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Commons Chamber

Volume 404: debated on Thursday 8 May 2003

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House Of Commons

Thursday 8 May 2003

The House met at half-past Eleven o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

London Local Authorities Bill Lords

Order for Second reading read.

To be read a Second time on Thursday 15 May.

Oral Answers To Questions

Treasury

The Chancellor of the Exchequer was asked—

Euro

1.

If he will make a statement on his policy towards UK membership of the single currency.[111882]

9.

If he will make a statement on progress made with satisfying the criteria for joining the euro. [111890]

As I said in my Budget speech to the House on 9 April,

"I will present the Government's statement on the assessment on the euro by the first week of June.
The House will have before it all 18 of our background studies as well as our assessment of the five economic tests."—[Official Report, 9 April 2003; Vol. 403, c. 284.]

I am grateful to the right hon. Gentleman for that reply. Given that the so-called five economic tests have not been met, and that the harder the Government have tried to persuade the British people of the case for euro entry, the more strongly they have resisted, why does not the Chancellor abandon any plan to hand over massive powers for ever to people whom we do not elect and cannot remove, and concentrate instead on the crisis in our public services, which is letting people down week by week, month by month, and year by year of this failing Labour Government?

We will take no lectures from the Conservatives about either how to run a European policy or how to run our public services. As far as the five economic tests are concerned, those tests are designed to examine whether it is in the national economic interest to join. Some people, like the Conservatives, would refuse to join as an act of dogma, even if it were in the national interest, and some, like the Liberals, would want to join irrespective of whether the five economic tests were met. Our position is the right one, and I will report to the House in due course.

Does my right hon. Friend accept that even those of us who are supportive of the European project and of joining the euro at some point feel that recent events with our European partners over Iraq has made it less likely in the short term than it might otherwise have been? Does he agree that to go for a referendum early and fail would be the worst of all policies?

Will my right hon. Friend also make it very clear to the House that he rejects totally the nonsense peddled by Conservative Members that we must never, under any circumstances, join the euro?

The issue is that this is a long-term decision about the future of Britain. It should be made not on short-term considerations based on foreign policy or on other events that are happening this year, but on a long-term assessment of the national economic interest.

As for those people who would rule it out as a matter of principle, I have said before in this House that if the case for joining is clear and unambiguous on economic grounds, the constitutional factor should be taken into account, but it should not be an overriding factor. It is a pity that Conservative Members, who said that they were ruling out the single currency for the duration of a Parliament, now appear to be ruling it out for ever.

Does the Chancellor agree that there can never be a satisfactory convergence of exchange rates in Europe that will be permanently beneficial to Britain unless the age-old trade cycle is exorcised from the economic textbooks? Does he think that that is at all likely?

I do not agree with the hon. Gentleman. He is finding another way to justify ruling out a single currency on the ground of principle and as an act of dogma. I hope that those in his party and others who support that position will recognise that the assessment is about whether this is in the national economic interest. We are looking at investment, employment, financial services, sustainable convergence and issues of flexibility in the economy. Those are the tests that ought to be met, and it is on that basis that we will make a judgment in the national economic interest. It would be wrong for this country to rule out the single currency, as the Conservatives want to do as a matter of dogma.

If the time is not right for the moment, would the Chancellor consider introducing parallel pricing showing the price of goods in pounds sterling and in euros?

On all the details relating to the single currency, my hon. Friend will have to wait until the statement is made in the House of Commons. We will publish the 18 studies. This is the most detailed, comprehensive and rigorous assessment of these issues that has ever been made. It is a lesson of history that nearly 13 years ago, when the country joined the exchange rate mechanism, no analysis was done, no preparation was done, and no assessment was made. The result was the disaster presided over by the shadow Chancellor, who was Secretary of State for Employment at the time; we will not make those mistakes.

Inward investment in Europe in the decade before the launch of the euro averaged 39 per cent. for the UK, but Britain's share since the euro was launched three years ago has averaged only 23 per cent.—almost half the previous figure. Does the Chancellor attribute that to Britain's absence from the euro or his economic failures in the UK?

The hon. Gentleman has to look at the picture in some detail. Inward investment from the United States as a share of investment in Europe and Britain has increased. One cannot extrapolate a general picture from one year's figures.

Or from three years' figures. The issue must be considered as a whole. That is why one of the 18 studies is being conducted on inward investment and general investment. I hope that the hon. Gentleman will be sufficiently patient to consider the results when the assessments, especially that on inward investment, are published.

For far too long, the Liberal party has held the position that it wants us to join the euro irrespective of the economic issues. That would repeat the mistakes of 1990 when we joined the exchange rate mechanism. We need a proper analysis and assessment. We shall not repeat mistakes, nor should the Liberals.

While we await the report on the assessment of the five economic tests with great interest and anticipation, does my right hon. Friend agree that a review of the stranglehold of the stability pact in the European Union is long overdue? Will he confirm the Government's policy that there will be no harmonisation of taxation in the European Union in pursuit of euro membership?

We have already made our position on taxation clear. We have examined matters that relate to the stability and growth pact in European Finance Ministers' meetings, and further discussion will take place. We made the points that the stability and growth pact must take account of investment and acknowledge that there are pressing reasons for countries to make long-term investments. It must take account of the economic cycle, as the latest recommendations attempt to do, and the sustainability of the debt position. We have made those three points about the stability and growth pact consistently. I am pleased that opinion in Europe is moving in our favour on all those matters.

Has it momentarily escaped the Chancellor's mind that he and the Labour party supported entry into the ERM and that his permanent secretary is on record as saying that the five tests can never be clearly and unambiguously met?

In the past few weeks, we have read reports that the Education Secretary, the Health Secretary, the Trade and Industry Secretary and the Defence Secretary were gearing up for a concerted attack on the Treasury; that the Welsh Secretary has said that the pound has fallen to levels that would make British membership of the euro possible; that the Chancellor's faction has briefed that a referendum will be ruled out before the next election, and that the Prime Minister's faction has briefed that the Chancellor's chief economic adviser should be sacked for poisoning the Chancellor's mind. Is not it clear that the Cabinet is in disarray over the issue? Will not the terms of the Chancellor's forthcoming statement be determined not by an objective assessment of the effect of euro membership on jobs and prosperity in this country but by the outcome of the furious faction fighting in the divided Cabinet?

Why cannot the Conservative party address genuine issues to do with the economy? When we discuss stability, employment, investment and financial services—the subjects of the tests—Conservative Members can only cite unattributable gossip. The shadow Chancellor was Employment Secretary in 1990, and he cannot escape his responsibility for the events of 1990 to 1992. The British people will never forget them: 15 per cent. interest rates, mortgage repossessions, negative equity, businesses going bankrupt and massive deficit. The Conservatives will never be forgiven.

.

May I commend the Chancellor on his rigorous approach to the economic tests and direct his mind to the Treasury Committee's equally rigorous approach in its report, "The UK and the Euro"? I draw to his attention the comments of Professor Michael Moore of Queen's university, Belfast, who said that waiting for two economies to converge was like waiting for two lovers to pick the perfect moment for marriage—it will never happen. Convergence can take place only within a monetary union. On that basis, what criteria is my right hon. Friend using to ensure that we will ultimately have sufficient convergence with euro countries?

Question one of the tests relates precisely the point that my hon. Friend ends with. It asks whether there is sufficient convergence for Britain to be able to live comfortably with the interest rate set in the eurozone. Question two, if I may put it like that—the second test—is about whether there is sufficient flexibility. My hon. Friend rightly points out that this is a serious economic analysis of the consequences for Britain and Europe. We are looking at these issues in more detail than any Government have done in the past. We are not going to make the mistakes of the early 1990s, and I believe that the House will look forward to seeing not only the 18 studies that are being produced on all the difficult issues that my hon. Friend mentioned, but the assessment itself. I praise the Treasury Committee for involving itself in the detail of this work, and I just wish that the Opposition would take the issue as seriously.

Dividend Tax Credit

2.

What estimate he has made of the effect on pensions of the removal of dividend tax credit. [111883]

Payable tax credits were withdrawn on dividends paid to pension funds as part of a package of reforms that included cuts in corporation tax and the abolition of advance corporation tax. These changes were designed to improve the climate for long-term investment in the United Kingdom. In the long run, this should benefit all investors, including pension funds and those saving for retirement.

Will the Paymaster General now accept that, although the removal of dividend tax credits in the afterglow of the 1997 general election victory might have seemed like a clever wheeze and a clever stealth tax at the time, many pensioners in my constituency and elsewhere are suffering hugely in the cold light of today because of this irresponsible raid on pension funds?

As the right hon. Gentleman knows, the abolition of the dividend tax credit was part of a wider corporation tax reform to remove a distortion in the market—a distortion that the then Chancellor of the Exchequer, now Lord Lamont, described as having a "damaging economic effect" when the Tories themselves reduced the tax credit. Furthermore, in an article published on 24 November 2002, when asked whether the Conservatives would reintroduce the tax credit, the hon. Member for Havant (Mr. Willetts) said:

"Actually, I don't think we'll be doing that. Helping pensions funds doesn't mean going back to the same system we had before. you know."
Precisely. The Government are helping pension funds and pensioners through their Green Paper on pension reform, their support through the tax system and their simplification of the tax system, and by providing a stable economic framework of low interest rates and low inflation, allowing the economy—and, therefore, future investment—to do well.

Does my right hon. Friend agree that the message for those who are in work is that they must save more for their pensions? In that way, they will have a better future once they have retired. Has she made any assessment of the effects that the removal of the money released by the abolition of the dividend tax credit from public spending would have on public services?

My hon. Friend raises an important point. This is precisely why the Government have introduced proposals on the simplification of tax payments and support to those saving for retirement. The Green Paper looks at ways to give greater choices, more flexibility and secure savings, so that people can plan for the long term. The money released in the way that my hon. Friend described was used to cut corporation tax and to help to introduce reforms in the corporate tax system to enable our businesses to become more competitive and to tackle the productivity gap. That is why this country has, according to the Organisation for Economic Co-operation and Development, one of the best environments for companies in the European Union.

The Minister seems to hold the almost incredible belief that removing £5 billion a year from pension funds has no negative effect on those funds. Does she know anyone who shares that view, other than the late Robert Maxwell?

As the right hon. Gentleman knows—or as I thought he knew—the effects on pension funds and on the stock market are varied. To try to attribute those effects to changes in the tax system—changes that were beneficial to our companies, and which his party pursued when in government—is absolutely ridiculous. He needs to address the question of why the hon. Member for Havant, the Conservative spokesperson on social security, now says that he does not think that the Conservatives will be returning to the tax credits. There are better ways of helping pensions and pension funds than going back to the old system. It is the right hon. Gentleman who lives in the past; this Government are placing the economy in a competitive system to benefit citizens now and in the future.

What analysis did my right hon. Friend make before taking decisions on the future of pensions, based on the comparison of £4 billion taken out of pensions in an unregulated pension market by the previous Government? When looking at how money is used in the pensions services, is it not better to consider a proper, regulated market with properly managed funds in a strong, stable economy in which people can make proper decisions about their futures?

I entirely agree with the points that my hon. Friend makes, and I remind her that the right hon. Member for Hitchin and Harpenden (Mr. Lilley) was a member of the Government who presided over mis-selling and the cheating of millions of people in this country of their pension rights. This Government enabled that mis-selling to be put right and put in place the financial services structure to protect pensioners in the future.

National Insurance

3.

What estimate he has made of the effect of the recent national insurance rises on UK competitiveness. [111884]

With regard to national insurance rises to pay for the national health service, employers' costs for health care have reached £30 a week in Germany, £60 a week in France and £70 a week in the United States. Even after the national insurance rise, employers' health care costs in Britain are, on average, £10.50 a week, while average wages rose by just 2.4 per cent. last month.

Why has the rate of productivity gone down ever since the day that Labour took office?

Productivity in this country is growing. I am glad that the hon. Gentleman has raised this: the only years in which productivity has been negative were Conservative years. The only years in which manufacturing productivity has been negative were also Conservative years—1995 and 1996. I am afraid that he wants to oppose the national insurance rises in health care because he does not believe in the NHS.

