Commons Chamber

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House Of Commons

Wednesday 17 January 1996

The House met at half-past Nine o'clock

Prayers

[MADAM SPEAKER in the Chair]

Mental Illness

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

9.34 am

Today marks the anniversary of the introduction of Wednesday morning Adjournment debates. Everyone who has taken part in them agrees that they have been an outstanding success, enabling Members to articulate a number of topics of concern to their constituents and the wider public in a non-partisan way.

Despite what my hon. Friend the Member for Hertford and Stortford (Mr. Wells), the Government Whip, may say, Wednesday morning debates have tended to be non-partisan. That may be helped by the fact that members of the press do not arrive in the House of Commons until 2.30 pm; they leave at 4 pm and then write about the short working day of Members. My right hon. Friend the Leader of the House is to be congratulated on this innovation and I make no apology to the House for introducing yet again the subject of the treatment of the mentally ill, about which I have spoken in a previous Wednesday morning debate.

Yesterday's papers reported widespread concern about the operation of care in the community. It is obviously difficult to talk about the subject because we hear only about the cases that fail. There are a large number of successful cases of care in the community, but my concern and that of the House and the country is that there are too many unsuccessful cases. Certainly, the views of the relatives of those affected is that sometimes the psychiatrists do not listen to the parents and relatives of those afflicted with schizophrenia as often as they might.

In addition to the concerns of parents and relatives are those of our constituents who live next to, opposite or in the same block of flats as people who have been released into the community. They sometimes feel that they are given insufficient back-up when there are major problems with a neighbour who perhaps ought to go back into secure care, and that their concerns are not sufficiently taken into account when they ask for action along those lines.

I thoroughly agree with my hon. Friend. About a dozen or 15 people from a council-owned block of flats came to one of my earliest surgeries, and I wondered what on earth had gone wrong. They explained that the problem was all to do with a Mr. Campbell. I asked whether he was the caretaker and they replied, "No. He is a patient who has been released into the community." Having been released into the community, Mr. Campbell lived in a flat where he had an armchair and a stereo system. His way of life was to operate his stereo system from 8 pm to 8 am and rest for the entire day. That was fine for him, but not for those of his neighbours who had to get up at 8 am to go to work.

My hon. Friend is quite right to say that the neighbours frequently suffer. It was with great difficulty that I was able to get a psychiatrist to look again at Mr. Campbell. In far too many cases, neighbours and individuals who are divorced from the problem become victims of it.

Yesterday's papers were full of the murder of the south London schoolteacher Suzanne Steckel by her son Gilbert, who then committed suicide. Gilbert had discharged himself from the Maudsley hospital, which is a mental hospital. Two lives were lost unnecessarily because of the ease with which he was able to discharge himself.

Secondly, there was a report that 61 murders had been committed by schizophrenics, who were involved in more than 200 suicides. That represents five unnecessary deaths every week. It is not sufficient to say that the trend is downwards from 109 murders in 1979. There are still too many unnecessary killings and deaths as a result of people being released prematurely from hospital.

Yesterday, a report in The Times stated that the Royal College of Psychiatrists attributed suicides and homicides to three factors—a failure of communication, lack of face-to-face contact between patients and doctors, and patients not taking their medication. An article in The Independent yesterday by Nicholas Timmins, a widely respected journalist writing on social issues, described the lack of psychiatric hospital beds. The Royal College of Psychiatrists estimates that London has a bed occupancy rate of 120 per cent. and that Londoners can be sent into secure accommodation as far afield as in Yorkshire or Wales, 200 miles away. The article pointed out that the bed manager of Gordon hospital in London has the telephone numbers of 37 secure units, so that when he receives a request for a secure bed, he has 37 units to call, on the off-chance that he will be able to locate such a bed.

All that is bad enough, but The Independent this morning contained another article by Nicholas Timmins, with further worrying comments:

"At one end of the system, approaching a quarter of Broadmoor's 450 patients could be discharged to a less secure environment if space was available… At the other end, ordinary acute wards are having to handle growing numbers of seriously disturbed patients because they cannot be moved up to more secure accommodation. More medium secure accommodation beds are being provided—numbers are due to rise from 700 to…1,200 by December".

The Mental Health Act Commission believes that the figure should be 2,000 rather than 1,200, and says that there was an underestimate of how many beds were needed to allow for occasional relapses. The commission reported the discovery of previously undetected cases by new community teams, said that there were too few 24-hour nursed beds outside hospitals and noted the premature discharge of patients from mental hospital to free beds for even more drastic cases.

Premature discharge is one of the real issues that we must examine. Individuals are released so that others in a worse situation can take their beds. They are released before the suitable time, then are taken back into hospital. It would be much better if their treatment could run its natural course in hospital, so that patients might be released into the community with a chance of real success.

As a Member of Parliament representing a London constituency, one tends to talk about the capital—hut the situation that I have described is not unique to London. The Mental Health Act Commission states:

"Occupancy levels of 100 per cent. and above have been reported from areas as far apart as Devon, East Anglia and Cheshire".

I am glad that my hon. Friend the Member for Macclesfield (Mr. Winterton) is in his place to represent that distinguished county. All those issues were raised in yesterday's newspapers, but earlier this year homicides were committed by Wayne Hutchinson, who was guilty of killing two individuals and wounding another three. It was commented that he had been "released by mistake". Earlier this year, Martin Murcell was gaoled for life for the murder of his stepfather and the attempted murder of his mother. In January, doctors reporting on an experimental scheme run by the Institute of Psychiatry in south London noted that 92 patients had been released, resulting in the suicides of three patients, while another killed a young baby.

Last December, Dr. Imweldo in Hampstead was attacked in his surgery when he attempted to defend another doctor, who happens to be a constituent of mine. We read about such cases in the newspapers and all have personal experience of individuals not receiving the treatment which they need and which we and their relatives can see that they need.

There is a tradition in the House to declare one's interests. My interest is as vice-president of the Jewish Association for the Mentally III—although I assure hon. Members that it advises me rather than relies on my advice. I pay tribute to the work of JAMI's volunteers and those of the National Schizophrenia Fellowship. Most are relatives of victims of schizophrenia. Some have lost their loved sons and daughters through suicide, but they have not become introspective and miserable. Instead, those parents and relatives decided to use their experience to help other victims of schizophrenia.

The treatment of mentally ill people in this country and every other has undergone a revolution. In the middle ages, the mentally ill were burnt as witches or kept chained in unpleasant and unsavoury surroundings, and that does not happen today. The Victorian asylums that Mr. Enoch Powell was so anxious to close were a remarkable improvement on the dismal surroundings of the past. When people sought to close asylums, they forgot that asylums were a place of refuge—that the mentally ill did much better in them than they would have done at home or in the community. Of course, the rules of the 1940s were far too restrictive—it was much too easy to have someone committed to a mental hospital. The Mental Health Acts of 1959 and 1983 went from one extreme to another. Admission to a mental hospital is now seen as the last resort. The power to section remains, but it is used far too reluctantly.

There has been a failure by psychiatrists to acknowledge the problems of care in the community, under which it has been assumed that persons so mentally ill as to require treatment were sufficiently mentally acute to acknowledge the need for that treatment. Drugs are a powerful weapon in dealing with schizophrenia, but a most unpleasant weapon. We all remember being given a nasty dose of medicine as children and being told by our mothers, "The nasty medicine is the most effective." I once persuaded my mother to try the medicine, and with the sort of logic that would not befit a politician I said, "You've taken the medicine, so I do not need to take it." She replied, "Yes, you do. The nasty medicine will make you better."

One may say to a schizophrenic, "You arc sufficiently cured to enter the community, but not to avoid the need to take nasty medicine." Some patients may willingly accept the first piece of advice, but be reluctant to accept the second. The result is that such patients become a danger to themselves and to other people. A policy horn of compassion was misguided in part because it failed to recognise that asylums were a haven for troubled souls and that some individuals needed treatment in institutions rather than in the community. Others will need periods of treatment in hospital, to enable them to return to the community.

Three areas require development. There should be a moratorium on patients, or at least we should reverse the policy of reducing the number of beds for the mentally ill. The dramatic decline from 145,000 beds in 1961 to fewer than 45,000 today has been too drastic.

The remarks of Dr. Searle were quoted in The Independent on 26 September. He said that he had left Hackney

"because it was so appallingly bad".

He continued:

"You had to throw out people who were very mad in order to admit people who were very, very mad. They are still doing that, having to discharge people who down here"—

Dr. Searle now lives in Bournemouth—

"I would be admitting."

There was an article in The Independent on 15 June last year, which stated:

"Hackney operates at 140 per cent. capacity instead of the 80 per cent. recommended to allow for emergency admissions. Admissions are restricted to psychotic patients threatening suicide, violence or facing imminent breakdown. Often, to make room for them, others are discharged before they are ready. Many seriously mentally ill patients are shunted in and out as their condition slightly improves with hospital care and then deteriorates without it."

The reduction in the number of beds has been far too drastic. I am concerned about what will happen to patients at Napsbury when the closure takes place. I would prefer Napsbury not to close. It is an issue of great concern in north London. I ask my hon. Friend the Minister to explain how many beds will be provided elsewhere if and when Napsbury closes.

We need a change in the philosophy of psychiatrists. I accept that psychiatry is not an exact science. If someone is suffering from pneumonia, the doctors know what to do. Psychiatrists, however, do not always know what to do when dealing with psychiatric problems. It is too easy to leave mental hospitals and it is too difficult for some people to enter them.

Mrs. X, as I shall call her, is one of my constituents. She has written to many Members claiming that she is being pursued by Mossad, by the Japanese, by MI5 and by various other organisations. The lady's quality of life is quite impossible. I once went to see her. She met me outside the block of flats in which she lives. She said. "We must speak very softly because we are going to he overheard." When I went inside I asked her, "Have you got a doctor?" Her immediate reaction was, "I don't need a psychiatrist." I had referred to a doctor, not a psychiatrist. It was clear that the lady's quality of life was appalling.

I went to a meeting in honour of former Prime Minister Rabin. Mrs. X was standing outside with a poster that went from her head down past her knees. Her quality of life is such that she feels persecuted. She is a victim living in the community who would be much better treated somewhere else.

I have another constituent who became convinced that my right hon. Friend the Member for Brent, North (Sir R. Boyson) was about to kill her. We had 19 telephone calls on our answering machine one weekend. She kept on saying, "It is Roddy Boyson. He is coming to get me." I could not think of anyone less likely than my right hon. Friend to attack a lady living in west Hendon. I could not believe that my right hon. Friend was going to live on the west Hendon council estate so as to attack this poor lady. Her quality of life was very poor. I cannot believe that she benefited from being in the community. She would have been very much better if she had been cared for elsewhere.

There is talk about civil rights, and I believe that everyone has civil rights. The parents of patients have rights. They would much prefer to see those patients in hospital rather than in the community. Potential victims have civil rights. The right to life is the greatest right of all. We must weigh the rights of neighbours, patients and individuals when considering whether people should be in hospital or in the community.

When we adopted the policy of care in the community, I believe that the Treasury was seduced by the capital that it could see flowing into its coffers. It did not realise that proper care in the community would be very expensive, involving purpose-built homes, adequate supervision and the training of many staff. The Royal College of Nursing believes that we need to double the number of community psychiatric nurses if care in the community is to work.

For far too many, care in the community has been a poor-quality service. I shall always remember my first meeting with members of the NSF. I turned to one lady and asked, "What is your problem?" She replied, "It is my daughter." I asked, "Where is your daughter?" She said, "I don't know. My daughter will be sleeping on a park bench somewhere in London tonight." That girl and her family were cheated by care in the community. The Economist was surely right when it commented that care in the community

"has turned out to mean neglect on a street corner."

That has been the outcome for some. The irony is that some of those who are released into the community for care in the community end up committing crimes and find themselves in a different institution, a prison rather than a hospital.

I welcome the suggestion in The Daily Telegraph of 28 December that the Government will produce a charter for the mentally ill that will provide for easier access to hospital treatment and for consultation with carers and relatives before patients are released into the community. One of the great failings of the care in the community policy is that we have not listened to parents, relatives and carers. All too often, their wishes and knowledge have been ignored. They know the patients best. They should be able to tell psychiatrists more than perhaps psychiatrists sometimes want to hear.

It is not sufficient to produce a charter. It is necessary to produce more beds for the mentally ill. The current supply of beds is an incentive for premature discharge into the community. It underlines the reluctance of some members of the psychiatric profession to keep patients in hospital.

However, my right hon. Friend the Secretary of State has great experience because he was the Minister with responsibility for the mentally ill. I believe that he recognises the problems. My right hon. Friend the Chief Secretary should as well because he is a former Secretary of State for Health. But if we fail to recognise the need for improving the quality of care in the community and the need for more beds for the mentally ill, we shall be failing not only the mentally ill but their relatives, their friends, their neighbours and society at large.

9.57 am

I commend the hon. Member for Hendon, South (Mr. Marshall) for introducing the debate and once again obtaining time to discuss a serious issue. He has previously been successful in doing exactly that. I genuinely respect his strength of feeling about the problems that have arisen in many respects although I differ to some extent with the solutions that he has put forward. On his own admission, he has concentrated primarily on failures rather than successes. He accepted at the beginning of the speech that there have been successes. It is important to recognise that the successes do not hit the headlines. They are not reported widely in news bulletins and accordingly do not come to the attention of Members. That should be borne in mind. Indeed, it should underpin our thoughts this morning.

I have probably been involved in most, if not all, of the debates on community care since the introduction of the National Health Service and Community Care Act 1990, and on the White Paper that preceded it. I have listened with interest to the opinions of Conservative Members. There is the irony that there is probably more support for the principle behind the Government's policy on the Opposition Benches than on the Conservative Benches. There is a scarcely concealed romantic vision—it underpinned the speech of the hon. Member for Hendon, South—of the past in psychiatry, where there were no problems on the streets and the lunatic asylums were full. I do not share that romantic notion because, as the hon. Gentleman is aware, I spent much of my working life before becoming a Member of Parliament discharging from psychiatric institutions—the former lunatic asylums—people who had been wrongly incarcerated, in many instances before I was born.

I feel strongly that although it is nice to go back to that romantic, idealistic past, we should not forget what happened to vast numbers of people in our society who were incarcerated in a way that nobody should defend. Nobody should want to go back to that. I do not suggest that the hon. Gentleman wants to go back to that, but I remind him that I was involved in discharging people from hospital who were incarcerated as moral defectives. They were not in any way mad or ill. They were simply people who had a different way of life from the majority of people at that time. All were women. I had never met a male moral defective until I came to this place. "Back to basics" exposed one or two, but I shall not go into detail on that.

I respect the fact that the Minister believes in the policy. I have worked closely with him over a number of years, so I exempt him from my accusation. The difficulty that the Government have is that they believe in institutional incarceration, whether in psychiatry or the penal system, but they are not prepared to pay for it. That difficulty has caused many of the problems that we now have in community care. Community care is nothing new. In a sense, what is new is institutional provision. If one goes back in history, one will see that community care was the norm. People lived in the community. There was the village idiot. Such people were accepted more than they are nowadays.

The institution was, for a variety of reasons, invented. Enoch Powell, who was the Minister responsible for the hospital plan in 1962, was advised that there had been changes in the drug regimes and that we could treat people in the community. There was vast evidence—from Goffman and others—of the effects of institutionalisation, but the key issue that persuaded Enoch Powell, who was a monetarist before Lady Thatcher, was that it was far cheaper to keep people in the community. What concerns me, and in a sense the hon. Gentleman referred to this, was that the Treasury attraction to the policy in the 1980s, and the rapid—perhaps too rapid—move towards closing and disposing of establishments and moving patients into the community, was driven primarily by monetarist policies aimed at realising the assets of the institutions rather than looking at the principles behind community care and the human rights that we would all agree should be accorded to people with mental health problems.

I was a member of a health authority when the process was going ahead and I recall the pressures that the authority in Wakefield was placed under to get rid of its psychiatric beds. I remember vividly one meeting at which we had a letter from the Yorkshire regional health authority, expressing concern that the people in Stanley Royd hospital in Wakefield were not dying as quickly as expected and that the number of beds was therefore not being reduced. Concern was expressed to the health authority about the impact of the policy.

We should look at what happened in the 1980s, because that is the key to unravelling some of the problems that we now have. One of the most insidious elements of what was happening with the care in the community programme in the 1980s was the introduction of performance-related pay for senior health officials on the basis of achieving bed reductions, ward closures and the closure of hospitals. They were personally paid bonuses—not to ensure that people were properly rehabilitated in the community, but to achieve the disposal of psychiatric facilities. That'is why we have the problems now. There was a rapid, ill-thought-out move to care in the community—care which, frankly, did not and in many respects still does not exist.

Perhaps the hon. Gentleman agrees with many of the points that I am making. We are now picking up the pieces as a result of that ill-thought-out, Treasury-driven policy in many of the tragedies that we face. I in no way underestimate the difficulties facing many people as a result of some of the tragedies. Like the Minister, I have met people who have been directly affected. Jane Zito is an extremely courageous woman for whom I have the greatest respect. After suffering the most appalling personal tragedy, she has gone out and fought. As she knows, I do not always agree with what she says, but I admire her courage, and the courage of others who came recently to the House of Commons when the supervised discharge order was being debated, to lobby Members of Parliament about their concerns. I appreciate their concerns and their courage in attempting to say to Members of Parliament, "Do something so that others do not have to face similar tragedies."

The real weakness of Government policy is that community care seems to he in a narrow policy box, divorced from a range of wider issues that impact on the lives of people in the community who face various mental health problems. We had an example of that this week. I understand that the Government are to slash 3,000 prison officers from the Prison Service. In my constituency, I have two prisons, one of which is a top security prison, and I know for a fact that a significant number of people in both those prisons suffer from mental illness. In slashing the number of prison officers and addressing the prison budgets, there has been no evaluation of the impact that that will have on the mentally ill. There has been no consideration of the knock-on effects that that will have or of the way in which the prison system is dealing—in my view, completely wrongly—with many people who should be helped by other means within society. The Government's housing policies have a clear impact on the ability of people from psychiatric hospitals to obtain and respond to care in the community.

What about employment prospects? The mass unemployment policy impacts on the most vulnerable. Clearly, people who want to be rehabilitated need employment opportunities, which are often denied them due to the policy of mass unemployment.

The key area that I wish to emphasise is the wider organisational aspects of community care. We have never really addressed the way in which, in terms of its framework, the current organisation of community care is a shambles. What we have as an organisational framework to assist people in the community is simply not working. I felt that that was so when the National Health Service and Community Care Act 1990 went through Parliament. I am on record as saying that I felt that we were not offering a way forward, although I did not differ with the Government on moving to assessments by the local authority and on community care planning. Everybody knows that the central motive for the community care changes was Treasury driven—the desire to reduce the social security budget. That was the real reason why we moved to the current system.

I found it amazing that on the one hand the Government introduced community planning within local authorities, and on the other introduced an internal market in health. The two simply do not square up. When there has been an inquiry into what has gone wrong when a person has come out of hospital and caused problems, and when sometimes there have been fatalities, the finger often points at the organisational structure of what is on offer to such people when they are being rehabilitated into the community. I appeal to the Minister to look at the division between local authorities and the NHS, because so long as there is a split responsibility on issues such as community care and continuing care there will he problems. There will be disputes and people will blame one another. That is at the heart of our present organisational difficulties.

Government policy has become reactive. It changes from day to day in response to various tragedies. As the Minister knows, I understood his dilemma in relation to supervised discharge orders, but the Government have ignored representations from virtually everyone who will have to administer the new arrangements. It has been pointed out that those arrangements are unworkable, and do not deal with the real problems of care in the community.

No alternatives to hospital provision have been devised, although hospital provision has been run down. I agree with the hon. Member for Hendon, South that we need to consider the lack of beds—I hope that he was referring to acute rather than long-stay beds when he spoke of a moratorium—but we should not return to an agenda that involves putting more and more people in asylums. We should, for instance, consider asylum in the community. We do not have to put people in Victorian buildings, away from society. The real challenge of community care is rehabilitation. I have seen good examples of asylum in the community—drop-in and day centres where people feel safe—but, sadly, they are few and far between.

Today's debate is about care in the community. We have reduced the opportunity of vast numbers of people to receive care in hospitals: rightly or wrongly—rightly, in my view—we have tried to move away from the old system. For many people, however, care in the community is not available. The Government should look forward, rather than back to a "golden age" of asylums that, in fact, never existed.

10.11 am

I congratulate my hon. Friend the Member for Hendon, South (Mr. Marshall) on obtaining yet another Adjournment debate. I am pleased to be able to speak on this important subject.

We have heard two well-informed speeches, both of which have contributed to a better understanding of the problems relating to mental health. I agreed with every word uttered by my hon. Friend the Member for Hendon, South, and with the overwhelming majority of what was said by the hon. Member for Wakefield (Mr. Hinchliffe). He and I served for some years on the Social Services and, subsequently, the Health Select Committee, and this subject was frequently discussed in both Committees. The Social Services Select Committee produced excellent reports on mental illness and mental handicap.

No one doubts my hon. Friend the Minister's commitment to care in the community. Hon. Members on both sides of the House consider him humane, sensitive and caring, and his reputation justifies that. But—here I agree entirely with the hon. Member for Wakefield—there has been a change in policy which dates back to the actions of Enoch Powell in the 1960s. As the Select Committee pointed out many times in its reports, the policy of decanting people from long-stay institutions to care in the community was initially Treasury driven: it was thought that care in the community was a cheaper option.

In fact, as anyone who has anything to do with mental illness or handicap will know, care in the community is not cheaper but more expensive, although I agree that it is more humane. I share the view of hon. Members on both sides of the House that long-stay institutions should become a thing of the past, but—and here I disagree with the hon. Member for Wakefield—I believe that a number of long-stay beds in asylums are still needed. Hospitals can provide the necessary care for the acutely mentally ill, who may suffer from drug or alcohol problems.

I support the principle of care in the community, but I believe that we have moved too fast. The closure of institutions is often driven by a desire to realise capital gains from the sites involved. Many long-stay hospitals are located in areas where land values are very high, and those managing the health service for the Government are often motivated by performance-related pay. I think it unfortunate that we introduced performance-related pay in a caring service. Hospitals were closed before adequate facilities were available in the community, including staff. In seeking to proceed with a desirable policy, we have thrown the baby out with the bath water.

My hon. Friend the Minister is well aware of my involvement in these issues, and my support for Parkside, a long-stay mental hospital in Macclesfield. He knows of the battle that I have fought, along with many local people whose relations have suffered from mental illness. We have campaigned to save the hospital; sadly, we have failed—which may demonstrate the lack of power possessed by Members of Parliament. Although for some years I have been a member of the party that is in government, propositions that I consider wise—fully supported by those most closely involved—have been ignored by those who manage the health service on behalf of the Department of Health and, indeed, on behalf of the people.

At Question Time yesterday, I raised two constituency cases. I make no apology for raising them again today. Two people died. One was a young girl called Emma Larkins, who burnt herself to death in her flat in Victoria Park in Macclesfield. She came from a family that was sadly split: her parents divorced when she was three years old. I do not think that I am being disrespectful or unfair to Emma or her family when I say that her behaviour had caused the authorities serious problems for many years. Much of that behaviour was generated by drugs and, perhaps, alcohol.

Emma's father has been in touch with the east Cheshire coroner, sending him his account of his daughter's life and the events leading to her death in November. He points his finger at social services. I agree with the hon. Member for Wakefield, who speaks with considerable knowledge on these matters, that there is a divide between the health service and social services. In the main, that is the gap that has to be closed. More thought has to be given by the professionals and by the Department to how to close that gap which allows tragedies such as that of Emma Larkins to take place.

Mr. Larkins says that social services are responsible and that he is concerned not just for his daughter who is now dead but for all young people like Emma. The social services have said that they do not want to comment on Emma's death until after the official inquest. Emma's mother is more specific. She feels that the health service, and Parkside hospital in particular, is responsible because her daughter went to Parkside hospital on the day of her death seeking help and, basically, seeking support—recognition of her problems. Sadly, the help that she required was not forthcoming. As a result, she returned to her flat and burned herself to death. Moreover, she could have caused the deaths of many other people if the fire had not been caught early before it spread to other apartments in the Victoria Park flats complex.

As I have said, there is a gap. Why is it that social services, which had been involved with Emma for many years, and the health service, which is responsible for dealing with people who have mental and behavioural problems and who engage in alcohol and drug abuse, were not able more closely to monitor this young person and give her the support and back-up that she needed to prevent her from taking this tragic action? I want to see that gap filled.

Yesterday I also referred to another case in my constituency, that of Lynn Fox who was not such a young woman as Emma Larkins but had created considerable problems for the community for a long time. She had been before the courts and had been taken in by the police, and had received treatment from East Cheshire NHS trust for her condition. She caused her neighbours immense aggravation, to such an extent that one of them, because of the pressure under which he was living, the aggravation that she had caused and the tension that had built up, stabbed her to death. The young man in question, Jason, is now in Walton gaol serving a sentence of just over three years. Why was this allowed to happen?

In recent weeks I have corresponded with Jason Lucas's wife, Deborah, who has provided me with some interesting material. In her latest letter she states:

"I am in possession of all the evidence collated for Jason's trial. This includes a copy of a statement by a Consultant Psychiatrist at Parkside hospital. In his statement he says that Lynn was frequently admitted to hospital, via A and E, after claiming to have taken an overdose. Later she would sometimes admit this was a lie, and declare that she had only said it to get help. The statement also contains the following comments:—

'In my opinion Fox was a chronic alcoholic who could not give up alcohol, she was also addicted to tranquillisers and she used to mix both and overdose on them.

When she was drinking she became abusive and violent and tended to become psychotic.'"

I accept that this is a borderline case. It might be the responsibility of social services or the health service because of that psychotic condition which, I believe, is a mental illness. As a result of Lynn's activities over a protracted period of time, one of her neighbours—the young man whom I have mentioned, who perhaps suffered a bit too much from an aggressive personality—took the action that I have described. I understand that he had received some treatment. None the less, he and his neighbours were driven to hate this woman and in the end he was driven to kill her.

In justification of what I have said about what that man did—that he was driven to do it—I shall relate some comments by the neighbours who shared his problems. One of them said:

"I am not surprised that someone has been driven to do something about the problem."

Another said:

"I'm honestly surprised that she has not been assaulted by someone before. I have certainly felt like hitting her myself, as she has really wound me up on occasions."

Another neighbour said:

"I felt relieved when the police told me she was dead. I feel no sorrow for her at all."

A fourth neighbour said:

"Fox upset and depressed us so much that I thought of doing her harm myself. I am not surprised at all that someone has done her harm. I've been expecting it for some time now."

I was in touch with the authorities about the behaviour of Lynn Fox over a period of time and nothing was done. I am sure that the House shares my concern about the fact that a young man now finds himself in prison because he was driven to take action, although the responsibility for dealing with this case lay with the health service and the social services.

What can be done to fill the gap and prevent further tragic cases such as the two that I have mentioned? I repeat that I have total confidence in the Minister's commitment and humanity. I say to my hon. Friend the Member for Hendon, South that care in the community is a humane and civilised way of dealing with those who suffer from mental illness. However, we must not go over the top. Long-stay beds are still needed and we need to be able to bring into hospital for treatment those who are clearly suffering from mental illnesses but who, because of their condition, are not prepared to take the decision to go for treatment. My hon. Friend highlighted that point in a number of the cases that he drew to the attention of the House.

I seek to be constructive in these matters. Certainly in respect of the Lynn Fox case I am in touch not only with social services in Cheshire but with East Cheshire NHS trust. I have had 100 per cent. co-operation from the chairman of that trust, Mr. Peter Hayes, who is held in high regard, is committed to the health service and is deeply concerned about matters relating to mental illness. He has given me 100 per cent. support in this case. I am also in touch with Councillor Simon Cussons, chairman of South Cheshire health authority, with the probation service, social services and the police. I am in touch with the Home Office. When I have received replies to all the representations, particularly my latter ones to the probation service and the Home Office, Peter Hayes and I propose to convene a meeting in Macclesfield of all the authorities that I have named to see whether we can prevent such a case recurring. I am seeking to be constructive and, like the hon. Member for Wakefield, to bring the health service and social services closer together so that we do not have this divided responsibility, whereby a gap can result in tragic deaths, with all the problems that go with that.

By securing this debate, my hon. Friend the Member for Hendon, South has done a great service in relation to mental illness. I agree with every word that he said. His concern is genuine, as is mine. The hon. Member for Wakefield is very informed on these matters. Although I disagree with him on a number of issues, overall I have complete confidence in what he is seeking to achieve. We are not far apart—we both want care in the community to work, but problems still exist and I hope that my hon. Friend the Minister will assure us that the gaps and problems will be dealt with.

10.30 am

Time is short and, if the Minister is to be allowed sufficient time to reply—I certainly want that—I must confine myself to one or two short remarks.

It is a coincidence that this debate is taking place in the same week as the confidential inquiry report into homicides and suicides was published, and that the junior Health Minister who set up that inquiry in 1991 is now Secretary of State for Health. In a press release issued at that time, he said:

"we must insist that if a discharged patient is involved in homicide or similar incidents, every detail of the history of that patient's management is fully examined and the lessons learnt. One such incident is too many. But if a repeat incident occurs because the lessons of the first have not been learnt, we are all culpable."

It is sad that, since that time, a number of well-publicised incidents have taken place. Usually, the ones that have received the most publicity have involved the killing of people who were unrelated to a mentally ill person. We have had reports on the Christopher Clunis case and several others, some of which have been mentioned this morning. Can the Minister say, hand on heart, that all the lessons of those reports have been learnt?

The Ritchie report into the Christopher Clunis case said that care in the community for that person was a

"catalogue of failure and missed opportunity".

Other reports have highlighted the lack of co-ordination, which has been mentioned this morning, between the various agencies, the health service and social services.

Those are the cases that have received publicity. The confidential inquiry report has shown that, although there have been 39 homicides, most of them have involved members of the mentally ill person's family and that a far higher number of mentally ill people have committed suicide. It is estimated that one in 10 schizophrenics commit suicide.

I congratulate the previous Secretary of State for Health on her intention to give mental health a higher priority and on "The Health of the Nation" target to reduce suicides among mentally ill people by 33 per cent. Sadly, that target has not been met, and we must ask ourselves why. No doubt the Minister will tell us about the increased resources for mental health services. Figures show that more has been spent, but, as a proportion of the total amount spent on health, the mental health service budget has been declining in importance.

I am sure that no hon. Member present, knowing the experiences that they have had, can say that this country has ever had a first-class mental health service. My father suffered from schizophrenia. In the 1950s and 1960s, I had personal experience of the failures of mental health care. He attempted to take his life and, on one occasion, threatened to murder me. I do not think that that was a serious threat—most mentally ill people are not a danger to the community—but, traditionally, this country has failed mentally ill people. We must give mental health a higher priority.

That is not happening in my constituency in south Birmingham. The figures show a dramatic reduction in the number of psychiatric beds—about 150 since 1985—and only about 85 community psychiatric nurses are in post. I have seen people working in the one mental health centre in the community that we have and have witnessed the stress that they are under. All too often, the service shuts at night and at the weekend. We need 24-hour community services and mental health centres.

The promises that we in south Birmingham were given have not materialised. Mental health centres were promised, but have not been opened, and staff have not been appointed. As a result, all too often, flagrantly mentally ill people receive treatment, but people who, in Marjorie Wallace's words, are silently suffering, are ignored and people, relatives and neighbours who silently, and not so silently, suffer with them are ignored as well.

We must do much more. The concept of community care is supported, but we must have increased resources—it is not enough to say that the resources are sufficient. Last year, in south Birmingham, the mental health service budget was cut by £500,000. This year, it faces a 3 per cent. cut because of so-called efficiency savings. There is no increase in the budget and no possibility that the community services that were promised when Rubery hospital was closed will be provided.

I ask the Minister urgently to consider the position. It is not just a matter of resources, but I note that the confidential inquiry recommends that higher resources should be provided for people who are seriously mentally ill. That is true, but not if there is a shift from other services for people who, as I have said, suffer in silence.

10.36 am

I congratulate the hon. Member for Hendon, South (Mr. Marshall) on securing the debate and pay tribute to all the speeches that hon. Members on both sides of House have made. We have had an informed debate about an extremely important topic.

As my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) said, this is a timely debate, coming hard on the heels of the confidential inquiry report, which highlighted the tragic toll of homicides and suicides involving people with severe mental illness. The hon. Member for Macclesfield (Mr. Winterton) showed how that death toll is tragically continuing. It is unusual for a month to go by without a further newspaper report highlighting some of the fault lines in the mental health services provision system.

As my hon. Friend the Member for Wakefield (Mr. Hinchliffe) said, however, all the tragedies tend to obscure many of the successes. It is right to have a sense of perspective. In responding to the confidential inquiry, the Minister has been quick to point out, for example, that the overwhelming majority of people who suffer from mental illness are not a threat, either to themselves or to others. Even people with schizophrenia are more likely to be withdrawn and quiet. If they do harm at all, they are more likely to harm themselves than anyone else.

It is right to strike a balance in these debates and to emphasise that mental illness is not a single problem: it covers a multitude of problems and a multitude of people, but the switch over recent years to care in the community has brought public attention to the plight of mentally ill people. I welcome the care in the community approach because it recognises that most mentally ill people prefer life outside hospital and prosper as a consequence. No one wants a return to the old, large, remote, anonymous asylums. where sometimes brutal care was hidden from public gaze. Care in the community is both more humane and more effective, but the tragedy is that recent failures have dented public faith in the policy to such an extent that I now believe that there is almost a crisis of confidence.

As my hon. Friend the Member for Selly Oak said, yesterday's publication of the confidential inquiry is but the latest in a long catalogue of reports that have highlighted the inadequacies in current health care provision and, indeed, policy. Christopher Clunis and Jonathan Zito may well have become household names, but many others have fallen victim to the failures in the current approach to mental health policy. Let us not forget that yesterday's report analysed 240 suicides and 39 homicides. The battle to overcome the fear of, and ignorance about, mental illness has been badly compromised by those incidents. Whether the number of homicides and suicides is rising is not the question—what is worrying is the extent of public concern about those incidents. Too often, in too many parts of the country, that concern has slipped into fear.

There is now a danger that the care in the community approach, which the Opposition support, will cease to command public support unless urgent action—the need for which was highlighted in yesterday's report—is taken. The hon. Member for Hendon, South referred to a failure to ensure that patients complied with treatment. There have been pleas this morning for more powers to be made available over those who suffer from mental illness. However, by and large, my view is that there are sufficient powers on the statute book. The problem is a lack of implementation.

Hon. Members have highlighted three main problems. The first is a failure of co-ordination between the relevant agencies involved. The second—it was dramatically highlighted in yesterday's report—is that the staff who work with the mentally ill are often overworked and overstressed. The third is that, all too often, appropriate accommodation, whether in the community or in hospital, is not available. The confidential inquiry loudly and clearly referred to the number of overcrowded wards and the lack of appropriate hospital and community facilities. That lack of support is compromising the implementation of care in the community.

The Government have been warned time after time that there is a serious problem. This latest report comes hard on the heels of many others. The mental health policy, as implemented over recent years, has given us the worst of all possible worlds—too few beds in hospitals, inadequate facilities in the community and a shortage of specialist staff in both.

The hon. Member for Hendon, South referred to the dramatic decline in acute provision in our hospitals. The closure rate over recent years has not been accompanied by a similar dampening in demand for acute services. When the Mental Health Act Commission reported last November, it highlighted average occupancy rates of 130 per cent. in some inner-city hospitals—and not just in London. There is a temptation to think of it as a purely London problem, but it is not. The report also referred to occupancy rates in excess of 100 per cent. in Devon, Cheshire and East Anglia. It is a nationwide problem.

It is all too common for psychiatrists to have to spend hours on the telephone desperately trying to find an acute bed for someone who is severely mentally ill. Quite simply, there are not enough appropriate beds available for patients when they need them. There are not enough facilities in the community. The Audit Commission, in its recent report "Finding a Place", argued that comprehensive mental health care facilities in the community had been slow to develop. As a consequence, in too many parts of the country the cart has been put before the horse. There was a rundown in acute provision before the introduction of appropriate community facilities. There must be a balance in provision to deal with the serious concerns that have been highlighted both in today's debate and in yesterday's report.

There is need for emergency action to deal with the shortfall in provision and the issues of public confidence that have been raised. I have four brief suggestions. First, there should he a moratorium on further acute bed closures pending the development of an appropriate community infrastructure. Secondly, there should he immediate implementation of the care programme approach in all parts of the country. There has been yet another delay in implementation—with the latest deadline now being the end of March—yet the programme was duc to be implemented in April 1991. Thirdly, there must he urgent action to deal with the problem of staff shortages, which is compromising patient care. Fourthly, over time, there should be changes to the mental health funding allocation formula so that cash ends up going where it is most needed. We all know that the inner cities experience a particular problem. Without urgent action, I fear that, before too long, the House will again be debating the same issues, but also a new round of tragedies involving mentally ill people.

10.46 am

I echo what the hon. Member for Darlington (Mr. Milburn) said about the quality of speeches from both sides of the House, including those from the hon. Members for Wakefield (Mr. Hinchliffe) and for Birmingham, Selly Oak (Dr. Jones) and from my hon. Friend the Member for Macclesfield (Mr. Winterton). In particular, I commend the speech of my hon. Friend the Member for Hendon, South (Mr. Marshall), who initiated this debate. As usual, he made a robust but thoughtful contribution. I always welcome his views on these matters.

I echo the points made about the need for a balance. We have a great national health service, which has made giant strides in mental health care. I pay tribute to all those working in health and social services, who have achieved so much for mentally ill people. They have transformed the approach to mental health.

Hon. Members were right to point to shortcomings and to the tragedies that occasionally occur. I agree that we need to continue looking for improvements while implementing the right policies. As my hon. Friend the Member for Macclesfield said, we need to close the gap.

My hon. Friend the Member for Hendon, South referred to the closure of Napsbury hospital. The decision was made some time ago and we are currently considering the consequences. As he knows, our policy is that no psychiatric hospital should close unless there are adequate replacement services. I understand that the chairman of Barnet health authority has given an undertaking that Napsbury will not close until replacement services based in Barnet are ready. Following the debate, I shall write to the chairman of that authority asking for evidence to satisfy me that that is indeed the case.

My hon. Friend the Member for Macclesfield made balanced and constructive points about the Lynn Fox case. I welcome what he is doing in bringing the agencies together. If, having done that, he would like to come to see me and tell me about what he has discovered, perhaps bringing the trust chairman with him, I would certainly welcome his visit.

My hon. Friend the Member for Hendon, South mentioned people who do not seem to have homes, which has been a problem in London. That is why we launched our initiative for homeless and mentally ill people. Indeed, immediately following the debate, I shall be going straight to Tower Hamlets to open another stage of that initiative: some move-on accommodation run by the Look Ahead housing association.

Five outreach teams are in place. They cover different parts of London, especially inner London. All 10 hostels that we promised are open. The last one opened in October. They provide 148 bed spaces. We are making progress with the move-on accommodation, to which I have just referred. We have an agreement with the Housing Corporation not only for the 150 supported places that it initially promised us, but for 181 places. Five schemes offering a total of 36 places were open by the end of last year and all the places should be available by the end of the financial year 1996–97. A valuation of that scheme has been generally favourable and I shall be looking to build on that scheme in future.

Reports often refer to the issue of beds. We know that there is a fairly constant provision of 80,000 beds and about 20,000 acute beds. However, important factors are the mix of available beds, where they are, whether they are effectively and efficiently managed and whether the right people are in the right beds. All those factors have come up in this debate and we shall continue to consider them.

We asked the mental health task force to consider the provision of beds, especially in London. I certainly noted the points made in the report by the Royal College of Psychiatrists. It drew up plans with all the inner-London authorities, which have in turn drawn up their own action plans. I hope that they will prove effective. I am not complacent about London. I am very conscious of the need for community work to be supported by the provision of beds.

Indeed, on one occasion, while meeting representatives of an authority, I heard talk of the ability to close beds once the community facilities were up and running. I said that that was not the case and that the authority would need beds to ensure the success, efficient running and well-being of patients in community service. That is very much the message that I bring to the House and to our mental health service.

Mention has been made of the high-security service. The range of Reed reports on that area of care has exercised our minds. From April, a new structure of three new special health authorities to run three special hospitals supported by new commissioning structures and boards will he introduced. Our purpose is to integrate more closely those hospitals with mainstream mental health services, which—I hope—will prove effective.

The hon. Member for Wakefield mentioned people who are in prison but perhaps should not be, and the need for mental health support. That support is sometimes provided in 'prisons and sometimes provided by transferring prisoners to mental health hospitals—often secure hospitals, for obvious reasons. That support has been a tremendous success. We are not often given credit for the way in which, since 1990, we have enabled more than 2,500 patients to move from prison to hospital. In 1994 alone, 784 people were transferred and found places in the health service under the provisions of the Mental Health Act 1983. That was more than double the number of transfers in 1990.

The facts that we have been discussing illustrate the scale of the issue before us. We know that one in four of us is estimated to suffer from mental illness at some point in our lives. We know that mental illness is three times more common than cancer and as common as heart disease, and that few of us will pass through life without being touched by it—whether personally or, as the hon. Member for Selly Oak rather movingly told us, through the suffering of a friend or family member.

The cost of mental illness to society is heavy—not only in terms of human misery but economically. In 1991, for example, some 91 million working days were lost to mental illness even without taking into account days lost by carers who were looking after somebody who was mentally ill. A degree of stigma is still attached to the topic. That is damaging because it makes life more difficult and distressing for mentally ill people and prevents others from seeking help when they need it. Removing stigma is part of our policy and must be part of the onus placed on all of us.

In Health questions yesterday, I referred to Professor Norman Sartorius, the president of the World Psychiatric Association and the former head of the mental health division of the World Health Organisation. Overnight, we have received a further message from him stating:

"England has taken the lead in work to prevent mental illness and to tackle stigma."

Although that is good news—I welcome the tribute—we must strive ever more. We sponsor surveys of public attitudes, we have produced leaflets which discuss in jargon-free terms the policies in different areas, and of course we support World Mental Health Day, which focuses especially on young people.

The debate has concentrated on the sort of support needed to avoid problems. That is why one of the keys to successful policy is the care programme approach, which aims to ensure that care is provided on the basis of properly assessed individual need, with a coherent care plan and a facility for regular review. The vast majority of health authorities have already implemented it. Perhaps, as the hon. Member for Darlington said, some progress is still to be made. On the whole, that relates to those who are not severely mentally ill, in ensuring that such care is available for everybody.

It is our firmly expressed policy that hospitals should not close unless and until alternative provision is available. Indeed, many are not closing but being converted to more modern and appropriate facilities We must have a range of facilities, including residential care, varying degrees of support, hospital facilities, crisis beds and medium-term hospital beds. The whole concept of asylum is essential as part of the package of measures to help people who are mentally ill. Some people will have to spend long periods of time in 24-hour nursed beds—in some cases the whole of their lives—and we should not duck that responsibility.

We also attach great importance to the development of primary care in mental health. We are continuing to part-fund a senior GP fellow who takes national leads in the education of GPs in that area. A senior primary care nurse facilitator does likewise. Our work on defeating depression is also part of that development.

I make no apologies for reminding the House of our programme to increase the number of medium-secure psychiatric beds. They are essential. Despite the fact that a gap in provision was identified by the Glancy committee in 1974, there was not one such bed by 1979. The Government have responded to that, and by the end of this year, there will be more than 1,200 such beds through our £47 million investment. With an additional 300 regional beds, and the provision of about 500 beds in the independent sector, the figure just about totals the 2,000 beds to which my hon. Friend the Member for Macclesfield referred.

Mental health services are at the top of our agenda. I am grateful that hon. Members of all parties recognise the priority and emphasis given to that area of our health service by my right hon. Friend the Secretary of State. That is why, last August, we wrote to health authorities requiring them to let us have details of their plans for service development. The results of that exercise are now being analysed and we hope to make an announcement on the conclusions shortly. I shall be surprised if those conclusions do not show that there are widespread plans for increased investment in mental health services. That underlines our commitment to the mental health service. It is one of the five key areas in "The Health of the Nation" strategy and one of the six medium-term priorities for the 1996–97 priorities and planning guidance for the NHS.

Mentally ill people, like everyone else who receives care, have a right to expect standards of care, and that is why we shall launch for consultation our draft booklet in the patients charter series specifically for users of mental health services. We can improve the system and we can improve the service. We shall do so if we all work together for the benefit of patients.

Severe Weather (Scotland)

11 am

I am very grateful for the opportunity to debate the effects of the extreme weather conditions which prevailed over Christmas and the new year. The presence of so many Back-Bench Members in the Chamber indicates that the matter touched just about every constituency in Scotland.

Today, I shall focus attention on the response of the Scottish Office to a national emergency which demanded a nationally co-ordinated response. I think that the Opposition are united in the view that the performance of Scottish Office Ministers was inept and inadequate. That is also a common view in Scotland.

In recent years, the Scottish Office has not been a byword for speedy action and transparent accountability. That is, perhaps, a criticism that the House would expect from me. However, the whole of Scotland will wonder today why this debate on this subject is proving of so little importance to the Secretary of State for Scotland that he cannot drag himself to the Dispatch Box to consider the matter or to defend his record and the record of his ministerial team. I understand that all the other political leaders of Scotland seek to catch your eye in this debate, Mr. Deputy Speaker. We are entitled to hear a reply by the Secretary of State for Scotland. Instead, he prefers to leave his junior Minister, the hon. Member for Kincardine and Deeside (Mr. Kynoch), yet again, to carry the can for the crisis.

Clearly, we would not find on the desk of the Secretary of State the same plaque that was on Harry Truman's. For the Secretary of State, the buck clearly stops elsewhere. After hibernating during the freeze, he is now hiding from the debate. He might well hide because it is his Department that failed the people of Scotland in the recent crisis. He should, therefore, be here to answer personally for his Department's inadequacy. After all, the crisis in Scotland was his first major challenge as Secretary of State for Scotland. For the first time in the tenure of his post, there was an opportunity to show his mettle and to direct the resources available to him to do some good. At the end of 1995, the Secretary of State for Scotland was weighed in the balance and found wanting.

The Secretary of State was on holiday during the crisis. I have no doubt that it was a well-deserved holiday. It must be exhausting setting up quangos here, abolishing byelaws there, listening intently to trade unionists and councillors and generally being the caring, sharing face of Scottish Conservatism.

And then ignoring them.

Then ignoring them, as the hon. Gentleman says. It must he exhausting to come into the office every day in the sure and certain knowledge, as we see again from today's System 3 poll, that Scotland remains solidly against the Tories and that the impact of young Lochinvar", as Lady Thatcher once memorably described the Secretary of State, has been only to force Tory support downwards.

In my view, exhausted as the Secretary of State undoubtedly was, he had a clear obligation to return to duty over the holiday period when it was obvious that the scale of the problem facing Scots in every part of our country was greater than could be imagined. There were, after all, many others—plumbers, electricity linesmen, road workers, housing officers, social workers and a huge cast of unnamed heroes—who abandoned the turkey and plum pudding to help those in trouble. They set a selfless example; that example should have been set from the very top of the Scottish Office structure.

Hon. Members may well ask what the difference would have been if the Secretary of State had taken personal charge. I suggest that the very inaction and lack of direction at the Scottish Office during the Secretary of State's absence show that it might have made a difference. I say that not with any great admiration for the Secretary of State's abilities and powers, but because in Scotland today, the only Minister with the power of initiative is the Secretary of State himself.

As well as telling us something of the calibre of the other Scottish Ministers in the dying days of this Government, that fact tells us a great deal about the way in which the Secretary of State runs his Department. Such is the centralist power of the Secretary of State and the effect of his purification of the machinery of government that without the king, the court is incapable of action. The Scottish Office was as incapable of movement as the water in the pipes of hundreds of thousands of homes across Scotland. The result was departmental inaction amid general chaos.

What did the mice do when the cat was away? The hon. Member for Kincardine and Deeside, who is replying to the debate—we should give him credit for that—Wrote himself out of the script at the first opportunity. His response to an appeal to see for himself the difficulties caused by the weather was to say to the Daily Record on 4 January this year that he would

"just get in the way".

That might well be a sign of appealing modesty but if so, I am at a loss to understand why he should be responding for the Government in today's debate.

The facts of the exceptional weather are these. From Christmas eve until at least 1 January, and later in some parts, the low temperatures experienced were exceptional. Glasgow recorded its coldest temperature ever on two successive nights—a record-breaking minus 19 deg. One highland village achieved an unofficial record of the lowest temperature ever recorded in Scotland—almost minus 32 deg. In Shetland, the deepest snowfall since the war cut off hundreds of homes and led to the constant use of an evacuation helicopter for medical emergencies.

Road safety was compromised when water and even de-icing fluid froze as it was being applied to windscreens, not just in the north, but on the M8 in the centre of Scotland. Rail travel was disrupted and some airports were closed for lengthy periods. The west and the north of Scotland were colder than Moscow, without the everyday experience of such conditions that makes life bearable and possible.

The domestic effect of those low temperatures was dramatic. In Strathclyde region alone, half a million homes were reported to have suffered burst pipes and 34,000 homes were without water. That does not take into account the rural homes in places such as Argyll where private systems were, no doubt, frozen for days on end. In Grampian, the water supply was devastated. Domestic and industrial cut-offs were common and many old folk and families with young children were put in a truly desperate situation.

Those are the facts. For each individual affected, especially at the festive season, it was an unpleasant and worrying time. Yet what was the considered response of the Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside? What was his ministerial summation of the situation? As he grandly claimed to the Daily Record, it was not a "major problem".

If the hon. Gentleman is going to continue to quote a fabricated story by one Scottish newspaper, he will not make anything constructive out of the debate, which we all, I am sure, wish to try to do.

The Minister will have plenty of time in which to answer. Although I do not claim that everything that appears in the press is accurate, the Daily Record seems pretty sure of the story. I hope that the Minister is taking action against the newspaper if it has misquoted him on a matter of such importance to Scotland.

I suspect that the folk memory of those patrician and patronising phrases will come to haunt the Minister for a long time. They may have the same currency as "The national health service is safe in our hands," and they may even match the prophecy by Michael Fish that there would be no hurricane. Even today, the Minister's remarks are reverberating. In another of his ill-judged comments during the crisis, he censured Grampian region for the closure of schools. It was noted in The Scotsman today that he was described yesterday in Grampian region, in a show of unity between the Labour, Liberal Democrat and Scottish National parties in that region, as a "buffoon".

Lack of water was the worst problem, which led to many people queuing in the streets with buckets. Lack of power was another major difficulty in Scotland. At Christmas time, 30,000 customers lost power in the Scottish Hydro-Electric area alone. Winds were blowing up to 115 mph. In East Lothian, gas supplies were disrupted for up to 72 hours. The state of transport meant that coal and oil deliveries were disrupted, and pressure on plumbers meant that if central heating went off, it stayed off for a long period.

I am grateful to the hon. Gentleman for referring to East Lothian. While he is right to say that gas supplies were cut off for 15,000 of my constituents for up to three days, the situation was worse than that. British Gas provided some households with electric heaters to make up for the loss of their gas heating, but the surge in demand for electricity that followed resulted in the failure of the electricity supply in some streets. This has been a catastrophe for people who will have to pay enormous costs because of their burst pipes and the failure of the gas supply. British Gas TransCo is offering them £20 compensation. I hope that the hon. Gentleman agrees that that privatised utility should be required contractually to pay more compensation to all concerned.

I certainly agree with the hon. Gentleman. All hon. Members will agree that there can be no greater criticism of British Gas than to say that that is sadly typical of its response to a whole range of situations in Scotland and elsewhere in the past few years. Hon. Members have illustrated some serious problems, but there were others.

The absence of effective cold weather payments for pensioners and those on benefit—a subject to which I shall return—meant that Scotland's winter death rate, already higher than Scandinavia's, began to rise. In some places, it was running at three times the normal rate. Hospitals have been forced to cancel hundreds of non-urgent operations because of the increased administration following the severe weather and the difficulties it caused. There is a winter crisis in Scotland's health service every year, but this year it has been much worse.

Schools were also badly affected. More than 500 were unable to open last Monday for the new session. Some children are still having to be accommodated in temporary classrooms or schools because water and other damage will take months to fix. I am sure that hon. Members from all over Scotland have their own horror stories of problems that they have encountered in their constituencies. But the overall agreement must be that this was a major national emergency that should have been dealt with—and, if possible, helped—by Government action. The conclusion that we must draw from what we have experienced in the past few weeks is that Government action was not forthcoming when necessary.

In my constituency, all of those who could help turned out to help. For example, the chaotic conditions meant that the director of housing was unable to contact the jammed lines of the local radio station. The station in my area—and others across Scotland—did a first-class job in trying to communicate information to the public. My office had to provide a means of communication between the director of housing and the local radio station. People wanted daily and, indeed, hourly information, and it was a pity that the Scottish Office did so little to co-ordinate or assist in that demand.

I accept that there are lessons to be learnt by all the agencies and services that were challenged by the difficulties and sometimes had great difficulty coping. Some of the companies will admit that they need to review their procedures and basic assumptions so that they are better able to respond if such conditions recur. I received a letter from Robert Young, chief executive of Hydro-Electric, in response to a letter that I wrote to him on Boxing day, which referred to the difficulties of answering the huge volume of calls which rained down on the company over the period.

We are told by some weather experts that we may be entering a period of more extreme weather conditions during winter and, we hope, summer. We must therefore be able to plan sensibly for the increasing vagaries of the weather, rather than always being reduced to responding to a crisis. Following the failure of the emergency systems to cope with the scale of the crisis, there may be deeper lessons to be learnt involving the historic under-investment in the utilities, which might explain why the services broke down on such a large scale in the first place.

These and other related matters require a thorough examination, and I very much welcome the decision of the Scottish Affairs Select Committee to mount an inquiry into exactly what went wrong during the big freeze and what can be done about it. In response to the crisis conditions, emergency staff, the utilities, local government and voluntary workers in my view did everything that they could as soon as they could. That is not the issue at stake today. But while everyone else was doing their level best, the key ingredient—the national co-ordinating role that the Scottish Office could and should have provided—was missing.

No one denies that the severity of the weather would have led to difficulties whatever the scale and nature of the Scottish Office response, but the difficulties could have been greatly lessened if a national effort, co-ordinated by the Scottish Office and including the distribution of practical information on how to deal with the problems of frozen or burst pipes, had been made.

According to information received by my office from the Scottish Office information directorate yesterday, there exists in the files at St. Andrew's house a short public information film on how to respond to the problems caused by burst pipes. At a time when householders were struggling with frozen and burst pipes and with water running down walls and through ceilings throughout Scotland, it is outrageous that that film was not shown. Why was the film not offered for showing by national and regional television stations in Scotland? Why was appropriate audio material not provided for local radio stations to transmit? The film was not broadcast during the most severe water crisis for more than 20 years. Perhaps the Minister will tell us when he thinks it appropriate to broadcast it. Judging by the Government's incompetence, we can look forward to seeing the film in perhaps June or July.

One of my favourite childhood memories is a similar film that was frequently broadcast in the 1960s, which starred—if I remember correctly—Dr. Snoddy of "Dr. Finlay's Casebook" fame. If the Scottish Office could provide such information regularly during the 1960s, why could it not be done in the 1990s? Given the enormous public interest in the weather problems, the broadcasting media would have been extremely grateful to have received such material, and that has been confirmed by senior broadcasters.

The BBC's "Frontline Scotland" programme was so keen to track down the 1960s film starring Dr. Snoddy that it set in train a series of investigations. I can inform the House that the film was traced to a company called Water Training International at Kilwinning in Ayrshire, where it forms part of the instruction programme for the Scottish and Northern Ireland Plumbing Employers' Federation. The Minister must explain why such public information was not shown during the crisis.

Where were the full-page advertisements in newspapers providing people with practical information, such as the appropriate emergency telephone numbers to ring? Such things could and should have been done by the Scottish Office, but none was. In what I thought was a lame attempt to defend the indefensible, a Scottish Office spokesperson was reported in the Scottish Daily Mail on 16 January to have said:

"News releases were constantly sent out".

Freezing families and flooded-out businesses needed not Scottish Office faxes trying to put a gloss on ministerial inactivity, but practical information and co-ordinated activity.

Even yesterday—some three weeks after the event—the Scottish Office information directorate could not provide my office with information about which Ministers were on duty on which days during the holiday period. I was incredulous when my office told me that. So that the Minister understands the difficulties that people have in getting common sense out of the Scottish Office, I shall explain what happened when my researcher contacted the Scottish Office yesterday.

My researcher called the Scottish Office four times, and was told four times that she would be called back. She was called back once. She estimated that she spent one hour being passed from staff member to staff member. Initially, she asked which Minister was on duty during the holiday period, but two press officers were unable to tell her. They said that she would be called back, but that did not happen. A second call was passed by one of the previous press officers to the press officer at the Secretary of State's department, who said that my researcher would be called back. That has not yet happened.

On her third call, my researcher tried the Scottish Office publicity section to ask about the "Keep Warm This Winter" phone line and the Scottish Office public information film. She was passed to another member of staff, who told her that no advertisement was taken out and that the Scottish Office films were 10 to 12 years old and were not being used this year. The story goes on. Can the Minister explain why, even after the event, the Department seems unable to give out information as to what he and his colleagues were doing during the crisis?

The Secretary of State, as we saw in the Scottish Grand Committee on Monday, has become rattled by the criticism that has been made by hon. Members from all parties. Perhaps that explains why he is not at the Dispatch Box today. Responding to journalists' questions earlier this month, the Secretary of State attempted to pass all responsibility for public information to local authorities. This new-found desire to extend the role of local government is somewhat surprising from a Minister who has spent most of his career trying to cut it to the bone. It is also a pathetic and evasive response. The problems that we encountered over the holiday period were national in character, not local. The newspapers and broadcasting stations which should have been targeted and provided with publicity and information extend far beyond even the largest of the local authority boundaries. Local authorities did all that they could, but there was a clear need for the Scottish Office to step in and adopt that national co-ordinating role.

To give the Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside, his due, the passing of the buck to local authorities was one of the few initiatives that he took to respond to the crisis. He led his Secretary of State in that, if in nothing else. The Minister may wish to deny this also, but in the Daily Record of 4 January 1996, he said:

"the current problems are the responsibility of the local authorities and, at this stage, to have a minister out and about would be irresponsible. It's my judgement that to go out and be photographed visiting affected areas would be taking up the time of people who are working to rectify the problems".

That is in somewhat sharp contrast to the Secretary of State's post-match explanation on Monday, when he told the Scottish Grand Committee that Ministers were "out and about".

I must warn the Under-Secretary that—if he is keeping an eye on his boss's opinion—his reticence seems to be out of step with another opinion which the Secretary of State gave to the Grand Committee on Monday. He said:

"I take a pretty dim view of the sort of politicians who sit by their firesides and do not even get out to see what is happening on the ground".—[Official Report, Scottish Grand Committee, 15 January 1996; c. 4.]

My hon. Friend will recall that during the floods which hit our area of Scotland in September, the Minister was not shy about getting into a helicopter and visiting the flooded areas without even mentioning it to the local Members of Parliament, who were busy co-ordinating activities between the local authorities and others dealing with the emergency.

We all remember the Minister not being backward in coming forward on that occasion. I think that it is possible to go on a fact-finding mission in order to gain a better understanding of people's problems without elaborate photo opportunities.

Apparently the buck is not to stop with the Secretary of State, for with the Under-Secretary of State. On Monday, the Secretary of State for Scotland told the Grand Committee that "the buck stops" with local authorities. It does not stop with local authorities. Scotland is saying that the Secretary of State for Scotland must accept the responsibility which goes with that office. Taking the responsibility is, or should be, his job.

If the Secretary of State has not been attending to the call of duty, what has he been doing? He has been busy pursuing his own political agenda. On 5 January, when Scotland was beginning to recover, hospitals were still under severe pressure, consumers were still without water and the extent of the problems in schools was only just being discovered, he revealed the fruits of his holiday meditation. In his first engagement after the holidays, he unveiled a political poster during a news conference and photo opportunity. He continued his attack on constitutional change. It was only then that it dawned on him that he himself was under attack, and he hurriedly arranged a visit to Strathclyde water services.

The poster is not an issue in this debate, nor is it that the Minister could not even handle its launch correctly—within four hours, it was discovered that the poster about Scottish jobs had been produced in Dublin and had to be covered up the next afternoon. What matters is the sense of priorities held by the Tories' man in Scotland—as opposed to Scotland's man in government.

The Secretary of State's actions show where his priorities are. Many Opposition Members think that there is a great deal wrong with a Scottish Office that is capable of spending public money on monitoring the media during the big freeze, but was incapable of delivering its own information to the media on how to deal with burst pipes. The Secretary of State would rather freeze comment, opinion and debate in Scotland than bring some warmth and relief to ordinary people's lives.

In my view, the moral duty of the Secretary of State and his Ministers is to resign. We cannot hold any expectation that they will volunteer to do that today, so I should like to pursue the subject of what the ministerial team could now do, after the event, to improve the position and provide redress and relief.

The Convention of Scottish Local Authorities estimates that the cost of weather damage to housing alone will be £25 million to £30 million. It is now proposed that there will be £16.8 million of extra borrowing consent, which fails to remedy even part of the problem, before we consider the huge bill for damaged schools and the many other costs that will accrue.

In relation to council properties, we note that the third member of the ministerial team, the hon. Member for Aberdeen, South (Mr. Robertson), was anxious to duck his responsibilities and pass the buck. The Under-Secretary was caught out more quickly than the other Ministers with his ill-informed remarks about local authorities insuring their properties. After chiding them for having inadequate cover, he has been squirming because, as has been repeatedly pointed out, it was his Government who commended self-insurance to local authorities, yet the Scottish Office does not insure its own buildings. The hon. Member for Aberdeen, South nods. I am glad that he has finally realised that.

The hon. Gentleman argues that the Scottish Office should not act as an insurer of last resort for local authorities. Who is to act as the insurer of last resort for the Scottish Office? Who does he expect to pay the £5,000 bill, for example, for the Scottish Office building that was flooded in the crisis? If he remembers the previous Prime Minister's words, she said that there was no such thing as Government money, only public money. If he expects the Scottish Office to be treated in that way, why does he not understand the plight of local authorities in a national emergency?

