946, which, on the basis of statistics gathered at that time, said that officers who had risen through the ranks could fairly represent the other ranks.

But, of course, as a result of the war, the composition of the forces was different in 1946. According to the statistics of the Ministry of Defence, it is certainly no longer the case that many officers have risen through the ranks. In 1986, only 22 per cent. of officers had risen from the ranks. Those of us who have served in the armed forces know that only in specialised areas and specialised trades do officers rise from the ranks. Therefore, there is every reason to suppose that officers are now far more remote from the other ranks than when the Lewis committee reported.

Another argument advanced for not allowing NCOs on to courts martial was that officers had greater experience and knowledge than other ranks. Again, those of us who have served in the armed forces realise that that is not the case. I do not think that many senior warrant officers in the Army would give way on experience to any other rank. Without our NCOs, our armed services would be in great difficulties. I shall not labour the point now, but we should like to examine the matter in Committee.

The second issue is the establishment of service personnel organisations. I emphasise that we are not talking about trade unions in the armed forces, because we realise that trade unions could not play an active part in such a disciplined area. Some service men are members of trade unions, and those in trade sectors are actively encouraged to join unions, especially prior to departure from the armed forces, in order to help bridge the gap between service life and civilian life.

It is obvious to all hon. Members that many service people are disgruntled about not being able to express themselves. I am sure that we have all received letters from service men who ask us to keep their names confidential for fear of reaction from their superior officers. Obviously, that means that there is something wrong in the armed forces. I can see no reason for any Government opposing the development of some form of personnel organisation.

I have said that I recognise the difficulty of trade unions operating in the forces, but we need some organisation for consultation. I do not suggest that out of political dogma, but in a profound belief that such organisations could help to prevent the considerable haemorrhage from the forces of skilled men and women, who have been trained at great expense to a high standard of competence.

For example, in 1982, the premature outflow of personnel from the armed forces was 16,000 a year. The present rate is 27,000 a year, which means that the figure has almost doubled over the last seven years. There are obvious problems. They are not caused simply because people cannot express themselves freely, but perhaps personnel organisations could stem that outflow.

Homosexuality in the armed forces was dealt with by the Select Committee five years ago. Unhappily, it led to some acrimony and differences in Committee. I am sure that the difference between the treatment of homosexuals in civilian life and those in a military context will again be brought up in Committee. Perhaps the Government could attempt to harmonise civilian and military law on homosexuality. In Committee, we shall also want to discuss suspended sentences, because the power to impose such sentences does not seem to have been extended to Army or Air Force courts martial or to standing civilian courts, although I understand that clause 12 of the Bill proposes to give Navy courts martial the power to impose suspended sentences. Perhaps the Minister will tell us why that is so.

Drug and alcohol abuse was also discussed in the Select Committee five years ago. The Committee did not come to any substantial conclusion, and there is now an increasing need to look at this matter again. All those issues affect morale.

I represent a Welsh constituency and served in a Welsh regiment, and I have been greatly lobbied by people in regular and volunteer services in Wales about the possible elimination of the Welsh district. I know that that is not a matter dealt with in the Bill, but it relates to morale, so we are concerned about it. The Minister will know about the tribal and national loyalties that are used in recruitment to our regiments. We shall want to discuss that in Committee. Perhaps the Minister could have a word with the Secretary of State about the reorganisation of Army districts.

Other problems brought to our attention recently relate to families in Germany who have to relocate to Britain. They encounter problems about education and housing, and young married women face severe problems with their families in Germany and in Britain when their husbands are abroad in the Gulf and they find difficulty in coping.

We are disappointed that the Government are not responding immediately to the important issues raised in the recent Stephen Anderson case, especially in view of the release last January of the Peat, Marwick, McLintock study of racial discrimination and ethnic minorities in the armed forces. The study was commissioned because of universal concern about racial discrimination in the Army, especially in the elite guards regiments. We accept that the Government are not standing still on the issue, and I praise them for what they have already done. However, they are not proceeding quickly on the matter and substantial shortcomings are evident in the Government's ethnic monitoring. Those shortcomings were outlined in the 1987–88 report of the Select Committee on Defence.

The case of Stephen Anderson demonstrates that the carrying out of surveys and studies at the point of recruitment does little to outline or monitor discrimination and abuse at later stages of a service man's career. Lord Justice Taylor and Mr. Justice Morland were quite right to ask the Army Board to look again at this matter in a freshly constituted board, so that fairness and justice can be achieved. Just as important as achieving justice in this case, the judges said that the Army internal procedures were "seriously defective".

We shall look to the Government in Committee to suggest amendments to the Bill and to those procedures so that the serious defects in procedures can be rectified as soon as possible. In seeking that, we are not trying to make a political point but are trying to ensure that racial abuse, bullying and discrimination are exposed and rooted out to the ultimate benefit of all, not just the victims but the poor, twisted, pathetic perpetrators of these crimes.

The Calcutt report was published just after the Select Committee on Defence last reported to the House. I remind the House that the committee inquired into the activities of the service police in Cyprus, which led to service men being brought before a court. It was established that the activities, standards and code of practice of the police needed to be revised. The Calcutt recommendations were concerned with practice rather than the law. The Opposition were pleased to see the issue of a code of practice. Again we congratulate the Government on implementing that in the Police and Criminal Evidence Act 1984.

Calcutt made only one recommendation that might be embodied in legislation—in paragraph 6.6, about the potential conflict between the need to learn the nature and significance of a breach of security and the need to bring the offender to justice. Perhaps in Committee the Government can suggest some possibilities in that area.

My last general point is about the problems of the largest regiment in the British Army which, oddly enough, operates in a limited area of Britain. That regiment is, of course, the Ulster Defence Regiment. The last time the Committee considered this matter there was some aggravation about it. We want to return to it, because the main problem is the controversy surrounding the UDR about allegations of collusion with loyalist paramilitaries and the harassment of nationalist civilians. The Stevens inquiry, set up to investigate those allegations, reported in May, but, in the event, it concentrated more on ways in which to prevent future problems rather than assessing the scale of the existing problem.

The Stevens inquiry made a number of recommendations concerning the Army and the UDR. The key recommendations relate to better screening of recruits and members and the investigation of complaints against members of the Army. Given the tense and difficult situation that pertains in Northern Ireland, agents of the Crown must act fairly and properly. We are extremely concerned about the criminality differential between the civilian population and members of the UDR. It is significant that the level of criminality among members of the UDR is twice that of the general civilian population.

Obviously, the UDR operates under great strain and it is composed mainly of part-timers. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has suggested that the regiment should consist of full-time members as soon as possible to effect better training and discipline.

The events of the past year and the past few days have created a new backdrop for any deliberations on defence. Those political changes will have a profound impact upon the future shape of our armed forces and our service men. Morale in the Army, Navy and Air Force as they numerically decline is a vital factor. That is why we must take this opportunity to ensure that the laws governing service life and discipline are framed for the 21st century, rather than bogged down in the 19th.

I welcome clause 2, which relates to sentences for young offenders, and clause 14, which deals with maintenance payments. I also welcome the general effect of the Bill, which means that the discipline Acts relating to the Army, Air Force and Navy are brought closer into line with each other and civilian law.

The present three armed forces Acts do not cover the grey area relating to injuries to people when they may or may not be on duty. Often, it is only after the event that it occurs to an individual that he was off duty and therefore not entitled to the various types of compensation available when he is on duty. There should be a tighter definition of the terms of duty, so that all our service men know what to expect in certain circumstances. Problems often occur, for example, as a result of sports injuries.

Although problems relating to insurance are not directly related to the Bill, they have a bearing on it. Most types of insurance for people in the services are slightly more expensive than for their civilian counterparts. Those who fly, for example, carry a loading on their insurance. In the past few weeks, a number of people who have been sent to the Gulf have had great difficulty in discovering whether their insurance policies provide adequate cover.

Insurance business is changing all the time, and we should ensure that service men have a better idea about whether their policies are adequate when posted to a particular area. They should receive more advice before such postings, so that they do not take out various types of insurance that turn out to be absolutely hopeless.

I agree with what the hon. Member for Rhondda (Mr. Rogers) said about drugs. We are lucky, because we do not have anything like the problem suffered on the other side of the Atlantic. We should not be complacent, however, because many of our young service men will mix with young people who are likely to take drugs. We must ensure that our young service men receive the best education on drugs so that they know the risks they run from them and are aware of the extra problems that drugs pose for them as service men.

In civilian life, it may be possible to take certain drugs that do not have an immediate effect upon one's job, but that is not so in the services. If someone services a high-performance aircraft while they are not in a tip-top condition, the results can be catastrophic for the hardware and the pilot. It is important that young service men are aware of the risks they run if they indulge in drugs.

I agree with the hon. Member for Rhonnda that, in times of change, it is important to pay attention to morale. There is a great deal of uncertainty in the armed forces now—units may be amalgamated and loyalties must change. Most service men are only too ready to make such changes, and many understand that change is part of their everyday life. They must, however, be kept informed about what is happening. Nothing annoys service men more than to be kept in the dark, only to find out indirectly what is to happen in the next weeks or months.

Separation can also have an effect on morale, especially when we consider the lengths of tour of service men in the Gulf or in the Falklands. People in different arms of the same service or in different services serving alongside one another may find that they have completely different conditions of service. When my right hon. Friend the Secretary of State for Defence recently toured the Gulf, an announcement was made about changes in the tour lengths decided upon by the Air Force and the Army. When people in different services work with each other it is important to ensure that tour lengths do not lower morale.

Another cause of poor morale is allowances—given their complicated nature, we must ensure that, when people move from area to area, they do not suffer as a result. A service man cannot refuse to go to a particular part of the world, but he may not realise that that posting has a significant change on his allowances and pay, albeit for a short time. It is important to explain any changes beforehand. If such explanations had been made before the deployment of our armed forces to the Gulf, we would not have faced the problems that arose—which, although not great, may affect morale.

It is a pleasure to welcome the Bill.

You will have noticed, Madam Deputy Speaker, that the atmosphere in the Chamber this evening is rather calmer than it is elsewhere in the building. That is perhaps a significant reminder to us that, whatever political battles may take place outside, the business of the House still requires to be transacted, and perhaps no business of the House is more significant or important than the Armed Forces Bill. We discuss the Bill on the eve of a debate about confidence in Her Majesty's Government. Some of us may feel that that makes our proceedings like the porter's scene in "Macbeth", but without the textual or dramatic significance.

We should not, however, take these proceedings as a matter of course. What is happening this evening is deeply rooted in the constitutional history of the United Kingdom, involving as it does the supremacy of Parliament and the suppression of what was once the Royal Prerogative. The fact that an Armed Forces Act is required every five years to prevent the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957 from lapsing is no mere administrative inconvenience; it reflects the fact that control of our armed forces and their disciplines is part of the exclusive responsibility of this honourable House.

Thus, every five years, we are given an important opportunity to review military law. I hope that the House will conclude that this is not a matter to be lightly cast aside. In the past it has been suggested that the statute should have permanent effect, but I am reluctant to allow that to happen as the opportunity that we are given every five years allows continual scrutiny of the facts and circumstances of service life.

Although the Bill deals with discipline, the invoking of its provisions—or those of the three service discipline Acts—is invariably due to a breakdown in discipline. The success of any armed service, or any unit within it, depends on self-discipline, not on statutory provisions. Reference has already been made to the special loyalty that attaches to some regiments in connection with their association with certain parts of the country. Coming from Scotland, I readily appreciate that, and there is no doubt that such geographical associations frequently make a substantial contribution to loyalty and morale. I hope that, in the changing circumstances that we all perceive, any proposals that are made will be sensitive to those associations, on the understanding that to remove them insensitively could well affect the loyalty and, indeed, the efficiency of those serving in the armed forces.

Of course, a special case cannot be made for every regiment or every regiment ever formed would have continued to exist. I hope, however, that in view of the difficult and changing circumstances that will necessarily follow the adoption of "Options for Change" or any similar proposal the Government will show the necessary sensitivity.

As has already been said, the Bill gives us an opportunity to consider more than just the proposals that it contains. My approach, which springs as much from my interest in legal affairs as from my interest in defence, is that the distinction between civilian and military justice can be justified only if it is made necessary by the special circumstances of military service as opposed to civilian life. Two examples have already been mentioned—the continued existence of the death penalty, and the law relating to homosexuality. In both regards, there is a sharp distinction between civilian and service life.

I hope that the Select Committee will examine with great care the arguments for the retention of the death penalty in service discipline. For my part, I find it very difficult to see how that penalty can still be justified in 1990, no matter how extreme the circumstances. I am in no doubt about its application in civilian life, which I have consistently opposed. Of course, I have no direct experience of service life.

As for homosexuality, there is little doubt that the climate of opinion in civilian life is much more tolerant than that reflected in the statutory provisions relating to the services. I recognise that specific considerations and difficulties may arise from the proximity in which service men are forced to work, and the nature of the relationships that are formed. It is possible for members of one rank to take advantage—both literally and metaphorically—of members of a lower rank. None the less, I feel that we should consider this issue with great care and sensitivity.

