Commons Chamber

                    The text on this page has been created from Hansard archive content, it may contain typographical errors.
                

House Of Commons

Wednesday 16 October 1996

The House met at half-past Nine o'clock

Prayers

[MADAM SPEAKER in the Chair]

Bse (Northern Ireland)

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

9.30 am

Thank you, Madam Speaker, for the opportunity to debate this issue, which is much appreciated by the farming community in Northern Ireland, and, indeed, by the greater rural communities on which it depends.

The bovine spongiform encephalopathy crisis broke out last March, and led to the ban on the export of United Kingdom beef. It was clear that the impact would be greater on Northern Ireland than on Great Britain, because 80 per cent. of Northern Ireland's beef product is exported, compared with some 20 per cent. of British beef. That means that by far the greatest proportion of the Northern Ireland farming industry's beef product has now lost almost its entire market. The collapse of the beef export market has left the farming community in Northern Ireland in great financial crisis.

The House should appreciate that the farming industry is the basic industry in Northern Ireland, not only for farmers and their families, but for the many rural communities that survive on the economics of the surrounding farming fraternity. It would not be an exaggeration to describe the impact of the crisis on the dependent rural communities as the single greatest tragedy since the great famine in Ireland 150 years ago. Although this crisis will never, thank God, reach the horrific proportions of that period, it is, none the less, a most devastating blow. The farming community sees it as the greatest single setback of the past 150 years.

As I said, agriculture is central to the economy of Northern Ireland—in fact, the beef industry is worth £1 million a day to the local economy. The unfairness of the impact on Northern Ireland was the first major reaction among farmers and their representatives. It should be noted that the incidence of BSE in Northern Ireland was only one tenth of the incidence in Great Britain, and the outbreak was largely confined to the dairy herds in Northern Ireland. Moreover, Northern Ireland had a much more efficient system for containing the outbreak and assuring the quality of Northern Ireland beef, through the farm quality assurance scheme.

Northern Ireland has a sophisticated computerised system that ensures the traceability of every animal in the cattle herd—I repeat, the traceability of every animal in the cattle herd. That reduces the possibility of infected animals entering the food chain to practically zero—the possibility is almost eliminated. On Monday, the Minister of Agriculture acknowledged that Northern Ireland had a significantly lower incidence of BSE than other parts of the United Kingdom, and that it had that almost 100 per cent. effective traceability scheme. Both those factors should facilitate easier access to a certified herd scheme, should one come about.

The first response of the farming community and its organisations, which received unanimous cross-party support from Northern Ireland's Members of Parliament and Members of the European Parliament, was to ask for separate status for Northern Ireland, so that it could escape the total ban on the export of UK beef. Commissioner Fischler has indicated then and now that the European Commission would look sympathetically on such a proposition, not only for Northern Ireland but for other parts of the United Kingdom, such as Scotland and other regions, that have that lower incidence of BSE and greater traceability of animals.

The stumbling block, however, is that a request for such status must be made by the sovereign Government of the United Kingdom, and the Government have adamantly turned their face against such a proposition. I hope that the arguments that we may hear this morning will enable a change in attitude and policy, or that the arguments will cause some other change that will enable the general idea of separate status to be implemented.

It was also interesting to note that when, last Monday, the President of the European Council of Agriculture Ministers—Mr. Yates, TD—met representatives of the farming industry and politicians in Northern Ireland, he offered strong support for the removal of the EU ban on the export of Northern Ireland beef. Therefore, the presiding Agriculture Minister of the EU and Commissioner Fischler have both indicated their support—if only the Government would make a request.

The Government's initial response to the crisis, with the agreement of the EU, was a cull of animals older than 30 months, on the basis that cattle younger than 30 months were less at risk because of the disease's development time. The cull began at the beginning of May. Initially, the prices paid were reasonable, and cattle began to move off the farms.

In Northern Ireland, the scheme was administered by the Northern Ireland Meat Exporters Association, which represents all the major beef plants, in a co-ordinated effort to ensure that all farmers received equal treatment. Farmers were invited to inform the association of the likely number of animals they would submit for the cull.

The theory was that a percentage of each farmer's animals would be taken away on a rotational basis, depending on the capacity of slaughterhouses and rendering plants, until the cull was complete. There have, however, been quite a number of problems in ensuring the smooth operation of the scheme. The scheme lost much credibility, and elements of unfairness and privilege have crept into it.

There is a huge backlog of animals waiting to go through the system. Since last May, 160,000 animals were booked to go through the cull, and about 80,000 have gone through it—30,000 culled cows and 50,000 "clean" cattle. There is an estimated backlog of 45,000 cows, and another 30,000 "clean" cattle require culling.

I think that it would be accepted in most quarters in Northern Ireland that there has been substantial overbooking, so that the backlog is possibly less than 100,000. The Department of Agriculture in Northern Ireland estimates that the backlog is approximately 50,000 cows, but we think that that is probably a conservative estimate. Each week, about 2,000 new animals—mainly older cows—are becoming eligible under the terms of the scheme. Clearly, therefore, with the current maximum rendering capacity of 4,000 animals per week and a net clearance from the backlog of only 2,000 animals per week, it will take a considerable time to clear the backlog.

I understand that new measures have been implemented recently to speed up the disposal of cattle over the age of 30 months, with changes in rendering and the storage of carcases. I hope that the situation will be improved, as it is still not acceptable.

There must be greater co-ordination between the Northern Ireland Meat Exporters Association and the meat plants. Farmers allege that animals have been booked for a long time and that none have been taken. Farmers are entering the most difficult period of their financial year, as the summer feed has finished this month, and cattle will now go into indoor feeding. The backlog of cattle is still on the farms, and some farmers are receiving no income whatsoever. If they cannot buy new feed, many of them will suffer financial disaster.

It is expected that two things will happen. First, some farmers, and quite a few small farmers—of which Northern Ireland has a great proportion—will go to the wall financially. That will affect not only farmers and their families but the communities in which they have lived perhaps for the past 200 years. It is a significant financial and deep psychological problem for Northern Ireland's farming communities.

Secondly, if the cull throughput is not accelerated, there is the prospect that animals will have to be killed and burned in the fields of Northern Ireland. I am sure that no hon. Member wants to see that happen to the rural communities of Northern Ireland.

Rendering plants have been working at full capacity from May to September. We have very few rendering plants, and the Lisburn plant will be closed down for refurbishing for a couple of weeks. Furthermore, the plant at Duncrue, in Belfast, was totally out of action last week, which has increased the backlog.

We need additional cold storage capacity, which might ease the problem. There are, however, some technical difficulties with storage. I am sure that the House would not be particularly interested in the details of the difficulties of freezing whole animals, and I am not able to give it those details. The shortage of cold storage, however, is one of the great difficulties that we are facing.

Over the next few weeks, additional rendering capacity could be made available elsewhere in the United Kingdom. The animals would have to be transported live—on the hoof—which would impose a burden of additional costs on an already impoverished farming community. The Government should commission additional freezer units, either static or mobile, as quickly as possible to store intervention stocks, thereby enabling the cull to proceed much quicker.

Beef producers in the United Kingdom are to receive additional support worth £29 million, as part of a £45 million package of extra aid that was announced by the UK Agriculture Minister, and £16.6 million will be spent on extra cold storage capacity to speed up the cull of animals over 30 months. The farming unions and communities of Northern Ireland and I welcome that support.

However, farmers have been quick to point out—as they always are in financial matters—that those additional funds are probably less than the amount that they will lose, because of the forthcoming 10 per cent. cut in compensation payments for animals over 30 months. It appears—I should like to hear the Minister's comments on this—that nothing will be gained from this so-called "extra money".

Farmers are suffering a severe loss in cull prices, and the problem will become even more acute this week. Farmers have been receiving £1.50 per kilo for steers and heifers at deadweight and £1.66 per kilo for cows, whereas market prices before the crisis were about £2.20 to £2.30 per kilo.

There had been a supplement of 25p per kilo live weight on steers and heifers, but Treasury pressure ensured that that was reduced by 80 per cent. to 5p, which is again a substantial clawback. Now that compensation rates have been reduced further, it is expected that the value of animals will go down yet again by another £50 or £60. As I understand it, that is due to take effect from 21 October. I urge that, at the very least, the supplement that has been cut be restored, and, in addition, that compensation rates be increased all around.

It will be noted that the European Commission made available 112 million ecu, which has been used to provide a top-up for the beef special premium at £17.40 per head and a top-up of £23.13 per head for the suckler cow premium and for a payment of £60 per head for all animals sold for slaughter between 20 March and 30 June. However, the Government were given the authority by the Commission—I hesitate to express it that way, as I know that the UK does not need that authority—to produce matching funding. That was the intention, but they have failed to do so. Should the Government match the Commission's funding, it would enable the top-ups for the beef special premium and the special cow premium at least to be doubled, thereby alleviating much of the financial hardship now being endured by farmers in Northern Ireland.

I note that Baroness Denton announced last Friday that beef producers in Northern Ireland would receive an advance of 80 rather than 60 per cent. of the full rate of payment under the 1996 beef special premium and suckler cow premium schemes. I understand that that will come into effect on 1 November. It is to be welcomed, because it will alleviate part of the current cash flow crisis being experienced by farmers in Northern Ireland. However, never being satisfied, may I suggest that the 80 per cent. could be increased to 100 per cent., to allow farmers to survive the great difficulties of the next few months?

Suckler cow farmers are facing a very difficult period. Most of them depend almost exclusively on the income received from sales of their calves at the autumn sales. Because of the uncertainty in the beef industry, there is a great fear that prices will plunge disastrously. The most effective short-term help for suckler cow farmers is through the hill livestock compensatory allowance.

A few years ago, the HLCA, as it is known, was reduced for two successive years, and subsequently frozen for two successive years. In effect, it thus fell for four successive years. I note that the Government agreed on 18 September last to make £60 million available to cattle producers in the less-favoured areas under the 1997 HLCA. Of that amount, we think that £14 million will be available to Northern Ireland, which is to be welcomed.

As I understand it, the difficulty is that the precise rates for the 1997 scheme will not be set until after the autumn review of economic conditions in the hills and uplands. In view of the unprecedented crisis in the beef industry, there is now a compelling argument for a substantial increase in HLCA payments to help tide suckler cow farmers over their present difficulties. I hope that the autumn review produces sensible, practical and, of course, increased rates of aid for the 1997 scheme. There should also be a compensatory payment on calves sold this autumn to compensate for the anticipated heavy market losses, if they are incurred.

In the medium and long term, the best way to steady prices at the autumn sales and to stabilise the beef industry generally is through the intervention system. I urge that a guarantee be given that all future Northern Ireland tenders for intervention will be awarded in full, that a fixed price be established for all grades, and that preconditions attached to weight limits be removed, at least until the crisis is over. That would enable farmers who buy calves in the autumn sales for fattening to plan with some confidence, and would help to shore up prices at the calf sales.

The argument for the removal of the ban on the ex port of Northern Ireland beef must not be abandoned. It has been suggested in some quarters that it could be lifted in the new year, but, given the Government's current attitude and interpretation, that seems unlikely. If the hassle between the UK and the European Union over throughput under the accelerated slaughter scheme is unresolved, pessimism will reign in Northern Ireland, and it could be 2000 or beyond before UK cow beef could appear in the marketplace. That would be totally unacceptable.

It must be emphasised that the beef industry in Northern Ireland already meets a number of the requirements of the Florence agreement, which were accepted as necessary to secure a step-by-step lifting of the ban. Northern Ireland is well placed in terms of animal identification and the recording of movement and total traceability, and it already meets the prerequisite for lifting the export ban.

Some 2,000 animals come under the BSE cohort slaughter programme. That number could be dealt with in weeks, if not five or six days. The accelerated slaughter programme was agreed in Florence last July as one of the conditions for lifting the export ban. The problem is that the scheme, which is 70 per cent. EU-funded, has not been finalised. Indeed, I understand that the Government have drawn back from it.

Does the hon. Gentleman agree that it would be helpful if the Minister responded to that point? As the hon. Gentleman said, the Minister of Agriculture has said that we are holding back for the time being, but implied that the Government are invoking scientific justification for doing so. It was agreed at Florence that detailed proposals would be made by the British Government, so, if no proposals are put forward, the Government are in breach of the agreement.

I thank the hon. Gentleman for his intervention, and I agree with him. As I recall the sequence of events, the Florence convention was suspended—if that is the right word—because of what was alleged to be new veterinary scientific information. That information was apparently the decision by some—I emphasise, some—veterinary scientists that BSE was not necessarily caused by maternal transmission, but that the source was a possible predilection in the progeny of an infected cow. Consequently, the Government decided that BSE would somehow magically run itself out by the year 2003.

I agree with the hon. Gentleman that the Government have pulled back from the commitment given at Florence. That has had a further effect. It has undermined the good will that existed in the Commission, in Fischler, Yates and the other Agriculture Ministers. It was a regrettable step, and a devastating one for Northern Ireland. The Government seem reluctant to implement the Florence agreement to secure the immediate lifting, wholly or partly, of the ban on Northern Ireland beef.

In the meantime, there is a possibility of movement through consultation with the European Commission on proposals for relaxing the export restriction for animals from certified herds which have had no contact with BSE. I point out to the House that 97 per cent. of herds in Northern Ireland could qualify for the UK certified herd scheme. It is hoped that such a scheme could equate to the well-established farm quality assurance scheme.

I note that the chief veterinary officer for Northern Ireland is to meet tomorrow in Brussels his counterparts in the European Union Standing Veterinary Committee. I note that he will seek assurances that "going it alone" with the slaughter could open the way for the certified herd scheme. I sincerely hope that he will be successful, and that he will receive unanimous and strong support from the Government in his endeavours in that respect.

In Northern Ireland, as in the United Kingdom generally, any herd that has had a BSE-infected animal has been flagged by the Department of Agriculture. There is a major problem here, in that, in the United Kingdom, and only in the United Kingdom, it is the farm and not the herd or the animals that is flagged; in the rest of Europe, it is the herd that is flagged. Therefore, even if all the cattle on the flagged farm are removed and slaughtered, and new stock is brought in, flagging remains a total impediment. Surely we must all agree that that absurdity must be ended.

I understand that our flagging system happened by accident, and that the relevant wording in the legislation was not caught on to at the time. As I understand it, the European Commission is willing to address the erratum at an early date if effort is put into the matter.

In reality, while flagging applies to the farms, there is no realistic market for animals from flagged herds, which is disastrous for farmers in that category. Those most affected are the small suckler herd farmers, some dairy farmers, and farmers with a high-quality output. There must be a buy-out scheme for the suckler herds—about 300 in number—leading to the removal of flagging of holdings rather than herds, so that farmers can begin to rebuild their herds and their livelihoods. At present, their livestock will not be dealt with.

The 3 per cent. affected are made up of a number of elements. The suckler herds are only 0.75 per cent. of the 3 per cent. total. They are a small fraction, and could be dealt with if the Government could devise a scheme to allow herds to be depopulated, farm buildings to be cleaned out and farms to be restocked with non-BSE-infected cattle. Farmers could thus, we hope, gain certified herd status. Such schemes exist in the Republic of Ireland and other EC countries, so why can they not exist in the United Kingdom?

Is there not now an opportunity in this very small sector to introduce a beef herd set-aside scheme, similar to other agriculture set-aside schemes, starting with the BSE-flagged beef herds in Northern Ireland? I should like the Minister to take that point on board as a means of getting round an impossible situation for the 3 per cent. that are not covered by the certified herds scheme.

Another element creeps into the equation. There is an enormous backlog of cattle on farms waiting to go through the cull system. Many of them are dairy cows which are still being milked, and milk production is running way ahead of what it would normally be. It is clear that dairy farmers in the UK will be severely punished for producing over quota this year, which could trigger yet another penalty in the super-levy.

I suggest to the Government that the best way in which to deal with that problem is to plead exceptional circumstances, and either to negotiate extra milk quotas for this year in recognition of the dimension of the crisis or, if that is unsuccessful, at least to negotiate a substantial reduction in the super-levy.

I have covered a number of points on the issue, which, as I said at the start, is an absolute disaster for farmers in Northern Ireland. I will sum up the main points for the Minister's quick reference, in the hope that he will respond to them positively and helpfully. First, I would like him to address the point about the provision of additional cold storage and freezer capacity. Secondly, there is a need to provide extra rendering capacity either in Northern Ireland or elsewhere.

Thirdly, the compensation price must be improved; I have already mentioned the details. Fourthly, the Government should address the issue of matching EU funding to enable a substantial increase in the beef special premium and the suckler cow premium. Fifthly, HLCA payments should be increased substantially as a result of the autumn review to help the suckler cow farmers through the present crisis. In addition, there should be a compensatory payment for calves sold this autumn.

Sixthly, there must be a guarantee of continuing beef intervention, with all future Northern Ireland tenders being awarded, full and fixed prices being established for all grades, and no weight conditions. I hope that the provisions of an accelerated slaughter scheme will go ahead as soon as agreement is reached on compensation levels.

I ask that the flagging of holdings should stop, and that flagging should be applied to herds only. A buy-out scheme for flagged suckler herds should be introduced. I mention again the problem of extra milk, the quota and the super-levy, and how that problem could be addressed. Finally, the earliest possible removal of the ban on Northern Ireland beef exports is vital.

Last March, the British Government pledged themselves to do everything possible to safeguard the beef industry. It is now important that the Government display that commitment by an immediate action programme in some—I hope all—of the areas that I have indicated.

There has been throughout Europe a total acceptance of Northern Ireland's low level of BSE and of our much better traceability system. Such acceptance must be backed and strongly supported with an action plan that is capable of immediate implementation. Farmers demand and deserve that immediate action, and they look to the Government to provide it. Perhaps there will be some indication that the Government will take such action when the Minister winds up this debate.

In my opening remarks, I referred to the great famine in Ireland 150 years ago, and said that the BSE crisis is the greatest disaster to hit the farming community in Northern Ireland since then. At the time of the famine, Britain was accused of standing by and doing nothing. I hope that history will not repeat itself.

rose—

Order. It is clear that four Back-Bench Members wish to contribute to the debate. We have 50 minutes left, which includes the time for the winding-up speeches. I make an appeal for short, succinct speeches.

10.8 am

I am grateful to the hon. Member for South Down (Mr. McGrady) for initiating the debate. He reminded us several times of the famine in Ireland 150 years ago. Had it not been for that famine, I might have been a resident of County Cavan instead of living in the west of Scotland, where there is a large Irish community. Names such as Murphy and O'Neil suggest that the famine, which caused terrible hardship in Ireland, brought people to Scotland to seek a livelihood.

The Glasgow meat market is in my constituency, and I should stress that, with all due respect to the farmers, they are not the only people affected by the BSE crisis. I am not trying to underestimate their problems, but people living in the cities also face difficulties.

I understand that 5,000 head of cattle per week are being slaughtered in Scottish abattoirs. Those cattle do not have BSE; they are perfectly healthy animals that happen to be more than 30 months old. I should put it on record that, like Northern Ireland, Scotland has not been affected by BSE.

Recently, I had the pleasure of visiting Mr. Alec Henderson, who has a farm on the outskirts of Glasgow. He told me that butchers throughout the west of Scotland can put notes in their windows stating that their meat has been supplied by Mr. Alec Henderson, and that is sufficient assurance that it is BSE-free. I hope that the Minister recognises that many farms in Scotland are BSE-free because the farmers feed their cattle with produce that is grown on the farms. They do not use artificial feeds.

It has been estimated that, of the 5,000 head of cattle that are being slaughtered each week, 1,000 are destroyed in the Glasgow meat market. The Scottish Office has taken the same approach whenever there is a crisis—it has passed on the problem to someone else. In this case, a so-called liaison committee has been created in Scotland, and Ministers have allowed it to rule the roost.

It is clear that some people will make a fantastic amount of money out of the crisis. One does not need to be a mathematician to work out that, if 1,000 head of cattle pass through one meat market every week, and, having been destroyed, their skins are sold to the leather tanneries, some people will make large sums of money. Yet, at the other end of the scale, farmers and wholesale butchers will lose.

If 30-month-old cattle have to be destroyed in the meat market, the wholesale butchers who have operated in the Glasgow meat market for more than 100 years will not be allowed to slaughter the meat they sell there. Thai will have the ludicrous result that wholesale butchers who operate in the Glasgow meat market will have to go elsewhere to slaughter the cattle that are normally killed in the market.

In today's short debate, it is hard to describe the Glasgow meat market, but I should mention that it occupies considerable acreage in my constituency. People tell me that, if 1,000 cattle pass through the meat market every week, there must be employment there, but there will be a price. As I have said, the wholesale butchers will have to consider leaving the premises that some of them have occupied for more than 100 years.

We must also consider what will happen after all the cattle have been killed. In my constituency, there will be a great empty building that no one will want. I know that that is the responsibility of the Scottish Office, not the Minister who is present.

Order. The hon. Gentleman has been in the House for many years. He really must relate his remarks to the Northern Irish cattle coming through the Glasgow meat market; otherwise, he will be out of order.

I apologise, Mr. Deputy Speaker. Perhaps I should have explained that the Glasgow meat market was built not only to deal with home stock, but to cope with the Irish market. Irish cattle also come through that market, and that is why I am participating in the debate.

I refer to the point raised by the hon. Member for South Down about the crisis in the rest of the United Kingdom. I am often reminded by some of his colleagues in the Ulster Unionist party that Northern Ireland is part of the United Kingdom. Irish farmers and the Glasgow meat market have been affected by the BSE crisis.

I stress again that some people are making an awful lot of money out of the crisis. I shall not say too much about that, but some of those on the so-called liaison committee are set to make a financial killing. I am not suggesting that they are dishonourable, but I am concerned that they may have a conflict of interest.

The Scottish Office has put such pressure on the cattle markets, that, as we have discussed in the House, there is concern about the welfare of animals which have to wait in trucks for hours on end. I hope that the Minister will take my concern to the Scottish Office, that, unless some of the smaller abattoirs are reopened, cattle will continue to suffer while they are waiting for slaughter. No one in the House or the country wants to see that.

Finally, we have to consider the head boners in the meat industry. They do not have a very pleasant job, but they have worked hard, honestly and in good faith. 'The Scottish Office told them to cease business, yet they have received not a ha'penny in compensation. Some of those men and women worked for 20 or 30 years in that industry and received no complaints about hygiene or any other aspect of their work. They were told to cease trading, and some of their mortgages and businesses have been threatened. Business in that industry is now non-existent.

If Ministers can tell the Tory party conference that the farmers will receive compensation, they should consider other people who are involved in the meat industry. Let me say, with no disrespect to the farmers, that others in the industry are also losing financially.

10.18 am

We have listened to two very interesting speeches. I assure the hon. Member for Glasgow, Springburn (Mr. Martin) that those of us who take an interest in the cattle industry understand that its effects extend far beyond the farm gate. I am sure that, like me, he is grateful to the hon. Member for South Down (Mr. McGrady) for raising this matter. It gives us a chance to express yet again concerns that we all have about the industry, the many ramifications of which were totally unforeseen until the disaster struck.

The hon. Member for South Down has rehearsed the concerns fairly comprehensively, and therefore made it easier for those who follow him to cover the matters on which he has given details. There are also, however, one or two matters that he missed.

As he pointed out, Northern Ireland exported 80 per cent. of its beef. A considerable amount of that entered Great Britain and, to some extent, Northern Ireland was caught by the ban on British beef. It seems that the Irish Republic has escaped because it is a separate country, yet it has an incidence of BSE that must be extremely worrying to Mr. Yates and members of the Irish Government.

The British beef market was immediately depressed as soon as Northern Ireland beef entered it—such beef had no place else to go. If we resolved the problem of Northern Ireland beef, it would therefore relieve the downward pressure on the entire British beef market and tremendously benefit all of us—not least the constituents of the hon. Member for Glasgow, Springburn.

Northern Ireland can, of course, meet the accredited herd requirements much quicker than the rest of the United Kingdom, but even if the European Community accepted the Government's accreditation scheme, it would still demand that the UK abide by the Florence agreement. The Government are trying to shut their eyes to this real and major problem, but I do not think that it will go away.

In order to comply with the scheme, Northern Ireland needs to slaughter about 2,000 cattle in 790 herds—not very many cattle per herd. On top of that, there is a backlog, to which the hon. Member for South Down referred, of 90,000 cattle, comprising 40,000 30-month-plus cattle and perhaps 50,000 cull cows, which is a fast-developing problem for farmers in terms of feed, shelter and wet land. Land is very rapidly becoming wet through.

If Northern Ireland could resume its exports beyond the shores of the nation, it would immediately benefit its farmers and the general economy there, and, as I have said, reduce the depressant effect of Northern Ireland beef on the Great Britain market, which would relieve problems and give a tremendous lift to the income of Great Britain beef producers.

The Government seem to be taking the view not only that is the Florence scheme atrociously expensive—which it is—but that it is unnecessary on any scientific grounds. I happen to agree with them. Perception is the determining factor. I fear that perception will be the determining factor in another matter that will come before the House this afternoon.

The Government believe that, by removing the 20 to 25 per cent. of beef in the market by the methods that have been and are presently deployed, a balance will be created between production and consumption, and therefore nothing more will be needed to be done. That may be true, but even if it is, there is a great chasm between where we are and that happy outcome. We need a bridge to get from where we are to where we have to be.

What needs to be done to resolve the problem in Northern Ireland? I speak about Northern Ireland not only because it is the subject of this debate but because of the ramifications it has for the rest of the kingdom. If Northern Ireland can clear the backlog, it can reach compliance with the accredited herd scheme standards. That means slaughtering the 2,000 cattle in Northern Ireland, which is proving to be the road block.

We should not be mistaken about the fact that the EC will use the fact that those 2,000 cattle are not slaughtered as a road block to reopening the export market for Northern Ireland cattle. That tiny number of the total national herd must be taken out of the equation as quickly as possible. If that is done, we will be able to export beef not only to Great Britain but—I hope—much further afield.

The hon. Member for South Down also referred to the problem of flagged holdings, which I agree must be addressed and resolved urgently. If it is not resolved, supermarkets will try to outdo each other in the purity of the products on sale. That will simply mean that they will not be willing to sell beef from a flagged holding. That would be a serious marketing problem. It is not very often mentioned, but it must be borne in mind. The Government must sort out this crazy system of flagging holdings rather than cattle.

The Government must understand that their efforts to reduce compensation for 30-month-plus cattle is totally wrong. Why should those who have had to keep their cattle the longest wind up with the least money? Farmers are well aware that, when a small technical change appears in the press or is announced from a Government source, it might not seem very significant, but it often represents a difference as great as that, which we in this House know from legislation, between "may" and "shall".

Farmers want to reduce the weights for cattle for which they will be able to claim compensation, but once they do that, they run across the age-weight problem. In order to get the second punching, cattle have to be kept until they reach a certain age. If they are kept until that age, they are over the weight. The farmer has a nice little choice. He can forgo the second punching, which involves a considerable sum at the moment, or go over it and run foul of the weight restriction. The Government must be a little more honest in dealing with that.

There has to be a serious and sustained effort to ensure that all farmers get away a proportion—which they expected from the very outset but has not materialized— of their cull cows and 30-month-old cattle so that there is no favouritism. Let us be clear. If the Government had taken on the job of running the scheme themselves, there would not have been any favouritism. We might have had a moan, but there would not have been favouritism.

We know of farmers whose cattle have been listed for slaughter from the first day, but who still have them, yet dealers seem to be able to buy them and get them off their premises in a day or two. That is causing great resentment among the farming community. Farmers also think that, whenever they try the help line, the telephone must have been left off the hook.

What information has the Department of Agriculture, Food and Forestry in Northern Ireland made available to the meat plants regarding the number, types and age of cohorts of cattle on farms in Northern Ireland? It has been put to me that it is possible for meat plants to tap into the central computer. If that is so, information that should be commercially confidential to farmers is available to meat plants, which is very much to the commercial advantage of the meat plants and the disadvantage of the farming community. The system was never designed for such use, and I should be glad to have an assurance that what I have been told is incorrect.

If the Government cannot get rid of the backlog, would they be prepared to buy up the cull cattle and arrange for the feeding of them so that use can be made of the feed that is lying around? People are frightened to buy that feed. People who are losing between £200 and £300 a head on last year's cattle are in no position to go to market this year. But they may have some feed left, and that could be used. People will not take action off their own bats, but if the scheme that I believe has been suggested by the Ulster Farmers Union were put into operation, it would go a considerable way towards helping to resolve the problems we face now.

10.29 am

I am grateful for the opportunity to speak, and I intend to be brief. I shall press the Minister to answer a particular question. Is there any liaison between the Northern Ireland Office and the Scottish Office, aimed at ensuring that, in terms of the Florence agreement, there is an agreed path towards beginning the accelerated cull, at least in Northern Ireland and Scotland, and that that can be put forward as part of the United Kingdom proposals under the agreement?

I am sure that hon. Members from Northern Ireland will agree when I tell the Minister that, if the Government simply stand by what the Minister of Agriculture said in the House on Monday, there will be not only anxiety but anger in Scotland and in Northern Ireland, because the interests of people there are being sacrificed for the sake of the division of opinion within the United Kingdom. What I propose seems to be within the Government's power, even considering the understood difficulties that they face.

The Minister must accept that Northern Ireland has an especially good record on the incidence of BSE, and also has a traceability scheme. Scotland comes close behind in terms of its incidence, which is falling, and also has an accreditation scheme. The scheme would be better if it were fully computerised, and we would like help from the Scottish Office so that that can be done.

It is not acceptable for Scottish and Irish specialist beef producers to be told that, despite assurances by the Prime Minister, no less, that, under the Florence agreement, there would be progress towards the lifting of the ban, and despite the recognition that Scotland and Northern Ireland could be in the vanguard of the process, their interests will not be taken forward.

Everybody recognises that the problem cannot simply be regionalised. That would be an over-simplistic solution. But we cannot allow the present state of confusion, disarray and shambles to continue, with specialist beef producers given no idea of what they can expect. They are now buying cattle at 25 to 30 per cent. below last year's market prices, in the hope that the home market will hold together and that there will be no further crisis to depress prices. They have to gamble on whether the export ban will be lifted within the maturation period of the cattle now coming on to the market. That is a pretty difficult situation for farmers to operate in.

The hon. Member for Glasgow, Springburn (Mr. Martin) talked about his local special interest, but I believe that in my constituency I may have a greater concentration of beef production in all its aspects, across the board and from start to finish, than any other Member who represents anywhere else in the United Kingdom.

Of course it is not only farmers who are affected. Cattle marts, abattoirs, refrigeration and transport companies and a variety of other service companies are affected, too. Thousands of jobs are at stake and thousands of incomes severely depressed. People face potential ruin. Yet, six months into the crisis, the Government have not even carried out their basic undertakings to the European Commission, which were to put forward detailed proposals on how to implement an agreed cull.

Worse than that, the Government are now backing off, saying that they are not sure whether there is a case for going ahead with the cull that they previously agreed. The hon. Member for South Down (Mr. McGrady) is right to say that the good will that has existed so far within the European Commission will evaporate if we do not make detailed proposals, as we have undertaken to do.

It is not good enough for Ministers to say that there is new scientific information. There is always new scientific information. That is the nature of science—and it is no excuse for not having made proposals on the basis of the scientific information available. If that includes a Government belief that, since the Florence agreement, new data have appeared that affect the outcome, let us by all means incorporate them into the detailed proposals.

Farmers in Northern Ireland and Scotland, and all those whose work is ancillary to the beef production industry, demand that the Government take action under the terms of the Florence agreement. Will the Minister tell me whether there is active discussion between his Department and the Scottish Office so that they will be able to lead the way for the United Kingdom out of the bind, and implement the Florence agreement?

10.34 am

I congratulate the hon. Member for South Down (Mr. McGrady) on his timely action in bringing this matter before the House. I assure him, and the leader of his party, that the leader of my party and all its Members will join the other Members of the House, especially those from Northern Ireland, in making a united case. That has been happening already. Only the other day, the three Members of the European Parliament for Northern Ireland stood united, shoulder to shoulder, on the important issue before us.

I am delighted that the Minister of State is at the Dispatch Box to answer the debate, because I believe that he is genuinely interested in all matters relevant to the Province.

Sad to say, while we were facing a great crisis, other European countries tried to take advantage of the problems facing our beef industry, and of the British horror scenario. But for some of them it backfired. They intended to enter the markets to take advantage of our tragedy, but found that raising the issue backfired on them at home.

The crisis affects not only agriculture but Northern Ireland as a whole, because the beef industry is our chief industry, and is worth £500 million to the Northern Ireland economy. It employs not only 25,000 people directly, on the farms and in processing, but many thousands of others in packaging, transport, distribution and sales. That is why the spin-off from the tragedy is hitting so many of our people. If decisive action is not taken soon, there will be no beef industry left. Radical steps are needed to restore confidence.

The ban on beef exports hits Northern Ireland especially hard because, as has already been said, 70 to 80 per cent. of all our beef production is sold outside the Province. Therefore, the fight must continue to establish that Ulster beef should have a BSE status separate from that of the rest of the United Kingdom.

Many of the reasons have been outlined already. Compared with the mainland, there is a minimal incidence of BSE in Northern Ireland; 34 per cent. of herds on the mainland have been struck by BSE, but only 3 per cent. of the herds in Northern Ireland. In Great Britain, 160,000 BSE cases have been recorded; the figure for Northern Ireland is 1,600. Yet Northern Ireland has more than 10 per cent. of the United Kingdom beef herd.

The main difference between the situation in Northern Ireland and that in the rest of the United Kingdom is that a full record is kept, which means that the background, health and contacts of all cattle are fully traceable. It has been acknowledged that we have one of the best schemes anywhere in Europe. Not only that, but other countries in the European Community have acknowledged that we have the best beef production anywhere in the world.

I know of countries that would be proud to accept Ulster beef, and delighted to sell it on their markets—but unfortunately, because of the decision in Europe, that cannot be done. I believe that the quality of our beef can meet the challenge of that produced anywhere else in the world, and that we could market it. But market outlets in Europe and beyond have made it clear that, although they would be prepared to sell our beef, they are prevented from doing so. The case for a separate BSE status for Northern Ireland beef is unassailable.

The farmers are the innocent people in the story. They did nothing wrong. They listened to the guidance given them by the Department. Yet despite that, they are paying the price. We must recognise that the farmers did not do something wrong to make a quick buck or a quick pound, and the Government owe it to a vital industry to compensate them during this great crisis.

It is sad to see big men in markets with tears in their eyes as they give away their cattle, but they realise that they cannot keep the animals, as they do not have feedingstuffs for the winter. The farming industry must not allow any dealer to make himself fat from the horror and tragedy that many ordinary decent farmers are facing because of these burdens.

As summer comes to an end, feeding cattle outside will be drawn to a conclusion. We are now entering the winter months, and many farmers will not have the finance necessary to provide food for their animals. I know of farmers who have gone to the bank and have been told not to write another cheque—not even for food for their own families. We must remember that many banks encouraged farmers to borrow, but—at the first sign of crisis—they will not even allow a farmer to write a cheque to put food on the table for his family. This is a human crisis, as well as an appalling crisis facing the industry.

In a recent debate in another forum, it was unanimously demanded that Northern Ireland be recognised as having special status for BSE purposes, so that the worldwide export ban can be lifted as quickly as possible; that the backlog of cattle in the over-30-month cattle slaughter scheme be eliminated; that BSE flagging should apply to herds, and not holdings, and that a voluntary buy-up scheme be introduced for BSE flagged suckler herds; that specific beef intervention for Northern Ireland be introduced; that the Government provide fair and adequate compensation for beef producers in keeping with their previous commitments; and that the HLCAs be increased in the autumn review.

These points have been unanimously expressed by hon. Members today. I hope that, as a result of the political unanimity in Northern Ireland, the Minister will concede our request, and that the Government will take urgent action on this very important issue.

10.42 am

I add my congratulations to the hon. Member for South Down (Mr. McGrady) on raising this important issue, and congratulate the other hon. Members who have taken part in a well-informed debate. The debate is especially timely, as it follows the Government's decision not to proceed with the selective cull of cattle, along with Monday's meeting in Northern Ireland with members of the European Parliament and the President of the Council of Agriculture Ministers.

The crisis has been with us since March this year, and we appear to be no further forward in our efforts to lift the European ban. The importance of the beef industry to Northern Ireland has been mentioned this morning and previously in the House. The export trade is valued at about £500 million, and 80 per cent. of beef from Northern Ireland is exported—mainly to Europe. More than 16,000 farms rely on cattle to some extent.

Yet, at the same time, the incidence of BSE in Northern Ireland is about l per cent. of the United Kingdom rate. That is mainly due to the traceability systems in operation in Northern Ireland, which must be replicated throughout the rest of the United Kingdom if we are to reduce the incidence of BSE and create the conditions to allow the ban to be lifted. The Minister of Agriculture has circulated a letter to all hon. Members this morning that refers to the proposed passport system, which will go some way to addressing the concerns.

The fiasco since March has continued because of the possible link between Creutzfeldt-Jakob disease and BSE, and the implementation of the ban by the European Parliament. We do not appear to be any closer to the lifting of that ban, despite the Government's decision to cull all cattle over the age of 30 months. Problems have arisen with that cull as a result of the lack of rendering capacity and cold storage, both of which have been mentioned this morning. There have also been allegations that some abattoirs have been selected in preference to others, and will be allowed to profiteer at the expense of the other abattoirs.

On the question of cold storage, I understand that another £16.6 million has been made available for extra cold storage facilities. An article in The Guardian last Friday referred to the possibility of the Government hiring cold storage ships to meet the demand for facilities as our existing cold storage facilities are—or will shortly be—exhausted. It is also argued that the £16.6 million has been made available by reducing the compensation payments that have been made to farmers affected by the crisis.

The lack of rendering capacity and cold storage are examples of the incompetence of the Government in dealing with this issue. The cold storage is necessary, and the backlog must be addressed. We have heard several times—and heard again this morning—that farmers are now facing the costs of food and shelter for their animals as we approach the winter months.

The backlog in Northern Ireland of animals in the over-30-month scheme is about 90,000, and this must be addressed. We are also conscious that farmers with animals that are waiting the longest to be part of the cull will be given the least compensation, as the Minister's letter tends to confirm. He said that market conditions have now led to a reduction in the compensation that is to be made available.

In June, the Florence summit set a framework that, we were led to believe, could have led to the lifting of the export ban. The summit proposed five stages and a number of preconditions that had to be met by the Government before the Commission would consider lifting the ban. The Prime Minister told the House that the stages would be considered only and exclusively on the basis of public health, objective scientific criteria and the judgment of the Commission. It is important to recognise that the objective criteria will be judged by the same scientists who recommended the imposition of the export ban.

The preconditions include the accelerated selective slaughter programme, which will try to accelerate the decline in the incidence of BSE. That programme was approved by the Commission, and the number of cattle suggested for that cull varied between 20,000 and 150,000. Other preconditions were: the recording of movement, identification and registration; the removal of meat and bonemeal from feed and farms; the confirmation of the over-30-month culling scheme; and improved procedures for the removal of specified bovine materials from carcases.

The Prime Minister said that, if those conditions were met, the export ban could be lifted over five stages. But he also said that the ban could be lifted by October, and it is quite clear that he was way off the mark. Those stages related to certified herds, animals born after a specified date and the export of embryos—which would come later—and meat from animals under 30 months of age.

The ban on meat from animals over 30 months would remain, but the basic preconditions were that the cull of animals aged over 30 months should continue and that the accelerated selective cull should take place. There have been delays in the over-30-month cull—as I have state—hut the selective cull was suspended by the Government in the week of 20 September 1996.

As luck would have it, I was in the European Parliament the following morning when Commissioner Franz Fischler addressed the Parliament on agricultural issues, and I can tell the House that he was completely surprised by the Government's decision to suspend the scheme. Most of the MEPs in the Chamber—I spoke to a few—were also surprised by the Government's decision. That raises the question whether the European Commission was consulted before the Government decided to suspend the cull. Obviously, that was done on the basis of the Oxford study, which mentioned the phasing out of BSE, by 2001.

As the Minister repeated in the Chamber on Monday, however, there are signs that European member states would not agree to lift the ban even if the selective cull took place. What evidence is there for that? If the Minister cannot answer today, perhaps he can write to me once he has consulted the Minister of Agriculture.

The reaction of the Commissioner in the European Parliament that morning was that he had not been consulted. He gave no sign that there would be any reluctance on the part of the Commission to the lifting of the ban if the selective cull took place. One thing was clear when he addressed the European Parliament that morning—he said that the conditions of the Florence framework still stood. Regardless of the Oxford study and the Minister's view of what the Commission might or might not do, the Government would have to meet the conditions of that agreement before the ban could be lifted.

At the moment, we are unable to meet two of the conditions of the framework. We cannot achieve the over-30-month cull until later this year—probably into next—and we cannot achieve a selective cull, because of the Government's attitude to the Commission and their belief that the Oxford study suggests that whatever we do would make no difference.

I agree with the hon. Member for Gordon (Mr. Bruce)—what are the Government going to do? Are we going to wait until 2001 to discover whether BSE dies out? Or are the Government going to take action to renegotiate the Florence framework to put in place a proper timetable? It is all right the Government saying that the Oxford study says that the selective cull is no good. The National Farmers Union said as long ago as July that such a cull had no scientific basis. The Commission is sticking to the Florence timetable, and the Government have to take some action to get the framework in place so that the ban is lifted.

The idea of certified herds is welcome for Northern Ireland, which has had fewer than 2000 cases of BSE—46 this year. A selective cull would enable Northern Ireland to meet the Florence framework; I endorse the words of the Minister of Agriculture, who said that the certified herd system lent itself well to Northern Ireland.

Better news for Northern Ireland came from the meeting on Monday between Members of the European Parliament and the president of the Council of Agriculture Ministers, which suggested that initiatives could take place to enable Northern Ireland to meet the Florence framework. I agree with Mr. Yates, who said that they had set out a route for a regional initiative, and that the British Government should treat Northern Ireland as a first pilot scheme for implementing the Florence agreement on selective culling. The Government should allow Northern Ireland to meet the conditions, and thus enable the ban to be lifted in the Province.

10.52 am

It is always a pleasure to follow the hon. Member for Barnsley, Central (Mr. Illsley) and I shall try to pick up as many of his points as I can. He invited me to write to him if I could not answer one question in detail, and I undertake to do so during the next few days.

This has been a particularly important debate for Northern Ireland, as has been evidenced by the number of Members representing Northern Ireland who have attended. They have included the right hon. Members for Strangford (Mr. Taylor) and for Lagan Valley (Sir J. Molyneaux) and the hon. Members for Belfast, South (Rev. Martin Smyth) and for South Antrim (Mr. Forsythe), as well as those who managed to catch your eye, Mr. Deputy Speaker.

In the few minutes left to me, I shall certainly try to pick up as many points as I can. I, too, congratulate the hon. Member for South Down (Mr. McGrady) on the way in which he opened the debate. He spoke for the farming community and all the political parties in Northern Ireland by expressing in some detail his concern about this important issue, which he correctly described as one of the greatest setbacks in the past 150 years. That was a theme of many of the other speeches.

I shall try to answer as many of his questions as I can to help him. He spoke about speeding up the over-30-month cull. By the end of October, I hope to be able to double the rate of the cull to 8,000 animals a week. As I understand it, the Lisburn facility will be fully operational again on 28 October, more cold storage space is being made available, and there is no shortage.

Since the beginning of the crisis—that is a greatly overused word in this place, but it is correctly employed when dealing with this subject—all but one of the Northern Ireland tenders have been met in full. The Government are consulting the farming unions in Northern Ireland on how the additional £60 million is to be spent.

With regard to the Florence agreement—the hon. Member for Gordon (Mr. Bruce) also intervened on this subject—the selective cull is only suspended, and the Government are proceeding in accordance with that agreement, looking at all the scientific evidence, and in consultation with European Commission authorities.

The hon. Member for South Down asked whether the Government could guarantee that intervention tenders would be met in full in future. That is for the European Union beef management committee to decide. The Government will press for all tenders to be awarded in full. He also asked about calf sales. So far, calf prices in the autumn sales in Northern Ireland are holding up well.

As one might suppose, the hon. Member for East Londonderry (Mr. Ross) spoke with his customary authority as a farmer. He properly reminded the House that the problems affect the community as a whole, and extend well beyond the farm gate. He is right. The hon. Member for Glasgow, Springburn (Mr. Martin) also pointed that out, and raised a number of questions relating to Scotland, which my colleagues in the Scottish Office will be interested to consider.

The hon. Member for East Londonderry also spoke about the help line telephone being off the hook. I take that seriously. The responsible officials will look into that matter to ensure that, when the telephone is used, help is available to those who seek it.

If the Government get approval for the certified herd scheme, they will consider the selective culling of the 2,000 or so animals in Northern Ireland. The hon. Gentleman also mentioned the over-30-month scheme. I can tell him that meat plants cannot tap into the Government's computer, as that would be illegal under the Data Protection Acts—a real constraint. The Government could have run the booking system more fairly, but the problem with that suggestion is that commencement would have been significantly delayed.

The hon. Member for Mid-Ulster (Rev. William McCrea) also spoke powerfully, pointing out that all Northern Ireland is united in trying to deal with the problem. The European ban on exports of British beef and beef products is damaging the livelihoods of all those dependent on the beef industry, and arguably nowhere more so than in Northern Ireland, with its heavy dependence on exports to Europe and beyond.

It should be noted that, before the EU ban was imposed, between 1991 and 1995 farm incomes in Northern Ireland had risen by about 91 per cent. in real terms. Now, the effects of the ban are being felt much more widely in Northern Ireland than simply in the agriculture industry.

Reference has been made to the special arrangement for Northern Ireland, and I shall say briefly in the minute that I have left that the answer, the Government contend, does not lie in that direction. The solution is—

Order. We must now move on to Her Majesty's Government's policy on Latin America.

Latin America

11 am

I am most grateful to Madam Speaker for granting this Adjournment debate, the latest in the current Session, on Britain's relations with Latin America. This is the ninth successive yearly debate that we have had on Latin America, a tradition started in the House in 1988. It is interesting to contrast the debate those nine years ago with the debate today, based on the situation in Latin America in those years.

Nine years ago, we were viewing the early stages of a return to democracy and the demise of the dictatorships that so stained the reputation of Latin America. The House itself was involved in heated ideological warfare with Chile on the one hand and Nicaragua and Cuba on the other, and Latin America was then a byword for high inflation. Today, we debate Latin America against a background of stable economies and stable Governments. It is interesting that the recent great political pressures in Venezuela and in Paraguay did not lead to the traditional overthrow of the Government and imposition of a dictator.

In recent years, we have also witnessed the impeachment processes of the Presidents of Brazil and of Colombia and how that painful process resulted in democracy holding sway, albeit with very different outcomes in the two countries. Today in Latin America there are stable economies, stable Governments, historically low inflation, growth, open markets and privatisation, all of which provide great opportunities for Britain.

We should not forget the power of the Latin American region. It ranks alongside the Pacific rim and southern Asia in opportunities for our country. Latin America's economy is equal to or greater than those of Africa, the Indian sub-continent and south-east Asia put together. We should reflect on the fact that Brazil alone has an economy as powerful as that of Spain and that its state of Sao Paulo alone has an economy equal to that of Belgium.

The economy of Mexico is greater than those of Sweden, Hong Kong and Nigeria put together. The economies of Venezuela and Colombia, taken together, are more powerful than that of South Africa, an area in which this country takes a considerable interest. Last, but not least, Chile's economy is greater than that of either Malaysia or Singapore.

British interests in Latin America are nothing new. George Canning, then Foreign Secretary, said in a Commons debate in 1826 that Britain had

"called the New World into existence. to redress the balance of the Old."—[Official Report, 12 December 1826: Vol. 16, (2nd Series) c. 397.]

From independence onwards, Britain has taken a major partnership role in the region's development, involving railways, public utilities, banking and shipping, to mention but a few aspects.

The historic links with this country are perhaps best exemplified by an event that is taking place just a few hundred yards from the House, as President Eduardo Frei of Chile lays a wreath at the tomb of Admiral Lord Cochrane in Westminster abbey. The House will perhaps recall the colourful career of that naval officer, who took a leading role in the independence struggles not only of Chile but also of Brazil and of Greece. Lord Cochrane's contribution to Latin American independence ranks alongside the midwife roles of Canning, of Ponsonby in Uruguay and of the British soldiers and sailors of the Legion Britanica who served under Simon Bolivar in the independence struggle in northern and western south America.

So much for history; what of today? Our Foreign Affairs Select Committee has just returned from its journeyings in Latin America duly impressed, and we look forward to its report. The Inter-Parliamentary Union has dispatched delegations to Argentina, Uruguay and Brazil in the past three months, all of which have been successful. Members of the House have played a key role in the six successive Argentine-British conferences, which have done so much to reconstruct relations between our two countries following the tragedy of the south Atlantic only 14 years ago.

In all those ventures, our embassies and consulates in the region have played a valuable facilitating role. I pay tribute to the valued work of our diplomats in all the countries of Latin America—we can proudly use the word "all", with the recent opening of our new embassy in Santo Domingo in the Dominican Republic.

There was a time, particularly under previous Governments, when we closed and reopened missions with the regularity of yo-yos. I hope that the tight spending round in progress will not lead to a recurrence of that dismal process and that my hon. Friend the Minister will be a doughty fighter on our behalf in that respect. That is particularly important, as Latin America represents a massive opportunity for Britain, which we would do well indeed to get up and grasp.

I commend the proposed conference of key British business men due to be held in January next year, co-ordinated by the Foreign and Commonwealth Office and the Department of Trade and Industry, with key Latin American speakers from the highest level in the continent. It will be a magnificent opportunity for British business to learn more, building on the "Links into Latin America" programme of the DTI. I also commend the initiatives of Canning house, the Latin American centre in London, and its series of conferences and seminars, not least in the educational sphere.

Perhaps the biggest challenge in Latin America is the development of trading blocs. Mercosur, which is in effect the southern common market, was established as recently as 1991 by Brazil, Argentina, Uruguay and Paraguay, and has flourished. Although much work needs to be done to free up sectors and to apply a common external tariff, the volume of intra-group trade between the countries has grown impressively. In 1990, the year before Mercosur's inception, trade among the four countries amounted to $4 billion; by 1995 it had more than tripled to $14.5 billion. The impact of Mercosur is clear.

