Commons Chamber

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House Of Commons

Wednesday 13 December 1995

The House met at half-past Nine o'clock

Prayers

[MADAM SPEAKER in the Chair]

Government Bills

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

9.34 am

There is widespread dissatisfaction with the working of Parliament. Some reforms, such as the work of Select Committees and the introduction of television, have improved the effectiveness and visibility of Parliament's role in governance, but the changes have not gone nearly far enough.

I am glad to have this opportunity to raise in the House matters for which the Government have responsibility and which require attention if the efficiency of the House of Commons as a legislative assembly is to be improved. The reform that led to the procedure that allowed the possibility of a debate such as this is itself a useful development that I welcome.

The issues that I want to raise do not reflect the concern that is frequently expressed that the contents of legislation are unacceptable. That goes far beyond this debate. The issues that I want to touch on reflect concern that the enactments of Parliament are defective and that the citizen is too often not consulted and dissatisfied. Criticisms are often made, which reflect dislike of the policies behind legislation, but I shall not be dealing with that.

I invite the House to consider, and the Minister to respond to, some of the proposals made by the Hansard Society for Parliamentary Government commission's report on the legislative process, "Making the Law", which was published more than two years ago. The House has not yet had an opportunity of considering it, although a year ago almost to the day, in another place, there was an informed and valuable debate initiated by Lord Nathan. Many of these matters would be appropriately considered in this House. If the legislative process is to be improved, it falls to this House to take an initiative. I hope that the Government will welcome the opportunity of making clear their views about some of those matters and their willingness to consider some of the recommendations.

Perhaps a word is in order about the composition and working of the Hansard Society commission. It was chaired by Lord Rippon, and the hon. Member for Great Grimsby (Mr. Mitchell), Sir Michael Latham—a distinguished former Conservative Member of this House—and I were members. The matters that the commission covered have been considered from time to time by authoritative bodies, some established by previous Governments. The Heap committee reported a quarter of a century ago and the Renton committee 20 years ago.

It is unfortunate that many of the recommendations made in those reports—and the public's grievances about the legislative process and the quality of legislation, its obscurity and user-unfriendliness, and the lack of consultation in its compilation, to which attention was drawn—remain effectively unaddressed. The problem has become more acute as there has been a great increase not only in the volume of primary legislation—although, in the past decade, Acts may not have greatly increased in number, they have hugely increased in quantity—but in the volume of subordinate legislation, for which adequate scrutiny processes are not, it must be admitted, in place.

The commission's report was thorough, comprehensive and based on a mass of evidence from a wide range of bodies. It all pointed to there being much wrong with our present legislative processes. I think it almost beyond the need to argue that the results have greatly exacerbated the sense of Parliament's incompetence and that, whatever view may be taken of the Government's aspirations in legislation, the product is too often so seriously defective that it requires early amendment. That cannot be a matter of satisfaction to the House or to any Government.

One need mention only the history of the introduction and ultimate abandonment of the poll tax to have a powerful example of what is wrong with the process. It is at least arguable, and was argued by David Butler, Andrew Dennis and Tony Travers in their book on the poll tax, that its defectiveness, not only in conception but in execution, with multiple steps to amend and ameliorate it taken by the Government, committed to trying to make it work, belatedly taking on board advice which had been given in consultation, but which had not been acted upon early, contributed to the Prime Minister of the day's downfall. That may have had a lot to do with the legislation's content and the policy that lay behind it.

Is not the phenomenon to which my hon. Friend draws attention especially obvious in cases where Parliament adopts a knee-jerk reaction to an immediate problem? I am thinking of the Dangerous Dogs Act 1991, which was rushed through this place and the other place at great speed, and now we are living with the consequences. Is there not something to be said for the saying, "Legislate in haste and repent at leisure"? Is not that a good lesson in relation to understandable responses such as that to the knife attack on the head teacher? We must be careful that we do not adopt a policy of reacting at such speed that legislation is defective.

I entirely agree with my hon. Friend. Had he not done so, I would have drawn attention to the Dangerous Dogs Act, as it is an example of a measure that was too hastily introduced to the statute book and that has left serious problems. Recently, much criticism has been made of it by the judiciary. Almost inevitably, the measure will require amending legislation.

Will the hon. Gentleman be somewhat more cautious about what he is saying about legislating in haste? The House should take prompt decisions when problems arise such as the recent knife attack and dangerous dogs. Surely the problem in that case was not the speed of the legislation, but the degree of consultation that went into the preparation of the measure that went through the House.

The Hansard Society's report recognised that there were occasions when it was appropriate for Parliament to act speedily. I signed that report and I therefore agree with the hon. Lady that there are such occasions, but the report said, and the House should reflect, that

"getting a bill right should always have priority over passing it quickly"—

not in every circumstance an overruling priority, but it should be the norm. That view was well expressed in evidence time and again to the commission. I refer to the evidence of the Association of British Insurers and Lloyd's, which said:

"it is better for legislation to be clear and workable than for it to be enacted at the earliest possible opportunity and, before long, have to be changed by further legislation or interpretation by the courts".

Another example of legislation that proved to be defective through lack of appropriate consideration and consultation was the Child Support. Act 1991. I do not make these points as partisan points, as all parties participated in passing that Act and the Dangerous Dogs Act, although, in the case of the latter Act, the Opposition parties offered alternative proposals to establish a registration system that might deal with many of the problems raised by dangerous dogs. What is clear, however, is that too many significant Bills dealing with real problems are introduced in a half-baked form. That is what we must deal with, and the Government can play the most significant role in tackling it.

The first point of substance is that it should be recognised, as the commission put it, that

"proper consultation should play a central part in the preparation of bills".

I imagine that the Government would have no difficulty in accepting that general proposition, but what is lacking is an institutional requirement that, in a governmental sense, that consultative process be built into Bills' preparation to allow the public fully to participate in the construction of legislation, to know when it is appropriate to intervene, and to have an opportunity to intervene, to influence both the direction of policy and the practicality of the proposals that are made.

That consultation process should be as open as possible, involving all the relevant bodies, especially those that are directly affected by the legislation proposed. There should be, as the commission put it, the minimum secrecy and the maximum feedback to those consulted.

For major policy reviews, it is sensible to involve independent inquiries. The practice that grew up during the lifetime of the Governments led by Lady Thatcher of not establishing such inquiries and of avoiding the appointment of royal commissions, for example, was much to be regretted. The examples of work carried out by such commissions and introduced as a result of their recommendations, sometimes backed by the detailed work of other bodies such as the Law Commission, can be of immense help in avoiding errors that vitiate the purposes of Acts.

The worst Department in recent years for neglecting to follow such advice, where it has existed, is the Home Office, which has produced a number of seriously defective criminal justice Bills that have been extensively criticised in the higher courts and, in some cases, have had to be subsequently amended. The knee-jerk reaction to capture the headline "Crackdown on Crime" has become a way of life under successive Home Secretaries.

On the requirement of consultation, it is right that there should be quite clear and specific questions inviting specific responses. There should also be consultation on draft Bills and draft clauses and not merely on Green Papers and White Papers. The commission found it astonishing that the Law Society was under the misapprehension that it was a constitutional impropriety to disclose the precise contents of a Bill to members of the public. The Law Society, of all bodies, genuinely believed that to be the case. I hope that that view does not prevail, because such consultation is proper and desirable. However, it is a reflection of the widespread view that the language of legislation is couched in arcana, the secrets of which are to be divulged only on the date of a Bill's publication. That is not satisfactory if the end product is to be the result of consideration. There is some welcome evidence that the Government have taken that point on board.

There is still concern about rushed consultation, which can certainly be embarrassing to parties whose interests are directly involved. Complaints about the time that is allowed for consultation on Bills were made to the commission by the Trades Union Congress, the Law Society, the Magistrates Association, the National Trust, Shelter, the BBC, the British Railways Board, the community council of Humberside, the National Consumer Council and the Industry in Parliament Trust. The evidence was that in too many cases consultation was effectively pro forma. That must be avoided. It is desirable that, as far as possible, copies of consultation documents should be freely available to those who are affected by legislation or to their representatives. That is a further recommendation by the commission.

There is good practice upon which to draw in setting guidelines for consultation, which all Departments should prepare. The Department of Trade and Industry has drawn up such guidelines and that is extremely welcome. In that context, there has been one hopeful development on consultation since the Hansard Society commission reported, and it is contained in the provisions of section 3 of the Deregulation and Contracting Out Act 1994. I am not in sympathy with the whole of that legislation, but at least in respect of the required consultation and the publication of the results it marks a creep forward, which I welcome.

It would be worth the Government's while to study the practice in some other countries, notably that in New Zealand where, for the purposes that I have described, a legislative advisory committee monitors legislation before Bills are published. Systematic and thorough consultation as part of the legislative process is not a pipe dream. It is a reality in the Deregulation and Contracting Out Act and it should be the practice for Bills and major items of delegated legislation. On that issue in particular, I should be grateful to hear the Minister's thoughts at the end of the debate.

More time and care must be devoted to the drafting of Bills. My ministerial experience occurred some time ago, although it extended over more than five years. I was concerned about the issue of ministerial responsibility for the work of parliamentary counsel. I understand that parliamentary counsel are answerable to the Prime Minister. Even a Prime Minister with an assiduous interest in detail—perhaps Lady Thatcher was an example—must find that the supervision of parliamentary counsel lies outside his daily interests and sphere of operation. The case for assigning to the Attorney-General responsibility for parliamentary counsel and for ensuring that legislation conforms to best constitutional practice and best legal drafting practice should be seriously considered.

In drafting the Consumer Credit Act 1974, I sought to make the language of the legislation more consumer friendly, but that was difficult to accomplish. The right hon. Member for Northavon (Sir J. Cope) may remember that legislation, because he was interested in some parts of it. Each step involved enlisting the support of the lawyers in one's Department, and the argument, which was nearly always difficult to sustain, was that parliamentary counsel could have drafted a passage with greater clarity and without reference to other Acts. That would have avoided complex legislation that was less helpful to those who required to use it.

As a general principle, parliamentary counsel should be pulled rather more into the supervisory overview of those within government who are responsible for the law, and their work should be assisted by some addition to their resources, because if the problems have not been tackled in the years since we received evidence on them, there are difficulties with recruitment, training and staffing.

The style of drafting should be based on the requirements of the main users of the Bill, and draftsmen should seek clarity, simplicity and brevity. The commission took the view that certainty should be paramount, and cautioned against too great a reliance on statements of principle that left too much interpretation to the courts. However, we have tended to err in the opposite direction, and greater clarity is certainly to be sought.

Achieving those ambitions will require a considerable push from the Government, not mere aspiration and generalised instruction. The commission suggested that notes on sections should be published with Acts, and that they could be used by the courts as an aid to understanding. I know that, when the Broadcasting Act 1990 was considered, such notes were provided to members of the Committee. However, we still have to rely on the practice, which is not entirely satisfactory, of dealing with ambiguities in the manner of the ruling in Pepper v. Hart. It would be preferable to avoid the type of ambiguities that arose in that case by the Government assisting the process of comprehension in the way that I have described.

The commission took the view that, on balance, it would be right to make greater use of delegated legislation, but that was under the conditions of the provision of greater scrutiny for delegated legislation, and improved arrangements being made for the publication of statute law. The failure of Parliament to scrutinise that delegated legislation effectively is very troubling. The new procedures of the Deregulation Select Committee, to which I have already referred, in scrutinising deregulation orders for their approval by the House could be applied to major delegated legislation.

The commission also welcomed, and urged on, the Government's plans to establish a statute law database. Can the Minister say what has happened to that? It was originally intended to be ready by September 1993.

We also made a number of recommendations to reform the way in which Parliament should examine and pass legislation, including, for example, more pre-legislative examination of legislation by Select Committees; more evidence from experts and the public on Bills and in Committee; and systematic post-legislative examination of how Acts have worked out in practice. Those are matters for the House, and perhaps for another debate. However, it is unfortunate that those matters do not appear to have been considered or reviewed by the Procedure Committee recently.

The points that I have made depend on the Government taking the initiative to improve our legislation. None of this—better consultation, better and less hasty drafting, and proper scrutiny—would be possible without changes in the way in which the legislation is programmed. However, that also depends on the Government.

There must be acceptance of the need for timetabling of legislation in the House of Commons to ensure the passage of the Government's legislation, but as a concomitant of that, the commission recommended a move towards the adoption of a two-year legislative programme, leaving proper time for consultation and drafting. With longer and more complex Bills, that would not only avoid the total domination of the parliamentary timetable by such Bills, which is undesirable, but would allow proper scrutiny as they passed through Parliament.

The Legislation Committee of the Cabinet would have to consider such matters, and I would suggest that it should be responsible not merely for the business management of Bills, but for their content, constitutional propriety, clarity and drafting. The Committee should also ensure that the proper, published, clear and agreed consultative processes have been followed. I do not think that that is a counsel of perfection, because, notwithstanding the point that the hon. Member for Dewsbury (Mrs. Taylor) rightly made about occasions when it is necessary to legislate in haste, in most circumstances hasty legislation is not required and priority should be given to getting it right.

I am grateful to the House for the opportunity to raise those issues, and I look forward to the Minister's reply.

10.5 am

I am very glad that the hon. Member for Caithness and Sutherland (Mr. Maclennan) secured this debate. He has opened it in a very interesting way.

I am also glad to see on the Front Bench my hon. Friend the Parliamentary Secretary, Office of Public Service, the hon. Member for Havant (Mr. Willetts), who will speak from the Dispatch Box for the first time. I am sure that he will speak many more times, but it is good to be present on the first occasion on which an ornament to the Government Front Bench makes his first speech.

The House has, of course, two main duties. The first is to monitor the Executive, which incidentally is primarily done through the fact that Members of Parliament are the main members of the Executive, rather than by other processes. The second main duty is, of course, the passage of legislation. The record suggests, and the hon. Member for Caithness and Sutherland has suggested, that the House is not very good at scrutinising legislation. I do not quarrel with that, and I believe that we are had at the drafting as opposed to the policy of legislation.

We often do not even attempt to draft legislation. For example, one frequently hears a Back Bencher say in Standing Committee that he is moving an amendment that he wants the Government to agree with in principle, and that he is happy for them to redraft it using the proper words. In taking that attitude, which is common, we are negating our responsibility for the drafting completely. It is understandable, but it is an illustration of the way in which we fail to even attempt to look at the drafting of legislation.

For that reason, it is right to go back up the legislative chain and consider drafting as we are doing this morning. I have had experience in various Government Departments over 15 years, half as a business manager and Whip, but the other half in various Departments. I know, as the hon. Member for Caithness and Sutherland has said, that it is extremely difficult for Ministers and for Departments to deal with parliamentary draftsmen. They are a small, exclusive, highly skilled band. Incidentally, they occupy a very nice office in Whitehall which was formerly the office of the Paymaster General. However, by the time I became Paymaster General, that office had long been taken over by the parliamentary counsel.

Ministers are somewhat insulated from draftsmen by their departmental lawyers. Most of Ministers' dealings on the drafting of Bills are with departmental lawyers, and they only have contact with the draftsmen on relatively rare occasions. I fully recognise the difficulties that the hon. Member for Caithness and Sutherland described in his dealings with the Consumer Credit Act 1974. I do not actually recall that Act passing through the House—he was kind enough to suggest that I might—but I recognise the difficulties that he had in dealing with the draftsmen. There are always good reasons, not bad ones. why it is difficult to alter the drafting. as Ministers sometimes wish. Often the process does not allow enough time for parliamentary draftsmen to do their work thoroughly.

Finance Bills represent a particular piece of the jigsaw puzzle. A number of reports have been published recently on the drafting of Finance Bills. The hon. Member for Caithness and Sutherland founded the debate on that published by the Hansard Society, but the tax law review committee of the Institute of Fiscal Studies published an interesting one recently. Yesterday, the Inland Revenue published its report on clause 160 of the Finance Bill, which was considered earlier this year. I shall refer to that interesting report later.

Finance Bills are obviously long and obtuse. They represent the one part of the revenue-collecting machinery that is not yet in the process of a massive sea change. They are about to be so, however, as a result of the reports to which I have already referred.

Customs and Excise and the Inland Revenue are already engaged in a massive programme of sea changes involving computerisation, the streamlining of offices and so on. The Inland Revenue used to have 104 offices, but in a few months time it will have just 29. That is one measure of the changing nature of the Inland Revenue. Another is the self-assessment of income tax, of which we are all becoming conscious.

Sometimes it is necessary to go through to complex procedures to reach simplification. The change involved in self-assessment is extremely elaborate, and legislatively and in fact the learning process through which people will have to go to get to the simpler system at the end—hopefully it will be simpler—

Hopefully.

Yes, hopefully—that process is complex.

Both departments have made great efforts to make taxation more user friendly. While I was responsible for Customs and Excise, it won a number of plain English awards for its leaflets. I fear that the parliamentary draftsmen's office is still a long way from receiving such awards for its efforts to produce legislation. It is important to remember, however, that the preparation and drafting of legislation are the basis on which leaflets are produced. Those leaflets cannot be clear if the legislation is not clear. That is why I welcomed the recent report from the Inland Revenue and its positive attitude.

Tax legislation is included in Finance Bills by three routes. First, those Bills include the simple kind of tax legislation that implements a change in rates announced in a Budget. The Bill would act on the instruction to "delete 25p and insert 24p", to take the current example.

The second route relates to the complex changes to tax law announced in a Budget, and implemented straight away in the forthcoming Finance Bill. The third route relates to the slow-motion changes in tax law.

Even the simple change of rates can produce problems regarding drafting and complexity. I am glad to say that we reorganised the vehicle excise duty categories a couple of years ago. Over the years, the number of categories, of which there were far too many, had become encrusted with all kinds of detail. We were able to clean that up. Such problems are therefore evident even in the simple types of tax legislation.

The second type of change, the complex tax changes announced in a Budget, cause a much greater problem because of the speed at which they pass from the Budget speech—the first public announcement of the proposal—into law.

The third category, of slow-motion changes, should be the one that causes the least problem, because there is no time pressure. In the past 10 years, there has been a greater tendency to spend far longer on consultation during the period of gestation of such tax reforms. There has been far more consultation, more Green Papers and White Papers, including the publication of draft clauses to the Finance Bill in those White Papers.

Those changes are not, of course, considered in the House until the last moment in Committee, but intense consultation is conducted by committees and trade and professional groups outside the House. The hon. Member for Caithness and Sutherland criticised the Government for the lack of such consultation, but I hope that he will acquit the Revenue departments of that charge. After all, the report of the Hansard Society specifically mentioned Customs and Excise and the Inland Revenue as examples of good practice on consultation.

Such consultation documents often include draft clauses, and I believe that the Law Society has frequently commented on such documents, so the attitude that the hon. Member for Caithness and Sutherland reported it as taking surprised me somewhat. It is certainly true that other professional bodies frequently comment on such documents.

The first reason for the complexity of tax law is a desire for equity. That is natural in politicians, but it helps to make for extra complications when extra categories of people must be dealt with and given special treatment. The second reason for that complexity is the desire to prevent avoidance. Those reasons are policy reasons for complexity. Both are difficult to avoid, and both are at their worst when there are high rates of taxation.

There are other reasons for complexity. First, it feeds on itself. When one has complex laws, it involves great complexity to alter them. We must remember that the tax law and other legislation must reflect the increasing sophistication of the outside world, particularly the financial one.

Another reason for complexity is the parliamentary draftsmen's desire to avoid the uncertainty of novelty. That is why they constantly want to use the old words and phrases used in previous Acts. That is why they constantly want to bolt changes to the law on to existing law.

I have already said that avoidance rates are at their worst with high rates of tax. When the top rate of income tax was 98 per cent., there was a massive incentive for people to invent tax avoidance schemes. The Government therefore had to invent anti-avoidance schemes. They are largely responsible for the current complexity of income tax law.

The trouble is that, even though rates are now much lower, and the top rate is very much lower than it was, one cannot uninvent the tax-avoidance schemes worked out. One cannot therefore repeal that anti-avoidance legislation easily.

Complexity is also caused by the length of time a tax has been in existence. We have had income tax for a century and a half or more, so it is no wonder its legislation has become more and more complex. Value added tax is now getting complex because it is becoming an older tax. To start with it was a pretty simple tax, but it has now become extremely complicated. There is no serious accountancy firm that does not have a special department of experts to deal with VAT. An added complication are the various European Community agreements which we have made. They, too, are another reason for the complexity of VAT.

All those reasons seem to suggest to me that, to a certain extent, it is down to us as politicians—both the Government and the rest of us—to give a higher priority to the simplification of tax when putting forward policies and urging the Government to make changes.

I also think that it is important to examine our procedure in that respect. During the Budget debates, I drew attention to what my right hon. and learned Friend the Chancellor said—in column 1066 of Hansard, appropriately enough—on that matter:

"We in the House will need to look at our procedures, to see how that tax rewrite can be sensibly handled."—[Official Report, 28 November 1995; Vol. 267, c. 1066.]

He was referring to the rewrite covered in the Inland Revenue documents, which were published yesterday. My right hon. and learned Friend was right to draw attention to the issue and we should pay some attention to it.

Some say that the Finance Bill should be published earlier, perhaps before Christmas, so that there would be more time to consider it before it is debated in the House. I would prefer the Provisional Collection of Taxes Act to be altered, so that there is not the necessity, at the end of the Finance Bill, to complete it within the period presently allowed. The Finance Bill timetable could then move a little further around the year. Of course, changing the Budget date to November has already facilitated that to some extent, but it is not easy to achieve it within the context of the whole of the Government's legislative programme.

We may need to consider a different procedure for simplification Bills. We already have a special procedure for consolidation Bills, when we can discuss only whether it is an accurate consolidation. In practice, it means that those Bills are not debated. We now have the new procedures for dealing with deregulation. I believe that we also need a new procedure for simplification Bills, so that we would be allowed to discuss only the substantive changes, but not changes made to the wording simply to improve drafting and clarity.

I recognise that it would be extremely difficult to draft a Standing Order to distinguish between the substantive and the non-substantive changes, as they are inevitably wrapped up together. Such a proposal would work only with the good will of the House and a cross-party wish to make it work. If all the definitions were exploited by the Opposition or by others opposed to a particular measure for whatever reason—perhaps to delay progress on other matters, for example—it would be difficult for the Chair to manage the proposed system because of the difficulty of making a distinction between the substantive and the non-substantive changes. Nevertheless, if we are to make real progress with the simplification of tax and other legislation, we should give some thought to the proposal.

I am glad that there has been progress with the consideration of Finance Bills and the attempt to make the drafting of complex matters more readily understandable. Lessons for other legislation may be learned from what is happening with Finance Bills.

10.23 am

I shall not attempt to follow the right hon. Member for Northavon (Sir J. Cope), who has great expertise in these matters. All that I can do is humbly to agree with the majority of what he said. However, I do not altogether agree on self-assessment, which is a disaster waiting to happen. I attended an Inland Revenue briefing on self-assessment last week, hoping to learn how the system would work and how it would affect me and my constituents. I was so baffled and so uncomprehending at the end of an hour and a half that I had to be carried sobbing from the room. The Inland Revenue had not thought to provide grief counsellors.

I congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on initiating the debate. It is characteristic of the earnest seriousness that he contributes to this House that he has taken up this issue and pursued it. I could barely stand the excitement of his speech. His intelligence and his devotion to serious causes are a credit to him and to the House, and no more so than today.

It is shocking that, after two years, the Government have still not dealt with the Hansard Society report on the legislative process. There has been no real reaction, despite an extensively signed early-day motion requesting one. We have not been given the opportunity to debate the report in the House, nor have the Government made any proposals to implement any of the report's recommendations. That is appalling. The report was prepared by a distinguished royal commission—not least because it had me as a member— with a distinguished chairman. It heard a wide range of serious evidence and reached an effective set of conclusions that deserve implementation.

It is a shame that a Government who are obsessed with charters; who say that they want to listen to the citizen as the consumer; who say that they want to involve people and make them feel that their views are taken into account; and who are obsessed with improving the efficiency of government, have not done something in an area where that improvement in efficiency is desperately needed.

Instead of the cones hotline, the Government should have set up a legislative hotline, saying, "Turn in your MP; complain about legislation; what is your reaction to such and such a clause?" and so on. Of course, that is reducing the matter to a partial dimension, but if the Government really want to listen to the citizen, there is no more important area where the citizen, needs to influence and needs to be heard than the legislative process. The Hansard Society recommendations would have achieved that.

I am aware that the Government are prejudiced against royal commissions. Under the previous Prime Minister, there was even a prejudice against rational analysis—it was an exercise of will. The Government's failure to listen to rational argument and their failure to reform the processes will damage not only their reputation but that of Parliament, which is far more important. Parliament is not functioning efficiently; it is not consulting and listening to the people. It could do so if we implemented the reforms recommended in the Hansard Society report.

There is a chorus of complaint—we have heard a small echo of it this morning—about inadequate, badly drafted, incomprehensible legislation, which is causing difficulty for the courts, resulting in the necessity of amendments this year to legislation enacted last year or the year before. That is creating an inadequacy in and a problem with the processes, yet the Government have done nothing about that or about the Hansard Society report. It is a serious indictment of the Government.

Why have not the Government done anything about the report? It is because it does not suit their convenience to do so. Ministerial convenience is the essence of the problem. They want their convenience to hold sway in a knee-jerk reaction to propitiate public opinion—for example, in the debate about dangerous dogs, which resulted in disastrous legislation. They want their convenience to hold sway when it comes to the exercising of will—for example, the poll tax, which again proved disastrous. They want their convenience to be dominant when it comes to political posturing by the Home Office. If the courts do not trust the Home Secretary's judgment and overrule him, why should Parliament trust him in the legislative process?

The problem is that Parliament is ill placed to prevent ministerial convenience from holding sway. Our role is to check the Executive and to protect and represent the views of the citizen, but we do not have the power to do that, because the will of the Executive dominates and therefore Parliament is the creature of the Executive, through the party system. It is bound to be so. We have an elective dictatorship and the job of the Opposition is just to heckle the steamroller. If the driver of the steamroller will not listen to the complaints of citizens, put to him by the Opposition and by Back Benchers, Parliament is impotent. The parliamentary majority overrules all. In those circumstances, the Government have a responsibility to reform procedures so that we can be more effective and have a say.

Frankly, 45 per cent. of the time of this place is devoted to legislation, and it is a farce. Our influence, control and ability to provide better legislation and check it is minimal. Standing Committees are a total farce, because all the Opposition are trying to do is hold up the Bill in the hope that public opinion will influence the Government to make the changes that should be made. The Government do not make changes because the Opposition say so or because there is obvious good sense behind the proposed changes. They make changes only because of political pressure generated outside the House. The process is therefore really a waste of a Standing Committee's time.

We could introduce a statutory delay that would allow public opinion to become effective. To be able to consult the people, to give us as Members of Parliament a useful job and to give Parliament a useful role, we need to make the kind of changes envisaged in the Hansard Society report.

I shall concentrate briefly on two major points that arise from the report and the motion. The first is about the preparation of legislation. I certainly feel strongly as a Back Bencher that people often catch up with legislation only when it has been passed. We receive letters from pressure groups and citizens asking us what we are going to do about a Bill or what is wrong with some part of it—but it is too late; the legislation has gone through.

People and pressure groups are not given adequate notice of proposed legislation and do not know enough about what is going on in this place for it to be drawn to their attention. The people want to be heard. Although they certainly complain about legislation as it is passed, there is no effective procedure that involves them and enables us to consult them and listen to complaints in the wider community.

I recommend the New Zealand practice, which the Hansard Society report endorses. A major improvement has taken place in legislative processes in New Zealand which could well be adopted here. Legislation is introduced and is referred to what they call a select committee. It is a matter of terminology. It could be a Standing Committee or a Select Committee; the title does not matter. That committee has to go through a Bill before it is discussed formally and changes are made to its drafting. That is its purpose. To do that, it puts adverts in the papers saying that a Bill has been introduced on a certain subject, with certain provisions, and calls for citizen representations.

On controversial and major non-political matters such as family, divorce and social legislation, representations pour in. Pressure groups and concerned citizens make their representations to the committee, which assesses them. If the representations are considered serious, people are called to give evidence to the committee and are given the opportunity to put the case for or against what is being done and to suggest changes to the way in which the measure is proposed to be enacted. The committee then goes through the Bill with those representations before it in a process of influencing legislation in the light of what the public want.

The great virtue of such a system is that the people feel involved. They have had a say; they have been consulted in a way that does not happen here. That strengthens the role and the perception of Parliament. The committee considers recommendations for changes and it can produce its own Bill. It has a Government majority and a Government member as the chairperson. He or she informally consults a Government caucus—the 1922 Committee, or the parliamentary Labour party in our case, or a committee thereof—and the Minister concerned.

During that process of informal consultation, changes are made. It is a negotiation process. The chairman is representing the views of the committee, the Minister is representing the views of the Department, and usually some kind of compromise is reached so that legislation is changed by the committee. That means that Members of Parliament are effectively involved. The Bill then goes through the formal processes.

That is a much more effective way in which to deal with legislation, involving Members of Parliament by giving us a useful job, and involving the citizen. Why cannot we have a similar structure here? It would take more time and slow up legislation, but that would be no bad thing given the inadequacies of much of the legislation that has been introduced. I commend that idea in the Hansard Society report. It is important.

Secondly, we recommended a review of legislation by a Select Committee after a period of, say, a year or two. It would ask how the legislation had achieved the purposes originally set out and provide a chance to set those purposes out more clearly. It would ask whether it was working and what was wrong with it. Let us have such a review—again, one in which people can make representations—to tidy it up and avoid stupid legislation lingering on the statute book and causing enormous problems in the courts, as happens now.

The Hansard Society's report is important. It produced serious and workable proposals that should be implemented to bring Parliament closer to the people; to involve them in the legislative process and make them feel that it is to do with them rather than something remote carried on in legal gobbledegook by a bunch of remote people who cannot be influenced. Let us give Back Benchers something useful to do. That is one of my dearest aspirations, not only in the party but in Parliament.

After all, the Government have time. The Budget makes it clear that there will have to be another Budget next year. That means that the election will not be called until April 1997. There is nothing for us to do until then. What are we going to do—malinger round the streets? The Government could introduce serious proposals based on the Hansard Society's report. The Minister, a welcome addition to the Government Front-Bench team, brings a high intelligence to the job that should be employed in this area. Get on with it.

10.36 am

I congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on securing the debate, which has been useful. I also welcome the Minister to what I understand is his first debate in his new post. I ought also to congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on making what is often a very dry subject somewhat more interesting and stimulating than it might otherwise have been. The amount of interest shown in the issue today is cause for regret, because we are discussing something that is fundamental to our role in the House. Much of the House's reputation is dependent on us getting legislation correct—leaving aside the political controversy surrounding it—yet, too often, that is simply not the case.

The issues raised have been the subject of many reports, and over the years many people have recommended changes. My hon. Friend the Member for Newham, South (Mr. Spearing), who could not be here this morning, sent me a well-thumbed and well-marked copy of the Renton report of 1975, to which the hon. Member for Caithness and Sutherland referred. On looking through it, it is alarming to find how many of the concerns that were expressed then remain concerns because nothing been done to tackle the problems. Indeed, in some very important areas, the problems have worsened in recent years.

Although I agree with much of what the hon. Member for Caithness and Sutherland said and the stress that he placed on the need for Parliament to be more efficient, he must also emphasise that we must be effective. Despite very slightly improving our system of working with the Jopling proposals, we have not made any fundamental difference to the effectiveness of the House in either of the jobs mentioned by the right hon. Member for Northavon (Sir J. Cope): scrutinising legislation properly and monitoring the Executive. We must do more to improve the methods by which we fulfil those tasks.

My hon. Friend the Member for Great Grimsby ended by mentioning that we were having a somewhat unusual parliamentary year. It is not really typical of what has been happening over the past 10 or 15 years. Certainly, in recent years, the volume of legislation has been growing and intensifying. This year, that is clearly not the case, and although there is some discussion about the reasons for that, there are only two possibilities, neither of which reflects much credit on the Government.

The first possibility is that we have so little legislation because the Government have introduced so much enabling legislation in the past. Perhaps Governments no longer need to come to the House so often to bring about the changes that they want, because so much can he done without reference to the House. That in itself has significant implications for the role of Parliament.

The second factor is that the Government have run out of steam, and there is little that they want to do. The Minister will tell us, as the Leader of the House did during the Queen's Speech debate, that the number of Bills anticipated is even greater than last year. However, we should think about the significance of those Bills. How many of them are fundamental or controversial? Most Bills proposed for this year are relatively low-key.

I could ask what has happened to some of the other Bills that we were promised, such as that on nursery vouchers. I do not want to see that Bill, because I want not vouchers but places for children in nursery education. However, the Bill is a case in point, with rumours now surrounding what is happening to it, such as the rumour that Back Benchers are concerned because the voucher system threatens nursery provision in their areas. We also hear rumours that the Government have not yet been able to draft the Bill to take full account of all the technical problems that can arise from a voucher system.

Whatever concerns there may he, and leaving aside the parliamentary controversy surrounding the issue itself, even if there are outstanding questions such as the technical ones that I mentioned, at this stage in the process we are expecting legislation in the current parliamentary year, and it will go through scrutiny in Standing Committee, along the lines suggested by my hon. Friend the Member for Great Grimsby.

As my hon. Friend rightly said, it is now more frustrating to be a member of a Standing Committee. There was a time when Governments of both parties would take on board many of the criticisms and suggested amendments from Standing Committees. They would not necessarily accept them there and then, but they would listen, then go away and redraft the Bill to improve it as it passed through Parliament. That activity seems to have diminished over recent years, which has led to the sense of frustration that my hon. Friend mentioned when he was talking about the role of Back Benchers.

That is not good for Back Benchers; even worse, it is not good for legislation. It is one of the reasons why we get into difficulties such as those that the hon. Member for Caithness and Sutherland mentioned in connection with the Child Support Agency. Originally there was agreement in principle across all parties on the issue, yet because of the way that the legislation was forced through with insufficient consultation and discussion, it was clearly flawed and has brought about all the problems of which hon. Members are only too well aware from their constituency cases.

I am sure that the Minister will also tell us that there has been consultation on some of the proposed legislative measures in the Queen's Speech. That must be welcomed by Members on both sides of the House. Yesterday, we debated the Armed Forces Bill, which was shown to, and discussed with, a wide range of people. The fact that the debate finished early yesterday does not imply criticism of anybody; it may reflect the fact that, if one discusses things in the proper way, there can be agreement about the direction in which things are going, and we can make progress and get better legislation in the end.

However, in some areas there has been frustration when co-operation has been attempted. During the previous Session of Parliament, there was agreement about how we should treat some of the Law Commission Bills, but at the end of that process, after agreement had been secured in both Houses about the way to deal with the Family Homes and Domestic Violence Bill, right at the last minute, internal opposition from Conservative Members scuppered all that good work. I suppose that the moral there is that, if the Government have consultation, they had better have it with their own side as well as with everybody else. All Governments, both the present Government and any Government anticipated in the future, must bear that fact in mind.

There is not time to talk about all the issues that we should mention in a debate of this kind. My hon. Friend the Member for Great Grimsby was right to say that we could do with more time for such debates, not least because the House is so slow to move towards change. I simply say that this year will be an extremely good year to experiment with new ways of dealing with legislation.

We should not underestimate the existing problems in scrutinising delegated legislation, or the problems with the Deregulation Committee. My hon. Friend mentioned the Hansard Society commission, one of whose suggestions was that we should be able to amend delegated legislation. Such issues should be given full consideration, because the quality of our legislation is threatened if we do not get our procedures right.

We need to improve our procedures not only for the preparation and drafting of Bills but for scrutinising legislation as it passes through the House. The hon. Member for Caithness and Sutherland emphasised the fact that there must be complete agreement that proper consultation on legislation is the right way forward. He recommended that we look for institutional processes, so that consultation can become automatic.

I do not believe that there is one set mechanism that we should adopt for all types of legislation in all circumstances. We can and should have some flexibility. There is a role for Green Papers and White Papers, and there may be a role for pre-legislative Committees or for First Reading Committees. There is certainly a role for Special Standing Committees. We should have no illusions that it is easy to secure agreement to experiment with the way in which we conduct ourselves in the House, but there is now a degree of urgency that requires us to examine thoroughly the way in which legislation is prepared and passes through the House.

10.47 am

May I begin, Mr. Deputy Speaker, by explaining that my right hon. Friend the Leader of the House is attending a Cabinet meeting this morning, and much regrets that he cannot be present?

I congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on securing the debate, and on selecting such an interesting and important subject. I am pleased to have the opportunity to draw attention to the Government's achievements in improving the quality of legislation, in which my right hon. Friend and my noble Friend the Lord Privy Seal have taken a close and productive interest.

The debate reflects a growing interest not only in what legislation contains but in the quality of its preparation and drafting, and of the scrutiny that it receives in Parliament and elsewhere. At the beginning of 1993, the Hansard Society published an important report by a commission chaired by Lord Rippon of Hexham, which has already been mentioned several times in the debate.

The Government genuinely welcome that interest in improving our procedures. The quality of legislation is not an arcane technical matter of concern only to insiders. It affects everyone directly or indirectly. In particular, it has important implications for business, in which, as the deregulation Minister, I have a close departmental interest. In the second competitiveness White Paper, we clearly set out our view that

"good clear legislation is an essential part of the infrastructure for a competitive business environment".

Over-complex or unclear legislation can he a burden on business and a brake on competitiveness.

Our aim is to produce legislation that is clear and coherent. On that, we have no difference with the hon. Member for Caithness and Sutherland or with the hon. Member for Dewsbury (Mrs. Taylor).

Many of the hon. Members who have spoken this morning do not appear to recognise how much has been done. I do not accept the remarks of the hon. Member for Great Grimsby (Mr. Mitchell), who was thrashing around what, I must say, was a copy in a suspiciously mint condition of the Hansard Society commission report. The hon. Gentleman said that the Government have done nothing. The truth is that many of the ideas contained in the report have been acted on, although—in a typically British way—without any bravura announcements. It is simply a case of practical improvements in the legislative process gradually being introduced. Perhaps I can give some examples of that.

Many hon. Members have spoken about the subject of consultation. The White Paper on open government which we published in July 1993 said that the Government believed in the value of consultation. In recent years, the practice of consulting on the basis of drafts of Bills or parts of Bills has become more common. For example, important parts of last Session's Environment Bill were published in draft.

Of the Bills in the most recent Gracious Speech, the Armed Forces Bill was published in draft and was the subject of widespread consultation—so much consultation, in fact, that the hon. Member for Dewsbury thinks that we have debated the Bill already. That is, of course, a pleasure to which we look forward today, rather than yesterday.

In the second competitiveness White Paper, which was published in May and from which I have already quoted, the Government said:

"Publication of draft Bills, in advance of introduction in Parliament, allows consultation to take place on clarity of structure and presentation, and on drafting detail, as well as on policy".

We have made it clear that we hope to move further in this direction. My right hon. Friend the Leader of the House announced during the debate on the Gracious Speech that we plan to publish before long Bills on adoption, building societies and merchant shipping. These are all areas where there are important business and professional interests outside Government, and indeed outside Parliament, and many people will eventually use the legislation daily and be affected by it. They are entitled to the best possible advance consultation.

We must recognise that, inevitably, there are limits to the extent to which advance drafting can be used. There are bound to be occasions when legislation is required more urgently, and when the publication of Bills in draft will not invariably be the right course. Both my right hon. Friend and my Noble Friend who is Leader in another place believe that this initiative is capable of further development.

I had not realised that this was the Minister's debut. May I also congratulate him on that? Will he draw the remarks that he just made about what the Government are doing on pre-publication to the attention of the Home Office, which is guilty of not consulting properly? We have heard plenty of evidence of that, including as recently as Monday, when we were considering the new proposals on asylum.

I have noted the remarks of the hon. Member for Caithness and Sutherland about the work of that Department, and I will draw them to the attention of my right hon. and learned Friend the Home Secretary. As the hon. Gentleman said, legislation needs to be drafted clearly, accessibly and with the eventual user in mind. First parliamentary counsel is himself wholly committed to this approach, and he has been looking at the experiences in Australia and New Zealand—which some hon. Members have cited—where innovative work is being done. The aim is for as great a degree of simplicity as is consistent with certainty. As the Hansard Society commission itself noted, there is no point in having simple statements of principle in statutes if, in the end, the law is uncertain. Certainty must be paramount.

I am not saying for a moment that we invariably get it right, but the objective is clear. I believe—as does my right hon. Friend the Leader of the House—that in pursuing that objective, we are extremely well served by parliamentary counsel, for whom I have some ministerial responsibility in the Office of Public Service.

We are also looking to other sources of advice. My right hon. and learned Friend the Chancellor of the Exchequer is conducting an experiment under which, after an open competition, several private sector contractors have been engaged to draft parts of this Session's Finance Bill. The purpose of the experiment is to test whether the preparation of legislation outside Government is feasible and cost-effective, and whether there is anything that the private sector can contribute on drafting style. It is too early for me to be able to give the House any sign at this stage of how the experiment is proceeding, but it is clearly worth while.

May we take it that the experiences of the Bank of England—of which we have evidence—which complained that it might not be permitted to talk to parliamentary counsel, will not be repeated? Will a body of that kind have something to lend to parliamentary counsel in terms of drafting?

I am not aware of the particular example to which the hon. Gentleman refers. It is important that parliamentary counsel are not bombarded with a variety of advice from a variety of sources, but I shall certainly take account of the point that he makes.

Legislation is complex sometimes because the underlying concepts are complex and sometimes because the concepts are expressed in a way which is not easy to grasp. In his Budget statement, my right hon. and learned Friend the Chancellor announced that he hoped to make a start next year on a major project to simplify tax legislation for the benefit of businesses and taxpayers generally. Yesterday, my hon Friend the Financial Secretary laid before Parliament a report on tax simplification as required in the Finance Act, together with a background paper by the Inland Revenue.

My right hon. Friend the Member for Northavon (Sir J. Cope), who has great expertise in this matter, made some very important points about this important attempt to simplify tax legislation, and I greatly welcomed his comments. There is an exciting possibility of reducing the compliance costs which the tax system imposes on every taxpayer, of taking forward the deregulation unit's work in simplifying the burdens on business and of supporting the Inland Revenue's continuing efforts to improve its service to the public and to reduce costs.

I am excited by the idea of involving private organisations such as the big six accountancy houses in the preparation of legislation. Why do the Government not involve criminals in legislation about police or Home Office matters? The point I wish to make is not that facetious one. The Minister could devote the rest of his very brief ministerial career—he can have only 16 months in the job—to reading out defensive briefs written by hack civil servants and ignoring the main points at issue. Would he try to achieve a little glory in that career by telling us what the Government are going to do about the major recommendations of the Hansard Society commission?

I am afraid that I have only three minutes left. I have been trying in my speech to go through the practical measures that we have taken in the past few years which are intended to implement many of the ideas to be found in the report. Sadly, I will not have time to list everything that we have done. I had hoped to talk about the implementation of the Deregulation and Contracting Out Act 1994, as that is a very significant example of the sort of procedures that were envisaged in the report. We have new Select Committees to make sure that the proposals put before them have been the subject of adequate consultation, and also to make sure that appropriate account has been taken of that consultation.

When the final version of the deregulation order comes for parliamentary approval, the Committees report to both Houses on how the Minister concerned has taken account of the comments made on earlier drafts. If the Committees are not satisfied with the consultation that has taken place, they will say so in no uncertain terms. I pay tribute to the work of the Committees, and particularly to my hon. Friend the Member for Isle of Wight (Mr. Field) and to Lord Alexander of Weedon for the work that they have done since the new Committees came into being in the spring. That is a good practical example, which reflects some of the concerns expressed in the Hansard Society's report.

There is not enough time for me to get into the subject of law reform. In the previous Session—with the assistance of the Opposition parties—we passed law reform Bills on civil evidence, private international law and requirements of writing in Scotland, a series of measures which constitute a significant improvement in the reform of the law.

I hope that I have said enough to persuade the House of the Government's seriousness of purpose in this important sphere. We are committed to good government and, through the various means that I have described—the publication of draft Bills, close attention to drafting style, simplification wherever possible, and the sensible use of subordinate legislation—we are striving to be the Government of good legislation.

I hope that the hon. Member for Caithness and Sutherland and the hon. Member for Dewsbury accept the fact that, in a low-key practical way. many of the ideas floated in the Hansard Society commission report are already being reflected in the practices and procedures of the House.

Family Life

11 am

I have asked for a debate on this subject for some time because, since I entered the House last year, I have been struck by the extent to which working time in our country has become completely out of control. That lack of control over working time is having the most disastrous consequences on family life.

My concern stems from conversations that I have had with my constituents at my surgery in Rotherham. I think of a man who came in with his wife and two small children. He was a confident chap, not yet 30, and he clearly had a very happy family, who came to the surgery with him. He was working as a van driver for a Sheffield computer company, and his working hours were such that he was leaving home before 7 am and returning home a little after 7 pm, when he had to spend time working out his routes for the next day.

The man said that he was utterly exhausted. For that amount of work, he was earning £8,500 a year, which I remember because he had signed a contract for a yearly salary. There was no overtime or possibility of getting an increase. He wanted to know what he could do either to reduce his working time or to increase his pay. I suggested the normal methods, such as talking to the boss. He said, "He will fire me." I said, "Join a union." He said, "He will fire me." I said, "Go on strike"—because at times old Labour does resurface. He said, "If we go on strike, all the van drivers will be dismissed on the spot." I had to send him away from the surgery with absolutely no advice at all. I have since learnt that he has quit that job because he will be better off even on the meagre benefits that the state provides.

I can cite other examples, such as the engineering workers in my constituency who work six and seven-day weeks, 10 hours a day, who are not yet 30 but who have the physique of a 50-year-old. They are exhausted, trying to earn enough money to maintain a living income for their families, but they do not have any time to he with their families so that they can spend that money.

I think of my many friends from university who, after a quarter of a century of working in the professions, find that they are working longer hours than ever before. One of my oldest friends is the deputy head of a comprehensive school not far from the House of Commons. She gets up at 6 am, arrives at her school before 8 am, stays until 5.30, 6 pm or 7 pm, and then takes work home. She has a small child—her two older children are now teenagers. Her small son does not see enough of his mother.

I have an interest to declare because I have four children under the age of 10. I do not intend to discuss the problems of Members of Parliament, however, because I find many hon. Members' self-regard about their hours nauseating. They have extraordinary privileges, should they choose to exercise them, to control and allocate their working time.

The issue of working hours is a party political matter, although it is one that transcends the divisions between Members. The hon. Member for Mid-Kent (Mr. Rowe) yesterday expressed his regrets that he would he unable to participate in the debate, because he takes a great interest in this problem. If we examine time in our society, however, we find that the Government have not only abdicated responsibility in this sphere but have, in a sense, taken away what control we previously had over our time. The Prime Minister will go down in history as the man who reduced Sunday to the status of just another ordinary day.

I do not know how many Members still read the Bible, but today I saw that Mr. Matthew Parris, in his column in The Times, enjoins us to use the Bible if we wish to insult hon. Members on the other side of the House.

Order. No hon. Member should insult any other hon. Member in this House.

If we wish to tell the truth about another hon. Member, we will find that the Bible is a rich source of quotations. We should recall the moving words of Ecclesiastes:

"To every thing there is a season, and a time to every purpose under the heaven … A time to weep, and a time to laugh; a time to mourn, and a time to dance".

In that marvellous quotation from the Bible, the author finds time for everything. We now find that we have time for nothing except to slave for the re-exalted god of mammon that the Conservatives have set above us. The making of money is now far more important than the making of a family or a community in which all may work hard, but should not do so to the exclusion of all else.

