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Opposition Day

Volume 281: debated on Tuesday 16 July 1996

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[19TH ALLOTTED DAY]

Ministry Of Defence Housing

[ Relevant document: Sixth Report from the Defence Committee on the future of the Married Quarters Estate, House of Commons Paper No. 424 of Session 1995–96.]

I have selected the amendment standing in the name of the Prime Minister. I have to limit the speeches of Back Benchers to 10 minutes during the debate.

4.8 pm

I beg to move,

That this House notes that the Government proposes to sell all Ministry of Defence married quarters in England and Wales, including those occupied by service families as well as empty properties, to developers; further notes that this will leave service tenants dependent on a declining number of properties leased back for 25 years; notes that most of the properties can be exchanged by the developer with a neutral arbitrator, rather than the tenants or the Ministry of Defence, deciding whether or not exchanges are permitted; notes that the arbitrator will have to base his decision on set criteria which are vaguely worded, so that developers with expert legal advice will be able progressively to cream off the best estates; notes that steep rises in rents and the downward ratchet on the number of homes leased back, embodied in the proposed scheme, will progressively reduce and break up married quarter estates; notes that, especially at a time of overstretch. and poor recruiting and retention, these estates play a vital role in maintaining the morale of service families and the maintenance of the regimental system; and calls on the Government to dispose of surplus estates, to provide homes for civilian families but, before selling any estate with service tenants, to consult the tenants on the estate, to report to Parliament on the outcome of the consultation and to table an affirmative resolution in both Houses.
Today's debate is the first occasion on which hon. Members have had the opportunity to consider the sale of our armed forces' family homes, something that has caused distress and concern to service families. Government and Opposition Members have voiced their concerns, including 20 Government Members who recognise the damage of the Government's proposals, and what they will do to the morale of the armed forces and to the security of their family homes. As they are honourable men and women, we have every confidence that they will join us in the Lobby tonight.

As the Prime Minister reminded us recently, the sale
"has been under consideration for a number of years".—[Official Report, 25 June 1996; Vol. 280, c. 149.]
The Secretary of State's immediate predecessor wasted £5 million on financial advisers in an abortive attempt to sell off the houses. On 28 November 1995, the present Secretary of State announced out of the blue his master plan.

That date is significant, as it was Budget day—which gives the game away. The Government have never seriously attempted to deny the fact that the sale was not concerned with the long-term interests of our service men and women: the scheme was concocted solely to raise finances for the Treasury coffers—which the House will recall is the Secretary of State's old hunting ground.

One question that comes immediately to mind is: why has this scheme succeeded in interesting the financial markets when all the others have failed? The answer is quite simple: this scheme is extremely financially rewarding for them, at the expense of the taxpayer and the service men and women and their families. The deal is breathtaking in its short-termism. The Government hope to raise about £1.5 billion by selling 58,000 forces family homes to a single purchaser—any one of four foreign financial institutions.

The MOD then plans to rent back the houses in order to meet our forces' housing requirements. However, it will retain responsibility for repairs, maintenance and management of the estates. It has guaranteed the purchaser market-based rents on shorthold tenancies and sweeteners far in excess of the money invested. Well within a decade, the speculators will have got back their cash and more, and will also own all defence rnarried quarters and the associated land. The MOD gets to keep all the responsibility and none of the power over how the estate is run—all the bills and none of the proceeds from the estate.

They are the facts as the House and our forces' families know them to be. What devil lurks in the detail of the scheme, which the MOD has consistently refused to disclose to hon. Members or to service families? Instead of allaying the very real concerns of hon. Members on both sides of the House and of service families, the MOD's obsessive secrecy has increased them. We know where the details are, but we are not allowed to see the prospectus.

The Government's lack of confidence in the plans is so great that they have refused numerous requests to see the "Married Quarters Estate Information Memorandum". In the past three weeks, representations have been made to me by a number of parties who have a financial stake in the sell-off. As a result of those meetings, I now understand why the scheme is so attractive to them—indeed, it is widely known as the "goldmine of the decade".

Under the terms of the contract as set out in the "Married Quarters Estate Information Memorandum", the MOD will transfer 58,400 houses to the purchaser. Some 2,700 of them—the surplus estate—will be disposed of immediately by the purchaser for a quick profit. The remaining 55,700 houses—the retained estate—will be transferred to the purchaser on 999-year leases, with breaks every 25 years, and rented back by the MOD.

The MOD will have to pay a guaranteed sum to the purchaser in order to rent the properties back. The sum will run into tens of millions of pounds every year; for the first year, the figure will be roughly £112 million. Over 25 years, that annual guaranteed payment alone will amount to many times more than the £1.5 billion to be raised from the sale. Market-rate rent rises will add to the sum to be paid by the MOD, while the purchaser will enjoy the attractive bonus of receiving progressively more empty houses, with which he can do what he chooses.

The key is the 25-year period. Under the terms of the 25-year master agreement, there is a guaranteed release of further units. As well as the 2,700 surplus houses to be sold immediately by the purchaser, the MOD has promised to release further units each year. The first 695 family homes must be released within two years, with a minimum of 2,780 within five years, and a minimum of 13,360 will he released over the 25 years. That represents a quarter of the entire estate as it stands today. I can only assume that such a drastic cut in the size of the estate reflects the Government's plans further to reduce the strength of our armed forces.

The hon. Gentleman will, of course, be aware that the MOD housing estate has been the subject of Public Accounts Committee recommendations for at least 10 years. At no time during that period have there been fewer than 12,000 empty homes, and at times the total has reached 15,000. Can the hon. Gentleman really defend such a state of affairs?

I assure the hon. Gentleman that that was the case sone years back, into the Labour Government as well. It has been the most disgraceful and incompetent performance for many years, and the hon. Member for South Shields (Dr. Clark) seems to want to perpetuate it. I can only tell him that the figures that he is now releasing do not even begin to match the number of homes on the MOD housing estate that have remained vacant for probably a quarter of a century and more.

I cannot accept responsibility for the mismanagement of Army houses over the past 18 years. I must point out that it is possible to sell off the houses without this financial rip-off of a scheme.

No, I must press on. Many hon. Members wish to speak, and I said that I would be as brief as I could.

Let me list one or two of the other benefits gained by the lucky purchaser. An aspect of the sale that has received considerable attention is the site exchange option, which provides the purchaser with the right to require the MOD to hand over properties in exchange for substitute sites. In a desperate attempt to placate service families, the MOD introduced a number of vaguely worded criteria that must be met by the substitute sites, relating to, for instance, travel-to-work time, suitability and standard of dwellings, security considerations and prime rates. Importantly, the criteria do not include access to employment for dependants of service personnel, which concerns service families very much.

That means that there is no guarantee for the families. The MOD has lost control of the transfer. If there is a dispute between the MOD and the purchaser, it will go to an arbitrator who will make the final decision. The military needs of this country will not be the criterion on which that decision is made. That directly contradicts the Prime Minister's assurance, given to the leader of the Labour party:
"It will not mean service personnel being moved against their will."—[Official Report, 25 June 1996; Vol. 280, c. 148.]
He was wrong, and we know that he was wrong, because the Minister of State for Defence Procurement told us later that, under the terms of the contract, service families could be moved against their will, but would be forced to do so only if comparable accommodation was offered. What is comparable is a matter for debate.

Service families are used to being moved regularly. They often have to move at least once a year. I recently met a Royal Air Force widow who told me that, during her first years of service, her husband had to move eight times in two-and-a-half years. We all know of people in the military who move at least once a year. They accept that, because they know that they are being moved for military reasons. In future, however, they may be moved at the whim of property developers. The speculators will call the tune, not military demands.

The Government claim that one of the benefits of the scheme will be an influx of £100 million over five years to improve married quarters. That is because, under the proposals—

I stand corrected. On the basis of seven years, the Government's case is even worse.

Under the Government's proposals, the MOD will still have to pick up bills for repairs and maintenance. Last year alone, the MOD spent £126 million on repairs, and £40 million on upgrading the estate.

In a recent parliamentary answer to the hon. Member for Romsey and Waterside (Mr. Colvin), we learned that, in the past five years for which figures are available, about £198 million was gained from the sale of surplus properties. That is almost twice the amount that will be spent on reinvesting in the estate. It is fair for us to ask the Secretary of State why the moneys from sales were not used to improve the quality of housing of our service men and women. Where has the money gone? If the houses are in such a poor state of repair, what have the Secretary of State and the Government generally been doing for the past 18 years?

For 25 years, the speculators will have a guaranteed income and receipt from sales. There will be a guaranteed cash flow. The principal attraction, however, is that, after 25 years, they will gain control of the married quarters estate. The memorandum to which I have referred gives the MOD the right to retain possession of the remaining houses after 25 years unless the landlord wishes to redevelop the properties.

Late in the day, the MOD realised the shortcomings of the scheme, and introduced what it thought was a cunning scheme, in the form of a ministerial certificate related to the future operational effectiveness of the relevant establishment. Tragically, the so-called ministerial veto is virtually worthless. The legal experts retained by the would-be purchasers believe that the MOD would have the utmost difficulty in making its case in the courts. The ministerial veto is useless. After 25 years, it will be necessary to go cap in hand to the purchasers to retain the married quarters estate for military purposes.

As for intervention by Ministers, I trust that the hon. Gentleman will bear it in mind that, during times of hostility, the Government take special powers and can do almost anything.

There are much easier ways of trying to safeguard and protect our service men and women, and maintain their morale, than starting to wage a war so that the Government of the day can introduce emergency legislation. I am surprised that the hon. Gentleman, who has shown so much interest in defence matters, is prepared to betray the interests of service men and women.

Given the facts that I have laid before the House, it is no wonder that our forces' families are so deeply concerned by the Secretary of State's proposals. Put simply, they feel betrayed and deserted by the Government. The House may not want to take my word for it, but, in a press statement on 30 May, the Royal British Legion declared that Ministers
"have not thought through the long term consequences of the sell-off … in short"—

The hon. Gentleman says, "Of course they have," but the Royal British Legion knows a little bit about this. I suspect that, over the years, it has accumulated information, and this is its opinion. It said:

"in short the proposals pose a threat to the ethos of Service life and demonstrate ignorance of Service people's real needs."
What an indictment. It is small wonder that the Legion went on to demand that the sell-off should be postponed, pending a thorough review.

Some of the most critical public statements against the proposals have come from the Army Families Federation, which declared that it was speaking out
"to make the public aware of what irretrievable damage will be done to Service life if the Government sells off Service homes."
The Defence Select Committee's report came out today. It is an excellent report. It analysed the problems, in the brief time that it had at its disposal, and concluded that, until such time as detailed proposals from the prospective purchasers have been communicated to it and assessed, it will not be in a position to reach a firm conclusion on the merits of the sale. As far as the Committee was concerned, the case was "not proven".

In evidence before the Select Committee, the Army Families Federation said:
"We know the Government was well aware of the concerns not only of the families but of if the three Services themselves, yet it appears to have ignored our warnings of the effect the sale will have on the morale of the Services, on recruitment, on retention and subsequently on the operational effectiveness of our Defence Force."
That strength of feeling cannot be ignored. My office has been inundated—as, I am sure, have the offices of many right hon. and hon. Members—with calls from concerned service families. Such feelings have been widespread. Indeed, they were expressed in a full-page open letter in the Evening Standard under the headline, "Mr. Portillo, you are betraying us", written by the wife of one of the our service men.

I believe that today the whole House should put our armed forces and their families first. It is easy to praise them from these Benches for their dedication and the sacrifice they make for this country. We all do it. But words are cheap. Words are not enough. The armed forces must know that they are valued and treated fairly by the House.

I hope that I have clearly demonstrated that this ill-thought-out plan makes no long-term economic sense, and will cost the British taxpayer severely in the future. It will continue to cause untold uncertainty to our service families, who rightly feel badly betrayed. Sometimes, the House has got to do something. Today is one of those occasions.

4.27 pm

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

'supports the Government in its determination to improve the quality and management of service housing; notes that the proposed sale of the married quarters estate in England and Wales will release £100 million of new funding to upgrade married quarters throughout the United Kingdom, and enable the Ministry of Defence to dispose more efficiently of surplus properties; notes that the sale will have no bearing on the charges service personnel pay for their quarters; recognises that the interests of the services and service families have been properly protected; and accepts the judgment of the Government and the Chiefs of Staff that the sale offers the right basis for real improvements in service housing which are long overdue.'.
Nothing is more important to me than the welfare of our armed forces and their families. The Government must provide proper homes in which our service families can live, and take care of their families. That is not just a matter of bricks and mortar. Families provide each other with support and understanding, and it matters to service families to be secure and to be surrounded by friends.

I take this opportunity to pay a whole-hearted tribute to service families and wives. They do not often receive the public recognition that is their due. In times of turbulence and great activity, still today they keep the home fires burning.

It is vital for the soldier, sailor or airman on active service to know that the family is decently housed and properly looked after. Given Britain's present high levels of military activity, I thank the service wives and families for their patience, courage and stoicism. They are an absolutely integral part of service life.

I want to get a little further.

A number of my hon Friends have expressed concern about our proposal to find a new owner for the married quarters. I am not surprised that it has been Conservatives who have raised the matter as it is the Conservative party that cares about defence and knows the issues that are of interest to service families.

I welcome the attention that the subject has received. It has helped me to improve the scheme that I am proposing. I welcome the representations that we have had from the organisations of service wives and I also welcome the report from the Select Committee on Defence. The matter has aroused anxieties among service families who have had to cope with change and who fear that the proposal might bring more changes. I am pleased to set out today why the policy is a good one and why people should not be anxious.

It is clearly good for morale and for peace of mind if service men and women who are posted are accompanied by their families. Our duty to provide married quarters for their families will continue indefinitely and we will meet the demand for them, where they are needed and when they are needed. But, in future, I propose that the Ministry should do so by renting, not by owning.

The Ministry has not been good at owning houses. In too many cases, their quality has fallen below the standard that service families have a right to expect and, legitimately, service families—like the rest of our community—have rising expectations. We now need to refurbish more homes more quickly. The sale of married quarters will provide the Ministry with an extra £100 million, which it would not otherwise have had, to spend on extra refurbishment. Over five years or so, we shall raise the quality of the houses we occupy to grade one condition.

If we do not proceed with the sale, I cannot imagine how, with all the pressures on public finances, we could hope to complete that programme of improvements. We would condemn a large number of service families to go on living in poor conditions.

The Ministry will do better and service families will benefit by our giving up ownership. Owning so many houses has its cost in that capital—taxpayers' money—is tied up unnecessarily and unproductively. Through the sale, that money can be released for better purposes, including meeting the many other demands for public sector capital investment.

I am surrounded by hon. Members who would like to intervene. I think that the hon. Member for Stockton, North (Mr. Cook) was first on his feet.

The Secretary of State said that the money could be released for better purposes. Would he care to enlighten the House as to the specific purposes that he has in mind?

I gave an example straight away, but I think that the hon. Gentleman was on his feet before I had finished the sentence. I referred to other demands for public sector capital investment. This money is not tied up productively at the moment; it can be put to better use. I now give way to my hon. Friend the Member for Davyhulme (Mr. Churchill).

My right hon. Friend spoke about the costs of ownership of armed forces' houses, but how far have the Government truly considered the cost of the proposed lease-back scheme? My right hon. Friend will be aware that over the past five years, comparative rents in the private sector have been increasing three times as fast as the cost of living. What will be the impact on the public finances at the five-year intervals when the service rents are ratcheted up to market levels? What guarantee can he offer that any increased cost will not, at the end of the day, be sought by the Treasury from the defence vote rather than being borne by the Treasury, which properly should bear it, given that it will be receiving 15 times as much benefit from this deal as will the armed forces?

My hon. Friend made many points. I do not want to detain the House too long. I do not recognise my hon. Friend's figures for the rise in rents of shorthold tenancies. My figures show that rents have risen by 14 per cent. between 1990 and 1996. My understanding with the Treasury is that the defence budget will not be left worse off through making rental payments. Indeed, we will be better off because the Treasury will meet the rental payments. The Ministry of Defence can give up the hidden costs that I have mentioned and exchange the uncertainties of ownership for a more certain stream of rental payments. What is more, as I have just said, the Ministry will be compensated by the Treasury for the rents paid.

We have been bad owners in another way. We have a large number of empty houses, to which my right hon. Friend the Member for Horsham (Sir P. Hordern) referred. Today, there are 12,000 of them in England and Wales alone. We have to pay to secure and maintain those houses out of the defence budget, and we are rightly criticised for not releasing houses in which civilian families could live.

It has not been for want of trying to sell them. Some of them are difficult to sell, so they remain on our hands, empty and expensive. Once there is a new owner, the Ministry can release surplus properties to him. Instead of having to search for a buyer ourselves, we will just need to give six months notice of leaving a site. From that moment, the property becomes the new owner's responsibility and the defence budget is relieved of the cost.

The MOD alone will determine what houses will be given up—not the new owner, not anyone else—and it will be our clear policy to release them in discrete groups that do not break up the integrity of the service patch. There is absolutely no right for the new owner to cherry-pick or infill. We will be able to improve in that respect on recent experience. I recognise that, in some instances, the pressure on service housing managers to sell surplus property may have led them to release the most sellable houses, even if it risked breaching the integrity of the patch. My hon. Friend the Member for Portsmouth, South (Mr. Martin) has made that point to me. In future, we will be free to release only the properties that we do not need and are not central to a service community. There will be no more mixing of civilian families among service homes. Communities will be kept intact to maintain the security and mutual support of the patch.

On how many occasions in recent years have the Opposition decided to use one of their Supply days or half a Supply day to discuss bad management of MOD housing? On the medium and long-term siting of service and married quarters, will my right hon. Friend confirm that the arrangements will not prevent the moving of service quarters to parts of the country that are less under pressure from civil housing developments and that the geographical arrangements are not absolutely set in concrete?

We will require the houses where the Ministry of Defence needs to do its work. We will need houses where our people have to be. Those locations may well change—certainly over 25 years and even more so over 200 years. The arrangements give us the flexibility to acquire houses where we need them and to give up easily houses where we no longer need them. It seems much more sensible to achieve that by renting than by owning. I do not recall any occasion on which the Opposition used their Supply days for the purpose to which my hon. Friend referred.

I assure the Minister that I have asked many questions about the management of RAF housing. He may be confident about the arrangements, but if a service man is on an unaccompanied tour in, for example, the Falklands islands, and receives a letter from home saying that the family home is in question because it is one of those that may be exchanged as part of the development deal, the kind of picture that the Minister wanted to portray earlier of giving service men confidence will not be that portrayed at all. Service men overseas will be extremely worried when the news comes to them.

As the right hon. Gentleman may be able to imagine, I shall come to that issue later, and I shall address his point then.

This is a short debate and I am therefore under pressure, but I realise that hon. Members want me to give way.

