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Orders Of The Day

Volume 264: debated on Monday 23 October 1995

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Public Accounts

4.20 pm

I beg to move,

That this House takes note of the 40th and 42nd to 51st Reports of the Committee of Public Accounts of Session 1993–94, of the 1st to 40th Reports of Session 1994–95, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 2732, 2739, 2754, 2757, 2786, 2825, 2832, 2906, 2921, 2988, 2990, 3013), with particular reference to the following Reports of Session 1994–95:
First, Ministry of Defence: The Major Projects Report (1993);
Second, The Sports Council: Initiatives to Improve Financial Management and Control and Value for Money;
Fifth, Council Tax Valuations in England and Wales;
Twenty-eighth, Severance Payments to Senior Staff in the Publicly Funded Education Sector;
Thirty-third, Foreign and Commonwealth Office: Overseas Representation: Irregularities at the Sana' a Embassy;
Thirty-fourth, Lord Chancellor's Department: Qualification of Audit Opinion and Alleged Frauds on the Green Form Scheme.
The Public Acounts Committee is presenting 51 reports to the House; 11 from the Session 1993–94 and 40 from the Session 1994–95. The number of reports indicates the amount of work that the Committee does—it is a large number and the Committee has been extremely busy, as is normal.

My first pleasant duty is to welcome the Financial Secretary to the Treasury to his post. We were very grateful to his predecessor, now the Secretary of State for Transport, for the way in which he welcomed the Committee's eighth report, on the proper conduct of public business. His welcome was of enormous help. The report paved the way, as we know, to some of the Nolan recommendations, which we watched with some interest. I look forward to the new Financial Secretary's contribution and I shall welcome him, in due course, to an early meeting of the Committee.

My next pleasant duty is to thank the Comptroller and Auditor General, Sir John Bourn; the Comptroller and Auditor-General for Northern Ireland, John Dowdall; and the Clerk to the Committee, Ken Brown, for helping to bring about the 51 reports which are being brought to the attention of the House.

Producing such reports is a burdensome task for members of the Committee, but it is essential. It is unquestionable that Gladstone got it right 130-odd years ago when he decided that the Public Accounts Committee should be set up. Surprisingly enough for those days, as well as for these, he decided that the Chairman should be an Opposition Member. I doubt whether that would have happened in any subsequent year. The choice of Chairman from the Opposition is central to the work of the Committee because it ensures that the examination is conducted with a more open mind than might otherwise be the case.

The evidence that the Committee gathers from accounting officers is of enormous importance. It monitors Government expenditure and looks for economy, efficiency and effectiveness. When permanent secretaries—accounting officers usually are permanent secretaries—come before the Committee, its members have in mind the assessment of their abilities and standing. I suppose that that in some way makes the PAC almost unique—I think that it is unique—among Committees of the House. Accounting officers come before the Committee again and again and we are able to assess their value to their work.

I know how much we depend on those servants of the country to prepare for their meetings with the Committee. I am aware that it is a great burden on them, but the result must be to ensure that their responsibilities are scrutinised properly.

Unanimity is the most important aspect of the roughly 500 reports we have produced since I had the honour of becoming the Chairman of the Public Accounts Committee in 1983. We are utterly dependent on that unanimity which, strangely enough, is not difficult to obtain. We get it because, at the end of it all, we are there to protect the taxpayer. Anyone who came to our meetings would find it difficult to know, on most occasions, who was an Opposition Member and who was a member of the party in government—we are united in the defence of the taxpayer.

Even when we have discussed matters such as privatisation, which most divides the House, we have come up with unanimous reports, not fudged reports in which we try to show that we are agreed when we are not. We say that it is not for us to look at policy, but to examine how policy has been implemented. Although we may disagree with policies—very strongly, in many cases—we want to ensure that the taxpayer gets value for money once a policy is accepted. We have come out with important points even on issues on which we are obviously divided.

Does the right hon. Gentleman agree that the key point is that, over a number of years, perhaps going back to 1981, many lessons, which have been taken up in subsequent privatisations, have been learnt from Public Accounts Committee reports?

That is undoubtedly correct. Some of the most important lessons were set out by the right hon. Member for Horsham (Sir P. Hordern), who I am pleased to see in his place. He pointed out the need to sell the issues in tranches. That was a valuable point. Why did the Government sometimes insist on trying to sell everything off at one go? They do not do that with Government debt. Sensibly, at the beginning of the year, the Government study the situation and try a billion pounds here or half a billion there—they test the market. Government brokers become expert in testing the market; that is what they are for.

When it came to selling off public assets in the privatisation procedure, however, the Government did not proceed in the same way. We should have had the expertise that Government brokers have in gilts so that we could have got the best price at any time. The Government could have saved themselves much of the strong argument that they experienced on the Floor of the House and elsewhere. We have welcomed the changes—there have not been enough in my view—that have come about as a result of that useful part of our reports.

We have also considered many other aspects of privatisation, such as brokerage fees and advertising. Even in the areas that divide us most as individuals—this is a most important matter—we are able to come to unanimous conclusions.

The National Audit Act 1983 gave us legislative rights to propose matters to the National Audit Office for investigation. Our success—and the success of the National Audit Office—is not only what we uncover, important though that is, but what our presence as a Committee prevents. We act as a deterrent to what would incur our displeasure.

We have the recruitment by Sir John Bourn and his staff of those who have a much better reputation than was the case years ago. In the old Exchequer and Audit Department, they were civil servants who were usually recruited as executive officers at the age of 18 and given training which amounted to not a great deal more than book-keeping.

Now, the civil servants involved are proper auditors. They have Chartered Institute of Public Finance and Accountancy qualifications and chartered accountancy qualifications. The enormous difference is that now, when they go into Departments and have discussions with senior officers up to the level of permanent secretary, they are seen as equals. Previously, they used to be seen as executive officers. Firms in the City now want their services and angle for them. Some have been made tempting offers but, fortunately, we have been able to retain their services. When they go into Departments, they are much more hightly respected as a result.

There have been considerable changes during the past 20 years since the days of the old Exchequer and Audit Department. Almost without exception, institutions—including the universities, the judiciary and the civil service—have been under attack and pressure, and had criticism levelled at them, but the National Audit Office's reputation has steadily improved, year by year. The reports of the old Exchequer and Audit Department were perfunctory compared with those produced now, as were the initial reports of the NAO itself.

In its 12 years of existence, the NAO has developed. Whereas in the beginning it produced tentative reports, it now displays a mastery of the subject. It has impressed us all. I am visited regularly—far too often for my poor battered diary—by people from different countries who want to see what we are doing and how they can learn from us.

Parliament should be proud that the Comptroller and Auditor General is now an Officer of the House—that was not the case previously—as that does more to maintain standards of probity, as well as those of economy, efficiency and effectiveness, than anything else that we could have done. My hon. Friend the Member for Norwich, South (Mr. Garrett) realised that Gladstone's ideas had been whittled down, and he showed how they could be reformed.

I should like more changes in the work of the NAO. One of the areas it is to examine—it is starting to do so already—is the regulatory framework of the public utilities. There is a range of methods of regulating the utilities; the NAO will want to ask whether they are the most suitable. It will ask what lessons can be learnt from the successes of each regulatory operation.

Another success was our important report on the proper conduct of public business. I am grateful to the Secretary of State for Transport who, as Financial Secretary to the Treasury, gave the report a great welcome. The PAC report showed that there were great weaknesses in certain methods of dealing with fraud. Normally, fraud does not take up a great deal of the Committee's time—although it takes up more time now—but when it appears on the scene, it must take priority over everything else in our discussions.

I was pleased to see that, as a result of our eighth report and the evidence that I gave to the Nolan committee, the Treasury accepted that notes of dissent should be made available to the PAC. If a permanent secretary disagrees that an expenditure is correct, he can write a note of dissent. Previously, if the permanent secretary came before the PAC, the note could be held up as evidence that it was the Minister, not the permanent secretary, who had instructed the accounting officer with regard to the expenditure, but the Committee would know about the note only if there had been an investigation or if there was a question of fraud. In the case of the Pergau dam, the Committee was fortunate in that an examination, which allowed us to learn about the role of Sir Tim Lankester, was being undertaken. I note that he is to be moved. I hope that that has nothing to do with his notes of dissent. I wish that I could be completely happy about that one.

The safeguard that we now have is of great importance. Even if a note of dissent does not relate to a question of fraud, the Public Accounts Committee will now be able to receive details of it. I am a little worried that notes of dissent will become less common because people who might write them will be uneasy that details will come before the Public Accounts Committee and that that might prevent their having the success that they might otherwise have had if the matter had been dealt with between the accounting officer and the relevant Minister. I should like to offer some guarantee that that will not be the case. We will not seek to capitalise on notes of dissent. Such matters should be open, perhaps to the Comptroller and Auditor General, to ensure that notes of dissent are not handled in that manner.

I know that a number of notes of dissent have been written, and that even more are written at night but, in the cold light of morning, are not delivered to the Minister. There are some good reasons for that. The relationship between the Minister and the permanent secretary would obviously be weakened or even damaged by such a note of dissent.

Fraud and probity in the civil service represent a continuing aspect of our work. Value for money and saving money are important, but most important are standards in public service. We pride ourselves on those standards. The need to prevent any fraud arises from the fear that there can be collusion between a number of people. The great help that we have is the enormous reputation of standards of conduct in public life. The greatest protection is the honest person who is feared by anyone who tries to commit such acts.

The task of the Public Accounts Committee is essentially simple with regard to value for money. What is required—I made this clear when we first started with the National Audit Office—is to compare the objectives with the achievement; the input with the output. It is simple. There is a certain amount of monitoring, so if people get it wrong at least they are able to stop it. We want monitoring phased so that, at any one time, we can see where we are. Sometimes it is not easy to quantify things, but almost always it is possible to quantify in some way. It is a wonderful discipline. That is what we try to achieve.

Many of this year's reports have lessons of one kind or another for us. The Committee's first report in the Session 1994–95 was "Ministry of Defence: the Major Projects Report (1993)". In paragraph 19 we say:
"We are concerned that some 80 per cent. of major projects were unlikely to achieve their in-Service date. We note that the Department have in the past tended to take an optimistic view of the in-Service date and that they are now taking initiatives to improve realism, such as 'three-point timings"'—
the three points being the best case, the worst case and the most likely case. The report continues:
"The Committee intend to monitor the outcome of this initiative closely."
The report deals with 25 projects totalling more than £25 billion. Although that is a small proportion of the total number of projects, the amounts of money are very large. Except on Trident, the overspend on each project was just less than £1 billion. What worries us most is the slippage, which is more than 30 months.

Mid-life updates occur when, half way through a programme, it is decided that improvements can be made in the weapons system. That creates a danger of slippage and cost overruns. We note that there is a five-year slippage, which is unacceptable. In paragraph 41 we say:
"Most of the upgrade programmes examined by the National Audit Office have been ambitious in scope."
They have a
"wide variety of proposed enhancements."
We used to call that "gold plating", meaning improvements that exceeded what was essential.

The danger of being at the front end of technology is that one does not know how much that technology will cost or how long it will take to produce. If one continues on that basis year by year, one will seek further improvements and, in theory, never obtain the weapons system at all.

A line must be drawn somewhere, and we say that we must be sensible about drawing it. We say that that process has
"led to the scope of programmes being reduced during their implementation to make them affordable."
The Department starts off with great plans to improve the weapons system. Some way through, it realises that it has overdone the cost and starts scaling down the project. There is not only slippage, but a poorer result.

We say in paragraph 44:
"there had been very little dissemination of experience between the project officers involved in such programmes."
We understand and hope that the Department will improve matters in that respect.

The Eurofighter is one of the most serious of our expenditures. The National Audit Office detailed a cost overrun at 29 April 1994 of £573 million. The latest overrun is £1.25 billion for the development programme alone—44 per cent. over estimate. Cost overruns of the whole project will probably be about £2.2 billion. That is phenomenally expensive, and it leads us to embark on a fresh examination of the way in which collaborative projects are undertaken.

Collaborative programmes involving several countries—in that case, Germany, Italy, Spain and the United Kingdom—unquestionably cost more than single-country programmes. At one time, it used to be reckoned that collaborative programmes cost 10 per cent. more. That figure is being revised. Language difficulties and pressure to obtain work in certain places add to the costs. We need to get that one right, because there will be much more international collaboration.

Ideally, one would have wished the smaller and well-defined programmes—the things that can be done more easily—to have come first, enabling us to learn lessons that would help with larger-scale expenditures. The trouble with smaller, well-defined programmes is that they can be done by individual countries, so there is less need for them, but we need to undertake some of them in collaboration. I believe that savings can be made there as well, because one obtains the advantages of scale and experience. That might be an approach to the large developments somewhere near the frontiers of technology in due course.

I shall now discuss our second report, "The Sports Council: Initiatives to Improve Financial Management and Control and Value for Money". We point out that the Sports Council receives £48.8 million grant in aid, which is 95 per cent. of its income, from the Department of National Heritage. We were worried about standards of propriety. In paragraph 24, we said:
"We are particularly concerned that the former Director General and Accounting Officer and the former Finance Director had conflicts of interest".
They arose from the setting up of a private subsidiary company, which happens in several Government Departments. For good reasons, they set up subsidiary companies to deal with, perhaps, the marketing of one or two aspects of their work—and very good they are, too—but there must be a clear distinction between the work of the Government Department or Government-funded body concerned and that of the private organisations.

We say that there were conflicts of interest
"despite numerous reports by this Committee drawing attention to such dangers."
Clear dangers exist. At all stages there is a need to establish an arm's-length relationship.

We discovered that there was not an arm's-length relationship, and we noted specifically in paragraph 42 that, on the retirement of the director general of the council,
"the Trust Company appointed"
"as their part-time Chief Executive without the post being advertised."
He went from director general of the council to chief executive of the trust company without the post being advertised. It is obviously very dangerous to act in that way.

We say in paragraph 52:
"We are very concerned that the Council awarded a contract to Blenheim SportsCo Limited"
— another subsidiary company—
"for twenty years to manage the Council's annual exhibition as this does not allow the Council regularly to test the market."
There was no testing of the market, and preference was given to certain people.

Although commercial spin-offs are desirable, they must be handled with great care. We have the enormous advantage of the standards in public life, which we must do our utmost to protect. The Committee fully accepts that.

The fifth report is entitled, "Council Tax Valuations in England and Wales". The council tax came into effect on 1 April 1993. Properties were placed in eight broad bands from band A, for properties worth less than £40,000, to band H, for those worth more than £320,000. The bands were slightly different for Wales. The responsibility for valuing properties rested with the Valuation Office Agency of the Inland Revenue.

It is important to get the banding right. The major problem that we have had with the council tax—as with the poll tax—is the weakening of the discipline of taxpayers. We must do our utmost to return to the position in which people did not, in the main, try to avoid their responsibilities as taxpayers. People's respect for the system is enormously important to us. It is important, for that reason also, to get the bandings right. Accuracy is important.

The banding was undertaken. We found that 2 million properties might be in the wrong bands—that slightly fewer than 1 million might be too high, and that slightly more than 1 million might be too low. When we examined the situation, we found that many appeals would not be resolved until more than two years after the introduction of the council tax.

The "Treasury Minute on the Fifth and Sixth Reports from the Committee of Public Accounts 1994–95" says:
"the aim is to settle appeals within 12 months",
which is better, but there is a serious problem with the wide variation between the level at which the bands were set in different parts of the country.

Some bandings by the private sector were undertaken at 19p a valuation. That might appear to be a good deal, but if there is an appeal it is likely that it will cost 70 times as much to correct, so it could prove to be a rather bad deal. We note that the Valuation Office Agency has not yet analysed the number of appeals it has received to determine whether they relate to the private sector or to Valuation Office Agency valuations. We recommend that that be done to provide further assurance that common standards are adopted.

We note that the Valuation Office Agency was not able to record the time spent by its staff on the banding exercise, but it tells us that it intends to introduce a better time recording system to allow the work to be fully costed. We welcome that.

I shall now discuss two aspects of our report, "Severance Payments to Senior Staff in the Publicly Funded Education Sector". The first is the university of Huddersfield and the vice-chancellor's severance package.

There are 151 higher education institutions in England, 21 in Scotland and 16 in Wales. They are independent bodies that manage their own financial affairs. We are concerned at the way in which the whole undertaking was conducted. The root cause of the problems with the original severance agreement at Huddersfield was the decision made at the end of 1993 to exclude staff and student representatives from the membership of the university council there. That led to considerable upset among staff. In consequence, there was a breakdown of trust between the governing council, the vice-chancellor, staff and students.

As a result, although the university is independent, the Higher Education Funding Council objected when a severance package amounting to more than £411,000 was given to the vice-chancellor—let us be open about this—to shut him up and get rid of him in the easiest way. The university used our public money to satisfy its own purposes. We cannot accept that.

Worse than that, there was a gagging clause in the agreement which insisted that the vice-chancellor should not say anything about the reasons for his dismissal or the amount of money that was involved. Luckily, we heard about it indirectly, partly from my hon. Friend the Member for Huddersfield (Mr. Sheerman) and partly from elsewhere. As a result, I stated clearly that gagging clauses cannot be justified. We cannot spend public money to enable people's positions to be changed on the basis that nobody will ever know about it.

The package included additional compensation and we understand that leading counsel for the HEFC advised that the settlement arrangements were irrational and excessive and could be ultra vires. As a result, we have agreed that, in nearly all cases, gagging clauses will not be allowed and that we must ensure that severance packages are justifiable and acceptable.

The second case involved the university of Portsmouth. The vice-chancellor there resigned after a no-confidence vote by the staff following an investigation into his expense claims. A settlement of £52,000 was paid to avoid possible legal action. We regarded that action as being similar to the first case and argued that public money cannot be used to keep people quiet. It might be done in private industry—that is its business—but taxpayers' money as voted by the House cannot be used to settle such matters. Purely as a consequence of that case, we came across the surprising fact that the former vice-chancellor had been paid an annual salary of over £17,000 as chairman of an NHS trust. The rate had been in accordance with a scale relating to the size of the trust and based on a notional time commitment of three and a quarter days a week. He got £17,000 for three and a quarter days a week and the rest of the time he was a vice-chancellor, for which he was paid £90,000. We stated:
"We are also surprised at the University's decision to pay the former Vice-Chancellor a salary of £90,000 a year while allowing him to continue with another important public sector job which had a notional time commitment of 3 1/4 days a week."
It is important that the National Audit Office should have the right to examine all such organisations.

We examine just over half of the non-departmental public bodies. I would want us to examine all of them. The National Audit Office should be able to examine them all. That does not mean that private firms of auditors would not be involved. There would be many cases, perhaps almost as many as there are now, where the National Audit Office could contract with the private sector to carry out the audit, but it would remain in charge. That way there would be more consistency between audits. In addition, the National Audit Office has the standing to which I have referred and its involvement would give the House reassurance.

There is the problem that many private sector auditors make a fair amount of their money through consultancies. It is difficult for them if their efforts are not well received by companies and they fear losing the audit contract and the profitable consultancies that go with it. By all means let auditors keep those consultancies if they wish, but at least let the audits be undertaken under the auspices of the National Audit Office.

The next report with which I wish to deal is the 33rd report, which deals with the Foreign and Commonwealth Office and irregularities at the Sana'a embassy. "Irregularities" is a wonderful word for a disgraceful, scandalous fraud—one of the worst for some time.

A Mr. Ryan, who was a member of the diplomatic service, had access to a sterling account from which he could draw money and convert it into Yemeni rials. The money was changed at the black market rate. The report states:
"During 1993 the Foreign and Commonwealth Office became concerned about possible contractual and current irregularities at their post in Sana'a, in the Yemen. The existence of these irregularities was confirmed in November that year … Mr. Gerald Ryan … former Second Secretary, Management Officer/Consul in Sana'a was arrested.
Mr. Ryan admitted to the police that he and the accountant … had been involved in these irregularitio
He said that his share of the gains was about ikA),000 at the current exchange rate and he was released on police bail while under suspicion of false accounting and theft. The police discontinued the investigation after Mr. Ryan died on 24 December 1994. Mr. Ryan accepted that he made $50,000—about £30,000.

The Yemeni rials were
"drawn from the post's sterling account at the official exchange rate. Enough of that was then converted at the higher market, or 'parallel' rate to replenish the … account and the rest pocketed by Mr. Ryan"
or his associate.

The report continues:
"The 'parallel' exchange rate was up to four times higher than the official rate.
The Department estimated the potential for profiteering in this way to have been between £607,000 and £677,000."
We will never know the exact amount.

That was not all that Mr. Ryan did. He was involved in other irregularities, such as issuing visas without following established procedures and interviewing clients and completing application forms, apparently without the receipt of a fee. That is serious because 405 visa applications were made and it can reasonably be assumed that he did not deal with them without any financial recompense. The report states:
"we find it astonishing that the management at Sana'a also allowed their staff to use public money to gain up to £670,000 from manipulating the local currency markets. And we are concerned that the Department did not inform us of other possible irregularities at Sana'a, possibly involving the use of Overseas Development Administration funds until after the evidence session."
That is a serious matter. The report says that we were concerned that
"there were no job specifications for locally-engaged staff, that Mr. Ryan was able to recruit local staff known to him and that those appointed may not have been the best candidates."
Mr. Ryan might have got his accomplices in that way.

The report then deals with the role of the ambassador. Mr. Ryan arrived in Sana'a in January 1989 and returned to the United Kingdom just over four years later, but there were two ambassadors during that period. We asked why action had not been taken, because failures had been reported by internal auditors, but the warning signals had not been appreciated immediately. The report says:
"The Department told us that, although there had been much visiting, action subsequently taken had not been sufficiently decisive. Management of the post by the Ambassador, Mr. Marshall, had been defective."
We therefore asked why he had not been removed, or some other pressure brought to bear. We were told that the Department knew about the management weakness in the initial period and about serious shortcomings in Mr. Marshall's performance, but that they were not judged to have reached an unacceptable level. One and a half years later, in January 1994, a visiting officer from the overseas accounts section found that many of the deficiencies reported by internal audit still existed. The report singled out several weaknesses.

The report says that the management by senior officers at the embassy was "appalling"—that was undoubtedly the right word to use—that that was the root cause of the problem, and that we looked forward to receiving information from the Department on the outcome of disciplinary proceedings as soon as it was available. I hope that we shall hear from the Financial Secretary about that when he responds.

The next report is the 34th report on the green form scheme. The criminal legal aid concerned amounts to £432. million. The accounts have been qualified for the fourth year in succession, which is an extremely serious matter. That part of the operation of the Lord Chancellor's Department had its accounts qualified year after year without proper action being taken. Payments to solicitors on green form schemes amounted to £141 million. We say:
"the Department has failed to resolve satisfactorily the problem of inadequately completed statements of means."
Justices' clerks are supposed to have statements of means, which are used to decide whether legal aid should be granted. In our report, the justices' clerks say that, in too many cases, they are still failing to comply with regulations that have the force of law. We go on to say:
"We find this inexplicable given the Department's assurance about the continued co-operation of the Justices' Clerks Society."
We strongly believe that that failure to carry out the law and comply with the regulations should not be allowed to continue.

We know that, in many ways, this is a blank cheque and that the Government do not carry out a proper investigation of the green forms. Moreover, an increasing number of solicitors advertise their services—that is perfectly sensible and no one is against it—knowing full well that the green form system is available. It therefore occurs to some of us that the two can be brought together: the green forms as a blank cheque and advertising for those blank cheques. This is a serious matter.

The idea behind the green form system is first class because people with limited means are helped to understand the law and to deal with certain matters, but the scheme cannot continue in that way. Either the law must be changed or we must insist that the justices' clerks obey the law. If justices' clerks in a court of law cannot obey the law, one wonders who can. The matter is totally absurd. There is a legal requirement and they must follow it. If for some reason which I fail to comprehend they cannot, we must change the law.

We note that a system of franchising is being set up, which will be available to firms whose control systems have been rigorously audited. We understand that, by March 1996, the board hopes to have between 1,200 and 1,500 firms, accounting for one third of the expenditure, in the franchising system. I hope that the Financial Secretary can tell us how that is proceeding.

On the wider question of legal aid and the high fees paid under it, I note that the Lord Chancellor is urging, in a Green Paper, a fixed rate for lawyers. That matter deserves further examination and, in the light of public expenditure constraint, that area cannot be left untouched. The Public Accounts Committee may wish to examine it in due course.

Time allows me to deal with just one or two other reports. I wish to comment on more reports this year than in most previous years, which makes it difficult to bring out the issues. Even if I picked out one of our less contentious reports, we could have a whole day's debate on it, but the very number of reports frightens people off a little and, as a result, the reports do not get the examination that they deserve.

I should say a word on a few of the other reports and, if I hurry through them, it is only because I think that the issues that concern us should appear somewhere on the record.

The third report deals with the Merseyside development corporation, which was set up in 1981 to secure the regeneration of the designated area. In August 1992, tall ships went to Merseyside, there was a grand regatta of Columbus, a splendid programme was held to commemorate the quincentenary of Christopher Columbus's trip to America and there was a gala concert and fair for the new world. In the event, neither the regatta nor the concert recovered its costs. Some £1 million was spent and the net cost was some several hundred thousand pounds.

The aspect that concerned us most was that there were major overruns on hospitality and publicity. Certain firms gained advantages from that expenditure and public money was used to purchase and distribute, free of charge, concert tickets worth more than £100,000. We say in the report:
"We note the Corporation's explanation of the terms of the additional £150,000 payment to a separate company formed to stage. the concert … four days before the concert. However, we find it astonishing that the Corporation were … required to bail it out at such short notice"
by purchasing sponsorship tickets and rights. That was an obvious and notable failure.

Another failure to which I should draw attention was raised in the 19th report on business sponsorship of the arts in 1994–95. The programme director in charge of the scheme authorised payments totalling £175,000 to fictitious organisations. That is a serious matter. Mr. Nick Wood, an association programme director in charge of the scheme, authorised that programme having first constructed elaborate fraudulent documentation. He was prosecuted, found guilty of fraud and imprisoned. Some of the money was recovered, but some was not.

Our sixth report deals with the Wolds prison. A contract was given to Group 4 on the basis of best value for money, although it was not the lowest price. We have no objection to that, because contracts are sometimes not given on the lowest price, but one of the eight members of the panel that recommended Group 4 left the Prison Service nine months after the contract was placed—to join Group 4.

Although the final decision was that of Ministers, a full explanation about why Group 4 was awarded the contract was not given. The Committee advised that, to avoid any question of impropriety,
"detailed reasons should always be recorded whenever a contract is not awarded to a tenderer who submits the lowest bid and is judged capable of meeting the key performance criteria. This would also provide a basis for informing the other short-listed firms why their bids had been unsuccessful, a practice we would recommend the Prison Service to consider."
That applies to many cases. The award of a contract should be subject to greater openness and, when it is not given to the lowest bidder, the reasons for that decision should be given.

The Welsh Development Agency has caused the Committee a great deal of concern and has been the subject of lengthy discussion. Our 29th report on the WDA for 1994–95 is not as serious as some of our earlier ones on it—it has an exceptionally serious history. We note that Mr. Michael Scholar, from the Treasury, is now permanent secretary at the Welsh Office, and we look forward to his putting the Department into somewhat better order than it used to be in.

We were concerned about the acquisition and sale of a site in Aberdare to Tesco plc. We were concerned that, in a number of key areas, the WDA did not know what was going on when it should have done. The PAC's particular concern involved the sale of the Gadlys road site to Tesco plc. The agency received a late and unsolicited offer from Tesco and it did not notify that fact to other interested parties. We questioned whether it was wise that two directors of Tesco should have been directors of the agency with responsibility for deciding on matters such as the disposal of the Gadlys road site. We were deeply concerned that that action was not fair to the other offerers and that the agency appeared to have given preferential treatment to Tesco. The PAC noted:
"We consider that the assessment by the Welsh Office that the disposal of the … site was badly handled severely under-estimates"
the serious matter of probity in the public sector. We considered that the disposal had been handled in a totally unacceptable manner. I hope that we will not hear any more about the WDA and its failure to carry out its responsibility for the proper conduct of public money.

I must also mention Dr. O'Connell, a consultant who was paid for 11 years because no one could bring himself to dismiss her or to bring her case to a satisfactory conclusion. That consultant was paid year after year until the matter came before the PAC and we saw what had gone on. I hope that we will not discover any similar examples.

