I should like to make a statement today on the report of the Committee of Independent Experts, and the resignation last night of Jacques Santer and his 19 colleagues in the European Commission.

The Committee of Independent Experts, set up last January on a motion from the Labour Group of the European Parliament to investigate allegations of fraud and mismanagement, reported yesterday. It is a damning report. It catalogues in key areas a culture of complacency and lack of accountability, and in some cases nepotism, that is unacceptable. The report could not be more clear-cut. It has revealed systemic failings in the Commission which have been tolerated for far too long.

It was absolutely right that the Commission resigned en masse. The President of the Commission should leave as soon as reasonably and practically possible, and a new President should take his place. The Commission should stay only in a caretaker role until a new Commission is appointed.

There is no criticism of the two British Commissioners. Indeed, they played a key role in bringing this issue to a head, and I believe that they should carry on.

Above all, the appointment of a new President and Commission should be the opportunity to push through root-and-branch reform of the Commission, its mandate and its method of operation. I will, of course, discuss these issues fully with Chancellor Schröder, the present European Union President, when I see him later today.

The new President of the Commission must be a political heavyweight, capable of providing the Commission with leadership and authority.

Jacques Santer is by no means solely responsible for this situation. Indeed, to be fair to him, he has instituted many changes of a worthwhile nature. Many of the issues revealed by the report predate his appointment. But I will be blunt: we cannot have the next President decided in the same way as the last, debating the narrow interests of one country or another. The top jobs, not just in the Commission, but throughout the European institutions, should go to the top people. Merit, and merit alone, should decide. We need the best person for the job of President, and we Heads of Government should make it clear that the Commission President operates under a mandate for reform and is a thorough-going reformer.

I would like Heads of Government, in the manner that we proposed last year at the conclusion of our presidency, to give the new Commission—with due involvement on the part of the European Parliament—a specific statement of what we believe the aims and mission of the new Commission should be: a new contract between the Commission and the Council. It should set a clear new course for a Europe of reform and change.

The changes suggested by the committee of inquiry yesterday are just the first step. In the short term, reform must include at least the following: a complete overhaul of the approval and auditing procedures for financial control; a new system for financial management and spending programmes; an entirely new procedure for the awarding of contracts for the provision of services with a new management system to oversee it; reworking of the whole disciplinary procedure so that staff in the Commission know exactly what is expected of them and what will happen if they fall short of those expectations; and a new system of accountability in the bureaucracy of the Commission so that each individual holding a position of responsibility is fully accountable for the budget and the measures that he or she manages.

In addition, we also need an entirely new framework for fighting fraud and financial irregularities. We have long been advocates of the appointment of an independent fraud investigation office which has full access to documents and officials, and the powers that it needs. That appointment should now be made.

The Committee of Independent Experts will report again soon with further recommendations on reform. We should implement them. In the longer term, we should put in place, as we argued at Amsterdam during our presidency and ever since, a new structure for the Commission, a better process of decision making, and a system of accountability that recognises the importance of connecting the people of Europe more closely to the decisions that affect them.

The inquiry's report has revealed a sad catalogue of negligence and mismanagement. There will, no doubt, be those who see this as just another chance to bash Europe. Intelligently seen, this is, in fact, an opportunity to make changes that many of us believe and have argued are long overdue. It is our responsibility now to use this crisis to ensure that the standards of management and public administration in the European institutions are as high as we expect them to be in national and regional governments in Europe. Let us seize that opportunity, therefore, and use it well.

Yesterday's report from the inquiry on fraud could not have been more devastating. It refers to the European Commission having

"lost control of the administration."

It says that

"it is difficult to find anyone who has even the slightest sense of responsibility",

and that

"no supervision was exercised and a state within a state was allowed to develop."

It is welcome to hear the Prime Minister speak of root-and-branch reform—although we are learning, week by week, to judge him by his actions and not by his words—but does he accept that a more drastic overhaul of the Commission is now required than has ever before been envisaged; more important still, that the European Commission needs to do less rather than more; and that what it does it must do better?

Will the Prime Minister ensure that the national Governments now take an immediate grip of this situation, if necessary at an emergency summit within days, to restore public confidence in European institutions and to implement radical change? Will he consider adding to the list of proposals that he made a few moments ago: a binding code of conduct for the appointment of senior officials to prevent personal appointments by Commissioners and to stamp out nepotism in the Commission; an agreement that the European Parliament should be able to sack individual Commissioners who are guilty of misconduct; strengthened and publicly available declarations of financial interest by Commissioners and by their senior staff; and the immediate introduction of a systematic career management system for senior Commission staff, so that they rotate between responsibilities, as would be normal in any other Administration?

Does the Prime Minister agree that Jacques Santer should be relieved of all responsibilities with immediate effect, leave his office today and not return to it? While supporting the idea of those Commissioners not directly implicated by the report serving out their terms as an interim measure, can I specifically ask the Prime Minister to agree that there should be a total clear-out of the existing Commission and an entirely new set of Commissioners appointed?

Is there not an even bigger issue and more important challenge now, which is that it is time to change the whole culture that leads the European Commission and the European Union to try to do too much and to interfere too often? The report makes it clear that the attempts of the Commission to implement a humanitarian aid budget, a policy on tourism and a highly expensive programme of aid to the Mediterranean led to massive fraud and irregularities that the Commission were unable or unwilling to deal with. Is that not what comes of trying to do too much? Is not the wrong answer to recruit more staff and the right answer to reduce the Commission's range of activities?

This is surely the heart of the matter. Does the Prime Minister recognise that a strong case already exists, further strengthened by this report, for cutting back on what the Commission does and letting national Governments do it instead? Will he accept that there is now considerable evidence that, in almost every case, bilateral aid provides better value for money than EU aid programmes? Is there not a strong case for the EU not to have an aid programme, but for those resources to be spent instead by member states?

Would it not be better, instead of the Commission trying to run a fisheries policy for every country, for local or national fishing industries to have control over the stock of their fisheries, while recognising the traditional rights of other countries?

Should not the Commission be doing less in those and in other ways, so that it might deal more effectively with the real priorities of enlargement of the European Union and completion of the single market? Is it not time not only for a new contract, but a new direction?

Will the Prime Minister now come clean and give straight answers to some specific questions on events of the past few months? Will he confirm that, only yesterday, at the Economic and Finance Council, the Chancellor signed up to creation of a fraud investigation office that, far from being independent of the Commission, would come under the control of the Commission, in directorate F?

Will the Prime Minister confirm that yesterday—on the very day the report was produced—the Chancellor thought it right, at ECOFIN, to sign off the 1997 European Union accounts, whereas the European Parliament itself has refused to do so?

Will the Prime Minister now give the House an answer about what instructions and advice he gave to Pauline Green, the Labour leader of the Socialists in the European Parliament, before Labour Members of the European Parliament let the Commission off the hook two months ago, after the revelations?

Why was the leader of the Socialist group, Pauline Green, to be seen celebrating that event with Jacques Santer, with champagne, as recorded on German television, rather doing her job of holding the Commission to account?

When the Prime Minister talks about what he will do, will he undertake, this time, to deliver some action instead of some talk? His spokesman has said that the Commission is like Lambeth council in the '80s, and the analogy is not a bad one—fraud and mismanagement resulting from a group of politicians trying to do too much and interfere too much, while the Labour party lets them do it. Is it not time to ensure not only that they clean up their act, but that the Commission is doing less, and doing it better?

I should start by reminding the right hon. Gentleman who it was who appointed Mr. Santer. Which country, under which Government, blocked each one of the alternative 15 candidates, until only Mr. Santer was left? It was the Government under whom he was a Cabinet member. If he disputes that, I should read what the former Prime Minister said at the time. He said:

"What matters is how competently and efficiently the new President is going to run the Commission. I have worked with Jacques Santer for … a number of years. I know his virtues and his capacity to carry matters forward."

The current Conservative finance spokesman—the right hon. Member for Wells (Mr. Heathcoat-Amory)—when he was a Treasury Minister, said:

"We are happy with Mr. Santer and we wish him well. He shows every sign, based on his record, of running an efficient and effective Commission."

We have from the Conservative party itself this quote about Mr. Santer:

"He is the right man in the right place at the right time".

So let us have no more of trying to blame this Government for any shortcomings in the Commission. The Conservative party has something of a habit of managing to appoint compromise candidates who seem like a good idea at the time, but do not quite work out in the longer term.

As for the irregularities that the right hon. Gentleman says that the Labour Government have let happen, if he reads the report, he will see that the vast majority of irregularities happened before we were even elected—they happened when the Conservative party was in government. The fact is that the current proposals have been made precisely because a committee of inquiry was established under a motion tabled by the Labour group in the European Parliament.

The right hon. Gentleman made some other extraordinary comments. He was wrong, for example, in his comment on the Chancellor, who made it quite clear that there should be an independent fraud investigation office. Today, the right hon. Gentleman has also suggested a very big change of United Kingdom policy—that we should effectively change all the Commission's powers—and has said that he would withdraw entirely from the common fisheries policy. Is that current Conservative party policy? [Interruption.] Really—to withdraw from it altogether? Do Conservative Members think that an attempt unilaterally to impose our policy would be of benefit to the United Kingdom, when it would all have to be negotiated with the very self-same European partners?