Above all, the venture of Mercosur is seen as a union of nation states with a minimum of supranational institutions, and with decisions taken by consensus. It is significant that it is avoiding the pitfalls of excessive bureaucracy, over-regulation and money-churning that have become the hallmark of the European Union. To date, Mercosur has maintained only a small secretariat in Montevideo and work is conducted through joint working parties, particularly to deal with the non-tariff issues.

Both President Fernando Henrique Cardoso of Brazil and President Carlos Menem of Argentina have given an impressive lead in those developments, and the four countries are pushing a five-year programme to develop the free trade area and the customs union.

Close ties are being developed with Chile. Tariffs are falling and Chile, the region's fastest growing economy, is coming closer to Mercosur. Bolivia is next into the frame to be associated with it. Mercosur has concluded an inter-regional co-operation agreement with the European Union that was signed in Madrid a year ago.

I was interested to hear what my hon. Friend had to say about Mercosur. Does he agree that one of the most interesting developments to arise from that freer, larger market is the substantial investment by European and other countries in the Mercosur countries, especially in the automobile industry? There has been great investment by, for example, Volkswagen and Fiat simply because the market in that area is so much bigger now.

Stability and free trade have already had the remarkable effects for Mercosur that I have outlined. The opportunities for British investment are certainly there. I hope that the Rover Group will read the debate and bring its proposals for that area to a more rapid conclusion.

Does my hon. Friend recall that the Trade and Industry Select Committee visited Argentina and Brazil last year and submitted a report to the House pointing out the advantages for British companies in trading with both those countries and in looking more widely to the Mercosur region? There are considerable opportunities. Mercosur is a very good and expanding organisation.

I thank my hon. Friend for raising the important Select Committee on Trade and Industry report and the hard work done by the Committee, which I hope will further highlight the opportunities for Britain.

Elsewhere in the continent, progress is being made by Colombia, Ecuador and Venezuela in the rejuvenation of the Grupo Andino, which is working on a free trade agreement with Mercosur, perhaps including Peru, and with which Panama is associated.

The process undertaken by Mercosur and the Grupo Andino contrasts with the north American free trade agreement, which was severely jolted by the Mexican financial crisis last year—a crisis that brought about a paralysis of any extension of NAFTA which has been exacerbated by United States internal politics.

All this points to opportunities for Britain and Europe. There is a growing tide of opinion in favour of a coherent relationship between a Latin American trading bloc bringing together its component parts, and a partnership with Europe and other regions around the world. The NAFTA experience and the Uncle Sam tendency, best exemplified by the haughty treatment of Colombia when it was struggling with the drugs menace can only emphasise Latin America's will to have close ties with the wider world.

All these matters underline the key role and opportunity for Britain. We are the natural point for Latin American countries' relationship with Europe—the logical first port of call in Europe. President Frei is here today. President Zedillo of Mexico was here earlier this year, when he addressed a meeting of both Houses of Parliament in an exceptional way. President Cardoso of Brazil is expected next year. Dozens of other high-powered Ministers, business men and so on have come to London in recent months.

Not only is London the world's leading financial and business centre, but our patterns of international trade are unique in Europe. That best ties in with the interest and preference of the Latin American republics. We are the obvious champions for Latin America within the counsels of Europe. Whereas France, Spain and Portugal have interests, particularly agricultural ones, which are competitive with those of Latin America, our interests are almost entirely complementary to those of Latin America. I look forward to my hon. Friend the Minister of State, Foreign and Commonwealth Office highlighting our work in that context.

To highlight the economic progress of the past year, I point to the stable currencies and low inflation in Brazil and Argentina, although I wonder what pressures are building up behind their highly valued currencies. We should note the continued excellent performance of Chile and the renaissance of Peru and Bolivia. Mexico is making a steady recovery after its financial crisis last year. We are also witnessing a coherent fight in Venezuela. Many of us were fascinated to hear the presentation at the House yesterday by the Venezuelan Finance Minister and the president of its central bank.

It is interesting to note in passing that the economy of the Falkland islands is also doing well, particularly in the fishing sector and the oil industry, in which more harmony is developing with its neighbour, Argentina.

Over the years, Britain has been a leading partner in infrastructure projects. One thinks of the Rio-Niterói bridge in Brazil, and we are looking at the Bolivia-Brazil pipeline. A massive series of projects is linked with the Hidrovia project—a project to develop the navigational capacity of the Parana and Paraguay rivers and their tributaries, from their upper waters in Bolivia and Brazil through Paraguay, Uruguay and Argentina to the River Plate and the Atlantic ocean. The scale of the engineering projects—to the tune of US$2 billion—presents massive opportunities for British companies. From the upstream terminus at Puerto Suarez in Bolivia, through the navigation channel up the Itaipu dam, opening up the Brazilian waterways as far as Sao Paulo, down to Nueva Palmira in Uruguay—the major open sea port at the mouth—there is much work to be done. Furthermore, there is the massive proposal for a River Plate bridge between Buenos Aires and Colonia del Sacramento in Uruguay. I hope that our embassies in all five countries are on the ball, and that our excellent trade promoters will alert potential British participants to the opportunities.

Privatisation is one of the greatest recent British success stories, and it is being emulated throughout the region. There are massive opportunities for British expertise and experience, not only in the process itself and the development of local stock markets but in popular shareholding. There is also a massive opportunity for British investment in the privatised companies. Our record, notwithstanding local successes such as British Gas in Buenos Aires, is not as good as it might be. There is much to be done. We must be in there, playing a leading part as the privatisation programme continues to roll out.

Education and training is another area of opportunity for us. My right hon. Friend the Secretary of State for Education and Employment recently visited Chile and Colombia and my noble Friend Lord Henley has visited Brazil, Argentina and Mexico. It is fascinating to note the enthusiasm of many Latin American countries for our national vocational qualification system. A major project is under way in Mexico in conjunction with our National Council for Vocational Qualifications. That project is funded by the World bank. There are also interesting developments in Colombia, Argentina and Brazil in that respect.

Throughout the region, there is dynamic activity in English language teaching, British cultural events and projects involving British higher education. This is being fostered and led by the British Council and its sister Cultura Inglesa institutes. Local British schools, notably in São Paulo and Buenos Aires, are flourishing. I am sure that the work of all of them will be encouraged by the Government.

Drugs are a scourge that afflicts Latin America, taking up too much Government time, corrupting the body politic and ruining lives. Let us always remember that the drug trade would not exist if the developed world did not pay very high prices for the deadly stuff. The solution is co-operation, not head banging. The disgraceful treatment of Colombia by the United States, with its certification process, is not the answer. The discreet professional assistance that we provide to Colombia and other Latin American Governments is the commendable route to take.

Latin America is a vibrant and developing area of the world and we ignore it at our peril. We must redouble our efforts, work with our friends and play a part in the continent, because it will rank alongside the Pacific rim as a focus of growth in the 21st century.

11.18 am

I shall speak briefly and I hope that the House will forgive me if I leave briefly when I have finished speaking. I will return for the rest of the debate.

It is good that we are yet again debating the situation in Latin America and relations with it. As the hon. Member for Gravesham (Mr. Arnold) said, this is the ninth year that we have had such a debate. It is usually at 3 o'clock in the morning, so this is a great improvement. We should put it on record that President Frei of Chile is visiting Britain this week. In the sense that he represents democracy in Chile and the removal of the dictatorship, his visit is extremely welcome.

Far less welcome are the strong rumours that General Pinochet is also in Britain. He is associated with the reign of terror in Chile and the destruction of human rights as well as of many Chilean trade unions and other organisations. He is here, presumably, on yet another arms buying spree. His very existence serves as a memory of the danger of the power of the military to any democratic movement in Latin America. Of course, the British Governments of the past happily sold arms to that dictator.

The hon. Member for Gravesham is true to himself, as he preaches privatisation in this country and everywhere else. He is an advocate of the trickle-down theory, whereby, if one makes a lot of people very rich, some of the poor might get a bob or two as a result. Unfortunately, the trickle-down theory does not work here any more than it works anywhere else, as he may well know.

The hon. Gentleman offered a rosy view of Latin America and suggested that the economic expansion that he described in a number of countries is working fine. That is merely a surface impression gleaned from the economic journals that the hon. Gentleman reads. There are serious human rights abuses in a number of those countries, as well as enormous problems of poverty and, indeed, the impoverishment of the poorest people in those countries.

The way in which the World bank and the International Monetary Fund have promoted privatisation projects and structural adjustment programmes is deeply regrettable. In many ways, such programmes pose a threat to the democracy that those organisations purport to support. British companies are making a great deal of money out of those privatisations.

Many of us look askance at the behaviour of British Gas. At the time of its privatisation it was sold cheap to shareholders, and it is now using the resulting enormous profits that it has made from share dealings in this country to invest in privatisation programmes in other countries. I find that deplorable, because Latin America needs long-term investment in infrastructure development and, above all, support to develop and improve public services, particularly education and health.

There has not been a vast increase in expenditure on education and health in some of the countries mentioned by the hon. Member for Gravesham. Indeed, the structural adjustment programmes adopted in many of them have led to cuts in public expenditure as a result of the combination of privatisation and the closure of a number of public service projects. That is a serious matter.

During the summer, I had the pleasure of meeting Hector Villamil, a member of the Ecuadorean Parliament, who was elected in May as a representative of an environmental party and represents part of the Ecuadorean Amazon region. He was on a lecture tour in this country, and when he visited my home we had a long discussion about what is happening in Ecuador. He described how oil companies, mostly owned by the United States, have been given enormous franchises for the Ecuadorean Amazon region and the problems that that has caused.

Hector's party has circulated a paper describing the problems that have arisen since those companies commenced oil drilling in the Amazon region. It states:

"Since then, oil drilling has left an indelible mark on the Ecuadorean Amazon: untreated toxic wastes have been dumped in the rainforest, rivers and soils have been contaminated, trees have been cut down and wildlife destroyed. Oil drilling has also seriously disrupted the lives of indigenous communities in this remote region by damaging natural resources they use for nutritional, medicinal, domestic … religious and recreational purposes. The oil companies' invasion of traditional territories has dislocated and dispossessed entire ethnic groups (such as the Cofan and Tagaeri). Oil pollution has also affected the health of local inhabitants, with increased incidences of skin rashes, fevers, headaches, malnutrition, and miscarriages."

Crucially, that paper goes on to report:

"Little, if any, of the wealth generated by oil has found its way back to these communities."

Hector was here in part to promote a book describing what is known as the "green guerrilla process" and recounts how the poorest people in the poorest regions of many Latin American countries are incensed by the activities of multinational corporations, some of which are based in this country. Those corporations are in the process of rapidly extracting oil and other minerals from the ground, but they pay scant or no regard to the needs of the people in those communities and the long-term damage caused to them.

One can understand the outrage and anger felt by those people when they see enormous wealth being made from their communities and none of it being fed back to them. Despite the vast profits made from those regions, those people still suffer high levels of infant mortality, a low life expectancy, poor education and almost non-existent health services. Moreover, the environmental destruction in Ecuador is not an isolated incident: one can see the same effects in Colombia and Venezuela and particularly in Peru and Bolivia.

On Sunday, Nicaraguans go to the polls for the first round of their elections—obviously, we do not know the final outcome. The programmes that the Chamorro Government have agreed with the IMF and the World bank have caused high levels of unemployment and massive privatisation. That has led to an increase in poverty and violence. Arms that were provided either to the Sandinista army or to the Contras during the Contra war are now in the hands of people who are either struggling to survive or who intend to use them for criminal purposes. The poison of the war waged by the United States against the Nicaraguan people in the late 1970s and the early 1980s is still with us. Those of us who saw "Newsnight" will be aware of the report about CIA sales of crack within the United States. That, too, emanates from the poison of that conflict.

It is interesting to note that, whatever the result of the election, the structural adjustment programme strategy of the IMF and the World bank will pertain. The national Government will have little power to alter it because those organisations have made it clear that they reached an agreement with the Chamorro Government, and that that agreement must stick.

Those who support the structural adjustment programmes which have led to the privatisation of utilities and state-owned enterprises and are opposed to land reform and all that goes with it should recognise that they are storing up enormous problems for the future. The rising in the Chiapas region of Mexico mirrored the activities of the Frente Farabundo Marti para la Liberacion Nacional in El Salvador and the Sandinista in Nicaragua, who responded to the impoverishment experienced in the 1960s and 1970s and the denial of democracy. We are storing up exactly the same problems for the future and this time British multinationals are as much involved as anyone else. We cannot just ignore those facts—we must bear some responsibility for them.

For many years many of us have been deeply concerned, if not appalled, at the human rights record of Haiti. It is important to put on record that the successive Duvalier Governments were cited in common parlance around the world as an example of a Government who destroyed human rights and lived entirely by the power of the secret police and the threat that they posed. It is difficult to say exactly which is the poorest country in the world, but Haiti, unfortunately, is certainly one of the poorest.

At least a mass popular movement and protest succeeded in getting rid of the Duvaliers. Since then, the Haitian Governments have looked to countries that espouse democracy for support and aid to develop an education system, a health service and all the other connected essential public services, but they have looked in vain. Instead, that country has been visited by representatives from Washington and the World bank. A structural adjustment programme has been introduced that has privatised the publicly owned services and industries, such as they were. Above all, however, that programme means that Haiti is used as a source of cheap labour for United States-owned multinationals. That is the US strategy.

rose—

I will not give way, as I want to conclude soon.

Multinational corporations, acting through a trading arrangement promoted by the US, intend to use the Caribbean basin and central America as a source of cheap labour. That policy will cause a huge conflict in the future. There could be competition between workers in the United States and workers in that region. However, a conference of trade unions in the United States this summer—which I attended—was told that people employed by the same multinationals on either side of the border are getting together because they believe that unity and not competition in low wages is the way forward.

Will the hon. Gentleman give way?

No, I will not give way. The hon. Gentleman has plenty of time to make a speech, so he need not worry.

When the Minister replies, I hope that he will deal with the concerns of many human rights organisations about the position in Guatemala, the training of the Guatemalan military and the supply of equipment by Britain to Guatemala. Although on the surface things have changed somewhat, as they have in many countries—Governments have changed and there are now some democratic opportunities—beneath the surface the same secret police, the same oppressive armies and the same people who abused human rights for so long still have substantial power. There is much concern about the fact that we are involved in training the Guatemalan military, which has an appalling human rights record—it is almost second to none in the continent. I do not believe that we should have such involvement.

We have an important role to play in supporting human rights and the democratic agenda in Latin America. If we promote an economic strategy which increases the gap between rich and poor, creates vast shanty towns, destroys people's environments and livelihoods, we are storing up enormous troubles for the future. The poorest people in that region will not sit idly by and watch their oil and other minerals being exploited by foreign multinationals while none of the benefits ever trickle down to those impoverished rural communities.

11.31 am

We are participating in what has become a happy tradition in the House of Commons. I am sorry that the hon. Member for Islington, North (Mr. Corbyn) has to leave us, but I understand why. He has become part of that tradition, which is to remind all of us present, and anyone who cares to read the record of the debate, where the soul of the Labour party still lies and how unreconstructed and resolutely backward-looking most of it is.

I am not sure whether the hon. Gentleman has participated in all nine debates, but for many years he has given the same performance as he gave this morning, which is to look resolutely backwards to the problems and ills of the 1970s, and even of the 1960s, and to talk about the dreadful threat of the multinationals. That shows his failure to understand the benefits of free-market economics, which almost everyone in the world save this last redoubt in the British Labour party has come to understand. The hon. Gentleman's contribution was comforting, because we can now feel at home again. I hope that the hon. Member for Stretford (Mr. Lloyd) will try to take his party a little further forward—if he cannot make 1996, perhaps he can at least get to the 1980s and take us out of the 1960s, where his hon. Friend left us.

I congratulate my hon. Friend the Member for Gravesham (Mr. Arnold) not only on initiating this ninth debate, but on his indefatigable contribution to the causes of British parliamentary links with Latin America at all levels. Those of us who know what he does will warmly support my remarks.

As my hon. Friend said, this debate has become an annual fixture, so the perspective inevitably changes. Last year, we were still in the shadow of the Mexican currency and political crisis and its impact on Mexico and the rest of Latin America. Happily, the 12 months since then have been good economically for Latin America—we always have the problem of not being able to itemise each country but having to speak about them as a generality. Solid progress has been made in the economic sphere, especially in the southern cone countries. We are all extremely thankful for that.

The free-market philosophy, which Opposition Members find so difficult to swallow, has continually proved its effectiveness. Although there are problems, to which I shall refer later, there has undoubtedly been a trickle-down effect. The Financial Times of 25 March 1996 contained an interesting statistic that caught my eye. The article referred to the better diet of the poor in Brazil, and stated that 17 per cent. more chickens were consumed in 1995 than in 1994. That statistic may be of interest to the hon. Member for Islington, North, who is worried about the trickle-down effect. More must be done, but the trend is in the right direction.

The privatisation process has been tremendous. The most recent figures that I have seen show that, in the five years from 1990 to 1995, no fewer than 645 state corporations throughout the countries of Latin America were brought into the private sector. Much of that transition was based on experience in this country. Many experts from Britain went to Latin America to assist, and made an important contribution to that process.

Most Latin American countries have conducted economic stabilisation policies that have achieved significant success. Legendary inflation rates—we all talked about the banana republics of Latin America with their 500 per cent. or 1,000 per cent. Inflation—are on their way out. In Brazil, the inflation rate in 1994 was 92 per cent., but in 1995 it was reduced to 22 per cent.

It is still high, but the figures are going in the right direction, as they are in virtually every country in Latin America. As my hon. Friend the Member for Gravesham said, every country is still exposed to certain pressures and dangers. The export earnings of Latin America increased last year by 20 per cent., and investment flows were estimated at $18 billion, which held up on the figure for the previous year. All that is very good news.

Growth in 1995 was only 0.3 per cent.—it was seriously affected by what had happened in Mexico—but this year it is 10 times that—about 3 per cent.—4 per cent. is forecast for 1997, and still greater growth is predicted for the year after. Economic progress is greatly to be welcomed and applauded.

Economic co-operation between the countries of Latin America has made significant progress. Those of us who have been connected with Latin America over the years will recall the many efforts made to establish regional co-operation that were not successful, and which gently trickled into the sand or into the pending trays of one or two diplomats. Now, there are two well-established organisations—the North American Free Trade Agreement and Mercosur—and we have every reason to believe that they will be successful.

What happened in Mexico has put a slight check on NAFTA's development, and the devaluation of the Mexican peso has changed the balance and the issues involved for the United States and Canada, but NAFTA is here to stay, whatever the trend. However, Mercosur is a story of considerable success. A recent forecast suggests that the links that Chile has developed will create

"a market of 220m people with a combined GDP of nearly $1 trillion and total trade of $175 billion. That makes it a … powerful … counterpoint to NAFTA"

and is very significant for the European Union. My hon. Friend the Member for Gravesham mentioned the development of links between our country and the European Union and the Mercosur countries. I welcome that process.

With the forthcoming addition of Bolivia, and perhaps of other countries, Mercosur will become increasingly important. Those of us who believe in free trade hope that it will develop throughout Latin America, that links between the European Union and the whole of Latin America will be enhanced, and that we will increase collaboration and not develop into two antagonistic trading blocs. Britain has a very significant role to play in developing that collaboration.

We all applaud the fact that, despite problems here and there, there is political stability. In three or four countries, there is a new tendency for presidents to become eligible for second terms. Some people regard that as a dangerous step, but it is to be welcomed within proper democratic limits because it gives stability and coherence. We should not forget that Latin America has had a turbulent political, military interventionist history since the second world war, and we should not take for granted the democratic stability that it has achieved. It needs to be further developed and entrenched by allowing presidents second terms.

That constitutional stability has been achieved at a time when many—probably all—Latin American countries have been obliged to institute tough economic stability regimes. As we know in this country and across the channel, tough measures of economic restoration carry with them political pressures and dangers; many Latin America leaders have successfully faced up to those pressures.

The threat of military intervention, to which we had grown accustomed in Latin American countries, did not materialise. The only example—the threat of General Oviedo in Paraguay to President Wasmosy—failed. Pressures from other Latin American countries and strength in Paraguay ensured that General Oviedo and all the other military leaders in the continent are back in barracks and, pray God, will stay there to do the job that they are meant to do instead of intervening in the political process.

The political stability that Latin American countries have achieved has enabled them, in their growing self-confidence, to play a much more justified role on the world stage. Brazil has strong ambitions for a permanent seat on the Security Council of the United Nations. Argentina makes important contributions to the United Nations' activities. That emphasises the fact that the United Kingdom Government must take Latin American countries extremely seriously—strategically, diplomatically, politically, economically and commercially—as I expect they do.

That is not to say that the countries of Latin America are without problems. It would be strange if they were. The strong personal presidential focus that occurs in so many countries poses dangers. The problems of the caudillo, which are traditional in Latin American countries, must be avoided. It is important that they create the democratic concept of a loyal and established opposition, with a democratic transfer of power from one group of politicians to another without upheaval. In each country, the concept of what we would describe in Britain as traditional political parties must be strengthened. There should not be a clique in the capital, wheeling and dealing for its own benefit. Progress is chequered, not uniform, but it is being made.

Progress is also being made in developing governmental and bureaucratic structures—education, health and all those things that people in many countries may take for granted—although there are problems. The infrastructure in many Latin American countries needs to be enhanced.

Many Latin American leaders admit that the gap between rich and poor is a growing problem, and I agree with the hon. Member for Islington, North that Latin American politicians must tackle it. Although I believe that the statistics prove that, in general, the trickle-down effect is working, there are some worrying data about the very rich in Latin America. The latest figures I have show that

"There are 35 dollar-billionaires in Latin America, according to Forbes"

magazine, of whom 15 come from Mexico. Although I have no objection to the accumulation of wealth in principle, that problem deserves serious attention in countries where there are the social problems of which we are aware and the linked problems of corruption and drugs. I shall not repeat the points made by my hon. Friend the Member for Gravesham.

The existence of such problems must not be allowed to obscure the great progress that has been made and the potential that continues to be developed in Latin America. That brings us back to the United Kingdom and to what Her Majesty's Government should do. For more than a quarter of a century, I have been involved. on and off, with efforts to make the British public—especially the British business community—aware of the potential of Latin America. Many are the initiatives that British Governments have taken and continue to take. It is time for a further renewed effort, especially—as I have said several times—in the regions of the United Kingdom. There is much knowledge in London, especially the City, about what happens in Latin America. Many of our old-established enterprises—trading houses and so on—in Latin America do very well, but in my opinion they tend to get on with it quietly and do it themselves.

We must make further efforts to ensure that medium-sized companies throughout the United Kingdom do not become fixated on, for example, the Asian tigers and think that Sao Paulo, Rio de Janeiro, Caracas, Buenos Aires and Santiago are strange places with funny generals in funny hats and unstable regimes. All hon. Members know that that is far from the truth. The reality is much more encouraging, but we must make further efforts to get that information across. I hope that all of us do what we can as Members of Parliament to further that campaign, but we look to the Government for a lead. I hope that my hon. Friend the Minister will be able to reassure all of us that the ambition to spread an awareness of the opportunities in Latin America is shared by Her Majesty's Government.

11.50 am

I am delighted to take part in this annual debate. I add my thanks and congratulations to my hon. Friend the Member for Gravesham (Mr. Arnold), not only for organising this yearly debate, but for everything else he does during the year to promote our good relations with Latin America. I have great respect for his activities in that regard.

I am delighted that our relations with Latin America have improved so much. All of us who love that part of the world can only take pleasure from the fact that our trade with that area is growing, that our links with the people are ever more active and that we appear to be moving on a strong upward curve toward re-establishing our historic links with those countries. That is undoubtedly occurring because free trade and firmly based democracy are now dominant in Latin America.

I am especially interested in watching the development of Mercosur. In my intervention on my hon. Friend the Member for Gravesham, I mentioned the stimulating effect on investment, free trade and the growth of jobs that that development has had over the past five or six years. Investment into the whole region is impressive and I am delighted that the United Kingdom is at the forefront of that effort.

As we all know, substantial UK companies such as British Gas, our water companies, British Petroleum and other oil companies, are now operating in Argentina and other countries. We are also investing in manufacturing in telecommunications. That is mirrored by the huge interest and activity of the financial services sector. Only a week or two ago, I visited a merchant bank in the City that had realised that it had to get back into South America because all its rivals were setting up offices there. Such activity promotes not only businesses that are already established and growing, but the skills that we can offer—for example, our experience in privatisation ensures that our aid and advice on that subject are second to none.

The scene is one of growing activity and encouragement. We all have an interest, therefore, in the continuing stability and growth of Latin American economies. It is not easy for countries to achieve those aims. For example, the value of the Argentine currency is high and unemployment is great. We must try to ensure that growth continues at the level that is needed to cut unemployment. Stability, democracy and inward investment are essential in that effort.

I strongly echo the words of my hon. Friend the Member for Wycombe (Mr. Whitney) about opportunities for this country. Although many of our major companies are active in Latin America, we need to spread the word to get middle-ranking companies involved to a much greater extent. I am always impressed by figures showing that our investment is, I believe, the second largest in Latin America—it certainly is in Argentina—but our exports are not as high in the league. We need the involvement of smaller companies if we are to do better.

We can help Argentina to face its current unemployment problems by investing in growth, but we should also support President Menem's courageous efforts to address the structural inflexibilities in Argentina's labour market. That is a difficult long-term problem and President Menem is trying to get the unions to address practically the requirements of modern economies. We wish him well in that brave effort.

In general, our relations with South America are encouraging. One of the most interesting aspects of free trade and economic stability is their effect on democracy. I tried to intervene on the hon. Member for Islington, North (Mr. Corbyn) to make that point, but he was determined not to listen. As my hon. Friend the Member for Wycombe said, the example of Paraguay, where the threat to democracy was overcome by pressure from neighbours, is a tremendous tribute to what can be achieved by free trade and large areas of economic co-operation. Everyone in Paraguay knew that, if a dictatorship were re-established, the country would have to leave Mercosur and all the advantages that that brought. In that part of South America, free trade and democracy go hand in hand.

My hon. Friends and I are adamant that we should seek to ensure that the European Union is generous and open with Mercosur. We do not want trading blocs to raise tariffs against each other. This country's reputation for supporting free trade should lead us to ensure that barriers between trading blocs continue to fall. It is of the greatest importance that our Government should pursue that aim over the next two years.

Before ending, I should mention the continuing difficulties associated with finding a long-term solution to the questions surrounding the Falkland Islands. I know that both the British and Argentine Governments are working hard to develop co-operation in matters such as oil exploration and fishing. We must work hard to find practical solutions. We must be tolerant. We must work hard to get the support of the peoples of both countries and make them see that the long-term solution to the problem is real co-operation and ever closer links. In the end, that is the only solution. I am grateful for the opportunity to speak in the debate. Next week, I shall have the great privilege of going with a party to Argentina to take part in the British-Argentine conference. The hon. Member for Stretford (Mr. Lloyd) was to have accompanied us, but I am sorry to say that he will no longer be coming. Such conferences are an example of how the exchange of ideas and people can lead to better understanding and they help to ensure that our links with that important and delightful part of the world will continue to strengthen.

11.58 am

I join in the congratulations to my hon. Friend the Member for Gravesham (Mr. Arnold) on initiating the debate. I have a warm regard for his close involvement in Latin America and his great knowledge of that region.

I have had the privilege of visiting Argentina and Brazil with the Trade and Industry Committee. In previous years, I visited Venezuela and, this year, I visited Colombia, Ecuador and Peru privately. On all those occasions, I found that there was a strong sense of this country's historic links, which go back centuries, with countries in that part of the world. I was enormously impressed by the landscape and the stunning beauty of the countries that I visited, and I think that they offer a huge opportunity for people to see something quite different from our civilisation.

I should like to concentrate my remarks on Peru. I do not think that anyone doubts that the economic progress made in that country in the past six years is anything short of stunning. In 1990, it had an inflation rate of 36,000 per cent.—which is extreme hyper-inflation. The inflation rate is now below 15 per cent., and it may even be below 10 per cent., which is a huge tribute to the economic management of that country. President Fujimori has clone a remarkably good job in Peru, and has laid down the foundation for steady growth. We are now exporting ever more goods to that country, and we have very considerable opportunities for foreign investment and for building a sure economic connection with it.

The foundation of that growth has been the privatisation of some manufacturing and of the telecommunications, mining, banking, transportation and energy sectors. There is no doubt that the work that has been done in privatisation in the United Kingdom has had an enormous effect worldwide and that it is being copied. There is also no doubt that the success of the economy in Peru is nothing short of miraculous and that it is due, in part if not in the main, to their privatisation policies. Domestic investment there has grown, and our exports to that country are rising considerably.

There have been ministerial visits to Peru—which I know have been warmly appreciated—including that by my right hon. Friend the Secretary of State for the Environment, who was there only a few weeks ago, following an earlier visit. I recall vividly his description of his visit to Machu Picchu, which was recounted at a lunch he hosted for a Peruvian delegation to the United Kingdom. That description played a part in convincing me of the importance of visiting that quite remarkable place, which is one of the world's greatest wonders. I shall never forget the visit I made there earlier this year with my wife and daughter.

Peru is not without its problems—it is in considerable debt to international banks and the international finance community. In the light of Peru's terrific economic progress, and in recognition of its poverty—such as exists in a great many Latin American countries—I hope that we will give careful consideration to recycling and alleviating some of its debt. We have an obligation to do what we can to help in the provision of education and health services.

I know that our Minister for Overseas Development is acutely aware of the work that is being done by the British Council, and particularly by the Overseas Development Administration, to deal with the problems that I have outlined in Colombia, Ecuador, Peru and elsewhere. I think that we do very well in providing aid, considering the restrictions that have had to be placed on our budget.

I believe that there are substantial opportunities for British companies to go out to Latin America, particularly to countries such as Brazil, Argentina and Peru that have shown that they have dealt with their economic problems and have laid the foundations for stability, which will give us opportunities for greater trade and closer links with them. I know that all hon. Members would welcome that.

12.3 pm

I join other hon. Members in welcoming this annual debate. I know that the hon. Member for Gravesham (Mr. Arnold) arranged the debate to coincide with the visit of President Frei to Great Britain, which is a very important event in cementing relations between Chile and Great Britain. More generally, however, this debate is a symbol of the importance of Latin America to us because of trade and the role in world affairs that we seek to play with our partners in Latin America.

The growth of interest in Latin American affairs in the House is very welcome. We have had a visit not only by President Frei but, earlier this year, by President Zedillo. President Cardosa will, we hope, visit Great Britain early next year. I regret that I shall not be able to take part in the visit to Argentina next week, but that visit is significant. The Trade and Industry Select Committee's report on Brazil and Argentina last year, and this year's examination by the Foreign Affairs Select Committee of Latin American affairs demonstrate the increasing importance of relations with Latin America to the House and to the political system in Great Britain.

I must, however, introduce a note of controversy. We must examine some aspects of our relations with Latin America and of our failure to maximise those relations. I do not want to arbitrate between my hon. Friend the Member for Islington, North (Mr. Corbyn) and the hon. Member for Wycombe (Mr. Whitney), but it is desperately important that we do not have a one-sided emphasise on relations with Latin America. Important though they are, we do not have only trade relations with Latin America; it is also important to recognise the need for economic progress and eradication of poverty there. Those matters are fundamental if we are to achieve political stability in Latin America, which all hon. Members desire.

We have a vested interest in political stability in Latin America because poverty and the corruption that sometimes feeds on poverty allow the widescale development of the drugs industry, as has been mentioned by hon. Members in this debate. The hon. Member for Gravesham is right: demand for drugs in countries such as Great Britain, and even more so in the United States, fuels the drug trade in parts of Latin America, where it is an endemic and deep-rooted problem. We cannot separate those issues.

The issue of economic progress is important, but it must be linked to building democracy and developing an active policy on human rights in Latin America. If we are to co-operate effectively in the spheres of drug control and eradication, we must consider all the issues.

The hon. Member for Gravesham has already mentioned the importance of Latin America and the growth of Mercosur. This month, Chile acceded to associate status in Mercosur and, early next year, Bolivia will achieve the same status. Mercosur is developing rapidly. I was recently in Venezuela, and the Venezuelans told me that they also are keen to enter negotiations to accede to Mercosur.

The hon. Member for Wycombe made the important point that trading blocs—of which Mercosur is now the third largest—must not develop as competitive and rival blocs. It is desperately important for Great Britain and for the European Union that we use our role to ensure that the European Union opens up a wide relationship with Mercosur and with Latin America, because the alternative—which needs to be spelled out—is economic hegemony by north America, and particularly by the United States.

I do not say that with any sense of aggression towards the United States, as it is and will continue to be among our most important political and economic contacts in the world. We must recognise, however, that we have to ensure that Latin America, and particularly Mercosur, can count on Great Britain, within Europe, to keep open world trade. We must also ensure that we keep open our access to Latin America, and that we give Latin America an alternative to the free trade areas of America as the only outlet for trade in that region. That will be good for Britain, good for Latin America and, in the long run, good for the world.

Despite the importance of Latin America and the warm words that we have heard, Britain performs relatively badly in Latin America, if we compare our trade performance with that of other comparable European countries. In virtually every country in Latin America, Britain performs worse than Italy, much worse than Germany and in most cases worse than France. That is a long-term phenomenon, but the situation is not improving. In 1994 and 1995, Britain's share of world exports to Latin America dropped. In fairness, that should be seen in the context of the rising tide of trade; nevertheless, we are slipping behind the countries that I mentioned.

Is it still the Government's view that we can double our share of trade? We ought to aim for that target. Is the benchmark of the year 2000 realistic? Many people have pointed out to me that, until we examine why we do so badly, we will not be able to rectify the problems. Other hon. Members have identified various relevant factors, but I should like to suggest one or two further respects in which the Government are not playing their role as we would wish.

For example, some 30,000 young people in Britain are studying French at GCSE level, whereas the number taking Spanish is little more than 4,000, and fewer than 200 are taking Portuguese. We should have begun to examine such statistics 30 years ago when we started to develop an interest in Latin America. The time is long overdue for us to rectify that problem.

The BBC World Service is widely respected throughout Latin America. Why is the BBC world television service not beamed into all parts of Latin America as it should be? I am told that there are plans to close down the Brazilian service of the World Service. Perhaps the Minister can tell us whether the matter has been resolved. as it would be outrageous if that happened. I hope that other hon. Members would support that statement.

On the staffing of British diplomatic missions in the region, the Minister took part in a debate with the Select Committee on Foreign Affairs, to which he said:

"I think that the Foreign Office is under-funded".

I hope that we will hear more such candour on the Floor of the House today as he rightly berates his Treasury colleagues. The memorandum that he sent to the Select Committee demonstrates that staffing levels in our embassies throughout the region are well below those of the embassies of France, Italy and possibly Germany. There have been recent increases, but the staffing of our embassies has been cut significantly over the past few years. Government rhetoric points us in one direction, but reality points us in another. I hope that we shall receive assurance this morning that the weaknesses will be examined and rectified.

Economic development is a necessary partner to the development of human rights and democracy building. Democracy and human rights are not a bolt-on extra to the debate. It is disappointing that the Minister's submission to the Select Committee contained only three short paragraphs on human rights. On the human rights clauses in European Union treaties with Latin America, he said:

"There was a concern but we have helped to allay it that this was somehow picking off the Latin American countries as being in need of human rights clauses. However, it is a universal clause in all EU trade treaties of this kind and therefore we managed to placate the Latin American sensitivities on that subject."

There is no question of sensitivities. We should be actively supporting the many people in Latin America who want strong democracy and who want to build societies in which human rights are taken for granted, not seen as extraordinary.

Latin America will not introduce democracy and better human rights as a result of bullying by Britain or other countries. It has not done so in the past and will not do so now. We should state, and a Labour Government will state, that we will work with Latin American Governments and people to build the institutions, particularly the legal and judicial systems, that will give proper recourse against those who perpetrate abuses against the civilian population. That still exists on a wide scale, but this is not the time to discuss individual countries and cases.

There are many countries in which the existence of a notionally democratically elected president does not guarantee individual liberty, and certainly does not guarantee that other institutions, especially the military, have been conclusively taken out of the political system. We should say—as a Labour Government will say—that we want to work with democratic forces in Latin America and that we will pursue a policy actively supporting democrats and discouraging perpetrators of abuses against the civilian population.

The new Guatemalan ambassador is being introduced today at Buckingham palace and the Court of St. James. Having long taken an interest in that country, I welcome the recent ceasefire and movements towards a conclusion of the problems in that sad country. Those movements are a beacon and an example of satisfactory developments on the continent.

We do no justice to our democratic traditions if our relationships are determined solely by narrow economic interests. We have a broader interest to exercise on that continent. We are greatly respected there. We should not overplay our hand or think that our role is greater than it is, but people and Governments in Latin America want Britain to play a constructive role in trade and equally in the development of strong democracy and strong human rights.

12.16 pm

I add my voice to those of other hon. Members who have congratulated my hon. Friend the Member for Gravesham (Mr. Arnold) on his now annual routine of introducing this debate. It is a useful opportunity for us to review the relationship between our country and Latin American countries.

Latin America is one of the most exciting parts of the world and one with which we can develop a close and worthwhile relationship, not only—as the hon. Member for Stretford (Mr. Lloyd) said—in respect of human rights and human rights abuses and so that we can together act on the international stage through the United Nations and other forums to our mutual advantage, but to build British-Latin American trade. As I said, this debate is a welcome opportunity to deal with such matters. I am sorry that I have so little time in which to respond, but I shall do my best to deal at least with the main issues that have been raised today.

When we last debated Latin America a year ago, the United Kingdom had just become a permanent observer of the Organisation of American States and the European Union was about to sign the agreement with Mercosur, which my hon. Friend the Member for Lincoln (Sir K. Carlisle) so rightly welcomed. That is a good step towards developing European trade generally in Latin America, and I think that, over the years, it will prove to be a constructive base on which to build.

Links with Latin America have been strengthened considerably since then. There has been much promotion of our interests in the region and special emphasis has been put on trade and investment in pursuit of the joint Department of Trade and Industry-Foreign and Commonwealth Office Link into Latin America trade campaign. The House will be aware of the conference that we are planning for January. I think that it will take that notion forward and provide a foundation on which we can build.

We have built a political dialogue with Latin America on global issues, involving the United Nations and the World Trade Organisation in particular. We also play a leading part in assisting Latin American countries to fight the evil drugs trade. In addition, we assist in fighting crime and terrorism and we take action in support of human rights and the environment. In all these regards, the British Government are taking a lead, which I am sure will be welcomed by all hon. Members.

There has been a good deal of progress on democracy in the region and I am glad that we have been able to watch closely the elections in Argentina and in Peru. There have also been presidential and congressional elections in Guatemala, which were observed by the Organisation of American States and the European Union, and which were widely acclaimed as being free and fair. There were presidential elections in Ecuador and the Dominican Republic and municipal elections in Argentina and Brazil.

Nicaragua's second presidential, general and municipal elections take place next Sunday. The absence of violence in the campaign is encouraging and, all in all, the strides that have been taken in Latin America towards democracy, in fighting the human rights abuses which we all abhor and in trying to combat the drugs trade and the increasing trend of criminal violence, as opposed to political violence, are to be widely welcomed.

There have been many ministerial visits to that part of the world this year. I will not go through them except to say that there have been, in all, 36 UK ministerial visits to Latin America and that 30 Latin American Ministers have visited the United Kingdom. Our particular pleasure in welcoming President Frei this week demonstrates the mutual warmth and closeness of our relationship with Chile. That country is developing extremely fast; it is one of the fastest growing economies in the western hemisphere, and the opportunities for British business and the EU-Chile framework co-operation agreement signed at the European Council meeting in June in Florence show the advances being made and the closeness of our relationship with that country.

We signed three agreements with Chile during President Frei's visit: a memorandum of understanding between the Ministries of Defence, an agreement between the British Council and the Chilean Ministry of Education and an agreement between our Securities and Investments Board and its Chilean counterpart. All those agreements are extremely welcome.

We are trying to deal with the long-standing and vexed problem of the tax on Scotch whisky. I believe that some progress, although not the progress that we would like, has been made on that front. The taxation regime on an extremely important export to the region should be relaxed. As I have said, it has not yet been relaxed quite as far as we would like.

Great progress is being made in our relationship with Argentina, building on the 1989 agreement whereby we have put the Falklands sovereignty issue aside and have gone forward as far and as fast as we can in building good bilateral relations in all other spheres. We have made some progress in attempting to reach a long-term fisheries agreement with Argentina; that is high on our agenda for the coming year. I hope that, next time we have a debate on this subject, we shall be able to report that we have made a breakthrough on that front.

We have, of course, had great success in the joint declaration on hydrocarbons which took place in September last year. The first round of licences is due to be announced shortly by the Falkland Islands Government. There is every sign of co-operation with Argentina on that front and I am pleased by that.

The success of Brazil's Real plan this year has been marked. The inflation forecast is 12 per cent. for this year which is a remarkable achievement as, two years ago, the monthly inflation rate was 50 per cent. The economy is stabilising, and the well-being of the Brazilian people has been largely improved. Brazil is a huge market; it has a population of more than 159 million people. It is extremely important that we take every advantage we can find to encourage British business to operate there.

The main threat to Brazilian progress is the delay or dilution that may occur in their key structural reforms. We will keep a close eye on that. President Cardoso has much to achieve. The economy will have to move forward quite fast if he is not to lose the momentum which has begun.

My hon. Friend the Member for Harrogate (Mr. Banks) mentioned Peru; I need do no more than endorse warmly everything he said. Peru has also benefited from doing a Brady deal on the outstanding debt with many banks and has received a lot of help from the Paris Club. We have been able to assist Peru in both areas, and it is making substantial and welcome progress.

I visited Peru briefly last year and then went on to Colombia. The continuing political crisis in Colombia remains a dominant problem and President Samper faces an enormous range of political and economic problems. His difficult relationship with the United States is not a help. The recent upsurge in guerrilla violence rather upstages his successes against the cartels. I am afraid that narco-trafficking and the link between the guerrillas and the drug barons remain serious concerns to all of us.

Our Government's position is that we wish to continue to help. We give a great deal of help to Colombia in terms of its fight against drugs and we will continue to do so. We encourage British business men to do business with Colombia and we will continue to do so, as long as that Government maintain the fight against drugs to our satisfaction. At the moment, I am confident that they are taking great steps to try to deal with that problem.

In May this year, I went to Venezuela. There has been substantial economic improvement there. Since my visit, the International Monetary Fund approved a $1.4 billion loan in July which will support the economic reform programme announced in April. That includes the complete lifting of foreign exchange controls, the freeing of interest rates, large rises in petrol prices—that was a brave move politically because, in the past, it has always been a source of great social friction—and increases in VAT and other taxes. The position in Venezuela is stabilising, and we can look forward to further progress in that country.

I would like to cover many other countries but, I am afraid, time is running out so I will limit myself to mentioning only Mexico. As has been mentioned, we welcomed President Zedillo to London at the beginning of this year. He and the Prime Minister signed a joint action plan to deepen our relations on a range of bilateral and global issues. I believe that our relationship with Mexico is extremely close. Liaison between the two countries is also effective in global terms, and the vexing question of Helms-Burton has led to substantial collaboration and co-operation between Mexico and ourselves in expressing our substantial dislike of the extra-territorial legislation that the United States has seen fit to put in place.

Will the Minister give way?

I do not have time. The hon. Gentleman did not give way to my hon. Friend the Member for Lincoln. I have only four minutes left.

As the Mexican economy pulls out of the worst recession for many years, helped by the North American Free Trade Association and by Mexico's other free trade agreements, we want in every way we can to encourage the British business community to re-investigate the opportunities in Mexico particularly, as well as in other parts of Latin America.

I now turn to the general point of our economy and our business links with that part of the world. There are two elements: the first is trade and the second is investment. It is true that our trading links with Latin America are very much weaker than those with our main European competitors and much weaker than our Government would like them to be. We are doing everything we can to encourage those links. I talked about the Link into Latin America campaign. The Department of Trade and Industry and the Foreign Office are joining forces to try to spread the word throughout the country, through the business links system, that there are huge opportunities for British companies to trade in Latin America.

I take the point made by the hon. Member for Stretford about learning of the Spanish language, and I know that my right hon. Friend the Secretary of State for Education and Employment is concerned about that and is looking at ways in which we can encourage more people to learn Spanish. I did not know that only 200 people were learning Portuguese. That presents a mammoth challenge if we are to improve the situation substantially enough to affect our trade with Brazil.

The investment picture is much happier, as hon. Members will know. We are the largest European investor in Latin America and we are the third largest global investor in Latin America. That tells us that our very large companies are fully involved in Latin American business. We now need to concentrate on encouraging medium and perhaps even small companies to take advantage of the huge range of opportunities throughout Latin America.

The hon. Member for Stretford also mentioned what I told the Select Committee. Perhaps he should read all that I said and not just part of it. I pointed out that the Treasury has difficulty in matching its expenditure to its income and the Foreign Office, together with all Government Departments, expects to take its share of the hardship that goes with that. As our economy improves, I am sure that greater resources will be put our way, and when that happens, I shall make certain that a fair proportion is put towards our Latin American efforts.

Finally, I reassure my hon. Friend the Member for Wycombe that the Government and I share his enthusiasm for Latin America and his determination that our businesses take advantage of that market, and that Latin America and Britain are better off as a result.

Order. We must now move on to the next debate.

Children (Parental Contact)

12.30 pm

My purpose in requesting this debate is to highlight a serious problem that I believe has arisen in the operation of one aspect of the far-reaching, wide-ranging and generally positive comprehensive reforms that were introduced in the Children Act 1989 and that came into law in 1991. I intend to focus my remarks on section 8 orders, and the role of the courts in enforcing contact between the absent parent and the child living with the parent with care.

In our modern society, notions of the family have changed, and it is my belief that the law, and above all its interpretation by the predominantly elderly male judiciary, have not adjusted to take account of those changes. To quote Simon Jolly in the Child and Family Law Quarterly in 1995:

"The general principle is now well established that when a child is living with only one of its parents it is almost always in the interest of the child to have contact with his or her other parent."

No one disputes that it is almost always the case, but my contention is that, increasingly, the courts are taking matters further, and enforcing contact when it may not be in the interests of the child, the parent with care or the new family and siblings in that new family.

The Master of the Rolls, Sir Thomas Bingham, is quoted in the same publication as saying:

"The courts should not at all readily accept that the child's welfare will be injured by direct contact. Judging that question, the court should take a medium-term and long-term view of the child's development and not accord excessive weight to what appear to be likely to be short-term or transient problems. Neither parent should be encouraged or permitted to think that the more intransigent, the more unreasonable, the more obdurate and the more unco-operative they are, the more likely they are to get their own way."

That may be a theoretical position, but how do we measure short-term costs and long-term benefits when we are talking about young children and their parents? Does that approach deal with the real world and all its complexities?

The real world is a very complex place. In Britain, one in three of all marriages end in divorce. Each year, about 250,000 children see their parents divorce. One in three marriages is a remarriage, and one in three births is to parents who are not married. There are 1.5 million one-parent families, and 2.5 million dependent children. Half the dependent children in one-parent families have part-time step-families because one of their birth parents has a new relationship. One in 12 dependent children live in step-families, and more than half full-time step-families have a new baby brother or sister.

I was concerned by reports in the press about separated parents killing themselves and their children. There were also reports of difficulties over contact arrangements, so I decided to ask some parliamentary questions and to seek some information from Ministers about the monitoring of an issue that potentially affects a large number of parents, children, step-parents and siblings. Earlier this year, I tabled a variety of questions to different Ministers, and I should like to refer to some of the answers that I received.

I asked the then Health Minister, now the Under-Secretary of State for Transport, the hon. Member for Battersea (Mr. Bowis), the following question:

"(1) how many children have been (a) placed in the care of local authorities, (b) placed in the care of the other parent and (c) cared for by a step parent or partner following the imprisonment of a parent with care in each year since 1991 as a result of contempt of court for non-compliance with a court order under section 8 of the Children Act 1989;

(2) how many incidents resulting in injuries to children had occurred during … contact".—[Official Report, 14 February 1996; Vol. 271, c. 602–3.]

I received the answer that the information was not available centrally.

I asked the Lord Chancellor's Department

"how many contact orders have been made under section 8 of the Children Act 1989 where the presiding judge had been aware that one parent had been charged with, or convicted of assaulting the other parent."—[Official Report, 16 February 1996; Vol. 271, c. 718.]

I was told that my question would be answered by the chief executive of the Court Service, who told me:

"the task of extracting what information might be available would be disproportionately costly in view of the volume of cases",

so he was unable to identify the cases but could give me only the overall figure. He told me that there were 106,911 contact orders made between October 1991 and September 1995. That did not answer my question.

I asked the Home Office

"how many convictions for assault had occurred as a result of incidents (a) prior to, (b) during and (c) after contact between parents whose children were subject to contact orders made under section 8 of the Children Act 1989 in each year since 1991."

The reply was:

"Information relating to the number of convictions for assault relating to incidents where contact orders were made … is not collected centrally."—[Official Report, 15 February 1996; Vol. 271, c. 702.]

And so it continued. I received answers from the Lord Chancellor's Department, the Home Office and the Department of Health, but none of them said that they had the information.

I then asked whether the Government intended to monitor and collect information on those matters. I asked the Secretary of State for Health

"what information he collects centrally on the effects of the operation of section 8 orders".—[Official Report, 21 February 1996; Vol. 272, c. 163.]

The answer was none. Once again, I was told that the information could be collected only at disproportionate cost.

When I asked about the most frequent pattern of contact between children and their absent parents, and what plans there were to carry out research on the impact of contact orders under section 8 on religious attendance by children at places of religious worship to illustrate that alternate weekends could be disruptive, I was told that there were no such plans. I therefore concluded that the Government were not monitoring the effects of an important Act, affecting so many young people and their parents.

Recently, there have been more reports about domestic violence and its consequences. A case reported in the press involved a woman, Dawn Austin, who has been gaoled for six weeks because she refused to comply with a court order under section 8 of the Children Act. She has been gaoled for contempt and her nine-year-old son and her four-year-old daughter have been placed in the care of strangers—they are with foster parents.

Is that sensible? It is not the first such occurrence, but it is alarming because the ex-partner of Miss Austin is a man who has a conviction for domestic violence in a previous relationship and has been imprisoned for it. Despite that history, the court decided to imprison the mother and take the children away and put them with foster parents—so much for priority being given to the welfare of the child.