Hospital catering was also the subject of one of our reports. We discovered that people inherit the catering requests of the previous occupant of their bed. In the week after the previous patient left, the new person in the hospital bed has to have the same meals that his predecessor ordered. That is nonsense. Some hospitals manage to change the catering orders on computer on the same day. I could detail a few more nonsenses, but time is pressing and colleagues would like to speak. Such matters deserve further attention.

This year, the PAC has had to deal with more questions of fraud than in most other years, and I hope that they will take up less of our time in the future.

5.13 pm

I join our Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), in paying tribute to Sir John Bourn and his colleagues at the National Audit Office for the splendid work that they have done during the year and to the Clerk of our Committee, Mr. Ken Brown. I also pay tribute to our Chairman for the great assiduity he displays in his work and the impressive tour d' horizon of the reports of the Public Accounts Committee that he has given hon. Members.

This annual debate provides us with the opportunity to consider the PAC's outstanding reports, of which, as we have heard, there are 51. As I listened to the right hon. Member's speech, I could not help thinking that perhaps few members of the public realise what is involved in producing 51 reports. It might be appropriate to mention that the Committee meets twice a week when the House is sitting and sits on average for about two and a half hours. Any member of that Committee who is doing his homework will spend at least two hours preparing for each of its sittings. It is probably the busiest Committee of Parliament and, as the senior Select Committee, it carries considerable clout.

As usual, today the Chamber is populated by colleagues who are members of the PAC, including the Financial Secretary to the Treasury, whom we are pleased to see in his place. Also listening to our deliberations is that distinguished parliamentarian, my right hon. Friend the Member for Horsham (Sir P. Hordern), the Chairman of the Public Accounts Commission and a former member of our Committee.

I should like to drallo the attention of the House to the 34th report of the PAC, which deals with the Lord Chancellor's Department and the qualification of audit opinion and alleged fraud on the green form scheme. The Chairman of our Committee has already referred to it, but such is its importance that I should like to mention one or two other aspects.

Expenditure on criminal legal aid in 1993–94 comprised £194 million paid for legal proceedings in magistrates courts and £238 million for proceedings in the higher criminal courts—a total of £432 million. By any measure, that is a huge expenditure of British taxpayers' money and it is absolutely essential that it should be properly accounted for. Most awards of legal aid, which provide the authority for payments to solicitors and counsel, are granted in the magistrates court. It was in the light of the audit findings of those courts that the Comptroller and Auditor General qualified his opinion for the fourth year in succession. He did so because of the limited evidence available to ensure full compliance with the regulations relating to the granting of legal aid.

Grants to the legal aid fund total the staggering amount of £975 million. As hon. Members know, the fund is administered by the Legal Aid Board under the general guidance of my right hon. and noble Friend the Lord Chancellor. One of the schemes offered by the Legal Aid Board—the well-known green form scheme—relates to legal advice and assistance. Payments to solicitors under that scheme amounted to £146.6 million in 1993–94. The Legal Aid Board and the police are investigating allegations of fraud in claims for legal advice and assistance.

Given the serious nature and possible implications of the alleged frauds, the Comptroller and Auditor General reported the facts to Parliament. It was on the basis of his report that the PAC took evidence from the Legal Aid Board and the Lord Chancellor's Department about the alleged frauds. We say in our report:
"we are dismayed that, after four years in which the Comptroller and Auditor General has qualified his opinion of the accounts and eight separate initiatives, the Department has failed to resolve satisfactorily the problem of inadequately completed statements of means."
Despite all the efforts of the Department, in too many cases justices' clerks are still failing to comply with the regulations which, as the Chairman of the PAC has pointed out, have the force of law. To me, and I dare say to any hon. Member, that is an extraordinary situation. Justices' clerks, surely the most thoroughly respectable and upright citizens, are failing to comply with the force of law. The Committee considers that failure inexplicable
"given the Department's assurance about the continued co-operation of the Justices' Clerks' Society."
It is still not possible to find out whether legal aid should be granted and, as a result,
"irregular expenditure is likely to result".
The PAC is seriously concerned that the Lord Chancellor's Department has no means of enforcing the regulations. It is a matter of urgency and I hope that my hon. Friend the Minister will tell the House whether the legal aid regulations are enforceable.

Does my hon. Friend agree that there are two tests before someone can obtain legal aid? First, one has to ask whether it is in the interests of justice that the individual should do so. Secondly, there is a means test. As the Lord Chancellor's Department and the justices' clerks seem unwilling to deal effectively with means tests, is it not about time that the responsibility was taken from them and given, perhaps, to the Benefits Agency or another body that is more familiar with implementing means tests?

My hon. Friend is right. I have considerable sympathy with his suggestion. There is much concern about the matter in my constituency and in my hon. Friend's. I can say that about my hon. Friend's constituency without a shadow of doubt because I am one of his constituents. There is general concern, however, that stems to some extent from the publicity that has been given to some high-profile cases such as those of Jawad Hashim and the Maxwell brothers. It is unacceptable to most ordinary citizens that grants of legal aid were made in some cases, given the large sums of taxpayers' money that were involved. Contributions were assessed on insufficient information about the applicants' claims to financial resources. We must remember the huge sums of public money that are at stake and the anger that has been expressed in certain newspapers—especially in the London Evening Standard but in many others—about a scheme that seems to most people to be extraordinary in its implementation.

I put several questions to the distinguished civil servant who is the permanent secretary to the Lord Chancellor's Department. Sir Thomas Legg is also the Clerk of the Crown in Chancery. In one instance, he replied that he could not say why grants of legal aid were made improperly because
"these assessments, or the lack of them, were made by the courts and here we are talking about 500 magistrates' courts that are dealing with over half a million applications a year."
I asked Sir Thomas if the Lord Chancellor has responsibility for the operation of the magistrates courts. He replied in a fascinating way. He said that it was "yes and no." He told me that my question required a two-part answer. I wondered whether I was listening to one of those wonderful Gilbert and Sullivan operas all over again. I was told that the magistrates courts are undertaking an essentially judicial function in granting or refusing legal aid and that they are not in any sense part of central Government.

It seems that members of the staff are not civil servants. They are not part of Sir Thomas's Department. They are not subject to the Department's direct control. Central Government, in the form of the Lord Chancellor's Department, grant-aids 80 per cent. of the expenditure of the courts, but it does not control the courts' administration in any detail. That is done by more than 100 local magistrates courts committees. According to Sir Thomas, they are fiercely independent of central Government. There we have it. Fiercely independent people are responsible for an extremely important job that is not, unfortunately, being done very well.

We are told that the Department and the Legal Aid Board have together produced a comprehensive guide that sets out what they consider to be the proper application of the interests of justice criteria, to which my hon. Friend the Member for Beaconsfield (Mr. Smith) referred. It seems, however, that the various sets of guidance have not yet proved to be effective, bearing in mind the huge sums that are involved. I was assured that the Justices' Clerks Society is well aware of that view. I was told that
"if the present system, by which legal aid is granted by the magistrates' courts, cannot be seen to deliver propriety and regularity then the Lord Chancellor will have to consider taking that function away from the courts and vesting it in other hands."
I hope that my hon. Friend the Financial Secretary will tell the House about the progress that the Lord Chancellor is making. Has he considered recently taking the responsibility away from the courts? If not, why not? After all, the record to date cannot be said to be very good. Public concern must be responded to urgently.

The PAC was told by the Legal Aid Board that over the past three years, there have been 12 prosecutions following alleged fraud on the green form scheme. It appears that 90 firms of solicitors have been reported to the police and about 90 to the bureau dealing with complaints about solicitors for abuse of legal aid. That is an unhappy situation. After all, we are dealing with an important profession.

The Legal Aid Board told the PAC that it has recovered £250,000 and was withholding £550,000 pending the outcome of inquiries. It appears that it has secured agreements with individual firms to refund a further £85,000, which has not yet been paid. Of all the cases investigated over the past two years, the board estimated that the loss through fraud would be between £1.9 million and £3 million. That is a significant sum. I am sure that my hon. Friend the Financial Secretary will expand on the Treasury minute, which we have studied, which takes the matter a little further forward.

The 30th report, entitled "Entry into the United Kingdom", is one of the most important to come before the House. It deals with issues that affect almost every citizen. The decisions of the immigration service of the Home Office, which turn on whether many millions of passengers arriving each year at airports and ferry ports have valid documents and are entitled to enter the country under our immigration laws, are of the greatest interest and concern. The report is of especial interest to my constituents because my constituency is adjacent to London airport. The House will know that Heathrow is in the borough of Hillingdon. That fact brings some special and expensive problems to the local authority, especially in caring for unaccompanied child refugees at a cost of much more than £1 million a year to council tax and income tax payers.

When the PAC examined the permanent secretary at the Home Office on this and other matters he told me, in answer to my questions, about the steps that are being taken to ensure the detection of child refugees when they leave the airport or vessel. Their entry into the United Kingdom appears to be a growing problem. He made the important point that the problem rests not so much with unaccompanied children but with such children who claim asylum. There were 357 in 1994. The rate at which they came in increased during the year. It was 69 in the first quarter of 1994, rising steadily to 109 in the final quarter. Heathrow is the principal port of entry.

After a good deal of correspondence with the Home Office, I was glad to be told that surveillance officers will be operating at the gates of airports and that closed circuit television will be used to detect young people when they arrive by aircraft. I hope that my hon. Friend the Minister will tell us what financial assistance can be provided to the borough of Hillingdon. As I have said, substantial sums are at stake.

I strongly believe that it is important for the House to. approach the question of unaccompanied child refugees, bearing in mind the considerable problems that it poses for them and for those who have to care for them. I am glad to know that steps have been taken to investigate the possibility of the young persons concerned being repatriated to their country of origin—only, of course, where it is safe to do so—so that they can be cared for there instead of in the United Kingdom.

On the more general question of preventing illegal entry, I am glad that the immigration service has introduced a computerised suspect index at major ports. It provides the immigration service with almost immediate access to some 340,000 entries. It will even allow for the different way in which foreign names are spelt, so it looks as though we shall have some fairly sophisticated equipment to help with the difficult problem that is faced by the immigration service at Heathrow and elsewhere.

One or two of the comments in the Treasury minutes deal with these particular problems. The first is that on unaccompanied minors. In minute No. 84 of the Treasury minutes, which were published in Command 3013, we are told:
"The Immigration and Nationality Department continues to address the issue of children abandoned in the United Kingdom. A specialist section was established in May 1995 in order to consider asylum applications from unaccompanied minors. The Immigration and Nationality Department has agreed to co-operate with the British Red Cross Society in its project to establish a register of unaccompanied children to facilitate the restoration of family contacts and eventual reunion with their families. Additional measures and options to combat abuse of the immigration control, such as improved surveillance, procedures for documents/visa issue and extending the Airline Liaison officer programme are being considered and, where appropriate, pursued with the Foreign and Commonwealth Office."
I ask my hon. Friend to ensure that the investigation that is being carried out includes co-operation with the London borough of Hillingdon, which has unique experience of dealing with that difficult problem.

I just want to say how much I, and other members of the Committee, support the work that the immigration service is doing to build up its intelligence work so that it is able to detect the changes in the method used by people to gain illegal entry. The increasing use of forged documents is becoming a significant problem, which must be tackled with all the sophisticated technology that is available. The measures that have been taken have led to a significant increase in the number of immigration offenders detected, but there is no room for complacency. It is necessary for the service to use all the resources at its disposal if this illegal flow is to be stemmed.

The Committee also recommended that the immigration service keeps the size of the detention estate under review so that sufficient places are available to meet any increase in asylum cases and the number of passengers detained for further inquiries. Therefore, I was pleased to see from the Treasury minute that action is being taken to enhance the quality and size of the immigration service's detention estate, and to make more efficient use of available facilities. The Treasury minute tells us that there will be an increase in the total number of detention places available by mid-1997. It also tells us that it is intended to replace the 95-bed detention centre at Harmondsworth with larger, purpose-built accommodation. That move is very good, and long overdue. The immigration service also shares the Committee's concern about the use of police cells, which, as everyone who has studied this matter knows, are unsuitable for the detention of immigrants while their cases await examination.

Visa regimes are another important way of preventing illegal immigration. Pre-entry controls are supposed to transfer the problems back to the originating country. The PAC heard evidence to the effect that, out of 1 million applications for visas in 1994, 60,000 were refused. The controls that operate on entry into the country form the second line of defence, but the visa regime will, in my opinion, be effective only if our high commissions and embassies overseas are adequately staffed and entry clearance officers have sufficient time to interview each applicant properly. There also need to be adequate intelligence staff to investigate the information that is obtained, quite frequently from local sources.

Two weeks ago, I was in Sri Lanka for the annual general meeting of the Commonwealth Parliamentary Association and took the opportunity to visit our high commission in Colombo and to discuss those matters in some detail with the visa officer. I was concerned to find that there is no intelligence officer in post in Colombo. Sri Lanka is a comparatively small source of illegal immigrants to the United Kingdom—there are about 1,000 a year, which is pretty small compared with a number of other countries—but if forged documents are to be detected, it is vital that adequate entry clearance and intelligence officers are in post overseas. I hope very much that my hon. Friend will look into that matter. I pay a warm tribute to the work of those entry clearance and intelligence officers overseas. A number of them are young officers, who have a difficult job to do in deciding that very emotive and personal question of whether a person should be granted a visa.

It is interesting to note that, between 1989 and 1993, the number of immigration offenders identified has steadily increased. Between those dates, the figure rose from 7,000 to 10,300. The Home Office told the Committee that, in 1994, the figure had gone up to 12,727. The proportion of people who were subject to further examination and subsequently refused leave to enter has also risen. The figures are quite dramatic. In 1992, 16,937 out of 60,623 passengers stopped for further examination were later refused leave to enter. In 1993, the respective figures were 19,000 and 63,000. In 1994, they were 23,000 and 66,000. Therefore, I hope that the Government will continue to make available to the immigration service the resources that are clearly necessary to deal with this rising trend.

The 27th report, dealing with general practitioner fundholding in England, is an important report because it is the first time that Parliament has, through the PAC, examined closely and at first hand the work being done by GP fundholders, and most important of all, the impact of the scheme on patients. It might be of some interest if I mention briefly to the House the evidence that we received from the national health service executive about the effect on patients. The report said:
"Many GP fundholders taking part in the National Audit Office survey said that they had achieved a wide range of benefits for their patients."
The report went on to say that GPs
"would not have said services had improved as a result of fundholding unless they believed this to be the case; GPs have been amongst the biggest critics of services provided by hospitals and other health services. They told us they had found that GPs had painted a realistic picture of the level of services provided and had demanded improvements in service, and that GPs had been quite successful in doing that … there was evidence that the impetus of GP fundholders had often led to faster turnaround times on pathology results and faster response times on discharge letter … The Executive stated that GP fundholders were often leading the way in relation to open access to physiotherapy, X-ray and reduced waiting times."
All the evidence that we received from the executive was very impressive, and led us to conclude that the fundholder service was working extremely well.

We also asked the executive
"whether all non-fundholding GP patients received all the benefits that patients of GP fundholders received. They considered that the fundholding scheme had not operated to the detriment of people who were registered with non-fundholding practices."
That, too, is important evidence.

The Committee was concerned about value for money; so we asked the executive
"whether the extra costs of administration would yield better value for money. They told us that GP fundholders were out performing non-fundholders in terms of coping with the ever increasing pressure on the drugs budget and that over the three years 1991–92 to 1993–94 they estimated that GP fundholders had saved in the order of £70 million on the costs of drugs."
That report should certainly be taken into account in consideration of the organisation of the national health service.

We also took account of the executive's view that
"fundholders have been achieving a faster delivery of patient care and improving the range and level of care; but that other initiatives, such as the Patient's Charter, will also have contributed to downward pressure on, for example, waiting times for hospital appointments."
There we have it: the GP fundholding scheme has not operated to the detriment of patients of non-fundholding GPs. It is working well, in conjunction with the patients charter, to achieve shorter turnaround times, shorter waiting lists and a better standard of medicine in our country.

As this is a highly political matter, I make no apology for stating that the PAC's work is not party political. One of our great attributes is that we try to examine impartially all the matters that come before us. I hope that all politicians who must decide whether the GP fundholding scheme is a good idea will pay attention to the interesting and useful report from which I have quoted.

I regard it as a great privilege to serve on the PAC. It is the one parliamentary Committee whose members have access to precise, factual information, and to an agreed report from the National Audit Office on which we can question witnesses. That is a powerful means of ensuring effectiveness, economy and efficiency in Government, and value for money for the taxpayer. When things go wrong, we can identify the mistakes and ensure that the Departments concerned learn the lessons. We always look forward to the Treasury minutes, which usually accept our recommendations. It would not stretch the figures too much, I think, to say that the PAC's work saves the taxpayer an average of well over £200 million a year.

5.43 pm

I congratulate my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) on his tour de force in opening our annual debate. As he said, we are considering 51 reports, which shows the depth and extent of the Public Accounts Committee's work in ensuring probity in the spending of money by the authorities to which Parliament has voted that money.

The report on general practitioner fundholding, referred to by the hon. Member for Uxbridge (Sir M. Shersby), reveals a number of problems to which the hon. Gentleman did not draw attention. It shows, for instance, that fundholders currently have nearly £100 million in their balances, which they are not required to spend for four years. That is a great deal of money, which would be much better spent on patient care. The report also points out that 20 per cent. of fundholders have underspent their 1993–94 allocation by more than £100,000. That money, too, would have been much better spent on patients.

Mr. Langlands pointed out in his evidence to the Committee that the establishment of GP fundholding had cost the NHS £150 million—money that would have been better spent on health care than on bureaucracy. I am glad that Mr. Langlands placed that information on the record, especially for the purposes of my hon. Friend the Member for Darlington (Mr. Milburn).

In opening the debate, the Chairman of the Public Accounts Committee mentioned the 33rd report, which concerns irregularities at the Sana'a embassy in the Yemen. Those irregularities concern me, as they have clearly cost the taxpayer a great deal of money. The financial transactions carried out by Mr. Ryan probably imposed a direct cost of £300,000 on the taxpayer, and Mr. Ryan's profits were probably of the order of £600,000, although the amount is difficult to quantify. The cost of the investigation of the fraud was some £41,000, and 17 visits were paid to the Yemen at a cost of some £100,000.

Another part of the report draws attention to the fact that while Mr. Ryan was in the Yemen he negotiated the lease for the ambassador's dwelling in Sana'a. The embassy is the most expensive in the diplomatic service. For a five-year period, it will cost the British taxpayer £1.35 million. It is clear that Mr. Ryan received what is known as a backhander for the contract. I find it astonishing that such an amount of taxpayers' money should be spent on an embassy, but I am even more astonished that a five-year lease cannot be renegotiated to save money for the taxpayer. That in itself is a disgrace.

We were not helped by the evidence of Sir John Coles, the permanent under-secretary of state and head of the diplomatic service. Just before the hearing, he submitted a note to the Committee saying that issues involved in some of the disciplinary hearings were sub judice, which made it impossible for the Committee to follow certain lines of questioning. I considered the attempt to constrain the PAC's role undesirable and criticism was made by the Committee itself.

The evidence given by Sir Jones Coles began straightforwardly: one ambassador had been removed from his post with no enhancement. By the time we finished taking evidence, however, two ambassadors had disappeared with enhancements at a cost to the public purse of £221,000 for the first and £131,000 for the second. They were given those enhancements so that they would take early retirement because they were incompetent at the job that they had been charged to do. That cost to the taxpayer could clearly have been avoided.

When we asked Sir John Coles why it had taken rigorous cross-examination to extract information from him, he came up with a number of less than convincing answers. He apologised for slightly misleading the Committee, saying that it was simply due to his "own poor memory": he did not set out to mislead the Committee, but his memory in regard to pension enhancement was defective and the facts had slipped his memory. He said that he was sorry if his evidence sounded evasive and stated:
"I appear to have misled the Committee"
. That was an unconvincing body of evidence, and the report is damning. I believe that the two ambassadors involved in that pitiful example of poor expenditure of public money should have been sacked rather than being told to take voluntary retirement or compulsory redundancy.

Out of that inquiry, 153 recommendations for improvements to the internal audit of the diplomatic service have been brought forward. I hope that every one of them is being carried out and that when the Financial Secretary sums up the debate he will be able to give us that assurance.

The 23rd report of the Public Accounts Committee was published on 17 May 1995 and entitled, "Value for money at grant-maintained schools in England: a review of performance". It contains the second set of evidence that the PAC has taken on the issue of grant-maintained schools. Clearly, a number of issues remain to be resolved in the GM school funding sector. The PAC has drawn attention to the double funding of GM schools, where the Government overestimate the central service charges of local education authorities and underestimate the amount of money that they delegate in their local management of schools budget. That means that when the Government recover the annual maintenance grant paid to GM schools from LEAs they take more money than necessary from the LEAs and give it to the GM schools.

That inflated payment to GM schools is made at the direct expense of other schools in the LEA. That is robbing Peter to pay Paul. In Tower Hamlets and Lambeth, two regions of high deprivation in London, state schools were badly affected by that double funding. The PAC has called straightforwardly for
"the central services element of annual maintenance grant … to reflect accurately local education authorities' delegation of central services to schools."
We are pleased to note that the Government have taken that on board. Clearly, earlier action would have allowed authorities in Lambeth, Tower Hamlets and elsewhere to have the right level of funding available for schools remaining with the local education authority.

If we have a state system of education, it is essential that all schools in that system are treated fairly, and that all pupils receive a fair amount of grant per head in each school. The example that the PAC has identified has been reluctantly taken on board by the Government and we hope that within the next two years the practice will have been removed. We are assured that new schools coming into the GM sector will not benefit from such double funding.

One of the other problems with grant-maintained schools is the lack of declarations of pecuniary interest by governing bodies. In 22 of the 70 schools visited by the National Audit Office, there was either no register of pecuniary interest or the register had not been kept up to date. The Public Accounts Committee is charged with ensuring probity in the expenditure of public finances. One of the best ways of doing that, where school governing bodies are involved, is to ensure that each individual member declares a pecuniary interest, so that when a governing body awards a contract there is no conflict of interest and no question mark over the probity of those schools' actions.

I have been told that a number of hon. Members are lining up to participate in the debate and to ensure that my remarks are succinct and to the point. To go back to pecuniary interest—

I am sure that that echo of encouragement will reflect on the points about pecuniary interest. Wherever contracts are awarded, whether it be in state schools under the local education authority or in grant-maintained schools, it is essential that a register of pecuniary interest should be maintained so that people who could be involved in the contract do not take part in decisions to award contracts to companies for which they work.

Clearly, we are concerned about some aspects of that matter in the incorporated and further education sectors. That approach is recommended by the PAC and its adoption by the Government would be a positive step. I look forward to hearing an assurance from the Financial Secretary that under the regulations of non-departmental public bodies it is a requirement to establish a register of pecuniary interest to ensure probity in the administration of public affairs.

Another example to which the Public Accounts Committee drew attention in relation to grant-maintained schools was their ability—or, currently, their lack of ability or legal power—to borrow money. We are assured that, where money has been borrowed or leased, its legality may be questionable and that the Government are examining the matter. In evidence, the PAC has been told that when GM schools are given permission to borrow money, so long as the governing body has acted properly, within the scope of its functions and procedures, with honesty and without ulterior motive, and it has reasonably carried out its business in a commonsense way, it will be protected from the risk to its assets. That is straightforward. If the governing bodies have done it properly, there will be nothing for them to worry about.

I am still concerned about what will be used as security for the loans that GM school governing bodies may take out. Will it be the school buildings? Will it be some other form of security? If a loan is not paid back but defaulted on, what will happen next? We want some assurances from the Government that they have followed that aspect through. If GM schools start to take out large loans on school buildings, the value of the school playing fields or some other asset, and then default on their loans, we shall start to experience problems with the delivery of education. We want to be sure that that will not be the case. I do not want to be a member of the PAC in the future, to be asked to sit in judgment and to find out that loans have been defaulted on and that the Treasury has underwritten them and paid them off.

Another aspect of grant-maintained school funding that is of great concern involves evidence given to the PAC by the chief executive of the Funding Agency for Schools. Under cross-examination, he conceded that if they opted out of the national pay scheme head teachers and deputy head teachers in GM schools would be entitled to have what is commonly known as a company car and private medical health insurance as part of their remuneration.

Having spent a lifetime in education before coming to this place, I think—and I cannot be faulted for believing—that if money is available for company cars and private health care for heads and deputy heads, the money involved would be better spent directly on education provision. It is not the state's role to provide private health care for head teachers in the state sector. That is a totally inappropriate use of public funds. I look forward to the Financial Secretary saying some words about that when he responds to the debate.

Clearly, we want confirmation that double funding has now ended, that the annual maintenance grant is calculated accurately in relation to the LEA's expenditure on central services and takes into account how much money it delegates to its schools, and that schools which remain within LEAs are not disadvantaged by preferential finance going to schools in the GM sector. It is a straightforward view that schools in the state sector should all be equally and adequately funded.

The 40th report of the PAC has already been mentioned by my right hon. Friend the Member for Ashton-under-Lyne. It deals with the suspension of Dr. Bridget O'Connell and it is a woeful tale of inadequacy. The sums involved are quite substantial, given that one individual is involved. The final settlement will have cost the taxpayer just short of £600,000—a total of £593,409, which includes £439,259 in pay for doing nothing for more than 12 years, £105,000 in settlement of the legal case out of court, and £11,000 in legal expenses and enhanced superannuation benefits assuming that Dr. O'Connell will live to the age of 75.

Dr. O'Connell was suspended in 1982 by North East Thames regional health authority because she did not get on with the staff in the paediatric unit where she worked and in the hospital generally. It took 12 years to resolve that personal difference in the hospital. It is astonishing that things could get so far and that the chief executive of the national health service management executive, Mr. Langlands, had to settle out of court. Clearly, the NHS management executive did not have a leg to stand on.

In my cross-examination of Mr. Langlands, I suggested that he "sued for peace". He did not agree with my analysis of what had happened, but said that he thought that the settlement was the best value that could be gained for the taxpayer after the case had gone on for so long. The case should have been resolved a great deal earlier.

The other extraordinary aspect of the case is that the evidence from Sir Duncan Nichol, the former chief executive, and from Mr. Langlands himself shows that the NHS does not like gagging clauses in severance contracts. However, under examination Mr. Langlands confirmed that there was a gagging clause in Dr. O'Connell's contract. He said that he did not like it, but that he was not too concerned about it because he knew that the case would hit the headlines. He was certainly right about that. In all fairness, it was not the NHS executive that asked for the gagging clause, but Dr. O'Connell's solicitor. It would have been better if the NHS executive had resisted that request and published the details in full. It would have saved the Public Accounts Committee a great deal of time and effort.

I hope that the case will prove to be an isolated one. We have received an assurance from Mr. Langlands that he has trawled the NHS to ensure that there are no other examples of people receiving full pay for 12 years and enjoying the full benefits of pay increases year after year without turning a tap for the health service. There has been poor management and weak procedures. We want an assurance that the weak procedures have been sufficiently strengthened to ensure that nothing like this case could ever happen again at the expense of the taxpayer.

I wish to refer next to a report that I have mentioned previously in the House, entitled "Merseyside Development Corporation: Grand Regatta Columbus and Fanfare for a New World Concert"—the third in this series of PAC reports. I am extremely disturbed by the report and astonished at the amount of taxpayers' money that has been lost through the incompetence of the MDC. The concert and the regatta were the brainchild of the chairman, Sir Desmond Pitcher, who is coincidentally also chairman of North West Water.

As the PAC Chairman has already said, the two events cost the taxpayer and private business £1.1 million. They actually exceeded the permission on expenditure granted by the Department of the Environment. A letter from the Merseyside task force dated 3 March 1992 stated:
"Further to my letter of 23 January, my Headquarters have now agreed to MDC's proposals as set out in your letter of 20 December. However, they do not consider MDC to be underwriting expenditure but rather estimating a potential financial contribution."
There is then the key sentence:
"My colleagues have been reassured by your having estimated the maximum possible contribution in a worst case scenario, by your recognition that MDC expenditure will have to be met from within the EFL, and by the scope that exists for MDC to prune costs if necessary."
The cost referred to was about £200,000. The letter then said that if the MDC expected to spend any further money on the regatta, approval from the Department of the Environment should be sought first.

That was a clear instruction about the maximum that the DOE expected the MDC to spend or lose. The letter clearly said that if further contributions were required, approval should first be sought. The warning was clear even before approval was sought because the MDC had spent money on the regatta and the concert before it wrote to the DOE seeking permission.

