If he will make a statement about the development of the Eurofighter Typhoon. [61338]

The development of Eurofighter in conjunction with our partners from Germany, Italy and Spain is continuing to meet the planned delivery of the first production aircraft to the Royal Air Force in mid-2002. Seven development aircraft are flying and have completed more than 620 sorties. A number of notable milestones have been achieved, including supersonic flight, care-free handling, air-to-air refuelling and missile firings.

Given the changes in policy and personality since the last election, what guarantee can the Minister give the House that the export prospects of the Eurofighter have been unharmed and undiminished as a result of the actions of his Government and some of his colleagues?

What an extraordinary question, not least because it was this Government who took the most important step to ensure that Eurofighter was a viable project—getting the agreement signed and by negotiating and discussing that with the previous German Government. We are involved in discussions—at ministerial level and at the level of officials and defence export sales organisations—with a number of other countries for the future prospects of this extremely good aircraft.

Is not the importance of Eurofighter not simply that it gives the Royal Air Force an outstanding aircraft, but that it illustrates eloquently the advantages of European co-operation in defence procurement? In view of the success of co-operation in defence procurement, is it not now logical to consider co-operation across defence as a whole? May we hear from the Minister a little more about the Government's proposals for greater co-operation in European defence?

The hon. and learned Gentleman will have noted that there have been discussions and an initiative by the Government to try to ensure that Europe plays a greater role in NATO's defence. We must ensure that we are getting a better return across Europe for the expenditure that is made, by ensuring a greater degree of interoperability and the ability of NATO European forces to act in operations in which the United States is not involved.

The House will be pleased to hear from the Minister how well the Eurofighter Typhoon programme is coming on—the initial hard work having been done, of course, by the previous Government. I am sure that hon. Members will want to know, as will our friends in British industry, whether the Eurofighter will be delivered on time, given the shortfall and overspend in the air equipment budget for the long-term costing in excess of £1 billion. Can the Minister confirm that there is such a shortfall? What impact is it likely to have on the delivery of the Eurofighter?

The hon. Gentleman says that the previous Government put in hard work; they certainly made heavy weather of it, given the time that they took to get to the position that they reached. It was this Government who ordered Eurofighter. It is on schedule to be delivered in mid-2002. We do not anticipate any slippage in that programme.

What plans he has to ensure that cadet-only units of the TA have access to senior and trained personnel from the regular forces and from other TA units; and if he will make a statement. [61339]

All cadet units will continue to be affiliated to either a Regular or a TA unit, which will provide the cadets with both equipment and access to senior and trained personnel.

My hon. Friend is aware that in my constituency the TA has been reduced to a cadet-only force. I am concerned about the consequences of that diminution in status for access to trained personnel, especially as it seems that the 29 officers in my local TA are being pensioned off. Will my hon. Friend confirm that it is possible that cadet-only units will be upgraded to full TA units, especially in cases where the nearest units have been closed down?

I can assure my hon. Friend that every facility for personnel and equipment support that his unit used to have will continue to be provided at that location using officers and equipment from other locations.

As a result of the changes announced by the Government, the nearest TA unit to the Vale of York will be in Scarborough, which will pose enormous problems of access to trained personnel and to training in general. The settlement announced last week for North Yorkshire does not allow enough money for the police force to police the millennium celebrations effectively within the present budget. If it is envisaged that it will have to have recourse to the TA—as has been considered north of the border—what provisions will be made for the TA to be given special training for this capability before the millennium?

The hon. Lady will be aware that those who wish to serve in the TA—we want them to serve—will be able to do so at a number of other locations. The police will have responsibility for policing at the time of the millennium celebrations. Any requirement for reinforcements would be considered in the usual way, but that is a prime function of our Regular Army. I emphasise that the main responsibility for policing the millennium celebrations will lie with the police, and they should be able to carry it out.