As my right hon. Friend the Secretary of State appears to have said something very significant and reassuring, will he give us an assurance on the integrity of the site that there will be no question of purchasers being able to put their tenants in a military area? As he is well aware, many of us are very concerned about the integrity of service areas. Will he further give an indication about the security of houses in military establishments? Will they be treated differently? They are terribly important matters. The Secretary of State has raised a significant point. It would be reassuring for it to be included in the contract.

My hon. Friend can be entirely reassured. The new owner would have absolutely no right to put civilian tenants into military communities. As I said a moment ago, the properties that we give up are entirely a matter for the Ministry of Defence. They have nothing whatever to do with the new owner. The change affects the title to the properties. It does not affect their maintenance, security or any other aspect. I shall explain the special arrangements for the 11,000 properties that are behind the wire. Apart from that, we have no intention of giving up our responsibilities, nor do the civilian police have any intention of giving up their responsibility for security in married quarters simply because the title to the houses may have changed hands.

I shall give way to my hon. Friend, but the House will recognise that I am constrained by time.

Does my right hon. Friend agree that the freehold of those properties is better off in the hands of professional property managers whose sole business is looking after property and who understand it, rather than in the hands of the Ministry of Defence, and that the resulting standard should be very much higher? He mentioned the £100 million to be spent on improving the properties. Will he ensure that the work is carried out by professional people rather than by the Ministry of Defence? Perhaps he should consult the new owners to make sure that we achieve good value for that £100 million.

Most of the improvements to our housing are carried out by private contractors. That has always been the case. No doubt it will continue in future. We have not done well in maintenance in the past. We now have a new organisation in charge of maintenance—the Defence Housing Executive. I shall explain the improvements that we have made in that respect.

I shall give way to the hon. Gentleman, who has been attempting to intervene, but then I must make substantial progress.

The Secretary of State has told the House about the ease of disposal of MOD properties either to the single buyer or afterwards—if the purchaser wishes to dispose of them. Has every property that he has mentioned—all 58,000 plus—been cleared through the Crichel Down regulations? Many of them must be covered by those regulations. He is well aware of the problems at Trecwn, just outside my constituency, where properties that were declared surplus at the beginning of 1994 still have not been disposed of because of the Crichel Down regulations. Will he assure the House that each property that he says can be easily disposed of can be sold?

I have engaged excellent legal advisers. I am not aware of any problem in that respect and I have great confidence in the Government's title to all the properties that are being disposed of.

My hon. Friend the Member for Pembroke (Mr. Ainger) has made an interesting point. Although I heard what the Secretary of State said, may I ask him to assure the House that the principles that guided the Crichel Down ruling will apply to the freehold sale of the land currently held by the MOD which is involved in the memorandum? Will the Government adhere to those principles?

Ministers are anxious to explain every point. I shall ensure that that point is covered fully by my hon. Friend the Minister of State for Defence Procurement in his reply to the debate.

The Ministry will be the tenant of the new owner and a most exceptional one at that. The Government will retain responsibility for the maintenance of the homes. We shall be renting more than 50,000 properties and we are the most reliable tenant in the country. That enables us to rent at a discount of more than 50 per cent., guaranteed for the first 25 years. At the end of that period, the rents will be renegotiated, taking account of the size of our lettings, our responsibility for the maintenance and our reliability as a tenant. I cannot imagine that any other tenant will be as attractive to the owner and I have no doubt that we shall again be able to secure an excellent deal.

As the Select Committee said, we shall need to do better on maintenance. The chief of the Defence Housing Executive is a professional in housing management and he will expect his staff too to obtain the proper qualifications. As now, those who occupy the houses will pay their accommodation charges to the Ministry, not to the new owner. What they pay will be set by the independent Armed Forces Pay Review Body as it is now. The review body will take no account of the rent paid by the MOD to the owner.

Service families will continue to enjoy a subsidy that will push their rents well below market levels. That subsidy is deserved because service families move house frequently—each time they are posted. They do not have the choices or the rights enjoyed by civilian tenants, such as security of tenure or the right to buy. Although the pay review body recently increased rents, it increased pay by much more so as to leave service men clearly better off overall.

In respect of a corporal, for example, rents were raised by £22 a month between April 1995 and December 1996 and pay rose by £66 a month. The occupiers of married quarters will have no dealings with the new owner. They will see few differences from the sale except the better programme of home improvements.

There are two special features to the sale regarding site exchange and redevelopment which have raised concerns. I shall set out the safeguards and propose some changes. Neither proposal applies to service homes behind the wire, and that cuts out 11,000 houses straight away.

Provided that whoever buys the houses initially keeps them and does not sell them on, the owner may propose exchanging the houses that we rent from him for a new site. If so, what he offers must be comparable or better. There are detailed contractual safeguards to ensure that.

We make that comparison by reference to five broad categories backed up by 21 detailed criteria. That ensures that we shall consider a broad range of factors: the distance between the houses and the military facility, the distance to leisure facilities, schools and churches and, of course, the quality of the houses—right down to room sizes.

On comparability, my right hon. Friend will know that a large number of service families accept the need for additional expenditure to improve the properties. In respect of the exchange of properties—for example, if an estate is closed down and sold off—will there be a total guarantee of comparability so that service men and their families are not moved into houses that are inferior in any way to those that will have been improved out of the £100 million that my right hon. Friend mentioned?

Comparability will apply to houses as they are at the time of the proposed exchange. It will be measured by reference to the five broad criteria and the 21 more specific criteria that I set out just a moment ago. In response to suggestions from my hon. Friends, I have already added an extra provision that job opportunities for families should also be taken into account.

That list of criteria makes it unlikely that many such exchanges will occur. It is a demanding list, it is tightly drawn up and it is binding. If for any reason, however, we cannot agree with the owner about whether our criteria are met, arbitration—based on the rules that we have set—provides a quick and inexpensive way to resolve the issue.

The second special feature allows the owner to propose, after 25 years, that a whole site should be returned to him for redevelopment. At that stage—who knows—that may be the best option from our point of view. The houses will be 25 years older than they are now. The armed forces may no longer wish to be in that location and it may be best to obtain new accommodation.

If, however, we need those houses for operational reasons, we have the power to veto redevelopment. The Secretary of State of the day can rule it out by issuing a certificate. That is the ultimate safeguard. I simply do not recognise the legal advice quoted by the Opposition spokesman as I think it has no basis in fact.

At paragraph 49 of its report, the Select Committee drew attention to the concern of service families that a site exchange might involve a change of school for their children which could affect children who might be in the middle of a GCSE course, for example. Can my right hon. Friend assure me that, in considering the scheme, he has at the forefront of his mind the quality of education for service families?

May I ask the Secretary of State about arbitration on comparability? If there is arbitration, it will take place only because there is no agreement between the parties. Even if the criteria on which the arbiter is to make his decision are those laid down by the Ministry of Defence, it is at least possible that he will find against the Ministry, in which case any guarantee offered will be only as strong as the Ministry's case at arbitration.

The hon. and learned Gentleman is being rather petty. We have a clear contract. The criteria are clear, numerous and specific, and have been drawn up by very good lawyers. There are contractual obligations. Nevertheless, of course it is possible that we may have a dispute. If we do, either we can take it to law, with all the expense and unpleasantness that that involves, or we can have the simpler system of appointing an arbiter. I believe that the second is the simpler and better way.

The hon. and learned Gentleman must recognise that over any contract there may be a dispute; no one can guarantee that that will not happen. So what we want is a good way of resolving such disputes. [Interruption.] I seem to have carried the hon. and learned Gentleman with me, and I am pleased about that.

My right hon. Friend has said that the houses will be of comparable or better quality, that schools and employment factors will be taken into account, and that an exchange would not require people to travel greater distances. Will he reassure the House that distance will be measured in terms of travelling time to and from the establishment to which the houses are linked?

While my right hon. Friend is answering that question, will he also assure the House that if an exchange were made, the estate given up would not be fragmented into a number of much smaller units?

There is no question of fragmentation. We would measure distance according to how long it took people to arrive at their destination—that is, the military establishment where they work.

I want to press on to the end of my speech now, because if I do not it will be an abuse of the time of the House.

As I said, I have valued the suggestions that I have received for improvements. I have already acted on a number, some of which were important to the chiefs of staff and some of which were made to me through Members of Parliament. Today I want to act on three more.

The first two relate to the option for site exchange—the proposal that we might swap one site for another. The Army Families Federation has asked us to include among the criteria for comparing one site with another not only the closeness of schools to the new site but the quality of the schools near the site. Education is of huge importance to parents, and I shall happily add that criterion to the list.

Secondly, there have been calls for consultation with those who might have to move. Such moves will be rare. And of course, moves to new accommodation in mid-posting already occur today, as we improve our use of the houses that we own. Moreover, it must be recognised that an exchange may take a long time to organise, and many families may have moved on anyway between the time of the proposal and the time of the change.

None the less, all that having been said, it is certainly reasonable to ask the occupiers of the day their views on how the two estates compare, judged by the criteria. I undertake that we shall consult them. We shall wish to accept a new site only if it is as good as what we have, or better—and we shall check our view with the views of the service people who have been living on the original site.

The consultation cannot be a veto, but it can be effective because it will be taken into account by the Government in reaching their view on how the estates compare. In the event of an arbitration, the occupiers' views will be given to the arbitrator and he will have to weigh them as a factor that he is obliged to consider. That is an important change. I have made it because I believe that it meets a point in the minds of several of my hon. Friends, and because it can be done without cutting across the chain of command.

The third change is this. If after 25 years we receive any proposal to redevelop a whole site, we shall stipulate that the Government must be given a minimum of four years' notice, as well as two years' free rent, so that we can be sure to have the alternative houses ready in good time.

My right hon. Friend will know that I am not a soft touch. Despite approaches and persuasions, I have not yet removed my name from the early-day motion. But will my right hon. Friend accept it from me that, having been in close personal touch with him and with my hon. Friends the Minister of State for Defence Procurement and the Minister of State for the Armed Forces, and having had several meetings, I fully accept the new proposals and I am happy to support the Government?

My hon. Friend's happiness is as nothing compared with my own. I told my hon. Friends that I would listen carefully to what was proposed. M y hon. Friend the Member for Macclesfield (Mr. Winterton) made a specific proposal, and I was happy to accommodate that; it was the second proposal that I announced today.

May I also thank my right hon. Friend, and my hon. Friend the Minister of State for Defence Procurement, for having listened carefully to representations made by my hon. Friends and myself and, most importantly of all, to representations made by representatives of the service families.

There is no doubt that the three additional measures that my right hon. Friend has just announced change the balance of the whole package considerably. I think that there was an implicit assurance in what he has just said, but will he give an explicit assurance that when the Government consider proposals for site exchanges, they will interpret and take account of the results of the consultation exercise in accordance with the criteria that he set out at the beginning of his speech—that is, that the Government's first priority in the matter is to ensure that the reasonable interests of service families are defended, and that the Conservative party will always take its stand on that subject?

Yes, indeed. I am grateful to my hon. Friend. I assure him that every word of my speech has been considered, and that all the words should be taken together.

As my right hon. Friend knows, the Army and the Royal Air Force have consultative bodies—the Army Families Federation and the Association of RAF Wives—to represent them when matters concerning families arise. Will he give sympathetic consideration to setting up a naval services families association, or something similar?

I have certainly benefited greatly from my contacts with the Army Families Federation and with the Association of RAF Wives. I have not come across any organisation representing Royal Navy wives. 'There is none, on a national basis, but if there were one I. should happily meet its representatives. Whether such an organisation should be set up is not properly a question for me, but I should certainly be happy to recognise and deal with one if it came into existence.

No, I think I must finish now, because otherwise I shall have taken too long.

We have devised a scheme that brings benefit to—

On a point of order, Mr. Deputy Speaker. Is the Minister not displaying grave discourtesy to the House by giving way only to his hon. Friends?

That is not a point of order for me. The Minister is responsible for his own speech, and for choosing whom to give way to.

May I ask my right hon. Friend to address himself to one important point before he finishes? I understand that several organisations have expressed an interest in the purchase of the estate. Will he make it plain to the House that he will give strong preference to a British purchaser?

I am pleased to say that, so far as I am aware, all the bidders have a British element to them. None of them is exclusively British.

Does the hon. Member for Blaydon (Mr. McWilliam), who was so upset, want to intervene?

Would the Minister care to enlighten the House on how large a British element there is in these bids?

No, because although details of the bidders have been published, it is not for me to say who they are.

We have devised a scheme that brings benefits to our armed forces and their families and, for that reason, I have received the support of the chiefs of staff, for which I am extremely grateful. The sale underlines some lessons that we have learnt in 17 years of Conservative Government. For the Government to provide a service, they do not have to own that service. Indeed, time and again we have seen that Government ownership has led to inefficiency and poor service.

I have no doubt that we can provide service families with the homes they need by renting them. Indeed, we can do it better than now. We will free our housing managers from the distractions of designing, building and trying to sell houses, and we will focus them on retaining and acquiring houses of good quality that are fit for service families.

The Government have a clear political philosophy. We look to a dynamic private sector to provide most of our needs. That is not a matter of dogma, but is because the private sector does most things better and can help us to improve the quality of services. We believe that the Government should not own things where it is unnecessary, and that we should reduce public sector borrowing where we can. It is worth remembering that people pay taxes in order to pay the interest on the Government's debt. That money could be better spent on other things.

The policy that I have described today improves housing for the services, but it also cuts public sector borrowing and releases money. The fact that it does so is a point in its favour, not a point against.

Over the coming years, I expect housing standards in our country to go on rising, and service families will want to share in that general improvement. As they see civilian standards rise, service families too will want something better. If we are to recruit and retain enough good people, we will have to provide more high-quality housing than we have in the past, and keep it in better condition.

I am committed to improving the quality of life for service families, and this scheme gives me the chance to make rapid progress towards that goal. I believe in the values, ethos and traditions of service life. If I believed that this sale would undermine them in any way, I would be fighting it—not proposing it.

I must remind the House that Madam Speaker has placed a 10-minute limit on speeches for the rest of the debate.

5.1 pm

The Secretary of State's introduction was a syrupy eulogy of the service wives who had been browbeaten into surrender. Then we saw the ritualistically self-defensive party of defence yet again being holed below the water line. The bugles sounding surrender are amusing and deafening, and those who did not surrender two weeks ago have done so now. The family silver is gone—now the Government have got down to getting rid of the bricks and mortar.

I have been a member of the Defence Select Committee since it began in 1979. In the 200 or so reports that we have produced, the Committee has borne witness to endless foul-ups that have become routine. I have seen many stupidities—indeed, I have seen them in superabundance—and I have seen party advantage elevated above public interest. It is unusual for all three to coalesce into one measure, as they have in this measure.

The Government are proposing to transfer the ownership of the married quarters estate in England and Wales to the private sector in a series of long leases, and then rent back the accommodation by paying a guaranteed annual sum. Was that the only way to do it? Of course not. The Ministry of Defence has been the owner of housing for two centuries—not a very good owner, I might add. But the Government have been in charge for 17 years—long enough to put housing on a proper footing. It is an appalling indictment of the way in which they managed the housing estate that they must flog it off at the earliest opportunity available to the Secretary of State.

If the management were inadequate, surely the Government should have given the organisation that they have just set up—the Defence Housing Executive—time to do its job. It is qualified to do so, and the Government should have allowed it to manage the housing estate effectively. If the Government wanted reform, why did they not proceed with the announcement that they made a few years ago to set up a new non-profit organisation to take care of the ownership and management of the married quarters? Why did they not follow their 1993 manifesto commitment to set up a
"non profit-distributing housing trust"?
The Defence Select Committee said:
"We are dismayed that an apparently arcane disagreement between the Treasury and MoD on the classification for statistical purposes of the proposed new Housing Trust should have obstructed a course of action embarked on some time ago. There is no evidence to suggest that the private sector would have been less willing to invest in the originally proposed trust than it will be in the recently proposed private company: merely that the transaction would be reflected as an increased PSBR figure rather than as a privatisation".
The report continued by stating that there was
"no significant public or parliamentary opposition to what the MOD had tried to do"
after the 1993 manifesto commitment, and added:
"We are not convinced that the only way to reduce the number of empty quarters and fund required improvements is by selling the bulk of the estate."
The report noted that the MOD had already sold nearly 7,000 married quarters. If the Government want to get rid of the excess, they can carry on doing what they have done—selling the estates if it is necessary to do so.

As a lot of people outside will be watching, listening to and reading this debate, would it not be helpful if the hon. Gentleman, or perhaps his Front-Bench colleagues, would make clear that, under a Labour Government, there would be no question of military housing being sold as a unit to the private sector?

I have no authority to give that assurance, but I trust that my Front-Bench colleagues will do so.

Why was it necessary to sell the houses? Were they all elderly, or stock that should be got rid of? No. The Government clearly had other intentions. The Select Committee report said:
"We note that the fact that the majority of the estate is in generally good condition was confirmed by an independent stock condition survey commissioned by MD to assist prospective purchasers."
So the idea that the houses are being sold off because they are dilapidated is nonsense.

Some £100 million given to the new authority set up by the Government would largely solve the problem. Why go through the pantomime of selling all the properties—potentially to the Nomura bank of Japan—when MOD Ministers should go to the Treasury and say, "We want £100 million to upgrade the accommodation because we owe it to our service men and their families"? The Minister of State told the Select Committee that
"we do not just go to the Treasury and get £100 million out of them"
but they should try to do so.

Everyone knows that the real motive is not to improve MOD housing, but to improve the Tories' election prospects. The British service man has made many sacrifices, but rarely for such a base and undeserving group of people. Families who are to be turfed out of their properties, who may have some headbangers located next door or across the road and whose service ethos is shot through will remember who imposed the scheme upon them.

Why is this scheme being carried out? It is bananas. "Surely," we are told, "the MOD will gain." But it will not. Although the MOD is to dispose of the assets, the Treasury will get £1.5 billion. The MOD will retain the responsibility for managing, providing social services and maintaining the security of the estate, but it is getting nothing out of it. The gainers will be the Tory party and the property speculators. The MOD will not get the dosh, because it is going to the Treasury.

The Government are the short-termers, whose eyes can rise only as far as the next election. They do not know or care what will happen in five or 20 years. It is "tax cuts now, stupid"—that is the cry. The morale of service men, already low, will plummet even further. This is being done unnecessarily.

The MOD argues that the chiefs of staff endorse its action, but chiefs of staff who have endorsed a deterioration of defence expenditure from 5 to 2.6 per cent. of gross domestic product are unlikely to worry too much about 60,000 houses. Those who argue that this action has been endorsed by the Army Families Federation should note its statement that it was reluctantly withdrawing from public opposition. That is hardly a ringing endorsement.

