While it is always a delight to see the Financial Secretary in her place, I regret that the Paymaster General is not here to listen to the debate and reply to it. In accordance with the conventions, and out of courtesy, I dropped him a note on Monday saying that I intended to refer to him in my speech today. So it is an additional source of regret that he has not seen fit to be here in person and is letting the Financial Secretary answer questions on his behalf. We also saw that last week in Treasury questions.

I am delighted to have this opportunity to debate tax avoidance and offshore trusts. It is timely for three reasons. First, the Budget is less than two months away and we can soon expect to hear what progress has been made on the Government's plans for a general anti-avoidance law. Secondly, the taxation of offshore trusts is under review. Thirdly, that review has been steered by a Minister who is closely linked with a Guernsey-based offshore trust. Some might say that that makes the Paymaster General uniquely well qualified to conduct a review of offshore trusts. Others might say that he has a severe conflict of interest and that, for that reason and for others which I shall explain later, his position has become untenable.

No one likes to pay more tax than he has to. So I make no criticism of anyone who takes legitimate and legal steps to minimise his tax liability. However, where genuine loopholes exist, where unforeseen gaps in the tax system allow people who clearly should be paying to avoid tax altogether, the Government should act. Blocking loopholes helps to keep tax rates low for everyone. That is a principle which guided the previous Government. Our last Budget stepped up the campaign against people who cheated the system. We wanted to protect genuine taxpayers who paid their fair share.

The Inland Revenue was given extra funds to step up its work on the black economy, on income tax compliance and on corporate tax avoidance. Her Majesty's Customs and Excise received an extra £88 million to boost its campaign against excise fraud and VAT evasion.

Of course, there are other ways to prevent tax avoidance. More intensive policing of the system is not the only way. The best way is to keep the system simple in the first place. The fewer taxes there are, the fewer reliefs, exemptions and allowances are available, the less potential there is for tax experts to work the system to their advantage. That is one reason why we were working steadily towards the abolition of inheritance tax and capital gains tax. Both are surrounded by a thriving industry of accountants and lawyers specialising in tax avoidance. When my right hon. Friend the Member for Charnwood (Mr. Dorrell) was Financial Secretary, he made the Conservative Government's position on tax evasion clear. He said:

"The Government remain determined to prevent the growth of tax avoidance to the level that existed before 1979. And over the last 14 years a large number of measures has been introduced to counter avoidance, including some in the present Finance Bill. … But there is a point where avoidance can be regarded as improper and unacceptable, deserving to be looked at critically, and deserving to be stopped."—[Official Report, 18 June 1983; Vol. 226, c. 761.]

That is what he said, but what about the present Chancellor of the Exchequer? In Treasury questions last week, he said from the Dispatch Box that when my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley)

"was Financial Secretary to the Treasury and was asked to take action on offshore trusts, he said that:

'It would impose a substantial and unreasonable burden on business.—[Official Report, 15 January 1997; Vol. 304, c. 482.]

So there we apparently have it. The Chancellor gave the House the impression that the previous Government, when asked to take action in 1990, did nothing.

Naturally, I looked up the quotation that the Chancellor used. I can only assume that it is because of what No. 10 calls deep psychological flaws in his character that his imagination has run wild with the actuality. The shadow Chancellor, my right hon. Friend the Member for Hitchin and Harpenden, was asked a question by the then Member of Parliament, Mr. David Shaw. It will enrage the Prime Minister when he discovers that his Chancellor has been using with approbation answers inspired by David Shaw. David Shaw asked my right hon. Friend to consider a complicated system of prior notification whereby all companies, all trusts and individuals would have to inform the Inland Revenue of any proposed transactions between themselves and a tax haven. My right hon. Friend said in reply:

"The Inland Revenue devotes substantial resources to countering tax avoidance and evasion, including the kind of offshore transactions involving tax havens to which the questions refer. Where appropriate, the Government would not hesitate to bring forward such further legislation as was found to be necessary. To require general notifications of business transactions with tax havens would, however, impose a substantial and unreasonable burden on business."—[Official Report, 10 January 1990; Vol. 164, c. 705–06.]

There is the true and accurate quotation. We can all now see why the No. 10 spin doctors are so keen to correct the Chancellor's perceived version of events in everything that he says and does.

We are all following what the right hon. Gentleman has to say with interest. Will he comment on the reports that a donor to the Conservative party based in Hong Kong had an offshore trust in Taiwan? This donor was known as White Powder Ma for some reason about which I am not too sure. He wanted back the £1 million that he had donated to the Conservative party because the previous Government failed to spring his father from gaol. I hope that the right hon. Gentleman will mention that as he goes through.

That is nothing to do with this debate. The one thing that occurs to me is that that donor apparently gave £1 million to the Conservative party and the policy did not change. Bernie Ecclestone gave £1 million to the Labour party and got the policy changed.

rose—

The hon. Gentleman is an experienced hand. He has been here slightly longer than I have. He knows that I will not be deflected this early in the debate.

When my right hon. Friend the Member for Hitchin and Harpenden was Financial Secretary, he said that further legislation would be introduced if necessary. Indeed, further legislation was introduced. The most important change in the way in which individuals are taxed on their holdings and offshore trusts was introduced by the Conservative Government in 1991. In his 1991 Budget speech, the then Chancellor, Norman Lamont, argued:

"I do not think that it is right for a relatively small number of wealthy people to shift very large assets into offshore trusts simply in order to avoid United Kingdom tax."—[Official Report, 19 March 1991; Vol. 188, c. 174.]

As a consequence of the Conservative legislation in 1991, United Kingdom residents transferring assets to an offshore trust for the benefit of themselves or their family are now liable for capital gains tax. It is notable that in a recent article in Accountancy Age on the possibility of a Labour Government cracking down on offshore tax avoidance via trusts, the chairman of the Jersey Fund Managers Association was quoted as saying:

"The Conservative Government already levelled up the playing field. I don't think a Labour Government holds any particular worries for us."

So while the Chancellor huffs and puffs in the House trying to pretend that the previous Government did not take action on offshore trusts, the view of the operators of the trusts is that the legislation passed by the Conservative Government removed so many tax advantages that they have no fear that Labour can make it much tighter.

However, the present Government have a long record of commitment to tighten up on offshore trusts. Back in 1993 the Chancellor published a Tribune pamphlet entitled "How to tackle tax abuse". His argument was simple. He argued that £10 billion could be raised by a combination of a windfall tax on the privatised utilities and the closing of tax loopholes. As he wrote at the time:

"The Chancellor should end the tax abuses which reach to the heart of our public finances by indulging the super rich at the expense of all the rest of us".

On offshore trusts, the Chancellor wrote:

"As the law stands, offshore owners of UK assets, including companies, shares and land, pay no CGT when they trade in these assets. A UK resident can transfer assets to an offshore trust and the trustees can then make payments to beneficiaries in the UK, avoiding much tax liability."

That was in his pamphlet "How to tackle tax abuse." I am sure that the Paymaster General can confirm the accuracy of the Chancellor's account of how one avoids paying tax.

Just a year later, the then shadow Chancellor returned to the fray, publishing another paper, entitled "Tackling Tax Abuses, Tackling Unemployment". He noted:

"The abuse of offshore trusts and companies continues",

and added:

"All Governments owe it to their people to take action against the persistent few who, at the expense of everyone else, shelter their wealth overseas whilst seeking to enjoy the benefits financed by those who pay their tax at home".

In his speech to the Labour party conference, he pledged:

"A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax havens."

Therefore, it was no surprise when the Chancellor used last November's pre-Budget report to promise a general anti-avoidance measure on the ground that closing loopholes one by one

"is no longer a satisfactory response to the continual inventiveness of tax planners".

That then seems to be the Chancellor's plan—a general anti-avoidance catch-all measure. I shall be interested to find out how the Government go about putting such a provision together, especially as one commentator said:

"As a matter of principle, we believe that the citizen is entitled to know where he or she stands before the tax law. A catch-all provision that came into play when all else fails, is unacceptable in a fair tax system."

Who is that commentator? Why, it is the Chancellor himself, writing in 1994, but we all understand that much has changed for him since then. At that time, he thought that he would like to be the Prime Minister; now he thinks that he is the Prime Minister.

The Government's position on offshore trusts is clear. They want to tighten the tax rules, so how embarrassing it must have been when it began to leak out that the Paymaster General had his own offshore tax haven. Although he has been reluctant to give the full facts, which have been extracted from him painfully over the past six weeks, we know at least that he is a discretionary beneficiary of the Orion trust, a Guernsey-based fund which was established by his late Belgian friend and business associate Madame Joska Bourgeois.

Madame Bourgeois was a remarkable woman. She made a £30 million fortune selling Jaguars to the Belgians. How many Belgians were so keen to buy Jaguar cars in the early 1980s that that car dealer made a fortune out of it? I confess that I do not know of any other dealer who made money out of selling Jaguar cars, with their famous reliability in the early 1980s, before Edwardes turned the company around. This is a case for Hercules Poirot to investigate.

I have no objection to any individual benefiting from such a trust, provided that he complies with the law, but most decent people, including many of those who voted for the Labour party at the last election and who apparently are now deserting it in droves, cannot stomach the blatant double standards that this sorry affair has exposed.

The Government clearly oppose offshore trusts, yet the Minister in charge of the policy has such a trust himself. Even worse, his plans for individual savings accounts will cut tax relief for many thousands of savers with more than £50,000 in personal equity plans and tax-exempt special savings accounts, yet he has the benefit from at least £12 million that is stuffed into a secretive tax haven, avoiding tax all together. No wonder he has been accused of hypocrisy and by no less a person than the Deputy Prime Minister, who said on "Breakfast with Frost":

"You may argue that the politician"—

the Paymaster General—

"has said one thing and perhaps done another. That seems to be the greatest charge against him."

That charge is hypocrisy and how true it is. At least that was the greatest charge against the Paymaster General on 14 December.

To understand the complex web of dealings in which the Paymaster General has enmeshed himself, we must first understand the nature of the Orion trust. Gavin Lumsden, writing in The Times on 20 December, described various types of trusts and went on:

"The Orion Trust in Guernsey, of which Mr. Robinson is a potential beneficiary, does not conform to any of the tax rules, not because it is an offshore haven, but because the woman who set it up, Joska Bourgeois, was a non-UK resident and therefore outside the scope of UK tax law. Because she died in 1994, Madame Bourgeois, a Belgian national living in Switzerland, had effectively put Orion beyond the reaches of the UK taxman forever. Because of this, Orion can grow its assets tax-free and distribute the capital to beneficiaries in the UK who have no tax to pay. The implications of this for Mr. Robinson were enormous when last year he was given the right to buy shares in Trans Tec, a company he founded. Mr. Robinson could have subscribed to the shares but would have had to pay tax on any increase on their value whenever he came to sell them. He could also have sold his rights to a third party, but that would have denied him the benefit of growth in the shares' value. Instead, Mr. Robinson sold the right to buy the shares to Stenbell, another company he owned, which sold them on again to Orion. By transferring them to Orion he could be confident that a trust, of which he was a potential beneficiary, could benefit from the growth in the shares free of tax.

According to Mr. Fitzpatrick of Chantrey Vellacot (accountants) it is 'a classic case study in how to use an offshore trust.' The effect of this could be dramatic if the Trans Tec shares continue to perform. In the past two years they have doubled in value. Orion now owns £13 million of the company shares. If they were to double again, the trust will have gained £13 million. Ordinarily, this would produce a £5 million Capital Gains Tax bill—but not for Orion or Mr. Robinson or any other beneficiary of the trust."

That is the view of the experts: it is a classic case study into how to use an offshore trust for tax-avoidance purposes.

Does my right hon. Friend agree that the one thing that should have happened is that all those transactions should have been totally at arm's length and done on the basis of true value? Are we to assume that the Paymaster General has extraordinarily short arms?

My hon. Friend makes an interesting point. I shall come to the arm's length attempt when I discuss Stenbell Ltd., but I must set out the chain of events if the House is to understand what has gone on. I have researched this in some detail, but I shall try to be as brief as possible. The House will find that the Paymaster General has attempted to put himself at arm's length from the Orion trust.

The Paymaster General has so far failed to answer several questions about the Orion trust. It was set up by the executors of Madam Bourgeois's will following a bequest in her will. The Paymaster General was one of her executors who had to set up the trust. He was the executor of her will from when she died in 1994, but he resigned abruptly in 1996, just a few months before the trust opened for business in Guernsey.

Who are the trustees? The Paymaster General will not tell us, except to say that they are independent. Offshore tax experts believe that they are professional trustees who manage various trust portfolios and that they are linked to a trust management company called Richmond Corporate Services. The first question that the Paymaster General has to answer is: did he, when he was executor of Madam Bourgeois's will, have any part in the selection of Richmond Corporate Services?

The Paymaster General and seven other family members are discretionary beneficiaries. The independent trustees advise the trust and decide when and how much to pay, but, as the settlor of the trust, Madam Bourgeois, is dead, the normal modus operandi is for trustees of discretionary trusts to have a so-called "letter of wishes" from the individual whom they regard as their client, so that they can administer the trust as required. The second question for the Paymaster General is: has he ever written a letter of wishes to the Orion trustees? If he has, he has been even more economical with the truth than we have believed so far.

In June 1996, TransTec, the Paymaster General's highly successful company, of which he is chairman, decided to raise £58 million by a rights issue of five new shares for every nine. The chairman of TransTec, the Paymaster, had the right to buy 9,805,550 shares at 103p each—a discount on the market price. But the Paymaster did not take up the shares personally. He sold the rights to buy them to a company called Stenbell Ltd. Stenbell Ltd. has two directors; the Paymaster General is one. He says that he did not take up the shares himself because he could not afford to. He was quoted as saying on weekend television:

"I didn't have the £10 million handy to do it"

but apparently his own company, Stenbell, did have the £10 million handy to do it.