Will the Minister confirm whether the cadet force at Chorley has a future under the review? Has he reconsidered the nonsensical removal to north Wales of the 101 Battalion headquarters?

I have discussed this matter with my hon. Friend on several occasions, and my hon. Friend the Under-Secretary responded to an Adjournment debate on it last week. I assure the House that, when there is a change in the location of a cadet force, we will guarantee that at least an equivalent level of service support, equipment and buildings are made available. Land Command will discuss with the Territorial, Auxiliary and Volunteer Reserve Association how that can best be achieved in Chorley.

I am grateful for the Minister's comments about protection for the cadet force. Will he carefully consider the cadet force currently located at the Connaught drill hall in Portsmouth, which is due to be disposed of by the Ministry of Defence? Will he also reconsider the relocation of the TA units that are staying in the Portsmouth area from the Perone road depot to the Connaught drill hall? That would kill two birds with one stone. It would keep the cadets where they are currently located, and it would keep this much-cherished building in public ownership. It would also allow the MOD to dispose of two buildings that would be easier to dispose of than the Connaught drill hall.

As the hon. Gentleman will know, I shall be visiting Portsmouth tomorrow. I shall be happy to receive representations from him or his colleagues at an appropriate point in my itinerary. The decision on future locations of TA facilities within Portsmouth will be made by Land Command in consultation with TAVRA and others.

If the memorandum of understanding relating to the United Kingdom's contribution to the United Nations peace support operations, due to be signed in March, will be available for parliamentary scrutiny beforehand. [61341]

Our intention to update our existing declaration of forces potentially available to the United Nations for peace support operations, and to incorporate that in a memorandum of understanding, was announced in the strategic defence review. The outcome of the review was fully debated in Parliament. Decisions about whether to commit our forces to particular UN operations will continue to be taken by the Government and will be reported to the House.

I am grateful to the Secretary of State for that answer. Given the importance of the memorandum of understanding and the assurance that Parliament should know in which general circumstances troops should be committed, will he consider either referring this issue to the Defence Committee or having a word with the Leader of the House about another parliamentary debate? I congratulate him on his contribution to the Western European Union Parliamentary Assembly in Paris last week. As some peace support operations are taking place and will continue to take place in Europe, will he take this opportunity to underline the importance and the continuing contribution made by the WEU and its Assembly?

I thank the hon. Gentleman for his kind remarks about my contribution to last week's meeting of the WEU Parliamentary Assembly, which was made in difficult physical circumstances.

Has the Secretary of State considered the merits of a truly committed, dedicated, international UN force whose orders, received from the Security Council, could not then be countermanded or obstructed by the Governments of troop-contributing nations?

At the end of the day, it will be for the Governments of the countries that contribute to any UN force to make decisions about the fate of the forces concerned. The intention is, however, to try to create circumstances in which the UN would have on call forces from a number of different countries to deal with events that might arise. Command and control is clearly one of the more difficult and tricky aspects, and would have to be considered in advance; but I am confident that we would contribute British troops only where clear areas of command existed, allowing us both to be in charge of the troops and their safety and to contribute to the military effectiveness of any such force.

What targets his Department has set for increasing recruitment among Britain's ethnic minorities. [61342]

Recruiting goals for this financial year are for 2 per cent. of all new recruits for each service to be from the ethnic communities. Those goals will rise annually by one percentage point until reaching 5 per cent. by financial year 2001–02.

I thank my hon. Friend for his response. I realise that these are—rightly—demanding targets, but can he tell me what progress is being made towards their achievement?

I am grateful to my hon. Friend for raising this important question. I can tell him that a comprehensive recruitment strategy is in place, involving the targeting of communities in which there are greater possibilities of increasing the number of black, Asian and other ethnic recruits. I am pleased to say that that strategy is already showing results. During 1997–98, there was an increase from below 1 per cent. to 1.3 per cent., and between April and September this year the figure increased to 1.8 per cent.