Today I ask the Ministers for a clear, unambiguous statement on financial compensation. I ask them not to dodge the issue or appeal to the principle of self-help, which they so lamentably failed to observe themselves. Will they tell us what measures will be put in place, and when, and whether proper and adequate financial compensation will be forthcoming for those local authorities? At one time during the emergency, the Minister praised them for the work which they were doing.

The extremely cold conditions in Scotland this year also brought into sharp relief the country's prevailing climatic conditions. Even in a normal winter, Scotland is a cold place where many people experience great difficulties. In a land of energy plenty, the problem of fuel poverty affects 800,000 households. Even in a normal winter, 3,000 people die of cold-related illnesses in Scotland each and every year.

The incidence of winter deaths is greater in Scotland than in Scandinavia, which has a more severe climate. Last year, during a relatively mild winter, 239 Scots died of hypothermia. That is a damning indictment of the amount of support provided to those people by the Government. Instead of a ramshackle cold weather payment system, what is needed is a guaranteed cold weather allowance for pensioners and others on benefit throughout the winter months. The SNP believes that that can be achieved in the context of an independent Scotland. We propose automatic payment to those in need throughout the winter of sums ranging from £7.40 to £11.15 a week. The total cost of such a system would be £170 million per annum, less than 6 per cent. of this year's estimated revenues from the North sea. Other countries, such as Ireland, already have such a system. It is a disgrace that an energy-rich country such as Scotland does not. We must end the scandal of fuel poverty amid energy plenty in Scotland.

I am delighted that my hon. Friend the Member for Moray (Mrs. Ewing) was successful in queuing for a ten-minute Bill last night. Therefore, the House will soon have another opportunity to debate the important issue of cold weather payments. It is not just the SNP which commends that to the House. Every pensioner and benefit claimant in Scotland, all of whom have experienced at first hand in recent weeks the effect of our climate, will want to see that measure given broad support.

The extreme weather conditions over the holiday period in Scotland were a natural phenomenon. We cannot avoid such crises, but we can act effectively to overcome the worst effects of them. The Scottish Office, led by the Secretary of State and staffed by his colleagues, failed to act. In my view, they were in dereliction of their duty. No one perhaps can be surprised at yet another failure by Tory Ministers. That is why this governing party commands the support of one in 10 of the Scottish population. This year's big freeze provides Scotland with yet another example of how badly governed Scotland is within the context of the Union. Even within my admittedly pessimistic view of how the structures of government operate for Scotland, in this debate we will hear that the experience of the big freeze provided something which was worse even than our lowest expectations. We want and need explanations, and we should have resignations and apologies. I hope that we will have no more bluff and bluster, and no more excuses and piling the blame on everyone except those who have clear responsibilities to lead and to act.

At the very least, we should receive a clear undertaking that in future there will be a clear recognition that the primary role of the Scottish Office is not as a ministry of propaganda and photo opportunities, but as a department of public information and public service. That is what Scotland has the right to expect, and it is a measure of the ultimate failure of the Government and the ministerial team that today we have to demand it once again.

Before I call the next speaker, I remind the House that we have 35 minutes before the closing speeches. Obviously, a fair number of hon. Members wish to contribute, so I make an appeal for some short speeches.

11.30 am

I welcome the opportunity to speak in this important debate, and I congratulate the hon. Member for Banff and Buchan (Mr. Salmond) on obtaining it. I was saddened by his speech, because we could learn so much from the experience that we all had. We could have learnt lessons that would make positive contributions towards dealing with people's problems.

One of the comments made by the hon. Member for Banff and Buchan shows clearly that he missed the opportunity to learn from the events. He sweepingly mentioned pensioners in Scotland. I am a pensioner and I have no intention of accepting public money for freezing conditions. Unlike others, I do not think that all pensioners need such assistance and support.

I live in probably the most modern house erected in a long time. It was built to the highest specifications laid down for United Kingdom building, yet I suffered five bursts in the main pipes serving the upstairs radiators of that modern house, which is only a few months old. Those five bursts show that the conditions were unique. One lesson that can be learnt is that, obviously, the highest standards laid down today for building in Scotland are not adequate for the conditions that we may meet.

I say "may meet" because I remember vividly the freeze of 1946-47, which the hon. Member for Banff and Buchan probably does not. I was in the Royal Air Force and every station was closed down. We were sent home because we could not heat the billets and the messes. I also vividly remember the conditions in the freeze of the 1960s and, again, I was in the Royal Air Force. The hon. Gentleman must realise that some of us have been down this road before.

I have seen the film that the hon. Gentleman mentioned. If that film had been shown on television, he would have chastised my hon. Friend the Minister for showing an out-of-date and irrelevant film.

I am not opposed to national activity to help cope with such situations as the cold weather caused. I welcome the fact that the Scottish Select Committee will look into the matter. Members of the Scottish Select Committee who are here will know that, on Monday, I suggested that that inquiry should have a very narrow remit and know exactly what it is doing. In that way, we can produce a report that will concentrate on suggesting solutions to the problem, and not on attacking individuals.

Like the hon. Member for Banff and Buchan, I wish to place on record my thanks to my local authority, which responded marvellously. I also thank Scottish Hydro-Electric, which in my area responded magnificently, the water authorities and British Gas. The people on duty while others were on holiday did a remarkable job in the most severe conditions that one could expect. That does not mean that lessons cannot be learnt, because they can always be learnt.

We should not be carried away by scandalised reports in a Scottish newspaper. If we were to believe some of the stuff in the papers, few of us would be here doing a worthwhile job, because hon. Members from all parties have been on the receiving end of stories in the papers at some time. Newspapers often use a story to create an issue with little regard for the truth.

The hon. Member for Banff and Buchan mentioned insurance. In Strathclyde, where the local authority paid to insure its buildings and schools, how will the people feel if they are asked to pay to bail out local authorities that did not insure themselves? That is what devolution means—giving authority to people at local level to make judgments, right or wrong.

We can learn another lesson from the events. The hon. Member for Banff and Buchan suggested that Strathclyde should be made to pay for somebody else's decision. That is wrong. If one authority decides to carry the risk—because that is what it is—and another authority decides to pay for insurance, why should the authority that has paid bail out the other?

The difference between the Scottish Office and local government is that all Government Departments are paid for by all taxpayers. One group of taxpayers is not given benefits over others, and the hon. Member for Banff and Buchan failed to take note of that. When one local authority decides that it is not going to take out insurance cover, it should make that clear. It should tell the people that it is offering a council tax lower than it would be—or should be—if it took out insurance cover. Then the local people would know that, in the event of another episode of severe weather—which seems to occur about every 20 years—they would have to pick up the tab. That is real local decision making, and the hon. Gentleman got it wrong. He should not suggest something that will disadvantage one group of Scots against another.

There are lessons to be learnt from this episode. I have taken note of what you said, Mr. Deputy Speaker, and I shall stop now. If the Scottish Select Committee can produce a helpful report and the Government can respond quickly, we might learn some positive lessons, but we shall get nowhere by attacking personalities.

11.37 am

As one of many hon. Members who applied for a debate on this important subject but who was unsuccessful in the ballot, I congratulate the hon. Member for Banff and Buchan (Mr. Salmond) on his good luck. I also thank him for allowing time for other hon. Members to participate, and I shall be brief.

Over the festive season, Scotland had not just severe weather, but exceptionally severe weather. Record low temperatures were established and the country had never known weather like it since record keeping started. The whole country was affected, but Glasgow suffered especially. For several days, it was one of the coldest cities in the world. Temperatures were recorded of minus 20 deg and even lower. Such freezing weather could not have been foreseen and nothing could have been done in advance to cope with the situation.

I wish to tell the House just how badly Glasgow's housing stock was hit by the weather. I am grateful to Mrs. Margaret Vass, the head of development for Glasgow city council, for some statistics for the period from 23 December to 11 January. During that time, 42,910 emergency repair requests were issued as a result of the severe frost and the subsequent thaw. In a normal winter, the number of such repair requests is around 2,000. Sometimes more than one request was made for the same houses because they had burst pipes on several different days, but about 25,000 council houses were affected, plus several thousand other houses in the city. Over 2,000 of them were in the east end of Glasgow and in my constituency.

I am glad to say that of the total number of necessary repairs reported, City Build has completed about 31,000—a remarkable record in such a short space of time. Of the outstanding repairs, about 9,500 relate to high-cost emergency reinstatement—work estimated to cost £5.5 million. The estimated provisional cost to the council for turning off water and for repairing burst pipes is £2.5 million, to repair major damage, £5.5 million, to pay for staff overtime, £150,000, for emergency equipment, £60,000, for temporary flats being refurnished and repaired, £450,000, for bed-and-breakfast accommodation, £50,000 and for lost rents, £400,000. That adds up to a grand total of £9.11 million. Those costs may vary, but if anything, they are likely to increase before the final figure is known. I suggest that a sum of £10 million is much more likely.

Just in case anyone thinks that those costs are excessive, it should be borne in mind that 25,000 houses and possibly 50,000 people or more were affected, and that more than 1,000 families had to leave their homes and be put up in temporary accommodation by the council. That does not include the many thousands who left their homes and went to live with relatives and friends, before being able to return home once repairs had been carried out. Moreover, many of the days involved were public holidays, which incurred additional expenditure and caused more difficulties.

Perhaps one of the saddest aspects of the results of the freeze will be the delays to other much needed projects and normal repairs—to housing improvements and modernisation, and to other capital projects. Everything will be slowed down now and people will suffer for months and possibly years to come.

Glasgow has seen nothing like this weather in living memory. Like other hon. Members, I pay tribute to everyone who helped in the crisis: the plumbers and tradesmen who worked day and night, the water, gas and electricity workers, the Army who helped to provide emergency water supplies in parts of the city, Clyde Action, and Radio Clyde, which set up a special freeze line that helped many people when they needed it most. I also thank all the volunteers who helped others, Strathclyde regional council and social work department, Glasgow district council, and the city's housing department and City Build. Those last two departments are much more used to criticism than to praise, but on this occasion they did a magnificent job, keeping offices and depots open at all hours through holidays and weekends. Staff did all they could to cope with the crisis.

It is always invidious to single out individuals for praise because some who deserve it more than others may be missed out. My constituency includes a higher than average number of elderly and vulnerable people and of the unemployed and people on low incomes. Rosemary Hendry and Dave Hanratty of the Whiterose tenant management co-operative in the Parkhead area of the city opened their community hall and cared for 15 families at a time. They put in beds and fed and looked after those people, who ranged from babies to an old woman of nearly 80. They certainly did a tremendous job. Frank Kelly co-ordinated efforts in Barrowfield, which was particularly hard hit by the effects of the weather.

There were many similar examples throughout the city and doubtless throughout Scotland of people helping others. Their efforts are to be contrasted with the lack of effort on the part of the Government—particularly the hon. Member for Kincardine and Deeside (Mr. Kynoch), the miscalled Minister responsible for industry and local government. He is quoted as having complained that it was his day off: he was not, he said, the duty Minister. It seemed that he was content to sit on his backside at home in front of the fire. No wonder the Daily Record described him on its front page as "A big drip". I do not like criticising other Members, but this time I feel that the Minister's actions left a great deal to be desired. He should have done much more to deal with the crisis.

The Prime Minister and the Secretary of State for Scotland have it all wrong. In replies to my written questions, they both refused to visit the hardest hit areas and chose instead to concentrate on water supplies. But the problem is not about water supplies; it is about restoring people's homes so that they can get back to normality. The Government seem more worried about the loss of water than about the loss of accommodation.

There have already been references to the insurance problems. It is estimated that almost half the tenants affected in Glasgow had no contents insurance. Before Conservative Members tell me that that was their own fault, I might point out that insurance costs are high. People who are unemployed or on low incomes but who have families to look after and must choose between paying for insurance or feeding their kids will inevitably choose to feed the kids: it is no contest. Many people have no insurance, not because they do not want it, but because they cannot afford it. Poverty is a terrible thing and the city of Glasgow is full of it.

The supreme irony is that while people were losing all their possessions and were in the depths of despair, the rollover jackpot in the national lottery rose to £42 million, with record profits being made for the company. There must be some way of devoting some of the money raised by such schemes to good causes such as helping people when they most need help. Who can think of a better good cause? I can think of none. I do not see why there cannot be a special fund to use some of the money thus generated to help people who have lost everything.

As far as I am aware, the Department of Social Security and the Benefits Agency are not giving grants to people who have suffered loss; they are giving them loans. But people who could afford to pay off loans at £8 or £10 a week would not need the loans in the first place—they could go out and buy replacements for what they had lost. I therefore hope that the Secretary of State and the Cabinet will argue for additional money to be given to local Benefits Agency offices, so that they can give people grants to buy bedding, clothing, cooking equipment and the other essentials of daily life that they have lost because their ceilings have collapsed or their pipes have burst.

The Minister must seriously consider the hardship suffered by people throughout Scotland and must do all that he can to help local authorities by giving them additional resources. Let him do that and earn, for once, the gratitude of i11 the victims of this disaster.

11.46 am

Hon. Members will recall that when the news about the bad weather broke, it tended to focus at first on my constituency, which between Christmas eve and new year's day experienced some of the heaviest snowfalls in memory, with drifts of up to 30 ft reported in places. I shall not indulge in semantic arguments about when a state of emergency is a state of emergency. Let us be clear, however: these were exceptional circumstances, which rightly prompted Shetland Islands council to activate its emergency response plan. It would appear that it proceeded to co-ordinate the various services remarkably well.

Obviously, people wanted the roads cleared sooner than they were, but we should not underestimate the size of the task. Besides road clearance, important work was done by the social work department, which concentrated on providing help for the vulnerable and the elderly. Fine work was also done by the health board—by nurses, doctors and district nurses, who kept the health service going, ably supported by the helicopter services of the coastguard. BBC Radio Shetland came back on air between Christmas and new year and provided an important flow of information. The people themselves were responsible for many acts of neighbourliness and showed their resilience in coping with the exceptional weather.

It would be churlish not to acknowledge the response by the Under-Secretary of State, the hon. Member for Kincardine and Deeside (Mr. Kynoch), who made it clear that Government resources were available, including military resources which were under review at the time and which were thought not to be necessary. As acknowledged in the local press, he was in regular contact with the islands council and no doubt put his knowledge of the islands to good use, making it quite clear throughout the period that the appropriate Government assistance would be available if required.

Obviously, I know more about my own constituency than about any other, but my hon. Friend the Member for Gordon (Mr. Bruce) has lent me a series of press releases relating to water supplies, issued by Grampian regional council. They show just how much activity there was trying to cope with the disaster. It is important not to lose sight of the people who did remarkable work to restore vital services.

Will my hon. Friend confirm that although there has been some controversy, particularly in the Western Isles, the individuals who performed heroically included local representatives of Scottish Hydro-Electric? Does he agree that, when we and our hon. Friends had the opportunity of a discussion with the chairman and chief executive of that company last week, we learnt of an important subsequent development? They are considering an improved communications system between the central offices in Perth and the outlying areas, to ensure a better flow of information in both directions on instances of power failure and—equally important, if not more so—the restoration of power supplies.

I agree with my hon. Friend on both points. I certainly agree about the work done by individual linesmen and the subsequent response of the chairman and chief executive of Scottish Hydro-Electric.

In circumstances such as this, there is a constant temptation to blame someone. We seem to have got ourselves into the situation in which everything is someone's fault. We blame Scottish Hydro-Electric, the Government, local government or whatever. In the immediate aftermath, the Secretary of State and his Ministers got their priorities wrong—to unveil a poster campaign against the plans of the Scottish Constitutional Convention was completely the wrong set of priorities.

Equally, although I have praised the Under-Secretary of State, he was wrong to blame Grampian region for closing schools for an extra day. Today's edition of The Scotsman states that the chairman of the education committee

"said that Mr. Kynoch's remarks had 'demolished the morale' of council employees working flat out to cope with the crisis."

Obviously, in exceptional weather conditions mistakes will be made. We are all very good at the perfection of hindsight. In the midst of trying to cope, people will inevitably make mistakes. The weather was exceptional and party colleagues to whom I have spoken in Glasgow—perhaps hon. Members representing Glasgow can confirm this—said that it was a very dry cold and that people might not have recognised just how low the temperature had plummeted. As a result, precautions might not have been taken.

Recriminations do not always help. The real blame will lie if lessons are not learnt, and we must see where they can be learnt. There will be lessons to be learnt with regard to what the Government can do and their role in public information. Having said that, however, I am not sure whether the hon. Member for Banff and Buchan (Mr. Salmond) saw what his local council did—it inserted a full half-page advertisement in The Aberdeen Press and Journal on 3 January, which went to considerable lengths to advise water customers.

That is the point.

The hon. Gentleman says that that is exactly the point, but perhaps a clear idea of the responsibilities of local and of national Government is required. If local government is providing the information, I am not sure that there is a case for national Government repeating it. There must be clear demarcation lines as to who is responsible and, if necessary, we must make sure that the financial resources are there to ensure that it is done.

The hon. Member for Glasgow, Shettleston (Mr. Marshall) rightly identified the fact that we are talking about many people's homes and households. I hope that central Government will respond to the problems that the Convention of Scottish Local Authorities brought to the attention of the Minister responsible for housing—the scale of the damage to the public housing stock. We are talking about people's homes. It is an immediate problem and the debate should not be protracted over a considerable time.

Local authorities should be examining their emergency plans to find out whether they can be improved. With the advent of the water authorities after April, it will be important to ensure proper co-ordination between them and the local authorities. One complaint, particularly in Grampian, is that while it is accepted that the statutory and prime responsibility is to reconnect domestic supplies—quite rightly—efforts should be made to ensure that industrial users are not disconnected for as long as they were on this occasion.

Scottish Hydro-Electric was another target, but as my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) pointed out, the linesmen responded well. My hon. Friend the Member for Gordon reminded me that, in 1984 when there was heavy snow in his constituency, 20,000 people were cut off for two weeks. I suspect that lessons have been learnt from that exercise because there was nothing on quite that scale on this occasion. That does not mean that people should become complacent. The meeting to which my hon. Friend the Member for Ross, Cromarty and Skye referred was very constructive, with Scottish Hydro-Electric identifying the fact that its communications were far from adequate and that there is a greater need to ensure a better flow of information to and from customers who are cut off and who want to know when they will be reconnected. The company also accepted that much more could be done to improve the helicopter operation in Shetland to get heavy lifting gear in place, particularly when areas are cut off because of the snow.

As individuals, we also must consider what we can learn from such experiences. One of the problems is that we all have greater expectations, and there is nothing wrong with that—it prompts Governments and companies such as Scottish Hydro-Electric to provide a better service—but we should not always take things for granted. If our houses are all-electric, we must face up to the fact that there might be times of the year when alternative sources of energy must be available.

On insurance, I echo a point made by the hon. Member for Shettleston. Income support levels do not take into account the payment of any element as a premium for insurance. If the Government are not the insurer of last resort and if people have to pay for insurance, will the Minister point out to his colleagues in the Department of Social Security that they must have the resources to allow them to pay insurance premiums? As the hon. Gentleman said, I suspect that if the choice is between food and an insurance premium, one will buy food. At the moment, such premiums are not included in the calculation.

People must also be able properly to identify what to expect from the authorities. The Shetland Islands council was asked at one stage to provide disposable nappies, which is not the responsibility of local government. We must tackle our own individual responsibilities.

Many lessons must be learnt and, as there may yet be more cold spells this winter, they must be learnt immediately. If they are not and there are more such failures of supply, the scope for recrimination will be much greater than it was for what was an exceptional period of cold weather over Christmas and the new year.

11.56 am

I do not think that it is necessarily important to apportion blame for any aspect of what happened due to the severe cold weather. It is much more important to look ahead and ask how we can deal with the problems that have been shown to result from such severe weather.

My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) eruditely outlined the situation in Glasgow in its widest context. As he said, many of the problems are poverty related. I want to concentrate on health service provision. The crisis in the past few weeks graphically highlighted the fact that the national health service in Scotland is simply unable to cope with the demands placed on it today, irrespective of severe weather. The reduction in the number of beds in recent years, particularly in Glasgow, and the lack of proper central planning following the introduction of an internal market within the NHS have left it unable to cope and to respond flexibly to the demands put on it.

Last week, I was faced with a ridiculous situation in two of the acute hospitals in my constituency. Glasgow royal infirmary had bodies piled high in rooms that were not mortuaries. They were left there for days because the hospital could not cope with the demand, and that was not entirely due to the freeze and to the fact that there could be no burials. The system was unable to cope with the severe numbers.

Clearly, severe cold means that more people, particularly the elderly, die and we accept that. Hypothermia is a serious aspect of the problem, but none the less Glasgow royal infirmary, which is perhaps the major hospital in Scotland, was unable to cope with the demands placed upon it and to provide the sort of service for which we have all been paying over the years and which we are entitled to expect.

The lack of flexibility was also shown at Victoria infirmary, which is also in my constituency. When I visited that hospital last week to discuss with management the problems that had resulted, it was interesting to note that no women were being referred there as emergency cases by general practitioners and ambulances, as the hospital had no women's emergency beds left. They had to be ferried onwards to the Southern General, if they could be accommodated there. They were shunted round the city at a time of great need. The management made it clear to me that the crisis had resulted not from the freeze-up or from staff illnesses, although they were contributory factors, but from the fact that the system simply did not provide sufficient beds to deal with the number of cases that were being referred to the hospital.

Obviously, the cold weather caused problems at Victoria infirmary. I understand that there were 83 deaths, mainly of elderly people, at Christmas and the new year, compared with 27 in the same period last year, but it was stressed that the system was not sufficiently flexible and had no slack to take account of extremities in the weather. There were also problems in the summer during the heatwave.

Almost 1,000 elective surgical operations had to be postponed during the crisis. All the patients who required non-urgent surgery did not get their operations. That sums up what is happening in the health service. It cannot cope with the demands that are placed upon it. By all accounts, the position in England, particularly in London, is even worse, but that is no consolation to those of us in Scotland who fought to preserve a health service to provide care at a time of need, free of charge and within a reasonable response time.

I am particularly concerned by newspaper reports in the past couple of days that Victoria infirmary is considering contracting out another 500 jobs and perhaps losing its auxiliary nursing service. The shortage of auxiliary nurses in the new year meant that some operations had to be postponed.

I conclude by 'quoting Matthew Dunnigan, a consultant at Stobhill hospital, who had warned the Government in the past. After the events of the past few weeks, he said:

"You have to look at your needs in terms of coping with peak demand. That is something that is understood by people who run trains and buses, but not, apparently, by those who run the health service…but the Scottish Office are sticking to this aim of reducing beds by 5,000 before the year 2000."

Will the hon. Gentleman give way?

I am sorry, but I have no time. I am sure that the Under-Secretary can cover those points in his reply to the debate.

We must completely reassess the number of beds in Scotland. I call on the Government to introduce a moratorium—a freeze on any further bed closures—until the whole picture has been considered in the light of the events of the past month—

In Inverclyde as well.

Yes—in Inverclyde and in other parts of Scotland. We must make absolutely sure that the health service can provide the services that the people of Scotland are entitled to expect and for which they have paid.

12.1 pm

As someone who applied for a debate on this subject, I congratulate the hon. Member for Banff and Buchan (Mr. Salmond) on his success in the ballot, and thank him for allowing me to contribute.

I was perturbed at Hogmanay when a constituent rang me from the royal infirmary saying that water had been cut off in many wards. I telephoned the hospital and spoke to the director of water and drainage. Water was provided by the fire brigade on a temporary basis, but there was still rationing for several days. There should be emergency cover for hospitals in those circumstances.

My main concern is my constituents who were affected by burst pipes in their houses. Many of them do not have insurance. I agree with my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) that some Government money should be made available to them. I note that a written answer last week referred to loans and grants. Will the Minister please explain who is getting grants? I hope they will be widely available to poor constituents who cannot afford insurance, especially since the Government increased insurance tax last year.

There has been considerable damage to the fabric of houses. Edinburgh district council will have to spend £5 million to repair the damage to its housing stock. If no Government assistance is available, that will mean a rent increase of more than £3, in addition to the £3 increase that will be necessary in any case because Edinburgh, like many other places, receives no housing support grant.

The Minister may refer to the Bellwin formula. How much will that involve for Edinburgh, and how long will it take? I understand that, when it was applied in Perth recently, there was a delay of 18 months. That is not good enough for tenants in Edinburgh, who cannot possibly afford a £6 rent increase next year.

Finally, I have noticed that the council houses most affected in my constituency are those that have not been modernised. Those with central heating systems and lagged pipes were generally unaffected. That is yet another reason why the Government should not carry out the madness of slashing housing budgets next year. Warm homes can provide protection against damage for many tenants—and if the Minister is fed up with me going on about the cuts to the housing budget, he ain't heard nothing yet.

rose—

12.4 pm

I very much regret that my hon. Friends have been squeezed out of the debate. I welcome the debate, but it is far from sufficient to deal with a national emergency that should have had national co-ordination. Frankly, it should not have been a matter of the hon. Member for Banff and Buchan (Mr. Salmond) being lucky enough in the lottery for Adjournment debates and to raise such a serious issue. I very much regret that my hon. Friends the Members for Western Isles (Mr. Macdonald), for East Lothian (Mr. Home Robertson) and for Greenock and Port Glasgow (Dr. Godman) were unable to make important constituency points that should have been raised in the debate.

There should have been an oral statement to the House last Tuesday, and the fact that one was not made is deplorable. On such an important occasion, when we are debating a matter that affects so many thousands of citizens in Scotland, it is quite unacceptable that the Secretary of State for Scotland could not find time to answer the debate.

In Edinburgh on Monday, the Secretary of State for Scotland made snide comments about the fact that I did not speak in the debate on law and order. When I asked him whether he intended to speak at every debate in the Grand Committee, he said that he would speak on every important issue. However, he is not here today, and the people of Scotland will reach their own conclusions about his priorities.

Despite the parrot cries of somebody who says and thinks that he is a Minister of the Crown, I intend to be constructive in the debate and to put the role of the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson), into perspective. Perhaps he should heed the advice of his fellow Ministers and remain quiet for the rest of the debate.

I shall concentrate on what needs to be done now to help councils and citizens in Scotland. Ministers have an opportunity to redeem themselves, and perhaps to give a lead on what can be done.

I begin by commending and congratulating the hundreds of public service workers in local councils and the public utilities, who gave up their holidays and left their homes to assist in dealing with the effects of the weather in Scotland over Christmas and the new year. No one who saw them on television, spoke to the countless numbers of Hydro-Electric and Scottish Power workers who recovered power to homes or saw the work of road clearers, transport workers, hospital, water and social workers, social security office workers and Scottish Office officials could be anything other than impressed by their real commitment to public service—which it is all too easy for Conservative Members to denigrate when it suits them.

The national emergency in Scotland was quite unprecedented in climatic terms. It deserved a response on a national basis and national co-ordination, and it is regrettable we did not get that. It is not good enough for the emperors of the Scottish Office to say that the buck stops with the local councils. They have the power, the control and the money, and it was their responsibility to take in hand what everyone regarded as an emergency.

It is rich to hear Conservative Members and Ministers complaining about scandalous and inaccurate treatment by the media. When the Daily Record ran an article about the Minister responsible for industry, whatever he has to say and plead today, and whatever wriggling excuses he has to put forward, that newspaper spoke for Scotland in the midst of a national emergency that affected so many Scottish people. It deserves commendation rather than denigration from Conservative Members. To blame school janitors for part of the problem is to stoop to desperate levels.

The hon. Member for Orkney and Shetland (Mr. Wallace), with his usual reasonableness, said that the Secretary of State committed an error of judgment on his first day back at work after a well-deserved holiday, when his priority was to unveil a propaganda poster rather than deal with the problems affecting the people of Scotland. The hon. Gentleman was a little too reasonable. The Secretary of State's behaviour was a spectacular display of indifference and cynicism, given all that we knew of the experience of people in Scotland. Perhaps the right hon. Gentleman's 11 per cent. rating in today's opinion poll reflects the conclusion of the Scottish people.

Many Scottish authorities did that which the Scottish Office information department should have been asked to do—mount a serious campaign. The new shadow authority for South Lanarkshire, which is my own authority, widely publicised emergency telephone numbers that were called by people as far away as Shetland who were desperate for information about the crisis.

The heating bills that the public will receive over the next few weeks will be a nightmare for many of them. It was clear to many householders that the only way to protect their property was to turn up their heating to a level that they probably could not afford. In the next few weeks, bills will pop through letter boxes throughout Scotland, creating serious financial difficulty for many of the people who receive them.

Every one of those bills will include 8 per cent. value added tax. I hope that people in Scotland will remember that if Ministers had had their way, and had not been stopped in the House by a Labour-initiated campaign, 15.5 per cent. VAT would have been added to their heating bills. [HON. MEMBERS: "It would have been 17.5 per cent."] I was too reasonable to the Government for a moment, but that will not last.

It is not that long since the last, supposedly election-winning Budget was out of the way. Deep in its small print was a cut in home energy efficiency schemes, which have done so much to help people in Scotland to deal with severe weather. A sum of £3.1 million was taken out of those schemes, under which 200,000 Scottish homes have been insulated—but 20,000 will now be denied the help that was to be available. Building industry installers who planned according to Government promises have discovered yet again that a Tory promise is virtually worthless. That was a mean cut, especially in the circumstances in which people find themselves today. It was scandalous.

What can the Government do to help? How can the Minister redeem himself and the Government's reputation? [HON. MEMBERS: "He cannot."] He can and he should, and he has that opportunity today. Councils are crying out for help. The scale of the damage is massive. The Convention of Scottish Local Authorities says that Scottish councils face bills of between £25 million and £30 million, in addition to their planned or forecast winter expenditure, to repair council houses.

That figure does not take into account schools and other properties damaged by burst pipes, which will probably double the estimate. Strathclyde regional council suggests that school repairs and extra staffing costs could involve expenditure as high as £12 million.

Councils are strapped for cash. The financial settlement announced recently is still being pored over by many councils and leaves them no room for manoeuvre, yet in 11 weeks' time the new unitary authorities are expected to be up and running. It is in no way reasonable to expect them to cope not only with the new challenges and costs of reorganisation but with the additional expense caused by the winter conditions.

I am acutely conscious that there is no pot of gold waiting to be thrown at Scotland's councils or the many people who need help, but central Government have the resources. There is a contingency reserve for precisely such situations. It is important to establish as quickly as possible how much money is available and how much is needed to help local councils, and how generous the Government will be. We expect the Minister to address that priority when he replies.

A letter from the Secretary of State for Scotland to his fellow Thatcherite who heads the Department of Social Security is not sufficient to deal with the misery and hardship that will be caused to many poor people throughout Scotland. The Benefits Agency has been inundated with demands for help. As my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) said, only loans have been given—not grants, which could have made a difference.

More resources must be devoted to the problem, so that the public will not have to continue enduring the misery from which they suffer at present. The Department of Social Security and the Benefits Agency need help, and they need it now. Scotland must learn, and learn quickly, from the lessons of this disaster. I am glad that the Scottish Affairs Select Committee has taken on board an emergency investigation. The priority is to assist local authorities to repair the damage caused. I hope that today's debate will allow them to get on with that important task.

12.16 pm

I join in congratulating the hon. Member for Banff and Buchan (Mr. Salmond) on securing this Adjournment debate, but that is probably all on which I will congratulate him. I am pleased to have the opportunity to respond on the Government's behalf to this interesting debate. The many good contributions have generally recognised the significant efforts made by many people during a period of severe cold weather.

The hon. Member for Glasgow, Shettleston (Mr. Marshall) spoke about housing problems and insurance, to which I hope to refer later. The hon. Member for Orkney and Shetland (Mr. Wallace), whose remarks I welcome, is aware of the communication links that were regularly provided between central and local government. I am grateful also for the hon. Gentleman's recognition that we must learn, so as to do things better in future.

My hon. Friend the Member for North Tayside (Mr. Walker) gave one of his usual positive and pragmatic speeches. He clearly understands the realities of difficult situations. He believes not in knocking but in being constructive and finding ways forward. I welcomed his contribution.

The hon. Member for Hamilton (Mr. Robertson) spoke about the assistance sought by local authorities, and the Bellwin formula. It is up to local authorities to prepare details of their costs. I will refer to that aspect later.

I assure all hon. Members that the Government fully appreciate the concerns and distress produced by a dreadful combination of severe weather, starting in Shetland over Christmas and spreading to the whole country over the Hogmanay period. I join my hon. Friend the Member for North Tayside in commending the many people in power companies, local authorities and emergency services, whose unstinting efforts over the holiday period helped to restore essential services as quickly as weather conditions allowed. They were the most severe encountered since 1963—the most severe weather before then being in 1947.

The penetrating frost between 27 and 30 December caused many parts of plumbing systems within domestic and commercial premises—I stress commercial premises—to freeze. That is not surprising, given the record low temperatures. The consequences were exacerbated by the holiday period. That factor had a marked effect, especially on industrial and commercial premises. Many domestic, commercial and industrial premises were unoccupied, with heating systems set at low levels. In some instances, those systems were switched off.

Commonsense precautions for individuals and businesses could well have had a beneficial effect in reducing some of the problems. The recent mild winters have perhaps lulled people into a false sense of security about severe weather and led them to omit some of the basic steps that I remember were taken in my youth, such as draining systems that might otherwise be unprotected from frost over the holiday closedown.

I can remember that we regularly used to shut down the water supply in the factory. The sprinkler system, which was there to protect against fire by insurance demand, was changed to a compressed air system during frosty weather. Perhaps we have been lulled into forgetting about severe conditions. It is more than 20 years since there have been frosts approaching the severity of those of the recent past.

The hon. Member for Banff and Buchan referred to a Central Office of Information film, which was produced about 12 years ago. My hon. Friend the Member for North Tayside rightly said that since then conditions have changed significantly, including the insulation of properties, and that the film is no longer in date.

I hope that, when the review body that my right hon. Friend the Secretary of State has announced comes to consider the lessons that can be learnt, it will take into account specifically communications, and the warnings that can be given to the general public. My right hon. Friend has said that we could seriously consider producing an updated film if the media were to revert to previous practice and regularly showed such films.

Responsibility for emergency planning lies with regional authorities—of that there is little doubt. Throughout the period that we are discussing, however, my right hon. and hon. Friends in the Scottish Office team have been in steady and regular contact, through the emergency planning section in the Scottish Office, with all the local authorities.

The hon. Member for Orkney and Shetland referred to a typical contact that we had with a local authority. We asked the authority whether it needed assistance, and if so what assistance. The military was one option. Throughout, no local authority asked for assistance. I would argue that no authority needed assistance because they were coping so admirably.

Water authorities, of course, have well-established procedures for dealing with burst mains. Generally, authorities mobilised their repair squads quickly as soon as the situation developed, and were usually able to effect repairs to damaged pipes, and restore supply, within 24 hours of a burst being detected.

The authorities' chief concern was the consequences of the massive loss of water through burst pipes, not in their mains but in customers' plumbing systems when the thaw arrived. We know that the thaw was dramatically quick. Overnight flow rates trebled and remained at more than 150 per cent. of normal demand for several days.

Levels in reservoirs, as I heard and saw in Grampian, fell rapidly, and the minimum pressure necessary to maintain supplies to all consumers could not be sustained in some areas. Inevitably, properties in elevated positions, or those at the end of systems or close to a major burst, were most affected.

When I visited the operational headquarters in Grampian, I was told about one industrial leakage that was the equivalent of the normal consumption of about 7,000 houses. That is why the water authorities cut off industrial premises, which were largely closed. When work resumed after the Christmas-new year period, the water supply was restored as quickly as possible. Massive industrial leakages were a major problem for water authorities.

I shall make only one intervention, because time is short. The Minister has conceded that there is a need for a public information film. Media representatives to whom I have spoken have told me that they would be delighted to show such a film, given their experience.

When it comes to insurance, whether it be for councils which were not insured or for individuals, will the Minister tell the House that he will not adopt the argument of the hon. Member for North Tayside (Mr. Walker) and say that nothing can be done because other people were insured? That is not what Scotland would want, given the extremity of the conditions that were faced by everyone over the past few weeks.

The hon. Gentleman should have been patient, because I intended to refer to the difficult position of domestic customers.

All the authorities took what steps they could to try to ensure that domestic customers were protected in the first instance. Industry was closed over the relevant period. I emphasise again that emergency planning is a regional council responsibility. The authorities were stretched, but they did not ask for assistance. They were constantly offered it by myself and my ministerial colleagues. The authorities were in the forefront in dealing with the emergency, and I stress that I believe that they performed commendably.

The Government are aware that thousands of Scottish householders in both the public and private sectors have been affected, mainly as a result of burst pipes. Local housing authorities and other agencies responded vigorously, both to the problems in their council houses and by securing temporary accommodation for those made homeless. I am aware that all public sector landlords are working as hard as they can to bring affected houses back into habitable condition as soon as possible, to end the ordeal of those who have had to leave their homes.

Our understanding from initial discussions with some of the authorities affected is that they are currently assessing the damage to their stock, and are unlikely to be able precisely to quantify the costs involved for some time. It is obviously important that they produce quantifiable information. Once that information is available, my hon. Friend the Minister with responsibilities for housing has expressed his willingness to meet the housing committee of the Convention of Scottish Local Authorities. He has said that he will consider the authorities' problems sympathetically.

For the most part, the cost of repairs to council houses will initially fall to be met from councils' housing revenue accounts. My hon. Friend the Minister with responsibilities for housing took this factor into account in distributing supplementary housing capital allocations totalling £16.8 million last week to 30 housing authorities facing housing capital receipt shortfalls in the current financial year. My hon. Friend is aware of the problems and has been in steady discussions with the authorities.

In due course, some authorities will be reimbursed from insurance, but councils may still be faced with a bill for any excess charges or items not covered by insurance. Housing revenue costs in providing relief and carrying out immediate work fall within the Bellwin scheme, but, as with non-housing expenditure, insurable losses are not covered by the scheme. Housing authorities that consider that they may be eligible for assistance under the Bellwin scheme should quantify the costs involved and contact the Scottish Office as soon as possible.

The Bellwin scheme, as I have said, covers only non-insurable risks. Local authorities can decide to insure or not. If they do not insure, as my right hon. Friend the Secretary of State said recently, they must have a contingency fund.

Will the Minister give way?

I do not have time to give way to the hon. Gentleman. I wish to take up a few more points before concluding my reply.

Individual tenants and owner-occupiers may have claims against their insurers. As the hon. Member for Shettleston said, some people have difficulty in finding funds to insure. Assistance is available to those in difficult financial circumstances through the Benefits Agency, which has arrangements to cope with such problems. It has been remarkably efficient in dealing with the many claims that it has received.

The hon. Member for Orkney and Shetland asked whether insurance premiums were included in the calculation of benefit levels. I am assured that they are.

As for schools, I have been quoted by several hon. Members, especially the hon. Member for Banff and Buchan. The representatives of one newspaper were not present when I made comments about janitors, yet an article appeared in that newspaper on that topic. I merely posed some questions on the basis of what regional councils should be doing. The response of certain newspapers was particularly galling.

Are the necessary precautions in place so that steps can be taken to try to prevent a recurrence of the circumstances that so recently arose?

Reasonable councils should be taking such steps. I remember that, when I was young, the janitor had the authority—indeed, it was part of his duty—to drain water systems. I do not know whether local authorities still do that. I hope that they will look seriously at that alongside the review that my right hon. Friend has instigated.

We must learn lessons. We have been through a particularly severe cold spell. My right hon. Friend has announced that a review will be carried out by a combination of Scottish Office officials, representatives from Scottish Homes, the new water authorities, an existing water department, a local authority emergency planning function and, indeed, representatives of business—the Confederation of British Industry or the Scottish chambers of commerce.

I believe that all those involved in dealing with this exceptionally difficult time did so admirably well, but it is important, as the hon. Member for Orkney and Shetland said, to learn lessons, so that we go forward and do things even better in future.

Driving Tests (Isle Of Wight)

12.30 pm

If I may, I shall set the background. I am referring in the debate to the new theory test for driving tests. The EC directive 91/439 on driving licences was adopted in July 1991 under article 75 of the European Community treaty. Member states were required to enact any necessary measures for compliance with the directive by 1 July 1994, but the directive itself has to be applied only from 1 July 1995.

The directive requires mutual recognition by member states of driving licences that have been issued by other member states, and allows members to recognise disqualifications for offences that were committed in another state. It also sets minimum standards of competence. That is the aspect that will affect the test and health for drivers.

The directive lists the required competence and the relevant criteria for theoretical knowledge as opposed to the skills element, which is currently covered by a practical test. Drivers are required to be tested on their knowledge of aspects of road safety regulations, the road, other road users, general rules and regulations and the vehicle. There are additional requirements for special categories of vehicle, including motor cycles.

Member states have considerable leeway in how they administer the test to examine candidates on the prescribed areas of competence and knowledge. In the United Kingdom, the practical driving test complies closely with the requirements of the directive, but the theory aspect does not. The wording of the directive says only that the form of the theory test shall be such as to make sure that the applicant has required knowledge of the subjects listed.

At present in the United Kingdom, candidates for the driving test are asked a few oral questions as part of the practical test. The directive itself does not require a written theoretical test, and at first it seemed as though the United Kingdom might implement the theory test requirement simply by expanding the number of questions asked within the present test format. Sadly, however, the decision was taken, yet again, to gold-plate a European directive with the addition of a theory test on its own.

The population of the Isle of Wight is 126,000. Seventy per cent. of households on the island own a motor car. The Isle of Wight has 62,000 registered vehicles, and there are approximately 70 driving instructors in business on the island. The Driving Standards Agency has a driving test centre that employs two full-time examiners. The agency carries out some 3,600 driving tests per year on the island.

With five high schools and a technical college on the island, it is apparent that there are a large number of potential new drivers. The rural nature of large parts of the island makes the ownership of a motor car almost essential. Young people find the process of obtaining a driving licence expensive enough, without the additional expense of having to cross the Solent by ferry to take their theory test.

The Driving Standards Agency put out to tender the examination of the theory test, which is due to start from 1 July. The tender was won by Drive Safe Services Ltd., which, I understand, must provide an examination centre based on population figures from the Department of Transport and cover an approximate 40-mile radius.

Mr. Tony Beere, secretary of the Isle of Wight Driving Instructors Association, telephoned me to say that he had spoken to Mr. Evans of Drive Safe Services Ltd., who had informed him that there was no provision for the theory test to be available on the Isle of Wight, and that it would need the authority of the Driving Standards Agency to provide it. Mr. Beere asked me to contact the Department of Transport to point out to it the problems that that would cause, and to draw its attention to the fact that the Isle of Wight college was prepared to make facilities available for the test.

I understand that Brian Crane, the island's traffic education officer, also offered the facilities at the traffic education centre on behalf of the Isle of Wight council. My hon. Friend the Minister will clearly recognise that there is no shortage of suitable premises and facilities for the theory test on the Isle of Wight.

I telephoned my hon. Friend's office, was promised a call back by a very helpful civil servant, and was told by a member of my hon. Friend's personal staff that the person dealing with the new theory test would telephone me later that day. Sure enough, later that day, 8 January, my office received a telephone call from the person responsible, who was quite adamant that, because the Isle of Wight is within a 40-mile radius of Portsmouth, my constituents would indeed have to travel to the mainland for the theory test from 1 July this year.

I then wrote to my hon. Friend—I also buttonholed him in the Lobby—and told him how concerned I was about the problem. I also asked Madam Speaker for this short debate, so that the record could provide what I hope will be an enduring solution for the people of the island.

On 15 January, I received a faxed copy of a letter from Mr. Steve Madden, the implementation director of Drive Safe Services Ltd., addressed to Mr. Tony Beere, the secretary of the Isle of Wight Driving Instructors Association, in which he says, inter alia:

"You may well be aware that Drive Safe Services Ltd. have now been authorised by the Driving Standards Agency to open an additional test centre on the Isle of Wight. I can confirm then that by 1st July 1996, when the theory test service is delivered to the public, there will be a facility on the Isle of Wight."

The headed notepaper, however, on which that letter came, has no address. It has no company number. It has no list of directors, which makes it an illegal document under EC law. That apart, I hope that my hon. Friend will be able to give me, the young potential drivers and the driving instructors of the Isle of Wight the cast-iron assurances we seek.

My hon. Friend will be aware that Her Majesty's Government have pursued a consistent policy towards the Isle of Wight, to try to ensure that, so far as possible, it has all the facilities and infrastructure that a modern community requires. As recent examples, ministerial decisions have been taken to ensure that services and facilities are not siphoned off to the mainland, thereby causing unnecessary inconvenience and unacceptable additional expense to my constituents, such as the magistrates court service, the island's tax office and the provision of VAT and valuation office inquiries on the island.

My hon. Friend will rapidly appreciate that the Department of Transport has—with the notable exception of my hon. Friend the Member for Salisbury (Mr. Key), who, while a Minister in that Department obtained road signs on the motorway around Southampton and Portsmouth which gave directions to the Isle of Wight—sadly gained an unenviable reputation for being singularly unhelpful in meeting the islanders' needs and aspirations. Nevertheless, it would fly in the face of consistent Government policy if that impediment were to remain by requiring Isle of Wight residents to travel to the mainland for their theory tests.

There is already a strongly held view on the island that, as the vehicle excise duty is the same as that for the rest of the United Kingdom, there should be some evidence that those of us who do not drive on the mainland should derive at least some advantage from the taxation we pay, rather than the "Road Closed" signs or the corrugations in the road surface that give rise to the famous Isle of Wight rattle.

I can recall a time when, to see a set of traffic lights on the island, learner drivers were taken out to the Yarmouth swing bridge, which had the only set of traffic lights on the island in those days. Things have progressed a little since those times, and we have even made the man with the red flag who walked in front of the motor car redundant. I hope that my hon. Friend the Minister will appreciate the need to provide the residents of the Isle of Wight with the convenience and accessibility that are available to residents of the rest of the south coast.

I understand that my hon. Friend will not stand at the next election. Let me say with all sincerity—not just for myself, but on behalf of many Back Benchers—that he has earned an enviable reputation as a hard-working Minister who has always tried to provide solutions to problems.

One of my abiding memories is of sitting in the back of a long-wheel-based Range Rover that was reversing up a jungle track in Dominica during a tropical thunderstorm when the temperature was 98 deg F and it was very humid. My hon. Friend—who always endeavours to lower the temperature—displayed his usual aplomb, leading the passengers in a rendition of "I'm Dreaming of a White Christmas". The fact that at least three of the passengers were Ministers in the Dominican Government who had never seen a snowflake and were somewhat puzzled, is by the bye.

I have great expectations of this short debate. I think that my hon. Friend the Minister will be able to deal with an impediment that has not been resolved by a telephone call from me or by correspondence. Let me put it on the record that, as soon as I drew it to my hon. Friend's attention, he promised a solution. He was very much on my side, seeing the problems that would be posed to Isle of Wight residents who would have to travel to the mainland to take the theory part of their driving tests.

That did not surprise me: when my hon. Friend represented an Oxford constituency, he was one of the first Members of Parliament to speak for me on the Isle of Wight, and I know that he is well aware of the island's problems.

12.41 pm

I have seldom had such a pleasant task as that of replying to this debate. I fear that my hon. Friend the Member for Isle of Wight (Mr. Field) has blown my cover: as far as I can recall—and, for reasons that may be all too apparent, my recollection is somewhat hazy—my hon. Friend had spent much of that day engaging in a serious educational process. As a result, I can now mix a strawberry Daiquiri, and will shortly learn how to spell it. My hon. Friend is clearly a master of his brief, and I am greatly indebted to him.

If you ever travel abroad with my hon. Friend, Madam Deputy Speaker—and I commend it—you will find it a singular experience. My hon. Friend's constituency is unique; he is monarch of all he surveys. If you have the particular good fortune to visit an island whose dimensions are roughly the same as his, you will realise that he can claim virtually to represent the entire process of government. For that reason, my hon. Friend is treated in a way that bears more relation to Napoleonic imperialism than to British parliamentary democracy. It is a heady experience, which ensures that the hospitality that my hon. Friend tends to generate is lavish.

My hon. Friend also carries artefacts on his world tours, with which he blesses various dignitaries: tie pins, badges, ties and all manner of paraphernalia celebrating the island's—

Order. I am sorry to interrupt the Minister, but I see little connection between his interesting discourse and the subject in hand.

I stand corrected, Madam Deputy Speaker—although I had hoped to convey the special nature of my hon. Friend's constituency, which, after all, led to today's debate.

My hon. Friend wants special recognition of his constituency's particular circumstances, and I welcome the opportunity to reassure him about arrangements for the new theory driving test, which constitutes the most important change to the test since it was introduced 60 years ago. I hope that my hon. Friend will not mind if I do as he did, and begin by describing some of the salient features of the general proposals before responding to his specific constituency point.

On 1 July this year, a new separate theory test will be introduced, which learner drivers will have to pass in addition to the familiar practical test on the road before they can obtain a full licence. The theory test will enable us to meet the new minimum test requirements of the European Community's second directive on driver licensing. My hon. Friend is, however, right in saying that member states will be left with a broad discretion in regard to the arrangement of their driving tests. We aim to secure the maximum road safety benefit from the exercise.

When I examined the subject, along with the then Secretary of State—my right hon. Friend the Member for Peterborough (Dr. Mawhinney)—we considered the option of simply posing some questions in addition to those that are currently asked at the end of a driving test, which might have satisfied the minimum requirements of the directive. It is important to remember, however, that Britain has the best road safety record in the world, because we take such issues seriously. My right hon. Friend and I discussed how we could use the theory test to expand the awareness and perception that are needed by new drivers in particular.

I am confident that the new theory test—which, incidentally, has the overwhelming support of motoring and road safety organizations—will make a significant contribution to improving road safety and reducing the accident rate among newly qualified drivers. In that regard, it will also make an important contribution to the achievement of the objectives specified in "The Health of the Nation" White Paper.

The current test is basically sound, but some candidates can pass it without adequate preparation for all aspects of driving. All new drivers need knowledge and understanding if they are to be safe. Drivers in the 17-to-21 age group—which includes most new drivers—constitute 10 per cent. of licence holders, and are involved in 20 per cent. of accidents and 25 per cent. of fatalities. It has been said that a young driver in that category is seven times more likely to be involved in an accident involving injury than a person of my age or that of my hon. Friend—in other words, a person in middle age or, in the case of my hon. Friend, old age.

Let me describe the position more graphically. Road deaths constitute 30 per cent. of all deaths among young people, and 75 per cent. of all accidental deaths in that age group. If we are to go on making our roads safer, we must ensure that the building blocks are right. We must ensure that learner drivers are taught more about observing and anticipating hazards.

I am confident that the theory test will achieve that, and will strengthen the preparations that new drivers make for their driving tests. Because they are likely to take the process more seriously, I expect the pass rate for the practical test—which is currently only about 50 per cent.—to rise.

Obviously, we shall carefully monitor the new test during the first five years, and we shall evaluate it rigorously to make sure that it has the desired effect. If it fails in that respect, we shall certainly be prepared to make appropriate adjustments. The test will last for about 45 minutes, and for cars and motor cycles it will consist of about 35 questions. Motor cyclists will have their own version of the test, with some questions specific to motor cycling.

Most questions will be multiple choice, and will require candidates to choose the correct answer from four possible options. It will also contain some multiple response questions, and candidates will be required to select several answers from five or six options.

As I have said, there will be separate questions for motor cyclists, but each question paper will test about 12 topics, including: driver attitude; traffic signs and regulations; the effects of alcohol, drugs and fatigue on driver behaviour; safety and environmental aspects of vehicles; and so on. Some theory test questions will be picture questions: the pictures might be of road signs or road situations, and a perfectly straightforward question will be asked.

There will be separate tests for learner drivers of lorries, buses and coaches, and they will cover separate topics that are relevant to those licence categories. Each test will consist of 25 multiple choice or multiple response questions.

It is important that the new theory test should discriminate between candidates only on the basis of their knowledge. It is not an intelligence test. The design of the questions and the layout of the papers take special account of the difficulties that people may experience if English is not their first language. The test takes special account of those with dyslexia or other reading difficulties, of the deaf and of people with other disabilities. We have taken some pains to consult all the relevant disability groups to make sure that the arrangements are practicable and as accessible as possible.

Provisions to meet the special needs of candidates will apply irrespective of the category of the theory test that is to be taken. Welsh variations of the test will be available in Wales. Versions of the test using British sign language or a lip speaker will be available for deaf candidates, and facilities will be provided to enable disabled candidates to take the theory test. Where necessary, that could include personal help from a member of staff in filling in the test paper, or perhaps even a test at the candidate's home.

The normal arrangement will be that learner drivers must pass a theory test before they are able to book a practical test. However, during the first six months between 1 July and the end of 1996, there will be a special arrangement to allow test candidates to take the practical test first. To gain a full driving licence, test candidates would need to take the theory test within the following six months. Those measures will help to avoid a bottleneck caused by candidates who cannot book practical tests because they have not passed the theory test. They will also help with the management of any surge in demand for theory tests following the introduction of the new tests.

Irrespective of the order in which the tests are taken, learner drivers will have to pass both the theory and the practical tests before they can drive unaccompanied and before they can be issued with a full driving licence. A programme of publicity has been developed to ensure that learner drivers are properly informed about the new tests well in advance of their introduction. Since September 1995, that has included enclosing with all the provisional licences issued by the Driver and Vehicle Licensing Agency in Swansea a leaflet providing information about the new tests.

The basic information needed to answer the theory test questions is contained in the "Highway Code", and in the Driving Standards Agency book called "The Driving Manual", which is readily available. Additional material to support test candidates is being developed by the DSA and a number of other publishers.

In March, the DSA will publish a book containing all the theory test questions for car and motor cycle learner drivers. The theory test questions for learner drivers of lorries, buses and coaches will be published in early May. As well as providing all the theory test questions and answers, the DSA books will contain text and graphics explaining why the correct answers are right and highlighting aspects of incorrect answer choices.

Before I leave this description of the general arrangements and turn to my hon. Friend's question, perhaps I may be allowed to address myself to young people who are currently contemplating the new test. I should like to do that because I understand from some driving schools and from occasional items in the press that some young candidates are desperate to take the test as soon as they can, so as to get in under the wire before the new arrangements are established.

No driver who is capable of passing the practical test need fear the theory. As I have said, the pass rate for the practical test is currently about 50 per cent. We anticipate that the theory test pass rate will be significantly higher. I urge candidates not to attempt to rush driver training to avoid the theory element.

I hope that people will have the chance to read what I have said. I know that my hon. Friend the Member for Isle of Wight will appreciate it. It is clear that the test will not be arduous. It will provide a full basis for understanding the questions and the answers, and why the answers are right. Therefore, no driver should fear it in any sense. I fear that young drivers who try to get in under the wire are far more likely to experience first-time failure, consequent extra cost and even more delay if they do not approach the subject sensibly and conscientiously. I make it quite plain that the theory test should hold no fears for the competent learner driver.

I now turn to the specific concern of my hon. Friend the Member for Isle of Wight. The specification for the establishment of the theory test and theory test centres was based on responses to DSA customer surveys. Driving test candidates and their instructors thought that it was reasonable in general terms to travel up to 20 miles for a driving test. A national network of theory test centres will be developed and will run frequent test sessions to meet candidates' needs.

The specification for theory test centre locations requires that, for most people, the centre should be available within 20 miles. In towns and cities where the population density is higher, a test centre should be available within about five miles. There might be slight changes in rural areas, where it may be appropriate to go as far as 40 miles, but, in general, we want the test centres to be accessible.

It is precisely on the issue of accessibility that I received a representation from my hon. Friend, and that has led to this short debate. I am extremely grateful to him for paying such a generous tribute to my private office staff, who are absolutely first class. I am glad that they were able to respond so constructively to my hon. Friend.

Following receipt of my hon. Friend's inquiry, I looked into the matter, and confirmed that the initial proposals for test centre locations did not include siting a theory test centre in the Isle of Wight. However, I have considered carefully what my hon. Friend has said on the matter. I know the island, and I enjoyed being there with my hon. Friend for an extremely successful meeting. In the light of his representations, and particularly in the context of the special circumstances on the island, I am happy to confirm to him that I have given directions for an additional theory test centre to be sited on the Isle of Wight.

As my hon. Friend says, practical driving tests for people on the island are provided in Newport, where two examiners are permanently based. If demand requires it, the agency will readily detach additional examiners from Southampton or Portsmouth. As my hon. Friend knows, motor cycle, lorry and bus tests are conducted from a centre at Rookley. That is not a permanently staffed centre, but test programmes are arranged there to fulfil known demand as required. At present, all the agency's target waiting times are being met at the centers—that is, six weeks for cars, four weeks for LGV and PCV vehicles and three weeks for motor cycles.

There have been changes to the DSA's network of booking offices in the past few months. The agency has closed five of its regional offices, including Eastbourne, which used to manage the booking of tests for centres in the Isle of Wight. That work was transferred to the agency's office in Cardiff. There were some initial difficulties there about making contact with the office because of the volume of telephone calls being received, but I am pleased to say that measures to address that have succeeded in improving the situation. As evidence, the booking staff at the office are answering 90 per cent. of all calls within a minute, which is the agency's service standard.

I am glad to have been able to satisfy my hon. Friend that we intend to offer his constituents the standard of service for which he has properly and rightly campaigned on their behalf. I am grateful to him for drawing the matter to my attention and for giving me this opportunity to set matters right. As my hon. Friend the Member for Welwyn Hatfield (Mr. Evans) might have remarked, my hon. Friend has got a result.

Rotherham District General Hospital

12.59 pm

I make no apology for raising this matter, as experience suggests that hon. Members have an obligation to maintain an interest in agencies and local organisations that serve their constituencies. National health service trusts and other bodies that administer the health service are extremely important in their regions and nationally. Their duties are vital. The funding for which they are responsible is large and needs to be larger. As the taxpayer provides those funds, the Member of Parliament, the taxpayer's representative, is entitled to maintain an interest—indeed, it may be an obligation.

That interest may not always be convenient to, or welcomed by, those bodies, but they need to appreciate that national health service trusts owe their position to the Minister. They are not directly democratically based or clearly representative in their nature—Members of Parliament are. I make the point because, on two or three occasions over the years, my relationship with bodies serving my constituency has not always been smooth and easy. It has usually been cordial, and I have great respect for the people who serve on those bodies. Some years ago, however, one chief officer imagined that he could refuse to meet local Members of Parliament: the Minister will appreciate that the meeting did take place.

Two or three years ago, hon. Members had cause for concern when a project of major importance was not drawn to their attention at a reasonably early stage and the trust's initial response to the public's growing concern was less than sensible. In another matter, I expressed serious concern about the fact that my constituency provided no lay member to serve on Rotherham health authority, an authority of considerable quality, which serves three constituencies: Rother Valley, Rotherham and my own. That was a serious omission. It led me to see the then Health Minister—the present Secretary of State for Health—who, unfortunately, was ill-informed about the position as he said that my constituency did not provide the authority with a lay member before it was reorganised. I was able to give him the relevant names and addresses.

Lest it be suggested that I am wholly critical, I make it clear that I recognise the fact that many of my constituents are justifiably grateful for, and appreciate, the services and help that they have received from the national health service in Rotherham, and that I share their view that the medical, nursing and caring staff at the hospital and in the service generally maintain high standards and show a commendable dedication to their work, which should be consistently recognised. Their position led me to seek this debate. I am not sure that the people responsible for the leadership of the service have adequately recognised their obligation to consider staff and to give proper regard to their views.

I accept that smoking is bad for health—that is beyond dispute. I agree that people, especially the young, should not be encouraged to smoke. I do not quarrel with the efforts of public bodies such as health trusts to discourage smoking and to take steps to protect others from the effects of smoking. Nor do I object to the Department of Health's advice on that matter—that point needs to be made clear from the outset. In effect, this debate is about not smoking, but the conduct of public business and Rotherham trust's approach.

The trust decided to introduce a complete ban on smoking, phasing it in until full implementation on 1 April 1995. That met the wish of Rotherham health authority, which, in compliance with its obligation to the Department, required its providers to operate an anti-smoking policy within Government guidelines. Just before the complete ban came into effect, constituents expressed their concern to me that they were to be prevented from smoking, not only in the hospital but within its grounds and in the car park, including in their motor cars.

On 28 March 1995, I wrote to the trust to express concern about the absolute nature of the ban. The acting chief executive responded promptly to say that the trust had unanimously approved the decision, and he informed me that that was in accordance with Department of Health guidelines. Constituents then said to me that they had been told that the ban had been introduced on the Minister's advice or instructions, so I wrote to the Minister involved—the noble Lady Cumberlege—who replied on 22 April. Her letter referred to the setting aside of a limited number of smoking rooms for staff. That position was significantly different from that of the trust.

National health service guidelines cover the point. They say specifically that a limited number of smoking rooms are to be set aside for members of staff who cannot give up smoking. They assume that all members of staff wish to give up smoking. The Minister who is to reply will accept that not all of them do—it is a free society. The Department asked district health authorities to implement the anti-smoking policy and specific reference was made in the guidelines to the provision of separate smoking rooms for patients and visitors. Rotherham appears to have disregarded that.

Many staff were unhappy about that absolute approach. I understand that the hospital administration department was unhelpful in the drawing up of a petition. The Minister will be aware that more than 500 members of staff at the hospital—500 dedicated and hard-working people—signed a petition seeking the provision of a smoking room. The petition was submitted to the trust and rejected, despite the fact that the Department's guidelines provided for that facility.

Following receipt of the noble Lady's letter, I wrote to the trust and said that the position was anomalous. The noble Lady had advised me that patients could be allowed to smoke if the clinician approved and if the arrangements to allow that had been put in place, and that the facility would be only for patients and not for staff, visitors or anyone else. However, given the number of patients who gather around to smoke outside the hospital, it is peculiar that the trust tells me that facilities have been provided for patients to smoke. If they had, they would not be standing by the hospital doorways in wet and cold weather indulging in the habit.

I wrote to the trust after I had received the noble Lady's letter and waited for a reply. Unfortunately, none came. At a function, I saw the chairman of the trust, a local and distinguished citizen whom I view highly and have known a long time. We still have a cordial relationship. I said that I had not received a reply to my letter. He assured me that the contents of my letter were being taken seriously, but I still did not get a reply.