The Bill raises some very complex legal issues. I do not think that it is appropriate to deal with all of them in detail on Second Reading. I welcome the provisions relating to children. I am also particularly interested in those concerned with compensation—especially the creation, under clause 10, of a statutory right to compensation for wrongful conviction by court martial. I hope that the Select Committee will examine both the conduct and the constitution of courts martial.

I have had two experiences of courts martial, one professional and one relating to a constituent. As a civilian lawyer, I defended a naval rating and was particularly impressed by the extent to which the service lawyers went out of their way to ensure that a civilian lawyer who might not necessarily be familiar with the procedures was properly advised and, to some extent, properly instructed. I was also impressed by the skill with which the judge advocate conducted the part of the proceedings which lay within his responsibility. I came away with a high regard for naval discipline as reflected in the conduct of that court martial.

My constituency experience involved a service man sentenced, in the first instance, to seven years' imprisonment for an offence that I need not detail. By the time he had exhausted the appeal procedures available to him, his sentence had been reduced to six months and he had to be released immediately because he had already, in effect, served a six-month sentence.

As I have said, it is important to examine the constitutional implications of courts martial. A civilian on trial before a jury on a serious criminal charge is tried by a group of people drawn by lot—at random—from the electoral register. Such a person is truly tried by his peers. It may not be appropriate to institute in service discipline a system that parallels that precisely in the form of courts martial, but we should surely ask whether it is possible to ensure that the constitution of courts martial more effectively reflects the overall constitution of the armed forces.

We must also try to achieve some consistency in sentencing. I have already mentioned the experience of one of my constituents. It cannot be right for a person to be subject in the first instance to a seven-year sentence, and then find it reduced to six months. I know of no parallel in civil criminal justice—certainly I have encountered none in my professional experience—and I feel that we should devote some consideration to the way in which the powers available to courts martial are exercised.

Those are just a few of the issues that the Bill will allow us to consider. In some respects, it confers a constitutional imperative—if it did not pass into law, service discipline would cease to have any proper statutory basis. For that reason, in the House this evening, the Bill can hardly be regarded as controversial. I am happy to support it and, if the lot falls to me, I look forward to raising some of the issues to which I have referred briefly on an occasion when they will be given deeper and wider consideration.

It is invariably a pleasure to follow the hon. and learned Member for Fife, North-East (Mr. Campbell), who speaks with not only great wisdom and insight, but superb knowledge of the law. I am happy to say that I have a knowledge only of basic aspects of the law which keeps me out of trouble. Therefore, I was surprised to hear that those who serve in the Army are subject to the death penalty. I served for five years in the Army and was unaware of that. I thought that the only threat to my life was from the enemy, not from lack of service to the law. As someone who strongly opposes the death penalty, I wish the hon. and learned Gentleman well in his crusade in Committee.

As the hon. and learned Gentleman rightly said, there is no doubt that we must remember that we are dealing with a different society in the armed services when considering homosexuality. Much as I welcome the Bill, the armed services society is different from that of civilian life and, where that difference is apparent, it must show itself in the law.

The Bill is extraordinarily welcome. It comes as a surprise to many of us that civilians can be subject to military law. We can understand that in some "combat areas"—a phrase introduced by Hollywood—that application of military law should rightly apply. However, when there are so many families abroad and civilians helping with important maintenance tasks, it seems remarkably archaic that they should not have the protection of the law that we have helped to establish and create through the proceedings of the House.

The Government are to be particularly congratulated on the special attention paid to children in part III. One of the best pieces of legislation passed by the Government in their eleven and a half majestic years of administration was the Children Act 1989. It received widespread support from both sides of the House and showed the House at its best. It is particularly important that the changes introduced in the Bill will represent children's interests. As my hon. Friend the Minister said, we must at all times hold in special consideration the welfare of children, which is paramount. We would expect children resident in this country to enjoy the care and protection of the Children Act.

We all welcome the fact that the changes in the law bring military law more into line with civilian law. I certainly welcome it. I have already exhibited my comparatively scant knowledge of the law. The Bill will help to give greater clarity; it will help the soldier, sailor and airman and those who advise them to understand what the law is about.

The Bill is significant because for the first time it makes it a statutory right for members of the armed services to receive compensation for miscarriages of justice before a court martial. That was the very point made by the hon. and learned Member for Fife, North-East. I have been involved in a court martial and have great respect for the procedures. In many respects, those who come before a court martial seem to get a fairer hearing than they would in some civilian courts. We do not want to destroy that spirit, but a court martial can make an error, so it is a wise step to give people the statutory right to receive compensation for miscarriages of justice. I welcome the initiative taken by the Government.

I welcome any overhaul of military legislation. Courts martial are important—my experience as a Member of Parliament points to that.

Several years ago, for a former constituent, I raised on the Floor of the House the matter of bullying in the British Army of the Rhine. He came to me and said that he had bruising on his back and was absent without leave. He said that his wife and mother were worried that if he went back to his regiment in West Germany in those circumstances he might face death. The bullying consisted of him and his comrades in arms being tied to the back of a lorry and being hit with a sledge hammer. As a result, he suffered serious injuries, the consequences of which he still suffers.

I raised the matter with the then Minister and received a guarantee that my constituent would not be sent back to West Germany pending a full inquiry, which was carried out. There were courts martial and this apparently outlandish story, told to me in a local hall at an advice surgery, was proved beyond peradventure. A number of people were disciplined by court martial; some were imprisoned, some expelled with dishonour from the Army and some fined. It did not bring that sort of bullying to an end because repetitions of it have been reported in the papers. I am not as familiar with them as I was with that case. The soldier who had gone absent without leave and so committed an offence was fully justified in taking the case to court martial.

As a consequence of the begrudging and unkindly attitude of the Army to what might be termed a whistle blower, an attempt was made to charge him for his uniform with which they had issued him after arrangements had already been made for him to be discharged from the Army. As I understand it, discussions continue about compensation. The Army did not bring the matter to a gracious conclusion because the soldier had exposed a sore point, a difficulty. At that time, the cold war was still being maintained and the soldier was more frightened of the British Army members involved in the bullying than of the Russians, which was not exactly a bull propaganda point for the maintenance of the nuclear deterrent.

I recognise the importance of military law, but I share the reservation that the death penalty should be removed as in civilian life. If there were a referendum on the issue I do not think there would be a majority to restore the death penalty. Arguments deployed against the death penalty are overwhelming and have been accepted by succeeding generations growing into adulthood without the death penalty. They accept it as a more just application of the law that, where mistakes are made, they can be rectified. That was not so in the infamous case of Timothy Evans, who was hanged in error. Military law should be brought into line with civilian law, and that is why I welcome the appointment of a Select Committee. It is an unusual procedure, but one that will provide an opportunity for such alterations to be made to the Bill. There should not be double standards—one for civilian life and one for military life.

I certainly support proposals in the Bill for the standardisation of the Children Act in nearly every respect within military legislation. When the Minister boasts of doing that, he should consider the validity of his assertion and examine the death penalty being retained in military law, as against civilian law.

Questions should be asked about the application of law in the armed forces. In our age the use of armed might has much wider consequences than ever before. The Minister can advise the Prime Minister to use nuclear weapons that would bring death and destruction on a scale hitherto unknown which would reduce some areas of the planet to a radioactive desert. What if someone objects to the deployment and use of nuclear weapons? What would be his position under military law and under the alterations in this Bill? What would be the position of a member of the armed forces who said that the Government were not carrying out their obligations under clause 6 of the United Nations nuclear non-proliferation treaty—a solemn and binding obligation? What if such a person refused to carry out his superior's orders to load nuclear weapons into an aircraft carrier or plane? I note that the Minister is smiling; when I first mentioned that treaty he thought that we were not signatories to it. Now he knows better because of my pressure, and I am pleased to have educated Ministers in this and other ways.

These are important matters and I want to suggest some alterations to the legislation that would help to take account of these great difficulties.

We know that it is an offence to give military secrets to the enemy, whoever he is now. Temporarily, the enemy is Iraq and Saddam Hussein, but in the longer run the Government are fast running out of targets for our nuclear weapons. What right does a service man or woman have to discuss dangers arising from cracks in the Polaris fleet, for instance? On Monday this week it was widely reported that the Ministry of Defence

"would confirm only that one Polaris boat is still at sea. 'We do not comment on the operational deployment or technical state of our submarines,' its spokesman said."

If a service man or woman is worried about cracks in the primary water-cooling circuit of the nuclear power plant of a submarine and goes to his or her superior officer, that officer can say, "Shut your mouth." The service man in question might start glowing with radioactivity halfway through the voyage, but that could not be taken into account as reasonable justification for raising the point or blowing the whistle to the newspapers. Presumably it would be regarded as an act of treachery, even though it might save lives.

The same report continued:

"According to the independent nuclear engineer, John Large, the defect appears to be cracking in the primary watercooling circuit where it re-enters the reactor pressure vessel, an appallingly difficult place to effect repairs because of radioactivity and the cramped situation—especially if there is no time to remove the reactor fuel and let the system cool off first."

It appears that someone in the services may have provided this information so that something could be done about it. There should be some means of ensuring that people who use dangerous equipment can raise these issues without the threat of punishment. They should be able to question the use and deployment of the nuclear deterrent. That is their moral right because there are no more immoral weapons on the face of the planet than nuclear weapons. I shall not go into that now because it is a little wide of the Bill; I merely point out that service people might be involved in the deployment and testing of weapons that are to be sold to countries to which the Government were urged by a United Nations resolution of 1988—passed in the General Assembly—not to sell such weapons. What are service people to do in such circumstances? The binding nature of military legislation, as amended by the Bill, places a heavy burden on them.

The United Nations resolution made it plain that member states were to reinforce their national systems of control over the arms trade. All hon. Members agree that that is splendid, but when the Opposition highlighted the supplies of arms to Iraq and the channel of arms through Thailand from western European countries, including from allies such as West Germany, people raised their eyebrows and said that these weapons could be used against our boys in the Gulf, which would be quite wrong. What should a service person, who has raised such issues with his superior officer but feels that nothing is being done and that a cover-up is taking place, do? How long have the cracks in the Polaris fleet been known to the operators of the submarines?

I urge the Minister to consider a report by the Common Market assembly. I call it an assembly because I do not give it much credence. It was a good Government job creation scheme when I found myself resting after 1983, but that is about all. The Government, however, refer to it as a Parliament. That was the title that they gave it in the Single European Act 1986. The argument in the Conservative party is about the degree of commitment that we should exhibit to the Common Market. I merely mention this to show that the European Parliament is a source of information that the Government does value.

The report, dated February 1984 and numbered PE84.688/fin./Ann II, concerns the right of members of the armed forces to form associations. I hope that this legislation can be amended later to allow trade unions to be formed in the armed forces. They already exist in the armed forces of other countries. We may not wish to emulate those countries, but I think that they provide useful examples. I note that the Minister of Trade has just come in for a chat about other matters, which no doubt are concentrating his attention and that of other Tory Members in clumps and congregations throughout the House. None the less, he will be interested to know that the right to form associations is not granted only in a minority of member states—Greece, France and Italy. In Ireland the right is available but not exercised, and in the United Kingdom the right to form an association is granted, but without the right to be consulted. The Minister said earlier that the Soldiers, Sailors and Airmen's Families Association had been consulted, and I welcome that useful development. I urge the Minister to go a little further. Associations have a valuable part to play, but it would not be a long step, after associations, to form independent trade unions. Service men and service women would be more likely to trust trade unions to deal with these matters.

The Minister said—I do not dispute it—that the House and the nation at large are indebted to those who serve in the armed forces. If we are indebted to them and if there is a move to form trade unions, why not recognise our indebtedness by providing the armed forces with the opportunity to form independent trade unions? In some of the member states of the Common Market professional organisations have the right to be consulted. However, they have no negotiating rights. In Belgium, Germany, Netherlands and Luxembourg those organisations have the right to be consulted. Denmark is the one member state in which professional organisations have negotiating rights.

When I asked the Prime Minister whether she had been to Denmark, she said that there had been useful talks and negotiations with Denmark. She did not tell the Prime Minister of Denmark how wrong it was for the professional organisations to have negotiating rights. She said that Denmark was a loyal member of NATO. The armed forces personnel in Denmark have the right to enter into negotiations. If that happens in Denmark, it could happen in the United Kingdom.

In the Grand Duchy of Luxembourg, another member state, article 11.5 of its constitution guarantees the freedom, by law, to form trade unions. Service men are allowed to organise or join non-political unions. The majority of them are members of the Syndicat Professionel de la Force Publique, which is part of the Confederation Generale de la Fonction Publique. If it is good enough for Luxembourg, it should be good enough for other member states. The Minister may say that there is only a tiny number of people in Luxembourg, but it is a member state of the Common Market and is represented in all its institutions.

The report makes it clear that in Denmark service men have the same negotiating rights and the same right to conclude agreements as all other Government employees. There are various groups of professional organisations for serving officers, reserve officers and serving soldiers. Those associations negotiate on general pay and working conditions with the Ministry of Defence. They voluntarily renounce the right to strike. Agreement has been reached, therefore, with the trade unions that the right to strike should not be exercised.