A very important study that compared domestic violence and child contact arrangements in England with those in Denmark was published in June. At my request, it is being considered by the Lord Chancellor's Department. The study was conducted by Marianne Hester and Lorraine Radford, and makes compelling reading. They studied the cases of 53 women, whom they interviewed, and 120 children across a very wide age range were involved.

The women had had difficulties involving domestic violence, and the study was concerned with what had happened to them before and after the breakdown of the relationships and the involvement of the courts with regard to contact arrangements under section 8 of the Children Act. The conclusions should ring alarm bells for so many professionals, people in the legal profession and politicians.

The report concluded:

"Contact takes precedence over child welfare. The value of contact to the child was rarely questioned in the light of the father's abuse. Professionals involved in contact cases rarely challenged a man's use of violence. Many reinforced the perpetrator's distorted perception of responsibility by focusing solely on the mother's hostility to contact."

Under the heading "The abuse of women and children during contact visits", the report concluded:

"child contact gives fathers the ability to continue to abuse, harass and exert control over women and children."

It also said that there was an emphasis in the process on getting an agreement rather than an outcome that was necessarily practical or would help the children or the parent with care.

The report's authors highlighted the failure to protect the parent with care when the handover arrangements were made. It said:

"inadequate provisions were made to ensure the safety of women during mediation and on court or court welfare premises. Resources to protect women from further violence when taking or collecting children from contact visits were also extremely limited."

The report is very long, and although I do not have time to quote too much of it, its conclusions are worth considering. It says:

"At the time of the last interviews, almost one third of the women whose children had maintained contact said the children had recently been abused on contact visits with fathers (eight out of twenty-six)."

It says that the professionals in the court welfare service place an emphasis on contact with the father that overrides anything else:

"They had a strong commitment to the idea of maintaining contact for children with non-resident fathers, even where there had been child abuse and the children were afraid … emphasis has thus shifted away from the individual circumstances and needs of a particular child and the actual quality of the relationship with the father, to addressing the needs of a `hypothetical child'."

There lies my point. We must consider the real situation of real children in the real world. Not every child fits into an idealised model, and not every family can easily accommodate children maintaining contact with the absent parent that is not to the detriment of the family and the parent with whom they live, or does not give rise to the potential for domestic violence.

Other serious concerns, which I do not have time to go into, were highlighted by the Children Act advisory committee's annual report for 1994–95. One of the many conclusions of that important report quotes the assessment of Judge Fricker that

"penal enforcement of contact orders is unlikely to be in the interests of the child and should not be encouraged as a punitive approach to non-compliance."

Mothers in this country who are in fear daily of contact arrangements also fear that the professionals will say, "If you don't comply, we will take the children away from you, the residence order will be given to the absent parent, and there will be other problems for you. We might even put you in gaol." We have seen that women can be gaoled under such circumstances.

I do not believe that, when Parliament adopted the Children Act, such outcomes were ever intended. There is a danger that the courts are reinterpreting the Act to the detriment of many children and their parents, and the Government need to reassert and make clear as quickly as possible that it is not their intention that the child's welfare is damaged by the imprisonment of the mother.

The situation could be eased if a commitment were given that, in cases of a record of domestic violence, there should be a presumption of no contact rather than contact before consideration of the matter. If we do not go down that road, serious problems will continue to cause great hardship and suffering to many women and children.

The Government must collect data, monitor the situation, respond positively to the recent studies and reports, and act to ensure that mothers are not separated from their children and children are not forced into foster homes for weeks at a time. What happens when the mother comes out of prison? Presumably the absent parent can apply for another court order, and the whole process can continue indefinitely. We must put a stop to this social problem that is being experienced by a minority of mothers.

12.47 pm

It is two and a quarter years since I contributed to a debate. I am delighted that, having been in the enviable position over that time of delivering probably the most popular speech heard in the House—"That this House do now adjourn"—I have been able to forswear my Trappist vow of silence to take part in this debate.

I congratulate the hon. Member for Ilford, South (Mr. Gapes) on choosing this important subject, and on drawing attention to the problems faced by families, women and children in this sensitive and often heart-rending issue. I also suspect that it is appropriate to discuss the Children Act 1989, since this week is the fifth anniversary of its implementation.

The Children Act is recognised as a most comprehensive piece of legislation, incorporating public and private law relating to children. It enshrines five main principles. First, the child's welfare is paramount—that is crucial. Secondly, children are best cared for by both parents wherever possible. Thirdly, the state and courts should intervene only where improvements will be made for the child. The fourth principle is that delay is generally not in the best interests of the child, and the fifth IS that laws and procedures regarding children should be unified.

Section 1 of the Children Act sets out the principles that guide a court making decisions under the Act. The child's welfare is the paramount consideration when a court determines any question involving his or her upbringing. I cannot emphasise that enough. Thus other considerations, such as the feelings of the parents, or any questions of "fault", must assume secondary importance, except as they affect the child's welfare.

Section 8 orders comprise a flexible package of orders which should cater for any question that may arise about the welfare of the child, and provide practical solutions. The intention is to encourage parents to maintain their involvement in the child's life, and to avoid driving unnecessary wedges between them.

Four types of order were created under section 8—contact orders, prohibited steps orders, residence orders and specific issue orders. In addition, under section 1(5), the court must consider whether making an order would be better for the child than making no order at all. I think that it will be helpful to the hon. Gentleman if I briefly define section 8 orders.

A contact order means an order requiring the person with whom a child lives, or is to live, to allow the child to visit or stay with the person named in the contact order, or for that person and child to have contact with each other. Previous legislation on access orders was about having access to the child, whereas section 8 contact orders are designed to provide for the child to visit or stay with the person named in the order. In 1995, the number of contact orders made rose by 12 per cent. to just over 35,000.

A prohibited steps order means an order that no step that could be taken by a parent in meeting his parental responsibility for a child, and which is of a kind specified in the order, shall be taken by any person without the consent of the court. Its purpose is to impose a specific restriction on the exercise of responsibility by the parents—covering, for example, taking a child abroad for an extended holiday. In 1995, the number of such orders was just under 6,000.

A residence order means an order settling the arrangements to be made as to the person with whom a child is to live. The residence order was a new concept introduced by the Children Act to replace the custody order. It is more flexible, and it may accommodate various shared care arrangements. A person in whose favour a residence order is made will automatically obtain parental responsibility for the child, if he does not already have it.

However, a residence order confers parental responsibility on a non-parent only for as long as the order is in force. The intention is that both parents should feel that they have a continuing role to play in relation to their children. In 1995, the number of such orders was about 26,000.

A specific issue order means an order giving directions for the purpose of determining a specific question that has arisen, or that may arise, in connection with any aspect of parental responsibility for a child. An example might be the need for permission in respect of a particular medical condition, or of the choice of a school for the child. Both prohibited steps orders and specific issue orders are concerned with "single issues", and are modelled on wardship jurisdiction.

In each case, the question of what is in the child's best interests must be decided on the particular facts of that case. There is no question of a fixed policy of discrimination against one parent in favour of the other, or against certain classes of people as parents.

The reforms contained in the Children Act emphasise that principle, but also the fact that both parents have a continuing responsibility for their child and, generally, should have continuing involvement in the child's upbringing, even after a separation or divorce. The legislation provides a flexible system of orders intended to settle particular matters in a way that neither parent may upset, rather than to remove parental power and authority from one parent to confer sole power and authority on the other.

In most cases where the court is required to decide what is in the best interests of the child, it will order residence in favour of one parent and contact for the other. I do not find it surprising that in many cases it will be in the best interests of the child to have a settled home with the mother.

As the hon. Member said, an emerging problem of the 1990s is the role of the father in a changing society. Structural and economic changes in society have brought especial stresses and strains to family life. The hon. Gentleman has already mentioned the fact that there is a great deal of concern about fathers with a history of violence seeking contact with their children after the marriage or relationship has broken down.

The Government are committed to helping families to stay together, where that is possible and realistic, but they cannot make marriages or relationships work. If breakdown or divorce occur, it is of prime importance that children are protected, and that both parents can also receive support. However, I repeat that the interests of the child must be paramount.

In such situations, parents need to be fully aware that they have both rights and responsibilities in relation to their children. It is a sad fact of life today that almost half the fathers whose marriages or relationships break down lose contact with their children within three years of the event.

I know that the hon. Gentleman will be aware of recent articles in the press drawing attention to the problem. They have mentioned, for example, the support that Bob Geldof has recently given to the organisation Families Need Fathers.

The hon. Gentleman has drawn the attention of the House to the recent case in which a mother has been imprisoned for contempt of court. I repeat the fact that the imprisonment was for precisely that—contempt of court. The woman concerned would have had the opportunity to oppose the making of the contact order and to put all the relevant information before the court. The court, having weighed all the facts, decided to make the order despite the mother's objections. By refusing to comply with it, the woman put herself in contempt of court. It was the eighth time that that had happened, and the decision of the judge was upheld by the Court of Appeal.

We need to emphasise again and again that, as any parent should know, being a parent entails a long-term commitment. It is that continuity of parental responsibility that we emphasised in the Children Act. Relationship breakdown and divorce are traumatic events, for parents and children alike. The Exeter family study suggested that the health outcomes of children in reordered or single-parent families may be worse than for those in intact families. Continuing contact between a father and his children may have a positive effect on reducing some negative outcomes for children.

The hon. Gentleman referred to the findings of a study by Marianne Hester and Lorraine Radford entitled "Domestic Violence and Child Contact in England and Denmark", published earlier this year by the Joseph Rowntree Foundation. In the short time available, I shall draw attention to the conclusions of that important in-depth study.

The researchers concluded that contact should not be presumed to be in the best interests of the child if there had been domestic violence to the mother. More attention should be given to ensuring the safety of the mothers and to assessing the needs and wishes of the individual child. That is in line with the ideas being promoted by various women's organisations working with domestic violence, most notably the Women's Aid Federation.

Although the study is small in scale, it has produced some worrying evidence about the effect on women and children of contact arrangements in cases where there has been domestic violence. It shows that professionals, especially legal professionals, need to become more aware of domestic violence and its impact on children.

With the Family Law Act 1996, which is due to come into effect in October 1997, we have taken several steps that will improve protection for women and children. I believe that that Act will reduce much of the hostility and antagonism that exists under the present system, because the changes will place less emphasis on the financial aspects and on fault in relation to marriage breakdown. Introducing a period for reflection and mediation will encourage greater thought to be given to the relationships between adults, and will help both parents to settle reasonably their future relationships with their children.

On the question of the monitoring of contact orders, it is important to refer to the Children Act advisory committee that was established in 1991 to monitor the operation of the Act, and to comment on issues arising from its implementation. I advise the hon. Member for Ilford, South to look at the document—if he has not already done so—because it is invaluable.

indicated assent.

I see that he is nodding, which suggests that he has seen the document.

I assure the House and the hon. Member that the Government understand the fears and concerns of a parent who has obtained a contact order from the courts but who has been frustrated when the other parent has not complied with the order. We also understand the fear of a mother who is threatened with violence to her or her children. I am grateful to the hon. Gentleman for raising this important—

Order.

Mr Michael Paynter

1 pm

I am grateful for the opportunity to raise the case of my constituent Michael Paynter and his experiences as a volunteer national service man at the former chemical defence establishment at Porton Down in the 1950s, which he believes, have resulted in permanent ill health. Having pursued the matter in some detail on his behalf for nearly two years, I am now convinced of the credibility of my constituent's claims, upon which I have drawn some serious conclusions that 1 wish to share with the House.

On 11 November 1994, Mr. Paynter came to see me at my surgery to seek advice on how he should pursue justice in response to the outcome of his experiences 40 years ago. In May 1954 and again in March 1955, Mr. Paynter—as a conscripted national service man in the RAF—volunteered to be the subject of research into the common cold at Porton Down. On both occasions, he stresses, that involved going into a gas chamber without any special protective clothing apart from a gas mask.

Mr. Paynter further stresses that, had he known that he was to be the subject of studies into anything else—and certainly studies into what I have been informed was the supposed real subject of the experiments—he would not have volunteered. Only research into the common cold was mentioned and, as a naive 18-year-old, he had no reason to question or disbelieve that. It was, after all, a welcome break during his two years as a conscripted national service man, and it also provided him and nine other volunteers with extra pocket money.

The fact is that Mr. Paynter has not enjoyed his previously robust good health ever since. Within six months of his second visit to Porton Down, he developed two skin infections that lasted for two and a half years. One was psoriasis that covered most of his body, while the other was running eczema. The latter infection hospitalised him for 10 weeks and did not clear up for 10 months. In 1956, he started to suffer severe migraines, for which he still receives medical care. He developed some small growths on his body that have never been diagnosed. In 1959, a twisted spinal column developed, causing permanent and severe restrictions on his neck movements, as well as other problems for which he has found no effective treatment.

In other words, since his experiences at Porton Down, Mr. Paynter's quality of life has been devastated—"Altogether, a life of hell," as he described it to me. All Mr. Paynter's claims are supported fully by his GP, Dr. Nandra. Indeed, it was his GP's unsuccessful attempt to obtain medical records of his time at Porton Down that caused Mr. Paynter to speculate that Porton Down could have been responsible for his bad health. The ITV "Network First" programme on 11 October 1994, which detailed similar cases to his, prompted him to seek my advice and help.

I referred my constituent's case to my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind)—the then Secretary of State for Defence—and I received a reply from the then chief executive of the chemical and biological defence establishment at Porton Down, Dr. Graham Pearson. That confirmed that Mr. Paynter attended the CBDE as a volunteer on two occasions—3 to 7 May 1954 and 28 March to 1 April 1955.

I was told that, on the first occasion, Mr. Paynter took part in treadmill testing to assess the physiological load induced by wearing individual protective equipment. On the second occasion, Mr. Paynter again took part in treadmill testing, and trials involving sensitivity to rubber mixes. On both occasions, I was told, there were no grounds for believing that those experiments would result in any harm or long-term health effects for Mr. Paynter.

All that was news to my constituent, who assures me that at no time did he undertake treadmill tests. He also points out that there was no follow-up whatever from Porton Down to discover whether there had been any effect on his health following his visit. In his letter to me, Dr. Pearson said rather pointedly that any volunteer who believes that his health has suffered as a result of participating in studies at Porton Down may apply for compensation or the award of a war pension.

That statement, in the light of what we know now, implies an acceptance of guilt on the part of the authorities at Porton Down. Moreover, Dr. Pearson pointed out that the medical records of such service volunteers are provided on request to their GPs, as is information from Porton Down on the studies in which they participated. That statement flies in the face of the experience of Mr. Paynter's GP, who has to this day been unable to obtain any record at all of any experiment carried out on Mr. Paynter at Porton Down.

I pursued those matters with Dr. Pearson and, in response, I received a reply from Mr. John Chisholm, the chief executive of the Defence Evaluation and Research Agency, which now includes CBDE Porton Down as one of its divisions. In that letter, Mr. Chisholm re-emphasised that the past 40 years had shown no evidence of any harmful effect on the health of volunteers participating in studies at Porton Down. Moreover, the long-term purpose of those studies had been explained to the volunteers. Neither of those statements is true in Mr. Paynter's case.

Mr. Chisholm's letter confirmed that my constituent had taken part in a study to assess the effect on performance and personnel of wearing clothing designed to protect against chemical and biological agents, and to assess human sensitivity to rubber mixes used in making protective equipment. On neither occasion was Mr. Paynter exposed to biological or chemical warfare agents. Moreover, Mr. Chisholm pointed out that research into the common cold had never been undertaken at Porton Down.

Only when I pursued matters further with Mr. Chisholm did he reveal that my constituent had, in addition, participated in a study to investigate the effect of substances found in London smog. That involved exposure through a mask in a chamber for between 10 and 60 minutes, on one or two occasions, to an artificial fog containing sulphuric acid mist and various aldehydes produced by diesel engines. Those are the suspected toxic constituents of London smog—either alone or mixed with magnesium oxide or ammonia—and the experiment aimed to neutralise the irritant effects of the smog.

It is clear to me and to my constituent Mr. Paynter that that subsequent piece of information comes much closer to his recollection of his experience at Porton Down and the cause of his subsequent and permanent ill health. He recalls that the chamber remained completely clear throughout and that no visible smog appeared. As he rightly points out, if that was research into the effects of London smog, why was he required to wear a gas mask? Needless to say, Mr. Paynter was appalled to learn for the first time that he was apparently the victim of research into London smog, and had been "duped"—his term—into volunteering for tests involving potentially dangerous gases.

If the experiments to which my constituent was exposed were related to London smog and were not defence related, why were they being undertaken at the defence establishment? If they were not defence related and were otherwise more innocently in the public interest, why were the participants not informed that antidotes to smog were being researched? Why were the participants required to sign the Official Secrets Act 1911, binding them to confidentiality on every visit to Porton Down?

I sought answers from my right hon. Friend the Secretary of State for Defence to those questions together with related others in my letter of 31 July. I had originally sought to table the questions for written answer, but was told by the Table Office that that was prevented by the 30-year rule. I wanted my right hon. Friend's confirmation that research into London smog was undertaken at Porton Down, and on whether it involved volunteer national service men in the 1950s, if so, whether they were informed of that and whether such research was defence related. I wanted to know whether his Department had monitored the subsequent health of those national service men and how many applications for a war pension or compensation had been made by them. I wanted to know what legislation prevents them and their legal advisers from pursuing action and claims against his Department and why. And I wanted to learn more about the Nuremberg code and how it applied to the use of service men at Porton Down.

Unfortunately, the reply that I received from my right hon. Friend the Secretary of State told me that those matters are the responsibility of the Defence Evaluation and Research Agency and that its chief executive had been asked to reply to me directly. That reply from my right hon. Friend was dated 7 August, and until yesterday I had not received any such reply from the chief executive. Then, lo and behold, I received this reply from the Under-Secretary of State, Earl Howe. I must ask my hon. Friend the Minister of State why it has taken my successful application for this Adjournment debate to obtain a ministerial reply, which I was not originally going to receive.

I have not read my noble Friend's reply. Instead, I look forward to some clear answers to my questions from my hon. Friend the Minister of State today. In particular, I seek his response to my clear conclusion, in the light of my constituent's experiences at Porton Down, that national service men such as him were encouraged to be used as guinea pigs for research into the effects of certain gases, that, as my constituent adamantly maintains, they were told and accepted that it was research into the common cold, that that was never the case and that records were designed to show that it was research into the effects of London smog, but that the research in which they voluntarily and innocently participated was much more lethal and dangerous than that. It was indeed defence related, which necessitated and justified the application of the Official Secrets Act. In effect, it was exposure to G-agents—nerve gas known as sarin and mustard gas. As a consequence, those people's lives have been irrevocably impaired because their health defences have been damaged and destroyed. That is a grave national scandal.

All that duplicity is enough evidence to enable me to put it to my hon. Friend that it is incumbent on the Government to establish an independent inquiry into the use and clear abuse at Porton Down of young conscripts such as my constituent. Should such an inquiry support my conclusions, it must be right to come forward with compensation that fairly, justly and adequately reflects the abuse of volunteers who were unwittingly poisoned in the pursuit of studies related to chemical and biological warfare, which are vital to the defence of the realm. I understand that the American service men used in identical tests at Edgewood have been awarded such compensation.

If the Government do not establish such an investigation willingly, they will have to respond grudgingly to a judgment from the European Court of Human Rights in Strasbourg, to which others are now appealing. That is not the right approach of a Conservative Government.

1.14 pm

I am grateful to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) for this opportunity to discuss the important case of his constituent Mr. Michael Paynter, who attended as a volunteer at the chemical and biological defence research centre at Porton Down in the mid-1950s. I congratulate him on the robust presentation of his constituent's case.

Before I deal with the specific and detailed concerns that my hon. Friend raised—if there are any that I omit, we shall follow them up by letter immediately—I shall take a moment to explain the purpose of the Porton Down volunteer programme in which Mr. Paynter participated.

The role of the chemical and biological defence centre, which is now part of the Defence Evaluation and Research Agency, is to carry out research to provide the United Kingdom's armed forces with safe and effective protection against the real threat posed by chemical and biological weapons. My hon. Friend knows a great deal about that from his experience.

A vital part of that work involves the use of human volunteers to evaluate the military implications of the protective measures developed through the research. That has its roots in the work carried out during the first world war at the Porton site, in which soldiers acted as observers during trials to follow the release of clouds of poison gas such as chlorine. To date, around 20,000 service personnel have contributed—through their participation in the programme—to providing the UK armed forces with some of the most effective protection in the world.

Volunteers for those studies are drawn chiefly from the three armed services. It is they, of course, who will ultimately benefit from the products of the research carried out at Porton Down. Volunteers are recruited through notices posted widely in the armed forces and apply to attend through their local military chain of command. When volunteers arrive at Porton Down, they are medically examined to confirm their fitness. The exact nature of the studies in which they will take part is explained to them. Only after they have formally consented to take part in a study by signing a consent form can the study begin. Once the studies are completed, a further medical examination is conducted prior to the volunteer's return to his unit.

I can assure the House that the use of human subjects at Porton Down is carefully controlled. All work requiring the involvement of volunteers is carried out according to a detailed written experimental protocol prepared by the scientists who wish to carry out the work in consultation with medical and military staff at Porton Down. The protocol is considered by an internal review committee to ensure that the use of human subjects is essential, that it is statistically sound and that it will provide valuable information that cannot be obtained by any other experimental methods. It also has to demonstrate that the proposed work complies with all the ethical guidelines for the conduct of work involving human subjects.

Once agreed, the protocol is referred to an independent ethics committee. That committee is made up of members of the medical and legal professions and lay members of the public and it includes experts in psychology and toxicology. Among other things, it considers whether the proposed work will present a hazard to the health of the volunteer and will not permit the work to commence if it does.

The members of that committee are not employees of the Ministry of Defence, although they provide reports on their deliberations to my Department's chief scientific adviser. In the past 80 years, the nature of the tests and the ways in which they are conducted have developed in response to changing principles and practices, as my hon. Friend will well understand. There has also been a considerable advance in the understanding of the hazards to health of many of the chemicals to which individuals are exposed.

It is, therefore, possible that some activities carried out in the past will raise concern when viewed through the eyes of scientists at the end of the 20th century. However, staff at Porton Down have always sought to follow the best practice existing in regard to human participation in trials and have endeavoured to promote a responsible approach to the involvement of volunteers in studies.

Having briefly outlined the procedures that currently govern the use of service personnel in studies at Porton Down, I come to the case of Mr. Michael Paynter, which was so well raised by my hon. Friend.

Mr. Paynter's case has been the subject of correspondence between my Department and my hon. Friend during the past two years. The facts of the case are that, in response to a request for volunteers that appeared in military station orders, Mr. Paynter attended the then chemical defence experimental establishment twice in the 1950s while completing his national service.

On the first occasion, in May 1954, Mr. Paynter took part in studies that required him to wear chemical protective clothing including a respirator while working on a treadmill under various different climatic conditions in a climatic chamber. That did not involve exposure to chemical warfare agents.

On his second visit, in March 1955, Mr. Paynter took part in similar physiological studies. In addition, he was involved in work to evaluate various rubber compounds proposed for use in respirator face pieces. Neither of those studies involved his exposure to any chemical warfare agents. His participation in those physiological studies and the evaluation of the rubber compounds was part of the on-going programme of research that has been conducted for the past 80 years to provide UK forces with clothing and respiratory protection to enable them to operate effectively in all military environments where the threat of attack from chemical and biological weapons exists.

During his second visit to Porton in March 1955, Mr. Paynter also participated in a study to evaluate the effects of some of the chemicals believed to be constituents of the London fogs. Those especially dense fogs, to which a large part of the population was exposed, had severely disrupted the life of the city at the time. My hon. Friend is too young to remember. The programme of work in which Mr. Paynter participated was part of the Government's research programme to investigate the causes and effects of the problem and possible solutions to it.

The research conducted at Porton Down contributed to the understanding of the hazards presented by the specific components of the fog and it would not have been unusual for research establishments across the Government to participate. That work, in conjunction with other related studies, eventually resulted in the clean air legislation of the 1960s, which considerably improved the atmosphere in our large cities and saw the disappearance of the London fogs of old.

My hon. Friend referred several times to Mr. Paynter's belief that he was participating in research into the common cold. I want to make it absolutely plain that at no time in its history has Porton Down ever conducted research into the common cold. All research relating to the common cold was conducted by the Medical Research Council on behalf of the Ministry of Health at the common cold unit based at Harnham down, Salisbury. That unit, which closed in 1989, had no connection with the Ministry of Defence.

My hon. Friend also asked about the Nuremberg code. The horrors exposed on the liberation of the Nazi concentration camps at the end of the second world war led to the development of the Nuremberg code of ethics in medical research. Since its inception, the principles laid out in the code have governed all the work relating to human subjects at Porton Down. The code emphasises the essential voluntary nature of the consent to participate and states that volunteers must be made aware of the nature of the study, its duration, its purpose, the method and means by which it is to be carried out, all inconvenience and hazards that can be reasonably expected and any likely effects on their health that are known to those proposing the study.

All the work in which Mr. Paynter participated would have required him to have that information provided to him so that he could make an informed decision to consent to participate in the studies. No work would have commenced involving Mr. Paynter unless he had given his informed consent freely and without duress. It is also made very clear to volunteers throughout their attendance at Porton Down that they are free to withdraw from studies at any time without prejudice or having to provide any reasons for their wish to do so.

My hon. Friend also asked about the legislation that prevents service personnel from pursuing claims and action against the Ministry of Defence. In 1987, the House passed the Crown Proceedings (Armed Forces) Act, which gave current and former service personnel the right to seek compensation for personal injury or loss arising from the negligence of the Ministry of Defence as their employer.

The 1987 Act repealed the Crown Proceedings Act 1947, section 10 of which had prevented service personnel from taking action against their employer for negligence. In passing the 1987 Act, the House thought very carefully about whether the legislation should be retrospective, but concluded that it should not, so incidents and injury sustained before 1987 are not covered.

As I made clear, all work at Porton Down complies with the principles stated in the Nuremberg code, and with revisions to ethical guidelines produced in the intervening 50 years. Nevertheless, we must consider the remote possibility of a volunteer claiming that his health has suffered as a result of the activities that he undertook at Porton Down. In such a case, the individual can apply to the Department of Social Security for the award of a war pension. That is subject to an assessment of each individual's claimed disability and a consideration of the impact of the activities in which he participated. In dealing with such claims, staff at the War Pensions Agency are provided with all the information that remains in the experimental records at Porton Down.

To date, Porton Down has supplied the War Pensions Agency with details of the attendance of approximately 40 former volunteers. Staff at Porton Down also provide such information to the volunteers or to their medical representatives when they write to request those details. So far, fewer than 100 of approximately 20,000 volunteers have requested such details.

I and the Ministry of Defence owe my hon. Friend and his constituent an apology for the wholly unacceptable delay in replying to his last letter on this case. I am very sorry—and know that my noble Friend Lord Howe is, too—that it took so long for a reply to reach him. I have today instigated inquiries as to why that should have happened. However, I think that he goes a little far in implying that we may have been less than open in respect of the amount of information that has been made available to Mr. Paynter.

Given the wide discrepancy between my constituent's recollection of his experience at Porton Down and what my hon. Friend has told the House about his experience as recorded there, is there not a case for further investigation?

I shall come to that point later because I have a helpful suggestion for my hon. Friend.

The nature of the information recorded with regard to the volunteer programme has also developed over the years. Details held on those who participate in studies at present are kept in paper folders that include the volunteer's entry and exit medical reports, a copy of their consent to participate and many other detailed records. That level of information is felt to be comprehensive by modern standards. Sadly, such information is not available for many of our former volunteers, and many of the remaining records are incomplete. Unfortunately, in some cases it is impossible to provide any further elucidation beyond confirming the dates of attendance and the general type of activity.

In Mr. Paynter's case, we have now found a fair amount of information, although as we have admitted to my hon. Friend, we had some difficulties in identifying that Mr. Paynter participated in the London smog trials, principally because of the nature of the records now held. We have made all the relevant facts available and provided my hon. Friend and Mr. Paynter with considerable detail.

I understand that in addition to details of the studies in which he participated, staff at Porton Down have provided Mr. Paynter with copies of technical papers believed to relate to the studies in which he took part. They have also offered to meet him to talk through the results discussed in the papers. Such a meeting, which he has yet to arrange, would be very helpful in addressing any other major concerns regarding his experience and would be a fruitful route to pursue in respect of the further inquiries to which my hon. Friend referred. I shall be happy to follow up the result of that meeting.

I wish to close by thanking my hon. Friend for bringing Mr. Paynter's case to the attention of the House. My Department is grateful to Mr. Paynter and all the others for their participation in the work of Porton Down. Without the involvement of human subjects, it would be impossible to evaluate the effects of wearing the equipment developed at Porton Down on the ability of the armed forces to carry out normal military tasks in hazardous environments. That was well demonstrated by the equipment and kit used by British armed forces in the Gulf, where there was a real threat of the use of chemical or biological weapons. The Ministry of Defence is very grateful to all those who through their participation in studies at Porton Down have contributed to providing the UK with safe and effective protection.

I profoundly sympathise with Mr. Paynter's concerns about his ill health, and we have tried to deal with his questions openly and honestly and to the full extent of the information that is now available. I hope that my hon. Friend will accept my reassurance and further urge his constituent to meet officials at Porton Down, if necessary with my hon. Friend's attendance, to discuss any further ideas that Mr. Paynter may have about how we can help him.

A5 Improvements (Ynys Môn)

1.29 pm

I begin by telling the House of the deep sense of anger and betrayal felt by my constituents at the Welsh Office's announcement on 10 July 1996 about the A5-A55 improvements in Anglesey that private funding was being sought for the project and that the starting date was to be put back 18 months at least.

We are angry that the announcement was made in a reply to a parliamentary question from the hon. Member for Vale of Glamorgan (Mr. Sweeney). This is the first time that any announcement on the A5 has been made in that way without consultation or prior notice. We feel betrayed by the content of the statement. Three "Roads in Wales" publications, a departmental report, a reply to a Select Committee report, a budget statement, ministerial statements and countless letters, up to 24 May this year, had made it clear that the Welsh Office regarded the improvements as a high priority to be paid for from public funds.

Those feelings are shared across the island of Anglesey—by the local authority, community councils, businesses and all who believe that the road improvements are crucial for the economic future of our communities. The anger and betrayal are felt most deeply by those who live on the route of the current A5. The residents of Caerwen, Gwalchmai, Bryngwran, Caergeiliog, Valley and Holyhead have to put up day after day and night after night with movements of traffic such a scale that their lives are becoming intolerable. According to a local authority report,

"the nuisance they suffer relates to noise, vibration, poor air quality, severance by traffic, road safety problems and visual intrusion."

In many cases, they also suffer from structural damage to their properties.

The road safety aspect is significant. In 1988, Gwynedd county council—the then highway authority—published an analysis of accidents on the A5. It found a concentration of accidents in the five villages on the route, and particularly along London road in Holyhead. Indeed, the A5 through Holyhead—one and a quarter miles of the 18-mile section in Anglesey—accounted for one fifth of all injury accidents. It is estimated that completing the road would reduce accidents by 70 per cent.

Then there are the economic arguments. The current situation, with long tailbacks at peak periods and heavy traffic during most of the day, is causing havoc for businesses that rely on good transport facilities. Successful businesses cannot tolerate such long delays on the major road artery serving the island. They all speak of the need to start the road programme as quickly as possible. I shall quote later in my speech from some of the letters that I have received. I have already received letters from more than half the community councils on the island, as well as more than 50 letters from businesses and organisations. I know that there are more to come.

Let me try to put the scale of the traffic into perspective. The second road crossing on to the island and the dual carriageway bypassing Llanfairpwll were completed in the early 1980s. In 1981, 22,465 freight units were going by road to Holyhead and a total of 123,764 cars and coaches. In 1995, the totals were 69,697 freight units and 408,474 cars and coaches—increases of 210 per cent. and 230 per cent. respectively. Those staggering figures do not take into account the increase in local traffic, the impact of the HSS vessel introduced by Stena this year or the new Irish Ferries super-ferry, said to be the largest in north-west Europe, which is due to come into service in Holyhead in 1997.

Let me recap on the story to date. The first significant development occurred on 13 April 1988, when I led a local authority delegation to the Welsh Office and met the then Minister, the right hon. Member for Conwy (Sir W. Roberts). After we had pressed our case, he declared that the Welsh Office had decided to dual the section from Llanfairpwll to Turnpike Nant.

Naturally, the delegation was pleased with the announcement as far as it went. I pressed the Minister not to close his mind to completing the dualling of the road all the way to Holyhead. I asked him to receive further evidence, and he readily agreed. Shortly afterwards, I supplied him with a memorandum setting out the case to deal with the whole section. I have re-read that memorandum in preparation for today's debate. The figures that I quoted on the increase in traffic to Holyhead proved remarkably accurate.

The Minister's announcement about dualling part of the section was confirmed in "Roads in Wales, Progress and Plans for the 1990s", published in 1989, which stated that the section to Turnpike Nant was included in the road building programme. It also said:

"The case for upgrading the remainder of the road across Anglesey is being considered".

The work was scheduled to commence not before 1994–95 and we were told informally that it could well start during that financial year.

We knew that our campaign to dual the whole road to Holyhead had been successful when the document entitled "The A55: The Road of Opportunity" was published late in 1989. There was a palpable sense of relief on the island that the case for the completion of the whole road to Holyhead had been won.

Our efforts were then directed to securing a timetable for the work. No indication came until the publication of the "Roads in Wales" 1992 supplement. It specified that stage 1, from Llanfairpwll to Turnpike Nant, was expected to start between April 1995 and March 1988. Stage 2, from Turnpike Nant to west of Bryngwran, was expected to start within the same period. Stage 3, from west of Bryngwran to Ty Mawr Holyhead, was expected to start after March 1998. The Holyhead relief road was expected to start before April 1995. None of those works has yet been started.

In its response to the report of the Select Committee on Welsh Affairs in March 1992, the Welsh Office said:

"The specific objectives of completing the M4 and dualling the A55 will be completed by the mid 1990s".

We are now coming towards the end of the 1990s.

The next step was the publication of "Roads in Wales: 1994 Review", published in July of that year. The document contained no firm timetable, but it made several key statements on Government policy. A number of road schemes were deferred or taken out of the programme, while others were given priority status. The document said:

"High priority is attached to extending the A55 across Anglesey to Holyhead. This road will be designated the A55. It is planned to publish draft orders for the Holyhead relief road"—

which was by then late—

"and the stage from Llanfairpwllgwyngyll to Nant Turnpike during 1994".

The report confirmed that the road was to be built in four sections, as outlined in 1992. However, that was to change. The scheme was later reduced from four sections to two.

The people of Anglesey were still concerned by the lack of a firm timetable for the building of the road. We had seen the dates slip, with promises of starts in 1994–95 and in 1996 failing to materialise. The first sign of a proper programme came in a letter sent by the then Secretary of State dated 15 May 1995. In view of its importance to the debate, I want to quote the relevant paragraph in full. He said:

"I can assure you that I attach high priority to extending the A55 dual carriageway across Anglesey. This is reflected in the plans I announced on 9 March in the 'Departmental Report 1995—The Government's Expenditure Plans 1995–96 to 1997–98' (Cm 2815). A copy of the Major Scheme Forward Trunk Road Programme is enclosed for your information. You will see from this that two schemes—A55 Llanfair PG-west of Bryngwran and A55 west of Bryngwran-Holyhead—costing over £120 million are included in the highest programmed category, i.e. planned to start before April 1998. I am afraid that it is not possible to give a more precise start of work date at this stage."

The letter also confirmed the road's strategic importance in European terms.

Given those assurances, the people of Anglesey felt that further pressure should be applied to bring the starting date forward. At least we knew that the Treasury had earmarked funds for the project, which was clearly shown as part of the Government's expenditure plans.

A meeting was held on 31 October 1995 with the current Minister with responsibility for transport in Wales, the hon. Member for Cardiff, North (Mr. Jones), at which he received a deputation, which I again led. We pressed him hard on the dates and we came away with the view that the first section could be started in the financial year 1996–97, and the second section would follow 12 months later. The 1995 public expenditure statement confirmed our view. On 13 December 1995, the Secretary of State said:

"the A55 improvements across Anglesey are important, and I plan to start the first stage of those improvements next year."—[Official Report. 13 December 1995: Vol. 268, c. 1004.]

Subsequently, he explained that next year meant the next financial year, ending 31 March 1997. I know that the Welsh Office has said to the local authority that there is reference in the statement to the use of private finance. Let me make it perfectly clear that that is a misleading statement, because that refers to other projects and not to the A55. The reference to the A55 in that document cites that public funds would be used.

The Under-Secretary wrote to a number of people to confirm the timetable. He wrote to Ynys Môn county council on 24 May and said:

"work on the new road is scheduled to begin in the spring of 1997, demonstrating the commitment to the extension of the A55 across Anglesey."

The local community had worked hard to secure those commitments. We were now being assured by the Welsh Office that the building of the road was a priority; that work on the first section would start in spring 1997; that work on the second section would start in the following year; and that public funds would be used. Little wonder then that the announcement made on 10 July caused such anger and outrage. It came only eight weeks after the Minister's final letter confirming the previous plans. It was made near the end of the summer session. It was made without consultation with the highway authority and on the day when the LG announcement was made. The Government were no doubt hoping to bury the bad news with the good—perhaps the link between the two is closer than we might imagine.

That announcement marked the first time that I was not given any warning about an announcement concerning the A5 in Anglesey. On previous occasions, I was always given at least a couple of days' prior warning, and rightly so, because it is a major issue in my constituency. Why choose to make the announcement in an answer to a question from the hon. Member for Vale of Glamorgan? What possible interest could he have in the A5 in Anglesey?

The sense of anger and betrayal to which I referred now has to be channelled into a campaign to demand that the Welsh Office keeps its promise to the people of Anglesey. I have received an overwhelming response to my request for support, and I should like to quote from some of the letters I have received. Beaumaris town council's letter is typical of many. It states:

"Dear Mr. Jones
A5-A55 improvement

Thank you for your letter of the 13 September which I have read to my council. As a consequence I am asked to reply, and say my council is 100 per cent. behind your cause and wishes you well in your efforts to improve the situation on Anglesey."

A representative of Tref Alaw community council wrote:

"The new road is already years behind schedule, without mentioning the further delay."

Businesses have been equally forthright. A representative of Anglesey Aluminium has written:

"The poor capacity of the existing A5 has been a deterrent to several aluminium use intensive businesses from locating near the smelter."

Many businesses have written to say that the condition of the A5 is a disincentive to inward investors, and some report that it is difficult to find suppliers who will deliver to the island. Even more alarming is the news that some might relocate unless the road programme moves ahead quickly. One business man wrote

"To bring the road to our doorstep then stop is an insult."

The two companies that operate ferry services from Holyhead have been strong in their condemnation of the Welsh Office decision. Stena's ship and port manager said:

"Stena Line has invested £46 million in redeveloping the Port of Holyhead … Both companies have committed large new ferries … There is no doubt that we are fast approaching the stage where the growth in business needed to justify the massive investments by the ferry companies and port authority is being stifled by the inadequate access routes."

The managing director of Irish Ferries, Gerry Hickey, wrote:

"The arrival of the new superferry in May 1995 has dramatically increased the traffic through the port, and this has been summarised on the accompanying table, with projections for 1997.

Since announcing plans regarding investment in this route in 1993, Irish Ferries has kept all its promises, and to date we have had little support from the Welsh Office".

He also sounds a warning that unless we get our act together, the port of Liverpool with its excellent motorway connections threatens to take business away from Holyhead.

The Under-Secretary has had a flavour of the anger, betrayal and outrage felt by the people of Anglesey as a result of the Welsh Office announcement. He is aware that the current campaign is designed to secure a change of mind. The least I expect from him today is to tell me that the Welsh Office will review its decision and will meet a delegation consisting of the people of Anglesey to present our case; otherwise its decision is just another one of those broken promises that have littered the Government's path since 1992.

1.45 pm

As the hon. Member for Ynys Mon (Mr. Jones) has pointed out, the Government announced their commitment to dual the A5 trunk road across Anglesey in the document published in December 1989, "The A55: The Road of Opportunity". The importance that the Government place on improving the route across the island has been reiterated on many occasions since then, as the hon. Gentleman has pointed out. We announced our intention to redesignate the proposed road as the A55 in "Roads in Wales: 1994 Review" to give continuity with the A55 dual carriageway on the mainland. Since then, as we have heard, work has progressed on the design and the statutory procedures, not all of which have yet been concluded, which are necessary to bring a scheme to the point where tenders for main works contracts can be invited. The hon. Gentleman will be aware that there are statutory inquiry proceedings still outstanding in relation to part of the scheme.

On 13 December 1995, my right hon. Friend the Secretary of State gave details to the House of the Department's spending plans for Wales for 1996–97. He reiterated the importance of the A55 improvements across Anglesey, on which preparation work was continuing, and, as we have heard, continues, and referred to his wish to develop a number of major road schemes in partnership with the private sector.

On 10 July, the Under-Secretary with responsibility for roads in Wales, my hon. Friend the Member for Cardiff, North (Mr. Jones), confirmed that funding was to be sought for three major road schemes in Wales: the M4 relief road south of Newport, the A465 improvement between Abergavenny and Hirwaun and the A55 dual carriageway across Anglesey between Llanfairpwllgwyngyll and Holyhead. My hon. Friend is unable to respond to the hon. Gentleman today because he is on a trade mission to south-east Asia. On 10 July. he also announced the intention to take each of those projects forward under the private finance initiative as design, build, finance and operate—DBFO—schemes.

My hon. Friend again emphasised the importance of the planned A55 dual carriageway proposals, and I want to reiterate his comments. I accept many of the points that the hon. Member for Ynys Môn has made about the importance of the work. My hon. Friend said that, subject to satisfactory completion of legal procedures, work on the scheme was expected to begin in autumn 1998, with the road being completed some three years later. It deserves to be emphasised that that is about the same time span as would have been involved if construction were undertaken by conventional means.

The Government place great importance on design, build, finance and operate contracts for major trunk road improvements, which form a significant part of our PFI. Just a few days ago, colleagues in England were able to announce plans for major improvements to the M40 between London and Oxford. I am pleased to note that a Welsh company, Hyder, was part of the successful consortium that was awarded that contract. I know of the widespread interest in those projects.

There are a number of misconceptions about the contracts. Let me make it clear at the outset that there is no question of tolling booths being placed at strategic intervals across Anglesey, as has been claimed. I accept that the hon. Gentleman has never claimed that, but it has been claimed in some quarters. The system is that the contractor designs the new road, funds its construction, and manages and maintains the road—together with any existing roads that form part of the contract—for a certain period, usually 30 years. In return, the Government pay shadow tolls using a formula based on the number of vehicles using the road and on lane availability. The DBFO contractor, by the nature of the contract, has a long-term interest in the road, which gives a greater guarantee that the initial construction standard will be maintained.

The hon. Gentleman referred to the misunderstandings that have given a number of community councils on Anglesey, and Anglesey county council, cause for concern. My right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary have received a number of requests for meetings to discuss the July announcement on funding the scheme and to express concern about the Department's alleged lack of commitment to the scheme proceeding within the announced time scale.

The July announcement was apparently received with some surprise locally. The hon. Gentleman said that there was a mood of anger and betrayal. Why that should be so is not clear. Since my right hon. Friend the Secretary of State's statement to the House last December, all public statements have reiterated the point that the Secretary of State is considering delivering a number of major road programmes in Wales through the private finance initiative.

Does the Minister accept that the original plan was to build a road using the public finance that had been allocated? Does he also accept that on previous occasions I was given advance warning of each step?

I am unable to comment on the hon. Gentleman's last point: I am sure that he will accept that. In the interests of road building and capital projects in Wales, we must surely explore the opportunities for involving the private finance initiative. If major capital works can be progressed on that basis, we are likely to have greater capital expenditure across the Principality than would otherwise be the case. The core of the hon. Gentleman's observations today was that the delivery of the scheme would be delayed. The time scale referred to would allow the scheme to be delivered within the initial time scale proposed. I accept his point that the preliminary start date will not be the same, but the point of delivery will be. It is the core date that is important.

The hon. Gentleman will be aware that my right hon. Friend the Secretary of State met members of the North Wales Economic Forum on 4 September at Wrexham. It was stressed at that meeting that members of the forum placed great emphasis on the Welsh Office adhering to the timetable for extending the A55 across Anglesey, as the overriding need was to ensure that north Wales had a robust transport infrastructure, with adequate links to the country's motorway network. My right hon. Friend recognised the importance of the A55 route to north Wales, and the need to ensure that the scheme was not delayed. He acknowledged that there might be some initial delay in the start of construction, especially while the Bryngwran-Holyhead section was subject to statutory procedures. The completion of the whole length of the dual carriageway was expected to be within the planned timetable, as I outlined.

I also emphasise that there will be no short cuts, literal or metaphorical, as a result of taking this scheme forward under PFI. All the necessary statutory procedures have to be undertaken, and orders made. Any commitments given in correspondence and at the public local inquiry will be included as part of the PFI contract. The adoption of the PFI approach involves the form and method of procurement, rather than the date when the scheme is likely to be delivered. The statutory procedures are not affected. The highways orders for the section between Llanfairpwllgwyngyll and Bryngwran were made earlier this year following a public inquiry into the proposals—the second public inquiry for the Bryngwran to Holyhead section is expected to be held in early 1997—and every opportunity will be given, in the normal way, for authorities or individuals to register their support for the scheme, or objections to any aspect of it.

The hon. Gentleman referred in great detail to the increase in traffic growth on the island. That increase, together with the pressures that it brings, is one of the main reasons why the Government have attached high priority to extending the dualling of the A55 across Anglesey. The traffic need for the new improvement is well documented in the Welsh Office's evidence to the public inquiry into the section between Llanfairpwllgwyngyll and Bryngwran, and recorded by the inspector in his report. A similar case will be put to the public inquiry, to be held early in the new year, into the remaining section between Bryngwran and Holyhead, at which the hon. Gentleman, the Ynys Môn county council and any other interested parties will have the opportunity of expressing their strong support for the scheme, as the hon. Gentleman has consistently done—support that he has outlined to the House again today.

The proposed dual carriageway, when it is built, will have adequate capacity to cater for the projected traffic growth on the island, including any that may result from increases in ferry capacity. The programme of the scheme is aimed at completing the whole length of the improvement across the island in the shortest possible time. The projection that has been made of the time from the start of the scheme to the date on which it is expected to be delivered will be shown to be correct.

On matters of detail concerning the construction of the project, I confirm that it is intended that the road will be built and will be completed as one length between Llanfairpwllgwyngyll and Holyhead. The Department is willing, in principle, to include an additional interchange—which was requested by the Anglesey county council—within the DBFO contract, subject to certain conditions of which the county council was previously advised. Having studied the correspondence, I know that the hon. Gentleman is aware of the county council's concern in that regard and of the conditions that were previously outlined by the Welsh Office.

The Welsh Office also pointed out to the county council that it is prepared to adopt the same approach in respect of possible road links at the Caerwen and Ty Mawr junctions, and that those and other issues would have to be further discussed with officials of the Department's highways directorate. Highways directorate officials in the Welsh Office will continue to liaise with local authority officials to keep them abreast of developments in the scheme.

The hon. Gentleman referred to the request for a meeting with a delegation. I must make it clear to him that the Welsh Office is of the view that the scheme has been properly introduced under the PFI. My right hon. Friend the Secretary of State hosted a reception for a number of contractors and others who may be involved in bidding for PFI schemes in Wales and elsewhere in the United Kingdom. I am aware of the substantial interest, especially in relation to major road schemes of this sort. If, therefore, the hon. Gentleman's request is based on the premise that the Secretary of State will be deflected from proceeding with the matter under a PFI scheme, no useful purpose will be served by such a meeting.

I hope that the hon. Gentleman will gather from my observations that the highways directorate staff, and even Ministers, are willing to engage in a dialogue about how the scheme should be taken forward. That is the dialogue that we seek, and there would be no point in leaving this debate in the belief that there is anything to be gained by returning to a conventional publicly funded route and not proceeding on the basis of the announcement made in July.

It is important for the Minister to understand the context of the request for a meeting. I understand his point, but it is important for the Welsh Office to meet a delegation to discuss the matters that he has said are vital. We need to know what will happen.

The hon. Gentleman and I have known each other long enough for him to know that I am never reluctant to meet hon. Members or to receive delegations. However, there is no purpose in holding such a meeting on the premise that the Government will be deflected from their intentions, given in the announcement, about how the scheme should be taken forward. That announcement was made by my right hon. Friend the Secretary of State. My hon. Friend the Under-Secretary is now taking the matter forward with the Welsh Office. If the meeting is to be held within that context, it is that and not a lack of courtesy on the part of the Welsh Office that leads my right hon. and hon. Friends to say that no purpose would be served by it at this point. If there are other matters that the hon. Gentleman wants to pursue—

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

Scotland

Cumbernauld Development Corporation

To ask the Secretary of State for Scotland if he will make a progress report on the wind-up of Cumbernauld development corporation. [38704]

Cumbernauld development corporation is on course for complete wind-up by 31 December 1996.

I thank the Minister for that reply. Will he join me in thanking Cumbernauld development corporation, its officers and members of the board, past and present, for the considerable achievements in developing the new town, not least in inward investment? Will he consider the issue of inward investment into retail trading as shopping in Cumbernauld is not nearly as good as it should be for a town of its size? Would the Minister be kind enough to meet me to discuss that matter of importance to local people?

The hon. Gentleman is a firm advocate for his constituents. Whenever he has asked for a meeting with me I have been only too pleased to give it, and I am more than willing to meet him to discuss the issue that he has raised today. I am happy to praise David Mitchell, his board and all the staff of the development corporation for the significant work that they have done for Cumbernauld. When I was last there, they showed me the retail development work that they had done. As the hon. Gentleman is aware, they are now at about phase 5 of the retail development, which is being carried out by the new local authority in conjunction with the private sector. I hope that it will develop smoothly and successfully for the people of Cumbernauld.

Inward Investment

To ask the Secretary of State for Scotland if he will make a statement on the latest figures for inward investment into Scotland. [38705]

Inward investment in Scotland continues to perform at record levels, the latest good news story being the decision by Hyundai to invest in Dunfermline, creating 4,000 jobs in the long term and providing more than £2 billion of inward investment.