Like other hon. Members, during recesses I make a number of visits and hold a number of meetings to fulfil my constituency obligations. Following usual practice, a meeting with the trust was arranged for 12 September last year, which my hon. Friend the Member for Rother Valley (Mr. Barron) and I attended. As soon as the meeting began, I drew attention to the fact that I had not received a reply to my letter and the chairman unhesitatingly offered a full apology. We discussed the problem of the smoking ban in detail. I hoped that, following that meeting, a rather more sensitive approach would be taken. However, within a short time I learnt that the trust had endorsed its existing policy in every particular and again claimed that it was complying with Department of Health policy—which it clearly was not.

I wrote to Baroness Cumberlege again, but I received a reply that I thought was inconsistent with her previous letter. The Minister may disagree about that. Baroness Cumberlege said that she stood by everything that she had stated in her previous letter about the provision of smoking rooms, but she then expressed total support for the trust's decision. I am sure that the Minister has seen the correspondence.

Baroness Cumberlege also referred to the claim that the vast majority of patients, staff and visitors wholeheartedly supported the trust's policy. I have very real doubts about that—514 members of staff requesting a different arrangement can hardly be described as overwhelming support. As far as I know, the trust has made no attempt to discover whether it actually does have the overwhelming support of the community, patients and visitors. Indeed, as far as I am aware, the only exercise to establish that was carried out by members of staff. It revealed that the majority of people who do not smoke as well as the overwhelming majority of people who do smoke disagreed with the trust's policy. That clearly shows that the trust's claim that its policy enjoys overwhelming support is not well founded.

I am concerned about people who visit the hospital and use their own cars. Despite the enormous successes of hospitals in modern times, they remain places of stress. To add additional stress by refusing to allow any opportunity to smoke is not necessarily wise. It is also rather oppressive to tell people that they cannot smoke in their own cars. I pointed out to the trust last September that it would face wholesale disregard of its ban. South Yorkshire is not the sort of area where big brother immediately and automatically commands obedience and respect. I told the trust that docile, obedient, responsible citizens would obey the ban, but a very large number of people would not, which would make those who respected the ban feel somewhat angry and embittered. The ban does not help to foster good relationships. It is much too oppressive to tell people that they cannot smoke in their own cars.

There has been a slight advance because the chairman has now told me that the trust will not enforce the ban. I am not happy about that because I believe that regulations should be sensible and enforceable. If they are not, they should not have been made. I hope that there will be a different approach.

The Department of Health is responsible for the trust and it appoints its members. It has issued guidance to which I do not object and nor do the majority of people and the staff of Rotherham hospital. However, the trust, which does not have a democratic mandate, has chosen to disregard the staff and impose a ban. That places a burden on staff, one of whom is a constituent of mine who has not had a day off work for health reasons in 20 years. She is now told that she cannot smoke within the precincts of the hospital.

The trust feels entitled to disregard the Department's advice on the provision of smoking rooms. It is distasteful that the trust, having decided to differ from the Department's advice, has not acknowledged that difference but instead claimed, both before and after the ban and during our meeting, that its action was in accordance with departmental advice. Will the Minister make it clear to the trust that it should not say that it is following ministerial instructions when it is not?

We are concerned here not with the merits or demerits of smoking but with the proper conduct of public business. Perhaps it would be appropriate for the Minister to confirm that trusts should always be willing to meet Members of Parliament and that they should never mislead them. Hon. Members are entitled to be, and must be, given accurate information by all the public bodies that serve their constituents. In this case, I do not think that I was given accurate information. Neither do I think that the trust recognised its obligations to the community and to its parliamentary representatives.

The dedicated and caring staff of Rotherham hospital should have received adequate information. I am not sure whether it is correct, but I have been told by several members of staff that they were not properly consulted. The Minister will acknowledge that departmental advice makes it absolutely clear that staff should be consulted. In this case, I have a real suspicion that they were not. I hope that there will not again be the same insensitive disregard of the views of staff that has clearly been the case until now. I hope that there will be an understanding that sometimes a draconian attitude can be counter-productive.

As I said earlier, when I have driven around the hospital area, I have been surprised by the number of people smoking. Not long ago, someone counted 250 cigarette ends by the front door. That shows that a hard and insensitive approach does not produce the desired result. I suspect that more tobacco has been consumed in and around the hospital since the ban than was ever the case before. Many people, including myself, would not smoke in the hospital when attending meetings and so on. However, as I was leaving after my last visit, I noticed that a great number of people were smoking. Therefore, the trust might wish to consider whether its policy is wise. Coercion should always be avoided and the views of the staff should be more carefully considered.

The matter was fully discussed at the recent annual meeting of the hospital trust. I was concerned to hear that when someone who attended the meeting asked to see the minutes, he was told that legal opinion was being sought on whether they could be shown to him. The trust should recognise that we are still living in a democracy. I hope that democracy will play a larger part in its future consideration of such matters.

1.18 pm

I am glad to have the opportunity to respond to the hon. Member for Wentworth (Mr. Hardy), who raised some important points. I have always respected his talents as an implacable pursuer of causes that are dear to his heart—which certainly include bodies that are not democratically elected. Indeed, he is quite right to point out that it is precisely the function of Members of Parliament, who are democratically elected, to raise such matters. Incidentally, I am also glad to note that he paid particular tribute to the staff of Rotherham district general hospital, and I would like to associate myself with that tribute.

I understand that this debate is not so much about smoking policy or anti-smoking policy per se, but about what the hon. Member for Wentworth called the proper conduct of public business—in this case the conduct of the trust. None the less, before coming to that matter, I shall briefly comment on Government policy on smoking, since it was the origin of the problem.

The Government believe that people are entitled to breathe air unpolluted by tobacco smoke and that non-smoking should be the norm in buildings frequented by the public, with special provision for smoking where local managers feel that it is appropriate. National health service premises are required to be virtually smoke-free. Smoking is responsible for about 110,000 premature deaths in the United Kingdom each year, and the treatment of smoking-related diseases costs the NHS, and therefore the taxpayer, about £610 million a year.

As the largest employer in the United Kingdom, and as the manager of premises used by thousands of members of the public, the NHS has a responsibility to protect patients, visitors and staff from the health risks of smoking. I do not think that the hon. Gentleman would disagree with that. The NHS, precisely because it is the NHS, should and does develop an exemplary role, leading the way and providing the model for other employers to follow.

In July 1992; the White Paper "The Health of the Nation" set out a requirement for the NHS to work towards a virtually smoke-free environment for staff, patients and visitors as rapidly as possible. Soon after that, guidance was issued in October 1992, to which the hon. Gentleman has referred, which set out the action required of NHS hospitals and authorities. That guidance is called "Towards Smoke-Free NHS Premises".

The Department co-operated with the Health Education Authority in the production and distribution of guidance on the design and implementation of smoking policies. That publication set out the basic requirements of an NHS policy, but left management free to tailor arrangements to suit local circumstances. Advice was also included on the responsibility of health authorities to specify that, wherever possible, NHS services should be provided in a smoke-free atmosphere.

It is worth remembering that the Government guidance issued to help implementation of that policy does not require hospitals to provide separate smoking facilities for staff and patients. It sets a minimum standard, which all parts of the NHS are expected to achieve. It is up to local managers—I emphasise that—to decide whether they feel that it is necessary or practicable to set aside such smoking rooms for staff and/or patients.

Following receipt of the Department of Health guidance, the Rotherham General Hospitals NHS trust set up a task group in 1993 to look at the question. On 4 October 1993, it sent out a letter, which was—to use the bureaucratic terminology—cascaded to staff via the team-brief network, and a policy statement, which I think that the hon. Gentleman has seen, setting out its position on anti-smoking policy. The letter asked for comments or questions by the end of December of that year. The consultation lasted for three months from the beginning of October to the end of December 1993. I am told—the hon. Member for Wentworth has not controverted this—that only two members of staff individually made representations during that three-month period.

The first stage of the policy, which was issued to staff—I understand—in a letter with their pay packets, was implemented on 1 April 1994. It made it plain that to help staff, a smoking room would be set aside until 1 April 1995, after which—two years after the beginning of the process—the whole policy would come into force. That is the burden of the problem raised by the hon. Member for Wentworth.

I am also aware that in February 1995, a 500-name staff petition against banning smoking was considered by the trust board. I should point out that although the hon. Member for Wentworth said that the petition received substantial support, the trust employs 3,000 staff and the petition therefore represents quite a small proportion of employees—fewer than one in five.

I am sure that there would have been a much larger response to the petition had the people responsible for it been allowed to put a notice on the staff notice board and the administration had not been especially discouraging. Many staff work strange hours, including night shifts, and so on, and I am assured by those responsible for the petition that many more signatures would have been obtained had it been simple to do so.

I hear what the hon. Gentleman says, but I can obviously go only on the facts in front of me.

Since April 1995, when its policy was introduced, the trust, which treats about 300,000 patients a year, has received only three formal complaints from patients about its smoking policy.

I shall deal with the effect on patients before I deal with the effect on staff. The trust decided to allow discretion for clinicians to designate smoking areas for wards where certain patients are allowed to smoke. Long-stay patients who are addicted to smoking are allowed to smoke, as are terminally ill patients, where the medical staff in charge of their care feel that it is in the patients' best interests. The trust is considering offering free nicotine patches to all in-patients for use during their stay. I am aware from the correspondence that some patients do indeed go outside the building to smoke, but they do so against medical and nursing advice. I stress to the hon. Member for Wentworth that about 500 deaths a year in Rotherham are attributed to smoking—that is one in five.

I understand that some staff reacted strongly when the trust removed the designated smoking room, although ample notice was given in the course of the procedure that I have described, and proper consultation was conducted. As the hon. Member for Wentworth has pointed out, the trust has adopted a lenient approach to staff smoking in hospital grounds. Although the trust cannot of course forbid smoking in private cars—that would be quite oppressive, to use the hon. Gentleman's word—it has every right to forbid smoking in its own vehicles.

The hon. Member for Wentworth kindly wrote to me on 13 January, raising a number of points related to the debate. He said:

"I do not entirely disagree with your comments about smoking. However, your letter overlooks several of the matters which I have raised.

The NHS guidelines do refer to the provision of smoking rooms. Rotherham has refused to provide these."

Simply, my point is that that is a matter for local decision. It is a matter for the Rotherham General Hospitals NHS trust and it is not therefore in conflict with Government policy. It is simply exercising its right to carry it a step further than the Government guidance suggests.

The hon. Member for Wentworth also asked whether the Department knew about the 500-name petition. It is not clear from the chain of documentation whether we were fully aware of it. As far as my noble Friend Lady Cumberlege could determine from all the evidence, we were, however, fully aware that there was not a majority in favour of reversing the ban imposed by the trust. We have discussed the figures and the hon. Gentleman has made his point. None the less, the petition contained only about 500 signatures, and there are 3,000 employees of the trust.

The hon. Member for Wentworth went on to ask what arrangements had been made to enable patients to smoke where a clinician agreed that they should be able to do so. That is an important and practical point. An arrangement may be made between staff and a patient so that he or she may smoke at agreed times, for example after meals. In such a case, a single room off the main ward may be made available or a sister's office can be allocated for that purpose by agreement with staff. The trust has made it clear that there are no spare rooms and no specific rooms are designated for smoking.

The hon. Gentleman finally raised the question of smoking out of doors and in cars. I take his point that a general ban was imposed at first. However, in the light of experience and, perhaps, common sense, the trust now operates that aspect of the policy leniently.

All those matters were raised again by the acting chief executive and by the non-smoking policy group just before Christmas—in October or November—and the trust board considered them at its meeting in December. Various recommendations were made—

Order.

A12 (Waveney)

1.30 pm

I am grateful for this opportunity to raise the matter of the A 12 trunk road in Waveney and to express some of my constituents' fears about the consequences of leaving it as it is, without development and without significant improvement.

When the roads programme was cut in the previous Budget, it was understood that all road schemes had to be reconsidered; no one argues against that. My hon. Friend the Minister for Railways and Roads and the Department of Transport can only do what they can with the money that the Treasury gives them. It is also now unfashionable in some quarters to build roads.

I hope, however, that my hon. Friend will understand the sense of betrayal and desertion that I feel on behalf of my constituents as a result of the fact that the commitment in the White Paper "Roads for Prosperity" to dual the A12 from London to Great Yarmouth by 1999 has been abandoned in the re-ordering of priorities. Such schemes are abandoned without hope when they are wiped out for ever instead of being put back. Putting back is not satisfactory, but expectation and community feeling are kept alive. Axing completely simply demoralises individuals, businesses and communities that trusted in that original hope.

I shall concentrate on two parts of the A12. The first is the A12 through Wrentham, an attractive village whose case for a bypass was established and settled many years ago, when the Department of Transport kept the A12 north of Ipswich as a trunk road and took over the Wrentham bypass scheme from Suffolk county council. On 27 November last, a child, Grace Wright, was almost killed crossing the A12 after school at 4.30 in the afternoon. By a miracle and as a result of intensive care in Addenbrooke's hospital, she is now recovering. There may be some traffic-calming measures, and there may be traffic controls and further speed restrictions, but what does it take to happen—how many lives will be put at risk—before a bypass, which was accepted when traffic volumes were lower than they are now, is built on road safety, environmental and quality of life grounds?

Surely when the Kessingland bypass was built, the Wrentham bypass should have been added to it. Having delayed the scheme with inquiries and arguments over routes, surely the most sensitive decision would have been to keep it in the active programme. Whatever the arguments about the stretch through Lowestoft, which I shall come to next, surely Wrentham was a stand-alone case with a watertight justification. I urge my hon. Friend the Minister to reinstate the scheme to a higher priority as so much money has already been spent on its preparation.

In Lowestoft, to the north of Wrentham, there is an even worse case. The Government have simply wiped out the spine road from Kessingland to Pleasurewood, roads on both sides of the river and the bridge that crosses Lake Lothing. The campaign for a third crossing at Lake Lothing began at the end of the first world war in 1918 and some of the approach corridors have been preserved since the mid-1960s. The two existing crossings, the crossing at Mutfordlock in Oulton Broad and the bascule bridge in Lowestoft harbour, have been variously replaced over the years. The Mutfordlock crossing was rebuilt most recently, but it is not a trunk road.

The existing bascule bridge is the only main link for the two halves of Lowestoft and beyond in either direction. To the north, there is Great Yarmouth where hundreds of my constituents travel to work. To the south, there are Ipswich, London and the channel tunnel. The bridge also provides a link to the A14 east-west link. That bridge is thus central and critical.

The bascule bridge is coming towards the end of its life. The previous bridge failed and for weeks, the town was cut in half. Business, cultural and social life almost died. The replacement was built in 1972 with an expected life span of 30 years, so we are only six years from its expected end, with no replacement in hand. Last summer, the bridge failed during a peak bank holiday period. The tailbacks were horrendous and life was literally rendered intolerable for thousands of people. I keep asking what plans the Government have in the event of permanent failure of that bridge. The answer seems to be that they have none. I ask again today what my hon. Friend will do if the bridge fails beyond repair.

In February 1991, I corresponded with Christopher Chope, who was then Minister for Roads and Traffic, about failures of the bridge in November 1990 and January 1991—failures of the same chaotic magnitude as last summer's. He replied:

"In November 1990 my Department announced the preferred route for the Al2 Lowestoft Relief Road which incorporates a new crossing in the vicinity of the North Quay. Subject to completion of statutory procedures and the availability of funds construction could start in 1994 and would take about two year… I hope that we can avoid further failures of this kind but recognise that the long-term solution is the construction of a new harbour crossing."

Nothing has changed since then except that the traffic volume, the pollution and the inconvenience have got worse. The need is still there.

Even when the bridge is working properly, it causes problems. It opens to shipping, on average, 12 times a day. Each opening takes three to four minutes although if there is more than one vessel to go through, openings can take 10 minutes or more. Average tailbacks of traffic at bridge openings are three quarters of a mile in both directions. The hundreds of stationary vehicles often keep their engines running throughout.

Of course the bridge openings are vital to the economic well-being of the port and no one suggests that the bridge should not be opened. The area is trying to encourage tourists and there is a growing Dutch visitor element. Those Dutch visitors, who are, in effect, our competitors in Europe, are astonished that a town the size of Lowestoft, with 65,000 people, has to hold its breath and hope that the bridge, having opened, will close again to allow the vehicles across. In Holland, there is no question of bridges not working or not being replaced because they are a priority in keeping commerce going.

What other town of Lowestoft's size and importance—it is the second largest in Suffolk—has to have a trunk road going through its heart while being 80 miles from the nearest point of the motorway network? In the north of the town, the A 1 2 is reduced to a single lane in several places although it carries more than 33,000 vehicles a day. In the south, where London road south runs through the Kirkley area, exhaust fumes were monitored last summer, with ghastly findings. The incidence of asthma around that part of the Al2 is twice the frequency for Lowestoft in general, which is itself higher than the national average. Drawing trunk traffic flow from those areas into the corridors that have been preserved is the only solution.

If there is any doubt, we need look no further than the circular, sent out every year by the Department of Transport, which advises local authorities on how to prepare their transport policies and programmes. The local authorities—I quote from instruction 25—are told:

"Authorities should pay particular attention to air quality in preparing transport plans especially through consideration of measures to reduce traffic levels in sensitive areas such as town centres."

What is good enough advice for local authorities should be good enough advice for the Department of Transport.

What of the corridors, the houses and the land that have been blighted and bought with taxpayers' money? Whole housing developments and minor roads have been built over the years which leave the Al2 spine road corridors. Are the corridors to be allowed to go to development—ribbon and odd-corner development—just because the spine road has been arbitrarily axed?

I was born and brought up in Lowestoft. For all my life—certainly all my political life—Lowestoft's traffic problems have been beyond any joke. There is an all-party consensus on the need for a bridge. There is agreement from industry and business, from the elderly and from young families that the third crossing is the solution. We call it the third crossing; the Department of Transport calls it the second crossing, implying that the bascule bridge will eventually go and that the new bridge will be built west of the inner harbour. Such joke as there was, was that the second coming would occur before the third crossing. As things stand now, that may well be so.

Those who did not want the new bridge are happy now. Some argued that the spine road was not a panacea and would encourage yet more vehicular traffic. There are those—I am certainly among them—who say, "If we cannot have a £80 million bridge up river, what can we have? What do we as a community want from our road layout which will improve the quality of our lives and our economic prospects?"

While we have been given a chance to rethink, there is a fear that nothing at all will be done to help Lowestoft solve its economic problems, which are being experienced deeply by many of my constituents. In recent years, Lowestoft has suffered a decline in its traditional industries, and jobs lost in food-related industries, shipbuilding and fishing have put local unemployment at about 11 per cent.

The existing A12 links are at best sub-standard and at worst wholly inadequate, given the economic pressures on the area. The area failed to get assisted area status, although nearby Great Yarmouth did. If the decision had been made a few weeks later, unemployment in Lowestoft would have been high enough to allow us to get assisted area status also. Lowestoft has been designated an EU objective 5b area, but so far we have not received approval for any big job creation ideas. That approval must come from the Government via the Government office for the eastern region, which includes my hon. Friend the Minister's Department.

Eighteen months ago, European Commission official Alfonso Gonzalez Finat visited Lowestoft and was shown the potential of the port. He pointed out that the road links create an unfair disadvantage for a port with such excellent European sea links. In 1980, a British Road Federation report criticised the state of all road links to ports, and singled out Lowestoft. Since then, nothing has been done except for one small piece of work—the eastern relief road from the port. Despite that, a single carriageway trunk road still goes through the heart of the town. The relief road funnels the traffic instead of moving it. When the bridge is open, the eastern relief road is no more than an expensive temporary car park.

The promise of road improvements has helped investment in Lowestoft to some degree, but now that the hope following the 1989 promise has been removed, we fear relocations and closures. There is a feeling in East Anglia that the central corridor of Great Britain from the north through the middle of England and London to the channel tunnel is being developed. That is fair enough, and I will not argue with that. But as a consequence, the furthest edge of East Anglia is being sidelined. I hope that that is not being done deliberately, but that appears to be the case.

People often say to me that the charm of an isolated area such as north Suffolk is what brings in the tourists, and that is true. The Broads and the North sea are great natural assets that attract visitors, while the local bathing beaches are the finest in England. North Suffolk is one of the most appealing parts of the country. There are people who visit the area regularly for many years, and some end up retiring there. But a thriving tourist industry based on water, entertainment, history and indigenous charm must be accessible. There must be a thriving local economy, and not one that is simply choked by traffic.

We were awarded objective 5b status to ameliorate the deficiency in our communications and infrastructure that adversely affects local businesses and communities and which erects barriers preventing sustainable development. The A12 at Waveney is surely a classic candidate for priority treatment under that criterion.

Where do we go from here? What is to happen to the Wrentham bypass, the spine road and the bridge? What schemes is the Department of Transport now looking at to ease Lowestoft's traffic problems? What will happen when—not if—the bascule bridge fails for good? What plans has the Department made in the event of the bridge failing for a few days, weeks or months? Will a replacement be provided for that crossing?

Why can we not build a bridge at the proposed crossing place, but under the private finance initiative? There is surely scope there for such a development. Will my hon. Friend undertake to look at that proposal urgently? At the end of last year, the Government were considering dividing the road network into 27 regions, controlled by a corporation set up to extend, run and maintain the road system. Drivers would have to pay companies by electronic metering, zone permits or a fuel levy to use the roads, in return for the scrapping of the £140 vehicle excise duty. That would mean that all of the money raised for roads would be spent on roads. Is that the answer for the A 12 and for other roads? If not, what is the answer? What can I take back to my constituents, who have been deeply affected by the change in the economic base in the past decade? With their great hopes of investment in the area's infrastructure from taxpayers wiped out—at least for now—what can I take back to my constituents?

1.43 pm

I congratulate my hon. Friend the Member for Waveney (Mr. Porter) on securing the debate. I know from many recent discussions with my hon. Friend of his concern at the lack of progress on work on the A12 in Waveney, and the Kessingland to Pleasurewood improvement and bridge in particular.

A combination of sharply rising road construction costs and reduced funds in the public expenditure settlement necessitated a review of the trunk road programme, as my hon. Friend has acknowledged. As part of the announcements at the time of the Budget in November, my right hon. Friend the Secretary of State for Transport announced the "Managing the Trunk Road Programme" review, which had looked at the whole national programme. The revised programme represents a practical assessment of what can realistically be achieved within the resources likely to be available.

We have targeted the new programme at key routes, while seeking to make the best possible use of the network. The new programme includes a significant number of bypasses, but many very desirable and strongly supported schemes have had to be deferred or withdrawn altogether. Within East Anglia, our main priorities are the A14 and the M11-A11. It was recognised in the review that the A12 and A140 between Ipswich, Lowestoft and Norwich were of lower priority in national terms. I accept, however, that they may be very important locally.

We have withdrawn all schemes on the A140, but on the A12 north of Ipswich we have retained the following four schemes in the longer-term programme—Martlesham to Wickham Market, Wickham Market to Saxmundham, the Yoxford bypass and the Wrentham bypass, to which my hon. Friend referred. These have been retained in the longer-term programme primarily because of the environmental benefits they will bring.

In Waveney, three of the original schemes on the Al2 fall within the boundary of the district council. The bypass for Blythburgh was withdrawn from the programme because of its serious effect on the local environment. It would have passed through an area of outstanding natural beauty, and close to a Ramsar site and a site of special scientific interest.

The scheme that combined the Kessingland to Pakefield improvements and the Lowestoft relief road—and, as my hon. Friend has explained, would have included a third crossing of Lake Lothing—has been withdrawn. I know that there is strong local support for it, and I sympathise with the view which my hon. Friend has expressed today that the economic development of Lowestoft is being constrained by poor links to the national road network and congestion in the town. The scheme would be very expensive, however, and the bridge is a particularly costly element within it. The scheme would cater mainly for local traffic.

The decision to withdraw the scheme was a difficult one in the light of local needs. My hon. Friend and I have previously discussed arguments advanced by local authorities—he advanced these arguments again today—that the bridge element of the scheme could be considered a candidate for a design, build, finance and operate project. But although the private sector would fund the work within a DBFO contract, an arrangement based on shadow tolling would still place a burden on the Department's public expenditure budget. Faced with tight limits on expenditure for highways infrastructure, a third harbour crossing for Lowestoft could not be regarded as a high priority for investment in national terms. Any further developments of DBFOs will be targeted towards schemes that are of sufficient national importance to be included within the main road programme.

My hon. Friend mentioned his concerns about the bridge itself. I hope that I can assure him that a structural assessment and detailed inspection of the bridge completed recently has shown that it is in generally good condition. However, it is likely that some further inspections and testing will take place later this year, together with other minor maintenance works.

The lifting bridge is operated by Associated British Ports, which also oversees the maintenance of the mechanical and electrical systems on behalf of the Highways Agency. The structure of the bridge itself is maintained by the county council as agents of the Highways Agency. A detailed programme of routine maintenance is managed by ABP, which continues throughout the year. This involves day-to-day servicing of the operating systems, as well as a replacement and refurbishment of major components on a regular basis.

I hope that I can reassure my hon. Friend that the bridge is in generally sound condition and should continue to operate satisfactorily for many more years. I acknowledge his point that we must look far enough ahead to take account of what might be required in terms of substantial refurbishment or, perhaps, replacement of the bridge.

We consulted the public on the proposed Wrentham bypass in the summer of 1993. I realise how frustrating a further delay in that scheme must be, particularly for those who live alongside the existing trunk road. As I explained earlier, the A12 is not one of the nation's most important routes, and we have not yet been able to find a place for the bypass in the main programme. The scheme has not been abandoned but placed in the longer-term category, which means that we shall take it forward as we make progress with the main programme.

I cannot give any promises now as to when the scheme might be brought into the main programme because it will depend on our progress and resources during the next few years. In the meantime, work on the scheme will be suspended. In the near future we shall make an announcement locally about how matters rest following the 1993 consultation.

Where we have withdrawn major schemes or we are unable to make rapid progress with them in the foreseeable future, as a matter of course we shall consider whether more limited improvements to the existing roads can be implemented to improve safety and ease congestion.

Recent improvements to the A12 include work on the Lowestoft eastern relief road, which forms part of the one-way trunk road system north of the harbour, and was completed in 1994. That scheme was funded by the Department of Transport using a 100 per cent. grant under section 272 of the Highways Act 1980 and incorporated into the network on completion.

The new road is expected to boost the local economy by improving access to the town's industrial areas and docks. In addition, the scheme has removed some 7,500 vehicles a day from Lowestoft's Triangle market shopping area. The local environment also benefits from reduced congestion and lower vehicle emissions—a point which my hon. Friend stressed.

The Department of Transport has carried out a programme of local improvements along the A12 corridor. Those include signing, road markings, junction modifications and improved facilities for pedestrians and cyclists.

A study has been carried out on the existing A12 corridor through Lowestoft, and a package of improvements has been identified, which includes changes to the one-way system, the introduction of a bus lane, changes to signal controls, junction improvements, signing, road markings, and waiting and loading restrictions. The package is designed to ease congestion and improve safety, and individual elements can be implemented to suit the level of any future funding allocation. Preliminary consultations have been carried out in order to draw up the proposals, but a more detailed consultation exercise will be necessary prior to implementation.

North of Lowestoft, a scheme is being prepared for the installation of central reserve safety fencing on the one and three quarter-mile length of dual carriageway north of Lowestoft. That will complete the installation programme for the county and assist in the overall installation target for the whole country by the end of 1996.

At Kessingland bypass southern roundabout, a scheme has been prepared to improve the existing layout in order to reduce the high number of overrun accidents. Contract documents have been approved, and the scheme is ready to go out to tender when funds become available.

A scheme has been prepared to install a right-turn lane at the A12 Benacre junction in order to reduce turning accidents. Contract documents have been prepared, and negotiations for land acquisition are under way. When that has been completed, the scheme will be ready to go out to tender when we can make funds available.

A scheme is also being prepared to improve the Wangford junction in order to reduce accidents. There is also a scheme to close one leg of the Wangford junction crossroads, where there is poor visibility, in order to reduce accidents.

A study has been carried out into the provision and standard of laybys on the A12, which has identified a further package of improvements along the route. It is intended that a rolling programme of improvements should be drawn up to suit the available funds.

I mentioned an investigation to identify improved facilities for cyclists along the route, not that we have forgotten the needs of pedestrians as well. A further scheme to reduce accidents along the A12 seeks to improve the conspicuity of junctions and implement other local low-cost measures.

We must look further than the A12. The other major route serving Lowestoft is via the A143 and A146 from the A14 at Bury St. Edmunds. The Government have provided considerable grant support for the Norfolk and Suffolk county council schemes to upgrade that route. In the past two years alone, support has been given for the Scole-Stuston bypass, the Brockdish-Needham bypass and the Rickinghall-Bottesdale bypass, all of which are now open to traffic.

We also continue to maintain the existing routes, and we have completed three schemes this year within the Waveney district. We have undertaken resurfacing work at Kirkley Cliff, at a cost of £25,000, resurfacing and reconstruction work at Waveney road, at a cost of £98,000, and resurfacing at Denmark road, which has cost £30,000. We propose to undertake further maintenance next year, including the resurfacing at Battery Green road and resurfacing at Sparrows Nest, at a combined cost of £186,000. I hope that that shows our commitment to a realistic programme of improvements to the strategic routes serving Waveney on trunk and county primary roads.

I said at the beginning of my speech that it was vital that priorities were set within a realistic financial framework. We have done that in a responsible manner, concentrating our efforts on the key national routes.

In East Anglia, the most important road project in recent years was the A14, which was opened in 1994. It is a dual carriageway trunk road from the Ml-M6 junction to Felixstowe, and it is regarded as one of the key strategic routes for the region. We have six schemes for capacity and safety improvements in the programme for that route. As part of the Ireland-UK-Benelux road, it is one of the 14 Christophersen priority projects for the European Community and therefore eligible for some funding from the trans-European networks budget. The A14, as I mentioned earlier, serves the needs of Lowestoft via the link at Bury St. Edmunds.

Our next priority is the M11-A11 route from London to Norwich. That priority appears to be widely accepted in the region as the key route to Norwich and the coast. We are making great strides with the dualling of the A11 from south of Cambridge, with eight of the 12 schemes already opened—I opened one scheme only a month ago—and the Besthorpe-Wymondham scheme to open later this year. That will leave us with only three schemes, all of which are retained in the main programme.

The Roudham Heath-Attleborough improvement is ready to start when funds become available. It is our firm intention to complete the dualling of the A11 from the M11 to Norwich.

On our third priority, the A47, we have spent some £150 million in recent years, on the schemes in Cambridgeshire and Norfolk, between the A1 at Peterborough and Great Yarmouth; including the Norwich southern bypass, which has considerably improved travel to the coastal towns of Great Yarmouth and, to some degree, Lowestoft. There are further A47 schemes in the main and longer-term programme, but I recognise that the long-cherished hope of many businesses and authorities for a complete dual carriageway route will not be forthcoming.

I know that my hon. Friend would like more by way of future intentions and improvements to the A12, but we have carried out a thorough review of the roads programme and put into the main programme a number of types of schemes which we think that we can deliver within the funding that we believe will be available over the next few years. We have identified for the longer-term programme schemes which we still believe will be needed at some time in the future, but which are not of sufficient priority to be taken forward immediately. It would not have been responsible of us not to recognise that, beyond those two elements of the programme, there are other schemes of which the possibility of being delivered is so far into the future that it would not be reasonable to continue to impose the blight which attaches to schemes in the programme, even if they are many years ahead.

To have kept schemes in the long-term programme which we know we have very little realistic opportunity to deliver would be to con people. I know that my hon. Friend would not want me—I know that he would never do it—to excite expectations which could not be realised among his constituents. I shall continue to reflect on what he has said, and to pay close attention to the bridge and the measures necessary to keep it available as a vital link on the A12 and within the town of Lowestoft, so that some of the problems which have been experienced in recent months will not be repeated.

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.

Oral Answers To Questions

Trade And Industry

North Channel Gas Pipeline

To ask the President of the Board of Trade what recent consideration he has given to the representations he has received concerning the British Gas pipeline in the north channel.[7885]

The President of the Board of Trade and Secretary of State for Trade and Industry

(Mr. Ian Lang)

I am kept fully informed of developments on this issue and my Department, with others, continues to consider all representations.

Is the President of the Board of Trade aware, however, that last night BBC Scotland showed a video, made before the pipeline was laid, revealing extremely dangerous munitions on the route of the pipeline, which explains why the Ministry of Defence opposed that route from the start? Will the right hon. Gentleman explain to the House exactly what requirements will be made of British Gas before the pipeline is commissioned so that ferry passengers, fishermen, submariners and, above all, my constituents can be assured that there are no further dangers from the munitions and from the gas pipeline?

I can assure the hon. Gentleman and the House that safety will be the predominant consideration before the pipeline is licensed for use. As the hon. Gentleman knows, following the survey carried out last November a further survey is now in contemplation. I have no doubt that the Health and Safety Executive will want to be fully satisfied of the safety of the pipeline before it is authorised.

What assurance can the Secretary of State give to potential consumers in Northern Ireland that gas will flow and that there will be secure supplies to Northern Ireland?

That is the objective of laying the pipeline. I am sure that the hon. Gentleman would be the first to agree that safety considerations must be satisfied before the use of the pipeline is authorised. I acknowledge that one advantage of converting Ballylumfort power station from crude oil to gas will be more competitive electricity generation prices. The conversion will also have the environmental benefit of reducing the acid rain emissions affecting south-west Scotland.

The President of the Board of Trade used to be Secretary of State for Scotland, and he has been a Member of Parliament for 17 years in south-west Scotland. Why has he said and done so little about the munitions that were dumped off the south-west coast of Scotland and the resulting huge environmental problems? Will he explain to the House why the assurances that he gave to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) today should be given any more credibility than the assurances given in the past, which have proved worse than useless under examination?

I hope that the hon. Gentleman is reassured by the provisional findings of the survey carried out in November as a direct result of the anxieties that were expressed about the munitions, which came to light because of the laying of the pipeline. Although the samples and findings are subject to final analysis, the preliminary conclusions are that there is no danger to the food chain and no pollution problem, and that the pipeline will be satisfactory once all the health and safety considerations have been addressed.

Export Levels

To ask the President of the Board of Trade what is the current level of United Kingdom exports to the European Union, to north America and to the rest of the world.[7886]

In the year to October 1995, UK visible exports to the European Union were worth £88 billion. In the year to November 1995, exports to north America were valued at £20 billion, while the rest of the world accounted for £42 billion.

I am grateful for that full reply, especially as it emphasises the success of British exporters compared with that of our principal competitors in the European Union. To what extent would that success be jeopardised if the social chapter were introduced to the United Kingdom, as Opposition Members would like, and what would be the implications for British jobs?

My hon. Friend is right to draw attention to the dangers of signing on for the social chapter, in accordance with Labour party policy. One of the great competitive advantages that the British economy undoubtedly enjoys is the flexibility of our labour market and our relatively low non-wage costs. Although average production worker take-home pay is higher than in most countries in Europe, and equal to that in Germany, non-wage additional labour costs are much lower in the United Kingdom than elsewhere. That is what gives us our competitive advantage, enabling our exports to do so well.

Surely a Government who claim to understand business recognise that no business and no country ever prospers by giving its attention solely to one side of the balance sheet and ignoring the whole picture. Although we all welcome the strength of British exports, surely the Secretary of State does not deny that our problem is that imports to this country have risen even faster. As a result, we still have a trade deficit, not just with the rest of Europe, including France and Germany, but with north America and the rest of the world. Do the Government not recognise that those continuing problems will never be resolved unless we engage in and press for a great united national effort of the kind that the Labour party is urging on the country?

The right hon. Lady will be aware that many imports come to this country in a semi-manufactured state to be converted into fully manufactured exports, so the increased economic activity represented by imports is also reflected in these record-breaking export figures. The leader of the Labour party was in Singapore recently, where I hope that he had time to listen and to appreciate the successes of Singapore and not just to make speeches there. Had he done so, he would have recognised that the value of our exports to Singapore in the year to last June rose by 60 per cent.

Since that time, Rolls-Royce has secured a major £1 billion contract for its Trent engines with Singapore Airlines.

Do not the figures that my right hon. Friend has just given—exports to the EU of £88 billion and to the rest of the world of £62 billion—reinforce the enormous importance to this country's economy of the single market? Will he therefore take this opportunity to pay tribute to the single market, and to Baroness Thatcher, whose initiative in introducing the Single European Act and providing for qualified majority voting established the essential precondition for the success of the single market programme?

My hon. Friend is absolutely right. United Kingdom exports are doing extremely well. In 1994 the UK increased its exports faster than the United States and Japan, and faster than our European competitors.

Telephone Numbers

To ask the President of the Board of Trade if he will make a statement on the Monopolies and Mergers Commission report on telephone number portability.[7887]

I welcome the conclusions of the MMC's report on number portability, which mean that from this spring customers will be able to keep their telephone number when they change their telephone operator.

The Government claim to wish to encourage competition in telecommunications services because that is in the interests of consumers—and we welcome what the Minister has just said—but who is to shoulder the cost for this?

The MMC decided to allocate 65 per cent. of the costs to BT and 35 per cent. to the other telephone operator. The prospect of competition in the telephone industry has been of enormous advantage to customers. The real costs of telephone calls have fallen by 40 per cent. since the privatisation and liberalisation that were originally opposed by Opposition Members. The benefits are to be seen in the investment in the industry, not just by BT but by many other companies, such as Energis, and by the cable industry. Customers have enjoyed enormous improvements in terms of quality and much reduced costs and are now gaining access to the super-highways which will deliver new and exciting multimedia services.

Will my hon. Friend confirm that the United Kingdom has the most liberal telecommunications regime in western Europe and that other countries will be copying us? That is a tribute to the Government and shows how short-sighted the Opposition were when they opposed privatisation.

I think that the Opposition are beginning slowly to realise that Conservative policies work, which is why they are attempting to adopt them in their speeches. The reality is that the rest of the European Union is also adopting liberalisation policies. I hope that the strict regulatory regime and the encouragement for market entry for new companies will both be factors that other countries in the European Union will adopt as they move towards 1 January 1998—the date for liberalisation.

Is the Minister really saying that the best way to protect telephone consumers is to commission a Monopolies and Mergers Commission report which takes eight months to produce and runs to 213 detailed pages? Does not resorting to such a cumbersome procedure demonstrate the Government's consistent and continuing failure to anticipate the problems involved in the regulation of privatised industries? Is not that failure exactly the same as the Government's failure to anticipate the massive confusion caused by the break-up of our railway network and the belated recognition that two new quangos will have to be established to sort out the mess that the Government have created?

The hon. Member might like to go away and practise that question again as I am not sure whether he means that the Labour party is now not in favour of regulation at all, or whether it is in favour of the regulator having such powers that no commercial company has a right to debate any changes in the licensing in public before those changes are permitted. The purpose of addressing a matter to the Monopolies and Mergers Commission is when an interested party—in this case British Telecom—and the regulator cannot agree on how costs are to be allocated. That is the role of the MMC. It did an excellent job and I have already welcomed its conclusions. The benefit of its conclusions will carry through to customers because if they wish to change to a new operator, they will not have the hassle of losing their telephone number with the change. That is very good news and I hope that, on reflection, the hon. Member will welcome it.

Electronics Industry

To ask the President of the Board of Trade if he will make a statement on the impact of the electronics industry on the British economy. [7888]

With an estimated annual output of £22 billion, the UK has the fifth largest electronics industry in the world and it is growing fast. Electronics contributes to the production of industries using computers, electronic control, multimedia and telecommunication systems. My Department has several schemes designed to provide wide-ranging support for the growth of the industry.

Does my hon. Friend also agree that the electronics industry has been particularly successful in attracting inward investment which has benefited it? Is not the success of that industry illustrated by the fact that this country is the seventh largest supplier of silicon chips, Scotland provides 35 per cent. of the personal computers produced in the European Community and, surprisingly, this country is now a net exporter of television sets? Is that not a credit to our electronics industry, which would be flat on its back if the Government had followed the policies advocated by the Labour party?

I am delighted to say that the Government did not listen to the Opposition and so have attracted inward investment. That investment has done a terrific job in the electronics industry, which is so crucial. In semiconductors, we are moving up the international league tables very fast. Siemens has put its massive plant in the north-east, which will transform not only work in industry, but the benefits to universities of research. My right hon. Friend the President of the Board of Trade, when he was Secretary of State for Scotland, saw an enormous benefit there. Scotland now has a remarkable record—35 per cent. of all European production of personal computers is based there, which is a great tribute to the economic climate in this country and the industriousness of workers in the industry.

If inward investment in such key sectors as the electronics industry and the selling of the United Kingdom abroad are some of the Government's main aims, can the Minister explain the outrageous and potentially damaging comments made by the Deputy Prime Minister and other senior Ministers when they attacked the efforts of my right hon. Friend the Leader of the Opposition in his recent speech in Tokyo, when he promoted Britain as a place for inward investment to business leaders there? Why do Ministers persist in such cheap, party political point scoring, to the detriment of the long-term interests of British industry and the economy? When will they learn that there are more important issues at stake than papering over the cracks of the divisions and disarray that are becoming the hallmarks of the present Government?

Nothing about this Government is cheap. Even in our criticisms of the Opposition, we indulge only in high value added jibes and taunts. I welcome the work of the Leader of the Opposition in promoting the United Kingdom in Asia. He realises, as we do, just how successful the Conservative Government have been and we are delighted with his efforts to tell the rest of the world about the success of the United Kingdom economy. I do not criticise him for that. If you, Madam Speaker, would allow it I might indulge in some discursive criticism of stakeholders, but that is not permitted now. It is crucial that Opposition Members realise the importance to the United Kingdom of investment by Japanese, Korean and Taiwanese companies, among others. The enormous investment in the electronics industry is creating jobs. There has also been investment from north America and Canada, producing terrific opportunities in the United Kingdom. And it is all thanks to the work of the Conservative Government.

Export Support

To ask the President of the Board of Trade what support his Department is giving to United Kingdom businesses which are seeking to export their goods. [7890]

The Government believe that international trade is vital to national competitiveness. Through Overseas Trade Services, my Department provides a first-rate package of information, advice and practical assistance to all British companies wishing to explore new export opportunities. In particular, we are assisting smaller firms through the business links network, which will help them to develop effective strategies to take advantage of international trade opportunities.

Will my right hon. Friend acknowledge that many companies can export successfully with little support from the DTI? One example is 3M in my constituency, which employs 250 people and exports 58 per cent. of its production of pharmaceutical aerosols and containers. However, many other companies need full support from the DTI to enable them to export their goods. Will my right hon. Friend confirm that the trained staff in our embassies and high commissions take a proactive line in ensuring that the opportunities available abroad are made known, not only to those companies which contact the DTI but to others which do not?

Yes, I can give my hon. Friend that assurance. I particularly welcome the fact that there are now more commercial officers at FCO posts overseas. We have a programme of training and experience to improve the professionalism of Overseas Trade Services staff. My hon. Friend mentioned the pharmaceutical industry. He may like to know that exports by that industry rose last year by 37 per cent. to the European Union and 16 per cent. to non-EU countries.

In so far as representatives of the Campbell's Soups company are in contact with departmental officials to discuss export marketing initiatives, why cannot those discussions be used as a forum in which representatives of that company can be told the real position of departmental officials and what is going on in my constituency? Does the Secretary of State share my outrage and concern and that of 332 other Members? In that light, is it not now time that departmental officials took a more hands-on approach to the matter?

The main question before the House relates to exports. I am not certain whether the hon. Gentleman is contemplating the export of the soups produced by that factory. The context of his question makes it impossible for me to answer it and remain in order, but I can reassure him that since 1979 the volume of British exports has nearly doubled and manufacturing exports have risen by almost 90 per cent.

Will my right hon. Friend confirm that his Department is looking to encourage exporters among small businesses, of which are there are many in my constituency, as they are not always aware of the opportunities which may be available to them and have particular needs which larger companies can often fulfil within their own specialisations? Will my right hon. Friend confirm that small businesses are also important to his Department?

I am happy to reassure my hon. Friend on that point. Successful though our export record is, we are keen to increase by a further 30,000 the present total of 100,000 or so companies which currently export. To that end, we have recruited some 70 export counsellors who will make their services available to small companies through the business links network.

Does the President of the Board of Trade acknowledge that cumulatively over the years Scotch whisky has become our biggest single export? Although it is welcome that the Chancellor of the Exchequer reversed his tax increase on whisky of the previous fiscal year, the industry still encounters resistance in persuading difficult markets abroad to lower their taxes. Meanwhile, it continues to suffer penal taxation rates at home. Will the right hon. Gentleman make representations to the Chancellor of the Exchequer to continue reducing the penal rate of tax on Scotch whisky compared with, for example, that on imported wine?

The hon. Gentleman knows how my right hon. and learned Friend responded in his last Budget to the case made by the Scotch Whisky Association. The issue of whisky duty in Japan has been taken by the British Government to the World Trade Organisation under its arrangements for dispute settlement. Scotland's largest export is electronic office equipment. Overall, UK computer exports to the European Union have increased 55 per cent. in the last year.

Trade With Japan

To ask the President of the Board of Trade if he will make a statement on the balance of trade between the United Kingdom and Japan. [7891]

The Parliamentary Under-Secretary of State for Trade and Industry

(Mr. Philip Oppenheim)

In 1994, the last full year for which figures are available, the UK had a balance of trade deficit with Japan of £5.9 billion. In the first 11 months of 1995, UK exports to Japan rose 25 per cent. while imports rose 9 per cent. in the same period.

Although I welcome those figures, to what extent would our trade with Japan grow if we reintroduced the closed shop and had worker councils, the minimum wage, union-only labour and all the policies to which the deceitful bunch opposite would sign up if given the chance?

Order. Did I hear the hon. Gentleman use the word "deceitful" in referring to hon. Members? If so, I am sure that he will wish to rephrase his question.

Of course I withdraw the remark, Madam Speaker. I did not mean it, in the heat of the moment.

I can give my hon. Friend a graphic example of what happened to British industry when Labour implemented those policies. Triumph was a world leader in motor cycle manufacturing in the 1950s. By the 1970s, after Government meddling and bad industrial relations, Triumph was bankrupt and the Japanese took over the market. That was the reality of British manufacturing under Labour. Triumph motor cycles started up again in the 1980s. It is now competitive and producing high-quality bikes. It exports world wide, including to Japan, and jobs and production are expanding. That is the reality of the high-quality manufacturing that Britain has under the present Government.

Is the Minister not aware that under a Labour Government, at least in manufactured exports, this country had a surplus against Europe and against the rest of the world, including Japan? The Secretary of State did not answer my right hon. Friend the Member for Derby, South (Mrs. Beckett). This country's economy will not be right until it starts manufacturing the products wanted abroad and selling them in greater numbers.

It might surprise the hon. Gentleman to know that I entirely agree that we shall get the economy right when we manage to sell our goods to the world. That is precisely what did not happen under Labour, when the surplus fell sharply and Britain's productivity growth was bottom of the group of industrialised nations. I will tell the hon. Gentleman about two important figures. Since 1980, British manufacturing productivity growth has been top of the major industrialised nations, and this country has closed no less than three quarters of the productivity gap with Germany. We may not be back in the first division of industrialised nations, but we are getting there, which is far better than in the 1970s under Labour.

Is my hon. Friend aware of the contract that has just been made between Leyland Trucks Ltd. in my constituency and Isuzu of Japan to manufacture and assemble 1,000 trucks over the next few months? The two specific reasons that Japan gave for the contract were the excellence of my constituents' manufacturing ability and its belief that the British economy is the best in the western world.

My right hon. Friend makes a valuable point. Opposition Members will recall the situation in the 1970s, when multinational car manufacturers such as General Motors and Ford were falling over themselves to push capacity out of Britain and foreigners would not buy GM or Ford cars if they were made in this country. Today, General Motors, Vauxhall, Isuzu and other Japanese manufacturers are investing massive amounts of money in car manufacturing in Britain and are exporting those vehicles. That stark comparison illustrates how much more competitive and efficient British manufacturing is now, compared with the dark days of the 1970s.

Coalfield Communities

To ask the President of the Board of Trade what steps he has taken to ensure that the activities currently undertaken by British Coal Enterprise in coalfield communities will continue. [17892]

The sale of British Coal Enterprise is a matter for British Coal, which has recognised from the start that in considering proposals the continuation of effective assistance to coalfield communities by purchasers is a priority.

Will the Minister confirm that he has seen research from independent experts showing that British Coal Enterprise has created thousands of jobs in coalfield communities? Will he talk to the chairman of British Coal to ensure that BCE is not necessarily sold to the highest bidder but goes to the bidder offering value for money—that is, the bidder who promises to retain and create much needed jobs in coalfield communities?

I pay tribute to the work that BCE has done over the years. It estimates that it has created about 123,000 job opportunities in the coalfield areas. British Coal has pre-qualified 14 organisations to bid for all of BCE or its individual activities. These include nine organisations for business funding, six for work space and four for Grosvenor. The deadline for receipt of firm offers will be the end of the month and BCE remains on course for sale by the end of March. British Coal will regard as a priority those bids which seek to continue BCE's work.

As a result of the Government presiding over wholesale pit closures, entire communities are facing a generation of unemployment. Does the Minister agree that some mining communities still face unemployment levels between 30 and 50 per cent. above the national average? Has not the promise made by Ministers two years ago to mining communities suffering dislocation proved entirely inadequate? Selling off British Coal Enterprise will not help. Where are the Government's detailed action plans for investing in desperately needed economic restructuring to ensure that mining communities get some work and some hope? Or will the Government walk away again, leaving behind a shambles with everyone but themselves expected to pick up the tab?

Arthur would like that.

As I have said, the sale of BCE is a matter for British Coal. I must reject what the hon. Gentleman says. The Government continue to provide support for economic regeneration activities through regional selective assistance and the single regeneration budget, in addition to support available for European structural funds. The coal industry to which the hon. Gentleman seems to be harking back—and which I believe, indeed, that Arthur Scargill wishes to recreate—was losing the country and the taxpayer £1.3 billion a year. The hon. Gentleman seems conveniently to forget that sort of figure. I know, however, that he will gain comfort from the fact that unemployment rates in all of the 27 coal communities have fallen since 1992 as well as from the fact that coal production in 1995 was up on that in 1994 and imports were down in that period. That is a success story of which we should all be proud.

Insurance And Financial Services

To ask the President of the Board of Trade what is his latest assessment of the value to the United Kingdom of overseas earnings from insurance and financial services. [7893]

It has been estimated by British Invisibles that net overseas earnings of the UK financial sector rose by nearly a third in 1994 to £20.4 billion, of which net overseas earnings by insurance institutions contributed £3.9 billion.

Will my hon. Friend join me in congratulating the London Insurance and Reinsurance Market Association on its fifth anniversary yesterday and on the success achieved in that time at the new London underwriting centre, which has contributed to the excellent news that he has announced? When I asked leading members of the association yesterday what concerned them about the future, I was told that it was European monetary union. It seems that they are as ambivalent about it as the House is. They said, however, that in view of the complexities of a single currency for London-based insurers it is vital that the Government remain central to the discussions about EMU. Will my hon. Friend bear those concerns in mind?

I certainly will. I join my hon. Friend in congratulating LIRMA on its fifth birthday. He will know better than me that the main currency of reinsurance is US dollars, but the London market is well used to dealing in multiple currencies. My Department stays in close touch with the industry. I agree with the prudence of staying close to all negotiations in Europe.

Although I welcome the earnings that insurance companies bring into the country, does the Minister agree that Baroness Thatcher was completely and Utterly wrong when she thought that all this country's benefits could in future be supplied by the insurance industry and not the manufacturing industries, whose capacity we have lost year after year?

I think that it is appropriate for me to tell the House that the UK has an extremely successful insurance market. London is the world's leading insurance centre. The Department of Trade and Industry, with secondees from the industry, is working with insurers to maintain our competitiveness: this includes a major benchmarking initiative to spread best practice throughout the industry; making the best use of new technology; and improving management development and training. Insurance is a major British success.

Small Businesses

10.

To ask the President of the Board of Trade what further steps are planned to remove unnecessary regulations on small businesses. [7894]

Small firms are vital to Britain's well-being. My ministerial colleagues and I therefore always look for ways to reduce the burden of regulation on small firms. One of the most significant ways in which my Department achieves that is by exempting small business from regulation wherever possible, for example in company law and competition law.

I welcome what my hon. Friend has just said about small businesses, which are so vital in constituencies such as those in Blackpool. What are the Government doing systematically to ensure that unnecessary regulations are not placed on the backs of small businesses to start with? Surely prevention is better than cure.

My hon. Friend has put his finger on the nub of the problem. Prevention is better than cure. The Government, through the competitiveness White Paper which is produced every year, are looking to see how they can reduce the various regulatory burdens on small business. I know that a series of conferences is taking place throughout the country, entitled "Your Business Matters", and the messages on the burdens that are unnecessary are coming through and will be responded to.

The most positive thing that has happened has been the appointment of a small business Minister in every Government Department, as announced by my right hon. Friend the President of the Board of Trade. I am convinced that those small business Ministers, who will watch legislation as it is proposed and how it might affect smaller businesses, are the way to improve the situation for the future.

Have not 1,000 regulations been identified as suitable for repeal, and have not the vast majority of them been carried into law by the Government since 1979? Do not the facts contradict the rhetoric that we always get from Conservative Members? Have not the Government engulfed small businesses in red tape and bureaucracy?

I look forward to the hon. Gentleman supplying me with information that proves that the statement that he just made is factually correct, because I sincerely have my doubts. Of the 1,000 regulations earmarked for amendment or repeal, more than 500 had been dealt with by the end of last year: for example, 75,000 small firms no longer need to pay VAT; there is a continuous licensing system for goods and public service vehicle operators; and restrictions on shop hours have been removed. We have made a positive move to reduce the burdens on smaller firms.

I welcome the very good work that my hon. Friend has done, but will he undertake to use the maximum exemption limit for small firms—those with a turnover of £4 million—rather than a lower figure? The limit of £4 million, as allowed by the European Union, would exempt far more firms from unnecessary red tape. Surely we should use the maximum figure rather than set a lower figure, because a firm with a turnover of £4 million is still a very small firm.

My hon. Friend is well known for the support that he has given small firms over the years, and I can only listen to what he has to say with reverence and attention. I assure him that we shall do whatever we can to reduce burdens on small firms.

Eu Directives

12.

To ask the President of the Board of Trade if he will make a statement on the implementation of EU directives by his Department. [7897]

The Department carries out full consultation with industry during the negotiation and implementation of EC directives. National legislation implementing EC directives is scrutinised to ensure that there is no confusion between European and national laws, and that legislative requirements are as light as possible.

Does the Minister agree with the view expressed by Mr. Bryan Cassidy, a Member of the European Parliament who came to speak to a Back-Bench committee recently, that none of the European directives comes with penalties attached or requires the attachment of such penalties? Does he agree that much of the damage that such directives cause to industry is due to the fact that we do not treat them as the rest of Europe does—as examples of best practice that should not necessarily be implemented fully? Could not the Department set a shining example by refusing to gold-plate any of the 19 major directives that Mr. Cassidy warned us were in the pipeline, and that were recently announced by Mr. Santer?

My hon. Friend has made some fair points. There is currently more awareness of the need to ensure that we do not gold-plate directives, and that responsibility is taken seriously. Eight directives are being reviewed, and my right hon. Friend the Chancellor of the Duchy of Lancaster has a programme of visits to other European Union states to ensure that they realise how burdensome regulations can be, particularly for small businesses. Penalties are sometimes needed to ensure compliance with, in particular, health and safety regulations, which involve important considerations, but I have much sympathy with what my hon. Friend has said.

Does the Minister accept that, to date, Britain has done more gold-plating and adding on to European directives than any other European Union nation? The Government have done that to prevent the House from discussing the issues. Will the Minister go a little further than he did a few moments ago, and guarantee that that will not happen in future?

There are so many self-serving fallacies in that that it is difficult to know where to begin. The hon. Gentleman's party accepted the social chapter, which would impose a further huge burden of expensive regulation on British business and would cost people their jobs. Moreover, surely the idea of the stakeholder economy is all about regulation. What is it if it is not regulation? Opposition Members have a cheek talking about a stakeholder economy; when they were in power we had a hamburger economy, because they had made mincemeat of British industry.

I warmly congratulate the Government on their announcement last week in the other place that they would not endorse a European directive that prevents the use of the drug emtryl in game birds. Does that not reflect a fundamental change in the Government's attitude to European directives? Does it not demonstrate that such directives lack democratic validity, are not properly discussed and are not uniformly enforced, and that the general arguments about the importance of the rule of law do not apply to directives that are forced down the throats of the British people?

I accept my hon. Friend's warm congratulations, and reciprocate them with the same warmth. However, his sporting credentials in regard to putting drugs down the necks of game birds are probably stronger than mine, and his comments might be more appropriately directed to my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food.

We take non-compliance in other states very seriously. Any substantive complaints that my hon. Friend has should be made to the DTI's single market compliance unit, which will investigate them.

Is the Minister aware that, although this country might be prepared to implement European Union directives, other member states are less compliant? The draft directive on the opening up of the electricity market in Europe, for example, continues to be flouted by the French Government, and they deny British generators access to very profitable continental markets. What do the Government intend to do to ensure that our efficient and low-cost companies are given the opportunity to compete fairly with the likes of Electricité de France, subsidised as it is up to its nuclear eyeballs, and secure good futures for our power stations, coal mines and gasfields?

It is a marvellous tribute to the rightward lurch of Labour that an Opposition Front-Bench spokesman is singing the praises of liberalisation and saying that the most efficient and cost-effective companies should have access to the market. If the hon. Gentleman is so against subsidies and regulations and so in favour of competition and liberalisation in France, why do the Opposition constantly oppose those things in Britain?

Aerospace Industry

13.

To ask the President of the Board of Trade what proportion of the total export of the United Kingdom is accounted for by the aerospace industry. [7899]

The best currently available estimate of the proportion of the UK's total manufactured exports accounted for by the aerospace industry in 1994 is about 7 per cent.

Does my right hon. Friend agree that a strong home market leads to a strong export market? Does he also agree that it is a bit rich for that lot over there to start talking about cutting the defence budget by £6 billion and about making things that nobody wants, as they did in the 1970s? Is it not about time that we told them straight that we have the best defence industry and have spent £6 billion more on defence than they would have done? When that lot opposite stop talking about stakes in Britain and start talking common sense, it will be better for all of us.

I could not have said it better myself.

Is the Minister in a position to say whether there are any concerns at the moment in the aviation or aerospace industry? What is the latest on the future large aircraft?

I think it is fair to say that in the civil aerospace industry, including the sector that is covered by Shorts, demand is generally more buoyant now than it has been for a couple of years, and expectations are rising. British companies, Rolls-Royce and BAe in particular, have had some spectacular orders over the past few months. It is an internationally competitive market. We have to continue assisting our aerospace industry to keep costs down and to stay in the forefront of technology. The Government are totally committed to that.

Would my right hon. Friend congratulate Avro International Aerospace, a subsidiary company of British Aerospace, on its great success with its RJ series which it is selling not just in Europe but in many countries, including America? Is my right hon. Friend's Department assisting British Aerospace with any future developments of aircraft which are so vital to this country's manufacturing capacity?

I certainly join my hon. Friend in congratulating Avro International, which won a particularly important order in August from Sabena. I pay tribute to everybody in British Aerospace who has transformed that company. There is no doubt that in manufacturing it is a world leader and it is accepted as such by aerospace companies throughout the world. My Department is working extremely closely with that company. One of the encouraging signs is that BAe is working not just with the Government but with its suppliers and engine manufacturers to present to the world a better integrated UK capability in the whole aerospace supply chain. That is in the interests of BAe and the whole country.

Water Companies

14.

To ask the President of the Board of Trade if he will take steps to ensure that all bids by water companies for other privatised utilities are referred to the Monopolies and Mergers Commission. [7901]

No. Each merger case will continue to be considered on its own merits and against the background of the market position at the time.

Does the Minister think that it is in the interests of consumers in places such as south Wales and north-west England for one monopoly to buy another to create an even bigger monopoly? Is that not both anti-competitive and anti-consumer? Will he take time today to rethink his decision so that the basic interests of people in those regions are at least reviewed by the Monopolies and Mergers Commission?

The hon. Gentleman is right to draw my attention to consumers' interests. I will tell the House the story of the privatised utilities. Water investment has doubled. Our water is among the cleanest in Europe. Electricity prices are down 7 per cent., gas prices are down 23.5 per cent. and, since 1984, telecoms prices have been down 35 per cent. That is a success story all round, especially for the consumer.

What is the position in Thames Water's region? Is it not true that at no point were hose bans introduced during the hot weather, and that supplies were properly maintained to all parts of the Thames region throughout the recent water shortages? What is the quality of Thames Water?

Better than ever is the answer to the final limb of my hon. Friend's question. He is right to offer an antidote to the scaremongering. I am glad that he brings a proper balance to these issues.

Does the Minister agree with Ian Byatt, the water industry regulator, that there cannot be adequate regulation of a water industry that has been taken over by companies unless they are listed separately on the stock exchange and present separate accounts to stop them hiding gross profiteering from consumers and avoiding complying with Greenbury rules on executive perks and pay disclosure?

I should not want to comment on any case that is uncompleted. It is for the Director General of Fair Trading to advise my right hon. Friend the President of the Board of Trade, who will make decisions and announcements in due course, but I will carefully study the matters to which the hon. Gentleman referred.

Steel Industry

15.

To ask the President of the Board of Trade what special measures he proposes to assist the United Kingdom steel industry; and if he will make a statement. [7903]

My Department is working with the industry on a number of initiatives aimed at improving further the competitiveness of an industry, the performance of which since privatisation has been among the world's best.

In view of the wretched trade figures, why do the Government not give priority to steel exports, and specifically manufactured goods? Does the right hon. Gentleman accept that the steel industry and, specifically, steel workers have made a great contribution to Britain's enterprise, ensuring productivity, flexibility and profitability? Why does not the Minister, on the Government's behalf, acknowledge the great sacrifices made by steel communities in terms of redundancies and closures and acknowledge that the industry needs more Government support with exports?