In the Netherlands, as in the Federal Republic of Germany, officials and service men are not entitled to take part in negotiations. However, the associations must be consulted when the legal status of service men is affected by ministerial rulings, and so on. A central consultative committee has been set up for this purpose with the Secretary of State of the Netherlands as chairman. It meets twice a month and discusses all legal conditions and provisions which affect service men and the policies, guidelines and general principles of the personnel programme. That is exactly the kind of body which could provide effective negotiating and consultative procedures, if they were enshrined in the sort of legislation that we are discussing.

At a lower level in the Netherlands, there are consultative committees in each navy unit, at company, battalion and barrack level for the army and for each air force base or unit. They consider individual cases or questions relating to working conditions. That is exactly the point that I made about the cracks in the Polaris submarine power plants. Instead of courts martial and the panoply of military law bearing down on people, thus intimidating them into not presenting important information, consultative committees would allow such matters to be raised without confrontation. In the Netherlands, there is freedom of the press, including the right to distribute broadsheets. There is no right to strike, but soldiers in uniform may stage demonstrations when they are not on duty.

The Netherlands is a member of NATO and of the Common Market. Provision is made in other member states of the Common Market for dealing with these matters, thus reducing the need for the confrontation that is created by the application of military legislation. In the Federal Republic of Germany, which is even stronger following unification,

"the right to form associations to safeguard and improve working and economic conditions is guaranteed to everyone and to all trades, occupations and professions."

That quotation is from article 9(3) of the basic law. Article 17(1) says:

"The right to form associations is therefore a fundamental right under the constitution and this right may not be restricted by laws concerning military service."

The idea of trade unions for our armed forces is not new—they operate in some EC countries.

The Government should seriously consider that. Indeed, they may have to do so. The Conservative party is arguing about the advance of unification. The Prime Minister, having capitulated on everything else, is saying, "We do not want economic and monetary union as a step towards a federal state." There may be a measure in five years' time to harmonise all these standards. Make no mistake, the Common Market is shifting towards a common foreign policy and a common defence policy, but hon. Members do not seem to understand what is happening.

Our service men and women should have at least the same trade union rights as those of our EC partners. That would ensure proper and adequate representation where the first procedures of discipline are used and at courts martial. The hon. and learned Member for Fife, North-East (Mr. Campbell) spoke highly of the procedures in courts martial because he attended one as an impartial observer. Some courts martial are not impartial because accused persons' representatives are part of the military. However, that would be improved by an independent body for the armed forces.

I therefore offer a critical welcome to parts of the Bill. I hope that the Minister will at least examine my proposals, but I say that with little hope because, until last week, one of the characteristics of this Conservative Government was complacency. Circumstances have a funny way of catching up with people and their complacency is blown to shreds, as happened to the Government this week. I hope that they will closely consider my suggestions because they will help to improve the law. I do not deny that the Bill makes improvements, but there is always room for improvement, even in this broken-backed Conservative Government.

I welcome this composite Bill. I well remember that some 30 years ago we had to have such a Bill every year and to deal with each service separately.

I particularly like the provisions for compensation and for children. I emphasise the importance of bringing civilian law into line with military law, in so far as that is possible. Most people agree that civilian life is not the same as service life. Service men are confined and live in special circumstances.

Two things will have to be considered very carefully—the death penalty and homosexuality. The conditions in which service men live are so different from those of ordinary people, except possibly prisoners.

Leave in the three services is different. Perhaps there could be equality of leave for troops serving in the Gulf in the different services, although I know that that might be difficult because the three services are so different.

When I served on courts martial, I always thought that more civilian expertise should be involved. That now happens and is an entirely satisfactory procedure. I should be grateful if my hon. Friend the Minister would explain how disciplinary action will be altered when there are more women in the services.

The Opposition referred to loyalty. It is important that men from certain areas have particular affiliations. So far as it is humanly possible, Scottish regiments or county regiments should be preserved. That will be an extremely hard task. I come from a regular cavalry regiment, members of which were drawn from all over England. Preserving the regional character of a cavalry regiment is not so important, but it is particularly important to have loyalty to territorial and yeomanry regiments. Men like to be with their comrades. There is tremendous loyalty to the regiment to which one belongs. I ask my hon. Friend the Minister to consider that point.

I am afraid that trade unions are not to my liking. They may be suitable in civilian life, but they are certainly not suitable for the Army. On that point, I disagree with the hon. Member for Bradford, South (Mr. Cryer).

Great thought has been given to the changes in the Bill and I welcome it as a whole.

Like other hon. Members, I welcome the Bill. I should like to make three observations. First, it was a tradition in most Government legislation that, wherever members of the armed services subject to military discipline happened to be, they were treated as far as possible as though they were in this country. For example, under the Representation of the People Act 1983, service men have the right to vote, wherever they may be. That happened long before the voting reforms introduced by the Government.

There has been an extraordinary two-sided division in the tax and allowances system. In the case of a service man subject to full military discipline and serving in Germany, Cyprus or the Gulf, his wife and his dependants pay the same income tax and national insurance contributions as their civilian counterparts, but they are not eligible for the same social security benefits as their civilian counterparts. Last year, I dealt with a case involving the wife of a soldier who had served 22 years and had been subject to full military discipline. The wife would normally have been eligible for severe disablement allowance, but because her husband had served abroad for so long she found that she was ineligible. That is an injustice. It is hard that service men who have been paying the same taxes and national insurance contributions as their civilian counterparts should be ineligible for certain social security benefits because they have served their country abroad.

Secondly, I wish to refer to military discipline as it affects NCOs—especially senior NCOs—and warrant officers in the Territorial Army. There is a curious anomaly whereby officers serving in the Territorial Army are subject to military discipline in the same way as their regular counterparts but other ranks—still, I believe, even including warrant officers—are subject to military discipline only when they are training. That has a perverse effect and in some circumstances undermines the status of those TA personnel vis-a-vis their regular counterparts, the permanent staff instructors who serve with the unit.

To take an example, let us suppose that an exercise is planned for a small group of soldiers involving the use of weapons or explosives or some other form of activity which could lead to difficulties. In some units, it is extremely difficult to gain approval for such an exercise if neither an officer nor a member of the permanent staff is present because there is no one who can be made legally accountable if anything goes seriously wrong. I therefore suggest to my hon. Friend the Minister that we might consider the possibility of making warrant officers and senior NCOs in the TA subject to the same military discipline as their counterparts in the Regular Army.

Finally, regimental affiliations were mentioned by my hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn) and touched on by the hon. and learned Member for Fife, North-East (Mr. Campbell) and are extremely important to discipline. The Government are absolutely right to examine the number of sites that we occupy at present as not only the armed forces themselves but the defence research establishments are spread over far too many sites. Nevertheless, although I was not an infantryman during most of my territorial service, I believe that we should tread wearily when it comes to the eight infantry depots, two of which gave exceptional value for money during the Falklands war. A very large proportion of soldiers who fought in the Falklands had come recently from two of those depots—the airborne forces depot at Aldershot and the Guards depot at Pirbright. Some of them went straight into action only weeks after leaving the depots and performed extremely strongly.

The culture and disciplines in the various regiments tend to vary and the two depots to which I have referred are at the extremes. The Brigade of Guards whose depot is at Pirbright consists of admirable regiments—I know that my hon. Friend the Minister was a distinguished member of one of them—strongly based on firm, old-fashioned discipline. At the opposite end are our airborne forces, who have always based their principles on self-discipline, initiative in service and, if my hon. Friend the Member for Aldershot (Mr. Critchley) is to be believed, quite a lot of fighting off duty.

I understand that it has been proposed that the airborne forces and the Brigade of Guards should be put into the same depot, so that they would share the same NAAFI, the same canteen. That is the surest recipe I can imagine for a breakdown in discipline, fighting off duty and the destruction of both cultures. I suggest to my hon. Friend the Minister that, of all the ways to save land and improve efficiency, the review of the eight infantry depots is the last that he should consider if he wants value for money and wishes to encourage the fighting culture of the armed forces—by which, of course, I mean fighting of the kind in which we want them to engage.

Like other hon. Members on both sides of the House, I welcome the Bill and look forward to hearing the outcome of the Committee's deliberations.

This is one of the relatively rare occasions on which we have the opportunity to review the workings of the machinery of discipline in the armed forces. Although our debate is overshadowed somewhat by events taking place elsewhere in the Palace, it is none the less an important debate, as the hon. and learned Member for Fife, North-East (Mr. Campbell) said, because discipline—both individual and collective—lies at the heart of the efficiency and effectiveness of our armed forces.

We have had a brief but wide-ranging debate. The hon. and learned Member for Fife, North-East mentioned the sensitivity about and attachment to the regimental system, and several hon. Members took up the same point. The Opposition are well aware of that. My hon. Friend the Member for Clackmannan (Mr. O'Neill) pointed out in a recent debate that, when the "Save the Argylls" campaign was running strongly in Scotland, many of his friends were so attached to the Argylls that they signed the petition five or six times.

The hon. Member for Wealden (Sir G. Johnson Smith) referred to homosexuality and the death penalty, although I hasten to add that he did not link the two. He revealed that he had been "involved" in a court martial, although he did not reveal in what capacity. Perhaps it is just as well that, until this evening, he was unaware that the death penalty was still in use in the armed forces.

My hon. Friend the Member for Bradford, South (Mr. Cryer) made possibly the most wide-ranging speech. He managed to discuss the death penalty, the important issue of billing, the nuclear non-proliferation treaty, cracks in the cooling systems on Polaris submarines, the representation of service men and women throughout Europe, the European Commission and the leadership contest in the Conservative party—all in a debate on a Bill that deals with Army discipline. That was a testimony to his skill.

The hon. Member for Canterbury (Mr. Brazier) raised the important issues of inequalities in taxation conditions and the anomalies in discipline regulations in the Territorial Army. He gave us all food for thought. The hon. Member for Windsor and Maidenhead (Sir A. Glyn) emphasised the importance of bringing civilian law and military law together. He made it plain that he is opposed to trade unions in military life, although I suspect that, if we pushed him a little further, he would be opposed to trade unions in civilian life as well; but I might be wrong about that.

We have had a wide-ranging discussion tonight, but many of the Bill's details will be discussed later in the ad hoc Select Committee. This quinquennial review occurs so rarely that it is vital that the Government use the occasion to address problems related to morale and discipline that are persistently raised in the intervening years. As my hon. Friend the Member for Rhondda (Mr. Rogers) said, there are a number of issues—such as service personnel organisation or the composition of courts martial—which we feel the Bill fails to address. We have mentioned them briefly tonight, and we will return to them in Committee.

It is important that we get the Bill right, because another major review is unlikely for another four or five years. Of course amendments can be made from time to time, but the Bill essentially sets the course for the next five years. The Opposition approach the Bill on discipline in the Army and in the other forces on the premise that has underlain that of successive Governments, namely, that military law should approximate to civil law as closely as possible, allowing for the particular need, which we accept, for discipline in the armed forces. We therefore welcome the fact that the Bill incorporates many of the features of civil enactments and in particular the Criminal Justice Act 1988 and the Children Act 1989.

It is right that the standard of justice for our service men and women should be no less than that expected by civilians. The forum of justice and discipline may differ, but the standard must be no less. It is also right that the protection of children of service families should be no less than that for civilian families. We therefore welcome the regulations in clause 4 that extend to courts martial the requirement, to which civilian courts are already subject, that a court imposing a custodial sentence on a young offender should give reasons why it is satisfied that he or she qualifies for a particular sentence. A court martial will now also have to explain to the offender in open court why it is passing a particular sentence. That is as it should be.

Clauses 7 to 9 similarly bring the service regulations into line with civilian practice by allowing the appropriate authorities the power to award stoppages as compensation for personal injury. It is right that, when an offender has insufficient means to pay a fine and compensation, compensation should take precedence.

Clauses 17 to 23 reflect growing concern in the country about child abuse. We do not suggest that it is any greater in the armed services than anywhere else. Part of the reason for the growing concern about child abuse may not be an increase in child abuse in general but a greater recognition that abuse exists and a willingness to report it. We welcome clauses 17 to 23 and we support the extension of the provision of child assessment orders into the armed forces, but we will want to examine more closely in Committee the logistic arguments behind the difference in the period for which orders are granted in civilian and military life.

If there are some aspects of the Bill to be welcomed, there are also some major omissions. In many ways, the Bill represents a lost opportunity—an opportunity that could have been used to tackle some of the persistent issues. I shall deal with one or two, which have already been mentioned by several hon. Members, including my hon. Friend the Member for Rhondda. As my hon. Friend said, one issue is the vexed question of service personnel organisation and representation. We believe that morale and discipline in the armed forces are interlinked and that representation is crucial to morale.

The hon. Member for Wyre (Mr. Mans) spoke of the uncertainties about "Options For Change" and the insecurity that is felt by many service men because of the lack of information. Some form of service personnel organisation would help to overcome those difficulties through the provision of information, and would indeed contribute to morale. The persistent claim that officers can best and fully represent the views and interests of other ranks and that there is therefore no need for any other representative mechanism does not hold water. It may be the view of the Government, it may be the view of the Ministry of Defence, it may even be the view of many officers, but it most definitely is not the view of the ordinary soldier, sailor or airman.