First, I congratulate my right hon. Friend on his birthday and wish him a happy day as well as a busy one. Does he agree that the Hyundai investment project would have been impossible if Scotland and the rest of the kingdom had been burdened with the social chapter and the national minimum wage, let alone the tartan tax north of the border? Is it not much more likely that the success of the Scottish Office in attracting that investment has been brought about by the successful economic, education and training policies carried out in Scotland in the past 17 years?

I am grateful to my hon. Friend for his birthday wishes. On my birthday last year, my right hon. Friend the Minister of State arranged for me to open the Skye bridge, and it is a delight to be at Scottish Question Time today.

My hon. Friend the Member for Swindon (Mr. Coombs) points to an important factor in inward investment. Such companies are coming to Scotland not for the climate but because we offer a quality work force and a competitive environment. That means low taxes and low inflation. Undoubtedly, if we had the social chapter, the minimum wage and the tartan tax we would be disadvantaged in that international competition. and jobs and investment would be put at risk.

How many, if any, foreign companies have recently located in the city of Glasgow? What is the right hon. Gentleman doing to help Glasgow's efforts to attract inward investment to the city?

I am happy to do all that I can to attract investment to Glasgow. One of the first things that we need to do is to get rid of the high-spending Labour council that has made Glasgow uncompetitive.

In view of today's excellent news of a drop in the unemployment figures for Scotland, will my right hon. Friend give an approximate estimate of the number of new jobs in the pipeline for Fife brought by Locate in Scotland and, no doubt, by local enterprise and the local council? Has he ever heard a word of commendation and thanks from the Opposition Front-Bench spokesmen for the tremendous achievement in Fife, bearing in mind the doom and gloom they put out when times were difficult?

My hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch), the industry Minister, tells me that the total is 9,000 jobs. That is a significant achievement for Scotland. The Government have played their part, but it would be wrong not to draw attention to the part played by Fife council and the local enterprise companies in achieving that success. It means that we have delivered what we promised. Following the closure of both Rosyth and Ravenscraig, we promised that we would bring new jobs and new opportunities to those areas. That has happened because we have embraced the enterprise culture and been prepared to go out and win business for Scotland. The people of Scotland have reciprocated and I believe that as we approach the millennium we shall see more and more examples of people locating in Scotland because of the environment that we offer and will continue to offer under a Conservative Government.

Is it not likely that the owners of Hyundai, although South Korean, can read English and that they know from opinion polls and from the opinions of every serious commentator that there will be a Labour Government before Hyundai lays a brick or makes a single thing in its new plant in Dunfermline—a Government who will have signed up to the social chapter and introduced a national minimum wage? Does that not give the lie to the smear that our policies are somehow a disincentive to inward investors? Can the Secretary of State say, with his hand on his heart, that the Hyundai spokesmen ever raised with him any concern about an incoming Labour Government's commitment on the social chapter and a minimum wage?

I congratulate the hon. Gentleman on the size of his cigar—I do not know whether it is a birthday present for me or a sign of new Labour. The answer to his question is that I visited Korea earlier this year and the social chapter was one of the issues that were regularly raised with me by companies such as Hyundai in relation to their concern about costs. Indeed, I have unashamedly sold Scotland on the basis that we do not have the burdens carried by other European countries being considered as a location.

As for the hon. Gentleman's point about opinion polls and press reports, the people with whom we deal in inward investment are very sophisticated, very intelligent and very clever and they will no doubt take account of the fact that the opinion polls before the last election predicted the result that the hon. Gentleman would have wanted. He will find himself disappointed once again.

Does my right hon. Friend agree that it is essential not only for inward investment but for indigenous companies to have a competitive economic environment in which they can continue to succeed? Has he, like me, been approached by a number of individuals in senior appointments in Scottish companies who are deeply concerned about the impact of a possible tartan tax and other policies which might erode that competitive environment? They have told me clearly that they will move.

I agree that the tartan tax would be a disaster for Scotland and it would certainly put us at a disadvantage compared with the rest of the United Kingdom in attracting inward investment. My hon. Friend is right to point out the importance of costs. For example, in my discussions with Hyundai, one of the issues on which we focused was the cost of electricity in Scotland which, thanks to our privatisation programme, has been falling and has therefore made us more competitive. We had a long discussion about the relative cost of electricity in Scotland versus the cost in the United States. It is extremely naive to assume that those companies will not examine employment costs. The point about the social chapter and the tartan tax is that they add to those costs in an industry in which labour costs are very important.

I welcome the announcements made during the recess of 200 jobs for Rhor and a further 100 jobs for Western Welsh in my constituency. I also welcome the intended £250 million private finance initiative investment for the new air traffic control centre in Prestwick. May I ask my right hon. Friend to press that issue hard with the Treasury and with the Department of Transport?

My hon. Friend seems to fill every post with letters to me on that issue, and I know of his enthusiasm to ensure that Ayr benefits from that private finance initiative. I also very much welcome the support that he has had from Opposition Members for it. My hon. Friend's arguments will of course be made robustly. As he knows, this is a matter for my right hon. Friend the Secretary of State for Transport, with whom I have had occasion to discuss the matter following my hon. Friend's representations, and he has assured me that he has been inundated with information on this matter from my hon. Friend. I know that my right hon. Friend will carefully consider all the arguments so robustly made by my hon. Friend on behalf of his constituents.

I am grateful for my hon. Friend's welcome for the good news in Ayr. There are more jobs in Ayr, and the prospects for employment for people in Ayr are very strong. I know that my hon. Friend will continue to represent the people of Ayr for many years to come.

The Secretary of State will be aware of the recent announcement of the closure of Robert Wilson and Sons—established in 1849 in my constituency—with the loss of 280 jobs. In those circumstances, does the Secretary of State agree that it is surely wrong to take a decision, which he has already taken, for the early wind-up of the development corporation in Irvine? The redundancies at Robert Wilson and Sons are only the latest of many redundancies in my constituency, and they clearly demonstrate the folly of the early wind-up of the development corporation in Irvine.

I share the hon. Gentleman's enthusiasm for ensuring that we minimise job losses in his constituency and maximise new opportunities. If he has specific proposals that he would like to discuss, having written to me on the subject, my hon. Friend the Under-Secretary of State for Scotland with responsibility for industry and local government would be delighted to see him.

I warmly welcome the announcements of inward investment coming to Scotland, especially the Hyundai investment in Dunfermline and the Chunghwa and Lite-on decisions in Lanarkshire. I congratulate all who were involved in local and national Government on bringing those valuable jobs to Scotland. I should, however, remind the Secretary of State of the reality that must have faced those intelligent and highly astute inward investors. They were faced with a situation in which we are six months away from a general election and in which the governing party in Scotland has a miserable 13 per cent. approval in public opinion—just 1 per cent. higher than when the Secretary of State took office a year ago. They could have come to only one serious conclusion—that there will be a Labour Government and that that Government will achieve constitutional reform and a Scottish Parliament for Scotland based, through a referendum, on the specific consent of the Scottish people. Those investors, like the majority of the Scottish people, concluded that a Labour Government will be good for Scotland and good for their industrial future.

Oddly enough, I did not feel that it was part of our marketing of Scotland to draw attention to the possibility suggested by the hon. Gentleman. Telling inward investors that there was a prospect of a Labour Government, who would impose a specific higher income tax rate in Scotland, does not seem to me to be a very attractive prospect to outline when one is competing not only in terms of the United Kingdom versus Belgium or Ireland, but in terms of Scotland as the preferred location in the United Kingdom. I did not feel that it was incumbent upon me to draw attention to the hon. Gentleman's aspirations.

On inward investment, it is striking that those companies plan on a long-term basis and try to minimise uncertainty. If they have observed the antics of the Labour party in Scotland, they will have seen four changes of policy on devolution and the tartan tax. They may believe that reality will break in and the Labour party will have to abandon its plans for a tartan tax and a tax-raising Parliament if it eventually decides to put the interests of country before those of party.

Local Government Finance (Clackmannanshire)

To ask the Secretary of State for Scotland when he intends to meet Clackmannanshire council to discuss local government finance. [38707]

Neither the hon. Gentleman nor Clackmannanshire council has requested such a meeting.

Since the question was tabled, there has been some movement by the Government, which the local authority welcomes, in respect of the funding of the A907 improvements. However, two other aspects of local government financial problems require attention. One is the partnership priority area bid and the competition for additional funds, for which Clackmannan is in contention. Will the Minister tell us when the bidding process will be completed and when an announcement is likely to be made?

The second aspect relating to the road system in Clackmannanshire is the likely construction of a westward element to the Kincardine bridge. When will an announcement be made about that? It is important for the industrial development of an area in which, even allowing for the slight improvement in unemployment figures today, 18 per cent. of males capable of working and ready to work cannot get jobs. Will the Minister act as a matter of urgency to resolve these matters so that the anxieties of people in Clackmannanshire can be allayed?

I am glad that the hon. Gentleman recognises that the Government have moved to help Clackmannanshire council. I thought that he might ask for a meeting with me, in which case I would have suggested that he bring the newly elected Conservative councillor, Alastair Campbell, who on 10 October increased the Conservative majority in a by-election in Clackmannan. I congratulate Mr. Campbell and wish him well in bringing common sense to Clackmannan council.

With regard to the specific issues that the hon. Gentleman raised, I am assured by my right hon. Friend the Minister of State, who is responsible for transport matters in Scotland, that announcements will be made shortly.

Can my hon. Friend confirm that grant support in Scotland is 44 per cent. higher than in England, and how can I justify that to my constituents?

Order. We are dealing with a particular council. The hon. Gentleman is aware— [Interruption.] Order. I will deal with this. The hon. Gentleman will relate his question to Clackmannanshire, or he will not be called. Which is it to be?

I have visited Clackmannanshire four times in the past two years, but I doubt whether the hon. Member for Clackmannan (Mr. O'Neill) has ever visited my constituency.

Will my hon. Friend the Minister comment on the profligacy of Liberal and Labour-controlled councils such as that of Clackmannanshire?

My hon. Friend is right that Labour-controlled local authorities and some Liberal Democrat and Scottish National party local authorities have complained that they must make cuts in expenditure this year—at a time when, as my hon. Friend rightly stated, they are being funded by central Government with taxpayers' money at 44 per cent. more per head than those south of the border. Clackmannanshire has a budget this year which enables it to increase last year's budget by almost 6 per cent.; yet like many other Labour councils, it is talking of cuts. That is because of their inheritance from outgoing councils which did not adhere to budgets. That is typical of the financial management of the Opposition parties. We believe in setting budgets and keeping to them.

When will the Minister face up to the crisis in local government finance in Clackmannanshire and elsewhere, which arises from the Government's squeeze on spending and from their serious underestimate of the costs of local government reorganisation? Why is his response a planned 1.4 per cent. cut in grant levels for next year, which would mean massive council tax increases in Clackmannanshire and elsewhere simply to keep cash budgets at their present unsatisfactory level? If tomorrow's joint report by the Chartered Institute of Public Finance and Accountancy and the Convention of Scottish Local Authorities on the costs of local government reorganisation confirms what Labour has been saying, will the Minister undertake to increase grant levels so that local council tax payers do not have to pay the price for this Government's miscalculations and incompetence?

If the hon. Gentleman knew how government worked, he would know that it is far too early to talk of next year's settlement. Equally, I suspect that it is too early realistically to look at the cost of reorganisation to local authorities. Indeed, as I travelled around the country during the summer and visited many local authorities, I was appalled to find that most of them were unable even at that stage of the year to present management accounts to enable councillors to determine how they were performing against budget. That indicates to me that it is difficult for councils to make the sort of statements that the hon. Gentleman is making, which are simply scaremongering.

The amounts involved are in any case nothing in relation to the cost to the taxpayer that would result if the hon. Gentleman's party got the £395 million extra expenditure that it asked for last year. The hon. Member for Dundee, East (Mr. McAllion) at least had the decency to try to find a source for that money in that he indicated that it could come from the health service.

The hon. Member for Edinburgh, Leith (Mr. Chisholm) should talk to councils and find out some facts rather than just feelings before he makes such reckless statements.

Does my hon. Friend agree that compulsory competitive tendering has been of great benefit to local authorities in Clackmannanshire and elsewhere? Does he agree that in opposing CCT the Opposition have shown that they are much more interested in jobs for the boys than in value for money for the taxpayer or quality of service for council service users?

My hon. Friend is absolutely right. I find it unbelievable that elected councillors, who are elected to look after taxpayers' money and to try to provide services in the most cost-effective way, are so reluctant to put tenders out to competition not only to themselves but to the private sector. I should have thought that if by doing so they could gain savings for taxpayers in their area, they would have welcomed that. My hon. Friend is absolutely right to say that they do not recognise that competition brings improvement and better value for the taxpayer, although that is what they were elected to achieve.

Hampden Park Stadium

To ask the Secretary of State for Scotland if he will arrange to meet representatives of the Scottish Football Association to discuss funding of the final phase of the Hampden Park development. [38708]

My right hon. Friend announced at Hampden Park on Wednesday 18 September that the Scottish Office would contribute up to £2 million towards the redevelopment and rebuilding of the national stadium.

On behalf of the all-party Scottish sports group, may I thank the Minister for the Government's contribution which we hope will help to ensure that the Scottish football team and their supporters get the high-standard national stadium that they need and deserve? Will the Minister take this opportunity to congratulate the Scottish football team on their progress in the World cup, even though Scottish Tories may feel some empathy with Estonia since the Scottish Tory party with only 10 Members of Parliament cannot field a team in the House?

I am grateful to the hon. Gentleman and, indeed, to the all-party Scottish sports group for their kind words about our decision. I am sure that he will join me in congratulating Austin Reilly and the National Stadium Committee on their tireless efforts to ensure the funding necessary to match the lottery donation of £23 million from the Millennium Commission. That will ensure that Scotland has a world-class stadium for the new millennium.

Like the hon. Gentleman, I hope that we shall see world-class displays from the national team to match. I congratulate the national team on their brilliant performance in Latvia, where they put two past the Latvians, and against Estonia, when they showed that keeping possession and playing one-touch football really can win games. I am afraid that that match was a bit like Scottish questions—no opposition.

Forestry

To ask the Secretary of State for Scotland how many people are currently employed by his Department on forestry matters; and what was the figure in 1990. [38709]

The Forestry Commission currently employs 3,600 staff throughout Britain, compared with 4,800 in 1990.

I thank my hon. Friend for that helpful and reassuring reply. May I also add my congratulations to those of my hon. Friend the Member for Swindon (Mr. Coombs) to Scottish Office Ministers on their efforts in securing inward investment to Scotland? Can my hon. Friend explain, however, why forestry is the specific responsibility of his office?

It is because there is a large amount of forestry in Scotland—[Interruption.] My right hon. Friend the Secretary of State for Scotland seems to be lapsing into my habit on previous questions from my hon. Friend by saying that perhaps at the Scottish Office we can see the wood for the trees.

That is a hard one to follow. Is the Minister aware that I warmly welcome the additional jobs in forestry to be created by the Egger chipboard factory proposed for my constituency and that I have personally thanked the officials from Locate in Scotland who helped to obtain that? Will the Minister be equally honest and frank about the unemployment figures? Is he aware that over the past three months the Labour party has carried out a door-to-door survey of every house in New Cumnock? The full detailed results, to be published tomorrow, show that the real level of unemployment in New Cumnock is well over twice the official statistics, and I am sure that the same is true throughout Scotland and the United Kingdom. Why do the Government not tell the truth about unemployment, just as I have been honest about Egger?

The hon. Gentleman gets very heated about these matters. Having visited that part of the world during the summer, I understand the difficulties when there is unemployment in an area, but that is all the more reason why we should concentrate effort on trying to bring new industry to the area. I welcome his comments regarding Egger. We are not quite there yet but, as the hon. Gentleman knows, the company has indicated that it wishes to build a new chipboard manufacturing plant at Barony, which is very good news for east Ayrshire. Like my hon. Friend the Member for Ayr (Mr. Gallie), the hon. Gentleman should recognise that there have been other successes in his part of the world: we have brought the inward investment company AI(R) to Prestwick and we shall continue to make every effort to encourage further investment and to address the unemployment problems that I recognise exist in his area.

European Union Policies

To ask the Secretary of State for Scotland what plans he has to visit the office of the representative of the European Commission in Edinburgh in the near future to discuss EU policies affecting Scotland. [38710]

None.

Despite that answer, does my right hon. Friend agree that what strikes visitors from England about Scotland is the strong enthusiasm for United Kingdom membership of the European Union and the strong feeling that European Union membership has been good for Scotland in respect of specific policies? Will he finally overcome the hesitations that he has just demonstrated by persuading some of his English colleagues in the Government of the necessity of showing more enthusiasm for Europe and perhaps even considering the daring possibility of accepting the invitation to become a patron of the European Movement?

I am grateful to my hon. Friend for his question. I have declined the invitation to be a patron of the European Movement because I would find it difficult to sign up to a series of proposals within its programme of objectives. As for his point about visiting the office concerned, my understanding is that the European Commission office in Edinburgh exists to promote the European Commission and is not concerned with matters of investment and manufacturing. I believe that Europe offers Scotland a tremendous opportunity as a Europe of nation states offering a market for our people, but I totally reject the view of a Europe of the regions that would reduce Scotland to regional status in Europe, which is the policy of the Scottish National party, the Liberal party and the Labour party.

When the Secretary of State next meets Mr. Kenneth Monro, the European Commission representative in Edinburgh, will he take the opportunity to discuss the repayment of the illegal payment of some £600,000 that was made to Tate and Lyle? Under European Union law, that money should not have been paid to that multinational which is quitting Greenock next year. May I remind the Secretary of State that on 26 June I wrote a letter on the issue to his hon. Friend the Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside (Mr. Kynoch), but that as yet I have not had the courtesy of a reply?

The hon. Gentleman says that he has not had a reply, and I apologise for that unreservedly. He shall have a reply this week. No, I will not be discussing the matters with the representative, because it is not really what he is there for and would not he relevant. Although I hesitate to fill up the diary of my hon. Friend the Under-Secretary, the Member for Aberdeen, South (Mr. Robertson), I am sure that he will be very happy to see the hon. Gentleman. I know how hard my hon. Friend worked to try to ensure that Tate and Lyle stayed in Greenock, where it had been for many years, and I know of the impact that that decision had on the community. I know that the hon. Gentleman worked very closely with my hon. Friend and the trade unions to do everything possible to try to maintain employment in the area. In that spirit, I am sure that, if the hon. Gentleman has not received a reply, it is certainly not through any deliberate intention.

As one of the patrons of the European Movement in Scotland, I am disappointed that the Secretary of State has not joined us, but pleased that his right hon. Friend the President of the Board of Trade continues to subscribe to many of the European Movement's objectives.

If the Secretary of State is not prepared to go to the office of the European Commission's representative in Edinburgh, will he at least take the opportunity to engage with some of the European institutions with regard to two important Scottish industries—the fishing and fish farming industries—and specifically state what steps he is proposing to take forward the case against quota hopping? Will he ensure that we have substantial indigenous fish farming in future? That will require considering the imposition of duty on imports of fish farm products from countries such as Norway, which is dumping them, and not having to wait for a considerable period of time for a report of the European Commission's case on anti-dumping.

I would be very happy to be in any organisation with the hon. Gentleman, but I shall resist the invitation. My right hon. Friend the President of the Board of Trade has always had a reputation for being somewhat more broad-minded than me on a variety of matters.

On the hon. Gentleman's serious points, he is of course absolutely right to draw attention to the importance of quota hoppers. We shall raise the issue at the intergovernmental conference. I am not sure whether people realise just how important the farmed salmon industry is to Scotland—certainly to the hon. Gentleman's constituency and the west of Scotland. My hon. Friend the Minister responsible for fisheries has been to Norway, entertained the Fisheries Minister in Scotland and worked hard with colleagues. The industry is fighting hard. It has our support and I share the hon. Gentleman's determination to tackle the problems. It is experiencing unfair dumping as a result of overproduction in Norway, which is putting it at risk. We must do everything that we can to support the industry.

Is not the Secretary of State having great difficulty referring to antecedents in the context of the European Movement because his heroine, Baroness Thatcher, was also a patron of it? Perhaps he would like to dwell on that.

On the points raised by the hon. Member for Orkney and Shetland (Mr. Wallace), will we have to wait on the Irish Government to fight for the fish farming industry in Scotland? What exactly will the Scottish Office say at the IGC about the common fisheries policy and the implications for the thousands of jobs in Scotland that depend on that industry?

I know that the hon. Lady has a constituency interest. If she would like to discuss the issues with me, I shall be very happy to do so. I am surprised to learn that my right hon. and noble Friend Baroness Thatcher is a patron of the European Movement. Despite that, I have no plans to reconsider my decision.

Does my right hon. Friend agree that, in Scotland's dealings with the European Union, as with those of all parts of the United Kingdom, when Germany east and west is united, it is essential that the components of the United Kingdom remain together in union, speaking with a single voice, rather than being picked off individually as separate units? For Scotland and England, is it not vital to be together within Europe, as with our dealings with the rest of the world?

I agree. The proposals for a Scottish Parliament envisage somebody shuffling down from Edinburgh to sit alongside the United Kingdom representative, who would be guided by decisions in this House. The hon. Member for Moray (Mrs. Ewing) has drawn attention to the importance of fishing and fish farming to Scotland's future. The idea that Scotland's representation should be reduced to someone who would not speak for Scotland's interest and would not have the power to carry the vote for Scotland's interests—

Douglas Hogg?

would be deeply damaging to Scotland. The hon. Lady's position is better than that of the other Opposition parties in that respect, in that she wants an independent Scotland with its own representative—assuming that Scotland could then continue as a member of the Community. Unfortunately, as a small country dependent on the Community for support, our voice would be greatly diminished, as opposed to our being part of a United Kingdom with the power, the influence and the strong voice in Europe that has been our tradition, and is our future.

When the Secretary of State next decides to visit the office of the Commission in Edinburgh, will he do so in a spirit of contrition and humility in view of the anger and dismay expressed by the National Farmers Union of Scotland, Sandy Mole and others, about what they call the "bumbling shambles" of the bovine spongiform encephalopathy policy? In walking away from the Florence agreement, does the Secretary of State not realise that he is jeopardising 37,000 jobs in Scotland—as witnessed by the 300 jobs lost in Kilwinning last week? Is he not aware that the export of beef is crucial to the Scottish economy, so good relations with Europe are essential? Will he therefore stop relying on a policy designed to allay the fears of the Euro-sceptic wing of the Tory party at the expense of the fragile rural and farming areas of Scotland?

I am sorry that the hon. Gentleman seeks to politicise an issue that is important for Scotland's economy. We are not abandoning the Florence agreement, and I do not believe that we would be able to stand up for the interests of Scotland's farmers, or of anyone else, by adopting the kind of policy suggested by the Leader of the Opposition, who has said that he would never be isolated in Europe. That means that he would never say no, and would never stand up for Britain's interests, for Scotland's farmers or fishermen, or for anyone else. The hon. Member for Dumbarton (Mr. McFall) is right to draw attention to the importance of the export business. That is why we shall continue to argue the case for Scottish beef, which is the best in the world and should have access to those markets. When I voted to join the European Community, I was told that I was voting for access to a single market for our producers. That is what we expect to have under the treaty, and that is what we intend to see delivered.

Scottish Grand Committee

To ask the Secretary of State for Scotland what assessment he has made of the impact of the work of the Scottish Grand Committee on the work of his Department in the current Session of Parliament. [38711]

Meetings of the Scottish Grand Committee fall within the parliamentary responsibilities of Ministers and the normal duties of officials.

Is the Minister aware that, when my teenage son asked me whether the Scottish Grand Committee was a quango, I had to explain that it was nothing like as powerful as that? Will he confirm that the substantive decisions taken by the Scottish Grand Committee in all its travels round 11 locations in Scotland this year have been as follows: the Second Reading of the Deer (Amendment) (Scotland) Bill, the Second Reading of the non-controversial Licensing (Amendment) (Scotland) Bill, and no fewer than 24 resolutions "That the Committee do now adjourn"? Does the right hon. Gentleman accept that the time has come to adjourn that token Committee once and for all, and to allow the people of Scotland to elect their own Parliament to control their own affairs?

I wholeheartedly disagree with the hon. Gentleman. The Scottish Grand Committee has been an enormous success and has greatly improved accountability. Many positive decisions relating to areas throughout Scotland have issued from it. It has been responsive to representations from local communities. The hon. Gentleman should bear in mind the fact that his party's proposals for a Scottish Parliament would cost no less than £36 million in capital costs and well over £40 million a year in running costs. The running costs of the Scottish Grand Committee are negligible in comparison, and I believe that it performs a great service to the nation.

Does my right hon. Friend agree that, despite what Opposition Members say, the movement of the Grand Committee around Scotland has been a great success? Cannot the Committee do almost everything that a Scottish Parliament could do—except raise the tartan tax? Does he agree that we should continue the policy this year? Perhaps we could end up with another great event in Dumfries this year—even if we do not have Robert Burns to celebrate in 1997.

My right hon. Friend is absolutely right to highlight the fact that the Scottish Grand Committee met successfully in Dumfries—it was the first time that a Prime Minister had ever addressed the Committee. So successful was the experiment that it is now to be extended to Northern Ireland, and Wales is following our example. That is wholly admirable.

The tartan tax would be an appalling infliction and would probably mean that the average individual in Scotland would pay £6 a week extra in taxes, which would damage jobs and services.

Apart from the extra cost of making some hon. Members travel more, how much has the travelling circus cost? What has been the impact of the Grand Committee on the Scottish Office, given that the Committee cannot make any decisions about anything?

If the hon. Gentleman is saying that he and his colleagues have no influence, he is incorrect—as long as they are doing their jobs properly. Hon. Members who operate effectively and use the parliamentary machinery available to them can have great influence on behalf of their constituents. The costs of running the Grand Committee are negligible in comparison to the cost of a Scottish Parliament, and the people of Scotland will keep that in mind.

But what has the Scottish Grand Committee actually done?

It has met on a great many occasions. [Laughter.] What is more, it has listened to many representations—some of them from the hon. Gentleman who, if I remember correctly, argued for stronger action to be taken by the Law Officers against drug dealers and vandals in his constituency. We were glad to respond to the problems in his area.

Government Of Scotland

To ask the Secretary of State for Scotland what representations he has received on the government of Scotland. [38712]

I have had lots of representations on the government of Scotland, and in particular about the adverse effect of a tartan tax that would hit the work force and pensioners in Scotland harder than those in other parts of the UK.

If a Scottish Parliament with tax-raising powers were created, would not my constituents in Chingford be right to question the funding arrangements whereby the United Kingdom Government would spend more per head in Scotland than in England? Does my right hon. Friend agree that that would lead directly to a schism between England and Scotland, and thereby to exactly what the Scottish National party wants—a separate England and a separate Scotland?

I agree with my hon. Friend to the extent that Labour's unstable proposal would lead to conflict between Westminster and the Edinburgh Parliament and that funding would certainly become an issue. The supporters of this policy include the Liberal Democrats, who have argued for a reduction in the number of Members of Parliament and the loss of the office of Secretary of State for Scotland, which would diminish Scotland's voice in this House, where the funding of Scotland's vital services is determined. That in turn would put those services at risk, and is a recipe for corrosive acrimony and discord.

My hon. Friend is right to say that that move would play straight into the hands of members of the Scottish National party, who seek the break-up of the United Kingdom. I hope, therefore, that Opposition Members who realise that will ask those Labour Members who adhere to the scheme to think again.

In a recent speech, the Secretary of State denounced nationalism as "patriotism gone to seed", among other things. Will he denounce that form of British nationalism that wraps itself in the Union flag, indulges in blatant anti-European sentiment and displays not so much love of our country as loathing of the countries of other Europeans? If not, can we conclude that he is a secret supporter of that ugly face of British nationalism that is associated with the Euro-sceptics in his party?

I am delighted that the hon. Gentleman is reading my speeches. He will have seen that, in the same speech, I described patriotism as being based on love of one's own country, not hatred of other people's. The hon. Gentleman can take my words for what they are. He has sometimes had difficulty deciding whether he is a nationalist or a socialist.

Both.

I will not link both because that might get me into some trouble. In that speech, I was drawing attention to the failure of the hon. Member for Banff and Buchan (Mr. Salmond) to condemn a recruiting leaflet produced by young Scottish nationalists which denounced English people in filthy and abusive terms. He has refused, and he has the opportunity to do so this afternoon.

On the question of Scottish governance, and given the Secretary of State's announcement last week of the inaugural meeting of the highlands and islands convention, could I indicate to the Secretary of State on behalf of my hon. Friends in the area that we look forward to participating in that meeting? I must also place it on record that we will at the outset raise the question of the convention deciding for itself who should act as the chair and of it having ownership of its agenda. Does the right hon. Gentleman agree that it is absurd to have a consultative body to the Executive that in itself will be chaired and driven by the person in charge of the Executive?

If the hon. Gentleman takes that attitude, it will not work. We have tried to set up a body made up half of elected members and half from other bodies. The purpose is to come together with my hon. Friend the Minister with responsibility for the highlands and me to discuss issues that we can approach on a cross-party basis. It is meant to be not an Executive, but a consultative, body. If the hon. Gentleman wants to be in the chair, he must win the next election.

The convention is not set up as some sort of Executive body. It is there to try to find common ground and ensure that those people, both elected and unelected, in the highlands have an input. The hon. Gentleman's ambitions go beyond that. I hope that he will adopt a co-operative attitude. Many people in the highlands would welcome that. I appreciate that he would rather have something else, but that is not something that I am in a position to deliver and it would not be the right thing to do.

Does my right hon. Friend agree that the most effective and efficient mechanism for a Government with a majority of Scottish Members of Parliament—if they are determined to have a body legislating in Scotland—is to use the Scottish Grand Committee and their majority in it? In such circumstances there is no need to set up other, expensive establishments.

My hon. Friend makes an interesting point. In a Scottish Grand Committee under a Labour Government—perish the thought—a majority of members would be of the Government side, otherwise there would not be a Labour Government. That means that the Grand Committee would be able to pass legislation, hold the Executive to account and do everything and more that a Scottish Parliament could do. As my right hon. Friend the Minister of State pointed out earlier, the only thing that it could not do is raise the tartan tax. Too many people are keen to pay extra tax in Scotland compared with England.

Campbeltown To North Antrim Ferry

11.

To ask the Secretary of State for Scotland what assessment he has made of the tourist potential for Scotland of the proposed ferry from Campbeltown to North Antrim. [38715]

It is difficult to make a precise estimate of the benefits, but I am certain that the new ferry service will be of enormous tourism benefit to Campbeltown and the west of Scotland as a whole. I also believe that it will be of benefit to Northern Ireland and that it opens up the possibility of people doing a round trip and seeing parts of Scotland and Ireland that might otherwise be less accessible. I pay tribute to the way in which the hon. Gentleman has worked to make the project a success.

I welcome the statement by the Secretary of State. The project has gone beyond the proposal phase and should be in operation next summer. We welcome its linking of the kingdom of Dalriada and I am glad that the Secretary of State agrees that it will release Campbeltown from an experience, at times, of isolation and make it part of a through route for tourism, to our mutual benefit.

I am grateful to the hon. Gentleman and to the hon. Member for Argyll and Bute (Mrs. Michie), who also played a part. My only regret is that it took so long to bring the matter to fruition. Those who have followed the project realise that it took so long because there have been serious difficulties in achieving it, but it has been worth fighting for and I am glad that it is on course to start next summer.

I, too, welcome the announcement, at long last, of the ferry service, although I am disappointed that Caledonian MacBrayne was not allowed to run it. It will nevertheless make a significant difference to Campbeltown and to the Kintyre peninsula. For how long does Sea Containers have the contract? Is the Secretary of State expecting the service eventually to run all year, so that we can build up not only a good tourist service, but a good import-export service?

I shall take the hon. Lady's point about CalMac head on. I spent a considerable time this summer going around islands, and in her constituency. The unique circumstances in those areas and the importance of ferry services are perfectly apparent. We must consider the support that we provide through CalMac for ferry services for the future.

It was important for the new route to be established. It was possible to achieve that with a private sector operator taking the risk, which means that CalMac's available public capital and running costs can be deployed on maintaining other services and introducing new ones. It must be the right approach to use the state nationalised service and the scarce resources available to it as wisely and as effectively as possible. That was what lay behind our thinking.

I must confess that I am not immediately au fait with all the details of the contract, but I shall write to the hon. Lady and if she has any concerns, I shall be pleased to consider them.

Hon. Members of all parties welcome the new ferry service, which will link two beautiful parts of the British Isles, but is not it absurd that the Secretary of State for Scotland cannot give a convincing reason why public assets have been gifted to a private company, Sea Containers, when CalMac would have been perfectly capable of running the service as it did in the past? Will the Secretary of State admit that he is so in thrall to his narrow right-wing ideology that he is prepared to gift to a private sector company public assets at the taxpayer's expense?

The hon. Lady should take a week off to read the speeches of the right hon. Member for Sedgefield (Mr. Blair), as she is talking old Labour. She is arguing that, when a private sector operator is prepared to provide finance, purchase the ferry and take the risk on its working—even the most enthusiastic supporters have questioned its viability—we should ask the taxpayer to do it instead. That is nonsense. We should use taxpayers' resources as wisely as possible. The resources that we have for CalMac should be used to run the services that the private sector cannot run.

Dermatology Patients

13.

To ask the Secretary of State for Scotland how many hospital beds are available in Scotland for dermatology patients [38719]

At 31 March 1996, 207 beds were available and, in the year to that date, nearly 13,000 treatments for dermatology were carried out. That was 27 per cent. more than in the previous year.

The dermatology unit in Stobhill hospital is excellent and serves communities as far away as Falkirk, but the worry is that the beds are being taken away and it is my understanding that those requiring a bed will have to go to the Western infirmary. May I urge caution, because some of the hospital trusts, although they mean well, are trying to operate their hospitals as slick business operations, when first and foremost they should look after the interests of the patient?

I should explain to the hon. Gentleman that there have been some changes in clinical practice, including the introduction of a great deal more day care, which has been successfully introduced at Stobhill. There has been consultation. The health board is now purchasing in-patient dermatology services from the Western infirmary, where bed capacity has been increased. Glasgow is well provided with dermatology beds, having approximately four times as many in-patient dermatology beds per 100,000 of population as London. Overall, the hospital trusts are sensitive to the point made by the hon. Gentleman.

Is the Minister aware that the all-party group on skin, which is very active in the House and of which I am an office bearer, has been looking into dermatology services? I am deeply concerned that the type of in-patient provision described by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin), when someone undergoes tar treatment for severe skin disorders, is the only time that they can spend among others suffering the same disease. Relaxation is very important. Day care is no substitute for the relaxation that comes from week-long stays in hospitals such as Stobhill.

The Minister seems to ignore the fact that the service provided at Stobhill is for nearly all of Scotland, not just for Glasgow. It is for people in my constituency and many others in Scotland. It is not sufficient at the moment and should be expanded, not cut down.

If there are complaints about clinical practice, I should be grateful if the hon. Gentleman would give me the details, which I shall investigate. There has been an increase in out-patient facilities at Stobhill. Since the date of transfer of services from Stobhill catchment area, only a handful of patients have required in-patient treatment at the Western infirmary. Out-patient treatment has increased. If there are cases of dissatisfaction with clinical decisions, I should be grateful if the hon. Gentleman would let me know.

Stone Of Destiny

14.

To ask the Secretary of State for Scotland what representations he has received about the future location of the Stone of Destiny; and if he will make a statement. [38720]

I have received a number of representations on the location of the Stone of Destiny on its return to Scotland, including from my hon. Friend.

I thank my right hon. Friend for that answer. Can he confirm that no final decision has yet been reached and that the proposals for a kingship centre and for the stone to be located at Scone are still in the running?

I can confirm that no announcement has been made; I hope to make one shortly. The announcement will take full account of the representations made by my hon. Friend, in particular his proposal for a kingship centre at Scone.

As the other Member of Parliament representing Perthshire, may I add my voice to those who have called for the stone's ultimate return to Scone, where it of course belongs? When that great symbol of Scottish nationhood is returned, will the Secretary of State also consider the return of some of the realities of our nationhood?

I am grateful to the hon. Lady for her representations. The important fact is that the stone will return to Scotland on the 700th anniversary of its removal. I am sure that its place in Scotland will be more permanent than the hon. Lady's place in Perthshire.

Will the Secretary of State admit that there is really only one place for the Stone of Destiny to rest—in the capital city of Edinburgh? Will he assure the House and the people of Scotland that, wherever the Stone of Destiny is lodged, it will be accessible to as many people as possible, and certainly to people with disabilities?

The criteria that need to be met for the placing of the stone were set out fully in the consultation paper. We have received a number of representations, although I am not aware that the hon. Gentleman made one. I can see that he is now doing so from a sedentary position. I promise that I will revisit the representations before making an announcement.

Deregulation

15.

To ask the Secretary of State for Scotland what new deregulation initiatives he intends to introduce in the next six months. [38721]

The Scottish Office will continue to take action on all aspects of the Government's deregulation initiative.

While I pay tribute to the Secretary of State's well-known commitment to promoting the Government's policy of deregulation, does my hon. Friend agree that the test for the Government is how many rules and regulations that impinge on business they have repealed, rather than to argue that, but for the Government's deregulation policy, there would have been even more statutory instruments? Since January 1994, there have been 8,101 statutory instruments.

My hon. Friend is absolutely right. He will appreciate that much business legislation is United Kingdom-wide legislation, and therefore the responsibility of other UK Departments. I can assure my hon. Friend, however, that we in the Scottish Office are adamant that we will reduce the burden on industry and encourage business in Scotland. That is something which the Opposition parties are totally against, because all their proposals for business in Scotland are counterproductive, counter-competitive and would be bad news for Scottish business, and, therefore, Scottish employment.

How can anyone take the Government seriously when, of the 3,500 regulations that have been introduced and directly affect manufacturing industry, 2,625 have been introduced by this Government?

That is absolutely nothing, as the hon. Gentleman may realise in due course, compared with the burdens his party would put on Scottish business and United Kingdom business. I shall name but a few—the social chapter, the minimum wage and the tartan tax. They would all be exceedingly bad news for Scottish business, UK business and the people of Scotland.

Dunblane (Cullen Report)

3.30 pm

With permission, Madam Speaker, I should like to make a statement about the publication of the report of Lord Cullen's inquiry and the Government's response.

On 21 March, following a resolution of both Houses, I appointed the Hon. Lord Cullen to inquire into

"the circumstances leading up to and surrounding the events at Dunblane Primary School, to consider the issues arising therefrom, to make such interim and final recommendations as may seem appropriate and to report as soon as practicable."

Lord Cullen concluded that he should not make an interim report. He completed his report within the demanding timetable he set himself by the end of September. But I received a letter from the hon. Member for Hamilton (Mr. Robertson) saying that it would be

"wrong for the Report to be published during any one of the party conferences".

I discussed that request with him, and with the hon Members for Orkney and Shetland (Mr. Wallace) and for Banff and Buchan (Mr. Salmond), and with their approval I requested Lord Cullen to delay submitting his report to me until Monday 14 October. It is being published today, together with the Government's response, as a Command Paper. I can also tell the House that the report will be available on the Internet, so that there will be access around the world for those who expressed support for the community of Dunblane.

I am also grateful to you, Madam Speaker, for your agreement that I should allow the families of the victims to receive copies of the report and the Government's response ahead of its presentation to Parliament.

I am enormously grateful to Lord Cullen for the dedicated, prompt and efficient way in which he has carried out the inquiry. I appointed him in the knowledge of the careful way in which he conducted the Piper Alpha inquiry and the rigour and the practicality of his conclusions on that occasion. He approached the present inquiry with sensitivity, courtesy and care. As the inquiry proceeded, he deservedly gained the wide respect of the parties to the inquiry, the media and the public. He has had to consider the most harrowing of circumstances, and to acquaint himself with a number of very complex issues—issues which are of great concern to the people of Dunblane and throughout Scotland.

It was right for there to be a full investigation of all the background to the events of that day and of the policy questions raised by them. And it was essential that the House had before it a full analysis and the facts before attempting to reach conclusions about further action.

I can tell the House that we are going to accept all Lord Cullen's recommendations, and in some respects intend to go further. Many of the recommendations relate to firearms legislation for which my right hon. and learned Friend the Home Secretary has lead policy responsibility. He will be making a statement about that immediately after mine.

Lord Cullen's report describes in detail the tragic events of Wednesday 13 March. The gunman, Thomas Hamilton, entered Dunblane primary school shortly after 9.30 am and made his way to the gymnasium armed with two 9 mm Browning self-loading pistols and two .357 Smith and Wesson revolvers, together with 743 rounds of ammunition—all of which he lawfully held, and which he legally kept at home, together with more than 1,000 further rounds of ammunition. Within three or four minutes, he fired 105 rounds with the 9 mm Browning, resulting in the deaths of Mrs. Gwen Mayor and 16 children, and injuring a further three teaching staff and 14 children. He then used the .357 Smith and Wesson to take his own life.

Of the head teacher and his staff, the report says that they

"did everything that they possibly could to assist, far beyond what might reasonably have been expected of them".

Lord Cullen also commends the general quality of the work of Central Scotland police and, in particular, the individual officers involved. He records the gratitude of the relatives and the school authorities for the help, support and professionalism of the force. From my own experience on that day, and on the days that followed, I reinforce those tributes.

Lord Cullen is, however, critical of the delay in providing information to victims' families. Those criticisms were accepted by the chief constable of Central Scotland police, who made a written submission to Lord Cullen, identifying procedural inadequacies and suggesting improvements, which Lord Cullen has endorsed. The Government will ensure that those issues are discussed with police forces throughout the United Kingdom.

An ambulance and a team of doctors and nurses from the local health centre were quickly on the scene. The health service's major incident plan was implemented, and a number of expert teams from Stirling and Falkirk royal infirmaries went to the school. The report highlights the magnificent way in which all the health teams responded. The victims were taken to Stirling royal infirmary and Falkirk and District royal infirmary. The most seriously injured were later transferred to Yorkhill children's hospital. The professionalism of all concerned undoubtedly saved lives.

The report sets out the facts about Thomas Hamilton and his background, and Lord Cullen has considered, with expert advice from a psychologist and a psychiatrist, what may have prompted Hamilton's atrocious act. He concludes that

"the violence which he used would not have been predictable".

Hon. Members will want to study the report for themselves, but I conclude that this was an act of calculated wickedness.

Lord Cullen's report considers in great detail the granting and renewal of the firearms licences that Thomas Hamilton had held since 1977. He points to the weaknesses in the system used by Central Scotland police for the carrying out of inquiries and the making of decisions about firearms applications.

In particular, the report is critical of the former deputy chief constable of Central Scotland police, Mr. Douglas McMurdo, who was appointed earlier this year to Her Majesty's Inspectorate of Constabulary for Scotland. I thought it right that Mr. McMurdo should have sight of the relevant paragraphs in the report, and he has today offered his resignation, which I have accepted. He has informed the Scottish Office that he also intends to resign from Central Scotland police. The House will respect his decision.

The report makes two recommendations, which I have accepted, concerning improvements in school security. I will be introducing a specific grant to assist authorities to improve the security of school pupils and staff, and my right hon. Friend the Secretary of State for Education and Employment will be doing likewise in England. All authorities will benefit, and I intend that councils should have as much discretion as possible on the measures to be taken.

I expect such measures to be in line with the action plans that Lord Cullen encourages individual schools to draw up. They will add to the measures that the Government announced in May in response to the recommendations of the working group on school security.

Two further recommendations, which I have accepted, concern the vetting and supervising of adults working with children and young people. One concerns the development of a Scottish vocational qualification in respect of work with children, including the organisation of clubs and child development and protection. The other involves accreditation, by a national body, of clubs and groups involved with young people. That body would ensure that there are adequate checks on the suitability of leaders and workers with unsupervised access to children and young people.

I also intend to introduce legislation at the earliest opportunity to allow all youth organisations access to criminal records, and to certain other information that does not relate directly to criminal convictions and is held by the police. I appreciate that that may cause concern in some quarters, but I believe that the safety and protection of our children must come first.

The whole country has been struck by the courage and dignity with which the community of Dunblane has worked together in the aftermath of this terrible atrocity. That community now looks to the House for rapid and united action.

I thank the Secretary of State for his statement, and join him in thanking Lord Cullen for his report, and for the patient, thorough and painstaking way in which he conducted this important and sensitive exercise. The wide-ranging issues that he has examined and has made recommendations on emphasise the wisdom of holding this sort of inquiry, and I look forward, with my colleagues, with more time available, to examining in detail what he says.

I also express my personal gratitude and thanks to the Secretary of State for Scotland for the genuine kindness and consideration that he has shown to myself and to my wife during and after the tragedy—a tragedy that took place in the small town of Dunblane, which he represents and where I and my family have lived for over 20 years.

On 13 March, we were two rival politicians with politics utterly forgotten in the shadow of unspeakable evil and tragedy; two fathers united in total grief at the horror that we were to witness, and perhaps recall for ever, in a school that we both knew so well; two men, members of the human family, united then and now in an overriding conviction that this massacre, involving 16 tiny children and their brave, dedicated teacher, or anything like it, must never, ever, happen again.

That must, of course, remain the starting point for approaching any of the recommendations in Lord Cullen's report today and in the days ahead. Let me make it clear that I fully appreciate the feelings that the Secretary of State for Scotland must have experienced in these past seven months as he tried, as indeed I had to do myself, to reconcile strong personal feelings with an obligation to make the right decisions on changes to the law of the land.

I now turn to the detailed recommendations in the report. As the Secretary of State has said, Lord Cullen deals in some detail with the handling of the incident on the day, and, as he acknowledges, there was here an incident of unprecedented scale, involving such horrifying carnage that no one could have been fully prepared to deal with it, still less one of Britain's smallest police forces.

Mistakes were clearly made, the most serious one of which was the treatment on the day of the parents of the dead and of the injured. Lord Cullen says that this was unacceptable. Central Scotland police and the chief constable have acknowledged the fault, and have apologised to those who were concerned, but it is a lesson in human handling which must never be lost.

Is the Secretary of State aware, though, that what comes through from the harrowing description in this report of the events of 13 March is the remarkable, indeed inspirational, performance of the school staff—especially the head teacher, Ron Taylor—and the whole range of medical services, emergency services, and indeed individual police officers, all of them local, all of them traumatised and all of them emotionally connected to the victims? Their heroism and professionalism in the face of the most terrible events imaginable should never be forgotten by us.

Lord Cullen deals in his report with the circumstances whereby Thomas Hamilton continued, in the face of rising concern about him, to get his gun licences renewed; this is a matter of real importance to those, like myself and the Secretary of State and many others, who long campaigned against Thomas Hamilton. Lord Cullen makes the point:

"On balance … there was a case for revocation"

which

"should have been acted upon",

but he goes on, pointing up the need for serious reform in this area, to say that the eventual outcome would have depended on the outcome of the appeal to the sheriff, which he had no doubt that Thomas Hamilton would have taken. Lord Cullen's conclusion, setting aside the great wisdom of hindsight, is:

"It is not certain that an appeal would have been unsuccessful."

Certification changes are now being proposed, and the means by which Thomas Hamilton got his gun licences and continued to hold them must not be used again. Deputy Chief Constable McMurdo, Her Majesty's Chief Inspector of Constabulary, has today taken responsibility for what he did. His resignation is an example of honour, but the system has to change.

On school security, Lord Cullen makes the valid point:

"It would be unacceptable to carry measures to the point where schools were turned into fortresses."

We agree with that, and with the point that varied school layouts and geography do not easily lend themselves to a simple formula. The recommendation of an action plan for each school on the points that Lord Cullen identifies is right. I commend the right hon. Gentleman's announcement, both on its speed and on the promise of funding for that recommendation.

On the vetting and supervision of young people, I welcome Lord Cullen's recommendations and the Government's acceptance of them. Lord Cullen underlines the sadly deficient present situation when he says:

"There was no system in general use for the vetting of persons who operated such clubs or for monitoring their conduct."

The establishment of a new registration body will be a major step in the direction of placing hurdles in the way of future Thomas Hamiltons, without deterring genuinely motivated people from helping with youth clubs. The Secretary of State has our support for the new qualification in that area and for the procedures on police information.

Decisions about how we deal with the lessons of Dunblane are helped immeasurably by Lord Cullen's wise analysis and recommendations—but the buck stops here, with the lawmakers of this country. It is up to us to make the final judgment, and then to be judged on that. We have to act decisively and urgently, and the Opposition will co-operate fully in what needs to be done.

I know that firearms are to be the subject of a separate statement, but I feel it necessary to make one point. I warmly welcome the shift by the Government to an almost complete ban on handguns. They were right to listen with care to the force of public opinion.

Given that they have already come that far, I urge the Secretary of State and the Government to take that final but fundamental step towards the eradication of handguns in our country. There is no place in any decent civilised society for handguns of any sort. Let us therefore resolve that the lasting legacy of the evil that visited Dunblane on 13 March will be the complete outlawing of handguns, so that that sort of atrocity can never, ever, happen again.

I am extremely grateful to the hon. Member for Hamilton (Mr. Robertson) for his kind words. I echo the tribute that he paid to the performance on that day of the emergency services and—although there have been criticisms of the police—of individual police officers, which was inspiring.

I agree that there are issues relating to the appeal to the sheriff for refusal of licence certificates. Those issues are addressed in the Cullen report, and my right hon. and learned Friend the Home Secretary will respond on that.

I also agree that we must do what we can to make schools secure, but we must not turn them into fortresses. They are schools—they are places where our children should be safe, but they should feel as open as possible to the wider community.

The hon. Gentleman referred to a shift in the Government's position. I have been determined that the Government's position should be decided only when we had the Cullen report. The Government's position was decided yesterday at a meeting of colleagues, where a paper was presented jointly by me and by my right hon. and learned Friend the Home Secretary. There has been no shift in our position—which represents our considered view, having considered Lord Cullen's recommendations. It is important that the House should be aware of that.

I agree that it is important that we should be seen to act speedily, and I welcome the hon. Gentleman's support.

I believe that the package of measures that will be presented to the House today represents the right answer. The package represents a proper, balanced response, and I very much hope that all hon. Members will be able to deal with it quickly and with as much unity as possible.