There is one question, and one question only: do we use this event as an excuse to indulge the anti-Europeanism of the current Conservative party, which wants to take us out of Europe entirely, or do we regard it as an opportunity to drive through a reform agenda, from a position of strength and influence, in Britain's and in Europe's interests? The worst thing that we could do, when we have the chance of reform, is to return to the disastrous days of Tory diplomacy.

Withdrawing from the common fisheries policy would be not only politically inept, but illegal under the treaties that we have signed. There is no denying the humiliation that the Commission has suffered over the past 24 hours or the significance of the victory achieved by the Parliament over fraud and mismanagement. Is it not clearly the case that relations between the Parliament and the Commission will never be quite the same again? Do not those events provide an opportunity for the reform of the European Union, the Commission and the Parliament, even to the extent of giving the Parliament the power to hold individual Commissioners to account, which the Labour Members of the European Parliament voted against earlier this year? Does the Prime Minister accept that we shall not achieve an open, accountable and transparent Europe merely by modifications or alterations, and that we need radical reform? Do we not need a set of clear political rules by which to manage the affairs of the European Union? Is not the case for a constitution for the European Union overwhelming?

It is important to get the reforms right. The reforms suggested by the Leader of the Opposition would be wholly detrimental to the interests of this country. We must be careful how we reform the European Commission and other European institutions. In the short term, measures connected with financial management and budgetary control are essential, and we can put them into effect quite quickly. We can also set up an independent fraud office almost immediately.

In the longer term, we must be careful about saying that the answer to everything is more power to the European Parliament. The right hon. and learned Gentleman suggested that, as did the Leader of the Opposition to an extent. One of the strongest connections that we can have is with the Council of Ministers, which represents the democratically elected Governments of the European Union. We need to get the longer-term reforms right and the shorter-term reforms in place. We can do that now.

I agree with the right hon. and learned Gentleman that we should use this situation as an opportunity for reform. We can do that. The initial indications from other countries in the European Union are that as a result of what has happened, the reformers are very much in the ascendant.

Does my right hon. Friend agree that one of the biggest institutional blocks on reform is the fact that individual Commissioners cannot be disciplined and removed from office without the wholesale resignation of the Commission? Will he also ponder on the fact that we have a weak leader of the European Commission because he was foisted on us by the previous Conservative Government? They took their decision not in the national interest, but because of the divisions in the Conservative party at the time. Is it not also the case that when there was misconduct at the highest levels of Government under the previous Administration in this country, we used that not as an argument to remove and dismantle that Government, but to bring about fundamental and effective reform? That is what should happen with the Commission and the European Union.

It is important that the next President of the Commission is someone of strength and real authority in the European Union. It is also important to look carefully at the terms under which Commissioners and senior officials in the bureaucracy are appointed. Those changes can be taken forward with considerable backing from all countries of the European Union.

Will the Prime Minister accept that, no doubt inadvertently, he misled the House on the subject of Mr. Santer's appointment? Mr. Santer was proposed by all the other members of the European Union before I accepted his appointment on behalf of this country.

On the substantive point of his statement, does the Prime Minister agree that the report throws up an institutional problem that has long existed in the European Union? The structure of the Union is such that the Commission, in theory, is accountable to the Council of Ministers. However, in practice, the irregularity with which the Council meets means that detailed supervision over many of the activities of the Commission is not undertaken properly, either by the Council of Ministers or, in any other sense, by the European Parliament.

Is not one of the most important reforms—it is many years overdue, I happily concede—clear-cut financial accountability by the Commission, ideally to the member states of the European Union or, if that is too cumbersome, to a body that itself reports directly to the member states for them to judge how effectively the accounts are being managed? The Prime Minister and his fellow Heads of Government have a tremendous opportunity, in light of the report, to effect such a reform. Simply replacing the existing Commissioners will not do. If he takes that opportunity for structural reform, he will deserve the support of both sides of the House.

I will deal with the second part of the right hon. Gentleman's question and leave aside what will have to be disagreement on the first part. The institutional problems to which he drew attention have been there a long time, and there is a lot of merit in what he says, in two senses. There is a problem with detailed supervision because the Council, necessarily, meets irregularly. Secondly, we need a better system of financial accountability—that was one of the things that I set out in my statement. That better system of financial accountability—in the longer term—may well require some fundamental change to the way in which the present system works. The point that the right hon. Gentleman made is well worth looking at.

Reading back on much of what the right hon. Gentleman said at previous European Councils, one sees that it is true that this has been an issue for a long time, and it would be misleading—on this point, although I do not accept that charge on the first point—if I were to say that this argument was not mounted by the previous Conservative Government. However, the big difference now is that I believe that a consensus for reform is beginning to form right across the European Union for some of the things for which the right hon. Gentleman argued but, at the time, was unable to get through. We can build the alliance for that now, but we can do so only if we see this as an opportunity, and not as an excuse to indulge in the Europhobia that some Conservative Members—although not the right hon. Gentleman—want.

Is not what the right hon. Member for Huntingdon (Mr. Major) said an example of the importance of this country having a positive approach to Europe? If we have a negative and divided approach, the problems of which we have been aware for some time will inevitably continue. We need a strong and independent check on fraud, and a body dealing with standards and privileges for Commissioners. Perhaps at this stage we ought to record our thanks to Pauline Green and Alan Donnelly for the lead that they have taken on this matter.

The committee of inquiry would not have been set up but for the motion, which came not merely from the Labour group, but from British Labour members of that group. Secondly, the committee of inquiry will make a further report shortly. We should implement that as well.

The Prime Minister says that we must get the reforms right. Why can he not match the scale of this crisis with a statement dealing with the real problems facing this country? Is he prepared to go to the Berlin summit in a few days and make a proposal to the other Heads of Government to deal with the real questions, which relate to the loss of national democracy, accountability and the means of calling people to account? Is he prepared to table amendments at the intergovernmental conference that is due shortly to ensure that we get the balance right, and bring back to this House and to the other national Parliaments the democracy and accountability that the electors of Europe and this country truly deserve?

The hon. Gentleman will no doubt get a lot of support for that view from his own side. He believes that Britain should not be a member of the European Union at all. The idea that if I adopted his position on Europe I would go to Berlin with great influence is absurd: I would go there with no influence at all. If he had his way, I would not even be invited to Berlin and to the conference.

On a point of order, Madam Speaker.

I can take points of order only at the end of statements, and I have three statements to deal with today.

The hon. Gentleman caused quite enough difficulty for my predecessor without causing difficulty for me as well. We have a fundamental disagreement about how to get the best for Britain out of Europe. He would do it by effectively taking Britain out of Europe; I believe that we should stay in Europe, fight for our interests as other countries do, and build consensus and alliances for the changes that we want.

My right hon. Friend the Deputy Prime Minister will recollect that when he led the Labour delegation to Strasbourg, I was the Labour member on the Budget Committee and on the Budget Sub-Committee dealing with fraud. In the light of experience, especially of the Friuli earthquake compensation, does my right hon. Friend the Prime Minister accept that it is very difficult to get politicians to have anything to do with fraud investigations into their own country, not least if they are Italians? No Italian MEP would have anything to do with the Friuli investigation. Does he agree that if an investigation is to be effective, it will have to be on a European, rather than on a country-by-country basis, and that there will have to be a strong, independent investigative team?

I will not pray my hon. Friend's remarks in aid for my new strategy for the Italian alliance. My hon. Friend is right to say that there is a problem with countries investigating their own institutions to determine whether fraud has occurred, but that is surely precisely the reason why we need an independent investigative fraud office, which is what we proposed and what I now believe will be accepted.

In June and July last year, before the furore that led to yesterday's events, the Public Accounts Committee published a report criticising the fraud and waste in Europe. I called for an independent anti-fraud office, with teeth, to be set up. The Commission dismissed that as unnecessary. Does the Prime Minister accept that an anti-fraud office that will do the most to stop the rot at the centre of Europe will be on the Danish, Dutch and British model: independent in funding, appointment and activities, with absolute access to the information in all the institutions in Europe, and reporting back to European taxpayers through the Council of Ministers?

I do indeed believe that the body should be fully independent and allowed to carry out its functions in a way that establishes its own credibility, quite apart from anything else. That is the best thing for Europe. The standing of the European Commission has been damaged, quite rightly, and the best way for us to respond is to act now. The right hon. Gentleman is right to say that the Public Accounts Committee made that proposal before, but the difference is that this time—I found this in the discussions in Petersberg a few weeks ago and, before that, in Vienna—it will find an echo right across Europe.

I support what the right hon. Member for Haltemprice and Howden (Mr. Davis), the current Chairman of the Public Accounts Committee, said. I want to refer to events as they unfolded late last night. Is not it clear that the responses of Jacques Santer and Mrs. Cresson were wholly inadequate? The report found fraud, nepotism and mismanagement, and the minimum response from those singled out should be not only immediate resignation, but no possibility of reinstatement.

I agree that the response was wholly inadequate, which is why we have called for the measures that I outlined today.

Did the Prime Minister hear Sir Leon Brittan this morning, saying, without making any excuse, that one of the problems that the Commission had was that national Governments asked it to take on more than it was equipped to handle? Does he accept that if, in his new contract, he were to take the opportunity for reform by circumscribing the activities of the Commission and the pressure put on it by national Governments to do more, not as a cover for disengagement but as a genuine reform, he would carry the support of all parties in the House?