The Minister of State may ask, "How do you know?" because he knows that I am far too young to have gone through conscription. With the courtesy of the House and with some assistance from the Minister of State, I managed to spend a month with the Army this year. It was not some formal ministerial visit, when the world smells continually of fresh paint, but a hands-on operation, courtesy of the armed forces parliamentary scheme. From my recent experience in the Army, I can tell the Government that the grievance that was most often and most loudly declared by the toms, apart from pay, accommodation and the poll tax, was about representation. When will the Government face the fact that complaints and grievances can be adequately dealt with only by proper consultative procedures?

As my hon. Friend made plain, we are not calling for trade unions, although my hon. Friend the Member for Bradford, South did, and we are certainly not advocating any involvement of service personnel in political activity. However, there is scope for allowing service personnel to join a properly constituted organisation that can make representations on their behalf. Several organisations are highly effective in representing the views of ex-service personnel—for example, the Royal British Legion. Their loyalty to and support for the services is unquestionable and unquestioned. Why should similar organisations representing active service personnel be any less supportive? The people in today's professional armed forces are highly responsible; of course they can be trusted properly to run such an organisation. We shall return to that matter in Committee.

There is another issue which the Government have ducked. It is a tenet of British justice that an accused person is entitled to a trial by his or her peers. The hon. and learned Member for Fife, North-East raised that important principle. We accept the difficulties of applying that principle completely and directly to the armed forces. However, the Government have refused even to move in that direction. In refusing to include senior NCOs in courts martial, they are failing to take account of changes which, as my hon. Friend pointed out, have taken place in the past 44 years in the constitution of the officer corps of the armed services.

As my hon. Friend rightly pointed out, after the second world war, when the Lewis committee looked at the issue in 1946, most officers had come up through the ranks and could not be accused of being remote from other ranks. Nowadays, only one officer in five comes up through the ranks, so the Government have not moved far enough in the direction of allowing service men to be judged by a group of their peers as far as possible.

Nor do we accept that senior NCOs are necessarily unqualified in terms of experience to sit on courts martial. Given the considerable experience that many NCOs serving in Northern Ireland have developed in dealing with questions of civil law, the Government's argument begins to look rather threadbare.

The Minister may recall that, in paragraphs 12 and 13 of the report of the Select Committee on Defence in 1985–86, the Government were asked to consider giving courts martial or standing civilian courts the power to give suspended sentences. In clause 12, that has been done in relation to naval courts martial, but there does not appear to be any such move in relation to the Army or the Air Force courts martial, or to standing civilian courts. I hope that the Minister will address that point and explain that selectivity, or will he do so at some future stage?

Many other issues could be mentioned tonight. The hon. and learned Member for Fife, North-East asked about equality of treatment for homosexuals, my hon. Friend the Member for Bradford, South asked about bullying and the hon. Member for Wyre spoke about the problems of drug abuse. We shall return to those issues in Committee.

One matter which merits attention now has only been mentioned by my hon. Friend the Member for Rhondda. It has been the subject of considerable attention and at least some activity since the last Select Committee report. I refer to racial discrimination in the Army. Following concern about racial discrimination surfacing in 1986, when the Commission for Racial Equality felt that it had to go public in expressing its anxiety, the Defence Select Committee reported on its investigation in a report entitled "Ethnic monitoring and the armed forces" and, as has been mentioned, earlier this year the Ministry of Defence published a study of the subject commissioned from Peat, Marwick, McLintock.

Why is there no mention of that issue in the Bill'' When does the Minister expect to be able to bring forward proposals on that matter? In particular, does the fact that there is no mention of it in the Bill mean that the Government are satisfied with the present position? If not, why was the opportunity not taken to deal with the matter in this legislation.

If the moral issues involved in racial discrimination were not compelling enough—I believe that they are—there are pragmatic considerations to which the Government should attend. Despite the cuts which might be expected with "Options for Change", there is no doubt that, during the next few years, recruitment will prove difficult. We must ensure a fair and equitable distribution of representation of the ethnic minorities in the Army. There are good moral, administrative and pragmatic grounds for that. That is another issue that we shall pursue in Committee.

As I have said, earlier this year I spent about a month with the armed forces, and I wish to record my deep appreciation for all that they did for me and my colleagues. But Opposition Members also want to make plain their deep appreciation of the commitment and dedication of our service men and women. In many ways, that goes without saying, but it bears repetition tonight, when many of those same service men and women await the outcome of diplomatic and economic pressure on Iraq.

They would not be human if they did not face the future with some trepidation. We know that they will also face the future with resolution, courage, determination and discipline which is the hallmark of the British armed forces. As we conclude the debate tonight, we are entitled to reflect that the Bill and the regulations on Army discipline will be applied only in a minority of cases. For the vast majority of our service men and service women, the normal discipline is self-discipline and dedication. We owe them our gratitude and commitment for their discipline and dedication, and the Opposition gladly give it.

With the leave of the House, I first welcome the hon. Member for Motherwell, North (Dr. Reid), following what I believe was his first speech from the Front Bench. He will find that debates on defence are normally pretty friendly—too friendly, some of us would say. I have heard a terrible rumour that it was the Leader of the Opposition who recognised that his Front Bench spokesmen on defence needed sharpening up. That is why we are more than happy to welcome the hon. Member for Motherwell, North, who will add to the quality of our debates. He did extremely well this evening as he had obviously read the Bill, which put him in a somewhat exclusive minority.

Several hon. Members, including the hon. Member for Rhondda (Mr. Rogers), the hon. and learned Member for Fife, North-East (Mr. Campbell) and the hon. Member for Motherwell, North, mentioned the composition of courts martial. The inclusion of service men below the rank of commissioned officer in courts martial was last fully considered in 1985, when it was concluded that such a proposal would not improve the quality of the court nor the prospect of the appearance of justice being done. There is no evidence of any desire in the services to change the composition of the courts martial and the present system enjoys a high degree of confidence from all ranks.

The hon. and learned Member for Fife, North-East mentioned the lack of consistency in sentencing. He particularly raised the case of someone who was sentenced to seven years and whose sentence was then reduced to six months. Sentencing guidelines are available to courts martial. In a serious case, for example in the Army, a judge advocate trained in sentencing would advise the court about the appropriate sentence. Sentences are subject to confirmation and review, again with the advice of the office of the Judge Advocate General. Permanent presidents of courts martial also receive training and advice from the office of the Judge Advocate General about sentencing. Without knowing the full facts of the case raised by the hon. and learned Member for Fife, North-East, one can only speculate as to why the sentence imposed was so drastically reduced on review.

The hon. Members for Rhondda, for Bradford, South (Mr. Cryer) and for Motherwell, North raised the old chestnut of whether the services should have their own trade union. We take the view that active involvement in trade unions or professional associations would run counter to the principle that service personnel should not engage in any activity which might conflict with their service duty.

The hon. Member for Rhondda said that service men cannot express themselves, if I remember his words correctly. I found that a slightly patronising remark. When I have gone around talking to service men in all three services, I have found that the one thing from which they do not seem to suffer is an inability to express themselves. They have raised many complaints with me and have told me how they believe that their conditions should be improved, and so forth

I regret that the Minister has introduced such a discordant note. He has completely misquoted me and seems to have misunderstood what I said. I said that at some time all hon. Members have received letters from service men, many of whom asked to remain anonymous. They expressed their problems without any difficulty, but wished to remain anonymous for fear of recrimination or retribution from their superior officers. If the Minister does not recognise that as a fact of life, he is living in cloud cuckoo land

There is an understood chain of command through which people can register complaints. They use that, and they often register complaints to Ministers. The hon. Gentleman should look at the record tomorrow to see whether he said that service men cannot express themselves, because I wrote it down as he mentioned it.

The hon. Member for Rhondda and the hon. and learned Member for Fife, North-East referred to homosexual activity. I believe that their general feeling was that there should be increased harmonisation between military and civil law on this matter. The Bill makes no change to the law on homosexual activity. It therefore remains the case that service personnel may be prosecuted under the discipline Acts for homosexual activity which would not be an offence under the civil criminal law. That is in recognition of the different circumstances in the services, where people live in closed communities on and off duty and often under stress. Such conditions and the need for absolute trust and confidence between all ranks require that potentially disruptive influence of homosexual practices to be excluded. That view was explained and endorsed by the Select Committee in relation to the last Armed Forces Bill, in 1986, and nothing has occurred since then to give rise to a change of policy.

The hon. Member for Rhondda spoke of the military districts and the reorganisation about which he has heard rumours. I am afraid that I am not in a position to tell him what proposals we are bringing forward on that, but I hope that I shall be able to do so shortly. I can tell the House and my hon. Friend the Member for Canterbury (Mr. Brazier) that under "Options for Change" we are taking a radical look at the whole infrastructure of the three armed services. There is no way in which we can do that painlessly. It will result in depots being closed and in restructuring of the armed forces in many areas of the country. I am afraid that if we are to get the so-called peace dividend and to make savings on the defence budget there will be local problems. We shall, of course, deal with them as sensitively as we can.

The hon. Members for Rhondda and for Motherwell, North raised the question of racial discrimination. In particular, the hon. Member for Rhondda mentioned the Anderson case. We recently received the final judgment in the case of Stephen Anderson. The Ministry of Defence will consider that judgment to decide what changes are necessary in service procedures to conform with the guidance in the judgment or whether to appeal against the judgment on any aspect. In the meantime, a re-hearing of Mr. Anderson's case will be set in hand. As originally proposed by the Ministry of Defence, a board of inquiry will be set up to investigate all facts relevant to the case prior to consideration by the Army Board in the light of the judgment. Any changes required as a result of the Anderson case will not require primary legislation. The procedures involved are set out in Queen's regulations.

On the general point of racial discrimination, I can tell the House that the services are fully integrated, non-discriminatory organisations and that no discrimination is tolerated. Any complaint of racial discrimination by a member of the armed forces will be fully investigated under a redress of grievance procedure and, if proven, action will be taken against those involved. It concerns us that there is still far too low a percentage of people from racial minorities entering the armed forces and we are doing all that we can to address that problem and to stimulate recruitment in areas with large numbers of people from racial minorities.

The hon. Member for Rhondda also mentioned the Stevens inquiry and the Ulster Defence Regiment. In his report, Mr. Stevens said that his was an extensive and thorough inquiry by some of the most experienced detectives in the United Kingdom. He emphasised that both the Regular Army and the UDR had co-operated fully and whole-heartedly with the inquiry. We welcome the conclusion that the passing of information was neither widespread nor institutionalised but was restricted to a small number of individuals. We have no difficulty in agreeing with Mr. Stevens's conclusions that procedures for screening recruits and handling information need to be tightened. We have already taken some initiatives and, as Mr. Stevens makes clear, further steps were taken during the course of the inquiry. A dedicated unit has been established to screen all applicants to the UDR, and transfers from the Regular Army will be subject to the same full screening process. The procedure for the control of recognition material was tightened up in June 1988 and further stringent methods were introduced last autumn. Mr. Stevens recognises those initiatives.

My hon. Friend the Member for Wyre (Mr. Mans) spoke about compensation for injuries and the problems relating to whether an individual is on or off duty. My hon. Friend mentioned sports injuries. Service men are entitled to claim compensation for injuries caused during a service sports activity, which is treated as an on-duty event, in the same way as that person can claim for injuries sustained in the course of his employment. He would need to demonstrate that his injury was attributable to negligence on the part of the service, but the Department, provided that it is satisfied on that point, will offer an appropriate compensation payment.

My hon. Friend also referred to the increased life insurance premiums charged to members of the armed forces. In normal circumstances, those increased premiums apply to personnel in high-risk occupations such as air crew or divers and we already refund 90 per cent. of the additional cost of their premiums within set limits. My hon. Friend will be pleased to know that that scheme was recently extended to include all personnel serving or under notice to serve in the Gulf who choose to take out new policies. We have also negotiated special insurance schemes for such personnel.

My hon. Friend also raised the question of drug abuse. I am aware that many hon. Members are much concerned about the extent of drug abuse in the armed forces. Although there are, almost inevitably, some cases of such abuse in the armed forces, it is not a major problem. Nevertheless, it is a subject which is treated with the utmost seriousness and my colleagues and I take a close personal interest in it. The services are well aware of the need for constant vigilance and steps have been taken to improve protection from and the prevention of drug abuse. A service education programme on drug abuse includes information on the dangers of crack. I gather that 85 per cent. of those convicted of drug offences within the armed forces are dismissed.

My hon. Friend also referred to the need to keep service men informed of the changes as a result of "Options for Change". I recognise that need, but we always have a difficulty because the House likes to be informed first about what is going on. It is difficult to ensure that the services are informed simultaneously, but we make every effort to do so.

The death penalty is another old topic which came up for discussion. My hon. Friend the Member for Wealden (Sir G. Johnson Smith) did not realise that the death penalty is still valid for offences under the service discipline Acts. It might be of interest to know that the death penalty still applies for assisting the enemy, serious misconduct in action, obstructing operations, mutiny and failure to suppress mutiny. The important point about those five offences is that they require a positive act of treachery—for instance, deliberately assisting the enemy or actively preventing operations against the enemy. Such acts are likely not only to jeopardise national security, but to put the lives of other service men at direct risk. The nearest civil criminal offence of this nature would be an act of high treason, for which the death penalty is still mandatory.