I think that I heard the hon. Gentleman, who is a member of the Defence Select Committee, being pretty insulting to the chiefs of staff. As the record of the debate will be read, I wanted to give him an opportunity to reconsider what he has said.

I thank the right hon. Gentleman for giving me the opportunity to reconsider but I shall move on to the identity of the buyers. That is secret. I was not present when the Minister of State for Defence Procurement reluctantly divulged to the Committee who they were. I read details in the newspapers. It is all hush-hush. I received a video from one buyer today so perhaps it is not really so hush-hush.

I am not xenophobic, but I do not like the idea of housing for which the MOD is responsible being bought by the Nomura bank. If the Japanese win contracts, many people will be insulted. I asked the Secretary of State whether the Japanese would be able to demand name changes on the housing estates, perhaps removing references to Montgomery or the Chindits. I was told that that was over the top but we must not forget what happened in County hall, whose new Japanese owners refused to permit British service men to honour their war dead until public pressure forced them to do otherwise.

Our report was the best that could have been produced in the circumstances. We could have produced a much better one if we had had adequate information. Our conclusion used the words
"We have sought to be satisfied".
We did not say, "We have been satisfied".

This action is being taken at the direction of the Treasury and, perhaps, of Smith square. It is being done for the wrong motives. The Government, those who supinely follow them, and those who will be dragooned into following them will reap the whirlwind. We have ample information about the threats against hon. Members who were seen to be opposing the Government. I hope that the Government will relent because I do not want service men to be inconvenienced and their family homes sold, potentially to foreign owners.

5.12 pm

I pay tribute to the hon. Member for Walsall, South (Mr. George) for his speech and for his contribution to the Defence Select Committee, on which he has served for so long. On defence matters, he knows what he is talking about.

My intervention will be brief because although the Defence Select Committee, which I chair, set out our preliminary conclusions on the sale of the married quarters estate in our sixth report of this Session, which was published this morning, it is, as the hon. Member for Walsall, South said, inconclusive. I apologise to the House for its interim nature. It is incomplete because much of the information that we would require to finalise it is commercially confidential: hence all the stars in some of the evidence-taking sessions. They do not refer to expletives deleted but to confidential information.

We felt a duty to report in advance of the debate on the Floor of the House, which was bound to take place before the House rose for the summer recess. I pay tribute to our staff, to our special adviser and to the Committee, who have enabled us to meet the deadline and to have the report available for this debate. We felt that there would be such a debate, either because the other place would have approved the amendment to the Housing Bill or because the Opposition would use a Supply day for it.

The debate in the other place was interesting. Most of the speeches opposed the Government's scheme for selling married quarters until there had been more consultation and a resolution of both Houses in favour of it. However, most of the votes were in favour of rejecting that proposition and letting the Government proceed as they planned. Surprise, surprise.

I attended that debate and I have never seen the other place more crowded. They must have brought them out of the woodwork.

The House will have noted that with interest and a certain amount of agreement.

The proposed sale of the married quarters estate has sparked off a lively debate in the House and outside—and quite unnecessarily. If the Government had handled the operation with more care, many of the anxieties of service men and women and their families would never have arisen. The House can agree on that.

The married quarters estate has been badly managed and maintained. There is an urgent need for better management and an enormous injection of funds to upgrade properties. Further, there is no good defence reason for the MOD to own between £1 billion and £2 billion in bricks and mortar. The money to upgrade the properties was not going to come from the shrinking defence budget; it had to come from the Treasury. As we know, there are Treasury pressures on all spending Departments and the defence budget is most certainly not immune to those threats from the Treasury.

We hope that the recently established Defence Housing Executive may improve management and maintenance—provided that it recruits the right people and is properly funded on an on-going basis. We also note that more than 2,700 quarters are surplus to requirements and 20 per cent. of the total stock of 60,000 dwellings is empty. In defence terms, in today's uncertain world, the turbulence of service life and the pressures on service men and women—and, therefore, on their families—will increase. The quality of life necessary for recruitment and retention will be more difficult to achieve. We can also agree that the cohesion and ethos of the married quarters estate—the so-called patch—is a vital part of the welfare, and therefore the morale, of service men and women.

The charges for accommodation for married quarters had fallen behind the market and the Armed Forces Pay Review Body had taken overdue but necessary action to bring them more into line with the charges for council housing, housing association dwellings and the private sector generally. We can also agree—and even Ministers might acknowledge this—that the Government have made a rod for their own back by their appalling timing in the setting up of the Defence Housing Executive, the introduction of new, increased accommodation charges through the Armed Forces Pay Review Body and by the announcement of the current proposal on Budget day, which made the insistence of my right hon. Friend the Secretary of State that this was not a Treasury-led operation rather incredible.

As our inquiry continues, the Committee will need to be satisfied, first, that the concept of the sale is in the public interest; secondly, that the method of sale is appropriate; and, thirdly, that the needs and expectations of service families are properly protected and that defence interests are being respected. We already feel that the Defence Housing Executive needs to be strengthened if it is to do its job properly. It must be assured of an adequate allocation of cash each year from the proceeds of sales to guarantee the proper maintenance and repair of all MOD housing.

The £100 million mentioned by Ministers works out at approximately £2,000 per dwelling. Bearing in mind that we have been told that upgrading is likely to include new kitchens, double glazing, new window frames and decorations, I cannot believe that £2,000 per dwelling is anything like enough. That money will be made available over five years and the House needs to be reassured that money will continue to be made available for that purpose beyond that period direct from the Treasury, rather than from the defence budget.

As my hon. Friend's report says that the majority of the stock has been well maintained and is in generally good condition, surely the money will be directed to the 19 per cent. of properties that are in poor condition?

I thank my hon. Friend for that intervention. That is true but there is bound to be an on-going demand. The money that has been promised will not go far to maintain and upgrade properties. I am sure that if his wife asked him for a new kitchen, she would not get one for £2,000.

The House and service families need to be reassured that the sale will have little or no immediate effect on service families' housing other than to improve it, and that the safeguards recently offered by the Ministry of Defence in the site exchange option scheme and the absence of any link between housing charges and the sale will be accepted universally.

My hon. Friend heard the Secretary of State announce three specific proposals. I think that the proposals are excellent. Before my hon. Friend finishes his speech, will he comment on those proposals?

For a ghastly moment I thought that my hon. Friend had changed his mind or had second thoughts. I am glad that he used that opportunity only to endorse what he has already said, and I agree with him.

Whereas rents paid by service families will be fixed by the Armed Forces Pay Review Body, I remind the House that rents paid in future by the Ministry of Defence to the purchaser of the married quarters estate is, we have been told, likely to be calculated on an assured shorthold tenancy basis. If that is so, have Ministers modified their projections of the rent that they will have to pay to the purchaser in the medium term? The House needs to be assured that if the rent that the MOD pays the purchaser is increased, the Treasury will fund that amount for at least 25 years.

Any reader of our report will see that it raises as many questions as it answers. Until such time as the prospective purchasers' detailed proposals have been made public and assessed, we will not be in a position to reach a firm conclusion on the merits of the sale. Our Committee intends to re-examine this issue when all the necessary information is available.

Our Committee was very impressed by the quality of the evidence presented to us. Undoubtedly the star of our sessions was Mrs. Cherry Milne, the chairman of the Army Families Federation. But I should also say that, considering the sticky wicket on which he was batting, my hon. Friend the Minister of State for Defence Procurement carried his bat very well. I am pleased that he is in the Chamber today for a second innings.

We must ensure that our service men and women and their families have the housing that they deserve, because we owe it to them. As they comprise the best forces in the world, they should have the best housing.

5.21 pm

If the speech of the Secretary of State had been set to music, certainly the early parts of it would have owed rather a lot to Vaughan Williams and to William Walton. As he came towards the end of his remarks, however, it was rather more reminiscent of the childhood ditty "10 Green Bottles". One after another, those who had so bravely held out before suddenly found themselves converted to his position, because of the nature of the concessions that he was able to make. If concessions on the proposals were necessary even in the course of this debate, they have been hardly indicative of the type of intellectual rigour that one would be entitled to expect—[Interruption.]

The hon. Member for Macclesfield (Mr. Winterton) makes a lot of noise. He is not always listened to, and he must ask himself why he has been particularly successful on this occasion. It is less than a week since he was talking about matters being obscene and wholly unwarranted—relating to the vital consideration of car mileage. Possibly he will be more successful when he adopts rather less dramatic language, and perhaps he will bear that in mind in future.

We would respect Ministers rather more if they were to come clean about the motive for this sale, because to argue that the motive is to improve conditions in married quarters is disingenuous, and even offensive to intelligence. To argue that is to confuse objectives with consequences. Clearly, the motive is to reduce Government borrowing in the short term. As an objective taken on its own, it is highly desirable, but the question that we must ask ourselves is whether the price, in this case, is worth paying.

What has been the first cost of the proposal? It has been the peace of mind of service families. It is no use saying now, "We, the Government, will have to make a better case," because the damage has been done. It is no use saying now, "They do not understand the nature of the proposals." Whose fault is it that service families do not understand the nature of the proposals, particularly as the proposals—as we have just seen—change daily? It is no use saying now, "We shall embark on an exercise of consultation." A very extensive consultation exercise was embarked on when the issue of homosexuality in the armed services was under consideration, and rightly so. Why was it that something that goes right to the heart and ethos of the armed services, such as the proposal to sell married quarters, was not subject in advance to that degree of consultation?

The proposal's complications are a clear sign of its weaknesses. The Select Committee on Defence was unable to reach a conclusion—as the hon. Member for Romsey and Waterside (Mr. Colvin), the Committee's Chairman, said—because of the absence of detailed proposals from prospective purchasers. That is bad enough for the Committee, but it is much worse for the families, who, in the absence of such information, are not themselves able to reach conclusions about the merits and advisability—or otherwise—of the proposals.

When I intervened on the Secretary of State, he described me as "petty". I shall not allow him an opportunity to withdraw that observation, as he allowed my fellow Defence Committee member, the hon. Member for Walsall, South (Mr. George), an opportunity to withdraw what he had to say about the service chiefs, but I shall repeat the point that I made to the Secretary of State: if the issue, ultimately, is arbitration, the Government cannot guarantee anything other than the strength of the case that they will make to the arbiter. There cannot be "guarantees"—in the strict sense of that word, or in the sense in which most service families understand it.

There is a financial price to be paid by the Ministry of Defence. Do not take my word for that, but take the word of The Times of 11 July 1996, which referred to
"the Government's short-term interests storing up a mess of trouble for the future"
and stated that, over 25 years, the Government, in return for £1.6 billion now, might pay out more than £10 billion. That should certainly focus our minds on whether this proposal is worth it.

If a shortfall arises between the rental paid by service families to the Ministry of Defence and that which is required to be paid by the Government to the purchaser, where will the money for that shortfall be found? It will be found in the defence budget. Any undertaking or "guarantee" to a contrary effect is simply meaningless.

The proposal embraces the proposition that £100 million will be made available over five to seven years for improvements to the housing stock, to be administered by the Defence Housing Executive. The executive already receives £40 million per year for that purpose. After five or seven years, however, what then? What benefit will service families receive from the sale then? It is not as if the £100 million will be a recurring figure; it is a once-and-for-all figure. Once it has been paid and spent, no doubt the Defence Housing Executive will be back to the same level of financial support for improvement that it currently enjoys.

I should like to explore the justification provided by the £100 million, as it seems to be the raison d'etre for the entire set of proposals. The fact is that 12,000 properties might be available. I do not know whether the hon. and learned Gentleman feels that £10,000 a unit would currently be an excessive price for a house on the market, but does he realise that 12,000 times £10,000 is £120 million, which would enable the Government to take the £100 million and to put the £20 million excess where it is probably going in any event—into Tory party funds?

I am not sure that I am in accord with the final part of the hon. Gentleman's proposal, but I certainly believe that he mentioned something interesting in his intervention. It anticipates a point that I had planned to make. There are 2,700 houses for immediate release. If he is right and they would command a figure of £10,000 each—which is a pretty low figure—that would release £27 million in the first year. However, if the figure were £40,000, for example, £108 million would be released, which is almost exactly the sum that will be made available over five to seven years to the Defence Housing Executive.

The Government have not properly explored the possibility of the sale of surplus houses and thereby the release of funds for the purpose of improvement and, at the same time, the issue of whether to use private management companies to quell their anxiety about quality of management. I do not come to this debate with a doctrinal bias in one direction or another. If the Government could demonstrate that using private management expertise would be a better way to manage the defence housing estate, I would support that. However, this proposal demonstrates their willingness to consider not the best means of managing and improving stock but the best means of raising £1.5 billion. That is why there are so many defects in the scheme.

One of the principal defects is that the purchaser need take virtually no risk. Indeed, the scheme is so risk free that I am thinking of forming a private company to make an offer.

I am sure that I could call on some international support to assist me.

Purchasers can buy those properties and get a market rent for them with a review every five years. Furthermore, they will receive a guaranteed annual payment from the Government with a guaranteed annual release of properties. They also have the prospect each year of realising the development potential of the houses released to them. Can one conceive of a better scheme for purchasers? It is virtually risk free and, as a consequence, the Ministry of Defence will obtain an inadequate reward for the contract. The scheme is essentially wrong, but, if the Government want to adopt it, they should look for a much larger sum than £1.5 billion or £1.6 billion, because the nature of the contract that they will enter into is so favourable for the purchaser.

Two features of this tawdry proposal cause me particular offence. The first is the veiled threat that, if it does not go through, the defence budget will suffer directly. If that is so—there has been the usual heavy briefing of the standard Sunday newspapers—it is an eloquent demonstration that the proposal is about raising cash, not about raising standards of accommodation. The second is the assertion that the proposal has become a battleground for the supporters of the rival right-wing contenders for the leadership of the Conservative party.

The hon. Gentleman says rubbish. I see that the right hon. Member for South Thanet (Mr. Aitken) has joined us. I heard him make that point about a fortnight ago. He is a man of considerable intelligence and judgment; I cannot imagine that he would have made that point if he did not think that there was substance in it.

Those two features unquestionably ensure that the conventional and customary expressions of support for the armed services and their families, which characterise debates of this kind and form part of the speeches of Conservative Members, have a distinctly hollow ring on this occasion.

The Government survived—perhaps that is an unfair way to put it; they triumphed—on this issue in another place. The trading rooms of the merchant banks must have been deserted. Indeed, the pheasant-rearing pens of the estates of England must have gone without proper supervision, because people who had been a long time deciding to vote came and voted. The issue for the House this evening is whether it is willing to try to stop this proposal in its tracks. Originally, 67 honourable and, in this context, gallant Members signed the early-day motion, the terms of which are precisely reproduced in the motion before the House. That number has decreased to 20. All that is necessary for the proposal to be killed off is for those brave boys to join the Opposition parties in supporting the motion. By their votes we shall know them.

5.33 pm

It is no secret that I have been and am profoundly opposed to the structure of this scheme, although it would be churlish not to acknowledge that my right hon. Friend the Secretary of State has announced some significant concessions today. They are concessions of substance, not just presentation.

The media are currently dominated by pictures of the unhappy situation in Northern Ireland. It is common for hon. Members on both sides of the House to pay tribute to the behaviour of the security forces. The armed forces are deployed much further afield, not least in the difficult and potentially dangerous conflict in Bosnia. It is easy for us to forget that our armed forces have been subject to an unparalleled—except in the immediate aftermath of war—series of changes. They have had "Options for Change"; a mass of regimental amalgamations; "Front-line First"; and, in the past decade, a halving of the fraction of gross domestic product allocated to defence. Obviously, some of those changes were necessary because of the end of the cold war, but as the list goes on and on—each change was to be the last—so we risk undermining the ethos at the heart of our armed forces.

Baroness Park said in another place that our armed forces were "becoming punch drunk". I remind my hon. Friends of the remarks of my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) last week about the threat of another set of defence cuts in the coming Budget. This debate is a timely reminder of the special duty that we owe not just to our armed forces but to their families. I feel that particularly strongly because I represent a garrison city. When I was canvassing for the 1992 general election, a little boy told me that that morning his father had been shot in the leg on the streets of Northern Ireland. The special duty that extends to our armed forces and their families is not just because they serve us in often dangerous and difficult conflicts but because they cannot speak for themselves. That gives us, as Members of Parliament, a special duty towards them.

As this matter has been discussed in the public arena—it has at last come to Parliament—the message that has come across again and again is that the scheme has been misunderstood. That is not altogether surprising because, as my hon. Friend the Member for Romsey and Waterside and other members of the Select Committee said, the details have been slow in coming forth. Initially, members of the armed forces knew about what was happening only from a terse signal that went out through the channels of command one way, and from a letter from my right hon. Friend the Secretary of State.

I received a letter from the honorary colonel of a Territorial Army unit about the fate of the regular members of that unit in the build-up to this scheme, with the repackaging of housing that will take place as a result in the next few weeks. It said:
"The Commanding Officer, half way through his tour, is being compelled to move to Biggin Hill to a quarter that just does not compare with one he lives in at present. This does at least allow his boy to remain on at the same school. The RSM has already been moved to Coulsdon to a very indifferent quarter. For a Warrant Officer the posting as RSM should be the peak of his career—this has been spoilt by this move. The Training Major is being short toured, partially to avoid a move of his family from Caterham."
People have always been moved, often frequently, between tours of duty, but it is new for large numbers of service personnel to be moved about in the middle of postings and, as in this case, dispersed to meet pressures for sales.

Built into the measure is a formula for the release of 600 houses a year—not automatically every year, but it must average 600 a year on a cumulative basis—which means that the process will continue, and will add to the turbulence experienced by armed forces personnel.

The programme of site exchanges has caused considerable worry in the armed forces. We have heard some worthwhile movement on that today, and the two concessions that my right hon. Friend the Secretary of State announced will make a significant difference and go some way towards meeting the representations by the Army Families Federation.

I remain, however, profoundly concerned about what happens at the 25-year mark. When we consider the idea of exercising a ministerial veto via a certificate, we should bear in mind the fact that, at the 25-year mark, the developers are not required to provide alternative accommodation, although they will now have to give four years' notice. The certificates would present a problem if the developers wanted to take a large number of their sites, as all the sites would come up together.

There are good reasons for thinking that the developers may well wish to take a large number of the sites. A high proportion of them are in southern England, in districts where there is development pressure. Many are close to training areas, which are not only vital for the armed forces but extremely attractive to wealthy civilian families, who want to live near genuinely unspoilt countryside.

Ministers might be confronted by the prospect of trying to issue large numbers of ministerial certificates of operational necessity at the same time. It is unrealistic to believe that, in a judicial review, they could get away with doing so when Ministers have testified that that procedure would be used only "very rarely". We are building up a serious problem in a generation's time—one that worries me as someone who was commissioned 24 and a half years ago into Her Majesty's forces.

We are also driving a wedge into the defence budget, as the ratchet increases every five years much faster than inflation. My hon. Friend the Member for Romsey and Waterside explained that, so I will not cover the same ground.