What assessment has my right hon. Friend made of the effect of past under-investment in the NHS on UK competitiveness?

I am grateful to my hon. Friend, because the Confederation of British Industry did a study on those issues fairly recently and it is estimated that the cost of sickness is over £11 billion to business every year. The British Chambers of Commerce president said last year that it is our duty to ensure that investment takes place in health care for the interests of business and of employers. The choice is very clear for this country: the national insurance tax rise, which is paying for 80,000 extra nurses between 1997 and 2008 and for 25,000 extra doctors, or the Flight plan, which means 20 per cent. cuts in our public services.

Is it not extraordinary that the Chancellor apparently made no assessment of the effect of the additional £3.9 billion of national insurance employment tax that he is imposing this year on employment and business competitiveness? Has he forgotten, or changed, his conclusion of 21 March 2000 that lower national insurance contributions would act to promote employment opportunities? Is he not concerned at the findings of the recent British Chambers of Commerce survey that one firm in five intends to lay people off and that 16.7 per cent. of firms plan to cut investment as a result of the additional national insurance tax when the profitability of British companies is at its lowest for a decade?

The hon. Gentleman seems to forget that there are 1.5 million more jobs in the economy and that unemployment is at its lowest since the 1970s. Unemployment is lower than in America, lower than in Japan and lower than in the rest of Europe. We have the lowest inflation for 30 years and the lowest long-term interest rates for 40 years. Now, on national insurance, perhaps he will get to the Dispatch Box and explain how he could save 80,000 nurses' jobs in the health service with a plan to cut 20 per cent. out of public expenditure.

Is it not clear that there is a direct correlation between health expenditure funded by the national insurance fund and a productive labour force? Many people in my constituency and elsewhere have long-term illnesses, although they might be able to get back to work if the health service was properly funded. Derek Wanless clearly showed that 40,000 of the 110,000 people who die each year from coronary heart disease would still be living, and perhaps be contributing to a productive economy, if the health service was adequately funded, as it will be under this Chancellor.

That is precisely why the health service is performing more operations, more beds and hospitals are being opened in the health service, and more nurses and doctors are being employed. I believe that in every part of the country people want that additional investment in the NHS. As for its general effect on competitiveness, perhaps the shadow Chancellor and members of the Conservative party generally will read their own observations about the United Kingdom being the most liberal economy in the European Union. How can they say at one and the same time that it is wrong to invest in the NHS and that ours is the most liberal economy in Europe?

Tax Receipts

4.

If he will make a statement on the methodology used to calculate tax receipts. [111885]

The Treasury makes forecasts for each individual tax based on relevant economic assumptions and forecasting methodologies, and then aggregates them to arrive at forecasts of total taxes.

I am grateful to the Chief Secretary for admitting that the Treasury produces forecasts for each tax. The Treasury makes available, in public, its economic model, and independent commentators can offer their own views about the performance of the economy. Will the Chief Secretary publish the economic model that underpinned his answer to me, so that in the interests of transparency, knowledge and understanding of the economy we can all know more about the way in which our tax receipts are progressing?

We have no intention of producing any such publication, but as a former Financial Secretary the right hon. Gentleman understands very well the basic methodology that is applied in these cases. He understands it well because it is exactly the same as that used by past Governments, including the Government in which he served.

There are, however, a number of crucial differences. The most important are that the key assumptions underlying our forecasts are subject to audit by the National Audit Office, that we are committed to more transparency than the right hon. Gentleman ever was, and that we ensure that our forecasts are cautious and seen to be cautious—something that the right hon. Gentleman and his Administration never did.

Is not a policy of full employment the best guarantee of a solid base of tax receipts, and in that regard is there not a fundamental contrast between Labour in power and that lot when they were in power?

My hon. Friend is absolutely right. The difference is between stability under a Labour Government and instability under a Conservative Government; between employment under a Labour Government and unemployment under a Conservative Government. The right hon. Member for Fylde (Mr. Jack) is himself the beneficiary, in his constituency, of a 32 per cent. drop in the claimant count, a 74 per cent. drop in long-term youth unemployment, and a 66 per cent. drop in long-term unemployment. That is the record under a Labour Government. Imagine what it would have been like had the right hon. Gentleman's party been in power!

If by any chance the private-sector forecasters were right and the Treasury wrong, and growth this year and next were 0.5 per cent. lower than the central Treasury forecast, what would be the shortfall in tax receipts compared with what is in the Red Book?

I refer the right hon. Gentleman to table C.8 in the Red Book, which I think he will find useful and valuable. The fact is, however, that UK growth is still strong in global terms, and is forecast to be higher than growth in Italy, Germany and France. That is a record of which we are proud, and the right hon. Gentleman should at least give us some credit for it.

Football Clubs

5.

What his policy is on the Inland Revenue's dealings with professional football clubs in administration. [111886]

When a football club, or any other business, goes into administration, the Inland Revenue must act in accordance with insolvency law, and will seek to recover no more and no less than that to which it is legally entitled.

I declare an interest as the unpaid chairman of Supporters Direct. The Minister will know that the collapse of ITV Digital last year left many of the great names of English football on the brink of collapse. I thank him for the Inland Revenue's general approach of rescuing those clubs, rather than closing them down, but I draw his attention to the inconsistency in some of the deals struck in respect of unpaid tax. For example, the business consortium at Leicester City paid 10p in the pound, yet the not-for-profit supporters trust at York City paid more than 60p. Will he agree to meet MPs from the all-party group on football to discuss whether a standard approach could be adopted towards unpaid tax, to ensure fair competition in the league? In particular, will he look at a special regime for not-for-profit supporters trusts, given the community benefits that they can bring?

The Inland Revenue does indeed have a good track record in helping some of our football clubs out of administration, and has been party to agreements in 13 cases in the past couple of years. It is serious about trying to secure a viable future for such clubs, at the same time as fulfilling its duty towards the taxpayer. So it has a consistent policy and approach, but every situation in every business is different: the assets, liabilities, prospects and potential investors are all different, so it is not surprising that the agreements struck are different. Notwithstanding those remarks, my right hon. Friend the Paymaster General will indeed meet my hon. Friend and his colleagues in the all-party group.

May I congratulate the Government on reaching an agreement with the administrator to allow York City football club to be taken out of administration? The club was given a tax reduction of about £60,000, which made the difference between its having a future and not having one. In particular. I thank the Minister for responding so quickly when I wrote to her asking for the quick decision that was needed. As a result of that quick decision, she is seen as a good supporter of York City, and I give her colleague who is answering—he is a good Yorkshire lad—the opportunity to wish the club well for this season, and for the future seasons in which it will play because of this decision.

For the avoidance of doubt, the Minister whom my hon. Friend refers to is not me but my right hon. Friend the Paymaster General. The Paymaster General has indeed worked closely with the Inland Revenue. I welcome my hon. Friend's remarks, and the support given and the part played by the Revenue in reaching this latest agreement relating to the succession of problems that football clubs have experienced. We wish York City well for the future now that it has come out of administration, along with the other clubs that are suffering similar financial difficulties. The pressures are indeed severe in the lower divisions.

World Trade Agreements

6.

What plans he has to raise world trade agreements at the next meetings of the (a) IMF and (b) World Bank. [111887]

In my capacity as chairman of the international monetary and financial committee—the governing body of the International Monetary Fund—I will seek to ensure that, just as trade was discussed in our April meetings, it will be considered at the annual meetings of the IMF and World Bank in September, and in the sessions on the global economy and the needs of low-income countries.

I am grateful to the Chancellor for his response. It is widely recognised that nobody has done more internationally than him to push the case for the poorest people in the poorest countries, but does he accept that trade is probably the best mechanism that we can offer to those people in order for them to join the world economy? Does he accept that the IMF's historical pursuit of the case for the destruction of protections for infant economies has been disastrous for the poorest people? We need to bring the poor into the world economy, but the way to do so is by recognising the fragility of their economies and the need for real assistance from powerful economies in Europe and north America.

I am grateful to my hon. Friend, who has taken a wide interest in all the issues affecting developing countries. He will agree that the benefits of a successful trade round could be between $250 billion and $400 billion a year for the world economy, a third of which would go to the poorest countries. So that would be a major injection of resources and make possible the development of these countries. He will also agree that, although it is true that structural adjustment policies have, in the past, been very damaging to some of the poorest countries, the IMF has now changed its policy on these issues. We now have country and civil common ownership of poverty reduction strategy programmes, which—in partnership with the World Bank—are the means by which trade issues, health, education and other economic development matters can be considered together. I hope that the whole House will support the IMF and the World Bank working more co-operatively to make those programmes work in order to secure over the next few years and, ultimately, by 2015, the halving of world poverty.

I welcome the Chancellor's statement, but does he share the concern of the Trade Justice Movement that more needs to be done, particularly by the developed countries, which often protect their own industries and farming communities at the expense of the developing countries?

I am grateful to the hon. Gentleman. In thanking people for their work on development issues, I include those in all parties who have taken them up. The hon. Gentleman is right that the Trade Justice Movement, which brought thousands of people to the House of Commons a few months ago and is organising a major event in a few weeks' time, has put on the table a set of issues that the developed world must now address. The European Union initially made an offer to the 49 least developed countries of duty-free and quota-free access for all products except arms. That offer is still to be taken up by some developed countries, which should support it. Equally, I agree with the hon. Gentleman that the EU should also respond to the American offer of the past few months to remove the remaining barriers, especially those of agricultural protectionism.

Earlier this week the European Union held a conference attended by representatives from developing and industrial countries on the future of the textiles and clothing industry after the phasing out of the multi-fibre agreement and the Doha round, which seemed to show that China would be the main winner at the expense of some developing nations and our own industry. In that light, will my right hon. Friend discuss with his colleagues at the Department of Trade and Industry whether any further help could be given to our own industry to remain competitive in world markets, and to invest in new technologies and training? That is necessary to maintain the industry in line with the work of the national industrial strategy drawn up by the industry with the Government.

I know of my hon. Friend's work in her constituency and beyond in putting the case for the textile industry. It is important that the Department of Trade and Industry and other Departments help the textile industry as it moves towards high-quality and high-technology products. We will continue to provide help with investment, regional development grants and training. I hope that the regional development agency in my hon. Friend's area will continue to take seriously the needs of the textile industry. The fact remains that in her constituency and many others, the number of jobs is still rising. As to trade agreements around the world, we have four blockages that affect industries in many of our constituencies. There are continuing problems with agriculture and services, which need to be addressed, and many hon. Members will know of problems relating to pharmaceuticals, with poor countries being denied drugs at prices that they can afford. It is urgent to make progress on that, because lives are being lost unnecessarily as well as damage done to trade.

Research And Development

7.

What steps he is taking to encourage investment in research and development in the north-east. [111888]

The Government are encouraging investment in research and development throughout Britain. Last year, we allocated the largest sustained increase in the science budget for more than a decade and, to boost commercial research and development, we have introduced tax credits for large and small companies.

I welcome my hon. Friend's response. For the record, my region has accorded widespread praise for the research and development credits proposals announced in the Budget. However, will the Minister acknowledge that the management of British industry needs an urgent change of culture, given that Corus spends only £64 million out of an operational budget of £7.2 billion on research and development in the steel industry? Is not that simply managing decline in the steel industry rather than growth in the UK?

My hon. Friend is right to point to the importance of private sector investment, because the major variation in research and development spending in each region primarily reflects private sector variations. My right hon. Friend the Chancellor is well aware of the particular challenges faced in my hon. Friend's region. He mentioned in his Budget statement that business R and D in the south-east is worth £450 a head, and that in my hon. Friend's region, the north-east, it is only £50 a head. The £650 million in R and D tax credits will help, as will the work being done in the region by One NorthEast. My hon. Friend might like to know that her regional development agency is now investing more than twice the average amount invested in other regions in support of regional science, engineering and technology.

Universities are at the very heart of the north-east region's research and development programme, as they are in any region. Does my hon. Friend agree that any proposal that suggested a further concentration on a few universities, nearly all of which would be in the south-east, would be a disaster for regional regeneration?