The hon. Member for Bradford, South mentioned bullying and related a horrific story about a person he knew who had been bullied. The services take a serious view of bullying and it has been made clear throughout the forces that bullying and ill treatment will not be tolerated. A range of measures to combat bullying have been introduced, including the banning of initiation ceremonies. In the Army a new man-management training package has been developed. Of the 252 allegations of bullying in the Army reported since January 1986, 92 were substantiated and disciplinary action was taken. In 145 cases the allegations were not substantiated. Others are still under investigation. There have been three substantiated cases in 1990. Allegations of bullying substantiated by courts martial or summary disciplinary action are as follows: in 1986, 16 cases; in 1987, 31 cases; in 1988, 17 cases; and in 1989, 25 cases. The figures are bad and we should do something about them, but they are not so appalling as some might imagine.

My hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn) raised the pertinent question, now that women are playing a much bigger role in the three armed services, as to whether there would be any change in the disciplinary arrangements. No change is necessary to take account of the increased number of women in the services. For a long time, female personnel have been subject to the same disciplinary provisions as their male counterparts. The only change is that a women's wing is being constructed at Colchester to take account of the larger numbers. In practice, as in civilian life, women are much less likely to commit crimes than men are.

My hon. Friend the Member for Canterbury raised the question of unemployment benefit, and the difficulties that people in the services have in that respect. I reassure him that discussions are continuing between the Ministry of Defence and the Department of Social Security about the payment of unemployment benefit to spouses of service personnel overseas. I know that my hon. Friend will be glad to hear that.

The hon. Members for Rhondda and for Motherwell, North raised the question of suspended sentences for courts martial and standing civilian courts. As the hon. Member for Rhondda rightly pointed out, clause 12 extends to naval courts martial the power to suspend sentences of imprisonment and detention, as recommended by the Select Committee on the last Bill. However, we have decided not to extend the power to courts martial in the Army and the RAF, or to commanding officers in those services exercising summary jurisdiction. Court martial sentences in the Army and the RAF—unlike those in the Navy—are subject to confirmation, and the confirming officer has wide powers to alter sentences, although he may not impose a greater or more severe sentence than that imposed by the court. To give courts martial the power to suspend sentences in their own right would inhibit the powers of confirming officers who have the final word on sentence, and who may already suspend sentences of imprisonment and detention

I do not understand the Minister's logic. If the court has the right to suspend sentences in the Navy, why cannot the same apply to the other two services? The argument that further confirmation is required does not hold water. We shall return to this matter in the Select Committee discussions, where we shall want to hear far more substantial arguments than the Minister has produced today

I think that it would be right for the Select Committee to examine the matter in more detail. If it troubles the Committee, we shall be more than happy to examine the matter again.

I commend the Bill to the House. It will do much to bring the legal system covering the armed services into line with their civilian counterparts. That is the least that we can do for them in recognition of the magnificent role that they play.

I beg to move,

That an humble Address be presented to Her Majesty, praying that the Statistics of Trade Act 1947 (Amendment of Schedule) Order 1990 be made in the form of the draft laid before this House on 7th November.

Towards the end of the 1980s, it was widely thought——

On a point of order, Mr. Speaker. Groups .of Conservative Members all over the House are busy plotting about next week's ballot, but I am sure that you take exception to groups of Conservative Members plotting in the Chamber and taking no notice of the legislation being discussed

I doubt whether the hon. Members are plotting; I should think that they are discussing with great interest the debate that is about to begin

Further to that point of order, Mr. Speaker.

During questions to the Leader of the House last Thursday, the hon. Member for Bradford, South (Mr. Cryer) said that he believed in nuclear and other disarmament, so we cannot understand what interest the debate could have for the hon. Gentleman

I hope that all hon. Members remaining in the Chamber have an interest in the debate

It is an exciting subject, Mr. Speaker.

Towards the end of the 1980s, it was widely thought that the quality of the national accounts had deteriorated. Three criticisms were generally levelled: first, that wide discrepancies had opened up between the three measures of the gross domestic product; secondly, that successive measures of GDP and the balance of payments were subject to substantial revisions; and, thirdly, that the sector balancing items had grown unacceptably large, especially in the personal and the overseas sectors.

Those weaknesses created difficulties for economic policy makers, particularly for the then Chancellor of the Exchequer in constructing his 1988 Budget. The problems were clear to Treasury Ministers. They were also obvious to the Select Committee on the Treasury and Civil Service, which commented on the role that the poor quality of the statistics had played in recent economic policy making. The Committee recommended that the Government should undertake an investigation into the operation of the various Departments involved in the collection of national account statistics with a view to improving the reliability of those accounts.

In June 1989, the Government announced the setting up of a scrutiny committee of economic statistics. That was carried out the following year, and led to the publication in 1989 of what has come to be known as the Pickford report. The scrutiny revealed an extensive awareness of the problems with micro-economic statistics, and reiterated the three main areas of concern—discrepancies between GDP measures, revisions and large balancing items. It concluded that the problems were

"deep seated, pervasive, have multiple causes and have existed for a long time."

The scrutiny committee proposed a number of sectors where improvements were needed, or where further work was necessary, and made recommendations in three areas: first, to change the way in which macro-economic statistics are collected or compiled; secondly, to propose further work on statistical issues to identify improvements; and, thirdly, to create a statistical organization—[ Interruption.]

Those Conservative Members should go outside

I am grateful to the hon. Gentleman. This is an exciting subject.

The third improvement suggested was to create a statistical organisation more likely to meet the needs of users in a cost-effective manner.

As a consequence of that third group of recommendations, we set up a review to examine the organisational issues. On 5 April 1989, the Prime Minister announced to the House the enlargement of the Central Statistical Office as a separate Government Department responsible to the Chancellor of the Exchequer. The reorganisation, on 31 July 1989, brought together the old CSO, the Department of Trade and Industry's business statistics office and the Department of Employment's responsibility for the retail prices index and the family expenditure survey. It enabled the new CSO to pay more attention to priorities for improving the national accounts.

It soon became apparent to my right hon. Friend the Chancellor of the Exchequer that even those improvements would be insufficient to solve the underlying problems quickly enough. In April 1990, he told the Treasury and Civil Service Committee that he was

"concerned about the statistical base".

We needed,

"the best level of statistics we can get for measuring precisely what is happening to the economy."

Despite the Pickford improvements, he said that he was discussing with the director of the CSO what might be done to improve the general quality of economic statistics.

Shortly after that, on 17 May, the Chancellor announced his package of further measures to improve the quality of statistics. Those were to be in three sectors—services, companies and the balance of payments. On services, there will be extensions to the quarterly turnover inquiries into the service industries and more information will be collected on external trade in services. To improve company statistics, the Chancellor announced that more quarterly information on capital expenditure, stock-building and profits would be obtained.

On the balance of payments, the Chancellor announced that, in addition to improvements on trade in services, the quarterly direct investment inquiry would be expanded. More information would be collected about United Kingdom companies' financial transactions with overseas residents. Due to the very severe problems with the balance of payments accounts, which had shown large and persistently positive balancing items over the past four or five years, he announced that the CSO would give a senior member of its staff a year to undertake a thorough review of balance of payments statistics. Those additional inquiries, including that on company profits, will be undertaken as statutory inquiries.

The powers available to the CSO to collect these statistics are embodied in the Statistics of Trade Act 1947. That Act enables "competent authorities"—certain Government Departments including the CSO—to require undertakings to provide statistical information on specified areas of their activities.

The Act includes a schedule which lists the topics on which competent authorities can demand information. Section 5 allows additions to be made to the schedule by Order in Council. Such orders have been made on two previous occasions. However, the schedule, even after these amendments, does not include profits. Therefore, I am seeking the approval of this House for a further amendment to be made.

Company profits make an important contribution to the income measure of gross domestic product. They represent about 15 per cent. of the income measure of GDP. Perhaps more importantly, they are the most volatile component of income, accounting for a large part of the quarter-to-quarter or year-to-year changes in GDP.

Statistics on company profits provide the base from which corporation tax receipts are forecast. They are also important in providing the Government with assessments of the financial position of the company sector. Finally, the statistics are used by Treasury economists in their analysis, modelling and forecasting of the economy.

The Government already compile statistics on company profits, but there are some significant weaknesses in the existing statistical systems. The CSO currently estimates the profits of industrial and commercial companies from Inland Revenue data on assessments for corporation tax. Although substantial adjustments have to be made to bring them into line with the national accounts, these statistics are thought to be soundly based. These data, however, are inevitably not available until some time after profits are earned and also relate only to whole years, not to quarters. For monitoring, forecasting and policy purposes, quarterly data are needed.

In an attempt to meet those needs, tax assessment data are supplemented by a quarterly inquiry asking a sample of companies for information on their profits. Results from those inquiries provide figures for the national accounts for the latest two to three years. The inquiry is voluntary, and many large companies exercise their right not to provide data. Despite several efforts to recruit more companies, the inquiry remains unrepresentative, and lacks a number of large company groups.

As a result, estimates derived from the present quarterly inquiry are weak, and subject to large revisions when the tax assessments data become available two or three years later. For example, the 1987 estimates of industrial and commercial company profits were revised down by £10 billion between April 1988 and the summer of 1990.

It is for these reasons that I seek approval for amending the schedule. By adding the words "profits" and "losses" the CSO will be able to collect up-to-date quarterly information from industrial and commercial companies about their profits on a statutory basis. It will be able to collect statistics from all the largest company groups in the country, not just those which agree to report voluntarily

Many of us, like the Minister, serve on the Treasury and Civil Service Committee. Often private companies are asked to provide information at their own expense and to fill in one form after another, and junior people are asked to fill them in to satisfy the people who gather statistics——

In this Government

All Governments have had the problem of collecting statistics and this Government have done more to try to make them respectable and clinical than any other Government since the war. But how are we to make sure that statistics are pure? Until we have a fully computerised system—and the Government pay for it—why should private companies set their best people to collecting figures?

My hon. Friend makes a valid point. Certainly the number of forms that businesses have to fill in has been greatly reduced by this Government. We have consulted the CBI and the stock exchange on this order and we think that the information that we shall request will be readily available from companies without their having to do additional work.

Statistics from a statutory inquiry would be of much better quality, not just because of the greater size of the inquiry, but because of its better representativeness. A statutory inquiry would also produce an earlier and higher level of response.

A general advantage of statutory inquiries is that they are more equitable than voluntary ones. Companies that respond to voluntary inquiries do so from a sense of public responsibility. The costs that they incur may be small, but they are still costs that will not be incurred by their non-responding competitors

It is important that the statistics on which economic decisions are made are correct, but my hon. Friend will be aware that there are considerable cost implications for businesses. He referred to the largest companies. However, it would be illogical if the consequences of his inquiries were to be limited to large companies, particularly as, under this Government, there is a booming middle and small business sector. What worries me is that this will be extended to the small business sector and will impose even more burdens on small business men, for which there will be no compensation. What does my hon. Friend have to say about that?

My hon. Friend makes substantially the same point as that made by my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). We must make sure that we do not ask for information that we do not need. However, the Government must have proper economic statistics for the management of the economy. Moreover, industrial companies like to have reasonably accurate statistics about what is going on in the economy. Those inquiries are being sent only to about 1,500 companies. We are asking each of them for seven pieces of information. All that information is, we believe, readily available in their management accounts. We do not believe that we are imposing additional costs upon them, and our view is supported by the stock exchange and the Confederation of British Industry

Will the Minister confirm that some trade associations have approached the Government for information about their area of manufacturing activity? They do not have that information. As they wish to obtain it, they recognise that the only possible body who can provide it efficiently is the Government.

There is certainly something in what the hon. Gentleman says. We receive complaints about the inadequacy of the information that is available just as often as we receive complaints about companies being asked to provide information that they would prefer not to provide.

As the House knows, the Government are very sensitive to the reporting burdens that they impose on businesses. In this case, I believe that that burden must be slightly increased. The reward of better statistics is worth it. We have already consulted the CBI and the stock exchange about the proposals. Both accept the need for accurate statistics and support the introduction of such an inquiry

If it leads to better statistics, can my hon. Friend assure me that gross domestic product figures will finally be made available in their entirety for the Isle of Wight? We have suffered for a very long time from being included in Hampshire's statistics. There is considerable prosperity and industrial growth in Hampshire. Our inclusion in those statistics has caused us considerable grief on a number of occasions, because we should like to know precisely how our own economy is doing

My hon. Friend's sentimentality is admirable, but I am afraid that the answer to his question is no.

The CBI believes that the reporting burden will not be too great as most of the required information can easily be provided from existing sources in most companies. That was confirmed by a number of large companies visited by the CSO a year ago. Any new inquiry is bound to involve some companies in extra work. I shall be discussing the details of the inquiry with the aim of minimising that extra work with my right hon. Friend the Secretary of State for Trade and Industry.

That explains why the Government have sought the addition of the words "profits" and "losses" to the schedule, but we are seeking further additions: rents, interest and investment income receipts, dividends, interest and tax payments. The reason for their inclusion is mainly related to the collection of information from financial companies.