It is worth considering how we describe the functions of the Commission, although I suspect that even those who are most insistent that we remove some of its activities would want, in other circumstances, to start adding responsibilities. It is necessary to look root and branch at the activities we want the Commission to undertake and how it undertakes them. I hope that we can have a sensible debate across the House, because that would be in the interests of this country.

Is my right hon. Friend the Prime Minister aware that although the two British Commissioners were apparently cleared completely of any charge against them, they were collectively responsible for the work of the Commission? Will he take the opportunity to make one significant reform—which is entirely in his hands—and give the House of Commons the opportunity to vote for and appoint the British Commissioners in Brussels? I wrote to him on that point today and legislative provision for it is contained in the Crown Prerogatives (Parliamentary Control) Bill, which has support on both sides of the House and would be a significant way to spread power from the few—indeed from the individual—to the many of the House of Commons.

I am afraid that I cannot offer my right hon. Friend any solace on that last point. In respect of his first point, I have looked at the report carefully and neither of the two British Commissioners was personally criticised or involved in any shape or form in the specific cases that were examined. Therefore, it would be wrong if we were to single out our Commissioners for blame in those circumstances.

Is it not curious that the one word that did not pass the Prime Minister's lips was Parliament? As a democratically elected leader, does he not believe that he should discuss with his fellow Heads of Government how the European Parliament and national Parliaments can co-operate rather than compete to represent the people's interests in Europe and achieve genuine accountability? The Prime Minister mentioned a new President. Is he suggesting bringing forward the appointment of the whole of the new Commission or merely appointing a temporary stop-gap between now and next January?

I have said that I believe that the President of the Commission should stand down as soon as possible and that we should put the new Commission in place as soon as possible. I am here, being accountable to Parliament through the statement I am giving, but when I described longer-term reform, I had in mind the clutch of issues that we raised in Cardiff during our presidency, which included the need for better co-ordination between the European Parliament and national Parliaments. Because Europe has those powers, the more scrutiny to which it is subjected and the better the debate between the European Parliament and the national Parliaments and Governments, the better it is for democracy. However, I would stress, as I said to the right hon. and learned Member for North-East Fife (Mr. Campbell), that—I suppose probably all Prime Ministers say this—we must take account of the fact that the Council of Ministers is also a democratically accountable body, in the sense that each Prime Minister goes home and is accountable to his or her Parliament.

My right hon. Friend rightly called for a root-and-branch reform of the Commission. Which institution of the European Union has the power to carry out such reform? If proposals are made for such reform, will they require a treaty to ratify them?

That depends on the nature of the reforms proposed, but we already have in the Amsterdam treaty some issues that were left over for the purpose of sorting out enlargement including, for example, the structure of the new Commission. In any event, we will consider some of those issues very carefully over the coming months. We should bind into that an opportunity to analyse some of the fundamental reforms that we can make. My right hon. Friend asks about the correct institution, but the correct beginning of the process of reform is with the Council of Ministers.

Does the Prime Minister agree that the basic problem is the fact that those 20 little emperors in Brussels have massive powers? They are not highly qualified, experienced civil servants, subject to disciplines and controls, but redundant politicians who are faced with daily temptations on the basis of the ever-increasing powers given to Brussels. While a minority take the view that Europe would be strengthened if the Commission were to close its doors tomorrow, does the Prime Minister agree that we could improve the administration of, and spending controls in, Europe if powers such as agricultural management and foreign aid were returned to member states?

I do not believe that it would be in our interests to renegotiate the entire terms of European Union membership or of the institutions of the EU. I must disagree with the hon. Gentleman, and our disagreement will simply remain. In respect of the hon. Gentleman's very harsh words about the Commissioners, I must say that I dug out an interesting statement that he made when Mr. Jacques Santer was appointed. The hon. Gentleman said:

"He is a quiet, decent, responsible person and we can congratulate John Major for accepting him."

Is the Prime Minister aware that one reason why he has had to come here today to talk about the latest crisis in the common market is the contradiction in the common market? For as long as it is based on the idea that nation states must scratch one another's backs to get what they want—that is roughly how the common market operates—the net result will be a democratic deficit. If that democratic deficit resulted in a European Parliament that could properly scrutinise fraud and all the rest of it, we would have a united states of Europe. My right hon. Friend the Prime Minister does not want that, and nor do I.

Crises will therefore continue to confront the Prime Minister and everyone else in the common market. We must understand that no matter how well meaning the proposals are, the common market will continue to have one nation state scratching another's back to get what it wants. That is the problem that the whole common market must face.

If we consider the balance of our interest in being in or out of the European Union, we can see that it is fundamentally in our interest to be in it. It is in our interest in terms of jobs, trade, industry and influence in the world. Scratching each other's backs is one way of describing what happens, but there is a mutual self-interest in being part of the European Union. Whatever changes and reforms we make in the EU, I believe that Britain is better in than out.

I accept that Her Majesty's Government have a role in the appointment of the new President of the Commission and the nomination of two United Kingdom Commissioners. Have the Government any say, however, in the appointment of other Commissioners? In particular, have they any say in the reappointment of one retiring Commissioner who is the subject of a public inquiry into the disappearance of £50,000 in his own country?

Secondly, in so far as centre right politics in Europe is concerned, does the Prime Minister agree with new thinking in Europe that the Commission should be appointed by the European Parliament, not by national Governments?

If the right hon. Gentleman is saying that the European Commission should be appointed by the European Parliament, not national Governments, I do not agree. It is better that nation states appoint Commissioners.

In respect of the right hon. Gentleman's other point about the appointment of other Commissioners, of course we have a say. All Commission appointments are discussed at the Council of Ministers.

May I congratulate my right hon. Friend on his proposals, which seem exactly the right way in which to deal with a long-running problem? Our own Select Committee on European Scrutiny said in January:

"This is the fourth successive year in which the Court has not been able to provide assurance about the legality and regularity of the accounts of the general budget."

There remains the problem of the existing Commission and its collective responsibility. Without wishing to bash Europe in any way—there is no need; Europe is self-bashing these days—may I suggest that we should follow the practice of a president of a company that has failed because of incompetence, nepotism, selfishness and lack of leadership among its board? The board should go, and we should call in the administrator.

The board has effectively gone and it is right that the President of the Commission takes responsibility. My hon. Friend mentions that the European Scrutiny Committee has raised the issue of dealing with the problems of fraud; it is fair to say that this country and the various Committees of this House have been raising that issue for many years. My point is that we now have an opportunity in Europe to push that reform with the agreement of other countries. I do not know how it will be seen by our national media, but it is interesting that the media of other European countries see the whole issue as giving a fair wind to those who want to reform the system, once and for all.

If we are facing institutional corruption and fraud, to borrow Sir William Macpherson's phrase, what proposals does the Prime Minister have for institutional reform?

The proposals I made in the statement for changes in the whole system of financial accountability, disciplinary proceedings in respect of Commission staff and awarding of contracts are all institutional changes, as is the establishment of an independent fraud office. In the longer term, we should look at ways in which we can introduce a better system of accountability between member states and the European Union. Those are all changes that we can look at and do.

Surely it is not only a matter of appointing a stronger President who has even greater authority—I think my right hon. Friend spoke about greater authority being established—but a matter of having democratic arrangements in place, so that whoever is there is controlled by those provisions. Should we not move to a system whereby the bodies that make decisions are the Parliaments—the European Parliament and the Parliaments of the nation states?

There is a case for looking at how to strengthen the link between national Parliaments and the European institutions, and that is what we proposed at Cardiff during our presidency. When I talk about the new President of the Commission having strengthened authority, I mean that we should appoint someone who is clearly a political heavyweight and who can make the European Commission into the sort of body that Europe needs. However, I am also suggesting, as we proposed at Cardiff at the conclusion of our presidency, that the Commission operate under a specific mandate and statement of aims and mission from the Council of Ministers. That is the right place to start.

I agree with the Prime Minister's analysis of the situation and that his proposals are worth deep consideration. I would suggest only that when discussing those matters with the other countries, the right hon. Gentleman bear in mind the danger of being told that the British just want to run everything. That is a real danger, which he has encountered once before.

The good side of the situation is that, for the first time, the European Parliament has been prepared to act and to act decisively. Things will never be the same again, because, in future, the Parliament will always take an attitude and carry it through. That has to be taken into account. I suggest that that gives every one of us a powerful argument to use in the forthcoming European elections, which is to say to our own electorate that the time has now come when they should use their vote to get the representation in the European Parliament that we ought to have, rather than having the smallest of the lot.

I agree entirely that it is right that we try to get representation in the European Parliament that will stick up for Britain's interests in a sensible way. It is also true that we are not telling the rest of Europe that we in Britain know how to run everything and everyone has to take our instructions. However, with a Government who believe in a strong and influential position for Britain in Europe, we now have the chance to build the alliance necessary to get the right changes in Europe. I say with respect to my predecessor as Prime Minister that, at the beginning of his premiership and before his party put the manacles on him, he tried to achieve that and to construct a different set of relationships in Europe. It is possible for us to do that now, but we shall succeed only if we recognise and say, right up front, that Britain is a key partner in Europe. We shall play our role as a partner in Europe and, in doing that, fashion a Europe of which this country can be proud.