I pay tribute to my hon. Friend's expertise in this area. He is Chairman of the Select Committee on Education and Skills, and has also worked for a long time on these matters. What he says is right, of course, but he is also right to say that RDAs have a very important role now. They must encourage regional innovation and better local transfer of knowledge, and—crucially, as my hon. Friend mentioned—they should foster better and more collaboration between universities and businesses in the regions.

Growth Forecasts

8.

What methodology he used in drawing up the growth forecasts in the 2003 Budget. [111889]

The forecasts for the UK economy are constructed using the Treasury's model of the macro-economy as a framework within which to apply forecasters' judgments, and to ensure consistency.

At the time of the 2002 Budget, the Chancellor's forecast for UK growth was way ahead of independent forecasts. The independent forecasters were right, and the Chancellor was proved wrong. At the time of last autumn's pre-Budget report, the Chancellor's forecasts were again more optimistic than those of independent forecasters. They were right, and the Chancellor was proved wrong. In this year's Budget, the Chancellor is again completely out of step with independent experts. How can anyone have confidence in his forecasting ability, or is he simply hoping that it will be third time lucky this time?

I am afraid that it is the hon. Gentleman who is wrong. The heightened uncertainty in the world economy has resulted in forecasts for almost all the major economies being downgraded. Since the pre-Budget report in November last year, almost 90 per cent. of independent forecasters have revised down their forecasts. At Budget time, the Chancellor's forecasts for the current year were in line with those of three quarters of independent forecasters, who expected gross domestic product growth to be within or above the Budget range. Finally, of course, at each and every point the British economy, unlike the economies of some of our competitors, has continued to grow.

Paragraph 1, annexe a, of the Budget report makes it clear that long-term economic growth depends on long-term fiscal sustainability, which cannot be achieved if we switch financial burdens to future generations. How does my hon. Friend the Minister set that against the growing and damaging impact of the private finance initiative, which does just that—transfer financial responsibilities to future generations, with a damaging effect on growth?

I do not accept my hon. Friend's contention. The Government, and the Chancellor in his Budget statement, are able to be so confident about future increases in investment in public spending because of the tough decisions taken earlier on tax and spending. They included reducing debt as a share of GDP to the lowest of any country in the G7, and they mean that, despite the challenges of the world economy, the Government can meet their public spending commitments and tough fiscal rules. Also, the Government can be sure that the current Budget will be in surplus over the cycle.

Will the Minister explain why there are no specific growth targets for the UK's constituent nations? Is the reason that no target has been set for Scotland that Scotland has once again experienced chronically low economic growth, compared to the UK as a whole?

The reason is clear. We are the United Kingdom; we do not devolve macro-economic management. I remind the hon. Gentleman that during this Government's period in office, 150,000 extra jobs have been created in the Scottish economy as a result of this Government's measures.

Does my hon. Friend agree that growth is something that does not just happen, that it depends on economic policies and that the Government can use the levers of macro-economic power to make sure that it takes place? I hope that my right hon. Friend the Chancellor and hon. Friends will do that. Does my hon. Friend also agree that giving up those levers of power by joining the euro would not be sensible?

The general contention laid out by my hon. Friend is absolutely right. Of course we are in the present situation not by chance, but as a result of deliberate policy choices by the Government. That is why, 10 years ago, inflation was at 10 per cent. and is now one of the lowest levels in the EU, and why it has been consistently low. That is why, 10 years ago, interest rates were in double figures for four years in a row and are now the lowest since 1955. That is why 1.5 million new jobs have been created in the British economy since 1997.

Is it not astonishing that the Chancellor once again refuses to answer questions on his forecasts? At the time of his Budget, the Chancellor blamed his downgraded forecast on world growth and world trade. Yet his forecast for G7 gross domestic product growth in the 2003 Budget was identical to his forecast in the 2002 Budget. His forecast for growth in world trade in the 2003 Budget was actually higher than in the 2002 Budget. Does the Economic Secretary agree that it is absurd for the Chancellor to continue to cling to such ridiculous excuses that lack all vestige of credibility?

What is absurd is for the shadow Chancellor to try to pick holes in the forecasting record of the Treasury. Since 1997, the Treasury's forecasts have been better than the independent consensus. For every year-ahead projection since 1997, we have had a smaller or identical size of error than the average of independent forecasters. The right hon. and learned Gentleman might like to consult his colleagues on the Treasury Select Committee, who will have heard my right hon. Friend the Chancellor dealing with these questions in detail. They will also have heard the views of independent experts called by the Committee, such as Peter Spencer from the university of York, who said:

"There is no doubt the Treasury has a good forecasting record."

The Economic Secretary seems to have forgotten that the last time the Chancellor got his forecasts wrong—four or five months ago, in the pre-Budget report—it took him 24 hours to abandon his lame excuses and accept responsibility. This time, helped by the co-incidental timing of the fall of Baghdad, he has not abandoned his excuses at all. Will the Economic Secretary finally and belatedly do so on behalf of the Chancellor, accept responsibility and apologise to the British people for misleading them twice in a row?

I will do no such thing. I explained earlier that with the sharp economic downturn across the world in 2001, compounded by the added uncertainty of last year, independent forecasters across the board have been downgrading their forecasts in line with the Chancellor and the Treasury.

Northwest Development Agency

10.

What recent discussions he has had with the north-west regional development agency on unemployment. [111891]

Treasury Ministers have met with members of regional development agencies and particularly value their input, but we have had no specific discussions recently with the Northwest Development Agency on unemployment.

Unemployment in my constituency has fallen dramatically in recent times, with one of the main driving forces for that being small businesses. Will the Chief Secretary comment on the work of the development agency in helping small businesses to develop broadband, which is vital to them? What measures can he put in place to support small businesses and help job creation?

My hon. Friend takes a real interest in small businesses and the work of his RDA. We particularly welcome the proposals coming from the Northwest Development Agency in relation to broadband infrastructure in Cumbria. Both sides of the House will welcome that, not least because of the concerning state of affairs exposed by the Countryside Agency a few days ago, which found that only 7 per cent. of rural villages and 1 per cent. of remote rural areas had access to affordable broadband internet connections. The NWDA is right to bring forward proposals and I hope that others will do likewise.

We, in the meantime, are assisting small businesses investing in information and communications technology, and that is why my right hon. Friend the Chancellor announced in last month's Budget the extension of 100 per cent. first-year capital allowances for a further one year. That is the sort of help that small and medium-sized enterprises are getting under the Labour Government, and it is help that they never had when Opposition Members had stewardship of the economy.

Does my right hon. Friend accept that the Northwest Development Agency is doing tremendous work in developing the former Michelin site to provide employment in Burnley? It is important to encourage all investment in research and development and in manufacturing industry if we are to gain employment in towns such as Burnley.

My hon. Friend works hard in Burnley on employment issues, and he is absolutely right to point out the importance of investment in this area. He will appreciate the work on skills that the regional development agency is doing with local higher and further education institutions. He will know that employers are more likely to invest in areas such as Burnley when real efforts have been made to enhance the skills of the people who make up the labour market. That is happening, and it is good news for Burnley and the rest of the north-west.

Child Tax Credit

11.

If he will make a statement on access to free prescriptions for families in receipt of child tax credit. [111892]

Claimants receiving the child tax credit can get access to free prescriptions if they have an annual income for tax credits purposes—that is, income assessed before any tax credits are paid—of £14,200 or less. This will be the income set out on the claimant's tax credit award notice. If claimants meet the qualifying conditions, and have a tax credit award, they will automatically be sent an NHS tax credit exemption certificate by the Prescription Pricing Authority on behalf of all the Health Departments—that is, the Health Departments in England, Scotland, Wales and Northern Ireland. In the period between receiving their award of tax credits and receiving the NHS exemption certificate, claimants can sign for free prescriptions and use their tax credit award as evidence of entitlement.

I am grateful to my right hon. Friend for such a comprehensive reply. Can she assure us that no one who previously received free prescriptions under the working families tax credit will lost out under the new child tax credit system? Before Conservative Members comment on the implementation of the child tax credit system, does she agree that the Government have made the most generous investment in families that any Government have ever undertaken? No Opposition party would ever have introduced such generous investment for British families.

As my hon. Friend says, the new tax credits are more generous than any predecessor payment made directly to mothers to support their children. As for access to free prescriptions, the level was set to ensure not only that all those who received free prescriptions through the working families tax credit and the disabled tax credit will continue to do so, but that another 80,000 families will benefit for the first time. I know my hon. Friend's enthusiasm for campaigning on these issues, and I am sure that he will be keen to ensure that constituents of his who newly qualify for free prescriptions will take them up.

What role did the Treasury play in the decision announced yesterday to reduce the renewal period for prescriptions from three months to two months, thereby increasing prescription charges for those long-term sick people who are not on benefit or tax credit by 50 per cent?

That is a matter for the Department of Health, and I will ensure that the hon. Gentleman's comments are drawn to the attention of the relevant Minister.

Notwithstanding the complacent answers that the Paymaster General has given so far, is she aware of the outrage and anxiety that the shambles, chaos and confusion of the Chancellor's burdensome new child tax credit system are causing the constituents of Members on both sides of the House? She told us 11 days ago that 700 staff had been added to the tax credit helpline personnel. To check whether it is now working effectively, my office made 80 calls in 90 minutes yesterday and did not get through to speak to any member of the helpline staff. Will the Paymaster General now get a grip on that failing service and tell us how much the 700 extra helpline staff are costing, in addition to the £53 million of taxpayers' money that she has already spent, and why the helpline is still not working effectively?

The Opposition said that the take-up of the new tax credits would be low and a disaster. They were wrong. The take-up of the new tax credits has resulted in more than 4 million people currently claiming, tens of thousands of applications coming in each week and 1.3 million people on income support and jobseeker's allowance also receiving their payments. Indeed, the hon. Member for Havant (Mr. Willetts) said, when forecasting that take-up would be low, that he preferred the working families tax credit. That is interesting because, in March 1998, he attacked the introduction of the working families tax credit and said that take-up would be low and that it would not work. The Conservative party's history on this is to deny families money, to attack a system that delivers—

Tax Credit System

13.

What representations he has received about the administration of the tax credit system. [11189]

My statement to the House last week reflected a range of representations received about the two new tax credits—child tax credit and working tax credit—currently being introduced. I made it clear then that more than 4 million claims have already been received and that, along with the 1.3 million families who will get the benefit of the increased generosity of the child tax credit through income support or jobseeker's allowance this year, more than three quarters of the number of families that we expected to get the new credits have therefore already either claimed or are benefiting from them. I also said last week that all claimants whose claims were received by the Inland Revenue by Friday 25 April would be contacted and either be in payment or have received inquiries from the Inland Revenue to complete their forms by the end of this week.

May I take the Paymaster General back to the question asked by my hon. Friend the Member for Eddisbury (Mr. O'Brien), which she did not quite answer? Will she tell the House what was the Government's original estimate of the cost of setting up and administering the child tax credit and the working tax credit? Has the administrative cost subsequently increased?

If my memory serves me correctly, the figure given to the House on the budget for setting up the new tax credits was about £300 million, and I can confirm that we are well within budget, as we always are.

Iraq

14.

if he will estimate the cost of the military action in Iraq. [111895]

It would be premature to make such an estimate, but we expect the costs of the military campaign to be covered by the £3 billion reserve announced by my right hon. Friend the Chancellor in the Budget.

I would say to my hon. Friend the Father of the House that we have made available a £3 billion reserve. That is the figure announced by my right hon. Friend the Chancellor, and it is our best estimate of the right figure to make available in the reserve at this time.

I understand why the Minister is vague on such large figures, but when he eventually gets around to computing them, will he also take into account the costs to the country that will be saved of not having to fight a third Gulf war as a result of finally winning the second one?

G8 Summit

15.

If he will urge the forthcoming G8 summit to tackle the shortfall in the HIPC trust fund. [111896]

At the forthcoming G8 summit, we will push for a change in the HIPC rules to exclude additional voluntary bilateral debt relief from the calculation of topping up at completion point. The aim of that measure is to provide an estimated $1 billion extra debt relief to low-income countries.