On 12 July 1992, in an estimate of what the two events would cost, the MDC in a handwritten memorandum estimated the loss for the concert to be £187,840. The MDC knew that the event would lose money, yet it proceeded with the concert. It did not cancel it, nor were strict measures taken to mitigate the losses. The MDC carried on with the concert, but in a rather peculiar way. Four days before the concert took place it signed a deal with a private shell company, with a share value of £2, to take over the whole of the financial responsibility for the concert and the regatta.

With the stroke of a pen, the MDC transferred the losses from the public purse to the private purse. That was deplorable. It knew that the events would lose money, so it moved the debt from the public to the private sector. Private business on Merseyside was left £375,819 out of pocket. That is a phenomenal amount of money which the MDC wrote off with the stroke of a pen for an event that. was the brainchild of its chairman.

Questions must be asked about the clear lack of supervision by the Department of the Environment. Questions must also be asked about the role of the Merseyside development corporation, which has played fast and loose with public money. From the response by the Treasury to date, it appears that nothing is to be done.

In addition to those losses, the MDC gave away £100,000 worth of tickets. Hospitality was overspent and the whole thing was a complete shambles. However, three and a half years later, not one member of the board has been removed from office and the chairman is still in place. The time has come for action. First, the private sector should have its losses reimbursed. Secondly, disciplinary action should be taken within the MDC so that future activities will be kept within the terms of its charter to oversee the economic regeneration of Merseyside, rather than fall in blindly with the wishes and whims of its chairman to produce glossy brochures about fanfares which prove to be a heavy cost on the taxpayer.

I end with the report entitled, "The Proper Conduct of Public Business", the eighth report of the 1993–94 Session, which draws attention dramatically to the failures identified by the PAC. It states:
"In recent years we have seen and reported on a number of serious failures in administrative and financial systems and controls within departments and other public bodies, which have led to money being wasted or otherwise improperly spent. These failings represent a departure from the standards of public conduct which have mainly been established during the past 140 years. This was the period following the publication of the Northcote and Trevelyan Report"
. The PAC has considered 51 reports this year and it is obvious that there are still serious problems with the proper conduct of public business. However, it is not the final tale of the PAC's work over the past 12 months because a number of reports are yet to come before the House. There are to be reports on fraud in the Metropolitan police, the royal palaces, the Mount Vernon sale, the sale of county hall and the incompetencies of the Child Support Agency. Those are five major reports that we can look forward to debating in 12 months' time. I hope that there will then be a far better picture of the proper conduct of public business within the United Kingdom.

6.8 pm

Thank you, Mr. Deputy Speaker, for giving me this early opportunity to complete the last of the three key initiation rites required to become a fully fledged Member of Parliament. It is almost three months since I passed the first and most important test, when the people of Littleborough and Saddleworth elected me to represent them.

I want to begin my speech with a few words about my predecessor, Mr. Geoffrey Dickens. In a parliamentary career spanning 16 years, he became a familiar figure on the Conservative Benches. For 10 of those years, I was his political opponent locally, and, in truth, found that our views rarely coincided—but I always knew that he was not a man to underestimate.

From the moment of his election, Mr. Dickens made his home in the constituency. His total commitment to the area that he represented was never in doubt, and he will long be remembered locally as a Member of Parliament who served his constituents well and as an individual who had the ability to mix comfortably with people from all walks of life and all backgrounds.

Mr. Dickens was literally a larger than life figure. His opinions made him a popular speaker at Conservative party conferences, although they were perhaps not always welcomed by some hon. Members. I understand that, from time to time, the views that he expressed here were heard with amusement, but Geoffrey Dickens possessed a most important virtue—that of being able to tell a joke against himself. It was a characteristic of the man's humanity which was much to be admired.

We should not forget that Mr. Dickens also became known as a leading parliamentary campaigner against the sexual abuse of children, helping to bring the issue to public attention more than a decade ago. His campaign gained support across party lines, and his efforts deserve full and proper public acknowledgement. For seven months, he fought cancer with cheerfulness and courage, and his death robbed his family of a much-loved husband and father, and the House of one of its real characters.

A hard-fought by-election projects a constituency into the spotlight. I am sure that most of my constituents will have been pleased about the way in which their local area was portrayed, as visiting journalists found that their impressions of Oldham and Rochdale, which were perhaps perceived as grim, dark and oppressive places, were proved false, and that the towns and villages of Littleborough and Wardle, Milnrow and New Hey, Shaw and Crompton and Lees and Saddleworth, all proved to have a distinctive character.

Far from being dark, grim and oppressive, those places proved cheerful. Journalists discovered that, from a doorstep in almost every part of the constituency, one can see over the rooftops to the south Pennine hills.

My constituency is indeed an attractive area. That fact was brought to the fore by television coverage of the by-election. I admit to nursing a desire to see its further enhancement by the removal of the electricity pylons which mutilate some of its finer views and the replacement of the barbed wire fences with restored stone walls, but with up to 10 million people living within an hour's travelling distance of the constituency, and especially the south Pennines, the countryside is fragile and under constant threat from those who seek to use it for commercial advantage.

Activities that were once acceptable when the area was part of the cradle of the industrial revolution are no longer acceptable when the population grows and the open countryside recedes. Those activities must now be curbed.

I cite, for example, the problem of the planned recommencement of quarrying in New Hey, which I strongly believe is no longer an appropriate activity now that traffic density is so much greater and lorries are so much larger. I seek greater protection for the countryside from such developments, and in particular, for our sites of special scientific interest, a topic partly dealt with by the Public Accounts Committee in its 11 th report, on which I shall comment later.

Our hills and moorland are beautiful and precious and deserve special protection, but they are bereft of people, and it was the people of Littleborough and Saddleworth who elected me. During the by-election campaign, I spoke out strongly for change, for investment in public services—especially education—for those in politics to be more honest about the problems we face as a society, and for all hon. Members to look more to the long-term needs of our country—and, indeed, of our planet.

The House provides opportunities—many opportunities, perhaps—for individual Members to raise matters of concern on behalf of their constituents. I certainly intend to use those opportunities to the full, but I have long nursed the gravest doubts about whether the institution itself is capable of performing the essential functions that my constituents and others have the right to expect from their legislative assembly.

Parliament should ensure that legislation is sensibly considered and emerges clear and effective, but few of my constituents believe that the chaos of rail privatisation demonstrates for a moment that it succeeds in doing that. Parliament should ensure that it provides real challenges to the policies and practices of public and private sector organisations when that is needed.

Although I greatly admire the work of the PAC and the Select Committees, I fear that they are exposed as toothless tigers in the face of even the slightest Government resistance. Parliament should be able to challenge the Government when Executive power is abused, but that will never be the case so long as the whipping system prevails in the larger parties, and there is no proper separation of powers. My first few days in this place have done nothing to dispel these concerns.

To walk into the inner sanctum of the Members' Dining Room and look up at the pictures of Gladstone and Disraeli is to be reminded that so much of the present House of Commons was moulded in their day; but that day was 120 years ago. Those Prime Ministers in their time were reformers who worked to broaden the franchise. I wonder whether they would be pleased to know that in the last years of the 20th century, the people of Britain still do not possess votes of equal value, and that our democratic system is so flawed that, for 16 years, it has kept in place a Government opposed by 57 per cent. of the voters, and denies millions of Liberal Democrat, Green and even true socialist supporters the representation in the House to which their votes should entitle them.

I found from the Library that I am the 68th—only the 68th—person to be elected as a Liberal or Liberal Democrat Member of Parliament since the end of the second world war, yet the votes that my party won at the previous general election alone would have entitled it to more than 100 Members of Parliament under any system that genuinely purported to be democratic. It means, I fear, that the very basis of representation in the House is a sham and a disgrace.

The House of Commons may be a cosy club for those who are here, but radical reform is needed if it is once again to do the job for which it is intended, and to wipe away some of the cynicism with which it is now regarded by the majority of people in this country.

As we have heard, however, there is much to admire in the work of the PAC. I am pleased that it has turned its attention to matters such as the protection of sites of special scientific interest. Of the almost 3,800 such sites in England, just four are in Oldham, and one, I understand, in Rochdale, covering the south Pennine moors. They represent the basic minimum area of habitat that needs to be conserved if the range and distribution of plants and animals in this country is to be maintained. It must therefore be a matter of great concern that nearly a quarter of these exceptional areas have been damaged in the past seven years alone. That is on the basis of English Nature's figures, which I think are generally accepted to be an underestimate of the true situation.

Within its limited remit, the PAC report makes some reasonable suggestions. Although I have some doubts about recommendations that, for example, English Nature should be finding ways to reduce the average payment made in return for a management agreement, I generally endorse them. However, surely more consideration should be given to the promotion of positive conservation measures within such agreements, rather than simply paying owners not to cause damage in the first place. I commend to the House the ideas for the protection of SSSIs in the draft wildlife Bill being prepared by Friends of the Earth.

The PAC's 42nd report deals with renewable energy research. The PAC is absolutely right to ask rigorous questions about the way in which public money is being spent, even though the £20 million a year spent on such research is tiny in comparison with the money poured into nuclear research and subsidy for many decades. I fear, however, that the Committee's narrow remit prevents it from taking the wider and longer-term view which should be so essential in energy matters. The basis of our economy continues to rest on the exploitation of finite resources laid down over millions of years. We continue to use that precious asset as though it were infinite, with no attempt in our national accounts to make allowances for depreciation. The present exploitation of our limited gas reserves demonstrates that short-term approach only too well.

The potential for energy conservation in this country is still said to be immense: sufficient to reduce energy consumption by 50 per cent., I am told. Such a programme would conserve the country's resources, generate employment and reduce energy costs. But so long as our finite energy resources continue to be treated as infinite, market forces alone will never encourage such investment and energy conservation measures to take place.

In recognition of the fact that the protection of our environment and the earth's resources is a duty for all of us in elected positions, many enlightened local authorities are now including environmental impact statements in reports, so that councillors may take account of the full long-term consequences of their actions, which so often fall outside the narrow scope of a local authority's balance sheet. The metropolitan borough of Rochdale is one authority which now conventionally makes use of environmental impact statements. Indeed, the metropolitan borough of Oldham, of which I am still a member, is starting to do the same.

I would feel happier about the PAC's recommendations if its conclusions took account of environmental impact in the same way. I hope that the Committee will consider such a course in future. It would be a step which might well influence its future judgments, and would deserve a warm welcome.

6.21 pm

I congratulate the hon. Member for Littleborough and Saddleworth (Mr. Davies) on surviving the ordeal of the maiden speech. Everyone who comes to this House says that it does not matter how experienced one is in public speaking or in broadcasting, making one's first speech in the House is a very intimidating experience. The hon. Gentleman spoke with great clarity and strength of feeling. There is a tradition that one is non-controversial in maiden speeches—and he almost managed it—although I think that it is observed more in comment than in practice.

I congratulate the hon. Member for Littleborough and Saddleworth on the graciousness of his comments about his predecessor, for whom there was great affection in the House. His predecessor was one of the personalities and characters of the House. All of us, especially those of us who are a little longer in the parliamentary tooth than others, would say that it is one of the sadnesses of Parliament that there are fewer personalities today than the history books lead us to believe—perhaps—that there were in the past.

I remember when I had to make my maiden speech—it is relevant to the party of the hon. Member for Littleborough and Saddleworth because I was sitting in its corner of the Chamber—on the first motion of censure of the 1964 Wilson Government. I go back that far, so there is hope yet for the hon. Gentleman since I too won a marginal seat.

The Speaker got in touch with me in the morning, with the kindness that Speakers and Deputy Speakers always show to hon. Members who are about to make their maiden speeches, and said, "I just thought that I would let you know, you will be speaking fourth this afternoon." I said, "Oh really. It is a motion of censure. What does that mean?" I was told that Alec Douglas-Home would open, Harold Wilson would speak second, Jo Grimond would be third and I was fourth. I immediately volunteered to make my maiden speech the following week. However the Speaker of the day was rather adamant about such things, and as I had put in to make my maiden speech, I had to make it.

In the end I need not have worried. That is not meant in any derogatory way. I sat there listening to the first vicious attack by Alec Douglas-Home on the Wilson Government, followed by Harold Wilson making a rather humorous reply, and became increasingly depressed. But when the Speaker stood up as Harold sat down and called Mr. Jo Grimond, I am sorry to tell the hon. Member for Littleborough and Saddleworth that about 600 Members stood up and walked out.

That happened not because there was not great affection for Jo Grimond—there was—and it was not due to lack of respect for him. He was a good questioner and a delightful colleague, but he was not noted for making the most stirring of speeches. So I congratulate the hon. Member for Littleborough and Saddleworth on commanding an audience approximately four times the size that I was able to command on that particular day.

The hon. Member for Littleborough and Saddleworth made an important point when he referred to the need for us to have regard to finite resources and not to treat energy sources as though they are infinite. History will show that the great tragedy of this century, and the great opportunity of the post-war era, was the period of energy plentifulness in the 1980s, which was sadly squandered. Energy cannot be made infinite, but we could have reinvested the surpluses, the profits, the returns to the Exchequer from the North sea, which could have given the country further earning power through a second industrial revolution. None the less, I congratulate the hon. Gentleman and wish him well. I hope that he has many more years in the House and I look forward to hearing him when he is in a more confrontational mood, when I shall remember not to sit too near.

I want to make only a couple of main points—I am sorry to depress my hon. Friend the Member for Bristol, South (Ms Primarolo). The hon. Member for Littleborough and Saddleworth referred to Select Committees as being toothless tigers. Most of us would recognise a great deal of truth in that. That is not to underestimate what they have achieved. The innovation of the Select Committee system, based on shadowing individual Departments, is probably one of the most important innovations of the past quarter of a century. They have done a great deal of good work, but the problem for Parliament and members of the Committee is shown by today's debate.

Here we are, with a massed audience in the House and an even fuller Gallery—I am talking of course about the Press Gallery [Laughter.] We are trying to discuss 51 reports in one day. Yet in doing that, we are privileged because the other Select Committees have great difficulty in finding any time in which to consider their reports. The Government are only too happy to put the reports on a shelf and leave them there. So the hon. Member for Littleborough and Saddleworth is quite correct in saying that if parliamentary accountability means anything, we have to consider the next stage for Select Committees to ensure that they have more bite and more power.

For the PAC and the House—if I may return to a particular hobby horse: the process of parliamentary accountability—regardless of the rights and wrongs of the development of agencies and trusts, such bodies present a problem in accountability, in that they create increasing numbers of accounting units. There has been a proliferation of accounting units which have to be monitored and audited, on which the NAO may need to report, and on which we as members of the PAC have to deliberate. I know that the following viewpoint commands support from just one member of the Committee at this stage—myself. We shall have to consider whether, at some stage, we go down the route of some of the other Select Committees and break down into a Sub-Committee system because inevitably, the Public Accounts Committee is the bottleneck in the whole system. Any Government can create extra accounting units as they wish. The National Audit Office can expand, given the manpower which, in fairness, it has had and the resources it has had, to accommodate those extra accounting units. What cannot expand under the present format is the capacity of the Public Accounts Committee.

Hon. Members who have served on the Committee and anyone who has been acquainted with the Committee will confirm that it is extremely hard working. One of the difficulties and joys of the Public Accounts Committee is that unlike other Select Committees which consider the same subject week after week, pursuing it in great depth, we have the problem that on a Monday, we consider something to do with the Department of Health and then on Wednesday, we consider major capital projects in the Ministry of Defence. Sitting as a whole, as we do at the moment, we could not accommodate a larger work load from the National Audit Office. I return, therefore, to my suggestion to my right hon. and hon. Friends that at some time, we must consider whether a Sub-Committee system would be appropriate.

I join in congratulating our Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), on the diplomatic and assiduous way in which he manages to keep the Committee together and to keep the consensus which marks the Committee. That does not mean that we do not have different viewpoints. It does mean that when we produce reports, they are unanimous simply because individuals have made concessions—I am talking about all Committee members—when they disagree with various points and because they regard getting the main report out as the most important objective.

My right hon. Friend the Member for Ashton-under-Lyne has carried out his work in a way that has won admiration from hon. Members on both sides. I also pay tribute to the National Audit Office and to the Clerk—I should say Clerks—of our Committee. I use the plural because we have had several Clerks. The Committee is a good training ground for hon. Members. Indeed, for Opposition Members, it seems to have become almost an essential part of progress towards Front-Bench service. The Public Accounts Committee has become for us what the Whips Office has been, for many years, for the Conservative party. I notice a smirk of pleasure on the face of the hon. Member for Croydon, South (Mr. Ottaway), the Government Whip, in anticipation of the logical consequence of what I have just said about the Conservative Whips Office. The Opposition treat the Public Accounts Committee as somewhere where one can get good experience of how Governments work, how Departments work and how the Committee system works.

One of the most interesting of our reports this year—I shall not deal with it in great depth—is the report on the Trident base. The project was important not only because it was the biggest civil engineering programme, second only to the channel tunnel, in this country, but because it was fascinating as a case study of how not to go about managing a capital project. One could hardly find a more perfect example of many errors bundled together.

There was an £800 million overrun on the Trident base. We must be fair to the Ministry of Defence. I am not saying that an overrun is the same as being wasteful and I am not saying that money was squandered or used improperly. The overrun happened because despite the scale of the project, it was devised as it was being built, day by day. Some 7,200 variations were introduced in the design of a ship lift alone. There were as many as 10 variations a day throughout the life of the project. Anyone who has experience of a major construction will know that that is a contractors' paradise because every variation means a renegotiation. In effect, the Ministry of Defence completely lost financial control of the project, and it is worth mentioning for just that reason.

I understand the strategic reasons and we well understand that the Government said that a policy decision was being taken which had to be implemented as quickly as possible. Nevertheless, although the errors may have been made as a result of a desirable objective from the Government's point of view, as they may concede, it is important that we as a House of Commons do not overlook the lessons that, clearly, should be learnt.

With some regret, I now turn to matters Celtic. I am glad to say that despite a rather bad press at times for some of the Welsh quangos, the reality is that almost all the organisations at which we look in the Public Accounts Committee and which have problems are London based rather than based in Wales or in Scotland. We must be careful not to get one or two instances that relate to Wales, to Scotland or to Northern Ireland out of proportion. However, that does not alter the fact that one cannot condone what happened at the Welsh Development Agency.

It is a matter of sadness to anyone who cares for the future of Wales that an agency on which we depend for inward investment and for the strategic development of our economy fell into the hands of people who did not understand the public ethic and who did not necessarily share the civil service attitude towards probity and standards of conduct. We had a fly-by-night period at the Welsh Development Agency and, I am sad to say, one particular individual who was responsible for appointments, from outside politics, made appointments in his own likeness.

Unfortunately, the cutting of corners, which may or may not have been well intentioned, led to the first report on the WDA. Again, we had the gagging clauses, the free cars for private use as well as for business use, redundancy schemes that had never had Treasury approval and did not conform to Treasury rules and, above all, the case of the operation known as Wizard. A group of senior members of the WDA connived at using public funds, through three consultancies, to try to devise a package for management buy-outs—that is really what it was all about—of the most lucrative parts of the WDA. So that the Treasury and the Welsh Office would not know what was going on, the three consultancy projects were spread into different parts of the budget. It was hoped that no one would realise that an attempt was being made to undermine the standing of the WDA.

Again, it is salutary to realize—we have referred to this before—that even the National Audit Office, for which we all have enormous respect, did not discover Wizard, so well was it buried. We came to know about Wizard only because we were contacted by a couple of whistle-blowers within the Welsh Development Agency who were appalled at what they saw and came to meet three members of the Committee in one of the small Committee Rooms next to the Great Hall to tell us what was going on. The Chairman of the Committee could confirm that, for the first time in a PAC report, we praised people for leaking, and we stated in the report that had it not been for those whistle-blowers, we would not have been aware of what was going on.

I say to the hon. Member for Littleborough and Saddleworth that, while I am aware of the courtesies of the House, he may want to make comments to the press and—I mean this nicely—I do not want him to feel that he has to sit through my tedious speech as a courtesy. The hon. Gentleman should by all means feel free to leave the Chamber, because most of what I shall be talking about will not be familiar to him.

I am sad to say that the Welsh Development Agency reappeared on the scene in another matter when its conduct was utterly unacceptable, as the Treasury itself indicated. There was a virtual conspiracy between one senior member of the Welsh Development Agency and other parties in a joint venture set up with local authorities to promote a property deal in the Aberdare area, and to deliberately try to sink an existing project that was being developed by others in which a great deal of money had been invested.

Prior to the joint venture with the Welsh Development Agency, Tesco had been in discussion with another company called Landare relating to a site elsewhere in the valley. Landare had not only achieved planning permission for the development from the local authority, but had reached an agreement on planning gain in which the council would receive a sports hall and transport facilities as part of the project. But the project needed one more thing. The two councils that owned the property had agreed to sell a narrow strip of land which blocked the access from the site to the main road, as this was crucial to the project.

The joint venture between the Welsh Development Agency and the councils was chaired by a director of the WDA, and the WDA board decided that Tesco would not be allowed to bid for the site which the WDA was developing as part of that joint venture. A deadline was set, and tenders were invited. The tenders were received, and the councils and the joint venture team decided to have further discussions on the final details of the proposals with the bidders. Then, out of the blue, Tesco—which, we understood, had been banned from bidding in the contest—came in with a bid after the final date for bids which, to and behold, proved to be the highest.

Understandably, the Committee was deeply concerned, and the Chairman pinpointed the fact that Tesco had two representatives on the board of the Welsh Development Agency—the then chairman of the agency, Dr. Jones, was a director of Tesco, while another member of the board still is a director of the company. After the bids had been opened, and when one would have thought that the last financial offer had been received, in came Tesco whose bid won the day. There were delays to allow Tesco to get its bid in, and meetings were postponed to ensure that the company could make its bid.

We received assurances from Mr. Scholar, the permanent secretary—who, in fairness, was not the permanent secretary at the time this happened—that the two directors of Tesco had declared their interests and had taken no part in the making the decision. But the crucial point was made by the Chairman, who said that although the two gentlemen may have taken no part in the decision-making process, who can say what information was passed from them to other people? The Committee felt, and this was a point with which the Treasury agreed, that such conduct was utterly unacceptable and way below the standards we would expect from a public body.

Having received the bid from Tesco, the parties involved then set out calculatedly to sabotage the other side. In questioning Mr. Scholar, I quoted a minute of a meeting of the joint venture in which a letter from Chestertons, the agents and advisers for the sale of the site, to the Welsh Development Agency was read. The letter said that Chestertons was "facing untimely competition" from an alternative site, and went on to say:
"The scenario outlined above is of great concern as it may prejudice or even possibly prevent the successful disposal of the Gadlys site … The answer to this potential problem is to minimise any opportunity for an operator to swap sides. In this particular case … this is possible, given that the Joint Venture partners control the access to … the alternative site"
. The parties involved then tried to ensure that the councils—which had offered to sell to Landare land that was crucial for access—withdrew their offer, which would completely blight that site. The site would then cease to be an attraction to the retailer Landare had in mind, or to anyone else. I am sure that Conservative Members who have not been involved in this matter would admit that if they were being treated in such a manner by a governmental body, they would feel that that body was stepping way beyond its powers.

I received at my house one Sunday a copy of a report by Vernon Pugh QC. He said in the report that the Welsh Development Agency was guilty of half truths and untruths, had acted ultra vires and was guilty of serious omissions.

The report by the QC had been delivered to the Welsh Office, but the Welsh Office did not deliver it to the office of my right hon. Friend the Member for Ashton-under-Lyne so that he was aware of it before our hearings. So, with the hearing on Wednesday, there was a ring on the bell at my home in Swansea and, to my surprise, on the doorstep was my predecessor as Member of Parliament for Swansea, West. A Conservative represented the seat until 1964. He was acting for Landare in a professional capacity. He brought me a copy of the QC's document. It was devastating.

What followed was even worse. Not only did the report show that there had been conduct by the WDA which was unacceptable by any standards, but the way in which it was subsequently ignored revealed that there was a wish to pretend that it did not exist. There was a wish to bury it. In fairness, Mr. Hugh Rees, who was a Government Whip from 1959 to 1964 during the Conservative Administration and a former director of the WDA, did not try to embarrass his party. Instead of making a public fuss about the matter, he started writing letters to try to get things dealt with on the basis of sensible discussion.

Mr. Rees wrote to the then permanent secretary at the Welsh Office. The permanent secretary did not write back to him directly, but telephoned and suggested that Mr. Rees might see someone from the WDA rather than himself. This Mr. Rees agreed to do. He also wrote to various Ministers, including the then Minister of State, Welsh Office, the right hon. Member for Conwy (Sir W. Roberts), and the then Secretary of State for Wales, the right hon. Member for Wokingham (Mr. Redwood). He also wrote to the Deputy Prime Minister, who was originally a Swansea man. No one really wanted to know. Indeed, the sort of answer that Mr. Rees received was summed up by the brief letter from the Minister of State, which said:
"As you know, the new Chairman of the Welsh Development Agency has looked into the Agency's involvement in the Tir Founder Fields case very carefully. His conclusion is that, while he believes matters might have been handled more tactfully, the complaints made against the Agency are in the main unjustified."
Anyone who read the Pugh report would find it impossible to say that the complaints were unjustified. No Minister has made the slightest attempt to respond to the points that were made in that report. For that reason, I believe that my ex-opponent and his commercial colleagues have a legitimate grievance to air against the Government. I believe that Ministers should answer to the House for the way in which they, rather than behaved, have failed to behave.

The last report with which I wish to deal is on the occupied royal palaces. It was inevitable that I would refer. to it in view of my special interest in the subject, but I shall be brief. The report is important because it is the first time that Parliament has examined in detail any of the money that is spent on the royal household. I must admit that I could not carry my colleagues on the Committee with me. I wanted to examine the whole £50 million that is spent by the various Departments. I could get agreement to examine only the £25 million that was then being spent on the occupied royal palaces.

Even more worthy of examination would be the £20 million that is spent on royal travel. I have had to do a great deal of the work on that myself, through parliamentary questions. The occasion was interesting because Parliament is incredibly sycophantic about matters royal. I do not understand for the life of me why we should apologise for asking why a family which has two palaces of its own needs five palaces of ours. It seems legitimate for me to ask that question. It is appropriate to seek answers as to why five palaces are needed.

It emerged that the palaces were not needed to house the royal family. I question whether we have a duty to house the wider royal family. The palaces were needed for 280 grace-and-favour apartments. We would not quibble about some of the apartments. They are for people working on the estate—the equivalent of a tied cottage. No one begrudges someone such accommodation. However, it is a different matter when it comes to lavish accommodation in Kensington palace and so on, occupied by people who, as I see it—I recognise that this is not the way the Committee necessarily sees it—are protected by the aura of the Crown and the deference which is shown in the House to anything royal. They have escaped for many years the sort of attention that should be paid to the benefits that they enjoy at the taxpayer's expense. I am referring now to the royal civil service—the royal household.

The Committee called as a witness Mr. Peat, formerly of Peat Marwick. He put up a spirited defence of the grace and favour system. Towards the end of the hearing, the impact of that defence was somewhat diminished when my hon. Friend the Member for Warrington, South (Mr. Hall) was discourteous enough to ask him whether he had a grace-and-favour house. He said that he did not, but he hoped to move into one in a few months.

Indeed, he has now moved in. It strikes me as incredible that we should sanguinely accept that more than £250,000 was spent on furnishing, fixtures, fittings and decoration for that one apartment so that someone who already had a house in Battersea could live in Kensington palace. In order to be near his work in Buckingham palace, he had to be housed in Kensington palace. It is the most nonsensical case I have ever heard.

I must be careful not to go into too much detail because we are producing a second report on the matter. What worries me is the obstruction that one comes up against from the Department and from the palace when one simply tries to obtain information. For example, 46 of the senior members of the royal household—not the royal family, but the royal civil service—enjoy lavish accommodation because, or so we were told, it is necessary to facilitate their work and increase their efficiency in carrying out their work for the palace.

I ask two simple questions. May we know whether those 46 staff work part time or full time—not exactly a dangerous question—and may we have a job description for each of them? I have been told no—that Parliament is not entitled to that information because those people are paid from the civil list.

We cannot ask even general questions about the civil list, as I know that a Clerk of the House would confirm—such as whether, in the most general sense, the civil list has been exceeded—so we cannot ask detailed questions. The royal household continues to refuse to provide the information that I have asked for about the work that those people do and whether it is full time or part time.