The lesson of the past 20 years in the steel industry is that when the state owns it and intervenes it is a blinking disaster, but that when it goes into the private sector after privatisation it is extremely successful. Let me spell it out for the hon. Gentleman. Between 1975 and 1985, every individual in this country subsidised British Steel to the tune of £135. Since privatisation in 1986, British Steel has contributed £220 million in corporation tax to the Exchequer. Privatised British Steel has been a success; state-owned British Steel was a disaster.

To underline what my right hon. Friend has said, may I inform him that, on Monday, I visited Humber power station, which is under construction in my constituency? Will he note that that gas-fired power station was given the go-ahead by Her Majesty's Government and that every piece of steel that I saw there had been produced by British Steel, Scunthorpe? Is not the answer to the question of the hon. Member for Alyn and Deeside (Mr. Jones) that we must ensure that there are customers such as Humber Power, which buys steel because of its price and quality?

I absolutely agree with my hon. Friend. The changes that have been made to the previously state-owned sector have turned around what was a serious position for the providers of our infrastructure, electricity and gas. From lagging behind the rest of the world in efficiency, they have become world leaders. That has benefited the British steel industry and British industry as a whole because it has reduced energy costs overall.

Does the Minister understand that part of the cost and loss of the nationalised industry was due to the investment decisions of Lord Walker and a former Conservative Government, who instructed it to pursue a policy investment that would realise a 30 million tonne a year capacity?

Will the right hon. Gentleman focus his mind on the serious problem that steel production may be moving down from the top of the cycle—he must realise that it is a cyclical industry—and accept that it is therefore imperative that the Government prevent our European neighbours from continuing the unfair trading practices that they enjoyed for several years until the cycle improved?

The hon. Gentleman is rewriting history with his view of the investment pattern of British Steel. I find it surprising that the hon. Gentleman, who knows a great deal about the industry, has not welcomed British Steel's investment announcement of another £65 million for the Llanwern mill. He has also not welcomed the fact that British Steel used to take 13 man hours to produce a tonne of liquid steel, whereas now it takes only four man hours. That is the scale of achievement by a privatised British Steel and the hon. Gentleman should pay tribute to it.

Digital Terrestrial Services

16.

To ask the President of the Board of Trade what plans he has to promote the manufacture and marketing of digital terrestrial television converters and digital audio broadcast receivers; and if he will make a statement. [7904]

We are creating the regulatory framework in which digital terrestrial services can flourish in the United Kingdom. Applicants for multiplex operating licences under the Broadcasting Bill will be judged on their proposals for promoting or assisting the acquisition of digital receiving equipment by viewers and listeners in the proposed coverage areas.

The Government have put in place a practical plan that will ensure that analogue services are switched off at the earliest achievable date. That will create a significant market opportunity for the industry, with perhaps about £8 billion in replacement televisions alone.

I thank my hon. Friend for his long, detailed and helpful answer. Does he agree that this country has led the world in introducing a liberalised policy for broadcasting and broadcasting technology? Does he recall that the Labour party opposed the introduction of ITV, opposed the introduction of satellite broadcasting and opposed the introduction of Channel 4 and Channel 5 television? Does he agree that the last thing we want is a Government stakeholder in companies such as British Telecom?

There is no doubt that the policies of the Labour party would drive a stake through the competitive nature of the telecoms industry that is so vital if we are to deliver the information society at prices that the customer can afford.

In this digital age for television, I very much welcome the Broadcasting Bill. It will give Britain the opportunity to be the first country in the European Union to move to digital television. If things go well and investments improve, the Bill will give me a fairly rapid opportunity to retrieve the analogue spectrum, which I can then redeploy for further broadcasting and telecommunications activities.

Towards the end of the Minister's response, he mentioned the radio spectrum. Which Departments have provided him with information on the potential release of the parts of the spectrum that they currently control? Will he expand on his comment about the distribution of the analogue spectrum when some of the terrestrial television companies release it?

The Radiocommunications Agency, which reports to me, is responsible for the management of all the spectrum in this country. It is doing an efficient job, including clawing back underused spectrum from Departments such as the Ministry of Defence. We are also considering the way in which the emergency services deliver their use of the spectrum.

It is clear that the new mobile services, the new fixed-link service and the results of the recent competition to use parts of the spectrum to deliver multimedia services in rural areas will all require very close and detailed management of the spectrum. I am confident that as analogue is switched off and the public move to digital—which has enormous benefits for them—I shall be able to claw back and use the analogue spectrum on what are known as television bands 4 and 5. In those areas, some of it will be used for digital, but the majority will be redeployed with great value to telecommunications and further broadcasting activities.

I want that to happen as soon as possible. We have undertaken to review it within five years or when there is 50 per cent. coverage in the United Kingdom. The details are in the Broadcasting Bill.

My hon. Friend will know that the all-party cable and satellite television group meets regularly. It has heard from some broadcasters who are concerned that the Department of Trade and Industry may be giving preferential treatment to existing terrestrial broadcasters over the distribution of digital channels, especially those via satellite. In allocating the digital spectrum, I urge him to ensure the widest possible access to the television market for as many people as possible and not to leave monopolies to the BBC and the existing terrestrial ITV companies.

I hear what my hon. Friend says. A terrific amount of investment will be required to move into the digital age. There are not that many players in the game with the required capital, but alliances that we cannot predict at the moment may take us into this exciting new market. The Broadcasting Bill—on which the Department of Trade and Industry, as well as the Department of National Heritage, has had considerable impact—gives the maximum flexibility to incomers who wish for the first time to be involved in digital transmission and the control of multiplexes. It also gives existing terrestrial broadcasters the opportunity to do what they can to make the most of their enormous content and production facilities. ITV, BBC and Channel 4 will have to notify us within a certain period whether they wish to take that opportunity. It is absolutely right that they should be given that opportunity if we are to develop a competitive marketplace.

Fuel Supply

18.

To ask the President of the Board of Trade if he will meet the chairmen of the privatised utilities to discuss fuel supply. [7906]

I have no present plans to meet the chairmen of the privatised utilities.

When the Minister eventually gets round to meeting them, will he discuss the widespread incidence of fuel poverty? Although the chairmen may say that there has been a decrease in fuel disconnections by the fuel companies in recent years, there has been an increase in self-disconnection by people who simply cannot afford to pay their fuel bills, including pensioners who are at risk of hypothermia, especially during severe weather such as that recently experienced in Scotland. Will the Minister urge his ministerial colleagues to reduce VAT on domestic fuel and introduce a much fairer system of cold weather payments to help to eradicate fuel poverty?

I am grateful to the hon. Gentleman for the tribute that he has paid to the privatised utilities for the way in which they have reduced significantly the number of cut-offs of domestic consumers. A number of the English regional electricity companies have not cut off any individual consumer now for some months. I am sure that the hon. Gentleman would also be the first to pay tribute to the Government and the electricity companies for the introduction in England and Wales of the £50 rebate as a result of the flotation of the National Grid. That will be welcomed by many electricity consumers—those well-off and those less well-off.

What has been the reduction in the real cost to consumers of gas and electricity since privatisation?

Gas prices have fallen by about 23 per cent. in real terms since privatisation. Customers can look forward to further significant reductions as a result of the introduction of competition in gas. The latest offer being made to consumers in the south-west gas trial area is a further reduction of 25.2 per cent., as against the British Gas standard tariff, if they sign up and buy gas from one particular company. That is as a result of the introduction of competition and the sustained Government policy of privatisation and giving choice to consumers.

Telephone Numbers

19.

To ask the President of the Board of Trade which EU countries have adopted the 04 prefix for mobile telephone numbers and which 06; and if he will make a statement. [7907]

The Director General of Telecommunications, who has responsibility for numbering issues within the UK, announced a major review of numbering in October. It will cover many issues, including the question of the numbering range for mobile services, noting that there is not yet a complete Europe-wide database listing the proposed use of different numbering prefixes.

Is the Minister aware that the current proposal appears to be that the UK will adopt the digit 4, whereas France and the Netherlands have adopted 6, and Germany is likely to do the same? Is not this one area in which, notwithstanding Conservative difficulties over European issues, everyone would agree that there should be a common European approach? Is the Minister also aware of the possibility that if the UK, uniquely, adopts the digit 4, a 6 will have to be added on to the front of all the numbers at some point, causing immense disturbance and nuisance to everybody? Should we not stick with the European solution, on this issue at least?

I am aware that the hon. Gentleman had experience in this area before he joined the House. The Director General of Telecommunications obviously wishes to maintain control over the national numbering plan. He is, however, well aware of the implications of what is happening in the rest of the European Union. There is absolutely no doubt that the common spread of standards in mobile telephony throughout the European Union, now that we are moving into the digital age and one can move from country to country with the same phone, is vital. I take note of what the hon. Gentleman has said.

Water Charges (Amendment)

3.30 pm

I beg to move,

That leave be given to bring in a Bill to amend the Water Industry Act 1991 to prohibit the use by water undertakers of rateable values as a basis for charging from 31st March 1997; to provide for charging by water undertakers in accordance with council tax bands; and for connected purposes.

I put on record at the outset my warm appreciation of the widespread support for the Bill by all parties. The sponsors include senior Members not only from all parts of the House, but from all parts of England and Wales. I especially appreciate the support of the other four officers of the all-party water group, who top the list.

I have not invited Scottish Members to endorse the Bill for the simple reason that the council tax banding system is already used in Scotland to calculate sewerage charges. From April this year, it will be used for the water and sewerage elements so that the charges can be raised by that means. That may give cause for thought to any maverick Conservative Members who think that our Bill is impractical, undesirable or ill timed. Surely, what is good enough for Scotland is good enough for England and Wales.

By way of background, I shall sketch out the scale of the water charge problem. This year's average domestic bill for water and sewerage services nationally will be £205. In many water company areas, rises are around 8 per cent., which is way above inflation. However, that figure understates the burden in many areas.

The highest charges in the country are to be found in the south-west, which has the lowest average household income, above average unemployment and many more elderly residents than is the case for most other areas. The South West Water average this year is a staggering £332. Many people pay well over that—up to £600 or even more—if they live in highly rated properties. Many of those people are pensioners on low incomes.

Seven years ago, the average water and sewerage bill in the south-west was just £150. It increased by £153 to £303 by 1994, more than doubling in five years. Although the rate of increase has eased, the impact on low-income households is still disproportionately severe. South West Water's charges are £38 higher on average than those of the second most expensive water company, Anglian, and a staggering £150 more than the charges of the cheapest water and sewerage company, Thames Water.

Many hon. Members in the Chamber will acknowledge that the area has some of the highest levels of unemployment in the country, while average earnings are 20 per cent. below the national average. People who live in an area with the lowest average earnings in the country are paying the highest water charges. Some 3 per cent. of the population are paying for cleaning up 30 per cent. of Britain's eligible beaches. Some 30 per cent. of customers in the south-west are pensioners, and almost 9 per cent. of their income is being spent on water bills. Many individuals must pay even more. Nationally, the burden may not seem so dire, but the basic illogicality of the charging system is no less stark.

In the past, it has been suggested that universal metering was the answer. Even if the Government and Ofwat tried to force everyone on to water meters—which is impossible in the foreseeable future—there would be minimal savings for most householders. The extra costs of installation would take years to pay off, with limited charge reductions. I am indebted to the Consumers Association and to Which? for an excellent analysis of what would happen. In the Southern company area, it would take nearly 11 years to recoup the cost of installing meters. In Wessex, it would take nearly nine years, while in the Thames area, it would take nearly 23 years. In the North West, Northumbrian and Severn Trent area, the costs of installation would never be recouped.

This is an issue of national concern. The House will recall that the Government admitted the total inadequacy of the rating system when they abolished its use for local council purposes some seven years ago. Today, it is manifestly even more out of date. Ministers acknowledged some nine months ago that there is not the faintest chance of transferring all householders to water meters in the foreseeable future.

The Bill would ensure that water companies switched to the council tax banding system in April 1997. That would have five major advantages: first, it would mean that the valuation would be relatively recent and subject to a fair review; secondly, single residents or householders could be made eligible for a 25 per cent. rebate—as with the council tax—to reflect their lower usage; thirdly, the benefit system could be used to cushion the cost for lower-income householders, especially the elderly and those in the highest water charge areas; fourthly, there would be an obvious administrative saving, since councils could collect water charges on an agency basis and could cut out duplication; and fifthly, in the interests of simplicity, accountability and transparency, the householder would be able to compare the relative costs of different local services and he confident of co-ordination if and when there were band changes.

Given that the Government now acknowledge that the estimated cost of the complete metering of domestic properties is in excess of £2 billion and that it could take from 15 to 20 years, the banding system is the only realistic solution for now. Such a system involves capital savings, rather than increased capital costs. Southern Water, which carried out the largest trial of metering in the Isle of Wight, stated that it was opposed to widespread national metering, while the most innovative and enterprising companies—such as Wessex and Welsh Water—have declared their support for the change encompassed in the Bill.

In the South West Water area—where consumer costs have doubled since privatisation and are forecast to go on rising in the next four years—huge savings would result for the average low-income household. Significantly, in Scotland—where the council tax system is already used to calculate sewerage charges—the average combined water and sewerage bill is only £107, less than one third of the current burden for consumers in the south-west.

Of course, we still need public investment from the Government and from the European Union to ensure that a disproportionate burden does not fall on local residents, but with Ministers still reluctant to pursue that we simply cannot wait for a fairer system of charges. Some west country pensioners are already paying almost one tenth of their total income for water services.

In the meantime, the Bill could make a substantial difference to those people without removing the metering option for those who prefer it. The Bill has the support of all the officers of the all-party water group.

We call upon hon. Members from every part of the United Kingdom and every part of the political spectrum to help us persuade Ministers to back the Bill and to get it on to the statute book as quickly as possible.

Question put and agreed to.

Bill ordered to be brought in by Mr. Paul Tyler, Mrs. Helen Jackson, Mrs. Elizabeth Peacock, Mr. Richard Burden, Mr. David Nicholson, Mr. Elfyn Llwyd, Mr. Matthew Taylor, Mr. Peter L. Pike, Mr. A. J. Beith, Ms Jean Corston, Mr. Simon Hughes and Mr. Dafydd Wigley.

Water Charges (Amendment)

Mr. Paul Tyler accordingly presented a Bill to amend the Water Industry Act 1991 to prohibit the use by water undertakers of rateable values as a basis for charging from 31st March 1997; to provide for charging by water undertakers in accordance with council tax bands; 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 43.]

Social Security

3.40 pm

I beg to move,

That the draft Jobseeker's Allowance Regulations 1996, which were laid before this House on 19th December, be approved.

I understand that with this it will be convenient to discuss the following motions:

That the draft Income Support (General) (Jobseeker's Allowance Consequential Amendments) Regulations 1996, which were laid before this House on 19th December, be approved.

That the draft Social Security (Back to Work Bonus) Regulations 1996, a copy of which was laid before this House on 10th January, be approved.

That the draft Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations 1996, which were laid before this House on 19th December, be approved.

That the draft Employer's Contributions Re-imbursement Regulations 1996, which were laid before this House on 12th December, be approved.

The jobseeker's allowance is a major step forward in creating a labour market in Britain that will continue to generate jobs and help unemployed people get those jobs. It is the next stage in the Government's strategy, the success of which is becoming clear to everyone—or at least to almost everyone.

The unemployment figures that were announced this morning demonstrate the strength of that strategy. For the 28th successive month, there has been another welcome decrease in the unemployment rate, which is due to two main factors. First, the economic environment created by the Government is widely recognised to have created as favourable an environment as can be imagined for the start of new businesses and inward investment into the United Kingdom, which not only creates new jobs but consolidates existing jobs. Secondly, the policies that we are developing and the dedication of our Employment Service staff identify the needs of individuals who, regrettably, have lost their jobs and help them back into work.

The fall in unemployment is set against a background where this country now has lower unemployment and more of its people in work than any other major European Union country. Employment has grown substantially in recent years, and new vacancies continue to be notified to jobcentres at record levels. The number of people getting jobs through the help of Employment Service staff is also at a record level. In all, we have seen unemployment fall by almost three quarters of a million since the recovery began. We are determined to reinforce that success, and believe that the benefit system has a vital role to play in helping unemployed people find jobs.

The benefit system should help and motivate every jobseeker, but the truth is that the current system of unemployment benefit and income support has not always done that, and it is not providing that help now. The system contains disincentives to work. It is complex and out of date and it can be confusing for claimants. It fails, above all, to target help on those who most need it.

The Minister mentioned the disincentives to work in the current unemployment benefit regulations. He is surely referring to the benefit traps that are created by the loss of income among people who move from a stable amount of benefit payments into paid work that may be quite low paid. Will he explain how the jobseeker's allowance exacerbates that problem by bringing forward means testing from 12 months to six months? Does not that create a positive incentive for the partners of people who are means-tested after six months to give up their part-time jobs?

I do not believe that that disincentive operates, because we are improving the position for couples, or people with partners. The change from 12 months to six months will not have the effect that the hon. Lady describes because, as she knows—and as was well rehearsed during the passage of the Jobseekers Act 1995—happily the bulk of people who find themselves out of work are back in work within a six-month period. That fact, combined with the detailed, improved provisions in the regulations, especially for couples or people with partners, means that the effect suggested by the hon. Lady will not occur.

Surely the Minister's arguments lead in the opposite direction. If most people are back in work within six months, why bring in the change? The change is necessary only if most people are still out of work after six months.

That does not follow. As the hon. Gentleman knows better than almost anyone in the House, the current regime was designed and has operated for many years in very different circumstances. What we have attempted to do by introducing the jobseeker's allowance, with its many different provisions, is to reflect the current position as accurately as possible. Therefore, as most people find work within the six-month period, we felt that it was appropriate that the regime should reflect that as far as possible.

I do not deny—I do not think it has ever been denied—that there is a balance in the regulations that means that some will gain from them and others will not. That is inevitable when one makes a change. I stand behind the provision—in the Act, not the regulations—on the six-month cut-off period. In a sense, that is not negotiable. It may be debatable, but it is not contained in the regulations.

The existing regime can be seen as having been designed to support people who are out of work, but unemployed people want help to get back to work. That is what the jobseeker's allowance seeks to do and that is what the regulations are about.

In the White Paper in October 1994, the Government set out the three main aims for the new benefit regime. First, we aim to improve the operation of the labour market by helping people in their search for work, while ensuring as far as possible that they understand and fulfil the conditions for the receipt of benefit. The JSA emphasises the responsibilities of unemployed people to take every advantage of the opportunities open to them to get back to work.

Secondly, we aim to secure better value for money for the taxpayer by streamlining administration; by closer targeting on those who need financial support; and by introducing a regime that more effectively helps them to find jobs.

Thirdly, we aim to improve the service that we give to unemployed people through a clearer, more coherent benefit structure and a better integration of the payment of benefits with the delivery of help and advice to find work. We want to give jobseekers the most effective and up-to-date system that we can devise. Through the new labour market computer system, employment advisers will have unprecedented access to information on vacancies and other opportunities so that they can be matched against the individual needs of the jobseeker. We have taken great pains to ascertain and to meet those needs.

In achieving those aims with the implementation of the JSA in October this year, we expect to make jobs—the pursuit of jobs and the winning of jobs—the focus of our efforts on behalf of unemployed people.

Our proposals were debated at length, in the House and in another place, during the passage of the Jobseekers Act 1995. The regulations provide a further level of detail and set out the rules that will apply when the allowance is introduced in October. In view of those earlier debates and the extensive nature of the regulations, I thought it best to cover matters in a general and relatively brief introductory speech. My hon. Friend the Under-Secretary of State for Social Security, the Member for Monmouth (Mr. Evans), and I will of course listen carefully to comments made during the debate, and my hon. Friend will respond to as many of the questions raised as possible.

At the heart of the allowance are the labour market tests, which are designed to ensure that all jobseekers are open to as many as job opportunities as possible and are making all reasonable efforts to find work. There will be no change in the jobseeker's allowance to the basic availability condition that people must be willing and able to take up immediately any offer of employment. That has been a requirement for unemployment benefits for a long time. But the regulations do require, for the first time, that claimants should usually be available for employment for at least 40 hours a week; and that when they restrict the hours for which they are available, they should be able to agree an individual pattern of availability across the week. That flexibility is very much in line with the current labour market.

Can people in the tops of trees be described as available for work?

I was wondering which of my colleagues would be the first to raise that matter—I am not surprised to find that it is my hon. Friend. As she would expect, we have looked into it. I am satisfied that the Employment Service in the area where the difficulties have arisen—around Newbury—is treating everyone with the same fair-minded and even-handed approach that we would expect of that service. In other words, anyone receiving benefit from or through the local jobcentre will indeed be expected to demonstrate his availability for work and the fact that he is actively seeking work.

Some people have had their benefits disallowed because they have been unable to meet the conditions; others have been able, so far, to satisfy the jobcentre that they can meet the conditions applied to everyone. There may be some rather unusual circumstances at times. After all, one of the features of the current regime and of the jobseeker's allowance is that people are recognised as having hugely varying circumstances. We do not want to treat people in the mass; we have a flexible enough regime to deal sympathetically but firmly with people's varying circumstances. That is as it should be, as it is, and as it will be under the proposals in the Act and in the regulations.

Will the local Employment Service take these people's word for it that they are not taking part in the political activity? How will their good faith be tested? If there is evidence, photographic or otherwise, that they are taking part in the demonstrations, will the Employment Service be able to use it to disallow their benefits?

I have to be slightly careful when answering that question, because I must not intrude on the well-established relationship between Ministers and agencies. It is the responsibility of the Employment Service properly to implement the rules. As far as I am aware, taking part in what my hon. Friend describes as "political activity" will not in itself disqualify someone from eligibility for benefit. The key is availability for work and the fact that someone is actively seeking employment.

Political activity may sometimes be compatible with availability for work and with actively seeking it. A Member of Parliament seeking work might—who knows?—be able to do both things at the same time. I well understand the concern of many people about the fact that taxpayers' money in the form of benefits is being given to those indulging in activities of which we might not approve. That is not the test, however. The test in the rules, applied even-handedly and fairly, is whether people—regardless of their views and political activities—meet the requirements laid down for everyone in those rules. I am assured by the Employment Service—I am prepared to accept its assurance—that it is applying the rules even-handedly to everyone concerned.

Whether the Employment Service accepts a particular type of evidence is a matter for the service, but I should have thought it highly likely, if evidence came the way of the local jobcentre, that it would make it its business to look at it and then make a judgment.

Of course we all accept that a person can be looking for work at the same as engaging in political activities—attending political meetings in the evenings and so on—but these people are devoting themselves full time to disrupting others in their lawful activities. They are clearly not available for work, so Conservative Members would be grateful for my hon. Friend's assurance—I think he has already given it—that evidence that people are taking part in these activities, which are full time by their very nature, will be held against them; and that they will be made to understand that they will immediately lose all their benefits.

What my hon. Friend may know that I do not, is whether the people engaging in full-time activity are in receipt of benefit.

They are.

If my hon. Friend has evidence of that, I hope that he will let me have it and I shall certainly pass it on to the jobcentre. I cannot assume—it would be wrong of me to do so—that everyone we see on television and in the newspapers engaging in the sort of activity of which he and I might well not approve is in receipt of benefit. Equally, we are not sure whether those who are receiving benefit are participating only occasionally in those activities and are otherwise available for work and seeking it. I do not know that; the local jobcentre assures me that it does. Unless my hon. Friend can provide me with evidence, which I should be happy to pass on, there I must leave it.

Surely we are not going down the road of taking the lawful right to demonstrate away from someone because he is on the dole. I hope that we are not going down that road.

At the moment, I fear that we are not going down any road—that is the point at issue. I hope that the hon. Gentleman is satisfied from what I have said that there is no question of taking away that right. We must not confuse being available for and actively seeking work with someone's views, political activities and the like. I hope that that is not the case now and, from my point of view, I hope that it never will be. I am happy to give the hon. Gentleman that reassurance.

I was worried about that.

The hon. Gentleman must not worry. The matter is safe in my hands.

To follow on from the points that have just been made, the regulations make provision for people wanting to restrict their availability on religious or conscientious grounds, for those with caring responsibilities for children or sick or elderly relatives and for people with disabilities. In line with the commitments that we made during the passage of the Jobseekers Bill, disabled people may restrict their availability in any way, provided that the restrictions are reasonable in the light of their physical or mental condition.

Having said that, jobseekers must actively seek employment in every week that they are unemployed. In this, we are making no significant departures from an approach which, since the benefit reforms of the 1980s, has become accepted as a key responsibility of claimants. We want jobseekers to be more flexible in their approach to the search for work, so the regulations broaden the range of steps expected of a claimant so that they include actions to improve prospects of employment, such as drawing up a curriculum vitae or seeking specialist advice. At the same time, we are ensuring that jobseekers who deliberately undermine their chances of finding work may be penalised. As a new condition of entitlement, claimants must enter—

The Minister said that he is introducing some new flexibilities to take into account people improving their prospects of employment. What view are the Government taking of an appropriate eligibility for benefit for people engaged in study and training that is designed to improve their skills in the labour market? The present system penalises people who choose to study and to improve their opportunities in the knowledge-based economy—an economy in which people's personal opportunities depend increasingly on their intellectual skills—which is perverse. Have the Government been able to introduce changes or do they contemplate any changes to encourage people to study, rather than penalising them for doing so?

I suppose that I am fortunate that that question is aimed at both my responsibilities—the hon. Gentleman probably skilfully designed it so—and I accept it as such. The direct response is that we are not seeking to use the jobseeker's allowance as a vehicle to improve the support for those who are studying. That is the straightforward answer. There are more detailed considerations. We are clarifying the detailed requirements for people who are studying—guided hours and so forth—in line with the Further Education Funding Council, with which the hon. Gentleman is familiar. The answer to his question, however, is that it is not our intention to use the regulations, or indeed the provisions of the Jobseekers Act 1995, which covers them, to provide some sort of new regime to support people who are studying. That is for another time and it is part of my other responsibilities. I certainly believe that it is something to which the House and the Government will have to return.

Our "Lifetime Learning" consultation document raises questions in that regard. We shall examine the replies that we receive and the overall provision through higher and further education and full and part-time study, to see how best we can define the responsibilities between individuals, institutions and the taxpayer to promote the development of skills and qualifications.

I am grateful to the Minister for that thoughtful and serious reply. He said that he did not envisage that the powers provided under the legislation gave any positive enhancement of the incentives for people to study. Can he at least give an assurance that no penalties will be imposed upon people who decide to study—for example, that the jobseeker's directions, reinforced by benefit sanctions, will not be used to require unemployed people to take a Government-provided course that would interrupt or prevent them from pursuing a course of study on which they had already embarked, or which they reasonably judge may be more useful to equip them with skills to enter employment?

I cannot give the hon. Gentleman such an assurance in the form in which he is seeking it. The form of words that he used would provide an almost total discretion and give the individual carte blanche to say, "I believe that what I am doing is best for me, therefore, by implication, I expect you, the taxpayer, through the benefit regime to support me in doing that for as long as I consider that it is beneficial."

I said that there should be reasonable discretion.

Even with the word "reasonable", that approach would open up far too widely a responsibility on the taxpayer to fund almost any study that any individual considered beneficial. We cannot approach the matter from that direction. We have to approach it from a different direction that will better define the areas and vehicles for study, self-improvement and the acquisition of skills and qualifications, and identify the best means of financing them. We shall have to consider where the responsibilities should lie—with individuals, institutions, employers or the taxpayer, or more probably a combination of them all. Although those are important matters, with respect, I do not consider that they can or should be resolved through the vehicle of the regulations before the House today.

Can the Minister confirm that, under the 16-hour rule, the regulations will force students who may be just approaching an examination to participate in a Government programme and be unable to attend their course, even at a crucial time in that course, so that they can be taught how to look for work? That seems rather absurd.

The hon. Lady understands that the requirements now and under the jobseeker's allowance mean that a person must take a job if one becomes available. If we devised more individual circumstances in which not taking a job would be permissible, we should end up not just back where we started, but further back beyond that. I am not prepared—and it is not appropriate, even during today's debate—to invent new rules to make matters different, easier or better for certain prescribed groups of people. Therefore, I cannot give the hon. Lady the undertaking that she seeks.

I move on to a key part of the process. As a new condition of entitlement, claimants must enter into a jobseeker's agreement with the Employment Service. Each agreement will be individually tailored, recording how each jobseeker will be available for work and the best route for him or her to find a job. The agreement will ensure that jobseekers have information about the expert advice and services available at jobcentres. Trials of a prototype of the agreement have already been conducted in some jobcentres, with very encouraging reactions from jobseekers.

Many of the provisions relating to the agreement and the access to independent adjudication for the resolution of disputes lie within the Act. The regulations before us today, however, cover a number of more minor details such as the prescribed contents and the circumstances relevant to the backdating of an agreement.

While the vast majority of unemployed people make every effort to find work, we need effective measures against the minority who perhaps do not. Social security law has always included penalties for those who break the rules. It is wholly reasonable that people who pay taxes should not subsidise those, however few in number, who make little attempt to get a job. The sanctions regime in the jobseeker's allowance will make it crystal clear that persons who do not meet their obligations will suffer a loss of benefit. The 1995 Act sets out those obligations and the sanctions that may be imposed, but it also recognises that sanctions should not be imposed where a jobseeker has good cause for his actions in, for example, refusing the offer of a job or a place on an employment course.

The regulations set out the circumstances that we expect independent adjudication officers to consider and the circumstances in which a jobseeker is to be regarded as having good cause. A balance must also be struck between protecting the taxpayer and protecting vulnerable individuals from loss of benefit, which may subject them to unreasonable hardship. We shall protect persons most at risk of hardship. Claimants with children, who are sick, disabled or pregnant or who have partners in that position, and those with caring responsibilities will at any time be able to receive reduced payments if they would otherwise suffer hardship. They are also protected against delays in the system of deciding entitlement to benefit. The regulations provide for the making of hardship payments and identify the circumstances in which a person is to be regarded as being in hardship.

The Government also guarantee a suitable youth training place to every young person under the age of 18 who wants one. We are spending £676 million on youth training this year in England alone. That means that there is no reason for young people needing to be unemployed. We do not wish to encourage dependency on benefit at such an early age. The Government's guarantee to 16 to 17-year-olds removes the need for general access to benefits. The current approach in income support will be continued in the jobseeker's allowance. We recognise that there are circumstances in which young people need to claim benefits. We provide for them, and will continue to do so in the JSA.

The regulations provide that young people in vulnerable groups—for example, those who have recently left local authority care—will be able to claim JSA for a period, to allow them to overcome their temporary difficulties. Young people who are waiting for a suitable youth training place will be able to claim JSA if they would otherwise suffer severe hardship. But at the same time we aim to improve the help and service to young people. A specially tailored jobseeker's agreement will be introduced. That will reflect the Government's commitment to the importance of training for young people. It will build on a form completed at the careers service and will include details of the type of training and work that the young person is seeking and the action agreed to achieve his goals. The vital role of the careers service will continue, but as part now of a two-stop service—young persons need have contact only with the careers service and the jobcentre to make a claim for jobseeker's allowance. They will no longer have to attend the Benefits Agency as well.

The new allowance will provide financial help for unemployed people and their dependants according to their needs, and that will be paid as long as they need it. Persons who have paid national insurance contributions will receive a personal rate, irrespective of their capital or their partner's earnings, for up to six months—the point at which the majority of jobseekers leave unemployment. We expect that the majority of unemployed people will receive the income-related element of JSA. In bringing together the contributory and income-related elements in the one benefit, we shall provide a single coherent benefit for unemployed people. There will be an end to the confusion when unemployed people could be entitled to one or the other benefit handled by different agencies or both benefits at the same time.

Much of the content of the regulations deals with the assessment of the amount of benefit to which people are entitled—for example, regulations dealing with the applicable amounts and the treatment of income, capital or earnings. In the majority of cases, we have had the example of income support to follow. But there will be some significant updating and improvements to income support provisions. For instance, we shall provide new help for couples, enabling partners of JSA and income support claimants to work for up to 24 hours, not 16 as now. We believe that that will encourage partners to remain in or to take part-time work. Couples will also be able to earn £10 without their allowance being affected, even if only one is working.

Many unemployed people get substantial occupational pensions from their previous employer. Pensions are already fully taken into account in income support, and it is right that larger occupational and personal pensions should reduce the amount of contributory benefit for people of any age. The present limit is too severe, so we are removing the arbitrary age threshold and raising the amount of pension that can be paid without affecting benefit, from £35 to £50 a week.

Throughout the passage of the Jobseekers Bill, we emphasised that JSA should be seen as part of a far-reaching package of work incentive measures. The other sets of regulations before the House today complete the picture.

The unemployment and poverty traps have been significantly alleviated over recent years. Only a tiny proportion of the working population would not now be better off in work than remaining on out-of-work benefits. This imaginative package of regulations addresses three big issues. It gives direct encouragement to unemployed people to undertake part-time work and to use that as a stepping stone to full-time work. It removes uncertainty at the point of moving into work, encouraging employers to look more favourably on the long-term unemployed.

The back-to-work bonus is a clear demonstration of our resolve to remove disincentives within the benefit system. At present, unemployed people who take part-time jobs can lose benefit almost pound for pound. Yet if they could keep their part-time earnings on top of their benefit, they would surely have little incentive to go on to full-time work. The back-to-work bonus squares the circle. It is a far more effective measure than the calls that are sometimes made to raise earnings disregards across the board, because it is more targeted.

Jobseekers and their partners who take small amounts of work while on benefit can build up entitlement to a lump sum bonus of up to £1,000. They can cash that in when they move off benefit into work. We shall also pay the bonus to people who move off JSA at pension age and at the age of 60 to income support claimants who have participated in the scheme so that the bonus will not be lost.

Following commitments that were made during the passage of the enabling legislation, we are providing for extensive linking rules to protect the position of many people who leave JSA for incapacity benefit during long periods of sickness or disability. We expect to pay at least 150,000 bonuses to JSA claimants each year once the scheme is up and running. It will encourage people to stay in touch with the world of work while they are on benefit and to keep their skills up to date, and it will give claimants a financial boost at a crucial time by helping them to meet the expenses connected with the move back to work.

Building on the incentives for the long-term unemployed already provided by programmes funded by my Department, the regulations provide for a national insurance contribution holiday for up to 12 months for employers who employ someone who has been out of work for two years or more. That will encourage employers to take on long-term unemployed people. We estimate that about 120,000 people are likely to be helped by the scheme, and it is worth about £50 million to employers in national insurance savings.

In that context, I commend to the House the Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations. Those regulations underpin the measures being introduced by my right hon. Friend the Secretary of State to enable housing and council tax benefits to run on for four weeks regardless of earnings for people who leave unemployment for work.

The purpose of the measure is twofold. First, it protects the claimant from the gap in income that currently causes concern and difficulties on returning to work—a fear that I recognise can sometimes act as a deterrent to taking a job. Secondly, it ensures that local authorities give priority to dealing with continuing housing benefit and council tax benefit claims from those who take advantage from the run-on. That means that entitlement to benefit is established before the end of the four-week period and there is no gap in housing benefit if an individual continues to be entitled to it.

The House should be aware that the Joint Committee on Statutory Instruments has drawn the special attention of the House to the JSA regulations. I am happy to say that the Committee has identified only one aspect. The fifth report has drawn attention to regulation 150, where there are two printers' errors in the formulae, and has reported regulation 152 as being defectively drafted to both Houses.

The formula contained in regulation 150(1)(a) should read N multiplied by A divided by 7. Similarly, the formula in regulation 150(1)(b) should appear as N multiplied by (A minus 1) divided by 7 minus B.

Will the Minister give way?

I hoped that I would not be asked a question.

The implications of the text that the Minister has read to the House are clearly considerable and important. As the House does not have power to amend the regulations, what will he do about the errors?

I am assured that the rather unusual procedure in which I am now engaged will enable us to correct the regulations. That is why I am detaining the House, but only for another minute or two. I am sure that I have been correctly advised. I hope that Opposition Members will accept that in good faith we are trying to find a way to ensure that the regulations emerge from our process properly and in the way intended, and are not vulnerable to a printing error.

Will the Minister give way?

Yes, if the hon. Gentleman is not happy with my response.

Is the Minister saying that reading into the record a change that the Joint Committee has requested will ensure that the change will be made, irrespective of the fact that we are not able to amend the regulations this afternoon?

The Joint Committee has identified a printing error in the regulations, and I have been advised that there is a way to correct that. I should like, if I may, to take further advice on that. Perhaps my hon. Friend the Under-Secretary can return to it.

I hope that the hon. Member for Sheffield, Brightside (Mr. Blunkett) and his colleagues will accept that it is the desire of the House that a printing error in regulations as important as these, and which are so important to individuals, should be corrected. I have been advised in good faith that there is a method so to do. If Opposition Members are unhappy with that, they are, of course, entitled to pursue the matter. However, if we could not correct the regulations this way, I should be very unhappy if they had to emerge from the House in an unsatisfactory condition, particularly when they refer to a formula that could affect people's entitlement to benefit.

rose—

I give way seriatim to Opposition Members, starting, of course, with the hon. Lady.

I thank the Minister for giving way to me first. I hope that he is doing so alphabetically rather than for any other reason.

Perhaps the Minister will explain the difference between the formula—with the so-called printing error that has appeared in the regulations—and the amendment that he is seeking to read into the record, and what it means in practice, rather than just reading out mathematical formulae.

It is concerned with the meaning of the term N, which is a definition of the week, or the number of days, which then gives rise to the calculation of benefit entitlement. All that we are trying to do is ensure that the formula is correct and that its meaning is correct in the terms of the regulations. It is one of the ways in which benefit entitlement is calculated, and that is why I want to go to these rather extraordinary lengths to ensure that it is correct. There is no more and no less to it than that. The error has arisen, of course, after the report of the Joint Committee, which we are trying to follow in spirit.

What the Minister is saying could not be more important. He suggests to the House that we should not pass regulations that are wrong, but he hopes that by reading a correction into the record all will be well. If we discover that the Minister cannot change the regulations merely by standing at the Dispatch Box and reading something different from what they say, as a result of which they will emerge wrongly, should we agree them? Is he suggesting that he will withdraw them? As he said, he has no wish for the regulations to be passed today if they are wrong.

Subject to advice, I think that I would still have to ask the House to approve the regulations today, including the error. I would ask the House to approve the regulations with this small drafting error, which has arisen from a printing mistake—

It is a small error that affects benefits.

If the hon. Gentleman will wait, I shall answer his question.

I envisage that I would then have to introduce amending regulations subsequently to correct the error.

Subject to further advice that I may take, I or my hon. Friend the Under-Secretary will seek to clarify the matter for the House. I have no desire to confuse. Nor do I have any desire to undermine the authority of the House. I hope that Opposition Members will accept this in good faith. If it is found that this approach is not reasonable or, indeed, that it is in breach of any of the rules of the House, I shall still ask the House to approve the regulations and will then proceed with amending regulations subsequently. I think that that would be less satisfactory, given the enormity and complexity of implementing the jobseeker's allowance across the country.

I hope that Opposition Members will bear with me and that during the debate, or perhaps in his winding-up speech, my hon. Friend the Under-Secretary will return to that matter with further advice. I can understand the points raised by Opposition Members. I am attempting only to get this right.

On a point of order, Madam Speaker. How long must we exist in our present limbo, not knowing whether the regulations that we are approving are wrong or right? Should we not know that now?

The Minister is attempting, in good faith, to help the House as much as he can. He has explained his position. It is a printing error; that is all. He has said that, between now and the winding-up speeches, the Minister who will wind up the debate will have time to make the position clear. The Minister who is now at the Dispatch Box is doing his best to deal with a little difficulty involving a printing error. I think that the House should be tolerant, and wait a while until the Government have been able to make a clear statement. The Minister hopes to do that shortly.

I am grateful to you, Madam Speaker. Let me continue what I was saying in the spirit in which I began, for the sake of completeness.

The correct formulae are reproduced in a memorandum sent yesterday to the Joint Committee on Statutory Instruments by the Department of Social Security, attached as an annexe to the fifth report. As both mistakes resulted from a printer's error, we undertake to correct them in the version of the regulations that will be published subject to the approval of both Houses.

As for the defective drafting, it appears that printing gremlins have also got into the Joint Committee's system. The definition of the variable N for whose absence regulation 152 was reported as being defectively drafted is, in fact, missing from regulation 151. As the Committee pointed out, the meaning of N is reasonably clear, but should nevertheless have been included. For the avoidance of doubt, let me explain that N should be defined as the number of days in the part week. That partly answers the question posed by the hon. Member for Wallasey (Ms Eagle). I should like to give an undertaking—subject to the guidance that you have given us, Madam Speaker—that the deficiency will be corrected by means of an amending instrument as soon as possible.

I am about to end my speech. If any hon. Members are not happy with what I have said—or, dare I say, with what Madam Speaker said—

I shall come back another day.

I shall quit while I am behind.

We are debating an extensive and far-reaching package of legislation, but the regulations have one simple common theme: the Government's commitment to offer every help, encouragement and incentive to unemployed people to find work as quickly as possible. We already offer 1.5 million opportunities to unemployed people on Government programmes, and will continue that commitment next year. I am happy to say that the Employment Service is already placing a record number of people in jobs; we want to build on its achievement, and the introduction of the jobseeker's allowance will further that success.

I commend the regulations to the House, subject to further advice that my hon. Friend the Under-Secretary or I may wish to give.

4.22 pm

On 24 January last year, the Jobseekers Bill commenced its stormy passage through Standing Committee. During the Committee's first sitting, I described the actions of the then Secretary of State, the right hon. Member for Enfield, Southgate (Mr. Portillo), as inequitable and monstrous. The regulations with which we are dealing today lay to rest any pretence that the Tories are a party with one-nation values.

Both here and in the other place, the Bill was criticised for its lack of appropriate detail, before and after its enactment. In truth, the Act was a mere skeleton; all the vital issues and draconian measures contained in it were removed from public awareness and parliamentary scrutiny. If the motion is passed, the Secretary of State will have 116 powers to control the lives of the unemployed without further recourse to the House. Expansively drafted catch-all clauses, to be implemented by non-negotiable and, at the time of the Bill, non-defined regulations, would prescribe circumstances leading to the loss or reduction of benefit for upwards of a quarter of a million unemployed people and their families.

This contemptuous sleight of hand, devised to evade parliamentary scrutiny and deceive the public about the real purposes of the legislation, was forced through the House with all the subtlety of an elephant sitting on a pinhead. The Bill was badly drafted, ill thought out and socially divisive—51 pages of legislative vitriol directed at innocent victims of the Government's failed economic and social policies. Following scant consultation, the Government revealed the real Act under the guise of the regulations. They are a mesmerising 160 pages long, have 13 parts, 172 regulations and eight schedules. To that can be added a sprinkling of back-to-work regulations. The Act had only 51 pages and contained three parts, 41 clauses and three schedules.

The regulations are controversial and technical, but they will be forced through the House in approximately two and a half hours' time. The whole process brings Parliament into disrepute, and demeans this place as a democratic legislature. During the Minister's speech there were points of order and he asked us to bear with him. During the passage of the Bill, there was a complete negation of all attempts at dialogue with Opposition Members, behind the scenes, across the Dispatch Box or in Committee, about the nature of the regulations. All attempts, whether with the Minister of State or the Under-Secretary of State, to have such a relationship were rejected out of hand.

I want some clarification. If the Minister can seek by a verbal statement to amend the regulations, is it possible for the Opposition to do likewise? At least one regulation is seriously defective. If I am correct, it renders another two regulations ineffective, or at least in need of redrafting or of being withdrawn altogether.

If there is to be such an arrangement, as a matter of principle it must be for all hon. Members. If the Minister knew about this matter before he came to the House, he should at least have had the courtesy to consult behind the Chair and elsewhere with my right hon. Friends who have Opposition responsibility for the business of the House. If that had been done, perhaps we would be a little more forgiving about the shambles that the Minister outlined at the end of his speech.

The shambles does not stop there. In the Bill, the Minister claimed savings to the Exchequer of £10 million in the financial years 1996–98. That was reduced to a net saving of £320 million after taking into account measures relating to the national insurance contribution rebate.

So ill planned has been the introduction of the jobseeker's allowance regulations that the costs of implementation have escalated. On 8 November 1995, I questioned the Minister of State about the implementation cost, and I was advised in a written answer that it was £270 million for the four main areas of implementation. The cost for information technology was £110 million; for training, it was £70 million; for premises, £45 million; and for project management and communications, £45 million.

No costs were given for other areas of implementation. However, my hon. Friend the Member for Wallsend (Mr. Byers) wheedled out of the Minister a further range of figures relative to implementation costs. A sum of £979,000, rising to £2.147 million, was for private consultancy fees and advice. Just as worrying as the private sector consultancy financial bonanza was the Minister's statement that he could give no firm figure for the additional support costs.

We have had the revelation that to tart up the fading image of Department for Education and Employment Ministers, they spent a total in the past five years of more than £74 million on furnishings, carpets and curtains in the Department. That gave the staggering total of £346,329,791 as the cost of implementing this so-called legislation. Even if we take out the cost of carpets and furnishings, the costs so far, with the meter still ticking, are near to £320 million, reducing the savings to about £40 million. And for what?

It is difficult to imagine how the hon. Gentleman thinks that Ministers in the Department could sit on £73 million-worth of furniture. I hope that he accepts that, rightly in my view, we upgrade the quality of accommodation for officials working in the Department and in the jobcentres and make jobcentres fit for people to work in and for claimants to come to receive advice.

I hope that the hon. Gentleman is not suggesting that there is anything wrong with placing contracts with expert outside private consultants to help in the implementation of a system as complex as this. If he imagines that it could be done without them, I should like to know how he thinks it would be possible.

I shall deal with the last point first. It would have helped the House if it had been informed of the cost of private consultancies, and if implementation costs had been subject to public scrutiny. Secondly, the vast majority of jobseekers and unemployed people believe that the Government would do better to squeeze the budget for new chairs rather than budgets for training and other job creation activities.

At one point in the summer, the Secretary of State for Education and Employment was, we understand, offered three options on the regulations—to scrap them, to introduce further delay or to implement them in a less sophisticated form. She was also told, at all costs, to prevent another Child Support Agency debacle. Such is the Government's loathing for unemployed people that they are blundering on regardless.

Chapter II of the regulations, which deals with availability for employment, had a mini run-out in yesterday's debate on training. The Secretary of State claimed, in response to my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett), that the Government had worked an economic miracle and had got rid of the north-south divide—and so they have, but in a uniquely Tory way: not by decreasing unemployment, poverty and insecurity in the north, but by dramatically increasing them in the south.

From the time when the Prime Minister took office to his relaunch at last year's Tory conference, we have witnessed the scale of the problems that the regulations in chapter II are supposedly designed to deal with. In the south-east, unemployment has increased by 82 per cent. In Greater London, it has rocketed by 73 per cent. In East Anglia, the message is much the same—it is up by 61 per cent.—and in the south-west it has increased by 55 per cent.

In the country as a whole, unemployment has increased by 32 per cent., and among young people it has grown by 23 per cent. Among those out of work for at least six months, it has increased by 54 per cent. In Great Britain, in the past five years, long-term unemployment has gone up by 70 per cent. More than 1 million people are still out of work compared with when the Prime Minister took office.

Figures released today show that vacancies are down by 3,400 and that an average of 12 people chase each advertised vacancy in Britain. In London, the average is 20 for each vacancy, and in the north it is 18 for each vacancy. That is the real extent of mass unemployment in the United Kingdom. That is the real problem we face, but these regulations do not recognise it.

The real cost of unemployment is more than £23 billion—equivalent to 4.6 per cent. of our gross domestic product and to almost two thirds of the Government's current borrowing. Without Government borrowing to finance mass unemployment between 1990 and today, the basic income tax rate would have had to increase from 25 to 30 per cent.—taxing for failure instead of investing for success.

With that record, the Government deserve no plaudits for the minuscule reduction in the benefit claimant count, especially in view of the fiddled nature of the figures. Independent Library estimates show that 900,000 unemployed people are no longer included in any Government measure of the true level of unemployment.

What is the Government's response?

Is the hon. Gentleman suggesting that the labour force survey figures or the figures produced by the Organisation for Economic Co-operation and Development and by the European Union are all wrong? He will know that they all mirror closely our claimant count figures for people in work and those out of work.

The hon. Gentleman is wrong. In its entirety, the labour force survey reflects what has been said by the House of Commons Library: that about 900,000 to 1 million unemployed people are not included in the Government's measure of unemployment. In the past 12 months, we have already had an inquiry and report saying that the way in which the Government are conducting their so-called count of the unemployed is unsatisfactory and does not accurately reflect the real unemployment figure. It recommended that the Government should change the way in which the number of unemployed people is recorded. There has been a deafening silence from the Minister since that independent report was published.

Will the hon. Gentleman give way?

I shall give way in a minute.

What has been the Government's response? Has it been to invest in training? No. That has been cut by 50 per cent. in real terms. Schemes have closed with alarming regularity. Many of the programmes are ineffective in helping unemployed people to gain access to the labour market. Have the Government ended insecurity at work? They have not done that either. Insecurity is a plague across the nation.

No one, and I mean no one, has job security any more. The jobseeker's allowance, the supposed miracle cure, means what? The costs have escalated since its symbolic introduction. There is no genuine assistance for people to gain access to employment. Instead, additional benefit traps have been introduced that empower the Minister to reduce the period for unemployment benefit from 12 to six months.

Let us put the record straight—we are talking about a national insurance contribution scheme. People have paid thousands of pounds over many years to provide benefit should they become unemployed. Yet, at the same time as cutting the benefit period, the Government have increased national insurance contributions. They have awarded themselves a windfall increase of £2 billion in taxation, while cutting benefits for which people have already paid.

If it were a private sector insurance scheme, the provider would be in the High Court for breach of contract. It is scandalous that, having taken thousands of pounds of national insurance contributions from millions of people, the Government are now cutting the benefit period from 12 to six months.

Will the hon. Gentleman give way now?

Sit down. I will give way to the hon. Gentleman in a minute. I will give him more chances than he would ever give the unemployed.

After six months, there will be no benefit for people with partners in full-time jobs, and reduced benefit for people with partners in part-time jobs. That is a real disincentive for low-paid workers on minimum wages. Irrespective of their level of income, if they work more than 24 hours a week, they will be required either to give up their jobs and go on to benefit or to maintain the partner, irrespective of that partner's financial circumstances. That will disproportionately hit women in employment.

There will be no benefit after six months for people with more than £8,000 savings. That is a real attack on middle England, at a time when job insecurity and joblessness are rising in some sectors of banking and insurance. Those who receive more than£8,000 in redundancy payments will, after six months, have to maintain themselves, because they will receive no benefit. For those with £3,000 savings, after six months there will be a cut in benefit—despite the fact that they may have paid thousands of pounds into the national insurance fund.

I am grateful to the hon. Gentleman for giving way at last. If he believes that the unemployment figures, including those released today, are unduly optimistic, will he categorically confirm that, if Labour ever came to power, it would immediately revise the basis on which the figures are calculated, resulting in the higher figure that he believes to be valid?

Let us get the language correct—today's unemployment figures are a disaster, because more than 2.3 million people are unemployed. It is nonsense to say that the figures are good. I remind the hon. Gentleman that, in Committee and on the Floor of the House, I have twice given a commitment that a Labour Government would implement the recommendations of the independent inquiry. I ask the Minister to give a similar commitment and bring some common sense, understanding and legitimacy to labour market figures. I have given a clear and precise commitment to do so after the general election.

People undertaking study to improve their chances of obtaining a job will be hit, because the 20-hour rule will become the 16-hour rule. There will be no automatic increase in JSA in line with inflation, so the principle of state unemployment benefit will wither on the vine. The regulations say nothing about that; it is not something that the Government have trumpeted. However, for the first time, the Act will remove the legal requirement for the annual uprating of unemployment benefit in line with inflation.

The setting of the next JSA level will remain in place not for one or two years, but for three, four or five years, thus dramatically reducing the actual value of the benefit, despite the contributions paid by the recipients. That is the first step towards removing the concept in principle of the state being involved in the funding of unemployed people.

The truncated time available for this debate prevents me from going into greater detail about the regulations, and I therefore give notice to the Secretary of State that I shall be putting before her in the coming days a significant number of questions in order to clarify a range of ambiguities thrown up by the regulations, some of which seem contrary to guarantees given during the passage of the Bill. The questions will cover areas including young people, new jobseekers, age-related distinctions, and definitions of "seriously ill", "low pay", "actively seeking work", "variation of the jobseeker's agreement", "good cause", and "part-time study".

For the moment, I shall seek clarification in five areas of the regulations. Regulation 9 is about low pay. I call it the no-pay regulation. It describes the basis on which people may be offered a job for £1 an hour after—we thought—13 weeks, and if they do not take it, they lose their right to benefit. That regulation opens up the labour market to cowboy employers, to impose any level of wages, irrespective of the individuals' skills.

The regulation states that, after six months,

"a person may not restrict his availability for employment by placing restrictions on the level of remuneration in employment for which he is available."

Does that mean that, in that six-month period, a person can restrict his availability for employment by restricting the level of remuneration in employment for which he is available? That is what the regulation implies, yet it clearly contradicts regulation 16 on the permitted period, and regulation 72(7)(a) relating to sanctions for refusing a job offer because of the level of remuneration.

Is regulation 9 the result of having to meet international labour law requirements? If so, the Social Security Act 1989, which introduced the permitted period and the regulations preventing claimants from refusing job offers after 13 weeks because of low wage levels, was a contravention of International Labour Organisation regulations.

If regulation 9 is linked to international labour law, preventing disqualification from national insurance or employment benefit for refusing low-paid job offers, it raises serious questions about claimants penalised in such circumstances since the implementation of the 1989 Act.

I know that detail bores the Minister—we could tell that from his speech—but it is not boring for those it affects. After study of the regulations, crucial points arise—more serious than the spelling errors he mentioned.

A regulation similar to regulation 9 covering unemployment benefit would have protected claimants from being disqualified during the first 12 months of unemployment for refusing a low-paid job if they were in receipt of unemployment benefit. If that is the case, the Government have been wrongfully disqualifying claimants for periods of up to six months since the 1989 Act was implemented in 1990. I would like some legal clarification on that. It could have serious implications for thousands of benefit recipients, as well as the Government's financial commitments in the Budget to the paying of benefits.

Regulation 12 deals with volunteers. The Government agreed to conduct consultation following pressure during the passage of the Bill in another place, and I thank the Minister for carrying it out. There is, however, at least one unresolved question to be addressed.

The voluntary sector has given examples of considerable inconsistencies between employment offices in their interpretation of the regulations. That has led to a person in one part of the country being penalised for volunteering, while someone else is allowed to do exactly the same type of voluntary work and not be penalised. Will the Minister give details of the training that will be given to employment officers on the eligibility of volunteers for the jobseeker's allowance, so that consistency can be achieved?

During the passage of the Bill, I was given a commitment by the then Minister of State, Department of Employment, the hon. Member for Maidstone (Miss Widdecombe), that, from 1 April 1996, all staff training would be completed. Has that timetable been met or has it to be extended to, say, October? I would welcome information on that.

Regulation 18 deals with the so-called spoiling tactics of claimants. That provision was a shambles in Committee.

The then Minister argued against the wearing of earrings by certain job applicants, despite the fact that her civil service adviser, who was sitting 2 ft away from her, was wearing two earrings at the time. Now that the Minister is Minister of State at the Home Office, she is positively enthusiastic about the wearing of chains, although she is obviously still against the wearing of earrings by those claiming unemployment benefit.

Regulation 18(4) is particularly vague. It provides grounds on which claimants who otherwise meet the actively seeking work regulations can be disqualified. Employment staff can say that a claimant has an abusive manner or has spoiled the application form. They can say that his behaviour or appearance has undermined his prospects of securing the employment in question. During the passage of the Bill, spoiling an application form was not mentioned. Will people who are not proficient at filling out application forms be disqualified from benefit for that reason alone?

What standards will be used to determine what behaviour or appearance is suitable? Will the Secretary of State place in the public domain the Employment Service and adjudication officers' guidance on those issues?

What is involved is a matter of opinion rather than a matter of fact. If we are not careful, many people will be disqualified from benefit on the basis of factors that are outside the regulations, such as the length of their hair or their style of dress—whether they have a clean shirt on for the interview. There could be a shambolic number of complaints and appeals because of the wording of the regulations. It is important that the advice of adjudication officers and of the Employment Service is published and placed in the public domain.

Regulation 73 defines what is good cause for not attending a Government programme, and relates to the reduction from 21 hours to 16 hours. Again, the Minister owes us an adequate explanation. There is no provision in regulation 73, which covers people who are studying under the 16-hour rule, to protect people from being forced to give up their studies so that they can attend a Government programme, under threat of a benefit sanction.

Under the current system, Employment Service staff are advised to refer people in that position to compulsory re-motivation courses, such as restart and jobplan, during the vacations. Yet evidence suggests that that flexibility is rarely offered to claimants, and that the majority have their studies disrupted by attendance at those courses. If they do not attend the courses, they suffer a 40 per cent. deduction from their income support.

That has become an even greater problem with the introduction of workwise and worklink, the compulsory course for 18 to 24-year-olds. The course lasts for four weeks. Missing that amount of time from a part-time course can leave people with little opportunity to fulfil the coursework requirements. The jobseeker's allowance sanction for missing the compulsory courses will be much harsher, forcing more claimants to give up their studies to attend them.

In addition, the jobseeker's direction will enable Employment Service staff to instruct claimants to attend much longer Government programmes, such as training for work and job clubs. That will force more claimants to give up their part-time studies for inappropriate placements on Government schemes. How does that square with the Government's desire to improve access to skills to assist a person's employability?

A recent report, under the heading "Policy Analysis", says that there will be regional variations in the 16-hour rule, which will add further complexity to the regulations. Will the Minister give a clear explanation of the rules in Scotland and Northern Ireland? Why will the rules there be different from those applying to people studying for 16 hours in England? Why is there a change? Why was that change not explained clearly during the passage of the Jobseekers Bill?

Regulation 17 deals with workers on short time. Some workers whose companies are suffering difficulties, thanks to the Government's economic failures, temporarily stop work or are put on short-time working. At present, workers who are laid off temporarily or who work a certain number of days a week or weeks a month are allowed to claim unemployment benefit, and do not have to be available for work on the days when they are working at their normal jobs.

Under regulation 17, after a 13-week permitted period, a worker will be disqualified from benefit. To continue receiving benefit, claimants must be available for any job, irrespective of the fact that they are on short-time working for their employer. The rule will force workers who are temporarily laid off or who are working short time to give up their jobs. Many of those thus forced into unemployment will remain unemployed.

As I have said, most businesses that have introduced short-term working or laid off staff are in difficulties. For some, losing experienced staff will be the final straw, forcing them to make further redundancies among the remaining work force. I wrote to the Minister on this issue, but received a bit of a non-answer. Perhaps the implications of the regulation will be clarified during the passage of the Bill.

Regulation 63 deals with a range of issues affecting young people, on which I shall write to the Minister again. Why are the Government not giving a commitment during the passage of the legislation to help young people who are coming out of care and young people with special needs? The Minister said that the regulations protect them, but we know that the regulations will lead in some circumstances to vulnerable young people coming out of care—some without a family and some who may have been sexually or physically abused—being disbarred from benefit.

The regulations may also lead to a young person being sent on a training course or employment opportunity. If it is the second occasion on which the young person has been sent on such a course, there is no requirement on the employer to guarantee the quality of training, employment opportunities or the level of wages, and no prior check of the health and safety environment of the premises will be carried out by the Department. That is unacceptable in any circumstances, and I therefore ask the Minister to have another look at the young jobseeker's agreement and the complaints that we have consistently made about it.

The Government need a rethink, and there is an issue that I would like to raise that could form part of that rethink. In yesterday's debate on the cuts in training, I asked the Secretary of State to confirm the arrangements for the new project work pilots. She kindly confirmed to me that one of the two areas selected was the Medway travel-to-work area, which includes the constituency of the former Minister of State, Department of Employment, the hon. Member for Maidstone—the person largely responsible for this legislation.

I received a fax this morning advising me that that travel-to-work area was not the original choice for the pilot scheme, which had been an area in London. The fax alleges that, because unemployment in the hon. Lady's constituency has risen by 91 per cent. in the past five years—and by 39 per cent. in the marginal constituency next door—a lobbying exercise was undertaken by the former Employment Minister to ensure that the project was placed in her area, despite unease and unhappiness among Employment Service advisers. Perhaps, before the end of the debate, the Minister will clarify the process of placing the pilot scheme.

I can do that for the hon. Gentleman now. In the normal way, the Employment Service and officials from my Department came to me with a number of different options. These were discussed and considered, and they included a number of different areas, including Maidstone. With advice from my officials, I decided on what I thought would be two reasonably representative areas to give us usable results for the pilot project.

The hon. Gentleman should not read conspiracies in everything. There was a perfectly straightforward process, and it illustrates the harmonious relationship among Ministers, officials and the Employment Service, which I am confident will continue.

That was an interesting and revealing answer. I offer no conspiracy theory—I just asked a clear question. It was interesting to note that the Minister referred to the "harmonious relationship" between Ministers. [HON. MEMBERS: "And officials."] Fair enough. I apologise to the officials, who are neither seen nor heard in this place. But his answer seems to indicate that there was at least some discussion between the Minister and his hon. Friend the Member for Maidstone about the matter. Is that the case? Were any representations made to the Minister on the placement of the pilot scheme?

rose—

The Minister must be careful what he says.

I shall be very careful, and I am grateful for the hon. Gentleman's advice.

I had no discussions with any colleague, other than the Secretary of State—I hope that the hon. Gentleman accepts that that was correct—about the decision, which was mine to make. I gave advice to the Secretary of State, and she was content with the advice I gave. I had no discussions with other colleagues, parliamentary or ministerial.

I accept in good faith what the Minister said. [HON. MEMBERS: "So apologise."] I will apologise for nothing. I raised a pertinent point, which the Minister has clarified to my satisfaction. Let us hope that the matter will rest there. [HON. MEMBERS: "Hear, hear."] But we must wait and see. There are enough lawyers in this place to make mischief on almost any issue. I am not one of them. I am not a lawyer, but mischief-making is another matter.

It is important that, if the regulations are passed in their present form, when hon. Members seek, either collectively or individually, to discuss their implications with Ministers, there is an open-door policy. The regulations are complex. There is insufficient time today to cover all the issues which arise from the regulations, but I have tried to express—I hope without boring the House unduly—how seriously we take their implications. We need some assurances and some clarification of the regulations from the Minister, which I hope he will provide in his reply.