I have obtained the notes to the Stenbell accounts for the period ended 31 May 1997. They make interesting reading: Stenbell has an authorised share capital of 1,000 ordinary shares of £1 each. It only has two ordinary shares of £1 each allotted, called up and fully paid, and guess whose they are?

So is Stenbell a going concern? The notes to the Stenbell accounts say:

"At the period end, the company had a deficit of assets over liabilities of £240,850. The continued trading of the company is dependent upon the continued support of its principal creditor, the Geoffrey Robinson Personal Settlement. In the opinion of the directors, this support is likely to be forthcoming for the foreseeable future, as evidenced by a further injection of loan capital since the year end. Accordingly, in the opinion of the directors, it is appropriate to prepare the statements on a going concern basis."

That is pretty clear, is it not? Stenbell has no assets whatever except those that the "Geoffrey Robinson Personal Settlement" give it.

Therefore the third question for the Paymaster General is: did the "Geoffrey Robinson Personal Settlement" finance or guarantee the money so that his company, Stenbell, could buy the £10.1 million of shares from his company, TransTec?

As we now know, Stenbell did not retain the shares. They were sold to the Orion trust, whose trustees are, supposedly, independent, and if tax is to be genuinely and legally avoided, those trustees must operate without any influence from the Paymaster General. Indeed, when this affair broke, the Paymaster General's solicitors confirmed the independence of the trustees. His solicitors, Titmuss Sainer Dechert, rushed out a letter to The Observer, on 8 December 1997, stating:

"Our client did not appoint the trustees of the Orion Trust, who act entirely independently of him and are not controlled, or their decisions influenced, by him in any way; the trustees of Orion make their own decisions."

They threatened immediate libel proceedings if the newspaper continued to publish further reports—threats which were all bluff and have now been quietly dropped.

However, a few days later, the Paymaster General moved from threatening legal offensives to a charm offensive, when he gave extensive interviews to the Sunday media. Among other things, he told us that he did influence the Orion trust to buy the TransTec rights issue that he had sold to Stenbell. As the Paymaster General is an honourable man and a Member of the House, I believe him. He did influence the independent trustees, or as he says:

"I did suggest that they took up the rights issue and they did".

I can only conclude that, as the Paymaster General is an honourable man, Titmuss Sainer Dechert have the psychological flaw that the Prime Minister sees in his Chancellor, and that they, his solicitors, lied, lied and lied again in their letter of 8 December when they said that the Orion trustees did not have their decisions influenced by Her Majesty's Paymaster General.

Later, the same independent trustees were to jump at the Paymaster's next "suggestion", to buy his shares in Coventry City football club, which they did. Why should those apparently independent, professional trustees, listen to the Paymaster's suggestions unless they had a letter of wishes from him, as their principal beneficiary, giving guidance on how they should act?

I must accept that the Paymaster has operated the rules cleverly and well. Indeed, he is a highly successful and clever business man. He is the only man in history to buy a company from Robert Maxwell and find that it actually has more assets than liabilities. It is not appropriate today, but the Paymaster General's earlier dealings with Robert Maxwell deserve a thorough investigation. However, as far as the Orion operation is concerned, he would no doubt have succeeded if it were not for his public position now and the investigations of the press.

Let us consider the chain of events in summary. The Paymaster is executor of Madam Bourgeois's will, but resigns just before the Orion trust is operative. At the same time, his company, TransTec, planned to have a rights issue which will gain him almost 10 million new shares. He sells the rights to those shares to his company, Stenbell, which buys the shares—presumably financed by the "Geoffrey Robinson Personal Settlement"—and sells them on to the offshore Orion trust, which just happens to have acted on his suggestion to buy them. Why involve Stenbell? That is simply to add another link to the chain and make it look more like an arm's-length operation. If Orion bought the shares directly from the Paymaster General, he could be deemed by the Inland Revenue to be the settlor of the shares, and full income tax liability would attach, as a result of legal changes made by the previous, Tory, Government.

It is a classic case of the use of intermediate companies and offshore trusts to avoid tax on a massive scale, perfectly legally. The Paymaster's dealings have been designed to persuade the Inland Revenue that he was acting at arm's length.

We need to consider two further curious little events. The first concerns an interesting note that I found in the Stenbell accounts. It says that for the period ending 31 May 1997, Stenbell sold on shares to the Orion trust:

"A Trust in which Mr G Robinson MP is a beneficiary".

Note the wording "a beneficiary", not a discretionary beneficiary, as we had been told by the Paymaster.

Therefore, the fourth question for the Paymaster General is: are the Stenbell accounts, which he has produced, from a company that he controls, wrong? Have they misrepresented his actual position as a potential discretionary beneficiary, which he tells us that he is? We need to know.

Then there is what I call the "eve of poll affair." The eve of poll was not a happy night for me and many of my Conservative colleagues, who saw election defeat looming, but it was a great day for the Paymaster General. Not only did he sense victory on the morrow and a job in Government, but the Orion trust was suddenly informed that another 2.95 million TransTec shares were to be settled on it. The Paymaster General says that he knows nothing about it. He says:

"You'd have to ask the settlors that. I'm not briefed"—

but apparently the settlor was the late Madame Bourgeois and, of course, the Paymaster General was the executor of her will before he resigned just before the Orion trust became operative and he could be a beneficiary.

Surely it is uncharacteristically careless of the Paymaster, the successful and clever business man, to have, shall we say, "mislaid" 2.95 million of his own company's shares, which he failed to settle on the Orion trust, of which he is a beneficiary, at the outset, but which was then settled by a deed of arrangement, completed on 30 April, the eve of the general election. And the Paymaster General says that he has no idea how that convoluted state of affairs and amazing coincidences came about. I am afraid he must tell us.

The next question to the Paymaster General is: who informed the Orion trust of the 2.95 million missing TransTec shares, and why were they not transferred with the original bequest?

The Paymaster says that we need to ask the settlors that. No we do not. We are asking the Paymaster that question. He is the one who needs to come clean. We have no influence on the settlors of the Orion trustees, but we know that the Paymaster has. If the Paymaster General can influence them to buy his TransTec and Coventry City shares, surely he can influence them to tell him the circumstances surrounding this extraordinary share transfer—and then he can tell the House of Commons. It is about time he said something in the House of Commons about his dealings.

The legal technicalities of offshore trusts have served the Paymaster well. Apart from the tax avoidance advantages, they have enabled him to shelter behind highly evasive answers to parliamentary questions. As the House can see, this is a complex matter which is difficult to set out simply. That has enabled the Paymaster General to hide behind arcane offshore trust law. But slowly and surely, the complex web of his transfers and share dealings has been untangled, and day by day his position becomes more untenable.

The latest ministerial code, revised and endorsed by the Prime Minister—the one I have still refers to Ministers' spouses, not their partners—states:

"Ministers must scrupulously avoid any danger of an actual or apparent conflict of interest between their ministerial position and their private financial interests".

The Prime Minister says that the Paymaster General has followed the code—that he has avoided any apparent conflict of interest. But in his television interviews, the Paymaster General has admitted that on some issues he has given advice to the Chancellor of the Exchequer which goes against his own financial interests.

Thus if we take the Paymaster's version of events, which I believe to be true, as a Minister of the Crown he has looked at the policy options on tax evasion which his Treasury civil servants have provided, and he has advised the Chancellor to adopt an option or options disadvantageous to his personal financial interests. That is a noble thing for him to have done, but it is still a clear contravention of the ministerial code. That code, endorsed by the Prime Minister, does not advise Ministers to act against their personal interests when they face a conflict of interest. It tells them to avoid any "actual or apparent" conflict in the first place.

I must admit that the Prime Minister is showing more resolve in bluffing out this flouting of the code by the Paymaster General than the latter showed with his threat to sue the press for libel.

The Paymaster General is the Minister responsible for corporate taxation and general accounting issues in the Treasury. It is not possible for him to avoid any apparent conflict of interest so long as he is a discretionary beneficiary of an offshore tax haven. The ministerial code is quite specific:

"In some cases it may not be possible to devise such a mechanism … in such a case, it may be necessary for the Minister in question to cease to hold the office in question".

The Prime Minister even states in the foreword:

"I will expect all Ministers to work within the letter and the spirit of the Code".

If the Prime Minister is to follow his own code, he must immediately ask for the Paymaster General's resignation.

That, of course, is not how this Government of pals and cronies act. We read that when the code was about to be flagrantly breached by the Foreign Secretary, the Prime Minister apparently revised it to accommodate his right hon. Friend's private arrangements.

The Prime Minister has stood loyally by his friend the Paymaster. We read that they are very good friends; indeed, on at least two occasions the Paymaster General has put his luxury villa in Tuscany at the disposal of the Prime Minister and his family. My reading of the press reports suggests that this is not a self-catering "bring your own sheets and flea powder" establishment. It is apparently a very high-class joint—the sort of place I am not allowed into. I have not tried to calculate how much more four weeks in Tuscany in a luxury villa in August might cost than, say, a few nights in the Ritz hotel in Paris. No doubt others will do the calculation for me.

There is also a new angle on which the Prime Minister must act—now. Because of revelations concerning the influence that the Paymaster General exerted on Orion to buy his TransTec shares, and the probability that he has therefore tainted the offshore trust and technically brought it onshore, it is said that the Inland Revenue is investigating his links with the Orion trust. Is that true? The normal rules ensuring strict client confidentiality for ordinary citizens in their tax affairs are absolutely right and proper. But this is no ordinary citizen: this is a senior Minister in Her Majesty's Treasury with special responsibility relating to taxation who may be under investigation for tax avoidance. He cannot therefore shelter behind the client confidentiality rule. He must answer the question, and answer it soon. Is the Paymaster aware of any Inland Revenue investigation into the TransTec shares transfer to the Orion trust, or into his influence on their purchase? On that he must come clean.

Furthermore, has the right hon. Gentleman now told the permanent secretary at the Treasury, Sir Terry Burns, the full facts? I feel sorry for the permanent secretary; like all good perm secs of my experience he will do his utmost to defend his Minister and protect him from his own folly. The Paymaster General said in a statement of 29 November:

"I informed him"—

the permanent secretary—

"that I was a discretionary beneficiary under a trust established for my family. After advice from the Permanent Secretary and Titmuss Sainer and Dechert, I decided in accordance with their advice, that there was no need to include this in the blind trust arrangements, since I was a discretionary beneficiary."

It is interesting that Sir Gordon Downey took a different view when he looked into the matter, but I shall not go into that today. I am concerned with the Paymaster General's dealings as a Minister of the Crown, not with any failure on his part to register his interests as a Member of Parliament.

What would the permanent secretary to the Treasury say now that more of the truth has come out? Wisely, like any great man who has been duped, he is saying very little. He has still not replied to the shadow Chancellor's letter of 12 December, in which he pointed out that the dealings of the Orion trust cannot be compared with a blind trust. That of course was the assumption on which the permanent secretary worked when the Paymaster General told him of his "beneficial family trust". In truth, the permanent secretary cannot reply, and I do not criticise him for that. Any reply that he could make would kill off his Minister.

The time has come for the Paymaster General to go. He has ducked and dived, he has threatened and charmed, but he has failed to answer the crucial questions on his business affairs. The Chancellor of the Exchequer is also guilty of hiding the facts from the House. My right hon. Friend the shadow Chancellor has repeatedly asked him for details of the Paymaster's dealings, yet the Chancellor relies for answer on the press statement issued by the Paymaster on 8 December. That press notice contains the infamous Titmuss Sainer Dechert letter stating that the Paymaster did not control or influence the Orion trust. We now know that assertion to be false; yet the Chancellor in his parliamentary answers merely refers to it for his defence. It is disgraceful and astonishing that the best defence the Second Lord of the Treasury can muster is based on a lawyers' letter which, as I said earlier, lied, lied and lied again.

It is time for the Paymaster to go, not just because he has been economical with the truth, as my detailed account today has revealed, but because of the apparent and obvious conflict of interest. Who in the country will believe that a man who benefits from at least £12 million in a tax haven has no conflict of interest when doing his job of clamping down on tax evasion? It beggars belief. And who will believe that the Inland Revenue will fearlessly investigate the status of the Orion trust and the supposed independence of its trustees when one of the principal beneficiaries includes the Revenue's own Minister at the Treasury?

It is time for the Paymaster to go because of the double standards that this case exposes. The Government are vitriolic about offshore trusts, yet one of their senior Ministers benefits enormously from such a trust. Here we have a Minister who presided at a press conference to launch the Government's new savings accounts, which clobber 300,000 middle-class savers, just 18 months after he suggested to Orion that it buy 10 million of his shares and then tuck them away in a tax haven for his and his family's use. If the right hon. Gentleman does not see the inconsistency or hypocrisy in that, he is the only one who does not. The Deputy Prime Minister sees it, but apparently our Prime Minister does not.

It is time for the Paymaster General to go because he has failed to answer any of the crucial questions that must be answered if he is to be left with any credibility or trust. So that the Minister answering today has a clear and concise list of them, let me summarise the questions that must be answered by the Paymaster. First, did he have any part in the selection of Richmond Corporate Services as trustees of the Orion trust? Secondly, has he ever written a letter of wishes to the Orion trustees?

Thirdly, did the "Geoffrey Robinson Personal Settlement" finance or guarantee the money so that Stenbell Ltd. could buy the TransTec shares? Fourthly, Stenbell Ltd., of which the Paymaster General was a director, has produced accounts describing him as a beneficiary, not a discretionary beneficiary, of the Orion trust. Are those accounts wrong?