The new trend represents the values of the 1960s in a sense, which have come home to roost. In that regard, I commend to the House the elegantly penned, if vitriolic, denunciation of the baby-boomer generation by my friend Mr. Christopher Hitchen in the current issue of that underrated journal of comment, Vanity Fair. That generation fills almost all the Government posts, and it was sublimely understood by the former Prime Minister, Lady Thatcher. It is a generation that spoke only of its rights and never of its responsibilities: the right to buy, the right to hire, the right to fire, the right to manage, the right to wealth, the right to share options and the right to consume. It is an endless litany of rights, rights, and rights again. The values and limits of self-control, balance, equilibrium and responsibility were utterly forgotten. As we have created a society in which rights hold a higher place than responsibility, I fear that the responsibility that we have to our children has been lost in the wash.

We know that the Government are not family-friendly. There has been a 20 per cent. increase in divorce since the Tories took over in 1979, and the number of single-parent families has increased by almost 50 per cent. This morning, we read in our newspapers that Mr. Archie Norman, the quintessential would-be Conservative Member of Parliament and the head of Asda, has said that women who take maternity leave this year will not receive a Christmas bonus. Mr. Norman combines the Christmas generosity of Scrooge with the love of babies that was expressed by Herod.

The debate should focus on families. It is about children, not about divorce, nor it is particularly about the legal institution of marriage. Some of the happiest couples and families I know have not tied the civil knot of marriage.

I pay tribute to the excellent contribution that has been made by the Parents at Work campaign, the National Council of Women, the women's institutes and the Demos Foundation. The Parents at Work campaign commissioned the Gulbenkian Foundation to carry out a survey of the employment conditions of working mothers, which was published last month. It found that almost a quarter of all working mums work for more than 50 hours a week. Five per cent., which is still a significant number, work for more than 60 hours a week. The survey also found that three quarters of our working mothers report coming home exhausted, and almost two thirds say that they do not see enough of their children. A fifth say that their relationship with their partners has been put at risk by long hours.

Britain has the longest working hours in Europe: one in three British men work a six or seven-day week, according to the labour force survey of 1990-91. The Institute of Management—again, not a trade union-friendly organisation—reported in March 1995, on the basis of a survey of its members, that individual work loads had increased greatly for nearly half its respondents in the past two years. One in five are working an extra 15 hours a week, virtually two working days.

Overtime is the new British disease. According to information supplied to me by the House of Commons Library and taken from the labour force survey, last year we worked nearly 69 million hours of overtime a week. Divided by the 37 hours of the normal working week—I think that I can do it without a calculator—that is equivalent to nearly 2 million jobs.

It is, of course, not possible to construct a simple equation relating excessive overtime to the mass unemployment that still disfigures our society, but until overtime is under control, and until employees' wages and salaries are not merely sufficient unto their needs but sufficient without necessitating reliance on massive overtime, we shall continue to live in a society in which there is far too much working time for many and no working time at all for all too many others—the unemployed.

I must declare an interest as a trade union-sponsored Member of Parliament and a strong supporter of trade unionism here and abroad. I must, however, also appeal to my friends in the trade unions to accept responsibility for an unpopular task—that of persuading, cajoling and ultimately instructing their members that overtime must be severely limited. There are examples of work forces that have shared overtime to safeguard jobs, but if we are to develop a working-time policy as part of a new labour market, unions and the workers themselves must he empowered to limit overtime.

Saturday's edition of The Guardian featured a letter from a member of my former profession, journalism. Sue Watkinson of Aberporth, Dyfed, writes:

"As the hard-pressed deputy editor of a local newspaper and the mother of three children aged five, three and 20 months, a job share would seem the perfect solution."

Her problem was not seeing enough of her children. But who would pay the bills? As a professional journalist—a deputy editor—she earns £14,000. Half that amount will not bring home the bacon, or finance help with looking after the children.

That brings us back to the need for fair wages, and to Labour's advocacy of a minimum wage. In Asia, wage differentials are much narrower and more compressed than they are in this country. In my constituency—

Will the hon. Gentleman give way?

May I just finish what I am saying?

In my constituency a cashier at the National Westminster bank earns about £7,000 a year, while his or her chief executive officer in London earns 100 times that amount. In countries such as Taiwan, Singapore and Japan the narrower differentials mean that people have a living wage.

I apologise for interrupting the hon. Gentleman so clumsily at the wrong moment.

The hon. Gentleman referred to Labour's espousal of a minimum wage. Would he care to tell us how much that wage might be?

I can tell the House that Labour proposes a new model of partnership. The minimum wage will be arrived at after discussions between those directly concerned: employers, workers and their representatives—the trade unions—and Government. I believe that that will allow us to develop a wages and incomes profile that will ease the tensions that are so damaging to stable family life and community harmony.

One of the arguments against any control of working time is that it militates against economic efficiency, but we must draw a sharp distinction between hard work and long working hours, however. When I went to work in Switzerland 15 years ago, I found to my horror that I was expected to start work at 7.30 am. I had been used to more gentle office hours in England in the 1970s, and at first this was a shock to the system, but I subsequently found that finishing work at 4 pm gave me time for friendship and family life. No one there worked after 4 pm: the obsessive "yuppie" need to stay for hour after hour in banks, consultancies and legal firms was unknown in what is, after all, one of the most prosperous countries in western Europe. We need smart, efficient work; we need quality output rather than quantity input.

According to a recent survey by the Health and Safety Executive, 80 million days a year are lost through work-related stress. The International Labour Organisation says that stress at work costs up to 10 per cent. of Britain's gross national product. That amounts to roughly $100 billion—about a third of total Government expenditure. The loss of that money is a direct result of the amount of time that we take off. We work inefficiently, we work long hours and we have work-related illnesses, which, according to the ILO, have increased by 500 per cent since the 1950s.

As for our dynamic competitor partners, Japan's Government say that the number of annual working hours must be reduced. The Government of China, which many Conservative Members now pray in aid as the model economy, are legislating for a two-day weekend. In Germany, the dominant economy in Europe, working hours were reduced substantially in the 1980s. That was followed by an increase in engineering employment and a boom for the German economy, along with outflows of investment—some of which have saved industries in this country.

Britain is now internationally isolated. We have opted out of the European and world debate on working time. Let us take the example of Sweden—and here I cite not the Social Democratic party or the trade unions, but the leader of one of the conservative parties that were in alliance during the period of Swedish conservative rule in the early 1980s. He insisted on the passing of a new law allowing a man to take a month of paid leave when his child was born. He also insisted that only the father could take that leave.

As many hon. Members may know, Sweden already has generous laws relating to parental leave: parents can jointly take up to a year off. That arrangement has significantly increased the birth rate in Sweden. It appears that parental leave makes not only for happy families, but for bigger families.

In France—I leave aside the current travails of one of my favourite countries, after my own—the employers federation, the Confédération National du Patronat Francais, and the trade unions are discussing the possibility of a four-day week and a reduction in working time, with the full backing of the Government. Once the current troubles have calmed down, the idea will once more be a major item on the French economic agenda, promoted by employers and management.

In Germany, the president of the 3 million-strong German engineering workers union, Klaus Zwickel, has launched a Bündnis für Arbeit, which means an alliance for jobs, in which the unions agreed to hold back on wage increases in exchange for a reduction in working time. That has been taken up by German employers and Chancellor Kohl—another Conservative; I am stressing what Conservative Governments are doing throughout the world, especially in Europe—is discussing the issue with Mr. Zwickel and the employers, so his Conservative Government is taking this issue extremely seriously.

My interest in this subject was sparked by a remark made by the Minister for Industry and Energy, the right hon. Member for Enfield, North (Mr. Eggar), who is currently in Committee doing doughty business for British Steel workers. I wish him well in those discussions. He said that he had visited a factory in Essex where people were working 60 or 70 hours a week. As an historian, my ears pricked up. In 1876, Benjamin Disraeli passed legislation limiting the working week to 56 hours. That Minister, 120 years later, was boasting, proclaiming, relishing and wallowing in the 60-hour week worked by people in that Essex factory. What time do they have for family life?

Conservative Members talk of returning to Victorian values. I would welcome a return to some Victorian values, notably the long-sustained campaign by Victorian social reformers to bring working time under control. From Lord Shaftesbury to Benjamin Disraeli, political leaders of that era accepted the responsibility to limit working hours. The Shops and Factories Acts of the 1930s controlled working time, and further legislation was passed in the 1950s. I cite Conservative Administrations who accepted their responsibility because it is necessary to stress that the control of working time is not a demand of the Opposition Benches, the left, the trade unions or the Labour movement. Today, big organisations such as the Women's Institute and the Institute of Management are taking the lead in demanding that working hours be reduced. They echo the great Victorian reformers in saying that the main victims of long working hours are children.

What are the alternatives and how do we deal with the matter? We have an excellent proposal from Europe. As a former Member of the European Parliament, the Minister knows full well what is happening in Europe. In 1993, Brussels proposed a directive on parental leave and leave for family reasons. It would allow, first, three months' parental leave for fathers and mothers, to be exercised by both full and part-time workers; secondly, family leave for up to six months; and, thirdly, the right to up to 10 working days' leave a year for pressing family reasons. Those 10 working days' leave are vital when a child suddenly falls ill or, at the other end of the age scale, when an aging parent needs urgent care.

All the countries of Europe, from impoverished Greece to the rich Netherlands, supported that proposal, but it fell to the veto of the English Minister. How brave, magnificent, determined, triumphant and very English that a right hon. Secretary of State for excessive working hours slammed his little fist on the table in Brussels and said "No" to a modest measure to help shore up the crumbling pillars of family life in Britain.

We can shape proposals not by inventing new laws but by drawing on our traditions. When the Minister replies, I invite him to consider whether that could be done on a bipartisan, all-party basis. We must look to our British sources. I agree that we must retain flexibility, as the demand for part-time work is huge, but the old 1950s model of a 40-hour week, worked mainly by men, has gone for ever. We must adapt our work force to the new challenges of globalisation but must not allow the challenges of globalisation to undermine and destroy family life and children's right to see their parents. We must go beyond debate because willing the end but refusing to discuss and legislate the means is the ultimate hypocrisy as we seek to remedy the present ills, of which uncontrolled working time is the most potent.

We should consider a family-and-work law, which would outlaw excessive hours worked involuntarily; provide adequate parental leave, including paternity leave—in my case, I would not mind if it were retrospective—give all employees, full and part time, individual rights to be consulted and to agree to hours beyond those laid down in a legally enforceable contract; and provide creche, kindergarten and nursery facilities to give under-fives a start, instead of the absurd and almost laughable nursery voucher scheme, which does not even begin to tackle the problem.

Does my hon. Friend agree that the measures that he suggests would benefit families and society as a whole? At the beginning of a conference in Sweden that I attended in 1988, a preliminary discussion of the agenda was held. People agreed happily to alter the agenda to allow a young man who was scheduled to speak late in the afternoon to leave early to pick up his children from kindergarten. That was accepted as completely normal and it showed that children were not just the responsibility of mothers.

My hon. Friend makes a fundamental point. Fathers must accept their share of the responsibility for creating a stable family life. In this country, fathers are pressured into working long hours, bringing work home and doing excessive paid or unpaid overtime, so taking their share of the responsibility becomes extremely difficult. The institution of social partnership measures would help to introduce agreed flexible working time and would prevent unions from permitting excessive overtime. In many other European countries, works councils within firms must give permission for overtime above a certain limited amount each week.

We must alter the tax regime, so that the financial burden of bringing up children is no longer penalised fiscally. Our tax regime is one of the most anti-family and anti-marriage in Europe and Organisation for Economic Co-operation and Development countries. Family and working time law or arrangements should require public offices to be open at times that suit parents rather than bureaucrats. I welcome the flexible approach to shopping hours, but we need to go further so that other services, especially important public services, are available when people need them.

Those measures will require legislation. Let us not have the wishy-washy hope that they can be brought about by market forces, discussion or give and take. Legislation has a big impact and was the great reformer of working time and working life in the 19th century. It will require partnership, so that once again Britain becomes one nation—a young nation, if I may invoke Benjamin Disraeli again, in which the youngest of all our future citizens are allowed to see their parents and in which work, which is vital for us all, resumes its proper place. It must be something that we do to make a living and no longer a tyranny of long hours over which we have no control, which damages family life.

11.29 am

I congratulate my hon. Friend the Member for Rotherham (Mr. MacShane) on securing this important debate, focusing parliamentary attention on a revolution that is taking place in households throughout the country.

Research published last week by the Equal Opportunities Commission found that the move towards flexible working has

"improved the opportunities for some women to work."

The benefits of flexible working are becoming available to increasing numbers of people.

Opportunity 2000 reports that its 293 member companies now have, on average, eight "family-friendly" initiatives, and more than half offer flexible working hours. Other initiatives include job sharing, homeworking and paternity leave, subjects to which I shall return later.

The danger is that all the fine talk about flexible working can, as my hon. Friend made so clear, easily obscure the fact that attitudes in the workplace are not changing as quickly as they need to in order to enable parents to reconcile their roles as parents, carers and employees.

Juggling the demands of home and work is simply not an option for many people, who continue to be forced to make a straight choice between the two. An industrial tribunal recently heard how Sue Edwards, a woman tube driver, was told by her employer, London Transport, that she had no choice but to work the late shift. When she drew attention to the fact that she had a young son and would find it difficult, she was told that she could

"drive a train or be a mum".

She won her case, but it took her three years to do so. Not every working parent is presented with such a stark choice between work and home, but nevertheless, many parents are realising that they must make that choice. The lack of affordable, reliable and sufficiently flexible child care and the inevitability of low pay and long working hours all make it difficult for parents who would otherwise wish to work—especially working mothers—to strike the right balance between home and work, to achieve their aim of being both good parents and conscientious and reliable employees. The fact that Britain lags behind the rest of Europe on all those things, as my hon. Friend made so clear, should be a source of the most serious concern, and indeed shame, to the Government.

We seek evidence that the Government are taking that seriously, and that they recognise that there is an important role for Government in starting to promote a proper partnership between the responsibilities of home and work and a proper partnership between employers and Government in order to achieve that important end.

The problem is that we hear too much about the Government's good intentions, especially overseas. At the Beijing conference, the Government signing up to the platform for action was a good example of the huge discrepancy between the rhetoric that we hear abroad and the actions that we witness at home. In practice, it leaves all Opposition Members sceptical that the Government have any real practical determination to deliver policies that would make a real difference to men and women's lives.

At the fourth world women's conference in Beijing, the Minister for Overseas Development, Baroness Chalker, said:

"a more equal sharing, between women and men, of parental and household responsibilities, is fundamental for women's … access to education, jobs and politics".

All Opposition Members would agree with that.

Why, one might ask, have the Government in which Baroness Chalker is a Minister so consistently blocked the measures that would make that possible? Affordable child care and the availability of parental and paternity leave would give families a genuine opportunity to bring about a more equal sharing of parental responsibilities. That more equal sharing is impossible if those sources of support are not in place.

Consistently, the Government have denied British families that opportunity. They blocked the directive on parental leave from the moment that it was introduced, and eventually opted out of it as part of the Maastricht protocol. They have allowed a position to develop in which the United Kingdom has the lowest level of publicly funded child care in Europe. They have constantly undermined efforts to introduce proper paternity leave.

As long ago as 1979, when I was chair of the staff committee in the London borough of Camden, I introduced the first paternity leave scheme in the country. That was 16 years ago, and we have made precious little consistent progress since that time.

It is hard to understand why the Government are so complacent. If proof were needed that women, who bear the principal responsibility for managing the conflicting demands of home and work, continue to bear the responsibilities for juggling home and work, one need look no further than the Institute of Management's 1995 survey, which revealed that women account for 11 per cent. of all managers and only 3 per cent. of directors. For women working in low-paid jobs, frequently doing more than one part-time job to make ends meet, the problems of juggling the demands of home and work can be even more difficult.

The Government will no doubt be quick to proclaim the EOC's finding that flexible working has improved the opportunities for women as evidence of the success of the Government policy of deregulation of the labour force. Can we therefore presume that they will also take responsibility for the negative aspects of flexible working, which emerged from the EOC's survey?

Britain's unique long hours culture represents possibly the biggest threat to maintaining the right balance between work and family life. The EOC's report, "Flexible Employment in Britain", found that the long hours culture is having a destructive effect on the career development of women and on family life. It concluded:

"Even in higher status jobs, the 'long hours culture' stops women from getting promoted and in lower status jobs, women have to work long hours to make ends meet. British men work the longest hours in Europe and have less time to spend with their families."

British families are quickly finding out that there is little that is "family-friendly" about the Government's definition of "flexible". Flexibility is synonymous with insecurity in the workplace, and has increasingly come to mean being prepared to work all hours. As women continue to bear the main responsibility for caring for children and for elderly relatives, they are less able to put in the long hours that are increasingly being expected of them, or, when they do so, it is at great cost to themselves and their children.

There is no one reason for the emergence of the long hours culture, but there can he no doubt that the Government's mismanagement of the economy has played a large part. Low pay and job insecurity have led to people working longer hours to build up their pay packet to a reasonable level, or they do so because they fear for their job and do not want to appear less dedicated than their colleagues. The EOC's research concluded:

"the restructuring of organisations, by 'downsizing' or 'delayering', has meant that more work is being done by fewer staff."

British families now find it harder than previously to combine the responsibilities of work and home. Until recently, it was widely believed that employees would continue to enjoy increasing leisure time. That is holding true for the rest of Europe, but not for the United Kingdom. In the past 10 years, while the average working week has been decreasing in many other European countries, it has increased by about two hours in the United Kingdom. Last week's conference on the long hours culture, which was organised by the Women's National Commission, heard how employees in the United Kingdom work, on average, far longer each week than their European counterparts. Almost 28 per cent. of full-time employees in the United Kingdom work more than 46 hours a week—that is roughly double the figure in any other European Union country.

By contrast, slightly more than 7 per cent. of French employees and 6.7 per cent. of German employees work longer than 46 hours a week. Some 3.5 million people in the United Kingdom—15 per cent. of the work force—worked more than 48 hours a week in 1991. That was an increase of more than 12 per cent. over the figure for 1984.

The worst part is that the gap between the British and the European working week is widening. In 1993, British employees worked on average 1,952 hours a year—a rise of 48 hours since 1983. By contrast, German workers worked 1,739 hours a year—69 hours fewer than in 1983. The long hours culture is made worse by the fact that the United Kingdom is the only country in the European Union where employees do not have a statutory entitlement to paid annual leave. One out of 10 employees in this country has no holiday entitlement.

Working mothers are hit hardest by the emergence of the long hours culture. Research by Opportunity 2000 found that long working hours are a significant factor in preventing women from reaching the top levels of management. The long hours culture is not only preventing women from breaking into higher positions, but beginning to take a very heavy toll on the life of their children and on family life in general.

Two surveys carried out by the organisation Parents at Work, to which my hon. Friend referred, examined the effects of the long hours culture and found that it is putting many people under intense pressure and affecting both their health and their relationships. One of the surveys by Parents at Work concentrated on the plight of working mothers with children under the age of four. Two thirds of respondents said that they felt that they spent too little time with their children and experienced continuing problems with child care. They spent, on average, between two and four hours with their children each day. Parents at Work said:

"A picture emerged of women doing a good job, taking little sick leave, working to give their families economic security and rushing home to care for children at the end of the day. Fathers who in general worked even longer hours than their partners were able to spend even less time with their children, putting extra pressure on mothers."

It is in everyone's interests that working parents are supported in their efforts to strike the right balance between work and family life. Companies may derive short-term benefits from employees working long hours, but there are long-term costs such as a reduction in productivity, an increase in mistakes, loss of skilled employees who drop out of the work force, sickness, absenteeism and the burgeoning cost of stress-related ill health. The more responsible employers have realised that, but the danger of the Government's laissez faire approach is that, if the long hours culture is allowed to go unchecked, it will continue to spiral upwards, placing an even greater strain on family life.

We want the Government to do more than simply wring their hands. Industry needs stability, and it is in the best interests of business and industry to forge a partnership that enables men and women up and down the country to discharge their responsibilities in the workplace as well as their obligations to their children and families at home.

11.43 am

I, too, congratulate the hon. Member for Rotherham (Mr. MacShane) on securing the debate and on choosing to discuss these subjects this morning. They are important and topical subjects and I welcome the chance to debate them properly. However, I do not think that the hon. Gentleman will be surprised when I say that the Government disagree with much of his analysis and with that of his hon. Friend the Member for Dulwich (Ms Jowell).

We are dealing with complex matters. Employers and employees in the United Kingdom face a multitude of different circumstances. Simplistic approaches may hold a superficial attraction for Labour Members, but in reality they would cause more harm than good to both businesses and jobs. That is why the Government have consistently opposed such nostrums.

There have been some generalised and rather laboured assertions that employees in the United Kingdom work longer hours than employees in other countries. In fact, the average number of hours worked weekly in the United Kingdom is 38.1. The average number of hours worked weekly throughout the 12 countries of the European Union—when the Union comprised 12 countries—is 38.6. The average hours worked weekly in France, Italy and Spain are greater than those worked in this country, and only Germany, Denmark and the Netherlands have a lower average figure.

That is why the Government have consistently opposed the simplistic approach. We are very close to the European average, but we have a much wider spread of hours worked. More employees in the United Kingdom work more hours and, in the nature of an average, there are more who work fewer. For every person who works more hours than the average, there is another who works fewer.

Those differences exist because that is what many people want. Employees want the opportunity to work part time or full time on standard shifts or on flexitime. They want to work the hours that best suit their circumstances. The Government or Brussels should not dictate to employers and to workers the length of the working week or on what days they may or may not work.

There are proper protections for employees against working hours that are genuinely excessive and that could be injurious to their health. Employers have a general duty under section 2 of the Health and Safety at Work, etc. Act 1974 to ensure, so far as is reasonably practicable, the health, safety and welfare of their employees at work. Factors such as hours of work, rest breaks and holidays must be considered when planning the safe organisation of work.

The proper way forward, as advocated by the Health and Safety Executive, is to carry out risk assessment, taking account of the actual factors experienced by workers rather than hypothetical concerns. It is not feasible only to set maximum levels for working time in order to prevent stress or fatigue. The organisation of working time—length of shift, rest breaks, intervals between shifts and shift rotation—must be considered in conjunction with the type of work performed, its physical and mental demands and the individuals concerned.

I put to the Minister an historical, hypothetical question. In view of his recent comments, I assume that he would have voted against Benjamin Disraeli's control of the working week in 1876.

That is certainly an historical and a hypothetical question. I take refuge in the general proposition that Benjamin Disraeli was a most enlightened leader of this nation who took the decisions that were right according to the culture of the time. That approach is incumbent upon us all: if circumstances change, solutions and responses must change as well.

Less hypothetically, reference is made from time to time to the findings of recent research conducted by Parents at Work, the recruitment agency Austin Knight and the Equal Opportunities Commission in an attempt to show that family life is suffering under the Government. The widespread view is that, in the past 30 years or so, family life has become more pressured. But that view must be set against a background of people's changing aspirations.

Many women feel, quite correctly, that it is important to have both a family life and a full working life outside the home, with the increased benefits that that may bring. The flexible labour market that the Government have brought about has benefited employees as well as companies. It means that more women than ever before have the opportunity to continue to work after they have chosen to have a family. Some 48.6 per cent. of women in the United Kingdom are in paid employment. That is not true of much of the rest of Europe, where more regulated labour markets mean that women who wish to work part time are often excluded from the job market.

The United Kingdom has the second highest participation rate for women in the European Union. Only Denmark outranks us. We compare favourably with Germany, where only 43 per cent. of women have paid work, and France, where only 41 per cent. of women have jobs. If we were to follow the European model and impose unnecessary regulations, many women who now work part time would be denied the opportunity to combine work and family.

The larger percentage of women at work in the United Kingdom arises precisely because our flexible labour market gives people the opportunity to work the hours that suit their circumstances. I recognise that individuals may have to make difficult choices to balance the responsibilities of bringing up children with paid employment, but unlike the Labour party, the Government believe that such matters are best decided by parents, not Brussels or Westminster. What suits one family will be unacceptable to another.

There can be no question of the Government's commitment to stable and harmonious family life. The Parents at Work survey points out that many people are happy to work full hours. They value the extra opportunities and wages that those increased hours bring. The hon. Member for Rotherham pointed out that recent surveys suggest that some people who work longer hours feel that it is detrimental to their relationships with their partners and children.

However, the survey by Parents at Work shows that 80 per cent. of the women surveyed enjoyed the financial security that work brings, 48 per cent. said that it enabled them to enjoy the time that they spent together as a family and 45 per cent. said that it made their children more independent, which they saw as a positive advantage. Their children also benefited from a higher standard of living. We must not blind ourselves to the positive results of women choosing to go out to work. For many women, jobs and careers, even including some long hours at work, have enhanced their lives and those of their families, not detracted from them.

The Parents at Work survey identified action that could help reduce the strain on family life. It included flexible working hours and help with child care. The recent Austin Knight survey showed how employers were beginning to address those issues in order to retain their expensively skilled work force. It found that three quarters of employers now have some form of "family-friendly" policy, a third provide some child care facilities, and more than 50 per cent. of staff are able to work flexible hours. In addition, more than half the employees surveyed received paternity and maternity leave above the statutory minimum.

Our flexible approach to the labour market brings positive results. The number of people unemployed in the United Kingdom has been on a consistent downward trend for the past two years. In percentage terms, only 8 per cent. of the potential work force is unemployed. That is well below the European Union average of 10.6 per cent. The total number unemployed is nearly 600,000 less than in October 1993. The numbers employed in manufacturing are increasing. There were 53,000 extra jobs in the year to June 1995. The numbers employed in services are increasing, with 260,000 extra jobs in the year to June 1995.

Unlike some Opposition Members, I welcome the fact that increasing numbers of people are in part-time employment. There are now some 2.2 million more part-time workers than in 1979, the vast majority of whom prefer the flexibility that such work gives them.

I come now to parental leave. Let me make it absolutely clear that the Government strongly welcome voluntary agreements that help people reconcile their working and family lives, but the key word is "voluntary". Leave is just one aspect of an employee's terms and conditions and cannot be taken in isolation. Terms and conditions are a matter for negotiation between individual employers and their employees. Each business must be free to develop arrangements that fit its particular circumstances and best suit the needs of its workers.

The Government do not believe in dictating to employers and workers how they should arrange their affairs; we believe that they can do that better themselves. In other words, we believe in a flexible labour market. Of course, a flexible labour market helps to improve the quality of life for individuals. It offers them greater access to jobs and greater choice in their working arrangements. For example, if the workers in a company attach importance to parental leave, they can negotiate it. If they prefer a shorter period of paid leave to three months without pay, they are free to bargain for it. That would be prohibited by European legislation. Most importantly, they would be free to argue for their priorities, not those imposed on them by the Government or Brussels.

Fathers are directly benefiting from the United Kingdom's flexible and voluntary framework. There is plenty of evidence that increasing numbers of employers are voluntarily offering their employees some level of paternity leave. The Confederation of British Industry surveyed 584 of its members in 1992 and found that 31 per cent. of them offered paternity leave on a discretionary basis and 12 per cent. offered it as a contractual entitlement. Those figures had increased from 26 per cent. and 6 per cent. respectively in 1987.

A survey of 356 United Kingdom companies conducted by Industrial Relations Services in 1994 found that more than two thirds offered paternity leave, all but two of them with pay. Some three quarters of respondents offered such leave as a contractual entitlement. As one would expect, the amount of leave varied widely—from one day right up to 46 weeks—but I doubt whether it was retrospective, as the hon. Member for Rotherham was hoping.

Does the Minister accept that CBI and other surveys tend to cover the more advanced and stable British firms, but the problem arises in the great mass of firms that are not surveyed, in which parental leave is not part of contractual relationships? In particular, how does he address the problem of moving from good will or lack of it on the part of the employer to giving the employee the right to assert parental leave if he or she needs it?

Maternity leave is provided for in law. I was intending to show in that passage of my speech that there is an increasing trend towards paternity leave schemes, but they are voluntary. The Government believe that they should be developed on a voluntary basis at present.

An article published this October by Industrial Relations Services states that the lack of legislation in these matters

"has not diminished the incidence, scope and growth of contractual agreements providing such arrangements in this country. Indeed, there is increasing evidence that the incidence of paternity leave, in particular, is growing in the United Kingdom."

I welcome that, and I dare say that the hon. Gentleman does, too.

We certainly do not want that success to be put in jeopardy by possibly well-meaning, but potentially calamitous, interference from Brussels. The European agreement on parental leave is likely to become another piece of burdensome and unnecessary European legislation.

When that happens, many British businesses will breathe a sigh of relief that the United Kingdom has opted out of the social chapter and its damaging consequences for jobs and the economy, just as they did when we blocked the proposed directive on parental leave last year. That directive would have had truly horrendous implications for employers in the United Kingdom and across the Community. It would have forced employers to give employees at least three months' leave following the birth or adoption of a child. It would also have stipulated minimum leave entitlements for other family reasons.

Hear, hear.

The hon. Gentleman may favour it, but the proposed directive could have meant an annual bill of £200 million for British firms—expenditure that many of them could ill afford. In his previous intervention, the hon. Gentleman asked me whether the surveys had reached smaller firms. Those smaller firms would bear the brunt of the £200 million that they could ill afford.

The new agreement is not much better, except in one important respect: it will not apply in the United Kingdom. It means that we are free to continue the existing voluntary approach that is delivering what workers want and what businesses can afford, rather than what people in Brussels or Opposition Members think they should have.

These are indeed important matters, and I am glad that we have had the chance to debate them. I thank the hon. Gentleman for providing the opportunity. The Government are sympathetic to all initiatives to help people reconcile their working and family lives, but I think that I have shown that simplistic legislation does not hold out a panacea and is certainly not a cost-free remedy. Rather, it would cause more ills than it would relieve, because it would increase the cost of employing people in an arbitrary way, taking no account whatever of businesses' ability to pay. Ultimately, it would harm the very people it was intended to help. The most generous statutory provisions on parental leave, paid holidays, rest breaks and so forth are useless to the man or woman unable to find a job. The Government do not forget that simple message.

Radio Gloucestershire

12 noon

I am grateful for the opportunity to raise the subject of BBC Radio Gloucestershire and the problems with the reception of its signal in my constituency. I welcome the Minister's presence, not least because he has always been so courteous in helping me with my constituents' other problems. He will be aware of our continuing correspondence on the subject, and of the questions that I have asked in the House ever since I have been a Member.

The time is now right to move forward, not least because a clear and simple solution has been identified. Since my election in 1992, there has been a blackout of Radio Gloucestershire in much of the Cotswolds. The situation in December 1995 is unchanged from that of December 1991, when the main medium wave AM transmitter was switched off. I ask the House and my hon. Friend the Minister for their forbearance, because this is a very technical subject. I will do my best to take it slowly.

The result of switching off the transmitter is clear. Figures from Radio Joint Audience Research Ltd. show that it is technically possible for 338,000 adults to receive broadcasts out of a total population in Gloucestershire of 471,000. That means that around 150,000 people—133,000 adults plus a quarter of under-16s—in Gloucestershire are currently unable to receive Radio Gloucestershire. That is a large section of the population, many of whom are my constituents.

The current reception problems are not confined to the geographical extremes of the county, but are confined to outlying rural areas beyond the principal towns and cities. The major gaps are estimated currently as follows: 20,000 people in the south-west of the county; 20,000 in the Forest of Dean; and 20,000 in the north Cotswolds. The rest are dispersed evenly throughout the county.

As the Minister knows, Radio Gloucestershire is a speech-based local news and information station, upholding the finest traditions of public broadcasting. Indeed, in 1994, it won the prized Sony award for local radio station of the year. Among its successes was the coverage of the dreadful Cromwell street story, when its journalists had their reports networked to the rest of the BBC. Before it lost its AM frequency, Radio Gloucestershire had built up an average weekly following in 1991 of a staggering 27 per cent. of the adult population, from a standing start in 1988.

My constituents hold their public service station in high esteem. At this time of year, many of my elderly and other constituents need winter weather and traffic information. Unlike London, power failures in parts of rural Gloucestershire are still far too common. When the power goes off, rural communities turn to their local radio station for information. The local radio station also provides much valuable sports and other news coverage.

When simultaneous broadcasting ended, the commercial stations were allowed to develop separate radio programming on medium wave and FM. To the west of my constituency, the independent Severn Sound is a good example of that. It retains licences for light music on both AM and FM. In contrast, the BBC was forced, as part of a national policy dictated by the Home Office, to relinquish its AM frequencies; thus began part of the problem. Before 1992, the responsibility was not that of my hon. Friend the Minister and the Department of National Heritage but that of the Home Office. I absolve my hon. Friend the Minister from all responsibility for the matter.

Radio Gloucestershire's AM frequency was passed to Boss 603 Radio, a light music commercial station based in Cheltenham. Although that station can be hard by some of my constituents, it does not serve the wider needs of the Cotswolds. Its programming and advertisers aim at a target audience in the immediate Cheltenham area only. It strikes me and many of my frustrated constituents that it might be better off with an FM stereo frequency. That is a view shared by many independent radio stations and their advertisers, simply because they can get a better quality of broadcasting in their immediate local areas.

My plea to the Minister is to review the decisions taken in the wake of the Broadcasting Act 1990. It made good sense then but it is less relevant today, because we are a long way from the broadcasting situation that prevailed in the 1980s. At that time, no one could deny that the BBC held the lion's share of the AM and FM frequencies. A decade later, the commercial sector, under the Radio Authority, has a commanding lead. The situation needs to be reviewed and reversed.

The commercial sector has an interest in change, because many commercial stations, as I have demonstrated, are stuck with AM licences but might, for reasons of quality, wish to upgrade to FM. I recently discovered that, when a commercial radio licence holder maintains both FM and AM stations, such as Severn Sound in Gloucestershire or Capital Radio in London, cross-media ownership rules prevent them from converting from AM to FM. They are therefore caught in a bind that prevents public service stations, such as Radio Gloucestershire, from gaining space on the AM frequency. That needs to be reconsidered.

When Radio Gloucestershire was established in 1988, it was satisfied with its AM transmission, because that, unlike FM, can deal with difficult topographical and geographical situations. It meant that the AM frequency could be received throughout the whole county satisfactorily, whereas the present FM frequencies, which are interrupted by hills, gave rise to the current situation.

A year after the station was up and running, the Home Office held a meeting with the BBC in 1989. I am told by Radio Gloucestershire that the bottom line was that the Home Office required it to surrender its unused FM local frequencies, which it had been holding for future expansion of FM coverage in difficult rural areas. Home Office officials told the BBC that Radio Gloucestershire would keep its AM frequency, which had served the county so well, in return for surrendering its potential FM frequencies, a deal which made a great deal of sense to all parties involved at the time.

However, in July 1991, after the Broadcasting Act came into force, Home Office officials apparently changed their minds and revoked the AM agreement, as it did not accord with the new Act, and Radio Gloucestershire had to surrender its AM frequency. Despite a hard-fought battle by the BBC for extra FM frequencies, the best deal that the Home Office could subsequently offer was one FM filler transmitter in Cirencester in 1991. The situation has remained unchanged for the four years since. My constituents do not like it. Insult is added to injury by the fact that, in parts of the Cotswolds, we can hear the broadcasts of every other surrounding station: GWR, Three Counties, Radio Hereford and Worcester, Thames Valley Radio, Radio Coventry-West Midlands and even Radio Shropshire. However, my constituents cannot receive their own Radio Gloucestershire. The market towns of Moreton, Stow, Chipping Camden and Bourton are left high and dry from their own Radio Gloucestershire signal, because the FM signal is interrupted by the ridges and hills in my constituency.

For the past five years, the Department of National Heritage and its predecessor, the Home Office, have been resolute in their belief that this is a matter for the BBC to resolve using FM fillers, despite the fact that it has been granted only one licence to do so, but that solution's problems are enormous and inordinately expensive, and anyway, universal coverage would not be sensibly achieved.

I come to the solution, which my hon. Friend the Minister may wish to hear. On 30 November, the BBC chairman no less, Mr. Marmaduke Hussey, wrote to me and informed me that it would cost at least £500,000 to provide the five or so filler transmitters to give even a reasonable coverage to the whole of Gloucestershire. That would bring relief to the Forest of Dean and the main Cotswold towns, but not to those many constituents in highly rural regions. To attempt to give the whole county FM coverage would require at least a dozen transmitters and would be a scandalous waste of licence fee money: estimates place that exercise's cost at more than £1 million.

The BBC chairman has, however, presented me with an answer, with which I concur wholeheartedly. His recent letter says:

"It has recently become evident that the pressure on medium wave frequencies for commercial radio is not as great as had been anticipated. Therefore, we have taken the decision to look into the possibility of using medium wave again. We have had informal discussions with the Department of National Heritage and they have indicated that this would be an acceptable solution."

My plea to my hon. Friend the Minister is that we should adopt that solution so that my constituents' suffering can be ended once and for all. Mr. Hussey's letter also states:

"we intend to fund the additional transmitter out of next year's capital budget",

so the two things are in place: the technical solution has been identified and the funding is there. A single medium wave transmitter would be far better value than pursuing the FM option, and would provide something approaching universal coverage for the whole of Gloucestershire.

Before the BBC can proceed, however, the Department of National Heritage must allocate a frequency, and technical approval is required from the Department of Trade and Industry Radiocommunications Agency. I urge my hon. Friend to back the solution that I have outlined. I will send him a copy of the chairman's letter that sets out the BBC's plans. I hope that he can arrange an early meeting with officials to formalise those plans.

I am concerned because the precedent for this application is one made in 1994 for an FM filler at Coleford in the Forest of Dean. Apparently, it took many months for my hon. Friend's Department to respond, by which time the BBC had decided that it could not afford the FM option anyway. I do not want a repeat of that. Now we have identified the solution and the BBC is able to fund it, it would be a tragedy if, because the various Departments involved took such a long time to consider the matter, the BBC said that it could not afford to fund a new AM transmitter.

The commercial sector is much more interested in the new FM frequencies, and the Radio Authority has just obtained a space between 105 and 108 MHz, covering about one fifth of that expanded waveband. Since the time of the Broadcasting Act 1990, the FM space available for domestic broadcasts has doubled because the emergency services and utilities have transferred to other frequencies. Plenty of space is therefore available for all the commercial stations to broadcast on FM, and, in any case, they want to cover only a relatively small local region.

It is interesting that the Radio Authority intended to advertise a new commercial FM licence for the Cotswolds and had accelerated its plans precisely because of all my complaints about the BBC position—it told me that in a letter. A Radio Authority official has told me, however, that the Cotswolds licence will now be for the medium wave because of all the problems that I have outlined with the FM frequency. It was originally proposed to allocate more space to commercial stations on FM. It is now being proposed to allocate it on AM because of the problems, yet we cannot obtain AM space for BBC Radio Gloucestershire, an established and well-liked station.

With that evidence in mind, I strongly urge that we ensure that the BBC has a fair share of resources to continue in the local radio business, because it seems that the Radio Authority is awash with frequency options on both FM and AM.

I have shown that Radio Gloucestershire's problems derive from the Home Office's policy decisions at the time of the Broadcasting Act 1990. With a new chapter in broadcasting on the horizon, I hope that we can first sort out the previous legislation's unresolved problems. It is instructive to look back to the 1987 Green Paper on radio. This is the overall guiding theme that we should all remember in relation to broadcasting.

The Green Paper states:

"there remains a place for local BBC stations operating under public service obligations … there are particular reception difficulties in some less populated areas, and there may therefore be a good case for envisaging the continuation of simulcasting"—

that is, simultaneous broadcasting on FM and AM. In the case of Radio Gloucestershire, it broadcasts simultaneously only in the towns of Gloucester, Stroud and Cheltenham. It is therefore time to restore the station's full coverage by allocating a replacement medium wave alongside its current allocation. I hope that my constituents will not have to wait another four years since the present problems began.

I urge my hon. Friend seriously to consider what I have had said today. The solution is there, the funding is there. All it needs is a little push from him and I am sure we will achieve everything for my constituents' benefit.

12.15 pm

I truly congratulate my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) on the vigour and persistence with which he has followed this important cause. We have had many meetings, debates and questions and much correspondence, and I hope that his constituents are as grateful to him for his hard work on this matter as they should be.

I thank my hon. Friend for this opportunity to reaffirm that the Government recognise the value of the BBC's local radio services. As he knows, last year, we published a White Paper about the BBC's future. It said that it was especially important that the BBC should continue to provide news and current affairs programmes on its local radio services. It did not, however, commit the BBC to a specific number of local stations.

On 27 November this year, we published drafts of the BBC's new charter and agreement. Those documents give effect to the Government's policies in the White Paper and provide the necessary formal framework for the BBC's future role, including local radio services provision.

I know that, since he came to the House, my hon. Friend has been pursuing this matter for many months, indeed years, and I have congratulated him sincerely on that. I sympathise with those of his constituents who are unable to receive the BBC's local radio service. Some of them will have had the benefit of receiving Radio Gloucestershire's programmes when they were broadcast on medium wave—AM—between 1988 and 1992. Others in Gloucestershire may not yet have been able to hear the service due to their living beyond the range of the station's transmitters.

My hon. Friend knows that considerable practical difficulties exist in providing good broadcast reception in the Cotswolds. That is not a unique position: many regions have problems relating to their reception of broadcasting services. I know that he is aware of the fundamental characteristics of broadcasting transmission, but, perhaps for the benefit of others, it may be valuable if, for the record, I set out some of essential features to put this matter in context.

Radio reception on the FM waveband, as for television reception on the ultra high frequency, relies primarily on a clear line of sight between the transmitter and the receiving aerial. Reception is impaired and can be blocked by obstacles interrupting the signal path. In built-up regions, such obstacles are usually man-made, such as tall buildings or large reflective structures. In rural regions, it is more common for the obstacles to be naturally occurring features such as hills and trees. Despite those complications, broadcasters have achieved more than 99 per cent. coverage for their television and radio services in the United Kingdom, from several thousand transmitters.

It should be remembered that each service requires a different frequency, and that each frequency has to be separate from those in use at each neighbouring transmitter to avoid interference. Unfortunately, it is generally the most beautiful areas of the country with forests and hills for which transmitters are needed, and I am sure that my hon. Friend agrees that Gloucestershire fits that description.

Broadcasters reach 99.4 per cent. of the population with television signals. That is a considerable engineering achievement, but it means that perhaps some 300,000 people are without a television service. The situation is similar for radio. The BBC currently estimates that its coverage of its national FM networks is 99 per cent. That means that there would still be many transmitters to build at considerable expense if full coverage were ever to be achieved.

There is no obligation on the BBC to provide everyone with satisfactory access to all its services. The Annan committee recognised in 1977 that such an obligation would be wholly impracticable, in view of the small and scattered nature of many communities and because of the difficulty of matching transmitter coverage to the local geography.

I return to the specific problems in Gloucestershire that were raised by my hon. Friend. It may be helpful briefly to set out some of the background to the difficulty, and to explain how we have arrived at the current position.

BBC Radio Gloucestershire started broadcasting in October 1988, when most radio stations were providing a simulcast service on both the FM and AM wavebands. It had recently been established that this was a wasteful use of the frequency spectrum, and that simulcasting should be reduced to a minimum. Nevertheless, permission was given to the BBC to introduce its new Radio Gloucestershire service on both wavebands for a limited period. That was an exceptional and temporary measure, to help the new service to establish itself.

At the end of the agreed period, the BBC was to close its AM service, and Radio Gloucestershire was to broadcast on FM only. The BBC subsequently suggested that there would be little to gain by turning off the AM service before the frequency was needed for an alternative purpose. We agreed to that proposition, and extended the temporary transmission period until such time as the Radio Authority might need the FM frequency for developing independent radio.

On 31 January 1992, following a request from the Radio Authority, the AM transmitter was turned off and the frequency was reassigned to the authority for an independent radio service. The frequency is now used by the independent local radio service based in Cheltenham called Boss 603 Radio.

I should add, while mentioning independent local radio, that the Radio Authority has announced plans to advertise a licence for a service catering for listeners in the north-east of the county. That should feature among the licences that it aims to advertise from the middle of 1996 onwards. We welcome this extension of programme choice for listeners in parts of Gloucestershire.

However, we also recognise that some developments of this nature have adverse effects on listeners in other areas. The consequence of the BBC losing an AM frequency is that those listeners lose a service altogether, because FM and AM coverage of an area is rarely identical. Several areas, including Gloucestershire, have experienced a similar outcome.

A number of communities which had relied on signals from the AM transmitter could not receive the FM signals. The BBC generally hoped that, where possible, it might be able to build new FM transmitters to restore the service to such areas. However, its ability to do that depends on a number of factors, including the availability of frequencies and suitable transmitter sites. The BBC also has to take account of a variety of other pressing demands on its resources when determining its engineering priorities.

In Gloucestershire, the BBC has identified nine areas for which new transmitters are needed. It estimates that the total cost of providing FM facilities for each of those communities would exceed £1 million. My hon. Friend the Member for Cirencester and Tewkesbury drew that information from the letter that he received from the chairman of the BBC. It is by no means clear at this stage that suitable sites and frequencies will be available, and, as transmitter installation is not a simple task, the operation would take some time to complete, even if the resources were available.

I do not want to sound too dispiriting to my hon. Friend. As he knows, the BBC has not given up on Gloucestershire. It has been looking for alternative ways to resolve the problem, and one possibility might be to provide an AM service for the area. Understandably, my hon. Friend may feel—although, charitably, he did not put it in such serrated language—that this could take us back to first base.

I appreciate that the affected communities might believe that such a solution, if it proved workable, would show that they have been inconvenienced unnecessarily. However, it must be remembered that the Radio Authority had few spare frequencies at its disposal when it opened for business in 1991. Simulcasting the same programme service over an area on two wavebands remains a wasteful activity, which we discourage, and it was appropriate to give the new service, which had, of necessity, to operate on the poor AM waveband, the best frequency that was available.

From the beginning of this year, the Radio Authority has had access to new FM frequencies in the 105 to 108 Mhz sub-band. Accordingly, its need for AM frequencies has diminished, and it is appropriate for the BBC again to take its potential use into consideration. It is too early to know whether the BBC will find that a viable way to sort out the problem for my hon. Friend's constituents, but I assure him that the BBC is working on it, and that the Department of National Heritage will look at any proposal as sympathetically as possible for my hon. Friend.

As the Minister and I have said, the FM solution would cost about £1 million, but would still not give adequate overall coverage, whereas the AM solution, providing one transmitter, would cost £10,000 to £20,000, and would provide reasonable overall coverage for Gloucestershire. I hope that my hon. Friend will opt for the second of his two solutions, and push hard for the BBC to be allowed an AM frequency.

That certainly adds an element of realism to the sympathy that I have already promised my hon. Friend, and we shall take that important fact fully into account.

I know how greatly listeners appreciate the BBC's local radio services and I hope that listeners throughout my hon. Friend's constituency will similarly be able to take advantage of BBC Radio Gloucestershire's service.

12.26 pm

Sitting suspended.

Haemophiliacs

1 pm

On resuming—

I shall complete my speech as quickly as I can since the hon. Member for Hendon, South (Mr. Marshall), I am glad to see, is in his place. He has fought on this issue for a considerable period, and I am anxious that he be given the chance to speak in the debate.

I welcome the opportunity of bringing once again to the attention of the House the plight of 3,000 individuals who, while being treated in the national health service for haemophilia, were given contaminated blood products and as a result contracted hepatitis C. The Minister will be aware that those individuals were all treated before 1986. In that year, a system was introduced which prevented contaminated blood from being passed on, but for those 3,000 people, the system came too late—they had contracted hepatitis C.