We reject the JSA and all it stands for. The only vote that will count, however, will be at the next election, when we will get rid of not only the JSA but this Government. We will then introduce employment policies to benefit the whole nation.

4.55 pm

The speech—

Some sense at last.

My hon. Friend might want to make that judgment after I sit down.

The speech by the hon. Member for Makerfield (Mr. McCartney) was very revealing, and I hope that those who look after such things will ensure that Conservative central office has it duplicated and sent out to business men.

We will.

While the hon. Gentleman's leader goes around making speeches about a conservative economy and taking tough decisions, and even mentions workfare and the need to crack down on people who do not deserve to receive benefit, not one bit of that has washed through to any of his colleagues, including his spokesmen. It is clear that old Labour, which is real Labour, is alive and well and living in the whole of its policies.

We can hear it.

Not only can we hear it, it is clear that the country will hear it as time goes on. The speech of the hon. Member for Makerfield was grossly old-fashioned and demonstrated a lack of understanding that the only people in the world who do not believe in a conservative economy are those in the British Labour party.

Is it not curious that the Labour party leader must go around pretending to believe in a conservative economy? Perhaps he does, but his party plainly does not. I shall provide a brief tutorial for the Labour party, before I turn to the regulations. Unemployment does not cause excess Government spending, as the hon. Member for Makerfield suggested. Excess Government spending causes unemployment. If he understood that, he would understand a great deal more.

Does the hon. Gentleman agree that, after significant and hard cuts in public expenditure in the Budget, only £3 billion was saved for tax cuts? Year on year, however, we are spending at least £20 billion, and possibly as much as £22 billion, to support the mass unemployment that has persisted for the entire life of this Government.

I have no doubt that the figures given by the hon. Lady are correct. There were not cuts in public expenditure; the rate of growth was reduced, which is a significant difference.

Let us be intellectually honest.

As my hon. Friend says, it is intellectually honest, but that is not something that one would expect from the Labour party. What the hon. Lady has said shows that she does not understand new Labour either. Perhaps there is someone on the other side who does understand new Labour and who will explain it to us. It is a bit rich for the hon. Member for Makerfield to say that the regulations are being forced through in three hours, because a proper piece of primary legislation has been put before the House. I have no doubt that Ministers, Back Benchers and Opposition spokesmen spent many hours in Committee discussing the regulations.

The problem is that the regulations had not even been drafted when the Jobseekers Bill was in Standing Committee. This is, in effect, the first sight that we have had of them, yet they form much of the detail of that Act. That is one of the objections we had to the shape and status of the Act as it went through the primary legislation stage.

If we reach the dark days of a brief sojourn under a Labour Government, we will remember those words about every detail being on the face of every Bill which that Government might bring forward. However, I believe that we are unlikely to have a Labour Government.

Undoubtedly, there is much confusion among people who administer the system and, most important, among the people who receive the benefits. There is confusion between unemployment benefit and income support. Therefore, it is important that we should replace that confusing and out-of-date two-benefit system. Those two benefits cover different periods and play different roles. They require different bureaucracies, offices and computer systems, so it is not surprising that people are confused about it. The system is probably too complex for staff to administer, and it is bound to be more expensive for the taxpayer. Therefore, I welcome the principle behind the Bill.

I also welcome another element of the regulations, which I might describe as the carrot. That element is the way in which the new jobseeker's allowance will encourage people back into work. We all understand, from different perspectives, that the longer people remain on benefit, the more their motivation and skills decline, thus reducing their chances of finding a job.

I welcome the fact that the new system will attempt to keep people in touch with the labour market by encouraging them to take part-time work, and will help people to move from part-time to full-time employment. It will also allow others to take unfamiliar work without being unfairly penalised if the jobs do not work out.

The back-to-work bonus enshrined in the legislation is very inventive. At present, after a small initial level of earnings—£5 per person or £10 per couple a week—income support is reduced pound for pound, which discourages part-time work by claimants and partners. Under the new back-to-work bonus, the Government will set aside 50p of every £1 by which benefit is reduced when claimants enter part-time work to pay to them, up to a maximum of £1,000, when they enter full-time employment. That will have a genuine effect of increasing the incentive to begin work again. It will certainly reward honesty and encourage part-time work as a stepping stone to employment, while retaining the essential difference between a benefit that is paid to people out of work and one that is paid to people who are in full-time employment.

I also welcome another aspect of the regulations which could be called the stick—the regulations take the carrot and stick approach. I have a genuine criticism of what the hon. Member for Makerfield said in his speech, because the Labour party is good at talking about incentives, carrots, and not very good at contemplating the idea that one has to be tough sometimes and make people seek work, sticks. I welcome the sanctions on people who are simply working the system—those whom one might call the workshy—although everyone in the House, especially Conservative Members, recognises that most claimants make every effort to find work and that the jobseeker's allowance will assist them.

Taxpayers are rarely mentioned in the equation, but they have rights as well. They have the right to be protected against those who are not genuinely available for and looking for work. The discussion that my hon. Friend the Minister had earlier with my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) is very important. Of course, claimants' politics and the fact of taking part in political activity are no bar to their getting employment and should not be any bar to benefit. Nor will they be, but if people set themselves up as full-time political activists and deliberately make themselves unavailable for work, why should the taxpayers, who are suffering from those activities, pay the bill?

My hon. Friend was present when I asked the Minister how one could prove whether people were available for work. There is a simple way, because if we had a full system of workfare, which I would fully support, people would either work in return for their benefits or have an ordinary job. [Interruption.] There would be no doubt about whether they were engaging in full-time political activity.

That is certainly one of the merits of such a scheme. The reception given to what my hon. Friend has just said by Opposition Members is interesting. He was heckled when he suggested workfare. I thought that the Leader of the Opposition had recently floated that idea. Opposition Members must decide whether they are on the side of their leader or whether they will toddle off to join Arthur Scargill, where their hearts really are.

Under the existing scheme, in order to receive the jobseeker's allowance, unemployed people will have to be available for and actually seek work. The tests will be extended to ensure that people who take steps that deliberately undermine their prospects of finding work will be penalised. We have read enough in the papers about Government officials paying benefits to people living in tree-tops, as my hon. Friend the Member for Lancaster put it. Those officials can continue making those visits, but with a different purpose. We can find out who is demonstrating and whether the taxpayer is having to support them.

And penalise them when the officials catch up with them.

No, I wish to penalise them only if they are not available for work. If the hon. Gentleman does not support that, that is an interesting commentary on how much he supports the leader of the Labour party.

People must be available for work for a minimum of 40 hours. That will reinforce the message that people should be prepared to be open to as many job opportunities as possible and should be prepared to work full time for a full-time benefit. In other words, if people are prepared to take full-time benefits, they should be available full time to seek work. The existing official recommendation whereby Employment Service staff can instruct people to take certain steps to find a job will be widened under the new jobseeker's direction, and I welcome that. If unemployed people refuse all the help that is offered to them, it is right that the trained advisers should be able to require them to take opportunities for improving their prospects of finding a job.

I am sure that my hon. Friends and anybody else listening to the debate will have been deeply unimpressed by the way the hon. Member for Makerfield failed so dismally to welcome today's unemployment figures. Of course, any unemployment figure is too high if it means that people are actively seeking work but cannot find it. Nobody welcomes that, but the hon. Gentleman was so churlish that he did not welcome the reduction in unemployment.

Will the hon. Gentleman give his view, as a London Member of Parliament, on why there are 20 unemployed people in London for every one vacancy, even after today's figures? When will he start advocating for those people instead of being a sycophant to the Government?

I gave my views on that at the beginning of my speech. I am sorry that the hon. Gentleman does not understand the economics involved. No one welcomes unemployment; it is important to reduce it. But it is wrong to believe that we can buy our way out of unemployment—although that is Labour policy. The Labour party wants a tax on windfall earnings; Opposition Members believe, farcically, that that will do the trick. The Labour party has already tried to spend the money 11 times over and doubtless will come up with other ideas for spending it again. That is not a formula for improving the job prospects of anyone's constituents.

Unemployment has been falling and is lower here than in most of our European partners' countries. The European unemployment average is 10.5 per cent. of the population of working age. In this country, unemployment averages 8.2 per cent.; in Germany, it averages 8.4 per cent.; in France, 11.4 per cent.; and in Italy, 11.3 per cent. Of course it is important to give young people the best possible training opportunities to enable them to find jobs. In socialist Spain, youth unemployment is 40.3 per cent.; in the United Kingdom, it is 17.2 per cent.—quite a difference. Suggesting that those differences have nothing to do with the policies followed by the Governments concerned is ludicrous.

Will my hon. Friend comment on the fact that we have heard nothing from the Opposition on whether the stakeholder economy will increase or reduce unemployment? Why cannot the Opposition tell us whether it will reduce unemployment by 500,000, or a million, or any other number? Is it because "the stakeholder economy" is an empty and meaningless phrase uttered by the Leader of the Opposition?

As a vegetarian, I find the idea of the stakeholding society offensive—but my hon. Friend has hit the nail on the head. It is designed as an empty and meaningless phrase, among many other such phrases. The leader of the Labour party, interviewed on the television on Sunday, seemed to think—

Order. Before the hon. Gentleman continues, may I inquire how this relates to the regulations under consideration?

The number of people seeking jobs, Madam Deputy Speaker, is directly affected by the handling of the economy—but I agree that I have gone a long way down this road. I had intended to finish soon, but I was being egged on by my hon. Friends who, as ever, have been a bad influence on me.

We are told that the Labour party has embarked on a project to "think the unthinkable" on social security. The party has proved by its attitude to this subject that it has not yet got as far as the first word of that phrase. If Opposition Members started to think, they might come up with good ideas. So far, they have not even begun.

5.12 pm

I speak in today's debate because of the bad news given to me about the employment figures in my constituency. I welcome the fact that unemployment generally is falling, but I regret that today's figures show that it has risen in my area. That is because of redundancy problems; most recently, 520 people lost their jobs at a local steelworks. Most of them will not register in the figures until January, however. On top of that, there will be another 100 redundancies in a local foundry unless a buyer for it can be found.

Like many hon. Members, I take a keen interest in the jobseeker's allowance. I have read the regulations, and I am interested in how they are supposed to work. I am forced to the conclusion that they will not significantly help to bring people back into work. The main way to increase the number of jobs in an economy is to increase demand. In this and many other countries, however, the right sort of demand has been absent. Increasing consumer demand has not led to increased demand for British goods; it has merely sucked in imports throughout the economic cycle. According to the most recent trade balance figures, manufactured imports are running four percentage points ahead of exports. That represents a crisis for the British economy in what must be the longest recession, properly defined, since the war.

Even if these regulations were brilliantly thought out, novel and expeditious in their application, they would not significantly help people back to work. The Government must take responsibility for the debilitation of thousands of people, young and old, who have become disenchanted and lost all understanding of the world of work. People's understanding of the society in which they live may be summarised by the three Ws: work, wealth and welfare. We have to work hard to create the wealth that we can then distribute in the form of welfare. There is no purpose in going to work apart from improving the condition of all the people of this country through the distribution of welfare, in the widest sense of that word.

The hon. Member for Harrow, West (Mr. Hughes) talked about the earnings from windfall profits. That was a contradiction in terms. If they are a windfall, they have come, by definition, accidentally or fortuitously. [HON. MEMBERS: "No."] That is how your Government defined the word when they decided to tax the windfall profits of the banks. I am doing no more than your Government did at the time—

Order. I remind the hon. Gentleman that he should be addressing me.

I apologise, Madam Deputy Speaker.

The hon. Gentleman is banging on with commendable compassion about unemployed people. He seems to want to do more for the unemployed, but if a Labour Government were returned to power they would introduce a minimum wage which, it has been said, would make 1.7 million more people unemployed, because of differentials erosion and because employers would not be able to afford to employ them. How would the hon. Gentleman explain that to his constituents?

I shall deal with that directly in a moment, but I want to make some progress with my speech.

The Government have succeeded in breaking the link, especially for young people, between work and welfare. It is worth considering how many young people understand where wealth and welfare come from. Many of them see wealth and welfare as a girocheque dropping through the door on to the mat. They are disconnected from the process of work and wealth creation, and that is wholly due to the policies of this Government. Trying to mend the failure by these regulations—they did not appear in the Bill; Ministers claim that their details could not have appeared in the Bill—is disgraceful.

The Minister claims that the regulations have been forced on him because of printing errors, at least in respect of the arithmetical formula used. One wonders whether he should have got out of bed this morning. It is farcical to introduce regulations and Bills that are incomplete. It is not fair to the people who are forced for the foreseeable future to depend on benefits.

We know the purpose behind the Government's welfare regulations. They are not about targeting; one could make a respectable case for targeting limited resources. The whole purpose is to save money. That is what they will be doing and that is their intention with this new set of regulations.

As we all know, the social security and unemployment regulations are already so complex that there is considerable and continuing underclaiming. With the type of formula being brought before us today, the people who have to administer the system will not properly understand what people are entitled to. They simply cannot unravel the regulations to ensure that people are cared for properly by the unemployment benefit offices.

Unemployment has increased massively. There are a million fewer jobs than when the Conservatives came to power. What has been made up in part-time jobs in no way compensates for the loss of full-time jobs, particularly in west midlands constituencies such as mine, where there has been a proud history of innovation, scientific endeavour and engineering and technology to create the wealth from which we have all benefited for so many years. This country has been losing jobs in manufacturing industry year on year—200,000 every year. How do we count that unemployment?

The hon. Gentleman lists a catalogue of gloom and doom about the employment statistics. I have the figures for his constituency here. In December 1994 there were 4,914 unemployed, whereas in December 1995 there were 4,433. That represents a drop of almost 10 per cent. I hope that the hon. Gentleman will welcome that.

I was moving on to that very point. It is an excellent illustration of the way in which the Government have tried to fiddle the unemployment figures.

It cannot be a fiddle. Those are the figures.

I am telling the hon. Gentleman that it is a fiddle and a farce. I shall give the real figures for my constituency. My figures were compiled by the economic development unit of the local authority, which takes them from proper census information rather than from the imagined benefit claimants on which the Government's figures are based.

Another 149 people have been claiming benefit in my constituency—149 additional people on top of the total of almost 4,000 men and women claiming benefit. I shall give the House some of the ward figures, which are accurate because they are based on proper, up-to-date information about people who are of economically active age, but who are not in work. In the Heath Town ward, 25 per cent. of all men are unemployed. In the Low Hill ward, 25 per cent. are unemployed. Those are the real figures.

However one tries to disguise the fact, the evidence of people's eyes and their experience shows that they are unemployed now, they were unemployed 12 months ago and, sadly, in 40 per cent. of cases they have been unemployed for much longer than 12 months. That is the sort of problem that we have to face.

Is there not one loophole that states that anyone over the age of 50 who has not been gainfully employed for 10 years does not come under the rules? Surely that will help the Conservatives. After the next election, half their Members will not come under the criteria. They will still be able to claim.

My hon. Friend is right. That helps the Conservatives. It is appalling for my constituents and for everyone else's, but that is not part of the equation that they bring before us today, or any other day.

Let us move on and find out how else the Government have made the position so much worse and how much more they are spending on benefits and unemployment pay.

Order. I am sorry to interrupt, but we are dealing with the regulations that relate to the jobseeker's allowance. Although it is in order to adduce various examples, I hope that this will not become a general debate on unemployment, because that is not the purpose of this afternoon's debate.

I take your guidance on that matter, Madam Deputy Speaker. I am trying to show that the regulations will not assist in the way in which the Government say they will, because the problems lie deeper and, to some extent, are buried elsewhere. The regulations simply do not tackle the matters that the Government claim they are tackling. They will not assist my constituents and many others back into work, which is the express purpose of the regulations.

The question is: how much money is having to be spent and how could it be reduced without attacking people's benefit? The drive towards market rents in the local authority and housing association sectors means that rents have doubled and trebled. People are forced to stay unemployed because, if they work for the very low wages that some people are earning, they will not be able to meet any of the costs that they normally can because their benefits will be withdrawn. They will be in what we used to call, and still call, the poverty trap, because they will not get back into work, and they will not be assisted by the regulations.

I know that other hon. Members want to speak, but I want briefly to mention the way in which the Government deal with the problems. Boardroom scams in the privatised industries have been mentioned. This may be an old-fashioned, old-Labour way to put it, but I am proud to be associated in that sense with the sentiments that I am about to express. When a chief executive of a nationalised industry is given £250,000 in bonuses—earned or unearned—it is called market forces, and it is because we need to attract the right calibre of people into those jobs. They do not need a jobseeker's allowance—it is not on the cards. But when the labourer asks for an extra 2 per cent., it is a scandal and the ruination of the economy.

The hon. Member for Ribble Valley (Mr. Evans) mentioned the minimum wage. He is not correct in saying that it would lead to X million job losses. That is not the evidence, which is that, in the short and medium term, employment would increase. The evidence shows that demand would increase within the economy and that, because that increase would be from those on the lowest incomes, home-manufactured goods would be purchased in the shops and in the high street, which would assist in getting people back into employment. That will happen when the labour market gets back into balance and people can properly demand a reasonable day's pay for a reasonable day's work.

On a point of order, Madam Deputy Speaker. Earlier in the debate, I drew the attention of the House to the report of the Joint Committee on Statutory Instruments of yesterday's date, which pointed out printing errors in the regulations as laid before the House. Perhaps I made slightly heavy weather of dealing with the matter, but I did so in a spirit of openness, as I hope the House will accept. Labour Members expressed some concerns about the approach that I suggested. I have since had the benefit of conversations with Opposition Members, the authorities of the House and even more mysterious figures whom I dare not even mention because their anonymity is total. All the advice is that, since it is a printer's error and the Joint Committee's report makes that clear, it will be in order for that error to be corrected. If the House approves the regulations at the end of the debate, it can be corrected. That would be proper and that would be accepted. I hope that Opposition Members can accept that. I have raised the matter in good faith and that was the advice that I received. I hope that the House will be prepared to accept that that is how we should proceed in this important area.

Further to that point of order, Madam Deputy Speaker. I can confirm that the hon. Gentleman has had discussions with me and with what he claims to be other mysterious persons on the Opposition Front Bench. We have accepted his explanation in good faith. We have checked all his pockets, his wallet and other parts of his anatomy to ensure that he is not sneaking anything else through. On the basis that we could find nothing, we have accepted that this is simply another Government error—another bungle.

Order. That seems to deal with the matter satisfactorily. I call the hon. Member for Rutland and Melton (Mr. Duncan).

5.28 pm

The rather large batch of regulations that we are debating today has the merit of fitting coherently into the Government's intellectual path in their reform of social security. Nothing points out more clearly the benefits of the Government's wider economic policy and the detail of the regulations under discussion than the fact that unemployment figures have fallen for the 28th month in succession. That is important to every individual who manages to get a job, although, sadly, the Opposition have acknowledged it so begrudgingly. The Government's economic policy is working, and the regulations that we are studying today will help that policy work further to the advantage of individuals to whom getting a job actually matters.

I thank the hon. Gentleman, to whom I always listen with interest. Does he realise that the regulations are not yet in force, therefore, by definition, they cannot possibly be working.

Had she listened carefully, the hon. Lady would realise that I described the regulations as an extension of an economic and social security policy that is already in practice. It operates under the watchful eye of the Secretary of State, whose reforms have been to the advantage of the economy generally and the many individuals who have secured a job and have concentrated benefit on those who are most in need. It sits in stark contrast to the intellectual dishonesty of the Opposition that has been in clear evidence today.

The Opposition say that the Government are financing mass unemployment. That slogan is designed to deceive. It is a concoction of two economically illiterate concepts in an attempt to convince the public that Opposition policies would somehow deliver more employment. Regulations that properly assess how the labour market and the housing market work will deliver the progress that we seek.

When the hon. Member for Makerfield (Mr. McCartney) accuses us of financing mass unemployment, is he saying that he would reduce what I loosely call unemployment benefit? Is he saying that he would stop paying those who are unemployed and compel them to take jobs and that if Labour were in government resources would be diverted into forcing people to accept work in sectors for which they are not appropriately trained? That is economic nonsense. The hon. Gentleman and his colleagues know that it is a deceit. They should go back to the drawing board and devise policies that are intellectually more honest.

The reforms are good because they have been thought through in considerable detail, which is here for us all to see in rather too many pages of regulations. None the less, the regulations are designed to work.

The House will recall that I spoke in the debate on Second Reading of the Bill that produced the regulations. The jobseeker's allowance has much merit in simplifying the benefit system and combining unemployment benefit and income support into a single benefit. I regret that Opposition Members have not welcomed the simplification of a system that has caused many distortions in the past. The reform is designed to address the distortions and remove the traps and disincentives that many people have faced in the past.

The regulations improve incentives to work. Perhaps I find a common cause with the hon. Member for Makerfield in seeking regulations that do not give individuals an undue incentive to remain out of work and on benefit. He and I agree on that, and it is the purpose of the regulations, yet he does not give them the welcome that they deserve.

Has the hon. Gentleman read them?

I am asked whether I have read them and the answer is yes. There are 200 pages of regulations and I have taken the time to read them all. They did not make the most exciting reading, and are slightly more expensive than Mogadon, but I have gone through every page. I even read the printing error. The Opposition made heavy weather of the printing error, but the format of the equation is obvious further down the page. I am glad that the Minister and the Opposition spokesman have reconciled their differences and reached an accommodation to allow the regulations to continue.

I am concerned that the regulations are so extensive. I have an innate objection to regulations and, wherever possible, would like fewer, simpler, easier and less complicated ones. I rather feel for the employee at the Benefits Agency who has to administer this rather complicated, long and extensive series of documents—the regulations that we are debating today.

There is much to grasp and many rules over which there is bound to be dispute. When regulations are so complicated and designed by the best brains in the civil service in an attempt to cover every eventuality, there are bound to be problems. However, they are worth swallowing—albeit they are a lot to swallow—to deliver the benefits that Government policy rightly considers will work to the advantage of those who are unemployed and seeking a job or income support.

Although Conservatives take the view that Government involvement in such matters should be as limited as possible, the Opposition do not appear to share the same restraint. Opposition Members should realise that were regulation—in this case, properly designed for a good cause, so I welcome it—applied to other areas of Government and policy, it would produce a bureaucratic nightmare. It is in the nature of the beast that state involvement will produce just that, and the less of it we have, the better.

I confess that I would like the language and the drafting of the regulations to be much plainer and simpler. The House should address with a great measure of concern and concentration the fact that the convoluted language that bedevils so much of our legislation is translated into practice not by lawyers, but by people making decisions about delivering benefits to people in genuine need. Inasmuch as the regulations have been drafted with that in mind, those who produced them have done a good job, but we must be watchful in trying to work out the detail. The devil is in the detail and regulations should be as simple and practical as possible.

The regulations are an improvement on what went before. I found, from my heavy reading of them and my study of the Act on which I spoke, that they remove some of the distortions that have crept into the labour market and the housing market to the disadvantage of those who genuinely seek work and to the advantage of those who wish to make the most of the regulations and claim money from the state in return for no work at all.

Whenever the state becomes involved, the labour market faces certain distortions. We judge that the distortions that are caused by paying unemployed people are worth while in order to alleviate the pain of unemployment, but we have to beware of further distorting the labour market. The combination of benefits in the regulations draws together the incentives and disincentives in a far more practical way, to the advantage of a freely working labour market.

I draw attention to the regulators relating to housing costs, which does the same in the housing market. Contrary to what the hon. Member for Wolverhampton, North-East (Mr. Purchase) said about the grave distortions introduced in the housing market by the housing benefits system, the way in which the regulators will apply to younger people represents an improvement. Otherwise, there is an incentive—that also applies to regional variations—for people to take the most and for rents to rise to the level of the benefit available, which ultimately does no one any good.

One effect of any package of such regulations is that people learn how to use them. Regulations are constructed on the assumption that people will behave decently and claim only when they genuinely need to do so. Nevertheless, when state money is available, some people will realise that there is a way of getting some of that money and will use regulations and the system to get money for nothing if they can. The detail in the regulations is effectively designed to ensure that risk is minimised. I commend that approach because whereas the Department of Social Security properly wants to attack fraud, it has been cleverer of late in designing regulations that can be practically applied, to ensure that a system designed to help people in need cannot be abused.

After 28 months of successive falls in unemployment, the House should pause for a moment to consider what would happen if these regulations were being introduced in a different climate and under a different Government. Contrary to Labour's claims, if its policies of a social chapter, minimum wage and so-called stakeholding were implemented—under which trade unions would be back in control and demanding so much from the Government in return for power—the total number of unemployed would be far higher than today and the figure would be rising, not falling. Labour has had great fun over the past couple of years in trying to convince the electorate that it would deliver an economic miracle. The public are gradually waking up to the deceit contained in many of Labour's slogans and so-called policies. Economic reality is dawning again, and the public realise that our policies will deliver the prosperity that this country is increasingly enjoying.

5.41 pm

I will concentrate mainly on the jobseeker's regulations because they are the most controversial, but I will speak briefly to other regulations as well.

The Employer's Contributions Re-imbursement Regulations are welcome but are likely to get an insufficient number of long-term unemployed back to work. Unfortunately, most long-term unemployed are perceived by employers to be a liability. I doubt that the average of £375 per employer will encourage many employers to take on that many unemployed. A proper benefit transfer scheme is needed, which would get the long-term unemployed back into work.

The Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations are also welcome. They recognise the difficulties that confront unemployed people when they take a job, such as the extra money needed to travel to and from work and other difficulties experienced in the first few weeks of employment. The Social Security (Back to Work Bonus) Regulations are welcome but do not go far enough, and how they work in practice remains to be seen. I imagine that they could create an administrative nightmare, and we will have to monitor those regulations carefully.

The most complimentary remark that I can make about the Jobseeker's Allowance Regulations is that the Government had the good sense to delay implementing some aspects of them until October—those relating to the computer system and staff training in particular. Anyone who followed the fiasco of establishing the Child Support Agency's computer system can only welcome that decision. I hope that the computer system will be got right in this case. Otherwise, the jobseeker's allowance will risk being in the same mess as was caused by the implementation of the Child Support Act 1991.

The Government are not delaying the majority of the jobseeker's allowance provisions—such as the non-means-tested reduction in payment from 12 months to six months, which will go ahead in April. Partners of unemployed people, usually women, will be encouraged to leave part-time employment even sooner, to ensure that their husbands or wives have entitlement to benefit. Even more important is their entitlement to passported benefits. Many people entering employment discover, having lost passported benefits, that they were better off out of work.

At the heart of the regulations is the desire to coerce people back to work. Since 1986 the Government have introduced stricter tests and more benefit sanctions. In 1986, the sanction for leaving a job or being dismissed for misconduct was increased in terms of non-payment of benefit from six to 13 weeks, and doubled in 1988 to 26 weeks. Stricter measures affecting availability for work were introduced, and now the Government have introduced the jobseeker's allowance. We have seen one stricter regulation after another.

The regulations will make all Government employment and training schemes compulsory. Regulation 25 states that entitlement to the jobseeker's allowance will cease if the person fails to attend a training programme. Is that power really necessary? Are not the Government just conceding that many training schemes offer little hope of employment after completion? I would like an answer from the Minister when he winds up. Instead of coercion, surely the answer is better training and better employment schemes that people want to join.

Some of the conditions imposed on people actively seeking work relate to their appearance. Again, I would like the Minister's clarification. Will a young man with a ponytail have to cut it off? Will a young woman have to wear make-up, a shorter skirt or a longer skirt? Who will decide—the interviewer? Will guidance be issued? Will the interviewer have to provide the jobseeker with specific guidance on his or her appearance for a particular job?

Has the hon. Lady noticed that regulation 18(4), to which she refers, introduces a new criterion for disallowing benefit—that of an inability to fill in the application form properly? Is not that worrying, particularly when there is the problem at the lower end of the labour market of people being unable to read or write properly?

I totally agree and share the hon. Lady's deep concern. People who are now denied incapacity or invalidity benefit and who go to a jobcentre to sign on for the jobseeker's allowance may encounter extreme difficulty in completing the necessary form.

Perhaps I may end that controversy by directing the hon. Lady to regulation 18(4)(b). The act that causes disallowance to be triggered is spoiling the application—not something due to disability, but a deliberate act for the purpose, of not getting a job. We are not talking about people who are unable to complete the form or who have difficulties with it.

I am grateful to the Minister, but is there a reference to "deliberately" spoiling? I believe that there is not. Unless there is such a reference, the provision could be interpreted to apply to anyone who is unable properly to complete the application form. If the Minister intended the provision to mean deliberately spoiling the application form, surely he should have made that clear. He did not.

I did not read the whole of the relevant provision to the hon. Lady. If she reads the concluding words, she will find the clear proviso:

"unless those circumstances were due to reasons beyond his control."

In other words, spoiling must be intentional. It cannot arise "due to reasons beyond" someone's "control", such as inability to write.

I do not want to delay the House because I know that many hon. Members wish to speak. I do not think that the provision to which the Minister has referred gives a guarantee. I would like to see "deliberately" inserted. I shall move on because time is short.

One of my most serious concerns is that the regulations will force claimants into taking low-paid work. Claimants will not be able to say that they will work for a certain wage. They will be debarred from taking that approach even if the wage on offer is inappropriate to their skills and financial circumstances.

The idea of a public employment service matching individuals to appropriate vacancies has now been abandoned. We are seeing an attempt to drive more people into low-paid employment.

It is right, of course, that some people should take work with lower wages than those that they were receiving before becoming unemployed.

I am.

Of course some people should do that.

I am concerned that individuals will not be able to opt out. That is entirely wrong. We know that individuals could give specific reasons for being unable to take a job at a certain wage level.

The regulations will encourage more employers to pay low wages. They know that the unemployed person will be forced to take their jobs whatever the wage. With the abolition of the wages councils, the position is even more serious.

Conservative Members have been talking about the taxpayer. The consequence of the regulations is that the taxpayer will be asked to subsidise the low-paying employer. That cannot be right. The JSA will increase employees' financial hardship. What they need is encouragement, training and proper job opportunities. They do not need further coercion and benefit sanctions.

5.52 pm

1 am glad to have the opportunity to speak briefly on the regulations, especially on the Jobseeker's Allowance Regulations 1996. I was delighted to hear the speeches of the hon. Members for Makerfield (Mr. McCartney) and for Wolverhampton, North-East (Mr. Purchase). They prove that the old Labour party is still alive, kicking and well. Employers throughout the country should be wary of the prospect of a future Labour Government when a social security spokesman makes a speech of that sort.

There is a fundamental difference of philosophy between the two sides of the House. We believe that the social security system should provide for those in need. But those in need, and genuinely claiming it, need to help themselves, so that they can organise their affairs and do not claim benefit indefinitely. The Labour party is content for the present system to remain in place so that claimants can remain on benefits for as long as they want, or for the rest of their lives.

Under the present system, a millionaire can claim unemployment benefit for up to a year without being means-tested. That is daft. I recently participated in an audience-contribution television programme. The spokesman who appeared on behalf of the Labour party defended her party's wish—this was her interpretation of it—to have universal benefits available for all. Half the audience was unemployed and the other half consisted of floating voters. When I said, "It is you people who deserve benefit if you are eligible for it, not every millionaire in the country," they fully agreed with me.

I think that the country will agree with that approach. We should target the huge amount of benefit we pay to those who genuinely need it, not to millionaires. It is—[Laughter.] Labour Members laugh, but the country will make a judgment in due course. If Labour Members oppose the regulations, they must tell us how they will find the extra £4 billion to pay for the present system. Implementation of the regulations will save £4 billion. If Labour Members do not like them, what will they put in their place?

According to the Red Book, we shall spend £98 billion on the social security system this year. It so happens that income tax raises £68 billion and corporation tax £20 billion. The two taxes raise about the sum that we spend on social security. Without the present system, we would not need income tax or corporation tax. That demonstrates the scale of our expenditure on social security.

We are not advocating, of course, the abolition of the social security system, but we want to ensure that what we spend on it is directed to those who really need it. Surely—[Laughter.] Again, I do not know why Opposition Members laugh. The regulations make eminently good sense.

We are channelling two benefits into one. In other words, we are simplifying the system. The process will be of benefit to claimants, because they will have to complete only one form and go to only one office to obtain their benefit. The regulations will simplify and reduce the cost of administering the system. That is also important. We shall need to have only one office, as it were, one set of regulations and one set of annual upratings under the new system. That must make sense.

Conservative Members are all keen on reducing social security fraud. If we simplify a system, we are bound to reduce fraud. I believe that I have common cause with the hon. Member for Makerfield and others, because I accept that the vast majority of our people want to work. Unfortunately, a few are prepared to work the system. That being so, we must do all we can to ensure that the system cannot be defrauded.

It must be right that those who are unemployed for more than 12 months must be made to go on one of the myriad of schemes that are set out in the regulations. Indeed, the regulations propose an element of coercion to embark on such schemes. It cannot be in the taxpayers' interests or those of claimants that they, claimants, should be able to sit at home, go to the office once a week to draw money and have to do nothing else for the rest of their lives. That culture is not in the interests of the country or of claimants.

I welcome the raft of extremely sensible schemes set out in the regulations. I ask my right hon. and hon. Friends carefully to examine the Labour party's proposed windfall tax and the changes that it presages in introducing a workfare system. I have worked closely with my hon. Friend the Member for North Norfolk (Sir R. Howell), and I know that the idea of a community job creation programme is not a new one, although the Labour party claims it as its own. He produced two papers in the early 1980s, called "Why Work?" and "Why Not Work?", long before the Labour party had even begun to think about the subject.

I would like to see a more general element introduced into the community workfare scheme. Two such schemes have been introduced in north Norfolk, but at large cost, because they are trial schemes. I believe that, through the private sector, we could introduce a workfare scheme that would benefit both the unemployed and the country. We would all be a lot better off morally and spiritually, if not economically, because such a scheme is not cheap, as the Labour party has proved by its windfall tax.

The problem with a windfall tax, as has already been proved this evening, is that one can use it only once. The Labour party has so far pledged to use it about 11 times. I do not know how many more times it will pledge to use it before the election. It is also completely economically illiterate, because one cannot spend the money twice. If one takes the money away from the companies, the utilities that the Labour party proposes to tax—I am straying from the subject, Madam Deputy Speaker, while you are not listening—they will not be able to reinvest in the infrastructure, and then it will complain about leaks next week.

I come back now to the regulations, Madam Deputy Speaker.

Not before time.

I take note of your strictures, Madam Deputy Speaker.

I now come to housing benefit regulation 5. Housing benefit is one of our single most costly benefits. It will cost us a huge £12.5 billion this year, and that figure is rising rapidly. Until we recently introduced the housing benefit reduction scheme, there was no incentive whatever for local authorities, which have to administer that costly scheme, to investigate the claims to see whether they were genuine or not. The scheme that I have just described will encourage local authorities to investigate claims. The regulations before us will further that process.

It is vital that we find a mechanism for people to get off the raft of benefits and back into work. There is no doubt that housing benefit is one of the greatest deterrents for people to go back into work. Under the present regulations, there is a huge, marginal tapering tax rate with which an unemployed person gets clobbered the moment he goes back into work. The thrust of Conservative philosophy is to reduce those rates, so that people have every incentive to take part-time jobs and to work gradually into a full-time job, which is what we all want.

Housing benefit has the additional stigma that it tends to be concentrated in what are called "housing benefit ghettos". I should like to see that slowly broken down. Our housing policy has a much more imaginative part to play. We can have much more imaginative mixed housing schemes, so that people on housing benefit can start to live among people who are in work and be part of that culture. I believe that the regulations further that aspect, but we should go further still.

Regulation 6 relates to national insurance payments. I warmly welcome the changes that were announced in the Budget, and the national insurance holiday for employers who take on people who have been unemployed for two years or more. Employers will get a national insurance holiday of 12 months.

The hon. Member for Rochdale (Ms Lynne), the spokesman for the Liberal Democrats, said that it was a small amount, but I think that some £300 is quite a reasonable incentive for employers to consider taking on the long-term unemployed. I am delighted that my right hon. and learned Friend the Chancellor is about to announce a general reduction in the rate of employers' national insurance, because I believe that the tax is a disincentive for businesses to take on new employees.

I am hopeful that, if—as should happen—we are re-elected after the general election, we will be able radically to cut the amount of national insurance, and, if necessary, put a small amount on corporation tax. That would help this country to become the enterprise centre of Europe that Conservative Members are determined it should be. I am determined that the regulations should enable us to build on the record number of people in this country who are.currently employed.

The Labour party derides and opposes the regulations, but there is no disputing the fact that more people in this country are in work today than ever before—almost 26 million people. If it opposes the regulations, it behoves the Labour party to tell the House what it would put in their place, and what economic policy it would follow to ensure that we have the lowest unemployment rate in Europe.

It is no accident that this country has the lowest unemployment rate in Europe, particularly among the young. The young people are the real people of tomorrow. We must ensure that we employ them, and the regulations will build on that. It is no coincidence that the countries that have a minimum wage have the highest rate of youth unemployment. Just look at what the Labour party would put in place of the regulations. It would put in place a minimum wage, which—

Order. The hon. Gentleman is becoming a little excited and is going off the point, so could I bring him back strictly to the regulations?

I hope that I am not getting excited, Madam Deputy Speaker. I am using my normal passion to ensure that the debate on these somewhat humdrum regulations is a little more easy to listen to, and I had hoped that it would encourage other hon. Members to take part.

I wholeheartedly welcome the regulations. It behoves the Labour party, if it opposes them, to tell us what it would put in their place; how much it would spend on the social security system; and how it would run the economy so that more people are employed.

6.5 pm

I agree that the passion of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) perhaps unhinged him from the debate on the regulations.

As hon. Members have said, many people, thankfully, are unemployed only for a short period. But others in our constituencies are unemployed for long periods and—although they have been on endless training schemes, the number of which they cannot recall—are still unemployed. To what extent does the bundle of statutory instruments that we are considering today help that group?

We are considering 10,000 lines of regulations in a little over 200 minutes. The hon. Member for Rutland and Melton (Mr. Duncan) assures us that he has read them all. We could be forgiven for thinking that the Minister has not, for it was the Joint Committee, not he, that spotted the errors in them.

There is a slight element of farce to the conclusion of our debate—that we have 10,000 lines of regulations to consider in under 200 minutes; and that we were assured that, although there was an error in them, if the Minister read the proper words on to the record, all would be well. He follows a long tradition of Ministers who produce regulations. Most social security legislation is followed by regulations that are amended before the regulations take effect. The Minister, by reading changes on to the record, broke that record.

There is, of course, another important lesson to draw from our debate tonight, as the population is being taught a very important lesson. The regulations tear up a contract that the Government made with those who contribute to the national insurance scheme.

The Government rightly draw attention to the decline in moral standards, the decline in honesty and the decline in the number of people who keep their word. Yet tonight we are debating regulations which teach people that, although they should keep those standards, the Government should behave differently.

The Government do not really understand the power of legislation. We have passed divorce law reform in the House that allows divorces to take place—for a contract to be broken—after only half the length of an average hire purchase agreement. Then the Government turn around and say, "We are immensely worried about the number of divorces." Today, we are passing regulations that teach people that it does not matter whether they keep their word—and the Government will turn around and say, "Isn't it appalling? More people are breaking their word."

We are required to make payments to the national insurance fund, and a contract was laid down in the previous regulations. The Act, and the regulation that has followed it, breaks that contract. We were paying for 12 months of unemployment; now, by edict, the Government are changing the period to six months. That means that all the people who made contributions expecting to draw 12 months' benefit will receive half that amount. The Government have broken their word.

In fact, the Act rather than the regulations that followed it changed the position. It is also questionable whether, strictly speaking, this was ever a contract in the normally accepted sense of the word; but I accept the burden of the hon. Gentleman's remarks. He must surely recognise, however, that nothing in the relationship between Government and people is set in concrete. Circumstances change.

It must be generally accepted in the political environment that Governments are free to make changes from time to time. It is for them to justify those changes, and, indeed, to live with the consequences. It cannot be right to suggest that, once an arrangement is in place, it can never be changed on the basis that it is to the advantage or disadvantage of those involved.

If this were a private contract, people would be able to enforce their rights in the courts. The courts would say that breaking the contract was improper behaviour. But we have a sovereign body here in the Chamber; the Government control the Chamber, and can therefore break their word. They could have said that all who made contributions expecting to receive 12 months' benefit could continue to draw that amount, whereas those who paid under a different contract from this day forward could receive only six months' benefit; but they have not said that.

The Government are breaking a contract, and breaking their word. That teaches the country a powerful lesson. When we are trying to teach children not to deface areas with graffiti and to keep their word with school, parents and friends, it does not help when the most powerful authority in the land decides to break its word because it is a sovereign body and, unlike any other state authority, can take such action.

I have considerable time and respect for the hon. Gentleman, but surely his argument applies to previous Labour Governments. It was a Labour Government who cut benefit from 18 months' worth to 12.

They were equally wrong, as would any future Government be who broke a contract.

What we are really debating is whether the national insurance fund is safe in Government's hands. That is why some of us have talked about stakeholding, and believe that those who have made contributions—both employers and employees—need to run the schemes themselves. The Government should not be able to put their sticky fingers into them.

Let me say a little about the word "flexibility". We were given an example of flexibility today: we found that there were errors in the regulations, and that the Minister wanted to read changes on to the record. We understand from certain faceless creatures that that is allowed. In general, we all like flexibility, provided that it does not apply to us. Today we are applying it to the unemployed—but I believe that, in important respects, the Government remain inflexible. Indeed, the regulations suggest that they are becoming less flexible in regard to the needs of the unemployed.

Under existing income support regulations, a couple who have been receiving benefit for more than two years are allowed a £15 disregard; under the regulations, that disregard is cut to £10 for everyone. Those in receipt of the £15 would have thought, "Yes, this is flexibility"—but presumably flexibility in the wrong direction, if the aim is to reintroduce people to the world of work.

Let me give a second example of flexibility working to the claimant's disadvantage. The regulations tighten controls on those who spend their time profitably while they are unemployed by undertaking courses: the 21-hour rule becomes a 16-hour rule. That is another Poor Law, allowing people to claim benefit only if they are doing nothing profitable. It represents flexibility from the Government's point of view, and inflexibility from that of the claimant.

My final example of inflexibility is the worst. Our economy increasingly involves households with no workers, and households with many workers. The benefit system is a major reason for that, and it is reinforced in the regulations. The partner of someone who is unemployed and receiving insurance benefit is free to work: indeed, it pays that person to work. Under existing law, as soon as the 52nd week is reached and the recipient is dragged down to means-tested benefit, it pays almost no partners to continue working; in fact, if they do so, they will be substantially worse off. So what happens? People think economically, and give up their jobs.

The Secretary of State has said that one of the most important reasons for the growing inequality in household incomes is the fact that people have unequal access to the labour market. On the one hand, there are many households without work; on the other hand—thank God—there are many households with many people in work. The regulations are driving an even greater wedge between the two groups.

We are discussing 10,000 lines of regulations, but what we are debating is how those regulations will affect people. The hon. Member for Rutland and Melton was right: most people, thank goodness, move quickly from one job to another. Others, however—because of their lack of skills, and because of their age—find that immensely difficult. All of us represent many people who have found it impossible for decades to secure work.

We no longer collect the information on how long people have been out of work. In a fantastically powerful passage in "Doctor Zhivago", the storyteller condemns the wicked Bolsheviks not just for killing Lara, but for not even keeping a record of where the evil deed took place. We no longer know how many people have been out of work for five, 10, 15 or 20 years.

Aspects of the regulations, the new Act and the training schemes should be supported, but I beg the House not to kid itself that, by limiting ourselves to the present agenda, we shall either solve the problem of unemployment or—much more important—help those who have stood the longest at the end of a very long queue.

6.18 pm

It is always a privilege to listen to the hon. Member for Birkenhead (Mr. Field). I know that he is sincere, although obviously I do not agree with all that he says.

I welcome the fall in unemployment about which we have heard today. I consider it good news for those who have been unemployed even for a short time: unemployment is a worry for them if they are not certain of securing employment immediately, although two thirds of those who become unemployed will find jobs within six months. Their circumstances must be stressful for them and their families. Unemployment is an individual tragedy for each unemployed person. I am fortunate because unemployment is low in my constituency, but I am not complacent because, as the hon. Member for Birkenhead said, we are talking about people and about individual tragedies, stress and worry, and that applies even if there is only one unemployed person in a constituency.

As well as this month's drop in unemployment, I welcome the drops that we have had in the past 27 months. I hope that we shall be able to welcome unemployment falls in the months to come. We must make sure that we have policies that allow our businesses, especially the smaller ones which created so many jobs in the 1980s, to be able to create jobs in the 1990s. If each of those businesses took on just one extra person, there would be no unemployment problem.

It is of little consolation to the 8 per cent. of people who are unemployed to hear comparisons with France and Spain where far more people are unemployed. That 8 per cent. of people live in the United Kingdom and they are interested in our policies to try to get them jobs and keep them in employment. The hon. Member for Makerfield (Mr. McCartney) had an opportunity to welcome the drop in unemployment in his constituency. Even over the past 12 months, it has gone down by 7.1 per cent. and, since 1992, it has gone down by 34.8 per cent. I acknowledge that, during the recession, there was a massive increase in unemployment, but we must welcome the current trend. I hope that other hon. Members who speak in the debate will welcome the drop in unemployment in the past few years.

The regulations are complicated and there are many of them, but we have to guarantee that those who implement them have the best available training so that those at the receiving end of the rules and regulations will get a fair deal.

The hon. Gentleman demonstrates a commendable worry about the unemployed. Why is he supporting regulations that increase coercive measures and apply them across the board to everybody rather than targeting them at those who are cheating the system? How can he welcome that while at the same time pretending that he is concerned about the unemployed? The regulations attack the unemployed rather than the causes of unemployment.

Of course they do not. The hon. Lady had an opportunity to speak about unemployment in her constituency dropping between December 1994 and December 1995 from 5,298 to 4,827 and about a drop of 17.4 per cent. since 1992, but we hear nothing about that.

The regulations help those who are looking for work. The jobseeker's allowance is changing the culture of unemployment. I was on the Standing Committee that examined the legislation and we spent many happy days going through the Bill that led to the Jobseekers Act 1995. I welcome the Act and the fact that we are able to discuss the rules and regulations. Opposition Members had an opportunity to talk about the back-to-work bonus that is paid to people who use the stepping stone from unemployment to part-time employment. Part of the problem faced by those people is the obvious one of losing benefit and income support. It applies pound for pound at an early stage after 10 and a bonus of up to £1,000 will be paid to people who move from benefit to full-time employment. That money will be extremely valuable at the time that they enter full-time work. They get it when they need it most, and that is an imaginative way to help people to escape from the benefit or poverty traps that too many have experienced in the past.

Hon. Members have spoken about people who are workshy. I am the first to admit that there are few such people. The vast majority of people—92 per cent. of the working population—are in work. I recognise that only a small percentage of those who are out of work are not interested in any work whatever. The regulations will help them. We speak about appearance and ask whether the unemployed are putting enough energy into looking for work. That is a proper question because all hon. Members want to ensure that the available money will be targeted at those who need it. Therefore, those who are not serious about seeking work ought to face sanctions, and that is exactly what they will face under the regulations.

Earlier in the debate, we spoke about people who seem to spend 100 per cent. of their time on demonstrations, one of which is being held at the site of the proposed Newbury bypass, where demonstrators are living in trees. The Minister said that such people would face exactly the same rules and regulations and scrutiny as anybody else. I was delighted to hear that, and I hope that those who are enforcing the regulations in Newbury and in other parts of Britain and who witness such demonstrations, where it is obvious that some of the demonstrators have committed 100 per cent. of their time to demonstrations rather than to looking for work, will ensure that they face the full rigour of the regulations. If some of those people spent as much energy looking for work as they spend demonstrating up trees, they would not be in receipt of benefit.

In an intervention during the speech by the hon. Member for Birkenhead, I said that the benefit rules were being simplified by bringing unemployment benefit and income support together and by reducing the time from 12 months to six months. That is the continuation of a policy of a previous Labour Government, and it is right. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) spoke about millionaires and those who are extremely wealthy because of a good pay-off from a previous job. Those people would be able to get some of that money for an extra six months, but the Government have a duty to all taxpayers to ensure that money is targeted at those who definitely need it, and a means test after six months is the appropriate way to do that.

The jobseeker's agreement on page 30 of the regulations places a responsibility on those who are seeking work to demonstrate that that is exactly what they are doing. It is useful for people in the Employment Service to be able to see what their clients are doing so that if there are deficiencies, whether in the CVs or the letters that people are sending out, they can be picked up at an early stage and people can be given assistance to look for work. That is an onus on the Government under the contract. The legislation is not a draconian measure saying, "We do not trust the unemployed." It is a way of bringing the Employment Service and its clients together to see how one can help the other.

We have a responsibility to taxpayers because it is their money that is being utilised to pay unemployment benefit. There is a responsibility on those who seek work and a responsibility on the Government. We have heard a good deal about training, but it is pointless to say that we will cajole people into training that they would prefer not to do while at the same time not providing the schemes that will he absolutely necessary to give such people the opportunities that they seek. A marvellous book called "The UK at Work", which was published by the former Department of Employment, details some of the schemes that are available. Programmes in 1995–96 offered opportunities to almost 1.5 million people. We must ensure that such programmes are available.

If one had to be critical about those programmes, one could say that there are too many of them, and that, perhaps, many people find them too complicated to know what is available; but I welcome the fact that they are available for those who are seeking work.

I apologise for not being here for the earlier part of my hon. Friend's speech, but I have greatly enjoyed the remarks that I have heard. Is he aware of the appalling problems faced by tourist resorts, especially in constituencies such as mine? He may have noticed the rapid and incredibly large increases in housing benefit and unemployment benefit in the past five years. Does he share my concern about the way in which tourist resorts continue to be affected by such benefit problems and to be a magnet for people who come to them, often from all over the United Kingdom? They do not genuinely look for work, but are an appalling strain on the tourist industry. Does he not think it time that we dealt with that problem?

I am extremely grateful to my hon. Friend. Obviously, it was his loss that he did not hear the first part of my speech, but he will, no doubt, have the opportunity to read it tomorrow. I know that he is a doughty fighter, not only for people who live in his constituency, but for people who visit it. It is vital that tourist resorts are able to present a picture that will attract tourists and not people who are obviously trying either to avoid work or just to claim benefits. I know that he has been working hard on that matter with a number of other hon. Members who represent seaside resorts.

We have heard so much whining—we are still hearing it and, no doubt, we will continue to hear it before the end of the debate—from the Opposition. The regulations aim to increase opportunities for jobseekers. We hear that the Labour party really cares for unemployed people, but we know that its measures would wreck jobs. We hear about the introduction of the minimum wage and of the social chapter. The hon. Member for Wolverhampton, North-East (Mr. Purchase) disputed that view and said blindly that the minimum wage would create more jobs, but even the deputy leader of his party has said that there would be a massive shake-out if a minimum wage were introduced.

It has been estimated that, if the minimum wage were introduced at £4.50, because of differentials, 1.7 million people would become unemployed. We need an enterprise economy that is backed up by a jobseeker's allowance which will help people into work, not policies that will throw people on to the dole. That is what they would face if the Opposition ever came to power.

6.31 pm

We are debating five sets of regulations, principally the Jobseeker's Allowance Regulations 1996. The point has been well made that the way in which we deal with regulations is unsatisfactory. That is especially true of those regulations, which are 160 pages long and more extensive than the original Bill, were laid before the House only at the end of December, are to be debated tonight in less than four hours and, crucially, are unamendable—at least by Labour Members. Suffice it to say at this late stage that I hope that we will introduce more sensible ways of dealing with regulations in the House to enable better parliamentary scrutiny on behalf of our constituents, to whom these matters are critical.

The main regulations refer to the jobseeker's allowance, but I shall briefly deal with the other regulations, which have not had proper debate in the time available. The Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations amend the Housing Benefit (General) Regulations 1987 and the Council Tax Benefit (General) Regulations 1992. The new regulations extend housing benefit and council tax payments for four weeks to people who have been out of work and subsequently start work. That is clearly welcome.

Regulation 6 inserts new schedule 5A into the housing benefit regulations, and regulation 14 inserts a new schedule into the council tax benefit regulations to allow for extended payments. Eligibility is limited, however, to certain categories, which exclude one important group of people: the chronically sick or disabled who move into work. Regulations 6 and 14 make no provision for extended payments for people who move off incapacity benefit, severe disablement allowance or income support where a disability premium is payable on the ground of incapacity for work. Will the Minister explain the reasoning behind that exclusion and give a commitment to review the scheme's progress with a view to extending it to other groups? There are other points on those regulations to do with the linking rules and the way in which claims are processed, but I shall write to the Minister on those for detailed comment.

The Employer's Contributions Re-imbursement Regulations 1996 are welcome. However, regulation 2 provides for circumstances where someone is to be treated as entitled to jobseeker's allowance for two years immediately before employment. That can include periods when the claimant was in receipt of a training allowance, a carer or a lone parent. Again, there is no mention of disability. Will the Minister agree to review the position at the earliest opportunity with a view to extending the national insurance contribution holiday to employers recruiting disabled people who return to work?

The Social Security (Back to Work Bonus) Regulations were not even laid until last Thursday, so limiting even further the amount of time that hon. Members have had to scrutinise them. Clearly, the back-to-work bonus is the element of the jobseeker's allowance that the Government have promoted most. Although that bonus may receive a cautious welcome, it is no more than meagre window dressing of the whole range of measures. I shall do no more than quote Samuel Brittan, who said in the Financial Times on 20 October 1994:

"The scheme is typical of the minimalist reform that civil servants with the Treasury breathing down their necks, produce for Conservative ministers".

Declaring earnings and calculating and allocating the bonus will require complicated and costly administrative and technical procedures and could result in disputes between claimants and the Employment Service. Will the Minister confirm that all the necessary administrative arrangements, the computer system required and the training of staff to deal with the back-to-work bonus are in place and will be ready for implementation in October?

The main regulations relate to the jobseeker's allowance. As we have heard in elegant speeches from Labour Members, the crucial aspect of the new regulations is the benefit cut from 12 to six months, so moving people at an earlier stage to means-tested benefits. That is being introduced at a time when national insurance contributions have risen by more than 50 per cent.—from 6.5 per cent. in 1979 to 10 per cent now. With those regulations, people will pay more in work and receive less if they have the misfortune to become unemployed.

As we have heard, key groups of people will be especially disadvantaged by the regulations. We can highlight further the problems of people who have savings or who receive large redundancy payments. Those will be taken into account six months earlier. Those people may lose all entitlement to benefit because of those savings or redundancy payments.

Similarly, under new regulation 79 of the Jobseeker's Allowance Regulations, 18 to 24-year-olds will receive reduced benefit, although they may have paid the same amount of national insurance contributions as a person over 24 years of age. Will the Minister yet again explain why he believes that 24-year-olds have fewer costs and should therefore be entitled to less benefit than a 25-year-old?

Regulation 13 of the Jobseeker's Allowance Regulations affects disabled people. Sick and disabled people face particular problems from the combined effect of the jobseeker's allowance and incapacity benefit, which came into effect last April. The Government have said that, eventually, 250,000 people who would have qualified for invalidity benefit will not qualify for incapacity benefit and will have to claim jobseeker's allowance. Many sick and disabled people are especially concerned that they may fall through what may be described as the "incapacity trap". Some people will not be able to pass incapacity benefit's tighter incapacity test, but will still have severe problems that limit their opportunities to work.

To enable people entitled to incapacity benefit, who want to look for jobs, to claim JSA, the Government have allowed them to limit their job search in line with conditions under regulation 13(4). However, it is not clear how that will work in practice and how extensive the limitation will be. For example, will a person with sickle cell disease who wishes to claim disability benefit be able to avoid being forced into a job where there are cold or damp conditions? I am aware of a case in which an adjudication officer ruled that someone suffering from irritable bowel disease was available for work which started early in the morning—yet because of the disability that person could not be available. Will the Minister give us further details of how the regulation will work in practice?

There is not time to touch on the important issue of how hardship payments will be made and how vulnerable groups will be provided for. Suffice it to say that the amount of discretion allowed to adjudication officers will need to be monitored carefully.

There is also not time to do justice to regulation 46 on waiting days. Most of the alignment of JSA between unemployment benefit and income support regulations brought it into line with the latter, because the Government claim that that is a modern benefit and therefore more appropriate. However, for waiting days the alignment has been with unemployment benefit, so claimants will have to wait an extra three days before being entitled to benefit. Yet again, we are debating measures that are basically about finding the lowest common denominator to limit benefits in any way possible. Will the Minister comment on that?

I want to highlight the problems that have already been experienced because of the way that the administration of JSA has been piloted in different parts of the country. When the legislation was in Committee, we raised the potential problem of aligning the service under a one-stop agency. The practice of one benefit officer not only making a decision about someone's availability and eligibility for benefit, but informing that person that he will not receive any money, could lead to confrontation. There have already been disputes in various parts of the country, especially the north-east. Will the Minister assure us that all the fears that we expressed about the same officer dealing with the two aspects that I have mentioned have not proved to be valid? Will he confirm that all the relevant training of staff has been completed and that all the necessary administration is in place to ensure the smooth implementation of the new benefit?

It is clear from our debate tonight, our various discussions and the questions still being asked of Ministers that there is a real danger that the introduction of JSA will result in the same disarray as other measures such as the Child Support Agency. We know that JSA is not about helping people under a strategic welfare-to-work plan, but is a mean-minded attempt to cut benefit for unemployed people as part of the Government's aim further to reduce the social security budget and public expenditure to find money to fund tax cuts to bribe voters at the next general election. We know that that will not work.

We are disappointed that we have not had sufficient time to scrutinise the regulations. However, we are absolutely sure that when they are implemented it will be Conservative Members who will be looking at the fine print, because after the general election they will be, searching for jobs.

6.44 pm

We have been debating the original Bill—now an Act—and the regulations over a considerable period and I therefore feel it fair to say that I am not surprised by the peroration of the hon. Member for Manchester, Withington (Mr. Bradley), even if I disagree with it. Where was the flash of lightning? Where was the comment that no one expected? Where was the interesting idea?

The hon. Member for Birkenhead (Mr. Field) criticised the actions of previous Labour Governments in the same way that he criticised our actions—on a point of principle. He is not in his place, but I want to explain why I believe that his argument is fundamentally misconceived. He said that the arrangement in the regulations to alter the national insurance fund should be likened to a breach of contract. In other words, he believes that an understanding reached at a particular point in time is binding on everybody for life. That is an interesting model, which is used in personal pension plans and retirement annuity contracts. It is the classic model of the private provision of a personal pension—someone pays in contributions for a certain period and at the end takes out of the fund what has been paid in, with the ability to sue if that amount is not actually paid.

The difficulty with the private model, ideal though it may be, is that it is not entirely followed in the private sector. With occupational pension schemes, discretion must be given to trustees over how much they will pay, especially when the payment is linked to final salary rather than what one puts in being what one gets out.

The free-market right argues for the privatisation of all national insurance schemes. However, the national insurance fund—rightly or wrongly, and it is a creature of some antiquity—has always been a public scheme regulated by successive Acts of Parliament and statutory instruments that Parliament approves. However, the House is an elected body and from time to time priorities alter. There has never been a pledge cast in concrete, unalterable from 1948 to the present day. Successive Governments have argued from time to time—not without some controversy as it is a serious matter—that the national insurance scheme should be slightly altered or reformed. That is what the regulations do.

I understand that Labour Members do not approve of many, if any, of the alterations. However, I believe the principle to be well established. We are entitled by Act and statutory instrument to alter the arrangements for the national insurance fund. I reject the moral charge that what we are doing is dishonourable. It may be a matter of controversy, but it is a perfectly acceptable action for a Government, of any persuasion, to take from time to time.

The two examples of unfair flexibilities in the regulations given by the hon. Member for Birkenhead—which he used to support his argument against flexibility—included the abolition of the long-term disregard for couples. In fact, the purpose of the back-to-work bonus is a much better way of helping that category and, indeed, a wider one. It is thought that currently only some 15,000 people benefit from the disregard.

I am glad to note that the hon. Gentleman has now returned to the Chamber. The second example he gave, which is a matter not of substance but simply of changing definitions in the context of a fluctuating education system, is the change from 21 hours to 16 guided learning hours. The Department believes that the effect of that on eligible people will be neutral. It is simply that the education system has altered its terminology. Instead of people being made to turn up and sit behind desks so that the number of hours can be measured, they now follow modules and have guided learning hours.

I contrast what I regarded as a serious attack—intellectually and morally—on what we are proposing with the views of the official Opposition, especially the Front-Bench team. The House was left baffled and bewildered about what the hon. Member for Makerfield (Mr. McCartney) proposes to do in place of the Jobseekers Act and the regulations. He has fought them tooth and nail at every stage. He tabled a large number of amendments, many of which would have had the effect— or would have had if they had been agreed—only of increasing public expenditure and not carrying out the labour market improvements that we have effected.

Judging from his opening remarks, I thought that the hon. Member for Makerfield was going to oppose all the regulations, but his hon. Friend—

rose—

I shall come to the specifics in a moment if the hon. Gentleman is patient. I thought that he was going to say that he opposed all the regulations, but the goodies—I gathered from the hon. Member for Withington—in the form of regulations dealing with the back-to-work bonus appeared to be welcome.

I come to the specific queries raised by the hon. Member for Makerfield. I am very conscious of the fact that I have been asked a large number of questions. I shall try to answer as many as I can, and I shall obviously write to hon. Members if I do not complete answering the very long list and I miss out sickle cell disease. That is a serious question, but very specific.

I begin with the general point made by the hon. Member for Makerfield. He was complaining about the lack of opportunity to discuss and amend the regulations and the skeleton nature of the Act. I regret the complexity, length and detail of the regulations. I agree with my hon. Friend the Member for Rutland and Melton (Mr. Duncan), but it is difficult to draft such regulations. They are long and complicated. My hon. Friend said that we had done a pretty good job. I merely suggest to him—and I can understand the arguments of the hon. Member for Makerfield on this point—that were we to have a bundle of private insurance policies to cover the range of misfortunes and disasters encompassed in the Act to fit the whole population of the United Kingdom, I doubt whether even the private sector, using the plainest of English, would manage to do it very quickly.