Will my right hon. Friend accept that he has gained tremendous respect and praise across Scotland—as has the hon. Member for Hamilton (Mr. Robertson)—for his handling of this tragedy since that fatal day last March? I warmly accept Lord Cullen's recommendations—although, obviously, we have not had a chance to examine them in detail.

From the evidence and from what my right hon. Friend said, it seems likely that, had the proper procedures been carried out, Hamilton would never have had a firearms certificate. Will my right hon. Friend tell us how he hopes to improve co-ordination between the police, the procurator fiscal, social workers and others, so that doubtful cases can be vetted and this type of incident never happens again?

I agree with my right hon. Friend. The report details the shortcomings in how the licence application was granted and renewed. It also points out, as the hon. Member for Hamilton said, the difficulties that arose because of the uncertainty surrounding the possibility of a refusal being overturned on appeal to the sheriff.

The report contains specific recommendations dealing with the presentation of information and the tests that should be applied on appeal, which go a long way towards meeting my right hon. Friend's concerns. As I have already said, we have accepted all of the recommendations, including those relating to the matters about which my right hon. Friend is concerned.

I join the Secretary of State in acknowledging the task fulfilled by Lord Cullen, and the meticulous and sensitive way in which he conducted the inquiry and prepared this important report on a most awful and tragic event. I should like to take this opportunity to pay tribute again to staff and the emergency services, many of whom acted well beyond the call of duty.

I am sure that the Secretary of State will agree that Lord Cullen's report should be studied with great care, not only by hon. Members but by the public.

Liberal Democrat Members welcome the fact that the Government have accepted the recommendations. I am sure that the Secretary of State would acknowledge that, in instances in which the Government want to exceed Lord Cullen's recommendations, they are more in line with the submissions made by Liberal Democrat Members to Lord Cullen. I assure the Secretary of State that he will have our co-operation in the necessary legislation.

While the Secretary of State acknowledges that there may be concern in some quarters about legislation on making available access to information on criminals, and perhaps on those who have not been prosecuted, will he consult on the detail of that legislation? We share his view that schools should not become fortresses, and that fortresses are not suitable places for the upbringing and education of children. We welcome the fact that resources will be made available to help schools to implement action plans.

Although Lord Cullen identifies weaknesses in Central Scotland police in how they processed firearms applications, does the Secretary of State accept that the current law, even without further legislation, allows for a much more rigorous approach to the consideration and granting of firearms applications? Will he tell us what action has already been taken to bring that to the attention of police forces across Scotland?

On the latter point made by the hon. Gentleman, I am sure that there is not a chief constable in Scotland who has not examined this issue very carefully after the event. I agree with the hon. Gentleman in his analysis of the state of the law. Far be it from me as an ordinary mortal to disagree with a lawyer on Scots law.

I agree with the more general observations by the hon. Gentleman. He asked whether I would consult on the specific issue of making available to youth organisations information that the police hold that is other than about criminal records. I realise that this is, of course, a sensitive issue, but in situations in which we are dealing with the protection of children, the balance lies with tilting away from the civil liberties of the individual. I should be happy to discuss with him the criteria that will be applied and how that will operate.

One matter that comes out very clearly from the report and the analysis of Thomas Hamilton's background is that information was not communicated because he had never had a criminal conviction, although there had been several instances in which a prosecution was considered but did not proceed because of a lack of evidence.

That information would be of value to organisations thinking of employing people who would be acting in an unsupervised capacity with young children. I am certainly happy to discuss that with the hon. Gentleman. I greatly welcome his positive approach to the matter and his saying that he will support the Government's proposals for legislation when they are brought before the House.

Is my right hon. Friend aware that every hon. Member is with him on this difficult day, as he has to make a statement on the appalling event in his constituency? Will he confirm that, when considering the laws affecting the supervision of young people and children, account will be taken of the fact that bodies such as the Scouts, the Boys Brigade and the cadet forces will probably fall within the scope of organisations dealing with children, as they recruit at quite a young age? Will their position and structures and the way in which they do things be taken into account when the law is being formed?

We shall, of course, consult on the proposals; indeed, the Government's response gives a commitment to do so. It is important that all youth organisations can have access to a database that provides information about individuals across the United Kingdom. That is what we mean to achieve. Of course, if my hon. Friend has any particular suggestions, I should be very pleased to take account of them.

On behalf of the Scottish all-party group on children, I should like to welcome what the Secretary of State said about the regulation of voluntary bodies and the vetting of volunteers. Can he say anything about the regulation of summertime play schemes which tend to be of shorter duration than those of usual bodies? If he cannot comment now, is it something that he will be sure to consider when drawing up his plans?

The hon. Lady follows these matters in detail. She will confirm that we said that we would defer further consideration of that matter until we had studied Lord Cullen's report. I have had an opportunity to raise the issue with officials, and we hope to be able to reach a final conclusion, but, in the light of the Cullen report, it is very unlikely that we shall take the deregulatory road that we originally intended.

I congratulate my right hon. Friend the Secretary of State and the hon. Member for Hamilton (Mr. Robertson) on the dignified way in which they have proceeded, especially as this must have been so harrowing for both of them. It was entirely right to set up the Cullen inquiry and that it should have the blessing of the whole House. It was also right that we await the outcome of that inquiry before making judgments. I welcome the attention that my right hon. Friend has given to school security and the vetting of youth workers, but may I express regret that, to an extent, in the run-up to the publication of the report, the wider arguments have been lost to the issue of gun control?

I am extremely grateful to my hon. Friend. I know that one or two people have questioned whether Lord Cullen's report was necessary; once people have had an opportunity to study it, I think that they will know the answer to that question. Lord Cullen sets out in great detail the facts and the background, and I think that that is the best basis on which to take decisions about the variety of policy issues that have arisen.

Of course gun control is an important aspect of that, but there are other, wider issues that matter to thousands of organisations and literally hundreds of thousands of people across the country. It is right that we approach the matter with a clear and critical analysis of the facts carried out by a man of Lord Cullen's quality. At the end of the day, my hon. Friend is right: it is for the Government to take a decision about what is required, but it is best to do so with the type of report that Lord Cullen has presented.

Will my right hon. Friend accept that hon. Members representing constituencies far from Scotland are equally grateful to him for his speedy response to the report placed before us today, and that we are also grateful for the fact that we have had so succinct a report? I have not had a chance to read it in detail.

Does my right hon. Friend accept that the essential now is that energy is given to the establishment of clearly defined security procedures for each school and educational institution in Scotland and in the rest of the United Kingdom to provide for the safety and protection of children and of staff, which is a matter of everyday interest and concern?

I agree with my hon. Friend, but I think that Lord Cullen is right to emphasise the importance of individual schools looking at their own circumstances and working out what is required. It is difficult centrally to prescribe particular standards that will apply to every school. Every school, like every child, is different, and the remedies that need to be applied need to be looked at on a school level.

The remedies also need to be proportionate if we are to maintain the quality of schools, and it is for local authorities to work with the schools to achieve that task, and for grant-maintained schools and others to address the matter directly. The specific grant that my right hon. Friend the Secretary of State for Education and Employment and I propose will assist local authorities in that task.

I am sure that my hon. Friend agrees that Lord Cullen has addressed the issues in a sensible way, and that he has been greatly assisted by the work done by my right hon. Friend the Secretary of State in the earlier part of this year, much of which is already being implemented.

I join the Secretary of State in expressing admiration for Lord Cullen, and for all his work over the summer in respect of the inquiry. There are a great many recommendations which will undoubtedly gain widespread support. Notwithstanding the Secretary of State's statement, I must ask whether he personally agrees that the case for a total handgun ban has been made over the summer, and that to fall short of that and to exempt any number of handguns would leave far too many of those weapons in use.

As the hon. Lady knows, the firearms issues will be dealt with by my right hon. and learned Friend the Home Secretary. On the hon. Lady's direct question, she will know that my personal position has been that we should have the Cullen report and should consider the recommendations in that report, and that we should then decide what the way forward was.

I draw the hon. Lady's attention to the section of the report that suggests how we should consider the issues in terms of what is proportionate, where the balance of interests lies and how we address the issues of safety. My right hon. and learned Friend will shortly set out the Government's conclusions, which I fully support and which I presented to my colleagues with him.

With regard to the penultimate paragraph of the Secretary of State's statement, on the vetting and supervising of adults who care for children, will he confirm that that would embrace adults who are representatives of Church bodies and local authorities and who are in loco parentis for children, many of whom are vulnerable and far removed from their parents?

Yes, I think that I can confirm that point, although I did not quite catch the first part of the hon. Gentleman's question. The general purpose is to provide a means whereby people can obtain information as to the bona fide nature of organisations. Clearly, if people are in loco parentis, others are entitled to information about them. I think that that was the hon. Gentleman's question. I apologise if I have not got it right, and I am happy to have a word with him afterwards about it.

Having myself lost a child aged five—although it was in a motorway crash, which is not quite the same—I know that no one who has not been through such a tragedy can quite understand what it is like. Perhaps that gives me some right to sympathise not only with what the Dunblane parents have suffered, but with their need to campaign for a change in the law, as I felt I had to do over seat belts in cars.

Is my right hon. Friend aware that, despite some people's entirely understandable impatience, nothing whatever has been lost by the fact that it was bound to take some months for Lord Cullen to report? We now need to pause, hesitate and study, and to make quite sure that we get the change in the law absolutely right.

It is certainly true that the summer recess has enabled Lord Cullen to produce his report. Of course we all sympathise with my hon. Friend. I cannot imagine what it is like to lose a child, and we all sympathise with the parents. There are also wider issues involved, concerning the protection of our community and our attitude towards firearms, which my right hon. and learned Friend will address. I believe that the country will look to the House to take the necessary steps to provide legislation so that our communities are safer as quickly as can be achieved. We can achieve that if we have a united response throughout the House of Commons.

Is not the dreadful truth that such a tragedy was bound to happen, given the total inadequacy of the Government's response to a similar shocking event in Hungerford? [HON. MEMBERS: "Oh."] I do not believe that the people of Dunblane will forgive us for being mealy-mouthed about this. Is the Secretary of State aware that, since 1983, the Government have resisted suggestions that all police forces in the United Kingdom should use a standard inquiry form when people apply for shotgun certificates or licences? Will he now give the House an undertaking that he will raise the issue in the course of his consultation with the police throughout the United Kingdom?

The hon. Gentleman has not had an opportunity to read Lord Cullen's report. He will find that Lord Cullen concludes that the actions of Thomas Hamilton were unpredictable. I recommend to the hon. Gentleman that he reads the report and looks at the considered arguments. I am sure that my right hon. and learned Friend the Home Secretary will be happy to discuss his concerns with him.

Cullen Report (Firearms)

4.6 pm

I join my right hon. Friend the Secretary of State for Scotland, the hon. Member for Hamilton (Mr. Robertson) and other hon. Members in paying tribute to the community of Dunblane for their courage and dignity. I also join them in thanking Lord Cullen for the sensitive way in which he has undertaken his difficult inquiry and for the report that he has produced.

I hope that the House will forgive me for the length of the statement that I am about to make. I am sure that the House will understand that it deals with complex and important matters.

The proposals that I am about to set out will apply to England, Wales and Scotland. My right hon. and learned Friend the Secretary of State for Northern Ireland is carrying out a review of firearms law in the Province and will be issuing a statement this afternoon about the possible implications for gun control in Northern Ireland arising from Lord Cullen's report.

Among all the words that have been written since that dreadful event at Dunblane, there is one irrefutable fact. The crimes that were committed on 13 March were committed with a gun that was legally bought and legally possessed. Those facts place an extremely onerous duty on the Government to consider what controls there should be on the ownership and possession of guns.

I agree with Lord Cullen that it is right that we should concentrate on handguns, although some of my proposals will affect all gun owners. Handguns are not used for shooting game and are easily carried and concealed. Many are weapons derived from military or police models or are intended for self-defence—a purpose that is not accepted in Great Britain as a reason for possessing a gun. I agree with Lord Cullen that there are compelling grounds for imposing stringent restrictions on their use and availability.

Lord Cullen has made 23 recommendations for strengthening the regulatory controls on the ownership and licensing of all guns. We accept them all. The Government's detailed response has been placed in the Library. There are seven recommendations for improving the way in which the police handle all applications for firearms certificates, a further eight recommendations deal with the grounds for obtaining a firearms certificate, and eight recommendations are about the suitability of individuals to hold firearms.

I draw particular attention to the following recommendations: in future, anyone applying for a firearms certificate should be assessed against a checklist of criteria for suitability, a clear burden should be placed on the applicant to show that he is fit to have a gun, a new power should be created to enable the police to revoke a certificate where there is no longer a "good reason" for having a firearm, and the grounds on which an appeal against the refusal of a certificate can be made should be significantly limited. Taken together, those 23 recommendations add up to a drastic strengthening of controls on gun ownership.

In addition to Lord Cullen's proposals, we intend to introduce four further measures. First, we shall make it a requirement for all handgun shooters to obtain a certificate in order to fire a handgun at a gun club. Secondly, we shall make it an offence to fail to notify the police whenever a firearm or shotgun is sold, transferred, deactivated or destroyed. Thirdly, we propose to ban the sales of guns through the post. In future, it will be unlawful to transfer a gun from one person to another, except in person.

Fourthly, one of the most shocking and distressing features of the tragic events in Dunblane was the use of expanding ammunition, which is designed to cause the maximum injury. There is no possible justification at all for it to be available for people whose only authority is for target shooting. In future, therefore, it will be illegal to possess expanding ammunition except for the purposes of shooting deer, in accordance with the Deer Act 1991.

I come to the question that I know will be of greatest concern to the House and the nation: the controls on the ownership of handguns. Lord Cullen confines his suggestions to self-loading pistols and revolvers of all calibres. He does not consider that further restrictions are required for single-shot handguns, which he would allow to be kept in the home, as at present. He suggests that owners of multi-shot guns should be required to disable them when keeping them at home, and goes on to say that, if after consideration those arrangements are found not to be practicable, there should instead be a ban on the possession of multi-shot handguns by individual owners. He envisages that it would still be possible for guns to be kept by a club secretary so that target shooting could continue, using guns owned by the club.

The Government have taken advice from the Forensic Science Service on the practicability of Lord Cullen's suggestions for disabling handguns. Lord Cullen himself recognised that there were considerable practical difficulties in removing key components from handguns. The Forensic Science Service has confirmed that view. It is also not convinced that a barrel block—Lord Cullen's other suggestion—could be made that someone with sufficient determination and access to metal-working tools could not remove. As a result, I have come to the conclusion that we cannot recommend that approach to the House.

I therefore come to Lord Cullen's alternative suggestion of banning multi-shot handguns from individual ownership. I propose to go considerably further than Lord Cullen has suggested in two respects. First, we shall ban all handguns from people's homes. I do not agree with Lord Cullen that it would be safe to allow single-shot handguns to remain in the home. I believe that they should be subject to the same controls as those imposed on multi-shot handguns.

Secondly, we shall outlaw high-calibre handguns of the kind used by Thomas Hamilton. Low-calibre handguns—.22 rimfire handguns—will have to be used and kept in licensed clubs. We believe that a distinction needs to be made between high-calibre handguns, which are principally made for police and military use, and .22 rimfire handguns, which are largely intended for target shooting. Although Lord Cullen decided against making such a distinction, he sets out in paragraph 9.49 of his report a table that demonstrates that a .22 handgun is some four to six times less powerful than higher-calibre handguns.

In paragraph 9.44, Lord Cullen points out that the expansion in the use of high-calibre handguns has even made many shooters concerned about the use of such guns as symbols of personal power. In addition, target shooting with .22 handguns has been an Olympic sport since 1896. There will be exceptions for the very few professionals, such as vets, who need handguns outside gun clubs for the humane destruction of animals.

The proposals will mean that at least 160,000 handguns—80 per cent. of those legally held at present—will be destroyed. Appropriate compensation will be paid.

The clubs in which it will still be possible to use .22 handguns will be subject to the most stringent security standards. We shall consult as a matter of urgency chief constables and other interested parties on the details of the standards, and we shall set them out clearly in guidance. In addition, every individual club will need to be approved by the chief constable of the area in which it is situated. Handguns will be able to be removed from a club only for strictly limited purposes, which will be specified in law, and under the most stringent controls.

Few, if any, existing gun clubs will be able to meet those requirements. When the powers become law, we shall therefore require any owner of a .22 rimfire handgun to hand his gun to the police for safekeeping until he is able to find a licensed club that he can join. We shall then provide a period for clubs to improve their security, and to be inspected and licensed. Some handgun clubs may never be able to achieve an adequate level of security. If so, they will have to close.

The Government consider that those are the minimum acceptable conditions for the continuation of handgun shooting in Great Britain.

Breaches of the conditions for the safekeeping of handguns will be criminal offences. In 1994, the penalty for possession of a prohibited weapon was increased from seven to 10 years' imprisonment. Illegal possession of a higher-calibre handgun will therefore carry a maximum penalty of 10 years' imprisonment. We intend to create a new offence of possession of a .22 rimfire handgun outside club premises. The maximum penalty will also be 10 years.

The package of measures that I have announced today will give this country some of the toughest gun control laws in the world. We shall ban all handguns from the home. We shall outlaw completely higher-calibre handguns such as those owned and used by Thomas Hamilton. We shall require .22 rimfire handguns to be kept in gun clubs under conditions of the most stringent security. And we shall drastically strengthen the rules under which firearms certificates are granted. Those proposals will lead to the destruction of 160,000 handguns—80 per cent. of those legally held today.

I believe that the priority for Parliament should be to put the measures on the statute book at the earliest possible moment. So I intend this month to publish a Bill giving effect to them. I urge the Opposition parties to support that Bill. I am confident that if they do, it could have Royal Assent by Christmas. The country expects nothing less.

I thank the Home Secretary for his statement, and for the arrangements that he made to allow my hon. Friend the Member for Hamilton (Mr. Robertson), myself and other Opposition Members to have sight of Lord Cullen's report and the Government's response this morning.

As my hon. Friend the Member for Hamilton said in his statement, we are all deeply grateful to Lord Cullen for the thorough way in which he carried out his inquiry. It was right to establish the inquiry and to seek Lord Cullen's advice. But as Lord Cullen states at the outset of his report, he makes only recommendations. The ultimate decisions on such crucial matters of public safety are for Parliament to determine.

All of us have been profoundly moved by the grief and courage of the bereaved parents of Dunblane and their families and friends, and by the power and dignity of the Snowdrop campaign mounted in the wake of the atrocity. But is it not the case that often sympathy and concern are not enough by themselves? Thomas Hamilton was the man directly responsible for this appalling tragedy, but surely we all must accept our responsibility for permitting an environment of such lax gun control. Surely, too, we must acknowledge that we failed after Hungerford to put in place the controls necessary to reduce significantly the risk of such an event happening again.

Is it not the case that Dunblane and Hungerford were only the most extreme illustrations of the failure of the current system; that the number of licensed handguns has risen rapidly; that crimes involving handguns have more than doubled in the past 10 years; and that almost every day there are reports of licensed gun owners abusing the privilege that they have been granted?

As we heard from the Secretary of State for Scotland, Thomas Hamilton—one man—killed 16 children and one teacher, and injured 17 others, by discharging 105 rounds of ammunition from a single semi-automatic handgun in the space of three minutes. Handguns are small, portable, easy to hide and lethal. In the light of Lord Cullen's report—and especially his analysis—it is our considered judgment that handguns should be banned altogether from general civilian use.

May I make it clear to the Secretary of State that we shall of course co-operate fully to ensure that legislation is passed speedily through Parliament, to implement the will of this House and the other place for a root-and-branch reform of gun law? We welcome almost everything in the Secretary of State's statement, and especially the complete ban on all handguns from people's homes. But, with respect, we do not believe that his proposals go far enough. Let me briefly give our reasons.

In the evidence submitted to the Cullen inquiry on behalf of the Labour party by my hon. Friend the Member for Hamilton and me, we said that there was a strong case for banning all handguns, apart from some very limited occupational exceptions such as vets and casualty slaughterers. We then said that it was for the shooting fraternity to make a case for exceptions to that—for example, in respect of single-shot .22 pistols. But, in our judgment, the shooting fraternity has failed to do so.

Lord Cullen says that an exemption for single-shot .22 handguns would be both impractical and ineffective because they could easily be reconverted to multi-shot guns, and we accept that view. Partial bans, moreover, would create extra work for the police. As the Police Federation said in its evidence to Lord Cullen, .22 weapons may be just as lethal as higher-calibre weapons.

The problem with the compromise on clubs proposed by the Secretary of State is that there will still be 40,000 handguns, including many semi-automatics, remaining in private ownership—albeit for use in clubs. I am aware that the Secretary of State proposes tight new controls on the gun clubs that are allowed to remain. Is he not aware of a most compelling case made against the halfway house by the British Shooting Sports Council in its evidence to the inquiry, in paragraph 9.68 on page 121? Referring to the crucial issue of the booking out of weapons, even with tighter controls, the BSSC said:

"no matter what system of checks and paperwork is maintained in such circumstances, it would be a simple matter indeed for a shooter intent in recovering his guns to enter a competition, provide evidence to his club secretary that he had done so, recover possession of the complete gun together with ammunition for it, and perpetrate an outrage".

In the light of that evidence not least, I ask the Secretary of State to think again about the proposal to allow the licensing of some gun clubs before the Bill is published.

The Government have made welcome proposals for the licensing and appeals systems in their statement. May I press on the Secretary of State the case for a blanket ban on all mail order sales of weapons, for a total ban on replica and deactivated guns, which the police have called for, for air weapons to be controlled within a licensing system and for the age limit for any sort of guns to be increased to 18?

On the radio this morning, the right hon. and learned Member for Putney (Mr. Mellor) proposed that Ministers should produce alternative clauses to the proposed B ill to give effect to such a total ban and allow a free vote on it. Since such a vote would emphasise the non-partisan approach to the issue that we all seek and would not delay the legislation, may I endorse both calls that the right hon. and learned Gentleman made and ask the Secretary of State for his response to both?

Nine years ago, our nation was similarly repulsed by the consequences of the slaughter of innocent people in Hungerford by a lawfully licensed gunman. Our actions then failed to match what was needed. Is it not the case that today we owe it to the victims of both Hungerford and Dunblane not to fail again?

I am grateful to the hon. Gentleman for the remarks with which he began his observations. He identified with some precision the difference that lies between us. We believe that it is possible to give the public the protection that they rightly require and deserve without going so far as to put in place a complete prohibition on the ownership and possession of handguns for which the hon. Gentleman called. We believe that if it is possible to provide that protection without a complete ban, it is the Government's duty to take that course.

I ask the hon. Gentleman and those sitting behind him to reflect on the unhappy history of the complete prohibition of activities hitherto regarded as lawful. It would not be in anyone's interests, least of all the protection of the public, to drive underground an activity that could then be conducted without any safeguards for security, whereas if it remains possible to carry out that activity legitimately, under extremely secure safeguards, the public's protection might be greater. I ask him to reflect on that.

The hon. Gentleman raised a number of other matters. I do not think that there is anything between us on mail order sales. The position on replica guns is that it is extremely difficult to find a satisfactory definition for such weapons. We have said more than once that if such a definition could be provided, we would be more than content to consider that possibility.

As the hon. Gentleman will be aware, a free vote is not a matter for me; his observations will have been heard by those whose responsibility that is. I do not think that it would be appropriate for the Government to publish a two-clause Bill—a Bill with alternatives—as he has suggested and as was suggested on the radio this morning by my right hon. and learned Friend the Member for Putney (Mr. Mellor). I believe that it is for the Government to come to their considered conclusion as to the right way forward and to put that in the Bill to be placed before Parliament. It will of course be open to any hon. Member to table an amendment to its provisions.

Every reasonable person in the land will want to congratulate my right hon. and learned Friend on seeking, with the support of everyone in the House, to tighten the procedures by which people can lawfully get possession of guns of any kind. Will he also bear it in mind that the Home Affairs Committee identified the fact that one of the worst problems is the flooding into this country of hundreds of thousands of illegal weapons and, particularly, that nearly every crime committed with guns is committed with a gun that no one has ever lawfully possessed? Will he bear it in mind when he considers legislation that further action will need to be taken not only on lawfully held handguns, but on the hundreds of unlawful guns that come into people's possession through our ports, if incidents such as that at Dunblane are to be avoided?

My hon. and learned Friend is entirely right to identify the dangers that we all face from illegally held weapons. It would be an utter delusion to suppose that we are affording the community complete protection by putting in place more stringent safeguards on the use of lawfully held weapons. The problems posed by illegally held weapons are considerable and we are, and will continue to be, extremely vigilant and do all that we can, especially to prevent the importation of such weapons.

Does the Home Secretary accept the following proposition, the importance of which was underlined by the slaughter at Dunblane? In this country, we regard the possession of guns not as a right, but as a privilege that has to be carefully controlled and safeguarded to protect public safety and public confidence. As the Government's proposals have much common ground with our proposals to the Cullen inquiry, will the Home Secretary note that we are prepared to support and facilitate legislation based on those proposals, as long as the House has an opportunity to consider on a free vote whether a ban on 80 per cent. of handguns is adequate and workable or whether it is necessary to go further?

Under the Government's proposals, who would be allowed to transport guns between one gun club and another or from a gun club to a competition? Does the Home Secretary agree that it would be wrong to pretend that either the proposals or a total ban provided any guarantee against the misuse of guns leading to a slaughter such as that at Dunblane, so vigilance and effective and well-resourced policing remain essential?

I agree with the right hon. Gentleman's first proposition, that there is no right to hold a gun under our laws and that it is a privilege. I agree with that approach and I note what he said about his party's approach to the legislation.

On the transportation of guns from one club to another under the proposed arrangements, we intend to have consultations with chief constables and others about the details but, as I said in my statement, we envisage that it should be permitted only in the most limited circumstances and under the most stringent controls. For example, the transportation should be effected not by the owner of the gun, but by a third party specifically authorised for that purpose.

I entirely agree with what the right hon. Gentleman said about illegally held weapons and about the need for continued vigilance to deal with that very considerable problem.

I thank my right hon. and learned Friend for his statement, which contains many valuable insights. I should like to put two points to him. First, as he has concluded that there is a case for permitting single-shot .22 pistols only under rigorous conditions, which will take an enormous amount of time, effort, trouble and expense to enforce in order to keep the so-called sport going, is it not time to conclude that literally and metaphorically the game is up for handguns now, and that that is the public will?

Secondly, I am glad that my right hon. and learned Friend attaches importance to as far as possible keeping all Members of the House together in the effort to provide an effective solution. Will he consider again the merits of putting forward alternative proposals, as has often been done on contentious and difficult pieces of social legislation in the past, given that he knows that the real issue is whether to go 80 or 90 per cent. of the way, as he proposes, or 100 per cent. of the way? He should lay alternatives before the House and the matter should be dealt with on a free vote. With the greatest of respect to my right hon. and learned Friend, I do not believe that some of his loyal supporters should have their loyalties tested by the imposition of a Whip on the matter.

My right hon. and learned Friend has made his views on the subject known in his usual forceful manner from an early stage. He has put two particular points to me, to which I have already given a response. I do not follow him on the first, for the reasons that I gave in answer to the hon. Member for Blackburn (Mr. Straw). I do not follow him on his second point, because it is for the Government to come to a conclusion as to the right way forward and to incorporate their decision in a Bill. As for the question of a free vote, that is not a matter for me.

I thank the Home Secretary for endorsing the main plank of the minority report from the Home Affairs Committee on the issue. It is not every day that a minority report is endorsed so swiftly by the Home Office. I have one or two others that he might like to reconsider.

Did the Home Secretary hear the comments this morning by Mr. Michael Yardley, a firearms expert, that it was pointless to ban handguns if something was not also done about shotguns? Is it not about time that we made a start on collecting some of the 2 million shotguns in circulation, starting in urban areas? Everyone acknowledges that farmers need shotguns, for reasons that we all know about, but it is hard to understand why licences should be granted to shotgun owners in urban areas.

Does the Home Secretary have any plans to do anything about the misuse of air weapons, which, as many of our colleagues will know, are responsible for a great deal of mayhem in urban areas?

I note the hon. Gentleman's opening remarks. I am sure that he does not expect me to give any undertaking on my reaction to minority reports from the Home Affairs Committee in future. I do not follow the hon. Gentleman in his observations about shotguns. Shotguns have many wider applications than do handguns, which are restricted to target shooting. I do not think that the hon. Gentleman has made a case for the restriction on shotguns to which he has referred. Similar observations apply to air rifles.

I realise that what I am about to say may be unfashionable, but after we pass all this legislation, surely criminals and madmen will still get hold of guns. Surely we as a Conservative Government are about protecting the rights of law-abiding minorities, even if we do not agree with them, and about protecting the rights of private ownership. What we have heard today is extremely worrying. It is worrying to appoint a judge and then go much further than he suggests, after he has given such exhaustive consideration to the issues. It is worrying to store so many more guns in arsenals. Above all, it is worrying that we are accepting the view that wickedness lies not in the individual's heart but in a group of people who are in the main highly law-abiding and simply want to pursue their sport. It is a worrying situation.

I entirely agree with my hon. Friend that a considerable problem arises out of illegally held guns. I have said on a number of occasions this afternoon that that is something in respect of which we must be extremely vigilant. I hope that my hon. Friend will reflect on the contents of the Cullen report and on my statement today, as well as on the way forward which the Government believe to be right in the circumstances. I look forward to discussing those matters with him and I hope that, on reflection, he will reconsider his position.

As one who can empathise and sympathise with the families who have lost children and who replaced a Member of the House who was shot by a handgun, I understand the emotion surrounding the issue. I welcome the Home Secretary's statement, but I suggest that the emphasis of the previous statement is the most important because it is placed on the human element. If I read the proposals correctly, I understand that the suggested changes might improve the legislation here and bring it more into line with legislation in Northern Ireland, but there is another problem, that of illegal weapons. It does not seem right to curtail law-abiding people's ability to use something properly under licence, when, at the same time, we miss the point that illegal weapons will be used by people for their own purposes.

The hon. Gentleman's remarks, which are based on his particularly unhappy experience, command considerable respect, and we shall pay them that respect. I hope that I have already made it abundantly clear today that we do not in any way overlook or belittle the seriousness of the damage that can be done through the use of illegal weapons.

Will my right hon. and learned Friend amplify his proposals for compensating the individuals who currently own weapons that are legally held? How will that compensation be calculated? Has he made any estimate of the cost to the taxpayer of the compensation package?

It is very difficult to make any accurate estimate of the total cost of the bill. We intend to compensate those who hold guns that will be unlawful as a consequence of the measures announced—higher-calibre handguns—on the basis of the market value of those guns before I made my statement this afternoon.

The Home Secretary will recall that on 3 May last year I introduced an Adjournment debate to control specifically the use of handguns. It sickens me to the pit of my stomach that it has taken the death of 16 children and a brave teacher to bring us to today's decision. Having said that, I welcome some of the moves that the Home Secretary has made, but I implore him to go that extra mile, as suggested by my hon. Friend the Member for Blackburn (Mr. Straw).

I understand the strength of the hon. Gentleman's feelings and I know that they are shared by many. I have endeavoured to explain the reasons for the position that I have advanced to the House and I have no doubt that it is something we shall debate in the weeks ahead.

My right hon. and learned Friend and his colleagues in Cabinet have had to strike a difficult balance on this matter. I particularly welcome what he said two minutes ago, about compensation for those who have perfectly legally bought expensive items and who find them now taken away from them. I also particularly welcome what he said about giving compensation based on the market value. Would he include items that were not included the last time the matter arose—expensive accessories such as safes, unspent ammunition and various other things?

I am grateful to my hon. Friend for his opening remarks. I shall certainly consider the points that he made. His second point is important, and I hope that he will forgive me if I do not give him any kind of assurance now, but it falls for consideration.

The Home Secretary has announced a stringent package of controls, but however rigorously controls are enforced, they always leak. A great deal therefore turns upon the perhaps exceptional occasions when a gun finds itself in the hands of someone whose purposes are malign. That being so, so much turns upon the actual characteristics of the weapon.

One of the horrific features of Dunblane and the other event that occurred years before was that it was not just murder; it was a massacre. That massacre was possible only because of the rapid-firing nature of the guns that were in the possession of those who committed those crimes. If the .22 were a weapon that could be fired only with a single shot and not rapidly fired, the Home Secretary's case would be stronger. If, as we heard earlier, it cannot be turned into a single-firing weapon but is a weapon that fires rapidly, so that in the hands of wicked and evilly disposed people it can be used to commit mass killings, the Home Secretary should think again and go for a total ban.

The right hon. Gentleman draws attention to the implications of the distinction that I made, and to other distinctions that may be made. I believe that, in the end, it is a matter of judgment. Earlier, I explained the judgment that caused me to advance the proposals that I placed before the House, and I believe it to be the right judgment. I do not believe that the factors that the right hon. Gentleman has drawn to the House's attention represent the whole picture. It is necessary to look at other aspects and other implications, and to take seriously the dangers that would arise from total prohibition if the activity were driven underground.

It is a matter of judgment. I believe that the judgment that I put before the House this afternoon is the right one, but I have no doubt that we shall continue to debate this matter.

It is not the guns that are the problem; it is the people who use those guns illegally. Regrettably, the Home Secretary's statement means that the sins of this awful, deranged individual will be paid for by the many thousands of legitimate, decent and honest people who enjoy not a so-called sport, as my right hon. and learned Friend the Member for Putney (Mr. Mellor) put it, but a leisure activity that has great historic traditions and which they enjoy. The measures that he announced will be received with great dismay. He has got it completely the wrong way round. He is affecting many, many innocent people because of the awful, awful acts of one awful, awful madman. I think that he is wrong, and that his legislation will not be accepted by the majority of decent, honourable people in this country.

I agree with my hon. Friend. A great many decent and honest citizens take part in target shooting. I do not, on behalf of the Government, advance these proposals lightly. Much of what my hon. Friend said is right. But the Government have a responsibility to consider all aspects of the matter, and to decide to what extent it is sensible to take measures that restrict the ability of those decent and honest citizens to engage in activities that they regard as perfectly reasonable, so as to increase the protection to which the public, as a whole, are entitled. That is the basis on which I approached this difficult decision. I agree with much of what my hon. Friend said, but for those reasons I reach a different conclusion.

Does the Secretary of State agree that a child's right to life is far more important than any adult's so-called right to carry a handgun, even for so-called sporting purposes? How many more Hungerfords and Dunblanes must there be, and how many more children must die, before the Government implement a complete ban on all handguns along the lines of early-day motion 1238, which is supported by hon. Members on both sides of the House?

Of course, I agree with the hon. Gentleman's first question—I imagine that not one single hon. Member would disagree with that—but it does not follow that we agree with his conclusion. I believe that we can provide the public with the protection to which they are entitled without going as far as introducing a complete ban. That is the point at issue between us, and no doubt we shall argue about it in the weeks ahead.

In his report at paragraph 9.55, Lord Cullen speaks about the assessment of risk, and I want to ask my right hon. and learned Friend about two points regarding the "chances of harm".

During the summer, I had the opportunity to visit several clubs and to talk to members, and it became clear to me that procedures, standards and security vary enormously among clubs.

First, will my right hon. and learned Friend give an assurance that, before someone who holds a target pistol can rely on the basis of being a member of one of those clubs, the security that my right hon. and learned Friend outlined in his statement will be in place, so that all clubs reach a high standard? Secondly, an integral part of target shooting is entering into competition. Those competitions are known and well established. Will my right hon. and learned Friend be laying down the particular competitions that count?

I can certainly give my hon. Friend the assurance that he sought in the first part of his question. The security standards of clubs where shooting will continue to be permitted will be extremely stringent. We shall consult chief constables about those standards and lay down those standards in guidance. Not only will clubs have to comply with the guidance, but they will have to satisfy the chief constable for the area in which the club is situated that the standards that will apply in the club will be adequate.

As for the second part of my hon. Friend's question, we intend to prescribe in order those competitions that will enable guns to be transferred from one club to another, under the very stringent controls to which I referred earlier. We envisage that that should be restricted to national and international competitions, but we shall consult on the details.

I have read every paragraph of the Cullen report, and I thank the Home Secretary and the Secretary of State for Scotland for their courtesy in making it available to me and my colleague earlier today. Can the Home Secretary confirm 40,000 as the number of handguns that potentially will still be available for use under the proposals that he announced today—not only single-shot weapons, but rapid-fire weapons and multi-shot weapons? I understand that the Japanese Government licensed 58 handguns for sporting purposes last year. Is it not possible that the Japanese Government have it right and the British Government have it wrong?

Finally, will the Home Secretary reflect again on the call that has been made from all parts of the House to allow a free vote on the issue—a vote that is about public safety, and which must be a matter of individual conscience because it could involve life and death? Perhaps, in his reply, the Home Secretary will say that he will do the right thing on the free vote and allow every Member of Parliament to vote according to his or her conscience.

The estimate of the number of guns that the hon. Gentleman gave may be broadly right, but I anticipate that many people who use such guns at present will not do so in future, as a result of the stringent security standards that we shall insist on putting in place for the clubs where that activity will continue to be legal. The other points that the hon. Gentleman raised were not new, and I have no new answers to give him.

Is the Home Secretary aware that the vast majority of the shooting community, including hundreds of people in my constituency, are very conscious of grave public concern about this subject? Is he aware that they obviously expect, as he says, a drastic tightening of controls? Is he further aware that they probably also expect, and will go along with, the toughening of security at gun clubs, even though in my constituency it will probably lead to the closure of one or two of those clubs?

Is my right hon. and learned Friend aware that many people in the countryside, including farmers, wildfowlers and gamekeepers, who will now rightly fear for their sport, expected the Government to implement Cullen, and will need a lot of persuasion that the Government are right to go beyond Cullen? Can he confirm that he will carry out the widest possible consultation with those interest groups?

I am grateful to my hon. Friend for the qualified support that he gave to some of the measures that I proposed. I understand the anxieties that he expressed, many of which I believe to be misplaced having regard to the details of the proposals that I have made, but I would always be ready to meet delegations of the people whom my hon. Friend mentioned, to do my utmost to allay their fears.

I thank the Home Secretary for his positive proposals on the licensing of guns. Does he accept that they have come far too late for the children of Dunblane and for Douglas McMurdo, the deputy chief constable, who was only reacting to the signals that he received from the Government after Hungerford and from the courts—especially the ombudsman who gave Hamilton permission to continue to run his youth clubs? If the right signals had come out after Hungerford, we might not have had the Dunblane incident.

I have some sympathy, which I have already expressed, with the right hon. and learned Gentleman's view on Olympic shooting, but it appears to me that the Japanese Government have the numbers right. The Government are talking about having 40,000 guns in the possession of individuals—even if the guns are kept in clubs—just so that we can have a sport. I suggest that for many of those 40,000, shooting is not a sport, but thrill seeking. That is what gun possession is about to them; it is not about trying to reach the highest attainment in an Olympic discipline.

How many guns can each individual hold, even if they are kept at a gun club? I suggest that the proposals put forward by my hon. Friend the Member for Blackburn (Mr. Straw) were the start of the march away from the gun culture—a march that must end with asking why people hold shotguns for occasional shooting. The Government's proposals are simply a march up a blind alley for the people of Britain.

The hon. Gentleman's question about the former deputy chief constable of Central Scotland police is a matter for my right hon. Friend the Secretary of State for Scotland, not for me. Therefore, the hon. Gentleman would not expect me to comment.

I have answered the hon. Gentleman's other comments during my contributions to this afternoon's proceedings. The important thing is the stringent security under which guns will be kept in the clubs—that is the key.

How many guns?

As long as the conditions in which they are kept are of the utmost security, the number of guns owned by any individual is a secondary matter. The important thing is the security of the conditions in which they are kept—that is what I regard as being of supreme importance and that is what will be set out in the guidance that we provide.

While expressing every sympathy for the agonising decision that my right hon. and learned Friend and other Cabinet colleagues have had to make on these difficult matters and not yet having seen the Cullen report myself, I ask my right hon. and learned Friend to consider—not least because of this afternoon's debate—allowing a free vote. This is not a conventional piece of party political legislation—it is a primordial matter of humanitarian, social and family concern for the whole country. The more they think about it, the more the Government will be obliged to consider the real importance of a free vote on the relevant clauses that we have been discussing this afternoon. Will my right hon. and learned Friend, through the usual channels and with Government colleagues, ensure that we act in the only way that will satisfy public requirements?

As I have said several times this afternoon, that is not a matter for me. It is the responsibility of Government to come to a conclusion on matters such as this and to enshrine that conclusion in a Bill that they place before Parliament. It is then for Parliament to express its view.

I welcome the Home Secretary's statement as far as it goes, although—like many of my right hon. and hon. Friends and my Labour colleagues on the Home Affairs Committee—I do not think that it goes far enough. The right hon. and learned Gentleman will be aware that there is a shooting range and a gun club here in the House of Commons, despite there being no creche and no provision for children. That shows that this House has its priorities wrong. Is the effect of the right hon. and learned Gentleman's statement that members of that gun club will store guns on these premises? If so, does he consider that to be unacceptable? Should not the House set an example by banning all guns from the House of Commons?

Whether, as a matter of law, it will be possible for guns to be stored on the premises of the House of Commons gun club will depend on whether the club complies with the security requirements that we have yet to put in place. Whether, as a matter of practice, the House decides that that should continue to be the position is not a matter for me.

rose—

Order. As the statement has taken almost an hour, we shall now move on to the ten-minute Bill.

Scottish Parliament

4.59 pm

It is difficult to turn our thoughts to other matters after today's sombre statements, but I beg to move,

That leave be given to bring in a Bill to introduce a Scottish Parliament in accordance with the scheme proposed by the Scottish Constitutional Convention.

The first and greatest reason for creating a Scottish Parliament is that the people of Scotland want democracy. That is reason enough for change. Time after time, however, our democratic will has been denied by the Government, who are so determined to thwart us that they will even attempt to overcome the will of the people by means of the hereditary peerage. What could better illustrate the difference between those who want to advance democracy and those who will do anything to resist the advance of democracy? Those who want to resist the advance will not succeed, and, instead, they are likely to hasten the end of mediaeval baggage that a modern democracy should have left unclaimed long ago.

It will not be long now before a Scottish Parliament is meeting for the first time in almost three centuries. A Scottish Parliament will not be a return to the far-off, undemocratic days, when only a privileged minority could determine its actions. It will also not be a copy of Westminster. A Scottish Parliament will make advances in our democratic system, putting it in the forefront of change, and I hope that it will encourage Westminster to follow where it leads.

This is not the dry stuff of constitutional tinkering, remote from people's lives. We want a Scottish Parliament because it will make a difference to our lives. In election after election, Scotland has consistently demonstrated a desire for its collective and community traditions to be respected and acted on by selected representatives. We feel increasingly frustrated as our wishes are consistently disregarded. A Scottish Parliament, however, will be underpinned by the specific consent of the Scottish people, and it will place power in our people's hands to decide how our public services—such as health, education and housing—will be delivered, how our laws and administration of justice will be determined, how our economy will be boosted and how our cultural and artistic life can be shared and enjoyed by all.

None of that does any harm to our neighbours and friends in the rest of the United Kingdom, and it is rank dishonesty to pretend that it does. People who wrap themselves in the Union flag to defend the current negation of democracy are merely demonstrating that they have no clothes. As for the so-called "tartan tax"—which was mentioned again today at Scottish questions, as if Conservative Members thought that they had latched on to a stout argument—the Scottish people know that they will have that degree of power only if they vote for it. If they had been able to vote on VAT on domestic fuel or on the poll tax, to name but two Tory taxes, those taxes would have been thrown out with all the contempt that they deserve.

I have been involved with the Scottish Constitutional Convention since it was founded in 1989. I am proud of the way in which it has carried forward the debate, not only on what a Scottish Parliament will do but on the way in which it will do it. The convention has devised plans for how a Parliament will carry out its work, which will create openness and accountability. I believe that Westminster will be able to learn a great deal from how that Parliament conducts itself in the future.

The Members of the Scottish Parliament will reflect Scottish society. For the first time in any elected body in Britain, we shall see the equal representation of women and a fair reflection of the ethnic minorities in our society. A Scottish Parliament is worth fighting for to achieve those objectives alone. I remind the House that only 24 women have ever represented a Scottish seat in Westminster. As one of that small number, I look forward to the day when women in Scotland will have an equal share in making the decisions that affect our daily lives. If anyone thinks that we shall be deterred by a hereditary peerage, whose claim to rule is based on ancestral encounters on the battlefield or in the bedroom, they are about to be disabused of that notion.

Time is too short today to be able to describe all that we plan to achieve in a Scottish Parliament. If there is anything that I want for my constituency from a Scottish Parliament—I know that I speak for many others—it is jobs. I want secure and decently paid jobs, and an end to the poverty that blights so many of our people's lives. Thousands of our people live in inadequate housing, while building workers are idle and investment in housing declines. What a way to run a country!

We know a better way, and it will not be long now before we achieve it. I commend the Bill to the House.

5.4 pm

The hon Member for Glasgow, Maryhill (Mrs. Fyfe) started off by suggesting that the people of Scotland want a democracy—which means, I suggest, an assembly. Labour Members told us that back in 1979. At that time, the people of Scotland failed to register sufficient interest—sufficient interest even by the standards of the Labour party. Labour Members abandoned their ideas then, and apparently they are abandoning them now.

I congratulate the hon. Member for Maryhill on having the courage to present the Bill, because I believe that it cuts across her party's current policy—policy recently adopted and thrust upon the Scottish leadership. I recognise that that policy has not necessarily been signed on to, and that if "Islington Man" changed his mind tomorrow, the Scottish Labour party would follow along.

Obviously the Bill was prepared before the recess, when the hon Lady's Scottish boss, the hon. Member for Hamilton (Mr. Robertson), was proclaiming:

"We will have up and running a Scottish Parliament within a year of the Labour party taking office."

That could be a long way away. In fact, there is nae chance of that ever happening. There never was a chance of it, and it will be most unlikely under the referendum scenario now on offer.

The Bill was prepared at a time when the hon. Member for East Lothian (Mr. Home Robertson) was repeatedly telling us that never again will Scottish legislation be determined at Westminster. Such farcical comments are not untypical of the hon. Gentleman.

The Bill was prepared at a time when the hon. Member for Dundee, East (Mr. McAllion) believed that he was the Opposition spokesman on constitutional change. We all respect him for his beliefs, because we know that he holds them conscientiously. Quite honestly, I do not often agree with his beliefs, but at least he adheres to them. It must have been galling for him to discover that there had been a policy change on this key election issue, and for him to be informed of the change by the leader of the Scottish Liberal Democrats. That incident does not say much for Labour, and it demonstrates its unfitness to govern. Obviously hon. Members in the shadow Cabinet do not discuss issues of vital importance with so-called "junior shadow Ministers".

Speak up.

I am sorry if the hon. Gentleman cannot hear me; I shall try.

The fact is that the Labour party in Scotland is not in control of this issue, because it is being decided in Islington. The shadow Secretary of State for Scotland has, to some extent, been abandoned. He has submitted meekly to instructions from those above him, although some people would say that he has done so bravely, because he attempted to take responsibility for the change of heart on the referendum fiasco. Once again, however, he was undermined by the right hon. Member for Sedgefield (Mr. Blair), who has claimed full responsibility for the referendum decision.

On a day on which the House will be considering matters of honesty, Labour Members should examine a little more carefully the matter of honesty in their party, on their home ground. The Bill presented today by the hon. Member for Maryhill seems to be detailed. In effect, it demands that its passage through the House be set in train.

If the Scottish Constitutional Convention scheme is to be followed, there will be no referendum. With the return—if ever that were to happen—of a Labour Government supported by the Liberal Democrats, a tax-raising assembly would be imposed along the lines that Opposition Members will no doubt press in the general election campaign. If there was any honesty in their approach, surely they would be prepared to debate the issues in the general election campaign and, if they came to power, to follow through what they believed to be the right course for Scotland.

The Opposition's tax-raising assembly would impose a 15 per cent. tax increase on Scots who could least afford it. That would surely be unwise. In my constituency, I sent out 17,000 questionnaires to people of all political affiliations. To date, almost one third have been returned, of which 85 per cent. oppose the tartan tax, 4.3 per cent. support it and the remainder simply back an independent Scotland. That is an honest position, which I respect, although I do not support it.

Another survey carried out by "Newsnight" in my constituency showed that 12 out of 13 people questioned were against a tax-raising Scottish Assembly. Those are the views of the Scottish people, which they believe that the Conservative party in Scotland will have the guts to get out and fight for in the next general election. We shall stick to our principles, not abandon them as Opposition Members seem to have done.

As to a tartan tax, the idea of a Scottish Parliament opens up other threats. Already, we have heard Opposition Members querying the rights of local authorities to impose additional taxes on business. Conservative Members fought for the uniform business rate. A Scottish Parliament would put that in jeopardy and Scotland would be the worse for it.

The Bill refers to Scotland alone. The hon. Lady has ignored Wales and England. If a tax-raising Parliament is right for Scotland, why should there not be one for the regions of England and for Wales? She knows that that would not be wanted by the Labour party in those parts of the United Kingdom, where people are much saner than those on the Opposition Benches.

I am amazed that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) supports the Scottish Constitutional Convention's intention to introduce proportional representation. He has fought against proportional representation for many years, and rightly so: it is undemocratic and ensures that the party hierarchy will appoint those who represent the nation in such a Parliament.

If Labour Members support the Bill, they are cutting across the wishes and desires of the right hon. Member for Sedgefield and stabbing their leader in the back. That would be entirely inappropriate. On that basis, I ask the House to reject this stupid Bill.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 132, Noes 46.