Fifthly, who informed the Orion trust of the 2.95 million TransTec shares that were settled on 30 April? Sixthly, why were those TransTec shares not transferred with the original bequest to Orion? Seventhly, is the Paymaster aware of any Inland Revenue investigation of the TransTec shares transfer to the Orion trust, or his influence on their purchase?

Eighthly, has the Paymaster now told the permanent secretary at the Treasury, Sir Terry Burns, that he has influenced the Orion trust by suggesting that it buy his shares in TransTec and Coventry City football club, and is the permanent secretary still of the view that Orion is no different from a blind trust?

Ninthly, does the Paymaster General still believe that he is complying with the rules in the ministerial code that insist that there should be no apparent conflict of interest, when he benefits from £12 million in a tax haven, despite the fact that his ministerial responsibilities include closing tax loopholes? Finally, does he believe that full disclosure on all financial dealings is the only way to ensure that he has acted with due propriety and fairness? Those are important words.

I shall table all those questions today as official parliamentary questions. The Paymaster General must answer them. Indeed, the Chancellor of the Exchequer must answer them; no longer can he dodge them by hiding behind a lawyer's letter that we now know to be totally untrue. If the Paymaster General—or the Chancellor or the Financial Secretary today on his behalf—does not answer those questions, he must go, and go now, not just because of his conflict of interest, not just because of his economy with the truth, and not just because of the evident double standards. He must go because he has failed his own ethical test.

In a letter to The Times critical of the Conservative Government's handling of the sale of The Times and The Sunday Times to Rupert Murdoch, the Paymaster General wrote:

"What is required therefore is the full disclosure of all the financial documents and legal opinions. Only in this way can the public be satisfied that this important transaction has been handled with due propriety and fairness."

He continued:

"It is an occasion where proper behaviour must be seen to have been observed and the public assured that the right judgment has been arrived at."

Those are the Paymaster General's words, not mine. He has written his own political suicide note. He stands condemned in his own words. He has no credibility left. He must go.

I would have congratulated the right hon. Member for Penrith and The Border (Mr. Maclean) on raising this serious subject, but unfortunately he has used the debate for an unjustified attack on my hon. Friend the Paymaster General. I shall not go into the details; I shall make just three observations.

First, the right hon. Gentleman misunderstands the nature of trusts, and the position of beneficiaries and discretionary beneficiaries. I suggest that he take instruction from some of his hon. Friends, who know more about such matters than he apparently does.

Secondly, the House, through its Committee, has cleared my hon. Friend the Paymaster General. Thirdly, for what it is worth, I have full confidence in my hon. Friend.

I shall address the serious matter of tax avoidance and offshore trusts. The right hon. Gentleman said that the previous Government had taken certain steps in relation to tax avoidance. He mentioned in particular the changes in 1991 to the Finance Act. There is no doubt that from time to time, the previous Government made amendments to close gaps in the tax legislation. Unfortunately, they failed to do so systematically. They were often motivated by the haemorrhaging of public finances, rather than by any strategic view of the need to deal with tax avoidance.

The Labour Government have said that tax avoidance stands at the top of their priorities in their plans to reform the tax system. My right hon. Friend the Chancellor of the Exchequer made that clear in his pre-Budget statement. He said, rightly, that tax avoidance harms those who pay their fair share of taxes.

There are various ways to deal with tax avoidance. The previous Government were fortunate because in the 1970s and 1980s the courts had taken a purposive view of tax legislation. In a number of decisions, in particular the Ramsay and the Furniss decisions, which were confirmed last year in the McGurkian decision, the courts said that they would not adopt a literal approach, and that they would look at a preordained series of transactions in accordance with their overall effect. If, for example, a trust were interposed, they would look at the overall effect of the interposition of a trust in a series of transactions and act accordingly.

To a considerable extent, therefore, the attitude of the courts saved the previous Government from a huge haemorrhage in the public finances. The present Government have taken a much more strategic approach to the issue. First, as announced by my right hon. Friend the Chancellor, a large number of specific anti-avoidance measures will be introduced. I understand that up to 200 specific changes may be made to deal with tax avoidance.

Will the hon. Gentleman inform the House where he got the information about the next Budget that he has just announced to the House?

I shall speak to the hon. Gentleman later about the specific measures contemplated.

Secondly, there have been changes in the administration. As the hon. Gentleman will know, the large business tax avoidance units have been centralised to target resources more effectively. In addition, the Inland Revenue has adopted a higher profile in dealing with tax avoidance. For example, there were well-publicised raids last year, when the Inland Revenue took advantage of its powers under the Taxes Management Act 1970.

Thirdly, the Government have initiated procedures to deal with multinational enterprises, in particular the transfer pricing regime. In the view of experts, the previous Government did not deal adequately with that regime. Our controls on transfer pricing lag behind those of other countries. Several consultation documents have been issued on the matter, and the Government will toughen up controls in the Finance Act later this year.

The Chancellor has initiated discussions on a general anti-avoidance provision. There has been a great debate about the matter. The right hon. Member for Penrith and The Border touched on it in his speech, but did not deal with it adequately. There is an active debate about whether the United Kingdom ought to have a general anti-avoidance provision. The distinguished Tax Law Review Committee concluded, contrary to what the right hon. Gentleman suggested, that there is a need for a general anti-avoidance provision. The advantage, of course, is that it sends a message to taxpayers that they must not design their arrangements to avoid tax, which is intended to be caught by the legislation.

Contrary to what the right hon. Member for Penrith and The Border suggested, there is a head of steam behind this general anti-avoidance provision, which I support. It will ensure a more strategic approach to dealing with tax avoidance.

The Government have adopted a series of provisions to deal with the problem systematically, dealing with both specific and general matters. I support those measures. This is a serious topic. It was not dealt with seriously by the right hon. Gentleman. I commend the steps that the Government have taken.

Will the hon. Gentleman give way?

I have finished.

I thank the hon. Gentleman for giving way. He listed the scrutiny that the Government are giving to tax-avoidance measures. If the Paymaster General himself is the beneficiary of what is considered to be an extremely lucrative tax-avoidance measure, how can he take part in those discussions and examinations without being the subject of a glaring conflict of interest?

My hon. Friend is one among a number of Ministers. These decisions are being made by the Government. The Government have made their commitment to deal with tax avoidance quite clear and have set out their proposals in a series of consultation documents. Obviously, right hon. and hon. Members on the Opposition Benches have not looked at those papers. The Government are dealing with the matter in a serious manner, and I support them full.

Will the hon. Gentleman give way?

I have finished.

rose—

Order. The hon. Member for Dudley, North (Mr. Cranston) has truly finished.

I came along to the debate imagining, perhaps rather naively, that we would debate tax avoidance. Instead, we have had a Hetty Wainthropp-type amateur sleuth exercise into the private finances of the Paymaster General.

The hon. Gentleman will always have the support of the Liberal Democrats. They will look after him. Do not worry.

On this particular point, they do.

I ask a question that has persisted throughout the debate: why on earth was this matter not dealt with earlier? We were given the explanation that it was raised in the 1991 Budget, but we have had 18 years, several Chancellors and numerous Budgets in which to investigate avoidance. Why was not this loophole, which was so obvious to the Paymaster General and to numerous business men, detected? The reason was either incompetence or deliberate oversight—perhaps it was deliberate cynicism.

If the hon. Gentleman had been listening to the speech of my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), he would have heard clearly that the accusation was not one of using a loophole, and avoidance, but one of evasion.

The hon. Gentleman slipped from the word avoidance to evasion, and that is a crucial step in the argument, with which even public opinion and commentators outside have not caught up. Evasion is, of course, a legal matter. Perhaps I can return to the central issue.

We believe that tax avoidance is an important political issue. One reason why the Government were elected, and why we support their efforts in this respect, was to take a much tougher, less cynical approach to the whole issue of tax avoidance. As I understand it, the Treasury has a strong policy on tax avoidance, which was emphasised this morning with the announcement of the investigation into the conduct of the Channel Islands. We support the broad policy.

Will the hon. Gentleman state what anti-avoidance trust measures were included in the Government's July Budget, if they are so keen on the issue?

We are waiting for the Budget in a few weeks' time to take action on that. Liberal Democrats, like Conservative Members, will be looking for tough action in that respect.

Let me return to the central issue, which is important. We are looking to the Government to take the tough anti-avoidance action that they promised. This issue is important not because of revenue raising, which is a red herring, but because of the cynicism of the public about tax payments. I give a simple example. There is a trading group known as LETS—local exchange trading schemes—in my constituency: people who carry out and exchange services for each other. They do not pay cash. Some baby-sit; others carry out car repairs. Those people are frightened of expanding their scheme because the Inland Revenue will descend on them for tax avoidance. That is why public credibility has to be restored and tax avoidance dealt with firmly. I share some of the concerns of Conservative Members about the Paymaster General, not because he has been behaving improperly—that is a matter for investigation—but because Treasury Ministers should set an example. That is the issue.

On the specific issue of the Paymaster General, in the run-up to the Budget, it is clearly difficult, if not impossible, for him to continue to work on the sensitive issue of tax avoidance. The timing of the Budget is crucial, and within it must be measures to eliminate that loophole. If not, the position of the Paymaster General and the Government will become impossible.

This is the season of the pantomime dame, and Opposition Members' protestations have been perfectly in keeping with the time of year. My hon. Friend the Paymaster General answered the charges laid before Parliament. Sir Gordon Downey answered those charges and found that no parliamentary rule on registration had been broken.

Like so many other hon. Members, I came here this morning in the hope that I would hear a sensible debate about tax avoidance, but that has been far from the case. It could have been such a useful opportunity to explore sensibly the measures that the Government could take on tax avoidance, to bring in extra revenue for the Exchequer. I make the distinction, like the hon. Member for Twickenham (Dr. Cable), between evasion, which is illegal, and avoidance, which is legal until ruled otherwise. It is, as Opposition Members have said, perfectly proper to structure business affairs in a way that minimises tax liability. Indeed, a whole industry has grown up to support that practice, and many hon. Members seek its advice. However, it is also the Government's duty to ensure fairness in the tax system and to ensure that their tax intentions are translated into revenue for the Exchequer, for the proper funding of public services.

The Labour Government have clearly signalled their intention to act on tax avoidance. The Budget has signalled our intention to do just that, and future plans include a wide-ranging review of tax avoidance, involving the Inland Revenue and Customs and Excise. We are considering setting up a general anti-avoidance rule—avoidance is banned in many countries—which is welcomed by many, including the Institute for Fiscal Studies. We are serious about tackling avoidance and evasion. The record shows that the Opposition are not.

Will the hon. Lady give way?

No, I have nearly finished.

rose—

No, I shall not give way. Opposition Members were on their feet for a long time.

Have not the Opposition come along to deflect attention from their own shameful record? Will not the proof of the pudding be in the eating, as to whether they support measures on tax avoidance when they come before the House?

The right hon. Member for Penrith and The Border (Mr. Maclean) made an extremely important remark when he said that this was a timely debate. He is right, not only for the reasons that he gave but for an additional one, with which I want to deal now.

Tax avoidance could be argued to be an anomalous feature of an increasingly complex tax system. It may be lawful, but the issue is whether it is fair. When the public who vote us into this place consider the intricacies of tax avoidance and the way in which tax havens are used lawfully to avoid tax, they rapidly discover that that particular device is available for only the wealthy few. Most British taxpayers cannot avail themselves of that particular mechanism, so it is intrinsically unfair.

When my right hon. Friend the Chancellor announced that the Inland Revenue would conduct a comprehensive review of tax avoidance, including tax havens, he was right. Many British people show varying degrees of enthusiasm for paying their taxes, but everyone accepts that public services, of which we all avail ourselves, have to be paid for somehow. Nevertheless, many people do not like to be parted from their hard-earned savings, so we must devise a tax system that is basically fair, equitable and transparent.

The right hon. Member for Penrith and The Border somewhat humorously took us through the intricacies of the Paymaster General's offshore trust, but he lost me halfway through. I have no experience of tax havens and I never will, but if he lost me, he will certainly have lost most of the public who were listening to him. He gave an admirable demonstration of the complexity of taxation law, which tax accountants earn an enormous amount of money trying to make work. That simply cannot be understood by the public.

While researching the subject last night, I found an article in the Financial Times in July 1997 congratulating the Chancellor on taking on a comprehensive review of tax avoidance, saying that it was a "sorely underdebated topic". Seeing the subject on the Order Paper today, I rather hoped that we would have a more comprehensive debate, but, understandably, the Conservative party wants to concentrate on a certain issue.

Last night, I also did some research in our excellent Library on the Conservative party's record on tax avoidance. In 1991, Norman Lamont took the significant step of introducing capital gains tax for offshore trusts. But that is about it—one significant change in 18 years. The Conservative party cannot lecture us about tax avoidance and the comprehensive review of tax avoidance law.

It has become obvious that we are not simply talking about tax avoidance this morning; we are also talking about how this morally superior new Labour Government are avoiding the truth. Until we have some straight answers to the questions posed by my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), we shall continue to assert that they are covering up the truth and have something serious to hide.

This debate is about how a serving Minister of the Crown in the Treasury has a glaring and continuing conflict of interest between his public duties and his private interest, and how he is avoiding tax on a colossal scale. That has not been resolved by yesterday's statement by the Parliamentary Commissioner for Standards. That was a House of Commons matter and he goes out of his way to say that he has no jurisdiction over the Paymaster General in his duty as a Minister of the Crown. That latter issue is what we are debating this morning.