I am especially worried about the way in which the scheme will work in parallel with the findings of the Bett review, part of which has been welcomed in the interim statement from the MOD. The Bett review's vision is of far fewer of our future service families living on these married quarter estates and far more in owner-occupied accommodation. In practice, the officers will move off and the special situation of patch life, especially precious in the Army, where there are so many anxious young wives of those from other ranks who look to their officers' and senior non-commissioned officers' wives for leadership, will be progressively eroded. I shall be interested to hear what my hon. Friend the Minister says about progress on the Bett review.

I want to end where I came in. Considering the difficult and demanding job that our armed forces are doing abroad, and given that a higher proportion of them are involved on operation and tours than at any time since 1945, except briefly during the Gulf war—a higher proportion even than during the Korean war—I believe that this scheme does not meet their wishes.

I said at the beginning that it would be churlish not to take account of the fact that my right hon. Friend the Secretary of State has genuinely tried to listen. I came to this debate determined to vote against the Government—something that I have done on only one previous issue, and that was nine years ago. Because my right hon. Friend has gone quite some way towards meeting the most immediate problems in the scheme—the short-term ones—while still leaving in the scheme the serious problems that are much further in the future, I intend to leave open the possibility of abstaining.

I shall listen hard indeed to my hon. Friend the Minister, and I shall listen especially hard to what he says on two subjects—the policy on accompanied service on which the Bett review was so unhelpful, and the way in which the release of 600 houses a year is likely to impact on those people who are in the middle of tours.

5.43 pm

I have no direct constituency interest in the matter before the House because there are no service married quarters in my constituency and, even if there were, they would be not be part of this deal as my constituency is in Scotland. I want to raise a point arising from that and from what the Secretary of State said at the outset.

The Secretary of State said in ringing terms that the sell-off was the only way to secure good management of married quarters. He seemed to despair at the prospect of the Defence Housing Executive managing the married quarters estate efficiently. What kind of a vote of confidence is that for his newly appointed Defence Housing Executive, and where does that leave the 10,000 married quarters in Scotland and Northern Ireland, which will continue to be controlled by, and remain the responsibility of, the Ministry of Defence? He cannot have it both ways. He seemed to be saying that his Department was incapable of running the estate properly—but those married quarters in Scotland and Ireland will remain under his control.

I do not accept the Secretary of State's counsel of despair. I am convinced that it should be possible for the Defence Housing Executive to manage the estate properly. I am confident that it will be able to do so in Scotland and Northern Ireland, and that it should be given an opportunity to do so in England and Wales.

My interest in the debate arises from information gleaned as a member of the Defence Select Committee and from my visits to Army units under the armed forces parliamentary scheme, in which I am taking part this year. I have had the privilege of visiting units throughout England in recent months and I look forward to seeing more.

I have to tell the Secretary of State and his ministerial colleagues that service men and women of all ranks are very worried about what is proposed. Some of them are suffering from a serious depression in morale, if I may put it that way, as a result of a range of problems. The Secretary of State knows about the problems of overstretch, turbulence—call it what you will. Fewer and fewer service men are expected to take on more and more duties, which means that life is difficult for our armed forces at present.

I am left in no doubt from my conversations with service men and service women and their families in recent months that uncertainty about the future of their homes is pushing some of those people far too far. They are worried about rents. I heard what the Secretary of State said earlier, but I am afraid that the recent increase in rents is an alarming foretaste of what could follow. I heard his assurances, but there is no way of being certain that in future the Treasury will not put the Ministry of Defence under pressure to balance that account by increasing rents, and he should know that better than most, as a former Treasury Minister.

People are worried about the risk of being moved even more than they are at present from one quarter to another, as other hon. Members have said. People are worried about the integrity of the service housing patch. Those points were mentioned repeatedly.

The Secretary of State gave a welter of assurances and concessions. We have heard them in recent weeks; we heard them again tonight. They can be summed up as the Secretary of State saying, "Trust me; it will be all right on the night"—or in 25 years or whenever. "As long as I can get the money into the Treasury coffers by the end of this year, it will be okay as time goes on."

The Secretary of State showed a touching confidence in legal arbitration and did not dwell on the costs that are likely to be incurred when we get embroiled in such legal arbitration between a future Ministry of Defence and lawyers acting on behalf of the new owners, if the sale goes ahead. He cannot get away with that. The real problem, however, is that the assurances are largely meaningless. The package is unworkable and unenforceable. With the best will in the world, the assurances that the Secretary of State gave tonight and in recent weeks cannot be fulfilled in future.

The Secretary of State should bear in mind the fact that he will not even be here next year. Someone else will inherit this fundamentally flawed package. It is unworkable now and it will never become any more workable.

The Secretary of State must not be allowed to get away with creating a bed of nails for service families. He will get brownie points from his colleagues, because he will get some ready cash into the Treasury this year, but service families and taxpayers will be left with a whole range of problems in the future. The House should not let him do this. He is being fundamentally dishonest.

I refer to a more serious point concerning dishonesty. The Government's amendment refers to support for the package from the chiefs of staff. I have trawled the papers that have been made available to the Defence Select Committee on the issue, and the nearest thing that I can find to a reassurance is a letter in which one of the chiefs of staff—I shall not embarrass him by naming him—says that the benefits outweigh the risks. That is the sort of endorsement that one might expect to get on one's driving licence if one was caught driving too fast—but it is not a ringing endorsement of the package. It is dishonest of the Government to hide behind the chiefs of staff in that way. This is a bad political decision—it is bad for service families and taxpayers—and the House should not allow the Government to get away with it.

5.50 pm

I welcome the courteous tone of my right hon. Friend the Secretary of State, his comments on service families and his genuine concessions, particularly about consulting the families concerned—that is a real concession. Some people in the Tea Room say that early-day motions do not have any impact on the parliamentary scene. Over the past few weeks, I have seen Ministers and Whips scurry round my colleagues with suggestions polite and not so polite, and my impression is that early-day motions have a significant say in the workings of the Palace of Westminster.

I have listened to my right hon. Friend, and I have tried to work out how I shall vote this evening. I thought that he was busy trying to make a bad scheme better. He did not convince me that he had come up with a "Top of the Pops" scheme that I should admire and rush round my constituency supporting. I admit that I came in on the issue a little late in the day. I met a senior general at a social function and said, "There is a row on this issue. Does it matter?" For a good five minutes, he pointed out that in his command it was a serious issue, that morale was low and that he hoped that the scheme would be withdrawn in the House of Commons before too long.

I listened to an excellent debate in the other place the other day. Lady Park spoke with great vigour, eloquence and distinction. I was in the armed forces for 10 years in the Light Infantry battalion, and I pricked up my ears when I heard the speech of Lord Bramell—a field marshal; a Green Jacket; a man who has worked his way through the defence field and a man who understands the thinking in the Ministry of Defence.

I differ from the Front Bench in that I have not yet heard sufficient argument for the overthrow of the married quarters system, as we have known it in the United Kingdom and in Germany since the war. In most other countries, the armed forces own the quarters—they are organised and run by the Government. We should not be ashamed of the fact that we have owned the married quarters for many years, and we have to be careful about taking privatisation too far.

I was a little cool when privatisation was first suggested, and I have voted on every privatisation measure. I had some reservations about selling off nursing homes—an issue that is not entirely relevant to what we are discussing tonight. On the whole, privatisation has been a great success. However, I hope that we are not now going to embark on a programme of petty privatisation—looking for small bits and pieces of the national estate to privatise, and I am not just thinking of Greenwich. This is a clever wheeze from the Treasury—it has been around for four years, and many of my right hon. Friend's predecessors had it put in their in-trays and decided not to take it up.

We have to hear good arguments about why the whole system of married quarters, as we know it, needs to be changed in this way. I am concerned that if the change proceeds—perhaps even now there is a paper sitting in the Treasury—there will be plans for the privatisation of the sports facilities of the barracks and the bases: the football pitches, the running tracks, the swimming pools and the pistol ranges. Treasury officials could put up a case similar to that on the married quarters; they could say that if we sell off all these bits and pieces, we shall raise a significant sum at a time when the Treasury desperately needs it. I am not unsympathetic to the Treasury's point of view.

A base or a barracks has a certain integrity. I am not happy at the thought of the commanding officer's house at the Special Air Services in Hereford, or a rather more salubrious house belonging to the colonel of a Guards battalion in Windsor, or the house of the colonel of the Marine Command in Plymouth, being sold off to one of these grand international conglomerates. I do not think that our constituents will say that selling off married quarters to these large, foreign industrial concerns is a wonderful political move.

We have to use our judgment in this regard. I am not convinced that over the past 25 years we have had a copper-bottomed scheme. I do not doubt that the Ministers have the best of intentions, but I do not believe that the Ministry of Defence and whoever it may be in five, 10 or 15 years' time will be able to impose the controls on the developers that we have been hearing about tonight. The developers are in there because they want to cherry-pick—of course they want the commanding officers' quarters, and it would be naive of us to think that they did not. They want the site in the constituency of my hon. Friend the Member for Portsmouth, South (Mr. Martin), which overlooks the Solent, because it is a desirable property. There will be judicial reviews, and we shall move into a messy area. The Ministry of Defence, with the best will in the world, will not be able to hold to the firm intentions that were honourably stated from the Front Bench tonight.

One of the things that the Whips love to say as they scurry around is, "Of course you have to support this—we need £1.6 billion." That is not a serious argument. As Back Benchers, we are responsible for controlling the Executive, particularly in the financial sphere. We are allowed to comment in public and to have views on which particular scheme should raise money for the Treasury—for example, whether the poll tax should raise money for local government. It is a cheapjack argument to be told that we must vote for this at all costs, because that large and important sum can be funded only in that particular way.

Another argument went roughly like this: we do not believe that the Ministry of Defence, when the moment comes, will choose to put money into quarters rather than into weapons systems—the Ministry of Defence is so incompetent that it has not realised that it has to allocate time and resources to welfare as well as weapons. I do not believe that for a moment—it is a basic function of the Ministry of Defence; it is a basic subject of command. Any general who says, "Spend more money on weapons and ignore morale," is no good and ought to be sacked.

I am enormously conscious of the chopping and changing that have hit our armed forces in recent years. Two years ago, I did not support the Government when the defence White Paper came before the House because I believed that we had cut too far and without justification. We should pay particular attention to the service families on whom we rely so much at this time and who are suffering directly from the problems of overstretch. It is not that long ago when naive people spoke about the British Army pulling out almost totally from Northern Ireland.

If we are honest about our duty to those individuals, we should ask my right hon. Friend the Secretary of State to withdraw his scheme tonight pending further consultation. After careful deliberation, I remain committed to the wording of the early-day motion. I believe that it has already done a good job of work, and there is more mileage in it yet.

5.59 pm

I shall not detain the House long. It is a pleasure to follow the measured and lucid speech by the hon. Member for Bexleyheath (Mr. Townsend). I commend him for the courage that he displayed in making his final commitment.

It is easy to get lost in the detail about billions of pounds here, hundreds of millions there and so many thousand houses. I do not suppose that we shall win the argument tonight, but I wish to clarify the situation so that people in the big wide world will understand the nonsense that is being proposed.

It is rather like my owning a house in south London that is worth about £150,000. I do not own such a property, but, if I did, I could put it on the market and allow someone to buy it for about £100,000. In order to persuade someone to purchase my £150,000 property for £100,000, I would tell him, "Look, I shall spend £6,000 immediately doing it up and making it top grade. Having done that, I shall keep it in top condition for the next 25 years."

Exactly. On top of that, I would promise to pay market rent on the property until I ceased to use it—however long that might be. I suggest that if everyone operated in that way, we would be in lunatic asylums. It does not make sense in the case of my single property or in the case of the Government's many properties. We have talked about the need to house the troops properly. No one suggests that we should not do that: that is how it should be.

What will happen in the future? What will happen when we withdraw from Germany, Cyprus, Hong Kong and the Falkland Islands, as we are bound to do? Will we be in the same position then as is Russia today? Will service men and women return to this country to find that they have nowhere to live? Will they be housed in tented accommodation, regardless of the climate? That is a distinct possibility if we go down this route. Can we expect a developer, who is responsible for the properties and who fills the houses with civilian tenants over time, to change his pattern of recruiting tenants in order to make way for troops who are returning to their homeland? It simply does not make sense.

We have been asked to believe that the defence chiefs of staff accept the proposals—an acceptance that my hon. Friend the Member for South Shields (Dr. Clark) called into question. "Acceptance" is not the word used by the ranks of the defence force that I have encountered—I refer not to corporals, senior non-commissioned officers or middle-ranking commissioned men, but to those of the rank of air commodore, lieutenant-colonel and commander in the Royal Navy. They are all seriously concerned about the matter.

We are told that service families will be mollified. That is so ironic, it is almost insulting. When some service families first made their protestations, questions were asked about whether they were qualified to represent the views of all families throughout the forces. I considered that an insult at the time, but it is even more insulting for the Government to turn round now and say that they will accept some form of consultation. The right time for consultation was long before the proposals were put on the table.

If this Government had been in power in 1940, we need not have relied on the Spitfires, the Hurricanes or the men and women who kept them aloft so splendidly in defence of this country. We could simply have waited for the German Chancellor to sail across the channel with a bag of reichsmarks and then trotted happily to the bank. The proposals before the House tonight have little to do with improving estate management and much more to do with the logic of the pawnshop.

6.5 pm

This debate was billed in advance as a great clash of the gladiators over an issue of high principle. There were predictions that it would end in a photo-finish in the Division Lobbies tonight. However, the debate is coming to an end not with a bang, but a whimper. In fact, there are two whimpers—the whimper of a Back-Bench revolt fizzling out, and the whimper of an Opposition who are retreating with their tail between their legs because their transparently opportunistic ploy in the form of a Supply day motion has failed. It deserves to fail ignominiously.

It is right that the motion should fail, first and foremost, because my right hon. Friend the Secretary of State for Defence made an excellent speech. He announced some important new concessions and clarifications that meet virtually all the concerns about the scheme that were expressed sensibly during constructive discussions in recent weeks.

Secondly, the motion should fail because the facts of the scheme speak for themselves. The message is clear: the glory of the scheme is that it is in the interests of both the service men and the taxpayers. [HON. MEMBERS: "Rubbish."] Opposition Members have tried to conjure up all manner of hobgoblins, foul fiends and spirits from the vasty deep to justify their opportunistic Supply day motion. In the end, their grievances boil down to two highly fallible claims: first, that the scheme is somehow a threat to what is known in the jargon as the "service man's patch"; and, secondly, that it is a rotten deal financially.

I shall meet both those doubtful claims head on. The Secretary of State said—far more eloquently than I can—that the integrity of the married quarters patch is guaranteed and will be protected. Under the scheme, the purchaser will have no power to break up the patch, to move non-service families on to the patch, to slice up the patch, or to cherry-pick portions of it. Phantom arguments have been conjured up about problem families being moved into defence housing or security being lifted. They are complete and utter codswallop—old Canterbury tales. Nevertheless, we have dealt with those claims very efficiently.

The purchaser of the married quarters estate will not be able to call the shots as to which houses will be retained for service occupation and which will be released from the patch. That management function is exercised today by the Defence Housing Executive, and it will continue to exercise it into the future. It is subject to the overriding ministerial veto that maintains the paramountcy of service housing in order to meet operational requirements. There is no threat to the patch.

I turn now to the claim that the scheme is a bad deal financially. That does not stand up to serious examination. I shall speak personally for a moment. During my short life as a bird of passage in the ministerial aviary, I occupied two perches and I adopted two viewpoints—both of which are relevant to this debate.

First, for two years I had the honour to serve as a Minister of State for Defence, and, in that capacity, I believed it my duty to safeguard the interests of British service men. It was crystal clear that the defence married quarters estate had suffered over the years from under-investment, inadequate management and poor maintenance.

Time and again, on visits to military bases, it was possible to see those detrimental policies reflected in physically poor conditions such as leaking roofs, crumbling walls and far too many empty houses. The huge plus of this scheme is the introduction of much better professional management: over the next few years, £100 million will be spent on improving all those poor-quality houses to grade 1 accommodation standard. That is an enormous bonus, as service men on the estates will recognise when the scheme is explained to them properly.

From the viewpoint of a Minister of State—or, indeed, a Defence Minister of any kind—I can see that the scheme is in the best interests of service men. It is no surprise that the chiefs of staff, whose integrity should not be stupidly questioned, have come out clearly and said, "Let the service voice be heard. Let it be said, plainly and clearly, that this scheme has been supported down the line by the chiefs of staff, because it is in the best interests of service men."

The right hon. Gentleman says that the service chiefs of staff have supported the proposal unequivocally. Has he any evidence to support that?

I refer the hon. Gentleman to the exact words of Field Marshal Sir Peter Inge, Chief of the Defence Staff, who expressed such support in clear and explicit language only a few days ago.

As for the financial deal, let me correct—on an historical basis—a misstatement of fact by, I think, the hon. and learned Member for Fife, North-East (Mr. Campbell), which has run through the argument in recent weeks. I refer to the claim that this is a Treasury-led scheme—

No, I will not. I am still replying to the point made by the hon. and learned Gentleman.

I can speak with some authority and some historical knowledge, because I was—as it were—officer of the watch when the scheme went to the Treasury. I assure the House that the revelation that it would save the public sector borrowing requirement more than £1 billion came as a pleasant surprise to the Treasury. It was a surprise because the scheme had originally been service-led inside the MOD, for the housing reasons that I have mentioned, and had not featured as a possible cost-saving measure in the "Front Line First" or defence costs study arguments.

No. As I have said, time is short.

Let me repeat that, not having heard that it was a possible cost-saving measure, the Treasury was pleasantly surprised to learn that, in its new form, the scheme would save the PSBR more than £1 billion. That was a double whammyrcontribution>: good news for both service men and taxpayers.

That brings me back to the Opposition. We are debating a classic old Labour Opposition day motion. The Opposition defence spokesman, the hon. Member for South Shields (Dr. Clark), presented himself as the service man's friend, wearing his heart and CND badge on his sleeve, and proclaiming that he was speaking up for service men; but his weapons in the debate have been "Down with better housing for service men" and "Down with a reduction of £1.5 billion in the PSBR". That is not old Labour; it is neanderthal Labour. It might be called aboriginal Labour, for the weapons that the Opposition have picked for today's debate have turned out to be boomerangs. The motion deserves to be defeated resoundingly.

6.13 pm

I am very glad to have been called. I apologise to the Secretary of State and my hon. Friend the Member for South Shields (Dr. Clark) for not having been present for their opening speeches.

The right hon. Member for South Thanet (Mr. Aitken) said that we were debating an old Labour motion. I remind him that the motion with which the House was originally presented was tabled by 65 Conservative Members, including a number of those who sat near him nodding as he spoke. This is not a Labour motion but an old Conservative motion, tabled by Members of Parliament who wanted to do what would be best for service families.