Division No. 216]	[5.13 pm
AYES
Adams, Mrs Irene	Davidson, Ian
Ainger, Nick	Davies, Bryan (Oldham C)
Anderson, Donald (Swansea E)	Denham, John
Ashdown, Paddy	Dewar, Donald
Banks, Tony (Newham NW)	Dobson, Frank
Barnes, Harry	Donohoe, Brian H
Beckett, Mrs Margaret	Dowd, Jim
Benn, Tony	Eagle, Ms Angela
Bermingham, Gerald	Ewing, Mrs Margaret
Betts, Clive	Flynn, Paul
Blair, Tony	Foster, Derek
Blunkett, David	Foster, Don (Bath)
Boateng, Paul	Foulkes, George
Bray, Dr Jeremy	Fyfe, Mrs Maria
Brown, Nicholas (Newcastle E)	Galloway, George
Campbell, Mrs Anne (C'bridge)	Gerrard, Neil
Campbell, Ronnie (Blyth V)	Godman, Dr Norman A
Campbell-Savours, D N	Graham, Thomas
Canavan, Dennis	Griffiths, Nigel (Edinburgh S)
Cann, Jamie	Grocott, Bruce
Chisholm, Malcolm	Gunnell, John
Clark, Dr David (S Shields)	Hall, Mike
Clarke, Eric (Midlothian)	Harman, Ms Harriet
Clarke, Tom (Monklands W)	Harvey, Nick
Clwyd, Mrs Ann	Home Robertson, John
Cohen, Harry	Hoon, Geoffrey
Connarty, Michael	Hoyle, Doug
Cook, Robin (Livingston)	Hughes, Kevin (Doncaster N)
Corbyn, Jeremy	Hughes, Robert (Ab'd'n N)
Corston, Ms Jean	Hughes, Simon (Southwark)
Cunningham, Dr John	Hutton, John
Cunningham, Ms R (Perth Kinross)	Ingram, Adam
Dafis, Cynog	Jackson, Mrs Helen (Hillsborough)
Darling, Alistair	Jamieson, David

Jones, Dr L (B'ham Selly Oak)	Pike, Peter L
Jones, Martyn (Clwyd SW)	Pope, Greg
Kennedy, Charles (Ross C & S)	Prentice, Mrs B (Lewisham E)
Kennedy, Mrs Jane (Broadgreen)	Prescott, John
Khabra, Piara S	Primarolo, Ms Dawn
Kilfoyle, Peter	Quin, Ms Joyce
Lestor, Miss Joan (Eccles)	Reid, Dr John
Lewis, Terry	Rendel, David
Liddell, Mrs Helen	Robertson, George (Hamilton)
Lynne, Ms Liz	Roche, Mrs Barbara
McAllion, John	Rooker, Jeff
McAvoy, Thomas	Ross, Ernie (Dundee W)
Macdonald, Calum	Salmond, Alex
McFall, John	Sedgemore, Brian
McKelvey, William	Sheldon, Robert
Mackinlay, Andrew	Short, Ms Clare
McNamara, Kevin	Skinner, Dennis
Madden, Max	Steel, Sir David
Maddock, Mrs Diana	Steinberg, Gerry
Mahon, Mrs Alice	Strang, Dr Gavin
Marshall, David (Shettleston)	Straw, Jack
Martin, Michael J (Springburn)	Taylor, Mrs Ann (Dewsbury)
Meacher, Michael	Thurnham, Peter
Meale, Alan	Timms, Stephen
Michie, Mrs Ray (Argyll Bute)	Wallace, James
Miller, Andrew	Wareing, Robert N
Morris, Alfred (Wy'nshawe)	Watson, Mike
Mowlam, Ms Marjorie	Welsh, Andrew
Mudie, George	Winnick, David
Mullin, Chris	Worthington, Tony
O'Brien, Mike (N Warks)
O'Brien, William (Normanton)	Tellers for the Ayes:
Olner, Bill	Mr. John Maxton and Mr. Norman Hogg.
Pickthall, Colin

NOES
Alexander, Richard	Boyson, Sir Rhodes
Arnold, Jacques (Gravesham)	Brown, Michael (Brigg Cl'thorpes)
Ashby, David	Carlisle, John (Luton N)
Atkins, Robert	Carrington, Matthew

Carttiss, Michael	Monro, Sir Hector
Chapman, Sir Sydney	Neubert, Sir Michael
Duncan Smith, Iain	Pawsey, James
Dunn, Bob	Porter, David (Waveney)
Eggar, Tim	Richards, Rod
Gallie, Phil	Riddick, Graham
Gorman, Mrs Teresa	Shaw, David (Dover)
Greenway, Harry (Ealing N)	Shepherd, Sir Colin (Heref'd)
Greenway, John (Ryedale)	Shersby, Sir Michael
Griffiths, Peter (Portsmouth N)	Sims, Sir Roger
Harris, David	Sumberg, David
Hawksley, Warren	Thompson, Sir Donald (Calder V)
Howell, Sir Ralph (N Norfolk)	Tracey, Richard
Hughes, Robert G (Harrow W)	Twinn, Dr Ian
Hunter, Andrew	Waller, Gary
Jessel, Toby	Wardle, Charles (Bexhill)
Kellett-Bowman, Dame Elaine	Whittingdale, John
Knight, Dame Jill (Edgbaston)
Lawrence, Sir Ivan	Tellers for the Noes:
Martin, David (Portsmouth S)	Mr. Bill Walker and Mr. John Marshall.
Mitchell, Sir David (NW Hants)

Question accordingly agreed to.

Bill ordered to be brought in by Mrs. Maria Fyfe, Mr. Jimmy Hood, Mr. David Marshall, Mr. Brian H. Donohoe, Mr. Eric Clarke, Mr. Ernie Ross, Mr. William McKelvey, Mr. Mike Watson, Mr. George Foulkes, Mrs. Ray Michie, Mrs. Alice Mahon and Mr. Harry Cohen.

Scottish Parliament

Mrs. Maria Fyfe accordingly presented a Bill to introduce a Scottish Parliament in accordance with the scheme proposed by the Scottish Constitutional Convention: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 190.]

Privilege

5.25 pm

I beg to move,

That the matter of alleged improper pressure brought to hear on the Select Committee on Members' Interests in 1994 be referred to the Committee on Standards and Privileges.

The motion was facilitated by Madam Speaker's statement yesterday. I must stress, first, that the issue reflects no personal animosity towards the Paymaster General, the hon. Member for Havant (Mr. Willetts). Indeed, he and I have rarely spoken except to talk about my old school, Hayling Island county secondary, which is in his constituency.

Secondly, I should like to make it clear that I shall not draw any conclusions about the particular allegations. That is, in my view, the role of the Select Committee on Standards and Privileges. It is, however, my intention to bring the allegations to the attention of the House in the hope that the principle of my argument is fully understood and that the House will agree to refer the matter to the Committee on Standards and Privileges.

Page 135 of "Erskine May" argues that when a breach of privilege or contempt occurs, the House should exercise its penal jurisdiction sparingly, and

"only when satisfied that to do so was essential in order to provide reasonable protection for the House, its Members or its officers from improper obstruction or attempt at or threat of obstruction causing, or likely to cause, substantial interference with the performance of their respective functions."

The articles in The Guardian and other newspapers on 5 and 6 October 1996 suggest that there is a prima facie case and evidence requiring investigation. It may help the House if I remind hon. Members of the specific allegations made on 5 October.

The Guardian claims:

"Enclosed in the letters sent to the party leaders—and to the Speaker of the House of Commons, Betty Boothroyd—are copies of a document obtained by the newspaper as it built up its defence to the libel action mounted by the disgraced former minister and the lobbyist. The pair abandoned their action, paying part of the paper's costs earlier this week. The Guardian believes the document shows how the Conservative Party has, through senior party and government members using the mechanisms of Parliament, conspired to prevent a full and public airing of the facts about the behaviour of Mr. Hamilton and Mr. Greer."

The Observer, on 6 October, claims to quote from a memorandum. Again, I will read it exactly. The paper says:

"The memo says: 'Said No. 10 had got in a muddle about Committee on Members' Interests. They claimed it had cleared Neil Hamilton but actually this was only on a complaint about remarks of his, not on the new allegations.

He is now expecting to receive a formal complaint about Hamilton receiving money, etc. He could: (1) argue now sub judice, get committee to set it aside or (2) investigate as quickly as possible, exploiting good Tory majority at present. We were inclined to go for (1) but he wants our advice".

Also on 6 October The Sunday Times developed the story saying:

"Last night Johnson Smith, a member of the committee that will now investigate the charges against Hamilton, said he could well have discussed the case with Willetts but denied exploring any attempt to help the former Minister."

I congratulate my hon. Friend on the quiet dignity with which he is making his submission today. In doing so, as he knows, I speak as a member for quite some time of the Privileges Committee of the House. Will he accept, as I am sure he does, that if a buck has to stop, it may not necessarily stop with the particular hon. Member against whom allegations are made?

Junior Whips, Madam Speaker, as you know, are not soloists. Their work is very carefully choreographed.

Order. If this is an intervention, it must be pertinent and to the point or a question. It must not be a speech. Will the right hon. Gentleman please come to the point?

Their work is choreographed. I am saying that the Patronage Secretary may be involved. Others higher up may be involved. It may be that this has to be a very wide-ranging inquiry, not just about one hon. Member.

I respect my right hon. Friend's contribution to the Privileges Committee and other aspects of the House, but I shall not be drawn on other issues of that nature. If the House approves the motion, it will be a matter for the Committee on Standards and Privileges.

I have related to the House the detailed allegations in the press. Hon. Members may well ask whether, if they are all true, it is a matter for the Whips. The point is very simple. There must be a clear distinction between the functions of the Whips in areas of legitimate party management and, separately, in their role when Parliament acts in a quasi-judicial capacity.

The investigation undertaken by the Committee on Members' Interests under the chairmanship of the right hon. Member for Wealden (Sir G. Johnson Smith) was of a quasi-judicial nature. In Britain, it is accepted that when a body is considering matters in a judicial or quasi-judicial manner, it is fundamentally wrong to exert or seek to exert political or any other form of pressure on it. That would apply equally to a local authority planning committee or an Old Bailey jury.

The same principle applies in Parliament. Therefore, if the allegations are true, they are very serious. It seems to me that the Committee should demand to see all the papers referred to in the newspapers. I would also urge that the inquiry be totally open.

Hon. Members must realise that the public hold us in very low esteem. That is due in part to the so-called sleaze issue. If the alleged interference actually occurred, we cannot hope to restore any of that public confidence in the integrity of the House unless we take firm and decisive action. We have a duty and a responsibility to do that. Now let us ensure that there is the fullest unfettered inquiry into the allegations.

5.34 pm

I rise simply—and briefly—to express the hope that the House will agree to the motion and remit the complaint to the Standards and Privileges Committee for its consideration and advice. The House will understand, however, that as Chairman of the Committee that would examine the matter if the House were to make that decision, it would not be appropriate for me to make further comment this afternoon.

5.35 pm

I also shall be brief, not least because I am also a member of the Standards and Privileges Committee and I would not want to prejudge any inquiry. I shall simply say a few words to welcome the opportunity for such a reference.

The Committee has already embarked on an inquiry into allegations that have been made relating to Members' interests. It has done so as a matter of urgency. However, there is still some misunderstanding of the dual role of the Committee. It exists to raise issues concerning Members' interests, but it also deals with any complaints about privilege. Therefore, without reference to a Committee that relates specifically to privilege, and not just to Members' interests, certain aspects of recent allegations would not be subject to investigation. That would be most unsatisfactory. I hope that the House will agree that it would be wrong for the Committee to be restricted in any of its investigations.

On Monday, you, Madam Speaker, said:

"the reputation of the House as a whole has been called into question."—[Official Report, 14 October 1996; Vol. 282, c. 463]

I agree, and I am sure that hon. Members on both sides of the House share your strong concern. It is essential, therefore, that all the matters should be investigated as quickly as possible. However, it is also vital that the investigations are thorough and complete. I know that my colleagues on the Committee are as keenly aware as I am of their responsibilities in the matter.

I hope that those who may be called to give evidence or to provide documentation will also be aware of their overriding responsibilities to the House and that everything that the Committee needs by way of evidence or documentation will be forthcoming. Unless that is the case, the matters will not be resolved. I trust, therefore, that everyone will co-operate fully with the inquiry of the Committee on Standards and Privileges.

5.37 pm

The House wishes to reach a rapid conclusion on the matter and I am sure that that is right, but as we are considering the reputation of Parliament, I want to put two separate points to the House. First, was the reputation of Parliament damaged by what some of its Members did? I am not concerned with that. Secondly, has the reputation of the House been damaged by the way in which the House has handled the matter? In my view, that is the real problem that the House has absolutely failed to confront.

The matter arose more than two years ago. At the time, I was on the Privileges Committee—the Committee on which I was proudest to serve. As the House may recall, I was not prepared to sit on a secret Committee and I was duly removed on a motion of the Leader of the House. I am very glad that I was not on a Committee that was bound to secrecy because many of the problems have arisen because of that secrecy.

Why does the House not rapidly legislate to deal with the standards required of Members of Parliament? If I offered somebody £1,000 to vote for me in an election, I would be guilty of a corrupt practice. I would be taken before an election court. That court would report to the Speaker and the House would endorse the decision of the court because we have the final say. When we are elected Members of Parliament, why are we not governed by legislation? If somebody offered me £1,000 to table a question—nobody ever has—should that not be subject to legislation on the representation of the people by an extension of the law?

We should be discussing the rights of the electors, not the reputation of Parliament as if somehow we were preserving an old monument. When people elect a Member of Parliament, they should know that Members of Parliament can be relied upon to defend their constituents and present their own opinions honestly to the House. If people think that, when an hon. Member is elected, he has a marketable product at his disposal—his influence—we will enter an area that has been dealt with in the past in respect of corrupt elections.

When elections were contested in the old days—I am talking about the 19th century—the House used to deal with the matter in Committees like the Privileges Committee. The result was that the Government majority on the Committee always upheld their own candidates, so the House decided to transfer the responsibility to an election court.

I had a funny experience when I was once taken to an election court and disqualified by it—not for a criminal offence, but for the fact that there had been a biological change in my blood supply, which two judges contended disqualified me from sitting in the House of Commons, where I had been a Member for 10 years. There was not a jury, just two judges. The election court heard the evidence for two weeks and reached the marvellous conclusion that removed me from this House. That is how the matters before us should be dealt with. Parliament has abandoned the responsibility to make clear in law which rules govern it.

A code of practice and so on in the House is perfectly proper, but gets us into another difficulty. Whatever hon. Members may or may not have done—I am not a muck-raker and never have been—it is not at all certain that it was illegal. Perhaps some of the practices, which we would all regard as very undesirable, are perfectly legal. Why are they legal? That is the problem that the House has dodged.

There should of course also be full disclosure. When people vote for a parliamentary candidate, the candidate's interests should be on the polling card issued by electoral registration officers so that people know exactly what they are. Disclosure is a safeguard.

My final point also arises from my own unhappy experiences. I do not believe that the House has the right to remove elected Members of Parliament because it does not like what they have done, even if it is not illegal. The House has no right to remove its own Members. They can be removed only by law. The law has to be clear. If a Government contractor is disqualified, which he can be under the House of Commons Disqualification Act 1975, why should other people who are engaged in the business of promoting some private interest for money not also be disqualified?

It is not in doubt that the matter will go before the Standards and Privileges Committee, but how long it will take to deal with it I do not know. It is always possible that the Government might not survive the Queen's Speech, in which case it is possible that the business of this Committee, like that of many other Committees, will drift into another Parliament when it is long forgotten. I am not absolutely sure that the election will be after the Committee has reported. If the report is likely to be published before the election, I can imagine other Whips asking whether they really want it all to come out on the eve of polling day, and a similar type of influence may be brought to bear.

One objection is that the time scale is wrong. It is two and a half years since the matters came into the public domain and the House has absolutely failed to deal with them in the way it should: a quick and open examination of the evidence and an immediate move to legislation so that electors know the law relating to their Members of Parliament just as they know that which relates to their candidates.

I ask the House to consider that suggestion, not because I am trying in any way to stir argument about the merits of the motion, which my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) moved with proper parliamentary dignity, but to draw attention to the fact that the issue should not be one that sells newspapers due to access to leaks. The matter should not be used for that or party political advantage because who knows what would come up if there were a proper examination. It should be used to ensure that the people who send us here know that we are governed by law and that they can be as near as certain that if breaches occur they will be dealt with by the courts and not Committees that inevitably, by necessity, have a Government majority.

5.43 pm

>: My right hon. and hon. Friends and I warmly welcome both your statements, Madam Speaker, of Monday and Tuesday and the motion tabled by the hon. Member for Ellesmere Port and Neston (Mr. Miller), which we support without reservation. We also clearly welcome the fact that the Leader of the House and the shadow Leader of the House want expeditiously to refer the matter to the Committee. That is a welcome start. I subscribe entirely to the views expressed by the right hon. Member for Chesterfield (Mr. Benn) about declaration of interests for those standing for elections and about legislation. I share the hope of that outcome.

I should like to make four points about procedure. First, I agree with the point made by the right hon. Member for Manchester, Wythenshawe (Mr. Morris)—it is clear that it would be entirely inappropriate to investigate the activity of an individual or two without looking at those who may be connected to them. Out of fairness to all hon. Members, the Committee must consider all those who, by implication, as well as other ways, are associated with the allegations.

Secondly, it would be extremely unsatisfactory if this matter remained in Committee and was not reported to the Floor of the House before the end of this Parliament. Although it is obviously not entirely within the Government's control, the election could be as late as May next year. I hope that the Leader of the House, as the Committee Chairman, and Committee members will try to ensure that the Committee does its job as quickly as is compatible with its important task. Speed is important because justice and truth delayed is justice and truth denied to the public at the next election.

Thirdly, Sir Gordon Downey will produce his own report. We understand that he has been working hard already. That report must enter the public domain. It is important that advice from the Officer of the House charged with investigative and other responsibilities is a public document. If we are to restore public confidence in our procedures, as your statement, Madam Speaker, sought to establish that we would, that document must be published.

Fourthly, and perhaps most important, I hope that the Leader of the House will make it clear—obviously not now at the Dispatch Box, but by another method later tonight—that the vote in Committee will be free of party line. I also hope that, when the matter comes back before the House, there will be a free vote with no party line. It would be entirely unacceptable if any report and any subsequent motions that came before the House were accompanied by any party political attempt to determine the result of a vote. Indeed, it would be incompatible with the request that the Committee investigate.

The sooner the Leader of the House can make it clear to the public that that is what will happen, the sooner the Committee will command the necessary public confidence to assist the restoration of the House's reputation. It is vital that the matter is not dealt with in a party political way and that all hon. Members are free to speak and vote independently of the party to which they belong.

5.47 pm

I wish that I could get excited about the idea that the House of Commons, with all its mumbo jumbo, by sending the matter to a Committee of the House of Commons, will resolve it and satisfy the public. The truth is that the public know that self-regulation is wrong.

I have stood up in the House with many of my hon. Friends countless times to say that it is wrong for the police to investigate their own complaints and that investigation should be done by some outside body. We say it about the Stock Exchange, Lloyd's, and even about hospital trusts, which now investigate the complaints that we send in. Previously, another health service body used to investigate them. Somehow or other, for this place, it is right for a Committee to deal with such matters.

I read the other week that our Labour Front-Bench team—new Labour or whatever it is—were on the point of calling for a judicial inquiry. I thought that that was a smart move. Somehow or other they backed off. They should have stuck to their original proposition. There has been a litany of Select Committees. Although on some Committees hon. Members beaver away out of the glare of publicity about some matter before them—I recognise that much work goes into them—I do not approve of Select Committees. I am not on any; I do not believe in them. I do not believe in the system of sloppy consensus and the all-party embrace.

On this issue, the public are watching. They do not know about what takes place on many other Select Committees, but they know about this one. They think that the House of Commons should do better, and that the matter should be dealt with by somebody outside. There should be a judicial inquiry.

Just imagine what the story is about. It is about a Tory Whip being told, presumably by one of the higher-ups in the Government, to finger a Committee—to ensure that it uses its Tory majority to get the right result. I was not surprised when I read about that in The Guardian. What surprised me was the fact that the Whip—

Put it on paper.

Yes, the fact that he put it on paper. Then, because the Whip put it all on paper and handled the matter sensitively, he was promoted. That was what surprised me.

Cynic though I may be, I must point out that when the Committee is set up again, it will be another Tory-dominated Committee. The Tory Government have a majority of one, so they tell me, and the two people principally involved in the allegations are the hon. Member for Tatton (Mr. Hamilton) and the Paymaster General, the hon. Member for Havant (Mr. Willetts). Can the House imagine in its wildest dreams—I cannot—that the Tory Government who are hanging on for a May general election will throw away their majority by coming to any conclusion other than to save the skins of two of their Members of Parliament? I do not believe that they will do anything else.

Almost every Select Committee that has operated in the glare of publicity has backed the Government. I have watched them all. There was the Committee that investigated the coal industry, and many more. At the end of the day, when the chips are down, we always find that the Tory Government's majority holds sway.

That is why I am not convinced that the road that we are now travelling will resolve the matter. One of my colleagues told me earlier, "Dennis, ask them to make sure that all the papers—not just some, not just those that went to court—are submitted to the inquiry. What is more, would it not be a good idea if all the papers were put in the Library, so that those of us who are not on the Committee can read them?" What about that? Let us have some transparency. That is the new word that everybody keeps trotting out in this place.

The whole story has been a litany of failure. In 1976 we managed to set up a Register of Members' Interests. Some people said, "Stuff it. I'm not putting my name in there." Then the Nolan committee was set up, with some Members of Parliament and a few members of the chattering classes. It was the first time for many years that people had been brought in from the outside. That committee made a marginal proposition to improve the so-called register.

What happened? The Government ran away from some of the proposals, and when the new rules were introduced and it was declared that everybody must declare their income from moonlighting, about 30 Tory Members of Parliament said, "We're not putting our income in."

So the public outside say, "Oh yes? They are going to send the investigation to another Committee of the great and good in the House of Commons. What will happen to it there?" Most of them will draw the same conclusion as I do about where we will be when it is all done. That will probably be after the general election, because the Government will find ways of dragging it out. They will use Whips and every other means to ensure that the process goes on until after the election.

The net result will be that the Government will think that they have swept the whole thing under the carpet, but then something else will happen and people in the press and the other media will say that Parliament has been brought into disrepute. Then the Government will try again to cobble some other form of mumbo jumbo to look after the business in the House.

It ain't good enough. It is time to say that if we want to deal with the matter, it should be done by a judicial inquiry. Then, every Member of Parliament and every member of the public will have the chance to know what is taking place, and to see that the people who run Parliament—and, indeed, every Member of Parliament—are held to account, not by a small Committee in this little greenhouse, this palace of varieties, but by the people outside.

5.53 pm

I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) on what he has done today. However, I would hesitate to approve a motion that did not make it perfectly clear that the Committee would sit in public.

We have been through the argument before, and my right hon. Friend the Member for Chesterfield (Mr. Benn) made the same point when he was excluded from the Privileges Committee. There is nothing in the motion, and no commitment from the Leader of the House, who will chair the Committee, to say that the proceedings will be held in public.

If the Committee does not sit in public, there will not be public confidence. There can be no public confidence if such matters are dealt with as they were by the former Privileges Committee. I hope that that point will be well taken by the Leader of the House and by those who will sit on the Committee.

Until recently, the view expressed by my hon. Friend the Member for Bolsover (Mr. Skinner), that self-regulation was not appropriate, would not have been accepted by most people. Most, including me, would have said that we should regulate our own affairs—indeed, that we had a duty and responsibility to do so. That is a long tradition, and I would have said to my hon. Friend that I disagreed with him about it. I continue to disagree with him, but to a far lesser extent.

The situation is grave. I do not want to exaggerate it or give the impression that people have lost confidence in Members of Parliament altogether and no longer come to our surgeries or write to us. That would be nonsense. We know that when people have problems they often come to us and hope that we will do our best to resolve them, and I do not want to give a different impression, but people's view of Parliament as a whole should alarm us.

This is a narrow motion, and I do not want to broaden the debate—indeed, you would not allow me to do so, Madam Speaker—but the fact that 67 per cent. of the people consulted in a recent opinion poll published in The Guardian believe that we are generally on the make is certainly alarming and disturbing. The effects of the misdeeds, or alleged misdeeds, of one or two hon. Members have spread to the House of Commons as a whole, so we cannot simply dismiss the point of view that the time may come, if it has not come already, when self-regulation is no longer appropriate.

The Nolan committee has already been appointed. Years ago, it would have been unthinkable that such a committee would be set up to consider standards in the House. The conventional view would have been obvious—that that was our job—but few people disagreed with the decision that was taken, rightly in all the circumstances at that time, to set up the committee.

The important aspect of the matter before us—and of related matters—is that they constitute a test. If the Committee works as my hon. Friend the Member for Bolsover assumes it will, the time will have come when no confidence in self-regulation will be left. People will argue strongly outside that if other organisations have avoided self-regulation, there is no reason why the House of Commons should cling to the past.

That is the test. How will the Committee go about its business? Will it sit in public, as I have asked? Shall we ensure that the Government majority on the Committee does not act in such a way as to make it clear that the inquiry will not be the impartial inquiry that is essential not only in the context of the matter before us, but for the sake of the reputation of the House?

I have nothing against the Paymaster General, the hon. Member for Havant (Mr. Willetts)—certainly nothing personal. Some might say that, if we must have Tory Members, we might as well have Tories such as him. I have no desire to see the hon. Gentleman scapegoated. A serious allegation has been made, and he has a perfect right to defend himself. We all agree on that, but his defence should be heard in public before the Committee, and if others are involved, we should know.

I shall certainly not vote against the motion, but I believe that it sets the House a test. If our reputation is to survive and people are to have confidence in Parliament as a whole, it is essential that when this subject, and other far more serious allegations, are investigated—after all, the matter before us is fairly minor compared with the other matter that will be before the Committee—it is seen that the Committee can act impartially, so as to make it clear that we are capable of running and regulating our affairs.

Question put and agreed to.

Resolved,

That the matter of alleged improper pressure brought to bear on the Select Committee on Members' Interests in 1994 be referred to the Committee on Standards and Privileges.

Public Accounts Committee

5.58 pm

I beg to move,

That this House takes note of the 41st to 47th reports of the Committee of Public Accounts of Session 1994–95, of the 1st to 41st Reports of Session 1995–96; and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm. 3166, 3167, 3172, 3189, 3222, 3243, 3279, 3298, 3327, 3373, 3379 and 3384) with particular reference to the following Reports of Session 1995–96:

First, Child Support Agency (House of Commons Paper No. 31);
Sixth, A Review of the Financial Controls over Indirectly Funded Operations of the Metropolitan Police Service (House of Commons Paper No. 109);
Tenth, The Annual Report of the European Court of Auditors and the Statement of Assurance (House of Commons Paper No. 250);
Thirtieth, Ministry of Defence: Management of Works of Art (House of Commons Paper No. 337);
Thirty-eighth, Lord Chancellor's Department and the Court Service: Handling Small Claims in the County Courts (House of Commons Paper No. 410); and
Forty-first, Evaluating the Applications to run the National Lottery and the Director General's Travel and Hospitality Arrangements (House of Commons Paper No. 96).

We are looking today at the hard work of the Committee during the past year, in which 48 reports have been produced—seven in the 1994–95 Session and 41 in the 1995–96 Session. I welcome the presence in the Chamber of the Financial Secretary to the Treasury, whose predecessor was very helpful in wholeheartedly accepting our eighth report of 1994. That was a most important report, and his acceptance of it was of great value to us in our subsequent work.

I pay tribute to the outstanding Comptroller and Auditor General, Sir John Bourn, and his highly qualified and dedicated staff, who have been most valuable to the Committee and to the House. Sir John is, of course, now an Officer of the House, as is John Dowdall, the Comptroller and Auditor-General for Northern Ireland.

The current staff are different from what they were. It used to be that people came in at the age of 18 to learn bookkeeping, and they learned not much more than that. Now, we have auditors and professionally qualified accountants, who are in great demand in the City of London and accounting firms. They now have a level of professionalism that we never saw before—certainly not up until the early 1980s.

I welcome the help given by the Clerk of the Committee, Mr. Ken Brown, who has been most valuable in producing all our papers. These seem to grow in complexity all the time, but his explanations are welcome. I also thank the members of the Committee, who are outstanding. I am grateful to my colleagues, who do enormous amounts of work—far more than when I was first appointed to the Committee in 1965.

At that time, there was a very small amount of work in comparison with what we have now, with just one report a year covering all the various elements. Now we have a multitude of reports, and the work imposed on my colleagues is very great. They bring a great deal of enthusiasm, perseverance and dedication to it. I am also grateful to the Treasury's officer of accounts and to the accounting officers for their work.

During the past 13 years, the Committee has introduced a custom of inviting some accounting officers who are reaching retirement age to give their thoughts on the work of the Committee and the direction that it might take. Those comments have been welcomed. As this will be the last Public Accounts Committee debate of this Parliament, the present Committee should set out some matters that a future Committee may wish to consider.

First, success must hinge on the belief that nothing—certainly not party considerations—should come before the interests of the taxpayer. In the past 13 years, the Committee has produced more than 500 reports—all of which have been unanimous. That unanimity is not a result of fudged conclusions or recommendations, but because the people we are defending are at the forefront of our minds.

We know that we have the obvious advantage of not examining policy, as the Committee is as divided on such matters as any other in the House. But we take policy as given—even when we as individuals may thoroughly disagree with it. The report in which we examined the consequences of privatisation was an example of extreme disagreement on policy, but we examined whether the Government's goals were being realised, whether the assets had been sold for the best price, whether the timing was suitable for the sale, and whether, if there was a case for a clawback provision, it should be inserted. We studied whether the advisers and consultants were wisely and competitively chosen, and whether their rewards were commensurate with the work that they undertook.

We need a unanimous report, so that the Government are faced with conclusions that they cannot ignore by selecting those recommendations supported by one part of the Committee or another. As a result of our unanimity, the Government typically accept the overwhelming majority of our recommendations. When they do accept a recommendation, we do not leave it at that, but monitor the situation closely to ensure that it is implemented. If it is not implemented, we can return to it, as we have done several times. The advantage of meeting twice weekly is that we can come back again and again to matters.

We draw the attention of the House to the failure to implement the Government's own decisions. Such examples include the failure to institute adequate fire precautions covering Government property. Had the Government heeded our warnings, we would not have had the second fire at Donnington, where the Ministry of Defence lost £170 million of Government supplies, nor would we have had the fire at Windsor castle. The Committee has returned to each of these matters to underline the failure to implement previous recommendations.

In those cases where some of our conclusions are not acceptable to the Government, we still keep a close watch on the progress of the issue, and we frequently return to the matter and take further evidence. The evasion of vehicle excise duty in our 36th report this year is one example of this. Following our criticisms, I note that the Driver and Vehicle Licensing Agency is undertaking a programme of increasingly demanding targets. I shall be surprised if a future Public Accounts Committee does not return to that matter before very long.

There is a concentration on big issues such as defence procurement, which costs us £8 billion a year, and these must be a prominent part of our activities. In addition, we must examine a number of relatively small amounts of expenditure where the principles of good housekeeping, efficiency and—above all—probity need to be examined. I shall be dealing with these matters later. Taking account of those considerations, I must express my gratitude for the work undertaken by Committee members. The original work done by members is most important these days. Members have discovered matters that I, the Government and even the National Audit Office did not know about.

We need a close relationship between the Committee and the Comptroller and Auditor General. I know that we take that for granted, but we should not, because we have seen a number of examples in other countries where such a relationship does not exist. It must be based on mutual respect, trust and confidence. We are not in each other's pockets, but we understand the work that the National Audit Office does and the way in which these matters are dealt with. We should acknowledge the advantages we have, and make use of them accordingly.

I now come to the priorities for our work. First, I wish to mention our famous eighth report of 1994 on the proper standard of public conduct. This was a seminal report, which ranks alongside the most important reports ever published by the Committee. The evidence set out the kind of standards we need and how to uphold them, and it was brought to the attention of the House and the Nolan committee. It is crucial that we retain the standards of public conduct that we have had the good fortune to inherit.

Gladstone set up the Public Accounts Committee with the immense authority of an outstanding Chancellor of the Exchequer; that, along with his later premiership, set the standard for the way in which the public services have developed. It was he who decided that the Committee Chairman should come from the Opposition, and it would be hard to find any subsequent period when such a decision might have been made. Yet that decision ensured that Gladstonian standards became those of our public life.

In our own time, we have—through the National Audit Office Act 1983—the greater powers of the NAO and the Public Accounts Committee, as well as the selection of the Comptroller and Auditor General by the Chairman with the agreement of the Prime Minister. It is a great tribute to the work of the NAO and the Committee that, when the Comptroller and Auditor General, Sir John Bourn, was invited to become principal of the London School of Economics, he was able to say that the work of the Comptroller and Auditor General was even more important. That was an enormous tribute to our work.

Of the 185 or so countries in the United Nations, even with the decline that we note in our report, few come up to the standards of public life that we take for granted. We have received a valuable inheritance, and the Public Accounts Committee must pass it on. The eighth report left its mark on all the subsequent work of the Committee, and its impact has been far-reaching.

In the month following the publication of the report, the Treasury wrote to all Departments to draw their attention to it. They and other bodies for which they were responsible were required to review their procedures in the light of the report. A new memorandum for accounting officers reflected the issues of propriety and accountability. Detailed guidance for non-departmental bodies was issued, dealing with accountability and the declaration of financial interest. I am grateful to the Treasury for doing so, and for ensuring that the lessons we pointed out in our eighth report were spread as widely as possible.

The Civil Service College provided a course for newly appointed chief executives of agencies and non-departmental bodies as well as their boards. That course deals with aspects of public business and the maintenance of high ethical standards. I have here a summary of 10 Departments that have taken action based on the eighth report and the work of the Comptroller and Auditor General, who was invited to become the head of the London School of Economics, with one of the highest salaries in academic life. The fact that he is still there and undertaking that work on behalf of standards in public life is enormously important to us.

The sixth report illustrated the need to establish proper controls to prevent fraud. The report is entitled, "A Review of the Financial Controls over Indirectly Funded Operations of the Metropolitan Police Service". As the House will know, we have selected six reports to show some of the elements that we regard as important in the work of the Committee. Two others also deal with fraud.

The sixth report deals with a Mr. Williams, who lived the life of a lord in Scotland. He bought houses and hotels saying that he had acquired large sums of money from relatives in Norway. His fraud came to light only through an assessment of his work.

The Metropolitan police service is responsible for policing Greater London, and employs 28,000 police officers and 15,000 civilians, with a gross budget of £1.9 billion. The service has developed a number of confidential and indirectly funded operations to deal with serious crime—organised crime, drug importation, trafficking, terrorism and armed offences. Obviously, those are sensitive areas, which require a considerable element of secrecy.

In July 1994, a theft of more than £5 million allocated to one indirectly funded operation was investigated. Anthony Williams, a senior civilian member of the service, was arrested and charged with 19 counts of theft, found guilty and sentenced to seven and a half years' imprisonment. A further 535 offences were taken into consideration.

We felt it astonishing that a senior civil servant could have been living such a life in Scotland-buying hotels and becoming an important figure in his local town—"but coming to London to ensure that the sums of money were available. After his arrest, it was discovered that he had had unsupervised control over a bank account, and was the sole channel of communication between the operational and finance branches.

The operation was financed without detailed supporting evidence from Williams as to the funds needed. There was no independent reconciliation of the records with the claims made. Williams submitted no accounts, and there was no separate account code for his operation. He was responsible for accepting money, deciding how much he wanted, paying a certain amount for the purposes for which it was drawn, and making use of a large part of the balance for his own purposes.

I understand that one needs to be careful in some matters. If secrecy is necessary, one does not want a large number of people to know what is going on. Obviously, the operation involved was of that kind. Nevertheless, if secrecy is necessary, one must be even more careful to ensure that the proper safeguards are introduced. There was a greater responsibility on Mr. Williams' superiors to undertake the proper supervision. If someone has those powers—there may be occasions when they are astonishingly wide—the person's superiors have a greater responsibility for ensuring that other systems are in place.

Mr. Williams got away with that astonishing life. There was no investigation, and I find it strange that no one was aware of his life style. As in all these frauds, the trouble is that the person concerned usually gets too greedy. One starts with a small fraud, but it grows, and one gets over-enthusiastic. Before one knows where one is, one is taking such large sums of money that the fraud comes to light. As to recovery of the money involved, only about £1 million of the £5 million has been recovered.

Our 46th report of 1994–95, "Ministry of Defence: Fraud in Defence Procurement" found that there were 191 cases of procurement fraud, amounting to about £22 million. The Gordon Foxley case was by far the most serious. He dealt in the procurement of ammunition, and was able to secure at least £1.3 million—probably much more—in corrupt payments from overseas contractors. He got money from them rather than awarding contracts to the Royal Ordnance factory, which resulted in the loss of a large number of jobs in this country.

The corrupt payments were aimed at influencing the allocation of contracts for fuses and ammunition. That case was one of the worst that the Committee examined. Again, there was a failure to oversee the work of that procurement officer that I would not have expected, and I hope to see the loophole fully closed.

The third case of fraud I must mention is described in the 23rd report of the present Session, "National Heritage Memorial Fund Account 1994–95: Replacement of the Accounting Officer". A case involving such an officer is rare. The fund gives assistance towards costs incurred with certain items of national heritage.

In June 1995, the Department of National Heritage concluded that the accounting officer of the fund, Miss Nayler, had breached her basic responsibilities. The report states that she had

"allowed a clear conflict of interest to arise by permitting her partner's firm … to tender for a contract to be let by the Fund and was allowed to do so despite the knowledge of the Chairman of the Trustees of the conflict.

We note that, despite the issue of a letter from the Department indicating that such conflicts of interest should be avoided, she subsequently permitted the Fund to award her partner's firm further contracts, without competitive tender, which resulted in payments of some £35,000."

Clearly, that was fraud at the highest level. Although Miss Nayler was an accounting officer, an accounting officer of the Department was her superior, which is how the fraud came to light.

The interesting aspect of those three cases of fraud is that they arose before our eighth report of 1994 was produced. The Committee hopes, of course, that such fraud resulted from the sort of situations that could arise before that report and the action taken by the Treasury and Departments to deal with the serious decline detailed in it.

The Committee's first report of 1995–96 deals with the Child Support Agency, an executive agency which introduced a new system of child maintenance. The year 1993–94 was its first year of operations, and 40 per cent. of assessments on absent parents contained errors—a high rate. One can understand trivial errors, but these were mostly serious ones. I understand the difficulty of getting information from up to four partners—two from the current marriage and two from the previous one. That is a complication.

The Committee seriously criticised the agency and the Department, and said:

"We are gravely disturbed that at least 40 per cent of the child maintenance assessments made on absent parents in 1993–94 contained errors. We severely criticise the Department and the Agency for allowing this state of affairs to arise. While we recognise the difficulty the Agency face in getting accurate information from up to four parties, not all of whom may wish to be cooperative, achieving accuracy in maintenance assessment is essential if the Agency are to provide a fair and efficient service in the interests of children. We therefore urge the Agency to continue their efforts to explain to parents why the law requires the information concerned and to pursue non-compliance tactfully but firmly."

The agency has been set a new target of 75 per cent., rather than 60 per cent., accuracy. We were told by the Department that the planning assumed that the average assessment would take about two and a half hours. In fact, it took twice as long, so it fell hopelessly into arrears. As Sir Michael Partridge, the permanent secretary to the Department, said:

"it is quite unprecedented in anything I have come across in public service."

That is a serious indictment from a distinguished public servant, who understood the Department's work so well.

Finally, the Committee states:

"We consider that the Department should have established at a much earlier stage the financial and management information required by the Agency. We note that the Department are to produce a report of things that went wrong and lessons to be learned. We look to the Department to do so without delay and to ensure that the lessons are applied".

We have had the Treasury minute, but the situation is still not satisfactory. The Department was over-ambitious. In Australia and elsewhere, the past was ignored, and it was decided that the arrangements would apply only to future cases. Not following that example made things more difficult. It was the attempt to achieve fairness—and, I suspect, to get some money into the Treasury—that produced some of the problems.

The 10th report concerns the annual report of the European Court of Auditors and the statement of assurance. We have insisted that the Court of Auditors should be able to assure us that the money is spent properly. Partly as a result of our Committee's efforts—we have been very strong on this—in November 1995 we got the first statement of assurance from the Court of Auditors. It produces an assurance on the legality and regularity of transactions. It gives us information of which we can make some use. We immediately latched on to that. We were the first country in the European Union to say that the matter was important.

The hon. Member for Uxbridge (Sir M. Shersby) and I went to Brussels, and later we took the whole Committee to Luxembourg. Interestingly, we had by far the biggest representation at Brussels, and we had an impressive delegation to Luxembourg. I remember a Dutch Member of the European Parliament saying that he would speak in English, because English was the language of anti-fraud measures. That was a great boost to us, and an acknowledgment of our reputation for looking after the interests of the taxpayer.

There is now an internal audit every eight years; every three years is being talked about. The situation is not adequate or sufficiently stringent; we want it to be done better. Fraud should be a criminal offence, and the sanctions must be greater than repayment. At present, if fraud is found out, only repayment has to be made. The role of the court is too passive.

We notice that Mr. Tomlinson, a Member of the European Parliament, is doing useful work on the committee considering transit arrangements. The important thing is that fraud is going to be tackled. It hurts people to see their money going to the Community but not receiving the close scrutiny that we give.

We visited the Court of Auditors in Luxembourg in April. It had taken a sample of 563 payments among the then 12 member states and found that in 59 there were substantial errors. It had no opinion on 14 per cent. of cases, but of the rest, 4 per cent. had serious errors. It was unable even to assess 14 per cent. of cases. It is unable to provide an overall assessment. We regard that as serious. The financial systems of the Commission and of the member states are too often unreliable and inadequate.

From examining the money that we pay to Europe, we feel that fraud is indivisible. Some people say that it is only European money, so we can be more relaxed about ensuring that it is correct to the last penny. However, once such treatment begins, it can move across to the treatment of our funds in Britain. All public money must be treated in the same way. We tried to show the European Court of Auditors that lesson. There is a lack of effective sanctions. The court is an institution of the Communities rather than of the Union. The audits could be farmed out and national bodies made subject to supervision. Those suggestions should be followed.

On the auditors' powers, I should mention something about their rights of access. Astonishingly, the National Audit Office has fewer rights of access in Britain than have the European Union auditors. They do not much use their powers, but they have more of them. The National Audit Office has powers to deal with, and rights of access to, Departments, and does the audits of Departments and executive non-departmental bodies because they are laid before Parliament. However, it does not audit other non-departmental public bodies.

The present position here is unsatisfactory. The Executive, rather than Parliament, appoint their own auditors. Where public money is involved, it must be Parliament, not the Executive, that appoints the auditors. Something is fundamentally wrong there.

We need a practical way to provide inspection rights for all public bodies. The Treasury could issue guidance to Departments and other public funding bodies requiring access for the Comptroller and Auditor General as a condition of the grants that they make. The CAG should be offered the right to exercise rights of access reasonably and after consultation with the sponsoring Department, as he does now in respect of education.

In the past few years, Departments, agencies and executive non-departmental bodies have set up more than 200 publicly owned companies to help them deliver public services. Examples include the Student Loans Company and regional development organisations. Some executive non-departmental public bodies have been set up as companies.

Some of the statutes of those companies require Companies Act auditors, even though the non-departmental public bodies are not companies. Given the Comptroller and Auditor General's role as the auditor of public funds, it should be possible for him to be the auditor of companies wholly or mainly owned by the Government.

The Government have increasingly contracted out departmental functions to private sector firms under the "Competing for Quality" initiative. The private finance initiative has extended private sector involvement to the provision of services. The value of contracts awarded to them or pending amounts to more than £5 billion. The Comptroller and Auditor General has guaranteed rights of access only to papers under the control of auditor departments, not to relevant records in the hands of private firms which carry out contracted-out functions.

The Government's guide to market testing made it clear that the Comptroller and Auditor General should have access to contractors. There is a need to give the CAG access in every case, subject to the constraints that it would apply only to those activities carried out on behalf of the Government and funded by Parliament. It is clearly unsatisfactory that, in its direct responsibility to Parliament, the National Audit Office has fewer rights of access than other bodies or the European Union auditors. I hope that we may be able to see some movement on that, and I should welcome the comments of the Financial Secretary.

The 30th report is entitled "Ministry of Defence: Management of Works of Art". This dealt with a surprising situation. When the Ministry of Defence started to computerise the record of the Government art collection, it discovered that there were 900 works of art, but when it came to examine them, it found that 205 were missing. It did not know where they had got to. Such works of art were often donated by distinguished members of a regiment and displayed in mess halls and elsewhere. It was found that 205, or almost one fifth, were lost, and that many had been lost for more than five years. There has been little progress in recovering them.

The Treasury minute on the report said:

"The Department continues its effort to recover missing works of art but, so far, with limited success."

The problem is that there was no adequate inventory system. The Ministry should know where the works of art are, what they are, and rough valuations. We said:

"We consider the Department clearly negligent to have lost so many works … and we are concerned that so many items have been missing for more than five years. We are disappointed that the Department have made so little progress in tracking down the missing items, given that the problem has been recognised for some time. We look to the Department to continue the search for missing items, and to pursue with greater vigour incidents of theft. We find it deplorable that so many thefts have apparently been committed by the Department's own staff.

We recognise that the management of works of art may seem unimportant compared to the billions of pounds that the Ministry of Defence spend each year. But we are concerned about the loss of valuable and historic components of our national artistic heritage. and about the failure of stewardship: the failure to apply principles that people would regard as common sense in their private lives to their responsibilities as public servants. We believe that nobody would be as careless with their own pictures as the Ministry of Defence have been with these publicly owned works of art."

The 38th report is entitled "Lord Chancellor's Department and the Court Service: Handling Small Claims in the County Courts". The small claims procedure in the county courts is one of the great successes of our time, yet it is not trumpeted. I fail to understand why that is so. We found that the small claims procedure was introduced in 1973 to reduce the cost, delay and complexity of pursuing low-value civil cases through the county courts. The limit now stands at £3,000-it has been increased. Individuals use the procedure mainly to recover debts or seek compensation. Businesses use the procedure mainly to recover debts.

The report says:

"We are pleased to see from the National Audit Office survey that most people who had pursued a small claim found the procedure cheap and easy to use. However, we note the evidence that public awareness of the procedure is low."

That is most surprising. Here we have a way for people to obtain their rights readily, easily, and at small cost, yet so few people know about it. We say in the report:

"We consider that more needs to be done to ensure that people considering action know about the small claims procedure. We urge the Department to address these issues as part of their review".

The total cost of the county court system was more than £200 million in 1995–96. The Committee was astonished-we do not use such words often—that the Department did not know the cost of the small claims service. Here we have a success, but we do not know how much it is costing us.

The report goes on to say that the Department must undertake to determine the costs of the small claims courts so that it can set them in context and that it should determine the level at which fees need to be set in order to recover those costs. We said:

"We welcome the Court Service's recent moves to treat small claims as a separate area of county court business and to collect more detailed management information on the cost of the procedure. …

We are concerned about the limited information available to claimants on the effectiveness of the various enforcement services. We note that many claimants assume they should use the bailiff service when other enforcement methods might be more helpful."

We urged the Department to provide information, as well as comparative information, on the effectiveness of other methods

The 41st report was entitled "Evaluating the Applications to run the National Lottery and the Director General's Travel and Hospitality Arrangements". There were eight applications. The director general announced that the successful applicant was Camelot plc. The contract is effective for seven years. The Committee examined two issues: first, the evaluation of applications, and secondly, travel in aircraft and hospitality from GTECH, which is a shareholder in Camelot.

When we examined Mr. Peter Davis, we found that an important part of the evaluation was to establish that applicant companies and all individuals who would be involved in running the lottery were fit and proper for that role. We were concerned at information which raised doubts about the fitness of GTECH, a shareholder in the Camelot group. This included suggestions of undesirable business practices by GTECH in obtaining lottery contracts in the United States, and alleged corrupt payments in California, Kentucky and New Jersey to various persons, including the state senator.

We heard the director general's evidence that he had had access to all the information, that he had carried out intensive investigations into it, and that his decision to allow GTECH's participation in Camelot took account of a variety of factors, including the fact that neither GTECH as a company nor any of its officers had been charged with an offence, that adverse reports about GTECH were confined to its activities in the United States, and that a former employee of GTECH involved in corruption allegations had no connection with the United Kingdom lottery, the high reputation of the members of the Camelot consortium and GTECH's proposed role in the consortium.

We noted the director general's concern that, if he had required the withdrawal of GTECH, he would have ruled out the applicant offering the best return to the distribution funds. We said:

"We nevertheless stress that it is of overriding importance that the United Kingdom National Lottery should be subject to the highest standards of propriety and integrity and that the regulator should take a strong and active role throughout the period of the Section 5 licence to ensure that propriety is observed."

In relation to scratchcards, we noted that section 6 licences to promote individual games could be issued only in pursuance of an agreement with the section 5 licence holder—Camelot. We further noted that all

"Section 6 licences … have been issued to Camelot but that another Section 5 applicant, Rainbow UK Ltd, have alleged that Camelot were not prepared to consider their Section 6 proposals."

We also noted:

"We were reminded by the Director General that he has no duty to promote competition or a level playing field."

We nevertheless believe that Parliament would expect the regulator to ensure that all potential licensees are treated fairly. We therefore stressed the importance of the director general using the powers available to him to take a more active approach to those matters. We look to him to do so in the future.

We went on to note:

"at the time of publication of the Invitation to Apply for a Section 5 licence, the Director General gave a formal undertaking that he would not divulge information from applications without the applicant's consent because he believed this assurance was necessary to encourage high quality applications. We believe, however, that those applying for public sector contracts and licences must recognise that Parliament has a right to information to provide assurance that contracts and licences are properly let without impropriety and that they represent best value for money."

We cannot do our job without that kind of assurance.

As for the travel and hospitality arrangements, we noted that the

"Director General went to the United States in October 1994 to visit selected US Lotteries and that a similar visit was made by two members of his staff early in 1995. Throughout both visits all internal flights were made in G Tech corporate aircraft at G Tech's expense.

We note the Director General's view that his decision to make use of G Tech facilities in this way was based on the fact that to have undertaken the journeys by scheduled airlines would have taken much longer and would have cost the taxpayer more money."

The Committee did not feel that that was sufficient reason to take that kind of hospitality. We agreed with the Secretary of State, who said that she did not think that the director general's acceptance of the flights was wise in the context of his role as regulator of the lottery.

We recognized that the friendship between the wife of the director general and the wife of Mr. Menges has been a long-standing one, but we considered the director general's decision to make use of Mr. Menges's hospitality unwise, as was his decision to use GTECH aircraft for his private visit to the Menges's home. The Committee regards it as of vital importance that the director general should be seen to be impartial at all levels.

When the director general accepts any free flights from GTECH or any other person who has a role as an operator or a shareholder, or has any involvement, he has the

"continuing responsibility to regulate the Lottery and issue further Section 6 licences".