Those few words in medical terms trip off the tongue so lightly and so unemotionally that it is necessary to describe the way in which that treatment has adversely affected the future of those 3,000 people. Of them, 2,500—approximately 80 per cent.—will develop chronic liver disease. I should like to spell out their fate. They will be confronted by a variety of problems, including jaundice, vomiting and abdominal pain caused by the swelling of the liver and the spleen. When that continues for a long time, it leads to scarring. Scarring means cirrhosis of the liver. Between 250 and 500 of those 2,500 people will develop cirrhosis of the liver. Chronic hepatitis and cirrhosis can lead to a hepatoma, a cancer of the liver, from which many will die. Between 1988 and 1994, more than 550 people suffering from haemophilia died from liver failure, and in 1994 alone, 14 people died in those circumstances. The rate of deaths is accelerating.

That is the future confronting that tiny group of people who, already struggling to live a normal life with the burden of the debilitating effects of haemophilia, were given treatment on the NHS which resulted in them contracting hepatitis C. I have at least one example of somebody in my constituency who suffered that fate—a youngster called Neil aged 13 years old. He grew up with haemophilia. His family nursed him through his early years; they protected him and encouraged him to lead as normal a life as possible. There were scares, as the youngster was full of life and devilment and had little respect for his haemophilia. At 12 years of age, the parents were told that their young lad had been given infected blood and had hepatitis C. I am sure that the House understands the parents' devastation.

Last week, the Haemophilia Society published a report that examined the experience and needs of those with hepatitis C. It outlined the physical problems and described the effects on individuals and their families. We should listen to the words of one man aged 31, who said:

"My general health has rapidly deteriorated over the past four years. I suffer from chronic fatigue and am unable to finish a full day's work. Joint aches, pains, decreased appetite and weight loss, itching. a need for nine hours' sleep a night. I feel in the last four years my physical stamina has aged about 15 years. I have grown old before my time."

Another sufferer, aged 55, said:

"I have had 22 operations over the last two and a half years. 1 feel more tired as the months go on and I fear my liver will eventually fail. In the long term. the prognosis is bad."

Although physical fears are a major problem, the effect that the disease has on the family is also a serious and continuing concern. With an infectious disease, which could become debilitating and life-threatening, the financial problems that might confront families are always uppermost in their minds. Individuals aware of the growing weakness caused by the disease worry justifiably about the financial effects that their illness will have on their family. Fears about being able to continue in employment blight and constrain any long-term financial commitments, and because of the knowledge of the illness, there is no escape route through private insurance.

From reading the report, the Minister will acknowledge case after case of individuals who have faced problems at work or even problems finding work because of the illness. Salaries and careers are impossible dreams when a person has this terrible disease.

I have tried to convey the real physical and financial problems. On top of those are emotional and relationship problems caused by the disease: the worry of passing the infection on to a loved one, the dilemma of whether to have a child, and the strains on a marriage when illness means that income, and therefore standard of living, is reduced. All those factors add up to a blighted, uncertain future for each of the 3,000 people. Some may escape the full rigours of the disease, but as it may lie dormant in the body for more than 20 years, no one can tell or be entirely sure that they have escaped.

What can be done? Those four words represent the point at which—unfortunately—the Government and those concerned have in the past parted company. It is agreed that all I have spoken about until I uttered the four words "what can be done" is very sad and deserving of sympathy. Yet, when the matter was debated briefly in the other place, what followed was prevarication and an unwillingness to make any real contribution to ease the plight of those infected.

To be fair and to balance the picture, the Government were sympathetic and supportive of haemophiliacs who received contaminated blood and became infected with HIV. It is beyond argument that that disease is more severe than hepatitis C, but the similarities between them are too great to be ignored.

The circumstances under which individuals became infected with a second disease are exactly the same in each case. The test to prevent HIV being passed on stopped the hepatitis C virus being passed on. Both illnesses can be—and are—debilitating. All those who suffer face the worry of passing the disease to a loved one or to an unborn child. All face difficulties in education and employment. All face the impossibility of long-term financial commitments. All face the impossibility of gaining life insurance, unless it is offered at a totally prohibitive cost.

Let us take the case, often repeated in debates on this subject, of the three brothers who all became infected before 1986. Two of the brothers got HIV. They died. They received financial aid while they were alive and, on their death, their families received financial help. The third brother, also a haemophiliac, was infected at the same time, but did not contract HIV. He contracted hepatitis C and died. Yet during the painful debilitating stages of his illness, he received no financial help and his family received no help on his death. All three contracted the first and second disease in the same way, all three died, yet the brother who had hepatitis C received no help. Does that sound fair? Does it sound sympathetic or even defensible?

I hope that the House and the Minister will agree that there is an overwhelming case for giving financial help to those individuals and their families. It could be given on the same basis as for haemophiliacs with HIV, and could even be administered through the Macfarlane trust, which it is agreed has carried out the task of distributing and administering the aid for those with HIV in an exemplary fashion.

It is hoped that there will be a hardship fund for those who are already ill, partly because they suffer major reductions in income as a result of their illness, and partly to meet the increased costs of prescription charges, transport and food. Such a fund could also provide help for the dependants of those who have died, and an across-the-board payment to all those who have been infected, who suffer from uncertainty—from not knowing whether hepatitis C will have a serious or even a fatal impact on their lives and on those of their families.

The Haemophilia Society report asked for other measures to be considered, several of which cover resources for treatment and care. They include an up-to-date information system that is easily understood and in an accessible format; treatment with interferon alpha where that is deemed appropriate; access to PCR—polymerase chain reaction—tests to confirm the existence or otherwise of the virus in the body; access to a liver specialist; regular reviews and follow-up. The society also asked for a public education programme designed to break down the isolation and discrimination experienced by many.

Several hon. Members, such as the hon. Member for Hendon, South and my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), have taken an interest. Early-day motion 3 was signed by more than 250 hon. Members from both sides of the House. They all supported the case, which can be simply expressed as follows: 3,000 people, most of whom have families, have been infected with a destructive and potentially fatal disease. Because they suffer from haemophilia, they had no choice over the type of treatment offered by the national health service. Now, because they were given infected blood during that treatment, their lives and those of their families have been blighted.

No one blames the national health service or the Government, but we quietly plead for a recognition of the painful heartbreaking position in which those individuals and their families find themselves, and for an offer of help and hope. If the Government will not do that, no one else can. I know that every penny in the NHS is important and much fought over, but in terms of overall Government expenditure, the sum involved is small. None the less, it would be a significant sum for the affected families. It would show compassion and bring help, and it is desperately needed.

1.12 pm

I congratulate the hon. Member for Leeds, East (Mr. Mudie) on his success in securing the debate, and on his speech, with which, perhaps unusually in this place, I agreed 100 per cent. I also thank the hon. Gentleman for his courtesy in inviting me to take part in the debate, and I apologise on behalf of my hon. Friend the Member for Wealden (Sir G. Johnson Smith), who cannot be here because he has other parliamentary duties. My hon. Friend has authorised me to say that he would have liked to be here, and I am sure that he too would have agreed with everything that the hon. Member for Leeds, East said.

I also pay tribute to the work of the Haemophilia Society, whose chairman, the Rev. Alan Tanner, is a constituent of mine. The society has done magnificent work for its members.

Like the hon. Member for Leeds, East, I draw the parallel between the haemophiliacs who suffer from human immunodeficiency virus and those who suffer from hepatitis C. The cause of their illness is precisely the same. Both groups received infected blood products through the national health service. Both were given what was hoped to be life-enhancing treatment, which instead caused a life-threatening illness.

For both groups the consequences, too, will be the same. About 600 to 700 people will suffer a painful and premature death. Of course I accept that not all those infected with hepatitis C will suffer in that way. Indeed, 20 to 25 per cent. of them will be completely cured as a result of treatment with alpha interferon. But others, who neither die an early death nor enjoy a complete recovery, will suffer a life of pain and worry for many years to come.

I believe that when we consider those three categories of people we already have the key to a solution. The first principle is that no one should be denied treatment and the possibility of a full cure through interferon alpha. The other day, some of us met representatives of Schering, the company that produces that drug, and they expressed concern that in some parts of the country people who could benefit from treatment with interferon alpha were being denied it. I hope that the Minister will be able to give a lead on that matter, especially as, when my hon. Friend the Member for Bolton, West (Mr. Sackville), who is now the Under-Secretary of State for the Home Department, was a Health Minister, he spoke to us on that matter.

Haemophiliacs who develop cirrhosis of the liver should be treated absolutely on a par with those who develop HIV. For both groups the prognosis is the same. All those people face the prospect of an early death, they are all suffering physically, and they and their relatives are suffering mentally and emotionally.

Indeed, if the onset of cirrhosis of the liver were to be the trigger for the main payment, the Minister could tell the Treasury that the scheme would not cost too much money this year. The cost would be spread over four or five years, and would have relatively little effect on total Government expenditure while doing an immense amount of good for the individuals concerned. Those who do not suffer from cirrhosis of the liver could be given a more modest payment.

Last week I invited the Minister to read the Haemophilia Society's report, and in it he will have seen cited the case mentioned by the hon. Member for Leeds, East—the family with three brothers, all of whom died, two from HIV and one from hepatitis C. Those who died from HIV had been compensated, but the third had not. How can we say to the mother of those three sons that two were worthy of receiving Government money but the third was not? That does not stand up on the ground of logic, nor on the ground of compassion and human kindness.

When we debated the subject before, the then Minister talked in global sums and mentioned a figure of £6 billion, representing the cost of a total no-fault compensation scheme. That is not what we are asking for. We ask simply that a relatively discrete small group of people should receive some assistance as a mark of the financial hardship and of the physical and emotional pain that they are suffering.

Of course someone in the Treasury, or even someone in the Department of Health will say that that would create a precedent. However, the argument about precedent is the argument of administrative convenience; it is not the argument of compassion or of Christmas—you and I, Mr. Deputy Speaker, have just come from the Christmas carol service. The precedent was created when the Macfarlane trust was set up and the Government rightly decided to make ex gratia payments to haemophiliacs infected with HIV, and then to non-haemophiliacs infected with that virus. The Prime Minister took a major part in both those decisions, so I hope that the report of our debate will be sent to him so that he can act upon it.

1.18 pm

I congratulate the hon. Member for Leeds, East (Mr. Mudie) on his success in the ballot and on securing the debate. He put his points in his typically warm-hearted and down-to-earth way. I am delighted to see that he is well supported today, not only by Opposition Members but by Conservative Members, too.

I know that many hon. Members are concerned about the situation of haemophiliacs who have also had the misfortune to contract hepatitis C, which adds to the difficulties that they already have to face. The problem has been raised several times in the House. Last week, I answered a question on the subject from my hon. Friend the Member for Hendon, South (Mr. Marshall), to which the hon. Member for Leeds, East added a supplementary question. My hon. Friend also initiated an Adjournment debate at the end of the previous Session. I am also aware of early-day motion 3, which has a large number of signatures.

Let me say that I have great sympathy—and will always have great sympathy—for patients who have become infected with hepatitis C through blood transfusions or blood products. The Haemophilia Society originally launched its campaign for help for people in this situation in the spring. The hon. Member for Leeds, East will be aware that the Haemophilia Society has recently issued an interim report—I stress that it is an interim report—on its hepatitis C impact study.

I have just come to the Department of Health, and there is a great deal to read. I would like to read the Haemophilia Society's report thoroughly, but I have not yet had the opportunity to do so. I shall make that a very high priority, but I want to read the report and not merely a brief. I am aware that the report graphically describes the problems experienced by some sufferers who find that they now have to contend with the effects of hepatitis C infection on top of the effects of haemophilia. The hon. Member for Leeds, East graphically and eloquently explained those severe problems in his speech.

The great benefits to patients of medical procedures rarely come without some risk, and I would like to put the matter into that context. It is important to remember that it is not always possible at the time treatment is given to fully appreciate the risk or to avoid suspected or known risks. In the case of each individual patient, a balance must be struck between the benefit to be gained versus any possible risk. The patients we are now discussing received the best treatment available in the light of medical knowledge at the time. I do not think that either the hon. Gentleman or my hon. Friend will dispute that.

The factor 8 concentrate—the cause of the infection—has brought great benefits to patients with haemophilia. Previously, only about 5 per cent. of patients with severe haemophilia reached the age of 40, whereas by 1980—as a result of factor 8 concentrate and drugs—the life expectancy was very close to that of normal males. There was also less need for the periods of hospitalisation, and boys had a better chance of achieving a reasonable education. Additionally, the convenience of patients being able to keep concentrate in a domestic fridge and treat themselves at the first sign of a bleed meant a considerable reduction in long-term disability. All those benefits have come about as a result of the blood products which, simultaneously, have been the cause of the infection.

Most haemophilia patients infected with hepatitis C were so infected before the blood products were treated to destroy viruses in 1985, and well before tests for hepatitis C became available. Before then, the only way to safeguard blood was to limit those from whom blood was taken by a system of self-deferral. This excluded, amongst others, those known to be suffering from hepatitis, or any other liver disease, and drug misusers.

The basic facts are quite straightforward and are not in dispute. The figure of just over 3,000 for those infected, which was quoted in the recent Haemophilia Society report and again today by the hon. Gentleman, is substantially in line with the Department's own estimates. A figure of a total of 50 deaths from hepatitis C in patients with haemophilia has been suggested, and has been cited in the early-day motion to which I have referred.

While every death is a tragedy for the individual concerned and their family and friends, it is important to keep a sense of proportion. I understand from the United Kingdom Haemophilia Directors that, of 126 haemophilia patients known to have died in 1993, 12 showed the cause of death as liver disease, of which hepatitis C may have been the cause. That is less than 10 per cent. That figure of 12 for 1993 contributes to the figure of 50 which we are talking about as the number who have died so far in this way. Eight of those 12 were also HIV-positive.

I do not minimise the impact of such tragic losses on individual families, but it is vital that we do not lose sight of the fact that, fortunately, many of those infected will be able to continue to lead a reasonable life. We owe it to those individuals infected to ensure that the public perception of this illness is not distorted. If people are given the impression that there is little to choose between hepatitis C and HIV, we risk the very stigmatism which was such a sad aspect of the early days of HIV awareness. It has been argued that the fact that ex gratia payments were made to those who contracted HIV through blood or blood products means that payments should also be made in the present case. As both the hon. Gentleman and my hon. Friend will be aware, the Government have not accepted that proposal so far. We believe that different prognoses have been made for those with hepatitis C and those with HIV.

Many people infected with hepatitis C may live for a long period without any symptoms appearing, and my hon. Friend has conceded that. Fifty per cent. of sufferers may progress to chronic hepatitis with varying degrees of good or ill health. Perhaps 20 per cent. of infected patients will develop cirrhosis—a progressive destruction of the liver—that may take 20 to 30 years to be fully apparent. The majority of those years will be trouble-free in terms of ill health and, as I have mentioned, only a small proportion will die of liver disease.

The Haemophilia Society's report of its hepatitis C impact study makes a valuable contribution to our understanding of the effect of hepatitis C in this situation.

Does my hon. Friend agree that, if a relatively small proportion of sufferers will develop cirrhosis of the liver and die prematurely, the cost of helping them will be correspondingly small?

Yes. That is a valuable point, which my hon. Friend makes for the first time. The Haemophilia Society—understandably, as it has not completed its study—has not made full and costed proposals. We have never received such a suggestion to study, and I would be interested to hear details of the relatively modest and restricted proposal which my hon. Friend has made during the debate. We understand that the final report of Haemophilia Society will be published in 1996.

Infection with the virus will not necessarily lead to hepatitis, but if it should, it can he treated with the drug alpha interferon. Alpha interferon is not a universal panacea for hepatitis patients. It can have unpleasant side effects, and it is still not clear whether a permanent cure is possible. However, it has been shown to have real benefits for a proportion of sufferers. We have said all along that those people who could benefit from it should be able to receive alpha interferon.

My hon. Friend alleged that patients whose consultants wished to prescribe alpha interferon had been refused treatment due to a lack of resources. My predecessor said during the Adjournment debate on I I July that he would investigate the issue of medication supplies. Officials are continuing to make inquiries and have done so since that date. We are very serious about this. If my hon. Friend or any other hon. Member has any examples of cases in which alpha interferon has not been made available because of the cost, I will be delighted to hear from them. I shall certainly ask my officials to follow that up, as it would be very serious if that were happening. So far, there is little evidence of significant difficulties, and we have not been able to track down any particular examples. Hon. Members must let the Government know if any such examples come to their attention.

My Department is supporting an initiative by the Haemophilia Society to undertake a study of the best way to support its members who are infected with hepatitis C, and has made available substantial funds in 1995–1996 with a commitment to further funding in 1996–1997 and 1997–1998 for this purpose. My Department is also looking at what appropriate research may be undertaken to increase knowledge of hepatitis C, its natural history and its optimal treatment.

One example of that is that the standing group on health technology has identified the evaluation of the use of alpha interferon in the treatment of hepatitis C as a top priority in the NHS. Such developments are important to increase the evidence base upon which decisions can be made on the best treatment for each individual patient.

It is the Government's view that the most effective use of resources is to seek to improve the understanding, management and treatment of the condition. This is the best way to minimise the impact of the disease—which the hon. Gentleman described so graphically—on individual patients and their families. The Haemophilia Society's recent report gives examples of that.

All that I have heard in today's debate suggests that I should read the Haemophilia Society's report extremely closely, and I promise the House that I shall look at the matter afresh in the light of what is said in the report. We have also heard from my hon. Friend a sensible suggestion for a more modest and restricted compensation scheme than has been hitherto mentioned. For those reasons, I shall leave the matter at this stage, although I give my full sympathy to those who have the disease.

Army Technical Services Agency

1.30 pm

I am grateful for the opportunity to raise the issue of the Government's intended decision, announced yesterday, to move the Army Technical Services Agency from Malvern to a collocated site at Chertsey. I am relieved that my hon. Friend the Minister of State for the Armed Forces, rather than the management of ATSA, has the final word on the matter. That was not immediately apparent from a letter that I received dated 5 December from the parliamentary branch of the Ministry of Defence, which said:

"The Defence Secretary has asked me to thank you for your letter of 29 November about the collocation of ATSA. The matters raised are, however, the responsibility of the Chief Executive, Army Technical Support Agency and I have therefore transferred the correspondence to that Department and asked them to reply to you direct."

I should be grateful to have the Minister's assurance that the decision is ultimately for him and my right hon. Friend the Secretary of State to take and not one for the management of an agency.

I am not clear about the precise status of the decision to move the agency. In his letter to me which I received today, my hon. Friend the Minister says two things about the decision. First, he says:

"I have decided that, subject to the outcome of a period of consultation, the ATSA should collocate at Chertsey."

In a subsequent paragraph, he says:

"I can assure you that I will take full account of all representations before making a final decision."

I hope that the position is that expressed in the second quotation and not that implied in the first, and that my hon. Friend is in a position to change his mind on the matter if he is persuaded to do so.

The Minister's decision seems to spring from advice which is a reversal of advice that his predecessor received just over two years ago. I have here a document which, inevitably, as it is from the Ministry of Defence, is identified by numbers. It is the MAN S(ORG) study No. 761 dated May 1993. It is clear as to the advice that the Minister of the day had received. Paragraph 5.30c on page 73 says:

"Malvern is the cheapest option,"—

that is, comparing Chertsey and Hullavington—

"with a range of buildings which would seem suited to the type of organization we are proposing. It is Army owned and could be adopted with the least difficulty of the three sites to the requirements of the TSA, although Married Quarters and a Mess will be required. Of the three sites, it offers the best prospect of retaining quality non-mobile staff and it has a nucleus of electronics trained personnel ( who may be particularly difficult to replace elsewhere). Also it would offer some possibilities for long distance career development. Finally. although it is some distance from Andover, it is within easy reach of Bristol and Donnington, (the recommended site for the PPD)"—

which has now transferred to Bristol—

"and has good road transport links.

Given the savings that would result, the apparently favourable condition and structure of the accommodation, reasonable employment prospects and geographical location, we recommend that the TSA should be located at Malvern".

The point is that the advice is all based on criteria which are clearly laid out, and rather more clearly so than the advice report, to which I shall refer in a moment. The criteria are laid out in terms of costs, suitability of site, availability, any political considerations, environmental impact, recruitment potential and accessibility to senior management, customers and others.

Under the cost heading, the report clearly says that the investment appraisals

"show that locating the TSA at Malvern would result in the greatest savings (some £18M over the LTC period)".

In relation to Malvern, the report says:

"The effect of the increase in staffing levels would have less impact than at Chertsey as the site is large, considerable refurbishment has taken place already"—

that is an important point—

"and more existing buildings are available for use."

There are important issues on the question of recruitment. The report says:

"Chertsey is not a promising recruitment area given that it is in the London travel to work area, housing is expensive, unemployment is low and there is competition from the many private companies in the area who generally pay more than MOD."

The obvious question is, what has changed in the past two years completely to reverse the present advice on the decision from the advice that the Minister of the day received just a few years ago? That question is particularly relevant when one considers the nature of the new advice which has been given to the Minister.

I have a document with the reference QMG/205, dated 15 November 1995, which is headed "Loose Minute"— I am not sure what that means.

It is an MOD speciality.

I have not had time to check, but I think that QMG/205 is the same document as the one which the Minister issued last night as the basis for the advice that he gave. Some strange things are mentioned in the advice, to which I believe the Minister should respond.

In relation to cost, for example, which is clearly an important issue, the general tone and content of the paper—I am not trying to cast aspersions—is much less substantive and analytical and much more bland and assertive than the paper to which I have previously referred. This paper simply states that the cost of refurbishing Malvern, which it accepts is an option, would be £317 million or £319 million if everything were to be rebuilt. The paper goes on to say that the cost of totally rebuilding a site at Chertsey would be £312 million, which is some £5 million less than refurbishing at Malvern.

At this stage, one can only work on a gut feeling. The argument that the cost of refurbishing Malvern, which is in an area where costs are generally much lower than in the south-east, is £5 million more than the cost of completely rebuilding Chertsey needs further justification.

There are further matters in the report, and I shall write to the Minister about them, because there is not enough time on this occasion to get through them all. I have 16 fairly substantive questions that I want to put to him about the report. I will put two to him now. The first is on the rather crucial issue of where ATSA's client base will be should it move, or even if it does not move. The report which is the basis for the Minister's decision says that the agency has

"its Owner and main customers at Andover".

It goes on to imply that, because Andover is much closer to Chertsey, having those customers nearby would be another reason for collocating at Chertsey.

The work done at Andover is in fact related to the quartermaster general's operations. But half of ATSA's work—this was anticipated in the earlier report—is now undertaken for the MOD procurement executive at Bristol, which is considerably closer to Malvern than is Chertsey. That, too, should be given rather more consideration than it is given in the report.

According to the report, there is scope for hard roads for tank movements at Chertsey. The report does not mention it, but Malvern too has a hard road that is used for tanks: that too could be analysed. This report—which is slim in comparison with the earlier one—contains discrepancies, and refers to matters that need more careful examination.

Although I agree that the final decision should be made in the best interests of national defence—in other words, in the most cost-effective way—the fact remains that the original advice was accurate. Malvern has the experience, the buildings and the relative cost structures that are likely to make it more cost-effective for purposes of collocation than Chertsey, which has been sucked into the cost structures of London and the south-east.

I ask the Minister not to rely exclusively on the second report and on the advice of the internal accountants who prepared it, and who might be thought to be fitting the figures to suit the decisions required of them by senior management in ATSA and elsewhere. I ask him to secure the independent advice of an independent accountant or auditor and have the figures checked—especially those relating to the investment appraisal—before making his decision. At present, the figures do not seem to add up.

Representatives of the civilian staff at Malvern have assured me that they will accept the findings of an independent auditor. If the move to Chertsey took place, it would mean considerable disruption to members of the defence staff, some of whom are long-serving and valued for their expertise and experience. In the interests of good man management, the Government owe it to those staff members at least to ensure that the decision is made on the basis of accurate, transparent figures.

I intend to put a further 16 questions to the Minister in writing, as time does not permit me to ask them now. Meanwhile, let me simply ask him to recognise—as I am sure he does—his responsibility to ensure that the period of consultation is genuine. Although his mind appears to be firmly made up—no doubt that is how the position will be presented to the public—I ask him to be open to persuasion, and to re-analyse the arguments that have been put to him. In particular, I ask him to consider arranging an independent examination of the figures with which he has been presented.

1.42 pm

I congratulate my hon. Friend the Member for South Worcestershire (Mr. Spicer) on securing an Adjournment debate at such a timely stage, while we are making up our minds on this important matter. I am sorry if the phrasing of the letter that was sent to him gave him the impression that we had already made up our minds; the point of writing to him was to tell him of the conclusion that we had reached following our many studies of this thorny problem in an attempt to resolve it.

It was important for us to give some idea of the way in which the collective mind of the Ministry of Defence was moving, so that we could consult my hon. Friend and his constituents and they would be able to have their say. I give my hon. Friend an absolute assurance that the decision is one for Ministers to take: no one but Ministers should be held responsible for it, as he well knows.

My hon. Friend will now have received a copy of the document outlining our proposals, which, as he knows, are subject to consultation from now until 12 February. I note that he will be submitting a further 16 questions to me, and I shall be happy to provide him with a detailed written response. If he subsequently wishes to discuss the matter with me and, perhaps, bring a delegation of his constituents, I shall be pleased to receive him. I am under no illusion about the importance of this matter to my hon. Friend and his constituents.

Let me make it clear not only to my hon. Friend but to all his constituents who are understandably anxious about what is in the consultation paper that we take our obligations to consult extremely seriously. We have noted so many of those obligations in the defence costs studies that we fully appreciate the sensitivities that may arise, and the need for consultation to be real rather than merely cosmetic. As I have said, I shall be happy to receive representations, which will be given careful and detailed consideration before we reach a conclusion.

My hon. Friend has made a good start this morning. He has been pretty hot on the trail, given that the consultation document was issued only yesterday. He has made a number of relevant and important points about the Malvern site. We are well aware of the local impact that our proposals could have, and we shall consider those points very carefully.

As my hon. Friend knows, ATSA is a mixed military and civil service-manned defence agency which provides the Army with essential technical and engineering advice. The current organisation was formed from the amalgamation of the Army's six technical branches and authorities, and the majority of its staff are currently dispersed on seven main sites—Chertsey, Malvern, Middle Wallop, Chilwell, two sites at Woolwich and a small headquarters at Andover.

ATSA was formed in October this year as a result of a study conducted in 1993, which recognised that it would make good business sense to bring the various activities carried out at those disparate sites under one roof. The work done since then has borne out that view, and that is why we now propose collocation. We believe that it will result in a leaner and more efficient organisation, better suited to serving the front line. I was grateful to my hon. Friend for pointing out that the decision must be in the best interests of our management of defence; I know that, having been a Minister himself, he will accept that that is genuinely the case.

The chief executive is confident that collocation will enable him to make the best possible use of modern logistic support and management techniques, and to promote the efficient delivery of technical support. An equally important consideration is the value for money that should and will be achieved if we go ahead with rationalisation and standardisation. Overall, we believe that the case for collocation is both compelling and necessary to the achievement of optimum effectiveness and value for money.

In August 1993, the trade unions were informed of the outcome of the original study—which my hon. Friend mentioned—including the recommendation that the agency should be collocated on one main site. They were advised that no firm decisions would be made until investment appraisals had been completed and the fullest consultation undertaken. Since then, the staff have been kept fully informed through management briefings and quarterly newsletters. I emphasise, however, that I understand the anxiety that is felt by my hon. Friend's constituents during the decision-making process: I have every sympathy with them.

The chief executive has conducted a range of studies over the past 18 months, both to re-examine the original study findings—which my hon. Friend rightly mentioned—and to establish the best solution for ATSA in terms of value for money and business sense. In common with other Departments, the Ministry of Defence is extremely sensitive to the need to consider the effect that its proposals for the relocation of units may have on local economies. I know that people are anxious about that proposal, as I have seen their anxiety expressed in the Malvern press.

As a result, we have considered some 17 options, 11 of which have been subjected to an extremely full and detailed appraisal. Those options range from doing the minimum, through twin-site options, to a variety of single-site options. All 17 options have been discussed in the document that now forms the basis for consultation but the most logical, and those that I shall deal with in detail now, minimise disruption both for staff currently employed by the agency and for the business that it conducts.

The "do-the-minimum" option, which would keep things more or less as they are and therefore cause least disruption, is the most manpower-intensive of all the options. It is also unattractive, because it fails to realise the anticipated benefits of establishing the ATSA, even with improved communications and a rationalised management structure. My hon. Friend will understand that that option is therefore a non-starter.

Another factor against maintaining the status quo is that the ATSA units at Woolwich occupy buildings that are nearing the end of their economic life and must soon be vacated. The only possible alternative accommodation available to the ATSA in south London would be a new build on the Aquila site at Bromley, currently occupied by the Defence Evaluation and Research Agency. Largely for that reason, the "do-the-minimum" option is one of the most expensive of those considered.

For many, including my hon. Friend, an obvious choice might be to concentrate ATSA on both Chertsey and the north site at Malvern, the current locations for much of ATSA's activity on land systems. On close examination, however, that proved to be the most expensive option. Financial considerations apart, the two-site option also fails to offer the business advantages of an agency collocated on a single site. Although I recognise that continuation at both Chertsey and Malvern offers least disruption for staff, it would unfortunately perpetuate many of the inefficiencies of the current arrangements and offer no financial advantage. For this reason, we rejected the option.

The other option, which obviously finds favour with my hon. Friend, is to locate the entire operation at Malvern. As the consultative document explains, collocation at Malvern would involve either the refurbishment and use of the existing buildings or the construction of a new building. Both those options are more expensive than collocating at Chertsey. Malvern has one advantage as a single-site option: it would be better placed than Chertsey, in travelling terms at least, for communications with the centre of the new MOD procurement executive at Abbey Wood near Bristol. Balanced against that, however, is the fact that Malvern is far less convenient for meetings with ATSA's owner and main customers at the headquarters of the quartermaster general at Andover.

A collocated ATSA establishment would also introduce many additional military staff into Malvern, which would necessitate a major new build of married quarters and single living accommodation. The cost of that work, along with the need to refurbish or build new office accommodation, means that Malvern is a more expensive option than Chertsey.

Compared with the Malvern option, collocating at Chertsey would involve less building work. Some new office accommodation will be required, but the married quarters and messes for military staff can be met from existing resources. All that adds to the cost-effectiveness of the Chertsey option. In terms of net present value over 25 years, the Chertsey solution is also £5 million cheaper than the cheapest Malvern option.

From a business point of view, Chertsey is also the preferred option, as the agency's owner and major customers, the equipment support management staffs, are at Andover.

The Minister is simply reading out, almost word for word, the advice contained in the document that we have all seen. As I requested at the beginning of this debate, will he reconsider that advice in the light of what I have said?

I shall indeed, but it is important that I put our view on the record. The point of the consultation process is to take account of all the views that my hon. Friend expressed today, which his constituents will wish to express in the coming weeks and the more detailed questions that he will submit to me.

Of all sites considered for the ATSA, Chertsey is the closest to Andover in travelling time, which can represent a significant saving in staff travel costs for meetings at either location. Also, as it is geared to large armoured fighting vehicle support, Chertsey has the most extensive support facilities of all the current ATSA sites. I acknowledge my hon. Friend's comments about the road at Malvern.

The facilities at Chertsey are shared with the Defence Evaluation and Research Agency, and it would be extremely expensive to re-create them elsewhere. The appraisal of other sites has included the assumption that a detachment at Chertsey would have to be maintained to use those facilities. Chertsey also has ready access to test areas for large vehicles on MOD-owned property, a feature absent from other site options.

My hon. Friend quite rightly wants me to understand and take account of the effect that our proposals will have on the local economies of areas from which ATSA will withdraw and the disruption that it could cause to the families involved. He knows that I fully understand that. Nevertheless, it is a sad fact that reorganising in this way to allow the introduction of new working practices will often result in some job losses. On this occasion, if our proposals go though, we expect them to yield some 300 posts, both civilian and military, by the time and if collocation is fully achieved.

We expect our proposals to affect around 230 posts, both service and civilian, at Malvern. The majority of those losses are likely to fall on non-mobile staff and, although it is anticipated that many will be met by natural wastage, it would be wrong of me to rule out the prospect of some redundancies. If we go ahead, we shall attempt to minimise the number of redundancies as much as possible and shall examine the scope for civilianising some military posts, which may help us in this area.

As the consultative document explains, if we proceed with the proposals, up to 50 staff may ultimately have to be made redundant at Malvern. I stress, however, that, wherever possible, it is intended to transfer civilian staff, provided that job vacancies exist in the reorganised agency. We shall also seek to find staff posts elsewhere within the Department or the civil service generally. As well as reducing possible recruitment difficulties at the new site, transferring staff should reduce the number of redundancies and retain as many existing experienced staff as possible.

My hon. Friend will understand that I do not underestimate the upheaval that can be involved for staff who may need to move house. But if we proceed with our proposals, we shall offer our relocation package to mobile staff who transfer. That includes significant financial assistance to cover many of the costs associated with moving. I note my hon. Friend's comments about the costs associated with moving into an area like Chertsey.

We shall do all we can to ensure that any reductions are handled sensitively and compassionately, recognising the significant contribution that the staff have made to the extremely efficient functioning of the agency and its predecessors over many years.

I do not wish to underplay in any way the job losses that may flow from our proposals. Malvern will remain a major centre of employment for my Department, with the DERA continuing to employ more than 1,700 civilians there. In addition, more than 4,500 service and civilian staff will continue to be employed at establishments in the surrounding area. Where possible, opportunities would be sought to offer staff other posts in the MOD or elsewhere in the civil service.

All staff, both service and civilian, employed by the various branches that make up the ATSA—including those at Malvern—have provided first-class support to the armed forces. One does not get the chance often enough to praise those people who undertake important work, which, although well away from the spotlight, is vital in ensuring the fighting effectiveness of the front line. Troops now deploying to Bosnia will have equipment that the ATSA has dealt with. The staff at Malvern are no exception to that, and I am well aware of the need to ensure that all the arguments that my hon. Friend put forward, and the 16 questions that he will submit to me—he may choose to bring a delegation to see me—are carefully weighed before I come to a final decision on the ATSA's future site.

The facts described in the consultative document strongly support ATSA's collocation on a single site. As Minister of State for the Armed Forces, I must ensure that the Ministry of Defence adopts the most effective solution in operational, business and cost terms. Nevertheless, I assure my hon. Friend that the consultation period will be just that—a period for thorough, sensible and real consultation. That is the least we owe those people who have served their country so well.

I am grateful to my hon. Friend and congratulate him again on raising this important matter at such a timely moment. He may be assured that we shall deal with it in a thorough and comprehensive way.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Death Of A Member

I regret to have to report to the House the death of Sir David Lincoln Lightbown, Member for South-East Staffordshire. I am sure that Members on both sides of the House will join me in mourning the loss of a colleague and in extending our sympathy to the hon. Member's family and friends.

Private Business

Church Of Scotland (Property And Endowments) Amendment Order Confirmation Bill

Bill read the Third time, and passed.

Oral Answers To Questions

Education And Employment

Mathematics

To ask the Secretary of State for Education and Employment if she will make a statement on the standard of achievement of young people aged 16 to 25 years in mathematics. [3868]

The Parliamentary Under-Secretary of State for Education and Employment

(Mr. James Paice)

Mathematical skills are clearly a key to employability and international competitiveness. Achievements at A-level continue to show year-on-year improvement and are at their highest level ever.

When the number of specialist mathematics teachers in schools is down by 25 per cent. compared to 1984, when the number of graduate applications for teacher training courses in maths is down by 22 per cent. and in physics by 41 per cent., and when nearly all our universities now have four-year degree courses in maths, with the first year being effectively a remedial year to bring people up to standard, why does not the Department for Education and Employment realise that there are serious problems in the standards of mathematics of young people, and that that has serious knock-on effects in physics, in engineering and in other science courses?

The Government of course recognise the vital importance of mathematics. That is why my right hon. Friend the Secretary of State yesterday responded to the London Mathematical Society's worries about that matter in a way that demonstrated that, yes, progress continues to be made. The number of young people with A-level passes, as I said, increases every year as a proportion of the age group, but aspects remain that we need to examine further.

In answer to the hon. Gentleman's direct question, among other things that are happening, the Teacher Training Agency has the power and the ability to use special measures to encourage teacher training in those areas where there are shortages of teachers, which it can use—I hope that it will—directly to help to remedy the shortage of mathematics teachers that the hon. Gentleman mentioned.

Does my hon. Friend agree that, in order to improve young people's standard of mathematics, it is crucial that primary schools concentrate on the basics of education and get them right? Would that not be helped if all primary schools returned to formal methods of teaching, instead of using some of the trendy methods that have proved so disastrous?

The slimmed-down version of the national curriculum, which has recently come on stream, focuses much more on basic mathematics among the core skills. In the letter of my right hon. Friend the Secretary of State to the London Mathematical Society, she has said that the School Curriculum and Assessment Authority is to introduce a calculator-free test for 11-year-olds in 1996 and to consider the possibility of introducing a mental arithmetic test for 11-year-olds the following year. As my hon. Friend said, that clearly emphasises the vital role of the primary sector in ensuring that all young people receive a good grounding in mathematical skills.

Do not the Minister's comments conflict with the views of the London Mathematical Society? It believes that mathematical standards have fallen in recent years and it has noticed a marked deterioration in those standards among young people who seek to study physical sciences at university. What do the Government plan to do about that, or are they so complacent that they believe that no action is necessary?

The hon. Lady obviously did not listen to my earlier answer.

indicated dissent.

The hon. Lady shakes her head—she should listen rather than gesticulate. I have referred to the letter that my right hon. Friend sent to the London Mathematical Society, which responds at length to all of its concerns. That letter is on the public record and it was included with a press release that was issued at the time. We have clearly responded to the society's concerns.

We do not accept that there is evidence of a full, widespread decline in mathematical standards. We all want standards to rise, and that has been happening. However, as I have stressed several times in the last few minutes, we are keen to take other measures to improve even further the standards of mathematics teaching in our schools at all levels.

I am a graduate mathematician with two children who attend an excellent state primary school. Does my hon. Friend agree that mathematics is a very good example of a subject where early, well-organised testing is extremely important? Does he also agree that, if we are to achieve the highest possible standards in mathematics, the Conservative party's commitment to testing children thoroughly and early, in an objective manner, is extremely important?

My hon. Friend is entirely right. In the past few years, we have witnessed the apparent voltes face of the Labour party over testing. It opposed the concept of testing, which is how we shall find out whether young people are progressing and learning the mathematical skills to which my hon. Friend referred. We are now told that the Labour party supports testing—although Labour Members opposed the measures root and branch when we introduced them through legislation in the House. That is the style of the Opposition: they oppose measures only to support them when they realise that they are working. That is the reality with which we must live.

Nursery Voucher Scheme

To ask the Secretary of State for Education and Employment what will be the total administrative cost of the nursery voucher scheme. [3869]

The Parliamentary Under-Secretary of State for Education and Employment

(Mr. Robin Squire)

The cost of administering the nursery voucher scheme from April 1997 will be determined by a competitive tender.

Will the Minister confirm that, in the four pilot authorities, the Government intend to give the management consultancy Capita the job of registering playgroups and nurseries? Capita, by its own admission, has no educational professional expertise. In similar circumstances, would the Minister dream of using Capita to recruit generals or admirals to the defence forces of Britain? Is not such a policy a complete betrayal of our children's future? Is it not a move driven by right-wing dogma and a scandalous waste of an opportunity to provide quality nursery education?

Virtually everything that the hon. Lady said is wrong. Where she looked at her crystal ball, it was cracked—presumably she brought it with her from Islington.

As to the inspection regime, she will have to wait a little longer and then she will receive the full facts. It is pointless to speculate about the matter at the moment. The hon. Lady is charged by the Labour party with responsibility for under-fives issues, and we are waiting agog for a statement from her or from her party as to precisely how it plans to introduce its commitment to universal nursery education. When and if that commitment appears, I shall take the hon. Lady's criticisms seriously. In the meantime, we are clear that the scheme will be driven overwhelmingly by parental choice.

Is my hon. Friend aware that I represent a constituency which already has excellent educational provision for four-year-olds? While I strongly support the nursery voucher scheme, which will provide extra resources and spread nursery education, will my hon. Friend confirm that he will give priority to ensuring that the existing educational establishment for four-year-olds—where one exists—will not be destabilised or prejudiced?

I welcome my hon. Friend's support for the concept of the nursery voucher scheme and willingly give him that assurance. I remind him that we are talking about an expansion of provision for four-year-olds, and common sense dictates that good existing provision that is more likely to expand. I see no reason why it should contract.

Will the Minister explain, as I genuinely do not understand, how nursery vouchers can provide extra places in the state sector if there are no places to begin with? Will he explain what he said to the hon. Member for Gosport (Mr. Viggers)? In areas with good nursery provision, will not the vouchers be top-sliced from the grant and therefore decrease rather than increase the number of places available?

The hon. Gentleman, perhaps understandably, is thinking of everything being determined by providers. With regard to his second point, I remind him again that, if an authority is currently providing X number of places for four-year-olds, provided that it continues to provide that number in the first year of the universal scheme, it will lose no money. If it provides one extra place, it will gain. As to his first question, we are looking for a range of providers—certainly including LEAs and existing nursery and infant schools—to expand their provision. I should tell the hon. Gentleman—purely as a factual statement—that I have received several letters from schools in LEAs that were not part of phase 1, bemoaning the fact that they cannot expand their nursery provision next year.

Grant-Maintained Schools

To ask the Secretary of State for Education and Employment how many pupils are currently being educated in grant-maintained schools. [3870]

More than 680,000 pupils are currently being educated in grant-maintained schools in England.

I welcome the fact that 680,000 pupils are now educated in grant-maintained schools. Does my right hon. Friend agree that grant-maintained status is the best route for education, as it leads to higher academic standards and lower truancy than in neighbouring schools directly controlled by local education authorities?

Yes. I agree with my hon. Friend that the results in grant-maintained schools in terms of academic results, truancy, behaviour and so on compare very well with comparable schools in the maintained sector.

Is it not a fact that the Government are claiming that education can be as well based in grant-maintained schools as in those that are locally administered? Does that not mean that the accusation could be made that the Government's long-term policy is the elimination of local education authorities as we know them today? Will she confirm that that suspicion is well based in respect of the legislation that she has put in place?

There are very real benefits for pupils in grant-maintained schools, as I have just said. Those benefits are clearly perceived by 1.3 million parents whose children attend grant-maintained schools. According to a survey in The Times Educational Supplement last year, it is the view of heads and governors of grant-maintained schools that the independence of those schools from LEAs and the flexibility to handle their entire budgets contribute directly to the success of the schools. Therefore, it would be irresponsible not to examine whether those benefits might be extended to all pupils.

Deregulation

To ask the Secretary of State for Education and Employment what plans she has to reduce the number of regulations in force supporting (a) education and (b) employment matters; and what savings she estimates will be made in each. [3871]

We shall continue with the policies which have already made the United Kingdom one of the least regulated countries in Europe.

While the Deputy Prime Minister waxes lyrical about the importance of deregulation and the Prime Minister tells the leaders of Europe that they should follow our example, is my right hon. Friend aware that her Department has not referred any regulations or rules to the Select Committee on Deregulation? The only education rule that has been referred for deregulation is one about the length of the school day. As I am a great fan of my right hon. Friend the Secretary of State, before the Prime Minister finds out, would she make some plans—if not for 1995, for 1996—to have a bumper deregulation year?

Can I share a trade secret with my hon. Friend? One of the great difficulties faced by those of us who are extremely anxious to deregulate is that, every time we invite those who rightly complain about bureaucracy and regulation to give us specific examples so that we can tackle them as vigorously as possible, we get a disappointing response. When I had responsibilities for schools, I used to invite head teachers in particular, but chairmen of governors as well, to give me specific cases on which we could work. I regret to say that I am still waiting. If my hon. Friend can help to encourage small businesses, schools and others to give us specific examples, we shall do our best to deal with them.

Will the Minister confirm that, rather than strengthening the already inadequate child labour laws in Britain, he is proposing to deregulate them even further so that the 1.5 million to 2 million children working illegally in Britain will get even less protection than at present? Is it Government policy to exploit children?

Quite apart from the fact that hon. Lady is completely wrong in her assertion, we are anxious to give young people every proper, legitimate opportunity to enjoy the experience of an appropriate degree of work so that they can broaden and build on their educational experience. I would be rather disappointed if the hon. Lady were suggesting that young people should have no experience of work in properly controlled circumstances and with the proper degree of protection. That is our aim, and I hope that she shares it.

Would my hon. Friend like to compare the thirst of Conservative Members to get rid of regulation with the enthusiasm of other people in Europe and of the Opposition for introducing job-destroying regulations?

My hon. Friend is right to pose that distinction. Let us not underestimate the real difficulties that apply. As my hon. Friend the Member for South Hams (Mr. Steen) said, my right hon. Friend the Deputy Prime Minister, no less, is spearheading the Government's effort in this direction, and he has, of course, our full support. It would help enormously if all Members of Parliament and their constituents were to give us as many concrete examples as they can of where regulation and bureaucracy is giving them difficulty so that we can look specifically at them and direct the attention of my right hon. Friend the Deputy Prime Minister and the Deregulation Committee to them.

Grant-Maintained Schools

To ask the Secretary of State for Education and Employment what representations she has received concerning her proposals to fast-track grant-maintained status for voluntary aided schools. [3872]

The Parliamentary Under-Secretary of State for Education and Employment

(Mrs. Cheryl Gillan)

My right hon. Friend the Secretary of State has received almost 2,000 responses to the Department's consultation paper on self-government for voluntary aided schools.

Is it not a fact that self-governing schools have not only the ability but the obligation to consider opting out each year, and that what is now being disguised as a fast track by the Government is a deliberate attempt to deny parents the opportunity to choose? That is right-wing dogma dressed up as a fast track.

The hon. Gentleman could not possibly be more wrong. Grant-maintained status remains voluntary, and we are not at present proposing to change that, but we are committed to extending the benefits of self-government to more schools. We are looking at ways of bringing that about.

Will my hon. Friend take this opportunity to confirm that the Government have no intention of dragooning Church schools into a fast-track approach to grant-maintained status, and further confirm that there has simply been issued a consultation document that poses a number of alternatives? Finally, does she agree that it would be a good idea for the Churches to consult widely among parents so that their representations truly reflect what is best for the children at those schools?

My hon. Friend is right. We have received more than 1,900 responses to the consultation process and we are considering all the replies carefully. We shall make an announcement on that after the analysis has been completed.

In a written reply on 4 December to my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett), the Under-Secretary of State for Schools listed 23 separate issues that had gone out to consultation, only three of which had met the Department for Education and Employment's efficiency guidelines of a minimum of 10-week consultation. On that matter, the Government allowed four weeks, extended under pressure to five. In so doing, they have managed to unite the Catholic Church, the Anglican Church and the National Governors Council. Is that lack of consultation down to the Secretary of State's arrogance, or to obsequiousness to the Prime Minister's educational pipe dreams?

The hon. Gentleman is barking up the wrong tree. This is a consultation process and we have received many responses. Responses to the paper were requested by 24 November. To show that my right hon. Friend is a listening Secretary of State, she listened to the request to extend the consultation period, and did so by one week to 1 December. [Interruption.] The hon. Gentleman should listen to the reply—he asked the question. A substantially longer consultation period, would have effectively removed the option of legislation in the 1995–96 parliamentary Session, which would have been wrong. Our consultation processes are truly just that.

Teaching Quality

To ask the Secretary of State for Education and Employment what steps she is taking to improve further the quality of teaching in schools. [3873]

We are improving teacher quality across the entire profession, from a new qualification for aspiring head teachers to securing, through the Teacher Training Agency and the Office of Standards in Education, high-quality initial teacher training.

Does my right hon. Friend agree that a good and dedicated classroom teacher can probably have a more important, more beneficial, influence on a child's life chances than virtually any other single factor, whatever the child's social background or the region in which his or her school is located? Will she join me in praising the dedication of thousands of good teachers in maintained schools, but encourage the teaching profession to take seriously the call from Her Majesty's chief inspector for them to reflect carefully and critically on teaching methods and other professional skills, so that those skills develop in the interests of the children whom they seek to serve?