I congratulate my right hon. Friend, in particular, on his efforts to promote the international finance facility. I wish him every success in promoting that initiative at the forthcoming G8 summit, and I hope that he can persuade other members of the G8 to join it. Does my right hon. Friend agree that an urgent need exists to review the HIPC scheme and to adopt an approach whereby it should be based on the country's ability to meet its basic needs rather than putting priority on debt reservicing?

I thank my hon. Friend for the work that she does in promoting the case of debt relief and the international finance facility. It is absolutely true that the HIPC initiative achieves many but not all our aims. Twenty-six countries are receiving debt relief, and another nine could qualify. The long-term solution to the problems that she identifies—both debt and poverty—is a major initiative for a funding mechanism that could double the amount of aid available. That is why we are supporting the international finance facility, and I am pleased that there is all-party support for that.

Business Of The House

12.30 pm

Will the Leader of the House please give us the business for next week?

The business for next week will be as follows:

MONDAY 12 MAY—Consideration of an allocation of time motion, followed by all stages of the Northern Ireland Assembly (Elections and Periods of Suspension) Bill.

TUESDAY 13 MAY—Progress on consideration in Committee of the Finance Bill.

WEDNESDAY 14 MAY—Conclusion of consideration in Committee of the Finance Bill.

The House may also be asked to consider any Lords messages which may be received.

THURSDAY 15 MAY—Opposition Day [6th Allotted Day] [First Part]. There will be a debate entitled "Schools Funding Crisis and Teacher Redundancies" on an Opposition motion, followed by a debate on developing a national skills strategy on a motion for the Adjournment of the House.

The House may also be asked to consider any Lords messages which may be received.

FRIDAY 16 MAY—Private Members Bills.

The House will not adjourn until Royal Assent has been received to any Act.

The provisional business for the following week will be:

MONDAY 19 MAY—Progress on remaining stages of the Criminal Justice Bill (Day 2).

TUESDAY 20 May—Conclusion of remaining stages of the Criminal Justice Bill (Day 3).

WEDNESDAY 21 MAY—Second Reading of the European Union (Accessions) Bill.

THURSDAY 22 MAY—Motion on General Synod Measure, followed by motion on the Whitsun recess Adjournment.

The House may also wish to be reminded that, subject to the progress of business, we will rise for the Whitsun recess on Thursday 22 May and return on Tuesday 3 June.

In thanking the Leader of the House for giving us the business, may I wish him a very happy birthday today? It is a particular pleasure to have his youthful exuberance at the Dispatch Box. We all find it invigorating, and I will try to match it as best I can in my advancing years.

The Prime Minister, as we know, supports our membership of the euro: he supports it with enthusiasm and in principle. We can conclude from that that he trusts implicitly the judgment of the European Central Bank, which, of course, were we ever to join the euro, would have complete control over our economy. Given that, and given that the European Central Bank has said that our joining the euro would undermine if not destroy the national health service, can the Leader of the House afford the Prime Minister the opportunity next week to tell us whether he trusts the European Central Bank and wants us to join the euro or wants the national health service to survive, because he cannot have both? An answer to that would be most welcome and would help us all.

It is becoming obvious that the new system for postal ballots is a threat to democracy. In centuries past, the peasantry used to gather in the village square and the town hall and be leaned on by the local squire, who sought to influence them in how they cast votes. The modern equivalent would appear to be that Secretaries of State and Labour officials demand to see the ballot papers that the peasantry are considering and seek to influence the voters in how they will vote. In other words, the secret ballot is effectively disappearing before our very eyes, and I hope that the Leader of the House accepts that we must have an urgent debate on the matter. Perhaps one or two Secretaries of State might wish to attend that debate to explain their role in influencing voters now that the secret ballot is diminishing under the Government's scrutiny.

The Secretary of State for Education and Skills made a huge song and dance of his claims that £500 million of funding is being withheld by local education authorities rather than being passed on to schools, but it has recently emerged that £1 billion of funding is being withheld by his own Department. We need him to come here promptly so that he can tell us where his missing £1 billion is and when it will be passed on to schools—never mind his allegations that LEAs are holding back half that amount. An urgent statement from the Secretary of State would be welcome.

The Government were effectively bailed out yesterday by Scottish Labour Members voting on an English matter: nothing less than the future of the English national health service. Why do those of us in England who effectively pay for the Scottish health service have to sit here and watch Scottish Members voting on the future of our health service although we have no say in what goes on north of the border? Is that devolution and new Labour justice? I think we need to know more about it.

I am deeply touched and moved by the congratulations on my birthday. I shall try to learn from the example of my older colleagues in the House about how to conduct myself when dealing with the grave issues that come before us.

The right hon. Gentleman's last point was about Scottish Members. It is part of my job, as Leader of the House, to ensure that every hon. Member has the same rights. [Interruption.] The right hon. Gentleman misunderstands if he thinks that he has more or fewer rights than me because I have no more right to vote on the Scottish Parliament's decisions on Scottish education than he has. The last thing that we want is the creation of three or four categories of Members with different rights according to the level of devolution that has been given to their areas. The level of devolution given to Scotland is different from that given to Wales, which is different from that given to Northern Ireland—when the Assembly is not suspended—which is different from that given to the Greater London Assembly, which might be different from that given to regional assemblies in England. He is going down a very dangerous path if he is asking me to create different classes of MPs, and I shall stand against that as Leader of the House.

The right hon. Gentleman asked about the euro. Of course, the whole European dimension is hugely important to this country, both politically and in terms of jobs and employment. We shall debate accession measures to enlarge the European Union next week. On the euro and its supposed relationship with the national health service, the Prime Minister made it plain yesterday that we do not recognise the description of the influence, powers and implications that membership of the euro would have for our national health service. We are committed, in principle, to membership of the eurozone, but nothing has changed with regard to our decision on when that might happen. Our judgment will be based on the tests that we have clearly set out and, as the Chancellor and Prime Minister have said, we shall consider the tests and implications before the first week in June.

I am trying to give as full an answer as possible out of deference to the right hon. Member for Bromley and Chislehurst (Mr. Forth). The hon. Member for Buckingham (Mr. Bercow) made the same remark last week—

Order. The hon. Gentleman must be quiet. I have told him before that he sometimes gets far too excited.

Mr. Speaker, you are far too kind. The hon. Gentleman's silence will contribute greatly to the alacrity with which I can deal with questions.

On postal ballots, any implication that a member of the Government has acted improperly is refuted. Had that been the case, I and everyone else in the House would be greatly worried. As it is, we are concerned about the assertion of the right hon. Member for Bromley and Chislehurst that there is a huge threat to democracy if more people vote. That is certainly not the view of Labour Members. Of course, any system of democracy is potentially open to abuse, but I stress that at this stage there are not even any allegations that someone has acted improperly.

It is not true to claim that the Secretary of State for Education and Skills or his Department is withholding £1 billion from schools. Schools have received a cash increase of £2.7 billion this year, which is one reason why we all look forward to debating education at every opportunity.

May I express our good wishes for the Leader of the House's birthday? Did he, over his birthday breakfast table, have time to look at early-day motion 1136 on Gulf war illness victims? Perhaps we could debate that as soon as possible.

[That this House welcomes the adjudication of the War Pensions Appeal Tribunal in the case of ex-Lance Corporal Alex Izett RE; recognises that it provides powerful corroboration for the link between the cocktail of inoculations and long-term serious illness amongst veterans of the 1991 Gulf' War; and calls upon the Secretary of State for Defence to adopt a more sympathetic, generous and grateful attitude to the pleas for justice from those who served their country well.]

I hope that the right hon. Gentleman has seen a large report in the Evening Standard with the headline, "New fears over safety of 'toxic' vaccines against germ warfare terror attack". As a Minister who once had responsibility for such matters, does he agree that we owe it to the veterans who have served this country well to treat them at least as responsibly and sympathetically as the US Administration treat their veterans?

Does the Leader of the House recall that his office accepted responsibility for the state funding of Opposition parties in a parliamentary answer to me on 18 March by his colleague the Parliamentary Secretary, Privy Council Office? May I support the Opposition spokesman's plea for a debate on state funding of parties? Despite the Conservative party's opposition to such funding in principle, has the Leader of the House noticed that the Conservative party has received in the region of £16 million from the taxpayer since its defeat in 1997, including a sum of £500,000 each year to the office of the Leader of the Opposition?

Will the Leader of the House seek assurances that none of the money has been used to pay off senior executives from that office? Has he noticed that in recent weeks no fewer than four senior executives of the Conservative party have been paid off with apparently very large golden handshakes, including yesterday Mr. Barry Legg, a former Member of the House? Can the right hon. Gentleman give us an absolute assurance that despite the hypocritical attitude of the Conservative party to state funding, no taxpayers' money has been used for that purpose because clearly it would be bad value?

I also thank the hon. Gentleman for his good wishes. The expressions of kind sentiment are overwhelming. Before we know it, the Scottish National party will wish me a happy birthday, which would create a precedent.

On early-day motion 1136, I have a knowledge of the issue and am greatly concerned that we treat our servicemen and women properly. I also have some personal experience. I was the first Minister to invite Gulf war veterans in and to institute medical programmes and so on, although to be fair some of those were set up by my predecessor, the hon. Member for Mid-Sussex (Mr. Soames). However, we owe it to veterans and medical science to ensure that anything that we are considering as part of the so-called Gulf war syndrome is based on verifiable medical evidence, and thus far there has been no verification that such a disease or illness exists. I am aware that a tribunal last week reached a decision that on the face of it appears to indicate that, in its view, there was such medical evidence, but the Ministry of Defence disagrees. Such decisions can be challenged only on a point of law. There is no point of law on which the MOD can appeal. That is why it is not appealing—it is not because it accepts the medical basis of the decision. We try to provide whatever facilities we can, not only to troops who served in the Gulf war but to all our troops. We are aware of this and continue to search for a possible explanation, but it would be too easy to hold up our hand and say, "In the absence of any evidence we will accept that that is the case."

On state funding of political parties, I heard what the hon. Member for North Cornwall (Mr. Tyler) said. I am not sure whether we can make time for such a debate here, but there are other avenues for discussing those matters. We have been generous in providing £16 million to the Opposition which, as we always say of the public services, just shows that throwing money at a problem does not necessarily solve it. I trust that none of that money will be used for fat cat pay-offs to Mr. Legg, whom the hon. Gentleman mentioned. That leads me to something that I should have done earlier: I wish my opposite number, the right hon. Member for Bromley and Chislehurst (Mr. Forth), a happy day tomorrow when he goes to his party's bonding session. It will be the first occasion on which the whole Tory Front Bench arrives at a function Legg less.

It would be nice to see the shadow Leader of the House in a jumper in his bonding session. As there is a growing movement for the removal of wigs in court, is there not a case for the Modernisation Committee to consider the removal of all forms of ceremonial dress—gowns, wigs, swords, gaiters and so on—to bring the Chamber up to date? [HON. MEMBERS: "Shame."] Some people are more conservative than ever, but is it not important to consider that? After all, the devolved institutions and our parliamentary Committees do not associate themselves with court dress. What I have said is no criticism of those officers who have no option but to wear such dress.

The Modernisation Committee is continually looking at ways to improve our relationship with the public outside. I do not want to embarrass you in any way, Mr. Speaker, but I believe that you were involved in a radical departure from the dress code when you took up your position. I cannot remember whether it was stockings or another part of the attire that you dropped, but I am sure that you led by example, and I suspect that, following your example, there are few men on this side of the House wearing stockings. However, I welcome the proposed removal of wigs, and we are always willing to contemplate changes that make us more accessible and modern.

People in Castle Point went to bed last Thursday with a strong Labour council, and woke up on Friday morning with two Labour councillors and 39 Tories. May we have a debate to discuss the local reasons for that extraordinary and tremendous swing to the Conservative party? Perhaps it was the need to tackle issues such as a third road for Canvey Island, air quality and the high council tax for which the Labour Government are responsible.

It would be churlish of me not to congratulate the hon. Gentleman and his local Conservative party on having done enough throughout the country to keep the Leader of the Opposition in his present position. I am sure that all my colleagues will agree that there are few occasions on which a result that pleases both sides can be achieved, but I think that that one did.