If we had private insurance policies, they could be enforced in the courts if the contractor broke his word—unlike the Government's national insurance scheme.

The hon. Gentleman did not hear my argument, although I appreciate the force of his point. Under a contract for a personal pension scheme, one pays in so much, one is entitled to the fund invested and one can withdraw it. That can be enforced as a ordinary contract. It is like buying an annuity; it is fixed and simple. The difficulty with that model is that under the occupational pension scheme, for example, which guarantees X per cent. of final salary, there cannot be a simple contract. Therefore, one has a system involving trustees, a comparable system of regulation and a comparable series of discretions. It is more complicated because of the flexibility necessary. In the case of the public system, Parliament has always been involved, and rightly so.

I return to the specific questions asked by the hon. Member for Makerfield. I accept his point on uprating, but he should bear in mind the relative absurdity at the moment, whereby two thirds of the people who are unemployed draw income support, not unemployment benefit. Whether they are better off on unemployment benefit or income support depends on whether unemployment benefit, being uprated by the retail prices index, nudges ahead of income support, which is uprated by the Rossi index. That is simply the choice; there are two separate indices. The hon. Gentleman is of course right to say that one is a discretion and one is a mandate from Parliament, but there is a record of that.

Is that a commitment on the record that there will be an annual uprating of allowances?

It is a historical reflection on an accurate description of the state of law.

I am advised that regulation 9 has nothing to do with international law. On regulation 12, the new regulations, for very much the reasons given by the hon. Gentleman, are very detailed. That is their purpose. I give the assurance that training is being given and will be given to staff to implement those new regulations.

rose—

I should be delighted to give way, but I am concerned that I have only six minutes in which to deal with rather a lot of queries.

On regulation 18, the earring point as somebody helpfully called it, I ask the hon. Member for Makerfield to bear in mind the words of his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who said:

"If it is simply a matter of dress, deportment and drawing up a good curriculum vitae, or trying to motivate people, no one could object."—[Official Report, 24 October 1994; Vol. 248, c. 635.]

That is the responsible response to regulation 18, which will be applied reasonably by the Employment Service. There is also of course a right of appeal.

I was asked in respect of regulation 73 why the rule was drawn differently for England and Wales on one hand and Scotland and Northern Ireland on the other. That is simply because Scotland's education system has a different legislative structure and the terminology is different. Northern Ireland is not dealt with at all in the regulations. That is a matter for my right hon. and learned Friend the Secretary of State for Northern Ireland, who will deal with it in due course.

I was asked about regulation 17, which refers to the 13-week rule and temporary work. The point that the hon. Member for Makerfield did not seem to appreciate is that it is all very well talking about a permanent job when one is not working or not working regularly, but there comes a point at which the jobseeker's allowance must be about getting people back into full-time employment, not simply perpetuating short-time working.

The hon. Gentleman asked me about young people coming out of care. They will be a prescribed group and will be able to obtain the jobseeker's allowance without having to satisfy the severe hardship test. Young people generally will be able to restrict their availability to jobs offering suitable training.

The hon. Gentleman finally asked me whether students could be forced on to full-time training. I was a little concerned about the precise definition of the question, but as I understand it, the answer is that students who are part-time educated—up to 16 guided learning hours under the regulations or 21 hours under the existing regime—have of course to make themselves available for work. At the moment, the position is analogous to that referred to by the hon. Gentleman. A part-time student may have to drop an examination or the completion of a course because a job is offered of a certain sort, which satisfies all the characteristics.

The hon. Member for Rochdale (Ms Lynne) asked whether benefit will cease if a claimant refuses any training scheme. I can assure her that sanctions will apply only to particular prescribed employment programmes and training schemes. The details of the framework for that are set out in regulation 75. For many years there have been mandatory programmes, which have a proven record.

The hon. Member for Rochdale further asked about the administrative training and other preparations necessary for the introduction of the jobseeker's allowance—a point taken up by the hon. Member for Withington. I can assure her that training has begun. It began in the summer of 1995. All staff will be trained to carry out the jobseeker's allowance functions for which they will be responsible in October 1996. We are confident that the computer systems will be ready as planned for model office testing in the summer and for implementation in due course in October.

The hon. Member for Withington asked whether the national insurance contribution holiday for long-term unemployed people of two years or more and the housing benefit and council tax run-on should be extended to disabled people. The measures are designed specifically to help the long-term unemployed get back into work. The issue of disability is separate and there is separate provision for it.

I repeat more specifically, in respect of the back-to-work bonus, that all necessary administration, computers and staff will be in place. I shall deal with all the other points in correspondence.

I commend the five statutory instruments to the House, as part of a firm-minded Government programme to promote employment.

Question put: —

The House divided: Ayes 282, Noes 260.

Division No. 26]	[7.00 pm
AYES
Ainsworth, Peter (East Surrey)	Boswell, Tim
Aitken, Rt Hon Jonathan	Bottomley, Peter (Eltham)
Alexander, Richard	Bowden, Sir Andrew
Alison, Rt Hon Michael (Selby)	Bowis, John
Allason, Rupert (Torbay)	Boyson, Rt Hon Sir Rhodes
Arbuthnot, James	Brandreth, Gyles
Arnold, Jacques (Gravesham)	Brazier, Julian
Arnold, Sir Thomas (Hazel Grv)	Bright, Sir Graham
Ashby, David	Brooke, Rt Hon Peter
Atkins, Rt Hon Robert	Brown, M (Brigg & Cl'thorpes)
Atkinson, David (Bour'mouth E)	Browning, Mrs Angela
Atkinson, Peter (Hexham)	Bruce, Ian (Dorset)
Baker, Nicholas (North Dorset)	Burns, Simon
Baldry, Tony	Burt, Alistair
Banks, Robert (Harrogate)	Butterfill, John
Bates, Michael	Carlisle, Sir Kenneth (Lincoln)
Batiste, Spencer	Carrington, Matthew
Beggs, Roy	Carttiss, Michael
Bellingham, Henry	Cash, William
Bendall, Vivian	Channon, Rt Hon Paul
Beresford, Sir Paul	Chapman, Sir Sydney
Biffen, Rt Hon John	Churchill, Mr
Body, Sir Richard	Clappison, James
Bonsor, Sir Nicholas	Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ru'clif)	Hicks, Robert
Clifton-Brown, Geoffrey	Higgins, Rt Hon Sir Terence
Coe, Sebastian	Hill, James (Southampton Test)
Congdon, David	Hogg, Rt Hon Douglas (G'tham)
Coombs, Anthony (Wyre For'st)	Horam, John
Coombs, Simon (Swindon)	Hordem, Rt Hon Sir Peter
Cope, Rt Hon Sir John	Howard, Rt Hon Michael
Couchman, James	Howell, Rt Hon David (G'dford)
Cran, James	Howell, Sir Ralph (N Norfolk)
Currie, Mrs Edwina (S D'by'ire)	Hughes, Robert G (Harrow W)
Curry, David (Skipton & Ripon)	Hunt, Rt Hon David (Wirral W)
Davies, Quentin (Stamford)	Hunt, Sir John (Ravensbourne)
Davis, David (Boothferry)	Jack, Michael
Day, Stephen	Jackson, Robert (Wantage)
Deva, Nirj Joseph	Jenkin, Bernard
Devlin, Tim	Jessel, Toby
Dicks, Terry	Johnson Smith, Sir Geoffrey
Dorrell, Rt Hon Stephen	Jones, Gwilym (Cardiff N)
Douglas-Hamilton, Lord James	Jones, Robert B (W Hertfdshr)
Dover, Den	Jopling, Rt Hon Michael
Duncan, Alan	Kellett-Bowman, Dame Elaine
Duncan-Smith, Iain	Key, Robert
Dunn, Bob	King, Rt Hon Tom
Durant, Sir Anthony	Kirkhope, Timothy
Dykes, Hugh	Knapman, Roger
Eggar, Rt Hon Tim	Knight, Mrs Angela (Erewash)
Elletson, Harold	Knight, Rt Hon Greg (Derby N)
Emery, Rt Hon Sir Peter	Knight, Dame Jill (Bir'm E'st'n)
Evans, David (Welwyn Hatfield)	Knox, Sir David
Evans, Jonathan (Brecon)	Kynoch, George (Kincardine)
Evans, Nigel (Ribble Valley)	Lait, Mrs Jacqui
Evans, Roger (Monmouth)	Lawrence, Sir Ivan
Evennett, David	Legg, Barry
Faber, David	Leigh, Edward
Fabricant, Michael	Lester, Sir James (Broxtowe)
Fenner, Dame Peggy	Lidington, David
Field, Barry (Isle of Wight)	Lilley, Rt Hon Peter
Fishbum, Dudley	Lloyd, Fit Hon Sir Peter (Fareham)
Forman, Nigel	Lord, Michael
Forth, Eric	Luff, Peter
Fowler, Rt Hon Sir Norman	MacGregor, Rt Hon John
Fox, Dr Liam (Woodspring)	MacKay, Andrew
Fox, Rt Hon Sir Marcus (Shipley)	Maclean, Rt Hon David
Freeman, Rt Hon Roger	McLoughlin, Patrick
French, Douglas	McNair-Wilson, Sir Patrick
Gale, Roger	Madel, Sir David
Gallie, Phil	Maitland, Lady Olga
Gardiner, Sir George	Malone, Gerald
Garel-Jones, Rt Hon Tristan	Mans, Keith
Garnier, Edward	Marland, Paul
Gill, Christopher	Marlow, Tony
Gillen, Cheryl	Marshall, John (Hendon S)
Goodlad, Rt Hon Alastair	Martin, David (Portsmouth S)
Goodson-Wickes, Dr Charles	Mates, Michael
Gorman, Mrs Teresa	Mawhinney, Rt Hon Dr Brian
Gorst, Sir John	Mayhew, Rt Hon Sir Patrick
Grant, Sir A (SW Cambs)	Merchant, Piers
Greenway, Harry (Ealing N)	Mitchell, Andrew (Gedling)
Greenway, John (Ryedale)	Mitchell, Sir David (NW Hants)
Griffiths, Peter (Portsmouth, N)	Moate, Sir Roger
Grylls, Sir Michael	Molyneaux, Rt Hon Sir James
Hague, Rt Hon William	Monro, Rt Hon Sir Hector
Hamilton, Neil (Tatton)	Montgomery, Sir Fergus
Hanley, Rt Hon Jeremy	Neubert, Sir Michael
Hannam, Sir John	Newton, Rt Hon Tony
Hargreaves, Andrew	Nicholls, Patrick
Harris, David	Nicholson, David (Taunton)
Haselhurst, Sir Alan	Norris, Steve
Hawkins, Nick	Onslow, Rt Hon Sir Cranley
Hawksley, Warren	Ottaway, Richard
Hayes, Jerry	Page, Richard
Heald, Oliver	Paice, James
Heath, Rt Hon Sir Edward	Patrick, Sir Irvine
Heathcoat-Amory, Rt Hon David	Patten, Rt Hon John
Hendry, Charles	Pattie, Rt Hon Sir Geoffrey
Heseltine, Rt Hon Michael	Pawsey, James

Pickles, Eric	Sweeney, Walter
Porter, Barry (Wirral S)	Sykes, John
Porter, David (Waveney)	Tapsell, Sir Peter
Powell, William (Corby)	Taylor, Ian (Esher)
Rathbone, Tim	Taylor, John M (Solihull)
Redwood, Rt Hon John	Taylor, Sir Teddy (Southend, E)
Renton, Rt Hon Tim	Temple-Morris, Peter
Richards, Rod	Thomason, Roy
Riddick, Graham	Thompson, Sir Donald (C'er V)
Roberts, Rt Hon Sir Wyn	Thompson, Patrick (Norwich N)
Robertson, Raymond (Ab'd'n S)	Thornton, Sir Malcolm
Robinson, Mark (Somerton)	Thumham, Peter
Roe, Mrs Marion (Broxbourne)	Townend, John (Bridlington)
Rowe, Andrew (Mid Kent)	Tracey, Richard
Rumbold, Rt Hon Dame Angela	Tredinnick, David
Ryder, Rt Hon Richard	Trend, Michael
Sackville, Tom	Trimble, David
Sainsbury, Rt Hon Sir Timothy	Twinn, Dr Ian
Scott, Rt Hon Sir Nicholas	Viggers, Peter
Shaw, David (Dover)	Waldegrave, Rt Hon William
Shaw, Sir Giles (Pudsey)	Walden, George
Shepherd, Rt Hon Gillian	Walker, Bill (N Tayside)
Shepherd, Sir Colin (Hereford)	Waller, Gary
Shersby, Sir Michael	Ward, John
Sims, Roger	Wardle, Charles (Bexhill)
Skeet, Sir Trevor	Waterson, Nigel
Smith, Sir Dudley (Warwick)	Watts, John
Smyth, The Rev Martin (Belfast S)	Wells, Bowen
Soames, Nicholas	Wheeler, Rt Hon Sir John
Spencer, Sir Derek	Whitney, Ray
Spicer, Sir James (W Dorset)	Whittingdale, John
Spicer, Sir Michael (S Worcs)	Widdecombe, Am
Spink, Dr Robert	Wiggin, Sir Jerry
Spring, Richard	Wilkinson, John
Sproat, Iain	WiIletts, David
Squire, Robin (Hornchurch)	Wilshire, David
Stanley, Rt Hon Sir John	Winterton, Mrs Ann (Congleton)
Steen, Anthony	Wolfson, Mark
Stephen, Michael	Yeo, Tim
Stem, Michael
Stewart, Allan	Tellers for the Ayes:
Streeter, Gary	Mr. Timothy Wood and
Sumberg, David	Mr. Derek Conway.
NOES
Abbott, Ms Diane	Byers, Stephen
Adams, Mrs Irene	Callaghan, Jim
Ainger, Nick	Campbell, Mrs Anne (C'bridge)
Allen, Graham	Campbell, Menzies (Fife NE)
Alton, David	Campbell, Ronnie (Blyth V)
Anderson, Donald (Swansea E)	Campbell-Savours, D N
Anderson, Ms Janet (Ros'dale)	Canavan, Dennis
Armstrong, Hilary	Carlile, Alexander (Montgomery)
Ashdown, Rt Hon Paddy	Chisholm, Malcolm
Ashton, Joe	Church, Judith
Austin-Walker, John	Clapham, Michael
Banks, Tony (Newham NW)	Clark, Dr David (South Shields)
Barron, Kevin	Clarke, Tom (Monklands W)
Battle, John	Clelland, David
Bayley, Hugh	Clwyd, Mrs Ann
Beckett, Rt Hon Margaret	Coffey, Ann
Beith, Rt Hon A J	Cohen, Harry
Bell, Stuart	Cook, Frank (Stockton N)
Bennett, Andrew F	Cook, Robin (Livingston)
Benton, Joe	Corbett, Robin
Bermingham, Gerald	Corbyn, Jeremy
Berry, Roger	Corston, Jean
Betts, Clive	Cummings, John
Blair, Rt Hon Tony	Cunliffe, Lawrence
Blunkett, David	Cunningham, Jim (Covy SE)
Boateng, Paul	Cunningham, Roseanne
Bradley, Keith	Dafis, Cynog
Bray, Dr Jeremy	Darling, Alistair
Brown, Gordon (Dunfermline E)	Davidson, Ian
Brown, N (N'c'tle upon Tyne E)	Davies, Bryan (Oldham C'tral)
Bruce, Malcolm (Gordon)	Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)	Johnston, Sir Russell
Davis, Terry (B'ham, H'dge H'l)	Jones, Barry (Alyn and D'side)
Denham, John	Jones, leuan Wyn (Ynys Môn)
Dewar, Donald	Jones, Jon Owen (Cardiff C)
Dixon, Don	Jones, Lynne (B'ham S O)
Donohoe, Brian H	Jones, Martyn (Clwyd, SW)
Dowd, Jim	Jowell, Tessa
Dunwoody, Mrs Gwyneth	Kaufman, Rt Hon Gerald
Eagle, Ms Angela	Keen, Alan
Eastham, Ken	Kennedy, Jane (L'pool Br'dg'n)
Etherington, Bill	Khabra, Piara S
Evans, John (St Helens N)	Kilfoyle, Peter
Ewing, Mrs Margaret	Kirkwood, Archy
Faulds, Andrew	Lestor, Joan (Eccles)
Field, Frank (Birkenhead)	Liddell, Mrs Helen
Flynn, Paul	Litherland, Robert
Foster, Rt Hon Derek	Livingstone, Ken
Foster, Don (Bath)	Lloyd, Tony (Stretford)
Fyfe, Maria	Llwyd, Elfyn
Galbraith, Sam	Lynne, Ms Liz
Galloway, George	McAllion, John
Gapes, Mike	McCartney, Ian
Garrett, John	McFall, John
George, Bruce	McKelvey, William
Gerrard, Neil	Mackinlay, Andrew
Gilbert Rt Hon Dr John	McLeish, Henry
Godman, Dr Norman A	Maclennan, Robert
Godsiff, Roger	McMaster, Gordon
Golding, Mrs Llin	McNamara, Kevin
Graham, Thomas	MacShane, Denis
Grant, Bernie (Tottenham)	McWilliam, John
Griffiths, Nigel (Edinburgh S)	Madden, Max
Griffiths, Win (Bridgend)	Maddock, Diana
Grocott, Bruce	Mahon, Alice
Hain, Peter	Marek, Dr John
Hall, Mike	Marshall, David (Shettleston)
Hanson, David	Marshall, Jim (Leicester, S)
Hardy, Peter	Martin, Michael J (Springburn)
Harman, Ms Harriet	Martlew, Eric
Harvey, Nick	Maxton, John
Hattersley, Rt Hon Roy	Meacher, Michael
Henderson, Doug	Meale, Alan
Heppell, John	Michael, Alun
Hill, Keith (Streatham)	Michie, Bill (Sheffield Heeley)
Hinchliffe, David	Michie, Mrs Ray (Argyll & Bute)
Hodge, Margaret	Milburn, Alan
Hoey, Kate	Miller, Andrew
Hogg, Norman (Cumbernauld)	Mitchell, Austin (Gt Grimsby)
Home Robertson, John	Moonie, Dr Lewis
Hood, Jimmy	Morgan, Rhodri
Hoon, Geoffrey	Morley, Elliot
Howarth, Alan (Strat'rd-on-A)	Morris, Rt Hon Alfred (Wy'nshawe)
Howarth, George (Knowsley North)	Morris, Estelle (B'ham Yardley)
Howells, Dr Kim (Pontypridd)	Morris, Rt Hon John (Aberavon)
Hoyle, Doug	Mowlam, Marjorie
Hughes, Robert (Aberdeen N)	Mudie, George
Hughes, Simon (Southwark)	Mullin, Chris
Hutton, John	Murphy, Paul
Illsley, Eric	Nicholson, Emma (Devon West)
Ingram, Adam	Oakes, Rt Hon Gordon
Jackson, Glenda (H'stead)	O'Brien, Mike (N W'kshire)
Jackson, Helen (Shef'ld, H)	O'Brien, William (Normanton)
Jamieson, David	O'Hara, Edward

Olner, Bill	Speller, John
O'Neill, Martin	Squire, Rachel (Dunfermline W)
Orme, Rt Hon Stanley	Steel, Rt Hon Sir David
Pearson, Ian	Steinberg, Gerry
Pickthall, Colin	Stevenson, George
Pike, Peter L	Stott, Roger
Pope, Greg	Strang, Dr. Gavin
Powell, Ray (Ogmore)	Straw, Jack
Prentice, Bridget (Lew'm E)	Sutcliffe, Gerry
Prentice, Gordon (Pendle)	Taylor, Mrs Ann (Dewsbury)
Prescott, Rt Hon John	Taylor, Matthew (Truro)
Primarolo, Dawn	Thompson, Jack (Wansbeck)
Purchase, Ken	Timms, Stephen
Quin, Ms Joyce	Tipping, Paddy
Radice, Giles	Touhig, Don
Randall, Stuart	Turner, Dennis
Raynsford, Nick	Tyler, Paul
Reid, Dr John	Vaz, Keith
Rendel, David	Walker, Rt Hon Sir Harold
Robertson, George (Hamilton)	Wallace, James
Robinson, Geoffrey (Co'try NW)	Walley, Joan
Roche, Mrs Barbara	Wardell, Gareth (Gower)
Rogers, Allan	Wareing, Robert N
Rooker, Jeff	Watson, Mike
Ross, Ernie (Dundee W)	Welsh, Andrew
Rowlands, Ted	Wicks, Malcolm
Ruddock, Joan	Williams, Rt Hon Alan (Sw'n W)
Salmond, Alex	Williams, Alan W (Carmarthen)
Sedgemore, Brian	Winnick, David
Sheerman, Barry	Wise, Audrey
Sheldon, Rt Hon Robert	Worthington, Tony
Shore, Rt Hon Peter	Wray, Jimmy
Short, Clare	Wright Dr Tony
Simpson, Alan	Young, David (Bolton SE)
Skinner, Dennis
Smith, Andrew (Oxford E)	Tellers for the Noes:
Smith, Llew (Blaenau Gwent)	Mr. Eric Clarke and
Spearing, Nigel	Mr. Robert Ainsworth.

Question accordingly agreed to.

Resolved,

That the draft Jobseeker's Allowance Regulations 1996, which were laid before this House on 19th December, be approved.

MADAM DEPUTY SPEAKER then put the remaining Questions required to be put at that hour.

Resolved,

That the draft Income Support (General) (Jobseeker's Allowance Consequential Amendments) Regulations 1996, which were laid before this House on 19th December, be approved.

That the draft Social Security (Back to Work Bonus) Regulations 1996, a copy of which was laid before this House on 10th January, be approved.

That the draft Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations 1996, which were laid before this House on 19th December, be approved.

That the draft Employer's Contributions Re-imbursement Regulations 1996, which were laid before this House on 12th December, be approved.—[Mr. Forth.]

Orders Of The Day

Education (Student Loans) Bill

As amended (in the Standing Committee), considered.

New Clause 3

Commitment To Pay Subsidy For Private Sector Student Loans Not To Be Made Before 31St May 1997

'No commitment which would require the payment of subsidy under subsection 1(1A) of the Education (Student Loans) Act 1990 shall be entered into before 31st May 1997.'.—[Mr. Byers.]

Brought up, and read the First time.

7.14 pm

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

The need for the new clause arises because of the difficulties that the Government experienced in Committee, and it comes on top of a difficult couple of months for the Government on education matters. They have had to backtrack from their fast-track process of grant-maintained status for voluntary-aided schools. They have had difficulties with their nursery voucher scheme and with the four pilot authorities which have struggled to find sufficient places. On top of all that, the Minister had to announce on the second day of the Committee that the Government were unable to proceed according to their original timetable—which would have seen the Bill's proposals implemented by autumn this year—and would have to delay the implementation of the student loans measure by 12 months, so that the Bill's proposals will not start to be effective until autumn 1997.

Most hon. Members are aware that the proposals to privatise the student loans system appeared in the Queen's Speech very late in the day, and the measure was deemed necessary to appease those right-wing members of the parliamentary Conservative party who were desperate to have a privatisation measure somewhere in the Queen's Speech.

I am grateful to the hon. Gentleman for giving way at such an early stage. I am sure that he does not mean quite what he says. This cannot be a privatisation of student loans, since—as the hon. Gentleman well knows—the Student Loans Company will continue to exist as an alternative source of lending for students. The hon. Gentleman might wish to clarify his unusually loose use of the term "privatise" in this case.

I do not want to embark on an exercise in semantics, although the Minister clearly would prefer that to a debate on the matters of substance that are before the House this evening. But even this Minister should accept that the Bill will mean that the private sector will have an opportunity to take part in the student loans system. It is a privatisation by any other name.

The point that the Minister is trying to avoid is that he proclaimed the importance of the measure on Second Reading and on the first day in Committee, and added that it was vital that steps were taken—almost in haste—to ensure that the benefits, as the Minister saw them, of the measure would be available to students by autumn this year. Just 48 hours later, however, the Minister had to announce that the Government were unable to proceed along the lines they had originally intended. Instead, he had to announce to the Committee in a very embarrassed way on 14 December—

My hon. Friend will not embarrass the Minister.

As my hon. Friend says, it is unusual for the Minister to be embarrassed, but, on this occasion, he was. On 14 December, he said:

"following our discussions with the banks, we have decided to defer the implementation of the loans scheme from October 1996 to October 1997."

That is significant because it means that the scheme will not be implemented until a few months after the general election. New clause 3 deals with that issue as it is intended to ensure that under the Bill, and then the Act, no contractually binding arrangement will be entered into by the Government to provide subsidies for private sector student loans before 31 May 1997.

New clause 3 is intended to ensure that a new Government—who will be elected by 31 May 1997, and, we expect, of a different political complexion—

There is absolutely no way that will happen.

We expect that we will have a Government of a different complexion, and therefore we feel that it is essential that that Government should have the freedom and flexibility to decide how to proceed and should not be tied into a contractually binding arrangement.

The thrust of the Minister's decision to defer implementation, as well as the nature of the public subsidies that will be made available to the private sector, is all to do with making the scheme attractive to the banks and other financial institutions, which he has accepted that it must be. When he announced the delay, he said:

"Following fruitful discussions with the banks to date, they have pointed out to us that, among other things, considerable changes to their information technology systems would be required to pick up the offer that we are making to them and that, obviously, the considerable merger activity taking place in some sectors of the financial institutions—mainly in building societies—would make it difficult for them to meet the tight deadline that we envisaged earlier."—[Official Report, Standing Committee B, 14 December 1995; c. 40.]

The Minister had to admit that. Two days before, however, he had argued and voted against a Labour proposal to delay the implementation for precisely that length of time.

The Opposition's concern is that because the Government are now desperate to ensure the implementation and delivery of the scheme by autumn 1997—which will require the active participation and involvement of the private sector—they will be prepared to offer a subsidy from the public purse, paid by the taxpayer to the private sector. In normal circumstances, that would be unacceptable. The Government, in desperation, have been forced into a corner with a deadline of their own making, and might well enter into a contractually binding agreement that might be in the political interests of the Government but will not be in the long-term interests of the taxpayers and the students. That is why new clause 3 is particularly important.

One point that the Minister has failed to mention, arising from the delay that he announced on 14 December, is how the Government intend to make up the financial gap created as a result of the loss of the £100 million savings—which they announced in the Budget—that was expected to be accrued as a result of the student loans system privatisation coming into effect from autumn this year. Many of us are concerned that that £100 million will be found somewhere else in the education service.

The Minister has failed to give us any assurance on where that money will come from. It would greatly assist the House this evening if he would tell us where that money will be found. Is his silence a consequence of the fact that he knows that it will be taken away from other services within the Department for Education and Employment? He should identify this evening where it will come from.

If the new clause were passed and a Labour Government were elected, how would the incoming Labour Government finance student loans?

The hon. Gentleman was an active participant in the proceedings in Committee. We made it clear on numerous occasions which criteria and principles we would apply to the system of student financial support. We clearly said that we would strike a balance between the interests of students and the legitimate interests of the taxpayer and the Exchequer which took into consideration the need wherever possible not to push students into debt and poverty while they were studying.

Our system of student financial support will bear those two interests in mind. We will make positive proposals that may not be supported by Conservative Members but will have broad and popular support throughout the country, which the present student loans system clearly does not.

Returning to the point made by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), can the hon. Gentleman tell us when he expects he will make known his proposals on this matter, and what the costs will be?

The hon. Gentleman should not be so impatient. We will come forward in good time with our own—

Come on.

"In good time" is the only answer that the hon. Gentleman will get from me this evening. We will come forward with positive and popular proposals, which will be of benefit to students and also recognise the demands that are made on the Exchequer. That is the balance that we will strike between the two, and we believe that we can provide financial support to students that reconciles those two conflicting interests.

Is the hon. Gentleman aware that, just before our meeting at Lancaster university, the Labour party research department issued a document which said that the Labour party would abolish all grants? I know that the Labour party wriggled and wriggled—[Interruption.] Do not natter when I am talking. I know that the Labour party wriggled and wriggled and wriggled on this matter, but that is what was published at the time. Can the hon. Gentleman give an absolute and categoric assurance that that policy will not be implemented? If he cannot, my students will be interested to know it.

Order. The hon. Gentleman would not be wise to respond to that point. The debate is going much wider than new clause 3.

Thank you, Mr. Deputy Speaker; I shall address new clause 3 in accordance with your guidance. The hon. Lady's point is an important one which could usefully be debated at some future time, and there will no doubt be opportunities to do so. If the Government's business managers wish to arrange a suitable opportunity, they can do so.

New clause 3 would prevent the Government from entering into a contractually binding agreement with private providers which would entail payments of public subsidies before the next general election. Our concern is that, because they have got themselves into political difficulties, the Government will put their own interests first. The delay of implementation until the beginning of the academic year 1997–98 will certainly come some months after the last possible date of the next general election.

The importance of the new clause is that it would prevent a future Administration from being bound by any contractual arrangements entered into by the present Administration. That would be appropriate, and it might be important, because as the Minister himself said, on Second Reading:

"Private financial institutions would be invited to bid for the right to offer subsidised loans. That would probably be for a period of five years."—[Official Report, 27 November 1995; Vol. 267, c. 951.]

So any contractual agreement entered into by the Government would be likely to last throughout the period of the next Government. It would be inappropriate to tie the hands of a future Government in that way.

In Committee, the Government refused to accept any amendments to allow parliamentary scrutiny of the contractual arrangements between the Government and the banks, building societies and other financial institutions. Therefore, we have only a skeleton of a Bill. The interesting detail has not been revealed to hon. Members. Part of that detail will be the contractual agreements between the Government and private sector institutions. We believe that it is appropriate for that information to be made available to hon. Members before the Bill goes through all its stages.

The Minister has been steadfast in his refusal to disclose any details of discussions with institutions that might be interested in providing loans to students. Indeed, the Minister has not even been prepared to identify the institutions involved. No financial institution, bank or building society has been named by the Minister as being interested in taking part in the scheme. That raises the question of whether the financial institutions have any interest in taking part in the scheme.

7.30 pm

The Bill has been badly thought out, and the Government have tried to follow a highly restrictive and constrictive timetable. Sir Christopher Johnson, the former chief economic adviser to Lloyds bank, made an appropriate comment:

"There is every sign that a half-baked idea has been launched prematurely to get it into the Queen's Speech in time. Haste born of financial desperation is not a good recipe for fundamental reform."

We agree with that.

The Bill has been born out of haste and political expediency and that is why we are concerned about the nature of the contractual agreements that the Government will make. We have had no information from the Minister about the financial institutions that might be involved in the scheme, so we fear that the Government, for their own reasons, will make an agreement or contract that will not be in the long-term interests of the taxpayer or of students.

I shall give the House three examples of the possible results—if the subsidy were made available to private sector institutions—and the sort of agreements that could be made in a desperate attempt to ensure that the private sector was enticed into the new scheme. First, the details of the loan scheme are not he published and debated in principle in the House. They are dealt with annually by an order, brought forward by the Government. That order states clearly the amount of the loans being made available, the period for which the loans will be available and the rates of interest that can be charged for the loans. Under the existing regime, the loans are, in effect, made available free of interest. The level of public subsidy is then set at a rate high enough to cover the commercial return for the financial institutions. If the scheme is privatised, the taxpayers' subsidy would provide the profit for the bank involved.

We know from the Committee stage that a second regime was suggested to the Secretary of State for Education and Employment and to the Chancellor of the Exchequer by the student loans working group. The Minister was kind enough to acknowledge—48 hours later—that such a group existed and that it made recommendations to the Chancellor and the Secretary of State. He also acknowledged that the working group suggested two approaches. The first was the one which is now followed—the loans are interest free. The second possible approach identified by the working group was radically different, but the working group claimed it would be far more attractive to the financial institutions. It would require the students to pay a commercial rate on their loans, but they would have an interest-free period while they were studying. They would have to repay that interest when they entered the world of work.

The working group claimed that only a commercial rate would convince the private sector that it should become involved in the scheme, because it would then receive a flow of income that fully covered the cost of borrowing, administrative costs and an element of profit. That regime is a radical departure from the system that we now have.

The Opposition are worried that, because that second scheme would be commercially attractive to the private sector, it will become the preferred option and the Government in desperation will adopt it. If we pass the Bill without the new clause, we will give them the power and authority to do that. That would be inappropriate, and it would ensure that more students would regard higher education as no option for them if students were to be charged a commercial rate for their loan. We would welcome a guarantee from the Minister that that will not be an option that the Conservative Government, for as long as they are in office, will support. We hope that he can give that guarantee this evening.

The second result could be that the Government will try to come to a cosy arrangement with the financial institutions that are interested in taking up other governmental financial services work. One financial service that the Government have offered for many years is the Teachers Pensions Agency. It is a high-quality service, which is highly profitable and very desirable to the private sector. We know that six financial institutions are being considered by the Government with a view to one of them being given the contract to run the privatised—as it will be—Teachers Pensions Agency.

It is interesting that the Minister refused in Committee to deny that those six organisations—during their meetings with the Government to consider the privatisation of the agency, work that they would like to do—might be encouraged to take on responsibility for the student loans privatisation as part of the arrangements into which they enter. In that context, there would of course be discussion of the amount of public subsidy to be provided, and that subsidy might be hidden because it would come from the profits that those companies would receive from the privatisation of the Teachers' Pensions Agency. That sort of cosy arrangement would not be in the long-term interests either of the operation of the agency or of the British taxpayer.

The third and possibly most important reason why we are concerned and why we believe that new clause 3 is essential lies in the amount of subsidy to be provided by the taxpayer for the private sector. As the Bill stands, there will be no limits on the subsidy; we must rely on the negotiating skills of the Minister to secure a good deal for the British taxpayer. We do not believe that any Minister, let alone this one, should be given a blank cheque.

In Committee, we tabled a modest and reasonable proposal that the subsidy should be capped at no more than a quarter of the total value of the loan being provided. That was voted down by the Minister and his colleagues. We must, however, ensure value for money for the taxpayer. There are considerable doubts whether the Bill would guarantee to secure that.

The worries are that some sweetheart deal will be struck between the Government and the lender to save face, not to meet the interests and needs of the British public. Our view is that the taxpayer should not have to bail out the Government from the political difficulties that they have caused for themselves. If money is available, it is surely better to use it not to subsidise the banks but to expand the financial support that we give students.

That is all the more important when we hear, as we have in the past 24 hours, that for the first time in living memory the number of applicants to universities has fallen. The reason why universities and higher education in general are becoming less attractive to 17 and 18-year-olds considering applying is that the latter recognise that their friends and colleagues who have entered higher education have entered a world of debt and poverty. That acts as a massive disincentive.

Will the hon. Gentleman give way on that ridiculous point?

If the hon. Lady cares to rephrase her question, I am prepared to give way.

Will the hon. Gentleman give way on that precise point?

Yes.

It is still a ridiculous one, though. Is the hon. Gentleman aware that my exceptionally well-run university has about 10 applicants for every place, and that some of its faculties attract about 100 for every place? We have absolutely no dearth of students applying even though they know perfectly well what the regime will be.

Order. Before the hon. Gentleman replies, may I point out that he is getting close to a Second Reading debate?

I am rapidly coming to a conclusion. If the Government are providing money to subsidise the private student loan sector, their priorities must be questioned. Many of us think that the money would be better spent on financial support for students than on subsidising financial institutions with taxpayers' money.

The new clause deals with the concerns that I have expressed. It would ensure that a future Government would not have their hands tied, perhaps for as much as five years, by an agreement entered into for political expediency by this Government. I commend the new clause to the House.

7.45 pm

Earlier, the Minister objected to my hon. Friend the Member for Wallsend (Mr. Byers) calling the Bill a privatisation of student loans. Yet it was crystal clear from our discussions in Committee that if the scheme turned out so successful that the Student Loans Company ended up on its uppers, lending only to a tiny handful of students, that would be fine by the Minister, because he wants to open up the loans to as many financial institutions as happen to be interested.

Crucially, the amount of subsidy intended to be given to each bank has still not been revealed. We all know that the banks have expressed varying degrees of uninterest in the entire scheme—ranging from downright rejection to an expression of the view that a number of difficulties need to be overcome. Those difficulties include technological and merger problems.

The Minister claimed that it was not true that the banks were wholly uninterested: they were, he said, merely making opening moves in the negotiations. My hon. Friends will recall from serving on the Committee that the Minister seemed to think it laughable that the banks might mean what they are saying and that when they say no, they mean no. The clear implication is that the banks have only to keep on saying no to convince the Minister that they really mean yes—if the price is right.

We are talking about what may be immense subsidies of public money for these banks just to ensure that the Minister does not get egg on his face and can persuade an unembarrassing number of banks to take part. So the largesse will go to whichever banks can be persuaded to take part, if they ever can be.

This contrasts starkly with the treatment of the under-25s in respect of housing benefit, and with the treatment of students living in poverty. The citizens advice bureaux in Scotland and elsewhere have produced clear evidence of students in dire difficulty because of poverty. Thus the contrast between the treatment of the banks, which do not need the money, and the students, who do, is dramatic.

I was reminded of the Minister's view—that the banks do not really mean no when they say no—last night when I was re-reading "Pride and Prejudice", having recently watched the excellent BBC production of the novel. Everyone must be familiar with the character of Mr. Collins, and the part of the book in which he offers his hand in marriage to Elizabeth Bennet. She refuses, saying that she is quite sure that neither Mr. Collins' happiness nor her own would be enlarged by the prospect: under no circumstances would she marry him. He replies that he understands that young ladies may say no when they really mean yes, so he feels encouraged by her refusal.

What do the banks have to do to make the Minister understand that if they say no they really mean it? If the Minister thinks that he can persuade the banks to adopt this course, will he reveal what sums of money he has in mind?

You and I have been in this House for a long time, Mr. Deputy Speaker. One of the advantages of the Report stage of a Bill is that it is brought back to the House. When I was Minister of State responsible for education, 17 years ago and dealing with higher education, funding students was a problem. Now, it is a far more acute problem because of the welcome increase in the number of people in universities and higher education.

I do not know what the Minister will say in reply to this debate, but he is looking a gift horse in the mouth if he rejects the new clause tabled by my hon. Friend the Member for Wallsend (Mr. Byers). The new clause defers consideration of negotiations until after the next general election. No matter how long the Government limp on, 31 May of next year will be beyond the next election.

This is a most unwelcome Bill. Students do not want it and have never wanted it; the universities and vice-chancellors have never wanted it; the banks and building societies do not want it. The Government are considering the time factor—whether 31 May 1997, or today—in which they can bribe banks and building societies to engage in the Bill's provisions. Frankly, the banks and building societies do not want it. It is of no commercial interest to them.

I must tell my hon. Friend the Member for Wallsend that I thought some of the comments by Conservative Members very fair. They asked what the Opposition would do if the Bill were deferred until 31 May next year. As the Irishman said when asked how he would get to a certain place, my reply would be, "I would not start from here." I would not start from this Bill and I would abandon this process altogether.

We must grasp the fact that we now have a very large student population—a population that the nation finds it difficult to support financially. Whether a Conservative Government are in office or we are in office, that is a fact that we have to face. Neither the Government nor we, the Opposition—I regret to say—have faced up to how we are to fund students.

Many schemes have been put forward and have been tinkered with or played with, but they have never really been considered due to political expediency, or whatever. One is the Australian scheme—Australian students repay loans through a statutory income tax system according to their degree and ability to pay. The vice-chancellors have put forward a scheme to the Government and the Opposition, suggesting ways to tackle the problem. The Australian scheme, the vice-chancellors' scheme or any other scheme bear no resemblance to the weird system that the Government propose, which will solve nothing.

Meanwhile, tens of thousands of students are living in poverty and misery, as my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) said, when they should be devoting their attention to their studies. Instead, they have to devote their attention to wondering where their next meal is coming from and that must be wrong.

My right hon. Friend might not be aware that the Minister made it clear in Committee that he did not believe that there was any connection between student poverty and the quality of students' educational performance.

If the Minister tried to make that clear, it is the most nonsensical statement that I have heard. Every hon. Member, on both sides of the House, is aware of student poverty—not just poverty among working-class students, but among middle-class students and across the board. They will be the leaders of industry, the professions and academia in this country and that is the way that we treat them. The new clause gives the Government and my hon. Friends on the Opposition Front Bench time to think of an alternative to this ludicrous scheme, which no one loves.

One of the advantages of a Report stage is that another line can be put. I have served on many Standing Committees, as you have, Mr. Deputy Speaker, and I know that members of such Committees look at the problem from the point of view of the Committee. The new clause will give more time and I hope, therefore, that when considering it the Minister will grasp the gift horse with which the Opposition have presented him and will willingly accept it, saying that negotiations shall not take place until after 31 May 1997. I hope that if we are in government, those negotiations will not take place at all because we will have a far better scheme for funding students than this ludicrous Government scheme.

First, I must repeat something that I said in the Standing Committee about the principle behind new clause 3. The new clause is uncontroversial, helpful and necessary and it will benefit the Government. It is in line with the Government's timetable for the introduction of the private sector into the payment of student loans.

I hope that the Minister will accept the new clause on behalf of the Government because it will improve a very poor Bill. As it stands, the Bill encapsulates everything that is wrong with the Tory party approach to government—it is an arrogant abuse of power. The Government do not seem to care that they have not been able to explain to Parliament the full costs of the measures included in the Bill. The Government are asking Parliament for a blank cheque. They are saying, "Pass this enabling Bill and allow the Government to get involved in the negotiations with the private banks and to provide subsidies to them to grant loans to students." They are saying that they are not prepared to tell us what the cost to the taxpayer will be or to say what the cost of the student loans will he. They are asking us to take it on trust and to take the Bill through.

The new clause straightforwardly states that the Government can go so far but that, given that they do not want to implement the Bill in the private sector until 1997, the new Parliament can decide whether it wishes to proceed with the measure. That is the real strength of the new clause. It will prevent the Government's arrogant abuse of power—the fact that they are not telling us how much they are prepared to commit to the scheme.

The new clause allows time for the Government to say that the negotiations have been completed and to tell us which high-street banks will become involved in private sector student loans. So far they have been unable to tell us and, if they have the information, they have refused to reveal it. I believe that they are not holding anything back because they do not know which banks will become involved. A number have said that they will not do so. The new clause will allow Parliament the full knowledge of which high-street banks and private institutions are prepared to get involved in the scheme and, therefore, strengthen the democratic process.

The new clause will also give us time to consider the effects on students. Opposition Members tried to do that in Standing Committee, but the Government strongly resisted it. The Government have given great consideration to the effects that certain changes that we tried to make in Committee would have on private financial institutions, but have had no regard whatsoever to the impact on students. On Second Reading, in Committee and on Report—and, I suspect, on Third Reading—we have had no sign from the Government of how the scheme will affect students. New clause 3 introduces a means by which those omissions can be overcome.

At the second sitting of the Committee—it was almost thrown in as an aside—the Minister announced that there would be a delay in the implementation of the scheme. Instead of being introduced by October 1996, it would be done by October 1997, which will be some time after the next general election. That delay will give the Government the opportunity to put right all the problems that they have created within the Bill. That is another good reason for the delay that new clause 3 would put on the face of the Bill.

The Conservative party has nothing to fear from the new clause. If it wins the election, which is highly unlikely and most improbable—

No.

The hon. Lady says no, but she is completely wrong, as she is on every other issue.

No.

The hon. Lady continues to make the same mistakes. No doubt she will continue with the arrogant view that the Conservative party has nothing to fear from the electorate when it has everything to fear.

If the Tories win the election, they can proceed with the measure in the next Parliament. If they lose, the delay will allow the new, incoming Government, with a new mandate, to tackle the problem according to the promises in their election manifesto.

8 pm

The new clause strengthens the democratic process and is, therefore, nothing to fear. Accepting it would show, at this late stage, in the 17th year of the Conservative Government, that they have some regard to the democratic process. They would then be able to consider at length the principles involved in the Bill, which legislates for the use of taxpayers' money to subsidise private institutions to provide student loans. That is a crucial part of the Bill and represents a fundamental change from the current policy.

Parliament needs to give far more consideration to the principle of using taxpayers' money to subsidise banks to do the same business that they have carried out for years. Why do high-street banks or other financial institutions in the business of lending money need huge subsidies from the taxpayer to allow them to participate in the business in which they have been established for many years? That fundamental question goes to the core of the Bill and is one reason why new clause 3 is so important.

The new clause would allow proper parliamentary scrutiny. As I have said, although we have considered the Bill on Second Reading and in Standing Committee and we are now considering it on Report and no doubt will on Third Reading, we still do not know the precise cost to the taxpayer.

When the matter was raised in Committee, the Minister said that we will know the full cost to the taxpayer 12 months after the scheme has been implemented. Therefore, Parliament will not know how much the legislation will cost until October 1998. That is totally unsatisfactory and is an abuse of the democratic process.

Parliament needs to know the cost of the scheme and the new clause would allow us to address the errors in the Bill. It may well allow the Government to justify what we have said—that the estimated cost of the subsidy is £1,500 per loan. We used that figure throughout the Standing Committee and the Minister decided not to disavow it. He has made no comment whatsoever about the costs. Perhaps he is frightened to reveal them because he knows full well that the Government's use of money would create an outrage. Now he refuses to say whether the figure of £1,500 is right or wrong. The Minister may find it funny, but if the Government are prepared to subsidise high-street banks or private institutions at a cost of £1,500 per loan, perhaps they should give the money directly to the students and ease the problems of student poverty that has been well documented by my hon. Friends.

Implementation of the new clause would allow us to evaluate the effect of the Education (Student Loans) Bill on students. It is clear that the Government have been prepared to legislate to include discrimination. They decided that students should not be told why they may have been refused a private sector student loan; they see no reason why students need to know why they have been refused and they see nothing wrong in the institutions refusing the loans passing that information on to a third party. That is scandalous. It is an outrage in itself. The Government decided quite straightforwardly that there should be no appeals procedure. All that involves taxpayers' money to support our public education system. We need to build some accountability into that system and new clause 3 allows us to do that.

The Minister may respond by saying that the new clause expects him to negotiate on the Floor of the House the deals between the Government and the private sector. It does not. The Government can conduct their negotiations with the private sector, work out which banks are involved, produce the costs and tell us the implications of the scheme and that information will be available and ready to be used in the new Parliament on 31 May 1997, therefore the argument about negotiation on the Floor of the House does not hold water.

The other argument that the Minister used in Committee against the approach in new clause 3 was that it would delay the progress of the Bill. However, he has now delayed the progress of the Bill and moved the implementation date to October 1997, therefore there is no reason not to accept the new clause. The rationale of the arguments that the Government used in Committee does not apply. It does not stand up to scrutiny, so I hope that, even at this late stage, the Government will support the democratic process and allow hon. Members to do the job for which they were elected—to scrutinise legislation and improve it where they can.

We have not yet learnt what Opposition Members would do. I fought valiantly in Committee to winkle that out of them, but I failed totally. Yet again, the hon. Member for Wallsend (Mr. Byers) disappointed us, although he did not surprise us. It was also significant that the right hon. Member for Halton (Mr. Oakes), in the perceptive way that we would expect of a Member of such experience, said with some sadness that he could detect no policies emerging from the Labour party.

We learnt only one significant and interesting fact, for which I am grateful. The hon. Member for Wallsend accepts—by implication, so do his colleagues—that the general election will not take place until April or May 1997. That was a step in the right direction. It gives not just the debate, but other matters, an interesting perspective. I assume that he has the approval of the Leader of the Opposition in making that statement. If he has not, that is something for the hon. Gentleman to sort out. That is part of the background to new clause 3.

The other piece of background that the House will want to recall is that the measure was duly signalled in the normal way as part of the Government's programme. It received a Second Reading and was considered in Committee, where, as has been said, I resisted an Opposition amendment to put on the face the Bill an arbitrary delay in the implementation period.

I then announced a delay of one year, because, for perfectly practical reasons, the financial institutions that might be interested in picking up the opportunities offered in the Bill persuaded me—with no great difficulty—that it would take that length of time properly to put in place the procedures and mechanisms to give effect to the Bill's measures.

The Minister has just said that, during his discussions with the private sector institutions, they revealed that they would find it difficult to be ready for 1997, because of the information technology requirements. That statement implies that certain institutions had expressed an interest in the Bill. At this late stage, will he tell us the names of the institutions involved?

The answer is no. I should correct the hon. Gentleman. The difficulty would have been with implementation in 1996, which was the original target date. There would be no difficulty with implementation in 1997, unless the House were to agree to the new clause—which I hope it will not—in which case there would be no possibility of meeting that target date for implementation in 1997. To implement the measure in time for the start of the 1997–98 academic year, contracts would have to be finalised by the mid-point of this year, to give the financial institutions sufficient time. To delay the Bill in the way that new clause 3 proposes would defer implementation until 1998, which would be unacceptable.

Another argument for new clause 3 is a constitutional theory of which I was not hitherto aware—that a Government are unable to make any new policies or commitments, or to promote their legislative programme, in the 15 to 18 months before the likely date of a general election—or, as the hon. Member for Warrington, South (Mr. Hall) told me, the actual date of the next general election. That is new stuff of which I was not aware.

I am not sure that new clause 3 is the correct vehicle for an entirely new constitutional theory that will guide us in the governance of this country. It seems that Opposition Members are persuaded that there must be a sterile period of 15 to 18 months before a possible general election, even though we generally do not know when a general election will be. That seems a complication, although Opposition Members seem secure in their knowledge that a general election will not occur until spring 1997. That is all a horrible muddle, and simply will not do.

I assume that it is not incompetence that has brought new clause 3 to the House this evening, but mischief. There has been an element of mischief-making in this Bill, which I accept in the spirit in which Opposition Members offer it, but anyone who pauses for thought will realise that the Government cannot accept the new clause.

We have made it clear that we want to introduce the measure as rapidly as possible, consistent with its being implemented in a proper fashion. I have been persuaded that it is reasonable to delay the provision for 12 months, and I believe it proper that we should now aim at the period of tendering, invitation and finalisation of contracts ending at the mid-point of 1996. That will give the financial institutions that come forward approximately one year in which to prepare, which is a reasonable and practical timetable for implementing the Bill. New clause 3 would undermine that process.

The Minister is hopeful that, by the mid-point of this year, it will be possible to finalise the financial institutions that will be involved. Can the Minister say today, in mid-January, which financial institutions are involved now? If the Minister hopes to finalise matters by the middle of this year, he must know now the institutions involved.

I cannot recall offhand the hon. Gentleman's career before he entered the House, but I believe that it was in education. I suspect that he does not have wide commercial experience, or he would realise the folly of his question. The term "commercial confidence" does not seem to have impinged on the hon. Gentleman's consciousness. If we were to proceed to make arrangements with private institutions in the way that the hon. Gentleman suggests, bandied names about in a loose fashion and revealed details of contractual agreements at every stage, that would effectively make any deal between Government and the private sector impossible.

That may be the way in which the hon. Gentleman envisages a Labour Government, if ever there were to be one, conducting themselves. Because the hon. Gentleman does not have wide commercial experience, he may be unaware of the difficulties that would be imposed. That cannot be the way to proceed because it would undermine the whole process.

If the hon. Gentleman is making a commitment on behalf of his party that, on any future occasion that a Labour Government had a requirement to deal with the private sector, that Government would follow the hon. Gentleman's precepts of naming names and making revelations of detailed contractual arrangements at every stage, we will take that into account. If the hon. Gentleman reflects for a moment, he will realise the folly of that approach.

Has the Minister received assurances from financial institutions that, once his legislation is in place, he will have the support of those institutions in implementing the new conditions?

8.15 pm

No, because we are nowhere near that stage. The institutions are aware of the direction in which the Bill is taking us, and we had considerable preliminary discussions with a wide range of financial institutions. The delay I mentioned was part of the result. The financial institutions persuaded us that the changes that they would have to make to their systems and other developments would make an implementation date of October 1996 impracticable. I was prepared to delay 12 months to give the institutions a reasonable opportunity to go through the tendering and contractual process, to establish their systems and to make other changes.

We have not reached the point about which the hon. Gentleman inquires. I envisage us doing so some time between spring and summer this year. At that stage, I will give the House as much information as I reasonably can, within the constraints that I explained. New clause 3 is either mischievous or ill-founded, or it has been tabled in the wrong debate, for the wrong Bill. It seeks to alter our constitutional arrangements. One way or another, I must ask the House to reject it.

As to the date of the next general election, and for the sake of clarity

Wriggling.

I am not wriggling at all. We know that the Government want to hang on until Easter 1997, but we shall do all we can to ensure that does not happen. It is worth planning, on this occasion at least, on the basis that the Government and the Prime Minister may get what they want, which is why new clause 3 was tabled.

I was disappointed by the Minister's response. He failed to answer four specific questions. How do the Government intend to make up the £100 million deficit in the education budget as a result of the 12-month delay in implementing the measure? Will there be cuts elsewhere in the education budget? It would have been appropriate this evening for the Minister to give the House a reassurance that money will not be cut from other education services, or to identify precisely where cuts will be made. As it stands, £100 million of unspecified cuts will affect the education service in some way. I regret the Minister's failure to address that issue.

The Minister refused to give an assurance that the Government will not begin to charge a commercial rate for student loans, in accordance with the recommendation by the student loans working group to the Secretary of State and the Chancellor. The Minister confirmed that was one of two options, but he refused to give an assurance that that option will not be pursued. There has been no indication of the level of the taxpayers' subsidy to be made available to the private sector.

Finally, the Minister did not name one financial institution—be it a bank or a building society—that is interested in participating.

I noted the Government's spurious arguments about commercial confidentiality. Does my hon. Friend agree that the Government have not even said how many institutions have been involved, let alone revealed their names?

I agree. It is not without precedent for the Government to identify organisations with which they are in discussion in relation to such matters. The Teachers Pensions Agency is a good example. The six interested financial institutions have been named, and they are in negotiations and discussions with the Government to determine which will be selected. The procedure has been used in the past. The Minister has refused to respond this evening, because there is no interest in the private sector.

It is interesting that the Minister has also failed to make it clear that there is a possibility that a financial institution could receive a large amount of public subsidy, that a general election could take place, and that the institution could hang on to that subsidy although the process would not continue under a Labour Government.

That is another good reason why the new clause has considerable merit. We are disappointed that the Minister is not prepared to accept it, given the positive way in which it was introduced.

We have had a useful debate. We do not want to divide the House. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 5

Establishment Of Appeals Panel In Respect Of Student Loans

'() (1) The Secretary of State shall establish a Student Loans Appeals Panel ("the Panel") with the functions of investigating and adjudicating upon disputes between borrowers or intending borrowers (whether in respect of public or private sector student loans) and any person or body engaged in the making of such loans.

(2) The grounds of any dispute referred to the Panel under subsection (1) above may include—

(a) the refusal of a student loan; and

(b) the unreasonable disclosure to a third party of information relating to any applicant for a student loan held by any person or body engaged in the making of student loans under the Education (Student Loans) Act 1990.

(3) The Panel shall consist of three persons appointed by the Secretary of State, at least one of whom shall have recent employment experience in the field of higher or further education.

(4) Any party to a dispute referred to the Panel under subsection (1) above shall accede to any reasonable request to furnish the Panel with documents or information it requires in order to discharge its functions.'.—[M r. Byers.]

Brought up, and read the First time.

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

With this, it will be convenient to discuss amendment No. 4, in schedule, page 3, line 40, leave out from `(c)' to end of line 42 and insert

'sub-paragraph (5) shall be omitted.'.

The new clause would establish a new student appeals panel. As a consequence, we would need to delete the provisions contained within the Education (Student Loans) Act 1990 for the establishment of the independent assessor.

In Committee, the Government refused to accept any amendments aimed at providing students in both the private and public sectors with a right to appeal to the independent assessor. We felt it appropriate that, when a student applies for a loan and is then denied that loan, there should be an appeal mechanism.

At present, a student who is denied a loan by the Student Loans Company or is unhappy about the process or operation of that company may appeal to the independent assessor. We have had our reservations about the way in which the independent assessor has operated over the years. The operation has been limited in its application, and there has been a reluctance to publicise its workings. As a result, little use has been made of the independent assessor appeal procedure.

Nevertheless, it appears that the Government have recognised the failings of the process. The independent assessor is now conducting his business in a slightly different way, and is prepared to publicise the service he offers. The result has been—this may be because of some difficulties being experienced by the Student Loans Company as well—an increase in the number of students taking their cases to the assessor.

As the Bill stands, those students who wish to take out a loan with the private sector will have no one to go to to consider any grievance they might have. If they take their loans out with the already established Student Loans Company, the independent assessor will be available. We have two different systems. In one instance, the student will have the independent assessor, but if a student takes out a loan with a private sector institution, which is the Government's preferred option, there will be no appeal mechanism.

By means of the new clause, we seek to establish a mechanism to allow students to make an appeal. We list in the new clause the circumstances in which we feel that such an appeal might be made if an individual student felt a grievance.

It is important to recognise the emphasis that the Government are placing on the significance of the private sector element of the student loans system. The Minister has made it clear that, over a period, the Government want to see the majority of students taking out loans from private sector institutions. That means that the number of loans taken out with the Student Loans Company will reduce. We feel that it is appropriate that, in those circumstances, the majority of students, who will be dealing with private sector institutions, should have an appeal mechanism available to them if they have a grievance about the way in which they have been treated.

The Government—especially the Minister—have argued that it would be inappropriate to interfere in the manner in which private sector institutions conduct their business. They say that commercial decisions are for private sector institutions to make, and that it would be wrong for the Government to intervene or interfere in the way we propose. We disagree with that. We feel that there is a strong case for placing restrictions on the operation of private sector institutions.

In Committee, the Minister argued:

"there is no obligation on financial institutions to give their reasons for offering or withholding loan or other facilities. To put students into a mysterious different category from the rest of society would be extremely dubious."—[Official Report, Standing Committee B, 19 December 1995; c. 108.]

At another stage, in January, the Minister argued;

"People go to banks for loans to buy a home or a car, which may be an essential to their family, lifestyle or business. A student loan, albeit for something as important as education, is no more important than a loan for other essential purposes."—[Official Report, Standing Committee B, 9 January 1996; c. 134.]

That argument is fundamentally flawed. First, on principle, we cannot regard the necessity to take out a student loan—a student is being pushed into that position—as being on a par with taking out a loan for a car or for an extension to a house. We feel that students can be placed in a separate category.

First, the student loans system gives an entitlement to a student loan that is provided by statute. Students are treated by the Government through statute as being in a different and exceptional category. That being so, different and exceptional provisions can be made available. That is what we seek to do through new clause 5—to introduce a student appeal system.

Secondly, students will differ from other borrowers because their right to borrow exists only in so far as they are students. In general terms, their entitlement to borrow and the terms and conditions under which loans are made available are prescribed by Government.

We are also aware that, when many students apply for a loan, it is likely to be the first time that they have made such an application. A 17-year-old who is about to leave sixth form to go into higher education may make his first loan application at that stage. He or she may apply to a private sector institution. That institution can turn down that young person, as the Bill stands, without giving any reason for so doing. It may reach its decision on the basis of incorrect information. The student will never know about that because he or she will not be given a reason, yet the rest of his or her life will be blighted.

We are all aware that, if we apply for credit of any description—for a mortgage, for example—one of the main questions on the application form will be, "Have you ever been denied a loan—yes or no?" That poor student will have to say yes. He or she will not know why the loan has been denied. It is just that, for some reason, the private sector institution determines that he or she is not suitable to receive a loan from it.

Given the significance to the individual of being denied a loan from the private sector institution at 17, if that is to happen, the individual should at least be given an explanation why. As things currently stand, that is not so.

In Committee, the Minister was conscious of the problems that could arise as a result of someone being denied a loan, and showed his usual concern about these issues. He was very clear that there was really no need to worry, because, if a student was denied a loan by the private sector institution, the banking ombudsman would come galloping over the horizon to the student's rescue. The Minister made that clear in answer to a question from my hon. Friend the Member for Warrington, South (Mr. Hall), who asked where a student could take a grievance about being refused a private sector loan.

8.30 pm

The Minister replied:

"He would go exactly where students go to at the moment—to the banking ombudsman".—[Official Report, Standing Committee B, 9 January 1996; c. 135.]

Perhaps the Minister should have referred to the terms of reference of the banking ombudsman before making that comment. I have had the opportunity to do so, and it is clear that the banking ombudsman would have no status in considering a student's application that has been rejected by a private sector institution.

The limits on the ombudsman's powers are clearly stated:

"The Ombudsman shall have power to consider a complaint made to him except: —
(a) to the extent that the complaint relates to a Bank's commercial judgment in decisions about lending or security".

I am afraid that the Minister got it totally wrong in Standing Committee. The banking ombudsman has no part to play. If a student is denied a loan by a private sector institution, no one can intervene on the student's behalf. That is why new clause 5 is so important. The Minister was mistaken in Committee. He thought that the student had the right to raise the matter with the ombudsman. That is not the case. We need something in place that will allow the student to raise the matter so that further consideration can be given. New clause 5 puts such a mechanism in place.

In the light of those facts, I hope that the Minister will recognise, as he did in Committee, that there should be an avenue to consider these matters, because of the importance to the individual of having an application refused. I hope also that he will consider sympathetically the need for an appeals panel along the lines outlined in new clause 5.

I support the remarks of my hon. Friend the Member for Wallsend (Mr. Byers), particularly about subsection (2)(a).

I appeal to the Minister once again to consider the refusal of a student loan. My hon. Friend pointed out that, when a student's loan application is refused, it could be as a result of wrong information, and that could affect him or her for a lifetime.

In my constituency, an adult came to me because he could not understand why for years he was refused credit. In the end, it turned out that he had a common surname, and that someone else with the same surname and forename lived in a different tenement flat but the same tenement stair. That is a common problem in Scotland, as I hope the Minister will recognise, where so many tenement dwellings exist.

Wrong information could dog a person for years. It could, of course, be correct information, but perhaps the student comes from an area where bad debts are pretty rife, and far more common than the norm. In that case, such a decision could stay with the student for life, no matter how careful that individual was about repaying debts, and no matter how successful he or she turned out to be in a subsequent career after graduation.

The National Union of Students agreed with us, not surprisingly, that there is hardly any justice in an institution refusing to give a student information on why he or she has been refused a loan, yet at the same time being willing to disclose to third parties information about the student's financial situation, and whether to give a grant or loan. The Minister tabled an amendment to the Bill to protect students and graduates from unwanted mail shots that might result from that disclosure. Unwanted mail shots are the least of a person's worries; they can easily be thrown in the bin.