The importance of good teachers and good teaching is undeniable. That is why Conservative Members have made such a priority of training, of in-service training, and of grants for education support and training money to help raise teaching standards. There are thousands and thousands of dedicated teachers. Working with the Teacher Training Agency and with Ofsted, they are examining the importance of teaching the basic skills. I draw my hon. Friend's attention to my announcement after the Budget about the 12 literacy and numeracy centres that we are setting up across the country. Their attention will be directed towards helping primary teachers teach reading and numbers according to the best methods identified by Ofsted.

Will the Secretary of State accept that widespread public concern exists about her plans to revise the school premises regulations, and that schools with rising pupil numbers may be forced to cram even more children into overcrowded classrooms? How will that improve the quality of children's education?

The hon. Gentleman entirely misunderstands the purpose of this deregulatory measure, which we were urged, I think in an earlier question, to adopt. There is no link between the work that is going on about minimum teaching areas and class size. I remind the hon. Gentleman that there is no simple link between numbers of teachers or the amount of funding and higher achievement in the classroom. I am afraid that those who do not believe that should look at the striking illustration of Hackney Downs school, which had one teacher for every eight pupils.

My right hon. Friend is absolutely right to concentrate on the overdue task of improving teaching standards and methods. I particularly emphasise the teaching of reading in primary schools, where modern methods have done an enormous amount of damage. Does she agree that good pupil-teacher ratios do not necessarily mean high standards, as was found recently in Hackney Downs school? When she is listening to criticisms by Opposition parties, will she take account of the increase in classroom assistants, which I do not think are reflected in pupil-teacher ratios throughout the country?

Of course I will, and so will the teaching profession, head teachers and governors of schools. The important role of classroom assistants cannot be over-emphasised, and nor can the importance of proper training for all our teachers.

While it is welcome to have the Secretary of State and members of her party acknowledging that only good teachers can deliver quality education to pupils, may I ask what she intends to do about the crisis that is emerging in education of an exodus of teachers, largely due to their health being broken by the excessive pace of reforms being introduced by the Government, the lack of recruitment of teachers in general and of specialist teachers in such important subjects as English, maths and design technology? What are her policies for improving the supply of teachers?

Perhaps I can reassure the hon. Gentleman. A great deal has been said about redundancy among teachers, but very little has been said about the overall number of teachers which increased by 2,500 between January last year and January this year. There is no shortage of teachers at present and vacancies are at an all-time low. Indicative targets were issued for five years to assist the Teacher Training Agency and training institutions to plan ahead, especially for shortage subjects. They recently announced their priority subject recruitment scheme and they have begun promotional activities to attract students to the profession.

Will my right hon. Friend accept that, notwithstanding all the tributes that have rightly been paid to my constituent and friend Philip Lawrence, formerly headmaster of St. George's school, I could not let Education and Employment questions pass without paying tribute to his enormous professional courage and personal bravery in going to the defence of a member of his school? May I also say, as he would have said, that he did no more than any other member of the teaching profession would have done? It is a great profession. Does my right hon. Friend agree?

I agree, and I am absolutely sure that the whole House would want to pay tribute to Mr. Philip Lawrence's selflessness and courage. The greatest possible monument that he could have is the school and the pupils that he has left behind. I am sure that my hon. Friend was right when he said that Mr. Lawrence would have been the first to say that the vast majority of teachers would have done just what he did without a second thought.

Nursery Voucher Scheme

To ask the Secretary of State for Education and Employment what assessment she has made of the effect of the introduction of the nursery voucher scheme on children with a disability. [3874]

We attach great importance to provision for children with special educational needs.

My right hon. Friends the Secretaries of State for Education and Employment and for Health arc considering the responses to the consultation on provision for such children in the nursery education voucher scheme.

Does the Minister agree with the organisations for and of disabled people, such as the Council for Disabled Children and the Royal National Institute for the Blind, that the proposed voucher scheme is incompatible with the idea of the promotion of increased choice for children?

In a word, no. Indeed, it would be hard to do so. I explained to the hon. Gentleman and to the hon. Member for Barking (Ms Hodge) that they will need to wait just a short time for the final detail. It is self-evidently true that universal provision for four-year-olds must logically increase the number of children with special needs coming into the education sphere. I hope that the hon. Gentleman will agree—the outside organisations that he mentioned would certainly agree—that earlier diagnosis of special needs is in the interests of the pupil, and is also much cheaper for the country.

Does my hon. Friend agree that increased choice and diversity in nursery provision, which the Government's proposals for vouchers will enhance, will be good for all children, including those with disabilities?

My hon. Friend is absolutely right. That is why Conservative Members welcome wholeheartedly the introduction of the voucher scheme.

Additional Resources

To ask the Secretary of State for Education and Employment what are her Department's priorities for the use of the additional resources for education announced on 28 November. [3875]

We have provided an extra £878 million for schools next year. I would expect that substantial sum to result in an improved quality of education in our schools.

Last year, one of my children, who is at a local authority primary school, was in a class of 37. Is the Secretary of State aware that the National Association of Governors and Managers and the public sector accountancy association, the Chartered Institute of Public Finance and Accountancy—CIPFA—have revealed that more than one in three children in primary school are now taught in a class of more than 30?

Has the Secretary of State seen the estimate from the National Foundation for Educational Research that reducing class sizes to 30 or below for all five, six and seven-year-olds, as the Labour party proposes, would cost only £60 million a year? Does she believe that it would be better for more parents of more children in more schools to spend that £60 million on reducing class sizes for primary school children, rather spending a further £101 million on expanding the assisted places scheme?

We must have brisk questions. Answers have been very brisk today, and I must move down the Order Paper.

It is for local education authorities to identify their priorities and how they wish to spend the substantial increase—4.5 per cent. in all—that they will have next year, compared with this year. That is a substantial increase, and it will certainly enable authorities to place a priority on primary classes, if that is their decision.

I remind the hon. Gentleman, however, that his party's opposition to the assisted places scheme is the best possible example of its class-envious attitudes. We believe in choice and diversity for everyone: the Labour party believes in choice, but only for Front Benchers. Our calculation shows that the extra number of teachers that would result from the Labour party's putative use of the £60 million would be one teacher per 18 schools.

Will my right hon. Friend join me, and all the Conservative Members who represent constituencies within Lancashire county council, in pressing its education committee to pass on the full 5.5 per cent. increase that she has been able to achieve in the Budget negotiations? Does she agree with my suggestion that Lancashire county council's education committee has absolutely no excuse for failing to provide the necessary resources for our children in the county's schools, given the Government's increase in the education budget of more than twice the rate of inflation?

Lancashire county council will benefit from an above-average increase in its education SSA next year. I am quite sure that my right hon. Friend and other Conservative Members who represent Lancashire constituencies will not allow the Lancashire LEA to get away with doing other than passing the increase on to children in its schools.

Will the Secretary of State visit Withinfield junior and infant school in my constituency, where she will see for herself the appalling conditions in which 55 children share two urinals and six of the nine classes are taught in outside classrooms? When she sees that, will she help the local authority, which cannot possibly afford the money for a new school? That is the school's top priority, and it has the land for the new school. Will she give it some real resources so that those children are treated to a decent school before the old one falls down?

The hon. Lady asks about capital allocations, which will be announced shortly. The increase for next year is substantial, and her authority will be able to use it to good effect to deal with the problems that she has described.

Does my right hon. Friend agree that all parents would agree with the priorities that she has laid out today, and on previous occasions, to the effect that the money allocated, and particularly the extra money now available, must go to schools and should not be retained by the local education authority? Will she therefore condemn the plans contained in papers from Liberal-controlled Harrow council? Instead of giving the money to schools, it wants to increase the staffing of its central bureaucracy. Is that not a disgrace? Should it not be condemned? Not only that, but, with the cheek of the devil, the council wants to blame the Government for its decision.

I fear that that is typical of many councils under such control. I trust that my hon. Friend and his colleagues will make absolutely certain, as they have today, that such a ludicrous practice will be roundly condemned by parents in his constituency.

First, may I associate everyone on the Opposition Benches with the Secretary of State's comments on the tragic death of Philip Lawrence, and, if I may say so, the concerned and measured way in which she has responded to that tragedy?

Will the right hon. Lady confirm that the standard spending assessment is the assessment of the Government's understanding of what they believe local authorities should spend? It is not grant provided to an authority in order to provide services. Far from a 4.5 per cent. increase—or, in the county of the right hon. Member for South Ribble (Mr. Atkins), a 5.5 per cent. increase—there has been a cut of £298 million in the revenue support grant. Next year, the amount of money available will be cut by at least £41 per pupil. It is only because Labour authorities spend way above the SSA estimate that an even bigger cut has not been announced in the amount of money and resources available to schools throughout the country.

That was a brave attempt by the hon. Gentleman. He and his right hon. Friend the Leader of the Opposition did not star mathematically last week when they confused 30 per cent. of schools with 30 per cent. of lessons. What the hon. Gentleman is trying to do, and this is why it was a brave attempt, is to compare settlement with spending. He should compare Government settlement with Government settlement. What local authorities spend above their SSAs is up to them, but whatever they choose to spend, the Government resources available to them overall will increase by 4.5 per cent. There is no getting away from that, however much Opposition Members do not like it.

Assisted Places Scheme

To ask the Secretary of State for Education and Employment what representations she has received about the assisted places scheme. [3876]

We have received many representations welcoming the expansion of the assisted places scheme, details of which were announced on 29 November by my right hon. Friend the Secretary of State.

Is my hon. Friend aware that the Royal Ballet and Music school is offering 47 assisted places and is bidding for further assisted places? Is she further aware that that institution is currently putting on an excellent performance of "Peter and the Wolf"? Would not Prokofiev be appalled to think that the future Christmas performances of his great orchestral narrative would be jeopardised if the wolves in the Labour party were to abolish assisted places throughout the country?

Trust my hon. Friend to come up with such a seasonal question, but he is absolutely right. Music and ballet schools are covered by the assisted places scheme and would be eligible to bid for more places if they so wished. Pupils at those schools who perform at Christmas provide us with great pleasure and enjoyment. Let us hope that, like Scrooge, the Labour party has a conversion this Christmas.

What does the hon. Lady think the expansion of the assisted places scheme tells us about the current state of the Conservative party? The Government have chosen to spend additional resources on a select number of children, rather on the majority of children in the United Kingdom who would benefit from those resources.

We value choice and we believe in value for money. I am not rehearsing the same arguments that I put from the Dispatch Box during our last Education and Employment questions about value for money and the Opposition's politics of envy.

I refer the hon. Gentleman to an article in the Daily Mail earlier this month. A Mr. Patel, who is alleged to be a Labour voter, wrote to the Leader of the Opposition urging him to think again. He said:

"This scheme is popular with ordinary working people."

In considering the expansion of the assisted places scheme, will my hon. Friend pay particular attention to the position of cathedral choir schools, such as King's school, Gloucester, many of which have been outside the scheme for many years and would greatly benefit from being within it?

I thank my hon. Friend for that suggestion. The scheme is proving very popular. By the end of last week, we had already received bids from more than 30 schools for almost 1,000 new places over the next two years. With a month to go, we expect to receive even more bids for this very successful scheme.

Overseas Students (Fees)

10.

To ask the Secretary of State for Education and Employment if she will make a statement on fees for overseas students. [3877]

We welcome the presence of the increasing number of overseas students in our universities and colleges. This shows that people abroad recognise that a British education is an excellent investment.

Does the Minister recognise the undoubted benefits, both commercial and cultural, that this country gains from those many people who, having been educated here, have risen to senior positions in their own societies? The Government's decision some years ago to increase fees was an act of vandalism. As we have a listening Secretary of State, is it possible that she might seriously consider whether that was a wise move for this country?

The hon. Gentleman ignores the fact that for several years, since the early 1980s, the number of overseas students in all categories has increased year on year, every year, and continues to do so. That suggests that the premise underlying his question is wrong.

The implication of what the hon. Gentleman has said is that we should find money from somewhere to subsidise more overseas students coming to this country. I would find it rather difficult to justify that in current circumstances. If, at some stage, he or his colleagues would say where they would find the money to do what he suggests, I should be very interested.

Does my hon. Friend understand that, following the withdrawal of so many local education authorities—including the Hereford and Worcester LEA, which covers his and my constituencies—from making discretionary grants, so many institutions that teach dance and drama depend on the income from overseas students? I urge him again to consider the possibility of revising the scheme to ensure that our constituents in Hereford and Worcester, as well as those in the remainder of the country, can benefit from a proper training.

It is entirely a matter for LEAs to make a judgment about the value of the discretionary awards and their nature. If the tuition in the subjects to which my hon. Friend referred is excellent, no doubt it will attract overseas students in exactly the way as it will attract students from the home market.

What action will the Minister take to prevent overseas students from being adversely affected by the Asylum and Immigration Bill, which denies child benefit to those granted limited leave to remain in the United Kingdom?

None.

Expenditure (Schools)

11.

To ask the Secretary of State for Education and Employment what plans she has to ensure that additional spending on education reaches schools and pupils; and if she will make a statement. [3878]

We have provided an extra £878 million for schools next year, and that is where I expect the funds to go. Authorities that choose to do otherwise will be called to account by parents and governors, and rightly so.

Does my right hon. Friend accept that, although parents in Lancashire are extremely pleased to know that that additional money is being provided, they are becoming increasingly frustrated by the fact that the local education authority, under Labour control, continues to waste money, as it did last year, when it made cuts in schools at the same time as providing advisers to advise teenage girls on lesbianism? Is that not the record of Labour in office, and is it not a disgrace?

My hon. Friend makes his own point. Lancashire is set to benefit from a 5.5 per cent. increase in its education SSA. It is therefore well placed to ensure that those extra resources go to the classrooms. I am quite certain that the pressure exerted on the LEA by my hon. Friend and his colleagues will ensure that that happens.

Will the Secretary of State tell the people of Lancashire precisely how much of that supposed rise will go to new spend in schools after taking into account inflation, the teachers' pay rise, the extra numbers coming on stream in schools and the extra spend that is required on special educational needs? How much will be left?

The extra money is there, as it always is, to fund the teachers' pay award, the increase in pupil numbers and so on, and of course to take account of LEAs' own priorities. Naturally, I would expect them to continue to look for savings and to ensure that the extra money is used to maximum advantage.

May I put a Yorkshire point of view to my right hon. Friend? Instead of putting up with the crescendo of whingeing from Opposition Members, to which we have been subjected this afternoon, may I tell her that the people of North Yorkshire are absolutely delighted with the additional resources in this year's education SSA? Does she think that it would be a good idea, if it wanted to spend more money on education, for North Yorkshire county council to sell its £14 million worth of farm land?

A Yorkshire point of view is always refreshing, as we have just heard. I can do no more than say to my hon. Friend that I am delighted that he and his colleagues, and, indeed, North Yorkshire, are pleased with the extra resources allocated to education. What the local authority decides to do with its farm land, and its other assets, is a matter for it.

As the nation is becoming aware that this so-called extra expenditure on schools is largely illusory, shall we consider some of the realities of the Budget? Will the Secretary of State take this opportunity to explain to the country the benefits of slashing higher education capital expenditure by a third and further education colleges' capital expenditure by two thirds over the next couple of years?

Higher education and further education recurrent spending has been protected. Indeed, there is provision for an extra 12 per cent. increase in student numbers in further education and provision for the continuing steady growth in higher education numbers. There is still provision for capital programmes for higher and further education, but we expect them to take advantage, as indeed they already are—in the case of higher education to the tune of £1.6 billion—of the private finance initiative.

As my right hon. Friend will know from her recent visit, there is considerable satisfaction in Staffordshire about the recent announcement. Will she send a note to Members of Parliament of all counties pointing out what prudent management of this extra money could result in?

I shall certainly take on board my hon. Friend's suggestion.

Unemployment

12.

To ask the Secretary of State for Education and Employment what assessment she has made of the impact of the Budget on unemployment. [3879]

The Budget of my right hon. and learned Friend the Chancellor built on the policies that have helped to achieve a fall in unemployment of more than 700,000 in the past three years.

I welcome the fall in unemployment announced today, but the Minister will realise that it is falling at a rate of only 0.5 per cent. a month and that the Red Book assumes that it will remain at more than 2 million until the turn of the century. Will he explain how big cuts in the home energy efficiency scheme, housing, transport and other construction projects can possibly help in the fight against unemployment? Surely he will realise that the private finance initiative, which is supposed to take over, is viewed with dismay by the business community. It sees the PFI as an abrogation by the Government of their responsibility for infrastructure projects, which are needed in their own right and to create employment.

I have been struggling to remember whether the hon. Lady was one of the Opposition Members who voted against the tax cuts in the Budget—I think that she was. It strikes me as rather astonishing that she should do that and then express such concern about the level of unemployment. Even she must know what reduces unemployment, and we have been successful in doing that—more successful than our continental partners, whose policies some Opposition Members wish to emulate. Our unemployment rate is lower than those of Germany, France, Italy and Spain, and there is considerable evidence that the policies that we have pursued over the past three or four years are attracting inward investment and creating the climate in which unemployment will continue to fall.

Is it not true that, as a proportion of the population of working age, this country has more people in work and fewer people out of work than any other major country in Europe? On the day when a further reduction in unemployment has been followed by a further reduction in interest rates, is it not imperative, and in the best interests of the unemployed, that the Government continue on the course that they have so successfully set themselves?

I am grateful to my hon. Friend for pointing out those pertinent facts—and they are even more pertinent as our record on, for example, women's employment is also one of the best in the European Union. I believe that what we are creating stands comparison excellently with the record of any other country in the European Union and of many beyond. That leads me to agree with my hon. Friend that we should stick firmly to the policies that we have pursued. If we do that, we can expect to see continued steady economic growth through 1996 and beyond.

After a Budget conspicuous for the total absence of any job-creation strategy, despite the fact that unemployment still stands at more than 2.25 million, will the Minister recognise that today's supposed fall in unemployment is a mirage, because Government figures also released today show that, far from rising, the number of people in employment has fallen by 22,000 over the past quarter? Does that not clearly show that people are disappearing from the unemployment count not because they are getting jobs but because they are dropping out of the labour market altogether? Is it not now clear that the so-called economic recovery is spluttering out and that, with a 0.25 per cent. cut in interest rates, there is no prospect either of staving off the risk of recession or of preventing a rise in unemployment this winter?

The hon. Gentleman, who must be the walking personification of old Labour, really should get a new script, because what he says simply will not do. Not only is it grotesquely inaccurate, but it completely ignores the fact that in the Budget we cut taxes for small companies, lowered tax bills for the self-employed, capped business rates, lowered the qualifying age for capital gains tax retirement relief and increased the VAT threshold—to name only a few of the measures immediately related to small businesses. The Government recognise that small firms will be the creators of jobs for the foreseeable future, and we shall help them. The Labour party, with its blind obsession with, for example, a statutory minimum wage, would crucify job creation rather than help it.

Does the Minister accept that not only one Budget but a series of good, responsible Budgets has reduced the unemployment rate in Chorley, in the middle of Lancashire, from 10 or 11 per cent. to 4.5 per cent.?

My hon. Friend is right, and I am glad that he has pointed out that each constituency up and down the country has seen the creation of real jobs. Our constituents are getting jobs, and they recognise what is going on. They also recognise the value of economic stability and inward investment, even if the Opposition do not.

Education Statistics (Accuracy)

13.

To ask the Secretary of State for Education and Employment what new proposals she has to improve the accuracy of education statistics. [3880]

The Department has a continuous programme to ensure the accuracy of statistics.

Can the statistics be improved to show the huge increase in the number of children in care being excluded from grant-maintained schools? In one district where all but one of the schools are grant-maintained, only the one local authority school is now admitting children in care. The police have pointed out that the huge increase in exclusions—a result of the schools' league tables—is causing great problems to society, and is adding greatly to the distress of young people who have suffered unfairly from all the misfortunes that life has thrown at them.

My Department has no evidence to suggest that grant-maintained schools, any more than LEA schools, are excluding pupils disproportionately. If the hon. Gentleman has such evidence, I invite him to send it to the Department. All the comments from the hon. Gentleman and other Opposition Members suggest that the Opposition's claims that they support grant-maintained schools are based on fragile ground.

Does my hon. Friend agree that, rather than calling for new and improved statistics, the Opposition should perhaps spend more time studying the statistics that are available? Do not the statistics show that the Opposition's determination to abolish the assisted places scheme is irrelevant to the quality of education of our young people? Do not they show that thousands of less well-off families benefit from the scheme? Should not the Opposition learn a lesson from the statistics?

Like my hon. Friend, I remain optimistic that the lesson may be learned by the Opposition, but there are no encouraging signs. He is right that the assisted places scheme has assisted children from households who would otherwise have no chance to take advantage of that good education.

Youth Unemployment

14.

To ask the Secretary of State for Education and Employment what new measures she plans to take to get unemployed 18 to 24-year-olds into work. [3881]

We propose to continue policies and programmes that have seen unemployment among this age group fall by 225,000, or 28 per cent., since the recovery began.

Are not 650,000 people in this age group unemployed, of whom 150,000 have been out of work for more than a year? Today, 350 people have lost their jobs in MANWEB as a direct consequence of privatisation and the Scottish Power takeover. Does he accept that the Government's policies are laggardly and hesitant, and that only a general election will help the unemployed?

No.

Does my hon. Friend think that it is interesting that youth unemployment in France is 25 per cent. and in Spain is 40 per cent., whereas in this country it stands at about 15 per cent.? Is it not also interesting that in France, which has a similar population to this country, there are 2 million fewer people in work. Is it not a fact that, while France and Spain have adopted the social chapter and the minimum wage, we have not?

My hon. Friend properly reminds the House that unemployment among 18 to 24-year-olds in Britain is, on comparable statistics, 7 per cent. lower than the European average. He also reminds the House of the difference between this Government's policies and those of many Governments in Europe. In particular, they have adopted the social chapter and the minimum wage—policies that the Opposition espouse. The Opposition pretend to care about young people's unemployment, but they espouse policies that would destroy jobs, as they have destroyed jobs in many other countries throughout Europe.

Will the Minister confirm that more than a quarter of all unemployed claimants are aged between 18 and 25? Does he accept that, in the past 12 months, unemployment in this age group has increased by more than 100,000? Given those facts, does the Minister accept that urgent action is needed? Why do not the Government impose a windfall tax on the newly privatised utilities to finance a programme of training and job creation, as proposed by the Labour party? Are the Government simply prepared to stand to one side and watch a whole generation of young people become the innocent victims of the Government's failed economic and social policies?

Let us deal first with the facts. It is a fact that unemployment among 18 to 24-year-olds—the group about whom the hon. Gentleman is concerned—has fallen by 225,000 in three years. The number of them who have been unemployed for six months or more has fallen by 106,000, a 30 per cent. decrease. The number of those unemployed for a year or more has fallen by 54,000, a decrease of 27.5 per cent. That improvement is dramatic, and hardly what one would expect from a Government who do not care.

I wonder how many times one can spend a windfall tax. Every time we challenge the Opposition to tell us how they would fund one of their programmes, they say through a windfall tax. It will be the most swingeing tax that any Government have ever imposed, should the Labour party ever have the chance, because the programmes that it will have to fund are legion.

I have to ask the hon. Gentleman—

Order. It is the Government's business to answer questions, not to ask them. We now have a statement.

Hmso (Privatisation)

3.31 pm

With permission, I wish to make a statement about the Government's plans for the future of Her Majesty's Stationery Office and how the plans might affect Parliament.

For most of the past 200 years, HMSO provided free supplies to Departments and to Parliament, charging its costs to funds allocated in the Vote. In 1980, HMSO began recovering its costs. Within two years, Departments were freed from their obligations to purchase from HMSO, which then had to compete with private sector suppliers. HMSO and its staff met the new challenge, and the business became increasingly commercial, competitive and productive. In 1988, HMSO became an executive agency. I pay tribute to the management and staff of HMSO for their commercial success in recent years.

The public sector market in which HMSO competes is shrinking. Between 1990 and 1994, HMSO's turnover fell by more than 10 per cent. Job losses are likely unless HMSO is able to seek new sales opportunities.

Against that background, the Government plan to privatise HMSO by means of a competitive tender offer. The business will benefit from access to wider markets. Its staff will benefit from the increased security of a thriving business. Customers such as Parliament will benefit from an accountable, commercially enforceable relationship with a supplier well positioned to reduce costs.

We intend to retain in the public sector only a small residual body, which will continue to bear the name Her Majesty's Stationery Office. Its responsibilities will include Crown copyright. The residual body could also administer parliamentary copyright if Parliament so wished. Retaining responsibility for copyright in the public sector will allow us to sustain and improve the accessible and affordable publication of Government information.

The remainder of the business, which is the bulk, will be offered for sale under the name "The Stationery Office". We shall seek a buyer who will maintain the independence and integrity of the present HMSO. Under no circumstances will we offer the printing and publishing businesses separately. I placed earlier today in the Library of the House the information pack that we are using to elicit market interest.

Our objectives will be to maximise value for money for the taxpayer; to ensure that staff are treated fairly and that their rights are respected; to ensure that the needs of Parliament and other customers, such as Government Departments, are satisfied; and to complete the privatisation as soon as is practicable.

Madam Speaker, you have rightly stressed the importance that you attach to the maintenance of a first-class service to Parliament. Your letter of 28 November to the Leader of the House was published in the Official Report of 11 December. I have sought to reassure you, Madam Speaker and, with your agreement, I shall place a copy of my letter of 12 December in the Library of the House. The key point is that the buyer must be fully acceptable to Parliament. With that in mind, I intend to publish the shortlist of bidders in due course, and I shall involve parliamentary officials in the selection of the successful candidate.

Parliament's requirements will be enshrined In a binding and enforceable contract, based on the new supply and service agreements between HMSO and Parliament that take effect from 1 January 1996. The contract could include the provision that any future changes in the structure or operation of the Stationery Office should take account of Parliament's requirements. Potential purchasers will have to honour recently negotiated improvements such as reductions in the price of publications, and, I hope, negotiate further reductions.

Parliament benefits from the dedication of trained and experienced staff in HMSO. The type of sale that we envisage would mean the buyer taking on HMSO's staff with their existing terms and conditions.

The Government are sure that the interests of HMSO, its customers, its staff, the taxpayer and Parliament will be best served by privatisation along the lines that I have set out, but uncertainty—particularly among staff—necessarily accompanies a change of this sort. The Government aim to complete the sale by summer next year—subject always to meeting the requirements of Parliament as a prerequisite.

My right hon. Friend the Leader of the House will seek an early opportunity for a debate on those issues.

I thank the Chancellor of the Duchy of Lancaster for his statement. I also thank the right hon. Member for Berwick-upon-Tweed (Mr. Beith) for ensuring, Madam Speaker, that your letter to the Leader of the House, dated 28 November, was recorded in the 11 December edition of Hansard.

Will the right hon. Gentleman assure the House that he will meet each of the House's requirements as laid down in your letter—which, as I said, is recorded in the 11 December edition of Hansard? In particular, will he delay the sell-off to enable the House authorities to complete all the preparatory work? He said in November, in a public interview, that the arrangements would be put in place only after Parliament had given its approval; will he therefore ensure that a full debate takes place, involving votes in both Houses of Parliament, before he goes any further?

Will the right hon. Gentleman confirm that HMSO has operated profitably in the public sector for some time, and has met all the targets set by Government? Will he also confirm that it has served Parliament for more than 200 years, while maintaining the highest standards of confidentiality and meeting the most exacting requirements?

Is the right hon. Gentleman aware that 95 per cent. of staff have rejected the idea of privatisation? They are proud of HMSO's achievements in the public sector, and want it to remain in that sector. Why has the right hon. Gentleman not investigated ways in which HMSO can operate in the public sector with greater commercial freedom? Is he not aware that such an option was included in the Government's Green Paper on the future of the Post Office, and was recommended by the Select Committee on Trade and Industry in its report of January 1995? Will he now refer his proposals to the new Public Service Select Committee, so that it too can examine that option? That would give new hope to the staff of HMSO, and reassure the House authorities.

Is the right hon. Gentleman aware of the plummeting staff morale, and the pall of insecurity that has descended on Norwich and HMSO since his announcement in September? He claims that there will be "no automatic redundancies". What does that mean, and what guarantees will he give?

Is it not a fact that this privatisation is driven not by the interests of HMSO, but by Tory dogma and the right hon. Gentleman's wish to privatise as many public services as possible before his Government are driven out by the electorate? He claims that the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply, but is not TUPE an extremely difficult and uncertain area that cannot be defined in advance? Is he certain that transferring public contracts as part of a privatisation is legal under European law?

I believed the Chancellor to be a decent man fallen among thieves, but he is doing the Deputy Prime Minister's dirty work in his last-ditch attempt to become the Leader of the Opposition. The Deputy Prime Minister says, "Lurch to the right," and the Chancellor says, "How far?"

Will the Chancellor now bury these proposals and return to the House with a new proposal for HMSO to operate more commercially in the public sector?

The right hon. Gentleman asked me six questions, and I shall try to answer them briefly but properly.

First, I intend to meet all the requirements set out in Madam Speaker's letter. The vast majority of points will be dealt with by the contract that I envisage both Houses of Parliament will take out with the Stationery Office under its new ownership. There will be proper protection, but it is not a matter for me. It is for both Houses of Parliament to satisfy themselves that the requirements set out in Madam Speaker's letter are met. I remain confident that they will do so.

Secondly, the right hon. Gentleman asked whether I would delay the sell-off until all the conditions set out in Madam Speaker's letter, particularly the completion of a draft contract, are met. The answer is yes. I made it plain in my statement that it is a prerequisite that the interests and requirements of Parliament are met. We cannot and should not proceed until those requirements are legitimately met. Parliament is by far HMSO's largest customer, although HMSO also prints and publishes for the Crown and many Government Departments.

Thirdly, the right hon. Gentleman requested a full debate, with or without votes. I shall appear before the Public Service Select Committee. I am in the hands of the business managers, but am delighted to appear before any Committee and at any debate. This important matter should be taken seriously. I shall therefore answer fully and, I hope, satisfactorily in whatever forum is chosen.

Fourthly, I do not believe there to be a problem in respect of European law. That is the advice that I have received. We can go into that matter in greater detail when an opportunity presents itself.

The right hon. Gentleman's fifth and sixth points go to the heart of the matter: why are we proposing the privatisation of HMSO, given the inevitable adverse effect on the morale of those who work for the organisation? We are a conservative country and whenever change is proposed, people fear the worst. I firmly believe that, if I do nothing with HMSO, its market will contract further. [Interruption.] Whatever the Administration—Labour, Liberal Democrat or Conservative—its market will contract. It has been contracting for a decade now. The hon. Member for Norwich, South (Mr. Garrett) will know of the significant job losses that have occurred in the past five to 10 years. HMSO has handled them well, but as the market contracts, jobs are lost.

The prime purpose of the privatisation, therefore, is to enable HMSO, when no longer owned by the taxpayer, to compete for private sector work. The right hon. Member for Bishop Auckland (Mr. Foster) asks why a state-owned company cannot compete for private sector work. It is not this Administration's philosophy to allow a taxpayer-owned state corporation to compete unfairly. [Interruption.] The principle has been proven to be right, because when those companies enter the private sector—many successful privatisations have occurred—their business tends to grow as they have access to new markets.

Then change the rules.

It has nothing to do with the rules. It has to do with the realities of business life.

I want Her Majesty's Stationery Office to have bigger markets and to employ more people than would otherwise be the case.

The final question that the right hon. Gentleman asked me was about jobs. I firmly believe that, if I do nothing, there will be redundancies—some compulsory—at Norwich and elsewhere throughout the country. Under the proposals, if the market grows, as I believe it will, more jobs will be available—more than would otherwise have been the case.

May I thank my right hon. Friend for the tributes that he paid to the staff at HMSO, so many of whom, as he said, work in Norwich and in the surrounding area? I am also grateful for the assurances that he gave about jobs and prospects for the future.

Will my right hon. Friend continue to consult members of staff, and everyone involved in HMSO, at every stage in future? Will he also consult especially Members of the House, many of whom, representing constituencies away from Norwich, are worried about that matter? Will he consult officials of the House, because, after all, Parliament is a key customer of HMSO?

I am grateful to my hon. Friend. I can give the assurance that I shall consult representatives of the staff. It is not possible for me to consult every member of staff, but I have been to Norwich twice, and I envisage going again, to meet the union representatives of the employees.

In my statement, I gave an additional assurance, based on the advice of our consultants, that the core of the business—the printing and publishing business—will not he broken up. I also said that we intend to offer HMSO as a whole—not only the printing and publishing business, but the other ancillary businesses. That suggestion was made to me by representatives of the work force, and I accepted it.

Does the Minister realise that the proposed privatisation of that successful and profitable public enterprise is pure dogma? It is merely an item of ideology. What guarantees—and I mean guarantees—will he seek that HMSO will not be broken up? If it is broken up, large parts of it will become unviable. It undertakes not only printing and publishing; there is a very large reprographic and office supplies business, which the Minister did not even mention.

What security obligations will be placed on a private buyer? The organisation is a major security printing and publishing business, with a strong influence on national and parliamentary security. Will the Minister seek any employment guarantees from the proposed bidder? Those are essential. Nine hundred people work in HMSO in my constituency. It is probably one of the largest single employers left.

Is the Minister absolutely sure that TUPE—and I brought pressure to bear on him about that the other day—will apply in that sector of rapid technological change? Undoubtedly, there are ways around TUPE under those conditions.

Does the Minister agree that it is a totally unnecessary privatisation, which is destroying a business that was set up 200 years ago to avoid corruption in the supply of services to the Government?

I respect the hon. Gentleman's position. After all, he represents, I dare say, the majority of the work force in Norwich. However, he needs to reflect on the central argument that I made about jobs and the marketplace in which HMSO operates. It is a serious business point, and it is the reason why we are proceeding. Perhaps, when we have a fuller debate, the hon. Gentleman might care to come to grips with that point, because it is in the best interests of his constituents.

The hon. Gentleman asked me three questions. I cannot give any guarantees, with HMSO in the public sector or in the private sector, about the shape of business in 10, 20 or 30 years' time. However, I have made it crystal clear that we shall offer the business as a whole and, in any case, not break up the printing and publishing business. The best guarantees that that will not happen lie in the drafting of the contracts, not only from the House but from the other place and from Government Departments—and I dare say, through the Office of Public Service.

We, as the customers—that is to say, the Crown and Parliament—can require the business to have a certain nature and structure. If that is not maintained, the contract may well be vitiated. It depends on the terms of the contract. Parliament is entitled to formulate its own views about the location of the press and the staff and the way in which the business is structured and organised. Therefore, Parliament will be able to control the nature of the business that supplies the products.

As to TUPE, I am grateful to the hon. Gentleman for drawing my attention to what he considers to be a residual problem. I shall ensure that I am properly briefed in good time for the debate, when we shall examine the matter in detail. [Laughter.] I am trying to give a serious response to the hon. Gentleman's point. [Interruption.] With respect, I have repeated very clearly the advice that the Department has received. I am treating the hon. Gentleman's point seriously. He has cast doubt upon the advice available to the Government, and I shall certainly reflect further upon the matter.

Does my right hon. Friend recall that he has used the words "public service" several times this afternoon? Does he accept that there is no more important public service than delivering accurately and properly the proceedings of this place and all the activities connected with it?

Therefore, does my right hon. Friend accept that there are Conservative Members who are not necessarily excited by his proposal and who do not necessarily believe that it is in the best public interest? Will he consider the option of Parliament taking control of the affair and being responsible entirely for its own publications? It could be voted a suitable sum of money so to do. If he will not take that suggestion on board—I hope that he does—will he at least give a complete and firm undertaking this afternoon to set up a proper Select Committee to supervise whoever produces the works?

I was attracted initially to the idea of separating the business. I visited the south London printing works and came to the clear conclusion that one could not separate the parliamentary from the Crown business. I am afraid that the two are inseparable in a commercial sense: the business is run as an integrated whole. Therefore, I do not believe that it is possible to have a dedicated parliamentary press, with Parliament receiving the appropriate funds directly and then negotiating for the direct control and management of the business. That would be a neat solution, but it is not a practicable one. I am happy to examine the matter again, but I do not believe that that is possible.

As to the establishment of a proper Select Committee, I have appeared before the Finance and Services Select Committee, which I understand has some responsibility for the matter. I am happy to appear before any Select Committee that the House of Commons, in its wisdom, decides is a better forum.

I welcome the suggestion of an early debate on the subject in the House, but do the Government intend to make available in time for that debate a draft of the contract for which the private sector will be invited to tender? Does not the Minister believe that the timetable that he has outlined is rather ambitious if the complex issues in the supply and service agreements are to be turned into a contract or series of contracts? If that cannot be achieved in the time scale that he suggests, will he give an absolute assurance that there is no need for it to be completed by any arbitrarily set date?

I am not setting deadlines, and you will confirm, Madam Speaker, that I gave you an assurance in that regard. Deadlines cannot apply in this case, as there is a prerequisite that Parliament be satisfied.

As to the hon. Gentleman's two specific points, I have placed in the Library the information pack comprising documents and information about HMSO, which are publicly available and which potential purchasers will wish to study. That is separate from the service agreement, which I understand was signed yesterday with HMSO by the House authorities and authorities of the other place. It governs services that should run from 1 January. That will form the basis of a contract with a new owner of the business in due course. I have offered my Department's assistance to the House authorities in drafting that contract, but at the end of the day it is for the House to agree the details of the contract that will protect its position.

Does my right hon. Friend agree that a structure that was vital 200 years ago is not appropriate in today's modern world of enormously competitive multi-media and complex publishing? He is absolutely right in his statement that the new model that he has presented to the House today could be the saviour of people with high skills and great integrity, and could protect their reputation. Finally, I thank him for fulfilling my commitment to the trade unions that they would be consulted at all appropriate stages.

As I recall, my hon. Friend was a distinguished public service Minister responsible for HMSO. I am grateful for his support, not only in repeating the assurances that he gave, but in emphasising the ones that I have given.

After the close of business on Monday evening, I visited the parliamentary press to see the production of Hansard and the Vote at first hand. After more than 20 years in the House, it was remiss of me not to have done so before. I left with the impression that, for all practical purposes, the function on the other side of the river is effectively a department of the House. It is dedicated to the vagaries, the pressures, the timetables and the ebb and flow of business in the House, in which no other commercial printer can ever be experienced.

Can the Minister name another commercial operation that is experienced in dealing with the ebb and flow of work produced by the House and the other place? Woe betide any Minister who gets rid of that service and then has to explain to the House why the Votes and Proceedings, Committee Hansard and the Order Paper are not available. It is not possible to fit in jobbing contracts on a commercial basis between bits of parliamentary work.

As the Leader of the House has left the Chamber—[HON. MEMBERS: "He is here."] He is here, so I suggest that, because of its unique parliamentary aspect, it should be a House of Commons matter whether the privatisation goes ahead. We want a clear, unambiguous statement that there will be a free vote on whether the parliamentary press should be privatised. Members on both sides of the House should see for themselves how the work is produced and consider the benefits and disbenefits.

It is a House of Commons matter, not an ordinary privatisation where we follow the political divide. Although there is ideological division, today's statement concerns how the House functions on behalf and to the benefit of our constituents and not for us privately. We cannot do our job—representing our constituents—if there is the slightest shadow of doubt about the supply of our necessary papers.

I find myself in agreement with the hon. Gentleman. However, he visited the parliamentary press in the evening. Had he done so during the day, he would have found a different business. In the late afternoon, the evening and all night the parliamentary press is geared to producing Hansard, Bills and documents for Committees. Had he gone there during the day, he would have found it producing documents for the Crown—for Government Departments. The business, sadly, cannot be separated. The presses need to be loaded with the London Gazette, which is a Crown publication, not a parliamentary publication, at different times of the day to get maximum use from expensive machinery.

I caution the hon. Gentleman against jumping to the conclusion that the press can be dedicated entirely to parliamentary business. It cannot, and that would not he in the interests of the management and the staff, because jobs would have to be lost. I agree with the hon. Gentleman's sentiments, but the way to protect the quality of service required from that plant—the quality of work supplied, the timeliness and the cost—is through a contract.

I am sure that the House will require that press to be retained. It is a valuable asset, with substantial recent investment in plant and machinery, and the House will require standards of service that the printing and publishing business in the private sector will aspire to meet. Can anyone imagine any owner of that business, whether it is myself as a Minister of the Crown, or a private sector printer or publisher, seeking to embarrass itself by providing rotten service to the House?

Yes.

The hon. Gentleman is not living in the real world.

I welcome the news about the privatisation of HMSO. Does my right hon. Friend agree that it is undoubtedly the hest way to protect jobs, because HMSO will be able to seek greater commercial freedom? Will he suggest that the staff of HMSO contact the Crown Agents staff, who last summer gained their freedom from the Government and have now moved into a much more secure future?

That is an interesting idea. Other work that I would like HMSO to undertake, in addition to private sector work, is some of the European Commission's and European Parliament's work. We have an extremely efficient parliamentary press—it is called a parliamentary press, but it does other work—and I would like to see its machines properly loaded and more people employed in south London, not fewer.

Could it not he said that the Minister has condemned his case from his own mouth? What reason is there to privatise something that works efficiently and well in the interests of the House? Why cannot a public sector contractor enter the private sector market to secure further work if it wants? It can do so on favourable and equal terms.

It does.

As my hon. Friend says, it does. There is no necessity for privatisation. Is it not just dogma overcoming intelligence?

The philosophy pursued by the Government consistently over the past 16 years has been, where there is a state corporation or enterprise and we want its business to grow by taking on private sector business, for the business to be moved into private sector ownership, 51 per cent. or 100 per cent. I am never going to be able to convince Opposition Members about that approach.

We do not believe that the taxpayer, as the shareholder of the business, should subsidise or underwrite a business that unfairly competes with the rest of the private sector. There are many other advantages for example, removing Treasury control on investment and on running costs. I do not believe that that is appropriate for this business. I also firmly believe that, in the private sector, the management will be able to augment the skills, particularly of marketing and finance, which one does not normally associate with public sector bodies.

Does my right hon. Friend agree that there are plenty of printers in the private sector that provide absolute accuracy and security to their clients in important matters such as printing reports and accounts and keeping the inside information secret until it is due to be published? Would they not resent, rightly, HMSO moving into their markets if it was underwritten by the taxpayer rather than operating on a commercial basis? Could he reassure employees that they might have the opportunity to have shares in the business, or in the business that purchases HMSO? Although the Labour party regrets every privatisation, the employees never do.

I particularly agree with my hon. Friend's last comment. It is appropriate for the management and staff of any business—public sector moving into the private sector or already there—to have an equity stake in that business or at least a share in the profitability of the business. I hope very much that it will prove possible for that to apply to HMSO. We shall see how the market responds.

Does not the right hon. Gentleman appreciate the Opposition's concern? He referred to TUPE, but when he was asked a detailed question, he could not answer. The whole point about TUPE is that it lasts, at most, for three months and can be abandoned thereafter. The experience of takeovers in the printing industry in particular has been that pension funds have been filched as soon as many of those companies have been taken over. We want a guarantee that the pension fund will be ring-fenced, above and beyond TUPE, so that there is no possibility, in the event of an unwanted privatisation, of the workers' money in the pension fund being filched by the new owners in the interests of shareholders elsewhere.

That is an important point. TUPE, of course, does not cover pensions and is a separate but emotive issue, as anyone who has had responsibility for public sector departments will know. I give an undertaking to the House that, specifically as regards pensions, but also as regards TUPE, whose provisions will apply—that is the advice that I have been given—I will address separately and specifically protection of the pension rights of those who work in the business. I have already given that assurance to the trade union representatives in Norwich.

Will my right hon. Friend confirm that Parliament will continue to have exactly the same rights over its copyright and over the contracts into which it enters, especially in relation to electronic publication, which, obviously, will become important, bearing it in mind that the House may wish to publish documents over the Internet? Will he think carefully about nomenclature, bearing it in mind that considerable confusion may arise if there is a "Stationery Office" in the private sector while, at the same time, Her Majesty's Stationery Office is retained with residual responsibilities in the public sector?

I was merely alluding to the transaction's structure. I do not envisage that the residual body in my Department and the Cabinet Office would he referred to as HMSO. I imagine that the individual and his staff would be referred to as the Queen's Printer and would retain the Crown copyright.

It is not for me to comment on what the House may decide to do in terms of Internet access and publishing more documentation. Speaking on behalf of the Crown, I should like much greater access—this sits well with our views on open government—to Government documents. Of course, Ministers will control Crown copyright; that will not be a matter for the private sector printing and publishing business owner at least, or for the existing HMSO business. I hope that that satisfies my hon. Friend.

In the past 35 minutes, the Minister has repeatedly used the phrase "acceptable to Parliament". If that means anything, it means acceptable to more than a majority of five in Parliament. Therefore, why does he not rely on a free vote? Will he deal with the question that was put by my hon. Friend the Member for Norwich, South (Mr. Garrett) on security, which he, inadvertently no doubt, did not answer? What happens now if Budget statements are leaked? As I understand it, the printing side has never been guilty of any leaks because, of course, there are sanctions. In the new set-up, what sanctions will there be on security? Will he answer my hon. Friend, whose constituency this relates to, who asked a proper question on security?

Yes. On security, the hon. Gentleman is right. I cannot recall, certainly in the past 16 years, any specific problems with security in terms of printing Budget documents. The printing presses are sealed overnight and suitable security arrangements apply; I understand that, having printed the documents, staff remain on the premises. Those arrangements will continue. In the past, if there was a problem, I would be called to account and I would sack the management. In future, on the Budget, which is a Crown matter, the Treasury and myself acting on its behalf would take action under the terms of the contract with the printing and publishing business responsible for publishing Budget documents. We would either suspend the contract or seek redress, so in practical terms there is no difference.

I congratulate my right hon. Friend on his statement, which will lead to increased job opportunities in HMSO, and should lead to increased investment where it is no longer subject to the dead hand of the Treasury. May I remind him that the people who talk about dogma are the very people who opposed the privatisation of BT, British Airways, British Steel, British Gas and all the other great public utilities? Will he not be seduced by those who call for a free vote, because, when there was a free vote on the Nolan committee report, the Labour party's Chief Whip made it clear that he did not recognise what a free vote meant?

I am grateful to my hon. Friend for his general support for the notion of privatisation.

Just to correct my answer to the hon. Member for Linlithgow (Mr. Dalyell), I am advised that the vast majority of Budget documents are already printed by private sector contractors, and not by HMSO.

Does the Minister realise that he cuts a sorry figure today, trying to defend the indefensible? When he was asked a question about why he was doing this, he said that he was doing it because it was the Tory party's philosophy. The Government have had £80 billion selling off the nation's silver and now they have got down to this paltry little set-up—HMSO. Will it be the Mace next and the Dispatch Boxes? Will he give a guarantee that, if this thing goes through, the publishing firm that gets hold of HMSO will not include Haymarket Publishing Group, his gaffer's—the Deputy Prime Minister's—firm, and Murdoch? Are they excluded?

The normal rules governing the propriety of Ministers and decision making will, I can assure the hon. Gentleman, apply.

As Chairman of the Select Committee on Administration, I am deeply concerned. Our Hansard facilities are second to none, and the Minister must know that in Canada the printing facilities were privatised and it was an absolute disaster. I hope that hon. Members will keep our excellent services and that they will vote against this proposal.

My understanding is different from that of the hon. Gentleman. He raised that matter with me before. In Canada there has been no such privatisation, although there are proposals. I shall certainly watch progress on those proposals with great interest, as I am sure will the hon. Gentleman.

What consolation does the Minister's statement contain for the work force at HMSO, when privatisation of gas and electricity undoubtedly led to redundancies? Is not that why he cannot give a guarantee?