Yet there is a flaw in the argument of the royal household, and it should be important to the House. We were told that part of those people's salary is the accommodation. We were told that they cannot be offered the salaries that they might command elsewhere. In evidence we were told that therefore the accommodation makes the job more attractive to them. However, that accommodation is not paid for from the civil list; it is paid for from grant in aid. If it was paid for from grant in aid from the Department of National Heritage, I am entitled—Parliament is entitled—to know what work those people do and whether they work full time or part time, in order to judge whether the public receive good value for money in allowing them to have that accommodation in addition to the salaries, whatever they may be, that they receive from the civil list.

To the best of my knowledge, unless the Chairman of the Public Accounts Committee, my right hon. Friend the Member for Ashton-under-Lyne, has heard anything since I last discussed the subject, as yet we have had no firm decision as to whether that information will be forthcoming.

In the same way, I found out that, during the five years before the £0.25 million was spent on Mr. Peat's accommodation, the six directors of the royal household had £325,000 spent on decorations and furnishing. I am now trying to find out how much they have had since the provision of furnishing and decoration and so on started in 1982. Every obstacle is being placed in the way.

As a member of the Public Accounts Committee, I am horrified at that lack of transparency about matters relating to taxpayers' money. Some of my constituents survive on housing benefit; some must sign away their homes to obtain care in old age. Yet I am not allowed to obtain the information that I need about people who live in the grandest housing benefit scheme that anyone has ever devised. The royal household is not willing to provide us with the information that I want.

I apologise for going on for so long. I apologise especially to the Whip, my hon. Friend the Member for Leeds, East (Mr. Mudie), who I know is deeply concerned that my comments should be as succinct as possible. I hope that, if I voluntarily sit down now, I shall have done my share to facilitate a 10 o'clock Division.

7.2 pm

I say to my right hon. Friend the Member for Swansea, West (Mr. Williams) that it was most enlightening for members of the Committee to hear someone with such knowledge, especially of what I would call the housing benefit scam for the elite, which the Government do not appear to be worried about tackling.

Obviously, several Public Accounts Committee reports are of interest to me as a Scottish Member. I look forward to the final report on the Health Care International (Scotland) Ltd. inquiry. We have the minutes of evidence of Wednesday 21 June 1995 with us. If a private investor had subsidised a company to the tune of £27.6 million and a further £9.4 million, and that company had gone into receivership in less than a year, there would have been a scandal and a serious investigation.

We have evidence before us, in paragraph 3 of page 1 of the report, that Health Care International (Scotland) Ltd. built a hospital in Clydebank in the Clydebank enterprise zone, that expenditure of £9.4 million was incurred by the Scottish Office to make the site safe and capable of development, and that further various forms of public assistance totalling £27.6 million were provided to that company.

The subsidies were within the budget until July 1994, but, by February 1995,
"the receivers announced that a new company, HCI Holdings Ltd, which is wholly owned by the Abu Dhabi Investment Company, had taken over the HCI project"
and that the money that we had put in had been lost to the country.

There was serious talk of further subsidies going to the Abu Dhabi Investment Company to entice it to take over the project. That was a private hospital that said that it would gather money by bringing patients from throughout the world to use top world-class surgeons in Scotland, and thereby bring a great deal of money into Scotland's economy. What happened was that more than £36 million of public money went into that project, to be lost for ever.

I shall not speak at length about that, because I hope that we have a chance to debate the final report, and that the Government will be seen to be so obsessed with the private sector in medicine in Scotland and throughout the country that they are willing to throw public money at it without any thought for proper corporate governance.

I wish to discuss the 48th report of the Public Accounts Committee, entitled "Management and Sale of Houses in Borders Region". I am often told by colleagues that, when one discusses Scottish matters in the House, one speaks a foreign language, because there is not a great deal of interest in them, but the following case translates well into the experiences of public housing authorities in England and Wales.

The anxieties expressed in the report are many. On page v of the report, in paragraph 3, the Committee states:
"We are disturbed that the Department allowed the contract to manage these houses to be awarded without competition."
That is the Government who said that we should have open competition, that competition was good for us, and that the market was the way to clean out the bureaucracies. Yet they were found in that case to have awarded the management of the houses in the Borders to a new housing association, the Waverley, without any other competitor being allowed to bid. As will be seen if one continues to read the report, the Waverley did it in such a way that serious questions arose about whether it even offered to do so efficiently.

The houses in what became the Waverley housing trust had been managed directly by Ettrick and Lauderdale council on behalf of Scottish Homes for 13 years, and the management costs were considerably less than those that were in the bid for management by Waverley Housing. In fact, the report states that Waverley Housing, in the management contract, offered to manage the houses for £2.5 million and spend a further £1.1 million after the sale of the houses as a result of improvements—basically improvements in the fabric of the buildings. However, Ettrick and Lauderdale council had been able to manage the houses for considerably less than the sum that Waverley Housing bid.

One would suppose that the Government would have considered the Ettrick and Lauderdale bid, and said, "They are able to manage those houses for much less than Waverley, so let them continue to manage them." That would have made sense to anyone. However, the Government, in the context of the United Kingdom and of Scotland especially, are obsessed with trying to destroy public sector housing in Scotland and trying to force a false third sector into existence.

In spite of the wish of the tenants of those houses to have Ettrick and Lauderdale council as their landlord, they were not allowed the choice of a public authority that had proven itself to be efficient. They had to take what the Government called the only bidder in town—Waverley Housing.

That is in spite of the fact that we see on page vii, paragraph 5 that
"an experienced housing association (Eildon Housing Association) had also expressed an interest"
in those houses. It was not just a matter of debarring the public sector and the local authority, which had managed the houses so efficiently; the Government debarred anyone else who was in the third sector—the housing association sector—from even putting in a bid. That is unacceptable.

The Government's stated purpose in allowing competition is given in paragraph 3(iv) of the report:
"This is not only to secure the best possible value for the taxpayer but to help ensure that the public bodies concerned can demonstrate a clear arm's length relationship with those wishing to bid for the provision of services."
That cannot be achieved only by examining public accounts.

The feeling of the people of Scotland is that people in the Scottish Office were under ministerial instruction or persuasion to cosy up to certain senior public officials who had previously worked for local authorities and who had put together the concept of Waverley and ensure that the way was smoothed for Waverley to get the contract to manage the houses in 1989. The Scottish Special Housing Association, which was the predecessor of Scottish Homes, gave the management contract to Waverley in February 1989.

The Scottish Special Housing Associations's costs for managing 1,800 houses had been £1.2 million yet the Government accepted a bid, without competition, from Waverley to manage 1,300 houses—not 1,800, but 1,300—for £2.4 million. How can the transfer of those houses at twice the cost be justified? It cannot be justified. People are therefore deeply suspicious of the management relationship that was set up by the Scottish Office.

The Government went further in March 1992, when they sold 1,191 houses to the Waverley housing association, once again without any other competitor being allowed to hid. The local authorities and Eildon housing association were debarred from bidding and so Waverley had a free run. Not only did it obtain a lucrative—and expensive—management contract, but it was then allowed to buy the houses without competition.

The Public Accounts Committee asked many questions and found many faults. In particular, its report states:
"It is unclear to us how, in the absence of competition for the contract, the Department have reached"
the conclusion that £2.5 million for the management was a reasonable cost. No test was made against any other valuation, and there was no evaluation of any outside bid.

The problem is that the Government were—and continue to be—obsessed with the destruction of the public housing sector in Scotland. In my constituency, there are some 1,200 Scottish Homes houses. The Government have said that they must be put up for a bidder to take them out of Scottish Homes' hands. The choice before tenants is, again, Hobson's choice. They can either stay with Scottish Homes, or they can go to the new housing association.

A survey has been carried out in Grangemouth and Bo'ness. The tenants showed by a vote of over 90 per cent. that they wished to have a local authority landlord as an alternative to Scottish Homes, but they cannot have that. That is why, back in 1989 and 1992, the Government twisted, bent or broke the rules of good government and sensible finance by selling the houses to Waverley without competition.

Scottish Homes, we are told, is to become only a builder of houses and mainly for people with special needs, not the bulk of the population. As local authorities in Scotland do not have the funding, or permission to spend from the Government, no one is building houses for mainstream public need. There is a distortion in Scotland in respect of the sort of housing being built by the public purse. That all started back in 1989 with this sorry, dubious affair, in which the Government allowed a single bidder to manage, and then purchase, a substantial number of houses in the Borders. That has been the theme ever since.

The criticisms in the report of the Public Accounts Committee are stark, but it would appear that Scottish Office Ministers are not listening, because the only choice before the people of my constituency and the rest of Scotland is still Hobson's choice. It is take it or leave it. Usually, one housing association is cultivated by the Government and civil servants to tee itself up to take over the housing. It is strange that, in the cases that I have dealt with recently, the people involved were ex-employees and managers of Scottish Homes in the areas where the houses are being put up for sale or transfer.

People say that they do not want Scottish Homes or a housing association; they want to have a public authority landlord. Just as with Waverley in 1989 and 1992, that option is not being allowed. I hope that the Public Accounts Committee report will be read by people in the rest of United Kingdom, because what happened in Scotland and the Borders can happen anywhere when the Government put ideology before good management and good government.

I may disagree with the Government about whether there should be a third sector or a large public sector or private housing, but I hope that all hon. Members would agree that the Government do not have the right to give a management contract that costs twice what the previous management cost just because they favour the new managers for personal or political reasons. They cannot be allowed to give away those houses to that same management without allowing open competition. We must be able to see whether the people who are going to pay, through their economic rents, the debts incurred by Waverley have been robbed of better value that could have been achieved had another bidder been involved.

If a Government do not stand comparison, they must stand condemned. In the report, the Government stand starkly condemned by the people of the Borders, by the former tenants of Scottish Homes, and I hope that they will stand condemned by people who read the account of tonight's debate.

It is not right that a Government should do deals in such dubious circumstances. The report says that there were six meetings between senior Government officials and the people who were to become Waverley housing association at which no minutes were taken. It was clearly a little behind-the-door arrangement—and a lucrative one for the people who set up Waverley. If the Government are willing to bribe their ideology into reality, then, as far as I and the people of Scotland are concerned, they are not to be trusted with the running of any Department and not only the Scottish Office.

That is why the Government's popularity stands so low in Scotland, with the massive bribes to private sector health involved in the Health Care International affair and the dubious arrangements that they set up to allow Waverley to take over the houses in the Borders. There is also their continued determination to force people not to have the landlord they want—the local authority—but another one, usually a housing association whose managers were previously managers at Scottish Homes. It seems to me that the Government and their policies are sick. That is proven starkly by the report.

7.17 pm

I add my congratulations to the hon. Member for Littleborough and Saddleworth (Mr. Davies), who made a fine maiden speech this evening. The generosity of his tribute to his predecessor was noteworthy, as was the—perhaps controversial—forcefulness with which he put his case. I am sure that it will be the first of many sizeable contributions from him.

I was struck by the clarity and authority with which the Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), presented his case. I know that there is a wealth of information to consider, but the way that he dealt with it was excellent and clear to all concerned.

Many subjects have been touched upon in the debate, and, I fear, many subjects will not be raised.

I should like to deal specifically with what the right hon. Member for Swansea, West (Mr. Williams) euphemistically referred to as the "Celtic problem". I shall confine myself to the 29th report, which deals with the Welsh Development Agency.

Despite the fact that the Welsh Development Agency alleges that the Grant Thornton report was independent, it was neither independent nor impartial. Its terms of reference were tightly drawn, and it was instructed and funded by the Welsh Development Agency, so I do not accept for a moment that an arm's-length investigation has been made into the matter.

I shall not repeat the facts of the case, which were more than adequately placed before the House earlier this afternoon by the hon. Member for Swansea, West. The Grant Thornton report has been described by one eminent Queen's counsel, Mr. Vernon Pugh QC, as "selective" in what it decided to investigate. That is a damning condemnation of the report and its terms of reference.

That things were not right during that period in the Cynon valley goes without need for emphasis. At that time, the Welsh Development Agency had two directors, who were also directors of Tesco and who profited royally from the whole deal. That cannot be right. Even if it was not illegal, it calls into question the veracity of the matter.

To deny, as has been denied by the agency and the council, that a formal partnership existed between Cynon Valley borough council, the Welsh Development Agency and the county council is plain folly. It is misleading, and an outright untruth. The association, which I would call a syndicate—a partnership for one specific purpose—which is to deal with the land in question, was formed in April 1991, so any denials are unfounded.

The Public Accounts Committee's report into the matter has been heavily critical, and rightly so. In paragraph 74, it says:
"We note that the Grant Thornton Report found no evidence of improper pecuniary gain or collusion but … that the Agency had been over-zealous and had left itself open to allegations of undue influence. We note that disciplinary action has been taken … and … trust that the … revised procedures will prevent"
such actions
"in the future."
Given that two members of the WDA board were also members of Tesco plc, the words "over-zealous" and "undue influence" are not strong enough.

The Department agreed that the agency's handling of the matter was unacceptable. It drew attention to the code of practice, which sets out the principles to be applied in such circumstances, including integrity, objectivity, accountability and openness.

What happened in Cynon valley was justifiably open to criticism. The leading counsel, Vernon Pugh QC, said that the activities constituted a joint venture or syndicate, and that the moneys expended by the local authorities were ultra vires, and could now validly be claimed back, because no sanction had been obtained under the relevant legislation from the Welsh Office. I therefore suggest that other matters need to be examined, perhaps in another forum, in the coming months.

The Welsh Office was firmly of the view that the disposal of the land was badly handled. I should have thought, therefore, that some form of in-depth and arm's-length inquiry would have been set up by the Welsh Office. Although the Welsh Office has accepted in several parts of the report that things were wrong, it evidently intends to do nothing about it. In the interests of open and fair government, via the quango system or whatever, this matter deserves a full, independent, arm's-length tribunal of some form, with a broad remit to investigate the whole matter from beginning to end, and to make positive and real recommendations in due course.

I echo what previous hon. Members have said: that the Welsh Development Agency has not been the flavour of the month with the PAC, and rightly so. Matters have improved of late, and we are now looking back some two or three years to this set of incidents. Despite a considerable improvement in the running of the WDA, this incident is serious and calls for a full, powerful, arm's-length inquiry into the matter.

7.25 pm

As always, this afternoon's debate has been informative and interesting. The work of the Public Accounts Committee is extremely detailed and I commend to all hon. Members a careful reading of its reports, for they teach us much about the actions of Government.

I thank my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) for his explanation at the beginning of the debate. He described clearly and precisely many important points in the key reports. I pay tribute to the work of the Public Accounts Committee. It is a hard-working Committee, which has paid a great deal of attention to its work. I also commend the excellent work of the National Audit Office, which has a great deal to do in trying to pursue public money wherever it finds itself and to ensure that it is accountable and transparent in its use.

For the record, I congratulate the hon. Member for Littleborough and Saddleworth (Mr. Davies), who made his maiden speech today. He was generous in his tributes to his predecessor, Geoffrey Dickens, who was a hard-working constituency Member. He was much respected on both sides of the House and will be greatly missed. His courageous fight against his illness was an example to us all in the dignity of life and the confrontation of such a dreadful and debilitating illness.

The speech of the hon. Member for Littleborough and Saddleworth was controversial, but none the worse for that. He talked about the importance of the countryside, its fragility and the pressure on it. In particular, he referred to sites of special scientific interest. He spoke out clearly and strongly about the need for long-term planning, not only for this country but for the planet, if we are to discharge our responsibilities to younger generations. He criticised the House's procedures, and I look forward to him participating effectively in the process of legislation in the House and to his contribution to challenging the Executive. He said that he was the 68th Liberal Democrat to be elected this century. Perhaps there is a message in that for him, which I shall not dwell on tonight. He also spoke about the important issues of alternative energy sources and energy conservation. I am sure that we all look forward to his rigorous participation in debates on those issues.

The 51 reports of the PAC consider the principles of economy, efficiency and effectiveness; compare input and output and consider the work of Government. Having looked at those reports, I was relieved and consoled that I did not have to pay such close attention to the 500 reports that have been produced by the Committee since 1983.

As has been said, those reports are passed unanimously by the Committee. Their purpose is to examine the implementation of policy; they do not necessarily question it, and they are none the worse for that. Today's debate has referred again to the relationship between the workings of the National Audit Office and those of the Audit Commission. It echoes last year's debate, when we considered the Committee's important eighth report on the proper conduct of public business. That report stated:
"In recent years we have seen and reported on a number of serious failures in administrative and financial systems and controls within Departments and other public bodies which have led to money being wasted or otherwise improperly spent. Those failings represent a departure from the standards of public conduct which have mainly been established during the past 140 years."
I note that my right hon. Friend the Member for Ashton-under-Lyne said that although fraud still represents a small proportion of the Committee's investigations, it is a growing problem. Today's debate has focused again on how the fragmentation of so much of the Government's structure has led to a lack of accountability in the expenditure of public money. We need to reconsider how to ensure that that money is not wasted and is accounted for.

In last year's debate, the hon. Member for Orpington (Mr. Horam), now the Parliamentary Secretary, Office of Public Service, and no longer a member of the PAC, referred to a number of major Government initiatives. He said that the Government had made
"major improvements in the way in which public spending is controlled and managed."—1Official Report, 26 October 1994; Vol. 248, c. 926.]
He said that he was thinking in particular of market testing and competitive tendering. It is a shame that he is not present to discuss those improvements because two of the reports deal specifically with the conflict between market testing and value for money in the privatisation process. I refer in particular to the 39th report on the sale of Forward Catering Services and the problems created for the Treasury in trying to deal with market testing and privatisation, and the loss of revenue as a result.

My right hon. Friend the Member for Ashton-under-Lyne spoke about the need to consider expanding the role and work of the NAO. He referred specifically to the regulatory structure governing the public utilities. Much has been said about the role of those utilities, the huge profits that have been made and whether value for money for the taxpayer has been exacted. I do not intend to continue to debate that now as I am sure that you would rule me out of order, Madam Deputy Speaker, but I reinforce my right hon. Friend's argument about the urgent need to look again at that structure.

My right hon. Friend also identified, correctly, weaknesses in certain areas as a result of ever-increasing fraud. He raised the important issue of accounting officers and their role. I wonder whether the Financial Secretary can give us an assurance that notes of dissent are now available to the PAC. My right hon. Friend referred in particular to the Pergau dam and the role of Mr. Lankester. He also said that Mr. Lankester may be moved—

In that case, can the Minister assure the House that that move had nothing to do with notes of dissent and will not act as a disincentive to civil servants writing such notes in the future?

My right hon. Friend the Member for Ashton-under-Lyne referred to the Eurofighter project and the enormous overspend on its development. He was right to ask whether collaborative programmes, which by their nature tend to be more expensive, will be subject to better controls in the future, because it is inevitable that such programmes will continue to develop as our partnership in Europe strengthens. I hope that the Financial Secretary will he able to provide the answer.

My right hon. Friend referred to the Sports Council and the problems still emerging throughout the public sector because of conflicts of interest in the administration of public finance and the fact that regulations governing that public finance are not properly met.

My right hon. Friend also referred to council tax valuations. He was right to point out that although it may have cost 19p for the average valuation, if 2 million properties are incorrectly valued—75,000 of my constituents believe that they are—the appeals cost for correcting those valuations will be extremely high.

My right hon. Friend also spoke of the irregularities at the embassy in Sana' a in the Yemen. Questions surrounding that amazing episode have still not been properly answered—it is worthy of an episode of "Yes, Minister". The financial irregularities included trading money on the black market; a lease that was too expensive and included a bribe; staff recruitment to cover up errors; no checks on proper financial transactions and problems with the issue of visas. The Foreign and Commonwealth Office explained away all the difficulties at that embassy with the words, "There were also personality problems and the Yemen was not an easy country to live in."

When those financial irregularities came to light, the FCO assessed the management skills of the then ambassador and described them as "totally inadequate".

In its judgment, however, those skills had not reached the level of being unacceptable. I would like the FCO to give us its definition of unacceptable because it is obviously different from that understood by the rest of us. After that assessment, the FCO encouraged the ambassador to make several changes. Some time later—several expensive visits later—it was decided that he was not the appropriate man after all. He was given early retirement and more money was paid out of public funds. The problems at the embassy were not, however, sorted out and when the new ambassador was appointed, the problems continued.

That raises a series of questions about the role of Government Departments and their stewardship of public money. The Financial Secretary must understand that we are seeking undertakings that there will be changes in the difficult environment that apparently exists only in the Yemen to ensure that public funds are not fraudulently removed.

There is an important report on the green form scheme—legal aid—and the problems that result from incomplete statements of means. The hon. Member for Uxbridge (Sir M. Shersby) referred at length to those important issues. The green form scheme is a vital method of ensuring that those whose financial position may prevent them from receiving the legal advice that they require can receive that advice, following assessment. The report makes it clear, however, that something is going extremely wrong. We must give further consideration to improving the necessary controls, but not with a view to reducing access to the scheme to those who need it. Instead, we must ensure that funds are properly spent.

The hon. Member for Uxbridge referred also to the report on fundholding. Having listened to his comments, I thought that I had read a different report. My hon. Friend the Member for Warrington, South (Mr. Hall) took up the issues. The report is inadequate when it comes to making judgments on the fundholding scheme. The reason for that is made clear by the report; there are no quantified objectives. There has not been a full assessment of the impact of the scheme. The NHS executive has its views but there has been no independent assessment. There is still a case to be answered. I am sure that the PAC will return to it.

Important arguments have been advanced about value for money in grant-maintained schools. There is unacceptable double funding and a need to ensure that all schools in the state sector are funded equally. My hon. Friend the Member for Warrington, South talked about head teachers being provided with health care insurance and questioned whether that was acceptable.

The 40th report deals with the suspension of Dr. Bridget O'Connell. She was a paediatrician, a profession in which there is a national shortage. Indeed, there is difficulty in treating children in certain areas. The outline report is a catalogue of the ineptitude of the internal market and of a lack of direction. I fear that these shortcomings have not yet been resolved. I understand that a consultant within the North Durham trust has been suspended for three years. I hope that another seven or eight years do not pass before the case is resolved.

It remains the fact that Dr. O'Connell was suspended for voicing her concerns about standards of care. She then struggled through byzantine procedures involving disciplinary action in a health service that is breaking ranks with national agreements and procedures. Although guidelines have now been issued by the Department of Health to trusts on the disciplinary procedures that they should follow, the guidelines cannot be, and are not being, enforced. As trusts develop their own contracts with their consultants and as local pay bargaining moves apace, the problems illustrated in the Dr. O'Connell episode will continue to arise and cause problems.

The British Medical Association made it clear that the NHS executive has been moving in a direction opposite to that which has been taken by trusts. Hospitals are persuaded to break or abandon national agreements, including disciplinary procedures, at the very time that we are told that the Department is trying to persuade them to return to a national agreement.

The report on NHS hospital catering in England is truly fascinating. The Department of Health issued a press release on 4 September in which it stated:
"Food is at the heart of everybody's life and its quality is even more important when ill in hospital. Meal times bring interest to a boring hospital stay and nourishing food aids healing and recovery."
I wonder whether the Department read the 49th report of the PAC when it issued its press release. The release adds that nutritional guidelines for hospital catering are to be issued because food, and nutritious food, is vital to the recovery of patients.

The 49th report makes it clear that some of the catering departments surveyed expected patients to order their meals more than a week in advance. That contradicts the trend within the NHS—unless a patient is seriously ill, his or her chances of staying in hospital for a week are pretty slim. If someone is that ill, he or she is probably receiving sustenance through a drip, not through the hospital's catering department.

The report questions the costs of meals, which range from £2 to £15 a day. I am sure that all hon. Members know that hospital catering is often complained about by our constituents. Indeed, they complain at length about its quality. The report states that over 25 per cent. of patients surveyed aged younger than 35 years said that the quality of the food was either poor or very poor. Many of those patients would be women in maternity wards, who would be in need of a proper diet.

It would seem that the promise does not meet the practice. After agreement with the National Audit Office, some Departments are not able to deliver or implement policy. There is sometimes a conflict between what is said in the House and what is delivered outside.

My right hon. Friend the Member for Swansea, West (Mr. Williams) made some challenging points about the functional structure of the PAC and how it might deal with an increasing work load. He referred also to the Trident base, lack of financial controls and the Welsh Development Agency and the Aberdare sites. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) referred to the same problems in Wales.

In his contribution, my hon. Friend the Member for Falkirk, East (Mr. Connarty) highlighted the problems in the 48th report of privatisation clashing with value for money, and the lack of proper tendering arrangements in the dealings with the Borders region sale of homes. He rightly pointed out that in this case the deal was very poor.

I was intrigued by the fourth report of the 1994–95 Session, entitled "Inland Revenue: Getting Tax Right First Time and Dealing with More Complex Postal Queries". I thought that it may be addressed to the Chancellor and his failure last year to get the whisky taxes right, so that we ended up collecting less tax than we had anticipated.

The debate has been about the importance of public money, of value for money, of ensuring that that money is accountable, that its use is transparent and that waste is eradicated. Although the reports from the Public Accounts Committee are excellent, as they always are, the challenge to the House is that we ensure that the recommendations are implemented. How do we ensure that they are delivered and that the waste and, unfortunately, the fraud, is eradicated? How do we ensure that all public money, and the complex structure of Government now, with their quangos and unaccountable bodies, is still accountable?

The new Labour member of the Treasury team, my hon. Friend the Member for Warwickshire, North (Mr. O'Brien), is to join us in the task of pursuing the Government on waste and on the undemocratic nature of much public spending, and we look forward in the coming months to discussing, through the Budget and the Finance Bill, and into next year's election campaign, the waste of the Tory Government and the probity of a Labour Government.

7.52 pm

This has been a very interesting and wide-ranging debate, and it has certainly covered a vast number of topics. For one brief moment I thought that I had come to the wrong debate when I saw a number of my former colleagues who used to attend debates on the subject of fishing coming into the Chamber. I thought that a time warp had occurred, until I realised that the debate on the work of the Public Accounts Committee was running a little longer than some had expected.

I, too, add my thanks to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and his colleagues for the dedicated work that they have undertaken in their onerous task. He reminded us in his own remarks of the considerable volume of work, and that fact was supported by other hon. Members.

All who have spoken represent the bipartisan nature of the work of the PAC. That is a very proper approach and I shall in no way seek to challenge it. The starting point for the Committee's examinations and deliberations is the work of the Comptroller and Auditor General and his staff, through the good offices of the National Audit Office. We should also not forget a further dimension to this: the work of the Northern Ireland Audit Office. A few days ago, it struck me that I really should visit the NAO, as it was some time since I had been there. As a new Member of Parliament I had been there and was inculcated as to the ways in which it is Parliament's office, being there to protect the interests of Parliament in monitoring the expenditure of public moneys. I went to meet the team again and to refresh myself as to the work that it was undertaking.

One interesting point that has come out in all that we have said is that, by and large, many of the problems that we have talked about today result from basic human frailties. We sometimes look at each report as though it were a new discovery when in reality it reflects on that frailty. Although in so many cases we look to systems to try to solve those frailties, it is the role of human beings, in what they do in following rules, procedures and codes of practice, which can make the difference between a proper system operating, giving value for money, being run in terms of probity and correctness, and that same system becoming the subject of a report by the PAC.

It is quite right that the NAO and the Committee criticise Departments when they deserve it. I very much hope that the Committee and the NAO see part of their role as drawing attention to examples of good practice, which can be used as a guide by other Departments and, indeed, working with Departments to ensure that the highest standards of financial management are achieved and maintained. I was struck in my discussions with some of the audit team by the fact that that is precisely what they are now doing. I very much welcome that development.

I see that as a natural remark from a Minister in Government, a Government who have made improvements in efficiency in the public sector such a central part of their policies. The hon. Member for Bristol, South (Ms Primarolo) derided, perhaps, some of our attempts through privatisation and its associated works within government, but we have taken some £500 million in costs out of the running of government and reduced the size of the civil service, against many people who said that government should be reducing their costs if the private sector is being asked to do the same.

For too long, the debate has overlooked another aspect of this audit. I put on record my appreciation of the work of the Audit Commission, which is responsible for the audit of many billions of pounds of public money, including expenditure by health authorities and NHS trusts. The latter was touched on by some Opposition Members in their comments. One of the interesting features of audit is the fact that the National Audit Office and the Audit Commission are increasing their contacts together, to bring in a cross-Government view of auditing procedure.