Is my right hon. Friend aware that, in the Welsh Assembly elections last week, 30 women and 30 men were elected, which means that the Assembly is the only legislature in the world with equal numbers of men and women? That is largely due to the positive action of the Labour party. Will my right hon. Friend draw that to the attention of his colleagues and consider a debate on women's representation to look at the lessons that can be learned?

It is not my job as Leader of the House to draw that issue to the attention of the Labour party, but I am sure that 50 per cent. representation will have been noted among the many successes of the Welsh people in the course of the past week. Another success was wisely giving the leader of the Labour party in Wales the opportunity to form his own Administration—an interest that I am sure is also close to my hon. Friend's heart.

Will the Leader of the House make time for a debate on an issue that is of great concern to many of our constituents—the rights of our senior citizens? While many laws are in place that outlaw and banish discrimination against a range of people, many senior citizens still feel a great sense of injustice about discrimination in access to goods, services and facilities, as well as employment. Will he convey to his relevant ministerial colleagues the need for action in this important area?

Yes, I certainly shall. That issue grabs the attention of many people in this House, up to and including those in its highest positions as they enter the decade of their lives that qualifies them for membership of Saga, as I think happened to one our colleagues a couple of days ago. I shall certainly consider the issue. Of course, one reason why Westminster Hall has been such a success is that it provides opportunities to discuss a cross-cutting agenda, but the hon. Gentleman makes a fair point.

My right hon. Friend will be aware that there is a great deal of speculation that the Government are about to approve an Olympic bid for London. Many of us are concerned that such a decision would have a major effect on areas such as the north-west, which would suffer a massive reduction in funding. Can he find time in the House to discuss the matter and the implications for areas such as the north-west?

I can tell my hon. Friend that no decision has been made as yet regarding the Cabinet position on this matter, although it probably would have been discussed if we had not spent a great deal of time in the past few weeks considering matters relating to Iraq. To give all of us a chance to consider its implications not only for London, but for the nation as a whole, we have delayed that decision. I am sure that all members of the Government will take on board his points. I am also sure that, if the decision is taken. there will be an opportunity to discuss it in the Chamber, at which time he can raise the very points that he has raised today.

The Leader of the House may be aware that we had an all-postal ballot in my constituency and that it was initiated by the former Labour controlling group, which was trounced by the Tories; the number of seats that it held fell from 28 to 14. However, there have been many stories about ballot papers going missing and houses receiving more than one ballot paper. In spite of the professionalism of the electoral returning officer, many people complained that the double envelope system should have been used. Surely, such all-postal ballots are a dumbing down of democracy and a compromise of secrecy and we should have a debate about them.

I do not know about the specific details in the hon. Gentleman's constituency, but I hope that I speak for everyone in the House in saying that greater participation in voting is in all our interests. That is a minimal threshold in securing greater participation in politics and wider participation in democracy. I am not saying that postal balloting is a panacea, but it is one of a range of measures that we are considering and I have no doubt that time will be made available to discuss it in due course. We must wait to see the results of the various approaches—weekend voting, text voting, electronic voting, all-postal ballots and so on—but the early evidence seems to suggest that participation is much higher. While we must ensure that there is no misuse of any system, that general point should be welcomed by hon. Members in all parts of the House.

Can my right hon. Friend find time for a debate on the role and accountability of strategic health authorities and especially the Cheshire and Merseyside strategic health authority? I have had problems in getting a meeting with it to discuss the deficit at my local hospital. I have raised the matter in the House and I know that hon. Friends representing Merseyside constituencies have experienced similar problems in the past. Can we have a debate about how to prevent such health authorities from developing into independent fiefdoms and how to make them more accountable and responsible to the communities that they are supposed to serve?

I know that my hon. Friend raised that issue earlier this week in attempting to secure an emergency debate, but she was, unfortunately, unsuccessful. Nevertheless, the application itself made some of the points that she wished to make. I take it that there will be opportunities to raise the matter during discussions about the Health and Social Care (Community Health and. Standards) Bill, which is passing through the House. Some of the elements that she mentioned are meant to be addressed by foundation hospitals, so I have no doubt that she will have the ingenuity to relate some of those issues to in-order subjects that arise in the course of discussions about that Bill.

On 11 February, the Select Committee on Standards and Privileges published its eighth report, which proposes a number of changes in the way in which the House regulates itself. The right hon. Gentleman's predecessor indicated that he hoped that we would debate the report before Easter, but the Iraqi war intervened. Mercifully, that is now behind us. When can the Leader of the House offer us a debate on this important report?

First, I thank all the members of that Committee for the work that they have done. I have begun to look at the report—I am now catching up with the backlog of work that any new Minister takes on—and I have also discussed it with one or two of my colleagues. I cannot give the right hon. Gentleman a specific date, but I can tell him that we regard the report as a very important document and that we will turn our minds to it as soon as we possibly can.

Many human rights organisations investigating the situation on the ground in Iraq have now reported that 2,700 civilians have died and that many thousands more have been injured. Today, the World Health Organisation has reported that there are 15 cases of cholera in Basra. Last week, in Fallujah, we saw the United States firing on and killing 15 Iraqis and injuring 50 more for demonstrating about the fact that their school was occupied. Can we have a full debate on post-war Iraq and, more importantly, a statement on our Government's position on the role of the United Nations in rebuilding Iraq?

On the recourse to statements and debates in the House, my hon. Friend's position on this matter is well known and she will accept that, whatever her criticisms of the Government, we have tried to make time available, often to the detriment and risk of our previously published programme. We have tried to make time available for statements and debates. I do not know that I can say that we will have yet a further statement on the matter at this stage, but I have no doubt that, from time to time, we will come to the House on the very important issue of reconstruction, redevelopment and humanitarian aid in post-war Iraq.

I should point out that, through the Department for International Development, the Government have committed £115 million to support work by the humanitarian agencies to address some of the problems that my hon. Friend has mentioned. Of course, like every hon. Member, I regret every single death, whatever the figure, and every injury. A further £60 million was set aside by the Chancellor as late as 9 April for Departments to claim from the Treasury for work in Iraq if and when the need arises. I am sure that we will report if and when that happens.

Will the Leader of the House make time for a debate about the constitutional Convention? He will be aware that both the Conservative and the Labour representative on that committee have called for a referendum on the future of Europe. Perhaps in the course of such a debate, the Government will be able to tell us why the citizens of Denmark, Ireland, the Netherlands, Spain and Portugal will have the opportunity to vote on the constitution, while the citizens of the United Kingdom are being denied that opportunity.

The reason is simple. They have a constitutional system different from Britain's. If the hon. Gentleman suggests that Ireland and all the other countries that he mentions have a better constitutional system than ours, that would be something of a reversal of the Conservative party's position over the decades. Nevertheless, I should like to give the lie to the idea that the discussions in the constitutional convention are a deep threat to the sovereignty of this country. I do not take that view. The Convention on the Future of Europe is publicly debating a draft constitutional treaty for the EU to replace the present constitutional position, which is extremely complex and based on many treaties. The convention does not threaten Britain's independence or identity.

I refer my right hon. Friend to the exchanges that his predecessor had on progress with legislation on corporate manslaughter. He may be aware that one of the rumours doing the rounds is that the blockage preventing the legislation from being introduced is the fact that permanent secretaries in the various Government Departments are worried that they may end up in jail themselves if they do not adequately look after their employees. I hope that he can scotch that rumour. Can he give any clear indication of progress on that legislation—if not today, perhaps in writing at a later date?

I know of no evidence or facts that would give substance to the rumour that my hon. Friend mentions.

Well,theoretically anything may be true, but I have never heard anything to suggest to me that the delay is related to what my hon. Friend suggests. It is largely the result of pressure of work in the House. There is always a balance between the ambitions of the Government and the rights of the House to scrutinise legislation. They often come into conflict and it is not possible to introduce every piece of legislation that we think desirable. We believe that legislation on corporate manslaughter is desirable; it has not dropped into some black hole from which it will not re-emerge.

In the spirit of non-partisanship, may I offer the Leader of the House congratulations on his birthday on behalf of the Scottish National party and Plaid Cymru? When he is considering what he should eat for his evening birthday meal, will he out of solidarity consider eating Scottish fish? After all, the Scottish fishing industry has suffered a double whammy this week. The European Commission confirmed that the industrial fishery will be allowed to continue in the North sea, while Scottish fishermen and fishermen from elsewhere in the UK will see their quotas cut massively. It also announced that €32 million in additional funding would be available for communities such as those that I represent, but I understand that the UK Government do not intend to draw down those funds to help fishing communities. When will the House have time to debate that matter in full? It is of supreme importance to fishing communities around this island.

We take the issue very seriously, which is why we had a debate on fisheries policy just before Easter. However, we have to be honest and truthful with people. There is a real problem to do with conservation of stocks. Ultimately, however often we debate the issue, that problem will not be miraculously cured just by wishing that it were not the case. So we have to try to balance the needs of present Scottish fishermen with the needs of those who in the coming decades will want to earn their living from that direction. We always try to make time to debate fishing, but given that we have had a debate recently, perhaps an Adjournment debate or a debate in Westminster Hall will be more accessible.

While I would like—and often fantasise about—a good big haddock fish supper, as my wife is paying tonight I think I might go for something more expensive. Aberdeen Angus steak may well be on the menu.

May I draw the attention of my right hon. Friend to the recently published Treasury Select Committee report on the UK and the euro—an all-party report which sets out the issues relevant to the Chancellor's five tests and the ultimate decision? Can he find time for a debate on it on the Floor of the House, before the Government come to a conclusion on this important issue?

I am aware of the report, and I am grateful for the work that has been put into it. It is the culmination of a great deal of consideration by the Select Committee, so in a sense the detailed debate by the best-qualified Back Benchers has already taken place, and it has been put into the public domain. Perhaps it would be more appropriate to have any further discussions after the Cabinet has reached a view on the matter. We have always said that if a decision were taken to proceed on the euro, we would bring it to Parliament before going to the ultimate arbiters—the people of this country—in a referendum.

Notwithstanding the fact that the Leader of the House has announced a debate in Opposition time on education, may we have a debate specifically on money that is being held back or otherwise by local education authorities? We understand from a letter from the Secretary of State that the reason why teachers are being made redundant is that LEAs are holding money back. [Interruption.] The hon. Member for Streatham (Mr. Hill) says, "Right." There will be teacher redundancies in Staffordshire, including in Netherstowe high school in Lichfield, yet according to the Secretary of State's own figures in his letter, Staffordshire passes on 106.2 per cent. of its SSA grant—more money than is allocated by the Government. So someone has not done their sums right. "Shurely shome mishtake?", as Private Eye might say.

I do not know the details of the case that the hon. Gentleman mentions, but the disbursement of money from the centre via LEAs to a myriad schools and other educational institutions is a complex process. Some of the things that he mentions could be the result—I merely speculate—of changing school rolls, changing numbers of teachers and the pressures created by increases in pensions. I am glad to say that the terms and conditions—[Interruption.] Well, we should be proud that the Government have provided a better pension scheme for teachers.

One thing is certain. The amount of money provided has in every case been greater than the pressures on local authorities. We have gone to enormous lengths, and will continue to do so, to find out if and why any of the money has not been allocated to schools.

We do not deny that there is a problem, but we should see it in context and remember that spending per pupil is up something like £800 since the Government were elected. So there will be no reticence on the part of the Government about holding debates on education. When one looks at the bigger picture, the reason why we have had the best ever primary school results, GCSE results and A-level results and the reason why we have moved from sixteenth to third in the world in terms of primary literacy is that we have put the money in. If some of that has not yet got through, of course we regret it, and we will do everything possible to ensure that the reasons are identified and remedied.

My right hon. Friend will be fully aware of the contribution that has been made to rising educational standards by the system of national testing and league tables, but does he accept that there is now growing concern that the main factor that determines a school's place in the tables is the ability and motivation of the pupils who happen to come through the doors? Does he also accept that the school performance tables rely on a single indicator to an extent that no other performance tables in the public services do? Does he agree that there is a genuine feeling that it is time to revisit the methodology of school league tables; and can he find time for a debate on the subject in the near future?