The Paymaster General's solicitor has issued a misleading and false statement which, because it was issued by press release from the Treasury, has the status of a Treasury and Government document and has been referred to in parliamentary answers. Therefore, the Government are also associated with that misleading statement.

It is a pity that the Paymaster General is not here to answer the debate, but it is always nice to have the Financial Secretary, who herself is no stranger to not paying her taxes. The House knows that in 1989 she pledged that she would not pay the poll tax. She has also been associated with the peace tax campaign, which persuaded people not to pay that part of their tax which would go to defence expenditure. Therefore, we have two Treasury Ministers, one who would not pay her tax because of what she called her socialist conscience, and the other who will not pay his tax because he has an offshore trust. No doubt the Paymaster General will read what we have to say and come to the House in due course to resign.

The Chancellor of the Exchequer and the Prime Minister attempt to hide behind the separate defence that the matter was all settled a long time ago when the permanent secretary to the Treasury, Sir Terry Burns, cleared the Paymaster General and said that there was no conflict of interest. That is false and it is also a fiction, as I shall touch on in a minute. But first I return briefly to the charge of hypocrisy: the huge and growing gap between what the Labour party in opposition said it would do and what it now does in government.

My right hon. Friend the Member for Penrith and The Border, in his powerful and able speech, mentioned the Labour party document, "Tackling Tax Abuses". It could hardly be clearer. It is utterly explicit. It promises

"to take action against the persistent few who, at the expense of everyone else, shelter their wealth overseas".

That was backed up by the Chancellor at the last Labour party conference before the election, when he said:

"A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax havens."

He is the Chancellor now, the Paymaster General is a millionaire, and Guernsey is an offshore tax haven, so why is the Chancellor permitting it? The answer is that they were all words before the election and the Paymaster General is no ordinary millionaire; he is a new Labour millionaire and a Minister.

Will the right hon. Gentleman give way?

The hon. Gentleman has already spoken, and I shall touch on some of what he said.

Now that the Labour party is in a position to deliver on that windy rhetoric, it has done nothing except set up a review. The hon. Gentleman referred to some 200 measures planned by the Treasury. We shall be asking where that information comes from, because if it is another leak from the Treasury, about which the rest of us have not been told, that will also be the subject of an inquiry.

The hon. Gentleman and the hon. Members for Erewash (Liz Blackman) and for Wolverhampton, South-West (Ms Jones) were wrong about the previous Conservative Government and the one before that. We used every Finance Act to block up unjustified tax avoidance loopholes. My right hon. Friend the Member for Penrith and The Border gave examples of that. I do not think that those three Labour Members were in the House during those years, so they clearly know nothing about it.

We have nothing in principle against offshore trusts. We do not declare unrestricted warfare against overseas trusts in the way that the Labour party has. That would be stupid, unrealistic and wrong. However, we do take action when the wishes of the House of Commons are being circumvented, and we did so.

Contrast that with what the new Labour Government are doing. They are attacking not the big offshore fat cats, such as the Paymaster General, but the little man, the small savers. They used their first Budget last July, within weeks of taking office, to conduct a £5 billion raid on ordinary pension funds. It was the Paymaster General who announced the abolition of the most popular and successful savings vehicles of all time—TESSAs and PEPs. A £50,000 limit is good enough for small savers, but, meanwhile, those big offshore trusts about which we heard so much before the election are so far untouched. That is not because the Treasury does not know about the subject. The Paymaster General knows all about offshore trusts. There is a clear, continuing and glaring conflict between his private interests and his public duties.

Yesterday's report by the Parliamentary Commissioner for Standards observes that the existence of the Orion trust

"might 'reasonably be thought by others' to be a source of potential influence."

That is the situation that paragraph 109 of the separate code of conduct for Ministers warns against. It says:

"Where there is any doubt it will almost always be better to relinquish or dispose of the interest but Ministers should submit any such case to the Prime Minister for his decision."

The Paymaster General has not relinquished or disposed of his interest, as required by the code. He did not submit it to the Prime Minister for his decision. He has broken the ministerial code and should now resign.

There is another charge. Again, it was ably described by my right hon. Friend the Member for Penrith and The Border, so I shall merely summarise the facts rather than going into great detail. We have not been told the truth. The Paymaster General has a family trust in Guernsey. His family are the sole beneficiaries. It is called the Orion trust, but we now know that that is a short title for the Robinson Family No. 1 and No. 2 trust. We were not told that at the start, but the information has subsequently come out. The trust was founded in 1996 with money from the mysterious and generous Madame Bourgeois. Of course, she did not set up the trust, because she had died two years before. Her executors set it up. One of her executors was the Paymaster General.

The purpose of the trust in Guernsey is simple—to avoid tax. There is no other reason for setting up a family trust in Guernsey. To succeed in avoiding United Kingdom taxation, the trustees, who are professional appointees doing what they are told, have to be seen to be entirely independent. They are not. The Paymaster General has said—and we believe him—that he suggests investments to them from time to time, and they act on those suggestions. He suggested that they bought 12 million shares in his company, TransTec—and they did. He suggested that they bought the shares that he wanted in Coventry City football club—and they did. If that is not influence, what is?

That is why the link between the Paymaster General and his family trust is under investigation by the special compliance unit of the Inland Revenue. That is an awkward position for a Treasury Minister. How can the Inland Revenue do its job properly when the object of its investigation is serving in the Department to which it reports?

The Treasury made the problem a great deal worse in its press release dated 8 December 1997, which included the solicitor's letter asserting that the trustees of the Orion trust

"are not controlled, or their decisions influenced, by him in any way".

That is not what the Paymaster General is now saying. That statement, issued on Treasury notepaper, is clearly untrue. A misleading statement from a Government Department must be corrected. We expect the Financial Secretary to correct it.

The Paymaster General threatened to sue the newspapers for making similar revelations. They have not retracted their statements. He did not sue. That was another bluff.

The Government's final throw is to claim that the issue does not matter, because it was all settled in a discussion between the Paymaster General and Sir Terry Burns. It was not. Sir Terry Burns was not told about the link between the Orion trust and the Paymaster General. He was not told that it buys shares on the Paymaster General's suggestion. My right hon. Friend the shadow Chancellor is awaiting a further letter from Sir Terry Burns to clear that up. In the meantime, perhaps the Financial Secretary will admit the truth about that interview.

In any case, as the ministerial code makes clear:

"It is in the end for Ministers to judge (subject to the Prime Minister's decision in cases of doubt) what action they need to take".

The Government should stop hiding behind civil servants and face the fact that the Paymaster General broke the rules. He did not break the rules of the House—we are not asking him to resign as a Member of Parliament—but the ministerial code, which applies to all Ministers of the Crown. That is why he has to resign.

I am leaving the Financial Secretary plenty of time to answer the debate. If she has an alternative explanation, let us finally have a full disclosure of it. The Government have recently published a White Paper called, "Your Right to Know". It has the usual photograph of the Prime Minister and so on. The foreword says:

"Openness is fundamental to the political health of a modern state."

I agree with that. If the White Paper is not to be yet another piece of breathless hypocrisy from the Government, let them deliver on their fine aspirations. Let us have a full disclosure of all the facts from the Financial Secretary now, a full admission of the hypocrisy, a full description of the conflict of interest—which undoubtedly exists and continues—and an admission that there is a central falsehood; a difference between what the Paymaster General is saying and what the Treasury press release of 8 December last year said. Finally, let us all agree that the issue can be settled only by the Paymaster General's immediate resignation from office.

This was supposed to be a debate on tax avoidance and offshore trusts. The right hon. Member for Penrith and The Border (Mr. Maclean) spent five minutes on tax avoidance and loopholes and 35 minutes restating the innuendo and the points that the Conservatives have already made against my hon. Friend the Paymaster General. The Opposition cannot stomach the fact that they made a complaint to Sir Gordon Downey—the complaint that they have outlined again this morning—and the report says:

"We agree that there is no case for saying that Mr. Robinson breached the rules of the House."

No case—and yet still they persist with their allegations.

Then they make snide comments and direct us away from the debate by making points against other Ministers. I am surprised that the Conservatives want to bring up the poll tax again. I am happy for them to remind the country that they introduced that unfair tax, they wasted £14 billion and they had to change the legislation. They do not want scrutiny of that.

As the Minister responsible, I am replying to a debate on tax avoidance. [Interruption.] Conservative Members can laugh and ridicule as much as they like. The facts stand for themselves—let us move away from the innuendo. As my hon. Friend the Member for Dudley, North (Mr. Cranston) has said, the general anti-avoidance regulations, on which the Tax Law Review Committee has published an excellent report, could have stood some debate from Conservative Members—but they did not want to know. As the hon. Member for Twickenham (Dr. Cable) said, there are important discussions to be held about the difference between loopholes and evasions—something which the Conservatives do not apparently appreciate as they slip into continual allegations. As my hon. Friends the Members for Erewash (Liz Blackman) and for Wolverhampton, South-West (Ms Jones) have made clear, the Government are pursuing a coherent policy in this regard. It is quite simple: the official Opposition do not have a policy. They want to keep making personal attacks instead of dealing with the issues.

Will the Financial Secretary give way?

I shall finish this point, and then give way to the hon. Gentleman. It is encouraging that some Conservative Members have a new-found interest in tax loopholes, but it is regrettable that they did not take action to deal with them when they were in government. Perhaps the hon. Gentleman will explain why.

The hon. Lady's line of defence seems to be that the Government are against tax avoidance in general, but in favour of it in this case.

I have not started the line of defence yet; I have not started explaining all the action that the Government has taken to counter tax loopholes.

This debate, secured by the right hon. Member for Penrith and The Border, a former Conservative Minister, has initiated discussion of the Government's policies, how they have been implemented to tackle tax avoidance, and how we shall meet our manifesto commitments to close tax loopholes, as the hon. Member for Twickenham said. The debate allows me to set out what the Government have already done to root out tax loopholes, to explain why we have had to act as a result of the Conservatives' failure over 18 years, and to signal the direction in which the Government intend to go.

It is very courteous of the hon. Lady to give way. I understand that she will wish to do so rather than try to answer the questions that I have put to the Paymaster General. May I ask her for her personal opinion? She has furiously defended her role concerning the poll tax, and I admire her for saying so. Does she personally agree with the Deputy Prime Minister, when he said on "Breakfast with Frost":

"You may argue that the politician has said one thing and perhaps done another"?

Does she share that view?

Does the right hon. Gentleman agree with the chairman of the Conservative party, when he said on television:

"I'm sure that Geoffrey hasn't done anything illegal"?

Perhaps Conservatives should make up their minds about the allegations. One Conservative Member has accused the Paymaster General of evasion. Evasion is illegal.

indicated assent.

The hon. Gentleman confirms it. He must substantiate it outside the Chamber and not seek protection in order to make an allegation without supplying the truth.

The hon. Lady knows that I said that that charge had been made against the Paymaster General. Does she agree that, since we understand that he is being investigated by the Inland Revenue, he should resign from his job because, effectively, he is being investigated by his own Department?

I caution the hon. Gentleman on two points. First, he should look up the difference between avoidance and evasion to ensure that he understands the seriousness of his allegation. Secondly, the allegation that the Inland Revenue is investigating the matter was made in the same newspaper article in which it was said that the Paymaster General had offshore trusts in Bermuda. Opposition Members should not believe everything that they read in the press. They should base their allegations on fact.

rose—

I shall give way in a moment.

This debate is about Government policy. Conservative Members do not want to hear about Government policy because they know that they do not have a leg to stand on. I shall get it on the record.

rose—

I shall not give way at this stage. I shall give way to the right hon. Gentleman before I conclude my remarks.

In July, we took action in a series of significant areas where we found exploitation of tax loopholes. In the Budget, we ended abuses of corporation tax, value added tax and the pay-as-you-earn scheme. That action will raise £1.5 billion over five years and relates to points that hon. Members have made about the importance of the security and integrity of the tax system.

Dividends on shares which are trading assets are now treated as part of the holder's trading profits. That will yield £500 million up to April 2001. Conservatives did not do anything about that when they were in government. They are telling us today that they are committed to such action, but they did not do anything about it. They were too busy trying to explain why their colleagues were taking cash for questions to look properly at the tax system.

On acceleration of capital allowances, finance lessors can no longer use subsidiaries to gain advantage. New rules counter arrangements under which unused past allowances were transferred to the lessor through a sale and leaseback, as was so under the previous Government. They did nothing about it, yet they now tell us that they have a new-found commitment to root out tax loopholes. I am glad that they are late converts. Perhaps we shall see much more committed support of the Government's policy.

Provisions on company purchase schemes counter certain company tax avoidance schemes where a company's owners sell the company to avoid paying accrued or anticipated corporation tax liabilities. That will yield £300 million before 2001. Conservatives did not do anything about that. They did not think that it was important. They were not committed then to rooting out tax loopholes, but, apparently, they are now.

The Government have moved on PAYE avoidance.

rose—

I shall finish this point and then give way.

The Government have already acted on second-hand goods margin schemes, cash accounting schemes, capital goods schemes and scope of insurance premium tax, in their first Budget, and are now developing their policy.

Will the Financial Secretary answer just one of the questions that we put to her, rather than trying to answer the questions that she would have liked to be asked? She has referred to our statement that the Paymaster General is under investigation by the Inland Revenue because of his link with his family trust in Guernsey. She obviously knows—because she has made reference to it—whether that is so. Will she tell the House whether the Paymaster General is being investigated? If he is, he must resign immediately. If he is not, will she assert that beyond doubt?

The right hon. Gentleman knows that he is merely repeating press speculation. That is typical of Conservative Members' innuendo and allegations. They are interested only in smears.

I have described what the Government have done so far, but I want to talk about the work that we are developing. The Inland Revenue has been carrying out a wide-ranging review of tax loopholes, to which the hon. Member for Twickenham referred.