For national accounts, there is a major difficulty in collecting profits information from financial companies. To the companies themselves, a substantial share of their profits is earned by making a turn on interest rates, or on the price of instruments traded, such as shares or bonds. For the national accounts, interest and dividend flows are viewed as transfers between institutions or people and are not therefore viewed as part of profits.

There is therefore no point in sending out a survey asking financial companies for their profits. The results would be irrelevant to the national accounts. The only way to obtain the required data is to ask companies to provide certain components of their income and expenditure accounts and for the CSO to derive profits in the appropriate terms.

That approach is adopted in existing surveys of various groups of companies. However, most of the surveys are confined to the collection of annual data. Figures for the lastest quarters are simply projections from the latest annual survey. They are subject to revision—sometimes substantial—when the next survey results come round.

For example, in August this year, estimates of financial companies' profits were revised down by £4 billion when annual data were substituted for the quarterly projections.

The further additions to the schedule will enable the CSO to block this gap in its statistical base by collecting income and expenditure information from financial companies on a quarterly basis. I do not believe that expansion of collection would add significantly to the burdens on businesses. Most of the information that is likely to be sought is readily available from most companies' accounting systems.

The phrase in the proposed amendment on services is included to make it clear that such information falls within the scope of the Act. Amendment of the schedule will enable the CSO to undertake statutory inquiries of companies to collect information on their United Kingdom profits. The information thus provided will be of significantly better quality than the present estimates. As part of the package of improvements announced by my right hon. Friend, this will be a further step in eliminating the three major problems in the national accounts. It will help to reduce the gaps between the GDP measures; it will reduce the scope for revisions; and it will lead to more coherent accounts for the company sector by reducing its balancing items, particularly for the early estimates. This will be an important contribution to the improvement in the statistical base for economic monitoring, forecasting and policy making.

I commend the motion to the House.

It is ironic that the last business of the House before the censure debate should be an attempt to reform one of the principal culprits blamed for the Government's and the country's economic difficulties—the disparities and balancing items in the national accounts in recent years, to which the Economic Secretary referred.

To avoid such major mistakes in economic policy as occurred in 1988, it is necessary to have reasonably good statistics, a reasonably good model and reasonable objectives. However, none of those can be blamed for the economic policy mistakes of 1988. It is also necessary for Ministers to pay attention to the evidence, and to use the system of policy analysis intelligently.

I sent a paper to the Treasury shortly after the crash in October 1987, of which I sent a copy to the Economic Secretary this morning, reporting an exercise that I had done on the Treasury model using the Treasury's own policy optimisation programmes on the data and model available at the time. The policy adjustments required, on the Government's own priorities, to take account of the stock market crash were indeed a reduction of interest rates, but by less than 0·5 per cent. and for one year; and a reduction of income tax—but at 0·1 per cent., it was so small as to be effectively zero. The trouble was that the analysis of the situation before the stock market crash was already calling for increases in interest rates and income tax, but that was not acceptable to the Government and they were not prepared to listen. I am sure that comparable information was given to Ministers by Treasury officials.

Certainly, better characterisation of the effect of the housing market, structural reform in housing finance and consumer behaviour were needed. Changes have now been made in the Treasury model. There are now fresh problems—convergence within the exchange rate mechanism, to name but one. The Treasury has even refused to equip itself to model the problem of competing policy makers with different objectives. Whether it be between countries, within the United Kingdom or even within the Cabinet, the problem of conflicting policy makers would seem to be of some topical interest to the Treasury.

The quality of the Treasury's economic policy analysis, and, more important, the use made of it by Ministers, is not so high as to justify the cut of two thirds, from £1·5 million a year to less than £500,000 in the next academic year, in the funding of external research on economic models by the consortium of the Economic and Social Research Council, the Treasury and the Bank of England. Those funds support the work of the London Business School, the National Institute of Economic and Social Research, Patrick Minford in Liverpool, other friends of the Government and the smaller projects that are producing the new ideas for the future. That is an essential service to the Treasury and the Bank of England, from which they have benefited enormously in recent years.

On the "customer pays" principle, the Treasury and the Bank of England should have taken up the financing of their quasi-executive servicing when the ESRC found it hard to meet urgent new demands for work on the global environment and other matters.

Certainly, however, better statistics are needed, too. Household and consumer behaviour is an important matter, with which the Economic Secretary did not deal and which is not our business tonight. We are dealing with company profits and finance, and services used. Four information systems describe the same activities in the corporate sector: company internal management accounts; company reports and accounts published under the Companies Acts; tax returns to the Inland Revenue; and Government statistical returns, not to mention the returns of banks to the Bank of England under the Banking Act 1987.

It is easy to say that the different systems serve different purposes, but they interact and their incoherence reduces their efficiency and increases the cost to businesses of complying with them. It would be much simpler for companies if their management accounts giving a true and fair account of their companies' position could serve as the basis from which all the other requirements could be met. Attempts at economic and statistical analysis of companies' present reporting of their profits have fallen on stony ground. I doubt whether Government statisticians will be able to make much sense of them, with their jumble of different accounting conventions, varying from company to company. The Institute for Fiscal Studies and the London Business School have put a great deal of effort in this direction. If they are not able to make sense of the picture, I do not see how greater insight could be brought by the Central Statistical Office.

In tabling the order, the Government do not seem to have informed or consulted the Financial Reporting Council and the Accounting Standards Board. The Bank of England recently submitted a paper to the Financial Reporting Council on corporate reporting, summarising three major United Kingdom research studies. Edwards, Kay and Mayer, in their book "The Economic Analysis of Accounting Profitability", have given a convincing economic rationale for accepting value-to-the-owner rules as the basis for the valuation of assets for both economic analysis and company taxation purposes.

The Government should use their powers, not just under the Statistics of Trade Act but, probably more importantly, under section 228 of the Companies Act 1985, to specify a form and content of company accounts which will tell a coherent story about the company to managers, shareholders, investment analysts, employees, creditors, the Inland Revenue and Government statisticians and economists. It will still be necessary to set accounting standards, but the new accounting standards bodies will be given a coherent basis on which they can work. The accountancy profession has not found it easy to agree on a number of conventions, and a lead is needed from the Government in the interests of economic management, good company management, efficient capital markets and realistic wage and pricing behaviour, which needs to be based on information on the profitability of individual companies.

The claim to commercial confidentiality has always been used to resist every extension of disclosure in the interests of greater efficiency. We are talking not about personal information, where there is a basic right to privacy, but about the activities of corporate bodies. There should be a presumption in favour of disclosure. In any particular case, the onus of proof that the preservation of confidentiality is in the public interest should be on those who are arguing for it.

This makes possible a different approach to the integration of the four information systems. The basic report should be the company report and accounts produced by the company for its own purposes to satisfy its own shareholders. Accounting standards working on the foundation of the updated requirements of schedule 4 to the Companies Act should make the published report and accounts a true picture of well designed management accounts within the firm. Statistical returns to Government should be consistent with these and stated to be so in the company report, with the statistical returns subject to audit at least on sample basis.

Already, the Bank of England can call for the auditing of prudential returns required under the Banking Act 1987. If corporation tax definitions were brought within the same system, it would be possible to see much more clearly the effects of corporation tax and changes in it on company behaviour, as well as the response of corporation tax yield to changed economic circumstances. That would improve the quality of the tax base and provide a clearer climate in which companies could compete, take over and merge, and in which competition policy could be formulated and conducted.

The concept of the national accounts should not be sacrosanct. Their purpose is to facilitate the analysis and management of the economy. The apparatus for economic policy analysis has developed enormously since the system of national accounts was conceived, essentially in its present form, 50 years ago. Modern information technology makes it possible to base macro-economic policies on micro-economic behaviour, examining the aggregate of effects on actual companies or on samples of actual households, which is what the Treasury, the Department of Social Security and the Inland Revenue do today. The concept of the national accounts has now been replaced by the much wider date set, with a variety of analytical and modelling tools that can be used to ask particular questions.

Government use accounts for only a small part of the total use of business information and decision support systems. But the Government have a vital part to play in developing the statutory and operational framework for such systems, most of which will operate, in a distributed way, throughout the economy.

Opposition Members support the present order, but it is only a first and partial step towards giving business and the Government the modern information and decision support systems that they need. I gave the Economic Secretary notice of some questions with which I should like him to deal. I am grateful for the replies that he has given thus far, although I cannot say that they are very satisfactory or reassuring. Opposition Members believe that the House will have to return to these matters in a wider context.

How frequently does the Economic Secretary propose to publish the profits and incomes statistics that he will be collecting under the order, what degree of disaggregation will he offer and will he distinguish between revenue in the United Kingdom and the international revenue of companies?

Finally, let me say in the hon. Gentleman's support, on the question of the burden of the collection of statistics, that he is entirely right that, in some cases, it is more satisfactory to have a statutory basis than a voluntary one. Inquiries carried out by the Department of Trade and Industry and the Central Statistical Office provide good evidence to support that assertion. Those inquiries were first reported in British Business on 21 July 1989. Following extensive telephone interviews, an attempt was made to appraise firms' attitudes to completing statistical forms. British Business states:

"he results do not suggest that the majority of firms regard statistical form-filling as particularly burdensome. Only about a sixth of firms contributing to voluntary inquiries expressed any sort of negative attitudes in their answer to the most directly relevant question … The scrutiny team also noted that only 12 per cent. of all respondents experienced difficulties in completing forms."

A survey of attitudes to reduced statistics of trade under the new Community provisions gave an even clearer picture. Only 39 per cent. of firms said that they were willing to provide voluntary data, but 71 per cent. said that the reduction in detail was damaging to their business. Some 50 per cent. said that it had no effects, and a further 21 per cent. no significant effects, on costs. Some 66 per cent. preferred monthly returns to quarterly returns, and 71 per cent. preferred regular periodic returns to occasional returns.

Conservative Members, when speaking for small companies, often—quite understandably—reflect the views of owner-managers, who are immensely busy and do not want to be bothered, and who play a small part in the overall statistical collection system of Government. In bigger firms, and in many specialist small firms, information collected by Government is essential to the business, not on the secretarial or accounting side, but on the marketing and business planning side. If the Government and hon. Members asked them about their requirements for Government statistics, they would learn that those people would be entirely in favour of improved quality, greater accessibility and greater accuracy.

I therefore hope that the Minister will not be discouraged by some of the reactions of his colleagues and will press on with the improvements in statistics, bearing in mind that a very much more radical reform is required in the interests of both the Government and business.

I note with interest, but without criticism, that the Minister tonight has the advantage of six advisers. The substance of the text of this order comprises seven lines, which I make gives 0·8571428 officials per line. That is of course an entirely useless piece of information, but it could be used for the preparation of statistics to show how many advisers Ministers have on the average night in the House. It is an example of the sort of methodology which political considerations could impose on statisticians under the politically dominated regime for the collection of statistics which we currently have.

Useless statistics do no harm, but politically massaged statistics, of which we have seen much in recent years, can do great harm because they mislead. Above all, they can mislead those who need them most, in particular those concerned with managing industry or dealing with exports.

It is clear from various reports, including the Pickford report to which the Minister referred and which was commissioned by the Cabinet Office, that the Government have had many problems with their economic statistics in recent years. Their forecasts have been seriously out and many measured indicators which should have been giving the same message have diverged. In particular, the measures of gross domestic product expenditure and GDP income have diverged.

The changes proposed in the order, in addition to placing yet another form-filling burden on industry, fail to resolve the real problem underlying the collection of Government statistics and the regime in which Government statisticians operate. I would also be interested to know from the Minister how many of the pieces of information that are now going to be asked for, in the survey of 1,500 companies to which he referred, would be available from a proper examination of the accounts that companies file at Companies house. Is adequate use made of the information provided to Companies house? I wonder whether Companies house is rigid and severe enough on those who do not file their accounts in proper time.

The Royal Statistical Society remains critical. According to Professor Peter Moore, the chairman of one of the Royal Statistical Society's working parties, there is some justification in the widely held public view

"that much statistical information is not of the quality that many users would expect and that, in some instances, it is being used subjectively in the domain of public policy."

That means it is being massaged for political reasons by Ministers.

On 28 July, The Economist, a magazine which is frequently not unfavourable to the Government, reflected that

"most international boffins reckon that Britain's statistics—once the world's best—have deteriorated more than anybody else's."

That appeared in an article headed "Numbers not worth crunching", a title which gives a clear idea of the journal's view of Government statistics.

I support several trenchant criticisms that have been made by the Royal Statistical Society. I can divide them into three headings, the first of which is autonomy. In terms of formal constitutional arrangements, the autonomy of the United Kingdom's statistical system is poorly protected by statute and practice compared with most other developed countries. The order does nothing to improve the situation. In many countries, the statistical agency has total control over publications, with an embargo, generally, on anyone having access until the statistical results are publicly available. That embargo includes the Government and the Minister who is notionally responsible for the statistical agency. That should be the arrangement in the United Kingdom, but the United Kingdom entry in the United Nations handbook makes it clear that the Government statistical service lacks control over publications. It states:

"Decisions on publication of statistical results are the responsibility of the (policy) Department, but the Head of the GSS will be consulted on the more important issues."

Thus it is the case that the Government statistical service is not proof against charges of bad news diversion because its operational environment denies it satisfactory control over the nature and timing of publications. The order does nothing to address that problem.