How does the Minister intend to retain those recruits once they are in the forces?

I thank the hon. and learned Gentleman for his helpful contribution. We must try to retain black, Asian and other ethnic recruits in the same way as we retain other recruits: through valuing their contribution to the defence of the nation, looking after them well and trying to improve the conditions in which they operate. The same applies to black, Asian and other ethnic recruits as applies to everyone else.

If he will discuss with his EU counterparts military training in national parks and other environmentally protected areas. [61343]

We have no immediate plans to discuss military training in national parks and other environmentally protected areas with EU counterparts, but environmental considerations are always taken into account in planning training.

Why is it that no other European country ruins its areas of outstanding natural beauty by allowing live firing by the military? Is the Minister aware that, on Dartmoor, we allow live firing on three ranges, which, in effect, closes the northern, most beautiful and highest part of the national park for 10 months of the year, Monday to Friday? Does he agree that it would make better sense to concentrate the Army's firepower at Willsworthy, where millions of pounds-worth of Government money have already been spent, and which is only spasmodically used, rather than allow live firing across the three ranges? The activities could be concentrated in one spot so as to allow the public to enjoy the national park for the purposes for which it was set up.

I fear that the hon. Gentleman is confusing two issues. Areas of outstanding natural beauty that are within our areas of military training are retained better than those where there is widespread public access—indeed, in many areas with sites of special scientific interest, we work extremely well with conservation bodies and we have commendations from them. We have to get that balance right and we attempt to achieve that. The hon. Gentleman should try to separate the two issues. We look at what we can do to improve access, but, in terms of the conservation and preservation of some outstanding areas and many areas of biological diversity, we have a good record, of which we should be proud.

As changes announced in the strategic defence review have materially affected the case put to the inspector at the public inquiry into the Otterburn range improvements in Northumberland national park, when will the Government decide whether to reopen that inquiry? If they do, will the Minister give a categorical assurance that the Army's military training programme will be unimpeded?

I do not accept that the SDR changes the Army's case. Indeed, there is a strong case for the AS90. That is the one that we presented to the inquiry. The inspector in charge of the inquiry is considering whether those other matters should be taken into account, but our basic case for extending use of the AS90 at Otterburn stands and is sustainable within its own terms. We hope that the case that we have made will carry the day and enable that important training to take place there.

What discussions he has had with the Chilean Government about the future availability of dry dock facilities to Royal Navy vessels in south America. [61344]

My colleagues and I have had no discussions with the Chilean Government about the future availability of dry-dock facilities to Royal Navy vessels in south America.

That was short and sweet, but is the Minister not aware that, in 1994, HMS Brazen ran aground in the south Atlantic, was rescued by the Chilean navy stationed at Punta Arenas and was afforded repair facilities in a Chilean dock? How confident is he that similar help will be on offer from Chile to the many royal naval and merchant navy vessels that serve in the south Atlantic? Failing that, what alternative arrangements has his Department been discussing with other south American countries?

We do not have great ranges of agreement throughout the world about dry-dock facilities. We have ad hoc arrangements, dealt with under the normal arrangements between countries and, particularly, between navies, which are obviously concerned if a vessel of another fleet is in distress. The good relations that we have with our Chilean counterparts—

Had.

The good defence relations that we have with our Chilean counterparts will continue. We have no evidence to the contrary.

Is the Minister aware that, after using any Chilean dry dock, the ships involved would be required to undertake sea trials, and that sea trials are the only sort of Chilean trial that we believe would be impartially conducted?

My hon. Friend ingeniously tries to tempt me into an area in which the Home Secretary has a quasi-judicial capacity and on which I should not be tempted further.

What plans his Department has to promote a European defence review. [61345]

If he will make a statement on his recent discussions on common European defence. [61352]

We have invited our partners and allies to join us in thinking afresh about how to strengthen both European defence capabilities and the European Union's common foreign and security policy. The initiative has been very positively received, and I look forward to continuing the discussions with my colleagues in the coming months. The agreement of a statement of principles at the British-French summit last week was an important step forward.