Will the hon. Lady give way?

I am short of time; I cannot give way.

Action in several such tax areas will be announced in the Budget. Customs and Excise are also re-examining and improving its procedures for finding, reporting, preventing and countering tax loopholes. We are also looking at the question of general anti-avoidance regulations, and draft regulations on this important issue will be published this year for consultation.

The Government have already said—most recently, the Chief Secretary to the Treasury said so in the House last week—that the present tax treatment of offshore trusts is being considered in a wide-ranging review of areas of tax, as the Chancellor announced in his Budget statement. Hon. Members will recall that a number of steps were taken in 1991 to deal with such issues. They were inadequate, delayed matters and did not work properly. It is regrettable, but that is the case. The Conservatives cannot wear the badge of honour as the party that reduces tax loopholes. They have never done that and they are not committed to it.

The Government are committed to detecting loopholes, to deterring people and to preventing them from using loopholes. Tax rates in the United Kingdom are now low in comparison with those in many other countries, and by curbing tax leakage we shall help to keep them that way.

Conservative Members do not want to engage in a proper debate about tax avoidance. They name a debate and then use it to smear. I hope that the next time they choose such a debate, they come here with information about what is possible, with a better understanding of their appalling record and with more support for the Government's action to close tax loopholes.

I thank the House and Madam Speaker for giving me permission to introduce a debate on a crucial issue—carbon monoxide poisoning. There is probably no Member of the House who will not at some time in his or her parliamentary career have a constituency case involving a needless and tragic death resulting from that insidious form of poisoning. Carbon monoxide is often referred to as the silent killer because it is a poison which is tasteless and odourless. It is the evil killer of a huge number of people every year.

As with many such debates, I raise the issue in the House because a young girl from my constituency, Anne Brennan, who was 20, died of carbon monoxide poisoning in rented accommodation two years ago while studying at Durham university. Another constituent who lived in Washington, Glen Halliday, also died of carbon monoxide poisoning five years ago.

I had the privilege of meeting the parents of Anne Brennan recently, and spoke to them yesterday to talk about the issue and about my raising my concerns in the House. I beg the indulgence of the House while I read from a letter they sent me, and I ask the House to listen carefully:

"We were obviously saddened and devastated by the death of our daughter Anne. She was a gifted girl who had vitality and a great love of life, she was a talented singer and artist, she helped underprivileged children"

in the north-east. Apparently her real ambition, declared in writing, was to become a Member of Parliament.

The letter continues:

"We know nothing can replace Anne and our lives were torn apart with her passing. What we are determined to do is help prevent other families having to suffer a similar loss. We urge the government to do anything it can to ensure her death was not in vain."

Although Anne's parents have had to cope with that tragedy, they still want to see some good come out of it, so that she will not have died in vain.

I must tell the Minister that I realise that there are no easy answers and no quick fixes. None the less, we must realise that there is a real problem. The CO-Gas Safety charity, to whose work I pay tribute, estimates that, between September 1995 and November 1997, about 134 deaths resulted from carbon monoxide poisoning, as well as about 800 near misses.

I ask the Minister to bear in mind the following points when she responds, because, although there are no easy answers, there are a number of points that the various Departments could take on board.

The first important point is about individual responsibility and increasing awareness. We must ensure that people are aware how carbon monoxide poisoning can occur, and that they check ventilation systems and ensure that gas appliances, in particular, are checked regularly so that their users are not put in danger.

The blame does not lie with gas appliances alone. Carbon monoxide poisoning can also be caused by fossil fuels. Coal-burning and wood stoves can often result in that form of poisoning. Publicity and trying to make people aware of the facts are therefore important. We must also consider the resources available through the Health and Safety Executive, and ensure that it has the necessary back-up to investigate solutions to the problem.

Following the denationalisation of British Gas, the position of that company and of Transco should be examined, and the major gas companies need to exercise greater responsibility. All gas users pay a standing charge of £32.92 a year, and a small proportion of that could go towards trying to solve the problem.

I am reliably informed by the carbon monoxide safety campaign that Transco, one of the British Gas businesses, has no equipment for tracing carbon monoxide. That is a bit like asking someone to investigate radioactivity without supplying a Geiger counter. We need to think about the support that gas companies have.

Another problem is that a company's representatives will turn up and say that they have solved the problem by turning off the gas, whereas many carbon monoxide poisoning deaths occur through leakages from nearby houses and flats. The gas companies must exercise greater responsibility.

Landlords should be licensed to ensure that they fulfil their statutory responsibility to see that appliances are checked by a registered Confederation of Registered Gas Installers company. That would improve safety. It is worth pointing out that in this country even dog kennels are licensed; landlords should be, too.

People should consider installing detectors, because if about £30 had been spent, my constituent need not have died. For £30, one can buy an audible alarm that also switches off the gas supply in the house; greater emphasis should be placed on that. We should talk to manufacturers, house builders and local authorities about the possibility of installing detectors. That would go a long way towards saving people's lives.

Public health is an important area, because of the role of the medical profession. The symptoms of carbon monoxide poisoning are often similar to those of flu, so when people go to the doctor the symptoms are often misinterpreted. The medical profession needs to think about the ways in which doctors and others who work in accident and emergency departments can be trained to identify the symptoms. One great danger is that if symptoms are misinterpreted and diagnosed as flu, the advice is often to go home, wrap up warm, close the windows and keep the heating on—which, by definition, is exactly the wrong thing to do if there is a leakage of carbon monoxide.

I congratulate the Minister for Public Health, although she is not the Minister who is to reply to the debate, because she has met campaigners and looked into the issues.

Penalties, too, are important. The installer, if I can dignify him with that name, who installed the appliances in the flat in which Anne Brennan lived, was fined £4,000. That is not a sufficient punishment for the British legal system to give for an action that resulted in the death of a young girl.

I ask the Under-Secretary of State to pass on to the Home Secretary my suggestion that we reconsider the penalties involved. They should fit the crime, and in many cases a charge of manslaughter should be considered by the Crown Prosecution Service and other legal authorities. Such crimes are serious, and must be thought about.

Does my hon. Friend agree that the Health and Safety Executive needs to be far more vigorous in following up incidents? In many more cases, a charge of involuntary manslaughter, or even voluntary manslaughter when there is negligence, should be used. There should be better co-operation between the police and the HSE, so that what happened when one of my constituents died does not happen any more. Only when the coroner was forced to bring in a verdict of manslaughter was a criminal case brought—and even then the landlord got away with autrefois convict.

I agree that co-operation between the authorities is important. The judge at the trial following Anne Brennan's death said at the end that those involved were lucky to get away without facing a charge of manslaughter. I agree, and I believe that the Crown Prosecution Service and other legal authorities should be vigorous in ensuring that the full weight of the law comes down on such people. That is the one way in which we will make people sit up and listen, including dodgy landlords who take large amounts of money from, in particular, students and other young people.

Carbon monoxide poisoning, however, does not affect only young people. It is no respecter of status, class or sex. We must be rigorous. We must send out the message that those who do not accept the statutory responsibilities that the House has laid down in the past will experience the full weight of the law, and that if gas appliances, in particular, are not regularly checked, they will face manslaughter charges. People are dying at a rate of about one a week. As I said at the beginning of my speech, I suspect that every hon. Member will, at some point in his or her parliamentary career, have to meet the parents of a constituent who has died from carbon monoxide poisoning—as I had to meet the parents of a young and talented girl who had died from it. Penalties, then, are important.

What are the answers? I have raised the issue of public health, and the need to ensure that members of the medical profession are aware of the problem. I have also mentioned the licensing of landlords, and the responsibility that should rest with the major gas companies. I do not believe that those gas companies have fulfilled their responsibility as well as they should have in recent years. Talking to householders and manufacturers is also important. The Under-Secretary of State for the Environment, Transport and the Regions who is present today, but I am sure she will agree that this subject is also covered by the Home Office and the Department of Health. There should be more co-ordination between those Departments: they should sit down together, along with members of the carbon monoxide safety campaign, to find a sensible way of ending the problem, and they should take advice.

I am not going to stand here and say that we can solve the problem completely. Inevitably and tragically, there will always be deaths from carbon monoxide poisoning. I believe, however, that we can reduce the number of deaths—that there need not be roughly one death a week as a result of this insidious form of poisoning. People go off to sleep, and that is it: lives are ruined, and families experience tragedies.

I urge my hon. Friend the Minister to take what action she can, especially to improve public awareness. We can produce legislation, and legislation is critically important to ensuring that landlords and others fulfil the responsibilities laid down by the House; but it is also necessary for individuals to be aware of problems caused by, for instance, blocked flues, and to ensure that appliances are checked regularly.

That is the landlord's responsibility. Most of the cases that I have encountered have been due to the negligence of landlords, who have stated incorrectly—in fact, they have lied—that their appliances have been inspected.

I agree. Knowing that we were to have this debate, a neighbour in my constituency—I was at school with him—telephoned me. He is a CORGI installer. He told me that it was possible for people to obtain certificates fraudulently, and to put them on appliances.

My hon. Friend is right. The tragedy is that such deaths tend to occur in rented accommodation. They can happen anywhere, and we need to ensure that people know that, and that detectors are available; but the fact is that landlords letting cheap accommodation, and often ripping people off, are not prepared to fulfil their responsibility. We should send out a clear message that we will not tolerate the present position, in which vulnerable people—many of whom must rely on rented accommodation, because no other option is available—die of carbon monoxide poisoning every year, or suffer the consequences of such deaths.

I thank the House for giving me the opportunity to speak. I know that my hon. Friend the Minister will say that there are no easy answers, but I feel strongly that we need co-ordination and tough legislation, and that we must make people—especially those in rented accommodation—aware of the dangers. I urge my hon. Friend to respond to all my points, but, in particular, to my point about the need to convey publicity and information about the dangers of carbon monoxide poisoning.

I congratulate my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp) on securing the debate, and on bringing this important public safety issue before the House. In the time available, I will try to answer his concerns; if I am unable to do justice to all of them, I will, of course, be happy to meet him or write to him to discuss any outstanding matters.

This is a sad debate, and I wish that we did not have to have it. Regrettably, however, carbon monoxide poisoning claims lives, and maims. My hon. Friend has mentioned the tragic cases in his constituency, and all hon. Members will want to join me in sending sympathy to families and friends who have lost loved ones from this needless cause.

I want to use this opportunity to emphasise the Government's commitment to reducing needless deaths and suffering. The Government—supported by the Health and Safety Commission and its Executive—have taken, and will continue to take, action to reduce the incidence of gas-related carbon monoxide poisoning. As I shall explain, there is co-ordinated activity across Whitehall Departments to tackle carbon monoxide poisoning issues more widely. I am anxious to consolidate our strategy further, and hope soon to meet Ministers in other Departments to discuss it.

Gas can be inherently dangerous. If it can get out, it will; when it does, it has the potential to do massive damage, and to claim lives beyond those immediately close to the source of the leak. That is why there have been specific health and safety regulations covering the installation and use of gas appliances since 1972. They were originally introduced, and have since been updated regularly, to establish a stringent safety framework, essentially to ensure that domestic gas appliances are safely installed by competent people. A strong and effective legal framework is vitally important, given that more than 19 million homes in Great Britain use natural gas, which, over the years, has become the preferred fuel for heating and cooking.

Changes to the law have been made since 1994 to allay public concern about the number of deaths caused by gas-related carbon monoxide poisoning. My hon. Friend quoted the figure of 134 that had been given to him by Co-Gas Safety, along with the figure of 800 for near misses. We are aware of the cases in which deaths have been caused. The Co-Gas figures may include, for instance, suicides, and are not as reliable as our statistics. I am sure my hon. Friend will agree, however, that even one death from carbon monoxide poisoning is one too many.

As I have said, changes have been made. The rented sector has been a particular target, as about a third of all fatalities have occurred in it. I agree to an extent with what my hon. Friends the Members for Houghton and Washington, East and for Hull, North (Mr. McNamara) said about the private rented sector. We intend to concentrate particularly on that sector, but we must remember that two thirds of fatalities occur in the owner-occupied and social housing sectors.

In the private rented sector, certain landlords, including those who let property on short leases, are required to ensure that gas appliances that they provide for their tenants to use are safe and properly maintained—only by competent gas fitters. In addition, landlords are required to arrange annual safety checks of those gas appliances, including the flue, to keep a record of those checks and to provide a copy of the record for their tenants. A particular aim of the law is to protect vulnerable tenants at the cheaper end of the rented sector, such as students and young people in digs.

In owner-occupied property, anyone doing gas work—including home owners—must, by law, also be competent. Home owners, too, have been exhorted to get their gas appliances checked for safety once a year, and the Government have included in their publicity combustion appliances fuelled by means other than gas, which are equally capable of causing carbon monoxide poisoning. There has been much publicity in recent years on a full range of carbon monoxide poisoning issues, and we are taking new initiatives.

Any law is effective only if it is properly enforced, and the Health and Safety Commission and the HSE continue to give high priority to enforcing gas safety provisions and prosecuting when serious breaches of the law occur and there is evidence to justify criminal proceedings. Breaching gas safety law is a criminal offence, so it is only right that those who flout the law and put the lives of others at risk should have the book thrown at them.

The HSE has achieved a good conviction rate of more than 80 per cent. in gas safety prosecutions. I am encouraged by recent signs that the average fine imposed by the courts for breaches of health and safety law has been increasing, but I think that there is a long, long way to go. It surely cannot be right that someone can be fined only about £2,500 for putting human life at risk—or, indeed, destroying it—by failing properly to observe health and safety law, including gas safety regulations.