Hon. Members on both sides of the House who table early-day motions have a distant ambition that they will be discussed at an early day, and we must often contain our disappointment at the delay in discussion of the matters involved. I hope that the 65 Conservative Members who signed the early-day motion will now congratulate my hon. Friends on bringing the early day forward so conveniently, enabling us to discuss a matter that was so important to them only three weeks ago. The question before the House today is not whether Conservative Members will vote for a Labour motion, but whether they will vote for their own motion.

My constituency contains many service families, and Plymouth contains more than 3,000 service quarters. I use the word "quarters", because those who occupy the accommodation have no choice about the location. They are not ordinary tenants. They cannot choose their furniture, or even what they plant in the garden. They are allocated their quarters for the period during which they, or their husbands, are serving in the armed forces.

As has been said, those families need to feel secure, especially when the menfolk are working away. This deal is bad for service families and disastrous for the taxpayer, and in isolated pockets of the country, which nevertheless constitute significant areas, it will be bad for small home owners.

Without doubt, to make the deal work, service families will be encouraged to be shunted around from one place to another. The developers will eventually want to maximise profits: they will want to clear out lucrative estates that could easily be sold, and put them on the market. The scheme cannot operate in any other way. As the Minister and the Secretary of State know, there is no question of operating mixed estates, with service and civilian families living side by side. Indeed, the Minister of State for Defence Procurement has made that point. Service families will be cleared out of estates so that they can be sold as cheaply as possible.

There is a clear relationship between the sell-off and rent increases in the coming years. Earlier this year, in a written answer to my hon. Friend the Member for Warley, West (Mr. Spellar), the Secretary of State revealed that rents for service married quarters would increase by between 10 and 25 per cent. this year. In the same answer, he said that rents would continue to increase over the next few years until they reached the same level as civilian rents for surrounding houses.

The Secretary of State shakes his head; I hope that, when he winds up, he will tell us just what those rent levels will be. I calculate that they will be two or three times as high as they are now.

The Secretary of State will also know that, earlier this year, when I asked whether service families would be given any recompense for the extra rent that they would pay, the Minister of State for the Armed Forces replied:
"We do not propose to introduce any additional financial assistance to compensate for the rises in service accommodation charges."—[Official Report, 18 March 1996; Vol. 274, c. 68.]
This is a tax on service families. They will pay the price of the sell-off, so that the Conservative party can use tax cuts as a weapon in the election.

That was confirmed by the hon. Member for Bexleyheath (Mr. Townsend), who denied what had been said by the Minister. The Minister said that the Government's proposal was intended to provide better homes for service families, but the hon. Member for Bexleyheath—who presumably listens to his Whips—told us that the Whips were going around saying that they needed the money for tax cuts for the election. That is the truth. Service families will pay for the folly of this sell-off in years to come: they will pay for the extra money that is needed to lease back the properties. They will pay the £100 million a year that will be needed in the first few years as a tax on their income.

Each year, in my city of Plymouth, the MOD declares up to 80 service families homeless by evicting them at the end of their tour of duty. Will homes be available for men and women who have served their country but no longer have a home because the Ministry of Defence has evicted them? Will those homes continue to be available? Will developers take on the responsibility to put a roof over those people's heads? The MOD is not taking on the responsibility, and I see no prospect of a private developer doing so.

We hear that there are about 20,000 empty homes. Why does the Secretary of State not do what the Conservative party set out in its 1992 election manifesto? It was one of the few matters on which the Labour and Conservative parties agreed. The Conservative party stated that it would make these homes available for social housing—for rent—to get people off housing waiting lists.

I shall read the 1992 Conservative manifesto to the hon. Gentleman, because he has got it wrong. The relevant passage reads:

"We will set up a task force—headed by an independent chairman—to help bring empty government residential properties back into use. These will either be sold or let on short term leases to those in housing needs."
We are selling them.

May I assist the Minister by reading on? The Conservative party manifesto claims that the party's policy

"will enable us to house more people on the waiting list".
That is what the Conservative party stated in its manifesto. The Government are now denying that claim by the action that they propose to take.

I will not give way again to the Minister. He will be able to take up my argument when he responds to the debate on behalf of the Government. He will have the opportunity to deny what is set out in the Tory party's election manifesto.

The Minister knows that, in my constituency, 147 houses have recently been released to a housing association. The lets have gone to Plymouth city council so as to do what the Conservative party stated in its manifesto—to take people off the housing waiting list and put decent roofs over their heads. The Minister will be aware that 50 per cent. of those homes are for former service families so that they can have some security once they have left the services, or because they have been evicted by the MOD.

The Government's proposals are bad for service families. The price of the sell-off will be met over many years by a tax on those families' homes and incomes. The proposals are bad news for local housing markets, because in certain areas a flood of cheap houses will suddenly come on to the market. House prices will be depressed, and that will have a special impact on home owners who are in negative equity.

The Minister knows that that has happened already in some areas. It has happened, for example, at RAF Sculthorpe and RAF Wittering, where groups of houses were sold. House prices in those localities suddenly plummeted. In one instance, three-bedroom bungalows came on the market at £10,000 each. What price did the taxpayer receive for those homes? We are seeing a scandalous waste of taxpayers' money, and that is why Opposition Members will be voting for the motion. We urge Conservative Members, whose motion, in effect, we are discussing this evening, to have the courage to vote in accord with their original thoughts.

6.22 pm

In one sense at least we are complying with the motion, by debating it. The motion suggests that we should have more consultation. It suggests also that we should have debates in both the other place and this place. A debate has taken place in the other place, and there has been considerable consultation over the past few weeks. Indeed, there has been more than we could have anticipated. Perhaps it would have been better if we had had that consultation earlier, but, in any event, consultation has taken place. In addition, we have a Select Committee report and an endorsement by the chiefs of staff.

I thank my hon. Friend the Under-Secretary of State for the courteous way in which he has consulted many Conservative Members at least over the past few weeks and taken on board many ideas. I recognise that he has implemented those ideas that he felt able to take on board.

I have no problem with the idea of a prudent Government considering their assets and deciding whether they can sell some off to the benefit of the taxpayer or to the benefit of public matters generally. In that sense, the proposed sell-off is not a privatisation. Nor is it a sale and lease-back. It must not be, for if it were, it would appear on the wrong side of the public accounts. Instead, it is an asset sale, but one that will ensure an outflow of funds in the form of rent from the public sector for at least the next 25 years. I have no problem with that, either.

We must be clear, however, about who is selling the assets and who will be responsible for the outflow of funds. If it is the Treasury that owns all public property in the final analysis, it is right that it should have the benefit of those assets. I suggest that, at the same time, the Treasury should take on board responsibility for the rent that will be paid out over the next 25 years. We know that that rent will come from other than the defence budget. It will be made clear in the Red Book that it does not form part of the defence vote. If it were, that would in another way be a further cut in the defence budget.

When my hon. Friend the Minister responds, I hope that he will give us further assurance that the Treasury will do rather more than simply recognise the outflow of funds and show it to be separate from the defence vote. If in the next two or three years we find that the defence budget is having to take on board some of the costs of the rent, that will negate at least some of the £100 million that will be made available by the Treasury to upgrade quarters over the next five, six or seven years. We cannot have the money twice. Either the money will be used to upgrade quarters or it will be used to contribute to the rent that will have to be paid to the developer who owns the estate.

If we are to ensure that the defence vote is not to receive a cut even before the public expenditure round is complete, we need more reassurance that the Treasury, not the Ministry of Defence, will pay the rent over the next 25 years. The size of the defence budget has decreased considerably over the past five years. The planned total after "Options for Change" has been reduced by £5 billion when the figure for this year is compared with what it was planned to be five years ago. Over the same period, the increase in the social security budget in cash terms exceeds the total sum spent on defence this year.

I strongly believe that, where possible, we must protect the defence budget. I suspect that my right hon. Friend the Secretary of State will manage to protect the defence budget more effectively this year than perhaps his predecessor did when he was having to fight his case against the then Chief Secretary, who was none other than my right hon. Friend. We have cut defence spending in real terms and cash terms, and more than we should have done, in my view, over the past five years.

There is a human side to these matters. I very much welcome the improvements to the scheme—I do not call them concessions—that my right hon. Friend the Secretary of State has mentioned this evening. They will go some way towards alleviating the fears of service men that they will be ejected from their homes for reasons other than service ones. I am certain that the improvements will do much to reassure them.

I sincerely hope also that the reassurances that we have received about what will happen to the estate during the 25 years and afterwards will be correct, because I strongly believe that, into the foreseeable future and well after the 25-year period, we will need a stock of quarters to house our service men. I shall go further than that, and say that it will probably be even more important in future to provide them than in the past, because, if we are to recruit the right people, we must look after not only their equipment and their weapons but their welfare as well.

The motion, the debate and the consultation have been a very positive exercise. It has meant that this matter has been dealt with publicly, as it should be because this is a large asset sale, and many of the problems have been overcome.

6.30 pm

I have a constituency interest, as in my constituency we have what are known as tobacco houses, which used to house Army personnel from 47th area support group of the US Army following their intervention in the war in 1942. The houses were built some time afterwards and were paid for from the income from tobacco, which is why they were called tobacco houses.

One hundred and nine of the properties were handed over to the Ministry of Defence in June 1992, when the Americans declared that they had no future use for RAF Burtonwood, but 60 were in a poor state of repair and were not fit for habitation, so much investment was needed to make them habitable by service personnel—in terms of energy conservation, double glazing and cavity wall insulation.

In a Ministry of Defence answer last year, we were told that there are only 24 empty properties in my constituency, which must mean that a large number of units have been brought back into use by the MOD. It must have spent a great deal of money in the past four years to bring those properties up to scratch, which will now be sold off over the heads of the residents to a private company. It is a particularly bad deal.

Another problem is that RAF Burtonwood is a discrete estate. The estate, which contains 109 units, has a tennis court, play area and bowling green. The roads and the sewers are not up to standard, and the drains run under the houses, so there will be many problems for years to come. When the MOD sells those properties to a private developer, what will happen to the continuing liability? I am very concerned about that.

There is a huge problem in my constituency, because RAF Burtonwood, which was declared surplus to requirements in June 1993, is now being used as a private storage and distribution depot. It is the largest single above-floor warehouse space in the whole of Europe, and it is being used by the private sector at very low rent. That is causing much concern to my constituents who live in and around the air base. As well as being the local Member of Parliament, I am one of those residents. The MOD's privatisation programme will adversely affect my constituency.

The deal before the House is a bad one. We will get short-term gain and long-term pain in terms of what will have to be done and the cost of the decision. It is obvious that the taxpayer will be worse off in the long run. We are told that the deal is popular with armed forces personnel who occupy the houses, but why do we not ask them?

When properties were transferred from Warrington new town development corporation to local housing associations, tenants were asked in a ballot who they wanted to become their new landlord. When local authorities want to transfer their houses into the private sector, into housing action trusts, each tenant is given the choice about who their new landlord should be. If this is such a good deal for Army personnel, the Secretary of State, before he does anything else, should consult each and every member of the armed services who lives in these premises to find out their views. If we believe in tenant choice, Army personnel should be given the same choice as that given in the public sector.

This deal is bad for the taxpayer. It is bad for Army personnel. It should be rejected by the House this evening.

6.34 pm

Hindsight is a wonderful thing. When my right hon. Friend the Secretary of State wrote last November to all tenants of Ministry of Defence housing, I wish that we had had a debate such as this, as it would have set the scene for a well-informed debate nationally about the issue. That is my greatest regret.

My position six months ago approximated closely to that of my hon. Friend the Member for Bexleyheath (Mr. Townsend). It has taken me some six months to come to terms with the issues. People have, quite rightly, praised the Army Families Federation and the way in which successive generations of Army and other service families have followed the flag around the empire, the Commonwealth and the world on peacekeeping and peace-enforcing missions, but they should never underestimate the fact that it is not just the wives, families and spouses who are concerned about this; the men in the front line are equally concerned.

Hon. Members who have the honour to represent constituencies with a large number of service men and women and civilian support staff recognise the depth of feeling on the issue. The Army Families Federation has not been representing the views of only a handful of wives. It has been doing an extraordinarily good job. Those of us who have a regular case load of MOD issues will recognise that the Federation persists. I have had a number of meetings and many telephone calls over the past six months with the Federation and other individuals. They have raised many issues that have improved the scheme to the point where, as one of the chiefs of staff said, the scheme that we now have is not the scheme we started with. It is remarkably improved.

Army wives and families who criticise the leadership of the Army Families Federation should know that, of the 10 points that were put to me on 5 July by Cherry Milne, the Federation's president, eight have been addressed and are discussed in depth in the Select Committee's report. One is the subject of correspondence with Ministers. Another, on the question of Abbey Wood and housing, is one to which we can return at another time.

Many of my hon. Friends will do well to listen to the debates that follow this one. I pay tribute to my hon. Friend the Member for Canterbury (Mr. Brazier), who has, over a decade and more to my certain knowledge, because I have often been beside him, pursued the interests of Army families, as well as the structure of the Army itself. Our constituents have often been in touch with us over the years, but I had a telephone call only this weekend from a retired Colonel, who asked all the right questions and outlined the problems. I just wished that I had been able to divulge to him—I did not, of course—the contents of the Select Committee's report. He will be able to read the debate, as will others.

One of the greatest misconceptions is that the current situation is cost-free. The fact that these huge assets are tied up is expensive for the taxpayer and for public service investment. We do not need sterile arguments about what will happen, and I have heard some utter drivel spoken tonight. We need to get down to the real problem about the quality of housing. I am most concerned about the small percentage of housing that is inferior. It appears to me that much of it is in my constituency, but I am sure that, in reality, it is spread around.

If we are going to talk about realities, about Bulford, Larkhill, and the sort of quarters that our service families put up with, the fact that an extra £100 million will be spent over five to seven years, in addition to the £40 million that has already been spent, must be good news. I particularly welcome the concession on schools, which is very important to families. They move around very loyally, so education becomes ever more important.

I welcome the many changes that have been made. I look forward to a boost in the Defence Housing Executive, which we can confidently expect. The last thing that we and Army families want is yet another review of the Army and its functions, as proposed by the Labour party and others. To the Johnny-come-latelys who have entered the debate, I simply say that, for those of us who have followed this issue over many years, this is a good deal for Army families as well as front-line forces, and I shall support the Government tonight on behalf of my constituents.

6.39 pm

I shall be brief. My first point is that the experience of service families has not been positive. They have been stretched to the limit by the Government's defence cuts, which have meant families spending more time apart. It is therefore no wonder that Army wives and others have done something which is very rare for them—they have spoken out publicly because they feel badly treated by the Government.

Secondly, it is clear that the policy has been Treasury driven. It is no coincidence that the right hon. Member for South Thanet (Mr. Aitken) moved from the Ministry of Defence to the Treasury after he had been responsible for decisions that affected my constituency and which led to the creation of surplus MOD property and its sale.

Thirdly, people have been badly treated. I cannot quote the communication in full, but I was contacted by a Mr. and Mrs. Trotter. Mr. Trotter served with the Royal Navy for 22 years—in the Gulf, Bosnia and the Falklands—and is desperate for help, which he was not receiving, in trying to find suitable accommodation for his retirement. Another constituent—a Mr. Anderson—came to see me when the rent for his MOD property was doubled and he was told that he and his family had to find other accommodation by the end of this month.

Fourthly, in Scotland the situation is different for legal reasons and because of the sale of surplus property at Rosyth owing to the Government's defence cuts. The situation there has been marked by obsessive secrecy. I have written to the Minister for the Armed Forces and the Minister of State for Defence Procurement, asking why they have apparently made a deal with Home housing association, which has no property north of the border, and why they did not invite other Scottish-based companies to bid, but I have been given no information and no clear answers.

In view of the plight in which the Government have placed so many service families, I hope that there will be all-party support for the Labour party's motion.

6.41 pm

This debate has rightly focused the House's attention on the vital role played in the life of this country by the armed forces and on the invaluable support given by their families. As we know, that is inextricably tied in with the community spirit of their estates and the support provided by their being surrounded by friends who know the strains and stresses of service life, especially in view of the regrettable recent increase in tension in Northern Ireland. The real question is whether the proposed sale adds or detracts from that. In our view, it surely undermines the system, which is why I believe that the Select Committee's report said that the jury is still out. It is also why the matter has aroused such cross-party concern.

The Chairman of the Select Committee on Defence said that the Committee's report raised as many questions as it provided answers. I must say that the Secretary of State's speech did not provide those answers, especially not to some of the important questions. For example, it is not clear how much it will cost to bring the estate up to grade one standard. Although pressed, the Secretary of State did not specify the other public sector investments for which he said the money would be available.

The concern raised by the hon. Member for Bexleyheath (Mr. Townsend) was mirrored in The Economist, which recently stated:
"Should the Government be forced to withdraw the privatisation, Mr. Portillo would be hard pushed to stop the Treasury deducting the missing money from his budget. That would mean cancelling programmes for new weapons—which is why the generals, unlike the men and women they command, want the privatisation".
I could understand the reaction of service chiefs faced with that case, even though any analysis would show that it does not stand up for a second. But has the case in fact been made? Is it true? Has the connection been made? We need a categorical statement on the matter.

The Secretary of State alluded to, but did not deal properly with, the fact that the MOD has lost long-term control of the future of the estate. The MOD may make a decision on an exchange on military grounds, but, as far as we can see, it can be overruled by a civilian arbitrator. Families may be consulted—let me make it clear that that is a welcome change—but the decision will not be in their hands, nor in the hands of the MOD, the House or another place.

The consultation is welcome but it is largely cosmetic. Indeed, it is not the consultation that was proposed in the early-day motion or in the resolution—it is consultation after 25 years, not consultation before the sale. In any event, as has been mentioned by hon. Members of all parties, it does not alter the fundamental weaknesses of the scheme, which is still a matter of concern to the hon. Members for Canterbury (Mr. Brazier) and for Bexleyheath.

Let us consider the £100 million for upgrading, which was mentioned by many hon. Members, especially the hon. and learned Member for Fife, North-East (Mr. Campbell). I find it astonishing that, in their amendment, the Government are still setting great store by the £100 million of what they claim is new funding. First, it is £20 million a year over five years, or even less if it is over seven years. That may impress the right hon. Member for South Thanet (Mr. Aitken), but I am not sure that it impresses Army families.

Secondly, last year alone, the MOD spent £126 million on repairs and £40 million on upgrading the estate. The £20 million is a welcome increase, but it is a small percentage of the total. Thirdly, there is no guarantee of additionality. The Minister of State for Defence Procurement must tell us how much will be spent in each of the next five years on repairs and upgrading; if not, the scheme has as much substance as Scotch mist or a promise made on a wet Thursday night i n Dudley town hall.