Does the Secretary of State think that—despite the Prime Minister's speech at the North Atlantic Assembly and talks with the French a few days ago at St. Malo—there should have been some mention of the matter in the defence review, so that hon. Members could have debated the overall issue of European foreign policy and defence? Is it not time that that policy was debated in the House before it is announced to the press? Is the Secretary of State happy that the Prime Minister is talking to the French but has apparently not approached other European partners?

That is absolutely wrong. We are talking about a call for fresh thinking and not a major revision of British defence policy. A week ago last Friday, the House had a debate on the Queen's Speech that touched on those issues. We have made it absolutely clear that we are talking about a fresh look at the way in which Europe might take quicker, better and more effective decisions on a European defence capability that will be built on several key principles: no question of a European single army; no Commission or European Parliament involvement in decision making; no transfer of decision making on military capabilities from individual Governments; and no undermining or duplication of NATO. Surely, especially after Kosovo, this is a time for Europe to recognise that perhaps we should be thinking much more clearly about how, in certain circumstances, Europe might act, should act or might have to act without the United States of America, and about building our capability so that, if we do so decide, we shall really be able to do it.

Will the Secretary of State include nuclear defence in the list of exclusions that he has just given the House? Does he agree that this might be an appropriate time to examine seriously the possibilities for co-operation on that matter, and that, even while retaining our independent nuclear deterrent, there could be useful gains from rationalising, for example, control and refitting schedules, so that we not only maintained a constant deterrent but reduced our overall dependence on nuclear weapons?

If the hon. Gentlemen will examine the strategic defence review and the very significant and radical suggestions on the nuclear front that it contains for implementation, he will see that, some time ago, we took on board the very ideas that he is expressing. When it makes sense for us to co-ordinate with other nuclear powers, we shall do so. How we can contribute to the general debate on arms control and disarmament is a matter of primary importance to the Government, which is why certain moves were made within the strategic defence review itself.

May I remind my right hon. Friend, in supporting his European approach, that there is news in today's edition of The Times that delivery of the 25 C130J Hercules aircraft that have been ordered is now two years behind schedule? Was he not therefore very wise to indicate in his strategic defence review that he had not closed the door on the heavy-lift future large aircraft project? May I tell him that, if he does go forward with the project, he will find that my 3,700 constituents at the Broughton factory will not only make the wings of a future large aircraft on time but will acknowledge him as a fine Secretary of State?

I look forward, with ambition, to receiving such praise. I again compliment my hon. Friend on the articulate and forceful way in which he promotes the interests of his constituents and his constituency. He is right to point out the inordinate, unreasonable and, I believe, disgraceful delay in delivery of the C130Js. I have taken up the matter at the very highest reaches within that company. It is one of my inherited delayed programmes, but I intend to ensure that British taxpayers get value. Similarly, on future strategic lift, the idea—perhaps even more than the idea—of a future large aircraft produced in Europe is well among our plans.

Can the Secretary of State confirm that the Prime Minister said in his North Atlantic Assembly speech that the European Union needs genuine military operational capability and that, on Friday, the British and French Governments signed an agreement stating that

"the EU must have the capacity for autonomous action, backed by credible military forces and the means to decide to use them"?

"an ill-judged Franco-German transplant operation"?

No, the Prime Minister did not. Under the Maastricht treaty, which was signed by the previous Government, we moved towards the idea of European common defence. Under the previous Government, at the time of the Berlin summit—when Michael Portillo stood at this Dispatch Box—they set out to create a European security and defence identity inside the North Atlantic Treaty Organisation. The European Union, under the Amsterdam treaty, has access via the Western European Union to the capabilities being built up in the European security and defence identity.