The right hon. Member for Ashton-under-Lyne went through a number of key reports, which he drew to our attention. Before turning to those, I hope that he and the House will understand if I say a word about a maiden speech which formed part of our proceedings today—that of the hon. Member for Littleborough and Saddleworth (Mr. Davies). Like other hon. Members, the hon. Gentleman properly and with great humanity mentioned the work of our dear friend Geoffrey Dickens. The hon. Gentleman and the hon. Member for Bristol, South remarked on Geoffrey Dickens' bravery in his fight against cancer. He was a politician who brought humour as well as a campaigning spirit to the work of the House. I know that all hon. Members will miss his unique contributions.

The hon. Member for Littleborough and Saddleworth spoke with passion and vigour, as I would expect anybody new to the House to do, just about staying in order in terms of controversy. Although I wish him well during his time as a Member of Parliament, and in serving his constituents' interests, I fear that many Members on the Conservative Benches may wish that stay to be limited. He mentioned the sites of special scientific interest, and the Government welcomed that report. If he wishes to see more on that subject, a reading of the rural White Paper may be to his advantage.

In his opening remarks, the right hon. Member for Ashton-under-Lyne discussed the very important subject of the Ministry of Defence, and major projects. He rightly drew our attention to some of the complexities and difficulties in dealing with matters connected with complex major projects. I reviewed that particular matter with the National Audit Office during my time there. Listeners to Radio 4 may have heard the diaries of Samuel Pepys and will have been attracted by what he had to say about the costs and complexities of running a naval department, when his mind was not on other things, whether his diaries or his personal affairs.

Three things came out of my discussions at the National Audit Office which were central to addressing some of the concerns that the right hon. Gentleman mentioned. First, there is the need to get the specification right for the intended purpose at the outset: that is a central issue in the complex matters to which the right hon. Gentleman referred. Secondly, there is the need to stick to logical stages in the project and not to rush into later stages before preceding stages can be adequately implemented.

Thirdly—this emphasises an important, to me crucial, part of the human dimension—there is the question of continuity of personnel in senior management in such major projects. There may often be a desire to put a new person in to move something along, but the combination of new vigour with wisdom and experience can mean much when such complicated issues are being dealt with.

The right hon. Gentleman cited a number of specific projects. There is no doubt that the Ministry of Defence has taken account of the Committee's advice about, for instance, the mid-life update programmes that he mentioned, but the report also noted progress. The Government welcome its acknowledgement that the MOD is seeking to adopt procedures for better estimation of programme costs and in-service dates. The right hon. Gentleman also mentioned timing, which is crucial to the achievement of those objectives.

The right hon. Gentleman referred to a project dear to my heart—the Eurofighter. He may not know that the prototypes are currently being assembled in my constituency. I have been acutely aware of many of the concerns expressed from time to time about cost overruns, but I must tell the right hon. Gentleman that this is a collaborative venture, for the very reason that it is doubtful whether any one nation could pursue it and achieve the same value for money. I believe that the MOD would argue strongly that in overall terms this arrangement ultimately constitutes a better buy for the British taxpayer. It will, however, have noted the important points made by the right hon. Gentleman.

The right hon. Gentleman mentioned fraud, which was dealt with in the report about the Sana'a embassy. When I discussed fraud with Sir John Bourn, he told me that he had recently been reading a hook about accountancy which had tried to collate a list of fraudulent happenings in an attempt to show where risks of fraud were occurring. Those happenings, apparently, conform to 40 basic models. Sadly, fraud has been around for an awfully long time, but the accountancy profession has now narrowed it down to that short list.

Organisations can find themselves at risk of fraud when there has been too little change for too long, when there has been too much change too quickly and when there is an over-concentration of responsibilities in the hands of one person. Perhaps that covers some of the concerns expressed in the report on the Sana'a embassy.

I draw comfort from the fact that it is possible to apply disciplines learnt from other areas such as health and safety, in which there is a continued process of challenge to accepted procedures. I believe that part of the audit trail, and part of the excellent professional audit work carried out by the National Audit Office, relates to a desire to challenge accepted systems and never to accept that work is being done correctly.

The right hon. Gentleman rightly referred to the Sports Council and the need for a separation of powers and responsibilities. The council recognises that need; a financial memorandum has been agreed between it and its trust company for the purpose, and the company's structure is to be simplified as part of the remedial work involved. The report makes an important point about the need to separate responsibilities in organisations which may operate at arm's length from central Government.

Hon. Members have raised the question of notices received by accounting officers in respect of the PAC. The right hon. Gentleman rightly said that accounting officers now need to inform both the Treasury and the Comptroller and Auditor General if they have been given an accounting officer direction in relation to a course which gives poor value for money. That is a useful way of securing proper accountability and indicating the respective roles of Ministers and accounting officers, and an important further discipline in dealing with how to respond to the work of the PAC.

Both the right hon. Gentleman and the hon. Member for Bristol, South mentioned council tax valuations. I listened carefully to what they had to say, but I think that anyone viewing the arguments the other way round, as it were, would see that the report could have been interpreted as describing the success constituted by the accuracy of 94 per cent. of the valuations, as opposed to making an important observation about the relationship between achieving a particular value for money and the quality of the work undertaken. There was clearly a lesson to be learnt from the costs of remedial action if the original work was not done as it should have been done, but it should sometimes be pointed out that work can be done effectively, which the report attempted to do.

The right hon. Gentleman rightly drew our attention to some of the difficulties associated with severance payments in publicly funded education. That underlined the importance of good information. In fact, both the Department for Education and Employment and the Higher Education Funding Council have responded positively to the PAC report and will be working together to encourage good practice and to ensure that public expenditure is seen to be both open and accountable.

The HEFC and other funding councils share the PAC's views about the undesirability of gagging clauses, which were mentioned by the right hon. Gentleman and others. It will be discussing with its institutions the best way to restrict their application to commercially sensitive information. It has already acted to require the disclosure of severance payments in institutions' annual accounts, and to monitor and encourage compliance with the Committee of University Chairmen's guidance on governors.

The HEFC has acted with commendable swiftness to get the original severance package for the vice-chancellor of Huddersfield university set aside, and has also instigated an investigation of the departure of the vice-chancellor of Portsmouth university. I hope that that shows that robust action has followed. It deals with one point made by the Opposition about the PAC, which was described as a toothless watchdog. The fact that robust action is being taken as a result of the PAC's reports is a clear indication of the importance attributed to them.

One issue that emerged from the reports was the question of the National Audit Office's access to areas to which it currently has no access. While I acknowledge the concern expressed by the right hon. Gentleman and his colleagues, it should be pointed out that the Comptroller and Auditor General already carries out certification on audits of more than 550 accounts, covering total income and expenditure of £500 billion per annum. While it does not necessarily have direct access to certain bodies, it does have a right of inspection. The activities of the Comptroller and Auditor General, therefore, are perhaps wider than some are led to believe. As the right hon. Gentleman knows, however, that sector is the subject of further consideration by Government and more will be said in due course.

The right hon. Gentleman rightly mentioned the Sana'a embassy saga, as did a number of other right hon. and hon. Members. They pointed out that disciplinary action had been taken against those who were directly involved in that matter. I wish to reflect on some of the wider issues that came out of that sorry saga.

The Foreign and Commonwealth Office has acted. It has created a financial compliance unit, a rapid reaction team, able to deploy quickly to investigate reports of financial weaknesses and to get to the root of any problems that may ensue. It has instituted an early warning system to highlight posts at risk through internal management problems or local conditions. The permanent under-secretary wrote personally to all heads of post reminding them of their duties and responsibilities as sub-accounting officers. Finally, the FCO has published a booklet with advice on how to prevent and detect fraud.

It is right that people should be critical and point fingers, but it is equally right that we should learn lessons from that. Just as the hon. Member for Bristol, South pointed and prodded her finger in my direction, one could equally say that perhaps there are local authorities run by members of her party in which some of the lessons learnt from all these exercises may be properly applicable.

The final matter that the right hon. Gentleman mentioned, and which my hon. Friend the Member for Uxbridge (Sir M. Shersby) also touched on, involved the whole question of green forms. There is no doubt that there is a serious problem there, which is why something that has been in operation in its current form for some 50 years is the subject of investigation by the Lord Chancellor. The right hon. Gentleman will know that steps have been taken through the franchising operation to try to control much more carefully the operation of the solicitors' end of the green form activity, but the whole subject is to be considered by my right hon. Friend the Lord Chancellor, who has announced a fundamental review of the whole basis of the matter. I shall take pleasure in drawing his attention to the many sage comments made by my hon. Friend the Member for Uxbridge.

My hon. Friend went on to talk on the subject of Hillingdon. One could sense from the passion with which he dealt with that subject that he was talking very much in his capacity as Hillingdon's excellent Member of Parliament. To that extent, I hope that he will not mind if I draw his remarks to the attention of my right hon. and learned Friend the Home Secretary, which were relevant and should be attended to in some detail. On the other comments, I should like briefly to deal with some of the points made by the hon. Member for Warrington, South (Mr. Hall). He, too, mentioned the Sana'a embassy and I have given our response on that. He touched on the subject of grant-maintained schools. The Funding Agency for Schools shares his concerns and, as part of the review and updating of guidance on financial management to such schools, the agency will place a mandatory requirement on them to maintain a register of pecuniary interests of governors and of staff with significant financial responsibilities. The hon. Gentleman will find that that matter has been taken seriously, as have some of his comments on events on Merseyside.

The right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) touched in their own ways on matters connected with the Welsh Development Agency. That matter has been thoroughly commented on in public. They picked out their own particular matters of concern. The right hon. Member for Swansea, West touched on matters connected with a land deal at Gadlys road. The Government agree that aspects of the agency's handling of the case were unacceptable and, as he knows, appropriate action has been taken. The Welsh Office has issued new guidelines to the agency which have revised its procedures, and a code of practice has been issued to all staff. Lessons have been learnt not only from that but, as I have said, from all the reports by the Public Accounts Committee. Those matters have been taken extremely seriously and I am sure that further note will be taken of what hon. Members have mentioned.

The hon. Member for Meirionnydd Nant Conwy touched on the Grant Thornton report. The agency has commissioned that report at the instigation of the Secretary of State for Wales. The report examined all the issues relevant to the development at Aberdare, including the Tirfounder fields, which the hon. Gentleman mentioned. The agency has accepted all the recommendations of the report. Both those examples show the way in which the role and work of the Public Accounts Committee lead to robust action to deal with particular matters.

The final speech was made by the hon. Member for Falkirk, East (Mr. Connarty) and included points on housing. The Government maintain that the objectives of the sale were met, particularly in terms of tenants' interests. I understand that the tenants had already shown a preference for the Waverley housing association that he mentioned. I have noted his particular comments.

As we come to the conclusion of a wide-ranging debate which has touched on value for money, fraud, matters of control and complex projects, it is right to put on record the fact that Conservative Members have sought to improve the efficiency of Government by effectively removing Government from many areas where we should not be operating. The result of that has been a dramatic improvement in efficiency, a reduction in the number of civil servants, a substantial reduction in levels of public expenditure, and due note being paid to the question of value for money, which brings us full circle to where the debate started and to where the right hon. Member for Ashton-under-Lyne drew the House's attention to the continuing importance of the PAC's work in the vital matter of value for money. I thank him for the way in which he introduced the debate and all those who have spoken in it. Without doubt, it shows that the PAC is as robust as ever in probing properly the inner workings of Government and the positive way in which the Government have responded by taking action in so many of the ways that the reports have recommended.

I commend the motion to the House.

Question put and agreed to.


That this House takes note of the 40th and 42nd to 51st Reports of the Committee of Public Accounts of Session 1993–94, of the 1st to 40th Reports of Session 1994–95, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 2732, 2739, 2754, 2757, 2786, 2825, 2832, 2906, 2921, 2988, 2990, 3013), with particular reference to the following Reports of Session 1994–95:
First, Ministry of Defence: The Major Projects Report (1993);
Second, The Sports Council: Initiatives to Improve Financial Management and Control and Value for Money;
Fifth, Council Tax Valuations in England and Wales;
Twenty-eighth, Severance Payments to Senior Staff in the Publicly Funded Education Sector;
Thirty-third, Foreign and Commonwealth Office: Overseas Representation: Irregularities at the Sana'a Embassy;
Thirty-fourth, Lord Chancellor's Department: Qualification of Audit Opinion and Alleged Frauds on the Green Form Scheme.


[Relevant documents: European Community Documents Nos. 6588/95 relating to NAFO conservation and Greenland Halibut, 6191/95 and 7618/95 relating to European Union and Canadian fisheries and the NAFO Convention, 6/92/95 relating to drift net fisheries and salnwnids, 6196/95 relating to drift net fisheries and tuna and 7599/95 on NAFO fisheries, the Observer scheme for Community fishing vessels operating in the NAFO area, the scheme of joint international inspection adopted by NAFO and the provisions for the application of certain control measures adopted by NAFO.]

I must inform the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition and that she has also placed a 10-minute limit on speeches by Back Benchers throughout the debate.

On a point of order, Mr. Deputy Speaker. Could not Madam Speaker have selected amendment (b) in the name of my hon. Friend the Member for Ludlow (Mr. Gill) bearing it in mind that we are asked to make a decision on the basis of 120 pages of paper which I am sure some of us have not read—we received them only on Friday? As the decision will in any event be taken in Brussels on Thursday on a majority vote, would not it help the House more if we were to debate amendment (b) and have a proper debate—

Order. I have already explained to the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition.

8.17 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food
(Mr. Tony Baldry)

I beg to move,

That this House takes note of European Community Documents No. 7596/95, on establishing a control system applicable to the Common Fisheries Policy, No. 7465/95, relating to Community financial contribution towards certain expenditure incurred by the Member States in implementing the monitoring and control system applicable to the Common Fisheries Policy, and No. 8817/95, concerning a proposal for a Council Regulation establishing the list of species to be recorded in the fisheries logbook and landing declarations; welcomes the agreement reached at the Fisheries Council on 15th June on fishing effort levels; and supports the Government's efforts to secure effective measures to monitor and enforce fishing activity in Western Waters, including the Irish Box, while not placing unnecessary burdens on the fishing industry.
I shall try not to take up too much of the House's time as this debate is short and I am sure that a number of hon. Members want to speak. To help, I have sought in advance of today's debate to keep informed those hon. Members on both sides of the House who have a particular interest in this subject, but it will be helpful briefly to put tonight's debate into context.

The United Kingdom joined the European Community on 1 January 1973, nearly a quarter of a century ago. It must have been abundantly clear at that time that, by joining the Common Market, Britain would be taking part in a European fisheries policy. Articles 38 to 46 of the EC treaty set out the provisions that deal with agriculture. Fishery products are specifically mentioned in article 38 and in annex 2 to the treaty. The common fisheries policy is very much part of the EC treaty.

To put the matter beyond all doubt, the treaty on European Union in 1993 amended the objectives of the Community in article 3 to refer specifically to
"A common policy in the sphere of agriculture and fisheries."
Nor was the UK's involvement in a European fisheries policy seen to warrant great concern in the years after we joined. When the Labour Government renegotiated the terms for Britain's entry into the Common Market prior to the referendum in 1975, there was no mention of fisheries policy; nor, once the European Commission's common fisheries policy was agreed in 1983 and the Community enlarged, was there much interest from the Opposition. Indeed, at the general election, the Labour party did not mention fisheries policy in its manifesto. It was a lengthy document, but there was no mention of fisheries policy.

I fully appreciate that the nationalist parties have their particular angle, consistent with their broad political philosophies, but other than that it would be extremely disingenuous of anyone to suggest that the solution to the challenges facing the United Kingdom fishing fleet is for Britain to seek unilaterally to leave the CFP.

The House should acknowledge that, when Spain joined the European Community some 10 years ago, its accession had been agreed with the existing member states, including the UK. I have re-read all the debates on Spain's accession, both in this House and in the other place. The Committee stage of the Bill was taken on the Floor of the House. There were reasonably lengthy debates, but in none of them, and in not one speech either here or in the other place, was any query raised about Spain's accession to the European Community and the possible effect of that on the CFP in general and the UK fishing industry in particular.

The Minister makes a somewhat disingenuous point. The treaty of accession for Spain and Portugal did not envisage full Spanish and Portuguese access to Community waters until 2003. That is not on offer now. The House has never been told when and why it was agreed that access should take place from 1 January next year. What was the deal and why did the UK subscribe to it?

It is not me who is being disingenuous. Throughout the debates to which I referred, it was clear that the treaty of accession contained very specific references to fishing, to Spain and to the fact that Spain would not have access to the North sea. The fact that no hon. Member raised the matter of Spanish accession and its impact on the CFP should be taken into account. I am sure that the hon. Gentleman knows the answer to his point about 2003—[Interruption.] If the hon. Gentleman is genuinely seeking the truth, let me help him.

It was quite clear that when Norway and other applicant states sought to join the European Union, they negotiated on the basis that the CFP would apply to them once they had joined. Therefore, it was difficult for existing member states to insist that the transitional arrangements for Spain should continue for a long time after the new applicants had joined the EU. That is the perfectly straightforward reason why the date was changed.

Why was it difficult to resist countries that had freely signed the treaty of accession? Why did the Government agree to a six-year acceleration in the access arrangements? The Minister has given us rather more of an explanation than we have ever had previously, and I am grateful for that, but will he deny outright that the basis of the deal between Iberian countries and the British Government was Spanish support for Major on qualified majority voting and British support for the Spanish on accelerated access? Was that the deal?

The hon. Gentleman is indulging in an enormously complex conspiracy theory when in fact the matter is quite straightforward. As I have already explained to the hon. Member for Orkney and Shetland (Mr. Wallace), it was not unreasonable of the Spanish Government to say that, as other countries applying to join the EU were to be included in the CFP immediately, the transitional arrangements for Spain should be brought into line.

It should be clear that we are talking about an agreement that meant that the Spanish would have no access to the North sea, the Irish sea or the Bristol channel. They have access for up to 40 trawlers at any one time to the Irish box, the vast majority of which is within the territorial waters of the Republic of Ireland.

It must have been clear to everyone when Spain joined the European Community that, just as previously member states had had to adjust to take on board the entry of the UK, Denmark and Ireland in 1973, so we and the other members of the EU would have to integrate Spain and Portugal within the CFP. It is worth noting that not one Member of Parliament voted against Spain's accession to the European Community at any stage of the Bill's progress through Parliament.

Does my hon. Friend accept that if hon. Members on both sides of the House had known what the deal would be—if they had been fully informed at the time of Spain's accession—a large number of them would have protested? The Spanish have marauded their way through the south coast and decimated the British fleet. That is why hon. Members, even if they did not protest before, are entitled to protest now.

My hon. Friend reflects rather poorly on a number of right hon. and hon. Members who were in the House at the time in question, many of them on the Conservative Benches. They were well and fully informed of what was involved, but saw it as sensible and proportionate to Spain's accession to the European Community. It is rather disappointing that hon. Members should cast aspersions and suggest that we do not understand what we are doing. I am sure that every right hon. and hon. Member at the time fully understood what he was doing when the House agreed to the treaty and allowed Spain's accession to the European Community without one vote against.

My hon. Friend referred to the Spanish marauding through our waters. I appreciate the concerns of the UK fishing industry, but I think that it fully recognises that the deal that we have agreed means that the Spanish fleet will have no access to the Irish sea, the North sea or the Bristol channel. There will be a limit of 40 Spanish trawlers at any one time in the Irish box, the vast majority of which involves waters within the jurisdiction of the Republic of Ireland, not the UK.

I shall give way in a moment, but I want to make some progress.

What we are dealing with this evening follows on logically from a number of decisions taken by the House and by the country as a whole in the 1975 referendum, which led to the UK's and, eventually, Spain's accession to the European Community and the involvement of all member states in a common fisheries policy.

I want briefly to outline some of the history of the transitional arrangements for Spain in relation to the CFP. Under the Spanish accession treaty, the number of Spanish vessels that could fish in western waters north of 48 deg north was limited to 300, of which only 150 could fish at any one time. Those vessels were excluded from the Irish box and the North sea and were required to submit detailed information on their fishing activities.

The exclusion from the Irish box was due to cease at the end of this year and failure to agree new provisions would have resulted in unrestricted access. That was not acceptable to the Government or to the UK fishing industry. A new agreement that safeguarded UK fishing interests was essential and we achieved that last December after tough and difficult negotiations. As a result, there will be no overall increase in fishing effort in western waters. Effort ceilings are to be established for each member state permitted to fish in the waters and, most important, Spanish access to the Irish box will be limited to a maximum of 40 vessels at any one time.

I emphasise the fact that the Spanish will not be allowed to fish within the North sea, the Irish sea or the Bristol channel. They will be allowed to fish only in the areas of the Irish box beyond the 12-mile limit. The Irish box covers a sea area of nearly 250,000 sq km of which around 73,000 sq km, or 33 per cent., falls within British fishery limits, so the vast majority of the Irish box is within the territorial waters of the Republic of Ireland.

In my travels around the coast, talking to members of the fishing industry, it became clear that there is a general recognition that the vast majority of Spanish fishing activity in the Irish box will take place in the waters of the Republic of Ireland.

My hon. Friend mentioned the North sea. He will appreciate that many hon. Members who represent constituencies on my side of the coast are extremely worried. Does he envisage a time when the Spanish may be allowed to fish in the North sea?

Not while I am the Minister responsible for fisheries policy. I have only one brief as the United Kingdom Minister responsible for fisheries policy and that is to represent the best interests of the United Kingdom fishing industry. It is perfectly straightforward.

Everyone, not least ourselves and the Republic of Ireland, wants to be confident of having a system that will enable there to be effective control so that there are no more than 40 Spanish trawlers in the Irish box at any one time. There is also a broad recognition—and agreement among all those involved in the fishing industry—that we have to have effective conservation policies to protect tomorrow's catch and ensure that we have a sustainable industry that can go with some confidence into the next century. That means responsibly controlling effort for today to ensure adequate catches tomorrow. Part of the western waters agreement is that there should be measures to monitor and control fishing effort.

As the House knows, the Commission was sent away to come up with proposals to achieve those objectives. The proposals that it came up with were overly bureaucratic and would have been unnecessarily burdensome and costly for our fishing industry. They were simply unacceptable to us and to our fishing industry. They would have required the masters of vessels of more than 18 m in overall length or 15 m between the perpendiculars to have notified flag and coastal states, by radio or telex, of each movement into or from a fishing area or port within western waters, including the Irish box. That would have meant that a major part of the United Kingdom fishing fleet would have spent much of its time hailing in and hailing out.

I estimate that, under the Commission's proposals, our vessels would have had to make some 170,000 calls to the United Kingdom authorities and perhaps a further 50,000 to other member states. The costs of communication alone would have been more than £1.2 million, averaging £1,400 for the 900 or so vessels affected. That is clearly daft, unacceptable and unnecessary.

I see from reports in some national newspapers that there has been some briefing from Brussels which is a mixture of scaremongering and speculation. The compromise proposals which the presidency will be putting forward to the Fisheries Council on Thursday have wide support among Ministers, as I shall make clear.

As I have already made clear to the fishing industry in this country, I have only one brief, which is to promote the best interests of the United Kingdom fishing industry. I have no brief for the European Commission, and I have no brief in particular for the European Union. I do, however, have a brief for the United Kingdom fishing industry and a clear responsibility to try to ensure that it has to deal with the minimum level of regulation necessary.

Does my hon. Friend agree that, if he is to stick to that brief, to put the interests of the United Kingdom fishing industry first and to ensure that it genuinely has a future, the best course is undoubtedly for the United Kingdom to withdraw from the common fisheries policy, which has been ecologically and economically disastrous for our traditional fishing communities?

I believe that my job, which is to be the best possible advocate for the fishing industry, entails listening carefully to what the industry says and then, like any good advocate, explaining honestly and straightforwardly what I believe to be within the politics of the possible.

I do not believe that it will ever be within the politics of the possible—nor should it be—for the Government unilaterally to seek to leave the common fisheries policy. It is not possible legally or pragmatically. It would jeopardise something like £500 million worth of United Kingdom fish sales each year and, furthermore, what would it achieve? I or my successor would, I suspect, have to spend something like the equivalent of a Parliament negotiating bilateral arrangements with each and every European Union member state.

Hon. Members who suggest that the solution to the challenges facing the United Kingdom fishing industry is simply for us unilaterally to try to leave the European fisheries policy are misleading the industry and being disingenuous.

Because this is a short debate and because a large number of right hon. and hon. Members would like to take part in it.

Since taking on this job in July, I have spent a considerable amount of time in discussion with the presidency of the European Union and ministerial colleagues in other member states to try to ensure that we come forward with sensible proposals that enable us to control and monitor Spanish activity in the Irish box and to record effort generally in the western waters without imposing further costs or burdens on the United Kingdom fishing fleet. The proposals on which I have been working and which the presidency will be putting to the Fisheries Council on Thursday—where, I am glad to say, I shall have the support of my right hon. Friend the Secretary of State for Scotland—are sensible and proportionate to what needs to be achieved.

First, individual member states will be able to determine the arrangements for monitoring the movement of their own vessels operating within waters of their jurisdiction. Secondly, vessels at sea for fewer than 72 hours but operating in waters of other member states will be able to submit a single report to the flag state and relevant coastal state, advising their fishing intentions prior to departure from port. Thirdly, vessels at sea for more than 72 hours and fishing in the waters of other member states—for example, Spanish trawlers in the Irish box—will have to provide real-time information about their movements, although there will be greater flexibility as to how this information might be communicated.

Those proposals will enable us and the Irish Government to monitor Spanish trawlers entering and leaving the Irish box, but involve vessels in the United Kingdom fleet calling in only if they are entering other nations' fishing waters and are at sea for more than 72 hours. That should significantly reduce the number of calls and the cost to our fishing industry. Vessels engaged in pelagic fishing will be wholly exempt. For United Kingdom vessels operating within our fishing limits, we envisage making full use of the present logbook system to record and report on fishing effort, supplemented by our extensive surveillance activity at sea, in the air and on land.

I appreciate that the Northern Ireland fleet has particular concerns about how the proposed regime will impact on its traditional Irish sea fishery, which involves frequent passage between our waters and those of the Republic of Ireland. At present, there is a long-standing agreement that vessels from the Northern Ireland fleet and vessels from the Republic of Ireland go freely in and out of each other's waters.

Northern Ireland fishermen will be especially interested in how the new control arrangements will apply when they are fishing in the Republic of Ireland's jurisdiction. I am grateful to the hon. Member for Londonderry, East (Mr. Ross) and the right hon. Member for Strangford (Mr. Taylor) who, with Dick James of the Northern Ireland Fishermen's Federation, met me last week to set out their concerns constructively and in detail. I hope that they and other right hon. and hon. Members will take some reassurance from the fact that extensive discussions have been and are taking place between the Department of Agriculture in Northern Ireland and the Department of the Marine in the Republic of Ireland. I am confident that sensible and pragmatic reporting arrangements, with which I hope the Northern Ireland fleet will be happy, can be made.

The proposals that I have just set out, and which I believe to be reasonable and proportionate, now have the support of Fisheries Ministers throughout the European Union. I hope that they will thus be endorsed by the Council of Ministers on Thursday so that everyone will know where they stand as of 1 January next year.

Does the Minister reject entirely the advice that some of us received from Brussels to the effect that, if the arrangement that he has made is accepted, individual Spanish fishermen could take action to overturn it on the basis of unfair discrimination because Spanish vessels were not being treated in the same way as those from the United Kingdom? Does he agree that he was incorrect to say that there were no votes on Spanish accession? A reading of the proceedings of 10 December 1985 reveals that there were.

I am not entirely clear about the last point that my hon. Friend is trying to make. Perhaps we could clarify it. I am sorry that he has to pray in aid—an unusual experience for him I am sure—press articles which have as their basis briefings from officials in Brussels concerned at the progress that democratically elected Ministers have made in bringing forward sensible proposals.

The measures are not discriminatory. They are the same for all member states and they reflect reality. All vessels that fish in the waters of other member states will have to notify their fishing intention prior to departure, and if they are at sea for more than 72 hours they will need to report each entry and exit immediately prior to making that entry or exit.

I am confident that the arrangements that I and other Fisheries Ministers have made throughout the European Union are perfectly capable of withstanding any legal challenge. It is also absolute rubbish for anyone to suggest that foreign vessels fishing in British waters will be given a blank cheque. I do not think that anyone who is involved with Spanish vessels in this country doubts the rigidity of our enforcement arrangements.

No, I need to make some progress. It is only fair to others.