Where will that leave the MOD? It leaves it precisely with the concern expressed by the Select Committee—that, in the longer term, the Treasury might press for any gap that may arise between the money paid by the MOD and the money received from the occupants to be closed. That reality is glaringly obvious, not only to the Select Committee but to service families around the country. If the Minister has any doubts about their feelings on the subject, I hope that the MOD official who covered my meeting with Army wives in Colchester will have made them clear.

What have the service families lost? They have lost the possibility of the discounted sales scheme, which has not been mentioned today. This year they have already had rent increases of between 10 per cent. and 25 per cent and have been warned that more are on the way. They are concerned that financial pressures will reduce the availability of housing and create difficulties as they move from one establishment to another. The sale will only make things worse, and it is therefore no wonder that they are fearful for the future.

It is also clear that the proposal is financially a bad deal for the country. In this dash for cash, the MOD is taking on an open-ended commitment. One does not have to follow the figures that appeared in The Times to realise that annual payments towards the end of the first 25 years could be substantial and, indeed, could well exceed the original purchase price. While house prices have been falling recently, private sector rents have been rocketing—up 19 per cent. in 1994, 22 per cent. in 1993, 26 per cent. in 1992 and 26 per cent. in 1991. The Government are selling at the bottom end of the market and renting on a rising tide. As many hon. Members have asked, what will that ultimately mean for the MOD's budget?

What are the key attractions for the purchasers? They are getting a steady guaranteed income stream that can only be adjusted upwards, as I have outlined—and for what? Contrary to the views of the hon. Member for North-West Surrey (Sir M. Grylls), they will not have to use private sector skills and will not be managing or maintaining the estate. All that they have to do is rake in the cash and sell the spare property, although what bankers in Tokyo, New York and Amsterdam know about the property market in Portsmouth or East Anglia is quite beyond me. Presumably, the purchasers are hiring people who do know about it, but why the MOD cannot do the same is equally beyond me.

I also find it remarkable that when we recently debated the Armed Forces Bill, we were told—rightly, to my mind—that the armed forces were a special case. Yet now, because the Chancellor of the Exchequer has got his sums wrong, we are told that their housing should be treated like any other commercial transaction. That is significant because in a country such as ours which has an unwritten constitution, it is very important to acknowledge the informal relationships that keep society together. We have a strong tradition of our armed forces being loyal to the Government of the day. In turn, the troops are loyal to the armed forces and wives and families are loyal to the troops. All those relationships are reinforcing, but they must be reciprocal. That is the unwritten contract that we have with our forces. If it appears, or even believed, that the Government are not loyal to service families, shock waves run through the system, affecting not only recruitment but retention, with all the subsequent impact on morale and operational effectiveness.

As many families fear, the Government may have decided that they want the forces to comprise primarily single young men. If so, they should come clean and say so, allowing service men and their families to make a decision about their future. If the Government have taken that decision, it would be a retrograde step, especially since the Army is involved in peacekeeping operations, which require a balance of personnel including mature and experienced soldiers, and what all the services increasingly need—it is part of the Bat report that has been mentioned—are trained, experienced, technical personnel. [Interruption.] I tell the Minister and Conservative Members that that fear has been expressed to me very strongly by Army wives. The Minister needs to dispel those fears by not only words but deeds.

We need to strip the scheme down to the essentials and consider it apart from all the fripperies. As has been rightly mentioned, it is not a privatisation. Nor is it a property deal. It is a shuffling of the financial pack to help out the Chancellor. Essentially, it is a sale and lease-back scheme. Whatever the hon. Member for Wyre (Mr. Mans) says, that is the scheme's essential financial nature. It is a live now, pay later scheme. It is not defence led; it is Treasury driven.

Future Governments, the armed forces and service men and women and their families will be paying for the scheme—without even being properly consulted before the sale. That is why I have no hesitation in asking not only my hon. Friends but Members of all parties who have the interests of the armed forces at heart to join me in the Lobby.

6.52 pm

I can say without fear of contradiction that this has been one of the best debates that I have attended in the House. Hon. Members on both sides of the House have made speeches of deep passion and knowledge, and it is an honour to be able to take part in the debate. To those to whom I shall be unable to respond directly—there will be several, I am afraid—I apologise. I will write to them after the debate.

I must first deal with the point raised by the hon. Member for Pembroke (Mr. Ainger) about the application of the Crichel Down rules. A very small number of properties are being considered in relation to Crichel Down. The sale package has not yet been finalised, but we hope to sort out those properties very soon.

My hon. Friend the Member for Romsey and Waterside (Mr. Colvin), the Chairman of the Select Committee on Defence, went through the Committee's report, which we have welcomed and found extremely constructive and helpful. I thoroughly enjoyed giving evidence to the Select Committee. It was an instructive experience, even when faced with Jesuits.

My hon. Friend the Member for Romsey and Waterside raised the important point about future rent, as did my hon. Friend the Member for Wyre (Mr. Mans). The question was whether the Treasury compensation would grow in real terms in line with any rental growth. Rental growth has been taken into account in our calculations. I do not want to say precisely what rental growth we expect, but it is nothing like that suggested in a rather absurd article in The Times recently. There will be a reduction in the number of quarters that we rent back, and that will of course offset the growth in rents. The bottom line is that the defence budget will not be the loser, which is very important.

My hon. Friend the Member for Romsey and Waterside also asked whether £2,000 a dwelling would be enough to upgrade MOD quarters. As my hon. Friend the Member for Beaconsfield (Mr. Smith) rightly pointed out, about 50 per cent. of the houses in the MOD's possession are in top condition. We will want to concentrate the spending on those in the worst condition.

The hon. and learned Member for Fife, North-East (Mr. Campbell), who is a member of the Select Committee, made an interesting speech in which he said that the purchaser has no risk, as did the hon. Member for Warley, West (Mr. Spellar). When the hon. and learned Gentleman was looking at the Select Committee report, perhaps he should have read paragraph 76, which says:
"It is clear that the MoD marketing of the estate has been approached professionally, and put to prospective bidders in a way that encourages them to expect a potentially profitable but not risk free acquisition."
[HON. MEMBERS: "Go on."] That was the end of the paragraph.

I turn to the important speech of my hon. Friend the Member for Canterbury (Mr. Brazier). I am grateful for what he said about a significant number of concessions of substance. As he said, moves have already taken place. He also referred to some moves in his constituency—I think that they were in his constituency.

In either event, I am not familiar with the specific case to which he referred, but I draw attention to the circumstances in which individuals may be called to move because we need to release surplus properties in discrete blocks. We have a conflict. We have to reduce the number of empty properties that the MOD owns, yet, because of the points that he among others raised, we need to preserve the coherence of the regimental patch. We could address that problem either by pepper-potting civilians into military estates, which would not be satisfactory, or by moving people in order to ensure that we can release discrete blocks. The only alternative would be to leave empty the current 12,000 empty properties, but that is not acceptable.

I am sorry. I am afraid that I do not have time.

My hon. Friend the Member for Bexleyheath (Mr. Townsend) raised a number of important issues. He suggested that we might be overthrowing a system that has been in existence since the war. We are not really doing that. We are ensuring that we have a significant amount of money to upgrade the property in which our service men and women live, which must be of benefit to the country. Opposition Members cannot dismiss lightly the £100 million as though it were an irrelevance. That is the amount that the Defence Housing Executive believes is needed to upgrade substandard properties to the proper standard.

Does the Minister accept that he is talking about more than £50 million for one estate alone?

No, because the amount that the hon. Gentleman is suggesting, which relates to the estate that he went round only last Thursday, would be quite sufficient to knock down and rebuild the entire estate. I am afraid that he is wrong on that.

No. Furthermore, that amount is additional to what we already have and represents an increase of 50 per cent. every year over the period in which we believe that we can spend it.

My right hon. Friend the Member for South Thanet (Mr. Aitken) made an important speech in which he said that the support of the chiefs of staff was important. I agree. The chiefs of staff have said that the position has improved dramatically and their concerns have been allayed.

My hon. Friend the Member for Wyre (Mr. Mans) said that the Treasury would need to fund the rent over 25 years. I have made it clear there will be no detriment to the defence budget in respect of that transaction. He said that we would need stocks of quarters in future in order to improve recruitment into the armed services. He was absolutely right and my right hon. Friend the Secretary of State concentrated on that point.

As for the speech by my hon. Friend the Member for Salisbury (Mr. Key), I agreed with every single word, as I said in the Select Committee.

The hon. Member for Warley, West (Mr. Spellar) made an extraordinary speech in which he got virtually every statistic wrong. He said that it was not clear how much it would cost to improve the estate. I have already said—on the advice of the Defence Housing Executive—that it would cost £100 million. That is the amount we are getting as an addition to the budget. He said that there was no guarantee of additionality. The Treasury has guaranteed that it will be additional to the defence budget. He said that £20 million a year was a small proportion of the money already spent. It is a 50 per cent. increase in upgrading on the amount that we already spend. I cannot go through his entire speech as it would take me until tomorrow morning to correct every aspect that he got wrong.

The public profile of the married quarters estate has risen considerably over the past few weeks. In their early-day motion, my hon. Friends—not the Opposition—expressed a number of concerns which reflected the genuine worries of the people occupying the married quarters. I hope that this evening we have demonstrated the Government's determination to protect the interests of service families and the maintenance of the service way of life. Any suggestion by the Opposition that we are not mindful of those interests is utterly wrong.

Morale and confidence are vital and they must and will be sustained. Therefore, we attach the greatest possible importance to the preservation of the patch and all that goes with it and all that it means for the solidarity and security of service families.

When service men and women are serving abroad, the last thing they need is to worry about is their families back at home. Of course we recognise that, so we shall ensure that nothing in the sale leads to the break-up of the patch.

In addition, we have secured a good deal for the taxpayer. We have consulted widely in recent months and responded positively and constructively to the points made to us by families' representatives, hon. Members and those in another place. The services can be confident that the housing in which they live in future will be of a better standard than they have been used to in the past and the taxpayer can be assured that the waste of empty public accommodation will come to an end. I commend the Government's amendment to the House and invite my right hon. and hon. Friends to reject the Opposition motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 275, Noes 307.

Division No. 203]

[7.03 pm

AYES

Abbott, Ms DianeBeckett, Rt Hon Margaret
Adams, Mrs IreneBeith, Rt Hon A J
Ainger, NickBell, Stuart
Ainsworth, Robert (Cov'try NE)Benn, Rt Hon Tony
Allen, GrahamBennett, Andrew F
Alton, DavidBermingham, Gerald
Anderson, Donald (Swansea E)Berry, Roger
Armstrong, HilaryBetts, Clive
Ashdown, Rt Hon PaddyBlair, Rt Hon Tony
Ashton, JoeBoateng, Paul
Austin-Walker, JohnBradley, Keith
Banks, Tony (Newham NW)Bray, Dr Jeremy
Barnes, HarryBrown, Gordon (Dunfermline E)
Barron, KevinBrown, N (N'c'tle upon Tyne E)
Battle, JohnBruce, Malcolm (Gordon)
Bayley, HughByers, Stephen

Caborn, RichardHardy, Peter
Callaghan, JimHarman, Ms Harriet
Campbell, Mrs Anne (C'bridge)Harvey, Nick
Campbell, Menzies (Fife NE)Hattersley, Rt Hon Roy
Campbell, Ronnie (Blyth V)Henderson, Doug
Campbell-Savours, D NHeppell, John
Cann, JamieHill, Keith (Streatham)
Chidgey, DavidHinchliffe, David
Chisholm, MalcolmHodge, Margaret
Church, JudithHoey, Kate
Clapham, MichaelHogg, Norman (Cumbernauld)
Clark, Dr David (South Shields)Home Robertson, John
Clarke, Eric (Midlothian)Hood, Jimmy
Clarke, Tom (Monklands W)Hoon, Geoffrey
Clelland, DavidHowarth, George (Knowsley North)
Clwyd, Mrs AnnHowells, Dr Kim (Pontypridd)
Coffey, AnnHoyle, Doug
Cohen, HarryHughes, Kevin (Doncaster N)
Connarty, MichaelHughes, Robert (Aberdeen N)
Cook, Frank (Stockton N)Hughes, Roy (Newport E)
Cook, Robin (Livingston)Hughes, Simon (Southwark)
Corbett, RobinHutton, John
Corbyn, JeremyIllsley, Eric
Corston, JeanIngram, Adam
Cousins, JimJackson, Glenda (H'stead)
Cox, TomJackson, Helen (Shef'ld, H)
Cummings, JohnJamieson, David
Cunningham, Jim (Covy SE)Janner, Greville
Cunningham, Rt Hon Dr JohnJenkins, Brian (SE Staff)
Dafis, CynogJohnston, Sir Russell
Dalyell, TamJones, Barry (Alyn and D'side)
Darling, AlistairJones, leuan Wyn (Ynys Môn)
Davidson, IanJones, Jon Owen (Cardiff C)
Davies, Bryan (Oldham C'tral)Jones, Lynne (B'ham S O)
Davies, Chris (L'Boro & S'worth)Jones, Nigel (Cheltenham)
Davies, Rt Hon Denzil (Llanelli)Jowell, Tessa
Davies, Ron (Caerphilly)Kaufman, Rt Hon Gerald
Davis, Terry (B'ham, H'dge H'l)Keen, Alan
Denham, JohnKennedy, Charles (Ross,C&S)
Dewar, DonaldKennedy, Jane (L'pool Br'dg'n)
Dixon, DonKhabra, Piara S
Dobson, FrankKilfoyle, Peter
Donohoe, Brian HKirkwood, Archy
Dunwoody, Mrs GwynethLestor, Joan (Eccles)
Eagle, Ms AngelaLewis, Terry
Eastham, KenLiddell, Mrs Helen
Etherington, BillLivingstone, Ken
Evans, John (St Helens N)Lloyd, Tony (Stretford)
Fatchett, DerekUwyd, Elfyn
Faulds, AndrewLoyden, Eddie
Field, Frank (Birkenhead)Lynne, Ms Liz
Flynn, PaulMcAllion, John
Foster, Don (Bath)McAvoy, Thomas
Foulkes, GeorgeMcCartney, Ian
Fraser, JohnMacdonald, Calum
Fyfe, MariaMcFall, John
Galbraith, SamMcKelvey, William
Galloway, GeorgeMackinlay, Andrew
Gapes, MikeMcLeish, Henry
Garrett, JohnMaclennan, Robert
George, BruceMcMaster, Gordon
Gerrard, NeilMcNamara, Kevin
Gilbert, Rt Hon Dr JohnMacShane, Denis
Godman, Dr Norman AMcWilliam, John
Godsiff, RogerMadden, Max
Golding, Mrs UinMaddock, Diana
Gordon, MildredMahon, Alice
Graham, ThomasMandelson, Peter
Grant, Bernie (Tottenham)Marek, Dr John
Griffiths, Nigel (Edinburgh S)Marshall, David (Shettleston)
Griffiths, Win (Bridgend)Martin, Michael J (Springburn)
Grocott, BruceMartlew, Eric
Gunnell, JohnMaxton, John
Hain, PeterMeacher, Michael
Hall, MikeMeale, Alan
Hanson, DavidMichael, Alun

Michie, Bill (Sheffield Heeley)Shore, Rt Hon Peter
Michie, Mrs Ray (Argyll & Bute)Short, Clare
Mitchell, Austin (Gt Grimsby)Simpson, Alan
Moonie, Dr LewisSkinner, Dennis
Morgan, RhodriSmith, Andrew (Oxford E)
Morley, ElliotSmith, Chris (Isl'ton S & F'sbury)
Morris, Rt Hon Alfred (Wy'nshawe)Smith, Llew (Blaenau Gwent)
Morris, Estelle (B'ham Yardley)Snape, Peter
Morris, Rt Hon John (Aberavon)Soley, Clive
Mowlam, MarjorieSpearing, Nigel
Mudie, GeorgeSpellar, John
Mullin, ChrisSquire, Rachel (Dunfermline W)
Murphy, PaulSteel, Rt Hon Sr David
Nicholson, Emma (Devon West)Steinberg, Gerry
Oakes, Rt Hon GordonStevenson, George
O'Brien, William (Normanton)Strang, Dr. Gavin
O'Hara, EdwardStraw, Jack
Olner, BillSutcliffe, Gerry
O'Neill, MartinTaylor, Mrs Ann (Dewsbury)
Orme, Rt Hon StanleyTaylor, Matthew (Truro)
Parry, RobertThompson, Jack (Wansbeck)
Tipping, Paddy
Pearson, IanTouhig, Don
Pendry, TomTownsend, Cyril D (Bexl'yh'th)
Pickthall, ColinTrickett, Jon
Pike, Peter LTurner, Dennis
Pope, GregTyler, Paul
Powell, Sir Ray (Ogmore)Vaz, Keith
Prentice, Bridget (Lew'm E)Walker, Rt Hon Sir Harold
Prentice, Gordon (Pendle)Walley, Joan
Purchase, KenWardell, Gareth (Gower)
Quin, Ms JoyceWareing, Robert N
Radice, GilesWatson, Mike
Raynsford, NickWicks, Malcolm
Reid, Dr JohnWigley, Dafydd
Rendel, DavidWilliams, Rt Hon Alan (Sw'n W)
Robertson, George (Hamilton)Williams, Alan W (Carmarthen)
Robinson, Geoffrey (Co'try NW)Wilson, Brian
Roche, Mrs BarbaraWinnick, David
Rogers, AllanWise, Audrey
Rooker, JeffWorthington, Tony
Rooney, TerryWray, Jimmy
Ross, Ernie (Dundee W)Wright, Dr Tony
Rowlands, TedYoung, David (Bolton SE)
Ruddock, Joan
Sedgemore, Brian

Tellers for the Ayes:

Sheerman, Barry

Mr. Joe Benton and Ms Janet Anderson.