That was the answer to a different question, because I quoted exactly what the Prime Minister said after Amsterdam. The proposal is exactly the same as the one put forward then by the French and the Germans. I know that the Secretary of State and the Prime Minister are not consulting each other on this matter, because while the Prime Minister made that statement in an interview with The Times, the Secretary of State was telling the House in the strategic defence review debate that that development would take place entirely within NATO, and re-established and restated the Amsterdam position.

If it uses the European security and defence identity component—the forces that are designed to be in place for use by Europe and can be triggered through the EU via the WEU. We are talking about the same thing. We are not in any way undermining NATO—indeed, we are strengthening it.

With great respect, the right hon. Gentleman has got it all wrong. He sends confusing signals. What is required is not fresh thinking, but action. We have the structures. Is he aware that the Western European Union already embraces the nations that contribute to Atlantic defence? France is not an integrated member of the command structure. The European Union contains large numbers of neutral states. Rather than confusing us with rhetoric, would it not be better to talk about the WEU as the separable but not separate arm of NATO?

The right hon. Gentleman should listen carefully to what is said. The Western European Union can act on the suggestion of the European Union and access the European security and defence identity components of NATO. All that the British Government are saying—although our thinking is quite radical—is that we need fresh ideas on the connections between the European Union's determination of common foreign policy positions and its ability to access the existing NATO European security and defence identity resources.

A year ago, the right hon. Gentleman and the Minister for the Armed Forces, who was then a Minister at the Foreign Office, preened themselves on coming to the House having secured a protocol on NATO in the treaty of Amsterdam. Many Conservative Members, including me, congratulated them on that achievement. That protocol contains a request for the Western European Union to come up with proposals on exactly what the right hon. Gentleman is talking about. Either the Prime Minister is gulling us with a load of waffle about nothing or there is a substantive change under way to what the Government agreed less than a year ago.

This is a real storm in a Europhobe teacup. Conservative Members must get to grips with the fact that this Government secured the first ever mention of NATO in a European treaty. We are concentrating on making that work. How can the European Union, with its reinforced common foreign and security policy, get together the capability to ensure that when Europe wants or needs to act militarily and the United States does not want to get engaged, we can do so quickly, safely and effectively? My announcement on the extraction force to be based in Skopje in Macedonia shows that it is common sense to ensure that we have the proper capabilities in Europe and streamlined structures to ensure that action follows decisions.

What assessment he has made of the impact of his planned reductions in TA centres on recruitment into the various cadet forces; and if he will make a statement. [61347]

So that recruitment to the cadet forces is not affected by the closure of Territorial Army centres used by cadet units, we shall ensure that suitable alternative accommodation is provided for a cadet unit before it has to vacate its present site. We plan to invest up to £12 million to ensure that those cadet units that have to move are provided with the accommodation necessary to support them.

Does my hon. Friend agree that, when Army cadet units are located in TA centres, there is a greater enthusiasm which comes from being associated with enthusiastic territorials? The cadet unit at Aintree barracks, close to my constituency, is particularly viable and usually has about 150 members. I fear that recruitment in the area will suffer from the proposed closure of the barracks. I should like a review of the situation. Will the £12 million that my hon. Friend mentioned be sufficient?

I am grateful to my hon. Friend. I know that it is an important issue in Liverpool. I can assure him that, if a cadet unit has to move, we will guarantee that it will get the same level of support, equipment and buildings that it has at present. Having said that, one has to recognise that there are 1,400 Army cadet units in Britain. Until the statement by my right hon. Friend the Secretary of State three weeks ago, 390 of them met at Territorial Army centres. The others met in schools, youth centres and other venues and received support from the Territorial Army and other regular Army units when necessary. Only 90 units have been affected and they have the guarantee that I have just given the House. I hope that that is acceptable to my hon. Friend.

Is it really true that the Government are contemplating a cut of one third in the permanent TA staff? Will that not be severely damaging both to the cadet interest to which the hon. Member for Liverpool, West Derby (Mr. Wareing) referred and to the mobility and flexibility of the TA—the one thing that the Government say that they are trying to promote?