No Minister should be believed if he or she were to give a guarantee about jobs in either the public or the private sector. I repeat what I said earlier: that, if the market is allowed to grow and if HMSO is allowed to operate on a bigger canvas, more jobs will be created than would otherwise be the case.

Is it not interesting that even Lady Thatcher refused to take this step, and she did not need any lectures about privatisation? Does the Minister not realise that one of the reasons—there are others, I know—why the Government are so deeply unpopular and discredited in the country, as shown by every by-election and council election, is that people recognise that the Government base their policies not on common sense but on dogma, indifferent to public opinion? Does not this decision in the dying days of this Administration show how right people are in coming to that conclusion about this Tory Government?

No one on the Opposition Benches—perhaps this is not the occasion—has yet dealt with the point of substance, which is that, to safeguard jobs and expand job opportunities, HMSO should be allowed to operate in both public and private sector markets. It can do that only under private sector ownership, and so far I have not heard a coherent argument against that.

Is there not a fundamental contradiction between the Minister's response about protection of the rights of the House and his answers to my hon. Friend the Member for Norwich, South (Mr. Garrett)? For example, if the printing works were sold on, let us say to an overseas company, the House would clearly have reservations about continuing that service. How will we deal with those issues? More fundamentally, how will we deal with the issues that the Minister dodged, when two days ago I raised the vexed question of developments of intellectual property rights in a rapidly changing world? Is it not important for those matters to be addressed by the House before this daft privatisation goes through?

I am not sure whether the hon. Gentleman is referring to intellectual property rights that are possessed by HMSO as a printing and publishing house. [Interruption.] If he is referring to that, I can tell him that HMSO, like any other printer and publisher, is entitled to protect its position. In the context of copyright, if that is the thrust of the hon. Gentleman's question, I have explained that the House controls its own copyright and that the Government control the copyright of Departments. We can certainly go into the matter in greater detail if the hon. Gentleman has the time on a more suitable occasion to develop his points, so that I can more fully understand them.

I have two points to make about control over the ownership of the business. First, I have indicated that the House, through its officials, will be involved in the selection of the purchaser of the entire business. Secondly, it is open to the House to put into the contract that any change in the identity of that owner or the structure of ownership could be a precondition for cancellation of the contract.

Why does not the Minister recognise that, by common consent, Her Majesty's Stationery Office has served the nation and Parliament well over very many years? Would it not he better to accept the old principle "if it works, don't fix it", and to let HMSO develop as a publicly owned concern? Instead, the Government seem to have adopted the rather bizarre approach, "If it moves, privatise it".

The hon. Gentleman says, "If it works, don't fix it". It does not work—jobs are being lost and the market is contracting. I should not be discharging my job properly unless I addressed those fundamental issues. That is why there has been a protracted review of the future of HMSO for the past two to three years. That is also why I am taking action now to end the uncertainty and to chart a sensible way forward.

For the third time of asking—so far unanswered—is this not a matter for a free vote?

That is not a matter for me.

Will the Minister tell the House whether the consultants that he used to prepare the proposal were allowed to consider the option of HMSO remaining within the public sector, but with a wider commercial remit? If so, what was the consultants' response to that option? Did they have the freedom to say that privatisation of HMSO was not the most desirable option to bring before the House?

It is not the policy of the Government to permit the unfettered entry of a state body into the private sector market. That never has been and never will be the policy of the Government. There are certain limited derogations by the Treasury permitting the marginal capacity of HMSO to be used to bid for private sector work, but one should not—in my judgment, ever—allow the taxpayer to subsidise public sector companies competing with the private sector.

On a point of order, Madam Speaker.

Points of order come after statements, and I have another statement. However, I will allow the right hon. Member for Bishop Auckland (Mr. Foster) to speak again, as he has requested.

Thank you, Madam Speaker.

I would not wish the Chancellor of the Duchy to mislead the House. He accused the Opposition of not addressing the central issue. Many Opposition Members have said that we want HMSO to be able to sell in wider markets, and we want it to be able to borrow for investment in the private sector. Why cannot that be done within the public sector? Will the Minister put that point to the new Public Service Select Committee, so that it can investigate whether it is a feasible option? That would please everyone at HMSO and avoid the embarrassment of the House authorities.

We can return to those issues. I would humbly suggest to the right hon. Gentleman that he might check with the shadow Chancellor. We had exchanges on that point during the process of railway privatisation. We cannot permit a publicly owned body with more than 51 per cent. of its equity controlled by the state to borrow and that borrowing not be included in the public sector borrowing requirement. The shadow Chancellor, who has been challenged on that issue in the past, has made it clear that he does not propose any change to those rules. If the shadow Chancellor is also suggesting that state bodies should be allowed to compete freely with the private sector in the provision of services, that would represent a change in policy. Perhaps we should return to that point at greater length at the appropriate time.

Public Expenditure (Wales)

4.18 pm

With permission, Madam Speaker, I should like to make a statement on public expenditure in Wales. Copies of my statement, provisional standard spending assessments, provisional capping principles and base budgets for unitary authorities are available in the Vote Office. I will outline today how I propose to allocate money to spending programmes in Wales and what I expect that money to buy. Full details will he published in the departmental report early next year.

I have already announced that the Welsh Office will have the biggest budget ever next year—£6,865 million, including the proceeds from the planned privatisation of the Housing for Wales loan book. That is an increase of 2.2 per cent. on what is expected to be spent this year, compared with 1.2 per cent. for all Departments taken together. The long-established formula arrangements ensure that the need for higher spending in Wales than in England continues to be recognised. It is indisputably a good settlement for Wales.

The money available is a large amount. But I intend to make that money go even further than usual by maximising the use of private finance and making further efficiencies in the cost of government in Wales. I am examining 25 potential projects under the private finance initiative, which together have a total value of £1 billion. In the next three years, I expect the PFI to bring in £360 million of additional capital investment. Private finance has a lot to offer the health service and the roads programme.

We will announce very soon the first major PFI project in Wales to come to fruition. That will be in addition to the large amount of private investment which Welsh Office programmes already lever in. This year, I expect more than £600 million to be generated. I want to see that sum increased in future years.

Next year, the Welsh Office will reduce its running costs as part of the drive for reducing the cost of government across the public sector. Running costs will be reduced by 8 per cent. in cash terms over the next three years. My Department will invest in new information systems to help it to build on its impressive record of securing savings, while still providing a high-quality service to the public. I also expect non-departmental public bodies in Wales to make savings in their running costs. The less money that is spent on delivering services, the more there is to spend on the services themselves.

Since I became Secretary of State for Wales, I have listened to the views of a wide range of people and organisations about what they think should be the priorities for spending. I have concluded that our priority areas should he investment in health to care for the sick and elderly; spending on education and training to ensure that everyone, but especially young people, is best equipped for the future; and protecting the environment and ensuring that conservation and economic development go hand in hand. Above all, I want to ensure that the steady and sure progress made by the Welsh economy is consolidated and encouraged. There will also be a substantial increase in the budgets of the Welsh police forces. Giving priority to those areas will mean some reductions in others, but difficult choices are unavoidable, if we are to make proper provision for our priority areas.

My decisions are set against the background of an economy which is growing healthily. In the past two years, manufacturing output has gone up nearly 7 per cent., while employment in manufacturing has grown by 13 per cent. over the same period. Productivity continues to rise, and time lost through industrial disputes has plummeted—14 working days per 1,000 employees last year, compared with 1,590 working days per 1,000 employees in 1979. Indeed, the past four years have seen the best performance since 1891.

I recognise that unemployment remains too high in some places, but it has fallen by nearly a quarter during the past three years, and today's figures show that it is continuing to fall. Long-term unemployment is falling even faster. Numbers of new vacancies notified to jobcentres are at record levels, and average wage levels are rising faster in Wales than in Great Britain as a whole.

The Government's stewardship of the nation's finances has laid the groundwork for that success. We have created the conditions in which enterprise and innovation can flourish by keeping taxes, regulation and Government spending down to a level lower than our major European competitors, which is helping to make Britain the enterprise centre of Europe.

As well as getting the basic conditions for growth right, the Government have an additional role in fostering economic development. Offers already made this year, taken together with business in the pipeline, will produce grant offers of £65 million in regional selective assistance, levering in £967 million of capital expenditure by the private sector. The number of applications received so far this year is 30 per cent. up on the same period last year. So, next year, I am making available £55 million, £12.5 million more than planned provision for this year—as well as more money to promote innovation and technology in small firms.

I will also increase the central Government assistance to the Welsh Development Agency by 58 per cent. next year to £40 million, an increase of £12 million on the previous plan. That will enable it to maintain its total spending at about this year's level, while it presses ahead with its property disposal programme.

I will maintain the level of grant in aid to the Development Board for Rural Wales at £8 million. That will enable it to sustain an economic development programme of some £18 million.

I am also maintaining the grant in aid to Cardiff Bay development corporation at £51.5 million. That is an increase of £1.2 million on the previous plan, and will enable the corporation to continue to press ahead with the barrage, take forward plans for the development of Bute avenue, and establish a site for a multi-media park at Ely fields. In recognition of the particular importance of tourism to the economy of Wales, the amount of support for the Wales Tourist Board next year will continue at its present record level of almost £15 million. Local authorities also have a role to play. I will be announcing shortly allocations of more than £56 million under the strategic development scheme.

Those are huge sums of money going into economic regeneration. They will lever in even greater amounts of private money to continue the success story that Wales has become.

Training and education are also vital to future economic growth. We must continue to invest in the work force if we are to keep pace with global competition, and if Wales is to continue its outstanding record of success in attracting inward investment. Of the total training budget for next year of £142 million, £53 million will be directed towards training young people. That is an increase of £6.6 million, or 14 per cent., over this year.

This year, about £6 million will he spent on modern apprenticeships, allowing a total of 3,400 starts. Next year, I am providing £16 million, so that, by the end of next year, more than 8,500 young people will have been able to start this programme. That will result in a real and lasting injection of new highly skilled and qualified workers into manufacturing industry in Wales.

Both the Further Education and Higher Education Funding Councils will receive increases next year over planned provision for this year. That will provide for the equivalent of more than 121,000 full-time students—a record level. Almost one in three young people now go on to higher education, compared with one in eight in 1979. In line with that priority, I have also been able to find a further £2 million in the current year to enable the Further Education Funding Council to buy more information technology and capital equipment.

Capital spending on schools will also he increased. Despite the need for reductions elsewhere, I will provide almost £44 million to local authorities for education capital—the same amount as this year. In addition, I am providing £8 million for the popular schools initiative, so that the schools that parents choose have the capital to expand. Within the overall totals, £1.5 million of capital expenditure for education will be spent over the next three years to improve access to schools for disabled children.

I come now to the health service. Spending per head on the health service in Wales is 13 per cent., or almost £100 per person, above the level for England to take account of greater need. For next year, I will make available £2.274 billion, an increase over previous plans, and an increase over this year of almost £84 million. That is a cash increase of 3.8 per cent. and a real terms rise of 1.1 per cent.

There will be more doctors, more specialist staff, fewer administrators and more patients treated. The private finance initiative will supplement that amount even further. I am determined that there should be the best standards of health care in Wales for those who need it. On top of that, I am providing a special package of £4.5 million over the next three years for people with mental illness.

For the central Government roads programme next year, I propose to spend £154 million, which is a reduction of about £33 million on provision for the current year. Provision next year will enable starts to be made on the A40 Fishguard western bypass, the A4060 Mountain Hare to Dowlais scheme, the A55 Waen to Pont Dafydd, the A40 Carmarthen eastern bypass, and the A470 Lledr valley stage 2. In addition, the A55 improvements across Anglesey are important, and I plan to start the first stage of those improvements next year. Preparation work will continue on the A465 dualling between Abergavenny and Hirwaun, which is also of high priority

I want to seize the opportunities to take forward a number of major road schemes in partnership with the private sector under the private finance initiative. I am looking into the possibilities of the scope for projects to be privately designed, built, financed and operated.

I propose to make £100 million available next year for capital expenditure on local authority roads in Wales. Much of that will be on the 17 transport grant schemes for which I am already meeting construction costs, but work can start next year on the Ceredigion link road in Dyfed and on the eastern bay link, which forms the final section of the Cardiff peripheral distributor road. The Cardiff scheme could be suitable for a private finance approach and my officials will be discussing the feasibility of this with the local authorities. Preparation work can continue on a further six schemes, including improved access to Cardiff international airport, the Port Talbot peripheral distributor road, and the Porth and Lower Rhondda Fach relief road.

I now come to the overall local authority settlement. Provision to local authorities for capital programmes next year will total £508 million, excluding transitional costs of local government reorganisation. In addition, there are many opportunities for local authorities to supplement that through the private finance initiative, and I hope that they will take full advantage of them. Provision for local government reorganisation will be almost £42 million next year, on top of the £41 million provided so far. I am issuing a written announcement today about the distribution of support for compensation costs this year.

The overall local government revenue settlement for Wales provides for a substantial increase. The increase in total standard spending of 3.1 per cent. to £2,867 million recognises the needs of local authorities for increased spending on schools, which I expect to receive a large part of the increase.

On community care, I have confirmed the levels of funding announced last year already, and I now propose a further increase of £21 million for 1998–99 to £190 million. Within TSS, £331 million will be available for police authorities—an increase of 5 per cent. following last year's 11 per cent. increase, which underlines our commitment to combat crime with high-quality, high-visibility policing.

I propose to increase Government support for local authority spending by 2.1 per cent. to £2,517 million. That is around 88 per cent. of TSS, and represents £860 for every man, woman and child in Wales. Within that total of support, I propose to make available £459 million in redistributable non-domestic rates, £237 million in specific grants including police grants, £1,792 million in revenue support grant, and £29 million to damp down council tax increases arising from changes in allocations due to the move to unitary authorities.

Local government must play its part in restraining public expenditure, and capping is an important tool in ensuring that it does. Next year, I propose that an authority's budget should be considered excessive if it exceeds either its standard spending assessment by 12.5 per cent. or its base budget for this year by 3 per cent. An authority cannot be capped at or below its SSA. My capping proposals are provisional. I will make my final decisions in the light of local authorities' budget decisions and all other relevant considerations.

Full details of my capping proposals, local authority provisional SSAs and base budgets are being sent to unitary authorities today. The SSAs have been calculated using the distribution formula developed with the local authority associations and ratified by the Welsh Consultative Council on Local Government Finance. I will announce my final decisions on TSS, central Government support and SSAs in January.

I have noticed some speculation about the impact of this settlement on council taxes in Wales. The actual levels of council tax will be set by local authorities. In some years, it will be necessary for local authorities to raise a greater proportion of their revenue locally. None the less, I expect there to be a large differential between council tax levels in Wales and England for the foreseeable future.

For the second year running, we will maintain the rate of grant for housing association schemes at 58 per cent. I will provide more than £85 million for Housing in Wales. Together with private finance, that represents a capital provision of more than £150 million. It will enable it to provide 3,000 new homes as planned and help 700 families to move into low-cost home ownership, even though it is a reduction in my provision of 8 per cent. That is consistent with planned provision in England.

For local authority capital provision for housing, I will make more than £257 million available next year, of which £180 million will be devoted to housing renovation grants and will allow for a further 17,000 grants. We will maintain this year's spending, which will continue to make an enormous difference to the quality of Welsh housing stock. It is in recognition of this that housing expenditure per head in Wales will continue next year to be at least 50 per cent. higher than in England.

I am also allocating £2 million over the next two years to conduct a comprehensive housing condition survey across Wales. That will help to ensure that the huge amounts we spend on housing are focused on the areas of greatest need.

I shall now deal with provision for the arts and libraries. Revenue provision for the National Museum of Wales and the Arts Council of Wales will be maintained at the current year's levels. With further efficiency savings, I expect those bodies to have more to spend on their objectives than they have this year.

There will be a small increase in revenue provision for the National Library for Wales, so that the third library building can be brought into operation. That will enhance the storage capacity of the library, and strengthen its position as a pre-eminent repository of literature and culture. A modest increase for the Welsh Language Board will enable it to take forward the implementation of the Welsh Language Act 1993, and to develop its longer-term strategy for the language.

I am making provision of about £6.5 million for the Cadw agency. That will enable it to maintain its programme of grants for historic buildings at this year's level, and enable it to meet higher targets for listing.

I am maintaining funding for the Sports Council for Wales, which will enable it to take forward the initiative that I announced in September for the encouragement of sport for young people.

The Countryside Council for Wales plays a key role in providing conservation and environmental protection of the Welsh countryside. I want to see that role enhanced. I am boosting the council's budget by 24 per cent. over this year's original plans to a budget of £22 million, and I am increasing provision for Tir Cymen to bring around half the farmland in the pilot districts into the scheme. That dramatic increase demonstrates my stated commitment to promoting conservation and to preserving our natural heritage.

The Welsh Office budget next year will be the highest ever, and the private finance initiative will bring in more capital investment on top of that. Considerable sums of private money will be levered in by a whole range of programmes. In reaching my spending decisions, I have given boosts to health and to education, to training, to economic regeneration, and to preserving the environment. I believe that the decisions that I have announced today will benefit every person in Wales, and represent a solid investment for the future. I commend them to the House.

I am surprised that the Secretary of State is so modest about his achievements in moving towards his ideological objectives. After all, we know that he wants to roll back the frontiers of the state and cut public expenditure. From his letter of 7 November to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), we also know that he wants high and ever-increasing levels of council tax. So why on earth does he not admit this afternoon that he has cut £100 million in real terms from the Welsh budget, and that council tax increases in Wales next year will, according to local authorities' latest estimates, average 15 to 20 per cent.?

Perhaps the right hon. Gentleman will not own up to that because he realises that his statement is the Government's latest admission that, after 16 continuous years of office, they have produced an economy too weak to maintain our basic public services, and too small to provide the opportunity for work for all those who want it.

The cuts in the budget will fall most heavily on the capital programmes, especially the building of houses, roads and hospitals, and also on local authorities' regeneration programmes. Will the Secretary of State tell us his estimate of the number of jobs that will be lost to the Welsh economy as a result of those cuts? Will he confirm that the capital spending forecast for next year is 25 per cent. lower than spending this year?

Does the right hon. Gentleman realise the great concern that his budget will raise among those involved with economic development? Is it true that, of the 600 jobs that he is axing at the Welsh Office, about 23 per cent. will be the jobs of people central to the task of attracting inward investment? The department that deals with industry will be hit disproportionately hard, and the proposals that he announced concerning the Welsh Development Agency are little short of pathetic. The proposed increase of £12 million contrasts with the £23 million shortfall for the current year, and the agency is still having to rely on a programme of forced asset stripping, which is leading it to an uncertain and unsustainable future.

Is the Secretary of State surprised that he has still not been able to sort out the shambles of his Department's handling of European grants, and that, as a result, inward investment in Wales has collapsed from 13 per cent. to 8 per cent. of total United Kingdom investment in the current year?

Does the Secretary of State accept that his statement on the private finance initiative is based more on hope than expectation? The Government have yet to meet any of their targets for the programme or announce one successful significant scheme in Wales. My hon. Friend the Member for Cardiff, West (Mr. Morgan) described the PFI as the "probably fictitious investment scheme". Is that not the most appropriate description?

I welcome the fact that there will be a modest increase in resources for the police, but will the Secretary of State express regret at the fact that 16 years of Conservative policies have produced a society that is so divided and has such record levels of crime that these additional resources are now essential? Does he also accept that the new figures mean that there will be an increase in the police precept on council tax payers of 22 per cent? Is that not another hidden Tory tax on Wales?

Will the Secretary of State confirm that, excluding the ring-fenced new community care resources, the local authority SSA's total, standing at £2,438 million, is a reduction of 1.3 per cent.? Is not the figure £33 million less in cash terms than the current year's budget? Does he realise that inevitably there will be cuts in services, and that his claims of increased spending on education are neither honest nor credible? Expenditure on the popular schools initiative and the nursery vouchers scheme has attracted no public support in Wales whatsoever.

Does the Secretary of State realise how reviled his party has become because of the way in which it is now playing party politics with the education of other people's children? Governors are resigning from schools throughout Wales because they realise that the present problems with class sizes, standards and pupil-teacher ratios will all be made worse by the failure of the Government to meet next year's teachers pay award. Everybody understands the problem—parents, governors, teachers, educationists and pupils. Why cannot the Secretary of State understand it?

The cut in funding to Tai Cymru is particularly unwelcome, given the growing housing problem in Wales. There are 70,000 homes unfit for habitation in Wales, and homelessness has increased by 50 per cent. in the past 10 years of Tory government. Can the Secretary of State explain his strategy to deal with this growing housing crisis, given that the 14 per cent. cut of the £97 million forecast budget of Tai Cymru will mean a reduction in the number of homes built for social housing in Wales next year of 750?

On the question of the £65 million of receipts from the sale of the assets of Tai Cymru, will the Secretary of State confirm that that money will not be available for expenditure in Wales—least of all in the housing programme—but that it will be recaptured by the Treasury?

Finally, will the Secretary of State agree to an early debate on the proposals in the Welsh Grand Committee? Does he realise that, when the people of Wales understand that his "pay more, get less" policies give poorer services and less investment in the future, he will never be able to command popular support?

On a day when job vacancies have reached a record level, unemployment has fallen again and interest rates have been reduced, only the hon. Gentleman could describe the economy as weak. [Interruption.] The hon. Gentleman described the economy as "weak", and that is the background against which he did so.

The hon. Gentleman has criticised those areas in which I said that Government spending would be reduced, as he is entitled to do. Does that mean that he is not in favour of the increases which I have announced? Unless we are prepared to make some reductions, it is not possible to make increases elsewhere.

Or does the hon. Gentleman think that £6,865 million is not the right figure for expenditure in Wales? He has not told the House whether he thinks expenditure should be higher or lower, or what the Labour party would have as the total of Government expenditure in Wales. To call for higher spending for programme after programme comes a bit rich from a party that wants to waste millions of pounds of taxpayers' money on setting up an assembly in Wales. I find the hon. Gentleman's general approach extremely unconvincing.

The hon. Gentleman asked about the £65 million that will be raised by the sale of the Housing for Wales loan book. That money will be spent in Wales, which is why it is additional to the Treasury provision of £6,800 million. The two sums added together give the total budget. So the hon. Gentleman is mistaken.

The hon. Gentleman asked about council tax. He claimed that I had said that there should be ever-increasing levels of council tax. I have said that, in some years, it will be necessary for local government to find locally a larger proportion of its revenue. It is not necessary in every year. In that, I have agreed with the stated views of the Assembly of Welsh Counties.

When the council tax was introduced, the minutes of the Consultative Council on Local Government Finance showed that the assembly considered

"that the introduction of the council tax provided the Government with an opportunity to enable local government to raise a greater proportion of its revenue from local taxation. At present local Government was able to raise less than 10 per cent. of its revenue locally, insufficient to ensure local accountability".

What I have said is entirely in line with that.

The hon. Gentleman said that people concerned with economic regeneration would be worried by this statement. I have increased the provision for regional selective assistance, increased the grant to the Welsh Development Agency, and redirected training resources in a way that aids economic regeneration. That is extremely good news for people who want to see continued economic progress and development in Wales.

In relation to the private finance initiative, as I have said, I shall announce the first project to be contracted extremely soon. On the question of local government revenue overall, I am increasing the Government's provision for local government revenue by £51 million in total. In relation to the housing budget overall, I am confident that the budget that I have provided will enable Housing for Wales to meet its stated plans, and that I have maintained a housing budget for Wales that is proportionately far ahead of the budget in England.

If the hon. Gentleman wishes to criticise the reductions in the areas where I have set them out, it is incumbent upon him to say where he would find the money to avoid them, and to tell us how he would square that with the 10p tax rate advocated by his hon. Friend the Member for Dunfermline, East (Mr. Brown). He will find that that is a difficult task.

I welcome my right hon. Friend's statement, and, in particular, its strong thrust towards economic development, not only in the industrial and business sphere but in the rural areas and through the Countryside Council for Wales, which will receive an extraordinary increase in its budget of 24 per cent. next year.

Does my right hon. Friend agree that the increase in regional selective assistance and the increase in the WDA's funding for training and education, coupled with today's cut in interest rates and the fall in unemployment, mean that the prospects for growth in the Welsh economy next year can be viewed with far greater confidence?

My right hon. Friend is right; the economic outlook is very good. The increased provision for regional selective assistance that I have set out today reflects the new momentum that is behind the inward investment effort. That is evidenced by the 30 per cent. increase in applications for regional selective assistance to which I referred. Set against the background of a lower taxed and more lightly regulated economy than is the case throughout most of the rest of Europe and the steady growth of the United Kingdom's economy as a whole, the outlook is very promising.

The Secretary of State has told us that Government funding for local authorities in Wales next year will amount to 88 per cent., that the increase in Government funding is about 2.1 per cent. and that the increase in local authority revenue spending altogether is to be 3.1 per cent., leaving out of account relief spending and capital spending for the moment.

Does the Secretary of State accept that those three figures alone—merely for local authority revenue spending—imply an average increase of well over 10 per cent. in council tax, which will mean that the people of Wales, rather than the Government, will have to pay for the increases in spending on education and other services of which he is so proud? Does he accept that that will mean that the people of Wales will lose further confidence in the new unitary authorities which are to be set up on April fool's day next, which will turn out to be an expensive and unpopular April fool joke?

The position is as I have stated it to be. The actual council tax levels for next year will be set by local authorities. The figures that I have given today imply that authorities should raise a slightly larger proportion of their total revenue locally, but that is a marginal change, which will still leave a great differential between council tax levels in Wales and those in the rest of the United Kingdom.

I thank my right hon. Friend for including in his statement on road spending provision for preparatory work on the new road link with Cardiff international airport. That will be very good for the economy of the Vale of Glamorgan. I also thank my right hon. Friend for following the 11 per cent. increase in last year's police budget with a further 5 per cent. this year. The Vale has already been given 14 extra police officers this year; they are much needed, and very welcome.

Finally, I thank my right hon. Friend for the extra provision for education and health. Would not the Opposition's demands for even more spending carry more weight if, instead of advocating the spending of millions of pounds on a building for politicians, they wanted to spend money on children and patients?

My hon. Friend is right, and I am grateful for what he has said. He rightly draws attention to the preparatory work on improved access to Cardiff international airport, which I know is important to his constituency and to the local economy; he also identified the importance of improved provision for education and health.

The health spending that I have announced today should enable 27,000 more out-patients and 46,000 more in-patients and day cases to be treated next year. It should also enable 100 more medical staff to be employed in the health service as a whole. As my hon. Friend said, that is a much better way in which to spend the taxpayers' money than setting up a new talking shop in Cardiff.

Why is it so splendid and vital to cut direct taxation nationally, but then decide to increase direct, compulsory council tax, as the Secretary of State has done?

There is no connection between any national tax changes and the size of the Welsh block, which is determined by a formula: it is 6.02 per cent. of changes in the amount for comparable English programmes. If I were to provide a different amount in local government revenue support next year, I would have to find it from other components of the Welsh block—or vice versa. Those who call for more revenue support for local government must be prepared to say where it would come from in the rest of the Welsh block, or to say—as Opposition Members so far refuse to say—that the total amount to be provided is not the right amount.

Does my right hon. Friend accept that, as one who is unaccustomed to attending the House for statements about Wales, I feel that the higher spending that he has announced—I believe that he mentioned extra spending of as much as £100 per head on health, which is £100 more than is spent in the rest of the country, particularly Birmingham—will strike my constituents as inexplicable?

Nevertheless, does my right hon. Friend agree that that spending demonstrates the advantages to Wales of membership of the Union, and the disadvantages that would ensue should Labour's policies for Wales be implemented?

I assure my hon. Friend that the differences are explicable. There are greater problems in public health in Wales than in many other parts of the United Kingdom. For instance, the proportion of people with limiting long-term illnesses is significantly higher in Wales, which justifies continued higher expenditure.

My hon. Friend is, however, right in saying that the higher expenditure shows the benefits of Wales being part of the United Kingdom. We should do nothing to endanger the part that it plays in the United Kingdom, and in this United Kingdom Parliament.

Will not the fledgling unitary authority of Flintshire begin its life in a seriously underfunded state? Is it not inevitable that council tax will go through the roof in Flintshire? Should not the excellent Flintshire councillors have a better deal, so that they can aim to provide more teachers and houses, and better community care? The settlement is unsatisfactory, and there should be a rethink for Flintshire, at least.

As I have explained, it is important to choose between different priorities. The below-average provisional SSA increase for Flintshire is due mainly to decreases in its share of secondary pupil numbers and updating of the financial database, which determines the relative weight of each service within the calculations. Naturally, I shall take account of the views of local authority associations on all the figures that I have announced, and make my final announcement in January.

I shall look at the point that the hon. Gentleman has raised, but I reiterate that we are choosing between many competing priorities. I believe that I identified the right priorities in my statement.

May I welcome the generous increase in resources to train young people, which will enhance their future job prospects? Does my right hon. Friend agree that it would be a cruel trick if those young people ever became victims of the social chapter and a minimum wage, which would devastate their job opportunities and their chances for life?

My hon. Friend is right. By the end of the next financial year, 8,500 young people will have started modern apprenticeship courses in Wales, which is an encouraging sign for future job prospects and skills in the Welsh economy. We would do no favour to young people in Wales or elsewhere in the United Kingdom if we adopted job-destroying measures, such as a minimum wage or the social chapter, which would deny rather than improve prospects for a whole generation.

Is the Secretary of State content with the fact that discretionary educational grants in Wales have virtually dried up, with the result that many professions are now no longer available to working-class children?

I have explained to the House my overall priorities within education. I have increased the total provision for capital spending on local authority schools as well as the provision for further and higher education funding councils, so the hon. Gentleman can see that I am increasing resources for several educational areas. It is impossible to spend as much as we would like on every aspect of education at the same time.

Does the Secretary of State realise that, despite his smiling face and silver tongue, he cannot hide the central con in his statement? He pretends that great priority is being given to education, but the increases do not reach primary and secondary education in the state sector, which is the most critical area for most people.

Does the right hon. Gentleman realise that, once community care is taken out, Government support will increase by only 1.8 per cent.? The Government's figure for inflation is 2.5 per cent., and teachers' salaries are likely to rise by 3 per cent., so, even if educational spending is to stand still, council tax needs to rise by 15 to 20 per cent. The fallacy of this statement is that the people of Wales will pay just to stay where they are in respect of education.

The overall increased capital provision for schools will feed through across the state sector. We must be clear about that. As for the total revenue settlement, the increase in total standard spending gives authorities room to make substantial increases in educational provision. Naturally, I look to local authorities to continue to improve their efficiency, just as central Government are improving theirs.

If the unitary authorities carry through all the changes to their payrolls for which I am offering to fund the mandatory costs for the next couple of years, local authorities' running costs should be about £30 million less in total. More money is therefore available to local government than appears on first examining some of those figures.

Is it not deceitful of the Secretary of State to paint such a rosy picture of the Welsh economy, when independent, impartial observers are saying clearly that Wales has been reduced to one of the most impoverished areas in western Europe? Why will he not be straightforward with the House this afternoon, and confirm that council tax in Wales is likely to increase by more than 11 per cent.—double the expected increase for England?

We have dealt with the council tax argument. Council tax levels, as I have explained, are to he set by local authorities, but I have said very clearly in the past several weeks that I would expect a larger proportion of revenue to be funded locally by local authorities in the coming year.

On the overall economic picture, I believe that the hon. Gentleman does an injustice to Wales. There are problem areas. There are pockets of high unemployment—I referred to that in my statement, and I acknowledge it—hut the overall rate of unemployment in Wales, as in the rest of the United Kingdom, is now lower than that in the other major European economies. That is a very different picture from the picture that we saw in previous decades. That picture has improved further with today's statistics, and it will improve still further in the coming year.

Is the Secretary of State aware that the statement will confirm the worst fears of many of my constituents, and of constituents throughout Wales, especially if they are parents or school governors or if they are one of the more than 100 people in my constituency who newly joined the dole queue this month—as the figures published today confirm?

The Secretary of State is not, in real terms, increasing the expenditure of the Welsh Development Agency to make up the £23 million cut, which meant that many very important projects had to be ended—or not begun—in my constituency and elsewhere in Wales. His announcement of an additional £12 million will not make up any of that £23 million, because the statement says that the WDA's spending for next year will remain approximately the same as for this year. That means that the £23 million cut will be made this year and next year.

A significant number of projects will not be able to go ahead, and many of those people who joined the dole queue last month in my constituency will remain on it directly as a result of the Secretary of State's failure to overcome that £23 million shortfall.

The hon. Gentleman must consider the provision for the Welsh Development Agency, which is a £12 million increase on what was planned in the Government's grant alongside the other measures that I announced—the increase in the budget for regional selective assistance and the attention that I have given to the training budget, especially for young people, which is good news for people in the hon. Gentleman's constituency, where the unemployment record has not been as good in the past 12 months as it has been in Wales as a whole.

If the hon. Gentleman wants me to increase further the WDA's budget, he must be able to say where, in the other programmes, that money should be found. I have not heard Opposition Members make any suggestions about that today.

May I welcome just one part of the statement—the announcement about the Carmarthen eastern bypass? We have waited for about 20 years, and we suffer appalling problems of congestion throughout the year, especially in summer. The bypass is badly needed. I also welcome the improvement of the links to Ceredigion, because those links are frustrating the economic development of that region.

There are some small problems with the Carmarthen eastern bypass. We have had major public inquiries, but we do not want another full-blown public inquiry. We want those little problems to be ironed out and the project to go ahead as soon as possible.

I am grateful to the right hon. Gentleman for his welcome. I am trying to ensure that the road projects that have the highest priority, and the road projects that I have described in the statement, are those that are of strategic priority to the whole of Wales. I believe that there is a strong case for the projects that the hon. Gentleman mentioned, and I have, as he says, included them in my statement. I will consider the issue he mentioned of the specific problems with those roads projects, and I should be happy to discuss them with him further.

Will the Secretary of State explain the position in Clwyd? He has received representations from local authorities in Clwyd, and they have explained to him in great detail that there is nursery provision in Clwyd for 100 per cent. of four-year-olds, provided outside the SSA. That is funded by a Labour local authority. If he introduces nursery vouchers, the people of Clwyd know that that will disrupt nursery education in Clwyd; it will take it away from the parents in Clwyd. I want to know what he will do about it.

There is no reason for local authorities to have anything to fear about nursery provision if they are providing a service that people want to use. The money that will be recouped from local authorities to help to finance the nursery vouchers will not exceed the cost of the voucher. There will be more money in total; it will be a net injection of cash into the system, and it will give parents choice. I do not understand why we should not give parents choice in those matters. I had supposed that the Labour party had become persuaded of the need for choice in recent times. Certainly its members often appear to want to exercise it, but evidently that is not the case today.

Is this not a shamelessly cynical exercise by the Secretary of State in bouncing local authorities into imposing swingeing council tax increases? As those local authorities in Wales are almost all Labour-controlled, that will be very convenient for the Conservative party in the run-up to the next general election.

I specifically appeal to the Secretary of State to intervene to require his officials to reconsider the disaggregation of West Glamorgan county's budget. The way in which it is being done is penalising Neath and Port Talbot compared with Swansea, to such an extent that, in Heol-y-Ffin in Trebanos in my constituency, whereas all the people in that street at present pay the same council tax, from April 1996, people living on the Neath and Port Talbot side of that street will pay £100 more than people living on the other side.

It has nothing to do with the way in which the two new authorities distribute their spending and budgetary plans. The reason that that discrimination is occurring is to do with the Secretary of State's own Welsh Office incompetence and obstinacy.

I do not think that it is to do with anyone's obstinacy. My officials have worked on the disaggregation very hard, together with people in the local authorities. A great deal of work has gone on through the Welsh Consultative Council on Local Government Finance, so that the disaggregated figures and the notional amounts are agreed figures, and everyone's best understanding of what the figures should look like.

Of course I will be happy to consider the matter that the hon. Gentleman draws to my attention, but I hope that he appreciates that the disaggregated figures and the notional amounts are already the product of a great deal of detailed work, taking account of the many anomalies that might arise. I will certainly consider that matter.

Was the Secretary of State able to take account of representations made to the hon. Member for Cardiff, North (Mr. Jones) by Flintshire specifically about the staff from Clwyd county council who have now adopted Flintshire as their new authority, and about the position of Theatre Clwyd, both of which are aspects of the settlement that cause concern?

Can the Secretary of State confirm to the House that, wherever in the statement he has used the phrase

"maintained at current levels of expenditure",

as he has with the tourism budget and with the libraries and museums budget, he means a cut, because inflation has increased?

I have already mentioned Flintshire in my answer to the hon. Member for Alyn and Deeside (Mr. Jones).

Yes, maintaining budgets flat means that the cash amount remains the same, but all those organisations have opportunities to reduce running costs so that more is available to be spent on services. In the case of the National Library for Wales, as the hon. Gentleman will recall, I announced a cash increase, so there is an increase in the resources available to introduce a much larger service, to bring the third library building into use.

Will the Secretary of State comment on the reorganisation of local government in Wales? The cost of that reorganisation has been put at £150 million, and the Society of County Treasurers has said that only districts with populations of 350,000 will achieve a payback. Bearing in mind the heavy on-going cost of local government reorganisation, will the Secretary of State assure us that the £42 million for local government reorganisation next year to which he referred in his statement will be sufficient, and will not lead to cuts in services? Is the £42 million new money?

Yes, the £42 million is new money, in the sense that it is additional to the other amounts that I have announced in support of local government next year. The provision that I have made for the years up to and including 1998-99 will mean that the Welsh Office's support for transitional costs will total about £104 million over a five-year period.

The amount that I have announced in the statement will cover all the mandatory costs that my predecessor indicated would be covered. It will also cover a proportion of the discretionary costs of local government reorganisation. It would be wrong to meet all those costs, because that would lead to an increase in bids and an increase in the costs over time. We do not want to see that occur.

I cannot believe that the Secretary of State is so unintelligent that he does not realise that this is a "Fantasy Island" budget, replete with Orwellian newspeak. When the Secretary of State talks about an increase in the Welsh Office budget, he actually means a cut.

The Secretary of State has announced cash increases for local government, but if we take into account inflation and local authorities' spending this year, we find that their funds will be cut. The Secretary of State has only to look at the statistics on local government education produced by his own Department. They show that the pupil-teacher ratio has increased in the past few years. More and more children are being taught in classes with more than 31 pupils, and last year the local authorities reduced their administrative costs by more than £8 million. Yet the Secretary of State is providing those authorities with less money to run the education system.

Will the Secretary of State confirm the figure that he gave to my right hon. and learned Friend the Member for Aberavon (Mr. Morris) of a minimum 11 per cent. increase in the council tax budget in Wales? If authorities are to meet existing levels of service with reduced funding from the Welsh Office, they will have to increase their council tax by more than 11 per cent.

Let us be clear that the Government's support for local government revenue funding will be £51 million higher next year. That will amount to a lower proportion of total standard spending by a small sum, which is why we need to increase the revenue raised locally in the coming year. I have already referred to that fact. If the hon. Gentleman wishes to direct more resources to that area, he must say where he would find them. He must be able to tell us where he would get them. If he is not happy with the total budget of £,865 million—as he implied in his question—he must confirm whether he has squared his views with the hon. Member for Dunfermline, East, and whether he believes that extra money should be raised through higher taxation, higher borrowing or reductions in spending elsewhere. Unless Labour Members are willing to confront that basic problem inherent in all their remarks, their criticisms of today's statement will have no credibility.

I find it extraordinary that Labour Members have not uttered a single word of welcome for a statement which announces this level of provision for health, education, training and the Countryside Council for Wales. They are professional gloom-mongers—but they have not even been successful in that regard this afternoon.

Points Of Order

5.14 pm

On a point of order, Madam Speaker, of which I have given you notice. You will be aware that, some weeks ago, Baroness Blatch, a Home Office Minister, announced in the other place that social security resolutions would be laid before the House on Monday next. They will come under our negative resolution procedure, so they will be eligible for debate only if a prayer is laid.

Given that the orders will be implemented on the day before the House returns from the Christmas recess on 8 January, it will mean that hon Members will not have the opportunity to debate the orders, which will lead to more than 10,000 refugees and asylum seekers being left destitute and on the streets.

I am sure that, as the defender of the House's liberties and our rights of free speech, you will recognise that, even if that is technically within the rules, it is against the spirit of the rules that we usually operate in this place. Therefore, I hope that you will examine our procedures and consider the question to ensure that, if someone raises a prayer with you on Monday, provision may be made for a debate to occur even on Tuesday or Wednesday.

rose—

I believe that the hon. Member for Bradford, West (Mr. Madden) wishes to make a similar point of order. I ask the hon. Gentleman to be brief, as it is a very important matter.

Further to that point of order, Madam Speaker. While I endorse everything that the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has said, I must add that the Standing Committee on the Asylum and Immigration Bill, which is directly concerned with these matters, will not have an opportunity to debate them for several weeks. The Social Security Select Committee is considering the issue at this very moment, and it has still to report.

While we do not criticise you in any way, Madam Speaker—we realise that you have no responsibility for the way in which the Government choose to conduct their business—the procedure amounts to an abuse of Parliament, and demonstrates a contempt for Parliament. It is not an arcane matter: thousands of people will shortly be left with absolutely no income. Therefore, would you at least deprecate the procedure?

Further to that point of order, Madam Speaker. During the recent debate on the legislation, I intervened on the Home Secretary precisely to point out that many people who are perfectly legitimate refugees will be deprived of all their income on 8 January. They cannot work, and their families will have nothing to live on, yet Parliament is approving that outrageous and thoroughly unjust measure.

It is a disgrace that the matter cannot be debated properly before it comes into effect on 8 January. When I intervened on the Home Secretary, he promised to provide me with an answer. He has not done so, and I think that he should be made to explain his position to the House.

I am grateful to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) for allowing me time to consider his point of order. He wrote me a long letter late yesterday afternoon. I have taken into consideration not only his point of order but also the other two points of order on the subject—which is a most unusual course for me—as I appreciate the seriousness of the situation, and the fact that hon. Members feel very strongly about it, and it is right that they should place their views on the record.

However, I must inform the House that the Chair has no power to do what the hon. Member for Mossley Hill and other hon. Members have requested. They want me to interfere with the Government's use of order-making powers which have been given to them by Parliament in statute. No Speaker has the right or the authority to intervene in that way, but I hope that the strong views that have been expressed today have been noted by those on the Treasury Bench.

Further to that point of order, Madam Speaker. Thank you for your reply. I ask you also to look very sympathetically at an application for a Standing Order No. 20 resolution so that the matter might be debated urgently next week.

Does the hon. Gentleman seek to ask leave to move a Standing Order No. 20 application now?

indicated assent.

It is somewhat hypothetical. I think that the hon. Gentleman must submit the proposal to me at the appropriate time and of course I shall examine it, as I always do.

On a point of order, Madam Speaker. It is usually unsatisfactory to try to grasshopper back to a previous statement, but I believe that there is a point of order for you, as you are responsible for the Clerks Department and its operation in the House.

The impression was given—I put it no higher than that—not so much in the statement as in answers from the Chancellor of the Duchy of Lancaster that the Clerks Department was participating in matters—I shall not go into their merits, but they are nevertheless highly controversial—in relation to the privatisation of the Stationery Office. If the Clerks Department agreed to participate in the way in which the Minister certainly indicated to the House—Labour Front-Bench Members also received that impression—have they agreed to participate in the operations with contractors or potential contractors for the Stationery Office?

I take the hon. Gentleman's point very seriously. We all have to interpret in our own way what Ministers say, particularly in answer to questions, but that was not the impression that I obtained. Although participation by parliamentary officials in Government decisions is, of course, quite improper, consultations between Government representatives and House authorities will be required at many stages of the proposed process of the privatisation of HMSO. However, there is an important difference between the two that must be maintained at all times, and I shall see that it is.

Bills Presented

British Time (Extra Daylight)

Mr. John Butterfill, supported by Mr. John MacGregor, Mr. Greville Janner, Sir Terence Higgins, Mr. Paul Tyler, Mrs. Ann Clwyd, Sir Peter Lloyd, Mr. John Maxton, Mr. Paul Flynn, Mr. David Rendel, Mrs. Anne Campbell and Dr. Tony Wright, presented a Bill to advance by one hour the time for general purposes throughout the year: And the same was read the First time; and ordered to be read a Second time upon Friday 19 January and to be printed. [Bill 15.]

Wild Mammals (Protection)

Mr. Don Dixon, on behalf of Mr. Alan Meale, supported by Mr. John McFall, Mr. Roger Gale, Mr. Elliot Morley, Sir Andrew Bowden, Mr. Don Dixon, Mr. Simon Hughes, Mr. Eric Clarke, Sir Teddy Taylor, Mrs. Margaret Ewing, Mr. David Winnick and Mr. Tony Banks, presented a Bill to make provision for the protection of wild mammals from certain cruel acts; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 26 January and to be printed. [Bill 16.]

Sexual Offences (Conspiracy And Incitement)

Mr. John Marshall, supported by Mr. Harry Greenway, Mr. Hartley Booth, Mrs. Ann Winterton, Sir Michael Neubert, Mr. Julian Brazier, Rev. Martin Smyth, Sir Teddy Taylor, Mr. A. J. Beith, Mr. Donald Anderson, Mr. Michael Alison and Mr. Norman Hogg, presented a Bill to make provision about conspiracy, or incitement, to commit certain sexual acts outside the United Kingdom: And the same was read the First time; and ordered to be read a Second time upon Friday 2 February and to be printed. [Bill 17.]

Employment (Upper Age Limits In Advertisements)

Mr. David Winnick, supported by Mr. Alex Carlile, Mrs. Gwyneth Dunwoody, Mr. Hugh Dykes, Ms Angela Eagle, Mr. George Foulkes, Sir Anthony Grant, Mr. Doug Hoyle, Mr. Greville Janner, Mr. Alan Meale, Mr. Andrew Rowe and Mr. Allan Stewart, presented a Bill to prohibit the use of upper age limits in the advertising of employment vacancies: And the same was read the First time; and ordered to be read a Second time upon Friday 9 February and to be printed. [Bill 18.]

Noise

Mr. Harry Greenway, supported by Mr. Robert Atkins, Sir Michael Neubert, Rev. Martin Smyth, Sir Marcus Fox, Mrs. Llin Golding, Mr. Richard Tracey, Mr. Simon Hughes, Mr. Tony Banks, Mr. John Marshall, Mr. David Evenett and Mr. Robin Corbett, presented a Bill to make provision about noise emitted from dwellings at night; about the forfeiture and confiscation of equipment used to make noise unlawfully; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 16 February and to be printed. [Bill 19.]

Public Interest Disclosure

Mr. Don Touhig, supported by Mr. Malcolm Bruce, Sir Patrick Cormack, Mrs. Edwina Currie, Mr. Cynog Dafis, Mr. Iain Duncan-Smith, Mr. Derek Fatchett, Sir David Knox, Mr. Giles Radice, Mr. Andrew Rowe, Mr. Richard Shepherd and Dr. Tony Wright, presented a Bill to protect individuals who make certain disclosures of information in the public interest; to allow such individuals to bring action in respect of victimisation; to protect the identity of sources of information in certain cases; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March, St. David's day and to be printed. [Bill 20.]

Treasure

Sir Anthony Grant, supported by Mr. Peter Brooke, Sir Peter Hordern, Mr. A. J. Beith, Sir Patrick Cormack, Mr. Tam Dalyell, Mr. Andrew Faulds, Mr. Toby Jessel, Mr. Robert Key and Mr. Richard Spring, presented a Bill to abolish treasure trove and to make fresh provision in relation to treasure: And the same was read the First time; and ordered to be read a Second time upon Friday 8 March and to be printed. [Bill 21.]

Trading Schemes

Sir Nicholas Scott, supported by Mr. Robert Hicks, Sir David Knox and Sir David Madel, presented a Bill to make provision in respect of certain trading schemes; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 2 February and to be printed. [Bill 22.]