Sheldon, Rt Hon Robert

NOES

Ainsworth, Peter (East Surrey)Boswell, Tim
Aitken, Rt Hon JonathanBottomley, Peter (Eltham)
Alison, Rt Hon Michael (Selby)Bottomley, Rt Hon Virginia
Allason, Rupert (Torbay)Bowden, Sir Andrew
Amess, DavidBowis, John
Arbuthnot, JamesBoyson, Rt Hon Sir Rhodes
Arnold, Jacques (Gravesham)Brandreth, Gyles
Arnold, Sir Thomas (Hazel Grv)Bright, Sir Graham
Ashby, DavidBrooke, Rt Hon Peter
Aspinwall, JackBrown, M (Brigg & Cl'thorpes)
Atkins, Rt Hon RobertBrowning, Mrs Angela
Atkinson, Peter (Hexham)Bruce, Ian (South Dorset)
Baker, Rt Hon Kenneth (Mole V)Budgen, Nicholas
Baker, Nicholas (North Dorset)Burns, Simon
Baldry, TonyBurt, Alistair
Banks, Matthew (Southport)Butler, Peter
Banks, Robert (Harrogate)Butterfill, John
Batiste, SpencerCarlisle, John (Luton North)
Beggs, RoyCarlisle, Sir Kenneth (Lincoln)
Bellingham, HenryCarrington, Matthew
Bendall, VivianCarttiss, Michael
Beresford, Sir PaulCash, William
Biffen, Rt Hon JohnChannon, Rt Hon Paul
Body, Sir RichardChapman, Sir Sydney
Bonsor, Sir NicholasChurchill, Mr
Booth, HartleyClappison, James

Clark, Dr Michael (Rochford)Heath, Rt Hon Sir Edward
Clarke, Rt Hon Kenneth (Ru'clif)Heathcoat-Amory, Rt Hon David
Clifton-Brown, GeoffreyHendry, Charles
Coe, SebastianHiggins, Rt Hon Sir Terence
Colvin, MichaelHill, Sir James (Southampton Test)
Congdon, DavidHogg, Rt Hon Douglas (G'tham)
Coombs, Anthony (Wyre For'st)Horam, John
Coombs, Simon (Swindon)Hordern, Rt Hon Sir Peter
Cope, Rt Hon Sir JohnHoward, Fit Hon Michael
Cormack, Sir PatrickHowell, Rt Hon David (G'dford)
Couchman, JamesHowell, Sir Ralph (N Norfolk)
Cran, JamesHughes, Robert G (Harrow W)
Currie, Mrs Edwina (S D'by'ire)Hunt, Rt Hon David (Wirral W)
Curry, David (Skipton & Ripon)Hunt, Sir John (Ravensbourne)
Davies, Quentin (Stamford)Hunter, Andrew
Davis, David (Boothterry)Hurd, Rt Hon Douglas
Day, StephenJack, Michael
Deva, Nirj JosephJackson, Robert (Wantage)
Devlin, TimJenkin, Bernard
Dorrell, Rt Hon StephenJessel, Toby
Douglas-Hamilton, Lord JamesJohnson Smith, Sir Geoffrey
Dover, DenJones, Gwilym (Cardiff N)
Duncan, AlanJones, Robert B (W Hertfdshr)
Duncan Smith, IainJopling, Rt Hon Michael
Dunn, BobKellett-Bowman, Dame Elaine
Durant, Sir AnthonyKey, Robert
Dykes, HughKing, Rt Hon Tom
Eggar, Rt Hon TimKirkhope, Timothy
Elletson, HaroldKnapman, Roger
Emery, Rt Hon Sir PeterKnight Mrs Angela (Erewash)
Evans, David (Welwyn Hatfield)Knight, Rt Hon Greg (Derby N)
Evans, Jonathan (Brecon)Knight Dame Jill (Bir'm E'st'n)
Evans, Nigel (Ribbb Valley)Knox, Sir David
Evans, Roger (Monmouth)Kynoch, George (Kincardine)
Evennett, DavidLait, Mrs Jacqui
Faber, DavidLamont, Rt Hon Norman
Fabricant, MichaelLang, Rt Hon Ian
Fenner, Dame PeggyLawrence, Sir Ivan
Field, Barry (Isle of Wight)Legg, Barry
Fishbum, DudleyLeigh, Edward
Forman, NigelLennox-Boyd, Sir Mark
Forsyth, Rt Hon Michael (Stirling)Lester, Sir James (Broxtowe)
Forth, EricLidington, David
Fowler, Rt Hon Sir NormanLilley, Rt Hon Peter
Fox, Dr Liam (Woodspring)Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Rt Hon Sir Marcus (Shipley)Lord, Michael
Freeman, Rt Hon RogerLyell, Rt Hon Sir Nicholas
French, DouglasMacGregor, Rt Hon John
Fry, Sir PeterMacKay, Andrew
Gale, RogerMaclean, Rt Hon David
Gallie, PhilMcLoughlin, Patrick
Gardiner, Sir GeorgeMcNair-Wilson, Sir Patrick
Garnier, EdwardMadel, Sir David
Gill, ChristopherMaitland, Lady Olga
Gillan, CherylMajor, Rt Hon John
Goodlad, Rt Hon AlastairMalone, Gerald
Goodson-Wickes, Dr CharlesMans, Keith
Gorman, Mrs TeresaMarland, Paul
Gorst, Sir JohnMarlow, Tony
Grant, Sir A (SW Cambs)Marshall, John (Hendon S)
Greenway, Harry (Ealing N)Marshall, Sir Michael (Arundel)
Greenway, John (Ryedale)Martin, David (Portsmouth S)
Griffiths, Peter (Portsmouth, N)Mates, Michael
Grylls, Sir MichaelMawhinney, Ftt Hon Dr Brian
Gummer, Rt Hon John SelwynMellor, Rt Hon David
Hague, Rt Hon WilliamMerchant, Piers
Hamilton, Rt Hon Sir ArchibaldMills, Iain
Hamilton, Neil (Tatton)Mitchell, Andrew (Gedling)
Hampson, Dr KeithMitchell, Sir David (NW Hants)
Hannam, Sir JohnMoate, Sir Roger
Hargreaves, AndrewMolyneaux, Rt Hon Sir James
Haselhurst, Sir AlanMonro, Rt Hon Sir Hector
Hawkins, NickMontgomery, Sir Fergus
Hawksley, WarrenNeedham, Rt Hon Richard
Hayes, JerryNelson, Anthony
Heald, OliverNeubert, Sir Michael

Newton, Rt Hon TonySquire, Robin (Hornchurch))
Nicholls, PatrickStanley, Rt Hon Sir John
Nicholson, David (Taunton)Steen, Anthony
Norris, SteveStephen, Michael
Onslow, Rt Hon Sir CranleyStem, Michael
Oppenheim, PhillipStewart, Allan
Ottaway, RichardStreeter, Gary
Page, RichardSumberg, David
Paice, JamesSweeney, Walter
Patnick, Sir IrvineSykes, John
Patten, Rt Hon JohnTapsell, Sir Peter
Pattie, Rt Hon Sir GeoffreyTaylor, Ian (Esher)
Pawsey, JamesTaylor, John M (Solihull)
Peacock, Mrs ElizabethTaylor, Sir Teddy (Southend, E)
Pickles, EricTemple-Morris, Peter
Porter, Barry (Wirral S)Thomason, Roy
Porter, David (Waveney)Thompson, Sir Donald (C'er V)
Portillo, Rt Hon MichaelThompson, Patrick (Norwich N)
Powell, William (Corby)Thornton, Sir Malcolm
Rathbone, TimThurnham, Peter
Redwood, Rt Hon JohnTownend, John (Bridlington)
Renton, Rt Hon TimTracey, Richard
Richards, RodTredinnick, David
Riddick, GrahamTrend, Michael
Rifkind, Rt Hon MalcolmTrotter, Neville
Robathan, AndrewTwinn, Dr Ian
Roberts, Rt Hon Sir WynVaughan, Sir Gerard
Robertson, Raymond (Ab'd'n S)Viggers, Peter
Waldegrave, Rt Hon William
Robinson, Mark (Somerton)Walden, George
Roe, Mrs Marion (Broxboume) Walker, Bill (N Tayside)
Ross, William (E Londonderry)Waller, Gary
Rowe, Andrew (Mid Kent)Ward, John
Rumbold, Rt Hon Dame AngelaWardle, Charles (Bexhill)
Ryder, Rt Hon RichardWaterson, Nigel
Sackville, TomWatts, John
Sainsbury, Rt Hon Sir TimothyWells, Bowen
Scott, Rt Hon Sir NicholasWhitney, Ray
Shaw, David (Dover)Whittingdale, John
Shephard, Rt Hon GillianWiddecombe, Ann
Shepherd, Sir Colin (Hereford)Wiggin, Sir Jerry
Shersby, Sir MichaelWilkinson, John
Sims, Sir RogerWilletts, David
Skeet, Sir TrevorWilshire, David
Smith, Tim (Beaconsfield)Winterton, Mrs Ann (Congleton)
Smyth, The Reverend MartinWinterton, Nicholas (Macc'f'ld)
Soames, NicholasWolfson, Mark
Speed, Sir KeithWood, Timothy
Spencer, Sir DerekYeo, Tim
Spicer, Sir James (W Dorset)Young, Rt Hon Sir George
Spicer, Sir Michael (S Worcs)
Spink, Dr Robert

Tellers for the Noes:

Spring, Richard

Mr. Derek Conway and Mr. Michael Bates.

Sproat, Iain

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House supports the Government in its determination to improve the quality and management of service housing; notes that the proposed sale of the married quarters estate in England and Wales will release £100 million of new funding to upgrade married quarters throughout the United Kingdom, and enable the Ministry of Defence to dispose more efficiently of surplus properties; notes that the sale will have no bearing on the charges service personnel pay for their quarters; recognises that the interests of the services and service families have been properly protected; and accepts the judgment of the Government and the Chiefs of Staff that the sale offers the right basis for real improvements in service housing which are long overdue.

Energy Policy

We now move to the next debate, which is on energy policy. I have to announce that Madam Speaker has selected the amendment in the name of the Prime Minister.

7.16 pm

I beg to move,

That this House notes that British Energy has been privatised for just £1.4 billion, well below the Government's early estimates and proof that the sale was a bad deal for the taxpayer which was carried through in defiance of basic common sense; notes that there is no sign of a strategy from the Government upon the ad hoc restructuring of the electricity industry in which companies and billions of pounds have changed hands but consumers have become an afterthought; further notes that, as more coal pits close, there is no sign of a strategy on the effect of the renegotiation of the coal contracts in 1998 or of the take-or-pay gas contracts problem and no sign of leadership on the introduction of competition into the domestic gas and electricity supply industries in 1998, risking chaos and a crisis of public confidence in competition; and calls on the Government to establish a framework to promote efficient energy industries delivering a fair deal for consumers.
According to press accounts, the Minister for Industry and Energy will relinquish his post soon, and he has already informed us that he intends to stand down from Parliament. I believe that his intention, on going into the private sector, was to leave us on a high note following the successful privatisation of British Energy—that "final burst of energy".

I understand that on 12 July the right hon. Gentleman delivered a valedictory address subtitled, "Some thoughts on energy policy, past, present and future", in which he helpfully admitted:
"there's still a few things to be sorted out."
Perhaps that was a coded way of telling us that he is leaving behind him an in-tray stacked high.

One tribute in the Evening Standard report of the Minister's leaving says:
"One major unresolved issue left by the minister is the introduction of competition in the domestic electricity market, in theory due to start in 1998."
This week Sir Denis Rooke, who was the head of British Gas from 1976 to 1989, declared that millions of "Sids" had been conned into buying shares:
"Over the years 'Sid' certainly has been conned … There's not even been any real explanation … What is happening is the kind of mess I thought we were going to get into. It happens to be much greater, and faster, than I'd expected".
So much for the dream of shareholder democracy that the Conservative party held out to the Sids.

In The Times today, under the headline, "Damning report for electricity competition plan", we find an article spelling out Coopers and Lybrand's view that the plans to bring competition to 23 million domestic energy customers
"will fail or be significantly delayed, with the inevitable resultant recriminations and potential harm to the industry and its customers".
In today's "City Comment" column in the Evening Standard we read:
"The British Energy flotation"—
that is, the nuclear privatization—
"has combined bad subject matter, bad luck and bad judgment … the advisers look foolish, the Government is poorer than it hoped and Sid is out in the cold … It is an ignominious end to a story that was jaded from the start."
If that is the note on which the right hon. Gentleman hopes to leave, he is getting out of the way in time before the flak catches up with him.

In recent months, the Labour party has twice forced the Government to come to the Chamber to debate nuclear privatisation—on 26 March and 18 June. After each debate, our critical questions were left unanswered. Our view—that this fag-end privatisation would prove to be a bad deal for the taxpayer—has proved to be right. Sadly, it is fast proving to be a bad deal for the 606,000 who have bought shares since then. They have seen their shares falling in value, and they do not yet have their share certificates—so they cannot even get themselves out of the privatisation.

We objected to the selling off of the eight nuclear power stations for less than the cost of building a single one—the new Sizewell B. BZW, the Government's advisers—who put the prospectus together—originally suggested a valuation of £2.4 billion. However, the price in the end was £1.4 billion—well below the original estimate. It was a giveaway sale by the Government, who were fixed on a last desperate dash for cash. We argued that the cash-generating profitable part had been sold off too cheaply, while millions of pounds of liabilities would remain with taxpayers for generations to come.

How can the hon. Gentleman say that it has been sold off too cheaply, as anything only has the value that someone is prepared to pay for it? If the market is now pricing it at below the level at which it was sold, did not the taxpayer get a very good deal?

I am delighted by that intervention. We once had monetarism and neo-Reaganomics, but we now have the economics of the car boot sale—it does not matter what we get for it as long as we get something. The point is that the Government have sold off assets at well below their value to the taxpayer, and the taxpayer will carry on paying for those assets for years to come. The sale has proved to be a bad deal for the shareholders as well. The estimates of the productive efficiency of the power stations, which at the time were set at 83 per cent., were well above 75 per cent.—the usual performance of the reactors. In other words, they were grossly optimistic.

When we challenged the Government on reports of faults at Hunterston B power station, we were accused by the Minister of scaremongering. Yet within five hours of the closure of the sale of shares on 10 July, the company publicly revealed that two out of the seven privatised advanced gas-cooled reactors—Hunterston B and Hinkley Point—had been found to have identical steam leak weld faults, and both were taken out of service.

Before the Minister leaves, perhaps he will tell us when he and his Department knew of those faults. Why were the potential investors not told? Why was the problem not even spelt out in the prospectus? Can he confirm the chronology of the problems with the re-heat boiler pipe weld cracks on Hinkley Point B and Hunterston B? In late March, Hunterston B reactor 4 load was reduced and the C quadrant boiler was taken out of service with a suspected steam crack. It was shut down on 13 April, but was re-opened at 75 per cent. of capacity on 4 May after the removal of the defective pipe. It was then put into what is called statutory outage for repairs on 1 June.

When we challenged the Government on 4 June to publish the Clifford Chance report that made direct references to the steam cracking, we were told that these matters would be dealt with in the forthcoming prospectus. We asked for that Clifford Chance report to be put in the public domain, and I again ask the Minister to do that, so that the details of what went on can be known. I hope that the Minister will confirm that, on 7 June, Hinkley Point B also moved into statutory outage. Yet, for some reason, it took 28 days until 4 July to reveal that a similar fault with steam pipe weld cracks had been discovered on reactor 4 of Hinkley Point B as well. Why did it take 28 days for that fault to be revealed?

The Minister may claim that the problem was announced in advance and that the shareholders ought to have picked it up. But it was published in that well-known and well-read journal, the "British Energy Monthly Output" figures. It appeared on 4 July, but only as a footnote on weld inspections at Hinkley and Hunterston. I do not think that those who have bought shares will think that that is good enough. They will believe that they have been seriously short-changed.

The hon. Gentleman is telling the House that because certain reactor faults were not made public, shareholders have overpaid for the purchase of nuclear energy shares. How does he reconcile that with his earlier comment that the Government did not get a sufficiently high asset price for the sale?

We know that the reactors were undersold because of the price of building them, and we have seen today that the cost of the shares is falling through the floor—89p is I believe the price today. [Interruption.] I do not think that the shareholders will be amused by the remarks of the hon. Member for Rutland and Melton (Mr. Duncan). They believe that the Government have short-changed them again. [Interruption.] The hon. Member for Rutland and Melton puts his finger to his head, as if he were an idiot. I would suggest that his economics have proved to be idiotic for the past 15 years, and that it would have been common sense to calculate the cost to future generations of taxpayers of selling off the nuclear industry.

I have given way already to the hon. Gentleman, and I want to make a little progress.

Why were the shareholders not told that there were faults in the reactors? It is not that the structural faults would jeopardise safety—I accept that, despite what some have irresponsibly claimed. But they certainly would affect generating efficiency and capacity. In other words, those reading the prospectus and buying the shares on the basis of that prospectus were sold short. Either that, or Conservative Members think that they ought to talk up shares and not give people the real facts about what they are buying. I suspect the latter to be the case.

While the Secretary of State was in the dealing room of BZW watching the shares being sold on screens, were the Ministers sitting on that crucial information that we know and they know would have jeopardised the sale even more? That is why this desperate dash for cash is the final betrayal of the ordinary shareholders whom the Government have claimed for years to support.

I have allowed the hon. Gentleman to intervene once already. I want to refer to that other acclaimed success—something to which the hon. Gentleman may wish to refer himself—the opening up of the electricity market to competition. Day by day, we learn that company after company—including GEN and Sainsbury—are refusing to pay the pool for electricity because they believe the pool system to be operated in the interests of its members, rather than its customers.

Of the 9,000 who were brought into the scheme in the industry on the last occasion the Government opened up the electricity market to commercial customers, only 5,000 had meters on the day. Coopers and Lybrand published a report subsequently describing the whole process as chaos. What do we find today? Coopers and Lybrand has published a review of the preparations for the introduction of the 1998 competitive supply market. On the likelihood of delivering that market in 1998, the review states:
"A significant majority felt the likelihood to be well below 50 per cent., while a number felt that the deadline is already unachievable."
The report continued:
"OFFER's contribution is still not sufficient … Furthermore, PA Consulting … who currently undertake the role of the overall programme manager on behalf of OFFER was seen by many as being 'gagged' by OFFER leading to a lack of trust and credibility in them within `the industry'."
The report continues:
"By most standards, an industry-wide programme such as 1998 represents a very sizeable project and not one to be managed by loose overall coordination … it is inappropriate to allow the various parties free rein with the hope that it will all prove 'all right on the night'. In our view, it requires firm and committed programme management."
That is the view of the Government's own auditors.

The hon. Gentleman seems to assume that the value of energy projects is exactly equal to the amount of money invested in them. Is he aware that he is making the same mistake as that made by the Labour Government that invested millions of pounds in the ground nut scheme, which proved to be worthless?

I am always glad of a historical reminder. I am tempted to divert the debate, but you would rule me out of order, Mr. Deputy Speaker. If the INMOS project had been properly supported, half of software production would be in Britain rather than elsewhere. This is a Government who know the price of everything and the value of nothing.

Competition, yes—but not simply for its own sake. We believe that it is vital to get it right. If competition in the electricity market in 1998 fails and falls flat, although the Minister for Industry and Energy will be well out of the way, it will generate a massive crisis of consumer confidence in competitive energy markets. There must be leadership from somewhere to ensure that metering, billing and the settlement of the bills and payments is sorted out in advance and not left to a simmering row between the regulator and the pool.