We are looking at achieving better efficiency—which is what the taxpayer wants—while providing the same level of capability in our armed forces. That means that sections of our armed forces, such as the TA, have to make changes to achieve a more effective service. Our aim is as simple as that, and it applies to the matters raised by my hon. Friend the Member for West Derby and by the hon. Gentleman. There must be efficiency gains and that will mean some changes in the numbers of permanent staff.

If he will make a statement on the current security situation in the Persian Gulf. [61348]

Saddam Hussein remains the greatest threat to security in the Gulf. We strongly support the efforts of UNSCOM and the International Atomic Energy Agency to root out and destroy his nuclear, biological and chemical weapons capabilities and to establish effective monitoring regimes. The willingness of the United States and the United Kingdom to take military action three weeks ago was instrumental in persuading Saddam to rescind his earlier decision to cease all co-operation with UNSCOM. Our forces remain in the Gulf and we are ready to order them into action again if Saddam reneges on his promise of full co-operation.

I congratulate my right hon. Friend on his resolve in standing up to the brutal dictatorship in Iraq, but does he agree that Iraqi non-compliance with UN inspectors has nothing whatsoever to do with Israel, as has been suggested in some parts of the Arab world and indeed some parts of the House? Is he aware that, every time Saddam defies the UN, Israel has to distribute gas masks to its citizens because of the risk of chemical weapons? Does my right hon. Friend agree that dictators such as Saddam and Milosevic in Kosovo take diplomacy seriously only when it is backed by the real threat of the use of force?

My hon. Friend is absolutely right that the likes of Saddam seem capable of recognising the will of the international community only if it is backed up by the credible use of military force. That is why our troops remain ready and willing to act if he will not comply and co-operate with the UNSCOM inspectorate. He has been warned, and I warn him again that there will be no warning the next time if co-operation is not guaranteed. Saddam's non-compliance with the United Nations and his non-co-operation with the UNSCOM inspectors have everything to do with his ambition to dictate to his neighbours and eventually become the major force in that region. We intend to make sure that that ambition is thwarted.

Since the threat of force some three weeks ago was rescinded, has UNSCOM made real progress in securing access to the most highly classified and sensitive sites for nuclear and biological weapons and weapons of mass destruction in Iraq? Is it the right hon. Gentleman's view that the Tornado squadron in Kuwait will have to stay there over Christmas and into the new year, for ever and for aye, because, seemingly, Saddam Hussein enjoys sovereign immunity?

Saddam's failure to produce certain key documents has not been a good start after he claimed to be willing to co-operate with the UNSCOM inspectorate. We are watching his actions day to day and will make a judgment based on his performance. The UNSCOM inspectorate is building up to full strength and will, I should think, undertake a number of key investigations in the next few weeks. The rest of the world will watch carefully to see whether Saddam is willing to comply with the undertakings that he gave three weeks ago in the face of overwhelming force; our judgment on that will be swift and will involve no warnings to him.

Have there been discussions between United Kingdom Defence Ministers and American defence officials about support for the creation in the Basra enclave, in the south of Iraq, of a liberated area that is sanctions free?

The short answer is no. My ministerial colleagues in the Foreign Office have met members of the external opposition to Saddam Hussein's regime to make it absolutely clear to people in Iraq that there would be a better world for them if Saddam Hussein were not the dictator in Baghdad. We will continue to give that message loudly and clearly to the Iraqi people, with whom we have no quarrel. We will redouble all our efforts to ensure that they get the message that humanitarian aid from this country and the international community is available, that they are deprived of much of it by the dictator in Baghdad and that the sooner his reign of terror ends, the better it will be for all of them.

The Secretary of State has admitted that Saddam Hussein is effectively ignoring the west's wishes. How much longer will we huff and puff? Is it not time, before we say any more on the subject, for us to sit down quietly with the Americans and such other allies as we have to decide what options are really open to us?