A student could be refused for unfair and inadequate reasons and would never know why, yet other financial institutions are allowed to have that information. There is no justice in that, and I hope that, at this eleventh hour, the Minister will change his mind.

Whatever happened to new Labour? I thought that we were told by the leader of the Labour party that this was the era of new Labour and stakeholders and all those exciting new visionary concepts. I thought that new Labour was at ease with capital and business and that it would be friendly with the City. Yet I think that the truth is rather more unpalatable. The reality is that Opposition Members either do not understand the way in which business and the commercial sectors operate, or—I suspect—are instinctively hostile to the concept of private business and what the private sector does. That surfaced in Committee and it has surfaced again.

As the hon. Member for Wallsend (Mr. Byers) pointed out, where the Student Loans Company currently operates, and where it will operate in future, there is an independent assessor to whom students can go if they are unhappy with the way in which the company has dealt with them. The hon. Gentleman knows, although he did not give the figure, that, in the year to July 1995, such was the extent of rife dissatisfaction with the Student Loans Company that the huge number of students who approached the assessor was five. Only five students went to the assessor and complained, one way or another, that they were not satisfied with what the Student Loans Company had done for them. I shall leave hon. Members to make their own judgment about the Student Loans Company on the basis of that information.

Opposition Members argue that it is necessary to have an independent assessor mechanism to protect individuals against a public sector monopoly provider, which is what the Student Loans Company hitherto has been, but then they argue that it is necessary to have the same mechanism to deal with private sector providers or lenders. That is not so for a whole number of reasons, not least because students will continue to have a choice not only on whether they deal with the private sector or the Student Loans Company but on which private sector provider to use. We are talking about a competitive environment where the student—the customer—has choice, as opposed to the public sector. Until the provisions of the Bill become effective, the student has no choice of where to go for a loan. There is a real difference between the private and the public sectors.

At the moment, the Student Loans Company is required to make available a loan to a student who applies for one. It has no choice in the matter. The private sector will be able to choose the students to whom it wishes to lend. It is the refusal of a loan application by a private sector institution that causes Opposition Members concern, because of the future implications of such a refusal. That is why We believe that an appeal mechanism is necessary.

Will the Minister address that issue and recognise that we cannot compare the necessities of the assessor for the Student Loans Company with that of a newly established private sector institution that is involved?

We must inevitably compare them, as students will. If the hon. Gentleman believes that students will be blighted by a fear of dealing with banks, in his scheme of things no student would approach a private lender, fearing the humiliation of being rejected. I do not think that students hesitate to ask banks for credit cards, loans or overdrafts. It is a matter for them, but they do it, apparently with maturity and confidence. Some may be turned down, but I doubt that their lives are blighted by that. The hon. Gentleman is making far too much of the issue.

The hon. Gentleman's point does, however, lead me to a worry about the new clause that is fundamental to my objection to what the hon. Gentleman and his hon. Friends suggest. New clause 5 asks for a student loans appeals panel

"with the functions of investigating and adjudicating upon disputes between borrowers or intending borrowers…and any person…engaged in the making of such loans."

I can interpret that, and the thrust of what Opposition Members have said, only as meaning that the body concerned would have the power to oblige a private lender to lend to an individual. That is a new and disturbing development in the thinking of Opposition Members: if they are suggesting that a statutory body should have power to oblige a private concern—a bank or building society, for instance—to lend to an individual, we are in new and dangerous territory. If the new clause does not mean that, I do not think that it means anything; so, one way or another, that is what it must mean. If all that the panel will say is, "Having looked into the matter, we rather regret that you did not lend that person any money," I am not sure what its establishment will achieve.

The Minister says that we are in "new and dangerous territory", but nothing could be further from the truth. We already have industrial tribunals, which do not require an employer to take an employee back if he does not wish to: we have a system of adjudication that does not require a party to a dispute to do something that he may not want to do. That system works reasonably well in industrial tribunals, and we believe that it would also work well in the context of student loans.

In that case, I have doubts about the point or effectiveness of such a panel. Would it make financial awards? A tribunal can do that. Presumably, it could not undo the fact that a bank had turned down an applicant for a loan, so the blight that worries the hon. Gentleman would still exist. Disappointed students—with a blot on their record that will be with them for life—would, we now learn, have only the satisfaction of the fine that the panel would impose on the lender for having wrongly rejected the application.

The more we discuss the proposal, and the more detail I elicit from Opposition Members, the more absurd it becomes. I am suggesting that students should be able to choose between a number of private lenders and the Student Loans Company. There would still be an independent assessor to deal with the Student Loans Company, and the existing mechanisms of competition, the framework of law and all the other provisions that protect every citizen—including students—in regard to financial services would apply.

I believe that even young students are capable of learning how to deal with the various institutions, and possess the maturity and confidence to do so. I do not think it right to think of students as a special group that needs to be patronised, defended and protected at every turn, even when borrowing is involved.

In Committee, opposing our suggestions about income-contingent repayment, the Minister stressed that one of the main reasons for his opposition was the danger presented to confidentiality. Confidentiality was clearly important to him in that context; why is it irrelevant now?

I must ask the hon. Gentleman to explain himself. He has lost me.

I refer to the confidentiality that the panel would try to secure for a student whose application had been refused. In Committee, the Minister said that the need for confidentiality was his main reason for objecting to income-contingent repayments based on national insurance. Surely there is an inconsistency here.

8.45 pm

I did not say that that was the main reason for my objection; it was on a long list of powerful arguments that I advanced to explain why I was not enamoured of the idea of linking income contingency with national insurance contributions or income tax payments. As for confidentiality, I said then, and will say again, that a satisfactory number of arrangements exist to protect confidentiality in the context of financial services. That is the case now, and I expect it to continue to be so in the future. I was not persuaded then, and am not persuaded now, that any additional measures will be required. In any event, I do not accept that the measures proposed in the new clause and amendment are necessary, or would be particularly beneficial.

We are talking about students—young people, admittedly, but young people with intelligence and ability—learning to deal with different financial institutions for many different purposes. As I have said, they do that more than adequately now, and I am confident that they will continue to do so. I cannot agree with Opposition Members that we should single out students as a group, assuming that they are incompetent and that private lenders will spend all their time doing them down and gratuitously turning down their loan applications, with all the implications that that would have for the lenders' reputation and their competitive position.

Opposition Members have presented a false analysis. The new clause is unnecessary, and would damage the relationship between the Government and the private sector, a relationship about which those Opposition Members seem less concerned than their leader wishes to persuade us. I hope that the House will reject the new clause and the amendment.

The Minister suggests that it would be improper to single out students, but the Bill does precisely that: students are to be treated differently from other sections of the community. We feel that, when public money is involved—as it will be in this instance, because a subsidy from the taxpayer will be made available to the private sector—there is nothing wrong with attaching terms and conditions, especially when that is in the public interest. The establishment of a student loans appeals panel would allow proper consideration to be given to wrong decisions or the provision of erroneous information to the private sector institution involved, resulting in the denial of a loan.

As the Bill stands, a student cannot raise questions or appeal to any body about the refusal of a loan. Students can never know why their loans have been refused. The information involved may well be incorrect, but the student will be unaware of that. An appeals system would allow the information to be made available to an independent body, and would enable a student to find out why the loan was refused.

In Committee, the Minister clearly believed that there was an avenue of appeal to the banking ombudsman. That was his powerful argument. It is now clear that, under his terms of reference, the banking ombudsman cannot deal with such matters. The Minister should accept that he was incorrect in Committee, although he recognised the need for a body that could look at the matter. Given that the banking ombudsman cannot do that, we need a body that can consider those matters. We have advanced some powerful arguments for new clause 5, and we regret the Minister's refusal to accept it. However, the matter may be raised in another place and it is inappropriate to press the new clause to a Division. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

Subsidy In Respect Of Private Sector Student Loans

I beg to move amendment No. 1, in page 1, line 13, at end add—

'(1B) The Secretary of State shall, as soon as any arrangements under subsection (1A) above have been concluded, lay before each House of Parliament a statement containing the names of any person with whom those arrangements have been concluded and the terms of the arrangements, including the amount of subsidy to be paid to each such person under that subsection.'.

The amendment seeks to establish the absolutely bare minimum of parliamentary scrutiny of the Government's measures. As my hon. Friends have repeatedly stressed, the Bill is skeletal, an enabling measure. It contains barely any detail of the new private sector student loans that will become operative. Parliament is being asked to give blanket authority to the Government to negotiate with the private sector as they see fit. The Minister wants authority for public expenditure subsidies of whatever order he considers necessary to persuade the banks and building societies to participate in the scheme.

We know from experience how liberal the Government can be with public money when it is used as a sweetener to ensure that their privatisation measures do not bite the dust. For example, the additional cost to the taxpayer of a privatised railway system will be £850 million a year, which is more than £2 million a day. The Government cannot even be trusted with taxpayers' money in connection with overseas projects and Governments. We all recall Pergau dam and it has not gone unnoticed that the chief whistleblower in that affair, the former permanent secretary to the Department for Education and Employment, is no longer in the Government's employ.

In deliberations in Standing Committee, the Minister repeatedly rejected arguments that would have allowed the House to examine the arrangements that he finally negotiates. He did that on the ground that Parliament cannot be involved in the negotiation of commercial contracts. The amendment simply asks the Minister to report in a full statement to the House the outcome of his negotiations—the details of the contracts when they have been concluded. That is often the practice in the House when significant commercial contracts involving public money are awarded. Sometimes even the Prime Minister chooses to give the House advance notice of a decision, as he helpfully did yesterday over Land Rover ambulances.

As the Bill stands, it will offer no opportunity for Parliament to question the Minister on his arrangements. That surely undermines the rights of the House. How can the Executive object to making a proper statement to the House on a new set of contracts of this kind? Should we simply accept that we have to read a press release on the outcome of the Minister's negotiations, or a written answer, or should we have to go to the Library to look at a document that the Minister has kindly put there?

Let us not forget the magnitude of the issue that we are considering. Outstanding student loans, that is, principal and interest, will total some £5 billion by the end of the decade. We are not debating a small matter: these are substantial commitments of resources. Public subsidies to the private sector will be very significant. As the Minister cannot tell us the amount of those subsidies, he should surely accept the responsibility of presenting a full statement to the House when he is in a position to do that.

The House has a right to expect answers to a number of key questions. What level of subsidy will be paid to private sector lenders? How much will private sector lenders obtain for administration costs, for interest rate subsidy and for default on loans? All those factors are significant in the current public sector scheme under the Student Loans Company. This is the crux of the matter. Huge subsidies will be needed if the banks and building societies are ever likely to get involved. Anyone who doubts that should consider the pronounced reluctance of financial institutions at this time.

The Minister wants to walk off with a blank cheque and does not want to account for how he spends it. That is scarcely standard commercial practice, unless one works for a financial institution such as Barings bank. Of course the House is aware of the close relationship between the Conservative party and Barings bank, which gave the party more than £600,000 between 1979 and 1993. Nick Leeson caused the ruin of one of the most reputable institutions in the City at the same time as he caused great damage to the cash flow of one of the least reputable institutions in politics—the Conservative party.

Unlike secret Conservative party accounts, the subsidies to the banks and building societies should be open to public and parliamentary scrutiny as soon as possible. For instance, we require an answer to the question whether the subsidies will include the start-up costs of new information technology systems for the banks and building societies. Considerable importance has been attached to that issue. Scratching for an explanation in Committee as to why the timetable for the Bill was proving so totally unrealistic, the Minister stated that one of the crucial factors was the problem of the need for new technology systems to handle student accounts.

Why on earth did it take the Minister until after the Bill had been presented to discover those matters? Why did he not carry out some serious investigations and make inquiries before it was presented? It is worth remembering that the Student Loans Company, for which the Minister bears some responsibility, has invested some £20 million in computer operating systems since 1990.

When asked in Committee by my hon. Friend the Member for Wallsend (Mr. Byers) whether there would be a disclosure of the amount of public money that went towards the start-up costs in the private sector, the Minister said that he did not think that he could be specific at that stage, for the obvious reason that the detailed nature of the contractual arrangements had not yet been finalised. The Minister insists that we are obliged to accept that argument for the time being. But surely that question must be answered for Parliament to be satisfied with the Bill's provisions. The amendment gives the Minister the opportunity to assure the House that he will do that.

What about the public sector borrowing requirement effects of the scheme? When do Ministers expect the combined public and private sector loans scheme to secure public expenditure savings? When can we expect revised forecasts for the performance of the student loans scheme in its dual provision? What will be the exact terms and conditions attaching to student loans? How will repayment terms vary under the new scheme, and what repayment terms will be offered to students by different private sector providers? The Minister was exceedingly coy in Committee about even the basic principles upon which he was working when we questioned him on those matters.

Will the chosen private sector lenders offer sufficient geographical coverage in the United Kingdom? What guarantees do we have to ensure that all students in different localities throughout the country will be served by the new arrangements? Hon. Members will surely regard all that information as vital, but none of it is in front of the House of Commons in definitive form. Unless the Minister can tell us otherwise, a revised tender document has not even been made available.

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Nor, significantly, do we know, as my hon. Friend the Member for Wallsend said, how the Minister is making up the £100 million shortfall caused by the delayed introduction of his scheme. That figure will be of the greatest interest to all people in higher education who are wrestling with the savage implications of the 7 per cent. cut in recurrent and capital funding for next year. Is the higher education sector expected to bridge that shortfall with a further squeeze on its unit of resource? If so, that is to pile Pelion on Ossa. The Minister might have to bear some serious consequences should he attempt to go down that road.

Parliament cannot have any confidence in the new scheme when it is to be delayed for one year. The measure is short-sighted and ill considered. Surely, the Government have a duty to put flesh on the bare bones that they have offered to the House. That is why the amendment seeks a full statement from the Minister to the House at the appropriate time at the conclusion of his negotiations.

The hon. Member for Oldham, Central and Royton (Mr. Davies) makes a passionate request, but yet again, he is going not a little over the top. I have told him and the Committee—and I repeat to the House—that it is of course our intention that, when the Government finalise contractual arrangements with private lenders to give effect to the Bill's aims, I shall notify the House of those lenders. That is not a problem.

I have also said that details of public expenditure and private sector loans will be set out annually in the appropriation accounts and in the Department's annual report, and that all the normal arrangements of the National Audit Office and the other panoply of checks will apply in this case. That much is clear. When, however, the hon. Gentleman expects, as he does in the amendment, that the terms of the arrangements and details of contracts concluded—in this case, between the Government and private lenders—should be in the public domain, I cannot agree with him.

In Committee, I asked the hon. Gentleman whether he was giving an undertaking that any future Labour Government, in their dealings with the private sector across government, would publish in every case all the contracts in detail and all the contractual arrangements made between that Government and a private sector provider of goods or services. He did not give me an answer then and I suspect that he is not going to give me an answer now. If the amendment is a new enunciation of the doctrine that would form the basis of the relationship between thrusting, entrepreneurial new Labour and the private sector, which has been wooed by the hon. Gentleman's colleagues, I would be surprised, although many of my colleagues would not be.

This issue goes to the heart of the relationship between the Government of the day and the private sector. The relationship between this Government and the private sector is well established and well understood, but it is in the new clauses and amendments to this Bill of all Bills that we get a glimpse of the reality of Labour Members' attitude to the private sector, and of what their approach to that sector would be, were they ever to be in government.

I do not agree with the amendment because it takes us into territory that Conservative Members find unacceptable. It would undermine and prejudice the operation of the arrangements between the Government and the private sector. I urge to House to reject the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 247, Noes 278.

Division No. 27]	[9.04 pm
AYES
Abbott Ms Diane	Davies, Ron (Caerphilly)
Adams, Mrs Irene	Davis, Terry (B'ham, H'dge H'l)
Ainger, Nick	Denham, John
Ainsworth, Robert (Cov'try NE)	Dewar, Donald
Alton, David	Dixon, Don
Anderson, Donald (Swansea E)	Donohoe, Brian H
Anderson, Ms Janet (Ros'dale)	Dowd, Jim
Armstrong, Hilary	Dunwoody, Mrs Gwyneth
Ashdown, Rt Hon Paddy	Eagle, Ms Angela
Ashton, Joe	Eastham, Ken
Austin-Walker, John	Etherington, Bill
Banks, Tony (Newham NW)	Evans, John (St Helens N)
Barron, Kevin	Ewing, Mrs Margaret
Battle, John	Faulds, Andrew
Bayley, Hugh	Field, Frank (Birkenhead)
Beckett, Rt Hon Margaret	Flynn, Paul
Beggs, Roy	Foster, Rt Hon Derek
Beith, Rt Hon A J	Foster, Don (Bath)
Bell, Stuart	Fyfe, Maria
Bennett, Andrew F	Galbraith, Sam
Benton, Joe	Galloway, George
Bermingham, Gerald	Gapes, Mike
Berry, Roger	Garrett, John
Betts, Clive	George, Bruce
Blunkett, David	Gerrard, Neil
Boateng, Paul	Gilbert, Rt Hon Dr John
Bradley, Keith	Godman, Dr Norman A
Bray, Dr Jeremy	Godsiff, Roger
Brown, N (N'c'tle upon Tyne E)	Golding, Mrs Llin
Bruce, Malcolm (Gordon)	Graham, Thomas
Byers, Stephen	Grant, Bernie (Tottenham)
Callaghan, Jim	Griffiths, Nigel (Edinburgh S)
Campbell, Mrs Anne (C'bridge)	Griffiths, Win (Bridgend)
Campbell, Menzies (Fife NE)	Grocott, Bruce
Campbell, Ronnie (Blyth V)	Hain, Peter
Campbell-Savours, D N	Hall, Mike
Canavan, Dennis	Hanson, David
Cann, Jamie	Hardy, Peter
Carlile, Alexander (Montgomery)	Harman, Ms Harriet
Chidgey, David	Harvey, Nick
Chisholm, Malcolm	Henderson, Doug
Church, Judith	Heppell, John
Clapham, Michael	Hill, Keith (Streatham)
Clark, Dr David (South Shields)	Hinchliffe, David
Clarke, Eric (Midlothian)	Hodge, Margaret
Clarke, Tom (Monklands W)	Hoey, Kate
Clelland, David	Hogg, Norman (Cumbemauld)
Clwyd, Mrs Ann	Home Robertson, John
Coffey, Ann	Hood, Jimmy
Cohen, Harry	Hoon, Geoffrey
Cook, Frank (Stockton N)	Howarth, Alan (Strat'rd-on-A)
Cook, Robin (Livingston)	Howarth, George (Knowsley North)
Corbett, Robin	Howells, Dr Kim (Pontypridd)
Corbyn, Jeremy	Hoyle, Doug
Corston, Jean	Hughes, Robert (Aberdeen N)
Cunliffe, Lawrence	Hutton, John
Cunningham, Jim (Covy SE)	Illsley, Eric
Dafis, Cynog	Ingram, Adam
Darling, Alistair	Jackson, Glenda (H'stead)
Davidson, Ian	Jackson, Helen (Shef'ld, H)
Davies, Bryan (Oldham C'tral)	Jamieson, David
Davies, Rt Hon Denzil (Llanelli)	Jones, Barry (Alyn and D'side)

Jones, leuan Wyn (Ynys Môn)	Prescott, Rt Hon John
Jones, Jon Owen (Cardiff C)	Primarolo, Dawn
Jones, Lynne (B'ham S O)	Purchase, Ken
Jones, Martyn (Clwyd, SW)	Quin, Ms Joyce
Jowell, Tessa	Randall, Stuart
Kaufman, Rt Hon Gerald	Raynsford, Nick
Keen, Alan	Reid, Dr John
Kennedy, Jane (L'pool Br'dg'n)	Rendel, David
Khabra, Piara S	Robertson, George (Hamilton)
Kilfoyle, Peter	Roche, Mrs Barbara
Kirkwood, Archy	Rooker, Jeff
Lestor, Joan (Eccles)	Ross, Ernie (Dundee W)
Liddell, Mrs Helen	Rowlands, Ted
Litherland, Robert	Ruddock, Joan
Lloyd, Tony (Stretford)	Salmond, Alex
Llwyd, Elfyn	Sedgemore, Brian
Lynne, Ms Liz	Sheerman, Barry
McAllion, John	Sheldon, Rt Hon Robert
McCartney, Ian	Shore, Rt Hon Peter
McCartney, Robert	Short, Clare
McKelvey, William	Simpson, Alan
Mackinlay, Andrew	Skinner, Dennis
McLeish, Henry	Smith, Andrew (Oxford E)
Madennan, Robert	Smith, Llew (Blaenau Gwent)
McMaster, Gordon	Smyth, The Reverend Martin
MacShane, Denis	Spearing, Nigel
Madden, Max	Speller, John
Maddock, Diana	Squire, Rachel (Dunfermline W)
Mahon, Alice	Steel, Rt Hon Sir David
Marek, Dr John	Steinberg, Gerry
Marshall, David (Shettleston)	Stevenson, George
Marshall, Jim (Leicester, S)	Strang, Dr. Gavin
Martlew, Eric	Straw, Jack
Maxton, John	Sutcliffe, Gerry
Meale, Alan	Taylor, Mrs Ann (Dewsbury)
Michael, Alun	Taylor, Matthew (Truro)
Michie, Bill (Sheffield Heeley)	Timms, Stephen
Michie, Mrs Ray (Argyll & Bute)	Tipping, Paddy
Milburn, Alan	Touhig, Don
Miller, Andrew	Trimble, David
Mitchell, Austin (Gt Grimsby)	Turner, Dennis
Molyneaux, Rt Hon Sir James	Tyler, Paul
Moonie, Dr Lewis	Vaz, Keith
Morgan, Rhodri	Walker, Rt Hon Sir Harold
Morley, Elliot	Wallace, James
Morris, Rt Hon Alfred (Wy'nshawe)	Walley, Joan
Morris, Estelle (B'ham Yardley)	Wardell, Gareth (Gower)
Morris, Rt Hon John (Aberavon)	Wareing, Robert N
Mudie, George	Watson, Mike
Mullin, Chris	Welsh, Andrew
Murphy, Paul	Wicks, Malcolm
Nicholson, Emma (Devon West)	Williams, RI Hon Alan (SW'n W)
Oakes, Rt Hon Gordon	Williams, Alan W (Carmarthen)
O'Brien, Mike (N W'kshire)	Winnick, David
O'Hara, Edward	Wise, Audrey
Olner, Bill	Worthington, Tony
O'Neill, Martin	Wray, Jimmy
Pearson, Ian	Wright, Dr Tony
Pickthall, Colin	Young, David (Bolton SE)
Pike, Peter L
Pope, Greg	Tellers for the Ayes:
Powell, Ray (Ogmore)	Mr. John Cummings and
Prentice, Gordon (Pendle)	Mrs. Bridget Prentice.
NOES
Ainsworth, Peter (East Surrey)	Atkinson, Peter (Hexham)
Aitken, Rt Hon Jonathan	Baker, Nicholas (North Dorset)
Alexander, Richard	Baldry, Tony
Alison, Rt Hon Michael (Selby)	Banks, Robert (Harrogate)
Allason, Rupert (Torbay)	Bates, Michael
Arbuthnot, James	Batiste, Spencer
Arnold, Jacques (Gravesham)	Bellingham, Henry
Arnold, Sir Thomas (Hazel Grv)	Bendall, Vivian
Ashby, David	Beresford, Sir Paul
Atkins, Rt Hon Robert	Biffen, Rt Hon John
Atkinson, David (Bour'mouth E)	Body, Sir Richard

Bonsor, Sir Nicholas	Gillen, Cheryl
Boswell, Tim	Goodlad, Rt Hon Alastair
Bottomley, Peter (Eltham)	Goodson-Wickes, Dr Charles
Bowden, Sir Andrew	Gorman, Mrs Teresa
Bowis, John	Gorst, Sir John
Boyson, Rt Hon Sir Rhodes	Grant, Sir A (SW Cambs)
Brandreth, Gyles	Greenway, Harry (Ealing N)
Brazier, Julian	Greenway, John (Ryedale)
Bright, Sir Graham	Griffiths, Peter (Portsmouth, N)
Brooke, Rt Hon Peter	Grylls, Sir Michael
Brown, M (Brigg & Cl'thorpes)	Gummer, Rt Hon John Selwyn
Browning, Mrs Angela	Hague, Rt Hon William
Bruce, Ian (Dorset)	Hamilton, Rt Hon Sir Archibald
Burns, Simon	Hamilton, Neil (Tatton)
Burt, Alistair	Hampson, Dr Keith
Butterfill, John	Hanley, Rt Hon Jeremy
Carlisle, John (Luton North)	Hannam, Sir John
Carlisle, Sir Kenneth (Lincoln)	Hargreaves, Andrew
Carrington, Matthew	Harris, David
Carttiss, Michael	Haselhurst, Sir Alan
Cash, William	Hawkins, Nick
Channon, Rt Hon Paul	Hawksley, Warren
Chapman, Sir Sydney	Hayes, Jerry
Churchill, Mr	Heald, Oliver
Clappison, James	Heath, Rt Hon Sir Edward
Clark, Dr Michael (Rochford)	Heathcoat-Amory, Rt Hon David
Clifton-Brown, Geoffrey	Hendry, Charles
Coe, Sebastian	Heseltine, Rt Hon Michael
Congdon, David	Hicks, Robert
Conway, Derek	Higgins, Rt Hon Sir Terence
Coombs, Anthony (Wyre For'st)	Hill, James (Southampton Test)
Coombs, Simon (Swindon)	Hogg, Rt Hon Douglas (G'tham)
Cope, Rt Hon Sir John	Horam, John
Couchman, James	Hordern, Rt Hon Sir Peter
Cran, James	Howard, Rt Hon Michael
Currie, Mrs Edwina (S D'by'ire)	Howell, Rt Hon David (G'dford)
Curry, David (Skipton & Ripon)	Howell, Sir Ralph (N N'folk)
Davies, Quentin (Starnford)	Hughes, Robert G (Harrow W)
Davis, David (Boothferry)	Hunt, Rt Hon David (Wirral W)
Day, Stephen	Hunt, Sir John (Ravensbourne)
Deva, Nirj Joseph	Hunter, Andrew
Devlin, Tim	Jack, Michael
Dicks, Terry	Jackson, Robert (Wantage)
Dorrell, Rt Hon Stephen	Jenkin, Bernard
Dover, Den	Jessel, Toby
Duncan, Alan	Johnson Smith, Sir Geoffrey
Duncan-Smith, Iain	Jones, Gwilym (Cardiff N)
Dunn, Bob	Jones, Robert B. (W H'fordshire)
Durant, Sir Anthony	Jopling, Rt Hon Michael
Dykes, Hugh	Kellett-Bowman, Dame Elaine
Eggar, Rt Hon Tim	Key, Robert
Elletson, Harold	Kirkhope, Timothy
Emery, Rt Hon Sir Peter	Knapman, Roger
Evans, David (Welwyn Hatfield)	Knight, Mrs Angela (Erewash)
Evans, Jonathan (Brecon)	Knight, R Hon Greg (Derby N)
Evans, Nigel (Ribble Valley)	Knight, Dame Jill (Bir'm E'st'n)
Evans, Roger (Monmouth)	Knox, Sir David
Evennett, David	Kynoch, George (Kincardine)
Faber, David	Lait, Mrs Jacqui
Fabricant, Michael	Lamont, Rt Hon Norman
Fenner, Dame Peggy	Lawrence, Sir Ivan
Field, Barry (Isle of Wight)	Legg, Barry
Fishburn, Dudley	Leigh, Edward
Forman, Nigel	Lester, Sir James (Broxtowe)
Forsyth, Rt Hon Michael (Stirling)	Lidington, David
Forth, Eric	Lilley, Rt Hon Peter
Fowler, Rt Hon Sir Norman	Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Rt Hon Sir Marcus (Shipley)	Lord, Michael
Freeman, Rt Hon Roger	Luff, Peter
French, Douglas	MacGregor, Rt Hon John
Gale, Roger	MacKay, Andrew
Gallie, Phil	Maclean, Rt Hon David
Gardiner, Sir George	McLoughlin, Patrick
Garel-Jones, Rt Hon Tristan	McNair-Wilson, Sir Patrick
Garnier, Edward	Madel, Sir David
Gill, Christopher	Maitland, Lady Olga

Malone, Gerald	Spencer, Sir Derek
Mans, Keith	Spicer, Sir James (W Dorset)
Marland, Paul	Spicer, Sir Michael (S Worcs)
Marlow, Tony	Spink, Dr Robert
Martin, David (Portsmouth S)	Spring, Richard
Mates, Michael	Sproat, Iain
Mawhinney, Rt Hon Dr Brian	Squire, Robin (Hornchurch)
Mayhew, Rt Hon Sir Patrick	Stanley, Rt Hon Sir John
Merchant, Piers	Steen, Anthony
Mitchell, Andrew (Gedling)	Stephen, Michael
Mitchell, Sir David (NW Hants)	Stern, Michael
Moate, Sir Roger	Stewart, Allan
Monro, Rt Hon Sir Hector	Streeter, Gary
Montgomery, Sir Fergus	Sumberg, David
Needham, Rt Hon Richard	Sweeney, Walter
Neubert, Sir Michael	Sykes, John
Newton, Rt Hon Tony	Tapsell, Sir Peter
Nicholls, Patrick	Taylor, Ian (Esher)
Nicholson, David (Taunton)	Taylor, John M (Solihull)
Norris, Steve	Taylor, Sir Teddy (Southend, E)
Onslow, Rt Hon Sir Cranley	Temple-Morris, Peter
Ottaway, Richard	Thomason, Roy
Page, Richard	Thompson, Sir Donald (C'er V)
Paice, James	Thompson, Patrick (Norwich N)
Patnick, Sir Irvine	Thornton, Sir Malcolm
Patten, Rt Hon John	Thurnham, Peter
Pattie, Rt Hon Sir Geoffrey	Tracey, Richard
Pawsey, James	Tredinnick, David
Pickles, Eric	Trend, Michael
Porter, Barry (Wirral S)	Twinn, Dr Ian
Porter, David (Waveney)	Viggers, Peter
Powell, William (Corby)	Waldegrave, Rt Hon William
Rathbone, Tim	Walden, George
Redwood, Rt Hon John	Walker, Bill (N Tayside)
Renton, Rt Hon Tim	Waller, Gary
Richards, Rod	Ward, John
Riddick, Graham	Wardle, Charles (Bexhill)
Roberts, Rt Hon Sir Wyn	Waterson, Nigel
Robertson, Raymond (Ab'd'n S)	Watts, John
Robinson, Mark (Somerton)	Wheeler, Rt Hon Sir John
Roe, Mrs Marion (Broxbourne)	Whitney, Ray
Rowe, Andrew (Mid Kent)	Whittingdale, John
Rumbold, Rt Hon Dame Angela	Widdecombe, Ann
Sackville, Tom	Wilkinson, John
Sainsbury, Rt Hon Sir Timothy	Willetts, David
Scott, Rt Hon Sir Nicholas	Wilshire, David
Shaw, David (Dover)	Winterton, Mrs Ann (Congleton)
Shaw, Sir Giles (Pudsey)	Wolfson, Mark
Shephard, Rt Hon Gillian	Wood, Timothy
Shepherd, Sir Colin (Hereford)	Yeo, Tim
Shepherd, Richard (Aldridge)
Sims, Roger	Tellers for the Noes:
Skeet, Sir Trevor	Dr. Liam Fox and
Smith, Sir Dudley (Warwick)	Mr. Bowen Wells.

Question accordingly negatived.

Order for Third Reading read.

I have to inform the House that Madam Speaker has not selected the reasoned amendment.

9.17 pm

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

Our objectives in the Bill are simple and straightforward. We want to extend choice, competition and diversity in the provision of loans to students. Those are our fundamental principles in education, and indeed throughout the public sector. Through competition, student borrowers will get a better service and a better tailored product. Personal lending is best done by the banks and building societies—the experts, after all—and not necessarily by the Government. It is surely preferable that the enormous sums involved are raised and that the risks are largely borne by the private sector.

Any loan scheme has to balance the interests of the taxpayer and of the student. Our scheme offers preferential terms, including deferment and a retail prices index-linked interest rate for students, and a relatively short repayment period benefits the taxpayer. To that extent, our scheme is already income contingent. I am not persuaded that other schemes would offer a better balance.

We will have to wait to see whether Opposition Members want to shift the balance towards the taxpayer or the student, when they eventually decide what they want to do. At least we know that some Opposition Members appear to accept the principle of loans—five years after we debated the previous Education (Student Loans) Bill. I hope that we do not have to wait that long before we hear the Opposition's attitude to some of the more developed aspects of policy.

The Labour party aspires to be the party of business. Indeed, the matter was raised yet again while discussing the final amendment tabled on Report a few minutes ago. Yet given the opportunity to back choice and competition in the private sector, the Labour party has shown how truly empty its aspiration is—certainly in the context of the Bill. All that Labour could come up with was more or less pointless regulation and an inherent distrust of the private sector.

I believe that this modest Bill will move us forward significantly in quality and choice in the provision of loans to students. We have discussed it in detail in Committee and again on Report. The Bill, in its present form, will provide the ideal vehicle for the enhanced provision of loans to students, within the constraints of the existing regime. We should also bear it in mind that the new provision will exist in parallel with continuing provision from the Student Loans Company, which will continue to operate and to offer a choice between private and public sector loans. I hope that the House appreciates the merits of the Bill, however modest it may be. I ask the House to give it a Third Reading.

9.20 pm

I oppose Third Reading of the Bill. We are getting accustomed to the Government misusing the concept of choice in education. The choice that they suggest for school students and their parents frequently turns out to be choice by schools of students. Here we have the supposed extension of choice and opportunity to students. It is, however, clear that the choice will be exercised by banks and private institutions.

The Bill is an enabling Bill, without detail on the way in which the Government intend to act. It is without detail because there was not adequate preparation before it was introduced. The Bill was introduced in a tremendous rush, and that rush was born of one concept only—how to ensure that the Government could write into the budgetary forecast £100 million of savings from privatising an expensive part of the student loan provision. This first piece of legislation of the Government's last full parliamentary Session, the pathfinder of the Government's legislative programme, is sadly off course and is proving an appalling augury of the Government's Bills this Session.

Before the Bill was discussed in Committee, the Minister said that the whole issue was about breakneck speed and the necessity for extreme urgency in implementing the Bill. That urgency was, of course, born of an attempt to deliver £100 million of savings in the public sector in 1996–97. In Committee, the Minister admitted that the game was up for this year and that the Bill's real impact would be postponed until after the next general election, whenever that might be.

Why should Parliament indulge a Government on their last legs who seek to condition the actions of future Governments, against a background of their having manifestly failed to produce details of how the scheme should work and of there being no convincing sign that anyone supports the Bill, apart from Ministers and Conservative Back Benchers? Is there a single interest group concerned with higher education or any group concerned with the welfare of education that has had a good thing to say about the Bill? Why should the House grant power for subsidies to the private sector when critical assurances have not been given on how the Minister intends that the subsidies should be guarded?

In Committee and today, there has been no explanation of how the Minister will seek to give even limited protection to students—the remnants of a fair deal—before the legislation comes into force. What will dictate the allocation of loans to students will, of course, be straight commercial criteria. There will be no right of appeal for students and no guarantee that public money is being allocated on the basis of fair principles. The Minister believes in caveat emptor for students—they will have to look after themselves when dealing with the banks.

Moreover, the Government have learned nothing from the widely catalogued difficulties of the existing student loans scheme through the Student Loans Company. The present scheme is subject to almost universal criticism, yet the Minister has made no concession at all to that. He gave no concession to any concept that loans should be repaid on the basis of income contingency, and he made no attempt to recognise what is needed to support a learning-centred society.

The Government have thrown away an opportunity to consider how to guarantee the numbers of students in higher education adequately, and to guarantee that students are properly resourced on a fair basis to ensure that the country develops the skill levels that we desperately need. Instead, the Minister has produced a Bill that merely builds on the weaknesses of the existing system. The Bill is modelled on a scheme that has been subject to criticism on every side. Instead of using the opportunity to think afresh and to produce a new and good scheme—of which many models have been put before the Minister in recent years—the Minister has produced two bad schemes. The House should reject the Bill.

9.26 pm

When I was trying to sell the concept of student loans as a junior Minister in the mid-1980s, one of the many objections I heard was that the scheme was the thin end of the wedge. I was careful at the time not to deny that; frankly, I believe that the wedge has a long way to go.

I disagree with nothing in the Bill, but I would add a footnote. The way in which our universities and higher education establishments are developing means that, one of these days, we will have to drive that wedge in further to sustain the undoubted quality of our system. Hon. Members on both sides of the House will have to start thinking and talking about contributions to higher education fees, and not just what we are discussing in the Bill—student loans for maintenance.

That suggestion is recognised by honest Opposition Members, notably the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who has come up with the notion of a graduate tax. I do not think that Conservative Members should dismiss that proposal out of hand on partisan grounds. As a Chamber, as a House of Commons and as a country, we face the problem of how to finance the tripling in the number of students without going down the road of some of our continental partners, who provide a low-grade mass higher education system. We do not want that.

There are some signs of an increasing lack of facilities, and there is news today of an increase in the drop-out rate. One of the great things about our system was that we had a low drop-out rate, and we should read the warning signs and try to be as honest as we can in electoral and partisan terms about this matter. I am not such a fool as not to realise that that suggestion is electoral dynamite, because we are talking about some form or other of contribution from the middle classes towards the maintenance of the high standard of a system which their children preponderantly benefit from. That was not a very good sentence, and I am sorry about that.

I do not want to criticise the Government and, having been in at the beginning of the process, I understand the circumstances and why they are introducing the measure. This is not the end of the process, however. It is a thin wedge, but if we want to maintain the high quality of higher education, the Government—or Labour, if it takes power—will have to force the wedge in deeper. Funds will have to come from outside the Government, and that will involve some form of contribution towards university fees.

9.28 pm

The hon. Member for Buckingham (Mr. Walden) is right to challenge all political parties as he has done. The sadness is that the Bill does not address that challenge, which must be addressed. It is a desperate measure which has been hastily prepared and introduced. The Bill's passage through the House, as the hon. Member for Hyndburn (Mr. Pope) was keen for me to point out to the House, is a further example of the chaos and confusion created by the Government. [HON. MEMBERS: "Hear, hear."] I thought that Labour Members would like that.

Although there may be some merit in sharing loan risk with the private sector, in many respects the Bill fails. It fails to tackle the real problems of student debt and poverty. Despite what the Minister told us in Committee, student debt and poverty have an impact on the quality of students' learning, and are at least in part responsible for the unacceptably large number of students who simply do not complete their courses, creating a real waste of talent.

The Bill fails to provide support where support is urgently needed, for part-time students in higher and further education. It is particularly important that we should be considering those students this year, which is the European Year of Lifelong Learning.

The Bill fails to consider the possibility of moving from a mortgage-type repayment scheme to an income-contingent repayment scheme, which would be fairer to the borrowers and much more secure for the lenders. The Bill fails to meet the legitimate demands for parliamentary scrutiny, and it even fails to ensure that higher education institutions are properly recompensed for the costs that they incur in the administration of the proposed scheme.

The scheme has failed, above all, to attract the rush by the private sector to become involved with the scheme that the Government assumed would occur. The Government's failure to attract the private sector has meant that, only two months after the Chancellor's Budget, the education budget is now £100 million adrift.

When the Bill was introduced, it looked weak and pallid. As we studied the Bill in much more detail in Committee, it became apparent that it was seriously ill. The building societies and the banks are avoiding it like one would avoid a contagious disease. It is a sad and miserable Bill, and hon. Members should put it out of its misery by declining to give it a Third Reading.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 276, Noes 247.

Division No. 28]	[9.30 pm
AYES
Ainsworth, Peter (East Surrey)	Cash, William
Aitken, Rt Hon Jonathan	Channon, Rt Hon Paul
Alexander, Richard	Chapman, Sir Sydney
Alison, Rt Hon Michael (Selby)	Churchill, Mr
Allason, Rupert (Torbay)	Clappison, James
Arbuthnot, James	Clark, Dr Michael (Rochford)
Arnold, Jacques (Gravesham)	Clifton-Brown, Geoffrey
Arnold, Sir Thomas (Hazel Grv)	Coe, Sebastian
Ashby, David	Congdon, David
Atkins, Rt Hon Robert	Conway, Derek
Atkinson, David (Bour'mouth E)	Coombs, Anthony (Wyre For'st)
Atkinson, Peter (Hexham)	Coombs, Simon (Swindon)
Baker, Nicholas (North Dorset)	Cope, Rt Hon Sir John
Baldry, Tony	Couchman, James
Banks, Robert (Harrogate)	Cran, James
Bates, Michael	Currie, Mrs Edwina (S D'by'ire)
Batiste, Spencer	Curry, David (Skipton & Ripon)
Bellingham, Henry	Davies, Quentin (Stamford)
Bendall, Vivian	Davis, David (Boothferry)
Beresford, Sir Paul	Day, Stephen
Biffen, Rt Hon John	Deva, Nirj Joseph
Body, Sir Richard	Devlin, Tim
Bonsor, Sir Nicholas	Dicks, Terry
Boswell, Tim	Dorrell, Rt Hon Stephen
Bottomley, Peter (Eltham)	Dover, Den
Bowden, Sir Andrew	Duncan, Alan
Bowis, John	Duncan-Smith, Iain
Boyson, Rt Hon Sir Rhodes	Dunn, Bob
Brandreth, Gyles	Durant, Sir Anthony
Brazier, Julian	Dykes, Hugh
Bright, Sir Graham	Eggar, Rt Hon Tim
Brooke, Rt Hon Peter	Elletson, Harold
Brown, M (Brigg & Cl'thorpes)	Emery, Rt Hon Sir Peter
Browning, Mrs Angela	Evans, David (Welwyn Hatfield)
Bruce, Ian (Dorset)	Evans, Jonathan (Brecon)
Burns, Simon	Evans, Nigel (Ribble Valley)
Burt, Alistair	Evans, Roger (Monmouth)
Butterfill, John	Evennett, David
Carlisle, John (Luton North)	Faber, David
Carlisle, Sir Kenneth (Lincoln)	Fabricant, Michael
Carrington, Matthew	Fenner, Dame Peggy
Carttiss, Michael	Field, Barry (Isle of Wight)

Fishburn, Dudley	Leigh, Edward
Forman, Nigel	Lester, Sir James (Broxtowe)
Forsyth, Rt Hon Michael (Stirling)	Lidington, David
Forth, Eric	Lilley, Rt Hon Peter
Fowler, Rt Hon Sir Norman	Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Dr Liam (Woodspring)	Lord, Michael
Fox, Rt Hon Sir Marcus (Shipley)	Luff, Peter
Freeman, Rt Hon Roger	MacGregor, Rt Hon John
French, Douglas	MacKay, Andrew
Gale, Roger	Maclean, Rt Hon David
Gallie, Phil	McNair-Wilson, Sir Patrick
Gardiner, Sir George	Madel, Sir David
Garel-Jones, Rt Hon Tristan	Maitland, Lady Olga
Garnier, Edward	Mans, Keith
Gill, Christopher	Marland, Paul
Gillan, Cheryl	Marlow, Tony
Goodlad, Rt Hon Alastair	Martin, David (Portsmouth S)
Goodson-Wickes, Dr Charles	Mates, Michael
Gorman, Mrs Teresa	Mawhinney, Rt Hon Dr Brian
Gorst, Sir John	Mayhew, Rt Hon Sir Patrick
Grant, Sir A (SW Cambs)	Merchant, Piers
Greenway, Harry (Ealing N)	Mitchell, Andrew (Gedling)
Greenway, John (Ryedale)	Mitchell, Sir David (NW Hants)
Griffiths, Peter (Portsmouth, N)	Moate, Sir Roger
Grylls, Sir Michael	Monro, Rt Hon Sir Hector
Gummer, Rt Hon John Selwyn	Montgomery, Sir Fergus
Hague, Rt Hon William	Needham, Rt Hon Richard
Hamilton, Rt Hon Sir Archibald	Neubert, Sir Michael
Hamilton, Neil (Tatton)	Newton, Rt Hon Tony
Hampson, Dr Keith	Nicholls, Patrick
Hanley, Rt Hon Jeremy	Nicholson, David (Taunton)
Hannam, Sir John	Norris, Steve
Hargreaves, Andrew	Onslow, Rt Hon Sir Cranley
Harris, David	Ottaway, Richard
Haselhurst, Sir Alan	Page, Richard
Hawkins, Nick	Paice, James
Hawksley, Warren	Patnick, Sir Irvine
Hayes, Jerry	Patten, Rt Hon John
Heald, Oliver	Pawsey, James
Heath, Rt Hon Sir Edward	Pickles, Eric
Heathcoat-Amory, Rt Hon David	Porter, Barry (Wirral S)
Hendry, Charles	Porter, David (Waveney)
Heseltine, Rt Hon Michael	Powell, William (Corby)
Hicks, Robert	Rathbone, Tim
Higgins, Rt Hon Sir Terence	Redwood, Rt Hon John
Hill, James (Southampton Test)	Renton, Rt Hon Tim
Hogg, Rt Hon Douglas (G'tham)	Richards, Rod
Horam, John	Riddick, Graham
Hordern, Rt Hon Sir Peter	Roberts, Rt Hon Sir Wyn
Howard, Rt Hon Michael	Robertson, Raymond (Ab'd'n S)
Howell, Rt Hon David (G'dford)	Robinson, Mark (Somerton)
Howell, Sir Ralph (N Norfolk)	Roe, Mrs Marion (Broxbourne)
Hughes, Robert G (Harrow W)	Rowe, Andrew (Mid Kent)
Hunt, Rt Hon David (Wirral W)	Rumbold, Rt Hon Dame Angela
Hunt, Sir John (Ravensbourne)	Sackville, Tom
Hunter, Andrew	Sainsbury, Rt Hon Sir Timothy
Jack, Michael	Scott, Rt Hon Sir Nicholas
Jackson, Robert (Wantage)	Shaw, David (Dover)
Jenkin, Bernard	Shaw, Sir Giles (Pudsey)
Jessel, Toby
Johnson Smith, Sir Geoffrey	Shephard, Rt Hon Gillian
Jones, Gwilym (Cardiff N)	Shepherd, Sir Colin (Hereford)
Jones, Robert B (W Hertfdshr)	Shepherd, Richard (Aldridge)
Jopling, Rt Hon Michael	Sims, Roger
Kellett-Bowman, Dame Elaine	Skeet, Sir Trevor
Key, Robert	Smith, Sir Dudley (Warwick)
Kirkhope, Timothy	Spencer, Sir Derek
Knight, Mrs Angela (Erewash)	Spicer, Sir James (W Dorset)
Knight, Rt Hon Greg (Derby N)	Spicer, Sir Michael (S Worcs)
Knight, Dame Jill (Bir'm E'st'n)	Spink, Dr Robert
Knox, Sir David	Spring, Richard
Kynoch, George (Kincardine)	Sproat, Iain
Lait, Mrs Jacqui	Squire, Robin (Hornchurch)
Lamont, Rt Hon Norman	Stanley, Rt Hon Sir John
Lawrence, Sir Ivan	Steen, Anthony
Legg, Barry	Stephen, Michael
	Stern, Michael

Stewart, Allan	Walker, Bill (N Tayside)
Streeter, Gary	Waller, Gary
Sumberg, David	Ward, John
Sweeney, Walter	Wardle, Charles (Bexhill)
Sykes, John	Waterson, Nigel
Tapsell, Sir Peter	Watts, John
Taylor, Ian (Esher)	Wells, Bowen
Taylor, John M (Solihull)	Wheeler, Rt Hon Sir John
Taylor, Sir Teddy (Southend, E)	Whitney, Ray
Temple-Morris, Peter	Whittingdale, John
Thomason, Roy	Widdecombe, Ann
Thompson, Sir Donald (C'er V)	Wilkinson, John
Thompson, Patrick (Norwich N)	Willetts, David
Thornton, Sir Malcolm	Wilshire, David
Thurnham, Peter	Winterton, Mrs Ann (Congleton)
Tracey, Richard	Wolfson, Mark
Tredinnick, David	Wood, Timothy
Trend, Michael	Yeo, Tim
Twinn, Dr Ian
Viggers, Peter	Tellers for the Ayes:
Waldegrave, Rt Hon William	Mr. Roger Knapman and
Walden, George	Mr. Patrick McLoughlin.
NOES
Abbott, Ms Diane	Corbett, Robin
Adams, Mrs Irene	Corbyn, Jeremy
Ainger, Nick	Corston, Jean
Ainsworth, Robert (Cov'try NE)	Cunliffe, Lawrence
Alton, David	Cunningham, Jim (Covy SE)
Anderson, Donald (Swansea E)	Dafis, Cynog
Anderson, Ms Janet (Ros'dale)	Darling, Alistair
Armstrong, Hilary	Davidson, Ian
Ashdown, Rt Hon Paddy	Davies, Bryan (Oldham C'tral)
Ashton, Joe	Davies, Rt Hon Denzil (Llanelli)
Austin-Walker, John	Davies, Ron (Caerphilly)
Banks, Tony (Newham NW)	Davis, Terry (B'ham, H'dge H'l)
Barron, Kevin	Denham, John
Battle, John	Dewar, Donald
Bayley, Hugh	Dixon, Don
Beckett, Rt Hon Margaret	Donohoe, Brian H
Beggs, Roy	Dunwoody, Mrs Gwyneth
Beith, Rt Hon A J	Eagle, Ms Angela
Bell, Stuart	Eastham, Ken
Bennett, Andrew F	Etherington, Bill
Benton, Joe	Evans, John (St Helens N)
Bermingham, Gerald	Ewing, Mrs Margaret
Berry, Roger	Faulds, Andrew
Betts, Clive	Field, Frank (Birkenhead)
Blunkett, David	Flynn, Paul
Boateng, Paul	Foster, Rt Hon Derek
Bradley, Keith	Foster, Don (Bath)
Bray, Dr Jeremy	Fyfe, Maria
Brown, N (N'c'tle upon Tyne E)	Galbraith, Sam
Bruce, Malcolm (Gordon)	Galloway, George
Byers, Stephen	Gapes, Mike
Callaghan, Jim	Garrett, John
Campbell, Mrs Anne (C'bridge)	George, Bruce
Campbell, Menzies (Fife NE)	Gerrard, Neil
Campbell, Ronnie (Blyth V)	Gilbert, Rt Hon Dr John
Campbell-Savours, D N	Godman, Dr Norman A
Canavan, Dennis	Godsiff, Roger
Cann, Jamie	Golding, Mrs Llin
Carlile, Alexander (Montgomery)	Graham, Thomas
Chidgey, David	Grant, Bernie (Tottenham)
Chisholm, Malcolm	Griffiths, Nigel (Edinburgh S)
Church, Judith	Griffiths, Win (Bridgend)
Clapham, Michael	Grocott, Bruce
Clark, Dr David (South Shields)	Hain, Peter
Clarke, Eric (Midlothian)	Hall, Mike
Clarke, Tom (Monklands W)	Hanson, David
Clelland, David	Hardy, Peter
Clwyd, Mrs Ann	Harman, Ms Harriet
Coffey, Ann	Harvey, Nick
Cohen, Harry	Henderson, Doug
Cook, Frank (Stockton N)	Heppell, John
Cook, Robin (Livingston)	Hill, Keith (Streatham)

Hinchliffe, David	O'Hara, Edward
Hodge, Margaret	Olner, Bill
Hoey, Kate	O'Neill, Martin
Hogg, Norman (Cumbernauld)	Pearson, Ian
Home Robertson, John	Pickthall, Colin
Hood, Jimmy	Pike, Peter L
Hoon, Geoffrey	Pope, Greg
Howarth, Alan (Strafrd-on-A)	Powell, Ray (Ogmore)
Howarth, George (Knowsley North)	Prentice, Gordon (Pendle)
Howells, Dr Kim (Pontypridd)	Prescott, Rt Hon John
Hoyle, Doug	Primarolo, Dawn
Hughes, Robert (Aberdeen N)	Purchase, Ken
Hutton, John	Quin, Ms Joyce
Ingram, Adam	Randall, Stuart
Jackson, Glenda (H'stead)	Raynsford, Nick
Jackson, Helen (Shef'ld, H)	Reid, Dr John
Jamieson, David	Rendel, David
Jones, Barry (Alyn arid D'side)	Robertson, George (Hamilton)
Jones, leuan Wyn (Ynys Môn)	Roche, Mrs Barbara
Jones, Jon Owen (Cardiff C)	Rooker, Jeff
Jones, Lynne (B'ham S O)	Ross, Ernie (Dundee W)
Jones, Martyn (Clwyd, SW)	Rowlands, Ted
Jowell, Tessa	Ruddock, Joan
Kaufman, Rt Hon Gerald	Salmond, Alex
Keen, Alan	Sedgemore, Brian
Kennedy, Jane (L'pool Br'dg'n)	Sheerman, Barry
Khabra, Piara S	Sheldon, Rt Hon Robert
Kilfoyle, Peter	Shore, Rt Hon Peter
Kirkwood, Archy	Short, Clare
Lestor, Joan (Eccles)	Simpson, Alan
Liddell, Mrs Helen	Skinner, Dennis
Litherland, Robert	Smith, Andrew (Oxford E)
Lloyd, Tony (Stretford)	Smith, Llew (Blaenau Gwent)
Llwyd, Elfyn	Smyth, The Reverend Martin
Lynne, Ms Liz	Spearing, Nigel
McAllion, John	Spellar, John
McCartney, Ian	Squire, Rachel (Dunfermline W)
McCartney, Robert	Steel, Rt Hon Sir David
McKelvey, William	Steinberg, Gerry
Mackinlay, Andrew	Stevenson, George
McLeish, Henry	Stott, Roger
Maclennan, Robert	Strang, Dr. Gavin
McMaster, Gordon	Straw, Jack
MacShane, Denis	Sutcliffe, Gerry
McWilliam, John	Taylor, Mrs Ann (Dewsbury)
Madden, Max	Taylor, Matthew (Truro)
Maddock, Diana	Thompson, Jack (Wansbeck)
Mahon, Alice	Timms, Stephen
Marek, Dr John	Tipping, Paddy
Marshall, David (Shettleston)	Touhig, Don
Marshall, Jim (Leicester, S)	Trimble, David
Martlew, Eric	Turner, Dennis
Maxton, John	Tyler, Paul
Meacher, Michael	Vaz, Keith
Meale, Alan	Walker, Rt Hon Sir Harold
Michael, Alun	Wallace, James
Michie, Bill (Sheffield Heeley)	Walley, Joan
Michie, Mrs Ray (Argyll & Bute)	Wardell, Gareth (Gower)
Milburn, Alan	Wareing, Robert N
Miller, Andrew	Watson, Mike
Mitchell, Austin (Gt Grimsby)	Welsh, Andrew
Molyneaux, Rt Hon Sir James	Wicks, Malcolm
Moonie, Dr Lewis	Williams, Rt Hon Alan (Sw'n W)
Morgan, Rhodri	Williams, Alan W (Carmarthen)
Morley, Elliot	Winnick, David
Morris, Rt Hon Alfred (Wy'nshawe)	Wise, Audrey
Morris, Estelle (B'ham Yardley)	Wray, Jimmy
Morris, Rt Hon John (Aberavon)	Wright, Dr Tony
Mudie, George	Young, David (Bolton SE)
Mullin, Chris
Murphy, Paul	Tellers for the Noes:
Nicholson, Emma (Devon West)	Mr. John Cummings and
Oakes, Rt Hon Gordon	Mrs. Bridget Prentice.
O'Brien, Mike (N W'kshire)

Question accordingly agreed to.

Bill read the Third time, and passed.

On a point of order, Mr. Deputy Speaker. Have you had any request for a statement from any Scottish Office Minister about some remarkable developments in the Scottish Office information directorate tonight?

Order. I have had no request for any statements on any subjects.

On a point of order, Mr. Deputy Speaker.

Is it a new point of order?

Yes. Is it within the province of the Chair to consider "Questions of Procedure for Ministers", as issued by the Cabinet Office of May 1992? As you may know, this morning the Secretary of State missed an important debate on the cold weather in Scotland to deliver a speech in Scotland which, to many people, seemed to consider some political elements. A section of that speech was subsequently withdrawn by the Scottish Office information directorate, although the text was delivered verbatim by the Secretary of State. The director of the directorate—a former press officer for Westminister City Council—has been forced to apologise—

Order. The hon. Gentleman has been here long enough to know that that is not a matter for the Chair.

On a point of order, Mr. Deputy Speaker.

Is it on an entirely new subject?

It is within the province of the Chair to consider a breach of "Questions of Procedure for Ministers"—

Order. The hon. Gentleman knows that it is not for him to decide what is within the province of the Chair. That is for the Chair to decide. I call the Minister for Rural Affairs, the hon. Member for Daventry (Mr. Boswell).

On a point of order, Mr. Deputy Speaker. Can the Chair advise me whether it is in order for me to raise what is an admitted breach by the Scottish Office of "Questions of Procedure for Ministers", when the director of the Scottish Office information directorate has been forced—

Order. I am happy to advise the hon. Member that matters of ministerial procedure are entirely a matter for the Prime Minister and are nothing to do with the Chair.

rose—

Order. The hon. Gentleman has had three bites at the same cherry. That is quite enough for this time of night.

Potato Marketing Scheme

9.46 pm

I beg to move,

That the draft Potato Marketing Scheme (Commencement of Revocation Period) Order 1995, which was laid before this House on 12th December, be approved.

The draft order is presented in accordance with the requirements of the Agriculture Act 1993. Its purpose is to specify the date 12 months from which the potato marketing scheme will be revoked. The order is straightforward, therefore, but at the time of the debates on the Agriculture Bill in 1993 concerns were expressed about the future of the scheme. I will attempt to show that those concerns are now both misplaced and out of date.

I shall begin by briefly reminding the House of the background. The 1993 Act gave Ministers power to revoke the potato marketing scheme should they consider it necessary or in the public interest. In debate on the Act, which aroused considerable interest both here and in another place, Ministers made it clear that no decision had been made as to revocation of the scheme. Indeed, the then Minister, now Secretary of State for Education and Employment—my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), whom we are pleased to welcome to the Front Bench tonight—made it clear that she wished to consider all the arguments at first hand before coming to any decision. That she did, with considerable care. As a result, she made the definitive announcement in November 1993 that, on both trading and deregulatory grounds, the scheme must come to an end. In that, she was echoing the recommendations of the House of Lords Select Committee on the European Communities which, when examining the Commission's proposal for a common organisation of the market in potatoes, concluded that, even if there were no agreements on such a regime, Britain should not continue to impose unilateral market controls.

That Committee believed, as the Government now believe, that Britain would be better able to compete in Europe without the constraints of the potato marketing scheme.

Will my hon. Friend confirm for the benefit of farmers in my constituency that British and European farmers will operate on a level playing field without benefit to our European competitors?

I am grateful to my hon. Friend for raising that point. We seek a level playing field for our farmers in this as in other respects. I shall explain to the House in a moment the nature of the present provisions and the advantages of a lightweight regime in effecting that.

Indeed, there is a suggestion that my hon. Friend has reiterated that a link should be forged between agreement on a potato regime and revocation of the scheme. I intend to show that such a linkage is not only invalid, but would be damaging to our interests. As that is an important point, I shall explain it in a few moments.

Returning to the history of the matter, in announcing the intention to revoke the scheme—in 1993, as the House will recall—the Government recognised the need that was expressed within and outside the industry for it to have time to adapt to the conditions of the free market. The scheme was therefore allowed to continue in a modified form for three years. The modifications were based on suggestions by the Potato Marketing Board and the National Farmers Union. I shall not go into detail as to the modifications. Suffice it to say that they all led towards loosening the quota controls operated by the board, removal of intervention buying and reducing the administration costs of the scheme.

The industry has made excellent use of the intervening period. All the modifications requested by Ministers were speedily introduced and so much progress has been made towards the free market that the board has already decided that it will not operate quota controls this year. That means that there will be a de facto free market in 1996—a full year before the scheme is revoked. That is evidence of an adapting and forward-looking industry of which the free market need have no fears.

We have now completed all the necessary preliminaries to laying the draft order. They included consultation of representatives of producers, purchasers, retailers and consumers of potatoes as required by section 25(3) of the 1993 Act.

The draft order simply specifies 1 July 1996 as the first day of the 12-month period, at the end of which the potato marketing scheme will be revoked. That means that the scheme itself will come to an end on 30 June 1997. The reason for selecting the June date is not arbitrary; it marks the end of the potato marketing year and is therefore the most convenient transition date for all concerned.

Will the Minister confirm that that is the earliest date to wind up the scheme and that he has the power to extend the scheme if necessary? Will he use that power if he is not confident that there is a level playing field across Europe?

I shall explain to the House why it would be positively inimical to the interests of growers to continue with a scheme that is past its sell-by date, which is bureaucratic and which shackles the ability of the industry to respond to the new, free market conditions. I advise the House to accept the link between those two terms.

Will my hon. Friend explain to the House what mechanism will be in place to ensure that our European partners do not favour their own industries with domestic assistance? I do not know whether it is just the potato growers in the Forest of Dean, but I suspect that throughout Gloucestershire—and I see that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) feels the same—there is considerable suspicion among potato farmers that other Governments may not treat the matter in the same way as we do. Burnt into our memories is the fact that when the French decided to take on the British turkey industry, the turkey processors were awarded a grant of 120 per cent. to build a turkey processing plant in Brittany in breach of the rules and regulations. Can my hon. Friend reassure the potato growers in Gloucestershire?

I can tell my hon. Friend, who is much respected in agricultural circles, that there is widespread concern on exactly that point. It is the clear wish of producers that there should be, as far as humanly possible, a level playing field. In recent years, producers have done quite well—as is shown by their export performance—within the existing system, where there is no common organisation of the market. To effect the competition rules against state aids—my hon. Friend will be aware that those rules operate only where state aids distort competition, not automatically—it would be necessary to specify that in some common organisation of the market. That is a clear interest in having a so-called lightweight regime, to which I shall return. I thought it sensible to take time to explain that point, because of the concern felt by many hon. Members on both sides of the House.