I fully appreciate that, earlier in the year, our fishing industry was quite rightly totally opposed to the Commission's proposals, which the industry saw as being bureaucratic, burdensome and costly. I am sure that the industry now recognizes—I hope that the House will also recognise it, irrespective of the various views that might exist on the European Union—that I and other Fisheries Ministers throughout Europe have been able to move matters a considerable distance during the summer.

Given the policy objectives that we have to meet, I believe that the proposals place the minimum of extra regulation on the UK fishing industry, consistent with the need, which I am sure is recognised by hon. Members of all parties, to ensure that Spain's involvement in the Irish box is properly monitored and supervised. I would certainly welcome the House's support for the proposals tonight. That would send a strong signal to everyone else in the European Union that, on these matters, we stand together, and that we stand together in support of the UK fishing industry.

I shall deal briefly with Community funding for enforcement. It is a relatively straightforward proposal. It continues the provision of Community financial assistance to member states for fisheries enforcement for a further five years when the existing arrangements finish at the end of this year. It also incorporates special assistance for Ireland, agreed at December's Fisheries Council, which recognises the exceptional demands and costs involved in undertaking enforcement in the waters of the Republic of Ireland, which include the majority of the Irish box.

Those measures are justified because member states are required to monitor and enforce the Community rules relating to a common resource. It is also an important factor in achieving effective fisheries controls throughout the Community.

I shall mention the proposal to extend the number of species to be recorded in logbooks and to develop regional arrangements through the Commission's management committee procedures simply so that it will not become a distraction this evening. The proposal will not be considered at Thursday's Fisheries Council. Just as I have been determined that we should not have costly and bureaucratic controls for western waters, I hope that the House and the industry will be confident that I am equally determined to ensure that we keep logbooks as straightforward and as simple as possible.

The Commission's proposals on logbooks start off as being over-burdensome. How can it expect fishermen to record so many species—even if they were capable of identifying each and every one and of carrying a logbook large enough to record them all? I have made my position perfectly clear to Brussels. I am not prepared to consider any extension of the present number of species unless I receive a clear justification for the addition of each and every species and I have a clear view of the species to appear in regional lists.

I also wish to see a continuing derogation from the need to complete logbooks for vessels at sea for fewer than 12 hours and less than 17 m in length. I intend to resist further burdens being placed on what is already a very heavily regulated industry. Our energies should be directed to lessening the regulatory burden on our fishermen, not increasing it. Of course I fully support any sensible proposals to reform the common fisheries policy to that end.

A number of other documents have been tagged to this debate. They are mainly concerned with the arrangements for waters regulated under the auspices of the North Atlantic Fisheries Organisation and with the future arrangements for the regulation of drift nets. The use of such nets in the tuna fishery has been an issue of some controversy over the past two years. On 29 September, I announced that this year's tuna fishery had finished. I am very pleased to report that the arrangements that we have put in place, combined with the co-operation of our industry and efforts of the Royal Navy and the sea fisheries inspectorate, have ensured that the fishery was peaceful and free from serious incidents such as occurred last year.

Since the three-year decommissioning programme was announced in 1992, we have spent £16.6 million on two schemes—one in 1993 and a second in 1994. The schemes, using a tendering arrangement to give us the best possible value for money, enabled us to reduce the fleet by just over 10,000 tonnes, or some 4.6 per cent. of fleet capacity.

In January last year, the then Minister, my right hon. Friend the Member for Bristol, West (Mr. Waldegrave), announced that a further £25 million would be made available for decommissioning, taking the total over five years to £53 million. That shows the Government's commitment to securing the future of the fishing industry.

In July, I launched the third round of decommissioning—£12 million was made available. I am pleased tonight be able to announce that 164 vessels have been successful in the scheme. They represent 5,326 gross registered tonnes; equivalent to some 2.5 per cent. of the fleet's capacity. Together those excellent schemes will have removed more than 7 per cent. of fleet capacity. In the light of that, I shall analyse the detailed results of the schemes and consult the industry to see whether we need to adjust the rules for the 1996 scheme to continue to target spending where it is most needed.

I hope that I have demonstrated that the Government are determined to put forward the best interests of the UK fishing industry. We have listened very carefully to what the industry has had to say. I believe that the proposals on which I and other Ministers have been working hard during the summer will enable us to meet our policy objectives of monitoring effort in western waters and controlling foreign vessels in western waters without placing undue burdens or costs on our industry. I hope, therefore, that the House will give the proposals its full support this evening.

8.46 pm

I beg to move, to leave out from 'declarations' to the end of the Question, and to add instead thereof:

`recognises the widespread concern about the increased pressure on fish stocks in Western Waters including the Irish Box resulting from the failure of the Government to secure a satisfactory agreement on the future access of Spanish and Portuguese vessels; and calls upon the Government to secure arrangements which match fishing effort to available fish stocks and include a system of control and effective enforcement that reflects the operational needs of the United Kingdom fishing industry and the need to protect the interests of local fishing communities.'
As always, Opposition Members welcome an opportunity to discuss fishing issues, but I must start by saying that it is a disappointment that the debate has been cut to one and a half hours. Previous debates have been three hours. This debate is all the more important—I take the point made by the hon. Member for Southend, East (Sir T. Taylor)—because it also refers to a whole series of documents relating to the North Atlantic Fisheries Organisation, tuna fishing and drift net fishing in the north Atlantic; all of which are important regional interests which we should have had more time to discuss. Yet there is not going to be any opportunity for such discussion in tonight's debate.

To put the record straight, the Minister's comments from his brief about Labour's manifesto promises or mention of fishing are an old chestnut. In 1992, the Labour party launched a document as part of the election campaign in a dedicated policy launch in Tyneside on the fishing industry marine harvest. The Conservative party did no such thing. Although the Minister's predecessor, the hon. Member for Fylde (Mr. Jack), complained about the quality of that document, it must be said that in 1992 we did not have the resources of the Conservative party or, should I say, given its bank account, the overdraft of the Conservative party. That document is very well known to the fishing industry and was warmly welcomed by it, even if it is not known to the Minister.

Although the Government are known for their cheek, they have the brass neck to try to suggest that Opposition Members are responsible in some way for bringing forward the accession of the Iberian fleets by six years. That subject was never on the agenda when we were discussing matters. So it was somewhat of a surprise that the accession suddenly came forward in the negotiations. Indeed, our amendment points out that it was a failure of the Government in those negotiations to concede to the Spanish and Portuguese in such a way. We believe that such things as the principle of relative stability could have been used far more effectively than they were in those negotiations. I do not doubt that there was a deal in terms of conceding to the Iberian request and I do not doubt that sooner or later, the details of that deal will come out, probably when we are in government.

We are discussing these documents tonight because promises were given that the Spanish accession would not lead to greater effort; the controls that we are talking about are part of that discussion. Although there is a sensible case for effort control—no one would disagree with that—any scheme should be workable and should not put an undue burden on our fishing fleet. As the scheme stands in its draft form—I accept that the Minister has recognised this—it is totally unacceptable in terms of the burden that it would place on the UK fishing fleet.

We also expect the Minister fully to comply with the assurances that were given by his predecessor, the hon. Member for Fylde, in a letter to every fisherman in the country, stating that any such effort control would not add further burdens for the fishing fleet. I am a bit concerned that Fisheries Ministers seem to come and go. I very much hope that the assurances given by one Minister are not suddenly ignored by the next Minister. I refer to the Minister's own welcome assurance of protection.

I also note that although the Government have said that they welcome the presidency compromise, which goes a long way towards improving the draft proposals, even that compromise puts a heavy burden on parts of our fishing fleet, especially south-western vessels which frequently fish in French waters, and our Northern Ireland fleet which frequently fishes in Irish waters. We very much want their needs to be recognised in any deal because even the compromise does not go far enough. I very much hope that the Minister will give some thought to the desirability of reciprocal agreements with the countries I have mentioned if the presidency compromise forms the basis of a future settlement.

I shall now expand on what we envisage in our amendment when we talk about "control and effective enforcement". The Minister will be aware of the crisis of confidence felt by UK fishermen about the operation of the current common fisheries policy. The National Federation of Fishermen's Organisations stated in a brief that it circulated to hon. Members that it believed that there was no future for the fishing industry within the present structure and that it must be abandoned. Certainly, there must be radical change and the forthcoming Council meeting is an opportunity for the Minister to begin that change.

In essence, we believe that the member states should have far more control of enforcement and conservation management within their own waters. We would like to expand that into wider areas of fisheries management and control, but for the purpose of this debate, we want to concentrate on control and enforcement. We accept that the intention is to enforce effort and it is also recognised that the Minister has stated that in the UK, that will be done through logbook entries; we accept that that is a reasonable approach in terms of our own fleet.

However, we also share the concern of the Scottish Fishermen's Federation about what will happen in terms of the enforcement of Spanish vessels in UK waters, especially from 1 January. Will the Minister confirm that current reporting-in regulations for Spanish ships will be relaxed as they are absorbed into part of whatever scheme comes out of the Council of Ministers? Will he also confirm that the current restriction that limits Spanish ships in western waters to 150 will be relaxed from 1 January as the new measures come in and the restriction on numbers is replaced by kilowatt days?

Will the Minister also confirm that enforcement will be by the flag state? We believe that when there is fishing in UK waters within the CFP and within the principle of the CFP, the enforcement should be by the member states. Yet under the proposals, it seems that in terms of enforcing kilowatt days and enforcing regulations generally, the enforcement authority will be the Spanish authorities. With the best will in the world, the record of the Spanish authorities in terms of enforcement has not been good—I put that somewhat mildly.

The hon. Gentleman has asked a number of rhetorical questions which will take me a little time to answer. Actually, he is confused on a number of issues. I am sorry that if he had so many questions to which he genuinely wanted an answer, he did not seek to see me beforehand because I could have put him right on some things.

I hope that we shall not waste time in fisheries debates arguing about matters that are not correct. Of course the Spanish will have responsibility for ensuring that there are no more than 40 Spanish vessels within the Irish box at any one time. It is, however, of course a matter for us to supervise Spanish vessels generally in our waters. Last year, we inspected more than 5,000 vessels at sea; almost half were foreign. We made more than 45,000 sightings. The hon. Gentleman and the House can rest assured that we shall continue to monitor and supervise all vessels within UK waters. There is no question of our abandoning our responsibility for that. If the hon. Gentleman has any concerns about that, I shall be happy to put him straight.

If the Minister wishes to put me straight, will he tell us whether the management and enforcement of the kilowatt-day regime will be carried out by the flag state or by the member state in which the vessels are fishing? Am I misinformed on that issue?

We shall monitor effort in our waters through the logbook system. We shall, of course, as the flag state, continue to supervise Spanish vessels fishing in our waters, just as we do at present. Of course within the Irish box, the Spanish will have the responsibility of seeing that no more than 40 vessels are within the box at any one time. The Republic of Ireland will also have responsibility. The recognition of the extensive waters within the Irish box is the reason why we in the European Union have agreed to give the Republic of Ireland extra funds for enforcement purposes. The Irish will be able to ensure that the Spanish are complying fully with the arrangement to which we have come. There is no mystery about that. If the hon. Gentleman has any concerns—

Order. I hesitate to intervene and I fully appreciate that the Minister is trying to be helpful. However, these are long interventions. We have only 50 minutes now for this debate and many hon. Members want to speak.

I understand that the Minister's colleague, the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson), will reply to the debate and I am sure that he will have an opportunity to deal with some of these points. The Minister has, however, confirmed what I have said. Enforcement of the kilowatt days for Spanish vessels fishing in western waters will be the responsibility of Spain. I am talking not just about the Irish box, but about western waters, as a result of the accession agreement. The Minister is misleading the House if he is suggesting that the United Kingdom will have absolute control over Spanish vessels in UK waters. My information is that it will not.

Of course, we have powers to board and to check the logbooks and reporting of Spanish vessels, but those powers do not go as far as they do over UK vessels fishing in UK waters. I believe that within the principle of the CFP, we should have the powers to ensure the absolute enforcement of kilowatt days and that regime. I suspect very much that if we do not, Spanish vessels will not work to the same strict enforcement regime as our own vessels will. Time will tell.

Rightly or wrongly, our fishermen feel that the rules are often applied more rigidly in our country than they are in others. When the Under-Secretary of State for Scotland answers, can he tell us whether he has seen lists of vessels yet? Are the lists of vessels that will be fishing ready and what are the details?

Does the Minister believe that other member states will be ready to implement proposals of this kind on 1 January? It will be totally unacceptable if we implement the proposals fully while other member states do so in a somewhat relaxed way, which—rightly or wrongly—is a perception within the UK fishing fleet.

I do not wish to take any more time, as I know that more hon. Members want to speak in the debate, and I hope that the Minister will bear in mind my comments about the time to be allocated for these debates in the future. But I ask the Minister to bear it in mind when he goes to the Council of Ministers that the credibility of the CFP rests on a management scheme that is credible, effective and simple. He must also bear it in mind that it is not incompatible with the principle of the CFP for there to be more UK control over UK waters. I hope that the Minister will argue strongly for more autonomy over the management of our waters.

8.59 pm

I hope that the House will appreciate that we are making ourselves look rather ridiculous for a democracy—whether we are fishermen or not. Our constituents should realise that we had the opportunity to grab the bundle of papers that we are now discussing in the Vote Office on Friday. Those who were here on Friday will appreciate that hardly any hon. Members were in the House at that time, and Members instead received the papers this morning. As Members have lots to do—I am sure that the Members here now are very busy indeed—how on earth could they read all of the documentation?

Our constituents should also know that even if some hon. Members had managed to read all of the papers—I know that our friends in the Scottish National party work day and night—it would have been irrelevant because, at the end of the day, what is to happen will be decided by majority vote at Thursday's Council of Ministers meeting.

Hon. Members should appreciate that there is nothing more pathetic than Opposition parties—I am sure sincerely—putting questions to Ministers on issues over which the Government have no power. We must bear it in mind that whatever the Government do can be overturned by the European Court, and by majority vote thereafter.

The Minister objects to my intervening in the debate to remind him of tiny matters which are not terribly relevant, such as the vote on 10 December when a former Minister acted as one of the Tellers, and I accept that he is working very hard indeed. The Minister is faced with a nightmare, as the British fishing industry is faced with a situation in which the average boat must spend up to £5,000 on the most ridiculous bureaucracy. The boats must send in messages non-stop, and they could end up sending hundreds of thousands of messages because of the new arrangement.

We all appreciate that the only way in which we can properly police Spanish vessels coming into the Irish box is to have a Euro-policeman on every boat, or perhaps three Euro-policemen and a computer. That is why the Commission put forward its proposals. The British industry, of course, objected to the proposals because of the cost of the bureaucracy. Therefore, as the Minister kindly wrote to some of us, an arrangement has been made whereby that bureaucracy will be reduced, and it is thought that the arrangement will go through on Thursday. My point is that if the bureaucracy is reduced, the policing of the system will become less effective.

In addition, if the Government bring forward proposals—as they intend to—which basically discriminate against Spanish vessels by having separate rules for those who work 72 hours or more a week and for those who work fewer than 72 hours a week, they could find that the proposals will be overturned by the European Court.

I feel guilty taking up time in this debate, although we all know that—as is the case so often in debates on European measures—we are wasting our time. We do not have the power to do anything in this matter, and hon. Members' votes to note or not to note the proposals will not have the slightest effect on what happens. Even if the Council of Ministers agrees on the great new arrangement—I can appreciate that it has been forced on the Minister following the objections by our fishermen—it can be overturned by a European Court decision.

During the past 30 years, I have become a thorough Euro-bore. Ministers obviously regard me as such, but I ask them to realise what is happening to democracy. I shall mention only one other case. I had the pleasure of attending a political party conference in a place called Blackpool, where I heard someone say that we will fight on the issue of border controls and that we will surrender not an inch. A terribly important Minister—a Minister who is more important than any other—said that the issue was not negotiable. Yet we all know than an action has been started in the European Court on the matter. I have received advice from learned, clever and highly paid people—who must be intelligent—that this country does not have a hope in the matter because the declaration on which we are basing our defence does not hold any water.

On fishing, as with everything else, we should appreciate that democracy is dying. All of the assurances that the Minister gives with great sincerity to fishermen and all of the hard work that I know he does is basically one great joke. That is why I and some colleagues tabled an amendment—to make people think. There is no solution to the problems of British fishing within the present situation in the EU. In the same way, and despite all of the silly comments we have heard from successive Ministers of Agriculture, Fisheries and Food, we should appreciate that there is no way at all in which the common agriculture policy can ever be reformed within the present structure. We simply have to wake up to the fact that on this mountain of papers we are basically wasting our time, misleading our constituents and misleading the fishermen of Britain, who are probably among the most respectable, hard-working and decent groups in our community.

I look forward to the time when—if, by any chance, the Labour party is elected to power—we will see exactly the opposite happening. If only the parties would come together, accept things as they are and accept that if we are to save British fishing and avoid the crazy expenditure of vast sums on bureaucracy, we should consult others about the possibility of extracting the British fishing industry from the common fisheries policy. There is no other solution.

It is sad for our industry that so many people in this House of Commons—good, hard-working people—are not prepared simply to tell people things as they are. If we did that, irrespective of opinion polls, we would all have a great deal more respect. Therefore, I hope that my hon. Friend the Minister will accept that, no matter what is agreed on Thursday, it can be overturned. I also hope that he will accept that, irrespective of what the House says, the Council on Thursday can overturn what we think. I hope that he will also conclude that the views of the fishermen of Britain seem to be virtually of no consequence.

9.5 pm

It is worth saying at the outset some words about the background against which the debate takes place. The level of discontent and sheer anger among the fishing communities is well known by all hon. Members who represent fishing constituencies. It has never been higher. One sign of that is the growth in support for the aims of the Save British Fish campaign, which seeks to persuade the Government to withdraw from the common fisheries policy. It is fair to say that many of the people who subscribe to that campaign appreciate that its aim is probably not a realistic legal objective, but they are so fed up and angry about the way in which the policy has impacted on them and their communities that they feel driven to that extreme solution.

Over the years, fishermen have had to put up with conflicting advice from scientists about how much of various stocks is left in the seas. That advice leads them from one year to the next to change their fishing expectations and patterns. They are trapped in ever-increasing regulations and restrictions. They fear that the enforcement procedures that we are discussing tonight would represent a major step forward in those regulations and restrictions.

Fishermen have had to put up with the loss of the financial support that the industry has been able to rely on in the past for renewing and improving boats. They face ever-increasing incursion from foreign boats into waters that they regard as traditionally theirs. As a result of all those factors, fishermen are at the end of their tether. In considering and discussing the regulations before us tonight, and in thinking ahead towards the meeting with his fellow Ministers, it is important that the Minister appreciates the level of anger in fishing communities.

Fishermen are especially angry in my constituency of the Western Isles. The fishing industry there is a major aspect of the islands' economy. It is a major foundation for maintaining otherwise fragile rural communities. There is a special twist in the Western Isles in that more than 90 per cent. of the catch is shellfish. So the fleet in the Western Isles makes no real contribution to the problem of overcapacity that has afflicted the British fleet in recent years and led to many of the regulations and restrictions that we have had to put up with.

The Minister mentioned decommissioning. He may not realise that none of the Western Isles boats is eligible for decommissioning because the vast majority of them fish for shellfish—primarily for prawns. The Government have concluded, logically, that because the prawn sector is recognised not to be contributing to overcapacity, it should not be eligible for decommissioning.

However, if it is true that the prawn sector does not contribute to overcapacity, logically also it should be eligible for a resumption of financial support to help it renew and rebuild the fleet. Not only in the Western Isles but throughout the west coast of Scotland, the boats that are used for fishing are elderly boats that should have been renewed or replaced a long time ago. As a result of the freeze on financial assistance to be spent on fishing boats, that has not been happening. I ask the Minister, as he looks ahead into the next year—I specifically ask the Scottish Office Minister—to consider the possibility of again opening up those sources of financial assistance to help those boats.

Enforcement, which is the primary subject of the debate, continues to be murky and unclear. Fishermen remain confused as to the way in which Spanish access will work out from 1 January 1996. The Government continually repeat that there will be no increase in overall effort and insist that relative stability will be maintained. If those two things are true, it appears to follow—to Labour Members, at least—that that means that there will be no significant increase in Spanish effort.

Given the track record of Spanish boats, we find that hard to believe. Given the ability of Spanish boats to evade those rules and regulations that are laid down already, fishermen looking ahead to 1 January 1996 are fearful of what the impact of Spanish access will be. Therefore, in spite of the Minister's attempts, no one will believe his reassurances until the reality of the position unfolds in the new year.

It is now widely realised that we must think urgently about radical reform of the common fisheries policy. One of the elements of that reform will be an attempt to move to a system of regulation that pays greater heed to regional differences within countries. There are huge differences between the types of fleet, the fish and the problems in different parts of the United Kingdom, even in different parts of Scotland. A policy that pays greater heed to those differences and allows regions greater freedom to set guidelines or to regulate will be one of the elements of a reformed common fisheries policy.

We heard earlier about the problems caused by a state-based system of regulation. The Minister referred to the briefings that are apparently being given by Commission officials, complaining that what the Minister is trying to do will undermine the principle of equal treatment and non-discrimination between states. As long as we think only in terms of state regulation and state criteria, we shall run into those problems constantly. We need to aim much more for a regionally based system of regulation.

9.14 pm

I want to raise matters relevant to Northern Ireland. The Minister tonight rightly utterly rejected the first proposals that were put and pointed out how ludicrous they were and how expensive and discriminatory they would have been. It must be emphasised that the fishermen who would have been discriminated against more than any others by the original proposals were the fishermen of Northern Ireland.

For example, under the first proposals, vessels out of Kilkeel fishing in the waters of the Irish Republic would be required to report on leaving Kilkeel, upon entering the territorial waters of the Irish Republic, upon exiting those waters and again upon returning to Kilkeel. In some instances, reports would have had to be made to the authorities in both the United Kingdom and the Irish Republic. That burden could not have been borne by the fishing industry in Northern Ireland.

The Minister tells us that on Thursday, Spain, which holds the EU presidency, will put forward a compromise proposal. That is a step in the right direction, but it will still have a negative impact upon all Northern Ireland vessels. The essence of the compromise is that it would remove some of the clearly excessive parts of the Commission's proposals, such as reporting of catches by radio, and would allow certain exemptions from the reporting requirements. Vessels fishing in their own member state waters would be exempt from the Commissions's reporting rules and vessels operating within another member state's waters for fewer than 72 hours would have to make only one report on leaving port. However, Northern Ireland vessels working in the south-west which have to pass through Irish waters to fish in French and Irish waters will still be hit with the full force of all the Commission's reporting requirements. Each call will cost at least £5.

The Minister responsible for fisheries in Northern Ireland wrote to every individual vessel owner in Northern Ireland at the beginning of this year. He assured them:
"no new measures to control effort will need to be imposed in the United Kingdom industry"
. The fishermen of Northern Ireland would contend that the requirement to report in and out is a new measure and that the Ministers's undertaking has not been kept.

The Commission's proposals for Northern Ireland fishermen—even the compromise proposals—are expensive, complicated, excessive and unworkable. The compromise put forward by the Spanish Government as president of the EU may be a move in the right direction but, if adopted, it will leave Northern Irish and south-western fleets exposed to the full rigour of the Commission's excessive reporting requirements. The fishing industry cannot bear that burden.

The United Kingdom and Europe already have in place numerous measures regarding the minimum size of fish and net mesh sizes. The existing rules should be enforced; by doing so, many problems could be solved. Northern Ireland fishermen who, because of their position with regard to the Irish Republic are the most affected by the proposals, must not be given an extra burden when their living conditions and the making of enough money for them to keep ticking over are already so difficult.

I appreciate that the Minister says that he is going to fight for the industry, but his fighting capacity in the matter is limited. It is all very well for him to denounce people who did not see into the future but when the accession of Spain was proposed, we were told that it would not happen until into the next millennium. Although Spain's accession has now been brought forward, we have not been given the real reason for that.

The Minister may fight as hard as he can, but ultimately the interests in Europe that have the power can vote down any suggestion that he makes. I wish him well and hope that he will remember the plight of Northern Ireland fishermen, who will still be discriminated against if the second proposal goes through.

9.19 pm

I shall try to keep my remarks brief because many of the salient points in this debate have already been aired, not least by the hon. Members for Glanford and Scunthorpe (Mr. Morley) and for Antrim, North (Rev. Ian Paisley).

I thank the Minister for giving us an insight into the reasons why the full Spanish access to our waters has been advanced. Arrangements for the Irish box were due for renegotiation. However, the Minister has not answered the more fundamental question of why, given that Spain had voluntarily entered into a treaty agreement, it was necessary to make that concession to it. One might have thought that there was some kind of quid pro quo, but there is no evidence that Britain has achieved anything from a change in the arrangements. The change went ahead notwithstanding the warnings that the Government received from the fishing industry, which underlines what can happen when important decisions are taken by the Council of Ministers behind closed doors and when legislation is effectively made in secret. It certainly calls for greater openness in the Council of Ministers' deliberation.

The hon. Member for Antrim, North quoted a letter sent by the Northern Ireland Fisheries Minister to fishing vessel owners at the turn of the year. The same words were used in letters sent by the former Minister of State, the hon. Member for Fylde (Mr. Jack), to fishermen in England and possibly even in Scotland. The fishing industry sought comfort from the fact that, if effort did not increase, new measures to control effort would not need to be imposed on the UK industry.

On 25 August this year, both the chairman of the National Federation of Fishermen's Organisations and the president of the Scottish Fishermen's Federation wrote to the Minister to ask him to confirm that that was still the Government's policy and to give the same assurances as his predecessor had given last December. As of this morning, no reply had been received, so it would be useful if the Minister would say whether that is still the Government's policy. It would certainly not have been consistent with acceptance of the Commission's original proposals. It is to the Minister's credit that he has no doubt resisted those proposals and sought coalitions with our Community partners in an effort to have them taken off the table. He stated clearly what the proposals would mean in terms of increased bureaucracy—up to 170,000 reports to our authorities and 50,000 reports to member states' authorities. He has our support in resisting those.

As the hon. Member for Antrim, North said, even the presidency compromise would lead to an increase in bureaucracy for Northern Ireland boats and boats from south-west England, many of which would be in either Irish or French waters. I understood the Minister to say in his opening remarks that he is trying to negotiate with the Irish Government for some "voisinage" agreements—that is the swank name for neighbourhood agreements—to allow for further derogations to reduce the need to report in. Are similar efforts being made with the French authorities in respect of vessels, particularly from south-west England, which, even on journeys of fewer than 72 hours, would find themselves in French waters? What happens if, having set out on a journey that is intended to be fewer than 72 hours, there is a change of mind midway? Is it necessary at that point to report in again?

The hon. Member for Glanford and Scunthorpe raised the important question of who will prosecute in those matters. It is not a matter to be discussed before the debate but a matter on which the House should legitimately hear an answer. For example, if a 41st vessel appears in the Irish box when only 40 Spanish vessels are allowed, what is the legal position? Who will take action? Will it be the Spanish authorities, the United Kingdom authorities, or indeed the Irish authorities? Would anyone be prosecuted or would a diplomatic note of protest be sent to the Spanish embassy? We would like to know about such details.

It is also relevant to point out that the present arrangements on the accession of Spain and Portugal come into effect on 1 January. We would welcome information from the Minister about what will happen then and about whether every country will be in a position to implement and enforce the new arrangements. My understanding is that part of the arrangement means that each country must register with the Commission, which, in due course, will publish the arrangements that it is making to monitor the take-up and use of kilowatt days. Can the Minister tell me how many countries have so far registered how they intend to monitor that take-up? Will he assure the House that all will have done so by 1 January? Failing that, what precisely will happen?

An important point relates to catch reporting. The Under-Secretary of State for Scotland recently sent a helpful letter to hon. Members representing Scotland in which he said that the catch reporting proposals had been deferred and would not have to brought before the Council until the end of 1996.

According to the original regulations relating to Spanish access to our waters, it was a requirement on Spanish vessels to communicate on entry into and departure from the International Council for the Exploration of the Sea zone in which they were authorised to fish. They were required to communicate weekly, beginning on the date of the commencement of fishery operations, a series of facts, including the quantity of each species of fish in the holds and the quantity in kilograms of each species caught since the previous transmission.