I did not say that Saddam was effectively ignoring the United Nations; I said that, in certain respects, the disclosure of documents was not satisfactory. The UNSCOM inspectors are back and are continuing their investigations; some documents have been handed over. The hon. Gentleman would not expect me to tell the House or the wider world what judgment we will make or the criteria on which we will judge his co-operation with the UNSCOM inspectorate, but we will judge whether he is genuinely co-operating and whether he is genuinely interested in complying with the Security Council resolutions. We will make difficult decisions based on the outcome of that consideration.

If a draft text of the revised NATO strategic concept is to be submitted for discussion and agreement to Foreign Ministers at the December meeting of the North Atlantic Council. [61350]

I expect that NATO Foreign and Defence Ministers will discuss issues relevant to the strategic concept at the December meetings of the North Atlantic Council. Drafting of the revised strategic concept is at an early stage. An agreed text will be adopted by the Washington NATO summit in April 1999.

I thank my right hon. Friend for that reply. Does he envisage that any changes will be tabled to the section of the document relating to the role of nuclear forces, particularly paragraphs 55 to 57?

The strategic concept as a whole will be a product of consensus among allies, and some people have raised issues about nuclear forces. I cannot predict or pre-empt the outcome of any such discussion, but the United Kingdom—after a full strategic defence review that looked at all those issues—sees no need to change NATO nuclear policy as expressed in the strategic concept.

When NATO Ministers meet in Washington next year to agree NATO's new strategic concept, what chance is there of European Ministers agreeing on the same objectives? What initiatives can the Secretary of State take, in light of the fact that there is no clearly defined European security and defence identity and no common European foreign and security policy? The European countries share principles, but what initiatives can he take to ensure that European Foreign and Defence Ministers go to Washington not only with shared principles but with a shared identity, to improve the chances of getting agreement on NATO's new strategic concept?

We approach the 50th anniversary NATO summit in Washington next year with a consensus view that will involve the Americans and the Canadians, as well as the Europeans, in any forward thinking that might take place on the alliance. The hon. Gentleman underestimates the degree of success that there has been in building a European security and defence identity. He underestimates also the importance of the new, strengthened procedures for a common foreign and security policy that exist following the Amsterdam summit, and their implications. European countries will be able to build on and use capabilities when the Americans and the Canadians do not wish to be involved.

What assessment he has made of the resource implications of National Audit Office auditing of the use of private finance initiatives in the construction of public buildings. [61372]

The Commission meets regularly to assess the adequacy of the resources of the National Audit Office. In 1997–98, the National Audit Office produced four reports on private finance initiative projects, all of which were the subject of reports by the Public Accounts Committee. With the continuing and increasing importance of PFI, the Comptroller and Auditor-General will be making further reports in future years.

Would my right hon. Friend be prepared to authorise a further examination of the use of PFI, and of its long-term costs, in terms of borrowing and repayment for capital building and the loss by local authorities or health authorities of control of the buildings that they own? Does he agree that there is a danger that, in pursuit of short-term objectives, we will saddle future generations with large bills for newly constructed hospitals, schools or other public buildings?

There is of course the question of efficiency versus the finance cost, and it should be possible for those in the private sector to meet the extra finance costs by greater efficiency. If they cannot, the justification for the process is largely gone. I understand that the Public Accounts Committee is to publish a general report on the operation of PFI, and we look forward to receiving that in due course.

If he will make a statement about the proportion and amount of the Church Commissioners' contribution to clergy and widows' pensions and stipends in the current financial year. [61373]

In 1998, on current assumptions, the Church Commissioners will meet total expenditure on behalf of the Church of £160.6 million, of which £134.3 million—83.6 per cent.—will go on clergy stipends, pensions and related expenditure. This includes transitional support payments to dioceses to assist them in meeting the full costs of pension contributions for parochial clergy.