That had not been undertaken at that stage. In our view, the director general's decision to use GTECH corporate aircraft represented serious errors of judgment on his part.

Does my right hon. Friend agree that what is particularly preposterous is that the regulator had previously been told by the Secretary of State and by the Department that he had to be careful about accepting hospitality? He ignored that advice, and went further, by encouraging members of his staff to ignore it. Secondly, it is strange to note that it emerged from the closed session of our Committee that he ignored that advice in the full knowledge of the reputation of GTECH. No one is suggesting that the company had been charged with anything criminal, but the director general was aware that there was dubiety about the reputation of the firm whose hospitality he took.

Does my right hon. Friend agree that the director general's decision first to ignore the advice of the Secretary of State, and, secondly, to neglect to recognise the dangers of accepting such hospitality from someone whose reputation was somewhat clouded showed an enormous lack of judgment?

I was extremely surprised that anyone in public service might even consider for a moment acting in that way. What happened may not have been greatly influenced by that action, but certain procedures must be maintained if we are to be able to show taxpayers that we are looking after their finances as we have always done. It is our job to ensure that those standards are maintained. I hope that our report will help to ensure that.

I look forward to hearing the Financial Secretary's response to some of the matters that I have raised. He has been helpful in the past, and I am sure he will try his best to be helpful on this occasion.

6.44 pm

I should like to join the Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), in paying tribute to the work of the Comptroller and Auditor General and the staff of the National Audit Office and the Comptroller and Auditor-General for Northern Ireland and his staff.

It is an extremely pleasant experience to be able to stand up in the House and point to a substantial record of success achieved by the National Audit Office. I commend to hon. Members' attention the report of the NAO and some of the highlights from its work during the past year. Because of its work in the past three years, £775 million has been saved, which is £7 for every £1 spent on running the NAO. Some £500 billion of Government expenditure and revenue was audited by the NAO in 1995–6, and 50 value-for-money studies were completed. It presented the first report made to Parliament on European Community accounts, to which the Chairman has already referred. It also won a contract from the European Commission to audit its £2.5 billion of expenditure per annum on agriculture in the United Kingdom. The NAO also holds the chair of the central Government auditing standards advisory panel, and it published the panel's practice note on central Government audit.

That list is a fine tribute to the work of our NAO. Members of the PAC present in the Chamber know how its high standards make it possible for us to do our job and play our part in saving taxpayers money and ensuring that they get value for money.

I was interested in the Chairman's remarks about the small claims court. I commend to my hon. Friend the Financial Secretary what he said about the lack of knowledge of the work of that court and the limits that apply. It would be useful if a note were sent to all hon. Members to remind them of its existence. I hope that steps are also taken to ensure that every citizens advice bureau and other similar organisations are informed about the advantages to citizens that flow from that court, which is able to solve so many comparatively minor but nevertheless important problems that beset our citizens.

As the Chairman told the House, over the past year, we have dealt with a number of major items of public expenditure, such as the substantial problems because of the cost overruns on the Trident programme and our recent work on a report about the huge cost of building the British library. No doubt that work will come before the House in a year or so, when we have produced our final report on that most interesting but rather extraordinary building.

One of the most important reports by the PAC this year is the 10th report on the annual report of the European Court of Auditors. The Chairman has already referred to it. It is extremely important, because for the first time it came with a statement of assurance and a related special report concerning the reliability of the accounts of the Community budget for 1994 and the legality and regularity of the underlying transactions. We have never received such an assurance or report before, and it is extremely useful to our country. As a contributor to the budget and a recipient of funds from it, the United Kingdom has a vital interest in ensuring that the budget is spent with due regard for regularity and value for money and that the majority of the UK's transactions are properly accounted for.

On the court's overall findings, we as a Committee expressed our concern about the fact that there remains considerable potential for improving the way in which the Community's finances are managed in the areas of revenue and expenditure examined by the Court of Auditors in both member states and European institutions. The Committee is pleased that the Commissioners have started a management improvement programme, and I hope that the Government will support the continuing implementation of reforms under that initiative.

The Committee has also welcomed the emphasis placed on combating fraud by the European Council at Essen in 1994. We have acknowledged the steps taken subsequently by the Commission in its anti-fraud programme. We welcome the Government's strong line on fraud, and the fact that they are seeking even closer co-operation between member states, the Commission and the Court of Auditors.

The Chairman of the Committee mentioned a conference that I was fortunate enough to attend with him. It was organised by the European Parliament in Brussels on 23 and 24 April, and its purpose was to discuss action to combat fraud in the Community budget. We discussed the formation of the Commission's anti-fraud unit, known by the acronym UCLAF, which stands for Unité de Coordination de la Lutte Anti-Fraude. UCLAF describes itself as the flying squad of the Commission. It has 125 staff, of whom—we are told—a substantial proportion are experienced investigators; but, strangely enough, it has no legal personality or status. It is simply a co-ordination service.

Some member states would like UCLAF to do more, but it cannot now, because it is restricted by the institutional status of the Commission as a whole, and it has no power to conduct investigations in the territory of the member states. That is because of the understandable national susceptibilities relating to sovereignty. The question whether the United Kingdom and other countries would be willing to allow such a flying squad to cross their national frontiers and follow up investigations there is the crux of the issue of our membership of the European Union.

Other member states have reservations, as we have, about a Community-level body operating in an investigative role within their jurisdiction. They do, however, have a strong interest in the effective fight against fraud. My own view is that Britain would be most unlikely to grant cross-border investigative powers to UCLAF. I share the Committee Chairman's view that our own National Audit Office is the right body to investigate fraud, together with the PAC, and I hope that there will be no change in the present arrangements; but I strongly endorse the right hon. Gentleman's observation that the National Audit Office should have at least the same access as the European Court of Auditors in investigating all matters concerning Community finance.

As one of those who visited the European Court of Auditors in Luxembourg in June, I found it helpful to understand the work that the court is doing for the Community. It does not investigate fraud, because that is a matter for UCLAF. What it does is audit the Community accounts, and ensure that financial and management controls are adequate. I pay tribute to the work of the British member of the court, Mr. John Wiggins, and his staff for all that they do on our behalf.

Will my hon. Friend tell us a bit more about what the European Parliament is doing to tackle all this? Does he think that it, and its budgetary control committee, takes these important issues of financial regularity and value for money as seriously as the PAC? Could not the European Parliament get hold of the Court of Auditors' reports, and summon the Commissioners responsible for different areas of spending? Could it not increase the accountability of the Commission? It seems to me that there is so much work to be done that it is for the European Parliament, rather than the House of Commons, to tackle that work.

I am grateful for that intervention. The European Parliament has a very important role. It is vital for it to ensure that a European Community institution such as the Court of Auditors is doing its job properly—that it is providing the European Parliament with information, and that that Parliament in turn is providing member states with information about the success or otherwise of its work. I hope that that will happen.

As I said, that was the first occasion on which I had the opportunity to visit the European Court of Auditors. Like other members of the PAC, I had been somewhat in the dark about what the court actually did, and I felt that the two days there were very well spent. I believe that it was the first visit that the PAC had made to the court for some 13 years. We have a problem; as time rolls on and Parliaments come and go, it will be unfortunate if we do not understand what the court is doing. I hope that contact with it will be more frequent in future.

I, too, was privileged to participate in the Committee's visit to the Court of Auditors. I share my hon. Friend's feeling about the importance of its work. May I jog his memory in regard to the point raised by our hon. Friend the Member for Beaconsfield (Mr. Smith)? As I recollect, the court told us that only a small handful of Members of the European Parliament took an interest in the court's work. I was struck by that: it is a shocking fact, and the House should send a message to Members of the European Parliament that that is one of the most important pieces of work that they should be turning their hands to.

I agree. In passing, let me make my annual observation that it would have been very nice if the House had been a little fuller this evening to hear a debate about the work of the Public Accounts Committee, which also has a vital role in ensuring that we are given value for money and economy, effectiveness and efficiency in the services provided by Departments of our own Government. But perhaps Members of all Parliaments find it easier to devote their energies to other things when matters such as this arise. At least some of us, who are present, care very much about such issues, and they may make up for that.

Let me now refer to a matter that interests me greatly, although it is not included in one of the reports to which we have drawn particular attention in the motion. I refer to the 25th report of the Session 1995–96, which deals with civil legal aid means testing. I want to discuss it because of the substantial increase in expenditure on legal aid, and the way in which that expenditure is being monitored and approved. We should remind ourselves that the civil legal aid scheme is there to enable people of small or moderate means to pursue or defend a civil case, and that to qualify for legal aid, an applicant must pass a means test that examines his or her financial circumstances and the merits of the case, to ascertain whether there are reasonable grounds for taking or defending court action.

Unlike many funds that Members of Parliament must examine from time to time, the legal aid fund is not cash-limited; it is demand led. I raise the matter because the cost of the civil legal aid scheme increased from £255 million in 1990–91 to £601 million in 1994–95. The Lord Chancellor's Department told the Committee that it considered the increase to be due to the demand-led nature of the scheme, and to the fact that the legal cases for which assistance was given were now more complex, with more disputes relating to personal injuries.

As a Committee, we were worried about the verification of means, which is vital in determining whether a person is entitled to legal aid. We took the view that

"The Assessment Office should continue with its programme of seeking full verification of applicants' means in representative samples of cases, and that a stronger line will need to be taken with those applicants who do not co-operate".

We noted during our discussion of the matter that the Department is receiving

"an increasing number of allegations from third parties to the effect that applicants for legal aid have mis-stated their circumstances."

We therefore take the view that

"The Assessment Office will need to ensure that its investigation teams have sufficient resources to ensure that such allegations from third parties are thoroughly examined".

I am sure that most hon. Members whose constituents visit them at their constituency advice bureau will have heard the observation that someone who has been in receipt of legal aid should not be receiving it. Verifying means is therefore very important.

We found:

"Under the current system, the Assessment Office do not verify every item of income, outgoings or capital declared on the … application form … Outgoings, such as mortgage payments, council tax or loan repayments are not routinely verified. Verification of capital is usually sought only if the applicant declares more than £2,500, the relevant threshold being £3,000."

Our conclusions, as a Committee, are:

"We endorse the measures … being"

taken

"by the Lord Chancellor's Department and the Assessment Office to improve the arrangements for verifying the means of applicants for civil legal aid and to confirm, where appropriate, the income support status of applicants."

We also take the view that

"The Assessment Office should continue with its programme of seeking full verification of applicants' means in representative samples of cases".

It is important that that should happen, because the number of high-risk cases is increasing. We were told by the Department that

"a small but growing number of applicants … pose a high risk to the"

whole

"legal aid fund. Typically, their legal and financial affairs are complex, they may possess"

what was described to us as

"'an aura of wealth' not normally associated with"

applicants

"for legal aid, and the litigation has tended to have a business flavour of some sort or another, such as disputes about business assets and contracts, sometimes with an overseas element, sometimes not."

The Lord Chancellor's Department became aware of that problem in 1994, when, as the House will recall, some well-publicised cases emerged, in which

"people received legal aid who, as it appeared. were not the sort of people for whom the legal aid scheme was intended."

Shortly afterwards, the Lord Chancellor announced that he would take every step necessary to ensure that legal aid was provided only to those for whom it was intended.

I am sure that hon. Members will agree that £601 million is a lot of money. If that money is being spent on legal aid for people who do not qualify for it or who have taken steps to disguise their assets, every possible support should be given to the Lord Chancellor's Department and to the special investigations unit in ensuring that no one receives legal aid who is not entitled to it.

Sometimes, when I hear my right hon. and learned Friend the Chancellor of the Exchequer talking about the need to reduce public expenditure, my mind turns instinctively to reports that we have considered in the Public Accounts Committee, and one of the things to which it turns most often is expenditure on legal aid. I hope that my hon. Friend the Financial Secretary will say something about that when he replies.

Our 45th report is on the sale of County hall, a subject that arouses passions among political parties. I shall not get involved in the merits or otherwise of selling County hall, and I hope that other hon. Members will not do so. I simply want to draw attention to our report, with which we took considerable care.

The total proceeds of the sale of County Hall were about £92.3 million, compared with a valuation for the London Residuary Body, assuming planning permission and vacant possession, of between £90 million and £120 million in June 1987. The residuary body told the Committee that

"the advice from its property consultant and marketing agents was that the Shirayama bid of £60 million was a very high offer, and that the £30 million valuation obtained in 1987 would"

possibly have

"been high in 1990."

The eventual sale of the Riverside building, with which we are all familiar,

"to Shirayama for a cash payment of £50 million, plus a deferred payment of £10 million payable over a period up to 2012, was estimated to be worth between £52.5 million and £57.5 million in net"

present-day terms. One of the interesting things that happened during the saga of the sale of County hall was that the London School of Economics expressed an interest in purchasing it in March 1991. It was even given access to the buildings. The residuary body said that it did not pursue that bid because it was comparatively low, but the LSE's efforts to negotiate for the building continued through the national press.

More than a year later, on 29 June 1992, following an Adjournment debate in the House, the residuary body invited the LSE to submit a bid within 10 days. The residuary body acknowledged that

"in retrospect, asking the LSE to produce a bid in 10 days was possibly too early; but the LSE had been expressing an interest in the building for a very long time. In the Residuary Body's view, the LSE were negotiating through the press, and it needed to get them to put a financial offer on the table …

The Residuary Body considered that the publicity surrounding the LSE interest in County Hall was damaging the prospects of the sale to Shirayama."

It is important for the House to recognise that no offer was forthcoming from the LSE at the end of the 10 days, and it was very unlikely that it would ever have been able to make an offer to enable it to buy County hall.

The eventual proceeds of £92.3 million come partly from the sale to Shirayama and partly from the initial sale to County Hall Development Group, which fell through in October 1990. That group forfeited its £20 million deposit and £4.8 million in accrued interest, which formed part of the proceeds of sale of the building.

The subject is difficult and contentious. Whatever one's views, it is fair and reasonable to pay tribute to the work of Sir Godfrey Taylor and that of the London Residuary Body in obtaining a very good price in all the circumstances.

I pay a warm tribute to the Clerk of the Committee, Mr. Ken Brown, and his staff in the Committee Office. They provide us with a magnificent service. Their courtesy, helpfulness and enthusiasm make our job all the more interesting and worth while, and we are very fortunate to receive such excellent service.

7.8 pm

I congratulate my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Uxbridge (Sir M. Shersby) on their excellent contributions to this annual debate on the Public Accounts Committee. It is the fourth or fifth time that I have participated in the debate, and this is probably the worst-attended debate that we have had in the four and a half years that I have been in Parliament. I echo the sentiments of the hon. Member for Uxbridge; this very important debate deserves a wider audience.

The PAC has a very important history. It was set up under Standing Order No. 122 in 1862, following the Northcote-Trevelyan report, which condemned nepotism, incompetence and other defects in the civil service. Today, the PAC has three primary functions that stem from that report—to combat fraud and corruption, to ensure that public money is spent on the purposes voted by Parliament and to ensure that we get value for taxpayers' money. Those are all very important aims and the PAC is charged with upholding them on behalf of both the Government and the taxpayer. I have been delighted to be involved in the PAC over the past four and a half years and in the work that its Chairman, my right hon. Friend the Member for Ashton-under-Lyne described.

The benchmark for the work currently done by the PAC stems from the important eighth report of the 1993 Session. We did not take evidence for that report—it was an accumulation of the reports considered by the PAC during recent years—"The Proper Conduct of Public Business". It is an important report that underlines all the work of the PAC.

I want to concentrate on four reports which deal with combating fraud and corruption. However, it is worth recalling what we said in that eighth report:

"In recent years we have seen and reported on a number of serious failures in administrative and financial systems and controls within departments and other public bodies, which have led to money being wasted or otherwise improperly spent. These failings represent a departure from the standards of public conduct which have mainly been established during the past 140 years."

Over the past 140 years, we have built up a civil service that, by and large, is impartial, trustworthy and competent. It is the primary concern of the PAC to ensure that those standards are maintained.

There are 48 outstanding reports before the House—seven from the 1994–95 Session and 41 from the current Session. That demonstrates the work load of the PAC. I actually enjoy the work. I am not suggesting that we take on any more; the balance is about right. We get a proper response from the Government to the reports that we publish. The work of the Committee receives good coverage in the press. All that contributes to the ability of the Committee to ensure that our civil service is impartial, trustworthy and competent.

The first report on which I shall concentrate is the 13th report on the operation of the Student Loans Company. It is the PAC's second report on the role and work of the SLC. The company is wholly owned by Government, with the Secretary of State for Education and Employment and the Secretary of State for Scotland each owning 50 per cent. of the shares. That second report shows that the chief executive of the SLC had been summarily dismissed. When preparing the first report, the Committee took evidence on the setting up of the SLC. At that time, we were concerned because members of the Committee had received an anonymous letter making certain allegations about Mr. Harrison, the chief executive of the SLC. A separate letter was sent to the then Department for Education making further allegations about that individual's conduct. I will not list all the allegations as a number of them were proved to be unfounded, but it is safe to say that there was a question about that individual's relationship with the company that supplied the SLC with information technology—Electronic Data Systems. There was concern about the appointment to the SLC of Mr. Harrison's son, about expense claims, foreign travel and company cars and about membership of the Royal Scottish Automobile Club, to name just a few.

The SLC investigated the allegations, as did the internal auditors of the Department for Education and senior civil servants. The PAC was told by Sir Geoffrey Holland, the then permanent secretary at the DFE:

"No evidence whatsoever has been uncovered to suggest a corrupt relationship between the Chief Executive or any other company staff and ED-SCION."

The chairman of the SLC reached the conclusion that we were

"dealing with a grudge letter which has no foundation in the truth."

He said that

"Mr. Harrison … continues to cam the full confidence and support of the board."

It is a bit like the football manager who had the same support at Main road from Manchester City.

In December 1993, a decision was taken to extend the termination date of Mr. Harrison's contract from 1995 to 1998. The value of that three-year extension was £250,000. However, when we took evidence on the operation of the SLC on 13 December 1995, we discovered that Mr. Harrison had been dismissed in March that year. It was a summary dismissal without compensation. The report discloses that a forensic investigation by Coopers and Lybrand confirmed some of the earlier allegations against Mr. Harrison and discovered some new wrongdoings as well. It is that aspect of the report that is very worrying and begs the question why it took an independent investigation by Coopers and Lybrand to provide the necessary evidence on which to sack Mr. Harrison.

In the meantime, students were not getting a good deal from the SLC. Our report records that 1.1 million students telephoned the SLC seeking advice, but only 41,000 calls were answered. The Committee concluded that that represented almost a complete breakdown of the management of the telephone system. That failure to deal with student telephone calls was deplorable. In addition, some 35,000 students suffered delays in the receipt of loan payments averaging six weeks—in consequence, some of them could have been in very great financial difficulties. The PAC was right to draw attention to that aspect of the SLC. However, more importantly, we need to ask why the initial allegations into impropriety at the SLC did not result in a more judicious outcome to the inquiry into why the chief executive had his contract extended.

The next report that I want to deal with is the 46th report of the 1995–96 Session—"Ministry of Defence: Fraud in Defence Procurement". That report identifies 191 cases of alleged fraud between 1985 and 1994. The most significant recent case is that of Gordon Foxley. He was able to secure at least £1.3 million, and probably more, in corrupt payments from overseas contractors aiming to influence the allocation of contracts for fuses and ammunition. He also received substantial bribes. The exact amount is not clear, but the National Audit Office report shows that his English bank account received credits to the tune of £3.5 million between 1982 and 1990. The report rightly concludes that it is one of the worst cases of corruption that has come before the PAC. Some 12 contracts worth £33 million were cited in the criminal charges against Foxley, involving companies in Germany, Italy and Norway. It is interesting to note that there have been no charges, trials or convictions relating to that corruption in any of those countries.

At the time of the hearing in April 1995, I was trying to ascertain how much money had been recovered from the bribes or secret commissions that had been paid to Foxley. I wanted to know how much money had been recovered from the properties that he had purchased with the money that he gained from his illegal activities. At that time, the Government were still trying to gain access to Foxley's Swiss bank account. I hope that that has now been achieved and that some of that taxpayers' money is being returned to the Treasury so that it can be put to better use.

Another worrying aspect of the case is that Foxley's son, Major Andrew Foxley—a serving Army officer—was found in possession of documents that he was passing on to his father. They contained information on commercial matters that would have been beneficial to Gordon Foxley's corrupt activities. Major Andrew Foxley was not dismissed from the service. Again, important questions need to be asked about the investigation into that case.

The third report is entitled "A Review of the Financial Controls over Indirectly Funded Operations of the Metropolitan Police Service", which was the sixth report in the 1995–96 Session, and it is an extraordinary but sad tale. Anthony Williams—a civilian worker in the Metropolitan police—managed to steal £5 million. On 19 May 1995, he was found guilty of 19 charges of theft and sent down for seven and a half years.

When we took evidence during the hearing, I asked Sir Paul Condon, Commissioner of Police of the Metropolis, how many other offences had been taken into consideration when this case was prosecuted. The record shows that I was told that the number was between 40 and 100, which is not a very precise figure. In a written note to the Committee, we had the correct figure of 535 cases taken into consideration. We also learnt that, in a previous instance, £10,000 had been stolen from the police benefit fund.

The thefts were made possible and kept secret because there had been a fundamental breach of Government accounting procedures. Had Government accounting procedures been kept in place at the Metropolitan police, that £5 million fraud would not have happened. Williams was allowed to design the financial regime for funding the on-going indirectly funded operations. He became responsible for accounting for the fund, and he had unsupervised control of the use of that fund. Quite clearly, the temptation was too great.

We know full well that, in accounting procedures, we must separate the people who spend from the people who audit and account for money if we are to ensure that frauds such as that in the Williams case do not occur again. In that case, there was a single bank account, in Williams's name, and he was the only person who received a statement of the account. It was far too easy for him to defraud the Metropolitan police. Because of that massive fraud, committed over a substantial period, Williams was able to develop a double life.

The Williams case provides the Government with a lesson for the nursery voucher scheme. The company that has been charged with determining who is entitled to receive nursery vouchers is the same company that will distribute the vouchers. The operation of the nursery voucher scheme is a clear case in which there must be clear separation of responsibilities to ensure that a similar fraud does not occur. We do not want anyone to be able to do again what Williams did.

Williams bought a hotel, a public house and a restaurant in Scotland. He bought a villa in Spain, and he rented luxury apartments in London. He even bought baronial titles so that he had a suitable status to go with his illegally acquired wealth.

The surprising aspect of the Williams case is that he had a salary of £42,790. It was obvious from his life style that he was living well beyond his means. I should have thought that alarm bells would have rung at the Metropolitan police a little earlier. If they did not ring then—when he arrived at work driving his XJS or his Land Rover Discovery—they should have sounded when someone rang police headquarters in London and asked for Lord Williams. They told the caller that there was no Lord Williams on the payroll, but someone should have started to ask questions.

Another intriguing aspect of the case is that, in 1993–94—I can be no more precise about the date than that—Williams applied to Moray enterprise board for a business loan of £180,000. Moray enterprise board had the nous to ask for references and, when Williams did not provide them, his application was not proceeded with.

To mitigate the loss, the Metropolitan police have tried to sell Williams's assets. Sadly, they have been sold off at less than Williams paid for them, and the net loss to the taxpayer and to the Metropolitan police is approximately £1.2 million.

The next issue about which I am concerned is that contained in the report entitled "Ministry of Defence: Management of Works of Art", which has already been referred to by the Chairman. The use of the words "management of art" in that title is interesting, as we were told that 205 works of art have been stolen, and that 161 are still missing.

Among the works of art that are still missing is a painting entitled "Coastal Scene with Fishing Boat". It was stolen from the MOD's main building in London. When I cross-examined the permanent secretary to the Ministry of Defence about that theft, he told me that the building was one of the most secure in the country—as one would expect—that it is occupied seven days a week, 365 days a year and that he had nothing else to say. I asked whether he thought that it had been an inside job, and he said that he did not think that it had been an outside job.

Another painting that disappeared, entitled "Admiralty House", was painted in 1970 by Alan Dyson. It disappeared from the flat allocated to the Secretary of State for Defence. I shall not point my finger at any of the Defence Secretaries because the permanent secretary to the Ministry of Defence said that, between 1982 and 1991, there had been four Defence Secretaries, and that one of them had not occupied the flat in Admiralty arch. It is, however, a sorry tale.

A further problem in the report on the Ministry's management of works of art is that members of the Public Accounts Select Committee were told that the works of art were of "low value". We asked how the paintings could be valued after they had been stolen. We were told that they had been valued on the basis of the painter and the title of the work. I do not know whether we were being given a low valuation to demonstrate that the losses or thefts were not a serious matter. It is a serious matter, and I hope that there will be an attempt to ensure that the missing 161 paintings and other Government works of art are recovered.

The next report is on the Prison Service and the excess vote expenditure, which is the 17th report of the Committee. This is an extraordinary report. I am sure that the Minister's response to it, in his reply, will be one of severe condemnation of the Prison Service.

In February 1995, the Committee was told that there was a projected underspend in the Prison Service of £36 million. Even by 27 March 1995, the projected underspend was £20 million. When the book was closed, at the end of March 1995, the Prison Service had overspent by £1.6 million. I do not think that anyone would disagree that such a feat takes a great deal of effort and some ingenuity.

We have outlined in the 17th report the fact that there have been very sloppy accounting procedures in the Prison Service and a breach of Treasury guidance. The Treasury was kept in the dark over the situation; revenue was spent on capital; and there were dubious advance payments and unapproved virement. It was a shambolic state of affairs.

I am not sure what happened in the weeks when the Prison Service managed to spend that money, and I am not sure whether there was any central direction of it. Perhaps it is a coincidence that that was the same period immediately before the Prison Service attained agency status. I am convinced that it is not coincidental, and that a message was sent from somewhere to spend, spend and spend. The 17th report—it is very thin, but it contains a huge amount of detail—sets out a shambolic state of affairs that can only be condemned.

The Chairman has mentioned the Committee's report evaluating the application to run the national lottery. When the Public Accounts Committee takes evidence, I often think that senior accounting officers of Departments or next steps agencies are not there to collect the award for the best civil service department or the award for the best well-managed project.

In this case, the report from the National Audit Office on the setting up of the national lottery was very complimentary. The project had been brought in on time and on budget, sales had exceeded expectations, and the money that had been generated for good causes was better than had been anticipated. It was a model report, and the Director General of Oflot could have expected a reasonably comfortable ride from the Committee.

Things went wrong for the director general when he was asked by my right hon. Friend the Member for Swansea, West (Mr. Williams) about his trip to America. My right hon. Friend asked Mr. Davis:

"Did you go to Florida to talk to one of their rivals?"

Mr. Davis said that he had. He was asked whether he had found it rewarding, and Mr. Davis said that he had found it interesting.

My right hon. Friend asked:

"How did you travel there?"

Mr. Davis replied:

"By aeroplane."

My right hon. Friend said:

"Yes, of course by aeroplane. I did not think you swam. Did you travel at your expense, at anyone else's expense?"

Mr. Davis replied:

"I travelled across the Atlantic."

My right hon. Friend said:

"That is the usual way to go."

Mr. Davis went on to say that he had

"travelled across the Atlantic on scheduled airline and that came out of the budget of my department. Some of the internal journeys that I made within the United States were made in the private aircraft of G Tech."

GTECH owns 22.5 per cent. of Camelot and is therefore the organisation that the Director General of Oflot is charged with regulating. It is a matter of great concern that the director general chose to accept that kind of hospitality from one of the owners of Camelot, the company that runs the national lottery.

Mr. Davis then refused to answer any more questions along similar lines unless we went into private session. We did so—the proceedings of the private session are published in the minutes for all to see in the Public Accounts Committee's report—and were concerned about the relationship between GTECH and organised gambling in the United States. There were a number of prominent court cases involving members associated with GTECH.

Mr. Davis said:

"You may be interested to know that the day after I announced the award to Camelot I asked the chairman of Camelot to come to see me. I said to Sir Ron Dearing, who was then the chairman. that I wanted him to be aware that I knew of some serious concerns which had been expressed to me from the United States and that I required him to be aware that I knew and to make absolutely sure that he ran a regime within Camelot which monitored the situation and ensured that nothing untoward happened."

I am astonished that, having awarded the contract to run the national lottery to Camelot, the Director General of Oflot had to take the chairman of Camelot to one side to make that point to him. It was no surprise, however, that the PAC stated:

"In our view the Director General's decisions to use GTech's corporate aircraft represented serious errors of judgment on his part".

Had a member of a local authority done that, I suspect that he would have been surcharged and disqualified from office. I am also sure that had the Director General of Oflot been a time-served civil servant, he would have known that that type of such hospitality should not have been accepted and he would not have made that mistake. My view is that the position of the Director General of Oflot is untenable in light of the PAC's report.

The first of my two final points relates to my constituency and RAF Burtonwood. RAF Burtonwood is a Ministry of Defence property which is now surplus to requirements and being used as a private storage and distribution depot. It is the largest above-ground single-storey depot in Europe, providing 1.6 million sq ft of warehousing. When the PAC took evidence about fire risk, I was interested to note that the things that characterised the problems that we have had at Donington and elsewhere raised questions about automatic fire detection, fire suppression systems, weak buildings and the high value of stores. RAF Burtonwood has all those problems.

RAF Burtonwood is now surrounded by high-quality residential developments. Every time I mention this. I make the point that I live in one of the houses around it. I am not sure whether that counts as a pecuniary interest, but I want it put on record.

I was concerned about the fire precautions at RAF Burtonwood and remain concerned to this day. I fear that a fire there would be a huge environmental disaster and could have serious consequences for my constituents in that area. I still look to the Government to bring to an end the storage and distribution activities at RAF Burtonwood, which have made the lives of some of my constituents a nightmare, and to change the use of the facility to something more acceptable in an area that now has a residential development.

Secondly, I must mention a PAC report from some time ago on the sale of National Bus. Before the sale of National Bus, a £168 million surplus in its pension fund was paid into the Treasury. Mr. Wheeler, a constituent of mine, has pursued this aspect of the privatisation of National Bus with some enthusiasm. He finally got the pensions ombudsman, Dr Julian Farrand, to investigate the problem, and the ombudsman found in favour of Mr. Wheeler.

The ombudsman said that he has directed the new trustee to take without delay all practical steps to obtain the return of the money, with interest at an equitable rate, paid from the scheme's fund in breach of trust and received by the Department of Transport on behalf of the company. When the Minister replies, I hope that he will be able to give me up-to-date information on the Government's position on this case and their response to the report. It is clear that £168 million was wrongly removed the National Bus pension scheme, and the scheme's pensioners are entitled to get their money back from the Government.

7.34 pm

A tribute has already been paid to the work of the Comptroller and Auditor General, Sir John Bourn, for his excellent reports and for the excellent value for money provided by the National Audit Office. If I understand it correctly, the number of reports has increased, the number of staff has decreased and the NAO has kept within its operational budget. I should like to thank Ken Brown and other members of the Public Accounts Committee's staff for their excellent work in servicing hon. Members. I also thank members of the Committee, especially the Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). We are all aware of the amount of work faced by Committee members, but it can be only a fraction of that of the Chairman himself—he cannot have very much spare time during the week, in view of the number of reports produced and the fact that he works closely with the Comptroller and Auditor General.

Last year there were 48 reports, and we are considering 27 tonight. I shall not detain the House by going through them all, but I shall comment briefly on four: the 34th report on sickness, the 36th on vehicle excise duty—they appear in Cm 3384—the first report on the Child Support Agency this Session and the 19th report on fraud in Cm 3379.

I was sorry not to be able to visit the European Court of Auditors with the PAC. I know that the Committee made a worthwhile visit. I had hoped to be able to go, but other Committee work detained me in the House. The Committee was perfectly right to draw attention to the need to work closely with the European Court of Auditors in supervising the huge amounts of money spent from European funds.

I shall deal first with the report on sickness and draw attention to two points that arise from it. I was concerned to find that the Confederation of British Industry's evidence showed that the average number of working days lost in Britain is eight per worker, but in the private sector the CBI estimated it to be seven days a year and 10 days in the public sector. If the Financial Secretary to the Treasury is looking for ways to save money, he might consider why there are three more days' sickness per worker per year in the public sector than in the private sector. I do not know whether he can calculate the cost to the taxpayer, but it must run into hundreds of millions of pounds annually, and it must be worth investigating.

As the Financial Secretary represents a constituency in the north-west, he might be interested in evidence given to the Committee which showed that sickness rates for civil service staff are highest in the north-west. Sickness rates in the north-west are consistently the highest in the country, which I find unacceptable. I have drawn this matter to the attention of the Secretary of State for Health. I received a reply from the Under-Secretary of State for Health, the hon. Member for Orpington (Mr. Horam), in which he confirmed that the north-west does indeed have the highest sickness rates and links it to the area's

"high morbidity rates and mortality rates in general."

He offered no hope that we might solve the problem. I find it wholly unsatisfactory that, year after year, the north-west should have such high sickness rates. It would be more acceptable if it happened only in some years and not others. In attempting to explain why this might be, he makes what I regard as a typical comment from the south-east—that it is

"a reflection of the more general lifestyle and health characteristics of the population"

in the north-west. In other words, because we eat tripe and onions we are not going to be so healthy. I hope that more effort can be put into ascertaining properly why sickness rates in the north-west should be higher. Clearly, the health of people in the area is just as important as that of people elsewhere in the country.

I am concerned about the number of drivers evading excise duty—some 1.3 million vehicles annually. The Driver and Vehicle Licensing Agency estimates that there are some 60,000 unlicensed vehicles in the Greater Manchester area, which accounts for about £8 million of lost revenue. I estimate that there must be about 5,000 unlicensed vehicles on the road in Bolton itself, which emphasises the need to tackle the issue. There is also the question of false addresses being given to the DVLA. It is important that there should be a crackdown on the way in which licences are administered so that not only does everyone have a licence, but everyone gives correct addresses. People who are not interested in giving correct addresses should be made to do so.

I was concerned about other issues in the report. There is the question of whether wheel clamping should be used to impose sanctions against licence evasion. I am in favour of far greater sanctions in this area, but I hope that the Government will consider wheel clamping, because there is no doubt that it has been a racket for taking money off people who are entirely innocent and who have not intended to become the victims of wheel-clamping sanctions after parking accidentally on private land.

I will now move on to the report on the Child Support Agency. The Chairman of our Committee has already drawn attention to the difficulties of getting information from all the different parties; four partners could be involved. The problem of getting information is at the root of the CSA's subsequent difficulties in administering much of its work.

I am not happy with a lot of the work of the Child Support Agency. Just a fortnight ago, I visited the Data Protection Registrar, Elizabeth France, in her office in Wilmslow to discuss with her ways in which the CSA could operate more efficiently. That visit was in connection particularly with a constituent, Mr. Collier, who had been wrongly accused of fathering a child. The father was another Mr. Collier. My constituent was upset because his employers had been approached by the CSA to divulge his private address so that it could approach him at home. That disturbed his employers and it seems wrong that the relationship between an employee and an employer should be disturbed by the CSA coming in with its great big boots on and making requests for information which stemmed from its desire to find a father who was not owning up to a child. That can prejudice the relationship between the employee and the employer, and it is wrong.

I spoke to the registrar and she said how dissatisfied she was by the way in which the CSA requested information from all sorts of people in areas where it had no right to do so. In the case I was raising, the agency had the right to request information; I was concerned about the way in which it went about doing so. The registrar said that in some cases the agency had been requesting information when it had no right to do so, particularly from partners of absent parents from whom it does not have the right to ask for such information.

There is an important need to look at the way in which the whole operation works. The relationship with the Inland Revenue is the important one. To find out the earnings of self-employed people and others, it is essential that the Government use the information that is available to them so that the CSA and other operations can work efficiently. That brings us on to fraud.

There is no doubt that tax records are one of the most valuable ways in which to seek methods by which fraud can be reduced. If the Government's left hand has information that their right hand needs, subject to the proper safeguards, the two hands should work together to reduce the inefficiencies. I hope that, in that way, it will be possible for the CSA to obtain information about the private addresses of individuals without prejudicing the employer-employee relationship. The Inland Revenue might be able to give a private address from its records, with national insurance numbers and so on, straight away. All that the CSA has to go on is that there is somebody called Mr. Collier living in a certain area who may or not be the father of a child. I feel that the Inland Revenue could help just as easily with that matter as could the employer, without the consequent upsetting of an employee who may be perfectly innocent.

I shall not discuss further matters to do with the CSA, which I find an extremely inefficient operation. The inefficiency raises questions about the need to continue with such an organisation. I shall now move on to fraud and refer to the 19th report and Cm 3379, in which many issues have been raised.

I asked for regional performance figures, and I see that the appendix to the 19th report consists of information supplied by the permanent secretary at the Department of Social Security. It quotes a lot of offices under headings that I do not understand. Under the heading "Scotland and Northern Territory", performance figures are given for offices AD 1 to AD6. I do not have the faintest idea where the north-west fits into that. The three areas of the country are "Scotland and Northern Territory", "Wales and Central Territory" and "Southern Territory". I assume that the north-west is somewhere in "Scotland and Northern Territory". If the Financial Secretary is able to establish where the north-west and, for that matter, Bolton and Greater Manchester fit into the six offices AD1 to AD6, I shall be interested to hear that information because it would give some idea of the efficiency of fraud detection in those areas. We know from information that has been released that in Bolton, £4.3 million was saved last year by the anti-fraud team. I hope that work will continue on that front to reduce the amount of fraud in total.

On the operations of the Benefits Agency in Bolton, I draw attention to the concern about the out-of-hours service being reduced. I hope that funding will be sufficient to maintain the service, at least until proper consideration has been given to any options that could be provided if it is to be reduced.

A number of issues are touched on in the Government's response to the 19th report. In paragraph 15, the Department of Social Security says:

"we have commissioned a major survey of disability".

I do not know whether the Financial Secretary can comment on when that major survey might become available and exactly what its terms of reference are. I am not aware of any more information about that other than what is given in the report.

The report comments on the high levels of error and on the appalling performance when the severe disability premium was introduced in 1988. I can confirm from my constituency cases how badly the introduction was handled. One constituent—a disabled person with no other means—was owed £10,000 in arrears of benefit. He became almost suicidal while waiting for the money. By the time I got on to the case, the arrears were substantial. It should not have been possible for them to have reached that level. Paragraph 23 of the Government's response shows that the average level of arrears per head was close on £4,000. I find it incredible that disabled people above all should be left with enormous arrears. Coupled with the general errors, that is totally unacceptable.

The report draws attention to visits to houses as the best way in which to establish the veracity of new claims. I would be pleased if the Financial Secretary could confirm that the number of home visits will be maintained at the levels envisaged and, if anything, increased to improve the efficiency of the detection of fraud. The Financial Secretary may care to tell us whether he thinks that the detection of fraud is better done with centrally administered benefits rather then with those administered at local authority level, such as housing benefit which is mentioned in the report.

I draw the Financial Secretary's attention to a recent report—I do not know whether he has been made aware of it—from Liverpool business school, which was carried out by the unit for the study of white collar crime. The author, a lady called Eve Coles, is a research associate. She has given a lot of information in the report, and I will touch on just one item.

I was pleased to see that Eve Coles had estimated the percentage of total housing benefit saved in councils, categorised under different political control. She established that Conservative councils were better than Labour councils at detecting fraud. The former had a detection rate of 2.2 per cent. of total housing benefit paid whereas Labour-controlled authorities had a detection rate of only 1.44 per cent. However, she was able to point out that Liberal Democrat councils performed the best, with a saving rate of 2.3 per cent.

7.49 pm

You will agree, Madam Deputy Speaker, that in general it is an error for an hon. Member to attend a debate in which he has no intention of taking part. You will also confirm that my name was not on your list when you entered the Chamber this evening. However, a few thoughts have come to mind as a result of what I have heard this evening, particularly the points raised by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) about the erosion of accountability through Government restructuring.

The ultimate democratic responsibility is illustrated by the apocryphal story of President Truman, who had a plaque on his desk saying, "The buck stops here". In the past two months we have seen a variation on that. We are now assured that the Home Secretary has a doormat which says, "The buck stops here", but the mat is outside his door.

There has been a redefining of ministerial accountability. As my colleagues on the Committee will recall from our hearings, the accounting officer should be outside the Minister's door. If the Minister is not accountable, the accounting officer is. When we heard evidence from Mr. Alan Langland, who is an excellent witness and is always very honest and straight, he made a point that was distinctly disturbing. As the accounting officer for the national health service executive, he is responsible for an enormous empire. He made a legitimate but salutary point when he said that he had started to create within his empire the concept of accountable officers. I wonder whether my right hon. Friend the Member for Ashton-under-Lyne remembers that phrase. Under the new system, Ministers shrug off any responsibility other than policy, accounting officers say, "The buck does not stop at my door either," and there are accountable officers further down the line.

I see in the Box to which we are not allowed to refer our friends from the Treasury who always attend our hearings. I asked the Treasury representative whether he could give us some idea of the number of accountable units. If I remember correctly—I do not have the minutes with me—he told me that it was something in excess of 600. I found that astonishing, as did most of the Committee. We all thought that we had a nice, simple system with Ministers responsible to Parliament and accounting officers directly responsible to Ministers.

The Treasury representatives have now told us that there are approximately—they did not know the precise number—600 such accountable units. It is no wonder that we have the shambles that my right hon. Friend rather gracefully and flatteringly described. He was very kind to the system but would not reveal its worrying aspects.

There was another evolution when Sir Peter Gregson gave evidence to the Committee. During his final appearance before us, which was a matter of considerable relief to him—it was not a matter of sadness that we would no longer be in his work programme—he said that everyone appreciates and values the work of the Public Accounts Committee, but it should not be confrontational.

I remember my first meeting with Sir Peter when the Committee was dealing with the privatisation of the electricity distributors. I almost had to use thumbscrews to extract from him the value of the assets that had been sold off for £6 million. Eventually he told us that they were worth £16 million.

It is nonsensical to pretend that we can have a Public Accounts Committee without any risk of confrontation. Most of the reports that we consider involve questions that are thought to need answers. If we had not been confrontational, we would never have found out about Operation Wizard—the attempt at a covert privatisation bid within the Welsh Development Agency. The National Audit Office was unable to discover it because the costs had been farmed out in different accounts. I promise the Minister that all that is duly recorded as it was before his time.

If we had not been confrontational, we would not have discovered some of the misdemeanours of the Development Board for Rural Wales or wrapped around the neck of Wessex its monumental failure.

My right hon. Friend the Member for Ashton-under-Lyne was kind enough to read the relevant section of the report, but there was nothing confrontational in what I said to the regulator of the lottery. Had we not challenged him, we would never have found out about his trips with GTECH. That was not in the National Audit Office report.

Sir Peter also said that we should not be concerned about blame, but there cannot be true monitoring and accountability if, when someone has committed an offence, or one has occurred accidentally, no attempt is made to find out who is responsible or to blame.

In 12 months, we have had a massive rewrite of the concept of parliamentary accountability. Ministers have said, "It's not me, mate, it's him." Accounting officers have said, "It's not me either, it's them," and "they" are spread out so widely in 600 units that most of them know that we could never get around to seeing them all.

Nearly everyone has referred to the lottery. I shall not dwell on the GTECH issue because I made my point in an intervention, but it is salutary to think that during the period when the regulator was swanning around the United States in presidential style in GTECH aircraft, his staff were not doing the work. They had employed outside consultants to advise them on the establishment of criteria against which they could judge whether the terms of the section 5 licence were being complied with.

According to another report from the National Audit Office, 21 such tests were devised, but a year after the lottery had started, of the 21 tests to ensure that the criteria were being observed, only one was operational and it was sloppy, 10 were partially devised but not in operation and another 10 were notional ideas and no work had started on them. That was in October 1995, just over a year after the lottery had started operating.

Each day, Camelot is allowed to draw down the money that it has paid out in prizes. It is astonishing that, for the first 12 months, in which he paid out £700 million, the regulator was simply checking that the amount that was paid out to Camelot was the one that had been requested. He paid out £700 million on the basis that the figures balanced. As the National Audit Office report shows, there was no verification to show that Camelot was entitled to the sum being requested. No one was suggesting that Camelot would deliberately claim money to which it was not entitled, but surely the regulator's job is to ensure that the wrong sums could not be paid out accidentally. Yet a year—14 months to be precise—after the lottery began, he was still operating on the primitive system of assessing whether there was rectitude in the finances. I am sure that we shall have a chance to look at that during a future sitting of the Committee.

7.59 pm

I am delighted to follow my right hon. Friend the Member for Swansea, West (Mr. Williams), although I know that I show up badly in comparison. I served on the Public Accounts Committee with him and others before I finally escaped to the Whips Office. Although it may seem wrong for me to speak in this debate a year after leaving the Committee, I could not do so at a better time.

I should like to place on record my appreciation of the chairmanship, courtesy, integrity and kindness of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It was wonderful to see him get angry when faced with some of the individuals who attempted to avoid the very pointed questions that open up meetings. It was also an education and a pleasure to work with my hon. Friend the Member for Warrington, South (Mr. Hall) and the hon. Member for Uxbridge (Sir M. Shersby), and see the different approaches taken in the Public Accounts Committee.

The PAC dates back to Gladstone; it has a wonderful history. Coming from local government, I find it incredible that the Committee seems to represent the one area of parliamentary scrutiny of expenditure. When one tables written questions asking for the £24 million-worth of spending in a given area to be broken down and receives the reply that it would take too much time and expense to do so, one wonders what scrutiny there is. The PAC has an impossible task of covering all the Departments' public expenditure, and they well know that, if they escape scrutiny one year, another year or perhaps several years will pass before the roulette wheel comes back round to their turn.

One of the themes of the speech of my right hon. Friend the Member for Swansea, West was how badly the PAC is treated by the Treasury and, above, all, by Departments. Public scrutiny of public money is essential, and should be applauded. Gladstone should be applauded, as should my right hon. Friend the Member for Ashton-under-Lyne, who does a very important job. Almost every report that lands on the table from the National Audit Office demonstrates the need for such work and for more scrutiny.

I should like to refer to the Committee's 19th report, which relates to income support fraud and security in the Department of Social Security. It is not one of the reports highlighted in the bundle, but it deserves examination not only for the amount of money it relates to, but because it shows the Department's history. I am delighted to see the Secretary of State for Social Security about to take his place on the Front Bench. He is very hard when scrutinising benefit. I wish that he would scrutinise it more carefully and exert more pressure on the Benefits Agency, which seems to get away with murder in sheer incompetence. I shall back that up with figures.

The 19th report on the 1994–95 financial year demonstrated errors amounting to £848 million, including £546 million cash overpayments and, even more sadly, £183 million underpayments. As the report says, the errors are in an area of work where they can

"cause real hardship to benefit claimants".

They do not concern people the Secretary of State would chase or say were scroungers or did not require benefit. Of the total errors, £183 million should have gone to such claimants and did not. A written answer from the Benefits Agency demonstrated that, despite the fact that the Public Accounts Committee and the National Audit Office draw such figures to the attention of the Department, it does nothing to follow up the underpayments in an attempt to ensure that the money goes to the individuals concerned.

The Secretary of State is on a crusade at the moment against benefit fraud. Benefit fraud in the income support vote amounts to £1.4 billion—£600 million more than the amount caused by self-inflicted errors by the DSS and the Benefits Agency. Such figures should be enough to cause the matter to be raised on the Floor of the House. Not only the level but the doubtful consistency of the Department in respect of those errors is of concern.

Income support began in 1988. Each and every year, the NAO has qualified accounts in that area because of errors. In 1993, the 33rd report on the Department of Social Security for the financial year 1991–92 stated:

"We regard the reported levels of error in income support as unacceptable. The overpayments are a waste of resources and the underpayments are causing hardship to the most vulnerable members of society."

In that report, the NAO found that just under 17 per cent. of income support cases concerned monetary errors, and suggested that overpayments—this will gladden the Secretary of State's heart, but should raise questions about what has gone one since—amounted to £86.8 million and underpayments to £87 million. That totals almost £170 million.

In the Committee's 10th report two years later, for the financial year 1993–94, the PAC put total errors in income support since 1988 at more than £2 billion. Together with figures in the latest report, the DSS and the Benefits Agency between them have cost the British taxpayer almost £3 billion in that one area of benefit since 1988.

The Committee estimated two years ago that total arrears were £617 million, including £540 million overpayments and £77 million underpayments. There is a steadily worsening trail of error from 1991, through 1993 and up to 1996. The accounts were qualified each time by the NAO, hauled before the PAC and questioned thoroughly, and reports were prepared and sent to the Treasury: yet what was done about it?

I turn to the report in 1993 of the 1991–92 financial year. When my right hon. Friend the Member for Swansea, West hauls staff over the coals over such matters, he does not do it out of blood lust. We are talking about public money. Anyone can make a mistake, but to continue to do so increasingly over the years at such a level makes one wonder whether it would be a waste of time to bring the Department of Social Security and the Benefits Agency before the PAC again. Clearly the Department does not listen or learn, and pays no attention to the PAC.

In 1993, the Department said, "Aha, yes. It is a very complicated job." Apparently it had

"already spent several hundred million pounds on computerisation and this could rise to £2 billion by the end of the decade."

Now we have the 1994–95 accounts in front of us, and in that year £858 million of taxpayers' money was lost. In 1993, the response to the Public Accounts Committee was to boast that £2 billion was being spent on getting the computer systems right, which would deal with the problem. Presumably the £2 billion was spent, but the mistakes are increasing. Two years ago the loss was about £600 million; now it is £858 million.

I think that the fellow who drafted the report must have a sense of humour, because he wrote:

"The computerised system had also reduced the number of errors in the calculation of awards but other types of errors had gone up and more than outweighed that improvement."

Several hundred million pounds were spent on a computer that dealt with some mistakes, but which then produced more mistakes, costing more than the mistakes that it had stopped.

Of course, Hacker was at it. The response was, "We shall have a review." The review originally started in 1991—I would like the Minister to note that date. It was intended to deal with the "false statistics" that local DSS offices were apparently sending out. The Department did not really know the level of error, and intended to do something about that. The hon. Member for Uxbridge must remember it well.

Income support accuracy was to be made the Department's "number one priority" in 1993. It was going to have training, new advice and a handbook. So my right hon. Friend the Member for Ashton-under-Lyne, ever kind, courteous, patient, tolerant and understanding, said, "Go on your way. You will have learnt by your mistakes, you are taking all those steps and we shall not see you again." Ha, ha.