In the Murphy case in my constituency, of which my hon. Friend the Minister is aware, it was not until after the coroner's inquest that any action was taken by the police for manslaughter. That put my constituent at grave financial disadvantage, as he had to finance all his proceedings with no help whatever from the public purse, and we found that the police had no duty of public care in the matter. It is a matter of the emphasis that the police and the Health and Safety Executive are prepared to put on the issue. In this case, we found them most reluctant to prosecute.

The Health and Safety Executive has the duty to take prosecutions under safety law, but the Crown Prosecution Service decides whether manslaughter charges are justified. There are encouraging signs that the CPS is beginning to take the issue more seriously. Recently, there was finally a prosecution following a death by carbon monoxide poisoning that resulted in gaol sentences for both the installer and the landlord; but I have considerable sympathy with my hon. Friend's contention that that does not happen often enough.

The fines are too low. Too many employers and duty holders such as landlords see the derisory sums as a necessary business expense. To my mind, the present level of fines handed down by the courts does not act as a strong enough deterrent. I want the courts to impose punitive sanctions: punishments that fit the crimes committed, as my hon. Friend the Member for Houghton and Washington, East said. We are taking up the matter with the Home Secretary and the Lord Chancellor.

Larger fines are, of course, not the only sanction: imprisonment, or the threat of it, must surely concentrate minds. The HSE refers appropriate cases to the Crown Prosecution Service when there has been a death, so that manslaughter charges can be considered. I welcomed the outcome of the recent prosecution in Stafford Crown court brought against a landlord and a gas fitter in the tragic case of Sonja Hyams, a student at Keele university, who died from gas-related carbon monoxide poisoning.

The prosecution resulted in custodial sentences of two years for the landlord and 15 months for the gas fitter. That is the first time that custodial sentences have been imposed for failure to ensure the safety of gas appliances in rented accommodation. Personally, I do not think that the sentences imposed were anywhere near long enough, but let them nevertheless serve as a lesson to those landlords and unregistered gas fitters who think that they can ignore the law.

Carbon monoxide poisoning has the potential to affect the lives of millions in this country, and national publicity about the dangers is important. Great efforts have been made to raise public awareness of this silent, invisible killer. I do not limit my remarks to the strides forward made by Government and Government agencies: I include pressure groups such as CO-Gas Safety and Carbon Monoxide Support, which do good work in raising awareness. I have met members of CO-Gas Safety, and I am very much looking forward to meeting Debbie Davis of Carbon Monoxide Support soon.

The Health and Safety Commission and the HSE have run several high-profile publicity campaigns about the dangers of gas-related carbon monoxide poisoning, including national television and press advertising, and direct mailing of publicity material to vulnerable groups such as students and to university accommodation officers, landlords, general practitioners and other health professionals. The message about the dangers of carbon monoxide poisoning has also reached the 19 million gas consumers in Britain. The Department of Trade and Industry has also run campaigns focusing on the dangers of carbon monoxide poisoning from all carbon-based fuels.

Independent research for the HSE has shown a significant increase in awareness among the public about the dangers of gas-related carbon monoxide poisoning, as a direct result of the publicity campaigns. I welcome the fact that the Health and Safety Commission's provisional figure for fatalities from gas-related carbon monoxide poisoning in 1996–97 has fallen to 21; previously, it averaged 30.

I should like to think that the legislation and publicity measures that I have described have been responsible for the welcome reduction in the number of fatalities, but there is no room for complacency and we must continue to hammer home the message about the dangers of carbon monoxide poisoning.

It is tragic when anyone's life is cut short, but what makes deaths from carbon monoxide poisoning even more distressing is the fact that many can be prevented. The Government are determined to continue to keep the dangers of carbon monoxide poisoning in the forefront of the public's mind. To that end, I have three important announcements to make this morning.

First, on gas-related carbon monoxide poisoning, the Health and Safety Commission and the HSE are renewing their publicity, advertising the dangers in the regional press so as to target attention in parts of the country where the greatest risk occurs. The publicity also continues to promote the HSE's gas safety advice line, which has been operating for four years and deals with about 50 to 100 calls a day.

Secondly, my Department is today publishing a new advice leaflet about the dangers of carbon monoxide poisoning from all forms of combustion appliance. The leaflet stresses the need for all forms of combustion appliance, such as coal and oil fires, to be properly installed only by competent engineers, and for regular maintenance and safety checks. It has been produced in close co-operation with the Departments of Trade and Industry and of Health.

Thirdly, the Department of Trade and Industry, in conjunction with gas suppliers, is about to mail 19 million domestic customers again with a leaflet about carbon monoxide dangers.

This is a co-ordinated attack by the Government on carbon monoxide poisoning caused by whatever fuel source; I urge the public to heed our warnings. A central message is that carbon monoxide poisoning—the silent, invisible killer—does not respect age or housing type; nor, indeed, does it respect fuel type. Anyone—and I mean anyone—can be affected.

There are a number of simple steps that consumers can take to protect themselves, and our publicity makes those clear: ensure that gas and other solid fuel appliances and flues are installed and maintained only by competent people; get flues and chimneys swept regularly, ideally annually; and always ensure that rooms are adequately ventilated.

The gas suppliers are supporting this attack, but the industry at large has a bigger role to play. The Government and the HSE have paid out a massive amount of taxpayers' money to provide national publicity on carbon monoxide poisoning. We do not have endless funds, and it is not the Government who create the risk, so I hope that those operating in the liberalised gas market will play a fuller part in promoting gas as a safe fuel for people to burn in their homes. I look forward to industry initiatives in that respect.

Causes of carbon monoxide poisoning can include poor installation of an appliance or shoddy maintenance work afterwards. There have been some complaints about lack of competence by CORGI-registered gas installers: some wide of the mark and some justified. I shall meet the chairman and director general of CORGI later this week to review its work.

To provide gas consumers with the assurance that they deserve, the HSE has required CORGI to introduce a new, nationally accredited certification scheme for individual gas-fitting operatives. The new scheme, which comes on stream this year, will require all gas fitters to be assessed against nationally agreed standards for competence in the areas of work that they propose to undertake, and they will be reassessed every five years.

The new scheme will promote consistency in standards of competence among gas fitters, and provide further reassurance to the public that the person who arrives at their home to carry out gas work is competent to do so.

My hon. Friend the Member for Houghton and Washington, East mentioned the causes of gas-related carbon monoxide poisoning, and the HSE has established an industry working group to consider them. It includes industry representatives, and has made useful progress in identifying sources of information on such incidents. It is now exploring ways in which that information can best be used. Linked to that important work, I understand that British Gas Research and Technology has initiated an industrywide research project to consider a range of gas safety issues, including carbon monoxide poisoning. The HSE is actively supporting that project, and British Gas Research and Technology is working closely with the executive's group. I warmly welcome that initiative and believe that its outcome can be influential in securing a better understanding of the causes of gas-related carbon monoxide poisoning and the further preventive measures that can be considered.

I assure my hon. Friend and the House that the Government and the Health and Safety Commission will do all we can to reduce further the incidence of carbon monoxide poisoning. I hope that I have begun to give that assurance to my hon. Friend today.

I welcome the opportunity to raise the issue of recent incidents in the Maze prison in the House, and I thank Madam Speaker for affording me that opportunity. Recent weeks have seen a serious decline in public confidence in the Prison Service in Northern Ireland as a result of recent events at HMP Maze, which is in my constituency, as is Maghaberry prison. In 1997, we had at least three serious lapses of security at the Maze prison. The first was the discovery of an IRA escape tunnel in March; the second was the escape of the IRA prisoner, Liam Averill, in early December; and the third was the murder of the Loyalist Volunteer Force prisoner, Billy Wright, on 27 December. Those incidents represent serious breaches in security at the Maze prison.

Following the discovery of the IRA escape tunnel in March, a senior civil servant in the Northern Ireland Office, John Steele, was tasked to conduct an internal inquiry. He produced a report, but unfortunately it has never been published. The Minister must tell the House whether the recommendations of that report have been fully implemented and whether they were fully implemented before the escape of Liam Averill and the murder of Billy Wright. If not, why not? Will the Minister give a commitment to the House that the Steele report will be published so that public representatives can examine its recommendations?

Liam Averill was an IRA prisoner who effected his escape from the Maze prison during one of the Christmas parties held in December. I understand from sources in the prison, which have been corroborated by several other individuals, that the governor held discussions with the so-called officers commanding—OCs—of the paramilitary groupings in the prison. Those discussions concerned the arrangements for the Christmas parties. We have evidence of that in an interview with Liam Averill, published in Republican News after his escape. He said that, shortly before he made his escape, he was approached by a member of the IRA staff in the prison and asked if he wished to take part in an escape. He claimed:

"I was told that a successful bid could be made through the Christmas parties for prisoners' children."

How did the IRA know in advance that such an escape could be effected at the Christmas parties, unless it was aware of the relaxation in security that would facilitate an escape?

There undoubtedly was a relaxation in security. None of the women and children who attended the parties was searched when entering the prison. No proper searches were carried out of the gifts that those people brought in for the prisoners. That is a significant breach of security, because it enabled individuals to enter the prison without being searched and facilitated Liam Averill's escape. The IRA knew in advance that that would be the case, or the escape would not have been attempted. How did the IRA know? Did the governor discuss those terms with the OCs of the paramilitary groupings? We need to know the truth about that. If the governor's decision to relax security facilitated the escape of that IRA prisoner, serious questions must be asked about his judgment.

I understand that search equipment—similar to that used in airports—which was installed in the Maze prison was not switched on and was not used by the staff. What is the point of having such equipment if it is not used? How were two pistols, used in the subsequent murder of Billy Wright, smuggled into the Maze prison? The search procedures at the prison must be inadequate if pistols can be smuggled in. I also understand that the governor attended the Christmas party at which Liam Averill made good his escape. He therefore escaped under the nose of the governor himself.

In the circumstances surrounding the murder of Billy Wright on 27 December, one of the fundamental issues which must be addressed is the decision of the governor to place Irish National Liberation Army prisoners and LVF prisoners in the same block. Neither of those groups observes a ceasefire at present. They are both engaged in violence and it is extraordinary that the governor should decide to put those two factions together in the same block. Last night on BBC television, the governor confessed that that had been a naive decision. However, the governor's staff advised him against the decision and, at a governor's meeting, senior staff urged him not to proceed and to take steps to separate the two paramilitary groupings. They were a lethal cocktail and a serious incident was waiting to happen. I submit that the decision to house those prisoners in the same block was a major factor in facilitating the murder of Billy Wright. It was not naivety on the part of the governor: I suggest that it was incompetence. The governor, Mr. Mogg, has wide experience in prisons and has served in prisons in England. I cannot understand why someone with his experience and knowledge would take such a decision.

I also believe that the Minister knew of the situation before the murder of Billy Wright. We know that the Prison Officers Association raised the issue of INLA and LVF prisoners being housed in the same block at a meeting with the Minister, but no action was taken to rectify the situation. I hope that the Minister will be able to explain to the House why no action was taken by the governor or by him in the light of the concerns expressed by prison staff.

Last night on television, the governor said that he had talked to the LVF and INLA prisoners and accepted assurances from them that there would be no trouble. It is extraordinary that the governor of a prison should take assurances from prisoners and give them greater credence than the advice of his senior staff. The position of the governor of the Maze prison has become untenable. Given the serious situation which has developed in Northern Ireland, I submit that the governor has no alternative but to resign. If he has any integrity left, he will do so quickly.

Does my hon. Friend agree that, despite his obvious culpability in this matter, the governor of the Maze prison was also subject to pressure from the Director of Security and the Director of Prisons? Should not their position be examined because they, too, are in an untenable position? The catalyst, which was the murder of Billy Wright, is now spreading throughout society and jeopardising the political process that we have all worked so hard to keep in place.

I thank my hon. Friend for his intervention. There are two issues with regard to the involvement of the Northern Ireland Office in this sorry affair. First, why is Governor Mogg only a part-time governor in the Maze? Why is he also a director of prison operations in the Northern Ireland Office? The Northern Ireland Office tells us repeatedly that the Maze is a special case because it is a high-security prison. Why did the Northern Ireland Office appoint a part-time governor to a high-security prison? Who took that decision and why?

Was the management of the Maze prison given political direction as part of the so-called confidence-building process? Was it told to relax security measures to create an air of confidence among the prisoners during the political process? Did political direction from the Northern Ireland Office contribute to the relaxation of security, which facilitated the escape of an IRA prisoner and the murder of Billy Wright?

May I deal with the events on the day of Billy Wright's murder? I have already asked how it was possible, given that the Maze is supposed to be a high-security prison, for the INLA to have smuggled two firearms into the prison, but that was not the first time the INLA had achieved such a feat. The same prisoners who murdered Billy Wright had already smuggled a firearm into Maghaberry prison some months earlier and used it to hold a hostage for several hours. The fact that those prisoners were then transferred to the Maze and were able to repeat the exercise raises serious questions about the prison management's competence and the security measures in place. I hope that the Minister can reassure us on those points.

Were the INLA and LVF prisoners given a copy of the visits rota on the morning of Billy Wright's murder? If not, how did the INLA prisoners know that Billy Wright would receive a visit that morning? I understand from Billy Wright's father, Mr. David Wright, that Billy Wright normally took visits not on Saturday mornings but on Saturday afternoons. Indeed, Billy Wright never had visits on Saturday mornings. Who decided that that visit should take place on a Saturday morning and why?