Gender Identity (Registration And Civil Status)

Mr. Archy Kirkwood, on behalf of Mr. Alex Carlile, supported by Mrs. Edwina Currie, Dr. Lynne Jones, Mr. Jerry Hayes and Ms Glenda Jackson, presented a Bill to make provision in relation to sex reassignment treatment and the registration and civil status of those who have undergone such treatment: And the same was read the First time; and ordered to be read a Second time upon Friday 2 February and to be printed. [Bill 23.]

Offensive Weapons

Lady Olga Maitland, supported by Mr. Bob Dunn, Mr. Charles Wardle, Sir Sydney Chapman, Mr. Jerry Hayes, Sir Ivan Lawrence, Mr. Julian Brazier, Mr. Michael Brown, Mr. Andrew Hunter, Mr. Jacques Arnold, Sir Patrick Cormack and Sir Michael Neubert, presented a Bill to make provision about arrest without warrant, and punishment, in connection with offences under section 1 of the Prevention of Crime Act 1953 and section 139 of the Criminal Justice Act 1988; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 19 January and to be printed. [Bill 24.]

Railway Heritage

Mr. Mark Robinson, supported by Mr. Ray Whitney, Sir Kenneth Carlisle, Mr. David Amess, Mr. Anthony Steen, Mr. Quentin Davies, Mr. Nigel Forman, Mr. Tim Smith, Mr. John Whittingdale, Mr. Geoffrey Clifton-Brown, Mr. David Nicholson and Mr. Robert Jackson, presented a Bill to make further provision for and in connection with the preservation of railway records and artefacts: And the same was read the First time; and ordered to be read a Second time upon Friday 16 February and to be printed. [Bill 25.]

Wildlife

Mr. James Couchman, supported by Sir John Hannam, Sir John Hunt, Mr. Jim Lester, Mr. Andrew Rowe, Mr. Elliot Morley, Mr. Tony Banks, Mr. Alan Meale, Mr. Paul Tyler, Mr. Roy Beggs, Mr. Cynog Dafis and Mr. Harry Greenway, presented a Bill to make further provision for the protection of areas of special scientific interest; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 9 February and to be printed. [Bill 26.]

Leasehold (Reform)

Mrs. Jacqui Lait, supported by Mr. Dudley Fishburn, Mr. Nigel Forman, Dr. Ian Twinn and Mr. Roger Gale, presented a Bill to amend the law relating to leasehold and to introduce a system of commonhold property tenure: And the same was read the First time; and ordered to be read a Second time upon Friday 8 March and to be printed. [Bill 27.]

Interest On Debts

Mr. Nick Ainger, on behalf of Mr. Jon Owen Jones, supported by Sir Wyn Roberts, Mr. Peter Hain, Mr. David Alton, Ms Liz Lynne, Mr. Alan Meale, Mr. Ian Pearson, Mr. Nick Ainger, Mr. Doug Hoyle, Ms Jean Corston and Ms Diane Abbott, presented a Bill to amend the law by making provision for certain debts to carry interest; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March, and to be printed. [Bill 28.]

Non-Domestic Rating (Information)

Mr. Allan Stewart, supported by Sir Hector Monro, Mr. Phil Gallie and Mr. Bill Walker, presented a Bill to make provision for and in connection with the disclosure by persons who are valuation officers or assessors to other such persons of information connected with non-domestic rating: And the same was read the First time; and ordered to be read a Second time upon Friday 9 February and to be printed. [Bill 29.]

Law Reform (Year And A Day Rule)

Mr. Alan Milburn, on behalf of Mr. Doug Hoyle, supported by Mr. Alan Milburn, Sir Ivan Lawrence, Mr. David Trimble, Mr. Alun Michael, Mr. Alex Carlile, Mr. Don Dixon, Dame Jill Knight, Ms Janet Anderson, Mr. John Greenway, Mr. John Hutton and Ms Jean Corston, presented a Bill to abolish the "year and a day rule" and, in consequence of its abolition, to impose a restriction on the institution in certain circumstances of proceedings for a fatal offence: And the same was read the First time; and ordered to be read a Second time upon Friday 9 February and to be printed. [Bill 30.]

Energy Conservation

Mr. Alan Simpson, supported by Mrs. Alice Mahon, Sir John Hannam, Mrs. Margaret Ewing, Mr. Llew Smith, Mr. Matthew Taylor, Mr. Gary Waller, Mr. Peter Bottomley, Mr. Dennis Canavan, Mr. Dafydd Wigley, Mr. Robert Hicks and Mr. Harry Greenway, presented a Bill to make further provision for energy conservation; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 31.]

Dogs (Fouling Of Land)

Mr. Andrew Hunter, supported by Sir Geoffrey Johnson Smith, Dame Jill Knight, Lady Olga Maitland, Mr. David Nicholson, Mr. Julian Brazier, Mr. Geoffrey Clifton-Brown, Mr. Henry Bellingham and Sir David Madel, presented a Bill to make provision with respect to the fouling of land by dogs: And the same was read the First time; and ordered to be read a Second time upon Friday 19 January and to be printed. [Bill 32.]

Water (Conservation And Consumer Choice)

Mr. Richard Burden, supported by Mrs. Helen Jackson, Mrs. Elizabeth Peacock, Mr. Paul Tyler, Mr. Cynog Dafis, Mr. David Nicholson, Ms Joan Ruddock, Mr. David Jamieson, Mrs. Anne Campbell, Mr. Peter L. Pike, Ms Jean Corston and Mr. Nick Ainger, presented a Bill to provide for the conservation of water resources by the establishment of mandatory water leakage targets for water undertakers; by requiring water undertakers to encourage the installation of water efficient fittings in homes; and by providing for the review of abstraction licences which affect sites of nature conservation value; and to give domestic consumers greater choice as to methods of charging for the supply of water: And the same was read the First time; and ordered to be read a Second time upon Friday 19 January and to be printed. [Bill 33.]

Prisoners' Earnings

Mr. Hartley Booth, supported by Sir John Cope, Sir Peter Lloyd, Mr. Michael Alison, Sir Sydney Chapman, Mr. John Marshall, Mr. David Tredinnick, Mr. Nigel Waterson, Dr. Ian Twinn, Mr. Simon Hughes, Mr. Paul Flynn and Mr. Douglas French, presented a Bill to authorise deductions from or levies on prisoners' earnings; to provide for the application of such deductions or levies; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 9 February and to be printed. [Bill 34.]

Orders Of The Day

Armed Forces Bill

Order for Second Reading read.

5.25 pm

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

The Bill is extremely important. There is an Armed Forces Bill every five years and, like its predecessors, this Bill will continue the existence of the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957 for a further five years. Those Acts provide the statutory framework for discipline in the armed forces. Unless we renew them by an Act of Parliament before the end of December next year, they will expire.

Clause 1 achieves that purpose. It provides for the service discipline Acts to continue in force for a further year and to be renewed annually after that by an Order in Council, but not beyond the end of the year 2001. A number of other clauses address matters of detail, and I do not propose to detain the House with them today.

I shall propose that the Bill is committed to a Select Committee, which will enable the clauses to be examined in great detail.

As I do not expect to receive an invitation to sit on the Select Committee, I need to question the Minister now, before he sits down.

Why is the Bill so inadequate in its protection of Scottish soldiers and their families residing in Scotland? In terms of the courts martial appeals system, the Bill defines Scots law as inferior to English law.

Why has the Minister chosen to ignore recent improvements in child protection law in Scottish legislation? I refer to the Prisoners and Criminal Proceedings (Scotland) Act 1993 and the Children (Scotland) Act 1995, which give greater protection to children caught up in abuse cases than the Bill does. Why is that so?

At least we shall be assured of the hon. Gentleman not making a speech. That was a most long-winded intervention that was typical of a former military policeman.

Courts martial in Scotland do not apply the law of Scotland. They apply the same service law wherever the trial takes place. It is a portable system which the armed forces carry with them wherever they serve, whether it is in Bosnia, Belize, Brecon or the borders. While elements of service law are based on English law and certain English legal procedures have been specifically adopted, service law is a system of law in its own right. It would be entirely impractical for courts martial in Scotland to operate under different law from courts martial everywhere else. Perhaps the hon. Gentleman will now allow me to develop my speech a little more so that we can come on to those parts of the reforms that I intend to announce today and which I hope will please Scottish, England and Welsh soldiers and Ulstermen as much as they please the House. I intend to propose that the House commits the Bill to a Select Committee, which will enable the clauses to be examined in great detail. Now that the hon. Member for Greenock and Port Glasgow (Dr. Godman) has declared his hand, it is almost inevitable that he will find himself on that Committee, where he will be very welcome with his knowledge as a former military policeman.

I imagine that, as in the past, the Committee may also wish to look at one or two issues that are not included in the Bill. Indeed, we have already undertaken to give the Committee the report of our assessment of the armed forces' policy on homosexuality.

Before the Minister leaves that subject, will he accept that homosexuals are just as likely as anyone else to be highly competent and professional members of the armed services and that their sexuality should have no bearing on their eligibility to serve their country in that way? Will he legislate to that effect?

I do not intend to go into that matter now. As I have said, we intend to deal with it in Committee. I think that the reasons for the services' position are well understood. The Committee will have the opportunity, if it so chooses, to debate those matters at greater length and with the benefit of the review which we shall be presenting to them.

I intend to concentrate today on the more important clauses in the Bill. First, I wish to deal with local service engagements. Clause 2 will enable the armed forces to offer a new type of engagement for local service. Men and women recruited for local service would not have the same obligation to serve anywhere in the world as those recruited for general service.

There are no plans to introduce local service engagements on a general basis in the foreseeable future. However, it is sensible to give the services the flexibility to recruit for local service if they identify areas of activity where it would be appropriate so to do.

One specific area that has been identified is guarding. We have recently begun to consult on proposals to employ service personnel on local service engagements as armed guards at certain establishments.

I am not bidding, I hasten to say, for a place on the Committee but merely wish to ask my hon. Friend whether clause 2 could be applied to medical personnel. My immediate concern, and that of my hon. Friend the Member for Aldershot (Sir J. Critchley), arises from local anxiety about the closure of Cambridge military hospital, the extremely alarmist rumours that have been put about and the availability of surgical staff in the army. I hope that my hon. Friend can assure me that there is no possibility that the hospital will be closed and bulldozed in February.

I am grateful to my right hon. Friend for raising that point. My hon. Friend the Member for Aldershot (Sir J. Critchley) has been in touch with my Department and has sent me a copy of the most extraordinary, outrageous and inflammatory letter in a local newspaper in Aldershot on the numbers of surgeons and others available for deployment—which figures are completely and hopelessly inaccurate.

I am happy to confirm to my right hon. Friend—and I should be grateful if he would pass this on to my hon. Friend the Member for Aldershot—that it would be quite inappropriate to recruit medical support by way of local service engagements. We are quite clear, that for any foreseeable operation, we would be able to find regular personnel from the defence medical services. Any local peacetime shortfalls would be met in the short term by employing civilian practitioners. I would like to take the opportunity to ask my right hon. Friend to pass our best wishes to my hon. Friend the Member for Aldershot and ask him to rest his mind on the issue.

The suggestion that Cambridge military hospital will be bulldozed is also nonsense. The permanent buildings will be retained for defence-related purposes and the national health service will also maintain a temporary presence at the site.

I shall now deal with the question of consistency with civilian courts. Where it is sensible and practical, procedures in the services mirror those of the civilian courts and the police. Clauses 5 to 11 are clear examples of that. They incorporate a number of changes which have been made in civilian law over the past few years, remove anomalies in service rules and procedures, particularly compared with civilian ones, and contain improvements.

I shall come back to clauses 12 to 16 later.

Clause 17 tidies up the rules enabling service men and women to make complaints through the internal redress procedures. It will allow a time limit to be introduced for the making of such complaints. This is not intended in any way to be restrictive. However, it does not seem sensible to allow complaints to be made an excessively long time after an event.

The suggested three-month time limit will also tie in with clauses 18 to 24, which aim to introduce consistency into the arrangements for service men and women to take various complaints to industrial tribunals. At present, different sets of rules apply to different types of complaints. The Bill aims to introduce greater uniformity. The basic principle will be that in all cases eligible to be submitted to industrial tribunals, internal procedures must be used first In most circumstances in civilian life, there is a three-month time limit for applications to industrial tribunals. For service men and women, because of the requirement to use internal procedures first, the industrial tribunal time limit will be extended by three months. The three-month limit for internal complaints will provide time for efforts to settle complaints internally before the industrial tribunal deadline expires.

Clause 26 is designed to allow the Secretary of State for Defence, as the trustee of Greenwich hospital, to grant a lease in respect of the Royal Naval college, Greenwich. The House will be familiar with the background to this matter. It is, I believe, right that the Committee will have the chance to consider an issue which is of great public interest and of considerable importance.

I shall now deal with drug testing. I know that everyone in the House will understand that there can be no place whatever for drug misuse in the armed forces. For a year now, the Army has had a compulsory drugs testing programme. Those who refuse to take a test, or who test positively, are normally required to leave the Army, as is anyone found to he misusing drugs in the other services. Clause 27 makes it an offence to refuse to take part. This will provide flexibility in dealing with those whom it would be preferable to retain, such as the young, first-time offender. Time does not allow me to say much about clauses 25 and 28. In different ways, they amend the law to help the services do their business more effectively. Clause 25 will enable us to resume important recruiting activities which involve members of the public handling service firearms under supervision.

Clause 28 amends the Visiting Forces Act 1952, an extremely important piece of legislation, to enable Parliament to offer concessions on jurisdiction to visiting forces from a wider range of countries than at present. As such concessions are usually available on a reciprocal basis, the underlying purpose of this change is to facilitate arrangements for our forces to exercise in the countries concerned.

I now want to deal with what I believe is going to be the most important part of this Armed Forces Bill. A five-yearly Bill means that there is a regular review of the court martial system. It enables us to think afresh about whether we are doing things in the best way.

The House needs to be quite clear about the need for a separate system for administering justice in the armed forces. In many ways, life in the services differs fundamentally from civilian life. Discipline in the armed forces is not an optional extra; it is a key ingredient of fighting effectiveness. Lives can and do depend on it.

The system of discipline has to be capable of functioning in peace and war, and wherever in the world members of the services find themselves. That is the point that I was trying to make to the hon. Member for Greenock and Port Glasgow (Dr. Godman). It has to be firm. Just as importantly, it must be fair and be seen to be fair. Anyone who has served in the armed forces will remember that the first canon of military law is that justice must not only be done but be seen to be done.

The proposals for change resulting from our review are quite complex and I thought that the House would find it helpful to have the details before today's debate. I therefore answered a written question last Thursday, setting out the details. The salient points are these.

A key figure in the court martial system is the convening officer. He is the senior officer who agrees to the setting up of a court martial. He decides what the charges will be and when and where the court martial will be held. He is responsible for appointing the prosecuting officer and the members of the court martial and, where necessary, arranging the appointment of the judge advocate.

Additionally, the convening officer is responsible for aspects of the conduct of the prosecution, such as deciding whether or not to accept a plea by the accused to a lesser charge. He is also normally the confirming officer, responsible for approving or amending the verdict and sentence of the court martial.

The convening officer is part of the chain of command. He has performed all those functions because of the need for the chain of command to be involved in the administration of discipline. We have examined, however, whether he needs to continue to perform all those functions and have decided that he does not.

The role of convening officer will cease to exist in its present form. His duties will be divided. New higher authorities will ensure that the chain of command continues to be involved in preliminary decisions on how discipline cases should be handled. We recognise, however, that there is a need to remove the impression, however mistaken, that the chain of command can have an undue influence over court martial proceedings. Therefore, many of the convening officer's functions will be transferred to new bodies independent of the chain of command. The new prosecuting authorities will be staffed by legal officers. They will decide whether to prosecute and what charges should be brought. They will then conduct the prosecution.

The administrative arrangements for courts martial will be in the hands of cells independent of both higher authorities and the prosecuting authorities. Those cells will be responsible for selecting court martial members, who will be officers who are not in the same command as the accused.

Where they require legislative authority, the changes that I have just outlined will be the subject of amendments to the Bill. Clause 12, however, already ends the convening officer's role in confirming the findings of courts martial.

That is part of the reform of post-trial procedures dealt with in clauses 12 to 16. That reform involves simplifying the arrangements for conducting internal reviews of court martial findings and sentences. More important, though, is the opening up of access to the court martial appeal court, to enable it to hear appeals against sentence as well as against conviction.

It may not be generally realised that a civilian court of appeal, sitting as the courts martial appeal court, deals with appeals from courts martial. The change to allow appeals against sentence to be heard will mean that all courts martial decisions will be liable to challenge at the court of appeal.

I should like to return to measures that do not yet feature in the Bill.

My hon. Friend will know that defence is a matter over which the European Union has no competence. Will he confirm that the organisation and discipline of the United Kingdom's armed forces are entirely a matter for this country and this Parliament, and that no interference will be accepted from European courts on the pretext of health and safety, sex discrimination, employment or any other form of legislation?

It would not be right for me, a humble toad beneath the Government's harrow, to give such a blanket assurance. One of the many anxieties that we all labour under is the interference by the European courts in some of our judicial cases. It is devoutly hoped that this country's courts martial and judicial systems should suffer minimum interference from the European courts.

At most courts martial, there is a judge advocate. As a lawyer, he fulfils many of a judge's functions in a Crown court. He advises on the law, sums up and, in the event of a guilty finding, offers guidance on the sentencing options.

We have decided to enhance the judge advocate's role. Judge advocates will be present at all future courts martial. Unlike now, their advice on points of law will be binding on the court and they will have a vote on sentence. Also, the reasons for a sentence will be given in open court. Not all disciplinary matters are dealt with by court martial. Fortunately, the majority are disposed of summarily, normally by the commanding officer. That is an effective way of dealing with more minor disciplinary issues quickly.

Again, we have reviewed those arrangements. We intend to extend the facility that enables defendants in certain circumstances to elect for trial by court martial. In future, defendants in all Army and Royal Air Force summary proceedings will be able to opt for a court martial.

All the changes that I have described will apply to the Army and to the RAF. They will also generally apply to the Royal Navy. However, as hon. Members will, I am sure, understand if they think about it, there are differences in the Royal Navy's discipline system, and that will affect the way in which the changes are extended to it.

I have accepted the Navy's judgment that it would not be feasible to change its present arrangements for summary trials. They already offer scope for defendants in some cases to elect for trial by court martial. The operational environment at sea, however, means that widespread use of an extended right to opt for court martial could prevent relatively minor disciplinary matters from being dealt with quickly.

The Select Committee dealing with the Bill will consider those proposals closely. They represent a cohesive and coherent package of reforms and improvements to take the court martial system into the next century. Generally, I hope and believe that the Bill, as it is drafted and with the amendments that will be added to it, represents an important, sensible and satisfactory framework for future military discipline, and I commend it to the House.

5.44 pm

I thank the Minister for outlining the Bill's purpose and for doing so in such short order. I shall take a little longer, but I hope that I shall not detain the House too long, because I know that everyone has much business to do.

As the Minister said, this afternoon and over the next few months we will undertake the five-yearly review of the armed forces' discipline Acts. We will not vote against the Government tonight because, in general, anyone would accept that discipline is central, and perhaps more so to the armed forces than to any other institution. As we are concerned with discipline, it is natural that, by the very nature of our investigations, we will concentrate not only on the need for discipline but on its form and its breaches in the past few years.

As we will be concerned with breaches of discipline, I should make it clear at the outset that our concentration on those aspects of service life in no way reflects on the vast majority of men and women who make up our armed forces. It is worth recalling that at a time when our men and women are being dispatched to take part in the largest peacetime operation, and certainly the largest military operation in Europe since the second world war.

Thankfully, deficiencies in discipline or breaches of it are a minority sport in the British armed forces. That is not because it is imposed on our soldiers, sailors and airmen, but because of the appreciation that the best form of discipline is self-discipline. It stems partly not only from rules and regulations, but, as the Minister will know, from loyalty, because loyalty to one's friends, as the Minister will also know, is among the highest of virtues, although it is not always rewarded. We regard loyalty in the British armed forces, at every level from colonels-in-chief down to squaddies, as a virtue that should not be underestimated. I therefore take the early opportunity to thank the members of the British armed forces—men and women—for their discipline, courage and loyalty throughout the five years.

Discipline, good order and morale are inseparable. I make that point because the discipline that is an essential part of military life is often misunderstood by people, including some hon. Members, who are not familiar with military ethos and practice. It is not merely a matter of abstract rules and regulations inherited by tradition and imposed without rationale; it is an essential, crucial component of our armed forces' effectiveness.

That discipline serves the country well and is the fulcrum around which the efficiency of our service revolves. All other things being equal, an undisciplined or ill-disciplined force is doomed to defeat on the battlefield. It serves our military units well, as it is an integral part of esprit de corps and morale, delineating acceptable behaviour from unacceptable behaviour; and it serves our service men and women well, because disciplined practice in peacetime will minimise their personal risk in times of war. In short, from the individual to the nation, discipline saves lives.

The Minister referred to the interlapping between civilian and military law. The rule of thumb of hon. Members on, I think, both sides of the House is that, wherever possible, appropriate and practical service law should approximate to the law in civilian society. Of course, unlike some of our potential enemies, we live in a democratic society and therefore we approach military law with a conceptual framework that separates us from those who do not share our vision of civil liberties or social mores.

There is one aspect of the overlapping of military and civilian law that the Opposition do not support, and we are glad to see that the Bill does not refer to it. There have been recent reports—no more than that—that the Home Secretary intends to foist young offenders on the military. We make it plain that the armed forces neither need nor want to become the repository of the problem offenders of the penal system. Quite apart from their current obvious overstretch, it is not the job of the armed forces to be penal officers or probation officers for the Home Secretary, and we urge the Minister to resist whatever entreaties he is receiving from that quarter.

None of us thinks that it is desirable to mix criminals with serving soldiers, sailors and airmen, but does not the hon. Gentleman accept that young offenders might benefit from some of the outstanding leadership skills that are possessed by staff at the basic training establishments—although not, as the hon. Gentleman says, in a military environment?

I have suggested that we should separate criminals from those who are at risk. Leadership qualities in the armed forces, and especially among cadets, are much under-used socially. Young people who are at risk because of social circumstances are already dealt with by challenge weekends and development in the cadets, and I should like to see that greatly extended. However, that is quite different from using a period in the armed forces as some form of penal servitude or from using the forces as custodians of offenders. In some cases, presumably the dross of the penal system could be hived off by a Home Secretary who is so beleaguered on other fronts that he is shifting the problem towards the Minister of State for the Armed Forces, whose shoulders are broad enough to bear it. I hope that the Minister will resist those entreaties.

We welcome many of the proposed changes to courts martial, which are the major issue in the Bill. The ultimate vehicle for the imposition of disciplinary procedures in the forces is the court martial, and I suspect that consideration of its form and procedures will command by far the Committee's greatest attention. Although I welcome the proposals, we have certain reservations, which we shall detail in Committee. I shall outline some of them. The first one is general and the others are specific.

Our general reservation is that the treatment of serious court martial offences, not necessarily those that have been committed in the United Kingdom but which perhaps involve a civilian, raises a general concern. It is highlighted by the tragic case of Christina Menzies, which has already been raised in the House by the local constituency Member, my hon. Friend the Member for Glasgow, Hillhead (Mr. Galloway). The case highlights the inadequacies of the present system in serving justice on more serious offences such as homicide through the court martial system.

Christina Menzies, a young girl, was the daughter of a sergeant in the British Army, and she was brutally murdered in Germany. The accused was a serving soldier in the British Army and, although the tragic young victim was a civilian, it was decided to try the accused by court martial by the British military authorities rather than by the German civil courts and investigative bodies that had begun the procedure. Therefore, it was decided that the investigation and prosecution of the case would be undertaken by British military authorities.

I make it clear that I am not in a position to make a judgment about the innocence or guilt of the accused soldier, who was acquitted by the court martial. Many people, including Christina's parents, the local Member of Parliament and the German authorities feel strongly that justice was not served by that acquittal. There are grave doubts about whether the prosecuting officer had the necessary experience for such a role, especially as the defendant was able to hire a barrister who specialised in offences such as homicide. That barrister was hired at taxpayers' expense through the legal aid system.

There were equally serious doubts about the ability to handle complicated forensic evidence. In cases where a civilian victim is involved and where the offence occurs in a modern, civilised and democratic society, why is it necessary for a military court rather than a local court to be used? Is justice served by pitting armed forces officers, who perhaps are inexperienced in matters as serious as homicide, against the best that money can buy in an experienced criminal defence counsel? The Committee will need to examine seriously that general question and it will need to try to ensure that a case such as that involving the death of Christina Menzies never happens again. If we can achieve that, perhaps the tragic experience of that brutal murder can be put, at least in the long run, to some good purpose.

I have two or three specific points on other court martial issues. We have long made plain our view that reform of the system is overdue, particularly in terms of composition and appeals procedures. The Minister has gone some way towards doing that and we welcome that, but we have argued that it is wrong to exclude experienced warrant officers from sitting on a court martial.

A sergeant may have been hardened by battle or by military service on the streets of Northern Ireland, and may have a streetwise or barrackwise knowledge of men and women in the armed forces. He may have wisdom and knowledge that are not always immediately and spontaneously apparent in officers who have had a somewhat more sheltered background on their way to commissions, but he is excluded by our traditions and rules from sitting on a court martial.

If we wish, where practical and possible, to approximate to civilian law, we must bear in mind the primary civilian premise that a man or woman should be judged by his or her peers. In this case, not only is it practical and possible to take on experienced non-commissioned officers, but it is beneficial to justice being done and being seen to be done. We shall certainly raise that matter in Committee.

The Minister outlined the part that is played in the chain of command in the intended reforms of the courts martial system. The reforms provide only a mechanism that must be activated to ensure that members of the panel do not come from the same corps as the defendant in contentious cases. By repealing provisions that provide for an officer to confirm and revise a court martial's finding under, I think, clause 12, the Government have offered a compromise rather than a serious examination of the matter of advancing towards the principle of peer group judgment. We should recall that some 20 cases are pending in the European Court, to which the hon. Member for Shoreham (Mr. Stephen) referred. I doubt whether the proposals as they stand offer sufficient transparency to verify that senior officers are sufficiently independent to ensure fair treatment.

The Government will tell us, as they did five years ago, that they have surveyed opinions on courts martial, and that their last survey revealed no overwhelming demand for change. The supplementary memorandum from the Ministry of Defence and a service opinion survey about discipline in 1988 are based on 29 unfavourable comments from a total of 2,361 comments, which in turn are from a total of more than 142,000 trained strength for that year. That is hardly a scientific basis on which to approach the issue.

Before the Minister says that, if there was an unsettled feeling among members of the armed forces, they would all write in, I remind him—not that he needs it—that the first rule of armed forces life is never to volunteer, and certainly never to complain about anything in writing giving one's name. We need to find out on a more scientific basis whether there is satisfaction in the armed forces quite apart from finding whether it exists in outside bodies such as the European Courts. May we be assured that, in future, the Army attitudes survey will include specific questions on discipline, and that details will be given about the response rate to the survey since the most recent review?

The requirements proposed by the Government would amend the Courts-Martial (Appeals) Act 1968 to allow the courts martial appeal court to hear appeals against sentences and convictions under clause 14(2). They also extend the powers of the Secretary of State to refer sentences opposed by courts martial to the courts martial appeal court. Clause 15 provides for the registrar to extend time limits for the notice of appeal, or for application of leave to appeal. Those have been covered adequately by the Minister.

I do not believe that the court martial appeals court has ever sat in Edinburgh, but does my hon. Friend agree that it would make good sense for a Scottish judge to sit on the courts martial appeal court when it is hearing an appeal against a decision taken at a Scottish court martial?

My hon. Friend has thrown me a question as helpful as the one that the Minister was thrown on European courts by the Member for Shoreham. The frank answer is that I do not know. I can see the appeal of that, but nevertheless a judge in Scotland will by definition, as my hon. Friend knows, be practised and expert in Scottish law. Therefore, he will operate under a system that is different from English law, not only in detail, but in its first premise.

I am not a lawyer, and I am in a minority in the House in not being one, but I understand from the recesses of my memory that Scottish law is based on Roman law, which has a first-principle and philosophical basis—the hon. and learned Member for Fife, North-East (Mr. Campbell) will keep me advised on that—whereas English law is determined by case law. I think that generalisation is probably true. I can see the attractions of what my hon. Friend said, but I cannot give an answer in detail without giving it further consideration. I assure him that I will give the question further consideration before I next speak from the Dispatch Box, if he is in the Chamber. I thank him for pointing us in a constructive direction.

The hon. Member for Greenock and Port Glasgow (Dr. Godman) will definitely be on the Committee now.

Yes, my hon. Friend has made a good case for being on the Committee.

There is a further, perhaps more important, point on courts martial. Extending access to an appeals court comprising senior civilian judges would improve the present position under which appeals are made to the same panel who set the sentence. While we generally welcome the change, it raises some other problems. As usual, the minute we move in one direction, we raise unexpected problems from another quarter.

Many aspects of service life are unlikely to be taken into account in the approach of civil courts, and in any case the services may still take consequential administrative action. We require some clarification on that point, especially when we recall that the system of appeals has already been found to be in breach of the European convention on human rights on the basis that anyone held must be allowed to appeal against the unlawfulness of his or her detention. The Minister will be aware of reports in the press on one case as late as Monday this week.

I wish to mention the separate and general, but recurrent, issue—which might merit consideration—of past miscarriages of justice in the courts martial system, especially those that have affected large numbers of people. This is not an easy issue, but it has been raised in the House, most consistently by my hon. Friend the Member for Thurrock (Mr.Mackinlay), who has championed the cause of many executed during the first world war, among many other veterans' causes. I understand that he will address that subject, should he catch your eye, Sir Geoffrey.

The subject was highlighted again this year by the case of those were accused and convicted of mutiny at Salerno. I understand why people ask what purpose opening the subject serves. They argue that it may undermine discipline, and, after all, the people are dead. The reason for opening the subject was brought home to me because the family of John James MacFarlane, one of the so-called Salerno mutineers, are constituents of mine. I understand the anguish felt by that family. He had fought for his country, and had won gallantry medals. It is now accepted by everyone that, through a mistake at best—let us hope that it was not intentional —by his commanding officers, he and others were deprived of their medals, dishonoured, demeaned and dismissed. That is still deeply felt by that family in Hollyton in my constituency.

My hon. Friend the Member for South Shields (Dr. Clark) has already made our misgivings known about the sentences that were passed in that case. At the very least, we should not accept the bland dismissal of the right to rectify miscarriages of justice merely because of the passage of time. That seems to be the position that has been accepted by the Prime Minister and the Government. Why it should be considered as an appropriate—indeed, honourable—course of action to rectify miscarriages, even posthumously, in civil society but not in military society is frankly beyond me. I would go further—the ability and will to recognise miscarriages of justice, even posthumously, reinforces the legitimacy of the justice system in the military.

In some areas, problems in the services reflect problems in society in general—for example, the problem of drugs. We supported the Government in the introduction of random drug testing in the armed forces because of the peculiar and unique nature of the armed forces, with people handling guns, explosives and armaments. However, we are perturbed that, despite the efforts of the Government, there are continuing reports of apparently large-scale misuse of drugs within the armed forces.

I am even more perturbed by reports, which I hope the Minister will be able to deny, that the Government intend to adopt a softer line on recruitment policy for those with previous drug convictions. I accept that there can be no absolute prohibition on those who have one conviction for the use of soft drugs, and I have no intention—because it serves none of us well—to sensationalise the subject with cheap sloganising. But, whatever pressures are created by the shortfall of personnel, we should send no signals that drug misuse is an acceptable background for enlistment in the armed forces, especially when we are trying to stamp out the practice among established personnel. I hope that the Minister will be able to give us that assurance tonight. There is a policy of no tolerance of drugs within the armed forces, and I think that it should continue. By 15 November this year, 6,968 Army personnel had been tested for drugs; 133 had failed; and 200 to 300 tests are outstanding. However, in 1994, 490 soldiers were reported for offences under the Misuse of Drugs Act 1971, despite the no-tolerance policy towards offenders. As I have mentioned, those people are in charge of potentially lethal weapons, so let us press forward with the no-tolerance policy.

Race recruitment is another issue that comes up at every quinquennial review. The 1990 report commissioned from Peat Marwick McLintock still holds true today. Racial stereotyping and language are the most important factors in low application rates from black applicants. Only 233 applicants from the black, Asian and other ethnic minorities chose to apply to join the Army in 1992–93—the last year for which I have figures—of whom a mere 50 were accepted. That represents about 1 per cent. of the Army's strength—a negligible increase since the last review.

I do not question the Government's commitment, but we must accept that we are not making great headway. As the armed forces struggle to compete against civilian institutions for skilled personnel in the labour market, the MOD must improve its recruitment efforts and improve conditions in the workplace. That is not just morally and socially sensible, or a reinforcement of the link between civil and military society, but necessary given the skills needed by the armed forces.

Is the MOD examining recruitment patterns in the south-east and the west midlands, the regions with the highest proportion of ethnic minorities? Given the almost twofold increase in the Army's advertising budget, are resources being directed at strengthening ties with industry and further education institutions to identify recruits from ethnic backgrounds? We will raise such questions in Committee, and I hope we will reach a conclusion on them. We would like the current armed forces monitoring process to continue.

The Minister would not expect me to rush through even a short speech without mentioning sexual equality—a matter in which I know he takes a great interest. It is a subject to which the Committee considering successive Armed Forces Bills has returned consistently in recent years. We accept that efforts have been made in the past few years and accept that problems arise because of the strength of tradition and at times, to be frank, because of prejudice inside the armed forces. To be even more frank, it is difficult for Ministers—there is nothing personal in this—to trail-blaze when their attitude to service women has not always been marked by an enlightened disposition. Their blundered handling of the issue of pregnant service personnel has proved that prejudice can be costly financially—now to the tune of more than £50 million—as well as socially.

Lest anyone says that he was not warned, I know that several of my hon. Friends brought up the issue of pregnant service women during the 1981 quinquennial review, so the Government had a 14-year warning about it.

Women are still inadequately promoted and protected against discrimination in the armed forces, especially in terms of advancement to higher posts. We welcome the advent of women fighter pilots, but we want further progress to be made quickly. We will pursue that matter in Committee.

On combat forces, the Opposition take the general view that a woman should be judged by the same criteria as a man—gender-neutral criteria. They should be judged according to their standard of personal fitness for and operational effectiveness in the role in question. We accept that there are those who feel that my second criterion—the operational effectiveness of Army, Navy or Air Force units—has the potential to allow discrimination. We must start, however, by accepting that the raison d'être of our Army, Navy and Air Force is as fighting units. Any other starting position would undermine the raison d'être of our armed forces. That is why we include operational effectiveness as one of the criteria against which service personnel must be judged.

Homosexuality in the armed forces has been discussed in the past few years. The Secretary of State has established a review on that issue, and we will comment when it is published.

Clause 26 empowers the Secretary of State

"to grant a lease or otherwise permit occupation of the Royal Naval College Greenwich and other land in the vicinity of the College"

by repealing section 7 of the Greenwich Hospital Act 1869. We are not opposed in principle to the change of use of that building, provided that it is in keeping with its traditions, history and architecture. Section 7, however, already offers ample scope to permit occupation of the building, subject to certain limitations and the ultimate availability of it, if necessary, for the purposes for which it was originally intended.

We therefore do not believe that sweeping away section 7 of the 1869 Act is sensible. We are not prepared to give a carte blanche to any Secretary of State to get rid of that building, willy-nilly, as he or she sees fit. We will consider compromise proposals, but we will oppose the complete repeal of section 7.

The Minister referred to clauses 2 and 25(2). I am slightly unclear—or should I say slightly suspicious?—about the motives behind those clauses. Existing legislation already covers all classes of personnel, other than those in the armed forces, who might require to carry arms in support of military operations. Under the Firearms Act 1968, persons such as gunsmiths and armourers can be in possession of a weapon without holding a certificate. Police officers carrying out their duties are already exempt from the 1968 Act. Who are the persons referred to in clauses 2 and 25, and under what circumstances might they be required to carry arms? Two possible categories of person suggest themselves.

First, an amendment to the 1968 Act would allow the arming of the Ministry of Defence's guard service, which was mentioned by the Minister. That body of civilian guards was established on the recommendations of the Defence Select Committee after the tragic Deal bombing. The arming of the MGS has been mooted on previous occasions, but each time it has been rejected as politically undesirable. What has changed the situation now, other than a desire to save money?

The second possible category is even more horrific to hon. Members. The powers contained in the clauses, together with the provisions in the Reserve Forces Bill, would allow the arming of civilian commercial contract guards working for the MOD as reservists. In theory, if the Armed Forces Bill is passed, Group .4 or Securicor personnel could be armed if they were, according to the terms of clauses 2 and 25, supervised by service personnel. I have no personal prejudice towards any commercial institution, but the prospect of armed Group 4 personnel guarding our nuclear installations would not send a shiver of confidence up the backbone of the British population.

In order to prevent the hon. Gentleman from feeling that he must continue down such a fatuous route, may I give him an unequivocal and total undertaking that such a thing will never happen?

We are already making progress, and I take that commitment as it is given. No doubt that assurance will enable me to shorten my contributions, even in Committee, although I suspect that will mean that I will have to lose quite a few good lines that I might have used.

Some time ago I visited the South Yorkshire police to look at the arrangements that it makes when policemen have to carry weapons on duty. The arrangements made me feel confident that a properly run civilian police force, where officers are armed, can draw up plans that serve the public interest and convey confidence and a sense of protection to the public. If we were to arm non-service personnel in the armed forces, does my hon. Friend agree that the arrangements operated by a good police force would have to be operated by the people whom the Minister has in mind?

My hon. Friend makes a good point. Everyone in the House recognises that the implications of fiscal rectitude and the downward pressure on budgets mean that efficiency savings have had to be found. We will not make cheap points about that. Objective, mutually agreed criteria were used to assess the effectiveness of Ministry of Defence police. Although those criteria were a means of achieving certain savings in line with the reduced size of the military estate, they were commensurate with the maintenance of security. We would not wish any of these clauses to be used merely as a means of saving money.

I thank hon. Members for their indulgence in listening to my speech. Many issues will be raised in Committee. At the outset, I mentioned discipline and morale in the armed forces, so it is fitting to conclude—and before we divide on any of the issues—with the hope that we can all unite, I am sure we can, in once more expressing our gratitude and respect for the courage, dedication, discipline and loyalty of the men and women who serve in the armed forces and whom we have the privilege of speaking of this evening.

6.20 pm

It is just under five years since we last debated an Armed Forces Bill. It is already clear from the speeches we have heard, especially that of my hon. Friend the Minister, that much has changed. When we last debated the matter, it was during the closing stages of the cold war. It is worth reflecting that then there were 313,000 armed service men; there are now 238,000. By 1998, when the reforms are finished, there will be 210,000. That is a reduction of 30 per cent. in the armed strength of the Army, 30 per cent. in the armed strength of the Navy and 42 per cent. in the uniformed armed strength of the Royal Air Force. In 1990, we spent £21.7 billion on defence; this year we will spend 2.3 per cent. less in cash terms and 25 per cent. less in real terms.

I make these points simply to show how different the armed forces are now than when we last considered these matters. There are smaller numbers, they are required to carry out a greater variety of tasks, they are better equipped and, clearly, if they are to complete the tasks that they are assigned to do, they must be even more professional than they were five years ago.

Both this evening and during the special procedure that follows, we need to consider carefully the ways in which the Bill will apply to the smaller numbers in the greater variety of tasks that they do—and in particular the fact that there are now and will continue to be much larger numbers of civilians working alongside uniformed personnel in the years ahead, doing the same or similar tasks to those that uniformed personnel have been doing up to now. We must ensure that the legal framework that applies to the uniformed part of the force is right so that there are no inconsistencies with what the civilians working alongside them are doing.

I shall not follow much of what the hon. Member for Motherwell, North (Dr. Reid) said. However, he made much of the case of Christina Menzies. I acknowledge that there is a problem in that area, especially in Germany where court martial procedures still apply to the dependants of service men. The hon. Gentleman will remember that, when we both sat on the Committee considering the last Armed Forces Bill, we and one other hon. Member suggested changes. It is my recollection that that proposal was not endorsed by the whole Committee, including Labour Members. I am pleased that there has now been a change of view, and that we can return to the matter in Committee.

I want to raise one other matter. It relates to the other Bill being proposed by the Ministry of Defence—the Reserve Forces Bill. I hope that, as the two Bills are going through the two Houses concurrently, we can keep track of them both. Certain matters relate to both, and it would be most unfortunate if we amended this Bill only to find that that had been overtaken by events when the other Bill goes through the House. There was a similar problem last time around with a number of other Bills, not relating to service men, that were going through Parliament. It is important that, when we consider the Bill in Committee, we take account of Government and other legislation going through the House at the same time and amend the Bill by the end of its passage if the need arises.

Following the great changes in the armed forces over the past five years and the changes still to come, the Bill provides the opportunity to ensure that we have the right legal framework within which our armed forces can operate in the years ahead, when they will be asked to carry out even more varied tasks with even more varied formations. I am sure that the Bill will achieve that, and I commend it to the House.

6.26 pm

This is not just another Bill. It raises important and contentious issues, but its special procedure makes it very different from other legislation. When the Government tried the experiment with Special Standing Committees in the early 1980s, they received a series of bloody noses—and that was the end of experimentation.

The special procedure, which surfaces only every five years—the reason is obvious—means that the Committee, of which I very much hope to be a member, investigates and then it legislates. That is something that the Defence Select Committees should be doing. Why should they be restricted merely to investigating, while those who legislate are an entirely different group of people? I was sad that, when the Defence Select Committee was at least given the option of taking over responsibility for the Bill, it turned it down. That was a missed opportunity.

The procedures laid down for the Committee mean that Back Benchers have rather more influence over the legislation than they have in the normal Standing Committees, where the Opposition and Back Benchers are, in most cases, rendered superfluous to the legislative process, which is a carve-up between the civil servants and Ministers. Sometimes I wonder whether Ministers have much influence over what happens. I hope that we will take advantage of the opportunity to do more than simply acquiesce in what is presented to us in the Bill or in the notes on clauses.

Another reason why the procedure for this Bill is different—this was alluded to by the Minister—is that the lineage goes back to the 17th century. In essence, it is the legislature's manifestation—which in some ways is an illusion—of its theoretical supremacy over the military. It is another reason why this is an important Bill.

I support the Bill in general, but there are two areas that cause scepticism bordering on cynicism—clauses 2 and 26. The former enables the armed forces to recruit personnel on local service engagements and the latter amends the very important Greenwich Hospital Act 869. I heard what my hon. Friend the Member for Motherwell, North (Dr. Reid) said, and, if I do serve on the Committee, I shall vote against any amendment to that Act. Despite being 120 years old, it is still relevant.

On the face of it, neither of the two clauses appear to excite much opposition, yet they do. As someone who has professionally observed the MOD for more than 20 years, perhaps I will be forgiven the view that occasionally it is devious and wrong. Some people prefer to start from the assumption, at the other end of the spectrum, that it is honest and occasionally right. I fear that that is far too simplistic an analysis.

On the face of it, who could object to the MOD awarding itself the legal power to recruit personnel for local service under clause 2? I admit that the Minister in his brief speech could not be expected to give us all the information, but so far, the information revealed on why one needs this military home service engagement has been rather patchy.

In downsizing the armed forces, the Government have been largely unsuccessful. The downsizing is Treasury-driven—that is pretty obvious to anyone. It now appears that, at a time of high employment, people in the armed forces are being given a special inducement to remain in the services for longer. We read too about rather unusual methods of recruitment, which, in the circumstances, appear to be quite bizarre.

How many personnel will be required to serve at home only? Why does the MOD have to be given flexibility? I would have thought that having a number of military personnel who will not serve abroad would create inflexibility. I can understand a guy who has served abroad in some awful places wishing to settle down at the end of his career, put his feet up, go into a little guarding job, go home and be happy with his lot. If we had an Army of 2 million people, perhaps we would be able to afford the luxury of allowing some to operate on stay-at-home contracts.

But when the Army is down to such absurdly low levels in a dangerous and, some might add, deteriorating international environment, is it wise to block off a number of personnel who will serve their country only within the travel-to-work area laid down?

I do not wish to be hostile to people who are serving or will or might in future serve their country, but we cannot surely say, as we did in the old militia system of the 16th, 17th, 18th, 19th and early 20th centuries, that one's obligation to serve King or Queen and country will be determined on a narrow geographical basis. We cannot say either that perhaps they can serve elsewhere for 30 days in the year. What kind of engagements are cut and dried in a calendar month? I would like to explore that issue in more detail because it deserves to be explored. Will those personnel be part of the existing establishment or supplementary to it? That is an important question.

I suspect that one of the reasons why little clause 2 is included in the Bill is to provide the opportunity for the MOD to continue the process that it has been proceeding with for some 15 years: considerably downsizing the Ministry of Defence police. It says that they are far too expensive. Of course the police are very expensive, but we tend to think that it is necessary, in the interests of society, to have well-paid, well-motivated, very well-trained personnel who can deal with crime protection, crime prevention and a whole range of activities.

Given that the MOD possesses an enormous amount of land—it is the largest landowner in the country—and that it has an enormous amount of data, information, equipment and so on that need to be protected, somehow to argue that the police force is too expensive appears yet again to be compromising what should not be compromised: people's safety and the security of information that ought to be kept under MOD control.

The MOD police are expensive, but we pay for quality. The MOD appears to obsessed with privatising security. I can recall one senior member of the private security industry coming before the Defence Select Committee and saying that he would not bid for an MOD contract because he could not provide the required quality of service on the money that the MOD were paying private contractors.

I can understand why the MOD wants to change the mix of military police, contract security, the MOD guard service and the Ministry of Defence police, but I do not think that the MOD police should be reduced from fewer than 5,000 members today by—perhaps—2,000. I wonder what the critical mass for the MOD police would be—I suspect 2,500 members, although it might go below that. I hope that the Ministry of Defence will explain in great detail that its objectives are not pecuniary—or vengeful since the MDP have escaped the Ministry's attacks on several previous occasions. We want detailed explanations of why it is proposed to replace one group of personnel — perhaps 2,000 in number—by 2,000 or 1,000 or 500, or goodness knows how many. To make one group of people—potentially—redundant to provide jobs for another group of people does not seem to be the best practice to expect from an employer.

The Ministry of Defence has not persistently shown that it is capable of making the right decisions on security. I can recall how in the early 1980s it almost got rid of the MOD police from the Royal Ordnance factories. The Defence Committee stopped that. I can recall the inquiry made by the Defence Committee into security at military installations after the disastrous Deal bombings. It was not obvious to the Committee at that time that the MOD had got the balance right.

In light of those and other mistakes, I am not entirely convinced that the procedure under way is for any other reason than to save money. If the MOD thinks that it can get away with justifying the calculation simply on the basis of the investment appraisal examples in the documents published recently, I am afraid that it is wrong.

The MOD police are important and flexible. They are civilians, and it is important that civilians should be in a dominant position in the establishments that they patrol and guard. Civilianisation and constabulary powers cannot be bolted on to the powers of a soldier. The MOD police are versatile. They conduct guarding, armed guarding, policing functions, crime prevention, and fraud investigation, which the National Audit Office and the Public Accounts Committee have recently shown will keep them in a great deal of work in the years ahead. It is believed that £23 million has been fraudulently removed from the procurement process alone. They can liaise with the Home Department forces in a way which soldiers cannot. I accept that their numbers will have to be reduced further because the MOD estate is diminishing, but the proposals are erroneous. I want them examined closely.