Does my right hon. Friend agree that, if we are to achieve the long-awaited reforms on fighting fraud and bringing greater financial accountability to the Commission, the work of the Court of Auditors should be given due recognition and that organisation should be given greater power? The Court of Auditors has for some time been pointing out what is wrong with the Commission in that respect.

There is certainly a case for ensuring that the Court of Auditors has all the powers it needs. However, I believe that the existence of the independent fraud investigation office will make the critical difference. If people can see that allegations are investigated by an independent body, it will give the whole system greater credibility. When the issues were first raised in the European Parliament, the European Labour group was absolutely right to call for an inquiry first and to make the necessary changes on the basis of that inquiry. If we take this opportunity to put in place a wholly independent system, it will be far better and far more credible for the future.

Is the Prime Minister arguing for the immediate reappointment of the British Commissioners? If so, is that not rather odd because they must bear some of the collective responsibility for what has gone on and for the Commission's failure to act in spite of many warnings and reports? Would not the Prime Minister and his Government be better advised to stay their hand and consider carefully what is in the best interests of the Commission and of the European Union when appointing a new Commission, rather than joining other countries in rushing to reappoint discredited Commissioners?

It would be strange if Britain responded to this issue by sacking the two British Commissioners, who have been subject to no personal criticism or investigation regarding the original areas of complaint. It would be odd if we did not reappoint our Commissioners and other countries—whose Commissioners were also subject to no criticism—did the opposite. That would not be in this country's interests.

Although it is quite understandable that the previous Prime Minister, the right hon. Member for Huntingdon (Mr. Major), should seek to play down his key role in appointing the President of the Commission—Jacques Santer has, from day one, suffered from delusions of adequacy—does the Prime Minister accept that it is important to remember the role that the whistleblower played in revealing the fraud that has taken place? Greater provision for freedom of information in the European Commission's work and in dealings between each member state and the Commission, and greater protection for whistleblowers in the EC, should be part of the reform package.

I support any moves that make the system more transparent because transparency will aid accountability.

In several of his replies, the Prime Minister has asserted that the two United Kingdom Commissioners are free from blame—indeed, they were not mentioned in the report. Will the Prime Minister place in the Library the memorandums that show when the two British Commissioners first flagged up the mess that was under their noses—if they ever did so—before the balloon went up?

As I said in my statement, the two British Commissioners played a crucial part in bringing the issue to a head and in insisting that action was taken. Despite Conservative Members' comments, it would be very odd if we ultimately alighted upon the two British Commissioners—who were not subject to any personal criticism at all—as the ones who should pay the price.

The selection and appointment of Commissioners is clearly key to the reform of the institution and is a matter for national Governments. What will happen if the French Government wish to reappoint, or assert their right regarding, Mrs. Cresson?

Let us wait and see whether that is the case. As I said earlier, any appointments or re-appointments are discussed in the Council of Ministers.

With permission, Madam Speaker, I wish to make a statement on forthcoming Government initiatives to tackle crime. The Crime and Disorder Act 1998 provides the foundation for our strategy on crime and disorder. The major reforms of the youth justice system for which it provides are currently being rolled out; and the House will be familiar with them. Two other major parts of the Act come into force in the next two weeks. From 1 April, effective local crime strategies to reduce crime and disorder must be in place in every area of the country. Those strategies are being drawn up by the more than 400 statutory partnerships established between the police and local authorities. They follow a six-month period of consultation between local communities, police and local authorities.

Clear and deliverable local targets are being set to reflect the priorities of each local community. Those targets will, for the first time, give local people the means to monitor how effective are the police and local authorities in reducing crime and disorder in their area. The early signs are that those local partnerships have invested considerable energy and enthusiasm. We all understand that they must now deliver.

I know that many hon. Members have been as concerned as I, the police and local authorities about the lack of effective remedies to combat serious and persistent anti-social behaviour in our communities. We have been determined to put that right. I am therefore pleased to tell the House that the new anti-social behaviour order under the Crime and Disorder Act will come into force and be available to the courts from 1 April—in only 15 days' time.

That civil order will be available against any individual over the age of 10 whose behaviour is such that the court judges it likely to cause harassment, alarm or distress to others. In terms of the rules of evidence and the burden of proof, the order will be similar to a civil injunction. It will typically impose conditions restraining the behaviour of named individuals. Those may include a curfew or prohibition on going to particular areas or houses or contact with particular individuals. A breach of an anti-social behaviour order will be an arrestable offence punishable on indictment by up to five years in prison or by an unlimited fine.

Many police forces and local authorities are undertaking work to prepare for the start date of 1 April. I am today issuing detailed guidance about the use of the orders. Copies have been placed in the Library and are available in the Vote Office.

Last July, I announced our intention to begin a £250 million, evidence-based crime reduction programme to reverse the long-term upward trend in crime. It is the biggest programme of its kind ever undertaken in this country or abroad. I am pleased to say that the first projects under that programme will soon be under way.

On Thursday, I shall announce the first 11 provisional areas to benefit from a £30 million initiative in targeted policing to establish what works. That will give targeted support to some of the most innovative and dedicated police work that is taking place. The schemes will bolster the police in their dedicated work to tackle crime.

England and Wales have one of the worst records on burglary in the industrialised world, despite recent falls owing to excellent work by the police and local authorities. Early next month, therefore, we shall announce the 60 areas that are to benefit from the first phase of a £50 million anti-burglary initiative. Over three years, our scheme will cover more than 2 million homes in about 500 of the country's high crime areas. It builds on the previous Government's safer cities campaign, which I commend, and should have a major impact on property crime rates.

I turn now to the outline announcement made by my right hon. Friend the Chancellor of the Exchequer in his Budget statement last week. As he told the House, an additional £150 million is being allocated to boost support to crime prevention in areas in England where crime is highest. That brings the total funds for the crime reduction programme to more than £400 million.

The breakdown of the additional £150 million will be £20 million in the coming financial year, 1999–2000; £60 million in the next year; and £70 million in the third year, 2001–2002. In addition, £13 million will be available for projects in Scotland, £4 million for Northern Ireland and a further £3 million for Wales. A key focus of that additional programme will be investment in closed-circuit television systems and the infrastructure necessary to make these systems operate most effectively, including in housing estates, towns, bus and railway stations and car parks.

The evidence is clear. In the right context, CCTV can significantly reduce crime and disorder. It is like having permanently on the beat in particular streets or areas a number of police officers with eyes in the back of their heads and an incontrovertible record of what they have seen. When used properly, CCTV can deter criminals, greatly assist the police and others in bringing offenders to justice and help to reduce people's fear of crime.

Take vehicle crime, for example. It accounts for almost a quarter of all recorded crime and costs us £4 billion a year. In September, my right hon. Friend the Prime Minister announced a national target to reduce vehicle crime by 30 per cent. over the next five years. The additional resources for CCTV and related security improvements are a major step on the road to meeting that target. Among other things, the resources will be targeted at improving car park security. Home Office research in six cities provides firm evidence that the installation of CCTV in car parks leads to significant reductions in vehicle crime.

A project in Hull, for example, led to a fall in the theft of cars in the targeted car park of almost 90 per cent., compared with a reduction of only six per cent. in the city centre as a whole. Given that up to 30 per cent. of all such crime takes place in car parks, the potential pay-offs from this major new investment in security are enormous. Another project in Darlington has cut the number of vehicle offences in the town by more than 80 per cent.

Funding for the new initiative will be allocated through a competitive bidding process. We will invite bids for schemes in places to which the public have access. We expect roughly half the funding to be allocated to residential areas, although the precise split will depend on the quality of the bids received. Bids must be submitted through local crime and disorder partnerships. Successful bids will be those which have the biggest impact in reducing crime, are part of a broader strategy and represent the best value for money.

The initiative will be managed jointly by the Home Office and the Department of the Environment, Transport and the Regions, as part of the crime reduction programme, with the Scottish, Welsh and Northern Ireland Offices discharging their separate responsibilities. The joint work of the DETR and the Home Office is significant. It represents co-ordinated government at both national and local level, and will complement existing programmes, such as the new deal for communities and the single regeneration budget. My right hon. Friend the Deputy Prime Minister and I will issue a joint prospectus as soon as possible, which will set out guidance to partnerships on the submission of bids, including time scales and selection criteria.

The measures that I have announced today are part of a coherent strategy for giving local communities the means that they need to tackle crime, the fear of crime and disorder. I commend them to the House.

I welcome the proposal to extend closed circuit television. The previous Conservative Government introduced that measure, and it is one of the reasons why crime has come down over the past five years. In opposition, we have pressed for its extension, so we welcome the announcement. I quarrel only with the Home Secretary's description of CCTV as being like having a number of police officers permanently on the beat in particular streets. I do not agree with the implication of that remark. We certainly need CCTV, but we need policemen on the beat, too. Our fundamental criticism of the Government is that they are cutting the number of police.

CCTV apart, the Home Secretary's statement is simply a re-announcement of old policies—as we had yesterday from the Secretary of State for Health. If anyone doubts that, they need only look back to the Prime Minister's speech at September's Labour party conference, in which he said:

"Because of the Government's policies, young children alone on the streets can be subject to curfews. From April, anti-social neighbours can be taken to court and punished. I announce today that we will be introducing measures to tackle the first of 20 worst crime hotspots around the country."