I know that a report of the Commission in 1991 suggested that those arrangements were not working effectively, but at least they were something. Do those arrangements fall on 1 January 1996? Can the Minister clarify whether that means that between 1996 and the coming into operation of the new catch reporting regime, whenever that will be, there will be no requirement on Spanish vessels to report their catch?

I welcome what the Minister said about the recording of the list of species in fisheries logbooks. Will he assure me that there will be full consultation with the industry before that arrangement is subject to further development? When will there be an announcement on the decommissioning awards for the current year?

We know that a review group is sitting at the moment. I agree with the hon. Member for Western Isles (Mr. Macdonald) that that group should have a more regional dimension in terms of the representation of regional waters and nations. That is something worth pursuing. Until such time as that review group reports and the common fisheries policy is reformed, fishermen must continue to earn their living. That is why it is so important to get the proposals right. I assure the Minister that if he adheres to the undertakings made by the then Minister in December about the introduction of no new control measures, he will enjoy the support of the Liberal party.

9.27 pm

It is part of the tradition of the House that individual Members speak up for threatened minorities—of which, of course, our fishing industry is one. That is why I wish to speak briefly in this debate. Although I do not represent a fishing community, it is important for the fishermen of Britain to know that there is widespread support in the Conservative ranks for their Save British Fish campaign.

Every time I hear a debate about the fishing industry I am struck by its Chamberlainesque tone. It is all about appeasement, peace in our time and a good negotiated settlement, but we know that that inevitably means that our fishermen will lose more of their traditional rights. It ill behoves the Opposition to express their hypocritical concern; they, too, are well aware that they have no will even to constrain the activities of the European Community, still less—

No, I must be brief.

It was depressing to hear from the Minister that more and more money is to be spent on the decommissioning of boats. In the past six months, when I was less than normally constrained by party controls, I had the privilege of visiting the fishing ports of Britain and talking to fishermen. The process of decommissioning begs the question: what are those men supposed to do once their boats have been destroyed? They have no other occupation, their communities are dependent on fishing and no one knows how their traditions and the livelihoods of their families will be maintained without the ability of fishermen to fish.

We are talking about British vessels having to report their whereabouts every five minutes when our fishing communities have fished for centuries without the need for such frequent reporting. It ill behoves us as a Government and a country to say that fishermen are to be paid as bureaucrats. They will be required to phone, to telex and generally to make known their whereabouts.

My hon. Friend the Minister poured scorn on the requirement that our fishermen now have to report 20 species within their catch. Under the new proposals, they will have to report on 200. My hon. Friend neglected to say that if the wrong species have been caught, notwithstanding that the fish are dead on the decks, our fishermen are obliged to throw them back into the sea. Parts of the sea are becoming polluted because of the mass of fish that our fishermen are dumping in obedience to such rules.

I do not wish unduly to detain the House because I am aware that others wish to speak, but I should like to prevail on my hon. Friend the Minister to accept what my hon. Friend the Member for Southend, East (Sir T. Taylor) has urged, to take the bull by the horns and to insist that our waters are regained for the use of our fishermen. I would welcome the support of other Members, especially those who represent fishing communities. It is possible to do anything if we have the will to do it. If we insist, we can ensure that our waters are policed and that marauding Spanish fleets are kept out. We are talking of fleets that are becoming constantly larger on the strength of EC subsidies while having no natural fishing waters to support the volume of their vessels and the amount of business that they require to sustain themselves.

9.31 pm

It is a pleasure to be called to participate in the debate. I shall be brief because I know that many other Members wish to say a few words on behalf of their fishermen.

It is clear that the Government are worried about Spanish fishermen. The Irish are also concerned. I hope that on this occasion we shall find an ally in Dublin.

The Government appear to be handling different problems in various parts of the United Kingdom by lumping them all together. In that context, the remarks of the hon. Member for Western Isles (Mr. Macdonald) were especially appropriate. Within the general problem we have several discrete problems which need to be handled and dealt with separately. The measures before us would not have come into operation had it not been for the necessity to control the operations of Spanish boats in the Irish box. That being so, we should have it in mind that Spanish boats should not be given any access to the Irish sea. Against that background, what is the necessity for all the controls being proposed?

The Minister is well aware of Northern Ireland concerns, which I hope that he has taken on board. I hope, too, that the efforts being made between Belfast and Dublin will bear fruit. I know that some progress has been made, but much more needs to be done. I suggest that the Minister should consider carefully the existing agreement between Northern Ireland and the Republic. That would be a starting point.

Some problems have been resolved, but we must go a great deal further. The Minister should not rest on his laurels. Instead, he should reach a sensible agreement and not be deterred by the opposition that will be mounted from other quarters.

9.33 pm

I shall be brief because I wish to allow the Minister some time to answer the substantial questions that have been raised. First, I ask a simple question: who is leading the United Kingdom delegation this Thursday?

I am satisfied with that answer. It was said in another place today that the Secretary of State for Scotland was to lead it. I thought that he would be the ranking Minister. It is of some interest to Scottish Members that the hon. Gentleman will be leading the delegation.

There is an old, very bad joke whereby someone asking for directions gets the answer, "If I were you, I wouldn't have started from here." Opposition Members are in precisely that position because I do not think that anyone, whatever the Minister says, will have acquiesced in the acceleration of Spanish accession by six years with no apparent valid reason being given for it whatever. The reason why Spain wins fisheries negotiations is very simple: for Spain, fishing is an absolute top priority. It has two major concerns in European Council meetings—the first is fishing and the second is European regional policy—and it has been willing to use any instrument, particularly those in terms of enlargement of the Community requiring unanimity, in order to extract concessions in those key areas. The lesson must surely be that if one makes fishing one's top priority, things are more likely to go one's way than if it is way down the scale of priorities, as it most certainly is for the British Government.

There are two specific questions that the junior Minister from Scotland should address when summing up the debate. First, as of 1 January next year, when these control regulations come into force, will Spanish boats in western waters be required to report the catch on board, as they are now? That is not clear from the documents that we have. It is a vital question, because merely hailing in and hailing out, reporting in and reporting out, is relatively meaningless if no account whatever is being taken of the fish being caught by Spanish vessels at that time. Secondly, what assurances do the Fisheries Ministers have from their counterparts elsewhere in Europe that as of 1 January next year the resources will be in place to police what already seems to us a scheme that is full of loopholes and potential ambiguities?

My final point relates to what the Minister said in answer to a question from his own Back Benches. He said that so long as he was Fisheries Minister, the House could be reassured on these points. As previous Fisheries Ministers have been wandering in and out of the debate all evening, in all honesty that is not much of an assurance to give the House. Fisheries Ministers have very short tenures of office. What the fishermen of Scotland, England, Northern Ireland and everywhere else are looking for is an indication from the Government of some determination to make this great natural resource industry a top priority of policy, rather than something that can be bought and sold, a subsidiary element of negotiations in Europe.

9.37 pm

I am probably the only Member of the House whose constituency has an international water border with another country. South Down has two thirds of the fishing industry of Northern Ireland and is adjacent to the Republic of Ireland. I emphasise the point made by the hon. Member for Antrim, North (Rev. Ian Paisley). Is the Minister going to Brussels this week with a thought-out plan agreed with the Ministry of Fisheries in the Republic of Ireland?

The deputy leader of the Ulster Unionist party was in Dublin today with one of the Northern Ireland fishing organizations—that is very creditable in these political times—trying to get a compromise. We have precedents in dealing with the Irish Republic in terms of quota exchanges year by year. Can the Minister state categorically—or state at all—that he will be making a joint approach in Brussels on Thursday, or whenever it is, which will alleviate the great difficulties that the fishermen of Northern Ireland and of the Irish Republic will enter into if this compromise does not go through? Even if it does go through, there will be many difficulties still remaining and a lot of expense incurred. Will he ensure that some financial burden is taken off the Northern Ireland fishermen because of their position? I see that the Minister is edging off his seat. I should like him to reassure me that he and his Department will do everything on Thursday and afterwards to have this agreement on an all-Ireland basis because of the traditional, historical intermingling of the fishing in the Irish sea.

9.38 pm

I shall try to respond to as many points as possible. I am delighted that so many hon. Members with fishing interests—and a few with no such interests—have been able to contribute to the debate, but I must add that as a Scot I was very disappointed that no member of the shadow Scottish Office team spoke or, indeed, bothered to grace the debate with their presence. That is a worry, and I am sure that representatives of the Scottish fishing industry listening to our proceedings will have noted it.

My right hon. Friend the Secretary of State for Scotland, my hon. Friend the Minister of State and I will reflect the contributions of all hon. Members in agreeing the negotiating line that the Government will adopt at the Fisheries Council in Luxembourg later this week.

The interest shown in the debate demonstrates the continued importance of our fishing industry. The Government recognise the valuable contribution that the industry makes to the economic well-being of the United Kingdom, and the vital employment opportunities that fishing provides for many remote and fragile coastal communities. Various hon. Members have brought that to my attention today and over the summer recess. I stress that the Government are committed to ensuring a sustainable and profitable future for the whole United Kingdom fishing industry—an industry with long and treasured traditions for an island state such as ours.

Various hon. Members have raised concerns about the future viability of the industry in the light of proposed Community measures to introduce effort control in western waters. Effort control is one of the key issues facing us all: the need to balance the fishing effort of the European fishing fleet with the fishing opportunities available to it is crucial to ensuring continued sustainable and profitable fishing activity for all.

The hon. Members for Antrim, North (Rev. Ian Paisley) and for Londonderry, East (Mr. Ross) asked about specific arrangements for Northern Ireland vessels. As my hon. Friend the Minister of State said in his opening speech, we are conscious of the circumstances of the Northern Ireland fleet, notably when it is fishing traditional grounds in the Irish sea. The so-called "voisinage" agreement has operated successfully in the past and provides a good foundation for future arrangements. That is why we have opened up a dialogue with the Department of the Marine in Dublin as to how best we can deal with the matter within the framework of the control measures to apply to western waters.

I am confident that the use of the presidency compromise, as proposed, will cater for the vast bulk of trips by the vast majority of the Northern Ireland fleet, as fewer than 40 vessels go on trips lasting more than 72 hours.

The hon. Member for Glanford and Scunthorpe (Mr. Morley) asked how the flag state monitored its fleet's effort. Of course the flag state has an important responsibility to monitor the activities of its own fleet. However, I fully recognise the fears of United Kingdom fishermen. We have therefore argued over the summer for a central role for the coastal state. Spanish vessels will have to hail in in real time when entering UK or Irish waters.

Many hon. Members touched on the subject of bureaucracy. The United Kingdom has been at the forefront of negotiations for a practical, sensible system to integrate the Spanish and Portuguese fleets into the common fisheries policy. My hon. Friend the Minister of State and I have been working hard behind the scenes throughout the summer in bilateral discussions with other member states to canvass support for some alternatives to the bureaucratic, impractical proposals first advanced by the Commission. I do not want to tempt providence, but I believe that we have gone a long way down the road towards agreeing the outline for an acceptable outcome at the Fisheries Council later this week.

Many hon. Members have rightly identified the many risks and costs attached to bureaucratic proposals for monitoring fishing effort on a real-time basis. The Government have led the way in pointing out how excessively complex such a scheme would be, and arguing against heavy-handed bureaucracy. From the outset, we identified our key negotiating objectives for an acceptable alternative, and we have throughout kept in close consultation with the British fishing industry. I am pleased that we have managed to maintain a close dialogue with the industry north and south of the border, and I commend all concerned for that.

We want practical measures to integrate the Spanish and Portuguese fleets into western waters. From the outset, we have sought to avoid the unnecessary imposition of any new regulatory burdens on the British fleet, although we recognise that the arrangements should not discriminate between European Union member states. On the one hand, we want to achieve satisfactory protection for fishing grounds of importance to the UK fleet, particularly the sensitive water around Ireland and the Irish box. On the other hand, in order to ensure adequate control of the fleets of other member states, we must accept some of the quota requirements for our own fleet when it is in foreign waters. That is why we have long argued that the coastal state should have a key role in managing waters under its jurisdiction.

The hon. Members for Glanford and Scunthorpe and for Orkney and Shetland (Mr. Wallace) asked whether we were satisfied that other member states would be ready to start on 1 January next year. The answer is yes—we believe that all states will be ready on the same date.

The hon. Member for Orkney and Shetland talked long about the letter of last year from my hon. Friend the Member for Fylde (Mr. Jack) to fishermen. I have spent time reading and re-reading that letter, in which he stated:
"The UK will be able to monitor its own fishing effort and provided this does not increase, no new measures to control effort will need to be imposed in the UK industry."
Later he explained:
"Vessels going into or out of the area of the Irish Box and the other defined fishing areas in Western Waters will have to hail in and out to both coastal states and the flag state, which will enable us to keep track of Spanish fishing activity."
The position is therefore clear: there will be no need to place restrictions on the amount of time that vessels spend at sea so long as fishing effort does not increase.

On that point, my hon. Friend must recognise that, particularly in relation to his point about the Irish box, there is considerable concern among fleets in the south-west that the prosecuting authority is the flag state and that, with the best will in the world and not wishing to intrude into too sensitive waters, the Spanish record in prosecuting its own fleet is not good.

I accept what my hon. Friend says and I assure him that that will be very much on the agenda of both my hon. Friend the Minister and myself.

I should like to say a quick word to my hon. Friends and Opposition Members who talked briefly about quitting the common fisheries policy. It is wrong to talk down the UK industry and to underestimate our ability to defend our fishermen in the European Union. We cannot do that by putting our heads in the sand and by wishing that the CFP did not exist. We must work within it to ensure that the regime operates as effectively as possible in the interests of our fishermen. Being at the heart is better than being out on a limb. Some form of common European fisheries policy is essential as fish do not respect international borders and their conservation cannot be achieved unilaterally or in isolation.

Do the hon. Members who question our involvement in the common fisheries policy really want to call into question the livelihood of our fishermen? If the answer is no, I must point out that if there is no market for their fish, the economic position of fishermen is gravely threatened.

We have had a good and far-ranging debate and I commend the motion to the House. I believe that the House and the fishing industry in Scotland, England and Northern Ireland can look forward with some confidence to the Fisheries Council on Thursday.

Question put, That the amendment be made:—

The House divided: Ayes 150, Noes 236.

Division No. 220]

[9.47 pm


Ainger, NickGriffiths, Win (Bridgend)
Anderson, Donald (Swansea E)Grocott, Bruce
Ashton, JoeGunnell, John
Austin-Walker, JohnHall, Mike
Banks, Tony (Newham NW)Hanson, David
Barron, KevinHeppell, John
Battle, JohnHill, Keith (Streatham)
Bayley, HughHoon, Geoffrey
Beckett, Rt Hon MargaretHowarth, George (Knowsley North)
Beith, Rt Hon A JHowells, Dr Kim (Pontypridd)
Bell, StuartHughes, Kevin (Doncaster N)
Benn, Rt Hon TonyHughes, Robert (Aberdeen N)
Benton, JoeHughes, Simon (Southwark)
Berry, RogerHutton, John
Boateng, PaulIllsley, Eric
Brown, N (N'c'tle upon Tyne E)Ingram, Adam
Caborn, RichardJackson, Helen (Shef'ld, H)
Callaghan, JimJamieson, David
Campbell, Mrs Anne (C'bridge)Jones, Barry (Alyn and D'side)
Campbell, Menzies (Fife NE)Jones, Jon Owen (Cardiff C)
Campbell, Ronnie (Blyth V)Jones, Lynne (B'ham S O)
Chisholm, MalcolmJones, Martyn (Clwyd, SW)
Clapham, MichaelKeen, Alan
Clark, Dr David (South Shields)Kennedy, Charles (Ross.C&S)
Clarke, Eric (Midlothian)Kennedy, Jane (L'pool Br'dg'n)
Coffey, AnnKhabra, Piara S
Cook, Robin (Livingston)Kilfoyle, Peter
Cousins, JimKirkwood, Archy
Cummings, JohnLewis, Terry
Cunningham, Jim (Covy SE)Liddell, Mrs Helen
Dafis, CynogLlwyd, Elfyn
Darling, AlistairLoyden, Eddie
Davies, Chris (L'Boro & S'worth)McAllion, John
Davis, Terry (B'ham, H'dge H'I)McAvoy, Thomas
Dewar, DonaldMcCartney, Ian
Dixon, DonMacdonald, Calum
Dobson, FrankMcGrady, Eddie
Donohoe, Brian HMcLeish, Henry
Dowd, JimMcMaster, Gordon
Eastham, KenMcNamara, Kevin
Etherington, BillMcWilliam, John
Evans, John (St Helens N)Maddock, Diana
Ewing, Mrs MargaretMahon, Alice
Flynn, PaulMartlew, Eric
Foster, Don (Bath)Meale, Alan
Galloway, GeorgeMichael, Alun
Gerard, NeilMichie, Bill (Sheffield Heeley)
Golding, Mrs LlinMichie, Mrs Ray (Argyll & Bute)
Grant, Bernie (Tottenham)Milburn, Alan
Griffiths, Nigel (Edinburgh S)Miller, Andrew

Mitchell, Austin (Gt Grimsby)Roche, Mrs Barbara
Molyneaux, Rt Hon JamesRoss, William (E Londonderry)
Moonie, Dr LewisSalmond, Alex
Morgan, RhodriSimpson, Alan
Morley, ElliotSkinner, Dennis
Morris, Rt Hon Alfred (Wy'nshawe)Smith, Llew (Blaenau Gwent)
Morris, Estelle (B'ham Yardley)Soley, Clive
Murphy, PaulSpellar, John
O'Brien, Mike (N W'kshire)Stevenson, George
O'Hara, EdwardStrang, Dr. Gavin
Olner, BillTaylor, Rt Hon John D (Strgfd)
Orme, Rt Hon StanleyThompson, Jack (Wansbeck)
Paisley, The Reverend IanTimms, Stephen
Pearson, IanTipping, Paddy
Pickthall, ColinTouhig, Don
Pike, Peter LWalker, Rt Hon Sir Harold
Pope, GregWallace, James
Powell, Ray (Ogmore)Welsh, Andrew
Prentice, Bridget (Lew'm E)Wigley, Dafydd
Prentice, Gordon (Pendle)Williams, Rt Hon Alan (SW'n W)
Prescott, Rt Hon JohnWilson, Brian
Primarolo, DawnWright, Dr Tony
Quin, Ms JoyceYoung, David (Bolton SE)
Raynsford, Nick
Reid, Dr John

Tellers for the Ayes:

Rendel, David

Mr. George Mudie and

Robertson, George (Hamilton)

Mr. Robert Ainsworth.


Ainsworth, Peter (East Surrey)Coombs, Anthony (Wyre For'st)
Aitken, Rt Hon JonathanCope, Rt Hon Sir John
Alison, Rt Hon Michael (Selby)Cormack, Sir Patrick
Allason, Rupert (Torbay)Couchman, James
Ancram, MichaelCran, James
Arbuthnot, JamesCurrie, Mrs Edwina (S D'by'ire)
Arnold, Jacques (Gravesham)Curry, David (Skipton & Ripon)
Arnold, Sir Thomas (Hazel Grv)Davies, Quentin (Stamford)
Ashby, DavidDay, Stephen
Atkins, RobertDeva, Nirj Joseph
Atkinson, Peter (Hexham)Devlin, Tim
Baldry, TonyDouglas-Hamilton, Lord James
Banks, Matthew (Southport)Dover, Den
Banks, Robert (Harrogate)Duncan, Alan
Bates, MichaelDuncan Smith, Iain
Batiste, SpencerDunn, Bob
Bellingham, HenryDurant, Sir Anthony
Bendall, VivianElletson, Harold
Beresford, Sir PaulEvans, David (Welwyn Hatfield)
Biffen, Rt Hon JohnEvans, Jonathan (Brecon)
Boswell, TimEvans, Nigel (Ribble Valley)
Bottomley, Peter (Eltham)Evans, Roger (Monmouth)
Bottomley, Rt Hon VirginiaEvennett, David
Bowden, Sir AndrewFabricant, Michael
Bowis, JohnFenner, Dame Peggy
Boyson, Rt Hon Sir RhodesField, Barry (Isle of Wight)
Brandreth, GylesFishburn, Dudley
Brazier, JulianForman, Nigel
Bright, Sir GrahamForth, Eric
Brooke, Rt Hon PeterFox, Dr Liam (Woodspring)
Brown, M (Brigg & Cl'thorpes)Freeman, Rt Hon Roger
Browning, Mrs AngelaFrench, Douglas
Budgen, NicholasFry, Sir Peter
Burns, SimonGale, Roger
Burt, AlistairGallie, Phil
Butterfill, JohnGardiner, Sir George
Carlisle, John (Luton North)Garnier, Edward
Carlisle, Sir Kenneth (Lincoln)Gillan, Cheryl
Carrington, MatthewGoodlad, Rt Hon Alastair
Channon, Rt Hon PaulGoodson-Wickes, Dr Charles
Chapman, Sir SydneyGorman, Mrs Teresa
Clappison, JamesGrant, Sir A (SW Cambs)
Clifton-Brown, GeoffreyGreenway, Harry (Ealing N)
Coe, SebastianGriffiths, Peter (Portsmouth, N)
Colvin, MichaelGrylls, Sir Michael
Congdon, DavidHague, William
Conway, DerekHamilton, Rt Hon Sir Archibald

Hamilton, Neil (Tatton)Oppenheim, Phillip
Hampson, Dr KeithOttaway, Richard
Hanley, Rt Hon JeremyPage, Richard
Hannam, Sir JohnPaice, James
Hargreaves, AndrewPatnick, Sir Irvine
Haselhurst, AlanPattie, Rt Hon Sir Geoffrey
Hawkins, NickPawsey, James
Hawksley, WarrenPorter, David (Waveney)
Hayes, JerryPowell, William (Corby)
Heald, OliverRathbone, Tim
Heathcoat-Amory, DavidRedwood, Rt Hon John
Hendry, CharlesRenton, Rt Hon Tim
Higgins, Rt Hon Sir TerenceRichards, Rod
Hill, James (Southampton Test)Rifkind, Rt Hon Malcolm
Hogg, Rt Hon Douglas (G'tham)Robathan, Andrew
Horam, JohnRobertson, Raymond (Ab'd'n S)
Howell, Sir Ralph (N Norfolk)Robinson, Mark (Somerton)
Hughes, Robert G (Harrow W)Roe, Mrs Marion (Broxbourne)
Hunt, Rt Hon David (Wirral W)Rowe, Andrew (Mid Kent)
Hunt, Sir John (Ravensbourne)Rumbold, Rt Hon Dame Angela
Hunter, AndrewSackville, Tom
Jack, MichaelShaw, David (Dover)
Jenkin, BernardShaw, Sir Giles (Pudsey)
Jessel, TobyShephard, Rt Hon Gillian
Johnson Smith, Sir GeoffreyShepherd, Colin (Hereford)
Jones, Gwilym (Cardiff N)Sims, Roger
Jones, Robert B (W'Hertfdshr)Skeet, Sir Trevor
Kellett-Bowman, Dame ElaineSmith, Sir Dudley (Warwick)
Key, RobertSmith, Tim (Beaconsfield)
Kirkhope, TimothySpeed, Sir Keith
Knapman, RogerSpicer, Sir James (W Dorset)
Knight, Mrs Angela (Erewash)Spicer, Michael (S Worcs)
Knight, Rt Hon Greg (Derby N)Spink, Dr Robert
Knox, Sir DavidSpring, Richard
Lait, Mrs JacquiSproat, Iain
Lamont, Rt Hon NormanStanley, Rt Hon Sir John
Lawrence, Sir IvanSteen, Anthony
Legg, BarrySumberg, David
Leigh, EdwardSweeney, Walter
Lester, Jim (Broxtowe)Sykes, John
Lidington, DavidTapsell, Sir Peter
Lightbown, Sir DavidTaylor, John M (Solihull)
Lord, MichaelTaylor, Sir Teddy (Southend, E)
Luff, PeterTemple-Morris, Peter
Lyell, Rt Hon Sir NicholasThomason, Roy
MacGregor, Rt Hon JohnThompson, Sir Donald (C'er V)
MacKay, AndrewThompson, Patrick (Norwich N)
Maclean, Rt Hon DavidThornton, Sir Malcolm
McLoughlin, PatrickThurnham, Peter
McNair-Wilson, Sir PatrickTownend, John (Bridlington)
Maitland, Lady OlgaTownsend, Cyril D (Bexfyh'th)
Malone, GeraldTrend, Michael
Mans, KeithTwinn, Dr Ian
Marland, PaulViggers, Peter
Marshall, John (Hendon S)Walden, George
Marshall, Sir Michael (Arundel)Waller, Gary
Martin, David (Portsmouth S)Ward, John
Mawhinney, Rt Hon Dr BrianWardle, Charles (Bexhill)
Merchant, PiersWaterson, Nigel
Mitchell, Andrew (Gedling)Watts, John
Mitchell, Sir David (NW Hants)Whittingdale, John
Moate, Sir RogerWiddecombe, Ann
Monro, Rt Hon Sir HectorWiggin, Sir Jerry
Montgomery, Sir FergusWilkinson, John
Needham, Rt Hon RichardWilletts, David
Nelson, AnthonyWilshire, David
Neubert, Sir MichaelWinterton, Nicholas (Macc'fld)
Newton, Rt Hon TonyWood, Timothy
Nicholls, PatrickYoung, Rt Hon Sir George
Nicholson, David (Taunton)
Nicholson, Emma (Devon West)

Tellers for the Noes:

Norris, Steve

Mr. Bowen Wells and

Onslow, Rt Hon Sir Cranley

Mr. Gary Streeter.

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 233, Noes 152.