The major functions of data collection, processing, primary analysis and publication should be ring-fenced and centralised away from ministerial interference. The head of the statistical service should manage the operations and the staff of the service, including his appointees in ministerial Departments. A statistics Act, such as exists in most western countries, is needed to guarantee the autonomy and constitutional posit ion of United Kingdom official statistics.

The second heading is methodology—again something which is not improved in any way by the order. Questions of methodology, definition, scope and timing of publications should be the responsibility of the head of the statistical service. That would strengthen the perceived independence of Government statisticians and the line of professional responsibility to the head of the service on technical matters. Professional identity is weakened in this country because, unlike most other countries, we currently have a decentralised Government statistical service in which most statisticians are bound to have dual loyalty with the service on the one hand, but with line management responsibility to the policy departments— that is to say, the departments in which most of them are embedded—on the other.

It is important that a research unit be set up to strengthen evaluation and methodological research. That would do more than the proposals in the order to improve the reliability of and the credence given to Government statistics.

The third heading is accountability. To put it another way, to whom can the statistician run if he finds that the statistics that he has prepared are being massaged by policy departments for political reasons? At present, the only public mechanism available to the head of the Government statistical service in response to a ministerial decision which might compromise the integrity of the service appears to be a threat of resignation, whereas Government accountants, if they are asked to do something that conflicts with their professional principles, are entitled to ask the Minister for a written instruction which is brought to the notice of the Public Accounts Committee. What is really needed is a national statistical commission to be appointed to safeguard the objectivity, integrity, timeliness and scope of United Kingdom official statistics. It should report annually to Parliament via the sponsoring Minister so that Parliament can be assured that it is free of ministerial interference at any time and at any level.

This is an important order because such great use is made of Government statistics. They are used for the purpose of business, industry and the City in particular. They are also frequently used in the House for the justification of political argument. Unfortunately, they are not always accurate. There are ways of making them much more accurate, but the order fails in any way to address the ways in which that may be achieved.

The hon. Member for Motherwell, South (Dr. Bray) referred to the cut in the budget for work on the Treasury model. That decision was made by the Economic and Social Research Council, not by the Treasury. We are committed to paying 20 per cent. of that budget and would have been willing to pay 20 per cent. of a higher budget. That was the council's choice and priority.

Did the ESRC ask the Government's chief economic adviser whether the Treasury would increase its contribution to make good the cuts in the funding so that the ESRC could see its way to providing what was essentially a service to the Treasury?

I do not know the answer to that question, but I will let the hon. Gentleman have an answer. My understanding is that the ESRC made the decision and the Treasury would have been willing to pay its 20 per cent. share, as it has done in the past, of whatever the ESRC chose to spend.

It would be nice to have one set of company accounts rather than separate ones for corporate reporting, tax returns and statistics, but that would not be possible or practical. They serve different purposes and there is no such thing as a correct set of company accounts. Many different assumptions can be made, and for tax purposes there are particular rules on depreciation or what expenses are allowable for tax purposes. Therefore, it would never be possible to have the same annual accounts for shareholders as for the Inland Revenue.

On statistics, there are major differences—for instance, on the inclusion of overseas activities of United Kingdom groups which have to be disaggregated for the national accounts, the treatment of depreciation which is properly deducted from company accounts but not from national accounts, and the treatment of interest and dividend flows which are different for national accounting purposes.

The book to which the hon. Gentleman referred lays out a plan—largely for inflation accounting, as I understand it—but accounting standards bodies have not been able to agree on such matters for the past 20 years and it is highly unlikely that it would be right or proper for the Government to attempt to impose a particular standard of accounting and reporting which they felt would be suitable for the many different purposes. That is not a practical proposition.

Has the Economic Secretary asked either the Financial Reporting Council or the Accounting Standards Committee for their attitude to increased legislation in this matter?

As I have said, accountants and accounting standards boards cannot agree. The United Kingdom Accounting Standards Committee does not agree on all sorts of things. Its biggest difficulty was on inflation accounting. Company accounts should be clear and explain through their notes how they arrive at the figures presented. It is perfectly easy for any reasonably numerate person to interpret such accounts in a way which gives access to a good deal of information about a company. But to put the accounts of leasing and manufacturing companies, overseas traders and banks into some straitjacket which applies to all of them is impractical. The information will be taken quarterly. The foreign and United Kingdom profits will be disaggregated and we are asking for seven items of information, all of which will be made available.

I am grateful to the hon. Gentleman for what he said about the burden of the collection of statistics. We have reduced by half the number of forms that businesses have to fill in—from 800,000 to 400,000. I regret that this order and the Chancellor's initiative will result in a few more, but we are confining it to the 1,500 largest companies and we expect to get from them the vast bulk of the information that we need because that is where most of the corporate profits are.

The hon. and learned Member for Montgomery (Mr. Carlile) made a lot of the Central Statistical Office not being independent and of politically massaged and managed statistics. I work a lot with officials of the CSO, they are a thoroughly professional group of people and what he said is pretty offensive to them. There are absolutely no grounds for saying it. The Royal Statistical Society's report said that it found absolutely no evidence of what the hon. and learned Gentleman suggests. If he suggests that the statistics are manipulated politically, he is completely wrong

rose——

The hon. and learned Gentleman must let me finish. He made a serious allegation and I intend to convince him that he is completely wrong. There is absolutely no way in which Treasury or any other Ministers could interfere with statistics. We have no basis for doing so and we have no grounds on which to do so. They are collected by and analysed by professionals and the publications are put together by professionals.

The dates on which the vast majority of statistics are published are laid down well in advance. If any Treasury or other Minister instructed a delay, it would rapidly become apparent. It has never been the case. The hon. and learned Gentleman should be extremely careful about making allegations of that kind, which cannot be substantiated

The criticisms that I made were directed not at the professionalism of the statisticians but at the regime in which they are forced to operate. Moreover, is the Minister aware that every word that I said in the debate is supported by the representations of a working party composed of senior officials of the Royal Statistical Society? Why is the Minister not prepared to pay attention to that distinguished body's representations on these matters? I can show him documentary evidence of their support, if need be

The Royal Statistical Society said that it found no evidence whatever that

"individual government statisticians operate to anything less than the best professional standards".

Will the Minister give way?

No, I should like to respond to that point. The hon. and learned Member for Montgomery suggests that the statisticians allow themselves to be manipulated by politicians like me

No

It is what he suggests because the statistics could be manipulated only by politicians such as myself telling statisticians to do something other than what they would professionally want to do

I am grateful to the Minister for giving way again. I do not wish to prolong the argument, but does he not appreciate that the regime is such that if Ministers—I make no allegations against the Minister—wish to manipulate the statistics, there is no guarantee of the statisticians' independence? That is the complaint which the Royal Statistical Society rightly makes. Why are the Government not prepared to give the same guarantee of statisticians' independence as exists in most western countries, as he well knows? Why can we not have a Statistics Act to guarantee their independence?

The hon. and learned Gentleman now makes an entirely different allegation. He says that the system is such that it is not clear that the statistical service is independent. He said before that Ministers manipulated statistics

No

I am glad that the hon. and learned Gentleman is no longer making that allegation. I was coming to the system.

If the Minister had read on from the quotation that he gave, he would have read:

"but we are not satisfied that the organizational framework in which they"—

that is Government statisticians—

"work offers the best protection against undue pressure."

Earlier in the report the society said:

"Integrity has not only to exist, but to be visible."

It says further:

"the lack of a standing mechanism within which government statisticians can have a constructive dialogue with producers and users and meet criticism is itself a comment on the existing arrangements."

Ministers have frequently discontinued series of statistics and surveys which they found politically embarrassing. For instance, not only unemployment but the distribution of income and wealth have been scandalously treated by a Government who think that they do not matter

We have certainly reduced the burden of some statistics collecting——

Ah!

but there was a strong call for us to do so. It is not necessary to continue to collect information by product categories as we did previously. Articles are published annually on the distribution of wealth. The most recent one was published last week. Articles on the distribution of income are also published annually. If the hon. and learned Gentleman suggests that the regime under which the Government statistical service is managed does not exclude any possibility of interference, that is different from his original allegation

Will the Minister give way?

No, I shall not give way again. I have given way to the hon. and learned Gentleman a lot. He made two separate allegations——

The Minister was not listening

Of course I was listening.

We believe that it is not necessary to change the system. We do not want a centralised statistical service because it is right to collect many statistics in the Departments to which that information relates. That is the way in which it has been done for a long time under Governments of all persuasions.

One of the purposes of the collection of statistics on, for example, transport is to enable transport policy makers and Ministers to make decisions. The utility of that to the national accounts is obviously important. The business statistics office, the family expenditure survey and retail prices responsibilities were transferred to the Central Statistical Office, but it is not our intention to transfer any more. We do not think that a centralised service is the right way to proceed. It would be inefficient and expensive and it would not be as useful to Departments as the present system. [ Interruption.] It is independent as it is. The collection, publication and analysis of the statistics are carried out by professionals. I have repeatedly said that to the hon. and learned Member for Montgomery.

The main, though not the only, purpose of the collection of the statistics is to help Government policy makers and forecasters. Everything that the statistical service collects is published as soon as it is ready. The delay in publication of the series in which most people are interested is between 24 and 48 hours after the information becomes available. There is no lengthy delay and the dates on which such series are to be published are set out well in advance. If there were any attempt to delay publication of the retail prices index or balance of payments figures, everyone would know. We do not think that it would be right for the Government to lose control of the process. The Government should be able to set the priorities and decide where resources will be allocated.

I was asked about independence. Many things would happen if a Minister attempted to interfere. The permanent secretary who is head of the Central Statistical Office has access to me, to the Chancellor and, at the end of the day, to the Prime Minister. There is no question but that in the long run remedies are available. As I have said, there is no way in which a Minister such as myself or the Chancellor could interfere in one of these series. What would one ask to be done? Could someone be asked to knock half a point off the retail prices index? That is simply not a practical proposition and there is no basis on which to do it. We do not have an alternative source of information on which we could or would seek to argue a separate case.

The points made by the Royal Statistical Society are misconceived. That is not the way we run our statistical service, nor is it the way we want to run it. Statistics are not produced for the statisticians in the Royal Statistical Society. They are produced mainly for the Government, to enable us to operate our policies. I am happy with things the way they are and with the way matters are organised. It is right that matters should stay as they are.

rose——

I take it that the hon. Gentleman has the leave of the House to speak again.

I did not refer in my speech to the report of the Royal Statistical Society, which was not directly germane to the debate, but I am glad that the hon. and learned Member for Montgomery (Mr. Carlile) referred to it. The Government's reply to that report and to technical questions about the development of statistics illustrated their incompetence in economic management and were quite appalling. The complacency with which they approach government and the needs of business lies close to the root of the Government's problems and the economic failures of the past two years. The House will have to return to these matters at greater length another time.

I welcome this opportunity to debate the funding of sport. I also welcome to the Dispatch Box my hon. Friend the Minister for Sport whose appointment earlier this year was inspired. I am sure that he would agree. I wish him every success in his new post. I also pay tribute to the former Minister for Sport who is now the Under-Secretary of State for Energy, my hon. Friend the Member for Lewisham, East (Mr. Moynihan). Sport in Britain benefited enormously from the energy and foresight that he brought to the job. At the Department of Energy he is known as the new Red Adair.

Although my remarks are directed principally at my hon. Friend the Minister for Sport, they are by no means exclusively directed at him. Sport transcends lines of class, race, sex, geography and physical ability. In government it is an issue that crosses departmental lines. Therefore, I hope that my remarks will be heeded by other Ministers in the Department of the Environment, especially those responsible for inner-city policy, and by those at the Home Office, the Department of Education and Science, the Department of Health, and, most of all, in the Treasury.

We cannot escape the fact that we face a number of serious and deeply rooted social problems. Various Government initiatives have been taken which I welcome, but I draw the Government's attention to some of the reasons why extra funding for sport would have a huge social benefit.

Law and order is obviously a major problem. One third of all crimes are carried out by young offenders under the age of 17. The vast majority of adults in our prisons were juvenile offenders. The number of crimes committed by those under the age of 10 is running at a staggering 6,000 a year. The peak age of offending is now 15 years.

The national health service is strained to the limit because of an increase in the number of patients for which it cares—30,000 extra per week compared with the relevant figures in 1979—especially those suffering from heart disease and other major ailments caused by being unfit.

When addressing such problems we tend to focus on the cure rather than prevention. Therefore, those who commit crime are sent to prison at a cost, which is borne by the taxpayer, of £250 per person per week. Our prisons are crowded, again at great expense to the taxpayer, and they afford little reward in terms of rehabilitation. People who suffer heart attacks are naturally cared for in hospital—often, depending upon the severity of the attack, in intensive care units. It is right that such care should take up considerable NHS resources and I accept that much of that expenditure is unavoidable. But much of it is avoidable. Surely it is vital to find the means of prevention rather than the cure. I want the Government to consider one means of prevention in particular. It is not the complete answer to the nation's health and social problems, but it could make a significant contribution to alleviating crime, particularly petty crime which most youngsters commit, and serious bad health. I refer, of course, to sport.