Of course, one of the ways suggested by the MOD to keep its police numbers down is based on the number of gates. It has said that there are too many gates. That appears to be the MOD's version of the wrong type of snow or the wrong type of leaves on the track. To say that there are too many gates at MOD establishments surely ignores the fact that they been appraised many times previously. What would happen if the number of gates were cut from, say, three to one? If the Minister drove his car out at 5.30 pm and saw several hundred people undergoing searches, perhaps he would reach the conclusion that defence establishments have more than one gate for very sound reasons.

I should like to make two further brief points. First, while the special Committee will be examining security, another Committee will be examining it—the Defence Committee. The Minister and those associated with him will have to explain things to two Committees. Not only will the Committee on the Armed Forces Bill be keen to know what is proposed.

Finally, surely Greenwich is part of our heritage and our history—even more so than county hall, because it must be infinitely more important to our history than a building only 60 years old. We know that the Government fouled up the sale of county hall, too. Do estate agents have pictures of Greenwich to show people? Perhaps my hon. Friend the Member for Greenwich (Mr. Raynsford) can tell me whether there are pictures, so that people can see how our history is being sold. The whole idea is tacky and obscene—an act of administrative and political vandalism.

I am sure that my hon. Friend will go into far more detail on the subject, but as an individual member of the Defence Select Committee I find it degrading that something as important as Greenwich is potentially up for grabs. Perhaps it will not become the headquarters of McDonald's, or of a South Korean or American multinational company, and perhaps we should be reassured by that.

But why should we alter legislation to allow the Secretary of State for Defence, who is the custodian of that part of our national history that is within his responsibility, to line himself up for what is potentially not only the sale of the century, but the sale of several centuries? To say that it is not really a sale is disingenuous.

That is not a party political issue; I do not believe that any issue that has been raised in the debate is a party political issue. I only hope that the Government can be prevailed upon to say that that wonderful set of buildings, some of international significance, must remain within the public sector. Of course the public sector is a dirty word for some people, but it is now so flexible that surely Greenwich could fit somewhere within it without falling foul of the ideological obsessions of some hon. Members.

Please let us throw out the relevant clause and remove the temptation to allow Greenwich to be disposed of to the private sector. The Government must think carefully about how the buildings could be retained, if not in the MOD then in some other sphere. I hope that, despite the cuts in the armed forces, that may be possible.

I hope I may be forgiven if I make just one party political point, because I cannot resist it. When Labour party conferences voted each year to reduce our defence expenditure to the average of that of our allies, I do not think that even they envisaged that by now the Conservative party would be well on the way to achieving that objective.

While we are examining our downsized set of commitments—although perhaps I should not say that, because it is the number of people who are supposed to fulfil the commitments, rather than the commitments themselves, that has been downsized—let us not go mad in the process. Let us realise that we are living in a difficult world. What happens in the Russian elections next month, or in the presidential elections a year from now, may have significant consequences for international security.

Let us not forget the importance of observing intelligently what may lie in front of us. When the Minister and some of his colleagues are in the House of Lords, they may think, sooner rather than later, "Perhaps we were rather too hasty in making some of those decisions." I hope that one of the decisions that will be reversed during our proceedings on the Bill will be the decision on Greenwich. Certainly Ministers should be aware that the House will, as I hope, exercise its powers of scrutiny as it is not always able to do, and that we shall see our input in what is enacted. The legislation must reflect not only the Government's input but ours, and I hope that I can look forward to serving on the Standing Committee.

6.43 pm

I always enjoy the contributions by the hon. Member for Walsall, South (Mr. George), who is right to say that the Defence Select Committee has gained much information that would be relevant to the Standing Committee on the Bill. I share the view that it would have been an interesting idea for the Select Committee to be responsible for the scrutiny of the Bill in Committee. As things are, I, like the hon. Gentleman, hope that I may be able to make a small contribution and use the information that we gathered in the Select Committee.

Those who have the privilege of serving on the Defence Select Committee know that, as we visit our armed forces, we see their courage, fitness and technical skill at all levels. Our job with the Bill is to ensure that we provide the framework within which those armed forces can operate at best efficiency.

This year's Bill is indeed substantial, and there will be significant detailed work to be done on it. In updating the Service Discipline Acts, the Standing Committee will have a duty to scrutinise the whole remit of the armed forces and to consider the overall framework within which they operate.

Several factors will inform the Committee's thinking. It will have to bear in mind the current recruitment situation. The Select Committee on Defence has taken evidence on that, and there is a recruiting problem at present, not so much in the Royal Navy and the Royal Air Force, but certainly in the infantry branch of the Army, where there is a shortage of about 2,000 on the year's intended recruitment pattern. We must ask ourselves why.

We should also ask ourselves why, if the armed forces are really equal opportunities employers, the figures show that, on 1 September 1995, only 12.8 per cent. of those in the Navy, 3.5 per cent. of those in the Army, and 8.7 per cent. of those in the Royal Air Force, were women. Perhaps we should ask ourselves whether the whole structure of the armed forces and the discipline required within them are relevant to the problem.

Studies are now being carried out of the role of women within the armed forces, and it may emerge that appointments are made entirely on personal suitability. Perhaps, if women are fit physically, they will be able to do certain jobs, even perhaps in areas of the infantry. When the Committee considers the Bill, it will certainly examine attitudes within the armed forces, to see whether there may be disincentives to the recruitment and retention of women.

Also informing the views of the Committee will be the ethnic monitoring that has shown that, in July, only 1.4 per cent. of people in the armed forces were of black or Asian origin. If there is a recruiting problem, and if there are well-paid jobs available in the armed forces, is it right that we should have those extraordinary figures, which seem to reveal problems in recruitment and retention?

I am sure that the Committee will also bear in mind the Bett report, "Managing People in Tomorrow's Armed Forces", which deals specifically with military terms of service. We should ask ourselves about the exceptional position of those in the armed forces, which makes them subject not only to civil law but to military law and discipline. Is that requirement still necessary?

After all, there was a need for exceptional forms of law and discipline when ships were at sea, and armies away from the United Kingdom, for long periods. Then it was necessary for discipline to be both quick and effective. But perhaps that manner of carrying out service discipline is not quite so necessary or appropriate for the 21st century—that is the period towards which we are looking now. At one time, discipline needed to be speedy and decisive, but there may now be ways of getting around those original difficulties.

Are there procedures within the armed forces that were once necessary but are now redundant, or which need to be invoked only in exceptional circumstances? I share the Minister's view that procedures should be seen to be fair, but in my constituency experience, disciplinary procedures, both for service men and for civilians serving with the armed forces, often seem extremely protracted.

The Committee will need to take all those strands of thinking into account, and it should be able to call witnesses and take evidence. I believe that there has been a slight change in the procedure since I chaired such a Committee in 1985-86. At that time, we worked with a Select Committee procedure and then effectively took the Bill as a Standing Committee. I believe that now the Bill will come back before the House, where the Committee will be able to brief hon. Members.

I hope that that will be done on an all-party basis. In my experience, such Select Committees and Standing Committees work closely together on an all-party basis, and there is little cause for dissension.

I shall now flag a couple of small points that should be raised in Committee. I share the view that clause 2, which

"enables the armed forces to recruit personnel on local service engagements",

will cause apprehension within the Ministry of Defence police. That body has already suffered the Blelloch report and the Rucker report, and we can reasonably expect the Government to explain their position and intentions concerning the MOD police very soon.

In clause 9—similarly, this is a minor point for the Committee—I am surprised that there is no mention of DNA swabs when reference is made to taking fingerprints. I should have thought it appropriate to include that in the Bill.

Those are all very much points for the Committee and, like the hon. Member for Walsall, South, 1 hope that I shall be able to contribute to the Committee when the time comes.

6.49 pm

Because of the detailed nature of the Committee proceedings that are to follow Second Reading, I, like others, feel no particular need to delay the House for long at this stage. However, there are one or two matters that I should like to take this opportunity to raise.

The Bill seeks to bring service discipline into line with the civilian justice system, and that seems to me to be entirely desirable. One must accept that service discipline imposes more burdensome obligations on members of the armed forces than if they were simply members of the public. But I believe that it is right to start from the principle that only the additional burdens that are absolutely necessary should be retained. One particular element of service discipline marks it out from the civilian criminal system—the retention of the death penalty for certain military offences. For my part, I believe that the arguments against the death penalty are overwhelming and, on every occasion on which I have had the opportunity to do so, I have voted in accordance with that belief in the House. If those arguments are relevant and effective in relation to the civilian system of justice, I believe that they are equally effective in relation to military justice.

It is notable that the death penalty for military offences has not been invoked since 1945. In the 50 years since then, we have fought wars in Korea and in the Gulf and there have been engagements throughout the world in which British forces have been involved. If that most salutary of penalties has not been invoked for 50 years, I have to say that there are compelling reasons for saying that it should go. I am disappointed that the Bill contains no provisions to that effect.

I thought that the hon. Member for Walsall, South (Mr. George) made a good point about clause 2, which emboldened me to think that perhaps, instead of the TA, the Territorial Army, we should have the TTWA—the travel-to-work army. The hon. Gentleman did make some serious points, which I hope the Committee will consider carefully.

Service discipline—as the Minister rightly pointed out in opening the debate—has at its heart the system of courts martial. I have conducted a court martial as a civilian lawyer, and it is from that standpoint that I have given some consideration to the proposals for reform that the Bill contains. I have to say that, at first glance, they seem to me to be entirely sensible.

Any system of justice, whether civilian or military. should be seen to be fair, transparent, effective and speedy. If the proposals meet the criteria that I have just outlined, they certainly deserve support from both sides of the House. The same criteria must apply to any prosecution in courts martial, and here I share the misgivings that have been expressed by others in relation to the murder of Miss Christina Menzies. That matter has been raised in the House by the hon. Member for Motherwell, North (Dr. Reid), and very effectively on behalf of his constituents by the hon. Member for Glasgow, Hillhead (Mr. Galloway), who is not with us this evening. I think that that is a point which the Minister and those serving on the Committee may wish to consider in due course.

If it is the case that the accused person in a murder trial being conducted within the military system of justice is enabled in the interests of fairness and justice to have access to a civilian lawyer who is experienced and well qualified in conducting the defence in murder trials, why is there no provision so far as the prosecution is concerned for enlisting the assistance of a civilian lawyer of equal experience and aptitude to prosecute the case?

Some time ago, I myself prosecuted in murder cases in the High Court of Justiciary in Scotland. If I can be allowed a moment or two of anecdotal reflection, I must say that the first time I had to do that, I found it to be an extremely difficult and very arduous business. I do not think that I ever conducted the prosecution in any murder trial — perhaps I acted in about 40 or 50 such trials during my professional experience—without being aware of the very considerable burdens that it imposed.

If I may be excused a colloquialism, to land such a case on a serving officer who happens to be lawyer, or even on someone from the Judge Advocate's department, may be unfair. I hope very much that those with responsibility for these matters will consider whether it is practical in cases of such importance to use lawyers of sufficient experience from the Bar of Scotland, England or Northern Ireland, to ensure that the prosecution is carried out to the highest possible standards. Fairness should apply not only to the accused. It is a concept that must apply in the public interest as well.

During an exchange between the hon. Members for Greenock and Port Glasgow (Dr. Godman) and for Motherwell, North, reference was made to the need to have a Scottish judge on what were described as Scots courts martial. Of course, a court martial is Scottish only by virtue of the location where it may be held, because a court martial is a United Kingdom process authorised by a United Kingdom statute.

By virtue of section 2 of the Courts-Martial (Appeals) Act 1968—with which I am sure you are more than familiar, Mr. Deputy Speaker—the judges of a courts martial appeal court may, among others, consist of

"such of the Lords Commissioners of Justiciary as the Lord Justice General may from time to time nominate for the purpose".

The Lords Commissioners of Justiciary—as I am sure you are well aware, Mr. Deputy Speaker—are the judges of the High Court in Scotland. The Lord Justice General is the principal judge of that court.

The provision already exists for Scots judges, or those qualified in Scots law, to be members of a courts martial appeal court. But when those judges sit in that capacity, they sit not as Scots judges in particular, but as UK judges enforcing a UK statute and its provisions. While the provision does exist for the involvement of Scots judges in these procedures, it is important to remember that they are seeking to apply not Scots law, but the statutory framework laid down in the 1968 Act.

Naturally I defer to the hon. and learned Gentleman in his knowledge of these matters, but is it not the case that Scottish service men being tried by a court martial suffer certain procedural disadvantages vis-á-vis the procedures that are engaged upon in civilian criminal cases?

The hon. Gentleman is right to this extent. If an individual is prosecuted for murder in the High Court in Scotland, that individual's trial will he conducted according to the law of Scotland and to the procedures and laws of evidence applicable in a Scottish court. An individual who, on the other hand, is prosecuted by a court martial will be subject to the system of law laid down in the statute that governs courts martial. To that extent, it could be argued that a person facing trial by court martial may enjoy less protection than he would have had if he had been prosecuted in the ordinary civilian court.

The Minister referred to clause 18 in his opening observations. I know that he, like me, will have received a letter from the chairwoman of the Equal Opportunities Commission. The letter that I received informed me that a copy had been dispatched to the Minister, and I am sure that he will give it his usual careful and courteous consideration. But in that letter—which was written in extremely reasonable and moderate terms—certain anxieties were expressed about the precise language of clause 18. I hope that, when the Committee comes to consider the matter, careful consideration will be given to the requirement that that clause contains.

There are a number of other issues for the Committee which, to some extent, have been referred to by other hon. Members. I wish to refer to ethnic minorities, who are still inadequately represented in the armed forces. It is wrong to blame the Government or the Ministry of Defence for that. The problem is much greater and we should not simply endeavour to apportion blame across the House. It must, however, be a matter of concern for all of us with an interest in those issues that only 1.4 per cent. of the armed forces are black or Asian. We should be seeking to create circumstances in which people from all parts of society feel confident to apply for membership in any of the three armed services.

I do not wish to say much in detail in relation to the issue of homosexuality. My views on that have been put on the record in the past. I believe that it is a fundamental matter of civil rights that no person should be discriminated against by reason of sexual orientation. The service law relating to criminal matters has been brought into line with civilian law, and I hope that the House will have an opportunity at a later stage in these proceedings to express a view on the issue of administrative discharge.

There has recently been an effort to invoke the jurisdiction of the courts in England in relation to administrative discharge. In the course of that effort, although the judges held that the current policy was not unreasonable, in the sense in which lawyers use that word, at least one of the judges robustly pointed to the fact that public opinion had changed substantially.

If one is looking for parallels, one can look at the attitude that the armed services of Australia and New Zealand have taken to homosexuality. Anyone who has been in the company of the extremely fine soldiers from New Zealand who have been attached to the British infantry battalion stationed at Vitez in the former Yugoslavia will know that they are as robust and effective a unit as any that the British Army is able to produce.

In July this year, I tabled some questions about sexual harassment in the armed services. I hope that that is an issue which the Committee will feel disposed to take up. As a result of the questions and the subsequent correspondence, I discovered that the Ministry of Defence maintained no central record of claims of sexual harassment in the armed services. The Royal Navy does not hold central information about such claims; the Army maintains records only of complaints that have been referred up the chain of command since 1993; and the Royal Air Force is able to provide only the details of the cases that have been investigated by RAF police since 1989. If we are anxious to ensure that the armed services are truly equal opportunities employers, as I think the hon. Member for Gosport (Mr. Viggers) is, and if we envisage a far greater number of women serving in all three armed services, clearly we must have vigorous and effective policies on sexual harassment.

In relation to Greenwich, if one examines clause 26(2) or clause 26(5), one sees that the powers that have been conferred on the Secretary of State are extremely wide. He has an almost unfettered discretion. It is right to remember that the Secretary of State is the trustee of the Royal hospital. In my judgment and, I am sure, in the judgment of many hon. Members of all parties, he has much more than an obligation to get the maximum financial return from those buildings. I do not think that it is wrong, or that it demonstrates an unwillingness to accept that things have changed, to say that public buildings of that historical and traditional importance should have a public use that will entitle the public to have regular and reasonable access to them. Any such use must surely be consistent with the history and dignity not only of the Royal Navy but of the buildings themselves.

As matters now stand, it would be possible for the Secretary of State to grant a lease to the American company that recently bought the royal train so that the company could establish its headquarters at Greenwich. Many people would find that inimical to the traditions and dignity of those buildings. The Secretary of State is asking for substantial powers in the Bill. He should appreciate that the way in which he exercises those powers will he seen by many people as an important indication of his judgment and his understanding of how deep and important are the traditions of the three services for which he now has responsibility.

Discipline has much to do with history and dignity. The Bill is clearly necessary in order to preserve the highest standards in all the armed services. It undoubtedly has the support of the whole House, but some detailed parts of it will require, and will receive, considerable scrutiny. I shall be very surprised if the Bill comes back to the House in the same form as it leaves the House after this debate.

7.5 pm

The quinquennial appearance of the Armed Forces Bill is one of the most sensible traditions of the House. I wish to add just three points to those which have already been made by hon. Members on both sides of the Chamber. Our worst legislation is always that which is rushed through in response to some public outcry, or some crisis or tragedy. Dog bites man so we end up with a Dangerous Dogs Bill. Football fans run amok so we end up with a Football Spectators Bill. There is a tragic stabbing and people clamour to add more and more to a simple measure to give modest powers to give to the police so that they can do something about the problem. We must beware of doing the same thing in this Bill, particularly on the issue of sexual orientation.

The worst possible service to the cause of those who wish to see change—I am for the status quo unless I am convinced heavily the other way—is done by the action that we saw this afternoon from the hon. Member for Stratford-on-Avon (Mr. Howarth), who came into the Chamber late, halfway through my hon. Friend the Minister's speech, popped up, asked a question and then disappeared for the duration. The background to the matter and the understanding that is necessary if we arc to take on board the depth of feeling in the armed services about the issue can he learnt from a study of the military ethos paper of January 1994.

Those of us who have not had the privilege of serving in the armed forces—now a majority of Members, I suspect, whereas perhaps 40 years ago it was the other way round—have not understood how service people feel. I shall quote just three sentences from the document which sum up how people feel. Paragraph 7 says:

"The Army cannot remain wholly immune from the changes in the society it serves, and from which it recruits, but neither must it allow itself to follow trends which tend to undermine the traditional values essential to its unique responsibilities and operational role. The Army recognises that its adherence to its standards must be defended on pragmatic rather than emotional and traditional grounds. It also recognises that where reform is appropriate, this must be addressed as a matter of timely policy rather than a damage limitation exercise in the face of events."

That must be right. It is undoubtedly one of the matters that the Committee will have to consider.

For the military clothing manufacturers, 1996 and 1997 will be good years. It is popularly believed in our constituencies that we have the police to look after us. In my constituency at present 10 police forces are operating. They are the Home Department police—the Wiltshire constabulary—the British Transport police, the Atomic Energy Authority police, the Ministry of Defence police, the Royal Air Force police, the Royal Air Force Provost security service, the Royal Military police, the Ministry of Defence guard service, the Royal Marine police and the Royal Navy regulating branch. The Bill will add two more, the Military Provost guard service and the RAF police guards. Many hon. Members on both sides of the House will find 12 police forces operating in their constituencies—not to mention the private security companies that will be part of the MOD's security arrangements under the terms proposed in the defence police and guarding structures study.

I am not opposed to that; I understand the logic of it. However, as the hon. Member for Walsall, South (Mr. George) pointed out, the MOD's police have been subject to everlasting reviews for the last decade and more, and they desperately need some stability. They expected the worst in terms of manpower cuts, and they were right to be a little worried. No doubt the Standing Committee—on which I hope I shall be fortunate enough to serve—will examine that aspect carefully.

Some years ago, in 1987, we gave a Second Reading to the Ministry of Defence Police Bill. I took a lively part in that debate, as did the hon. Member for Walsall, South. Many of the issues that were debated then have been aired again today, especially in connection with clause 2. We were surprised to discover when we debated the Ministry of Defence Police Bill in 1987 that neither House had engaged in a debate on the police since 1860, when the Bill that became the Metropolitan Police Act 1860 was debated. I therefore welcome this Bill, and the clause in it that will give us an opportunity to examine the issue again.

My main aim in listing the police forces that currently operate in my constituency was to stress the importance of underlining the primacy of Home Office forces. That point was often raised during debate on the Ministry of Defence Police Bill, in Committee and on the Floor of the House, and firm assurances were given by my hon. Friend the Minister's predecessor, my right hon. Friend the Member for Epsom and Ewell (Sir A. Hamilton). There is now no doubt that Home Office chief constables have primacy throughout the United Kingdom, including within the wire of defence establishments. My right hon. Friend the Member for Epsom and Ewell said in Committee:

"I wish that to go on the record as there should be no misunderstanding about that."—[Official Report, Standing Committee B, 12 February 1987; c. 59.]

That Bill gave rise to an important concept that I think we must consider again: the interface between the MOD police, the Home Office police and all the other police forces in operation. When a crisis necessitates calling a police force into action, the worst possible outcome is ignorance of the rules under which each force is operating—not knowing whether they are armed, and not knowing their rules of engagement.

That is not fancy; it happens. It applies to, for instance, occasions when demonstrators try to get inside the chemical and biological defence establishment in my constituency, and to other activities including terrorism. Everyone understands now that the Home Office police have primacy, but it is not clear what the pecking order is thereafter, or what happens inside the wire when the Home Office police arrive.

Inter-force working arrangements were a feature of the Ministry of Defence Police Bill. On 16 October 1987, the Home Office issued circular 65/1987, which laid down guidelines relating to the respective responsibilities of the MOD police and "1964 Act" police forces, otherwise known as Home Office police forces. Will my hon. Friend the Minister ensure that that circular is updated, so that there can be no doubt about the interoperability of the police forces? That matters enormously, because at the interface of those police forces in our communities—in my constituency, for example—there is sometimes doubt about who investigates what.

The Menzies case, which has been mentioned, is an example; The guidelines that were issued following the 1987 Act were clearly not followed in that case. Paragraph 5 clearly states:

"Responsibility for the investigation of any incident in which terrorism is suspected, of serious offences against the person, of sexual offences (except minor offences or acts which are offences under Service law only), of domestic burglaries and of sudden deaths will rest with the appropriate local chief constable."

The hon. Gentleman has referred to MOD police in his constituency, and to other non-Home Office forces. Is there not a case for regularising the position, so that a constable in those forces is not inhibited—as he or she is at present—in responding to an emergency that is outside the perimeter of their immediate jurisdiction before the arrival of a Home Office police officer? There are currently difficulties relating to insurance and liability, and the only powers of arrest available to such constables are the common law powers that are available to the hon. Gentleman and to me. The point needs to be clarified in the interests of police officers, quite apart from the interests of everyone else.

That is an important point, but it was clarified pretty substantially by the 1987 Act, which gave constabulary powers to the MOD police. Nevertheless, I agree that some aspects need clarification. For instance, I feel strongly about the question of the jurisdiction of the British Transport police. It is ridiculous that they must stand and watch someone who rushes off a train having murdered someone disappear into the wide blue yonder because they have no jurisdiction outside railway property. That, however, is not relevant to the Bill, and is not a matter for my hon. Friend the Minister.

I had the honour to be a Minister in the Department of National Heritage, and to observe the difficulties that arose in relation to the Greenwich Hospital Act 1869. The ownership of Greenwich was in some doubt. A collection of buildings had been passed, if not from pillar to post, at least from one Department to another, under very peculiar arrangements. It was difficult to track down the ownership, and establish who was allowed to do what. I welcome this attempt to address the issue, and to make it crystal clear who can do what. I do not think that we should dismiss it as some ideological attempt to privatise the Greenwich royal naval college; I think that it is a much more sensible idea than that.

When I served in the Department of National Heritage, we were anxious to find the right use for the college. It was always clear that the Royal Navy would not have the use of all of it for all time. What was needed above all was a holistic approach. It was crucial for us somehow to recreate the wonderful vision of Greenwich that existed when it was built, including the observatory and the splendid park—for which I had the honour to be responsible when I was a Minister—and to tackle some of the enormous traffic problems in and around the college.

I feel passionately about that, because I spent many years singing in the Thomas Tallis choir in, among other places, the Greenwich college chapel, and I am very familiar with the buildings. I was relieved to read in the MOD's house journal in December 1995 that the defence land agent had said:

"Supermarkets and suchlike would not get past the starting gate".

Of course not. I am sure that that is not the Government's current intention. What matters is the need to find a solution that will ensure the future of that magnificent set of buildings well beyond the millennium, possibly making them a world heritage site but also ensuring that they are used. I do not want Greenwich to become a museum; I want the buildings to be used and alive, so that young people in particular will appreciate them more and more as we move into the next century.

Sir David Hardy and Lord Lewin, his predecessor as chairman of the national maritime museum and the royal naval college jointly, proposed a preservation trust to run the royal naval college site, funded independently of Government through a trust. I gather that that proposal has the strong backing of the heritage lottery fund, which may contribute to the large set-up and conversion costs, and other arts and heritage organisations. We should give serious consideration to that proposal. Let us not simply say that the buildings are too important for us to do anything with them, and that we should maintain the status quo. Let us find an imaginative way to proceed. A trust may be the answer, so we must give it a fair wind. I am sure that we can examine that matter in Committee.

In discussing this extremely detailed Bill there will be a lot of hot air and, I hope, constructive debate. It is a good Bill and I support it.

7.19 pm

I wish to raise three issues that relate to this Bill. The first is race and the armed forces.

Some ugly cases of racism have arisen. I asked a parliamentary question on that subject and received a full answer from the Minister, and inquiries are still going on. The Ministry of Defence is coming into the modern world very slowly in recognising that racism in the armed forces exists and needs to be stopped. In the past, it has taken a silly attitude to racism and bullying in the armed forces. I was present when a former Defence Minister expressed the view that someone who complained about bullying or racism was a bit weak and therefore should not be in the armed forces in the first place, as his or her personality was flawed. That is the Army's peculiar way of blaming the victim and it is a recipe for racism and bullying continuing.

I welcome the fact that clause 20 allows service personnel access to an industrial tribunal on race grounds. But what exactly do the Government intend to achieve by that clause? The Minister said that internal inquiries would be held first. Whatever the findings of such an inquiry, could cases be referred to the Commission for Racial Equality, for example? It is time that the MOD fully complied with the Race Relations Act 1976 instead of its own peculiar version of it, which has to be constantly changed when Bills such as this are introduced.

The relevant figures show that recruitment to the armed forces is discriminatory. Promotion procedures also seem to be unsatisfactory. We still have nowhere near the equivalent of Colin Powell in the British armed forces, which says something about the promotion procedures.

Following serious allegations in respect of the Household Cavalry, an inquiry took place under section 49(3) of the Race Relations Act. Although the inquiry's result went to the Ministry of Defence earlier this year, we have still not heard what the Minister intends to do about it. We should have an explanation.

My second point relates to the MOD police. I support the comments that have already been made, especially by my hon. Friend the Member for Walsall, South (Mr. George). We need a reliable MOD police service but it may be cut by a third under the Government's proposals, jeopardising its reliability. The Government want to replace MOD guards, particularly on armed duties, with military armed guards—often low-ranking service personnel—because they would be cheaper. They would also be much less well trained and would not have the essential policing experience required for many duties carried out by the MOD police, especially when they are armed.

Emphasis is placed on the MOD police's constabulary role, in which they have special legal powers. Ordinary soldiers will not have those special powers. The Government must explain the implications of the proposed changes, which could be serious. The option of replacing MOD police in their constabulary role with regular service personnel was dismissed by the recent Blelloch inquiry, yet the Government are proceeding down that road. That is wrong and unjustified.

My third point concerns the ban on homosexuality in the armed forces. Four individuals, all with exemplary service records, are challenging the legality of that ban in the court. Lieutenant-Commander Duncan Lustig-Prean of the Royal Navy, who enlisted in 1983, was discharged for his sexual orientation in January 1994. At the end of 1993, his commanding officer described him as

"A most able, conscientious and industrious officer. His engaging and warm personality allows him to communicate effectively at all levels. This is the cornerstone of his success; he is dynamic and extrovert, yet his magnanimous and conciliatory nature fosters genuine trust and support. Resourceful, versatile and perceptive, he is a most effective manager and organiser. He is a balanced enlightened and knowledgeable man who enjoys my complete trust in all matters. Lustig-Prean has great all round potential. He is an outstanding prospect for early promotion to Commander."

He was chucked out because of his sexual orientation.

Jeanette Smith, a service aircraftwoman and nurse in the Royal Air Force, enlisted in April 1989 and was discharged in August 1994. Her discharge report said:

"SAC Smith has an above average understanding of trade knowledge and the performance of her conversion course has been assessed as satisfactory. There is no evidence to suggest she is or has been involved in homosexual relationships with any member of HM forces, or that criminal offences have been committed during the course of the relationship. SAC Smith has confessed that she is homosexual, although there is no evidence to suggest misconduct, corruption, blatant or promiscuous activities or unnatural behaviour on service establishments."

Yet she was chucked out of the armed forces.

John Beckett, a weapons engineer and mechanic in the Royal Navy, enlisted in February 1989 and was discharged in September 1993. In September 1993, the naval personnel secretary said:

"Throughout his service Beckett's reporting officers have commented upon his efficiency, intelligence, dedication and ambition and there is every indication that had it not been for his sexuality his Royal Naval career would have blossomed."

Sir Michael Layard, Second Sea Lord, said:

"We accept that he was a loyal and patriotic man and that he has not committed a civilian or naval disciplinary offence."

Yet he was thrown out of the armed forces.

Graeme Grady, a sergeant in the Royal Air Force, enlisted in August 1980 and was discharged in December 1994. His squadron leader wrote:

"Sergeant Grady … has been a loyal serviceman and a conscientious and hardworking tradesman who could be relied on to achieve the highest standards. He has displayed sound personal qualities and integrity throughout his service and has enjoyed the respect of superiors, peers and subordinates alike. He was promoted in 1990. Sergeant Grady is recommended to any future employer."

All four individuals clearly had sound records, yet the armed forces got rid of them because of their sexual orientation.

Homosexuality in the armed forces was decriminalised in 1994, yet a blanket ban was retained. That was unreasonable. Heterosexual misconduct, even resulting in serious criminal convictions in the civil courts, such as rape, is treated as a discretionary disciplinary matter. Criminal-style investigations still take place, often following anonymous allegations. Those subject to them have their private property searched in a degrading manner and are subject to prurient sexual interrogation.

Many countries have lifted the ban. In the North Atlantic Treaty Organisation, the United Kingdom, Luxembourg and Turkey are the only countries that have an absolute ban on homosexuals in the armed forces. Several NATO countries have no ban—Canada, Norway, Denmark, the Netherlands, Belgium, Spain and France. Germany has no ban for conscripts. Italy operates a ban on conduct but not orientation. Other countries that do not operate a ban include Australia, New Zealand, Canada, Ireland, Israel, Sweden, Switzerland and Austria.

The United States of America has some sort of "don't ask, don't tell" compromise, which is unsatisfactory in my opinion, but even that is being challenged in the courts there, and some of those challenges have been successful.

The costs of the ban are extensive. Every investigation takes up a lot of officers' time, at considerable cost. There is the loss of the cost of training of those service personnel. It has been estimated that as many as 500 homosexuals may have been forced to leave the forces, or have left voluntarily, in the past four years. The cost of their training may amount to about £40 million of taxpayer's money—wasted as a result of that stupid ban.

The judges in the Court of Appeal who heard the four's case all called for an urgent review of the policy, especially in view of the experience of other countries that have lifted the ban. They commented on the complete lack of evidence that the ban was necessary.

In response to that court statement, the Ministry of Defence set up its own internal review to consider the ban, but the responses that came at the time that that internal review was set up were extremely unsatisfactory. The First Sea Lord publicly called for a campaign to retain the ban, and the Minister of State for the Armed Forces dismissed the argument of the Master of the Rolls as "politically correct claptrap".

I know that service personnel have been consulted, but there has been no guarantee in that consultation of anonymity. There are also marked signs that those who oppose the ban will be subject to face-to-face interviews and may find themselves in difficulties resulting from that. I therefore believe that the review process that the MOD set up in response to the judge's comments has already been seriously compromised, and has come dangerously close to conducting an exercise to encourage hostility to all existing serving homosexuals.

If the four ex-service people win their case, the MOD may be forced to pay compensation to more than 500 people. The organisation Stonewall estimated that that might cost more than £12 million. We have had the example of the women in the armed forces who were dismissed despite warnings to the MOD that it was acting outside the law, but the MOD would not listen and that resulted in large compensation payments, totalling —50 million. A similar position is arising in this case, but the Government appear intent on incurring that bill for the taxpayer. If they were in local government, they would be surcharged by the district auditor for that attitude.

There is a distinction between privacy for individuals when they are off duty and sexual misconduct when they are on duty. Of course there should be strong sexual conduct rules in the armed forces which deal with all sexual behaviour, but that must be in relation to all, whether they are heterosexual or homosexual. It should not discriminate. That ban should go.

I make one final comment, because I cannot resist it, although it is probably ungracious. For years, the left has asked, "Where are the enemy? Who are the enemy?" We had a huge defence budget, but we were never told who the enemy were. In the past month, we have had the royal "Panorama" programme and the events that followed, so I suppose that we can at last say that the enemy is in charge of our armed forces.

Very amusing, Harry.

7.34 pm

It is my pleasure to contribute briefly to the debate, and as so much has been said my contribution will be briefer than I had anticipated. First and foremost, I disagree with Opposition Members' interpretation of clause 2. It seems to me, as a result of my brief experience with the Royal Navy, visiting various shore establishments during my time as a participant in the armed forces parliamentary scheme, that the clause would help the Royal Navy enormously in some of its difficulties with service personnel acting in and maintaining shore establishments. I should like my hon. Friend the Minister to say whether that is a sensible interpretation of the need for the clause.

I shall canter briefly on through a couple of aspects of concern, which I hope my hon. Friend the Minister might be able to clarify or which might form the basis for further discussion in Committee.

There is much sensible provision in the Bill on procedures for various aspects of courts martial. In many clauses—clauses 18, 19, 20 and so on—there is an important element that refers to internal redress procedures.

I very much support that aspect of the clauses. However, as the ombudsman does not have a locus in the armed forces—I am a member of the Select Committee on the Parliamentary Commissioner for Administration—I hope that it will be a matter of discussion in Committee or that my hon. Friend the Minister might consider that there should be a method to monitor complaints that might arise as a result of the redress procedures, to ensure that the procedures do not come into disrepute, and that the monitoring should be conducted impartially by an independent person or a former officer.

I strongly support clause 27, which relates to drug testing. My hon. Friend the Minister knows that I have played some role in trying to rid sport of drugs. The only way of achieving that is random testing, and I strongly support the concept of compulsory testing. I hope that the Committee will consider that. Testing need not be introduced overnight; it may be phased in gradually. Voluntary testing as a first step is a sensible way to proceed in those services where it is appropriate.

I shall mention homosexuality in the armed services only to say that my comments are already a matter of record. I disagree profoundly with the hon. Member for Leyton (Mr. Cohen). My sympathies or my opinions on the subject mirror those of my hon. Friend the Minister.

I shall briefly mention the Race Relations Act 1976 and ethnic minorities to say, as someone who has employed and employs people from ethnic minorities, that the issue should be considered with sympathy in Committee. However, we should bear in mind, as the hon. and learned Member for Fife, North-East (Mr. Campbell) said, that it is a matter not of apportioning blame but of encouraging people from all parts of the community to play their part in the armed services.

I was delighted at the enthusiasm of the first black trooper to mount guard outside Buckingham palace, who said that his heart was bursting with pride at being able to take part in that event. He is a splendid example to other people, who I hope will follow.

I shall end on a note of concern, which was ably expressed by my hon. Friend the Member for Salisbury (Mr. Key), on the subject of clause 26 and the Greenwich building and all that lies in it. I pay tribute to my hon. Friend the Member for Salisbury for his remarks on that subject, which were well measured and sensible. I would reassure him and other people by saying that my right hon. Friend the Secretary of State is well aware of the opinions of hon. Members on both sides of the House about that. He is on record as saying:

"These beautiful buildings are a national asset, part of our heritage to be cherished. We are looking for a new occupier, of the highest possible quality, who will add lustre to the building."

I am sure that my right hon. Friend and my hon. Friend the Minister of State, who also cherishes national heritage matters, will ensure that that occurs. His suggestions should be considered seriously by the Committee. I commend the Bill to the House.

7.39 pm

I intend to focus on just one clause of the Bill—clause 26—concerning future uses of the site currently occupied by the Royal Naval college. The clause has already attracted the interest of a number of hon. Members.

The site is steeped in history. From the 15th to the 17th centuries it was a royal hunting lodge and palace and the birthplace of King Henry VIII and Queen Elizabeth I. In the late 17th century it became a hospital, founded by King William and Queen Mary, for elderly and disabled seafarers. The naval connection remained intensely strong, and it was in the painted hall at Greenwich that Nelson's body lay in state after Trafalgar—as anyone who has visited the admirable Nelson exhibition at the national maritime museum will know.

In the mid-19th century, as the need for a specialist hospital for elderly seafarers decreased, the site was transferred to the royal naval college, which has remained the principal occupant to this day. I was slightly puzzled by the comments of the hon. Member for Salisbury (Mr. Key) who said that the complex had been passed from one Government Department to another. I understand that it has been occupied by the naval college for the last 126 years—not a bad record of occupation by one Department.

Not only is it a location with a long and a proud history, but it comprises an incomparable series of buildings designed by several of the country's greatest architects. Inigo Jones, John Webb, Christopher Wren, John Vanbrugh and Nicholas Hawksmoor left their mark on Greenwich, and they created a complex that not only is unique in Britain but also counts as one of the great masterpieces of European baroque architecture. It is currently being considered for world heritage status.

The site is held in trust for the Greenwich hospital—the charity established 300 years ago by King William and Queen Mary. As the hon. and learned Member for Fife, North-East (Mr. Campbell) pointed out, the Secretary of State for Defence is the sole trustee and the uses to which the Greenwich complex can be put are prescribed by Act of Parliament.

The Greenwich Hospital Act 1869 paved the way for the establishment of the royal naval college at Greenwich, and I think that I should remind hon Members what section 7 of the Act says. It provides for the site to be used

"for the purposes of the naval service or any department of Her Majesty's Government".

The amendments now proposed to the Act stem from the Government's decision earlier this year to locate the new joint service command and staff college at Camberley and to close the existing Royal Naval college and the joint services defence college at Greenwich.

I do not intend to dwell tonight on the background to that decision. I have already spoken about the matter on previous occasions in the House, most recently in the debate on the defence estimates on 17 October. Suffice to say, I believe that the decision was a bad one, taken on dubious grounds and following consultation that would have made Mr. Alain Juppé proud. While the Minister of State for the Armed Forces was always courteous to me throughout the consultation process, I have no doubt that he made a terrible mistake in failing to recognise the outstanding advantages of Greenwich as the proper location for the country's new tri-service college. I believe that posterity will judge him and the Government harshly for that decision.

Although I understand that the process of establishing the tri-service college at Camberley is proving neither as easy nor as economical as the Minister led us to believe initially, that is a matter to he pursued on other occasions—and I shall do just that. The Minister will have his work cut out to convince hon. Members that the transfer to Camberley will proceed on time and within budget—or that it should proceed at all.

In the meantime, the British public have had their first real taste of the consequences of the Government's decision. In September this year, the royal naval college appeared in an estate agent's brochure as a desirable property for sale on a 150-year, full-repairing lease. Predictably, the brochure contained the typical estate agent's blurb extolling the site's potential.

It is difficult to imagine any other country that possessed such a magnificent complex of buildings treating them in that way. The present Secretary of State for Health, when Secretary of State for National Heritage, famously described Greenwich as the British Versailles. One has only to think about the implications of that comment to realise the absurdity of what is now happening. One cannot imagine the French putting Versailles on the market, the Spanish trying to hawk the Escorial around estate agents or the Greeks trying to flog the Acropolis. It is so absurd a concept as to make the Government's actions quite ridiculous: a British Secretary of State for Defence, who is only too pleased to wrap the Union Jack around him when it serves his purpose, is trying to flog the country's heritage through an estate agent.

It also makes a mockery of the statement made by the noble Lord Cranborne on behalf of the Government in a document entitled "Defending Our Heritage", which was published by the Ministry of Defence just a year ago. It is about historic military buildings on the defence estate, and I shall quote the opening words of Lord Cranborne's introduction:

"The Ministry of Defence is the single largest owner of historic buildings of any Government Department — Some, such as Horse Guards in Whitehall, the Royal Naval College at Greenwich and the Royal Hospital at Chelsea, are more than part of the history of the Armed Services alone: they are part of the nation's history and the Department has a particular duty to act as their preserver and guardian".

Is that how the Government fulfil that role—by offering them for sale in a brochure by Knight, Frank and Rutley? It is hardly surprising that the Government's actions prompted a national outcry—a reaction that has clearly surprised and alarmed Ministers, who cannot have anticipated the strength of public feeling about the issue.

Even the Secretary of State for Defence, who is not usually the most emollient of characters, back-pedalled very rapidly and gave an assurance that the royal naval college would not be sold to any bidder whatever the consequences. He assured us that Tesco need not apply. I am reassured by the fact that the Secretary of State had some qualms about the prospect of the family firm of the former leader of Westminster council getting its hands on the royal naval college.

The Secretary of State has also assured us that Greenwich will not he sold to the highest bidder, that only appropriate uses will be entertained and that careful consideration will be given to the options before any decision is reached. The Minister repeated those assurances in a recent letter to me on the subject, and he has said much the same thing tonight. That is fine, but should we trust the Government? Their track record does not exactly command confidence. After all, they sold county hall not to an appropriate user, such as the London School of Economics, but to a Japanese consortium that has had great difficulty devising any use for the former seat of London government other than as an aquarium.

Quite apart from their track record, there are two other compelling reasons to doubt the Government's bona fides. The first is the way in which they have handled the response to Knight, Frank and Rutley's marketing exercise. Bids had to be submitted by 15 November, and I understand from an answer to a parliamentary question that I tabled that 11 expressions of interest had been lodged at that date—eight for the whole site and three for part of it. However, we remain in the dark about the identity of the bidders. Ministers have simply refused to reveal the identity of the organisations or individuals who have lodged expressions of interest or how they intend to use the site.

When challenged, Ministers have tried to defend their stance on the grounds of commercial confidentiality. That is nonsense. We are not asking to know the precise terms of the offers, but who is in the running to take over some of the country's finest buildings and to what uses they may be put. I do not accept the assertion made by the Minister in a letter to me of 5 December, in which he said:

"It would be quite wrong for the Government to reveal the identity of interested organisations, if they do not themselves do so, before we have had the opportunity to analyse their expressions of interest."

I put it to the Minister quite simply: what do they have to hide? If they are reputable serious organisations that would make appropriate tenants for the premises, they can hardly wish to hide their bids under a cloak of secrecy.

The national maritime museum and the university of Greenwich have properly felt it appropriate to reveal their interest in the site. If organisations do not feel confident that their case for taking over the Greenwich site will withstand public scrutiny, they should not be entrusted with control of that magnificent complex of buildings.

In his letter to me, the Minister also claims that the Government need time to clarify the proposals and to consult heritage and other bodies before a decision is reached. I doubt what meaningful consultation can take place with heritage bodies and other interests if the identity of the bidders and the uses to which they propose to put the building cannot be revealed. That would be a strange consultation. In any case, why did the Government not consult before making the proposal? Why was there not an initial consultation to establish what uses for the site might be appropriate before estate agents were engaged to hawk the buildings around?

The second compelling reason for doubting the Government's bona fides is the wording of clause 26. Section 7 of the 1869 Act allows the use of the Greenwich site for the purposes of any Government Department. That would seem to make possible appropriate heritage or educational activities, such as those proposed by the national maritime museum or the university of Greenwich, but it would not permit a private use. There must, therefore, be real grounds for concern that, in seeking to change that legislation, the Secretary of State is paving the way for the privatisation of the Greenwich complex. If Ministers are not prepared to reveal the identity of the bidders, they cannot hope to assuage our anxiety that it is a prelude to privatisation.

The very broad remit given by clause 26 to the Secretary of State to grant a lease to any person appearing to him to be suitable for a period of up to 150 years on such terms and conditions as he thinks fit gives enormous latitude and would make it difficult even for a bizarre and inappropriate decision to be challenged. The Secretary of State may say that Tesco need not apply, but I see nothing in clause 26 that would prevent him from granting a lease to Tesco, if he chose to do so.

The only limitation on the Secretary of State's power is the requirement that any proceeds from the site should be applied to the benefit of the Greenwich hospital charity. I am not a lawyer, but others who are better qualified may have a view on that. It could be argued that the legislation imposes an implicit obligation on the Secretary of State to seek the best possible return for any lease that is granted. That obligation could make it difficult for the Secretary of State to approve an appropriate use generating a low income as against an inappropriate use generating a substantially higher income as that would be in the interests of the Greenwich hospital, of which he is the sole trustee. That issue should certainly be considered closely in Committee.

It is not acceptable, not least after the sobering disposal of county hall, to allow such wide-ranging powers to the Secretary of State to dispose of the Greenwich site to whomsoever he chooses. It is arguable that the clause should be dropped entirely and the 1869 provisions retained. That would allow appropriate uses for the purposes of any Government Department, such as the Department of National Heritage, and might prove sufficient to enable the national maritime museum, which occupies the adjoining premises, to take over the painted hall and the chapel and to organise through the proposed trust the letting of the other premises.

Even if it is felt that a new clause is now required to reflect the changes over the 125 years since the existing legislation was passed, it cannot be right to allow the Secretary of State such unfettered discretion to dispose of the Greenwich site. At the very least, clause 26 should be amended to provide proper safeguards so that only uses that are clearly compatible with the remarkable historical and architectural qualities of Greenwich could be approved.

For example, it might be possible to establish a separate organisation or trust, comprising people with relevant expertise and standing, to vet all proposals and give a public verdict on them before the Secretary of State is empowered to grant a lease. At least that would begin to reassure the public that the hugely important decision about the future use of one of Britain's finest sites will not be taken behind closed doors by Ministers who have demonstrated by their previous actions that they cannot be trusted with the custody of the nation's heritage.

I was pleased that, in opening, the Minister acknowledged that the Committee would need to look closely at the clause. I know from the comments of my hon. Friends the Members for Motherwell, North (Dr. Reid) and for Walsall, South (Mr. George) and of the hon. and learned Member for Fife, North-East (Mr. Campbell) that the Committee will look at the clause very closely indeed. I hope that the possibilities that I have described will be considered carefully in Committee, and that appropriate amendments will be made to clause 26.

7.55 pm

I want to outline an amendment that I hope to canvass in Committee or on Report. It relates to the 300 British and empire soldiers who were executed in the first world war, who were found guilty of such charges as cowardice, desertion, sleeping at post, disobedience, throwing away arms and hitting a superior officer.

It has long been my view, and that of an increasing number of people, that those British soldiers were denied the rules of natural justice. A high proportion of them were suffering from mental illness caused by their experiences in the trenches, and it is now time that they were granted pardons. That would be the purpose of my amendment, and I understand from informal consultations with the Clerks Department that it falls within the scope of the Bill.

Although a long time has elapsed, the matter is of our century, and, mercifully, a few thousand veterans of the great war are still alive. Nothing would give them greater satisfaction than to know, albeit late in the evening of their lives, that their comrades in arms had been pardoned and exonerated by the nation. There is overwhelming support for those pardons among veterans and those who were close to veterans of the great war.

My postbag is full of letters from every part of the United Kingdom and around the world. Almost without exception, they support those pardons, as does the representative organisation of ex-service people. The Royal British Legion has passed resolutions requesting that the matter should be reviewed.

Although a long time has elapsed, the British establishment—I hesitate to use that word—suppressed the documents relating to those courts martial for 75 years. When they were released and examined and people argued that there had been a miscarriage of justice, the establishment said that it was "too late". That is not satisfactory, because dependants of those executed soldiers have examined the papers relating to their loved ones' field courts martial and execution and demanded a remedy. They have received a great deal of support.