Within six months of the order's commencement date, section 27(1) of the 1993 Act requires the board to apply to the Agriculture Ministers for approval of a scheme to transfer its property, rights and liabilities to a successor body or bodies—unless growers, in a poll, tell it not to do so. The 1993 Act was framed specifically to allow for a successor, so that the desirable activities of the board—I emphasise that they are desirable activities—in research, promotion and information on behalf of the industry could continue. The Act allows for one of three different types of successor—a development council, registered company or friendly society. Our consultation revealed widespread support in the industry for a body funded by levy to succeed the board, which means in effect a development council.

The House will be interested and, I hope, encouraged to know that not only has the industry agreed on the necessity for a levy-funded successor body to the board but all sectors of the industry have reached consensus on the form that such a body should take. I am not in a position to comment today on the detail of the industry's proposals, as it will be for the board to present proposals to Ministers for approval at the appropriate time, if growers wish.

Can my hon. Friend assure the House that any body established on the levy principle will be answerable not just to the Minister but primarily to the growers, as the payers of the levy?

I understand my hon. Friend's feelings. Appointments to a development council, particularly in the new climate set by the Nolan committee, cannot be in any sense dictated in advance, but are the responsibility of Ministers taking advice. There can be no narrow constituency that automatically entitles one particular group of interests to a seat on the board. If my hon. Friend considers the experience of existing development councils, although occasionally they are not without their critics, they broadly represent the interests of those concerned in the industry. I am sensitive to my hon. Friend's point and hope that he will be sensitive to the constitutional propriety that I described.

The House will appreciate that details of the successor body are not yet available, but the fact that consensus on such a body exists is another testimony to the potato industry's progressive attitude.

I return to the linkage of the revocation of our scheme with agreement on a common agricultural policy regime for potatoes. The Government are well aware of and sensitive to widespread concern within the industry that a lightweight European Union regime for potatoes should be introduced as soon as possible, to remove national aids currently operating in other member states. The UK has been the only member state that has consistently supported the European Commission's proposals for just such a regime.

Will the Minister confirm that there is not an EU potato regime and that any such regime that may be established, no matter how lightweight, will cost a considerable amount of money?

I can tell the hon. Gentleman immediately, if he is in any doubt, that there is not an EU potato regime. I do not agree with him about cost. We do not wish to involve ourselves in a regime that is inordinately expensive. One of the concerns expressed by hon. Members on both sides of the House has been the high costs of the withdrawal and intervention system in the separate area of fruit and vegetables. That is exactly what we do not want. Nor do we want to tip the discussion into a mode where we end up having it against our will. We would resist that firmly. That is why we have been consistent supporters of the Commission's proposals for a regime.

The only supporter.

I am sure that it is nice occasionally to be on the side of the Commission.

My right hon. and learned Friend the Minister pressed the Spanish—

Will the Minister confirm that he is winding up a scheme which is costing the taxpayer nothing, or next to nothing, and calling for the introduction of a European scheme that is likely to cost something quite significant?

I cannot accept what the hon. Gentleman says about the likely cost of the European scheme. The purpose of a lightweight regime is primarily to safeguard our position on unfair and distorted competition through national aids. That is what we conceive as the main objective. The costs, if any, would be cast with that objective in view.

If it is, as the Minister says, that Britain is the only country in the Community that is prepared to accept the Commission's proposals and he does not want a regime that will cost money while all the other states clearly do, on what basis can he possibly say that when the present scheme is ended at the beginning of July, he will be able to deliver his undertakings?

The hon. Gentleman, in his anxiety to interrupt me, has jumped to the wrong conclusion. It is by no means the case that other member states want a heavyweight regime with the full works of intervention, or whatever. There are many member states that do not want a regime. We are interested in and prepared to support one. As I have already said, British potato growers have been doing very well. We are confident that they will do even better when the board is not round their necks.

Is not the reality that it is most unlikely that we shall be able to negotiate a potato regime with the other members of the EU? It suits them well to intervene nationally to help their potato growers. The great merit of our Potato Marketing Board in the past has been that it has kept supply and demand reasonably in balance without imposing any costs on the British taxpayer. What will happen to the British potato grower the next time we have a glut of potatoes in Britain and in the rest of Europe, when all the European Governments will be subsidising their growers and we will not be helping ours?

With great respect, I do not accept that the practice of subsidising potato growers is by any means universal in the Community among other member states. I understand the concern that my hon. Friend expressed so eloquently during the passage of previous legislation, when he advocated a control system with quotas and the maintenance of the familiar system of the Potato Marketing Board, even though it is in abeyance for this year. Our view, from the experience of member states that do not have such a regime and quota control, and from the experience of British growers who have been able to export competitively into Europe, is that whether or not we achieve a lightweight regime, it would still be justified to wind up the board, which is the expectation of the industry, and the Potato Marketing Board is anxious to make progress to pave the way for the establishment of a successor body.

Will the Minister give way on that point?

I have given way many times. Hon. Members may make their speeches in a moment.

Will my hon. Friend give way?

I shall give way to my hon. Friend.

I am grateful to my hon. Friend, as I know that he has nearly finished. One point that he has not touched on, however, is the cost of winding up the board. He will be aware that there are producer assets with the board and they may well be used entirely on redundancies, property, pensions and so on. Will he please comment on that important point?

I am aware of the overall situation. There is little indication that the overall liabilities of the board under winding-up procedures are likely to exceed its assets. It is likely to be positive and there are, of course, provisions in any winding-up scheme to deal with the situation if there is no transition to a successor body. To introduce the principle of Government subsidy for winding-up costs would be a difficult precedent. It was not adopted, for example, in relation to the milk marketing scheme, nor would it be justified in principle, however seductively my hon. Friend makes the point, because it is claimed that the board has been run as a producer organisation, and although there have been safeguards for consumers, the board has been for the benefit of producers over the years, and they have incurred some responsibilities as well as benefits. We think that they should meet those obligations, and I have every reason to think that that will be possible.

I am sure that my hon. Friend will concede that the board is being wound up at the behest of Government. Surely there is some moral obligation, therefore, on the Government to fund these costs, as the board could not possibly have forecast them when it was making its future plans all those years ago.

I think that my hon. Friend will he able to share with me some of the memories of the early years of the board. I am looking back to the end of de-control some 40 years ago. I am not sure that that is particularly helpful to the present case. I am saying that I do not believe that it is right to use taxpayers' money to add to the assets of the board on its winding up when we have not been prepared to do that for other marketing schemes.

We do not believe that there is any justification for further delay in taking the final steps towards a free market. Our side of the contribution is the revocation of the scheme. For its part, the board has worked very hard with other organisations in the industry to ensure that it is in a position to submit proposals for a successor by the end of this year. In fact, it wishes to put its proposals to growers during the next few weeks. It will be greatly assisted in that process by the fact that the necessary order has been approved. Therefore, I commend the order to the House.

10.7 pm

I did not realise that there were so many jokes about potatoes until earlier this evening. As hon. Members went past, we heard, "That lot over there get their chips", "The Minister is in a soup", "Boil them in oil!" and similar jokes.

That is the lightweight regime.

That is right. I must say that the jokes were very repetitive, and I shall not repeat all of them.

There was the one about stakeholder and chips.

Hon. Members missed that one.

Tonight we are talking seriously about potatoes. If there is one thing that Ministers should understand, it is the anxiety that is caused by occupational uncertainty and insecurity. The Government have, of course, brought their own troubles on themselves and deserve the retribution that they will undoubtedly face. Unfortunately, they have also blighted the lives of so many others who deserve better, including the blameless potato growers. In abolishing the very successful potato marketing scheme while neglecting to meet the legitimate needs of growers in other respects, the Government have once again put ideology before the welfare of people who want only to do a useful job for the country—[Interruption.]—unlike Conservative Members who are interrupting.

The Government's case against the potato marketing scheme was put during proceedings on the Agriculture Bill 1993. I do not intend to plough that field again; suffice it to say that the scheme was supported strongly by farmers in a ballot. They considered that it not only provided Britain with a steady supply of good-quality potatoes, but gave growers fair incomes at no cost to the taxpayer.

In his perambulation around the issue, the Minister failed to mention the impact on prices for the consumer. He did mention the deregulation of the milk marketing arrangements, which resulted in significant price increases. I believe that increases will be inevitable when the Potato Marketing Board is disbanded. Would my hon. Friend care to comment on the Minister's omission?

Nowadays, the Government are not interested in the cost to the consumer and the taxpayer.

I welcome the hon. Lady to her first debate speaking from the Front Bench. Why does she expect the lifting of a quota regime, and the concomitant increase in flexibility and freedom of supply, to lead to an overall rise in prices?

That is what the Minister said about the Milk Marketing Board. Yesterday, people in Birmingham expressed a very different view. The Potato Processors Association takes a more optimistic view of the abolition of the scheme, but it does not appear to have as much at risk as the growers.

The argument this evening relates chiefly to time, and to the Government's lackadaisical attitude. It is about not ideology, but incompetence and a lack of effort. The Minister will be aware of the excellent, practical, pragmatic brief sent to hon. Members by the National Farmers Union in London and the Scottish NFU. Their argument, in a nutshell, is that the Government should not destroy what we have until they have something to put in its place. It is a sensible and reasonable petition.

The growers have done everything possible to save the situation themselves. As the Minister is well aware, the NFU has said:

"During the last two years, the Potato Marketing Board has, with the support of growers and the NFU, laid aside its quota and intervention arrangements, reduced its staff and board numbers, welcomed further industry wide involvement, and cut by half its levy on growers".

The NFU has bent over backwards to give Ministers what they wanted—the removal of quotas, a year earlier than the Minister wanted, as he has admitted; an increase in planting thresholds; the end of intervention buying; a reduction in the levy to a level appropriate for the funding of the board's other activities, such as research, promotion and the provision of market information; a reduction in the board's membership; and the ending of licensing and registration of potato merchants. Unfortunately, the Government have failed to match its efforts.

The growers would have liked to keep the potato marketing scheme—hence the ballot. At the very least, they want a reasonable alternative. As they see it, the Government have severely constrained the industry's choice of replacement arrangements while making no progress towards a free and fair European market.

As the House knows, the Agriculture Act 1993 provides three possible options. The first is a development council based in statute, which could impose a compulsory levy; the second is a friendly society; and the third is a company. When he announced the results of his consultation just before Christmas, the Minister stated that there was widespread support for an industry body, which would be funded by a strategy levy, to succeed the Potato Marketing Board, and he said that it would be for the board to develop appropriate proposals if that was what growers wanted. That is what growers want.

The NFU insists on the need for a compulsory levy, for which only the first option provides. It also wants those who pay the levy to have control, but apparently that is being resisted by officials. Will the Minister give a clear answer to the growers' question? Can they have a compulsory levy over which they have control?

The NFU is also concerned about the European dimension, as are some others. The Government have sunk the lifeboat that was provided for 60 years by the potato marketing scheme. What are they doing to ensure that growers are thrown the lifebelt of a lightweight EU potato regime? The impression given by the Government is that, far from running for the lifebelt, they have neither the wit nor the will to do anything other than watch the growers go under. They have long since forgotten the fine words in Standing Committee when the then Minister of Agriculture, Fisheries and Food, the right hon. Member for Suffolk, Coastal (Mr. Gummer), now the Secretary of State for the Environment, uttered sentiments and said that no sensible Government would stand aside and say, "Let the Dutch take over," or, "Let the French subsidise their industry into defeating ours." He also said that he wanted to get rid of other countries' support for their potato organisations. Those are fine words.

It is a terrible indictment of British potato growers by the Opposition Front-Bench spokesman to say that, as a result of this measure, British potato growers will go under and that the entire needs of British potato eaters will be imported from Holland. Does she really mean that?

That is not what my hon. Friend said.

That is indeed what the hon. Member for Newcastle-under-Lyme (Mrs. Golding) said. Does she believe that British potato growers are so gutless and uninventive that they will stand back and watch the Dutch potato growers swamp the market? Potato growers throughout the UK should understand exactly what the hon. Lady says about them.

It is nice to listen to the hon. Gentleman and to know that, in addition to Opposition Members, a Conservative Member wishes to support potato growers. [Interruption.] The hon. Gentleman should listen to what I have to say. I assure him that we are committed to supporting potato growers and we want to ensure that they have fair competition. The hon. Gentleman, of all people, should understand that.

As I have said, the right hon. Member for Suffolk, Coastal used fine words in Committee, but the NFU says that foreign growers are supported. There is support in surplus seasons to retain productive capacity; support for processing facilities, production and research; and support for exports to the British home and export markets. The Government appear to be doing nothing about that, and that is one of the matters on which I take issue with the Minister. It is not the Minister but we who are pressing the Government to do something.

To stop other Governments undermining our growers, the growers are asking for those common rules of competition that an EU lightweight scheme would provide, and they seek a scheme that would avoid the market support regime, with the highly expensive policy of intervention buying that is wanted by some countries. The NFU believes that

"the Minister should undertake that, in good time before the scheme is revoked he will make a statement to the House, supported by a written report, indicating
1. The action which the UK Government has taken to secure common rules of competition in the European Potato Market, and particularly whether or not there will be a lightweight regime in place by 30 June 1997.
2. The results of a UK investigation into the state of competition in the European potato market at that time, including all available information on EU Member State aids.
3. The measures that the Minister proposes to take which will ensure that the GB potato industry can compete on even terms in the European market after June 1997."

Will the hon. Lady give way?

Not to him.

I will give way.

Opposition Members will know that my constituency has a large potato growing area.

It is represented by one.

I listen to the laird with great interest. As an ordinary working-class chap, I am always fascinated by what he says.

Will the hon. Lady tell the House how a Labour Government, if we ever have one, would ensure that all her proposals would be forced through the European Union—how that would be achieved? We would be interested to know how the Opposition would deal with qualified majority voting.

This is, of course, a typical question. When Conservative Members are in a mess, have got rid of something that they know works, and do not know what to put in its place, they ask the Opposition what they would do.

The NFU says:

"If other European producers are still in a position to receive national support GB producers will expect equivalent support."

It would be helpful if the Minister responded to the NFU position and to one other important point included in the NFU brief. It states:

"the PMB is being wound up purely as a result of UK Government policy."

Remember the ballot. It goes on:

"The majority of producer assets in the PMB are likely to be spent in meeting the wind-up costs in relation to property, redundancies and pensions. We seek a commitment from the Minister that the Government will meet a significant proportion of the costs of winding up the Board."

Is that a spending pledge? If so, has it been cleared with the hon. Member for Dunfermline, East (Mr. Brown)?

Another Minister is looking for the Opposition to get him out of a mess. He should never have got rid of the board. If he had abided by the NFU's ballot, he would not have done so.

That is not an answer.

That is the answer.

To express again our strong support for potato growers, and yet again to register our complete dissatisfaction with the Government and their incompetence, I ask my right hon. and hon. Friends to vote against the order.

10.23 pm

Since I have been in the House, I have sought to represent the interests of potato growers in my constituency of North Thanet. One of the most contentious things that I am likely to say tonight is that they grow the finest potatoes in the United Kingdom and, probably, in Europe. I appreciate that my hon. Friend the Member for St. Ives (Mr. Harris) and hon. Friends representing the Forest of Dean, seats in Norfolk and elsewhere might find that difficult to comprehend, but we in Thanet have significant potato growers of first early and main crop potatoes.

When I first arrived in Thanet, I was most compelled by growers' concern about the damage that the Potato Marketing Board and the regime were doing to their business. They cited two counts—first, that they were subjected to quotas, and secondly, that they were subjected to a levy. The quotas were especially damaging to the crops of first early growers, who faced ludicrous competition, especially from the French growers who did not have quotas and were dumping potatoes willy-nilly in the United Kingdom. Buyers in Covent Garden were sending back locally grown and excellent potatoes on quality grounds simply because they had already committed themselves to, and had to pay for, overseas products. The businesses also found the levy intolerable. They could not understand why a Conservative Government were allowing the continuation of a regime that placed such controls upon them.

One of the first things that I had to do as the newly elected parliamentary representative was to prevail upon my colleagues in the Ministry to abolish the potato marketing regime. I am absolutely delighted that tonight we are witnessing the dying throes of a regime that placed ludicrous controls on some of the finest potato growers in the world.

At that time, the growth in the potato consumption market was, as it is now, almost exclusively in processed potatoes. Then, as now, the housewife did not wish to peel spuds. I took the trouble—which I doubt Labour Members have done—to visit the potato processing plants being established throughout Holland and northern France, where processors knew that they had access to good, reliable, cheap and abundant crops. That investment was made on the European mainland rather than in the United Kingdom, largely because of the restrictions imposed upon our growers by the Potato Marketing Board.

The growth in the potato consumption market is still in processed potatoes. Thank heavens that there is at last investment in potato processing plant in the United Kingdom. It is creating jobs. The processing business is now aware that it can rely on an unregulated crop, free of quotas, from the United Kingdom. I regard that as progress. I am sad that no Labour Member—or, indeed any of my hon. Friends—has mentioned that point.

I am grateful to my hon. Friend for giving way. I shall be brief. When he went to inspect the Dutch processing industry, did he ascertain whether it received any state aid?

I was about to deal with precisely that point. We want a level playing field. [HON. MEMBERS: "Ah!"] Labour Members moan and groan, but their Front-Bench spokesman made a plea for state subsidy—[HON. MEMBERS: "No."] Yes. The hon. Member for Newcastle-under-Lyme (Mrs. Golding) said that other countries were subsidising plant and crops and pleaded for some of that for Britain. [HON. MEMBERS: "No."] Yes, she did. I want none of that. [Interruption.] I wish Labour Members would listen.

I did not stand here 10 years ago and I do not stand here tonight arguing for deregulation of the United Kingdom market, solely to see the imposition of regulation and subsidy in Holland and France, just 20 miles across the channel from my constituency. I agree with my hon. Friend the Minister's view of the need for a light European Union regime. Subsidy is outside European regulation—it is not permitted, nor should it be. I simply want to know that the Government will take a robust view of any hint of any kind of subsidy to our competitors on the European mainland. Having deregulated the industry in this country, having freed up our farmers to create the crop that we need, having seen the investment in plant that we wanted, I do not expect that plant to be supplied by cheap, subsidised products from either France or Holland.

Will the hon. Gentleman give way?

No, I will not give way. Stick to soup.

The signs are that the regime will be succeeded by a development council funded by a levy on producers. That is what the producers in my constituency want. Indeed, my constituent Richard Ash made that point to me only yesterday. The producers are paying the fiddler and they wish to call the tune. They want that development council to he answerable to them, the farmers, not simply to Ministers. Can we have that assurance?

I have listened carefully to the arguments concerning wind-up costs and money that may be left over from the Potato Marketing Board. I do not expect pensioners in North Thanet as taxpayers, any more than I expect pensioners anywhere else in the United Kingdom, to subsidise the wind-up costs of the Potato Marketing Board. My hon. Friend the Minister has said that there is likely to be surplus money after the wind-up costs have been paid. If that is so, will he assure me that that money will be paid directly to the development council to help it launch its work?

10.30 pm

I speak as a Member who represents a new potato growing area in Pembrokeshire that rightly has an excellent reputation. My growers are telling me, through the National Farmers Union and the Potato Marketing Board, that the commitments that they have been seeking from the Government before winding up the marketing scheme have not been given. That has certainly been confirmed by what the Minister has said tonight.

Absolutely no commitments have been given about a fair and open market in Europe or about the reduction or elimination of state aids to growers in our competitor countries, regardless of whether they are on the Iberian peninsula, or in Italy, France or Greece. All the Minister has been able to tell us is that, on our own, the Government, with the support of the Commission, are in agreement. Every other state, which is subsidising its growers in one form or another, is opposed to the Commission's proposition for a lightweight regime.

The hon. Member for North Thanet (Mr. Gale) could not have been listening to what the Minister was saying, because the latter made it quite clear that there was no way in which he could give any guarantee whatever that, by the time the scheme is wound up, there will be a level playing field—as it is called—or that there will be fair competition and no state aids.

I am concerned because the new potato market is extremely sensitive to competition, especially unfair competition. New potatoes have a very short season. We already have traditional competition from the near east, north Africa and southern states of Europe. There is concern that, if the protection—admittedly, it is only in the form of support by the growers—is removed in a year or two, there will be problems. There have already been problems over the past few years. The winter might be long or the spring wet. Certain problems always arise.

Without protection, and because the Government have failed totally to eliminate unfair competition in Europe, growers will undoubtedly go to the wall. The market is incredibly competitive. All it takes is a wet week or a wet fortnight, and the window for the market of premature new potatoes is lost.

Until the Government can give the growers the assurances they are seeking, which they have certainly failed to give tonight, the growers, through the farming unions and the Potato Marketing Board, will be very disturbed about the fact that the Government are going ahead with the revocation, willy-nilly and irrespective of what is happening in Europe.

The Minister rightly praised the work of the Potato Marketing Board, and its progress since the Agriculture Act 1993. I am sure that Members on both sides have received a letter from the chairman of the Potato Marketing Board highlighting the three commitments it seeks. The first is an assurance that

"British potato growers will be able to compete on even terms with their EU counterparts after the end of the Scheme".

The second commitment that the board seeks is a

"strong statement that the UK Government will do all in its power to ensure that EU member states are not able to provide state aids to their producers when British growers can not enjoy similar support. This should be achieved preferably by seeking the introduction of a lightweight EU potato regime".

The third commitment sought relates to the winding-up costs of the board.

The chairman, whom the Minister has congratulated, says that he believes that, if those commitments are satisfied, British growers can compete satisfactorily in this country and in the export market. He then says that, as long as the commitments are given, the vast majority of potato growers will accept the ending of the scheme and the move to deregulate the market.

However, that acceptance is conditional on the first two commitments in particular being given. As the Minister has absolutely failed even to address those issues properly tonight and has not given any commitments, the Opposition will oppose the revocation.

10.35 pm

I represent an area that grows a lot of potatoes, both early potatoes and early main crop potatoes for the crisps industry—crispers, as they are called. Most of that production takes place on a contract basis.

I must confess that when, under the Agriculture Act 1993, we took the first step towards the abolition of the Potato Marketing Board, I expected an outcry from some of my farmers, but not from all of them, because some of the farmers in my constituency have been very much against the workings of the board. However, I thought that those who supported the board—possibly the majority of farmers in my constituency—would be extremely worried.

All I can tell the House is that I have not had a single letter or telephone call. I addressed the Penzance branch of the National Farmers Union just before Christmas, and no one mentioned the factors that have featured in our debate tonight. Like every other hon. Member who has a constituency interest, I have had the documents from the NFU and the Potato Marketing Board that have been quoted. I am not in any way trying to rubbish the points they make. Obviously, there is concern on the part of the NFU and the board. I can report only that individual growers—I have a lot of them in my constituency—have not voiced those concerns to me.

Although, in more recent years, the Potato Marketing Board has come in for some criticism, not least from the constituents of my hon. Friend the Member for North Thanet (Mr. Gale), in whose constituency the campaign against the Potato Marketing Board was centred, it is right to pay tribute to the work done by the board over many years. I know some dedicated people in my constituency, such as Mr. John Badcock, who served on the board for many years. It is only right that we should pay tribute to those people.

I came to the conclusion, however, that the system we had some years ago could not be sustained, for the very reason given by my hon. Friend the Member for North Thanet—that it did not make sense to have a quota system that exposed us to competition, especially in the processed area, from countries that did not have a quota system.

Since the changes were announced in the Agriculture Act 1993, the potato industry has begun to make the necessary changes, and has adapted to the situation. Therefore, I am somewhat reassured. However, I share the fears being expressed on national aids, and when or if evidence is produced—none has been produced so far tonight—that some member states are making unfair use of national aids to distort competition, the Government will have to take action under the competition sections of the treaty, because that power exists.

I am also reassured by my hon. Friend the Minister's comments about the costs of winding up the scheme, because he made it clear that the board is likely to have a surplus to disburse, so there will be no need to go back to the industry for extra money to meet the winding-up costs.

May I clarify a point that my hon. Friend has raised, and to which my hon. Friend the Member for North Thanet (Mr. Gale) also referred? The existing board has been making provision for its winding-up costs, and there is a reference in the board's annual report to the position of pension funds under the board. The likelihood is that, if there is a surplus in assets, it will be possible to transfer those under any proposed scheme to a successor body. If that does not happen, funds will be redistributed to the producers.

I am most reassured by that. I wish to re-emphasise a point that I tried to raise in an intervention—that, when a new system is introduced, the growers themselves should be in charge of it. That is a very important point.

I end on a topical issue. Brown rot is a matter of extreme concern to growers, particularly in Cornwall. I ask for an assurance that the Government will maintain their checks for brown rot on seed potatoes coming into this country from Holland. On balance, I would conclude that the House should approve the order.

10.41 pm

I am glad to follow the hon. Member for St. Ives (Mr. Harris), if only to endorse his point about brown rot, which is extremely serious in our part of the country. The hon. Gentleman was lucky if, in the time he attended the annual meeting of the county branch of the NFU in Truro last Friday, he was not lobbied about the order, because I was. I was at the meeting in the latter part of the day—the hon. Gentleman was there earlier—and the issue came up several times.

The hon. Member for St. Ives has been misled. The issue tonight is not whether we keep the scheme in place but what will replace it and when. That is the question, and I very much hope that the Minister will listen carefully to the wise words of the hon. Member for East Lindsey (Sir P. Tapsell). The hon. Gentleman intervened to say that, if the scheme is swept away without real progress for the regime throughout Europe, our growers will be exposed to a most intolerable situation.

Before I return to that matter, I wish to deal with one or two misconceptions. Some hon. Members may have received a briefing from the Potato Processors Association. I think that the hon. Member for North Thanet (Mr. Gale) quoted from it.

Will the hon. Gentleman give way?

No, I have very little time, and the hon. Gentleman did not give way during his speech.

The association's briefing states:

"last season, processors of frozen potato products and par fries increased their usage of potatoes in UK factories by 10 per cent. whilst imports of processed products reduced by 24 per cent."

That gives the impression that everything is wonderful, that growers are doing very well and that imports are being cut. But we must recognise the very special climatic conditions that affect this sector of the industry.

In 1993–94—the year before the one referred to in the briefing—there was a poor, wet and cold season, after which the harvest collapsed. In previous years, those latest import figures were nothing like as encouraging as implied by that brief.

It is misleading for hon. Members to be given that impression. I hope that the Minister will not rely on that. It is certainly not true that growers are doing so well that the scheme can be cheerfully dumped. That is the first correction that I want to make.

Will the hon. Gentleman give way?

The Minister will have a chance to reply to the debate. I want to be as brief as possible, in case other hon. Members wish to speak.

The Minister implied that it was impossible—I think that he used that very word—for the new development council to be truly accountable to growers. He made that point twice. He said that there was no precedent. There is a precedent. The Scottish Seed Development Council includes several direct grower representatives. The Minister can quote no precedent for the position that he now describes. It is an illusion to lead us up that blind alley.

The Minister said that there was no precedent for sharing the costs of abolition as opposed to putting the whole burden on the growers who have contributed all these years to the success of the scheme and the board. He has not been at the Ministry long, whereas I have now shadowed four Ministers. The precedent is that, when changes were made to the sheep variable premium scheme and the beef premium scheme, the Meat and Livestock Commission was compensated by MAFF. There is a precedent for a contribution from the Government.

I do not think that any of the Ministers on the Treasury Bench now were involved in the Committee which considered the Agriculture Bill. Few of the Opposition Members present this evening were involved, but I was. The text that we were given then did not come from the right hon. Member for South-West Norfolk (Mrs. Shephard). She was not the Minister. The Minister was the right hon. Member for Suffolk, Coastal (Mr. Gummer).

I and my fellow members of that Committee remember extremely well that the Minister did not deign to appear at many of the sittings of the Committee, but he did appear to give some explicit assurances—hon. Members on both sides of the House will recall them—about the circumstances in which he would agree to the abolition of the potato marketing scheme.

The right hon. Member for Suffolk, Coastal gave us the following assurance to encourage us to agree to the abolition of the scheme:

"I want a system under which no country tries unfairly to promote its own potatoes against other countries' so that we can all use the single market to sell our products. I want that because I think that British potatoes are good potatoes, that our producers and processors are of a high quality, and that we could beat the lot of them. We could do that only if we operated on a fair and equal basis.…

Most of those countries that want a heavy regime would prefer a light regime to no regime if that were the only proposal on offer. Most of those countries that would prefer no regime will recognise in the end that they cannot have both no regime and a level playing field. They must decide which they prefer. In almost every case—I say almost because I have learnt not to say every—they will plump for a lightweight regime.

We shall find ourselves with the package of a lightweight regime, which will be supported by enough countries for it to be accepted. That is the best assessment of what is the overwhelming likelihood. It could be that, for some reason which I have not detected, what I think is extremely likely to occur does not occur, but that is the best advice I can give to the Committee."

That was the advice given to Members on both sides of the Committee. Conservative Members, Opposition Members, and I, as spokesman for Liberal Democrats, accepted in good faith the assurance that we were given by the right hon. Member for Suffolk, Coastal.

The right hon. Gentleman continued in the Standing Committee:

"I am merely saying that, without the very likely European regime, if it became clear that Britain was shooting itself in the foot by continuing the current potato marketing regime, no sensible Government would stand aside and say, 'Let the Dutch take it over. Let the French subsidise their industry into defeating ours.' In those circumstances, we would take measures, which would have to be approved by affirmative resolution, to replace the current potato marketing scheme with those elements that benefit us in the quest for export and import substitution and remove those elements that disadvantage us."—[Official Report, Standing Committee F, 4 May 1993; c. 225–27.]

The Minister has not come before the House with any of the measures that his predecessor promised that Committee. We were fooled then into believing that he would. I hope that the House will recognise that we are being led up the garden path tonight.

The growers deserve nothing less than the fulfilment of that ministerial promise. I know that some Conservative Members share my concerns; they have expressed them privately and publicly; they have expressed them to growers; they have expressed them to the National Farmers Union. I hope that they will not let down the growers tonight.

There is no urgency about the passage of this order tonight. We could now insist that Ministers be held to their promise and that we get what they promised us. The growers must be given the explicit assurance that Ministers will now face up to the threat of predatory support by other member states' Governments to assist our competitors in the European Union.

The Minister tonight admitted failure so far. Why should that be a reason to trust the Government to achieve something in the future? Nothing has yet been achieved. The House of Commons must insist that Ministers be held to account for the promises that they have made.

10.50 pm

What we are discussing this evening will not improve Britain's agriculture one iota. Deregulation of potato marketing is another example of the Tory policy of removing the steering wheel in the blind hope that that will make the car lighter and more efficient—ignoring the vehicle's susceptibility to crash.

I remind the House that the horrendous effects of BSE on the beef industry are a direct result of deregulation. Allowing the rendering industry to lower its temperature and solvent extraction standards to save a few pounds resulted in an epidemic that has cost the taxpayer over £200 million, and has cost farmers dearly.

Deregulation of the crop acreage of potatoes will allow for increased encouragement of precisely the unsustainable, monocultural and intensive agriculture that we are trying to move away from, buoyed up by the boom and bust cycle of an unordered market. That benefits the processor in the short term, but not in the long term. There is a vicious circle: the unordered market increases acreage, thereby increasing pollution and possibly ruining productive land. By encouraging this monoculture, we are shooting ourselves in the foot, as our growers are caught up in a spiralling risk of crop and/or market failure.

An unordered market leads to an increase in acreage devoted to potatoes, an increase in pesticide and fertiliser use, an increase in processor power over UK growers, and an increase in farmers' vulnerability. We need to be sustainable; we need to be fair. We must not cut farmers adrift and leave them in a sea of market distortion. Other EU countries are allowed to subsidise their potato production.

We are becoming increasingly sceptical of subsidising over-production and waste. Labour policy seeks to redirect regulation to encourage good, not bad, practice. Regulation under a light regime could allow us to move toward sustainable and efficient practices. The NFU is absolutely right in its reasonable desire to compete on even terms with our EU counterparts. We have heard a lot about level playing fields; perhaps we should refer to level potato fields for a change. Secondly, the NFU wants common rules governing competition—for example, not allowing other member states to provide state aid for their producers while British growers cannot enjoy similar support.

Thirdly, funding—if the Government are to go ahead with this daft idea—must be provided for winding up. Such transition funds should be used to smooth the path of farmers and producers alike towards a lightweight EU-wide regime.

The stakeholders have contributed to the potato marketing scheme, so it would only be right and proper for the Government to foot the bill for the producers, who do not want the change in the first place. The Government have expelled a lot of hot air about all the things they have done in the past six weeks. They have had three years to consider the matter, but are acting only now because they cannot think of anything better to do. They are panicking as they realise that they have not done enough work. Tory Members with rural constituencies know that, as some of their interventions—not their speeches—have shown.

The NFU and the Potato Marketing Board are wondering why the Minister does not implement his party's policy, as stated in the Committee quotation from 4 May 1993 read by the hon. Member for North Cornwall (Mr. Tyler). What has changed since then? Nothing—or nothing in Europe, anyway. This is just another doctrinaire policy, based on ideology and not on common sense.

10.54 pm

May I say one or two words, and perhaps ask a couple of questions of the Minister? My hon. Friend the Member for Newcastle-under-Lyme (Mrs. Golding), who spoke from the Opposition Front Bench, and the Liberal spokesman, the hon. Member for North Cornwall (Mr. Tyler), raised an important issue in this debate, which is that, in Standing Committee on the Agriculture Bill, Ministers gave us clear assurances about what would happen in certain conditions. We sought those assurances because the industry—in the form of the National Farmers Union—and potato producers wanted to establish what Government policy would be in the event of difficulties in the marketplace.

I sensed that the Minister had not considered the speech made by his right hon. Friend the then Minister in Committee when he spoke tonight. My first question—perhaps the Minister can give us a clear answer—is, did he read that speech, and does he believe that he has met the undertakings given to Parliament in 1993?

Secondly, to what extent does the Minister have complete access to all Commission reports on state aids to the potato processing industry and potato producers throughout the European Community? Can he give us an assurance that he has an unfettered right to all the reports that the Commission produces?

If the Minister intends to take the British potato producers into a free market without undertakings on subsidy—to which the hon. Member for North Thanet (Mr. Gale) and I object anyway—surely he must have some mechanism for being made fully aware of what subsidies are being paid within the Community, so that, when they are being paid, he can immediately raise the matter with the Commission with a view to those national aids being removed.

Finally, the scheme was devised in such a way as to reduce the potential for volatility in price. As I understand it, the mechanics of the scheme are such that potato producers take decisions on what to plant in any particular year within a quota system and target areas, and are guided not to over-produce. They have to guess to what extent they would be prepared to plant up to quota. If I remember rightly, some research done by Nottingham university in 1992 proved that there would be considerable price volatility in the market if the scheme were removed.

If that is the case, what will happen in the event that, let us say for two or three years in succession, there is a glut in the United Kingdom potato market? In those conditions, growers will totally lose confidence. Having lost money in successive years, they will worry and wonder whether it is worth their while planting potatoes in a third year, not knowing what the price is likely to be and not being able to assure their bank managers, who may well be lending them money, what will happen to their loan repayments.

As a consequence, we may be faced in one, two or three years with a sudden drop in the area planted in the United Kingdom, and a scarcity in the marketplace on an unparalleled scale, which might well lead to the importing of potatoes.

I wonder what will happen—

They will put up the price of soup.

The hon. Gentleman should know. The plant in his constituency is taking jobs from mine in two months' time. I cannot say that I would look favourably on anything that would help Campbell's Soups at the moment.

What will happen if there is a total loss of confidence in the marketplace? I have great reservations; I know that it is an argument of the past, but without the scheme, so as far as there is a potential for a loss of confidence, Parliament needs some reassurance as to what the Government's actions might be.

11 pm

I shall detain the House only briefly. I have a simple political philosophy: if it ain't broke, don't fix it. Cheshire farmers and growers believe strongly that the Potato Marketing Board has not only served them well by ironing out the peaks and troughs of production, but has served the consumer well. The reforms—the removal of quotas and so on—have benefited growers, processors and consumers.

My only worry is that, after we have got rid of the potato marketing scheme, the industry may face unfair competition from our partners in Europe. Surely we are not so naive that we do not remember examples in the past, when we played the game as it should be played and removed subsidies, and other countries used subsidies from their national Governments to undermine our success.

I hope that when my hon. Friend the Minister replies to the debate, he will reassure hon. Members on both sides of the House who share my concern that he would consider using his powers to extend the revocation period, and that he will tell the House that if at the time—that is, in June 1997—he found that the market conditions within Europe were unfair, he would then seek to act on behalf of not only British growers, but British consumers.

11.1 pm

It is extremely unusual for East Lothian and Congleton to be in agreement, but that is the case tonight. I represent some hundreds of potato producers in East Lothian. I also represent 68,000 potato consumers. It is surprising that more has not been said about the interests of consumers, who are also important.

I hope that the Minister will acknowledge that for many years the Potato Marketing Board has served the interests of consumers and producers very well. It is a complicated commodity and matters could become difficult for producers and consumers. Over a long period of years, the board has ensured a reasonable balance between supply and demand. I share the concern of my hon. Friend the Member for Workington (Mr. Campbell-Savours) that if we do away with the quotas and regulations, as the Minister is doing tonight, in a future year there could be a glut, the price could collapse and there could be a serious shortage in the following year. That would be bad news for all concerned in the United Kingdom, and our neighbours in mainland Europe would certainly take advantage of that. That brings me to state aid to industry on mainland Europe. I am anxious that today we are doing away with one scheme and creating a vacuum that could be completely against the interests of our producers and consumers.

Various Conservative Members have said that the Government should pay careful attention to state aid on mainland Europe and should be ready to take vigorous action. What on earth does that mean? Will the Minister of Agriculture, Fisheries and Food go round auditing the accounts of potato producers and processors in every nook and cranny of mainland Europe? Obviously the Commission will not do so, unless there is the regime that we want to see. It is likely that unfair competition will develop. It would be a serious error to tear up what is left of the scheme in the absence of something better in its place. It is grotesquely irresponsible of the Minister to be leading the industry and consumers up the creek without a paddle as a result of the debate.

11.4 pm

With the leave of the House, I shall reply to the interesting points made in the debate. The hon. Member for Newcastle-under-Lyme (Mrs. Golding) made the most revealing speech of many in a revealing and useful debate. The totem that she enunciated, in which she was apparently joined in unity by the hon. Member for East Lothian (Mr. Home Robertson), was that we should not destroy that which we have. If that is new Labour, it is an interesting gloss on new Labour. I was disappointed that the hon. Lady, in her somewhat limited remarks, was not able to define—and no other Opposition Member could—the position of stakeholders. The hon. Member for Clwyd, South-West (Mr. Jones) characteristically identified himself solely with producer interests. Conservative Members firmly believe in the interests of producers and consumers, who will be favoured by the proposed deregulation.

Only through the House passing the revocation order will the Potato Marketing Board be free to implement its plans to bring forward agreed proposals for a successor body. That is the way forward for the industry, rather than staying as it is.

The hon. Lady and other hon. Members did not seem to reflect the correct economic context. The hon. Member for North Cornwall (Mr. Tyler) mentioned the current state of exports and imports, particularly in relation to processing. My hon. Friend the Member for North Thanet (Mr. Gale) referred to the familiar fact that a high proportion of our imports are for processing—an area where we have tended to lose market share over the years. It is significant that since our announcement more than two years ago on winding up the scheme, processors have committed themselves to £50 million of additional investment in this country, which supposes that they will obtain supplies and that it will be economic to source from British producers.

There was a degree of obsession with activities in Europe, both as to state aids and the economic regime for the countries involved. It is clear that the most successful countries—in certain cases, those that want no regime—are those that do not subsidise their growers and emphasise the importance of being able to produce for the market.

As to the speech of my hon. Friend the Member for North Thanet, I much welcomed his robust attitude to the principle of subsidy and control arid his general remarks about state aids, which struck a chord with me. I understand his concern and that of the hon. Member for Pembroke (Mr. Ainger) regarding the special conditions for early potatoes. Occasionally, as is bound to happen with any commodity market, there is some instability where there is a high emphasis on the seasonal premium. As we move into a single market, the logic is that it should not readily be possible to dump, because it is open to our producers to export into markets offering a higher price. That is exemplified by recent experience.

There is no universal or general experience of damage to our growers from the prevalent practice of state aids in other member states being applied in such a way as to distort competition.

Why did the then Minister, now Secretary of State for the Environment, go to such great lengths in Standing Committee to make a series of commitments in relation to state aids in Europe? Can the Minister answer that?

I can tell the hon. Gentleman that my right hon. and learned Friend the Minister, who normally attends the Council, is tireless in pursuing those matters and in pressing the Commission and his colleagues to obtain a regime that will enable us to go forward.

There is no significant evidence at this stage—if there is, perhaps hon. Members will send it to me—of damage caused to the British potato industry by the imports to which reference has been made. They cause nothing like the damage that is done by the industry being held back by outmoded modes of regulation. I say to those who have argued in favour of the maintenance of the scheme—they are apparently in favour of quotas—that merely maintaining it, when the board has taken the decision to lift quotas, would not by itself produce that which they want.

It is interesting that my hon. Friend the Member for St. Ives (Mr. Harris) made it clear that in reality there is no systematic or serious opposition to our proposals. There are concerns, of course, and there is acknowledgement of the board's role in the past and of some of its achievements. That I readily acknowledge, but there is no systematic wish to continue with the practices of the past.

An issue that does not strictly arise from the order—it was mentioned by my hon. Friend the Member for St. Ives—is brown rot, which is apparent in Dutch seed potatoes. The Commission, on the advice of the Plant Health Committee, has taken action. We supplemented that with our own agreed national action. We take the matter seriously. We are determined to protect the British potato industry and our seed stocks. As a result of our testing programme, one lot of seed imported from the Netherlands has been identified with a case of brown rot. The matter has been reported to me within the past 24 hours. Under current legislation, we have the ability to control that seed. It cannot be planted without our permission. We have notified the Dutch authorities and the Commission, which will be considering the matter again in the Plant Health Committee next week. We shall continue to pursue our testing regime and to control all imports from the Dutch source.

I return to the general points. What is the regime that is desirable for the potato industry? Whatever the merits of a lightweight regime, which we shall continue to press vigorously in Europe, there is no advantage in holding up the revocation of the scheme to secure such a regime. The consequences of the present scheme and the inhibitions and costs that it has imposed and incurred are greater than any advantages that it offers the British grower or consumer. It would be desirable to secure a lightweight regime, but the two matters are separate. It is time to move on.

The emphasis of the existing regulations, which have their genesis in the thinking of two generations ago, is bureaucracy and restriction. The board and the industry are ready and waiting for change. We will not reintroduce quotas and control. We believe that there should be the earliest possible action and that the right way to take that action is to pass the order that I have commended to the House.

Question put:—

The House divided: Ayes 193, Noes 161.

Division No. 29]	[11.13 pm
AYES
Alexander, Richard	Fabricant, Michael
Allason, Rupert (Torbay)	Field, Barry (Isle of Wight)
Arbuthnot, James	Fishburn, Dudley
Arnold, Jacques (Gravesham)	Forman, Nigel
Arnold, Sir Thomas (Hazel Grv)	Forth, Eric
Atkins, Rt Hon Robert	Fowler, Rt Hon Sir Norman
Atkinson, David (Bour'mouth E)	Fox, Dr Liam (Woodspring)
Atkinson, Peter (Hexham)	Freeman, Rt Hon Roger
Baker, Nicholas (North Dorset)	French, Douglas
Baldry, Tony	Gale, Roger
Bates, Michael	Gailie, Phil
Batiste, Spencer	Garel-Jones, Rt Hon Tristan
Beggs, Roy	Garnier, Edward
Bellingham, Henry	Gill, Christopher
Beresford, Sir Paul	Gillen, Cheryl
Biffen, Rt Hon John	Goodlad, Rt Hon Alastair
Bonsor, Sir Nicholas	Goodson-Wickes, Dr Charles
Boswell, Tim	Greenway, Harry (Ealing N)
Bottomley, Peter (Eltham)	Greenway, John (Ryedale)
Bowden, Sir Andrew	Griffiths, Peter (Portsmouth, N)
Bowis, John	Hamilton, Rt Hon Sir Archibald
Brandreth, Gyles	Hamilton, Neil (Tatton)
Brazier, Julian	Hanley, Rt Hon Jeremy
Brooke, Rt Hon Peter	Hargreaves, Andrew
Brown, M (Brigg & Cl'thorpes)	Harris, David
Browning, Mrs Angela	Haselhurst, Sir Alan
Bruce, Ian (Dorset)	Hawkins, Nick
Burns, Simon	Hawksley, Warren
Burt, Alistair	Heald, Oliver
Butterfili, John	Heathcoat-Amory, Rt Hon David
Carlisle, Sir Kenneth (Lincoln)	Hendry, Charles
Carrington, Matthew	Hogg, Rt Hon Douglas (G'tham)
Carttiss, Michael	Horam, John
Cash, William	Howard, Rt Hon Michael
Channon, Rt Hon Paul	Hughes, Robert G (Harrow W)
Chapman, Sir Sydney	Hunt, Rt Hon David (Wirral W)
Clappison, James	Hunt, Sir John (Ravensbourne)
Clark, Dr Michael (Rochford)	Hunter, Andrew
Clifton-Brown, Geoffrey	Jack, Michael
Coe, Sebastian	Jackson, Robert (Wantage)
Congdon, David	Jessel, Toby
Conway, Derek	Jones, Gwilym (Cardiff N)
Coombs, Anthony (Wyre For'st)	Jones, Robert B (W Hertfdshr)
Coombs, Simon (Swindon)	Kirkhope, Timothy
Cope, Rt Hon Sir John	Knapman, Roger
Cran, James	Knight, Mrs Angela (Erewash)
Davies, Quentin (Stamford)	Knight, Rt Hon Greg (Derby N)
Davis, David (Boothferry)	Knox, Sir David
Day, Stephen	Kynoch, George (Kincardine)
Devlin, Tim	Lait, Mrs Jacqui
Dover, Den	Lawrence, Sir Ivan
Duncan, Alan	Legg, Barry
Duncan-Smith, Iain	Lester, Sir James (Broxtowe)
Dunn, Bob	Lidington, David
Durant, Sir Anthony	Lloyd, Rt Hon Sir Peter (Fareham)
Dykes, Hugh	MacKay, Andrew
Elletson, Harold	Maclean, Rt Hon David
Evans, David (Welwyn Hatfield)	Maitland, Lady Olga
Evans, Jonathan (Brecon)	Malone, Gerald
Evans, Nigel (Ribble Valley)	Mans, Keith
Faber, David	Marland, Paul

Marlow, Tony	Spink, Dr Robert
Martin, David (Portsmouth S)	Sproat, Iain
Mates, Michael	Squire, Robin (Hornchurch)
Mawhinney, Rt Hon Dr Brian	Stanley, Rt Hon Sir John
Merchant, Piers	Steen, Anthony
Mitchell, Andrew (Gedling)	Stephen, Michael
Mitchell, Sir David (NW Hants)	Streeter, Gary
Montgomery, Sir Fergus	Sweeney, Walter
Neubert, Sir Michael	Taylor, Ian (Esher)
Newton, Rt Hon Tony	Taylor, John M (Solihull)
Nicholson, David (Taunton)	Taylor, Sir Teddy (Southend, E)
Norris, Steve	Temple-Morris, Peter
Onslow, Rt Hon Sir Cranley	Thomason, Roy
Page, Richard	Thompson, Sir Donald (C'er V)
Paice, James	Thompson, Patrick (Norwich N)
Patnick, Sir Irvine	Thomton, Sir Malcolm
Pattie, Rt Hon Sir Geoffrey	Thurnham, Peter
Pickles, Eric	Tredinnick, David
Porter, David (Waveney)	Twinn, Dr Ian
Powell, William (Corby)	Viggers, Peter
Redwood, Rt Hon John	Waldegrave, Rt Hon William
Renton, Rt Hon Tim	Walker, Bill (N Tayside)
Richards, Rod	Waller, Gary
Riddick, Graham	Wardle, Charles (Bexhill)
Roberts, Rt Hon Sir Wyn	Waterson, Nigel
Robertson, Raymond (Ab'd'n S)	Watts, John
Robinson, Mark (Somerton)	Whitney, Ray
Roe, Mrs Marion (Broxbourne)	Whittingdale, John
Rowe, Andrew (Mid Kent)	Widdecombe, Ann
Sainsbury, Rt Hon Sir Timothy	Willkinson, John
Scott, Rt Hon Sir Nicholas	Willetts, David
Shaw, David (Dover)	Winterton, Mrs Ann (Congleton)
Shepherd, Sir Colin (Hereford)	Wlofson, Mark
Shepherd, Richard (Aldridge)	Wood, Timothy
Sims, Roger
Spencer, Sir Derek	Tellers for the Ayes:
Spicer, Sir Michael (S Worcs)	Mr. Bowen Wells and
	Mr. Patrick McLouglin.
NOES
Adams, Mrs Irene	Cummings, John
Ainger, Nick	Dafis, Cynog
Anderson, Donald (Swansea E)	Darling, Alistair
Anderson, Ms Janet (Ros'dale)	Davidson, Ian
Armstrong, Hilary	Davis, Terry (B'ham, H'dge H'l)
Ashdown, Rt Hon Paddy	Denham, John
Battle, John	Dewar, Donald
Bayley, Hugh	Dixon, Don
Beckett, Rt Hon Margaret	Donohoe, Brian H
Berry, Roger	Dowd, Jim
Betts, Clive	Dunwoody, Mrs Gwyneth
Boateng, Paul	Eagle, Ms Angela
Bradley, Keith	Eastham, Ken
Brown, N (N'c'tle upon Tyne E)	Etherington, Bill
Bruce, Malcolm (Gordon)	Flynn, Paul
Byers, Stephen	Foster, Don (Bath)
Callaghan, Jim	Fyfe, Maria
Campbell, Mrs Anne (C'bridge)	Galbraith, Sam
Campbell, Menzies (Fife NE)	Gapes, Mike
Campbell, Ronnie (Blyth V)	George, Bruce
Campbell-Savours, D N	Gerrard, Neil
Canavan, Dennis	Gilbert, Rt Hon Dr John
Carlile, Alexander (Montgomery)	Godman, Dr Norman A
Chidgey, David	Godsiff, Roger
Chisholm, Malcolm	Golding, Mrs Lin
Clapham, Michael	Graham, Thomas
Clark, Dr David (South Shields)	Grant, Bernie (Tottenham)
Clarke, Eric (Midlothian)	Griffiths, Nigel (Edinburgh S)
Clarke, Tom (Monklands W)	Griffiths, Win (Bridgend)
Clelland, David	Grocott, Bruce
Clwyd, Mrs Ann	Hall, Mike
Coffey, Ann	Hanson, David
Cohen, Harry	Harvey, Nick
Cook, Frank (Stockton N)	Henderson, Doug
Corbyn, Jeremy	Heppell, John
Corston, Jean	Hill, Keith (Streatham)

Hinchliffe, David	O'Neill, Martin
Hoey, Kate	Pearson, Ian
Home Robertson, John	Pickthall, Colin
Howarth, Alan (Strat'rd-on-A)	Pike, Peter L
Howarth, George (Knowsley North)	Pope, Greg
Hughes, Robert (Aberdeen N)	Powell, Ray (Ogmore)
Illsley, Eric	Prentice, Bridget (Lew'm E)
Ingram, Adam	Prentice, Gordon (Pendle)
Jamieson, David	Prescott, Rt Hon John
Jones, Ieuan Wyn (Ynys Môn)	Primarolo, Dawn
Jones, Marlyn (Clwyd, SW)	Quin, Ms Joyce
Kennedy, Jane (L'pool Br'dg'n)	Raynsford, Nick
Kilfoyle, Peter	Reid, Dr John
Kirkwood, Archy	Rendel, David
Liddell, Mrs Helen	Robertson, George (Hamilton)
Lloyd, Tony (Stretford)	Roche, Mrs Barbara
Llwyd, Elfyn	Rooker, Jeff
Lynne, Ms Liz	Ross, Ernie (Dundee W)
McAllion, John	Rowlands, Ted
McCartney, Ian	Salmond, Alex
Mackinlay, Andrew	Sheerman, Barry
McMaster, Gordon	Short, Clare
McWilliam, John	Simpson, Alan
Madden, Max	Skinner, Dennis
Mahon, Alice	Smith, Andrew (Oxford E)
Marek, Dr John	Smith, Llew (Blaenau Gwent)
Meale, Alan	Spearing, Nigel
Michael, Alun	Spellar, John
Michie, Bill (Sheffield Heeley)	Steinberg, Gerry
Milburn, Alan	Stevenson, George
Moonie, Dr Lewis	Strang, Dr. Gavin
Morgan, Rhodri	Sutcliffe, Gerry
Morley, Elliot	Taylor, Matthew (Truro)
Morris, Estelle (B'ham Yardley)	Thompson, Jack (Wansbeck)
Mowlam, Marjorie	Tipping, Paddy
Mudie, George	Touhig, Don
Mullin, Chris	Turner, Dennis
Murphy, Paul	Tyler, Paul
O'Brien, Mike (N W'kshire)
Olner, Bill

Wallace, James	Wise, Audrey
Walley, Joan	Wray, Jimmy
Wareing, Robert N	Wright, Dr Tony
Watson, Mike
Welsh, Andrew	Tellers for the Noes:
Wicks, Malcolm	Mr. Joe Benton and
Williams, Alan W (Carmarthen)	Mr. Eric Martlew.

Question accordingly agreed to.

Resolved,

That the draft Potato Marketing Scheme (Commencement of Revocation Period) Order 1995, which was laid before this House on 12th December, be approved.

Delegated Legislation

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

Financial Services

That the Financial Services Act 1986 (Investment Services) (Extension of Scope of Act) Order 1995 (S. I., 1995, No. 3271), dated 18th December 1995, a copy of which was laid before this House on 18th December, be approved.—[Mr. Brandreth.]

Question agreed to.

Liaison

Ordered,

That Mr. Richard Caborn and Sir Geoffrey Johnson Smith be discharged from the Liaison Committee and Mr. Martin O'Neill and Mr. Giles Radice be added to the Committee.—[Mr. Brandreth.]

Campions Wood

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

11.25 pm

I suppose I should begin by apologising to the Under-Secretary of State for the Environment, my hon. Friend the Member for Croydon, Central (Sir P. Beresford), for keeping him up so late. As some small consolation, I should tell him that the first time I had an Adjournment debate in the early 1970s, it came on at about 4 am. At least this is a comparatively civilised hour.

It is almost 40 years since the problem that I wish to raise began, because it was on 13 November 1956 that permission to extract clay and associated materials from a 65 acre site in fields on the edge of the mining village of Cheslyn Hay was granted. That site came to be known as the Campions Wood site, hence the title of the debate.

In 1970, shortly before I was elected to the House to represent that village and the rest of my then constituency of Cannock, the Minister of Housing and Local Government—who, if my memory serves me correctly, was the late Anthony Greenwood—on the recommendation of an inspector gave planning permission on appeal for a housing development right up to the boundary of this land after Cannock district council had refused planning permission.

The developer soon began to build his houses, and nice houses they were. It seems that the original owners moved in in ignorance of the earlier planning permission, and it does not seem to have been found in the searches that were conducted by their solicitors. There was no real problem until 1993. There had been some small-scale excavations that the county council was told by its legal advisers were probably of a sufficient scale to maintain the permission.

In 1993, prospecting began in earnest and one week in July 1995 operations began and a great bund some 6 m high was constructed less than 5 m from the gardens of my constituents. The House can imagine the appalling problems that they have faced as a result. I have been inundated with letters over the past six months or so, a great many of which have been received on my fax machine over the past 24 to 48 hours since it became widely known that I had secured this debate. I shall not quote from all of them but will quote merely from one that lists the problems that are faced by a constituent and his neighbours.

The letter states that there is no respite from noise or dirt, that windows can no longer be opened for any length of time, that houses and cars are continually covered by dust and dirt, that the immediate environment has been ruined and that there is severe blight on properties. Obviously, people wish to sell their houses to get away from that ravaged environment, but nobody wants to buy the houses. Residents are worried by the potential for accidents created by the enormous pit that is opening just behind their garden fences. It is

"an accident waiting to happen",

as my constituent says in his letter. The mud must be seen to be believed. The aspect to the village from the south has been ruined. The whole village has been blighted.

Residents believe, and I understand why, that only an end to the quarrying and subsequent landscaping can make the site acceptable. [Interruption.] I am relieved that my hon. Friends have finished their conversation. Residents have appealed to the county council to exercise its powers. It has begun negotiations, but it feels that it is in a dilemma. After all, it can in no sense be blamed for what has happened, which I accept.

The council has asked me therefore to appeal, just as my constituents have, to my hon. Friend the Minister. Over the past few months, he and I have exchanged a number of letters. He has referred me to the Environment Act 1995, which requires planning authorities to review planning permissions. This site does fall in the first category to be reviewed, but, even if the council lists it by the end of this month, the earliest that it can require the operator to submit to any new scheme of conditions is 1 February 1997. Even then, any conditions imposed on the site should not, I am told, prejudice to an unreasonable degree either the economic viability of the site or processing operation, or the asset value. There is no certainty therefore that, even if they take that route, my constituents will be relieved. It is certain that they will not be relieved for at least another year, even if everything falls into place.

The district council is powerless because it has no jurisdiction in the matter. The county council is unwilling immediately to revoke permission because of the liability for compensation, which is understandable. It is pursuing an alternative of negotiating, but the owner, Dr. Roberts, is often at sea—he is a medical doctor and serves, I believe, on a Cunard ship. It is difficult to contact him or his representatives. A third party, I understand, has now bought a portion of the site and it has been difficult to trace that party.

I asked my hon. Friend the Minister whether he would be willing to receive a delegation from the county council. He said that it might prejudice the Secretary of State's discretion in the event of any appeal, so he could not do so. Meanwhile, my constituents continue to suffer—the blight continues. All the appalling consequences of the quarrying—to which I referred when I quoted the letter—persist.

In these circumstances, and bearing it in mind that the houses are there only because a previous Minister who was not in this Government or even in the Conservative party granted permission, there is a moral obligation on the Government. I understand the constraints to which my hon. Friend referred in his correspondence. For the reasons to which I have alluded, this is in no sense a criticism of him or of the Government; it is a plea on behalf of some hard-pressed constituents. The debate is, I venture to suggest, a classic illustration of the worth of Adjournment debates, where a Member of Parliament can bring such concerns to the Floor of the House.

I should like to make two suggestions to my hon. Friend. I hope that he will either allow me to bring a group of residents to see him so that he can discuss with them their fears and worries and try to find a way forward or, better still, convene a meeting, to which representatives of the county council, the developer and residents would be invited with me, to discuss a way forward.

A way forward must be found. We cannot allow the lives of those people to be blighted in this way. We cannot allow children to grow up in the appalling atmosphere of dust, dirt and danger. The quarrying could continue for another decade, well into the next century. Children could grow up never knowing anything other than a large bund at the end of the garden with an enormous hole beyond that, with all the attendant dirt, dust and danger. When the quarrying ends, what will happen about filling in the hole?

There is a problem and it must be tackled. I appeal to my hon. Friend to use his well-known sympathy and considerable ingenuity to help me to find a way forward.

11.35 pm

I congratulate—rather than thank—my hon. Friend the Member for South Staffordshire (Sir P. Cormack) on landing this problem on my plate at this hour. As he said, perhaps I should be thankful that it is not 4 o'clock in the morning.

My hon. Friend has raised a considerable problem. The Government have recognised both it and the passions and concerns that it has aroused. That is why we responded significantly with primary legislation. He is aware that we have reformed the old quarry permissions and that considerable progress has been made. The Environment Act 1995 has given the local planning authority wide environmental powers. He knows that I cannot refer to the details of the case in question, but the planning authority has the power to impose environmental constraints upon working sites.

As my hon. Friend said, 31 January is the date by which the list of sites must be published and I expect the site in question to be included. An application must be made for new conditions and a date must be specified. I shall check whether it is possible for that date to be brought forward from 1 February next year, which was suggested by my hon. Friend.

In essence, my hon. Friend made one suggestion—that I act as a negotiator. I listened carefully, but I do not know whether he means between all sides.

I made two suggestions—first, that my hon. Friend should allow me to bring a deputation of residents to meet him, and secondly—this is preferable—that he convenes a meeting with representatives of the county, the developer and residents, accompanied by me, to try to find a way forward.

I thank my hon. Friend for that clarification. He is aware that his first suggestion is not really an option. It could cause a problem if there were an appeal because I, as a representative of the Department and the Government, would have listened to only one side of the argument. After this debate, I shall reflect on his second suggestion. Although it appears to be fraught with difficulty, it has possibilities.

The best way to proceed is for the county council to review the permission under the new legislation. It is an opportunity to ensure that it conforms to modern conditions. It would involve neither revocation nor payment of compensation. It would remove many of the difficulties, such as dirt and noise, referred to by my hon. Friend.

As my hon. Friend suggested in some of the correspondence, it would be possible for Staffordshire county council to revoke the permission. If it did that, it would have to pay compensation, as my hon. Friend said. He suggested that the Secretary of State should revoke the permission. That could happen only in absolutely exceptional circumstances, and I fail at this stage to consider the circumstances of this case exceptional. Even if the circumstances were exceptional sufficiently for the Secretary of State to revoke the permission, the county council would still have to bear the compensation by law. There is no choice.

If that is, indeed, the case and if the other avenues that I have suggested came to a dead end, my hon. Friend and the Secretary of State would lose nothing by treating the case as exceptional—as it properly is—and revoking the permission.

I am afraid that I disagree with my hon. Friend. I do not think that the case is exceptional. There are such cases up and down the country that have been carefully considered. That is why the Government required in the Environment Act 1995 an updating of the environmental conditions for the working of quarries.

I shall however take away the two points that my hon. Friend has made and consider them again. First, I shall see whether there is any way in which the date may be moved forward. Secondly, I shall consider whether there is any way in which some form of arbitration and negotiation between the various parties can be initiated in order to find mutually agreed, environmentally acceptable conditions, which will help the people and at the same time allow the quarry to be worked.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Twelve midnight.

Volume 269: debated on Wednesday 17 January 1996

House Of Commons

Prayers

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Clause 1

Subsidy In Respect Of Private Sector Student Loans

Potato Marketing Scheme

Delegated Legislation

Financial Services

Liaison

Campions Wood