What is new is that the Home Secretary is claiming credit for extra spending on law and order. He boasts of £400 million over the next three years. If that is his claim, where will the money come from? Let the Home Secretary confirm that between 1979 and 1996–97, under the previous Government, there was a 3.3 per cent. average annual real increase in Government financing for the police. If the Government had kept to that average, they would be spending an extra £1.3 billion on the police over the next three years. It is a story with which we are familiar: the Government have taken a lot of money from one budget, namely, the police; they have given some of it to another budget, namely, crime prevention; but, most of all, they have kept the change.

On the anti-social behaviour orders, let me ask the Home Secretary two questions. First, can he give the House an assurance that the orders, which we have supported, do not offend, as is claimed by some, against the European convention on human rights? We have already seen one example this week of how that may have happened—contrary, I suggest, to overwhelming public opinion in this country. No one wants to see another such example.

Secondly, as the Prime Minister said, the child curfew orders were a central part of the Government's strategy. Can the Home Secretary confirm that, after six months, no local authority has applied for such an order?

Lastly, the Home Secretary mentioned targeted policing—hotspot policing, as the Prime Minister described it. The idea comes from the United States, together with so-called zero tolerance policing. It has been very successful there in reducing crime, but I emphasise that it has been accompanied by a determined drive to recruit more police in New York and throughout the United States. Surely the trouble with the Government's approach is that they are presiding over a declining police service in this country. We increased police numbers by more than 15,000 during our period in office, but police strength is now coming down in this country—down in the cities and down in country areas. Does that not mean that the full potential to reduce crime in this country will not be realised under the Government's policies?

I am glad that the right hon. Gentleman seeks to welcome what I have said about closed circuit television—and well he might, because the previous Government invested £38.5 million in closed circuit television over four years whereas we are investing £150 million over three years into such crime reduction programmes. We are not taking that money from the police.

The right hon. Gentleman said that, under the previous Administration, budgets rose by an average of 3.5 per cent. That took place at a time of much higher inflation. Police budgets are due to increase by 3 per cent. during the next year and, in other areas, budgets are due to increase by 3.5 per cent.

As for accusing us of cutting police numbers, that is an extremely dangerous line for the right hon. Gentleman to follow. Although it is true that the number of police rose in the 1970s under a Labour Administration and in the 1980s under the Conservative Administration, after 1992 the Conservative Administration presided over a serious decline in police numbers. Notwithstanding the fact that they had promised 6,000 more police officers, they delivered 450 fewer police officers in that five-year period. As for the past two years, when the numbers have decreased, we were following the previous Conservative Administration's spending plans, with only this difference: we put in a bit more money than they did.

I see the right hon. Gentleman smirking about that, as Conservatives always did when they broke their promises, but Conservative Members need to remember that they lost office so comprehensively because they broke their promises.

The right hon. Gentleman says that there was nothing new in the statement except the increased funding for closed circuit television. There was a great deal that was new, including the guidance—which I have published today—on the use of anti-social behaviour orders, which has been the subject of a great deal of consultation with local authorities, the police and others. I am very glad that the right hon. Gentleman now welcomes the use of those orders, because we received a mixed message during the legislation's passage through Parliament. I believe that one or two Conservative Front Benchers welcomed them, but the hon. Member for Hertsmere (Mr. Clappison) described them as "dangerously unworkable" and the Conservative central office information simply dismissed them as "a gimmick". The orders will be workable, and they should make a great deal of difference. [Interruption.] I shall deal with child curfew orders in a moment.

I enjoyed the right hon. Gentleman's question about the European convention on human rights. There is always space for people to undergo a Pauline conversion on matters such as human rights, and we greatly welcome the Conservatives' subscribing to the convention. The answer is that I signed a clear statement to the House, saying that we believed that the provisions of the Crime and Disorder Act were compliant with the European convention.

Believed?

Of course. It is a statement based on the best opinion that we received. I cannot take account of all the possibilities that may occur in Strasbourg. It is our best belief, and it has never been gainsaid.

On child curfew orders, the right hon. Gentleman is right to say that no local authority in England or Wales has applied for such a curfew, [Interruption.] but as my right hon. Friend the Minister of Transport is pointing out, the equivalent has been used in Scotland. When I went to Yardley in Birmingham before the election, I was asked for such orders to be used there.

This is not an exercise in central government, whereby we tell local authorities and local communities what to do. We are responding to their requests for such orders. It is up to local communities to use them. It is possible that, owing to the success of all our other reforms of the youth justice system, they may not be needed, but if they are needed, they are there.

I suggest to my right hon. Friend that if there is one lesson that we should learn from the 1980s, it is that simply pouring more resources into the police is not the right way to deal with crime. The real issue is how those resources are used. My constituents will welcome the new measures that he has announced today, and will watch with great interest to see how they work. What assurance can my right hon. Friend give the House that the resulting reduction in crime will be properly audited, and that figures will not be massaged by some local police forces in order to give a better impression than is warranted by reality?

I am grateful to my hon. Friend for the welcome that he gives. He is right to say that we must be as careful about the expenditure of resources on law and order as about that on other areas. I hope that we may be able to get beyond the rather low level of debate offered by the Opposition, whose only concern now appears to be inputs, rather than outputs—notwithstanding the fact that they sought to elevate the debate on every other public service to the level of outputs.

The document entitled "Reducing Offending" shows that there are many cost-effective ways of reducing crime. For example, the research evidence from the safer cities programme initiated by the previous Administration shows that money invested in burglary prevention projects produces a rate of return five times higher than money invested in additional police officers. Chief constables know that, which is why, when they are offered a choice about how to spend their money, they often do not put it directly into expenditure on more officers, but invest it instead in IT systems and additional civilians.

My hon. Friend asked me to ensure that the reductions in crime are properly audited. I should tell him that a major exercise is being undertaken by the research and statistics directorate of the Home Office to lend greater credibility to the crime statistics across the country. Many police forces already ensure the highest levels of integrity in those data. Some do not, and we are taking them to task.

The thrust of the statement is to be welcomed, as is the fact that the Home Office and the Department of the Environment, Transport and the Regions are working together. Perhaps it would be better still if other Departments were brought in—the Department for Education and Employment and the Department of Health are two obvious examples.

Can the Home Secretary tell the House how much of the doubled crime that was experienced under the 18 years of Conservative Government will be eaten into by the measures that he announced today? When does he expect us to get back to the 1979 level that the Conservative Government inherited?

There is concern that the funding of the partnerships depends on local authorities and police forces working in partnership. Does the Home Secretary agree that local authorities are already underfunded, and that the measures that he has announced this year will lead to the police being underfunded? Although it is true that the number of police officers rose under the total period of the previous Conservative Government, it has fallen in the last few years. Does the Home Secretary agree that the number of police officers now is less than it was when he launched his "tough on crime, tough on the causes of crime" campaign?

I am interested in the crime reduction programme. Can the Home Secretary give an assurance that effective projects which started under the safer cities programme will continue and not be shelved?

Finally, is the Home Secretary seriously trying to tell people that CCTV cameras can replace the bobby on the beat?

To take the hon. Gentleman's last point first—which picks up a question asked by the right hon. Member for Sutton Coldfield (Sir N. Fowler)—no one is suggesting that CCTV should replace officers on the beat; rather, we are suggesting that it complements their work. CCTV has been successful in reducing crime in town centres and housing estates because it is literally like having a police officer on the beat with eyes in the back of his or her head and it provides an incontrovertible record of what has happened. CCTV is enormously important in providing good evidence for the police for prosecutions, in acting as a significant deterrent—and, as the hon. Gentleman will have seen if he has been in control rooms—in enabling the police to deploy their resources far better than ever before, for example where disturbances occur late on a Friday or a Saturday night. The two are therefore complementary.

A choice has to be made at the margin about how the additional resources should be spent, and we do not resile from that. Such choices must be made on the basis of the best evidence. The hon. Gentleman—like my hon. Friend the Member for Sunderland, South (Mr. Mullin)—picks up on the Conservative Government's record. It should be borne in mind that, when police numbers rose in the 1980s, we saw the largest rise in crime that Britain has ever experienced. We should consider whether there is the direct relationship between the number of police officers and the level of recorded crime that Opposition Members insinuate.

We accept that better co-ordination with other Departments is needed. The hon. Gentleman will know that health and education departments are partners at a local level in the crime and disorder partnerships, and we are working closely with the other Departments at a national level.

The hon. Gentleman asked me rashly to name the day when crime will be back to the 1979 level. I have not promised to do so, so I shall not take up his offer. However, I have been set the challenging target by the Prime Minister to bring vehicle crime down by 30 per cent. during the next five years, and I have been promised an imaginative career move if I fail.

Is my right hon. Friend aware that it was futile niggling of the kind that we have just heard from the Tory Front-Bench spokesman that led to the Conservative vote in my constituency falling to 4,000 at the general election, and to the total absence of Conservative councillors from Manchester city council? That is why my constituents look to my right hon. Friend to deal with the serious problems of crime from which they have been suffering all these years.

We welcome what my right hon. Friend said about burglaries, CCTV and so on, but my constituents will be looking most to the effect of the anti-social behaviour orders. Day after day I receive letters and approaches from constituents about rowdy gangs and abominable neighbours, including named people who move from street to street, causing havoc as they go.