Division No. 221]

[10.01 pm


Ainsworth, Peter (East Surrey)Evans, Nigel (Ribble Valley)
Ailken, Rt Hon JonathanEvans, Roger (Monmouth)
Alison, Rt Hon Michael (Selby)Evennett, David
Allason, Rupert (Torbay)Fabricant, Michael
Ancram, MichaelFenner, Dame Peggy
Arbuthnot, JamesField, Barry (Isle of Wight)
Arnold, Jacques (Gravesham)Fishburn, Dudley
Arnold, Sir Thomas (Hazel Grv)Forman, Nigel
Ashby, DavidForth, Eric
Atkins, Rt Hon RobertFreeman, Rt Hon Roger
Atkinson, Peter (Hexham)French, Douglas
Baldry, TonyFry, Sir Peter
Banks, Matthew (Southport)Gale, Roger
Banks, Robert (Harrogate)Gallia, Phil
Bates, MichaelGardiner, Sir George
Batiste, SpencerGarnier, Edward
Bellingham, HenryGillan, Cheryl
Bendall, VivianGoodlad, Rt Hon Alastair
Beresford, Sir PaulGoodson-Wickes, Dr Charles
Biffen, Rt Hon JohnGrant Sir A (SW Cambs)
Boswell, TimGreenway, Harry (Ealing N)
Bottomley, Peter (Eltham)Griffiths, Peter (Portsmouth, N)
Bottomley, Rt Hon VirginiaGrylls, Sir Michael
Bowden, Sir AndrewHague, Rt Hon William
Bowis, JohnHamilton, Sir Archibald
Boyson, Rt Hon Sir RhodesHamilton, Neil (Tatton)
Brandreth, GylesHampson, Dr Keith
Brazier, JulianHanley, Rt Hon Jeremy
Bright, Sir GrahamHannam, Sir John
Brooke, Rt Hon PeterHargreaves, Andrew
Brown, M (Brigg & Cl'thorpes)Haselhurst, Sir Alan
Browning, Mrs AngelaHawkins, Nick
Budgen, NicholasHawksley, Warren
Burns, SimonHayes, Jerry
Burt, AlistairHeald, Oliver
Butterfill, JohnHeathcoat-Amory, David
Carlisle, John (Luton North)Hendry, Charles
Carlisle, Sir Kenneth (Lincoln)Higgins, Rt Hon Sir Terence
Carrington, MatthewHill, James (Southampton Test)
Channon, Rt Hon PaulHogg, Rt Hon Douglas (G'tham)
Chapman, Sir SydneyHoram, John
Clappison, JamesHowell, Sir Ralph (N Norfolk)
Clifton-Brown, GeoffreyHughes, Robert G (Harrow W)
Coe, SebastianHunt, Rt Hon David (Wirral W)
Colvin, MichaelHunt, Sir John (Ravensbourne)
Congdon, DavidHunter, Andrew
Conway, DerekJack, Michael
Coombs, Anthony (Wyre For'st)Jenkin, Bernard
Cope, Rt Hon Sir JohnJessel, Toby
Cormack, Sir PatrickJohnson Smith, Sir Geoffrey
Couchman, JamesJones, Gwilym (Cardiff N)
Cran, JamesJones, Robert B (W Hertfdshr)
Currie, Mrs Edwina (S D'by'ire)Kellett-Bowman, Dame Elaine
Curry, David (Skipton & Ripon)Key, Robert
Davies, Quentin (Stamford)Kirkhope, Timothy
Day, StephenKnapman, Roger
Deva, Nirj JosephKnight, Mrs Angela (Erewash)
Devlin, TimKnight, Rt Hon Greg (Derby N)
Dorrell, Rt Hon StephenKnox, Sir David
Douglas-Hamilton, Lord JamesLait, Mrs Jacqui
Dover, DenLamont, Rt Hon Norman
Duncan, AlanLawrence, Sir Ivan
Duncan-Smith, IainLegg, Barry
Dunn, BobLeigh, Edward
Durant, Sir AnthonyLester, Jim (Broxtowe)
Elletson, HaroldLidington, David
Evans, David (Welwyn Hatfield)Lightbown, Sir David
Evans, Jonathan (Brecon)Lord, Michael

Luff, PeterShaw, David (Dover)
Lyell, Rt Hon Sir NicholasShaw, Sir Giles (Pudsey)
MacGregor, Rt Hon JohnShephard, Rt Hon Gillian
MacKay, AndrewShepherd, Colin (Hereford)
Maclean, Rt Hon DavidSims, Roger
McLoughlin, PatrickSkeet, Sir Trevor
McNair-Wilson, Sir PatrickSmith, Sir Dudley (Warwick)
Maitland, Lady OlgaSmith, Tim (Beaconsfield)
Malone, GeraldSpeed, Sir Keith
Mans, KeithSpicer, Sir James (W Dorset)
Marland, PaulSpicer, Michael (S Worcs)
Marshall, John (Hendon S)Spink, Dr Robert
Marshall, Sir Michael (Arundel)Spring, Richard
Martin, David (Portsmouth S)Sproat, Iain
Mawhinney, Rt Hon Dr BrianStanley, Rt Hon Sir John
Merchant, PiersSteen, Anthony
Mitchell, Andrew (Gedling)Sumberg, David
Mitchell, Sir David (NW Hants)Sweeney, Walter
Moate, Sir RogerSykes, John
Monro, Rt Hon Sir HectorTapsell, Sir Peter
Montgomery, Sir FergusTemple-Morris, Peter
Needham, Rt Hon RichardThomason, Roy
Nelson, AnthonyThompson, Sir Donald (C'er V)
Neubert, Sir MichaelThompson, Patrick (Norwich N)
Newton, Rt Hon TonyThornton, Sir Malcolm
Nicholis, PatrickThumham, Peter
Nicholson, David (Taunton)Townend, John (Bridlington)
Nicholson, Emma (Devon West)Townsend, Cyril D (Bexl'yh'th)
Norris, SteveTrend, Michael
Onslow, Rt Hon Sir CranleyTwinn, Dr Ian
Oppenheim, PhillipViggers, Peter
Ottaway, RichardWalden, George
Page, RichardWaller, Gary
Paice, JamesWard, John
Patnick, Sir IrvineWardle, Charles (Bexhill)
Pattie, Rt Hon Sir GeoffreyWaterson, Nigel
Pawsey, JamesWatts, John
Powell, William (Corby)Wells, Bowen
Rathbone, TimWhittlingdale, John
Redwood, Rt Hon JohnWiddecombe, Ann
Renton, Rt Hon TimWiggin, Sir Jerry
Richards, RodWilletts, David
RifKind, Rt Hon MalcolmWilshire, David
Robathan, AndrewWinterton, Nicholas (Macc'fld)
Robertson, Raymond (Ab'd'n S)Wood, Timothy
Robinson, Mark (Somerton)Young, Rt Hon Sir George
Roe, Mrs Marion (Broxbourne)
Rowe, Andrew (Mid Kent)

Tellers for the Ayes:

Rumbold, Rt Hon Dame Angela

Dr. Liam Fox and

Sackville, Tom

Mr. Gary Streeter.


Ainger, NickClark, Dr David (South Shields)
Anderson, Donald (Swansea E)Clarke, Eric (Midlothian)
Ashton, JoeCoffey, Ann
Austin-Walker, JohnCook, Robin (Livingston)
Banks TonyCorbyn, Jeremy
Barron, KevinCousins, Jim
Battle, JohnCummings, John
Bayley, HughCunningham, Jim (Covy SE)
Beckett, Rt Hon MargaretDafis, Cynog
Beith, Rt Hon A JDarling, Alistair
Bell, StuartDavies, Chris (L'Boro & S'worth)
Benn, Rt Hon TonyDavis, Terry
Benton, JoeDewar, Donald
Berry, RogerDixon, Don
Blunkett, DavidDobson, Frank
Boateng, PaulDonohoe, Brian H
Brown, N (N'c'tle upon Tyne E)Dowd, Jim
Caborn, RichardEastham, Ken
Callaghan, JimEtherington, Bill
Campbell, Mrs Anne (C'bridge)Evans, John (St Helens N)
Campbell, Menzies (Fife NE)Ewing, Mrs Margaret
Campbell, Ronnie (Blyth Valley)Flynn, Paul
Chisholm, MalcolmFoster, Don (Bath)
Clapham, MichaelGalloway, George

Gerrard, NeilMcNamara, Kevin
Golding, Mrs LlinMcWilliam, John
Grant, Bernie (Tottenham)Maddock, Diana
Griffiths, Nigel (Edinburgh S)Mahon, Alice
Griffiths, Win (Bridgend)Martlew, Eric
Grocott, BruceMeale, Alan
Gunnell, JohnMichael, Alun
Hall, MikeMichie, Bill (Sheffield Heeley)
Hanson, DavidMichie, Mrs Ray (Argyll & Bute)
Heppell, JohnMilburn, Alan
Hill, Keith (Streatham)Miller, Andrew
Hoon, GeoffreyMitchell, Austin (Gt Grimsby)
Howarth, George (Knowsley North)Moonie, Dr Lewis
Howells, Dr Kim (Pontypridd)Morgan, Rhodri
Hughes, Kevin (Doncaster N)Morley, Elliot
Hughes, Robert (Aberdeen N)Morris, Rt Hon Alfred (Wy'nshawe
Hughes, Simon (Southwark)Morris, Estelle (B'ham Yardley)
Hutton, JohnMurphy, Paul
Illsley, EricO'Brien, Mike (N W'kshire)
Ingram, AdamO'Hara, Edward
Jackson, Helen (Shef'ld, H)Olner, Bill
Jamieson, DavidOrme, Rt Hon Stanley
Jones, Barry (Alyn and D'side)Paisley, The Reverend Ian
Jones, Jon Owen (Cardiff C)Pearson, Ian
Jones, Lynne (B'ham S O)Pickthall, Colin
Jones, Martyn (Clwyd, SW)Pike, Peter L
Jowell, TessaPope, Greg
Keen, AlanPowell, Ray (Ogmore)
Kennedy, Charles (Ross, C&S)Prentice, Bridget (Lew'm E)
Kennedy, Jane (L'pool Br'dg'n)Prentice, Gordon (Pendle)
Khabra, Piara SPrescott, Rt Hon John
Kilfoyle, PeterPrimarolo, Dawn
Kirkwood, ArchyQuin, Ms Joyce
Lewis, TerryRaynsford, Nick
Liddell, Mrs HelenReid, Dr John
Llwyd, ElfynRendel, David
Loyden, EddieRobertson, George (Hamilton)
McAllion, JohnRoche, Mrs Barbara
McAvoy, ThomasSalmond, Alex
McCartney, IanSimpson, Alan
Macdonald, CalumSkinner, Dennis
McGrady, EddieSmith, Llew (Blaenau Gwent)
McLeish, HenrySoley, Clive
McMaster, GordonSpellar, John

Stevenson, GeorgeWigley, Dafydd
Strang, Dr. GavinWilliams, Rt Hon Alan (Sw'n W)
Taylor, Rt Hon John D (Strgfd)Williams, Alan W (Carmarthen)
Thompson, Jack (Wansbeck)Wilson, Brian
Timms, StephenWright, Dr Tony
Tipping, PaddyYoung, David (Bolton SE)
Touhig, Don
Walker, Rt Hon Sir Harold

Tellers for the Noes:

Wallace, James

Mr. George Mudie and

Welsh, Andrew

Mr. Robert Ainsworth.

Question accordingly agreed to.


That this House takes note of European Community Documents No. 7596/95, on establishing a control system applicable to the Common Fisheries Policy, No. 7465/95, relating to Community financial contribution towards certain expenditure incurred by the Member States in implementing the monitoring and control system applicable to the Common Fisheries Policy, and No. 8817/95, concerning a proposal for a Council Regulation establishing the list of species to be recorded in the fisheries logbook and landing declarations; welcomes the agreement reached at the Fisheries Council on 15th June on fishing effort levels; and supports the Government's efforts to secure effective measures to monitor and enforce fishing activity in Western Waters, including the Irish Box, while not placing unnecessary burdens on the fishing industry.

Accommodation And Works


That Mr. Timothy Kirkhope be discharged from the Accommodation and Works Committee and Mr. Derek Conway be added to the Committee. —[Sir Fergus Montgomery.]

Welsh Affairs


That Mr. Elfyn Llwyd be discharged from the Welsh Affairs Committee and Mr. Cynog Dafis be added to the Committee.—[Sir Fergus Montgomery.]


Motion made, and Question proposed, That this House do now adjourn.— [Mr. Wood.]

10.12 pm

I begin this debate by congratulating the Minister of State on his new appointment. I feel sure that the murder and mayhem of the middle east with which he will now have to grapple and the potentates and dictators with whom he will have to deal will prove to be a more tranquil billet than his previous position. I am sure that his famous good nature and good manners will prevail, and that he will do a good job for our country in that difficult and turbulent part of the world.

I want to raise the issue of our relations with Kuwait for a number of reasons. We have a long and close relationship with the Emirate of Kuwait, and in a sense we invented Kuwait. The father of my hon. Friend the Member for Linlithgow (Mr. Dalyell) was in the tent when the famous line in the sand was drawn, and one part of the sand was designated to be Kuwait and another part of the sand was designated to be Iraq. That line has caused many problems ever since, but that is a subject for another debate.

Not only did we invent Kuwait: to a real extent the ruling family of Kuwait was returned to its throne and its all but absolute power at the point of British and American bayonets. That gives us a clear focus of concern about some of the many problems that afflict that benighted country.

When I describe the ruling family as such, I really mean it. I remarked a little while ago in the House that 11 of the top 12 Ministers in the Government of Kuwait, and four out of the five provincial Governors, share the same surname and are members of the same family. The Amir is Jaber As-Sabah. The Crown Prince and Prime Minister is Saad As-Sabah. The Deputy Prime Minister and Foreign Minister is Sabah As-Sabah. The Minister of Amiri Affairs is Khalid As-Sabah. The Minister of Information is Jaber As-Sabah. The Minister of the Interior is Salim As-Sabah. The Minister of Defence is Nawaf As-Sabah. The Minister of Oil is Ali As-Sabah. The Governor of Ahmadi is Ali Sabah As-Sabah. The Governor of Jahra province is Ali Abdullah As-Sabah. The Governor of Kuwait province is Jaber As-Sabah. The Governor of Faranawiya province is Ahmad As-Sabah. I could go on, but I see that the Minister would prefer it if I drew my own line in the sand at that.

Kuwait is not so much a one-party state as a family business, and one that owes more to the Corleones than to the Sainsburys. It is my contention in this debate that the As-Sabah family and business are a disreputable lot indeed. The internal repression in Kuwait and the lack of basic human rights and democracy is legendary. It was bad before the Iraqi dictatorship's invasion and it is worse now, despite all the promises that were made to western public opinion, to justify the armed intervention. Some $690 billion was expended in returning the family to its thrones. Many lives were lost—many western lives, many British lives, not to mention the hundreds of thousands of other lives that were lost.

No doubt the Minister will tell me about what is laughingly described as a parliament in Kuwait. It is a parliament with no woman member, and for the members of which no woman can vote. Only male full citizens over 30 educated to university standard may vote. Fewer than one in 10 Kuwaitis have the right to vote. Some democracy; some parliament.

The Minister may mention, as has been done before, the press and the media in Kuwait, which are more free than in some of the other dictatorships round about, but it is far from a free press, with censorship and self-censorship everywhere. One newspaper was recently closed down for criticising the royal family.

Of all the human rights atrocities committed by the ruling family in Kuwait, the worst and the greatest is that against the people known as the Bedoons. There are more than 300,000 Bedoons—one third of Kuwait's native population. Half of them—150,000—have been driven into refugee camps in the desert across the Iraqi border by the regime and left there to bake and to rot, The other 150,000 are treated not as second-class or even fifth-class citizens but not as any sort of citizen. They are bereft of all rights.

The human rights organisation Human Rights Watch/Middle East has said:
"The totality of the treatment of the Bedoons amounts to a policy of denationalization of native residents, relegating them to an apartheid-like existence in their own country. The Kuwaiti government policy of harassment and intimidation of the Bedoons and of denying them the right to lawful residence, employment, travel and movement, contravene basic principles of human rights … Denial of citizenship to the Bedoons clearly violates international law … Denial of citizenship and lawful residence to Bedoon husbands and children of women who are Kuwaiti citizens violates rules against gender-based discrimination."
That violates the United Nations conventions to which Kuwait is a signatory.

The report continues:
"Denying Bedoons the right to petition the courts to challenge governmental decisions regarding their claims to citizenship and lawful residence in the country violates the universal right to due process of law and equality before the law.
By retroactively implementing restrictive citizenship and residency laws, Kuwaiti authorities deprive Bedoons of their vested rights to state citizenhip and residence."
I could go on.

It is a scandal that almost no one in the world cares a thing about the plight of 300,000 people, 150,000 of them cast out of the land in which they have lived. Many were born to Kuwaiti mothers, and many of those families have lived in the Kuwaiti area for many centuries. Indeed, given the ruling family's penchant for spending time on the Riviera or in the west end of London, many of them have spent a great deal more time in Kuwait than many of the members of the ruling family.

Literally hundreds of thousands of Palestinians, Sudanese and Yemenis were also sacked from their jobs, evicted from their houses and deported from the country, including constituents of mine who were born in Kuwait, who had never been in any other country but Kuwait and who had loyally served Kuwait, but who, because they were Palestinians, were kicked into the Yemen or into Iraq, where many of their families continue to live in appalling conditions. They are the very people whose labour, skill and dedication built much of the wealth of Kuwait.

Many times in the past five years, I have detained the House by speaking about individual atrocities against human rights. I have told the House about the British citizen Sulaiman Al-Adsani, who was tortured by a member of the Kuwaiti royal family, Sheikh Jabar Al-Sabah, who was put in a swimming pool which was afloat with six dead bodies, who was repeatedly held under the water in that swimming pool, and who was then burnt, suffering 25 per cent. burns all over his body, such that one year later he continued to wear protective clothing.

I have told the House about Naim Farhat, whose father and younger brother were shot dead protecting her honour, and who was herself raped and shot in the head, such that she is paralysed and permanently disabled, by a policeman in the Kuwaiti state employ, and for whom absolutely no compensation has ever been paid. The criminal, the murderer, the rapist, was sentenced to the grand total of five years in prison.

I could go on and on about the problems that have afflicted so many citizens in that country, but I intend to speak not only about the behaviour of the ruling family in their own country, but about their behaviour in our country, which gives so many people in their district so much shame and embarrassment. I could detain the House with legendary tales from the casinos and bordellos of London about members of that rapacious family, with more money than sense and fewer morals than the pound notes in their pockets.

However, I want to confine myself to the case of the London business man, Mr. Salus, which is described in early-day motion 748, supported by no fewer than 66 Members of the House from every party in the House, and by several peers of the realm, senior Conservatives, senior Liberal Democrats and senior members of the Labour party. I table plenty of motions in the House. Few reach 66 signatures, fewer have any Conservative names on them, and fewer still have the support that that motion has.

The Minister knows the case well. It is that of a London business man, a married man with a young family, ruined by the decision by two princesses of the Kuwaiti royal house, Princesses Nadia and Fatemah Al-Sabah, who commissioned him and other British contractors to renovate flats in Kensington in London and who, midway through the contract, without warning, liquidated their limited liability company and walked away from their liabilities to those British contractors, ruining all of them. Some of them died; the marriages of others broke up; all of them suffered terrible hardship as a result of that dreadful decision.

When Mr. Salus began to be concerned that his bills were not being paid, the princesses' fellow director pulled out a copy—I have it with me—of a Hello-style photo session in Harpers and Queen, in which the beneficence and massive wealth of the princesses was profiled. The Minister will say that it is a commercial matter, that it is a limited liability company, and that, under the law, it can be liquidated, but as a Minister of the Crown he must know that it cannot be morally acceptable for multi-millionairesses who are members of the Kuwaiti royal family to walk away from their debts and obligations in that way. He and the British Government have an obligation to have a word in the ear of the Kuwaiti Government and royal family to ask them to pay their debts to a man who has been ruined and bankrupted by this decision.

Members of the Kuwaiti royal family can put £75,400 on a turn of the roulette wheel in London casinos, but they will not pay up to people who did work in good faith, trusting the honesty—the bona fides—of members of the royal family of a friendly country, which was returned to power by the sweat and blood of British and other allied forces' arms.

The question is a moral, not a legal or commercial, one. Imagine if members of the British royal family decided not to pay their debts in a foreign country and made a company bankrupt. I do not believe that it could ever happen, but if it did, it would be a source of shame to the British people, and the British Government would have something to say about it.

Our relations with Kuwait are close and of long standing. We have influence there; its investments in Britain are legion, and our economic interests there are legion. I am asking not for a breach in relations with the Kuwaiti Government, but simply, quietly if need be, for the Minister to have a word in their ear about the Salus case and about other instances of behaviour unbecoming to a country that is so indebted to the British state.

10.27 pm

The hon. Member for Glasgow, Hillhead (Mr. Galloway) has given us an opportunity to debate our relations with Kuwait. This has been a significant year for UK-Kuwait relationships, and has been marked by the highly successful state visit of His Highness the Amir in May, following the Kuwaiti Foreign Minister's visit in February. We also look forward to the Princess Royal's visit to Kuwait in November.

Last year, visitors to Kuwait included my right hon. and learned Friend the Foreign Secretary and my right hon. Friends the Defence Secretary and the President of the Board of Trade. Those visits are symbolic of the closeness of our relationship, which is based on a friendship dating back over 200 years.

Our friendship is founded on close co-operation in many fields, particularly in defence. For many years, long before the discovery of oil, Kuwait's status as a British protectorate helped to ensure its independence and territorial integrity. That formal relationship ended in 1961, but Britain has continued to work closely with one of its oldest friends in the region. That was apparent immediately after Kuwait became a state in her own right, when we deployed troops in response to a military build-up and threatening moves by Iraq. More recently, Britain played a key role during the Gulf war, and was the first to respond last October when Iraq again threatened Kuwait.

Defence is only one, albeit important, aspect of the relationship. I am pleased that our trade with Kuwait is growing. The presence tonight of my hon. Friend the Minister for Trade is proof positive of that excellent relationship. Our exporters have played a leading role in the post-Gulf war reconstruction of Kuwait and in helping Kuwait to re-equip its armed forces.

British exports in 1994 were worth £312 million, and our performance is strong in many sectors—not least, of course, oil, where companies such as British Petroleum have a long and successful record of involvement. We expect that that involvement will create further opportunities, if and when Kuwait decides to allow foreign investment in the upstream sector of its oil industry. As usual, the Government will do all they can to help and support British companies that seek to do business in Kuwait.

The hon. Gentleman referred to a commercial dispute. We are aware of the dispute involving Mr. Salus and two members of the Kuwaiti ruling family, which is several thousand strong. We hope that lawyers acting for both sides in the dispute will meet soon, and that the dispute can be resolved as quickly as possible, but we cannot intervene in a commercial dispute of this nature, which, if necessary, should be pursued through the courts.

What would the Minister say if I told him that, just prior to the Amir's visit, the Kuwaiti embassy told me that members of the embassy would meet soon and resolve the matter? I was told that, if I would only stay my hand and desist from causing any difficulties during the Amir's visit, the matter would be resolved. I did so, and raised no protest of any kind during the Amir's visit. I behaved impeccably, but the embassy welshed on that promise. So I suspect that whatever the Minister has been told about a meeting that might take place soon is the same kind of falsehood that was conveyed to me.

I would say that we have mentioned the case to the Kuwaiti embassy, which I believe also has no standing in this dispute. It has been trying to arrange a meeting between lawyers acting for both sides in the dispute, and I hope that that will occur as soon as possible. More than that we cannot do, but I am sure that this debate will come to the attention of those to whom the hon. Gentleman referred, who may realise the urgency of the matter.

I also welcome the fact that parliamentary links are well established and flourishing. Madam Speaker was able to welcome her Kuwaiti colleagues here last year, and several hon. Members have visited Kuwait since then. Hon. Members may be aware that, last year, the Kuwaiti National Assembly organised and hosted the first inter-Gulf parliamentary conference.

Every country has the right to develop its political structure in accordance with its culture, heritage and traditions. The ruling family, Government and people of Kuwait have an impressive record. We are encouraged by the contribution made by the democratically elected National Assembly in Kuwait since the election in 1992. We also support recent decisions to extend the franchise to some naturalised Kuwaiti citizens and their male offspring, and we hope to see further extensions in the future. The hon. Gentleman referred to that, too.

Our links and co-operation with Kuwait are flourishing in other areas too, including medical training and research, education and culture. Each year, an ever-increasing number of Kuwaitis visit this country as holidaymakers, students and longer-term residents. They are most welcome, and I hope that their presence will help to promote a better understanding of Islam and the west, and of our respective cultures.

Some of our Kuwaiti visitors may be wondering what effect the European Union's common visa list will have on their visits once it is introduced. It was not in our power to block the common visa list, which could have been adopted by a qualified majority after the end of this year. We could not persuade our European Union partners that four Gulf states—Kuwait, Bahrain, Qatar and the United Arab Emirates—should be excluded.

We expect the majority of Gulf state travellers to be eligible for multiple-entry visas, and we aim to make the issue of visas as simple and straightforward as possible. Unlike most of our partners, we do not operate a system of post-entry checks. We hope that our many Kuwaiti visitors will not be inconvenienced as a result of the common visa list.

I shall now deal with the threat that continues to hang over Kuwait and Britain's interests there. I refer, of course, to Iraq. Our aim is to ensure that Kuwait never again suffers at the hands of Saddam Hussein. To this end, we co-sponsored United Nations Security Council resolution 949, which makes it clear that any substantial Iraqi military build-up and deployment towards the Kuwaiti border will be met with a robust response.

Saddam has often demonstrated that he cannot be trusted, and it is essential that we maintain the pressure on him. This House will know that we remain resolute in our view that Iraq must comply with all relevant United Nations obligations before sanctions can be relaxed. The United Nations special commission's recent revelations about Iraq's weapons of mass destruction programme demonstrate how important it is to remain firm. Some have suggested that the time has come to relax sanctions for one reason or another, but there is no reason to believe that Saddam is repentant. To relax the sanctions regime now would risk allowing Saddam to threaten the region again.

The reason most often advanced for a relaxation of sanctions is the plight of the long-suffering Iraqi people. We share that concern. We took a leading role in the adoption of Security Council resolution 986, which allows Iraq to sell oil to purchase humanitarian supplies. Sadly, Saddam rejected that offer. We urge him to reconsider, and to ease the suffering of the Iraqi people. He is to blame.

Resolution 986 was welcomed by Kuwait and other countries in the region that share our concern. Kuwait itself has donated humanitarian aid to alleviate the suffering of Iraqi refugees in Iran. As my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) will be aware, the Amir gave a very generous donation to this cause during his state visit.

One area of Iraqi non-compliance which causes us great concern is the issue of Kuwaiti prisoners of war and detainees, including other third-country nationals still missing in Iraq. The physical scars of the Iraqi occupation have been removed by Kuwait's impressive reconstruction programme. That unresolved issue, however, prevents the deeper psychological scars from healing and continues to cause much anguish and anxiety for the relatives and families of those missing in Iraq.

I know that several Members of this House take a close interest, and have visited Kuwait recently to discuss that and other subjects. They and others may welcome an account of what we are doing to press Iraq to provide substantive information on the missing persons.

Under the terms of UN resolution 687, Iraq has a clear obligation to co-operate with the International Committee of the Red Cross in its efforts to obtain information on prisoners of war and missing persons. Britain is a member of the tripartite commission, which was set up to monitor progress. We are very disappointed that progress has been so slow. Iraq has had the Red Cross case files on missing individuals for nearly three years, and has so far failed to provide substantive information on all but a few of them.

We have made it clear that we expect Iraq to provide some answers at the next meeting of the tripartite commission in November. We will continue to raise this issue in the Security Council at each review of sanctions against Iraq, and will take every opportunity to press Iraq to comply with its UN obligations in that and every other respect.

We are aware of the concern expressed about a number of human rights issues in Kuwait. We welcome the fact that the Kuwaiti Government permit international human rights organisations to visit Kuwait and conduct fieldwork there. The Kuwaiti National Assembly has established an effective human rights committee, and there is a local chapter of Amnesty International now established in Kuwait. Kuwait's democratic system allows for a thorough debate of local issues, which are fully reported in the media. We have made known our concern on specific issues, and will continue to monitor the situation.

A particular problem exists—the hon. Member made passionate reference to it—with a group of people known as the Bedoon Jinsiya, who are those without nationality. They are stateless persons, primarily of Iraqi or Iranian descent. The United Nations Commission on Human Rights estimates that there are 130,000 Bedoon remaining in Kuwait. The hon. Member mentioned those who are outside it. The Kuwaiti Government regard many of them as illegal immigrants, who have chosen to conceal their true nationality. However, some have strong residence ties. Her Majesty's Government welcome the fact that the Kuwaiti Government have set up a committee to examine the Bedoon problem and recommend possible solutions.

I appreciate the Minister giving way again. I must tell him that those who briefed him have misled him, inadvertently no doubt, on the origin of the Bedoon, whom he describes casually as of Iraqi or Iranian descent. I am sorry if that allegation disturbs the Minister, but they are of Iraqi or Iranian descent only in the sense that perhaps many in the House are of French descent. William the Conqueror came here many centuries ago, and no doubt some here are the progeny of those invaders.

These Bedoon have been in Kuwait for many centuries. If they are of Iraqi or Iranian origin, it is from a time when neither Iraq nor Iran existed. It is facile to describe them thus. Every human rights organisation accepts that these are people with an overwhelming claim to Kuwaiti citizenship.

I accept what the hon. Gentleman says about some of the Bedoon, who have lived in Kuwait for several decades and are the spouses or children of Kuwaiti fathers. That group has a good claim to Kuwaiti citizenship. Many of the Bedoon, however—it is likely to be about 80 per cent. of the estimated 130,000 who remain in Kuwait—are citizens of other Gulf countries, and predominately Iraq. They came to Kuwait to benefit from its generous social services, free health care, free education and low-cost housing. They chose to conceal their true identity. I do not think that the hon. Gentleman can deny that that case exists. A committee has been set up by the Kuwaiti Government to examine the Bedoon problem and to recommend possible solutions.

The trials of alleged collaborators by the martial law court, and more recently the state security court, have also caused international concern. We and our EU partners have told the Kuwaiti Government that international legal and human rights standards should be respected. We welcome the fact that the state security court has been abolished. We understand that the court of cassation has been active in reviewing state security court cases and has altered sentences, including the commutation of the death penalty, in a number of cases.

Similarly, we welcome the fact that the Kuwaiti Government have set up an office to look into complaints of abuse against domestic workers, primarily from south-east Asia. We hope that the provisions of Kuwaiti labour law can be extended to protect the rights of these workers.

I hope that hon. Members will agree that Kuwaitis are good friends, with whom we have much in common. We share a strong trading and maritime tradition, and we have both faced unwarranted aggression. Hon. Members familiar with Kuwait may be aware of the diwaniya system, which allows Kuwaiti families and friends the opportunity for full and frank discussion of every conceivable subject under the sun. Our relationship with Kuwait is conducted in similar fashion, and the fact that it is so close today is a tribute to good open communication based on shared interests.

Question put and agreed to.

Adjourned accordingly at eighteen minutes to Eleven o'clock.