I am grateful for that reply. Does it not underline the vital importance of the Church Commissioners maximising their assets, albeit within ethical constraints, to meet such a great proportion of clergy's and widows' pensions and stipends? Does it not also put into perspective the recent request that the parishes themselves try to produce more funding, given the significantly increasing costs of running the ministry?

Our current level of parochial ministry support of £20 million has been agreed following a long process of consultation with dioceses. We have to balance our support for today's Church with the need to provide long-term sustainable support for future generations. The commissioners are very grateful to the parishes for their generous response in raising giving levels to meet an increasing proportion of ministry costs. We are confident that the parishes will continue to rise to the challenge.

If he will take steps to ensure that the National Audit Office has sufficient resources to enable it properly to audit the Government Information and Communication Service. [61374]

The Commission meets regularly to assess the adequacy of the resources of the National Audit Office. The Government Information and Communication Service is a cross-Government service of about 1,000 communications specialists employed to engage in the full range of Government information activities. The activities of the service's members are audited as part of the annual financial audit of each Department undertaken by the Comptroller and Auditor-General.

Is the right hon. Gentleman aware of the disingenuous Government campaign that is unnecessarily frightening small businesses into preparing for the euro, even though a maximum of one in 10 are likely to be affected by it? Does he agree that the campaign might be propaganda and an abuse of public money; and will he ensure that the NAO has the money to investigate it, especially in the light of the Neill report?

As the hon. Gentleman may know, the Cabinet Secretary, Sir Richard Wilson, considers the boundary between party political advocacy and the presentation of Government policy. It is right that he should be in that position, and I am sure that he will draw the distinguishing line between the two forms of activity.

What systems are in place for assessing the effectiveness of the Church Commissioners' activities. [61375]

The commissioners reviewed their systems in the light of the Lambeth report in 1993 and responded to all its recommendations, including the establishment of an audit committee. They further reviewed their systems in connection with the National Institutions Measure, which establishes the Archbishops Council for the Church of England. They also take account of evolving best practice in corporate governance.

The commissioners' mission statement is to maximise the assets of the Church to support its ministry, especially in areas of need and opportunity. In the coming 50 years, the second half-century of the commissioners' existence, will there be a way of measuring the effectiveness of the outputs—we can already gauge how effective the inputs are—in terms of the number of people who belong to the Church of England and the number who become Christians as a result of the commissioners' efforts?

I can give one assurance: I do not think that I will be Second Church Estates Commissioner in 50 years' time. We shall do our very best to satisfy the hon. Gentleman. For the long term, we have set out policy and financial arrangements making us answerable to Parliament and to the General Synod of the Church of England. Our annual reports and accounts, together with the resolutions passed by the commissioners with reference thereto, are laid before both Houses of Parliament by the Secretary of State for the Home Department, and before the General Synod by its Secretary General.

What recent discussions he has had with the Chancellor of the Exchequer concerning the current scope of the responsibilities of the National Audit Office. [61376]

I last met the Chancellor of the Exchequer on 26 March, accompanied by the Chairman of the Committee of Public Accounts. Among other matters, we discussed the current scope of the responsibilities of the Comptroller and Auditor-General.

I am most grateful to the right hon. Gentleman for his answer, which is part of a series of answers that he has given me on the issue. Does he share my exasperation that it is now 18 months into the lifetime of this Government and we still have a glaring hole in the audit arrangements for public bodies? I note that he last met the Chancellor of the Exchequer to discuss this some nine months ago: would it not be a good idea to have a meeting every quarter day until the Chancellor realises that the hole must be filled?

The hon. Gentleman makes an attractive proposition that I would be happy to consider. It is important that the House should have the ability to follow public money wherever it goes, and there is a great gap at present. Some improvement has been made and we now have the opportunity to examine how Camelot gets its money, and one or two other organisations. The hon. Gentleman is right to pursue his campaign, and I welcome it.