My hon. Friend the Member for Sunderland, South (Mr. Mullin) is right in saying that we will judge my right hon. Friend's announcements by the effects. Is he aware that we shall look to those effects to take away the terrible misery from which ordinary people suffer day after day as a result of such offences?

In place of a futile niggle, perhaps I may be allowed a sycophantic difference of emphasis from my right hon. Friend: surely the real reason for the fall in the Conservative vote in Gorton was the excellence of my right hon. Friend's reputation. Knowing my right hon. Friend as I do, I am surprised that there were even 4,000 Tory voters.

I am grateful to my right hon. Friend for his welcome of the anti-social behaviour orders which are built partly on the experience of the people in Manchester and Salford. I have visited many of the areas that have suffered in that way. I know that Manchester city council is one of the authorities that are preparing themselves for the introduction of the orders. It has one of the best records in the country of taking out injunctions against its own tenants, but the orders are important because they will be available for use against people regardless of housing tenure.

My right hon. Friend is also correct that people are waiting for the beneficial effects of the orders. Their success will depend on the enthusiasm of the police and the local authorities in applying for orders and, in some cases, on the courage of local people in making applications to the police in the first place. It will also depend on how far the judiciary—magistrates and the Crown courts—are alert to the need to make those orders. I am pleased that we have had discussions with the Magistrates Association as well as with the higher judiciary to ensure that they understand the emphasis that the House has placed on the effectiveness of the orders.

Talking of Pauline conversions, will the Home Secretary accept that I will not unduly delay the House by reminding it of the number of times in the first year of this Parliament that he pooh-poohed the effectiveness of closed circuit television because the Chancellor would not give him any money? Now that the Chancellor has given him some money, he is all in favour of closed circuit television. I hope that this is the real Home Secretary.

The right hon. Gentleman talked of outputs. Will he tell the House what reduction in burglary, car theft and anti-social behaviour he wants to achieve, and over what period, in order to feel that that use of the money has been justified, and that it has been money well spent in terms of law and order?

The right hon. Gentleman is entitled to tweak me on that point, but I did not pooh-pooh the value of closed circuit television at all. Indeed, I have been through all the times that I used to raise the matter with him when he sat on the Front Bench, and I raised it time after time. I could not come up with the money—here, he must take the admonition—because we did not have the money; we were following the Conservatives' spending plans and no money had been allocated. That is absolutely true and he knows it.

The right hon. Gentleman asked me what reduction in crime we anticipate. We are setting a national target for reduction in vehicle crime of 30 per cent., which is a substantial reduction and something on which we as a Government will be judged. In particular, I will be judged on that, especially if I fail, although I do not suppose that anybody will notice if I succeed. We have set a national target partly because the factors affecting vehicle crime often involve national policy—for example, the design of vehicles and co-operation in and co-ordination of policies by car park groups—to which vehicle crime is directly susceptible.

Burglary and robbery are much more susceptible to local strategies, which is why we have not set national targets. We are inviting local police and local communities to set those targets, and they are doing so, but we shall also judge the effectiveness of the individual programmes within the crime reduction programme—for example, that to reduce burglary—very carefully. If they are not working according to the target that has been set for the individual programme we will withdraw the money from similar programmes.

May I tell my right hon. Friend that communities all over my constituency and the rest of Birmingham will welcome the anti-social behaviour orders, which come into force from 1 April, alongside other more positive measures to encourage young people to live more fulfilling lives? However, does he agree that the critical ingredient in combating crime in our communities is not the number of police officers or, indeed, the level of resources that they have, important as they are, but the active involvement of people within communities in retrieving the safety and security that they have had stolen from them?

My hon. Friend is entirely right about that. If we do not have the communities on side, no amount of police officers or CCTV will solve the problem of disorder. Moreover, and to emphasise the point, we know that, where there are high levels of incivility in an area, the chance of people suffering, for example, a violent crime is four times greater than in other similar areas. If we deal with disorder, we can cut a great deal of crime.

The Home Secretary seemed to come perilously close to suggesting that there was an inverse relationship between the number of police officers and the incidence of crime. In fact, the opposite is the case: there is a positive relationship between the number of police officers and the ability not only to prevent but to solve crimes.

Does the Home Secretary accept that much of what he said will not translate readily into provision for rural areas, where the incidence of closed circuit television cameras and the like will inevitably be low? It is the number of police officers that is instrumental. In Cambridgeshire, for example, only by maintaining the increased levels that have been accompanied by a substantial reduction in crime over the past couple of years can we achieve a further reduction.

Many rural areas have done very well out of the Budget increases that I announced earlier. For instance, Cambridgeshire—part of which the hon. Gentleman represents—has been allowed a 4.5 per cent. spending increase in the next year. That is more than adequate to maintain the number of police officers and to secure investment, especially given the efficiency savings we expect the police to make not as a result of the number of officers, but in a number of other areas in which the service has not been efficient in the past.

I did not suggest for a second that there was an inverse relationship between the number of police officers and the rise of crime under the last Administration. What I drew to the attention of thinking Conservatives, of whom I believe the hon. Gentleman to be one—[Interruption.] He went to a good school, same as me. Anyway, what I drew to the attention of thinking Conservatives was the fact that there was not necessarily a direct relationship. We have learned something from the Conservatives about the efficiency of public services; they seem to have forgotten what they learned about the same thing when they were in office.

I welcome the general measures announced by my right hon. Friend, but may I probe him beyond the distribution of cash? As he will know, my constituency, consisting of hundreds of square miles, is one of the most rural; but it has been at the forefront in using closed circuit television cameras in urban areas, which has helped the police to be more effective elsewhere. Does my right hon. Friend accept that his financial measures must address the deprivation in some of those urban areas? Does he also accept that, although crime may appear to be lowish in such counties as Norfolk, peaks of crime are hidden in the general average, which require every bit as much attention as crime in urban areas?

I accept what my hon. Friend says, not least because I visited his constituency about 18 months ago. On a wet Friday evening in King's Lynn, 700 people turned up to hear me speak about law and order, which suggests either that they were very worried about the situation or that there was nothing else to do in King's Lynn. I trust that it was the first, not the second.

As I saw during that visit, there are indeed serious peaks of crime in some areas, which are disguised by the overall figures. I am pleased to say, however, that next year Norfolk will have a 5.5 per cent. increase in resources. That reflects our view of the importance of giving proper resources to semi-rural counties such as Norfolk.

I welcome the use of anti-social behaviour orders in the criminal justice system. Such orders, however, are not akin to civil injunctions, as the Home Secretary said; they are part of the criminal justice system. Is the right hon. Gentleman content that it is constitutionally appropriate for the police or applicant local authorities to play an active part in the sentencing process? Only they may consent to a reduction in the two-year period of an anti-social behaviour order, as the right hon. Gentleman will see if he looks at his own Act. Does he think it appropriate for the police and applicants to be party to sentencing? It would surely be more appropriate for that to be entirely in the gift of the courts.

On a previous occasion, the Home Secretary was kind enough to admit that the Conservative Government had done great things with regard to the introduction of closed circuit television. Will he, as a Labour politician, join me, as a Conservative politician, in kicking the back end of Oadby and Wigston Liberal Democrat borough council, and in inviting it to apply to his Government—it refused to apply to mine—for CCTV funding for the hard-pressed people of the borough?

I am always happy to take part with Conservatives in the re-education of the Liberal Democrats—on CCTV and many other subjects. Of course, one of the reasons why all of us—I hope—are sensitive to the issue of anti-social behaviour and to problems of law and order is because of the constituency link. I make that point just in case anyone is thinking otherwise.

I acknowledge and commend the previous Government's work, for example, on safer cities. There is little point in calling into question the record of a previous Administration where we support it. I do not intend to do that.

I do not accept what the hon. and learned Gentleman says about the structure of the anti-social behaviour orders. The only point where, as it were, the applicant—the local authority or police—could play a part in what he describes as the sentencing process under the orders, is where there is an application to the court to lift the order within the two-year minimum period, but the order itself is not a sentence of the court. A sentence of the court arises only if there is a breach of the order. That is an arrestable offence. A breach of an order will be dealt with in the normal way for either-way offences. The police and local authorities will play no direct part in the sentence that either the magistrates or the Crown court judge hands down.

May I in the warmest terms congratulate the Home Secretary on his statement on crime reduction? I do so as a member of the Magistrates Association, as former chair of the North-West Leicestershire Safer Communities Forum, a forerunner of the statutory partnerships, and as chair of the Ashby-de-la-Zouch CCTV scheme, which installed cameras in that town.

It is true that the existence of cameras can have a positive effect. Does my right hon. Friend nevertheless accept that there is a need to look at the dispersal of crime that can arise with CCTV, and to tackle peripheral issues such as improving street lighting in car parks, so that the quality of the image that is produced by the camera is satisfactory? Does he accept that local authorities that are cash strapped—

Order. That is far too long. Mr. Straw.

I accept what my hon. Friend says. Let me make it clear that not all the money need be spent directly on CCTV. As my hon. Friend says, if CCTV is to be effective, other things have to be done as well—for example, improvements in street lighting and action to ensure that crime is not displaced. One of the good things about the latest round of cash for CCTV is that it will be available, for example, on housing estates to which some acquisitive crime may have been displaced by CCTV in town centres.