I recently had a long conversation with Lord Houghton of Sowerby, who was a distinguished Member of the House for many years and who fought at Passchendaele. He argues with immense conviction that there is a profound need for the wrong to be remedied, at least in terms of the public record.

I hope that, when hon. Members consider the matter in Committee or on the Floor of the House, there will be an opportunity to vote on it, and that there will be a free vote, because the proposal for pardons commands widespread support across the political spectrum, as it does in the country.

The Prime Minister has courteously written to me several times about the issue. While he expressed sympathy and acknowledged that there was injustice in the first world war because of the nature of trench warfare and so on, he said that there should be no pardons, because it is a matter of history. Of course it is a matter of history, but cannot be glibly dismissed as if it were the Napoleonic wars or the glorious revolution; it is of our century.

Comrades in arms and dependants of those soldiers are still alive. People who suffered shell shock and trauma in the second world war have written to me and other hon. Members saying, "I know what it's like. I suffered shell shock. I am pleased it didn't happen to me in the earlier conflict." There is an overwhelming demand to recognise the matter as not merely one of history but one which is still within our scope and time, and which it is our duty to remedy by granting pardons.

If we are to spend million of pounds each year teaching history to schoolchildren and college students, we need to write it with clarity and precision. That includes declaring and writing about some of the uncomfortable aspects of our history. I venture to suggest that this is an uncomfortable aspect, because, in retrospect, we did an injustice to those British soldiers. We must now acknowledge that, and should put the record straight.

There is immense interest among schoolchildren in the subject. I make no apology for saying that. Many schools have based lessons around the executions. They do so to demonstrate the trauma of warfare in the first world war and the fact that, while we are proud of our system of justice, it is fallible. I hope that the House will be minded to consider the point.

In my previous ten-minute rule Bill, I suggested that there should be some system whereby those field courts martial could be reviewed. My hon. Friend the Member for Motherwell, North (Dr. Reid) referred to another episode, with which I am less familiar but about which there is powerful evidence suggesting that it should be reviewed—the so-called Salerno mutiny in world war two. It would be sensible and sensitive of the House at least to put into the Bill the facility for such matters to be reviewed.

I said that the field courts martial were unjust. People might ask how that could be so, and how all 300 soldiers could possibly be innocent of wrongdoing and all simultaneously suffering from trauma and shell shock. In fact, I do not argue that, but a very large number of those men were in those categories. That is demonstrated, and documented in detail, by the papers that were suppressed for 75 years. Even the most cursory examination of those papers by appropriately qualified legal and medical people would conclude that it was wrong for those men to be executed.

The common factor for all 300 men is the fact that they were denied the rules of natural justice. Those rules were not invented just recently; they have been a theme of our justice system for centuries. The standards that applied in the earlier part of this century are no different from those of today.

The men were not given the opportunity to prepare an adequate defence. Many of them were not represented at all; if they were represented, it was by somebody who was demonstrably not qualified to do so. After their field courts martial were completed, they were often not told what their sentence was until between 12 to 24 hours before it was carried out. Not only is that demonstrably unfair and unjust, but for all the 300-plus soldiers, there was no right of appeal against the sentence of death.

Therefore, I say with confidence that all 300 cases justify pardons. In many cases, the arguments are not only buttressed but redoubled by the fact that the documents show that many men were sick, traumatised and suffering from appalling conditions that no man could endure.

I meant at the beginning of my speech to apologise to the Minister for missing his opening remarks. I do not think that he currently has a tremendously high opinion of me, but no discourtesy was intended. I am prompted to refer to the hon. Gentleman because his late grandfather's doctor, Lord Moran, wrote extensively in his diaries and memoirs about shell shock in the first world war. In moving terms, he demonstrated, as a contemporary witness of the executions, the fact that the men were sick and traumatised.

I invite hon. Members, between now and when I hope to be able to table an amendment, to examine the documents of Lord Moran, the powerful book "For the Sake of Example" by His Honour Judge Anthony Babington, and the well-documented book "Shot at Dawn" by Julian Putkowski and Julian Sykes. They show that wrongs were done.

While it is a matter of some regret that previous generations were responsible for those wrongs, it could be a matter of national pride for our generation that, towards the end of the century, we put the record straight, drew a line under this unhappy episode and included the names of those soldiers among those that we honour and respect every year at the remembrance services.

It is interesting that the regimental association of the Durham Light Infantry has already included the names of that regiment's executed service men in its book of remembrance. It considers that no shame attaches to those people. The memorial to the Black Watch in Dundee includes the names of the executed soldiers.

In the wonderful graves administered by the Commonwealth War Graves Commission in Flanders and on the Somme, those men in death lie alongside their comrades in arms. They are not discriminated against. That suggests that, in the years immediately after the first world war, albeit silently, there was recognition among those who made decisions that those men should not be discriminated against. There was a mood for such recognition of their service to be extended to them in death.

I hope that we can get the royal pardons either by statute or by the Prime Minister reflecting again on the matter during the course of this Bill, and subsequently recommending to Her Majesty that the royal prerogative be exercised. Statutory change would not then be necessary. Even if the pardons are not granted in the immediate future, which I would very much regret, one thing has changed since I and other people commenced this campaign some three years ago. My postbag shows beyond all doubt that, in a sense, those men have been pardoned by the highest court in the land—British public opinion. If one discusses the matter with people in our streets and in clubs among ex-service men and women who went through the first and second world wars, and with serving service men and women today, one finds that, overwhelmingly, they proclaim that those men were brave British soldiers who should be granted pardons. I hope for and look forward to the support not only of Opposition Members but of the many Conservative Members who have over the months told me of their support for such pardons to be granted.

8.9 pm

With the leave of the House, I shall be brief, because I have only two things to say. First, in response to the contribution of my hon. Friend the Member for Thurrock (Mr. Mackinlay), I and many hon. Members believe that it is never too late to right a wrong. When people tell me, whether it be a private or the Prime Minister, that these things are merely a matter of history, I commend to them Hegel's maxim:

"The owl of Minerva spreads its wings only at the coming of the dusk."

History is not a source of forgetting; it is ultimately the source of wisdom. Let that wisdom through history counsel us, as we deliberate on the issues raised by my hon. Friend.

The second general matter refers to the other speeches that have been made. Although there have been divisions on detail, I think that, on most of the issues—there are one or two possible exceptions—hon. Members agree in principle that advances have been made in the Government's position, whether we dispute the degree of those advances. The Minister will know that my view has not been fashionable in recent decades. We should be building towards a framework consensus on national security matters.

That view is imposed on us by circumstances as well as by its popularity in our armed forces around the country. I ask the Minister, therefore, wherever possible, to approach amendments in a consensual fashion, because he will find that our Front-Bench team is not destructive, but, I hope, constructive, and, on the odd occasion, perhaps constructive with effect.

Having said that, I look forward to discussing these matters further in Committee. I hope that we can do so in a fashion that is a credit to the service men and women whose lives will be affected by our deliberations.

8.10 pm

With the leave of the House, Madam Deputy Speaker. We have had a valuable, constructive and useful debate. I am sure that, in its work, the Select Committee dealing with the Bill will wish to take forward the views that have been set out by right hon. and hon. Members, and take account of the many experiences that they have brought to our debate.

The hon. Member for Motherwell, North (Dr. Reid) in an, as usual, good speech, made the most important point in relation to a Bill about service discipline: discipline, good order and morale are inseparable. I agree with him about the cadet forces' excellence, and about the wonderful nature of challenge weekends—what a tremendous force of good they are. I hope that we will be able to do more in that sector to help young people.

I am grateful for the hon. Gentleman's welcome for our reforms on court martial procedures. I note his point about drugs, and I agree that it would be wrong to soften our line on drugs; indeed, there is no question of softening that line. Drug misuse in the armed forces is unacceptable. As he knows, offenders are normally discharged. We do not accept habitual drug users into the armed forces.

One-off experimenters are not automatically excluded. The cases are considered on their individual merits, but we make it clear to all recruits that drug misuse will simply not be tolerated, and can and will attract disciplinary action, including dismissal or administrative discharge from the service.

The hon. Gentleman talked about racial discrimination in recruiting. I do not accept that there is such discrimination. It is true that we must do better on recruiting in the ethnic communities, and we are committed to trying to increase that. That point was made by a number of hon. Friends and Opposition Members, especially my hon. Friend the Member for Gosport (Mr. Viggers), who made his point in a powerful manner, as did the hon. Member for Leyton (Mr.Cohen), who has been a powerful enemy of racism in this country and whose words therefore carry weight.

As to someone who said that I was an unenlightened Minister in the matter of women in the armed forces, that was an outrageous suggestion. There is no more enlightened Minister in the Government when it comes to women, as you know, Madam Deputy Speaker. As hon. Members know, or would know if they knew something about the armed forces, women are excluded from literally a tiny handful of roles in the armed services. They make a hugely vital contribution to the armed forces, without which those forces would not be able to operate anymore. We need to go on recruiting the high calibre of young women that we are getting into the services.

I acknowledge what someone said about physical selection of women, gender-free testing and all that. There is much more work to be done on that. By and large in the armed forces, there is tremendous commitment. Anyone who has seen these young women in all three services, who make such a formidable contribution, will know that the only thing we have to worry about is how to go on recruiting such excellent women and to develop their careers. I accept that the need will always exist to ensure that, providing they are good enough, they are promoted on the same terms as.

The hon. Member for Motherwell, North mentioned the Home Office's use of the services. I think that he was exaggerating to make a point. As he knows—I have said it before here—we are considering setting aside part of the military corrective training centre as a young offenders institute. That work, which is being conducted in a most careful and detailed way, is being considered by Ministers. We hope to come to a decision shortly.

We do not intend to anticipate that decision tonight, but I want to repeat that anything we decide involving the use of part of the MCTC will in no way ever diminish the first-rate and highly professional military training undertaken there. If it were to do so, we would stop it at once. It will not affect the military ethos of the course. I turn to the question of pardon for soldiers executed in world war one, which was raised by the hon. Members for Motherwell, North and for Thurrock (Mr. Mackinlay), and I understand why the latter could not be here for the early part of the debate. For the edification of the hon. Member for Thurrock, I have read probably every book on that matter, and certainly almost all the great books about physical courage and otherwise on the battlefield. After the most detailed and careful consideration by the Prime Minister and the Ministry of Defence, it has been decided that it would be inappropriate to grant a pardon.

The people executed—some 346 men—represented 11 per cent. of the people who were condemned to death. As hon. Members know, the other sentences were commuted. A review found that there were no procedural errors or legal improprieties in the courts martial or in the subsequent reviews by the chain of command. On those grounds, there is no basis for a pardon.

As a general principle, it is inappropriate to reconsider historical events in the light. of modern attitudes. Most soldiers stayed and fought in the trenches under appalling conditions, and they needed to be able to rely on their comrades. I acknowledge, however, the determination of the hon. Member for Thurrock in his campaign, and he is to be applauded for sticking to his guns.

My hon. Friend the Member for Wyre (Mr. Mans) made some valuable points that we noted, especially the important point about the treatment of civilians alongside military personnel. I have no doubt that the Select Committee, when it discusses these matters, will wish to deliberate on that.

My hon. Friend the Member for Wyre, the hon. Member for Motherwell, North and the hon. and learned Member for Fife, North-East (Mr. Campbell) referred to the Christina Menzies case. That unfortunate case was thoroughly investigated by the special investigations branch of the Royal Military Police and the German civil police. The prime suspect was tried and acquitted of Christina's murder. No doubts exist about the competence either of the Royal Military Police or of the Army legal services in dealing with such serious cases. The prosecution was properly brought, and conducted by an experienced senior legal officer of Army legal services.

The service man in question was tried for and acquitted of Christina's murder trial. His trial by general court martial was properly conducted, and a "not guilty" verdict was passed.

I should make it clear that neither I nor anyone else, as far as I know, seeks to re-run the trial. Will the Minister at least give us an undertaking that, during the Committee investigations, he will have an open mind to considering the lessons that may be drawn from that case, with a view, if necessary, to drafting, if possible, an amendment that would be acceptable not only to the MOD but to others in the House, to avoid problems that have arisen? I do not seek to attack personal competence or decide guilt or innocence. However, there are lessons to be learned, and I hope that, in Committee, the Minister will keep an open mind on these matters.

In his distinguished career in the House, the hon. Gentleman will never come across a Minister whose mind is more open to change than mine.

Even the Minister cannot stop himself laughing at that.

I laughed before the hon. Gentleman.

If it is possible to do what the hon. Member for Motherwell, North requires, we shall do it, but I suspect that it is probably not possible.

The hon. Member for Walsall, South (Mr. George) who, sadly, is not able to be in his place, expressed interest in clause 2 relating to the MHSE, and the related question of military home service engagement and the Ministry of Defence police. He does not agree with the clause. The hon. Gentleman has always taken a close interest in the Ministry of Defence police, and he particularly links that to the MHSE. We recently issued a consultation document which was mentioned by my hon. Friends the Members for Salisbury (Mr. Key) and for Wyre and others. We shall have to see how that consultation goes.

Clause 2 is purely an enabling clause, which will provide the services with what I hope will be a useful adjunct. As an hon. Member implied, it is certainly not intended to use local service as some kind of panacea to overcome wider recruitment difficulties. It is a totally different type of engagement, and that would not be possible. By far the vast majority of service men and women will continue to be required to serve wherever we need them, at home or overseas, in peace or in war. They could not possibly be on local service engagements, but in future there may be merit in such an arrangement.

I shall now turn to security and the Ministry of Defence police. The hon. and learned Member for Fife, North-East, who knows a great deal about these matters, will realise that, whatever his criticisms of the Ministry of Defence, of which many are probably entirely justified, the one issue on which we are not prepared to take a short cut is on the security of our installations and our people. There is no question of our ever doing that.

The Ministry's first priority on security is to ensure the safety of our personnel and establishments and the effectiveness of our operations. Over the years, the Ministry of Defence police and others who are responsible for guarding our installations have done a first-class job.

My hon. Friend the Member for Gosport was right when he spoke about recruitment difficulties. We are making vigorous efforts to resolve them. He also spoke about the Bett review, which, of course, will not be a matter for the Committee, although the wonder of this procedure is that we will be able to raise almost anything, and I have no doubt that a way will be found to give Bett a good canter round the course. My hon. Friend raised a number of other important issues which we shall need to deal with.

As usual, the hon. and learned Member for Fife, North-East made an excellent speech. He is a lawyer, and therefore, of course, knows everything. We have to be particularly careful when dealing with matters of this type, because he knows what he is talking about.

The hon. and learned Gentleman raised the question of the death penalty. There are no proposals in the Bill to alter the powers of courts martial to pass death sentences. It is intended to retain the death penalty as a non-mandatory sentence for five offences that have been committed with an intent to assist an enemy directly or indirectly. As the hon. and learned Gentleman knows, it is the policy that such offences should never be carried in peacetime. The court martial reforms in the Bill mean that there would be a new right of appeal to the courts martial appeal court against a death sentence if one were ever passed after the Bill becomes law. The hon. and learned Member for Fife, North-East spoke about clause 18, relating to sex discrimination; that matter was also raised by the hon. Member for Leyton. Of course we shall give the matters they raised the most careful consideration, and I have no doubt that the Committee will wish to discuss this matter, which, for reasons of public comment and circumstances of time, is on people's minds.

There were several coloured soldiers in my regiment and I never saw any of the stuff that has been mentioned, but I am aware of public concern about it. It is easy to criticise, and that can be extremely serious for the armed forces. Ethnic minorities make a splendid contribution to our national life, and we need to get more members from those communities into the armed forces. My hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) made an extremely good comment about that.

My hon. Friend the Member for Salisbury is a member of the Select Committee on Defence, and has substantial forces interests in his constituency because of its location on the edge of Salisbury plain. It is in almost the heart of the British service areas. He made a well-informed and sensible speech. I was interested in his remarks about policing, which, as one would expect, made a good deal of common sense. We look forward to seeing the arguments developed in Committee. His list of police forces in his constituency should at least ensure a low crime rate in Salisbury. If not, what on earth are those forces doing?

My hon. Friend the Member for Salisbury spoke with feeling and considerable knowledge and authority, deriving from his former and happy incarnation as a Minister at the Department of National Heritage, about Greenwich. I totally agree with him on that matter. We can agree or disagree about the way in which the matter has been handled, and I am sure, with that wonderful hindsight that we are all so lucky to have, we could have handled it better. The purpose of what we now seek to do was admirably encapsulated by my hon. Friend.

As usual, the hon. Member for Leyton made a pithy and pointed speech, which was all the more impressive when we recall that, for his entire time in the House, he has had a genuine commitment to rooting out racism. I assure the hon. Gentleman that, as long as I am Minister for the Armed Forces, since before my time and into the future, the principle that the services are fully integrated and non-discriminatory will be at the front of our minds. If at any time there is a need to take action to ensure that that remains the case, the hon. Gentleman may be assured that we shall take it.

We should be happy for the hon. Gentleman to come to the Ministry of Defence to talk to us, so that we could tell him about our huge range of programmes to try to ensure that we get these matters right. He could help us by encouraging members of the ethnic communities to join the armed forces. They will find a warm welcome, and their contribution will be greatly valued, not because they are from ethnic minorities but because we need many high-quality young men and women to join the armed forces, and there are many such young people in the ethnic minorities.

The hon. Member for Leyton spoke about homosexuality, on which subject his has always been an honourable voice. As I have said, we shall present our review of our policy to the Committee as we promised, and I have no doubt that the Committee will wish to debate it at some length. The House knows the views of the Ministry of Defence, the joint chiefs, the chief of defence staff and others on these matters. All those views have been made plain, and they are not in any sense homophobic or judgmental. They have to do with military discipline and good order, and the immensely strong and genuinely held feelings of hundreds of thousands of people in the armed forces.

I congratulate my hon. Friend the Member for Hall Green on his membership of the armed forces scheme. His interpretation of clause 2 is quite correct. He supported clause 27 on drug testing, and we are grateful to him for that, because he has particular knowledge in this matter and are glad to have his endorsement. We note his views on homosexuality and race.

The hon. Member for Greenwich (Mr. Raynsford) made a powerful speech, as one would expect. I agree that Greenwich is not only one of the great masterpieces of baroque architecture, but probably one of the greatest masterpieces of any architecture, in this country. It is perfectly true that the question of the new arrangements for Greenwich has aroused feelings going far beyond those who have served there on the naval staff college course and the generations of serving officers and men of the Royal Navy. Greenwich has been at the centre of their lives and that of the Royal Navy.

It is an institution that has, however, changed use on a number of occasions. If those marvellous buildings are to live, they must be used properly. As the hon. Member for Greenwich knows, we are proposing to grant a lease, not to sell the freehold, to those whose proposals meet our criteria and are of the greatest merit. The buildings will remain for all time Crown property, held in trust by the Secretary of State for Defence for the exclusive benefit of the Greenwich hospital.

The hon. Gentleman and I have discussed on a number of occasions why Greenwich cannot be the joint services staff college. I am sorry if he does not agree with me, but we are happy to give him any further information that he requires. Greenwich simply could not possibly accommodate that college.

We are seeking for Greenwich the most appropriate, dignified and fitting use of those wonderful buildings for the millennium and beyond. Any suggestion about a joint services staff college is not a serious contribution, and simply not even a starter. I have already said that we must seek the most appropriate, fitting and dignified use of those wonderful buildings.

It has been reassuring that, in our debate, the House has demonstrated the need for and its understanding of the reasons behind the service discipline Acts, and the system of discipline they enshrine. I do not believe that anyone here would disagree with the admiration that is generally felt for the members of the British armed forces. Wherever they go, they show immense qualities of courage, resolve, tenacity, common sense and, above all, good humour. Discipline plays a large part in instilling those qualities. We can all properly take huge pride in the armed forces. As some 13,000 of our forces are to be deployed to Bosnia in the next few days, it is right .that we should remember that it is a complete fallacy to think of service discipline as some sort of gratuitous imposition on our young men and service women. It is better to regard it rather as a framework which is absolutely vital to their safety and well-being, especially when we ask them to undertake many extremely challenging, very difficult and sometimes dangerous duties. Such duties are the hallmark of service life, for which they are admirably trained and prepared.

That is why no responsible Government of any colour will play fast and loose with the system of discipline. It is our duty to ensure that that system is effective and fair and that justice is not only done, but is seen to be done. The Bill is about achieving that end.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Select Committee.—[ Mr. Ottaway.]

Delegated Legislation

With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

Companies

That the draft Uncertificated Securities Regulations 1995, which were laid before this House on 16th November, be approved.

That the Company and Business Names (Amendment) Regulations 1995 (S.I., 1995, No. 3022), a copy of which was laid before this House on 29th November, be approved.—[ Mr. Ottaway.]

Question agreed to.

European Community Documents

With permission, I shall put together the motions relating to European Community documents.

Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

Environmental Impact Assessments

That this House takes note of European Community Document No. 6612/94 and the unnumbered Explanatory Memorandum submitted by the Department of the Environment on 30th November, relating to environmental impact assessments; recognises the Government's continuing commitment that full consideration be given to environmental matters in decision-making processes; welcomes the Government's intention to press for the removal of a number of unnecessarily prescriptive provisions in the draft proposals; and supports the Government's intention to seek clarification of certain provisions.

Single Currency

That this House takes note of European Community Document No. COM(95)333 on the practical arrangements for the introduction of the single currency and the European Monetary Institute Report, dated November 1995, on the changeover to the single currency; and agrees with the Government that Protocol 11 annexed to the EC Treaty, which means that the United Kingdom is not committed to move to Stage 3 of Economic and Monetary Union, and can decide whether to join on the basis of the United Kingdom's national interest given the circumstances at the time, is to be welcomed.—

[Mr. Ottaway.]

Question agreed to.

Standards And Privileges

Ordered,

That Mr. D. N. Campbell-Savours, Mr. Quentin Davies, Mr. lain Duncan-Smith, Mr. John Evans, Mr. Doug Hoyle, Sir Geoffrey Johnson Smith, Mr. Nigel Jones, Dame Jill Knight, Sir David Mitchell, Mr. Tony Newton and Mrs. Ann Taylor be members of the Select Committee on Standards and Privileges.— [Mr. Ottaway.]

Burnley And Pendle Bus Company

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

8.33 pm

I am grateful for the opportunity to raise an issue which is of great concern to my constituents and also to those of my friend, the hon. Member for Burnley (Mr. Pike), who is present.

In one sense the debate has been placed in context and is nicely framed by the report of the Select Committee on Transport, entitled "The Consequences of Bus Deregulation", which was published today. The Committee makes a number of recommendations that I wholeheartedly endorse. It has recommended that the Government should undertake

"an urgent review…for the disposal of the remaining municipal undertakings."

That is germane to the subject of the debate. The Committee considers

"the present means of regulating competition in the bus industry through the OFT"—

the Office of Fair Trading—

"is unsatisfactory and needs to be changed."

I agree. It goes on to recommend that a

"specialist regulator be created for the bus industry"—

an Ofbus. I also agree with that.

The Committee also recommends that the Government

"should make a statement of policy objectives for buses."

When I reflected on that, I found it astonishing that we have not had such a statement from the Government. Perhaps the Minister will refer to that when he replies.

I am expecting quite a lot from the Minister following the article which appeared at the weekend in The Observer under the headline

"Norris reins in bus companies."

The newspaper reported that the Minister plans to rein in the "cowboy operators" this week. It also reported that new penalties will be introduced for sub-standard services. Apparently, predatory companies will feel the lash from the Government after a decade of free-for-all. I hope that the Minister will enlighten us as to his response to the Select Committee report.

We know from that report and the transport statistics which the Department of Transport published earlier this year that since deregulation the average age of buses has risen dramatically. The Observer reported:

"More than a third of Britain's buses are now more than 12 years old."

I believe that more like 48 per cent. of buses with more than 33 seats are more than 12 years old. The number of new buses that have been ordered by our bus companies since 1990 has plummeted by 66 per cent. Those are desperate statistics. We now barely have a bus industry to talk about. In 1979, we manufactured 25,531 buses; in 1994, we manufactured a paltry 9,566.

That is the context in which I would like to discuss what is happening in Pendle. In October this year, the local council, which is Liberal-controlled, announced that it intended to sell the municipal bus company, Burnley and Pendle Transport. The company is jointly owned by Pendle and Labour-controlled Burnley. It runs some 90 buses and 16 coaches, and employs about 270 people, including 200 drivers.

If Pendle council cannot persuade Burnley to agree to the sale, the council's stated policy is to sell its 50 per cent. stake and to press ahead on its own. That decision to sell came like a bolt from the blue. There was no mention of the planned sale at the local elections in May this year, which returned a majority Liberal council in Pendle. I have asked myself why it was not an issue.

A leading Liberal councillor, who happens to be an employee of Stagecoach, Mr. Ian Gilhespie, told the Pendle Citizen on 30 November:

"The buses were not an issue at the election because it was only after the election that Burnley Council approached Pendle to see what Pendle thought about the idea."

That is a preposterous claim, and a complete invention. The idea that Burnley was prompting Pendle to sell its stake in the bus company is ludicrous. I want to put the record straight.

The Price Waterhouse report, which set out the options for Burnley and Pendle Transport, went to both councils on 6 July. It made it perfectly clear what the consultants thought of the respective positions of both councils. The report said:

"Burnley Borough Council would prefer to maintain the status quo (ie retain the existing ownership) and Pendle Borough Council would prefer to seek an option which allows it to realise the value inherent in its shareholding."

That was the position then and it is the position now. Pendle council wants to sell, but Burnley council, to its credit, is not even prepared to contemplate any sale.

There has been an enormous tidal wave of opposition to the sale, which has dominated the local press since the beginning of October. Some 13,000 local people—a phenomenal number—have signed a petition against the sale, and that has been handed to Pendle's chief executive. That opposition shows the extent of the disquiet felt in the area.

The Liberals constantly trumpet about local democracy and they make a great virtue of it, but I challenge them to put the issue to a local referendum. That would not be impossible. Tower Hamlets, which was a Liberal-controlled council for many years, consulted the people on their preferred level of council tax. If it was good enough to consult on that, why is not it good enough to consult in Pendle on the level of bus services? Why will they not test the views of local people?

The idea of selling our bus company came not just from the Liberal group, but from a small number of people within it. Most of the Liberal councillors were kept in the dark. Why do they want to sell? They just want to get their hands on a valuable capital receipt. Councillor Tony Greaves, who casts a long shadow over this matter, told the press that there was no secret about that. On 9 November, he told the Lancashire Evening Telegraph that Pendle would go ahead and sell its 50 per cent. share in the company "with or without Burnley."

The Liberals want to sell the bus company, but not because it runs at a loss. On the contrary, it turns in a healthy profit, and last year it paid a dividend of £71,000 to each council. Nevertheless, there is tremendous pressure to sell the bus company before 31 March. If that is achieved, the council can get a 75 per cent. capital receipt. If the sale slips beyond 31 March and into the new financial year, the ratio will be just 50:50, with the council able to spend only half on whatever takes its fancy, with the other half being used to repay council debt. There is a race to sell, which could affect the sale price. I hope that the Minister will comment on that.

The Liberal leader of Pendle council, Councillor Alan Davies, claimed loftier motives for the sale. He told the "Town Crier", an excellent publication that circulates in the West Craven area of my constituency:

"We will not join the ignorant political abuse that is going on. Up until now, all we have had is the biggest set of false suppositions, emotive distortions and downright lies that I have ever seen from anyone. We will at least tell the truth."

He said that they would tell the truth. He then said:

"We have decided to consider the sale of Pendle's shares because we believe it could be the best for bus services and passengers, best for the company and its jobs and the best for the council tax payers and residents of Pendle."

It is certainly not the best for bus services and passengers, as the Select Committee confirmed in its report. It is also not the view of the Liberals in Eastbourne, which has the distinction of having the first municipal bus company in the country. It is still Liberal-controlled, and the Liberals want to hang on to their local authority bus company.

The company's managing director, David Howard, told me in October:

"There is no doubt that generally speaking the ownership of a bus company by a local authority can be seen by the population as being a service provided by local management with appropriate knowledge and identity with the area, who may be more sympathetic to consider service provision than the management of one of the larger bus operating groups remote from the district concerned."

That is certainly true.

Councillor Davies told people that the sale would be best for the company and for jobs. That is certainly not the view of the former general manager of the Burnley and Pendle bus company, Mr. Roy Marshall. He was general manager for 12 years from 1974 until his retirement in 1986. With his vast experience, he reached the conclusion that the sale would be detrimental to the employees and to local taxpayers. He said that a takeover by Stagecoach—which is one of four companies bidding for the company—or one of the other private operators could mean cuts in staffing levels and wages, closure of depots and workshops and the cutting of routes and services that do not bring in enough income. That is the reality, as testified by today's Select Committee report.

It was Jim Bowie, the well-respected district secretary of the Transport and General Workers Union, who told the Barnoldswick and Earby Times early last month:

"Burnley and Pendle has been one of the most successful municipal bus companies in the county. It has the best people, the best fleet and among the best workers."

That is a tribute with which I wish to be associated.

Councillor Davies also said that the sale would be best for the council tax payer. That is absolute nonsense. As I have already explained, the company makes a profit year after year.

The leader of the council said that the Liberals would not trade in abuse, yet his colleague Councillor Tony Greaves is a byword for abuse. He is ungracious, brittle and sour, and he constantly trades insults with people. In fact, he recently called Councillor Colin Waite a thug. The Lancashire Evening Telegraph chided him, saying:

"Hurly burly and hot tempered outbursts are the stuff of politics but personal abuse deserves no place in any debate. And unless he cares to understand this and apologise Councillor Greaves need not go out to a public meeting in search of thugs to condemn but could stay at home and look in the mirror."

Hear, hear to that.

Since then, there have been threats of legal action by Liberal councillors against the Pendle Labour party. I will not weary the House by going into the detail, as I have already covered it in a recent early-day motion.

To try to retrieve the position, the local Liberal party has been sending out a blizzard of leaflets—some 20,000—setting out the reason for the sale. In the leaflet "The facts about the buses", it poses the question:

"If it is sold will services get slashed?"

It gives the answer:

"No. Liberals have always been in the forefront of pressing for good local bus services. The fact is the council will not sell without strong guarantees about services."

I tell the Minister that the Liberals will not get those guarantees.

I tabled a clutch of parliamentary questions before the end of the last Session. The Minister wrote to me last month saying:

"There were very few cases"—

he was referring to previous privatisations—

"where the employment terms of the workforce were formally protected—although some purchasers promised that there would be no redundancies for a given (usually quite short) period. In a few instances minimum service levels were stipulated as part of the sale, again for a limited (usually three years) period."

There are no guarantees, and the Liberals are kidding people if they think that they can get any covering services and jobs.

Finally, there is the question of what happens when one council wants to sell but the other does not. Again, I raised that matter with the Minister. I do not know whether Burnley and Pendle is unique, but it might well be. The Minister told me that such matters would be considered case by case.

On 1 November, the Lancashire Evening Telegraph indirectly quoted Councillor Tony Greaves as saying that the Secretary of State had already given his informal approval for the sale. I find that absolutely astonishing, and I want the Minister to comment on it.

The Minister has told me previously, in reply to a parliamentary question, that the Government's policy is to legislate to force councils to get rid of their bus companies. However, the Government are running out of time. There is nothing down for this Session to facilitate that. The whole system of deregulation, as the Transport Select Committee report says, needs to be put under the microscope because it is certainly not working.

The industry needs to be re-regulated to protect services, diversity and consumer choice. We need to encourage the Monopolies and Mergers Commission to take vigorous action to prevent anti-competitive behaviour, and the Select Committee agrees. We need to strengthen the powers of the Office of Fair Trading. We need to help municipal bus companies such as Burnley and Pendle to compete effectively, free of the artificial financial restrictions created by Government rules on council-influenced companies.

The incoming Labour Government desperately need to re-regulate the entire bus industry to give local authorities powers to plan and contract sensibly for bus services in their area.

rose—

Before the hon. Member speaks, may I ascertain that the hon. Member for Pendle (Mr. Prentice) and the Minister agree to him speaking? That is the tradition in an Adjournment debate.

Yes I do, Deputy Madam Speaker. Forgive me.

indicated assent.

8.50 pm

I am glad that the early start of this debate has given me the chance to make a few brief comments because the debate is very important. I congratulate my hon. Friend the Member for Pendle (Mr. Prentice) on securing the debate, which he has initiated because the council in his constituency has caused a problem.

The transport undertaking in Burnley and Pendle was brought together some 60-odd years ago as—originally—the Burnley, Colne and Nelson joint transport undertaking. It ran in that context until the local government reorganisation of 1974, when it took the new name Burnley and Pendle. Before I became a Member of the House, I was a councillor in the borough of Burnley, where I served on the joint transport committee for a number of years, and therefore have some knowledge of it.

My hon. Friend referred to the Transport Select Committee report, "The Consequences of Bus Deregulation" that has been published today. It is somewhat fortuitous that that report has come out today. I certainly endorse my hon. Friend's comments and echo his full support for the points that he highlighted.

My hon. Friend referred to the guarantees that are said to be being given by some of those who are bidding to buy the Pendle shares in the Burnley and Pendle joint transport undertaking. I emphasise "the Pendle shares" because there is no doubt that the Burnley shares are not for sale. Indeed, we hope that we can persuade Pendle to think again and not sell those shares.

Pendle Liberals, and those who are inclined to support the sale in that borough, need to think twice on two particular points. First, the petition has clearly shown that the public are strongly opposed to the proposed sale. Secondly, as my hon. Friend said, the Liberals and their supporters should know that guarantees given now are not worth the paper that they are written on.

Certainly in Burnley we all know that when the Burnley building society was taken over by the National and Provincial building society—in the early 1980s it was called a merger—certain undertakings were given. Those undertakings were guaranteed in a letter sent out by the then chairman of the Burnley building society. All the undertakings given, including those that said that one third of head office jobs would remain in Burnley and that Burnley's name would appear in every office of the National and Provincial building society, were not honoured for very long at all.

Now there are no head office jobs in Burnley, and only a computer that may well go when the society is taken over by Abbey National plc. We do not even have a regional office. We know that, if any shares are sold with regard to the transport undertaking, the same thing will happen—and we will lose services.

One thing that people in Pendle have to understand is that while the profit of the Burnley and Pendle company is shared 50:50 between the two boroughs, most of it is in fact made within my borough of Burnley. That is because of the nature and geography of the constituency of Pendle. It is more rural, and has a scattered population, and services do not very easily make a profit. My hon. Friend and myself believe that the provision of services are far more important than making profit, but we recognise the context of the Transport Act 1985. I remember that you, Madam Deputy Speaker, were joint Chairman of the Committee on that Bill, along with Madam Speaker when she was a Committee Chairman.

My hon. Friend referred to the former general manager, Mr. Roy Marshall, and his strong view that the sale would be bad for transport and the provision of a public service for the people of Burnley and Pendle. When the joint transport undertaking became a company as a result of 1985 Act, the general manager was Mr. Luddeman, who is currently the manager of London General. Now the manager is Mr. Jelpke. Both those men faced the challenges of the 1985 Act and made Burnley and Pendle transport a very successful and viable undertaking.

I want to refer to the question of who is submitting bids for the company, since we do not really know. We understand that it might be Stagecoach, which took over the former Ribble undertaking. When the 1985 Act went through, Ribble, which was part of the National Bus Company, was split into three. The main part of Ribble, based at Preston, was the subject of a management buy-out and was subsequently acquired by Stagecoach. Indeed, Stagecoach garages some of its buses at the Burnley and Pendle transport depot in Queensgate in my constituency. Ribble used to have a depot in Centenary way, but it closed it a few years ago.

We understand that other potential bidders are Blackpool Bus, First Bus Yorkshire Rider, Greater Manchester Buses (North) and Preston Bus, which is submitting a bid in conjunction with Burnley and Pendle management and employees.

We know for a fact that the Preston Bus bid was considered by a specially appointed Pendle council sub-committee yesterday, but we do not know exactly what happened. We know that Mr. Souter, the multi-millionaire owner of Stagecoach, has already been to the Queensgate depot and met the work force. He has made no secret of the fact that there will be job losses, especially among the managerial, clerical, administrative and mechanical staff. The drivers' position is a little less precarious—in the short term at least. But once the services start to go, so will those jobs. We know that there will be job cuts and service cuts. On 4 December, a letter was sent to the chief executive of Pendle borough council by the chief executive of Burnley borough council, who was trying to ensure that there was no misunderstanding on the part of the Pendle controlling group. The final paragraph of that letter says:

"I think it is important that you draw the contents of this letter to the notice of all Members of your Council but particularly to the attention of those who will be involved in the decision to dispose of the shares. It is also important that you draw it to the attention of prospective purchasers as I am not certain that all of them will be aware of Burnley council's position in relation to the sale, the Articles and the replacement of Directors."

Burnley feels that Pendle council should know, as should potential purchasers, exactly where Burnley stands. That is why the letter was sent.

Among other things, Burnley has been told that if it does not sell, its 50 per cent. of the shares will not be worth as much as the other 50 per cent., when those are bought. As far as I am concerned, if there are two halves, one owned by the private sector and one by the public sector, instead of the two halves being in the public sector, as at present, the two halves are still equal to one, so if one half share is devalued, the other must be devalued too.

Burnley borough council wrote to Pendle:

"I understand that your Council are still considering the disposal of your shares in the Transport Company, that bids have now been submitted and that a decision will be reached following further consideration by a Special Sub-Committee and your Policy Committee.

Burnley Borough Council remain completely opposed to any form of sale of the company or the whole or part of its shares and I have been asked to write to you formally to inform you of this position and to ask you to draw the content of this letter to your Members, particularly the Liberal and Conservative Members who are supporting the share sale.

We have carried out our own survey of the effect of local authorities disposing of their transport companies and the pattern is all too familiar—job losses amongst both managerial and operational staff; less favourable working conditions; longer working hours; reduced pension arrangements; increased fares; poorer services; loss of less viable and rural services; lengthened 'bus frequencies; and loss of public involvement. This pattern has, I understand, simply been confirmed in a recent discussion which the Chairman of Stagecoach had with company employees when he implied that apart from some of the drivers the job prospects for the remaining workforce, if his company were the successful bidder, were poor."

Those are the things that both the public and the employees need to know.

Finally, I shall quote the paragraph that tells potential purchasers exactly where they stand:

"I have to tell you that my Council are prepared to take what action is considered necessary to prevent the sale and I am currently discussing various options with my Members. However, I think it would only be fair to draw to your Members' attention the possibility that Burnley council will not feel obliged to co-operate with any purchaser of the Pendle shares in amending the Memorandum and Articles of Association of the company. Similarly, my Members may not feel obliged to approve any nominations which a purchaser may put forward to replace the Pendle Directors with their own nominees."

Let the buyer beware. Pendle Liberal council should think again, decide that the sale is not in the best interests of jobs or of transport in its area, and it should not go ahead with that sale. Anyone tempted to buy shares should recognise that Burnley will not co-operate, because we believe that a sale would not be in the interests of Burnley or of Pendle in connection with either employment or transport. The proposal is an absolute outrage.

9.1 pm

It has been a pleasure to hear the debate so far. One hesitates to intrude on private grief, but it is a pleasure to witness the spectacle of the hon. Members for Pendle (Mr. Prentice) and for Burnley (Mr. Pike), both Labour men, using the debate to attack their Liberal opponents on local authorities. If I may say so, it has been a commendable performance by both of them, and it is a shame that there is no Liberal Member here to respond. I certainly do not intend to respond on the Liberals' behalf.

First I shall say a word about the Select Committee report. As the hon. Member for Pendle rightly said, it was fortuitous that, with brilliant timing, he chose today for his debate. He must even have anticipated the Select Committee's decision when to publish its report. Then I shall talk about the bus company itself.

I appreciate that it must be difficult for Labour Members to stomach the fact that, in its report, the Select Committee said that it did not wish to turn the clock back to before regulation, or to introduce franchising outside London. It rejected both those propositions, for the simple reason that ideology is one thing, but facts shout louder.

As the House knows, and as is now taken for granted even among such organisations as the Association of Metropolitan Authorities, which, when I last encountered it, was hardly a bastion of Conservatism, the reality is that, over the past 10 years, subsidy has been reduced by 50 per cent. and operating costs by one third, while route mileage has increased by about 27 per cent. There is a general recognition throughout the country that deregulation has been good for services and good for customers.

What the Select Committee and I have recognised—it has been generous enough to acknowledge that I set up the bus working group a year ago precisely to deal with this point—is that we can make the service better still. Everybody recognises that, as the bus is fundamental to any public transport strategy, we must see how we can make it a more attractive mode of transport.

Clearly, we do not want to turn the clock back—as the hon. Members for Pendle and for Burnley wish—to those dreadful days before the 1985 Act which introduced deregulation. I imagine that both hon. Members have impeccable new Labour credentials, but I shall have to examine their records in slightly more detail. I fear that there may be those on the Opposition Front Bench who will not take kindly to this outbreak of the dreaded "S" word, a word which is now to be excised from anything that emerges from Walworth road and about which we are not supposed to speak in the House for fear of offending public sensibilities.

Let me say a word about the Burnley and Pendle bus company. First, I must make it clear that Pendle borough council has not yet asked the Secretary of State for his consent to the proposal to sell its half of the company. I hope that the hon. Member for Pendle will appreciate that, in the circumstances, I cannot respond to some of his comments, because we have not yet received an application.

The hon. Gentleman described the company, and I will not therefore repeat the description. I should point out that, while the company makes a reasonable profit, it is a very static operating profit. The hon. Member for Burnley speculated as to whether it was a unique company. BPT is the last remaining municipal company which is a joint company. It is owned equally by Burnley borough council and Pendle borough council. The articles of association of BPT do not contain any pre-emption rights in favour of either partner and Pendle is entitled to sell its half share in the company independently of its partner.

For all the municipal companies—whether in joint or single ownership—the 1985 Act allows disposal of shares by the local authority owners. This can be done only with the consent of the Secretary of State, who has three basic principles in mind—that the objective should be to promote fair and sustained competition in the bus industry; that a fair market price should be obtained, subject to any small discount that one might allow for a work force buy-out team; and that the new pension arrangements are precisely set out and carefully considered.

Our aim throughout is to ensure that such sales result in the best value for money for the local authority, bearing in mind the state of bus competition locally. Our preference is for a normal open competitive sale. But where it is argued by a local authority that a public announcement of the intention to sell may bring about destabilising competition that could depress the value of the company, we will be prepared to consider agreeing to a private competitive sale. In such cases, local authority vendors have to clear the shortlist of bidders with the Department to ensure that the essential features of a competitive sale are retained.

The Government firmly believe that it is best for these companies to be run by and passed to the private sector. The evidence for that is that there are now only about 20 public sector companies left. The subsidiaries of the National Bus Company, the Scottish Bus Group and London Buses have all been successfully sold off and are now in the private sector. More than 90 per cent. of all bus operations are in the private sector. Frankly, we think that, if the remaining companies are sold, they will be more efficient operations, spurred on by private ownership and the need to generate profits. They will be more responsive to the needs of passengers and will be able to demonstrate that they are not receiving favourable treatment from their owners.

The companies will also have access to long-term private sector finance. It is now rapidly becoming evident that, far from any investment shortfall, investment in the bus industry is now extremely healthy. The hon. Member for Burnley had some rather disparaging things to say about Stagecoach. He neglected the fact that the company has just ordered 1,000 new buses. Other larger operators are also now ordering hundreds of new buses. The process of deregulation has introduced tremendous diversity into the bus market. Minibuses, midibuses and other essential design features are now commonplace. These have been pioneered in the new deregulated environment.

That has occurred because the companies have been freed from the interference of the owning local authority, and freed from the restriction that they cannot carry out activities beyond their pre-1986 operation. In other words, private companies can diversify into other areas.

There is a further incentive to local authorities to sell the bus companies. If assets are sold before 31 March 1996, local authorities will be able to devote 75 per cent. of the proceeds to local projects, such as improvements in public transport. The spending of the proceeds can, of course, take place after that date. For sales that take place after 31 March 1996, however, 50 per cent. of the proceeds will again have to be used for the reduction of debt in the traditional way.

Is not the existence of the 31 March deadline likely to depress the price which private sector companies will offer, because they know that the percentage that can be applied will go down from 75 per cent. to 50 per cent?

As the number of bus companies remaining in the public sector dwindles ever more, the circumstances in which the owners of those companies approach the market are likely to be less attractive for a variety of reasons. That is a further incentive for local authorities to accept the clear commercial reality, the clear operating advantages and the clear advantage to customers which are implicit in selling those operations while there is a market.

I imagine that purchasers are, indeed, aware of the capital rules surrounding sales, but if the local authority is sufficiently vigorous in prosecuting its ambitions to sell, it will be able to obtain a fair price with or without the additional proportion of proceeds which they can spend on public transport. As the hon. Gentleman knows, the difference after 31 March will simply be that the balance of the proceeds will have to be used for debt reduction and will not be available for current spending.

The local authority vendor has imposed conditions on the sale in almost all the cases in which a municipal bus company has been sold. I shall not list the companies in detail, but suffice it to say that the conditions were of varying complexity and duration depending on the importance given to them by the vendor. Standard concessions have often dealt with the assets of the company, such as property, so that any subsequent excess profits in the event of an on-going sale could be shared, usually on a 10-year reducing taper, with the vendor.

As for employment terms, some purchasers gave promises that there would be no new redundancies for a given, often quite short, period. In a few instances, minimum service levels were stipulated as part of the sale—again for a limited period, generally of about three years. I should emphasise that that sort of covenant is essentially a matter for the local authority and the purchaser.

The Secretary of State's concern when deciding whether to consent to the terms of a sale is confined to ensuring that the purchaser does not take on such onerous conditions that it will fetter the purchaser's ability to react in a commercial way should market conditions in the area change. The Secretary of State also examines the purchaser's arrangements to cover the pension rights of employees of municipal bus companies when considering whether to give consent to a sale.

I have outlined the general principles. I should now like to return to the particular case in Lancashire. Pendle wishes to sell; Burnley does not wish to sell. Burnley, as the hon. Member for Burnley said, is furthermore firmly opposed to the proposed sale of Pendle's half of the company. As we understand the present position, Pendle has invited expressions of interest and is currently having indicative bids professionally analysed. I should say nothing further on that issue, for reasons of straightforward commercial confidentiality. We have received requests in the past for part-sales of municipal companies, varying from as little as 10 per cent. upwards. We normally see no advantage in part-sales, first, because it is difficult to determine the true value of part of a company. The second reason is that, where the buyer also runs bus services in the area, the buyer is effectively getting in return for payment of only part of the company's value a guarantee that there will be no competition. There may also be a loss when the rest of the company is sold. Those points in a way reiterate what the hon. Member for Burnley said.

Despite those reservations about part-sales, however, I have every sympathy for a local authority which is willing and keen to withdraw from involvement in its bus company. I recognise that Burnley and Pendle is a unique company and that it is in a unique situation.

Under section 75 of the Transport Act 1985, the Secretary of State will consider each sale on its merits and take account of the different circumstances which prevail in each case. The Secretary of State is bound to look at every proposal that is put to him. I can confirm to the House that he will do so in this case. We shall take account of the fact that Burnley is opposed to the sale, and we have told them that we shall take account specifically of that view in considering any proposals that may be made by Pendle.

A number of options are available to Pendle borough council, but it is the council that has not yet decided what to do, and, as I have said, it has not yet asked us for consent. If and when it does, my right hon. Friend the Secretary of State will make a decision on the merits of the case. I hope that the hon. Member for Pendle will understand that I cannot comment further until he makes that decision.

Question put and agreed to.

Adjourned accordingly at fourteen minutes past Nine o'clock.

Volume 268: debated on Wednesday 13 December 1995

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Burnley And Pendle Bus Company