My hon. Friend will know that the Government very much value—and believe that parents value—as much information as possible about their child's education being passed to them. He will also know that we have been concerned to ensure that when that information is passed out it is as neutral and objective as possible. That is why, not long after we took office, we changed the league table criteria to added value.

If my hon. Friend believes that in the light of experience we need an even more sophisticated criteria base on which to evaluate those results, I am sure that he can take the opportunity to make those specific points during an Adjournment debate. He should be in no doubt, however, that, contrary to many recent commentaries and some recent propaganda, we believe that the tests are a vital part of allowing parents to evaluate their child's progress and of maintaining the progress that has been made so far in literacy, numeracy and the results that I mentioned earlier.

As, during our time in Northern Ireland, the Leader of the House and I knew Mr. Liam Clarke of The Sunday Times, a distinguished and very professional journalist, does he not think that it is time for a statement on the disgraceful behaviour whereby armed police came to the Clarkes' house in the middle of the night and arrested Mr. Clarke and his wife, which was quite unnecessary?

Is it not also appropriate, in the light of questions by the hon. Member for Thurrock (Andrew Mackinlay), that the Prime Minister should come to the House to give a statement about just what was going on in relation to the bugging of Mo Mowlam's telephone conversations?

I know that my answer will disappoint and frustrate the right hon. Gentleman and my hon. Friend the Member for Thurrock, but I will not add anything to the statement that the Prime Minister has already made.

In the light of the ruling by Judge Graham Jones against Thomson Holidays on Tuesday, will my right hon. Friend find time for a debate on the inadequacy of the Warsaw convention of 1929 in governing the liability of airline carriers? Airlines have complete control over the well-being of their passengers—where they sit, what they eat and even the air that they breathe—but have no legal responsibility whatsoever for their health or welfare. That must end. Such a debate would allow this House to warn the 50 million people in this country who fly abroad every year that they have no protection from the considerable health risks that face them, including deep vein thrombosis.

My hon. Friend has been a robust advocate of the rights of travellers and consumers, and, to his credit, has raised the subject on every conceivable occasion. Although I cannot promise him today that we will have a debate on the Floor of the House, I have no doubt that his commitment to the cause and his ingenuity in finding opportunities to make his points will stand him in good stead, as it has over the past year or two.

On behalf of the Ulster Unionists, I pass on our best wishes to the Leader of the House. We all hope that at the end of the UEFA cup final he will find new youth, but that at the end of the Scottish league season he will age considerably.

The Leader of the House announced that the House will have time on Monday to debate the second postponement of the Northern Ireland Assembly elections. That was caused for no other reason but that the organisation that the hon. Member for Mid-Ulster (Mr. McGuinness) commands has refused to disband and to disarm, while his party, Sinn Fein, operates as a normal democratic party. Would not the time of this House be better spent debating the evidence that is being given today a few hundred yards away in Westminster Central hall—that Martin McGuinness, the Member for Mid-Ulster, fired the first shot on Bloody Sunday, which exonerates the Parachute Regiment; and that in the same year in which Bloody Sunday took place, 1972, 24 soldiers and members of the RUC were murdered under the command of Martin McGuinness, 20C Derry brigade, Provisional IRA? Would not that be a more honest use of the House's time?

First, I thank the hon. Gentleman for his birthday wishes and for his rather cryptic comments in a language that the English do not know, but which he and I, and other Scots, probably understood.

On the Northern Ireland Assembly (Elections and Periods of Suspension) Bill, I should tell the House that draft copies will be available this evening and will be sent to Opposition parties and Northern Ireland Members. I mention that because last night I spoke to several Members who were worried that they would not have sufficient time to read it. The Bill will be published on Friday at 7.30 am, and amendments will be accepted at the Public Bill Office between 11 am and 3 pm tomorrow. I should also tell Members who were awaiting with anticipation the debate in Westminster Hall that it had to be adjourned because of the emergency statement that took place last Thursday, and that we understand that the Select Committee on Northern Ireland Affairs has requested that it be rescheduled to July.

As for the hon. Gentleman's comments about the Bloody Sunday inquiry, it would not be appropriate for me to make any specific comments about that, other than to say that my experience in Northern Ireland taught me that if truth, reconciliation and justice are to be achieved in future, they must be undivided truth, reconciliation and justice. In other words, they must be achieved in such a way that all people in the community who have suffered, not just one section of the community, feel that their woes, concerns and pain have been addressed.

May I ask the Leader of the House about the allocation of time motion in respect of the Northern Ireland Assembly (Elections and Periods of Suspension) Bill, which will be early business on Monday? It is very important that we have a proper Committee stage. How much time does he intend to allocate to that, bearing in mind that we will not have seen the Bill, that he cannot be privy to the number of amendments that will be tabled before 3 o'clock on Monday, and that as the legislation that we passed postponing the elections was relatively short, the Bill must by definition be quite complicated. There are reports that Members who had decided to retire from the Northern Ireland Assembly will be on half-pay for some indeterminate period, although they are no longer MLAs. That illustrates the fact that we need to consider the Bill with forensic skill and in some detail, and that it cannot be bounced or railroaded through Parliament.

I take my hon. Friend's comments very seriously, not least because of the interest that he takes in matters of Northern Ireland and of parliamentary scrutiny. In an ideal world, we would not have the Bill at all, and elections would be going ahead. In a less than ideal—but approximating towards it—world, we would have an endless amount of time to scrutinise an important issue: the postponement of democratic elections. But we do not live in an ideal world, and events in Northern Ireland move sometimes with incredible speed and sometimes with incredible slowness, inch by inch. This is one of the occasions on which it is necessary to act with some alacrity to postpone the elections, and to do so having gone extra miles, and having taken extra time, right up to the last minute, to try to avoid postponement. That is why we shall have to deal with all the stages of the Bill in one day. I hope that within those limitations we will give it as much scrutiny as we humanly can.

May we have a debate on rotten public services at rip-off prices in the form of higher taxation under the Government? They have already taken an extra £130 billion from the British people in higher taxes in the past six years, almost all Departments fail to spend even their existing allocations, and Ministers are all too fond of setting, missing and scrapping public service agreement targets. What confidence can the Leader of the House offer that the Government's record on public service reform and improvement will be any better in future than in the past?

Rather than condemning public services as rotten and rip off, the Government prefer to allow plenty of time to debate the way in which we match the unparalleled investment in our public services with radical reform. We want to match those two elements not simply because that is conducive to debate but because it results in genuine change and benefit to people's lives. I have already mentioned the changes in education. On health, there are 50,000 more nurses, 10,000 more doctors and 300,000 more operations. We achieve change in people's lives through radically reforming our public services, and we make adequate time available for debating that in the House. Yesterday's debate was an example of robust discussion ending in widespread support for the Government.

At Treasury questions, the Paymaster General pointed out that the Inland Revenue was dealing with 5.3 million cases of child tax credit and working family tax credit. If only 1 per cent. of cases go wrong and people lose out on benefits that they previously received, it means 80 cases per constituency. Can we hold a discussion about the problems? There is a specific difficulty in cases that involve several agencies. For example, the Child Support Agency, income support and child tax credit may affect each other. If difficulties arise in more than one agency, that creates an especially serious problem. Some of us are continuously on helplines; perhaps we could do with some help to deal with the matter.

The issue has been raised several times in questions and statements in the Chamber in the past week. Although the vast majority of cases have been tackled, a significant number remain to be transferred to the new credit system. Everything possible is being done: money is being spent and more human resources have been brought in to cope with the matter. I ask hon. Members to understand that although the position is distressing for everyone who has not received their benefit, the ultimate reward of the tax credit system for millions of people will be the biggest single advance for working families and pensioners in the history of the welfare state. Any complexity is therefore due to the huge step forward that the system constitutes.

The Leader of the House knows that, on Saturday, it will be a year since the tragic crash at Potters Bar in which two of my constituents were killed. He must also know that there is mounting concern about the lack of progress in the investigation and any resolution of the cause of the crash. Will the right hon. Gentleman ask the Secretary of State for Transport to make a statement in the House next week about the investigation and what is being done to secure progress? The victims, their families and those who travel on the line every day need reassurance that their anxieties are not out of sight and out of mind.

Everyone on both sides takes the matter extremely seriously. The inquiry is under way and effectively in the hands of the Health and Safety Executive. People would frown upon any interference by the Secretary of State in such an inquiry. Of course, we want it to be done as expeditiously as possible, but we also want it done properly and not rushed. I believe that Transport questions will be held next Tuesday or Wednesday, and the hon. Gentleman can raise the matter then.

Should not the House reconsider the electoral systems that we imposed on the devolved Assemblies? Last week's bizarre result means that the Welsh Assembly now consists of 40 winners and 20 losers. Forty seats, of which 30 are Labour, were won on the first-past-the-post system. The other 20 Assembly Members benefited from an assisted places scheme, under which not one member of the Labour party got a seat although it won the vast majority of votes in the second ballot.

Will my right hon. Friend join me in hoping, like most Welsh Members of Parliament, that Rhodri Morgan, the Prif Weinidog of Wales, will soon announce that as he was elected as old Labour, he intends to rule as old Labour?

If I remember correctly, my hon. Friend is a convert on the subject—I mean the electoral system, not old Labour. Others who are not necessarily converts would take the view that although it might be too early to consider changing electoral systems in Scotland, Wales and elsewhere, we should bear in mind experiences thereof when examining future developments in our constitution for other areas. If that is not sufficiently cryptic, I can find another way of putting it.

May I draw to the Leader of the House's attention the report of the Select Committee on Home Affairs on asylum removals, which is one of the most important and damning Select Committee reports of recent years? It demonstrates that immigration control and the process of removing asylum seekers who are not entitled to remain in the United Kingdom are totally ineffective. Will the Leader of the House therefore ensure that a debate on the matter is not tucked away in Westminster Hall in the middle of July but held on the Floor of the House, as a matter of the utmost urgency, preferably in the next two weeks?

I am not sure that I can guarantee a debate as soon as the hon. Gentleman would like, but I want to make several points.

The Government take the issue seriously and there is no attempt to push it aside. Although we have always maintained that it must be tackled, not exploited, if the Government are not prepared to face up to dealing with it, others will exploit it.

I welcome the detailed report of the Select Committee on Home Affairs on a complex subject. We shall consider it carefully. I also welcome its acknowledgement—perhaps, in fairness, the hon. Gentleman should have mentioned it—of the efforts of the immigration and nationality directorate and its contractors to carry out the removals task with "dignity, humanity and fairness". It is a difficult topic in practice as well as in political discussion, but we shall continue to tackle it.

Provisional management information suggests that we have removed approximately 24 per cent. more failed asylum seekers and their dependants in 2002–03 than in 2001–02. Any abuse of the system is unfair, not least to those who seek to enter this country by normal, legitimate and ordered means.

We must also consider ways in which to decrease the number of applicants for asylum in this country. The Prime Minister has outlined what we would like to happen between last October and next October to reduce numbers greatly. I believe that we shall realise that aspiration.

Almost a month has elapsed since the publication of the discovery in Baghdad of a document dated 27 November 2000, in which an Iraqi intelligence agent reported that the Russian intelligence service had provided him with the names of assassins for apparent possible use against the west. May we have a ministerial statement—perhaps a written ministerial statement—from a Foreign Office Minister about representations to President Putin on that serious matter?

I have to confess to the hon. Gentleman that I am not aware of the measure of veracity and substance of these reports. I am also somewhat constrained by the self-discipline under which we normally operate on such matters of intelligence. I am sure, however, that the Secretary of State will have heard the point that the hon. Gentleman has raised. On all matters relating to Iraq, we have tried, within the confines of time, to be as accessible and open with the House as we possibly can, up to and including the unprecedented debates that we have had on the war itself. There is no retention of information or curtailment of debate for the sake of it, so far as the Government are concerned.

What on earth has become of the Planning and Compulsory Purchase Bill?

It is still our intention to get that Bill approved and on the statute book as soon as we possibly can.