Organised and unorganised sporting activity absorbs the energies and, equally important, the enthusiasm of those participating. Sport is socially and physically healthy. Much crime is the product not of deliberate evil, but of boredom and peer pressure. Youngsters need to be offered activities to absorb their energies and families and schools can do much in that respect.

Can the general community encourage young people to engage in sports? It can, but encouragement is not enough. We must ensure that the facilities exist to make such activity possible. I do not believe that the Government have taken on board the fact that in every family someone is interested in one sport or another. After all, we are a sporting nation and we unite easily when we have a national champion to support. During the World cup we united to support a team of which we could be proud.

According to the latest Home Office news release—we are supposed to be proud of this—the Home Office is able to provide for a further increase in police establishments of 700 officers, together with 1,300 additional civilian staff. That means that in 1991–92 office establishments are expected to reach nearly 128,200, which represents an increase of 15,500, 14 per cent. over the last 11 years. Yet the crime figures are at an all-time high, which is an embarrassment not only to the Government but to the nation as a whole.

As I said, one third of the crimes are carried out by young offenders. I believe that we should tackle the problem by directing more resources towards schools, thus enabling sports teachers to help us to help the "latchkey youngster". When I was at school, my sports master and his colleagues would stay behind after 3.30 and organise all kinds of games. Netball, football, hockey, cricket, athletics—you name it, they organised it, voluntarily and willingly. Nowadays, however, we live in a different society with different principles, and sports teachers should be rewarded for taking part in sporting activities after school.

I believe that over the next few years the crime figures would drop dramatically if we concentrated our expenditure on that third of offenders who are under 17. It would establish a much better society in years to come

All hon. Members will agree with what my hon. Friend has said so far. But is not there a wealth of talent among youngsters and teaching staff in schools, and would not such people be keen to perform the very tasks of which my hon. Friend spoke with—regrettably—some nostalgia? Does my hon. Friend agree that what they need is encouragement, not only from the Government but from local authorities? It is a fact that many Labour authorities have actively discouraged team sports, thus discouraging teachers from taking part in worth while activities to the benefit of their pupils

My hon. Friend is absolutely right. Local authorities seem almost hell-bent on preventing any development in sporting activities, especially when planning applications are involved. I agree with every word that he said.

We have tried spending money on heavy policing, which—let us face it—does not work: the figures prove it. There must be another answer. What we need is not only a campaign to encourage youngsters and adults to take up sports; as a community, we must ensure that the means exist for everyone to participate in organised sport.

How are we to do that? A recent report by the Audit Commission revealed that sports centres provided by local authorities tend to be used predominantly by the middle class. That may be because they are more knowledgeable about the need to exercise, because they are more likely to be car owners or because the centres are too expensive; the fact remains that ordinary people do not use them. We must provide facilities for the vast majority of the population; it is not acceptable for only middle-class people to be involved in sports centres.

The answer may lie primarily—although not exclusively—with the schools, for three reasons. First, schools already have sports facilities; it is therefore a case of developing what already exists. Secondly, most people—especially in urban areas—live within walking distance of a school. Thirdly, it is at school that most people begin to participate in organised sport, and they will therefore be familiar with the facilities provided. For an adult, returning to use the facilities of one's own school will not present problems of going to the unknown, possibly distant, certainly expensive sports centres that may be provided.

A report published earlier this month by the Secondary Heads Association emphasised the problem faced by schools in the provision of sport and physical education. By channelling more resources into schools to provide sport and PE, one benefits the schools and the community generally. Ensuring that schools have good sports facilities is obviously good for pupils, but allowing the facilities to be more widely available benefits everybody. It is one of the most cost-effective and socially beneficial ways of proceeding. It will help schools in another respect. By hiring out their facilities for a modest fee, they will gain a much-needed source of income.

Schools require improved resources, which can be provided in part by Government, but should ideally be provided in partnership with local industry, local authorities and local benefactors. At present, most of the financial assistance provided by Government for sport in this country is in the form of grants to the Sports Council, which does much fine work. It assists many sports directly—no less than 66, according to its latest annual report.

As well as addressing such vital issues as the threatened loss of playing fields, the Sports Council has an established infrastructure and a strong regional arm and is best placed to liaise with local authorities and sporting organisations on the provision of sporting facilities. There is no better mechanism for using and distributing Government funds. Therefore, the question is: is the level of support sufficient? I do not believe that it is.

My hon. Friend the Minister announced last week that he was to increase the council's grant in aid for 1991–92 by nearly £3 million over this year's grant. That is to be welcomed, particularly when public expenditure is under tight control. But it still brings the total assistance to only just over £46·5 million, which is not generous. In terms of public expenditure, it is a joke. That sum could be substantially increased if my hon. Friend would consider a scheme whereby every pound donated to the Sports Council by industry were matched by a pound from Government, up to a maximum of £250 million of Government money. That would give the Sports Council £250 million from industry and £250 million from Government which, together with the sum already granted, would provide sufficient resources to make a major impact on our social problems and, in the long run, on crime carried out by young people.

Even if my hon. Friend is not convinced by those arguments, I hope that a hard-headed business reason may convince him because I know that he is a keen business man. Sport in this country generates about 400,000 jobs. It contributes to tourism earnings and pays £3 billion to the Treasury every year in tax returns. Therefore, the case for greater spending is as practical as it is socially beneficial. It is simple: the more one spends, the more one gets.

So far, I have put the case for an increase in public expenditure. I realise that that may come as a big surprise to my hon. Friend, as it runs contrary to Government policy and my own stated views. But what I seek is a comparatively modest investment, a long-term investment from which individuals, communities, the Government and ultimately society will benefit. But it is not just an increase in spending that I seek. The Government could also help by removing some of the obstacles that stand in the way of greater private sector involvement in sport.

There is no time this evening to go into, in detail, the various proposals being put forward. My hon. Friend is already aware of some of the organisations advocating them, including the Institute of Sports Sponsorship and Business in Sport. I should like, however, to refer to two which deserve serious consideration and which, if implemented, could have a major impact on the provision of sports facilities.

The first is exemption for qualifying sports organisations from corporation tax on income and gains. There is a case for sporting bodies being treated differently from their commercial counterparts. This measure would help to free funds for the development of sport at all levels, from the grass roots to national teams. For instance, the British Olympic Association would benefit by £750,000 every four years, and that would enable us to compete with other nations on a much more level playing field

In 1993 the Isle of Wight will be hosting the fifth international inter-island games which will attract competitors such as Iceland, the Faeroes, the Falklands, the Orkneys, Greenland and, of course, a team from the Isle of Wight. With 3,000 competitors coming to the island we greatly need an all-weather tartan track. My hon. Friend's point to the Minister deserves serious consideration, not just for the Olympics but for the inter-island games on the Isle of Wight

My hon. Friend is better known as the Foreign Secretary and Prime Minister of the Isle of Wight, and I agree with every word that he said.

The second relief would take the form of capital allowances on the construction of buildings housing sporting facilities. Such relief is available now only for facilities that are an integral part of hotel complexes or that form part of industrial buildings. That is an anomaly and it should be removed. There is a further case for providing a special incentive for facilities that are to be located in decaying and inner city areas.

These two measures, which would help to induce greater private investment in sport, would send out the right signals that the Government take sport seriously. I urge the Minister to consider them and I shall listen carefully to his reply to hear what hope it holds out.

This is an auspicious occasion for me, in that I can discuss the matter for which I have ministerial responsibility—sport. I am grateful to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans), who has done more for sport than almost any other hon. Member. That is well known inside and outside the House.

I am delighted that my two old friends the hon. Members for Isle of Wight (Mr. Field) and for Luton, North (Mr. Carlisle) are here, since I know that their interest in sport is as great as mine. I also notice that my esteemed and distinguished predecessor, my hon. Friend the Member for Dumfries (Sir H. Monro), has stayed up to participate in the debate. He performed with distinction the job that I now have. I also record the presence of my hon. Friend the Member for Tatton (Mr. Hamilton) in his capacity as assistant Whip.

My hon. Friend the Member for Welwyn Hatfield raised a number of interesting points, and I am tempted to throw away my prepared speech and answer them in detail. He and I are equally interested in two areas particularly. The first is the financial structure of sport. Because he and I share a friendship with the Chancellor of the Exchequer, he will know that our right hon. Friend has already done a great deal to show his commitment to the funding of sport, and not only in an increase in the Sports Council's grant for this year. That increase, although small, is an achievement by the Government during a time of difficult financial restraints.

My hon. Friend knows that matters of taxation are the responsibility of the Chancellor.

My hon. Friend was also kind enough to say that since I have been in this job I have asked for contributions from various sporting bodies, including the Sports Aid Foundation, the Central Council of Physical Recreation, the Sports Council and Business in Sport. I have asked them to send to me recommendations that they believe are pertinent to the financial structure of sport, particularly taxation. I think that my hon. Friend knows that I am extremely sympathetic, but this is a matter for the Chancellor of the Exchequer. It is only he who can make those decisions.

However, past evidence suggests, particularly in relation to my right hon. Friend's commitment to reduce the pool betting duty from 42·5 per cent. to 40 per cent.—thereby providing £100 million over the next five years for the reconstruction, renovation and improvement of football grounds—just where his heart lies. I hope that my hon. Friend's contribution, in addition to those that my right hon. Friend the Secretary of State is to make, will have some effect.

My hon. Friend also referred to sport in schools. I have much sympathy for what he said. The matters that he raised are, for the most part, for the Department of Education and Science. He will, I know, be as delighted as I that the new Secretary of State, in whose constituency lies Trent Bridge and Nottingham Forest football ground, understands sport. The father of my hon. Friend the Member for Enfield, North (Mr. Eggar), who has ministerial responsibility for schools, played first-class cricket. My hon. Friend also appreciates the importance of these matters. Any overtures that my hon. Friends and I make will at least be well received and well understood, even though it may not be possible immediately to implement all the decisions that we wish to be made.

School sport is arguably the most important area that has to be developed. As the parent of children aged 14 and 11, I see at first hand their sporting activities. Moreover, through our constituency interests, my hon. Friends and I know about the involvement of youngsters in sport. Since I took on this job, my prime objective has been to do whatever I can to develop and improve sporting facilities for young people, including those who are disabled. Sport can contribute a great deal to their long-term development, enjoyment of life and good health. Moreover, as my hon. Friend said, sport keeps them off the streets and away from crime.

Anything that can be done to bring pressure to bear on local authorities must be encouraged. My hon. Friend the Member for Luton, North made a particularly significant point about the attitude of some local authorities. Some years ago, I had the privilege to be a London borough of Haringey councillor. It is regrettable that, in recent years, Haringey has decided not to encourage competitive sport. I was told only the other day by a correspondent who wrote to me from Haringey that the council no longer allows sports days in some of its schools. They have activities days instead. No one has to compete against anyone else, and everyone gets points

Does everybody get a cup?

Probably.

The points made about sport in schools are very important. The activities that will follow as a result of local management of schools will have a salutary effect upon attitudes. Many local people, because of their parental or local community interests, will want schools to do well in sport. I suspect that that may be a radical improvement.

My hon. Friend was absolutely right to refer to those teachers who, after the school day is over, take youngsters into the nets, on to the rugby or soccer field or on to the athletics track or tennis court. Because of their interest in sport, they are prepared to give up their own time to coach youngsters and see them through at least to the school side, or even to a county or national side. I thank all those teachers who do so much to support and encourage youngsters.

My hon. Friend touched generally on another matter to which I wish to refer. I have set myself another objective: at the very least to maintain, and, arguably, to develop and improve, standards of sportsmanship. We have invented many sports—rugby, cricket, soccer, skiing——

Fives

fives, and many others. Americans use the expression, "It isn't cricket," without knowing what the game is, but they know precisely what the expression means. The standards of sportsmanship in this country, while always in need of improvement, are pretty good.

I was disturbed, however, when I attended a Football League meeting in my constituency, where I was told that Lancashire football association, which is responsible for amateur soccer in the county, last year imposed fines of about £84,000. That is a stunning figure. It represents about 8,000 bookings, 3,000 sendings off and 17 assaults on referees, one of which resulted in hospitalisation. That is amateur sport. The next item on the agenda at the meeting was where to get more referees from.

That problem encapsulates our difficulties in sport. I do not pick on soccer, which is at the forefront, because I have a high regard for our national winter game. It has achieved much. Gary Lineker and the England team and, if I may say so in the presence of my hon. Friend the Member for Dumfries, the Scottish team in the World cup contributed much to the improvement and understanding of sportsmanship, and we must build on that.

I hope that hon. Members will support me, the Sports Council and the CCPR in our attempts to improve the standards of sportsmanship so that youngsters, to whom we have dedicated much of our discussion, have heroes to emulate such as Bill Beaumont, Tom Finney, Nick Faldo and Gary Lineker, who are ambassadors for their sport and who provide an example that we should all follow. The administrators must encourage such people. The recent brawl between Manchester United and Arsenal is not the image that we want our youngsters to see. Anything that hon. Members and the administrators of our games can do to demonstrate the importance of sportsmanship will achieve much.

I am delighted to have replied to the debate without referring to my notes more than once. My hon. Friend the Member for Welwyn Hatfield has raised a topic of much importance, which is dear to his heart. I am delighted to be doing this job with the support and encouragement of my hon. Friends.