In 1995, the agency was back. By then, it had lost the computer somewhere. When asked about the appalling figures, it had apparently lost the computer, the handbook, the false statistics and—and I have lost my notes, but the point being made was that the work had become more complicated, so there was a need for training.

The ever obliging Treasury had stumped up £9 million for training, with the offer of another £15 million. Has anyone ever heard of such a case of throwing good money after bad? The ever gullible Treasury was offering £24 million to the Benefits Agency, because training was the answer. And in 1995 the agency again pledged that accuracy was its number one priority. Again, the ever understanding Chairman sent its representatives on their way. They may have had a tongue-lashing from the direction of Swansea, Warrington and Uxbridge, but they had escaped for another two years.

The latest report is now before us—or at least, it is not before me now, but I have it somewhere. Whatever we think of him, Hacker has been resurrected. The agency has now forgotten about training, and about the computer, the advice and the handbook. Now the line is, "We shall have a fundamental review." The fellow who wrote "Yes, Minister" could not have written that fiction—but this time it is fact. The review is the excuse that the Benefits Agency and the DSS gave to the serious hard-working members of the Public Accounts Committee—adding that, of course, accuracy would continue to be a high priority.

This time, the response was all about

"tailored training … improving the detail and reliability of management information",

but it was followed by the rider

"However, substantial and sustained improvements in IS accuracy will be achieved only with improvements in the processes and systems".

I thought that we had already spent £2 billion to do all that.

In 1996, we have an even higher level of loss—£858 million. What could the Secretary of State do with £858 million? If those errors had not been made, much of that money would have been available, without any cuts being necessary, to do things that the whole House would want to do.

When I served on the PAC, there were rumours that a training session was being held for those who were to appear before that Committee. People were told, "You realise that you will be there for only three hours. There are about 15 members, and they will all take 10 minutes each. Some are worse than others, and some are more courteous and polite—but just get through that three hours."

That, at least, is training that the DSS and the Benefits Agency seem to have taken to heart. It is certainly working, because they get away with things. Some may think I am joking, but I hope that the Secretary of State will simply pull all the reports together and get a decent member of staff to find out what on earth is happening to his money.

The Department and the agency are thumbing their noses at the Public Accounts Committee and at the public. The loss is £858 million, yet the Treasury offers only four paragraphs in response to the PAC. The first paragraph says—surprise, surprise—

"the level of errors is unacceptable".

It takes the Treasury a paragraph to agree with that.

Then the civil servant who wrote the response obviously realised that he was going dangerously far, because he added:

"As the Committee is aware, Income Support … is a complex safety-net benefit … inherently complex and thus creates a risk of errors at various points in the process".

There we are. They are off again, asking, "How do you expect us to get it right? Although the errors are unacceptable, the benefit is too complex to get right."

I ask the Financial Secretary to read the next paragraph. I could read it out now, but if I did it would confirm in the public mind the idea that people in the Treasury and the rest of the civil service do not write in English understandable to ordinary people. The Treasury says:

"Improving accuracy … will continue to be a high priority."

For how many years will it be a high priority? What about tailored training, and all those other improvements? There are four paragraphs, and now the Treasury has offered the agency more money.

On Sunday night, I saw a nice programme featuring the Secretary of State and one of the permanent secretaries, who has now moved on to another Department, but who was then rehearsing to appear before the Public Accounts Committee. Representatives of his 166 accountants—obviously the cream, the best he can get—were briefing him for his appearance in front of my right hon. Friend the Member for Ashton-under-Lyne.

With such a record, does the Department deserve to continue to employ those 166 accountants? When do we say enough is enough? The permanent secretary appears before the Committee and says that the loss is less than 1 per cent. of expenditure. Yet it amounts to £858 million. We cannot afford to throw away money in that way.

Where is that man now? In local government, we were supposed to be the hicks, the backwoods people-low—level, not parliamentary. But if we had a chief officer who delivered that standard of service year in and year out, he would be an ex-chief officer. That fellow is now a permanent secretary in another Department.

As a former member of the PAC, I must speak on behalf of its members, who work hard. They are dedicated Members from all parties. They deserve better treatment by the Government. To achieve improvements in the agency's finances, heads should roll. We should not be content with flowery phrases and allowing people to escape after a brief three hours before the Committee. Heads should roll, because the situation revealed in the report is not good enough.

That may be only one report, but, as the members of the PAC could tell us, it is the tip of the iceberg.

8.18 pm

This evening's debate has been informative and interesting. The work of the Public Accounts Committee is extremely detailed, and I recommend that all hon. Members read the reports carefully. I congratulate my hon. Friend the Member for Leeds, East (Mr. Mudie) on his speech, and on the detailed way in which he studied the reports on the Benefits Agency. He gave an eloquent explanation, and picked up on a theme that the House constantly echoes but does not honour—that the role of the PAC is extremely important. However, there is apparently a lack of respect for that work in government, including the Treasury.

My hon. Friend the Member for Leeds, East described the Treasury as "gullible", but that is not quite the word that I would use, as I am sure that getting money out of the Treasury is very difficult. I presume that the Benefits Agency is used to operating good stings, and the reports have demonstrated that clearly.

I must comment on the work of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), and thank him for clearly describing many of the important points in the key reports. I pay tribute to him and to the members of the Committee. It is clearly a hard-working Committee that does a great deal and pays great attention to its work. I also commend the National Audit Office and the Comptroller and Auditor General, who deal with the problems of trying to pursue public money to ensure that it is accounted for.

The many reports from the PAC—the figure given by my right hon. Friend the Member for Ashton-under-Lyne was 500—consider the principles of economy, efficiency and effectiveness. However, perhaps a report on how efficient and effective Departments are in paying attention to the work of the PAC needs to be added. The reports compare input with output, and consider the work of the Government.

The reports are passed unanimously by the Committee. The reason is that the Committee wants to examine the implementation of policy, not to question it. Today's debate has referred to the special relationship between the work of the NAO and the Committee. In his opening remarks, my right hon. Friend the Member for Ashton- under-Lyne talked about the importance of mutual trust, respect and confidence, and stated that they need to be present in the work of the Committee and the NAO.

My right hon. Friend and other members of the Committee referred to the eighth report, on the proper conduct of public business in 1994. While we reflect on the Committee's work in this Session and throughout this Parliament, it is timely to remind ourselves of what that report stated:

"In recent years we have seen and reported on a number of serious failures in administrative and financial systems and controls within Departments and other public bodies which have led to money being wasted or otherwise improperly spent. Those failings represent a departure from the standards of public conduct which have mainly been established during the last 140 years."

I am not seeking to make a party political point, as it is accepted by the House that that report made an enormous contribution, and that particular paragraph is important in considering the work of the Government. We should all be constantly vigilant in studying that work.

Today's debate focused on how the fragmentation of so much of the Government's structure has led to a lack of accountability in the expenditure of public money. We must reconsider how we ensure that money is not wasted and is accounted for. My right hon. Friend the Member for Ashton-under-Lyne laid out at the beginning of his speech the paramount importance of the interests of the taxpayer. My right hon. Friend the Member for Swansea, West (Mr. Williams) raised the matter of the erosion of accountability, a theme to which I shall return in my brief remarks.

The hon. Member for Uxbridge (Sir M. Shersby) complimented the NAO on its cost-effectiveness and stated that for every pound spent in running the NAO, there was a return of £7. That underlines the importance of having proper scrutiny of the Treasury, other Departments and all levels of government, local and national, to ensure that we receive value for money. Clearly, that is the case with the NAO.

The hon. Member for Uxbridge returned to a subject that he raised in last year's debate—the legal aid scheme, and the increase in moneys being drawn from the legal aid fund. He questioned whether those amounts were appropriate, and referred to the importance of verifying the means of applicants, which the whole House will endorse. In addition, we must remember that the purpose of the legal aid scheme is to ensure that people are not prevented from gaining access to justice simply because they do not have resources. I am sure that the hon. Gentleman was in no way implying that he wanted to see a reduction in the legal aid scheme, or that it should be cash-limited. He made some interesting comments on the sale of County hall. and I agree with him that we should note the income generated and make no comment on the merits or otherwise of the sale.

My hon. Friend the Member for Warrington, South (Mr. Hall) drew attention to the Student Loans Company, and asked pertinently why it took an independent inquiry to reveal impropriety and, in particular, to recommend that the chief executive be removed. He also pointed out that students were not being provided with the services that they needed from the Student Loans Company, and referred to a number of other reports.

The hon. Member for Bolton, North-East (Mr. Thurnham) made some interesting observations on a number of reports, particularly the 34th report on working days lost. He asked why more days were lost in the public sector through sickness than the Confederation of British Industry said were lost in the private sector. We should look at the terms and conditions of employment and at pay and stress levels, and they may account for that fact.

The hon. Gentleman also commented on vehicle excise duty, the Child Support Agency and access to information. When Government Departments, such as the Inland Revenue, hold privileged information for specific reasons, we need to be careful about the basis on which it is made available, to whom it is made available and whether there should be wider availability. The freedom of information Act and the Data Protection Acts are relevant.

The understated tone of the Public Accounts Committee reports always interests me. The 30th report, "Ministry of Defence; Management of Works of Art", for instance, states that when the Committee

"asked the Department how thefts could have occurred in their Main building and other secure buildings … Their assumption was someone who had legitimate access to the Ministry of Defence buildings had been responsible."

The Department was then pressed as to

"why the Ministry of Defence police had recovered none of the 23 items stolen from the central collection and had made only five recoveries following … 30 instances of theft from local collections."

The reply was that

"they were satisfied that the police were doing all they could"

In the second report on "Health Care International (Scotland) Ltd." and the loss of millions of pounds of public money, commenting on the rather ambitious proposals for the hospital, the Committee said:

"We suggested that it would have been better to have started HCI on a small scale and not gone for a 168 bed hospital, a four star hotel, a 175-seat auditorium and an international faculty",

all at the same time.

The Committee went on to ask the Department why Health Care International, which had no experience in the private health care market, had been able to undertake such a high-risk venture. The reply was that

"its Chief Executive had been running a very prestigious hospital in Boston, USA",

but acknowledged that there were some "novel features" in the hospital,

"such as the 'paperless' drug-prescribing system unique in the United Kingdom which the Greater Glasgow Health Board required to be validated."

The Department

"recognised that this was a new concept, the success of which would depend on the quality of the doctors and the links which HCI managed to develop with key people overseas."

When asked why the money had been given, when only three out of 12 advisory board members voted in favour of the project, the Department told the Committee that

"the Board, which meets once a month, is composed largely of businessmen. When they cannot attend meetings, they let the Department know if there is anything they are unhappy about."

None of the six who did not attend said that there was anything wrong with the proposals. The two members who had objected had not done so on areas that were considered relevant. So, absence counted as support for the project.

Finally, the report states that the Committee

"asked the Department whether the location of the hospital was a problem for marketing. They told us that the problem was marketing a hospital in an area where people expect to find one".

The mind boggles about where the hospital was located.

The reports on Ministry of Defence procurement and the Metropolitan police service highlight an absolute failure properly to vet and scrutinise work.

Two reports have not been mentioned. The 33rd report on "HM Customs and Excise Checking Claims for Repayment of VAT" and the 35th report deal with serious questions, which are at the heart of government—whether the taxpayer is being represented effectively and whether services are run on the basis of value for money. That returns us to fragmentation, the changing nature of government and the difficulty in pursuing public money. In a previous debate on the Welsh Development Agency—a report that we considered last year—Mr. Scholar, the permanent secretary at the Welsh Office, said that the Department was too small to carry out effective management of the quangos and that fragmentation and agencies, coinciding with other structural changes, had made it extremely difficult, if not impossible, for the staff properly to keep account of public money.

My right hon. Friend the Member for Swansea, West pointed out that with the proliferation of accounting units—there are now 600 or more—the job is becoming more and more difficult. The House needs to consider the gains, losses and economic benefits. The service has been fragmented, which has damaged career prospects for civil servants. Some people may consider that that was necessary because of the difficulties caused by lack of contact with people outside government. None the less, it has undermined civil servants' confidence.

In addition to that restructuring, the Government decided to parachute business men and women into Government Departments. Many did not have a background in the public sector and perhaps did not clearly understand the public sector ethos, conflicts of interest and the need to be transparent. The report on the lottery is an example. Such people were parachuted in over civil servants, further adding to their insecurities about their career prospects.

I am not advocating that we should not draw people from the business world to act in partnership. I question whether that process has gone too far, however, so that we are undermining the heart of government—the planning and the longer-term views that we need to keep public moneys accountable. Another issue was the growth of one-year contracts. That combination has brought short-termism to the heart of government and made it more and more difficult to have a longer-term objective. My hon. Friend the Member for Leeds, East made that clear.

As we finalise the reports for this Session, it is important for us to consider carefully the gains, losses and economic benefits, and the changes that have worked and those that have not, as my right hon. Friend the Member for Ashton-under-Lyne said at the beginning of the debate. We should restore the paramount importance of taxpayers' money being used accountably and efficiently and, far more important, ensure that it is transparent who is using it and why.

8.39 pm

This wide-ranging and interesting debate has touched on many subjects that relate to the 48 reports that the Committee has so assiduously produced over the past year. It was beneficial that the remarks of the hon. Member for Leeds, East (Mr. Mudie) coincided with the arrival of my right hon. Friend the Secretary of State for Social Security. Instead of my having to say that I would draw his attention to the detailed points raised by right hon. and hon. Members, I can say, at least for one Department, that that task has been done without my having to do anything other than turn to the Secretary of State; he heard what the hon. Gentleman said.

The hon. Member for Leeds, East brought a lighter tone to the debate when he drew an analogy between the various reports and "Yes, Minister". I want to paint another picture showing how Government Departments and accounting officers regard the Public Accounts Committee. I have attended it as a Minister, listening to what has been said. Officers take seriously the grilling that they are likely to get, even if it requires them to have some rehearsal. To go before the Committee is a difficult experience. When I was first appointed to this job, I sat in to get a flavour of it. The detailed, forensic way in which information is extracted gives an idea of why people are concerned about their performance and of the seriousness with which they take what happens.

Value for money, efficiency and propriety are serious issues. There was a little adverse comment on how the Treasury operates. However, I noticed some difference of opinion. The hon. Member for Warrington, South (Mr. Hall) said that he was grateful for our comments and that Government Departments had responded properly to the Committee's requests for information. I was grateful for his remarks. So important to us is the remit of trying to improve the service that we give the Public Accounts Committee that we asked its Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), whether he would grace us with his presence in the Treasury. He kindly spoke to civil servants involved in the work to give us the benefit of his views so that our response could be more tailored to the Committee's needs.

The right hon. Member for Ashton-under-Lyne put on record some sage advice. He said that the Committee's first concern was to stamp out fraud and corruption, of which he noted that there were mercifully few cases. He also said that the Committee's remit was not to hand out awards but to identify what had gone wrong and to make recommendations. He confessed that he occasionally pronounced himself satisfied—and, on very rare occasions, very satisfied—with the outcome of inquiries. Everyone who attended found his words useful. I hope that he will grace us with his presence again. That gives me the opportunity to put on record my appreciation, and that of the Treasury and many others, for the dedication and hard work that he puts in as Chairman of the Committee.

I also thank my hon. Friend the Member for Uxbridge (Sir M. Shersby) and the right hon. Member for Swansea, West (Mr. Williams) who, respectively, as vice-chairman of the Committee and one of its longest-serving members, represent all that is best about the Public Accounts Committee and the diligent way in which it undertakes its work.

I shall draw the detailed points that hon. Members have made to the attention of the relevant Secretaries of State. I would be doing them a disservice if I simply read out an annotated piece of paper in answer to some difficult, detailed and very correct probing that perhaps goes beyond some of the responses that have been given in the Treasury minutes and in respect of which more up-to-date information may be available.

One theme comes out of the debate. In any system run by human beings, we must ask how we can improve what we are doing and learn from our mistakes. Wherever human beings are involved, there will be human frailty and error. It is only by continual scrutiny that we can try to improve our systems. It is always easy to point, as we have in each of the commentaries on the reports, to what went wrong and consider how we could have stopped it. It is at that point that the value of debates such as this and of the reports comes through. They show us that—even where people thought at the beginning of a process that a system was in place and capable of dealing with matters such as value for money, accuracy, propriety, correctness or any other description of performance—when the system fails, something has gone wrong.

We are then drawn to the conclusion that it was either the system that was wrong or that the people who were operating it made mistakes or even that there was wrongdoing. However, it is only with hindsight that the problem can be identified and, more important, that we can try to put in place yet better systems and checking mechanisms to ensure that such problems do not recur. But that is a circular argument: because the system is operated by human beings, it is inevitable that human frailty will again play its part.

I acknowledge the excellence of the work of the Public Accounts Committee. Every year we have this debate and review about 50 reports, all of which point to areas where Departments, non-departmental public bodies, agencies and other bodies could do better. It is proper that we have that analysis, but we should recognise the human dimension. I was delighted that my hon. Friend the Member for Uxbridge drew the attention of the House, as others did, to the value-for-money aspects of the National Audit Office's work. Without it and its reports, the Public Accounts Committee would not be able to exercise its detailed role of scrutiny.

Since I have been Financial Secretary, I have come to have great respect for the National Audit Office and have twice visited it to discuss its work in detail. I look forward to further discussions with it on the private finance initiative. The interchange of views, expressions and information between the Committee and Ministers is an important part of developing the role of scrutiny which it undertakes. I am also delighted that it is involved in spreading good practice. One of the best ways to stop problems occurring is for those who have responsibility for the things that I mentioned to know what works elsewhere. I look forward to the introduction of the magazine Focus, which will address that issue.

If there is one word that runs like a seamless web through much of what we have been considering, it is "awareness"—awareness of risks, frauds and irregularities and of the need to follow best practice and put effective systems in place. That was touched on in the report on the Ministry of Defence art collection, which the hon. Member for Warrington, South mentioned. Anyone examining that report might well wonder how, if the MOD cannot look after the paintings, it will look after the tanks, missiles and other things for which it has responsibility. The report highlighted a slipshod attitude towards the good stewardship of public property.

The report highlighted the situation and a response was given. Again, that shows the sloppiness of a human system being drawn up short by the Committee in its report. There is awareness that the taxpayer has a right to good-quality public services and of the responsibility to improve value for money. That point was brought out by my hon. Friend the Member for Uxbridge in his commentary on the small claims court. He will be pleased to know that work is in hand to pick up, publicise and exemplify many of the good points about the small claims court and address his central point. An important general point came out about making people aware of what is going on. The small claims report is interesting because it drew the House's attention to an area where light had not shone. People were not aware of what was happening. The Lord Chancellor's Department is working hard to deal with that.

A serious theme that runs through much of what we have heard this evening is fraud. That draws us up short each and every time we hear about it. The Treasury was anxious to make its contribution to deal with that. I opened a conference across the Government that dealt with managing the risk of fraud. We tried to draw together from right across government those who are responsible for audit and accounting to learn what is best practice.

It is interesting to note that people are rather surprised to learn that few frauds are discovered by auditors, either external or internal. More are discovered as a result of information from third parties. The role of the auditor—to return to my opening comment—is to put in systems of deterrence and prevention to minimise risk.

The hon. Member for Leeds, East mentioned social security. In fairness to my right hon. Friend the Secretary of State for Social Security, who was here earlier, savings made through action to counter benefit fraud in 1994–95 were more than £700 million and in 1995–96 were £1.2 billion. The hon. Gentleman was right to draw the attention of the House to failings in the income support system, but in fairness and in defence of my right hon. Friend, I should point out that he has had successes in combating fraud. That also typifies the approach of the Inland Revenue.

Propriety in public conduct was touched on in the debate and reference was correctly made to the eighth report. I draw the attention of the House to the fact that, in its response to the 23rd report, the Treasury undertook to prepare new guidance on regularity and propriety. By drawing on reports from the Public Accounts Committee, it aims to make the reader alive to Parliament's exact expectations with regard to financial propriety. The handbook will also feature the checklist which the Committee included in the eighth report, together with the Nolan committee's seven principles of public life. That shows, albeit in a thumbnail sketch, how seriously we take the Committee's recommendations.

The hon. Member for Bolton, North-East (Mr. Thurnham) touched on the Child Support Agency. That highlights a further theme of much of the work of the Public Accounts Committee, which has been to draw attention to improving public services. If it had not been for my right hon. Friend the Prime Minister's citizens charter initiative, we would not have given as much attention as we should to that aspect of public life.

My hon. Friend the Member for Uxbridge touched on an important external but also internal theme—the European dimension of the Public Accounts Committee's work. Britain should take credit for the work that we have done to support the European Court of Auditors. The court is independent in the Community, but it reports to the Commission, the European Parliament and the Council of Ministers. It is right and proper to take seriously what the Court of Auditors has to say, as our scrutiny Committees do. I was delighted that my hon. Friend the Member for Uxbridge drew attention to the Prime Minister's work in the Essen European Council to examine ways in which the work of the Court of Auditors could be further extended, such as through the system of fines and spot checks on fraud.

It is important that best practice is exemplified and picked up on the basis of what the PAC's reports say, as the reports on Ministry of Defence works of art and fire risk make clear. That point, which was made by the right hon. Member for Ashton-under-Lyne, illustrates again the perceptiveness of the Committee and the need for each and every Department to take careful note of it.

Above all, good judgment is required. The comments made in connection with the national lottery illustrate that very point. My right hon. Friend the Secretary of State for National Heritage said in response to the Committee's report that an error of judgment had been made. Judgment is much required in all the matters on which we have touched in our debates this evening.

The hon. Member for Warrington, South mentioned a detailed point in connection with the pension of one of his constituents. I shall draw that specific point to the attention of my right hon. Friend the Secretary of State for Transport. The Government take careful note of matters to which the pensions ombudsman draws our attention. The hon. Gentleman was right to make that important point.

The right hon. Member for Swansea, West, a long-serving member of the Public Accounts Committee, drew our attention to the number of accounting officers. To make a serious point, in spite of the number of points at which responsibility may be exercised within government and its agencies, the ultimate point of accountability in the hierarchy remains with Ministers and accounting officers. It may be that more people can now be held accountable, but the buck stops with the Government, in the person of Ministers or accounting officers.

This has been an important debate. I always learn by listening to what right hon. and hon. Members say. The 48 reports are clearly noticed. I undertake to the House tonight to draw the attention of the relevant Secretaries of State to the important and detailed observations of those who have contributed to our proceedings.

Question put and agreed to.

Resolved,

That this House takes note of the 41st to 47th reports of the Committee of Public Accounts of Session 1994–95, of the 1st to 41st Reports of Session 1995–96; and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm. 3166, 3167, 3172, 3189, 3222, 3243, 3279. 3298, 3327, 3373, 3379 and 3384) with particular reference to the following Reports of Session 1995–96:

First, Child Support Agency (House of Commons Paper No. 31);

Sixth, A Review of the Financial Controls over Indirectly Funded Operations of the Metropolitan Police Service (House of Commons Paper No. 109);

Tenth, The Annual Report of the European Court of Auditors and the Statement of Assurance (House of Commons Paper No. 250);

Thirtieth, Ministry of Defence: Management of Works of Art (House of Commons Paper No. 337);

Thirty-eighth, Lord Chancellor's Department and the Court Service: Handling Small Claims in the County Courts (House of Commons Paper No. 410); and

Forty-first, Evaluating the Applications to run the National Lottery and the Director General's Travel and Hospitality Arrangements (House of Commons Paper No. 96).

European Community Documents

Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

Merger Regulation

That this House takes note of European Community Document No. 9961/96, relating to the merger regulation; and supports the Government's intention to look closely at the rationale of any proposal for significant further transfer of merger control to the European Commission, but not to rule out the possibility of a limited transfer.— [Mrs. Lait.]

Question agreed to.

Health Authorities (Deficits)

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

8.55 pm

I regret to have to introduce to the House in this Adjournment debate the subject of health authority deficits. I regret it for a number of reasons, but particularly because deficits should not exist and the debate should not be necessary. However, happily, we have some time in which we can examine the matter thoroughly. It is unusual for a Member who expects to get in perhaps a 15-minute speech to have the opportunity to speak for longer. We never know what may happen in this uncertain parliamentary life. This is the last debate of this Session. What next Session holds, who may know? Constitutionally, any Government could collapse on the Queen's Speech, which we shall have in a week's time, or on any subsequent Division. So this may be. as people sometimes think, the last opportunity. It certainly may be mine, for reasons that everyone knows. So if I go into a little detail and am pretty harsh in what I have to say, when I have said it, people will understand why. There should not be deficits.

I find it a little difficult to welcome the Under-Secretary of State for Health, who will answer the debate tonight. I am glad that he is here because he has answered some of my questions. The best comment that I can make is one that is often used, and I go along with it. One hates the sin and, in this case, respects the sinner, although for reasons which the Minister will know, but we need not go into now, my respect for him is a little less than it might have been 20 years ago.

The health service is still our prime public service. I think that it is the only one which still has the word "service" in its title, whereas agencies for this, that and the other constantly change their names. The health service is something we all cherish. Even the former right hon. Member for Grantham, now Baroness Thatcher, cherished it and assured us that it was in safe hands. It is now in the hands of the right hon. Member for Loughborough (Mr. Dorrell). I am afraid, however, that there is plenty of evidence to show that it is not safe. Indeed, I believe that there is enough evidence to show that, in practice, the health service is held in contempt—I use that word in its technical sense—as are those who wish to use it.

We should remember that the health service is one of care. It is a public service, and I hope it is not seen as too much of a party matter. Some of us on the Opposition Benches, and perhaps hon. Members on the Conservative Benches as well, believe that care is not a commodity. Care can only be genuinely given. That makes the health service a very particular service as against any other service. The way in which Ministers handle the health service and the deficit proves that, alas, it is held in contempt by the Government.

The destruction of the public services is instanced by the deficits of the health authorities. I wish to draw a distinction between that failing and those in politics who quite legitimately wish to narrow the ambit of the state—one can think of previous well-known Members of the House who wished to minimise the degree to which the state was involved in our community affairs. There is a temptation, however, to use that policy to justify anything that undermines even a public service which exists as a skeleton one. The Public Accounts Committee will be aware of examples of such behaviour.

Mr. Gladstone approved of the state and of certain services being run by it, but they must be run properly, openly, effectively and efficiently. That is not happening with our health service. What is worse, when hon. Members wish to find out what is going on in order to warn people about it and try to get to the root of the problem, alas, as I will prove tonight, they are faced with obstruction and obfuscation. Worse than that, Members are held in contempt by the Government, as are those whom we represent. That is happening because of the Government's efforts to camouflage what is going on.

We in east London have a particular need of the health service. The East London and the City health authority extends through three of the most needy boroughs of the country. It also contains St. Bartholomew's hospital—just about—but I do not know for how much longer. Four or five hospitals in east London are closing. We have had three Adjournment debates in the House on the difficulties encountered in east London, which arise because of the needs of the people who live there, their occupations. their housing and their history. The majority of the electorate of my hon. Friend the Member for Newham, North-East (Mr. Timms) has an overseas background. There are also many with similar backgrounds in the other two electorates in the borough.

Today on the radio we heard the great news of a £300 million investment in the London hospital, which is in part of our East London and the City health authority. Of course, Bart's will disappear, but such is the reliance on the private finance initiative that the £300 million of capital, perhaps a bit more, will mean a new medical complex on the site of the London hospital.

My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) had been given details of the great bid submitted by the contractor who won, but he only heard about the winner on the radio today. Such is the extent of the separation that a representative of the public now experiences. In this case, my right hon. Friend has been a distinguished Member of the House since 1964 and he has served in three or four Governments. Such was the treatment given to him concerning what is just about, although hardly recognisable as such, a public service.

In the press release that the managers of the new Royal London trust issued, they made it plain that the income to pay for the £300 million and the running of the hospital would come mainly from the revenue funders, the East London and the City health authority. That authority gets money from the Government and it then contracts with all sorts of providers, including the Royal London trust, for the provision of health services.

Let us start with the money that the Government do, or do not, give. There is a difficulty concerning the capitation formula that is used by the three boroughs of Hackney, Tower Hamlets and Newham in east London. I learnt to my surprise only this weekend that although a capitation formula and weighting are applied according to the nature of the population in terms of their need for acute hospital services, and although we have the Jarman index for general practitioners, there is no overall index, as yet—although it may be coming along—for GP services. They are the front line of the health service, however, and we were reminded of that just yesterday by the Secretary of State for Health. I leave to your imagination, Mr. Deputy Speaker, the deprivation that goes on at the front line. There is rationing all down the line because of the "provider and purchaser" arrangement: it cascades. The new guise of the London hospital, following the closure of other hospitals, will not do a great deal to improve the position. We have, in effect, rationing from the top down.

Even with the same resources, it would be possible to say to each unit, "That's your lot; work out your own priorities internally." But difficulties are involved in a system of contraction and competition. The actual amount of money involved is determined by the health service, right at the top; if there is more need, and the providers are having to push out more services, and the money is not there, that is it. That is what happened in the case of the East London and the City health authority: the division of the cake has been unjust on a national basis, and the authority is now in deficit.

Pressure has been placed on borough local services in particular—the social services that, as we know from recent unhappy examples, are "end on" to those of the health service. I hope that I can use the term "social services". We in Newham have a particular problem. Our standard spending assessment formula, which is a very controversial matter, is defective. I cannot go into the arithmetic deeply, but it means that we cannot always spend on education and social services what the Government allege that they give us. It does not work. I believe that the same is happening all over the country. Local government has its own financial problems.

Now I come to the actual figures, which are contained in a rather obscure set of documents—they were made public, yes—relating to the East London and the City health authority. I refer to the board agenda for 22 July, which has been set out and has, I think, been noticed by the community health councils.

The document to which I refer tells us that details of

"the Financial framework for 1996/97–2001/02 … are summarised below."

Those details show a recurrent deficit of £13 million for the current year, rising to £43 million in 1999–2000. In other words, even if the authority continued to provide what is currently an insufficient delivery, that would be the amount of debt that it would be accumulating. I know that that is a book total, but it may help if I quote from the footnote, which states:

"This forecast does not take account of as yet unquantified costs associated with existing service strategies e.g. Primary Care Development, Mental Health strategy. In addition, if any element of a deficit for a year is addressed using brokerage, the repayment of that brokerage will increase the deficit to be met in the following year."

In other words, there will be a cascade of debt.

It is possible that that debt could be met only by borrowing. That is generally the probability. It will see a business through a bad patch, but we are not talking about a business; we are talking about a service. I understand that at the moment—perhaps it is only temporary—district health authorities that have a little bit at the end of the year can make arrangements with each other allowing those that are in surplus, if there are any now, to balance the position with those that are in deficit. I will not say

that the system has worked reasonably well, but I understand that authorities have struggled along—up to now.

I do not believe, however, that deficits such as those shown in the health authority's report can sustain such a solution in the future, and that is the subject of the first question that I shall put to the Minister. I cannot see such deficits being allowed as they are now. That is problem No. 1.

I do not think that those figures were very well known, and I was shocked when I read them in July. I thought, "Crikey; if that is happening in east London, what is the national picture?" I therefore did what most Members of Parliament would do—I tabled a question. It was answered on 22 July—happily for the debate today, by the Minister present tonight.

Part of the question was:

"To ask the Secretary of State for Health"—

because he is responsible—

"if he will list for each district health authority for each of the financial years 1996–97 and 1997–98 and subsequent years for which figures can be given or estimated (a) the recurrent deficit".

I asked for some other figures, but I shall leave those out. The Minister present tonight replied:

"The information requested is based on estimates subject to revision."

Of course they are subject to revision. That is what an estimate is. I believe the Minister has had experience of business. We all know that, do we not? It is a substitute for an answer. And here comes the plucker:

"It is not suitable for publication."—[Official Report, 22 July 1996: Vol. 282, c. 122]

When I read that sentence, I nearly broke the window. There we have a Minister of the Crown, sitting in this House now, replying to an hon. Member asking about a matter of public finance of importance to everyone, and he says that it is not suitable for publication.

What did I do? When we get into trouble or believe that there has been sharp practice—as you know, Mr. Deputy Speaker, some of us may be prone to it—we raise a point of order. The morning after I received the answer printed in Hansard, I raised a point of order and put everything on the record. I asked Madam Speaker:

"What are the appropriate means by which I can draw that matter to the attention of others? If the practice is more widespread, perhaps my raising this point of order will encourage other hon. Members who have received similar answers to take similar action."

The price of liberty is eternal vigilance, and if we do not obtain facts that allow us to find out what the Government are doing on our behalf, it is covered up, is it not?

The reply from Madam Speaker was:

"It is my understanding that the Select Committee on Public Service is currently inquiring into ministerial accountability. The hon. Member might help that Committee in its inquiries if he were to put the matter to it."—[0fficial Report, 24 July 1996; Vol. 282, c. 263.]

In fact, that Committee reported the next day, and in its recommendations, it made a specific point about Ministers not answering questions, not because they did not know the answers, but because the answers would embarrass the Government.

The Public Service Committee had therefore already reported but, by enormous coincidence, the same day, 24 July, as the very last business before the House dispersed for the summer recess—understandably, not many people were about—we debated the report of the new Standards and Privileges Committee. It is called "The Code of Conduct for Members of Parliament", HC 604 of the present Session. I quote from page 10 of that report—a paragraph labelled "Openness". It says:

"Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands."

I challenge the Minister to tell us what public interest clearly demands reticence in that answer. What possibly can there be? It is not about defence, foreign affairs or Ulster or Northern Ireland—in which case, even if it had been unnecessary, a phrase would probably have got away with it. I cannot imagine the reason.

The Minister had given an unforgivable answer, a point of order had been raised and there had been a flouting of a code of conduct that the Government have espoused—at least the Leader of the House had said that they did. He is a very respected Member, perhaps more respected than some other Cabinet members I could name. That was the assurance that he gave.

If the Government are contemptuous of the House and its Members, the public are not only justified in being contemptuous of Ministers but might be contemptuous of the House because they do not believe that the House has power. I believe that that factor was touched upon in an earlier debate today.

Because of my good fortune, I can raise another factor relating to that answer—one that affects the quality of public service. The answer of 22 July must have been written indirectly on the instructions, or with the connivance, of Ministers. We all know what happens—it happens in all our offices. Certain routine matters arise and we give instructions on the way that they should be tackled. It is a code of conduct for those who assist us in our work. That happens in private offices. It cascades all the way down through Departments. A Minister may say that he wants something tackled this way or that way; he says to take a certain line on one issue and a different line on another. If there is a difficulty, he will have a look at the matter and say what he thinks. How is it that such an answer as I received got through a private office in a Department of state? The only reason can be that, over the years—perhaps it is an inheritance—there has been a decline in the standard of public accountability and service.

I am following with great interest the important points that my hon. Friend is making. He mentioned unsatisfactory answers from the Department of Health. Did he notice an answer that the Minister gave me this week? I asked about the amount of private capital that had been committed so far to health service schemes and to the private finance initiative. I was told that the information was not being collected. Does my hon. Friend agree that vital information that is necessary to evaluate the Government's performance in managing the health service, and that we need to safeguard the interests of our constituents in terms of the viability of services, is not being provided by the Government?

Order. I do not think that the PFI has much to do with health authority deficits, which is the subject of this Adjournment debate.

With great respect, Mr. Deputy Speaker, I explained about the PFI as it relates to the Royal London hospital. If there is a repayment of capital to those who are supplying the capital, whether the City or whatever, that money must be paid via the district health authority. The Government must pay sufficient money—

Order. I do not need a lecture from the hon. Gentleman on the workings of either the PFI or the health service. The context in which the matter was raised by the hon. Member for Newham, North-East (Mr. Timms) was not relevant.

On a point of order, Mr. Deputy Speaker. As you know, I always bow to your ruling. However, may I remind you that this is a debate on the Adjournment of the House and therefore any grievance or matter related to the subject is in order, as I understand it? Please correct me if I am wrong.

It is indeed a debate, for the hon. Gentleman, on the Adjournment, so he has a degree of width. The intervention was not appropriate.

Further to that point of order, Mr. Deputy Speaker. When I raised the matter with Madam Speaker, I pointed out that answers often state that information is not kept centrally. All sorts of excuses are given, the latest being "not suitable", which I believe to be a contempt of Parliament. We have had a succession of unsatisfactory and wrong answers which should never have been given. The answer about which I have been speaking went over the edge and, as I shall claim later, is a contempt of the House.

Following that answer, the House was in recess for three months. How were the people in east London to cope with the already difficult conditions in their health services, in the borough council and in the hospitals, some of which were closing? All those problems are found throughout the country, even in leafy Hillingdon. I thought that the best thing to do would be to write a short letter to the Minister. However, upon reflection I decided to write to the Secretary of State because he is head of the Department and he is responsible. I have previous knowledge of the right hon. Gentleman. We spent a great deal of time in the House yesterday talking about the health service and I thought that he might be able to help.

I should read out some of the letter, which is dated 31 July. It states:

"You will probably be aware that there is widespread concern about deficits now being incurred by Health Authorities nationwide. There is particular concern in East London in general and Newham in particular. since there is evidence suggesting that not only do national capitation formulae not reflect the real needs of East London. but that the resources thereby made available to the East London and The City Health Authority (ELCHA) are not being equitably reflected in the contracts with the two provider Trusts serving Newham.

As the future cumulative deficit of ELCHA has been published, I assumed that comparable figures would be available nationwide, and thus put down a Written Question to you, for Answer on 22nd July. It was replied to by John Horam, and stated that the figures I requested were 'not suitable for publication'.

The letter then goes on to mention how I had raised a point of order with Madam Speaker, and then referred to the publication by the Public Service Committee of "Ministerial Accountability and Responsibility". I concluded the letter by stating:

"In the light of all these circumstances would you please:

1. Provide Answers by letter to the Questions as tabled;

2. Explain why the information was then considered 'not suitable for publication';

3. Explain why deficits, both at District and national level, are being incurred by DHAs, even when needs are not being met, and how this can be done within their accounting system when local authorities and other public bodies are unable to incur such deficits."

That letter seemed to me to be very reasonable—reasonably couched and, I hope, businesslike. I thought that I would receive a reply from the Secretary of State, but I received no reply in August and no reply in early September. My office received a holding letter from the Secretary of State's office on 21 August, and my office sent a reply to it on 17 September. There had been telephone calls between the offices—the "official layer"—but, still, I received no reply.

Therefore, I did what I think most hon. Members would have done, and I tabled another parliamentary question, which was due to be answered today. The question is No. 81 on today's Order Paper, and it states:

"To ask the Secretary of State for Health, when he received the letter dated 31st July from the honourable Member for Newham, South concerning his failure to answer his Written Question requesting information on Health Service deficits, of 22nd July, Official Report; when a substantive reply was sent; and for what reason the figures requested were regarded as being unsuitable for publication."

The reply from the Minister was:

"I will reply to the hon. Member as soon as possible."

I read that response about two and a half hours ago. I hope that, in the course of his reply, the Minister will give a full account, because the Minister has been given more time to think out the answer.

Today, there has been much talk in the press and across the country about the House, about what hon. Members can and cannot do and about what Back Benchers allow Whips to tell them to do or not to do. All hon. Members are not being dealt with contemptuously by the Government, although I could not care less about what people think about me or about the contempt that they may hold for me personally. I do care, however, about the 70,000 people whom I represent, and all those whom hon. Members—including the Secretary of State for Health and the Under-Secretary of State for Health—represent.

No Minister who is using public money out of public taxation, however, has the right not to provide reasonable answers to reasonable questions about the use of money for which they are but trustees and stewards. That principle is the basis of public service and the basis of democracy in the House. The failure to provide such answers is one of the reasons why, over past years, there has been increasing contempt not only for government but for the way in which the Government—by various methods, including limited answers to questions and refusals to answer questions—have been in contempt of the House.

Unless the Minister has a very good reply—which he will find very difficult to make—I am minded to consider whether I should refer the entire matter to the new Committee as a contempt of Parliament.

9.24 pm

rose—

Order. I assume that the hon. Gentleman has the Minister's permission to speak.

I was unable to seek the Minister's permission because of the early start of the debate. I hope that I shall nevertheless be allowed to speak briefly.

I remind the hon. Gentleman that it is his duty and that of all hon. Members to take due note of the House's proceedings and not assume that a debate will take place at a set time.

I accept your guidance, Mr. Deputy Speaker, and am grateful for this opportunity to participate in the debate.

I reiterate the grave concern felt in east London about the scale of the deficit facing the East London and the City health authority. An exercise is being conducted within the authority to identify savings to bridge the gap in funding. We expect to be told the outcome of the review in the next month or so, but it is clear from what we know already that some draconian measures are being contemplated to bridge the gap that my hon. Friend the Member for Newham, South (Mr. Spearing) described.

My hon. Friend, and my hon. Friend the Member for Newham, North-West (Mr. Banks), have said in previous debates that east London already suffers great deprivation and inadequate funding. That is true in the health service, as elsewhere. We now face making very large cuts to meet the gap in the health authority's budget. As has been said, it is not only in east London that such problems have arisen. I think that the biggest problem is in east London, but problems have arisen in other parts of London and elsewhere.

The report published by the Select Committee on Health just before the summer recess examined the way in which resources are allocated within the national health service, and especially the way in which the element of the funding for community health services is distributed. The Committee recognised, quite rightly, that there should be needs weighting in the way in which that part of health service funding is allocated. There is not, although it was certainly envisaged in the original research done by York university. It was removed from the formula for reasons about which we can only speculate. The Committee pointed out that there should be needs weighting for community health services as there is for all other aspects of the health service. The Committee stated specifically that areas such as east London have suffered most from the lack of needs weighting in the formula.

I know that the Minister intends to deal speedily with the problem of needs weighting for community health service resources, but I hope that he will do so speedily, to offer the residents of east London, and some of the other areas similarly affected by the forthcoming deficit, the prospect of some relief, and so that the draconian measures now being contemplated will not be required.

9.27 pm

I genuinely congratulate the hon. Member for Newham, South (Mr. Spearing) on raising this subject on the Adjournment. As he said, he was fortunate in having more time than usual to make his case. In fact, he has raised two subjects: the official subject of the debate, as it were, is health authority funding, which is an extremely important topic, but he has also raised, in parentheses as it were, the provision of information by Governments to the House of Commons. That is in many ways an even more important subject; it is certainly equally important.

However, the hon. Gentleman began by referring to yet another subject—the commitment to care in the health service. I shall say a few words about that before dealing with the main subject of the debate.

The NHS continues to deliver more and better health care more speedily and more efficiently than ever before. As the House knows, Government spending in real terms will be a massive 74 per cent. more in this current year than it was in 1978–79. As the House also knows, the Prime Minister, as recently as last Friday, reaffirmed the Government's commitment to ensuring that real terms additional funding is made available to the NHS year on year.

Undoubtedly, the NHS is one of the most efficient health services in the world; efficiency has increased by more than a quarter over the past 17 years. The Government have succeeded in slashing the times patients need to wait to be seen in hospitals. In 1990, 200,000 people were waiting more than 12 months for treatment. That figure is down to 10,000 today, which is a truly massive achievement. When the hon. Gentleman rightly talks about care in the health service, he should realise that this Government and our predecessor Conservative Governments have a great deal to be proud of.

All that has been achieved against a backdrop of steadily increasing demand, as a result of improvements in life expectancy and new and costly drugs and treatments becoming available. That has naturally resulted in a public expectation of more and better-quality services. Those they continue to get, but the pressure on the NHS continually to seek to be ever more efficient is bound to prevail.

As well as putting in additional funding year on year overall, we naturally expect that all health authorities and trusts will seek further to improve their efficiency. That ensures that more moneys released from bureaucratic procedures and ineffective treatments can then be channelled into direct health care provision.

Everyone is already aware that this Government have been very successful in driving down management costs in the NHS now that the reforms are fully in place. The efficiency scrutiny, examining current and future information, will also assist the NHS to achieve this redirection of funds into the provision of health care.

The internal market we have put in place is designed to encourage all such improvements, but it will also inevitably cause some pressure points to emerge in the interim. I have confidence that NHS managers will continue to deal effectively with those as a normal part of their planning and management functions. Nobody ever expected this to be an easy process, but the goal of providing better patient services makes it all well worth while. We therefore do not plan to ease up on the process which has proved successful so far.

I now turn to the release of financial information. For some time now, health authorities' audited accounts information has been made readily available, both locally by publication of accounts and nationally in response to questions in the House. In-year forecast results, which is what the hon. Gentleman was talking about, have also been available from time to time at individual health authority meetings, which inform the local population of the health care delivery plans and the associated financial implications envisaged by the relevant health authorities. In the hon. Gentleman's case, that is the East London and the City health authority.

Health authority plans, including all their financial implications, are regularly discussed with the regional offices of the NHS executive to inform their performance management role. The health strategies appropriate to local circumstances are, however, clearly matters for the health authority. Naturally, health authorities have to take into account changes in the health care needs of the local population, advances in medicine and clinical practice, and contract negotiations with the health care providers. Plans and forecast financial positions are therefore likely to change substantially throughout the year. They have not previously been considered appropriate for central publication, precisely because they can be revised and changed during the year.

We have recently been considering whether it would be possible to release such information without prejudicing local discussions over service delivery and funding, and without giving out information which we were aware would be likely to alter substantially over the coming months, and which might therefore sometimes be misleading. To do so would be potentially harmful to the successful delivery of patient care, by causing undue concern to all those providing and receiving health care in a particular locality.

In the majority of cases, it is possible to make revisions to plans without recourse to drastic changes to service configurations, to which the hon. Member for Newham, North-East (Mr. Timms) referred. In any case, such changes, as he and the hon. Member for Newham, South know, are subject to full consultation.

There remains some risk to the process, particularly if commentators do not allow health authorities to get on with the day-to-day planning and arrangements necessary to purchase appropriate services for their local population. However, having considered all the various aspects, including those raised by the hon. Gentleman, and—as I hope he appreciates: I owe him that courtesy—having listened to his arguments, which were put with great force and clarity, I have now concluded that it will be appropriate to make available centrally the forecast financial position of all health authorities in the country, not merely the one in London that the hon. Gentleman requested.

The appropriate figures provided by health authorities will shortly be made available to the hon. Gentleman. They will also be placed in the Library.

I shall say a word about those figures, as I know the hon. Gentleman is interested in them. Let us be clear what they represent. They are monitoring information for management. That is their purpose. They do not represent how things will turn out at the end of the financial year, but are a starting point for management action.

indicated assent.

I am glad to see the hon. Gentleman nodding. I am sure that he understands.

No one would expect a perfectly even spread of spending across the year. The figures may be volatile, and they may be revised. However, one would expect management to monitor trends in spending and take action where necessary. That is what good management is about. Good management needs good management information.

The figures that I will provide to the hon. Gentleman will be published along with the audited accounts for the end of the year. That will enable the full financial picture to be available to the public in the spirit of the open government initiative that the present Government have put in place.

I should say a few words about how health authorities monitor and control their expenditure, as I know that it concerns the hon. Gentleman.

Will the Minister give way?

No. The hon. Gentleman has not spoken in the debate, and, having already given the hon. Member for Newham, North-East an opportunity to speak, I owe it to the hon. Member for Newham, South to answer his questions fully.

As the hon. Member for Newham, South is already aware, there are a number of health authorities whose monitoring suggests a need for management action during the remainder of the financial year. That does not suggest insurmountable problems. The health authorities concerned work closely with the NHS executive to balance priorities and make the necessary plans. Any corrective action should be designed to ensure the continued delivery of a high standard of health care. The financial options include reductions in working balances and brokerage arrangements with other health authorities.

I thank the Minister for some explanation, which may or may not stand up. Had he written earlier, the reasons why he considered it unsuitable might have become clear.

However, from what the Minister has said, bearing it in mind that all Government expenditure is to some extent estimated, is he not now admitting that there is greater volatility in financial forward planning in the national health service which cannot be to the advantage of the service or to its users, and that that arises from the structure of purchaser and provider that the Government, in my view wrongly and foolishly, put in place?

No. With respect to the hon. Gentleman, that is not how it arises. Any volatility in the financial position of a health authority during a year essentially arises as it does in any large organisation—through an imbalance between spending and income, which may occur over a short period and be evened out over the year.

At certain times of the year, any private sector business may earn high revenue and have low costs, while at other times the reverse will apply. For example, a Christmas card company would earn a huge amount of revenue at one time of the year, yet over an entire year a Christmas card company would calculate its profit taking into account expenditure and revenue.

Similarly, health authorities experience volatility in their spending, purchases and revenue, so the figures will vary from quarter to quarter. That does not mean that this essential unaudited management information will not be reconciled at the end of the year. I hope that the hon. Gentleman understands that.

I should like to make the simple point to the hon. Member for Newham, North-East that East London and the City health authority is the second highest beneficiary in the country under the existing needs element of the formula, and the third highest overall. As he knows, since he is a connoisseur of these matters, I accept that we are evaluating a proposed interim CHS-needs weighting based on the work of independent consultants, which may of course change the weighting in a way that may be helpful to inner-city areas such as those he represents.

Despite attempts to portray otherwise, the NHS is, as I said at the outset, better funded overall and in a better state than it has ever been. The finances of the NHS are under closer control than ever before, and a far better service is provided for the public, as witnessed by the greatly reduced waiting times and improvements in treatments available.

We have paid great attention to the subject of public accountability for the NHS, and in addition to the accounts information that has already been made available for some time, we will publish forecast information, as I described to the hon. Member for Newham, South. I trust that he agrees with me that we should all encourage responsible use of it to help rather than hinder the process of successful health care delivery to all our constituents.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Ten o'clock.

Volume 282: debated on Wednesday 16 October 1996

House Of Commons

Prayers

Bse (Northern Ireland)

Latin America

Children (Parental Contact)

Mr Michael Paynter

A5 Improvements (Ynys Môn)

Oral Answers To Questions

Scotland

Cumbernauld Development Corporation

Inward Investment

Local Government Finance (Clackmannanshire)

Hampden Park Stadium

Forestry

European Union Policies

Scottish Grand Committee

Government Of Scotland

Campbeltown To North Antrim Ferry

Dermatology Patients

Stone Of Destiny

Deregulation

Dunblane (Cullen Report)

Cullen Report (Firearms)

Scottish Parliament

Scottish Parliament

Privilege

Public Accounts Committee

European Community Documents

Merger Regulation

Health Authorities (Deficits)