Will the Home Secretary ensure that rural areas get their fair share of any money that is available? The money should go not just to areas such as Longridge in my constituency, to finance CCTV and other schemes, but to rural parts—of the right hon. Gentleman's constituency; of Lancaster, Burnley and Pendle; and all round our area. Rural areas need their fair share of the money as well.

I know that the Home Secretary has a reputation for being a hard Home Secretary and I believe him to be so.

What?

It is a compliment. Having that sort of reputation, the Home Secretary may not be popular with many Labour Members, but may I encourage him not only have a reputation for being hard, but to be hard where he has not been so far? Boot camps have proved very successful. Will he look again at that idea? A rigorous and firm regime is the only language that some thugs can understand. Perhaps the right hon. Gentleman will consider establishing a boot camp in the north-west.

I did not hear the first consonant when the hon. Gentleman said "hard", and various alternative expressions were running through my mind. I accept, of course, what he said about the importance of rural areas being covered by the provisions: it is a mistake to believe that only urban areas have high crime levels. Although crime is disturbing wherever it occurs, a sudden upsurge of serious disorder or acquisitive crime in a peaceful rural area can be very disturbing. I shall certainly give an undertaking to ensure that the money is used across the country. Which areas benefit from it will depend on the quality of bids. I hope that Ribble Valley district council—to name one council—will be able to make a high-quality bid.

I feel that the debate on the precise form of detention, punishment and treatment of young offenders is not served simply by attaching to it the label "boot camp". None of the so-called boot camps in the United Kingdom, whether at Thorn Cross or at Colchester, bears any relationship to the boot camps that I have seen in the United States, which are of a totally different order.

We need tough and effective punishments, and a range of punishments. We have kept going the so-called boot camp at Thorn Cross because it has turned out to be successful. I closed the facility at Colchester only because of its cost, not because of a judgment about its effectiveness.

I congratulate my right hon. Friend on the substantial resources that he has been able to extract from the Chancellor to achieve the laudable aims that he has described. I should like also to associate myself with the remarks made by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) in commending the general drift of the Home Secretary's strategy. However, may I tell my right hon. Friend that it is difficult to give the document unqualified support when it has been impossible to read the detailed guidance on anti-social behaviour orders? Although I have seen in his hand a copy of the document—it looks very nice—copies are not in the Vote Office as he said they were. When my right hon. Friend and I last had a little discussion on these issues—when a world cup football match was on—we were almost the only two hon. Members in the Chamber. On that occasion, too, the guidelines were not available.

My query concerns the possibility of people maliciously accusing other people of behaving anti-socially, and of insufficient resources or detection methods being available to ensure that such malicious claims are rooted out. I have had several such cases in my own constituency. I should be grateful if the guidelines can be made readily available, so that we may assess whether those points have been dealt with.

If—as I now appreciate—the document is not available in the Vote Office, I can only apologise to my hon. Friend and to the House. I shall take action to find out why it is not available.

There is a very powerful filter in the body of the Act itself to ensure that malicious claims are not made. It is not possible for any individual who feels that he or she has suffered serious anti-social behaviour directly to make an application for an anti-social behaviour order. An application would have to be made by the chief officer of police in the area or the chief executive of the local authority—and I am sure that they will take very careful action to filter out malicious cases. If they fail to do so in any individual isolated case, we shall expect—I believe that it will happen—the courts to filter out such claims as are made.

Will my right hon. Friend take it from me that many people have noticed the success of his policies and that, certainly in Battersea, police and many of the community partners in crime reduction strategies will greatly welcome today's announcement? The Opposition's obsession with what they call a declining police service is unfounded, and no one but Opposition Front Benchers would call a 0.5 per cent. fluctuation in police numbers a service decline. Yesterday, we even had the spectacle of the hon. Member for Bromsgrove (Miss Kirkbride) describing as a decline in police numbers what turned out to be a reduction of four police officers that was more than offset by an increase in seven police staff.

Not only are the Conservatives' claims not true: they are not relevant. There is no evidence of a direct relationship between the incidence of crime and police numbers. As the document "Reducing Offending", to which my right hon. Friend referred, says, what really affects crime statistics is effective policing, targeted on criminals and victims.

My hon. Friend is right. Reports by the Audit Commission and Her Majesty's inspectorate of constabulary show that there is no direct relationship between the gross number of police officers and the number of officers available for operational duties. One of the complaints of Her Majesty's inspectorate of constabulary, who are all experienced former senior professional police officers, is that while the overall number of officers has risen in recent years, the number available for operational duties has stayed static or declined. That has to change. That will be achieved through better management, better deployment, often civilianisation, the use of information technology and getting a grip—as the previous Administration failed to do—on the fact that early retirements and excessively high levels of sickness make a difference to whether the police are effective on the ground.

I am announcing today the results of the fifth quarterly review of progress in tackling the millennium bug for Government Departments, agencies and key parts of the wider public sector. I have arranged for all completed questionnaires to be placed in the Libraries of the House and published on the internet. To allow people to see at a glance how well individual Departments and agencies are doing, I shall also be publishing tables illustrating their performance against a number of key criteria.

Good progress continues to be made by central Government as a whole. The majority of bodies covered by the exercise are near to completing their correction programmes. Almost half the Departments and agencies have completed their work on business-critical information technology systems, which means that the problems have been fixed, the fix has been tested and the system is back in operation. Progress on business-critical embedded and telecommunications systems is equally good. On that basis, we expect that most Departments will have finished work on their business-critical systems by July. Ten bodies—although admittedly smaller ones—report that have already completed all their correction work on critical and non-critical systems. I am also pleased by the continued progress of the Department of Social Security, the Employment Service, the Department of Health and the Department for Culture, Media and Sport.

Costs remain relatively stable. The total estimate for central Government Departments and agencies stands at just over £420 million—a 2.5 per cent. increase on the previous quarter.

I am pleased to report that the Driver and Vehicle Licensing Agency, the Inland Revenue and the Medicines Control Agency, which I named in my previous statement, have made significant improvements over the past quarter.

Slippage continues to be apparent in other cases, although most are minor adjustments of a month or two in the first half of this year. However, I have a number of specific concerns about departmental programmes, including that of the Foreign and Commonwealth Office, although I acknowledge the unique difficulties that it faces in operating around the world. My right hon. Friend the Foreign Secretary assures me that the serious resources that the FCO is devoting to its year 2000 programme and relevant system upgrades will ensure that it is year 2000 compliant worldwide in time. I have written to colleagues to express those concerns and will continue to monitor progress closely.

The armed forces continue to make good progress in dealing with the bug. The Ministry of Defence expects that the Royal Navy, Army and Royal Air Force front-line units will be compliant by late summer. However, there remains no room for slippage in the large and complex defence programme. I am providing more detailed information on the Ministry of Defence's programme in a separate section of the tables that I am publishing today.

I am pleased to report that work is also now well under way on business continuity planning. Departments are looking at the impact of possible bug-related failures— in their systems and in key organisations in their supply chain—on their ability to continue to deliver key services. Most Departments and agencies have initial business continuity plans in place. Those that do not are required to produce one as a matter of urgency. Those initial plans will be developed and tested over the year. Details of progress in developing initial plans are available in the published returns.

All but five Departments and agencies have had some form of additional assessment of their programmes, either by internal auditors or by external experts. Of the remainder, all have plans in place for such assessments.

In the wider public sector, the returns for British Nuclear Fuels, the BBC, National Air Traffic Services, London Transport, the Bank of England, the Post Office and the General Consumer Council for Northern Ireland show that all are continuing to make good progress. In my last statement, I expressed concern about the Environment Agency's rate of progress in tackling the bug in its business-critical embedded systems. I am pleased to report that this work is now 90 per cent. complete, and is on course to be finished by the end of June.

Progress across the police service is mainly satisfactory, although a few forces have completion dates for business-critical systems in the second half of 1999. However, progress on business continuity planning is disappointing. Twenty-seven of the 46 forces in England and Wales do not yet have an initial business continuity plan in place.

The Association of Chief Police Officers' millennium co-ordination committee is monitoring progress closely, and its chairman has written to chief constables recently to raise issues of concern. Her Majesty's inspectorate of constabulary is continuing to review individual forces' year 2000 arrangements and identify areas for improvement. A similar process is taking place in Scotland.

The returns for the fire service in England and Wales show an improvement over the previous quarter. All brigades expect to complete work by the end of the year, although a few do not expect to complete work until the final quarter of 1999, allowing little room for slippage. Her Majesty's fire service inspectorate will continue to monitor progress closely and offer brigades advice. Brigades in Scotland are moving forward on a similar time scale.

The results of the most recent NHS quarterly review in England were announced on 16 February. The number of organisations reporting good or satisfactory progress was slightly down on the previous quarter, at 91 per cent. However, 98 per cent. of NHS trusts and heath authorities met the NHS executive's deadline of 31 December 1998 for having identified and resourced effective solutions for all year 2000 problems that could pose a threat to patient safety. The estimated cost of remedial year 2000 work remains at about £320 million. The NHS in Scotland and Wales is also making satisfactory progress.

The Audit Commission's latest analysis of progress across local government in England and Wales shows that the situation as a whole is slowly improving, but that much more work remains to be done. The new teams in Government offices, announced by the Prime Minister on 25 January, are working with the Audit Commission and the Local Government Association to help authorities, particularly those that are furthest behind, to prioritise their programmes and to access advice and good practice.