At about 9.30 on the morning of Billy Wright's murder, someone in the Maze prison ordered the prison officer manning the observation tower overlooking H block 6 to leave his post and report for other duties. That event was significant because the observation tower overlooks the scene where the murder took place. Had a prison officer been in the tower, he would have seen the INLA prisoners cutting the wire, making their way on to the roof and crossing over into the yard where Billy Wright was subsequently murdered. The fact that no prison officer was in the tower enabled the INLA prisoners to move undetected on to the roof and into that yard.

Who made the unprecedented decision to remove the prison officer from the observation tower and why? He would not normally have been removed from the observation tower, because that H block housed both INLA and LVF prisoners.

My hon. Friend will not be aware that, during yesterday's proceedings of the Public Processions (Northern Ireland) Bill [Lords] in Standing Committee B, the Minister said that my allegation that Billy Wright was in an INLA part of the prison was fundamentally untrue. The Minister said that he was in a segregated wing of a separate block. In reality, he was in another leg of the same H block, so the Minister appears not to know exactly where Mr. Wright and INLA prisoners were.

I thank my hon. Friend for his intervention.

Many serious questions must be answered about security and management at the Maze prison. The events surrounding Billy Wright's murder require a stringent inquiry. Many people in Northern Ireland wonder whether it was a series of coincidences and mishaps or pure incompetence on the part of prison staff, but many others suspect that there was collusion. If those suspicions are to be removed and public confidence restored, we need to know how Billy Wright was murdered and why there were serious breaches in security. Public confidence must be restored and the Minister has an uphill task to achieve that.

Those responsible for the prison management—the governor, the Director of Prisons in the Northern Ireland Office, the head of the Northern Ireland Prison Service and the Minister—must reflect on those matters. They must reflect on their judgments, particularly the decision to house INLA and LVF prisoners in the same block.

Does the hon. Gentleman accept that, the moment Mr. Wright was murdered, I called on behalf of my party for an urgent independent inquiry, which is the only way in which confidence will be restored? Does he share my concern that the distinguished public servant conducting the inquiry will not be regarded as totally independent because he is part of the Prison Service, the Home Office and the Northern Ireland Office? Would it not be helpful to have a further inquiry under a completely independent chairman and to publish its report in full? This is not a matter of seeking recriminations; we want to clean the slate, find out exactly what has gone wrong in the Maze and put it right. It does not necessarily matter whose fault it is. Many of us might be to blame, but we must ensure that it does not happen again and that prisoners are kept under a proper regime in the Maze.

I agree that we need a full independent public inquiry into the running of the Prison Service in Northern Ireland. Although I do not doubt the competence of those carrying out the in-house inquiry, there is a complete lack of public confidence in the inquiry. The Minister must deal with that.

The Minister must also say why the governor of the Maze is only part time. Should we not have a full-time governor rather than someone who wears both a policy and a management hat? We need to know the truth behind the escape of the IRA prisoner, Liam Averill. Why were the visitors to the Christmas party not searched? Who took those decisions and why? Most important, we need to know the truth behind the circumstances of Billy Wright's murder within the Maze.

Does my hon. Friend think that the incident will have great repercussions throughout the whole administration in Northern Ireland, given that the people who direct security policy in prisons are also the people who advise on the emergency provisions Acts, the Parades Commission and the Police (Northern Ireland) Bill—the most flawed Bill ever to go to a Committee of the House? Is it not time that we took that issue on board when considering future security administration in Northern Ireland?

I thank my hon. Friend for his intervention and hope that the Minister will note his remarks. I hope that the Minister can today allay many of the concerns felt by the people of Northern Ireland about the Prison Service, the competence of those who run the service and those in ministerial positions who have ultimate responsibility for prisons in Northern Ireland.

I congratulate the hon. Member for Lagan Valley (Mr. Donaldson) on having obtained this Adjournment debate. In the time available after all the interventions from Opposition Members, I might not be able to deal with all his points, but I shall do my best.

The hon. Gentleman mentioned the Steele report and it should be put on record that the decision not to publish that report was taken by the previous Government. The incoming Government took on board the range of measures set out in the report, which specifically dealt with a tunnel escape attempt and set out various means of avoiding such escape attempts in future. I shall comment on those measures later.

The hon. Gentleman made several strong criticisms of the operational regime at the Maze and in respect of recent incidents, including the escape of Liam Averill and the murder of Billy Wright. Unfortunately, many of his accusations and the conclusions he draws from them are based on, as yet, unsubstantiated allegations made by a number of sources, some of them anonymous. That is not to say that I am dismissing them out of hand—far from it. There can be no question but that the escape of Liam Averill and the murder of Billy Wright were extremely serious breaches of security. Those incidents have cast considerable doubt on the effectiveness of the security arrangements that were in operation at the prison at the time and, as the hon. Gentleman said, they have seriously damaged public confidence in the management and control of the prison.

Let me assure the hon. Gentleman that I share each and every one of the concerns that he raises. I can equally assure him that all the points that he makes are taken very seriously indeed. Later in my speech, I shall return to the way in which the Government are dealing with them. However, before I do so, it is important to place the Maze prison and those who are held there in proper context.

I have said this before, both in the House and elsewhere, but it is worth repeating: the Maze is unique. There is no other prison anywhere in the democratic world that has such a concentration of terrorist murderers or those convicted of terrorist-related crimes—more than 500 dedicated terrorists who consider themselves to be not criminals, but prisoners of war. It should also be remembered that 29 prison officers have been killed and innumerable numbers threatened, along with their families, over the past 25 years or so. That is the reality not mentioned by the hon. Gentleman.

As many of the murdered prison officers were constituents of mine, let me make it absolutely clear that we deplore those murders. We have nothing but the utmost admiration for the prison officers who serve in the prisons of Northern Ireland and nothing in what I have said is intended as a criticism of them. My remarks are a criticism of management and of those in political control in the Northern Ireland Office; in no way are they a criticism of the prison officers who serve in the Maze prison.

Of course, I fully understand the hon. Gentleman's point, but he did not mention the Maze prison's uniqueness; nor did he try to place what happens in that prison in context or acknowledge the pressures on serving officers resulting from having to deal with those difficult prisoners. That creates unique and difficult conditions which run throughout the management of the prison, from bottom to top and from top to bottom. That reality should never be ignored by those who comment on events and the regime at the Maze.

Given those conditions, the attendant security and control problems are understandably and uniquely complex and difficult when balanced against the need to maintain a humanitarian regime. Those who are charged with the management responsibility of undertaking such a challenging role are regularly faced with the need to make difficult and sensitive decisions about security at the prison. That is an unenviable task which they have to perform on our behalf.

That situation is what the Government have faced since taking office last May and what previous Governments faced in the years before that. It is why the Government have put in place a progressive programme of tightened security measures, including twice daily head counts; cell fabric checks; a comprehensive search of cells and the blocks; control of materials available to prisoners; the installation of enhanced closed circuit television coverage in the blocks; and the scanning of all visitors along with other management measures, with more to come.

It is not the case, as the hon. Gentleman maintains, that security has been relaxed since May. The opposite is true, as the measures I have described prove. Of course, the matter does not rest there. In the light of the most recent, extremely serious, breaches of security, my right hon. Friend the Secretary of State has commissioned a full, rigorous and independent inquiry into events at the Maze. She has also asked Her Majesty's chief inspector of prisons to carry out a full inspection at the Maze prison when the inquiry team has completed its work and reported its findings. Both those reports will be published and copies placed in the Library of the House.

The inquiry is well under way and its report is expected soon. I understand that the hon. Member for Lagan Valley has taken the opportunity to put his views directly to the inquiry team and I have no doubt that what he has already submitted and what he said to the House today, if that differs from his submission, will be fully considered by the inquiry team. However, as the inquiry is not yet complete, I am sure the hon. Gentleman will understand why it would be inappropriate for me to respond today to his detailed points.

I am, of course, only too well aware of the considerable speculation about what actually happened before, during and after the circumstances that led to the murder of Billy Wright. However, as the hon. Gentleman knows, that murder is the subject of a Royal Ulster Constabulary investigation and I must take care not to prejudice the outcome of that investigation and any criminal charges which may flow from it. The hon. Gentleman clearly has his own views on what went wrong, or what seemed to go wrong, on that occasion and in relation to the escape of Liam Averill.

The hon. Gentleman may well have obtained his information from sources inside the prison—sources who may have identified or commented on real or perceived shortcomings in security procedures generally within the H blocks. I hope that, if he has not done so already, he will encourage those who gave him that information to speak frankly to and co-operate fully with the inquiry team.

indicated assent.

I see the hon. Gentleman nodding, which is good, as such action will help the inquiry team in its investigation. His sources should give the same evidence and views to Her Majesty's chief inspector during his investigation. It is clearly in the public interest and certainly in the interests of the Prison Service that all relevant information is made available to the inquiry team and to the inspector.

I have listened carefully to the hon. Gentleman's views on the matter of attributing responsibility and accountability for the serious security lapses. I am aware that, in response to public concern, there have been calls for the resignation of Ministers and officials. My right hon. Friend the Secretary of State has already made it clear that resignations or dismissals are not an issue. The causes of the problem to which the hon. Gentleman refers will be clearer when we have the inquiry team's report and the report of Her Majesty's inspector of prisons. It would be wrong to prejudge or to speculate about what will emerge from that inquiry and that inspection; but, I repeat, those reports will be published and I have no doubt the hon. Gentleman and other Opposition Members will return to the subject at that time.

Let me make it clear that the Government inherited the regime at the Maze. The hon. Member for Bracknell (Mr. MacKay) should reflect on what the Governments he supported did during their 18 years of administration of that prison and on what they bequeathed to the present Government. Before issuing demands for full and independent public inquiries, he should remember that the decision not to publish the Steele report was made by a Conservative Government.

Since May, we have put in place a range of improved security measures. The most recent events have all too graphically highlighted that complacency is not an option and that security needs to be reassessed constantly and changes made where appropriate. The independent inquiry and the inspection to be carried out by Her Majesty's—

Order.

I thank Madam Speaker for granting me this important Adjournment debate.

It looks like we are building up to another military conflict in the Gulf. It has even been suggested that it will be in a couple of weeks' time, when Ramadan is over, in order to assuage Arab sensitivities.

I am opposed to any renewed war. Can the Minister of State, my hon. Friend the Member for Leeds, Central (Mr. Fatchett), tell me what the war aim would be this time? Would it be compliance with the United Nations resolutions? While Saddam Hussein stays in power, that compliance would not be worth the paper an agreement was written on. He has little incentive to comply because the United States has publicly stated that sanctions will remain in place—and largely unaltered—while he remains in power. Perhaps the war aim would be to remove Saddam Hussein from power, or even to kill him. How many Iraqis would it be acceptable to kill this time around? President Bush ended the previous war because more than 100,000 Iraqi soldiers were killed in a turkey shoot, yet the allied armies were nowhere near Baghdad. How many British and US troops could be killed in such an operation? Saddam Hussein might escape anyway.

Perhaps the war aim would be to bomb Baghdad or even to raze it to the ground. As the New York Times has said, the targets would be difficult to choose without assuming enormous civilian casualties. Would it be our intention to occupy Iraq and install a puppet Government? The activities of the IRA would be like a tea party compared with the terrorism that our occupying forces would face in such circumstances. If the Government are travelling along with the Americans towards another war that could kill thousands of Iraqis and some of our people, they should spell out the war aim without blandness or obfuscation.

Richard Butler, the chief UN arms inspector, visited Iraq earlier this week, and said:

"It is about disarmament. Iraq must comply with the UN."

That is not so. As I have pointed out, the US has issued clear and categorical statements that it will never agree to lifting sanctions while Saddam Hussein is in power. There is, therefore, no incentive for Iraq to comply because the sanctions will not be lifted anyway. It is all about pretexts for further conflict and not about compliance.

Let us consider the composition of the UN inspection teams. One consists of 16 members—nine from the US, five from Britain, one from Russia and one from Australia. Scott Ritter's team, which provoked the current dispute, consists of six Americans and three Britons. On Saturday 17 January, The Guardian reported:

"China and France have put forward lists of their own experts to take the place of US and British inspectors."

Can my hon. Friend tell me why that offer has been rejected? The paper also went on to report:

"The Russian defence minister, Igor Sergeyev, offered his country's surveillance aircraft to take the place of American U2 spy-planes, but the offer was turned down yesterday by his US counterpart, William Cohen."

I do not believe that Iraq can insist on a deadline for the completion of weapons inspections, but it is legitimate for it to ask when those teams will complete their work. Surely the American answer to that is that that work will never be completed while Saddam Hussein is in power. Whether Iraq complies or not makes a marginal difference to the western approach to it. The US will veto or undermine any attempt to ease the sanctions against Iraq.

We should remember that those inspections are being carried out in the name of the UN, but I remind the Minister that the US has still not paid its $800 million dues to that organisation. Sanctions are a form of economic warfare which, for ordinary people, can be almost as devastating as the military version. In 1919, US President Woodrow Wilson described sanctions as

"a quiet but most lethal weapon that exerts a pressure no nation can withstand."

The sanctions were imposed on Iraq following a devastating war and they are the most draconian and lethal form of economic warfare in modern history. More than a million people have died as a result of sanctions-related problems. Many of those victims have been children and those deaths still occur.

On 26 November 1997, UNICEF issued a press release on Iraq, which stated:

"The most alarming results are those on malnutrition, with 32 per cent. of children under the age of five, some 960,000 children, chronically malnourished—a rise of 72 per cent. since 1991."

Philippe Heffinck, UNICEF's representative in Baghdad, states in that press release:

"What we are seeing is a dramatic deterioration in the nutritional well-being of Iraqi children since 1991. And what concerns us now is that there is no sign of any improvement … It is clear that children are bearing the brunt of the current economic hardship. They must be protected from the impact of sanctions. Otherwise, they will continue to suffer, and that we cannot accept."