As the head of Yorkshire Electricity is already warning, the real test of 1998 will be its effect not only on price, as Conservative Members insist, but on our social obligations to the people who find it hardest to pay their bills. Yorkshire Electricity argues that the electricity prices charged to those least able to pay will have to rise in the new market when the new entrants take up their customers. The social obligation to share costs will disappear and companies will remove any cross-subsidies. That will lead, as we have predicted, to cherry picking. Direct debit payers will get the best deal and the cheapest energy at the expense of the poorest. Yorkshire Electricity and other regional electricity companies rightly ask who will address the effects of unbundling the costs before 1998. If price competition is to work, it must be judged by its effect on those least able to pay, whose need for energy is basic.

It is true that this is the great age of transition in energy markets. Coal, gas, electricity and nuclear energy have been privatised by the Government. There has been a shift from coal, the total fuel demand for which has fallen from 40 per cent. in 1970 to some 25 per cent. today. Gas-generated power contributes some 20 per cent. of energy generation; nuclear energy 25 per cent. There has been a dash for gas.

There is one point about which the House is puzzled. On the sale of nuclear energy, does the hon. Gentleman think that the share price should have been lower because of what he said about the prospectus, or higher because of what he said about the asset value?

We made it clear that we would not have started to sell nuclear energy. We have emphasised that it is a bad deal for the taxpayer and the shareholder alike. [Interruption.] I am sure that shareholders and future generations will not laugh when the Government have been seen off the park because they will have to pick up the tab for the Government's irresponsibility in dealing with the industry.

Does my hon. Friend think that it is a sensible use of taxpayer's money to spend £3 billion on building the world's largest pressurised water reactor at Sizewell and within 12 months of it coming on stream, to sell it for £1 billion and throw seven free advanced gas-cooled reactors into the bargain?

I thank my hon. Friend for his patience in spelling out the arithmetic so that a schoolchild could understand it. The problem is that the Government do not seem to be affected by the arithmetic. They are still prepared to press ahead.

There has been what has been described as the dash for gas—the move to gas as a primary generator of fuel. When we discussed the coal review, the Government said that they wanted diverse and secure supplies of energy at competitive prices for years to come. We should take that seriously and make sense of it so that we do not end up dependent halfway through the next century on one source of fuel generation—gas—and then run out of it, and so become dependent on importing gas through the gas interconnector. That would be typical of the short-sighted cash-in mentality of this Administration.

The recent report by the 2,000 scientists who came together for the United Nations intergovernmental panel on climate change concluded that the balance of evidence suggested that global warming is a real phenomenon in many parts of the world, even though it may be masked in Britain by pollution from burning fossil fuels. We should take it seriously and plan for it in our energy and environmental strategies. It is not simply about price.

In a written answer to a question that I asked when I was first appointed to my present position, the Minister for Industry and Energy told me that we did not need to worry because there were 53 years of gas reserves in the North sea. I do not know how he arrived at that figure but some oil companies argue that it would need only two hard winters for the gas bubble, as it is called, to disappear. That would put us under pressure and we would have to import gas. If our source of gas imports was the Caspian region, it would be difficult to guarantee secure supplies because of political difficulties.

We believe in a sustainable energy future for Britain. When a previous Secretary of State for Energy, Nigel Lawson, was asked about that, he said that Britain did not need an energy policy because the market would provide one. There would be some regulation for a while and then it would wither away. We do not believe that the market alone will provide for the future energy needs of Britain. The mayhem of the past week is proving that already. We believe that we will need fair, accountable, transparent, depersonalised regulation and we will publish our detailed plans for that shortly.

I do not want to interrupt the hon. Gentleman's flow but can he confirm that industrial gas prices, on average, have fallen by 48 per cent. in real terms since privatisation? To what does he attribute that—the tooth fairy?

I can confirm that gas prices are falling but we should compare them with the beach price. Some people believe that when the gas market is open for full competition in 1998, domestic prices could fall and commercial prices rise. The chimera of the lowest possible gas price is not what Conservative Members claim.

The target that we must aim at is not driving up the price every day for a short-term win or lose competition but to get sustainable, long-term competition in energy markets. We are committed not only to developing cleaner energy supplies, conserving energy and reducing demand but to ensuring that there is sustainable long-term competition in energy markets.

We are committed to increasing the proportion of energy generated by renewables. Lamentably, renewables such as combined heat and power schemes and photovoltaics have not been backed by the Government and renewables contribute only 3 per cent. of our energy. We shall push harder for a clean fuel levy. We spell out that we would increase targets for cutting emissions.

I am interested in the hon. Gentleman's comment about a clean fuel levy, because, at the weekend, the Financial Times suggested that the Labour party was considering using that levy to subsidise so-called "clean" coal. That clean coal will, however, contribute to global warming. Can the hon. Gentleman clarify what the Labour party's position is on this matter?

We would certainly examine the current levy on renewables and other options. The Government lock out the option of photovoltaics, for example. We would examine options to ensure that we have various sources of fuel, which does not mean writing off the coal industry. The tragedy is that the technology to clean up coal at the front end rather than at a later stage was developed in Britain but it was sold abroad. That technology could help to get rid of some of the noxious emissions, such as sulphur dioxide and nitrogen dioxide, and it is still a possibility.

We will consider the issue of home energy efficiency. We do not think that reducing energy demand is necessarily in conflict with the generation of energy. There should be programmes to promote energy efficiency and to build on home energy efficiency schemes. We could create 50,000 new jobs, as my right hon. Friend the Member for Sedgefield (Mr. Blair) spelt out in February. We are committed to taking action to reduce greenhouse gases, which means dealing with the issue of energy generation—as the hon. Member for Truro (Mr. Taylor) mentioned.

We need a more comprehensive approach if we are to reduce our carbon dioxide emissions. It could be argued that the Government have hit their targets only because they have closed down the manufacturing sector that created most of the problem. The Government have cut £31 million in the Budget from the home energy efficiency scheme, which has meant the loss of more than 1,000 jobs and the insulation of 2,000 fewer homes.

As the poet Valéery said:
"the future is not what it used to be."
Energy markets may look very different in the future. Already supermarkets are saying that they could be energy suppliers through the use of smartcards. Already we face turmoil in takeovers and mergers in the electricity generation and supply sectors.

We say clearly that we do not want to be faced with a nuclear flotation flop. We do not want to face competition chaos, which risks causing a crisis of public confidence in even the idea of competition in energy markets. We do not want takeover or merger confusion in which the Minister disagrees with the Secretary of State over reports from the Monopolies and Mergers Commission on PowerGen and National Power. The impression that I get from the Minister for Industry and Energy is that, yes, he has been involved in all the privatisations, but he has lit the blue touch-paper and is simply walking away.

The Government lack leadership and vision. They are incapable of providing the leadership and vision to face the fact that we live in an age of transition. We face great changes, not least in the energy sector, and the future will look different: but we should face the changes positively, and welcome their challenges.

We are prepared to work with industry to achieve the potential in the energy utility sector. We want to set our sights so that they break out of the restrictions caused by the Government's short-term thinking and to deal with the problems that our society will face half way through the next century. That is too much to expect from this short-term, short-sighted Government. Whoever replaces the Minister for Industry and Energy at the Dispatch Box will not be able to provide the leadership and the vision that we need in energy policy to take us into the next century.

7.43 pm

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

`congratulates the Government on its privatisation of the former state energy sector; notes that its market-based energy policies have led to lower prices and better services for consumers; and looks forward to the further benefits to consumers which will flow from the opening up of the gas and electricity markets in 1998.'.
Whoever replaces me at the Dispatch Box at some stage in the future, I am sure that he will do much better job of it than would the hon. Member for Leeds, West (Mr. Battle), whose speech was completely incoherent. He did not seem to understand most of what he talked about, and he made no attempt at all to describe the Labour party's energy policy, which does not surprise me. Looking at the motion, in a flash I was transported back to the old days of old Labour—back to the 1970s, and to the days when no speech from a Minister in the then Labour Government was complete without making reference to an energy strategy and no paragraph was complete without paying obeisance to an energy plan. Those features can still be found in the motion. Let us go through it.

According to the motion, the hon. Member for Leeds, West and his advisers should decide how much British Energy is really worth. For Labour today, it is a case not only of "Whitehall knows best" but of "Short money advisers know best". There is no role for the market. When my hon. Friend the Member for Rutland and Melton (Mr. Duncan) asked the obvious question, how a deal can be bad for both the shareholder and the taxpayer, the hon. Member for Leeds, West seemed to be totally incapable of understanding the absurdity of his statement. The Opposition motion seems to state that the Government should restructure the electricity industry. According to Labour, the market should of course have no role.

Further on in the motion there is a complaint about coal pits closing. But what is the Labour party's policy on coal? Will it or will it not, if it were to get into power, renationalise the coal industry? We know very well what the right hon. Member for Livingston (Mr. Cook) said about it. He was quite clear about it and said:
"I should be astonished if our plans to rescue the coal industry after the next election did not involve public ownership."
That well-known friend of the right hon. Gentleman, the hon. Member for Clackmannan (Mr. O'Neill), was even more precise later in the debate. He said:
"When Labour returns to power … we shall restore it"—
the coal industry—
"to public ownership".—[Official Report, 23 March 1994; Vol. 240, c. 313–84]
That is a quite clear and unequivocal commitment—one that would really warm the heart of the hon. Member for Bolsover (Mr. Skinner).

We have heard not a word about the Labour party's policy on coal. I ask the hon. Member for Leeds, West now to tell us—I shall willingly give way to him—whether the Labour party will or will not renationalise the coal industry.

I am always willing to allow the hon. Gentleman to speak for the Labour party, because he is its real core. The hon. Member for Leeds, West does not have the guts to stand up for anything.

The Minister has taken my name in vain, because he said that I would agree with the statement that he just made. Let me put him straight about coal. The Government destroyed the coal mining industry. There are now no pits left in my constituency. There are four or five pit villages in which the unemployment rate is more than 50 per cent. That is the tragedy of the pit closures.

I shall tell the Minister, in case he wants to repeat it, that I believe that the next Labour Government—when he has a job in the City, raking in money from the people whom he has been dealing with—should take the coal industry back into public ownership and not pay any compensation at all.

There we have it. That intervention is interesting, because, a few years ago, the hon. Member for Bolsover would not have prefaced his remarks by saying, "I believe." He would have said, "The Labour Government, if they come into power, will renationalise the coal industry."

I think that it is the hon. Member for Leeds, West, because he is squirming. He has discovered what all previous Labour energy spokesmen have discovered: they cannot make a single pronouncement, because they are frightened of the hon. Member for Bolsover and what he might do to them. They are concerned about making any commitment at all.

Let us go on and examine what the motion says. According to the Labour party, it is up to the Government to intervene to fix coal contracts and to impose changes on gas take-or-pay contracts. There is no role for the market there, only central direction by the Government.

To cap it all, the motion then says that we are not taking the lead in introducing competition in electricity and gas. Yet the Labour party opposed the Electricity Act 1989, which introduced competition in both the industrial and domestic markets, and the Labour party voted against the Gas Act 1995, which introduced competition for domestic gas consumers. So to accuse us of lacking leadership in introducing competition in electricity and gas is inaccurate humbug.

No, I shall not give way for the moment.

I wish to deal seriously with the points made by the hon. Member for Leeds, West. Although he did not have the guts to do so from the Dispatch Box, during the past two or three hours he has been running from television studio to television studio and from radio station to radio station saying that he has a leaked document that shows that British Energy deceived shareholders. That is a serious accusation to make. It is significant that he did not repeat that accusation from the Dispatch Box. I wish to go through the chronology of what actually happened.

The Minister will recall the chronology that I read out: it was from that document. There is no problem about that.

The hon. Gentleman did indeed read something out from a document. The problem is that the document is from a company that competes with British Energy; so he has been going around claiming that British Energy has been deceiving shareholders, basing his allegation on a document that comes from a competitor of British Energy.

The hon. Gentleman says that it is not a competitor of British Energy. I know that he is ignorant about the energy sector, but he seems to be unaware that Magnox is separate from British Energy. We have just floated British Energy, not Magnox, on the stock exchange. The Government continue to own Magnox, and it is therefore a competitor of British Energy.

If the Minister reads through the document, he will see that it is the minutes of the meeting attended by Magnox—that is the heading on the paper—Nuclear Electric, Scottish Nuclear, British Energy and various British Energy advisers.

I shall go through the whole chronology, and the hon. Gentleman will find out the true position. I am treating this issue with the seriousness that it deserves, because the hon. Gentleman has been making a serious accusation outside the House rather than from the Dispatch Box.

The British Energy prospectus sets out clearly and exhaustively the range of issues that prospective investors should consider. It covers British Energy's continuing programme of work to deal with the reheat cracking in welds, which led to last week's closures. Had the hon. Gentleman bothered to look at the prospectus, he would have found the details on page 65, and further warnings about this and other technical issues on pages 67 and 109. Far from misleading people, British Energy went out of its way to deal openly with those difficult technical issues.

I promise the hon. Gentleman that I will give way to him, but will he first listen to my statement? I am trying to put clearly on the record what actually happened. It will benefit the House if I am free to do that. While carrying out planned testing of reheater pipes during the Hinkley Point B statutory outage—which was scheduled to last for two months from 7 June—the existence of a crack in the pipe was confirmed on 1 July. A further test was carried out on 2 July. On 3 July, Nuclear Electric Ltd., which holds the licence, decided to cut out the affected weld for detailed metallurgy tests. On 4 July, Nuclear Electric issued a press release, which reported on its monthly output figures and, in accordance with normal practice, on the progress of the statutory outages at the reactors at each of Hunterston B and Hinkley Point B. I have that press release in my hand.

If my hon. Friend will forgive me, I shall do so in a moment.

The press release noted that a crack in a weld had been discovered at Hinkley; that the weld would be cut out and replaced; and that steam-pipe weld inspections would be undertaken on the remaining reactors at Hinkley Point and Hunterston in due course. Accordingly, the pipe was cut out on 8 July and, on the morning of 9 July, the pipe was sent to the Berkeley laboratory for analysis. At 5.30 that evening, the initial results of the analysis, which showed the extent of the crack to be greater than expected, was passed to Nuclear Electric's director of engineering and, shortly afterwards, to the chairman, managing director, operations director and director of safety at NEL, and to the chairman of Scottish Nuclear.

At 7.15 that evening, the NEL managing director and the Scottish Nuclear chairman, in consultation with the appropriate technical, engineering and safety directors, decided to shut down immediately the remaining reactors at Hinkley Point and Hunterston for precautionary inspection of their steam-pipe welds. Controlled shutdowns commenced at 8 pm. British Energy's chairman and chief executive were subsequently informed of the position and my officials at the DTI were notified at 9 pm that evening. Ministers, including me, were told about the closures at 9 am on Wednesday 10 July.

During the morning and early afternoon of 10 July, a high-level group of executives from the British Energy group, including its chief executive, met their advisers and considered carefully the evidence from the metallurgical examination of the cracked weld and the financial consequences of the decision to close the remaining reactors for a two-week inspection so that they could issue a press release containing all the relevant information. At 3.30 pm on 10 July, they met DTI officials and privatisation advisers to advise us of their conclusions and the terms of the proposed press release, before issuing it at 5.30 pm.

I have taken some pains to explain the process at length because I want to assure the House that there is no question of anyone being misled or of information being withheld. The company acted entirely properly and it is a tribute to its stringent safety procedures that precautionary measures were taken so promptly to deal with the problem. Clearly, the timing of the closures at the two stations was earlier than originally planned, but the company did not regard the developments as representing a significant change for potential investors, so invalidating the prospectus.

This is an important matter, and I listened carefully to the Minister's outline of the programme. The Minister will concede that Nuclear Electric is part of the group. I have in my hand issue No. 6, page 1, of "Hinkley Point News", dated Monday 1 July. It says:

"During planned inspections on boiler pipeworks associated with reactor 4, a slight defect was discovered on a reheater pipe weld. This weld will now be cut out and preparations are in hand to replace it. This will either require an extension to the current outage, or a separate outage later in the year."
That was on I July, which does not quite chime in with the timetable that the Minister has just read out.

Mr. Deputy Speaker, the existence of a crack was confirmed on 1 July. It was then—

The employees knew about it. It is part of the culture of British Energy that it is open in its communications with its employees and that it informs both management and employees as issues arise. I am very surprised that Opposition Members, especially the hon. Member for Barnsley, West and Penistone (Mr. Clapham), laugh at the idea of open communication with the work force.

The Minister says that it is the culture of the nuclear industry to have a free exchange of information with its work force, and I am pleased that we are making good progress in that direction, but should it not be part of that same culture to have free communication with its potential investors and shareholders rather than to defer this announcement to one hour after the close of that share offer? Should not that announcement have been made, at the very least, earlier that day or, better still, two or three days before the close of the share offer?

I am sorry; I did go to considerable pains, and I think that, if the hon. Gentleman reads Hansard tomorrow, he will follow through the sequence of events, which makes it very clear that the full extent of the crack was not known until the Tuesday evening, that the stations were then closed down and that, subsequently, the chief executive and chairman of British Energy were informed.

The chief executive and chairman met on the Wednesday, the day in which the retail offer closed, to discuss with their financial advisers the financial implications of the decision to shut down the two stations. They did that, because clearly there was an issue; they were in the process of floating the company. They decided, in the light of all the advice that they had had, that it was not an issue that needed more than the issuance of a press release. As I said, that press release came forward at 5.30 that afternoon.

I can assure the hon. Gentleman that there was no attempt to deceive, that absolutely—[Interruption.] The hon. Member for Leeds, West laughs.

Is the hon. Gentleman prepared to say from the Dispatch Box, despite what I have told him about the sequence of events, that there was a deliberate attempt to deceive?

I followed the details through as the Minister related them, but they still conflict with the newsletter and the information that was given to the shareholders. He told us to read the prospectus; I notice that he did not read out the relevant part, because it does not spell it out in the prospectus.

It is sad that, despite a very detailed, explicit, carefully weighed statement from the Dispatch Box, the hon. Gentleman is still prepared, speaking as a supposedly responsible Opposition Front-Bench spokesman, to wave at me a leaked document from a competitor company.

I have to say to the hon. Gentleman that it is, to say the least, unfortunate that a Front-Bench spokesman in the House behaves in that way.

I want to get on with the debate. I will, however, give way to my hon. Friend the Member for Rochford (Dr. Clark).

Does my right hon. Friend agree that nuclear power stations—indeed, any power station—will from time to time require shutdowns, sometimes scheduled, sometimes not? Despite all this, the power stations about which we are talking at present have increased their load factor in the past five or six years from 52 to 71 per cent. Does that not show the value that the taxpayers are getting when they buy into British Energy?

My hon. Friend is right. Anyone who knows the nuclear industry, who knows the improvement in the performance of the stations and the dramatic change that has been achieved during the past four or five years, knows that that is a tribute to the skills of the employees of British Energy and to the management of British Energy.