Well, there is a huge number of priorities, but I know that both the Government and my right hon. Friend the Deputy Prime Minister regard this as a very important issue, not only in itself but because of all the implications that it has for the wider issue. It is still our intention to get the Bill through as soon as possible.

When the debate to which my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) referred takes place, will Ministers also take the opportunity to explain why, when an unquantified number of asylum seekers have not been removed, they are encouraging 100,000 people a year to migrate lawfully to this country—a number that would require a new town the size of Luton every year for the next 10 years to accommodate them?

We have to distinguish between lawful, ordered immigration into this country—particularly when it can make a valuable contribution to its economy, as well as its social life—and unlawful immigration. Immigrants have made such contributions over many years. Indeed, many of us would not be here if the attitude that the hon. Gentleman is taking had been adopted. That is not to say that we should in any way tolerate abuses of the asylum system, and I have already made it clear that we have acted robustly on that over the past year. That is already having an effect. We have made great strides in speeding up the removals process; in particular, our targets on a proportion of decisions taken in two months, and on decision and appeal in six months. As intake reduces—that is where we are putting the emphasis at present—we will have more resources to deploy to making high-quality decisions fast, which, in turn, should reduce the proportion of cases granted on appeal. But I do not think that we want to take the attitude that, whatever skills we may be offered, or need, we should set our face against any form of immigration just because we dislike foreigners.

Points Of Order

1.32pm

On a point of order, Mr. Speaker. Following the question raised by the hon. Member for Thurrock (Andrew Mackinlay) about Monday's business, you will be aware that the only guidance that we have at this stage to the shape and form of Monday's business on the important and potentially controversial Bill on Northern Ireland is the item on page 1800 of today's Order Paper, which simply makes a reference to the business being concluded at 10 o'clock. So all we know at this stage is that the House will have the opportunity only from 2.30 until 10 o'clock on Monday to complete all the parliamentary stages of a complex and potentially controversial Bill. It would help the House to know whether it will be in order to table amendments to the motion on page 1800 of the Order Paper—for example, to extend the business beyond 10 o'clock.

Would it not be a courtesy to hon. Members if the Leader of the House could answer the not unreasonable question put to him by the hon. Member for Thurrock, and tell us how much time he envisages being allocated to Second Reading, the Committee stage, Report and Third Reading on Monday—all of which must take place between 2.30 and 10—so that hon. Members can have some idea of what the Government are proposing and of how to deal with this controversial matter? On the face of it, it seems entirely inadequate to allow only from 2.30 until 10 for all the parliamentary stages of a Bill that we have not yet seen to be completed, never mind the fact that we only have tomorrow, when the House is not sitting, to table amendments.

I make this appeal to the Leader of the House: it would be very helpful if he could tell us more of what is in the Government's mind at this stage. It would also be helpful, Mr. Speaker, if you could use your authority to confirm that amendments can be tabled to the motion, which is the only information that we have at the moment, so that we can give serious thought to whether the House as a whole might want to give itself more time than the Government now envisage.

Let me answer the right hon. Member for Bromley and Chislehurst (Mr. Forth). Perhaps I can assist him and the House by saying that amendments to this motion will be accepted and can be tabled.

Further to that point of order, Mr. Speaker. Can you confirm that there is nothing in Standing Orders, despite the recent changes to our hours, to prevent the House from sitting until it completes the process on that Bill in a proper way, and that it can sit until any hour? Can you confirm that there is nothing in either the modernisation proposals that were put to the House or in the decision made on them that could prevent that from happening? Could you use your good offices, in the interests of proper scrutiny of this very important measure, to make representations to the Leader of the House on that point?

At the moment, the guillotine motion is set for 10 o'clock, but that can be changed. The hon. Gentleman will perhaps have more influence than I on that matter.

Royal Assent

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

European Parliament (Representation) Act 2003
National Minimum Wage (Enforcement Notices) Act 2003
Electricity (Miscellaneous Provisions) Act 2003
Regional Assemblies (Preparations) Act 2003
Industrial Development (Financial Assistance) Act 2003

Bill Presented

Northern Ireland Assembly (Elections And Periods Of Suspension)

Mr. Secretary Murphy, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Blunkett, Dr. John Reid and Mr. Desmond Browne, presented a Bill to make further provision about the election of the next Northern Ireland Assembly; to make further provision about periods when section 1 of the Northern Ireland Act 2000 is in force; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Monday next and to be printed. Explanatory notes to be printed [Bill 104].

Orders Of The Day

Fire Services Bill

Order for Second Reading read.

I inform the House that I have selected neither of the reasoned amendments.

1.37 pm

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

It is with some reluctance that I find myself here today. This is a Bill that I would have preferred not to introduce, but after 12 months of negotiations and three separate pay offers, the fire dispute has reached deadlock. Legislation is therefore necessary in the public interest and to protect public safety. Reform of the public services is one of this Government's key priorities. In recent months, we have pressed ahead with the modernisation of the fire service, the repeal of section 19 of the Fire Services Act 1947, the introduction of a new system of fire cover based on actual risk, and a new White Paper that will be published shortly.

The Bill now before the House draws on the arbitration powers originally set out in the Fire Services Act 1947 but repealed in 1959. It will enable me—in England and Wales, but not Scotland—to make an order to do two things: first, under clause 1(1)(a), and subject to the negative resolution procedure, to set or modify the pay and conditions of service of fire brigade members; and secondly, under clause 1(1)(b), to give specific or general directions to the fire authorities about the use or disposal of property or facilities. Those combined powers will enable me to secure a pay and modernisation deal for the fire service if no agreement is reached through the normal process of industrial negotiations, and only after full consultation with the parties. That is the situation that we find ourselves in today.

This dispute dates back to May last year. Since then, the Fire Brigades Union has rejected three successive pay offers. The first was for 4 per cent., the second for per cent., and the most recent was the employers' final 16 per cent. offer. Hon. Members will also recall that we have attempted to resolve the dispute through Sir George Bain's independent review of the fire service, and that we brought the parties together at ACAS where, after two months of discussion, they still failed to reach agreement.

The dispute is made even more difficult because, in recent months, the FBU executive has failed to carry its members with it. The executive has twice made recommendations to the members, including a recommendation to accept the employers' final offer, and has twice been overturned. We are therefore back to where we were last May, 12 months ago. The claim remains 40 per cent. for the firefighters and 50 per cent. for the control room staff, without any commitment to reform or modernisation of any kind. Under those circumstances, we have tried to break the deadlock and I am therefore bringing the Bill to the House.

The Secretary of State is effectively saying that because we have reached an impasse he has to present the legislation to the House. What estimate has he made of the likelihood of us not having reached that impasse had he involved himself directly in the negotiations earlier?

This is a matter of judgment, and I give the best of my judgment to the House. I have reported regularly to it on the negotiations and, after 12 months, I have made the judgment to move to a form of arbitration in legislation, after saying that I would be prepared to consider it. That is what I am presenting to the House.

I thank my right hon. Friend for giving way, and I am very interested in the points that he is making. What consideration has he given to his imposition of a settlement to bring the dispute to an end being met with rejection by the union and by members, who could then take industrial action? What would he do at that point?

That is the difficult question that we have to answer in this matter, and I give the best of my judgment. If the House gives me those powers, there will still be a period before I can act—over two months. I hope that my hon. Friend will see from my speech that I am still encouraging negotiations and that there is still a lot of room for manoeuvre and agreement, but at the end of the day this is a free country where people make free decisions on whether they want to give their labour—that is why I am against the anti-strike legislation. But we all must make judgments, which is why I am giving the House my best judgment of how we can find agreement. The dispute affects this country's public safety, in respect of which all of us in the House have responsibilities.

The FBU and its members may refuse to accept the imposition of a settlement by the Secretary of State. What preparations is he making to ensure that the public have the fire cover that they would then need?

The hon. Gentleman would do better to wait until he has heard my speech. Clearly, I have to address those circumstances.

I apologise for interrupting the Deputy Prime Minister, but he made an aside in his response to the hon. Member for Islington, North (Jeremy Corbyn) that he is against anti-strike legislation. I understand that he has given the House an undertaking that the White Paper will consider whether there should be anti-strike legislation or an anti-strike agreement. I hope that he is not prejudging that White Paper.

It is true, as the right hon. Gentleman says, that I have promised the House that in the White Paper we will address ourselves to that essential principle. I shall still give my judgment, however, and I am entitled to it. A White Paper represents a Government's view on matters, and he must wait for that White Paper.

My main point about anti-strike legislation, whether people agree with that or not, is that it would take many months for it to go through the House and be achieved. I assume that that would do nothing more to solve the dispute. My judgment is that this can be done quickly, and it is an alternative beyond just sitting back and doing nothing. That is what I am addressing myself to today.

May I make a little headway? I will take an intervention later.

There has been a failure to reach agreement on the pay and modernisation deal. In addition, we are working against a background of wide-ranging national and local non-co-operation by the FBU and the continuing threat of strike action. In some parts of the country, old, badly located fire stations have been closed and replaced by new modern fire stations in areas of higher risk. That has taken place with the agreement of the local brigade. Even while the dispute has been on, those changes have been taking place in some areas while being resisted in others.

In some parts of the country, local brigades have opposed new fire stations. In two fire brigades, we have projects on stream for new control rooms shared with other emergency services. In other areas, joint control rooms have been blocked by the union. In some areas, there is flexible crewing or alternative shift patterns are in operation. In still others, firefighters are already using defibrillators and participating in co-responder schemes with the ambulance services, but elsewhere they are not. In too many areas, there are none of those things. Effectively, we have a postcode lottery for fire and rescue services, which is not acceptable.

Over the past year, the FBU has constantly called for the provision of new equipment to tackle the increased threat of terrorist attacks using chemical, biological, radiological or nuclear devices following the events of 11 September. I am pleased to tell the House that new equipment is available and ready for use thanks to the Government's £56 million investment. That equipment is designed to deal with members of the public, or indeed the firefighters themselves, who have been exposed to chemical or other weapons in a terrorist incident. However, now that the equipment is available, Members will be concerned to learn that at national level the FBU is refusing to use it, and it is a lottery locally as to whether ordinary firefighters agree to undertake the training.

The equipment essentially consists of mobile decontamination facilities where members of the public can be washed down, and it is absolutely necessary for them to be made available as soon as possible. It is unacceptable to the Government and to the people of this country for that equipment not to be available to them in the event of a terrorist incident. If the FBU will not co-operate, the Government will take action to provide that protection against terrorist attack by whatever means necessary.

In addition to the non-co-operation, the FBU continues to play cat and mouse with the Government through its extended threat of strike action. That has forced 19,000 members of the armed services to be kept on almost constant stand-by since last September. We have had only 15 days of strikes, but the cost to the public purse stands at over £100 million, largely due to the stand-by costs involved. On 15 April, the FBU gave an undertaking that there would be no strikes during the hostilities in Iraq. As a result, the Secretary of State for Defence was able to release 3,000 personnel for other duties. Even so, the impact of firefighting duties on the armed forces has been serious. Troops have been diverted from their training and preparation for core military tasks, and they have had to stay longer on tours of duty than would normally be the case. Military capacity has deteriorated, and members of the armed forces have often gone without leave. That cannot be allowed to continue.

The firefighting duties are having a progressively detrimental effect on our troops in Iraq and our capacity to fulfil a wide range of military duties and obligations. I have therefore agreed with the Secretary of State for Defence that the priority must be to relieve the armed forces in Iraq, and also to release those involved in firefighting for training and other important operational tasks. I have further agreed a release of 5,000 personnel from stand-by for firefighting duties with immediate effect. We will now have only 11,000 members of the armed forces available for firefighting duties, and by the end of the month we will be down to about 9,000 troops.

I want to spell out to the House exactly what those significant and continuing reductions to the number of armed forces personnel deployed on firefighting duties will mean in terms of public safety. In the event of a strike, they will result in significantly reduced fire and emergency cover. On a normal day, the number of fire appliances in the UK is about 3,000. The original deployment of green goddesses was about 829, crewed and supported by 19,000 military personnel. A reduction in the number of military personnel to 9,000 means the deployment of about 250 goddesses and 300 specialist vehicles.