On 28 November, UN Secretary-General, Kofi Annan, produced a detailed report on the impact of sanctions. He, too, quoted nutritional surveys that confirmed the high level of malnutrition among children and adults in Iraq. He said that the general level of malnutrition among infants had not improved. He also reported:

"The current food ration … and, in particular, its composition fall far short of meeting the nutritional needs of the Iraqi population. This is particularly valid since nutritional security is contingent upon a host of interrelated factors, such as safe water and available medicine, which are grossly inadequate at the moment. The current ration, even if it is distributed completely and in a timely manner, cannot address the chronic malnutrition and energy deficiency in adults. In order to improve the current serious situation, an enhanced ration is required.

In the health sector, United Nations observers regularly report an exceptionally serious deterioration in the health infrastructure: a high infant mortality rate and high rates of morbidity and mortality in general … Inputs under the resolution in the health sector will remain of limited impact if other related areas, such as proper treatment of water supply and sewage, electricity, improved quality of food rations and critical environmental problems, are not adequately addressed."

The Secretary-General also reports that the supply of drugs is inadequate and says:

"As for supplies to treat acute respiratory disease and diarrhoea, associated with 50 per cent. of mortality among children under five, deliveries have been grossly insufficient."

He concludes:

"The population of Iraq continues to face a serious nutritional and health situation and there is an urgent need to contain the risk of a further deterioration … The slow and erratic pace at which humanitarian inputs arrive in Iraq has been very unsatisfactory."

My hon. Friend knows that I disagree with him on this issue, although I agree with him on most others. He must be aware that under the present sanctions regime, up to 70 per cent. of the oil production is allowed to be sold, which is similar to the amount that was sold before sanctions were imposed. Is it not the case that Saddam Hussein has had considerable resources at his disposal which he could have used to alleviate the suffering of his own people? He has chosen not to do so and instead he has decided to continue to build weapons of mass destruction.

I will deal with that point as part of my speech, but let us deal with the suffering first, on which I am afraid my hon. Friend and some other hon. Members seem content to turn their back. The House should not turn its back on it.

Margaret Hassan of Care International said:

"There isn't a hospital we go into where we don't see severely malnourished children. It's a spiral of deprivation and this is being manifested through malnourishment."

She reports that medical shortages are reflected throughout the country and says:

"I've seen a child that was severely burnt and they didn't even have paracetamol to give that child."

I have received a letter from Felicity Arbuthnot, a journalist who has just returned from her 10th visit to Iraq since the war. It is a moving letter which deserves to be put in full on to the official record. Part of it will be published in the New Internationalist. I shall read one paragraph to give the House a flavour of it. Felicity Arbuthnot says:

"By 1993, doctors in Iraq had discovered a new diagnosis. Women too malnourished to breast feed and unable to buy milk powder (a can then as now exceeds the average monthly professional's salary) fed their babies on sugared water or sugared black tea. These babies become chronically malnourished, hugely bloated and almost all die. Doctors call them 'the sugar babies."

She says that this embargo-related child mortality is comparable to

"the genocide of Pol Pot in the name of 'we the people of the United Nations.' Does Britain's new 'ethical' foreign policy really include supporting genocide"?

Mary Robinson, the new UN High Commissioner, spoke at Oxford university on 15 November last year. She said:

"How can you expect me to condemn Human Rights abuses in Algeria and China and elsewhere when the United Nations themselves are responsible for the worst situation in Iraq? It's part of my job to bring to public consciousness the incredible suffering of Iraqi society."

The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leeds, Central justified the sanctions in a letter to Mr. Richard Wilkins of Bow as highlighting

"the terrible excesses of Saddam Hussein's regime."

Mr. Wilkins replied:

"Surely the opposite is the case? Sanctions make it impossible for Iraqis and the world to say what suffering is caused by the regime and what is attributable to sanctions. They have clouded the issue in a way which is potentially dangerous. Furthermore, are we to accept the suffering and death of the people of Iraq merely to 'highlight' the wickedness of the regime? It is shocking that this appears to be part of the matrix of Government decision making in this matter."

I think that Mr. Wilkins is right in that argument and that my hon. Friend the Minister is wrong.

The oil-for-food deal is supposed to be $2 billion every six months, but, as Kofi Annan made clear, some essential humanitarian supplies have not been approved while others have not arrived. The deal simply does not meet the minimum needs of the Iraqi people. Only once in the 12-month operation of the oil-for-food deal have the Iraqis received the full monthly ration planned under the accord. In any case, the complete ration is full of carbohydrates and poor in protein, and usually lasts less than three weeks.

In the United Nations sanctions committee, the United States has almost singlehandedly blackballed scores of contracts on minor points for no apparent reason. Thirty per cent. of the money in the oil-for-food deal is siphoned off in reparations and goes to pay many exaggerated claims. For example, United States oil companies are greedily claiming millions and Iraq has no option if it wants the food money for its people.

The programme serves the US, as it mutes humanitarian concern while continuing to deny Iraq access to its oil wealth to solve its social and economic problems. However, the United States has blocked real humanitarian improvements to the programme, even those suggested by other Security Council members, the United Nations Secretariat, the World Health Organisation and the Food and Agriculture Organisation. It has blocked, with the tame accord of our Government, the proposal to double the oil-for-food programme.

I hope that my hon. Friend the Minister will not, in simplistic soundbites, heap all the blame on Saddam Hussein, tyrant that we all know he is. The west also has choices in this matter and it has chosen the cynical game of targeting children and the sick. It may not have intended that initially, but it is now locked into it by American political will. It is morally wrong and our ethical Government should abandon their support for it.

I read to the House one last quotation.

"In the case of Iraq and other repressive regimes … it is clear that many of the problems arise from a small elite who hold power within the economic, social and particularly military strata of the country. Therefore, where the international community has expressed disapproval of the actions of these regimes, it is the elite whom sanctions should target. This would improve the sanctions instrument, both for moral and humane reasons—those who are responsible should face the consequences—but also for practical reasons, since elites are able to cushion themselves from the deprivations suffered as a result of blanket sanctions, and the regime is unlikely to change.

My view is therefore that the UN should examine alternative sanctions instruments, such as suspending international air links into and out of the country concerned, freezing assets held in overseas bank accounts and a ban on the granting of visas for overseas travel, study etc. These measures might hit people who are not members of the regime, even perhaps the opposition, but they would not increase the suffering of the millions of innocent citizens as blanket trade and economic sanctions do."

That letter was written on 3 December 1996 by the now Secretary of State for International Development. I agree with her. It is time that the west stopped its war on Iraqi children.

Four years ago, like every other visitor to Baghdad, I was taken to the Amariya and I saw the result of the use of cruise missiles. When one sees carbonated bodies against concrete, it is easy to understand the effect on people of a missile attack by the world's most sophisticated weapons. Before any proposal of that nature goes ahead, that matter ought to be discussed fully in the House of Commons.

I congratulate my hon. Friend the Member for Leyton and Wanstead (Mr. Cohen) on the way in which he introduced his debate. I fully respect his humanitarian concerns and his long record of achievement in that respect. Therefore, no part of my response will question his personal integrity. However, there was one element that should have been in his speech. Given his concern for justice and equity, which has been so much a part of his political career, I am a little surprised that it was not in his speech.

Whenever we discuss Iraq, we need to recognise the nature of the regime that has existed there in recent years. The regime led by Saddam Hussein is the most brutal dictatorship that has existed. It has turned regularly against its own people. Let us put on record, so that my hon. Friend's speech can be seen in a broader context, some of the events that have been rightly attributed to Saddam Hussein. This is a regime which has used chemical weapons against its own people. It is a unique regime—viciously unique—in that respect. It is a regime which turned against the marsh Arabs seven years ago, literally slaughtering thousands of people. It is a regime which turned against the Kurds in northern Iraq, again slaughtering tens of thousands of people. It is a regime which, as we have seen recently, executed more than 1,000 prisoners simply because they did not wholly and totally support Saddam Hussein. The regime has an abuse of human rights record that is sadly second to none. It attacked without any provocation one of its neighbours, Kuwait, and caused it personal, humanitarian and environmental damage that, again, is without precedent in the middle east.

My hon. Friend's humanitarian concerns are well known, but let us not forget Saddam Hussein's record in his treatment of his own people and of other people in the middle east. It would not be any exaggeration to say that any one part of that record shows Saddam Hussein to be a criminal, who has gone against all known and understood human values. His record is clear.

My hon. Friend argued that sanctions have not worked. I know that that was his argument because he would not argue against sanctions in principle. He and I are long supporters of sanctions in certain circumstances and he had a tremendous record in arguing for sanctions in relation to apartheid in South Africa. I congratulate him on his stand on that issue. The question is one not of principle, but of whether the sanctions have worked to achieve the objectives.

Let us consider the record, in particular that of the United Nations Special Commission in Iraq, which was heavily criticised by my hon. Friend. We are dealing with a dictatorship which has not only the record to which I have referred, but is capable of developing weapons of mass destruction: nuclear, biological and chemical weapons. One does not have to take more than a cursory glance at the daily Hansard to know that my hon. Friend has rightly fought a strong campaign for the disarmament of all those weapons.

Saddam Hussein had all that capacity: nuclear, biological and chemical. That weaponry was a threat not just to the middle east, but, as we know from the dictator's record, to his own people in Iraq. I do not believe for a moment that my hon. Friend would wish that arsenal to be in the hands of someone so evil and so reckless. UNSCOM's work has been able to rid Iraq of more weapons of mass destruction than the whole of the Gulf war achieved.

I am sure that my hon. Friend does not demur for a moment from that objective—the need to get rid of those weapons. He need only talk to people in the other regimes in the middle east. If UNSCOM were withdrawn and were not allowed to do its job, other regimes and peoples in the middle east would not sleep easily while Saddam Hussein had an arsenal and the capacity and will to use it.

Once a dictator has tasted blood, as Saddam Hussein did in Kuwait and against his own people, the ruthless wish to hold on to and to extend power will come through again and again. Every dictator throughout history has shown that insatiable thirst. The policy of appeasement—saying that UNSCOM is not working and therefore we must withdraw it—is immensely dangerous for the middle east and for the people of Iraq. UNSCOM must be allowed to get on with its work. We have made that abundantly clear and we will continue to do so.

My hon. Friend is a strong advocate of the United Nations and he is right to be because the UN features in the aims of our political party. We share a socialist commitment towards international organisations. If we allow the UN to be undermined by this dictator, we might as well say that that is the end of the objectives that we share with the UN. A defeat on these issues would be a devastating blow to the UN's legitimacy and credibility.

My hon. Friend referred to the end of sanctions. I was surprised by one or two of his arguments. The position is simple: compliance brings the end of sanctions—no more, no less.

The United States has never said that.

My hon. Friend says that the US position is different. It is on the record that the United States has said that compliance means the end of sanctions. I suggest that if my hon. Friend wants to make a real contribution to the middle east, he should send Saddam Hussein a copy of any document urging him to comply with sanctions because all we ask is that Iraq gives up its capability in nuclear, biological and chemical weapons, a point to which my hon. Friend has referred time and again and on which he has campaigned.

My hon. Friend argues that our approach does not include a concern for the people of Iraq and that we have turned our back on them. Let us again consider the record. Since 1991, the United Kingdom has unilaterally contributed more than £94 million in direct aid to the people of Iraq. We are involved in mine clearing and, through Save the Children Fund, we are working with children on water and sanitation projects. We are involved in aid to Iraq and we are trying to make a contribution towards the well-being of the ordinary people of Iraq.

My hon. Friend says that sanctions have been imposed against food and medicine. That is factually incorrect. There are no sanctions on food and medicine and we must not fall into the trap of believing other people's propaganda. If we consider the resolutions, we find that it is not true that there are sanctions on food and medicine.

My hon. Friend says that the oil-for-food approach is not working; I give him three facts to take away from this debate. First, the approach is not working because Saddam Hussein rejected it in August 1991 and has subsequently looked for every opportunity to divert resources towards not the people of Iraq, but his own programme of weapons of mass destruction. My hon. Friend is dealing with a dictator who kills his own people. Does my hon. Friend honestly believe that Saddam Hussein will give greater priority to Iraq's people than to his programme of weapons of mass destruction?

Secondly, we know where some of the money has gone. There is no more hideous element in the stand-off with UNSCOM than the dictatorship's claim, while thousands of Iraq's people starve, that it cannot allow UNSCOM into 71 presidential palaces. Is my hon. Friend, a keen supporter of equity and justice, going to say that one dictator needs 71 presidential palaces? Surely, on the resolutions argument, he should be saying that the money should be spent on the people of Iraq and not on the vanity and palaces of Saddam Hussein.

Thirdly, it is the United Kingdom which has taken an active part in ensuring that we open the process of oil for food. We want the system to work. A UN report will be published on 30 January on the matter. If we can make the system more efficient and get more money to Iraq's people, we shall do so. It is not our objective to damage the ordinary people of Iraq, but we can help them only if the Iraqi dictatorship allows it and does not divert the money towards its own purpose—to the elite groups to which my hon. Friend referred—and towards the weapons of mass destruction programme.

We debate Iraq on many occasions. I have no hesitation in concluding this debate by saying that there is no greater single humanitarian concern for Iraq's people than that they should have a change of Government and of approach in Iraq. If we can bring openness, pluralism and democracy to Iraq, we shall make the single greatest contribution to its well-being. If Iraq looked after and cared for its own people and was not going to threaten its neighbours, that would be a real humanitarian contribution. That is part of our ethical foreign policy and that is the objective towards which we work. We are not going to appease; we are going to stand up for our principles. That is the popular and sensible way in which to make progress.