The picture in Scotland is similarly mixed, and I am pleased that the Convention of Scottish Local Authorities and the Accounts Commission for Scotland are progressing work with Scottish local authorities.

Over the last quarter, we have taken steps to put in place a rigorous and independent assessment programme for those elements of the public sector that are key elements of our national infrastructure. These assessments will include the NHS, local government, emergency services, the criminal justice system and the payment of benefits and will reinforce our existing monitoring arrangements. This will give us one of the most—if not the most—objective and comprehensive monitoring regimes in the world. I shall report on progress in my next quarterly statement. From June, I shall be backing that up with more regular reports to Parliament.

With less than 300 days to go until the century date change, it is important that Departments and agencies make the fullest and best use of the remaining time available. Looking at the overall picture, the vast majority are well placed to finish work on business-critical systems in good time. However, in a few areas, a concerted effort is required to ensure that the remaining work is finished to time. We will be also placing an ever-increasing emphasis on business continuity planning as we move through the rest of the year.

The Government will continue to lead by example, by making information on our progress in beating the bug regularly available to the House, and to the public.

I am grateful to the President of the Council for her statement on the findings of the Government's fifth quarterly review of progress—or should I say slippage?—in tackling the millennium bug. Will she confirm that it describes the situation as it is today and is not an historical statement referring to forms filled in by Departments many weeks ago?

Today' s announcement shows that the Government are breathtakingly complacent in the face of their own failure. While they continue to fail to meet their own previously published deadlines, they have the gall to preach to the private sector on the subject. They inherited a golden legacy of action and preparation from the Conservatives. My hon. Friend the Member for Esher and Walton (Mr. Taylor) had set a deadline for all Departments to be millennium compliant by the end of December 1998.

The previous report showed that the United Kingdom had slipped from first to eighth position under the Labour Government. Can the President of the Council confirm that the United Kingdom is once again leading the field in year 2000 preparedness, as it was in May 1997?

The right hon. Member for South Shields (Dr. Clark), when Chancellor of the Duchy of Lancaster, said:

"I am now able to confirm that all Departments and agencies have work in hand and scheduled for completion in time—many by December 1998, a majority by March 1999 and a small number later in 1999."—[Official Report, 27 November 1997; Vol. 301, c. 1104.]

Today, in March 1999, we learn that fewer than half the Departments have even completed their work on business-critical systems—what a disappointing outcome—and that only 10 Departments met the Conservative deadline of completing all millennium compliance work by December 1998.

The President of the Council promised three months ago that all Departments and agencies would have business continuity and contingency plans in place by the end of January. Today, she has told us only that most Departments have them in place. What is the reason for the failure to meet that deadline? Will she ensure that the plans, once produced, are made available for public scrutiny and placed in the Library?

With the millennium fewer than 300 days away, has the time not come for more targeted reports? I welcome the announcement that there will be more frequent reports. Will the President of the Council expand on the nature of those reports, especially in the light of her statement, which gives a worrying picture of the state of preparedness in the police and fire services and in part of the health service?

Will the Government offer a millennium guarantee, that everything in the public sector will work properly on 1 January 2000? If things go wrong in the public sector, who is to be held to account? Will the President of the Council publish a list of Ministers and officials who will be in line for the plaudits or criticisms arising from their Y2K preparedness?

Who is to be held accountable in local government? Will the President of the Council arrange for all critical systems to have live testing before the millennium, as was suggested by several organisations, including the Federation of Small Businesses? Will she advise private business and individuals how much they should spend on their contingency plans? It is one thing to draw up a plan, but another to decide, on a risk assessment, how much should be invested in it.

In April 1998, the Prime Minister said:

"By treating this as an emergency we can make Britain one of the world's best prepared countries."

Can we be satisfied that the Government are really treating this as an emergency, when the statement has been delayed by a fortnight and relegated to third priority in today's business? I assure the House that Her Majesty's Opposition will continue to hold the Government to account and responsible for Y2K failure, if and when it comes.

Oh, dear. I had hoped that there was a vague chance of an intelligent response from the Conservative Front Bench, but that was clearly a mistake.

I will begin where the hon. Gentleman ended. He asked who should be held to account if anything goes wrong, and I will tell him. I am not in the business of dishing out blame, and I pay tribute to the work done by the hon. Member for Esher and Walton (Mr. Taylor). He did a great deal—although nothing like enough, because his Government colleagues showed no interest in his work. We picked up not a golden legacy, but a neglected baton and trebled, at least, the work that was being done. If anybody will be held to account, it will be those who were in government in 1994, 1995 and 1996, when the issues should first have been dealt with.

With the honourable exception of the hon. Member for Esher and Walton, nobody in the Conservative party wanted to know. If we are going to dish out blame, it belongs to the Conservative Government. We did not come to power until May 1997, and anybody who knows anything about the subject knows that that was very late in the day to tackle the issues.

Having listened to the hon. Member for Christchurch (Mr. Chope), I can conclude only that he knows nothing about the subject. I am surprised, because he has asked some moderately intelligent questions about it in his time, but he clearly has not listened to any of the answers. He made the throwaway remark that Britain had slipped from first to eighth in the international league tables, but, if he knew anything about the subject and had read any of the answers that he had received from us or anyone else, he would know that those league tables are worthless. If a country that knows little or cares nothing about the issue responds by saying that it is doing well—because it does not recognise the problem—it soars up the league table. Everybody knows that the league tables are worthless.

I share the regret of the hon. Member for Christchurch that not all Departments have, as instructed, business continuity plans in place. Most have, and those that have not are being actively pursued. As for advice for the private sector, I thought that the Conservatives were against the nanny state. It is not for me to tell those in the private sector what judgment they should make about their preparedness or what they should spend. It is for us to urge them to take the necessary action, and that we are doing.

We have considered the suggestions that have been made for live testing, including those from someone on the Conservative Benches whom I respect, the hon. Member for Bournemouth, East (Mr. Atkinson). However, such testing would consume enormous amounts of time and resources and would be a diversion from work on tackling the issues. For that reason, it has not been pursued by the Government or by most other organisations that have studied the matter.

I have told the hon. Member for Christchurch before that this statement has not been deferred for two weeks. The previous statement was a week early in the cycle. Last week, the statement would have coincided with the Budget and we thought, on balance, that the House would probably prefer to give the Budget a higher priority.

The hon. Gentleman asked whether we could give a millennium guarantee that nothing will go wrong. Only someone who was not paying attention or does not care tuppence about the importance of understanding the issue would even ask such a silly question, let alone expect an answer to it.

As someone who has already suffered from the millennium bug when using a Microsoft product, I welcome my right hon. Friend's statement. Many local authorities have made progress, but some have not. Has my right hon. Friend considered secondments from those authorities that have made progress or using Government officers to help local authorities to make more progress? I was very concerned by my right hon. Friend's comments about the Foreign and Commonwealth Office. In particular, many third-world countries will suffer if supply chains—many of which are just in time now—break down. What is being done to ensure that the third world does not suffer because of the millennium bug? The Soviet fleet contains computers that are non-compliant and I would be worried if the Ministry of Defence were not talking to its Russian counterparts about the issue.

My right hon. Friend said that she would introduce more frequent reports from June. Given that, on 1 April, in 15 days' time, the year 2000 financial year will start, will she start those more frequent reports from the cycle onwards?

I share my hon. Friend's concern, as we all do, that there has not been more progress in local government, and we are working closely with the Audit Commission, which is considering that matter. We are considering issues such as secondments from Government offices, and we are strongly encouraging those in local government who lag behind to learn from the best practice of the leaders in the field. The Audit Commission has said that, in or around June, it will publish the particulars of authorities that are not responding well enough to encouragement.

My hon. Friend asked about the third world. The Foreign and Commonwealth Office has taken a number of steps, along with the British Council, to conduct seminars, provide advice and do what can be done directly by British diplomats. We have given resources to the World bank project and to the Commonwealth to assist in encouraging compliance and in helping to fund the right kind of programmes in third-world countries.

My hon. Friend also asked about Russia. The Ministry of Defence has formed a co-operation committee with other member states, including NATO states. Advice, assistance and support are being given. We are being proactive with the Russians. We have offered to send a delegation to Moscow to discuss the issues. We support moves by NATO to engage Russia through the Permanent Joint Council mechanism and we are working supportively with the United States and others to offer advice.

The Health and Safety Executive in Bedfordshire has reasonably pointed out that private businesses should be careful to check on the effects of the millennium bug—particularly embedded effects—that may have an impact on health and safety. However, an article in The Business magazine, which covered that aspect, gave little indication that guidance was being offered on what to look for and how to do so. Can the right hon. Lady satisfy us that the HSE and similar agencies will give constructive advice as well as warnings?

Certainly, they are seeking to do so. If the right hon. and learned Gentleman has concerns, Action 2000, among other organisations, would be happy to hear from him and to do all it could to supply information. One reason why I was fairly hard on his Front-Bench colleague, the hon. Member for Christchurch, was that, as time has gone by, people have discovered more complications. When work began on compliance, the importance of problems that might arise from embedded systems was not as greatly appreciated as it is today. As work unfolds, ever more aspects emerge. The problem is complex, but Action 2000 and other organisations would be happy to assist the right hon. and learned Gentleman.