The Defence Fire Service and the fire service inspectorate judge that such a reduction would significantly increase the risk to the public and members of the armed forces. If the FBU calls for further strikes, lives will be endangered and property put at risk. Under normal circumstances, 80 per cent. of the population of England and Wales receive a response within 10 minutes. During the last strike in February, that fell to 47 per cent., and with 9,000 troops involved it would fall to about 36 per cent. Under normal circumstances, 600,000 people would have to wait more than 20 minutes for a response. With 9,000 troops involved, that figure would rise to 10 million people waiting more than 20 minutes. I therefore call on the FBU to make it absolutely clear that there will be no further strike action while our armed forces continue to be engaged in Iraq.

The armed forces are still engaged in military action—providing security and carrying out vital humanitarian and reconstruction work. They are still at risk. They are still in danger. The conflict may be over, but the military still has numerous commitments and responsibilities.

I am not one of those who have been critical of the way in which my right hon. Friend has been involved in the current dispute, but I am concerned about the powers that he is taking to impose pay and conditions. Those powers may well be used fairly by this Government, but one can imagine what might happen in the future. At this stage, I am not sure that I can support the Bill.

I understand my hon. Friend's concern. The same thoughts are in my mind. I have to make a judgment one way or the other, however, and come to the House to justify it. I still hope that an agreement will be reached through collective negotiation.

As for the length of time for which the Bill will be available to this or any other Government, all that is happening now is my presentation of it as one way of dealing with the situation. Certain safeguards, or protections, are provided: for instance, I must consult all parties involved. Then, however, I must make a decision.

The proposed powers are based on those in the Fire Services Act 1947, which provided for arbitration largely because everyone recognised the importance of fire and other emergency services. Employment in those services is not like any other employment: public safety must be given greater priority. Given the circumstances of the dispute and the delay to which I have referred, I think I am right to present this legislation.

Along with 13rendan Barber, general secretary elect of the TUC, I pay tribute to what Mr. Barber describes as my right hon. Friend's

"strenuous personal efforts to assist in finding a resolution".
That is indeed a fact, which ought to be recognised by all.

My right hon. Friend must bear in mind, though, that there are real concerns about the Bill. It poses enormous problems, and it may not offer a solution. I will reluctantly support my right hon. Friend tonight, despite my doubts, but ultimately a negotiated framework will be needed to settle the dispute. That is the right way forward for the Government, for the employers—who have not enjoyed much credibility during this process—and for the FBU.

The FBU sets great store by the Burchill proposals. I am not competent to tell my right hon. Friend whether the proposals have merit, but I should like to know whether he thinks either Burchill or, as it were, son or daughter of Burchill could offer a framework in which meaningful negotiation on both pay and modernisation could begin.

I am grateful for my hon. Friend's kind remarks. The proposal presented by Professor Burchill, who is independent chair of the National Joint Council for Local Authorities' Fire Brigades, has a number of cost implications. The existing costs are quite heavy, and I consider the 16 per cent. offer adequate; but Burchill's is just one proposal—although all the evidence suggests that FBU members are about to reject the executive's recommendation and accept Burchill's. I believe they are to decide on 15 May. There is, in fact, sufficient information to suggest that even that proposal may be rejected—but if Members will allow me to finish my speech, they will learn that I am prepared to present other proposals. During our discussions of the Bill. collective bargaining may yet provide a way of settling the dispute.

May I make a point relating to Professor Frank Burchill? The figure of £100 million has been mentioned. Many of us are at a loss to know how it was arrived at, as there is no evidence that fire authorities have done any costing.

I congratulate my right hon. Friend on all his efforts. If a negotiated settlement is reached before the Bill completes its progress, will he be in a position to abandon it?

I thank my hon. Friend for his kind remarks. The £100 million to which I referred did not, in fact, relate to the Burchill proposals; it related to the stand-by cost—more than £2 million a day—of having forces ready and available.

Burchill accepts a negotiated wage framework, but has presented proposals which we and the employers consider effectively prevent any modernisation. There must be a balance between modernisation and the payment to which we are committed to make some advance contribution. If modernisation proposals are not accepted, there will be an extra cost. We are talking about the difference between the £30 million involved in the mark 1 deal—the 16 per cent. Offer—and that extra cost.

All these matters can be discussed, but modernisation and reform must accompany a wage agreement. That was not at the heart of what Burchill proposed; in fact, he virtually vetoed any such possibility.

As for the time scale for the Bill and the possibility of a sunset clause, no judgment has yet been made, and I do not want to go into that now. I just want the Bill to be approved. It may prove unnecessary: I still believe that collective bargaining could finally settle the dispute.

Given that the Deputy Prime Minister is not the employer, I do not know why it is not possible for the Local Government Association or the fire authority employers to impose a pay deal. Why is the Bill necessary?

I am particularly concerned about clause 1(1)(b), which allows the Secretary of State to
"give specific or general directions to fire authorities about the use. or disposal of property or facilities".
Why does the Deputy Prime Minister feel that he needs that power? Does he want to set up regional fire authorities?

Of course the LGA, as employer, could impose a deal, although I think there would be quite a reaction from FBU members, but the point is that it is not prepared to take such action.

Having explored every avenue, I have brought the Bill to the House because neither party is prepared to move any further. There is deadlock, although I am still working constantly to secure an agreement.

As for whether the use of the facilities themselves will be necessary, I hope that if a difficult stage is reached during arbitration and fear is generated, fire stations will be available. On occasion even some fire authorities have made it clear that in such circumstances they would not be available. I had the rather quaint idea that the fire stations belonged to the public, although in one or two cases I have felt doubtful about whether that is so.

That was a flippant remark, but I think that hon. Members will know what I mean.

The Deputy Prime Minister has described in some detail the considerable dislocation experienced by our armed forces, who have had to stand in for the firefighters while being paid substantially less than what the firefighters currently receive. Even if the Deputy Prime Minister reduces the number on stand-by from 16,000 to 9,000, an intolerable burden will be imposed on the forces, and our capacity to train those men and women for emergency operations that might become necessary in future will be seriously damaged.

We take the advice of the Ministry of Defence on troop management. I am told that in certain circumstances, at certain levels of troop deployment, if a strike did not last longer than a certain period it could still be managed. The point is, though, that we must try to secure an agreement.

To be fair to the FBU, when the Iraq situation began it made it clear that it would not strike while we were involved. I now appeal to the union not to strike in the current circumstances, but it will decide on 15 May. Let us take this one bit at a time. Meanwhile, I must give the House a justification for the action that I wish to take. The least I can do is tell the House what the consequences would be if troops were not available, and I have tried to do that.

On a number of occasions the Opposition have called for the Attorney-General to take out an injunction with the aim of protecting public safety. I have kept the Attorney-General fully informed of the situation as it has developed, and I have frequently told the House that it is up to him to decide whether legal action is in the public interest. The Bill provides a way forward in these difficult circumstances: it allows me to secure an arbitrated settlement concerning pay and conditions, and gives me a statutory duty to consult before placing an order before the House. I propose to consult both the national joint council and the statutory advisers to the Central Fire Brigades Advisory Council, which includes a number of organisations and trade unions not represented in the national joint council.

The principles that will guide those consultations will be the same as those that have guided the negotiations. Any pay rise above inflation must be paid for by modernisation. The Government continue to stand ready to provide £30 million of transitional funding, in addition to the £100 million cost of the dispute so far—but we will not provide one penny more.

I am also very conscious that ordinary firefighters have received no increase in their basic pay since November 2001. That is particularly unjust for those who have not been party to this dispute—mainly the retained firefighters, including members of the Retained Firefighters Union—and have continued to work throughout, but have been denied their due entitlement to a pay settlement as soon as possible.

The powers in this Bill will also enable me, as well as making a decision about pay and proper consultation, to improve public safety and support the process of modernisation more widely, bearing in mind the primary concern for public safety as set out in our new guidelines on integrated risk management.

Hon. Members will be aware that one of the cornerstones of the current terms and conditions of service is that there must be a constant level of crewing at fire stations around the clock, regardless of daily fluctuations in the number of fires that actually occur. That is neither right nor sensible, and it is certainly not right to assume that fire cover cannot be provided in another way. No other emergency service operates on this basis. Through the powers provided in the Bill, I will be able to change existing constant crewing requirements and allow fire authorities to match staffing to the real risks posed by fire. The House—and indeed firefighters—should not misunderstand what I am saying: this is not about compulsory redundancies; it is not about attacking firefighters' second jobs; it is not about taking away rights and benefits that firefighters currently enjoy; it is about creating better ways of working for both managers and firefighters, and better provision for the public.

My right hon. Friend rightly points out that this Bill relates to England and Wales, and as a Scottish Member I have some concerns. Can he allay my fears and confirm that this will not end up in regional pay bargaining and agreements—that it will be a national agreement that cannot be split up?

On the agreement, if I were given the powers by this House and forced into using this legislation, it would apply only to England and Wales; it would not apply to Scotland, because it has a devolved Parliament. As to whether, as Bain recommended, the same privilege should be given to Wales, I ask my hon. Friend to await the White Paper, in which I shall give a judgment on that issue.

On regional wage bargaining, at present there is a national wage structure. If it is agreed to, I will be imposing not a regional wage structure but a national one to apply in Wales and in England. I am hopeful that there is still room to find an agreement while the House discusses this possibility.

The Deputy Prime Minister says that this is not an attack on firefighters' second jobs, and he has previously given a commitment—or the employers have, at least—that there will be no compulsory redundancies. Is he in a position to extend that commitment by saying that no existing firefighter will have a compulsory change in shift patterns imposed on him?

This is an important point, and I shall come exactly to it if the hon.

Gentleman will allow me to complete my speech. There is a genuine fear among many firefighters that we are proposing to give total control to the fire chiefs, who will decide that all firefighters are to come in at 8 o'clock in the morning and work 24 hours a day, or for seven days. I am just as concerned about the Captain Blighs in this situation as I am about those who have common sense.

The Deputy Prime Minister will be aware that throughout the country different brigades have achieved different levels of modernisation. The Shropshire and Wrekin Fire Authority is probably the most modernised of any fire service. The only step that it has yet to take is the establishment of a joint operations centre, which it is planning to do in conjunction with the ambulance authority. That proposal has the support of the FBU in Shropshire—even though it contradicts national policy—and of Unison; all that is holding things up is, I am afraid, an apparent lack of help from the Office of the Deputy Prime Minister. Will he examine this issue to see whether matters can be progressed?

I am coming to the issue of joint operations, but I believe that the situation is not exactly as the hon. Gentleman describes. He has in fact written to us about it, and we have made it clear time and again that we want joint control rooms. There are two or three places in which joint control rooms are used. There has been a great deal of controversy about whether the joint control room for Wiltshire should be divided by a brick wall or a glass wall, or whether the services should come together. However, in the past few days the FBU has agreed that it should be established, so there is movement.

My complaint is this: people may want national standards for wages, but why are there no national standards involving the best of the safety provisions, such as joint control rooms? That is the issue that I am trying to address. The standards were changed through the Fire Services Act 1959, and authorities were given the power to take decisions; before then, there was a national system under the terms of the 1947 Act. I have inherited a situation that, in my view, is not satisfactory.

Does my right hon. Friend agree that the White Paper that was produced a couple of years ago, and was universally welcomed, was at least a step in the right direction? What happened to it, and why has it been so difficult to make progress on the ideas contained in it?

I, too, was interested in that point. It was the general secretary of the FBU who told me that a White Paper had been published and the Labour Government would not deliver on it. Apparently, it contained a proposal whereby certain powers would be given to fire service chiefs. The FBU did not like that, and preferred that the White Paper not be delivered. As I understand it, because we could not reach an agreement, nothing happened.

However, I have made it clear that there will be a White Paper, and I made it clear to the FBU that it is absolutely right that we modernise. It is not just a question of wages and conditions; a whole range of changes needs to be made, and that fact will be encompassed in the White Paper. Scotland has already produced a White Paper on its own services, and I am taking that into account. I shall shortly publish a White Paper that will cover many of these issues, and our response to the Bain recommendations.